ADVICE FOR INVESTORS

INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE
CONTENTS OF THIS PROSPECT...
GLOSSARY OF TECHNICAL TERMS

CDA                      Central Depositories Act, 1997

CDC/CDCPL                The Central...
TABLE OF CONTENTS


1.    APPROVALS AND LISTIN G ON THE STOCK EXCHANGE ..................................................4...
PART 1

1.    APPROVALS AND LISTING ON THE STOCK EXCHANGE

1.1   APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF
     ...
Note: The deadline as mentioned in 3 above has been extended till November 20,
              2008by the Commission vide le...
PART 2

2.       SHARE CAPITAL AND RELATED M ATTERS

2.1      SHARE CAPITAL

                                             ...
2.4   MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF
      SHARES

      The basis and conditions of allotment t...
g) If the issue is oversubscribed in terms of amount only, then the allotment of shares shall
         be made on the foll...
The applicants who opt for receipt of shares in scrip-less form in CDS should fill in the
      relevant columns of the Ap...
2.10 PRINCIPAL PURPOSE OF THE PUBLIC ISSUE

    The purpose of th is Issue is to raise capital for expanding the Company’s...
2.15 DEDUCTION OF ZAKAT

    Income distribution will be subject to deduction of Zakat at source, pursuant to the
    prov...
PART 3

3.    UNDERWRITING,              COMMISSIONS,              BROKERAGE             AND       OTHER
      EXPENSES

3...
3.5   BROKERAGE

      For this Issue, Brokerage shall be paid to the members of the Stock Exchanges at the rate of
      ...
PART 4

4.    HISTORY AND PROSPECTS

4.1   THE COMPANY

      The Company was incorporated on August 31, 1989 as a private...
4.2.4 Fixed Income/Debt Securities

         FCIB is an active player of debt market development in Pakistan. The Bank has...
economy 3. ROE is around 12.2% currently, which is also a positive indicator for the
          investment banking sector4....
Interest Rate Risk

Interest rate risk is the risk of decline of earnings due to adverse movement of interest rate
curve. ...
License Suspension Risk

This is the risk that the Investment Finance Services license granted by the Commission
might be ...
Mitigant

        This risk is mitigated by the Company with a current ratio of 1.15X as on June 30, 2007
        which il...
Escorts            Dawood         Security         Trust            Average
Benchmarking
Sales                          84...
4.6     CONDITIONS IMPOSED BY THE SECP ON NBFCs THROUGH SRO
        1132(I)/2007 DATED NOVEMBER 21, 2007

4.6.1   Minimum ...
4.6.7   Underwriting Commitments

        Under Rule No. 30 of Part II, all underwriting commitments shall be fully backed...
PART 5


5. FINANCIAL INFORMATION

5.1 Auditors report under section 53(1) read with clause 28 of section 2 part I of the ...
2. Major Developments in the last Five Years

2.1   June 30, 2004

2.1.1 First Credit and Discount Corporation Limited (FC...
3.    Balance sheet

3.1   In accordance with Section 53(1) read with Clause 28(1) of Section 2 of Part I of the
      Sec...
4.        Commitments

4.1       The following figures have been reported as commitments:

                               ...
6.         Dividends declared

6.1        Dividends declared in the last five years are as follows


                     ...
5.2 Share Break -up Value Certificate

   06-16 / 1328
   March 5, 2008

   The Board of Directors
   First Credit and Inv...
5.3 Auditors Certificate on Issued, Subscribed, and Paid-up-capital of the Company

   06-16 / 1326
   March 5, 2008

   T...
PART 6

6       MANAGEMENT

6.1    BOARD OF DIRECTORS OF THE COMPANY

      Names of Directors / Chief Designation        ...
6.3     MANAGEMENT PROFILE


         Names                               Designation                   Year of Experience...
Economic Research Group, Management Development, Personnel Administration, and
        has managed field operations of the...
Mr. Hamad has conducted over fifty trainings on workshops and seminars as Director
        Research and Trainings of ALHUD...
6.6    REMUNERATION OF THE DIRECTORS

       Pursuant to the Articles of Association of the Company, remuneration of Direc...
6.12 AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE

    Audit Committee of the Board has been formed to comply with th...
PART 7

7     MISCELLANEOUS INFORMATION

7.1   REGISTERED OFFICE/ HEAD OFFICE

      First Credit and Investment Bank Limi...
7.7   ADVISOR & ARRANGER TO THE ISSUE

      AKD Securities Limited
      6th Floor, Continental Trade Centre,
      Block...
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
First Credit and Investment Bank Limited
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First Credit and Investment Bank Limited

  1. 1. 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 4.5 BEFORE MAKING ANY INVESTMENT DECISION SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE A PPLICATION IN THE NAME OF SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS’ MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE S ECURITIES AND EXCHANGE ORDINANCE, 1969 First Credit and Investment Bank Limited PROSPECTUS For Issue of 25,000,000 ordinary shares at par value of Rs. 10 per share to the general public out of the total capital of Rs. 650,000,000 divided into 65,000,000 ordinary shares of Rs.10 each SUBSCRIPTION DATES From July 09, 2008 to July 10, 2008 (Both days inclusive)During Banking Hours FINANCIAL ADVISOR TO THE ISSUE AKD Securities Limited UNDERWRITTEN BY Allied Bank Limited AKD S ecurities Limited The Bank of Punjab Pak -Libya Holding Co. Limited Faysal Bank Limited Saudi Pak Industrial & Agricultural Co. Ltd Date of publication of Prospectus June 29 , 2008
  2. 2. GLOSSARY OF TECHNICAL TERMS CDA Central Depositories Act, 1997 CDC/CDCPL The Central Depository Company of Pakistan Limited CDS Central Depository System CNIC Computerized National Identity Card Commission / SECP Securities and Exchange Commission of Pakistan Company / FCIB First Credit and Investment Bank Limited CVT Capital Value Tax GOP Government of Pakistan IPO Initial Public Offering Initial Public Offering of ordinary shares of First Credit Issue and Investment Bank Limited ITO Income Tax Ordinance, 2001 KIBOR Karachi Inter Bank Offer Rate KSE/Stock Exchange Karachi Stock Exchange (Guarantee) Limited Ordinance Companies Ordinance, 1984 WHT Withholding Tax FDI Foreign Direct Investment GDP Gross Domestic Product 2
  3. 3. TABLE OF CONTENTS 1. APPROVALS AND LISTIN G ON THE STOCK EXCHANGE ..................................................4 2. SHARE CAPITAL AND RELATED MATTERS.............................................................................6 3. UNDERWRITING, COMMIS SIONS , BROKERAGE AND OTHER EXPENSES ............. 12 4. HISTORY AND PROSPECTS ............................................................................................................. 14 5. FINANCIAL INFORMATION ............................................................................................................ 22 6. MANAGEMENT ...................................................................................................................................... 30 7. MISCELLANEOUS INFORMATION .............................................................................................. 36 8. APPLICATION AND TRANSFER INSTRUCTIONS..................................................................40 9. SIGNAT ORIES TO THE PROSPEC TUS ........................................................................................ 44 10. MEMORANDUM OF ASSOCIATION ......................ERROR! BOOKMARK NOT DEFINED. 11. APPLICATION FORM 3
  4. 4. PART 1 1. APPROVALS AND LISTING ON THE STOCK EXCHANGE 1.1 APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN Approval of the Securities & Exchange Commission of Pakistan (the “Commission” or the “SECP”) as required under Section 57(1) of the Companies Ordinance, 1984 (the “Ordinance”) has been obtained by First Credit & Investment Bank Limited (the “Company” or “FCIB”) for the issuance, circulation and publication of this Prospectus. It must be distinctly understood that in giving this approval, the SECP does not take any responsibility for the financial soundness of any scheme stated herein or for the correctness of any of the statements made or opinions expressed with regard to them. The SECP has not evaluated the quality of the Issue, and its approval of the Prospectus 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. 1.2 CLEARANCE OF THE PROSPECTUS BY THE KARACHI STOCK EXCHANGE (GUARANTEE) LIMITED The Prospectus of the Company has been cleared by the Karachi Stock Exchange (Guarantee) Limited (“KSE”), in accordance with the requirements under its Listing Regulations. While clearing the Prospectus, KSE neither guarantees the correctness of the contents of the Prospectus nor the viability of the Company. The KSE has not evaluated the quality of the Issue, and its clearance 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. 1.3 LICENSE TO CARRY OUT INVESTMENT FINANCE SERVICES AS A NON- BANKING FINANCE COMPANY The Company obtained license from SECP to carry out investment finance services (“IFS”) on January 15, 2004, which has been renewed by the Commission vide letter dated January 18, 2008 for a period of one year w.e.f January 15, 2008. Renewal of the said license is subject to the conditions mentioned below, or as may be prescribed or imposed hereafter: 1. First Credit and Investment Bank Limited shall ensure compliance of Non-Banking Finance Companies (Establishment and Regulation) Rules, 2003, Non-Banking Finance Companies and Notified Entities Regulations 2007, Companies Ordinance, 1984 and directions issued by the Commission from time to time. 2. No director of First Credit and Investment Bank Limited shall be appointed as a director on the board of any other NBFC engaged in similar business/holding similar licenses. 3. First Credit and Investment Bank Limited shall get itself listed on Karachi Stock Exchange latest by March 31, 2008; and 4. The said license is renewable on annual basis as specified in the Non-Banking Finance Companies (Establishment & Regulation) Rules, 2003. 4
  5. 5. Note: The deadline as mentioned in 3 above has been extended till November 20, 2008by the Commission vide letter No. SEC/NBFC-I-FC&IB/ /2008 dated June 16, 2008. 1.4 FILING OF THE PROSPECTUS AND OTHER DOCUMENTS WITH THE REGISTRAR OF COMPANIES The Company has filed with the Registrar, Companies Registration Office, as required under Section 57(3) and (4) of the Companies Ordinance 1984, a copy of this Prospectus signed by all the Directors of the Company, along with the following documents attached hereto: a) Letter dated March 05, 2008 from the Auditors of the Company, M. Yousuf Adil Saleem & Co, consenting to the publication of their names in the Prospectus, which contains in Part 5 certain statements and reports issued by them as experts (for which consent has not been withdrawn), as required under Section 57(5) of the Ordinance. b) Copies of Material Contracts and Agreements mentioned in Part 7 of this Prospectus as required under Section 57(4) of the Ordinance. c) Written confirmations of the Auditors of the Company, the Legal Advisor to this Issue and Bankers to this Issue, mentioned in this Prospectus consenting to act in their respective capacities, as required under Section 57(5) of the Ordinance. d) Consent of Directors and Chief Executive of the Company who have consented to their respective appointments being made and their having been named or described as such Directors and Chief Executive in this Prospectus, as required under Section 57(3) of the Ordinance, read with sub-clause (1) of clause (4) of Section 1 of Part 1 of the Second Schedule to the Ordinance. 1.5 LISTING ON THE KSE Application has been made to the KSE for permission to deal in and for quotation of the shares of the Company. In accordance with the “Regulation for Future Trading in Provisionally Listed Companies” of KSE the Company shall stand provisionally listed for trading and for quotation of its shares on the KSE from the date of publication of this Prospectus or any other date as may be specified by the KSE. If for any reason, the application for formal listing is not accepted by the KSE, the Company undertakes to publish immediately in the press a notice to that effect and thereafter to refund the application money to the applicants in pursuance of this Prospectus as required by the provisions of Section 72 of the Ordinance. 5
  6. 6. PART 2 2. SHARE CAPITAL AND RELATED M ATTERS 2.1 SHARE CAPITAL No. of Face Value Premium Total Shares Rs. Rs. Rs. Authorized Capital Ordinary Shares of Rs.10 each 75,000,000 750,000,000 - 750,000,000 Issued, Subscribed and Paid-up Capital Issued for Cash 3,500,000 35,000,000 - 35,000,000 Issued as Bonus 36,500,000 365,000,000 - 365,000,000 Total 40,000,000 400,000,000 - 400,000,000 The existing issued, subscribed & paid-up capital of the Company is held as follows: SPONSORS National Bank of Pakistan. 20,000,000 200,000,000 - 200,000,000 Water and Power Development Authority 20,000,000 200,000,000 - 200,000,000 Total 40,000,000 400,000,000 - 400,000,000 PRESENT ISSUE Now offered for subscription to the General Public Ordinary Shares of Rs. 10/- each 25,000,000 250,000,000 - 250,000,000 GRAND TOTAL 65,000,000 650,000,000 - 650,000,000 Notes: (i). As per Listing Regulation No. 6(A)(7)(i) of the KSE, sponsors’ shareholding in excess of 25% shall not be saleable for a period of six months from the date of public subscription. (ii). As per Rule 3(I)(iv) of the Companies (Issue of Capital) Rules 1996, the sponsors shall, at all times, retain at least twenty five percent (25%) of the capital of the Company. 2.2 OPENING AND CLOSING OF THE SUBSCRIPTION LIST The subscription list will Insh ’Allah open at the commencement of banking hours on July 09, 2008 and will close on July 10, 2008 at the close of banking hours. 2.3 INVESTOR ELIGIBILITY Eligible investors include Pakistani citizens resid ing in Pakistan, companies, bodies corporate or other legal entities incorporated or established in Pakistan (to the extent permitted by their constitutive documents and existing regulations as the case may be); provident/pension/gratuity funds /trusts (subject to the terms of their Trust Deed and existing regulations) and branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. 6
  7. 7. 2.4 MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF SHARES The basis and conditions of allotment to the general public shall be as follows: a) The minimum amount of application for subscription of 500 ordinary shares is Rs. 5,000/- b) Submission of fictitious and multiple applications (more than one application in the name of same person) is prohibited and such applicants’ money shall be liable to confiscation under Section 18-A of the Securities and Exchange Ordinance, 1969. c) Application for shares below the total value of Rs. 5,000/- shall not be entertained. d) Applications for shares must be m ade for 500 shares or in multiples of 500 shares only. Applications whic h are neither for 500 shares nor for multiples of 500 shares shall be rejected. e) If the shares to be offered to the general public are sufficient to accommodate all applications , all applications shall be accommodated. f) If this issue is oversubscribed in terms of number of applications and amount, the shares will be allotted by conducting computer balloting in the presence of representative(s) of the KSE in the following manner: (i). If all applications for 500 shares can be accommodated, then all such applications shall be accommodated first. If all applications for 500 shares cannot be accommodated then balloting will be conducted among applications for 500 shares only. (ii). If all applications for 500 shares have been accommodated and shares are still available for allotment, then all applications for 1,000 shares shall be accommodated. If all applications for 1,000 shares cannot be accommodated then balloting will be conducted among applications for 1,000 shares only. (iii). If all applications for 500 shares and 1,000 shares have been accommodated and shares are still available for allotment, then all applications for 1,500 shares shall be accommodated. If all applications for 1,500 shares cannot be accommodated then balloting will be conducted among applications for 1,500 shares only. (iv). If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and shares are still available for allotment, then all applications for 2,000 shares shall be accommodated. If all applications for 2,000 shares cannot be accommodated then balloting will be conducted among applications for 2,000 shares only. (v). After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in the following manner: 1. If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then 2,000 shares shall be allotted to each applicant and the remaining shares shall be allotted on prorata basis. 2. If the remaining shares are not sufficient to accommodate all the remaining applications for at least 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to the successful applicants. 7
  8. 8. g) If the issue is oversubscribed in terms of amount only, then the allotment of shares shall be made on the following basis: (i). First preference will be given to the applicants who applied for 500 shares; (ii). Next preference will be given to the applicants who applied for 1,000 shares; (iii). Next preference will be given to the applicants who applied for 1,500 shares; and then; (iv). Next preference will be given to the applicants who applied for 2,000 shares; (v). After allotment of the above, the balance shares, if any, shall be allotted on a prorata basis to the applicants who applied for more than 2,000 shares. h) Allotment of shares will be subject to scrutiny of the applications for subscription. i) Applications which do not meet with the above requirements or which are incomplete will be rejected. 2.5 REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS The Company shall take a decision within ten (10) days of the closure of subscription list as to which applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful applications within ten (10) days of the date of such decision, as required under Section 71 of the Ordinance. As per sub-section (2) of Section 71 of the Ordinance, if refund as required under Sub- section (1) of Section 71 of the Ordinance is not made within the time specified therein, the Directors of the Company shall be jointly and severally liable to repay the money with surcharge at the rate of 1.5% , for every month or part thereof from the expiration of the 15th day and, in addition, to a fine not exceed ing Rs. 5, 000/- and in case of continuing offense to a further fine not exceeding Rs. 100/- per day after the said 15th day of which the default continues. Provided that a Director shall not be liable if he/she proves that the default in making the refund was not due to any misconduct or negligence on his/her part. 2.6 MINIMUM SUBSCRIPTION FOR ALLOTMENT The minimum subscription on which the directors will proceed to allot shares is the full amount of the present issue of Rs. 250 million (Rupees Two Hundred and Fifty Million) which has also been underwritten in full, and in the opinion of the directors, must be raised in order to provide the capital required by the Company. 2.7 ISSUE AND DISPATCH OF SHARE CERTIFICATES The Company will dispatch share certificates to successful applicants through their B anker to the Issue or by credit ing the respective Central Depository System (“CDS”) accounts of the successful applicants within thirty (30) days of the close of public subscription, as per Listing Regulations of the KSE. Shares will be issued either in scrip-less form in the CDS or in the shape of physical scrips on the basis of option exercised by the successful applicants. Shares in the physical form shall be dispatched to the Bankers to the Issue whereas scripless shares shall be credited through book entries in the respective accounts maintained with the Central Depository Company of Pakistan (“CDCPL”) Limited. 8
  9. 9. The applicants who opt for receipt of shares in scrip-less form in CDS should fill in the relevant columns of the Application Form. In order to exercise the scrip-less option, the applicant(s) should have CDS account at the time of subscription. If the Company makes a default in complying with the requirements of the Listing Regulations of the KSE, it shall pay to the Stock Exchange a penalty of Rs. 500/- per day or part thereof during which the default continues. The Stock Exchange may also notify the fact of such default and the name of the Company by notice and also by publication in its Ready-Board Quotation. 2.8 TRANSFER OF SHARES 2.8.1 Physical Scrips The Directors of the Company shall not refuse to transfer any fully paid share unless the transfer deed for any reason is defective or invalid under the provisions of Section 77 of the Companies Ordinance, 1984, provided that the Company shall within 30 days from which the instrument of transfer was lodged with it, notify the defect or invalidity to the transferee who shall, after the removal of such defect or invalidity be entitled to re-lodge the transfer deed with the Company. 2.8.2 Transfer under book entry system The shares maintained with the CDS in the book entry form shall be transferred in accordance with the provisions of the Central Depositories Act, 1997 and the Central Depository Company of Pakistan Limited Regulations. 2.9 SHARES ISSUED IN PRECEDING YEARS An aggregate of 40 million fully paid ordinary shares of the face value of Rs. 10/- each have been issued during the preceding years. Following are the details of the shares issued during the preceding years: No. of shares Par value Amount Consideration Date of Issue (Rs.) (Rs.) 30 10/- 300/- Cash 08-08-1989 999,970 10/- 9,999,700 /- Cash 31-12-1990 250,000 10/- 2,500,000/- Bonus shares 16-11-1994 1,250,000 10/- 12,500,000/- Bonus shares 03-08-1995 2,500,000 10/- 25,000,000/- Right shares - Cash 07-02-1996 1,250,000 10/- 12,500,000/- Bonus shares 20-12-1997 1,562,500 10/- 15,625,000/- Bonus shares 26-12-1998 781,250 10/- 7,812,500/- Bonus shares 26-06-2000 859,350 10/- 8,593,500/- Bonus shares 25-04-2001 945,310 10/- 9,453,100/- Bonus shares 05-12-2005 1,559,760 10/- 15,597,600/- Bonus shares 01-11-2006 28,041,830 10/- 280,418,300/- Bonus shares 15-11-2007 40,000,000 400,000,000 There has been no other issue of shares during the preceding years other than those mentioned above. 9
  10. 10. 2.10 PRINCIPAL PURPOSE OF THE PUBLIC ISSUE The purpose of th is Issue is to raise capital for expanding the Company’s operations and broaden share ownership of the Company. The funds will be employed into the Company to further accelerate the growth already achieved by FCIB. 2.11 INTEREST OF SHAREHOLDERS None of the holders of the issued shares of the Company have any special or other interest in the property or profits of the Company other than as holders of the ordinary shares in the capital of the Company. 2.12 DIVIDEND POLICY The rights in respect of capital and dividends attached to each share are and will be the same. The Company in its general meeting may declare dividends but no dividends shall exceed the amount recommended by the Directors. The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company. No dividends shall be paid otherwise than out of the profits of the Company for the year or any other undistributed profits. No unpaid dividends shall bear interest or mark-up against the Company. The dividends shall be paid within the period laid down in the Ordinance. 2.13 DIVIDEND HISTORY The Company has paid the following dividends to date: 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 HY Cash 10.0 - 7.5 10.0 - - - 15.0 15.0 - (%) (i) Bonus 234.5 15.0 10.0 - - - - 10.0 10.0 25.0 (%) (i) (i) Interim 2.14 ELIGIBILITY FOR DIVIDEND The Company in this matter will follow the provisions of Section 92 (2) of the Companies Ordinance 1984, which reads as under: "The new shares issued by a company shall rank pari-passu with the existing shares of the class to which the new shares belong in all matters, including the right to such bonus or right issue and dividend as may be declared by the Company subsequent to the date of issue of such new shares". The Company has already declared 234.5% interim bonus and 10% interim cash dividend for the financial year 2008. The prospective investors should note that the new shares being offered through this prospectus will not be eligible for the said declaration. 10
  11. 11. 2.15 DEDUCTION OF ZAKAT Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat and Ushr Ordinance, 1980. (XVIII of 1980). 2.16 WITHHOLDING TAX ON DIVIDENDS Profit distribution to the shareholders will be subject to withholding tax at source under section 150 of the Income Tax Ordinance, 2001 at the rate of 10% as specified in part I, Division III of First Schedule to the said Ordinance. 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. 2.17 EXEMPTION FROM CAPITAL GAINS Capital gains derived from the sale of listed securities are not liable to income tax pursuant to Clause (110) of Part 1 of the Second Schedule of the Income Tax Ordinance, 2001. This exemption is presently available up to the income year ending June 30, 2010. 2.18 DEFERRED TAXATION Deferred tax is accounted for using the liability method in respect of all temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that the temporary difference will reverse in the future and the taxable profits will be available against which the temporary differences can be utilized. The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the deferred tax asset to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the tax rates that have been enacted or subsequently enacted at the balance sheet date. The Company has booked no deferred tax asset/liability as of December 31, 2007. 2.19 CAPITAL VALUE TAX (“CVT”) & WITHHOLDING TAX ON SALE/PURCHASE OF SHARES Pursuant to the provision of Section 233 (A) of the Income T ax Ordinance, and Capital Value Tax (Finance Act, 1989), the following charges are applicable on sale and purchase of securities: a) 0.02% Capital Value Tax will be charged on purchase of all shares, Modaraba certificates and instruments of redeemable capital as defined in the Ordinance. b) 0.01% Withholding Tax will be charged on the sale of all shares, Modaraba certificates and instruments of redeemable capital as defined in the Ordinance. 11
  12. 12. PART 3 3. UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES 3.1 UNDERWRITING The Present Issue of 25,000,000 ordinary shares of the face value of Rs. 10 per share, offered at par has been fully underwritten as under: Names of Underwriter No. of Shares Amount (Rs.) Allied Bank Limited 5,000,000 50,000,000 Faysal Bank Limited 5,000,000 50,000,000 The Bank of Punjab 5,000,000 50,000,000 AKD Securities 4,000,000 40,000,000 Pak-Libya Holding Co. 4,000,000 40,000,000 Saudi Pak Industrial & Agricultural Co. 2,000,000 20,000,000 TOTAL 25,000,000 250,000,000 If, and to the extent, shares offered are not subscribed and paid for in cash and in full by the closing of the public subscription list, the Underwriters shall, within 15 days of being duly called by the Company to do so, subscribe and pay for, or procure subscribers to subscribe and pay for, in cash in full, those shares not subscribed, in proportion to their underwriting commitments. In the opinion of the Directors, the resources of the Underwriters are sufficient to discharge their underwriting commitments. 3.2 BUY-BACK/REPURCHASE AGREEMENT THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY -BACK/RE- PURCHASE AGREEMENT WITH THE SPONSORS OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC ISSUE. ALSO, NEITHER THE ISSUER NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY -BACK/REPURCHASE AGREEMENT WITH THE UNDERWRITER(S) OR THEIR ASSOCIATE(S). THE ISSUER AND ITS ASSOCIATE(S) SHALL NOT BUY-BACK/REPURCHASE SHARES FROM THE UNDERWRITER(S) AND THEIR ASSOCIATE(S). 3.3 UNDERWRITING COMMISSION The Underwriters have been paid an underwriting commission @ 0.90% on the amount of public issue underwritten by them. In addition, a take up commission @ 0.75% shall be paid to the Underwriters on the number of shares required to be subscribed by them by virtue of their respective underwriting commitments. 3.4 COMMISSION TO THE BANKERS TO THE ISSUE Commission at the rate of 0.25% of the amount collected on allotment in respect of successful applicants will be paid by the Company to the Bankers to this Issue for services to be rendered by them in connection with this Public Issue, plus out-of-pocket expenses, if any. No commission shall be paid to the Bankers in respect of shares taken up by the Underwriters by virtue of their respective underwriting commitments. 12
  13. 13. 3.5 BROKERAGE For this Issue, Brokerage shall be paid to the members of the Stock Exchanges at the rate of 1.0% of the value of shares actually sold through them. No brokerage shall be payable in respect of shares taken up by the Underwriters by virtue of their underwriting commitments. 3.6 EXPENSES OF THE ISSUE The expenses of this Issue are estimated not to exceed R 12,152,500/- which would be s. borne by the Company. Expense Rate Amount (Rs.) Underwriting Commission 0.90% 2,250,000 Take up Commission* 0.75% 1,875,000 Bankers to the Issue Commission* 0.25% 625,000 Brokerage to Members of the Stock Exchange* 1.00% 2,500,000 Consultant to the Issue Fees 2,500,000 Printing, Publication and notice costs 600,000 KSE Fees and Listing Charges 735,000 CDC Fees and Deposits 67,500 SECP Application and Processing Fee 50,000 Legal & Professional Fees 200,000 Balloters, Transfer Agents and Share Registrars 600,000 Miscellaneous Cost 150,000 TOTAL 12,152,500 * These amounts represent the maximum possible costs under these heads. 13
  14. 14. PART 4 4. HISTORY AND PROSPECTS 4.1 THE COMPANY The Company was incorporated on August 31, 1989 as a private limited company with the name of First Credit and Discount Corporation Limited and converted into a public limited company on November 01, 2003. The name of the Company was changed to F irst Credit and Investment Bank Limited on March 15, 2006. T he Company obtained the license to carry out Investment Finance Services as a Non-Banking Finance Company on January 15, 2004. FCIB is a public limited company, working as a Non-Banking Finance Company (NBFC) and is regulated by the SECP. It is playing a pivotal role as the prime financial institution engaged in promoting development and growth of business entities by providing both fund based and non-fund based professional assistance. The Company has been assigned a credit rating of BBB+ (Triple B Plus) – Long Term and A2 (A Two) – Short Term by JCR-VIS Credit Rating Company Limited vide its report dated October 01, 2007. 4.2 BUSINES S DESCRIPTION OF THE COMPANY FCIB offers a wide range of investment banking products and services to its customers in all sectors of the economy. A summary of revenue generation by each segment is presented in the table below: 31-Dec-07 30-Jun-07 30-Jun-06 Revenue - PkR 6 months 12 months 12 months Syndicate & Direct Financing 17,630,184 37,033,539 23,479,810 Treasury & Money Market Activities 41,846,798 40,723,861 53,016,575 Equity Investment & Trading 13,445,707 65,423,152 54,658,271 Fixed Income/ Debt Securities 18,803,713 38,638,757 33,886,684 Corporate Finance Advisory 2,616,625 6,217,417 4,472,750 Bank Guarantee and Letter of Credit 381,250 872,500 1,362,944 Total 94,724,277 188,909,226 170,877,034 4.2.1 Syndication and Direct Financing Facilities FCIB is engaged in various financing activities through syndications and on standalone basis. 4.2.2 Treasury and Money Market Activities A separate division for the treasury operations has been established which is quite active in the money market and financing other fund based activities. Presently, this division is generating fund from various sources including treasury lines, deposits schemes. 4.2.3 Equity Investment and Trading FCIB has a well diversified equity portfolio and also takes advantage of trading opportunities for earning optimum capital gains. However, the Bank follows a cautious investment strategy in order to minimize the systematic stock market risk. Additionally, FCIB is an active arbitrage and CFS market player. 14
  15. 15. 4.2.4 Fixed Income/Debt Securities FCIB is an active player of debt market development in Pakistan. The Bank has closed various large sized bond issues like WAPDA and the Civil Aviation Authority bond issues. Underwriting of listed TFC has been another revenue generating avenue for FCIB. 4.2.5 Corporate Finance Advisory/Investment Banking FCIB acts as advisor and financial agent for companies in obtaining direct bank loans, syndicated loans, issuing debt securities, export credits, leases and project finances. It also assists companies in private placements of debt and equity securities in addition to financial restructuring, mergers and acquisitions and preparation of resource mobilization plan. In corporate finance transactions FCIB provides the entire range of services from preparation of feasibility reports to raising of funds and subsequent mobilization of the same. 4.2.6 Bank Guarantees and Letters of Credit FCIB also provides repayment/performance guarantees in addition to opening and partic ipating in inland letter-of-credit on behalf of its clients. 4.2.7 Deposit Schemes (Certificate of Deposits) FCIB is most proactive in meeting its customer’s investment needs. FCIB has a team of professionals working towards meeting the challenges of a dynamic financial environment. FCIB ensures implementation of modern principles of investment management and prudent practices in meeting the optimum risk-return balance inline with the overall investment strategy. 4.3 SECTOR REVIEW The Investment Bank ing sec tor in Pakistan offers a wide range of services varying from raising money for government and corporations through Equity and Debt markets to advising on buy/sell transactions and trading securities. With the global economy multiplying rapidly, banking in general and investment banking in particular has seen the revenue bars rise manifold, doubling the FY03 levels and reaching to massive USD 84.3 Billions in revenues in FY07 globally 1. This itself speaks for the investment banking industry and reveals the growth potential in the sector. Over the last five years, Pakistan has been able to benefit from the growing global economy as the GDP growth has averaged 6.98 percent 2. In order to take full advantage of this growth, investment banks were the need of time as they are capable of handling sophisticated financial transactions carried out by the talented human resource. To generate FDI inflow and attract investors to Pakistan, Investment Banks played a very important role. As the investment banking business has huge potential to earn high profits, majority of the commercial banks have setup their own investment banking divisions, which have massive ly contributed towards the profitability of these commercial banks. With the political turmoil settling down, it is expected that the resources would be once again directed towards economic growth of the country, which would require quality investment banks. The operating margin and net margin for the sector is currently 20 percent and 16 percent respectively whic h is very attractive compared to other sectors of the 1 IFSL Research-Banking 2008( page 1). 2 Economic Survey 2007-2008. 15
  16. 16. economy 3. ROE is around 12.2% currently, which is also a positive indicator for the investment banking sector4. 4.4 FUTURE PROSPECTS & STRATEGY FCIB has made a significant progress since obtaining the Investment Finance Services license. A strengthened capital base will enable it to expand in new areas while core products are suitably established to continue making significant contribution to profitability. Further, FCIB will make investment in infra-structure and human capital to ensure long-term viability and profitability. FCIB’s focus will continue to be on profitable growth in the existing lines of business with the ultimate objective of long term shareholder value creation. The long term vision and Company’s focus on fundamental core strengths including customer satisfaction, risk management, cost control, diversification of the product and superior execution in each of the core businesses is expected to assist to grow further in the forthcoming future. Going forward the Company plans to focus on and strengthen its Corporate Finance/Investment Banking division. The management has vast experience of the field and will be instrumental in achieving desired results. The CEO of FCIB has more than 30 years of experience in the banking sector, and the CFO has more than 15 years of the same. Furthermore, three of the directors of the Company are seasoned bankers, who will help the management in running the corporate finance/investment banking division effectively. 4.5 RISK FACTORS In making the investment decision, the investor may take into consideration the following risk factors: 4.5.1 Company Specific Risk Credit Risk and Concentrations of Credit Risks Credit risk is the risk that one party will fail to discharge an obligation and cause the other party to incur a financial loss. Concentration of credit risk arises when a number of counterparties are engaged in similar business activities, or have similar economic features that would cause their ability to meet contractual obligation to be similarly affected by changes in economic, political or other conditions. Mitigant The Company controls credit risk by monitoring its credit exposure on a continuing basis through its internal credit committee. FCIB has stringent policies in place for approval of a credit facilities , the credit portfolios are reviewed on quarterly basis. As for the concentration of credit risk the Company has extended credit to diverse mix of clients/industries 3 AKD Research 4 AKD Research 16
  17. 17. Interest Rate Risk Interest rate risk is the risk of decline of earnings due to adverse movement of interest rate curve. Interest rate risk arises from the possibility that change in interest rate will affect the value of the financial instruments. Mitigant The Company manages interest rate risk by extending floating (KIBOR linked) loans. FCIB while dealing in the financial instruments negotiates attractive fixed interest rates, which reduces the interest rate price risk. Political & Economic Risk Political and Economic risk can arise from volatile geo-political environment in the country. Such instability could cause hindrance in local and especially foreign investment. Mitigant The Company is well placed to tackle such a situation due to its diversified range of products and negligible dependence on foreign investment. FCIB has proved its ability to survive political and economic instability during its history of 19 years. Business Risk Business risk is the risk of lack of demand for credit & investment opportunities and also the risk of management failure. Mitigant The Company has seen the worst of times for the investment banking industry, therefore the chances of the Company collapsing are rather bleak. As for the management set-up, the present management has been successfully running the show for more than a decade. During this period its operating performance and financial viability has been quite satisfactory. Operational Risk This is the risk that the company may not be able to deliver its services to its clients due to any unforeseen problems in its system or its failure to extract the desired results from its employees. Another aspect of operational risk pertains to any action taken by the company that does not comply with the SECP Regulat ions for Investment Finance Service. Mitigant The Company has very professional and highly experienced individuals, who have time and again shown their ability to serve client efficiently. The Company also strictly follows the rules laid down by SECP in its NBFC Rules for carrying out Investment Finance Services. The directors of FCIB meet regularly to ensure compliance with the regulatory frame-work. 17
  18. 18. License Suspension Risk This is the risk that the Investment Finance Services license granted by the Commission might be suspended or cancelled/revoked. Mitigant The Company has a history of 19 years of professional operations and has not been involved in any irregularity during this time. Furthermore, the management that has successfully managed the Company is not expected to change. These are reasonable basis to assume that FCIB will not be involved in a situation that might lead to suspension or cancellation of its Investment Finance Services license. Regulatory Risk Regulatory Risk is associated with any changes in the regulatory framework such as the introduction of new rules/schedule as per SECP Regulations and SBP discount rate policy. Mitigant This risk can be mitigated by pursuing a proactive and cautionary approach, which means credit is extended to diversified basket of clients. The SBP discount rate regime risk can effectively managed by borrowing/lending at KIBOR liked interest rates. Competition Risk Competition risk may be seen from investment banks in the form of price war resulting in reduction in spreads Mitigant The Company is earning high enough spreads on its loans to be able to sustain a decrease in the same. Infrastructure Risk Performance of the company may be affected primarily due to failure in the information technology infrastructure and inadequate risk management by the back office. Mitigant The Company is expected to mitigate the impact of infrastructure risk through employing adequate risk management measures to ensure that exposure remains within prudent limits. In addition, disaster recovery plans should help mitigate the impact of risk arising from failure of information technology infrastructure. Corporate governance measures shall also be employed to further facilitate this effort. Default Risk This is the risk of FCIB failing to settle its liabilities due to inadequate availability of liquid assets. 18
  19. 19. Mitigant This risk is mitigated by the Company with a current ratio of 1.15X as on June 30, 2007 which illustrates prudent risk management policies of the Company. 4.5.2 Instrument Specific Risk Under-Subscription Risk This is the risk that the IPO may get undersubscribed on account of lack of investor interest. Mitigant Fair value of FCIB share is estimated to be Rs. 11.8/- per share based on the following valuation techniques: 1) Price-Earnings Method. 2) Price to Book Method. § Price-Earnings Ratio (PER) Valuation The following formula is used to compute PER based price of FCIB. PER Price = Sector PER Multiple * FCIB’s Annualized HY08 EPS HY08 EPS of Rs. 0.38/- per share can be annualized to forecast full year EPS, which computes to Rs. 0.76/- per share. If we apply the sector PER multiple of 10.3X (as on June 13, 2008), the P/E based fair value calculates to Rs. 7.83/- per share. § Price to Book Value Ratio (P/B) Valuation The formula below is used to compute P/B based price for FCIB. P/B Price = Sector P/B Multiple * FCIB’s Diluted HY08 BV/Share Based on HY08 fully diluted book-value of Rs. 12.3 per share and sector P/B multiple (as on June 13, 2008) of 1.28X, FCIB’s P/B multiple based fair value computes to Rs. 15.74/- per share. Valuation Technique Price (PKR/Share) PER 7.83 P/B 15.74 Average Price/Share 11.8 The companies used for evaluation of sector multiples include: 1. Escorts Investment Bank 2. Dawood Investment Bank 3. Security Investment Bank 4. Trust Investment Bank Orix Investment Bank Pakistan and IGI Investment bank have been excluded because these are loss making investment banks. 19
  20. 20. Escorts Dawood Security Trust Average Benchmarking Sales 841,511,657 1,235,301,695 315725688 732402635 781,235,419 Capex 28,957,704 59,462,278 5148919 76547811 42,529,178 Operating Profit 141,885,051 178,476,874 97778481 125860542 136,000,237 Depreciation 18,353,613 16,161,584 58282479 12340222 26,284,475 Market Capitilisation 562,275,000 3,698,592,760 227,196,160 1,783,524,380 1,567,897,075 Debt 961,215,341 1198648044 0 249973660 602,459,261 Cash and cash equivalents 133,428,181 9403986 102460234 200947091 111,559,873 NPAT 130,095,000 206,173,480 44,581,888 128,816,600 127,416,742 No. of shares 44,100,000 56,954,000 21,433,600 58,553,000 45,260,150 Share price (June 13, 2008) 12.75 64.94 10.6 30.46 30 EPS 2.95 3.62 2.08 2.2 2.71 Equity 802,232,726 1,591,618,430 654171206 1022658460 1,017,670,206 Book value per share 18 28 31 17 24 EBITDA/Share 3.63 3.42 7.28 2.36 4 Sales/share 19.08 21.69 14.73 12.51 17 OUTPUT EV 1,390,062,160 4,887,836,818 124,735,926 1,832,550,949 2,058,796,463 EBITDA 160,238,664 194,638,458 156,060,960 138,200,764 162,284,712 EV/EBITDA 8.67 25.11 0.80 13.26 11.96 EV to Sales 1.65 3.96 0.40 2.50 2.1 PER 4.32 17.94 5.10 13.85 10.30 P/BVPS 0.70 2.32 0.35 1.74 1.28 ROE 16.2% 13.0% 6.8% 12.6% 12.1% Operaing Margin 0.17 0.14 0.31 0.17 19.87% Net Margin 0.15 0.17 0.14 0.18 15.96% Investors are being offered the shares at Rs. 10/- per share, which translates into a discount to fair value of 18%. In view of this discount, the chances of share getting s under-subscribed are minimal. Furthermore, the PER calculation ignores the income that will be generated from the IPO funds. Price Risk This is the risk that the share price of FCIB may decline as a result of negative trend at the Karachi Stock Exchange. In addition to that the risk can get amplified if the company fails to sustain its impressive growth, forcing the investors to revise their expectations of Company’s share price in an adverse manner. Mitigants This risk is mitigated by strong performance by the Company since inception. Further, the Company has also diversified its business lines by strengthening its loan book and advisory services division. Therefore, these measures will precipitate into a higher earnings potential for the Company and reinforce investor confidence in FCIB commitment to provide its shareholders with maximum val e. u Note: It is stated that all material risk factors have been disclosed and nothing has been concealed in this respect. 20
  21. 21. 4.6 CONDITIONS IMPOSED BY THE SECP ON NBFCs THROUGH SRO 1132(I)/2007 DATED NOVEMBER 21, 2007 4.6.1 Minimum Equity Requirement for NBFCs Holding Investment Finance Services License (Part I General – Rule No.3) Time Line Equity Requirement Existing Rs. 300 Million June 30, 2008 Rs. 500 Million June 30, 2009 Rs. 700 Million June 30, 2010 Rs. 1,000 Million 4.6.2 Limit on Aggregate Liabilities of an NBFC Aggregate Under Rule No.4 of Part I, Aggregate liabilities of the Company, excluding security deposits shall not exceed seven times of its equity for the first two years of its operation and ten times in the subsequent years. 4.6.3 Creation and Building up of Reserve Under Rule No.14 of Part II, the company shall create reserve fund to which following shall be credited: (a) an amount not less than 20% of its after tax profits till such time the reserve fund equals the amount of the paid up capital; and (b) thereafter a sum not less than 5% of its after tax profits 4.6.4 Maximum exposure of NBFC to a single person and Group Under Rule No. 15 of Part II, the total outstanding exposure by an NBFC to any single person shall not at any time exceed 30% of the equity of the Company (as disclosed in the latest financial statements), subject to the condition that the maximum outstanding against fund-based exposure doest not exceed 20% of the equity of an NBFC. The total outstanding exposure by an NBFC to any group shall not at exceed 50% of the equity of the Company (as disclosed in the latest financial statements), subject to the condition that the maximum outstanding against fund-based exposure doest not exceed 35% of the equity of an NBFC. 4.6.5 Limit on Clean Placements Under Rule No. 16 of Part II, the Company shall not take aggregate exposure in form of clean placements in excess of the amount of its equity, at any time. 4.6.6 Total Investment in Equities Under Rule No. 28 of Part II, the Company shall not make total investment in shares, equities or scrips in excess of 100% of its own equity or of the issued capital of that company, which ever is lower. The shares will be valued at cost of acquisition for the purpose of calculating the exposure of the Company, under this condition. The shares acquired in excess of 10% limit due to the underwriting commitments will be sold off or off loaded within a period of six months from the date of acquisition of such shares. 21
  22. 22. 4.6.7 Underwriting Commitments Under Rule No. 30 of Part II, all underwriting commitments shall be fully backed by either available funds or firm standby lines of credit or other funding arrangements. 4.6.8 Conditions for margin loans Under Rule No. 31 of Part II, the grant of margin loans to clients shall be in accordance with the following conditions: (a) the aggregate of margin loans granted by the Company shall not exceed fifty percent of its equity; (b) the margin to be maintained by the client with the Company shall not be less than 30% of the loan amount outstanding calculated as the residual value obtained after deducting the loan amount outstanding from the market value of the portfolio; (c) margin loans to a single client or an associated company or undertaking shall not exceed 10% of the equity of the Company; (d) margin loans shall be approved in accordance with a pre-defined policy in writing duly approved by the board of directors for the purpose and shall not be granted to any employee, officer, director, or a shareholder having a beneficial ownership including that of close relatives of more than ten percent in the paid -up capital of the Company whether directly or indirectly (through their close relatives, companies controlled by them, affiliates, subsidiaries, or by way of acting in convert with others). 22
  23. 23. PART 5 5. FINANCIAL INFORMATION 5.1 Auditors report under section 53(1) read with clause 28 of section 2 part I of the Second Schedule to the Companies Ordinance, 1984, for the purpose of inclusion in the prospectus of First Credit and Investment Bank Limited 06-16/1325 March 5, 2008 The Board of Directors First Credit and Investment Bank Limited 2nd floor, Sidco Avenue Centre, Stratchen Road, Karachi-74200 AUDITORS’ REPORT UNDER SECTION 53(1) READ WITH CLAUSE 28 OF SECTION 2 OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES ORDINANCE, 1984 FOR THE PURPOSE OF INCLUSION IN THE PROSPECTUS FOR ISSUE OF ORDINARY SHARES We have reviewed the audited financial statements of First Credit and Investment Bank Limited (the Company) for the five years ended June 30, 2003 to June 30, 2007 and for the half year ended December 31, 2007, in accordance with section 53(1) read with Clause 28 of Section 2 of Part 1 of the Second Schedule to the Companies Ordinance, 1984. The financial statements, for the aforementioned period, of First Credit and Investment Bank Limited (FCIBL) were audited by the following firms of Chartered Accountants: 2003 & 2004 M/s. Khalid Majid Rahman Sarfaraz Rahim Iqbal Rafiq, Chartered Accountants 2005 to 2007 M/s. M.Yousuf Adil Saleem & Co., Chartered Accountants December 2007 M/s. M.Yousuf Adil Saleem & Co., Chartered Accountants 1. Modification in Auditor’s Reports Un-modified auditor’s reports were issued for the period ended June 30, 2003 to June 30, 2007 and for the half year ended December 31, 2007. 23
  24. 24. 2. Major Developments in the last Five Years 2.1 June 30, 2004 2.1.1 First Credit and Discount Corporation Limited (FCDC) was incorporated in 1989 as a private limited company. During the year ended June 30, 2004, the Company was converted into public limited company and its authorized share capital was increased from Rs. 200,000,000 (20,000,000 shares of Rs. 10/- each) to Rs.500,000,000 (50,000,000 shares of Rs. 10/- each). 2.1.2 During the year ended June 30, 2004, the Company obtained a license to undertake investment finance services as Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Establishment and Regulations ) Rules, 2003 issued by Securities and Exchange Commission of Pakistan (SECP). Previously the Company had obtained license to undertake the business of discounting services. 2.3 June 30, 2006 2.3.1 During the year ended June 30, 2006, the Company changed its name from First Credit and Discount Corporation Limited to First Credit and Investment Bank Limited. For this purpose, the Company obtained permission for change of name from State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP) on March 15, 2006 and January 28, 2006 respectively. 2.3.2 The Company increased its issued, subscribed, and paid-up capital to Rs.103,984,100 (June 30, 2005: Rs. 94,531,000) by issuing bonus shares at the rate of 10% of outstanding shares. 2.4 June 30, 2007 2.4.1 The Company increased its issued, subscribed, and paid-up capital to Rs.119,581,700 (June 30, 2006: Rs. 103,984,100) by issuing bonus shares at the rate of 15% of outstanding shares. 2.5 Half year ended December 31, 2007 2.5.1 The Company increased its authorized share capital from Rs. 500,000,000 (50,000,000 Ordinary shares of Rs. 10/- each) to Rs. 750,000,000 (75,000,000 shares of Rs. 10/- each) and also increased its issued, subscribed and paid-up capital to Rs. 400,000,000 (June 30, 2007: Rs.119,581,700) by issuing bonus shares at the rate of 234.5% of outstanding shares. 24
  25. 25. 3. Balance sheet 3.1 In accordance with Section 53(1) read with Clause 28(1) of Section 2 of Part I of the Second Schedule to the Companies Ordinance, 1984, we report that: 3.1.1 The assets and liabilities of the Company as at December 31, 2007 and June 30, 2007 were as follows: December 31, June 30, 2007 2007 ASSETS Rupees NO N-CURRENT ASSETS Fixed Asset – tangible 10,854,005 12,478,012 Long-term investments 464,762,220 434,866,800 Long-term loans 11,093,985 11,629,401 Long-term finances 111,106,580 144,200,884 Long-term placements - 175,000.000 Long-term security deposits 1,000,000 1,005,200 598,816,790 779,180,297 CURRENT ASSETS Short-term investments 71,113,251 52,281,638 Short-term finances 812,448,535 979,150,715 Short-term placements 260,000,000 35,000,000 Current portion of long-term loans 1,545, 555 1,465,219 Current portion of long-term finances 89,938,597 149,796,925 Markup/interest accrued 15,671,737 14,959,225 Short-term prepayments 764,849 975,112 Other receivables 877,005 5,888,330 Advance taxation – NET 14,397,872 14,619,721 Cash and bank balances 24,487,686 25,186,903 1,291,245,087 1,279,323,788 TOTAL ASSETS 1,890,061,877 2,058,504,085 EQUITY & LIABILITIES Authorized Share Capital 75,000,000 (June 30, 2007: 50,000,000) Ordinary shares of Rs. 10 each 750,000,000 500,000,000 Issued, subscribed and paid-up capital 400,000,000 119,581,700 Reserves 157,167,737 434,319,352 557,167,737 553,901,052 Deficit on Revaluation of Investments - NET (7,856,665) (6,391,553) NON-CURRENT LIABILITIES Long-term loans 131,249,999 208,333,331 Deferred liability 868,018 684,593 Long-term certificates of deposits 2,600,000 - 134,718,017 209,017,924 CURRENT LIABILITIES Short-term borrowings 182,500,000 295,000,000 Short-term running finance 246,783,478 99,995,000 Current portion of long-term loans 141,666,666 129,166,667 Short-term certificates of deposits 556,900,000 706,200,000 Accrued markup 19,986,466 16,465,433 Accrued expenses and other liabilities 58,196,178 55,149,562 1,206,032,788 1,301,976,662 TOTAL EQUITY AND LIABILITIES 1,890,061,877 2,058,504,085 25
  26. 26. 4. Commitments 4.1 The following figures have been reported as commitments: December 31, June 30, 2007 2007 Rupees Rupees a) Commitment to underwrite TFCs of PEL 50,000,000 - Securitized b) Commitment to underwrite shares of Dawood Equities Ltd. 8,750,000 - c) Standby letter of credit on behalf of clients 155,000,000 155,000,000 d) Commitment to provide term finance facility - 50,000,000 e) The Company has obtained short-term running finance facility from Atlas Bank Limited in the amount of Rs. 50,000,000 carrying markup at a rate based on 3 months KIBOR plus 2.15% per annum. The loan is secured by pledge of listed shares and Term Finance Certificates. The facility is unavailed as at December 31, 2007 5. Profit and loss accounts for the last five financial years: 5.1 The profit and loss accounts of the company for each of the five years ended June 30, 2003 to June 30, 2007 and for the half year ended December 31, 2007 are set out below: Half year Year ended June 30, ended Dec 31, 2007 2007 2006 2005 2004 2003 (Rupees) INCOME Income from term finances and funds placements 59,476,982 77,757,400 76,496,385 36,884,940 5,206,047 5,145,648 Income from investments 32,249,420 104,061,909 88,544,955 56,083,343 64,178,580 61,044,628 Fees and commission 2,997,875 7,089,917 5,835,694 1,065,000 50,000 - Other income 220,320 1,376,865 241,609 - 39,347 15,140 94,944,597 190,286,091 171,118,643 94,033,283 69,473,974 66,205,416 EXPENDITURE Finance cost 54,095,022 102,521,933 86,876,795 34,966,894 6,033,812 6,329,983 Administrative and operating expenses 19,315,380 29,859,817 25,000,198 17,713,728 13,405,986 9,119,843 73,410,402 132,381,750 111,876,993 52,680,622 19,439,798 15,449,826 Unrealized loss on held-for- trading investments (1,423,786) (526,892) (9,676,100) (2,423,940) (2,047,868) 1,111,784 PROF BEFORE IT TAXATION 20,110,409 57,377,449 49,565,550 38,928,721 47,986,308 51,867,374 Taxation-net (4,885,554) (1,704,081) (2,231,584) (8,281,866) (5,720,582) (19,267,573) PROFIT FOR THE PERIOD/YEAR 15,224,855 55,673,368 47,333,966 30,646,855 42,265,726 32,599,801 EARNINGS PER SHARE- BASIC AND DILUTED (in Rupees) 0.38 1.39 1.18 0.77 1.06 0.82 Note: The comparative figure of EPS has been restated to include the effect of bonus shares issued by the bank during half year ended Decembe r 31, 2007 26
  27. 27. 6. Dividends declared 6.1 Dividends declared in the last five years are as follows Half year Year ended June 30, ended Dec 31, 2007 2007 2006 2005 2004 2003 (Rupees) The rate of: - Cash dividend 10% - 7.5% 10% - - - Stock dividend 234.5% 15% 10% - - - Note: The cash and stock dividend have been reported based on the period / year in which they were declared. Yours truly, - Sd- M. Yousuf Adil Saleem & Co. Chartered Accountants 27
  28. 28. 5.2 Share Break -up Value Certificate 06-16 / 1328 March 5, 2008 The Board of Directors First Credit and Investment Bank Limited 2nd floor, Sidco Avenue Centre, Stratchen Road, Karachi-74200 Dear Sirs, BREAK-UP VALUE PER SHARE OF FIRST CREDIT AND INVESTMENT BANK LIMITED Based on the audited financial statements for the period ended December 31, 2007, the break- up value of an Ordinary share of Rs.10 each of First Credit and Investment Bank Limited has been worked out as follows: Rupees Share capital 400,000,000 Statutory Reserve 114,394,971 Un appropriated Profit 42,772,766 Deficit on revaluation of investments – net (7,856,665) 549,311,072 Number of Ordinary shares 40,000,000 Break -up value per share 13.73 Yours truly, - Sd- M. Yousuf Adil Saleem & Co. Chartered Accountants Management Note: The break up value of the Company (Post IPO Scenario) based on the total capital of Rs. 650,000,000, considering the reserves as on December 31, 2007 is given below: Post IPO Scenario (Amount) Rupees Issued subscribed and paid-up capital 650,000,000 Statutory Reserve 114,394,971 Un-appropriated Profit 42,772,766 Deficit on Revaluation of Investments – net (7,856,665) 799,311,072 Number of Ordinary Shares 65,000,000 Break -up value per ordinary share of Rs. 10/- each 12.30 28
  29. 29. 5.3 Auditors Certificate on Issued, Subscribed, and Paid-up-capital of the Company 06-16 / 1326 March 5, 2008 The Board of Directors First Credit and Investment Bank Limited 2nd floor, Sidco Avenue Centre, Stratchen Road, Karachi-74200 Pakistan Dear Sirs, AUDITORS’ CERTIFICATE ON ISSUED, SUBSCRIBED AND PAID-UP CAPITAL OF THE COMPANY We confirm that, as per the books and records of First Credit and Investment Bank, the issued, subscribed and paid-up capital as at December 31, 2007 and June 30, 2007 were as follows: December June 30, December June 30, 31, 2007 2007 31, 2007 2007 No. of shares Ordinary shares of Rs. 10 each 3,500,000 3,500,000 issued as fully paid in cash 35,000,000 35,000,000 Ordinary shares of Rs. 10 each 36,500,000 8,458,170 issued as fully paid bonus shares 365,000,000 84,581,700 40,000,000 11,958,170 400,000,000 119,581,700 Yours truly, -Sd- _______________________ M. Yousuf Adil Saleem & Co. Chartered Accountants 29
  30. 30. PART 6 6 MANAGEMENT 6.1 BOARD OF DIRECTORS OF THE COMPANY Names of Directors / Chief Designation Nomination as director on other Executive companies Mr. Shahid Anwar Khan Director National Bank Modaraba Management Co. House # 204, Plot N-142 W/2, Ltd. Block-2, ASMA Homes, NBP Exchange Co. Ltd. P.E.C.H.S, Karachi National Fullerton Assets Management Co. National Agriculture Ltd. NIC # 42201-9516876-1 Pakistan Refinery Ltd. Ch. Abdul Qadeer Director National Transmission & Despatch Co. House # 31, Street 52, Sector F- (NTDC) 11/3 Islamabad. NIC # 61101-1771737-7 Dr. Asif A. Brohi Director National Construction Ltd. Khyaban-e-Momin Phase V, HUBCO House # 38, Street 7, Karachi. NBP Modaraba Management Co. NBP Exchange Co. Ltd. NIC # 42301-3229653-7 Close Joint Stock Subsidiary, Almaty, Kazakhstan National Agriculture Ltd. Mr. Najib Tariq Director Central Power Generation Co. Ltd Nelum House # 3 Street VI Shair Shah Jhelum Hydro Power. Colony Achera Lahore. NIC # 35200-1438678-9 Mr. Wajahat A. Baqai Director National Bank Modaraba Management Co. Ltd. 29-A/II/I Golf Course Road-2 Dewan Cement Ltd. Phase VI, D.H.A., Karachi. Pioneer Cement Ltd. Jamshoro Joint Venture Ltd. NIC # 42301-4699101-1 Pak Electron Ltd. Galadari Cement Ltd. SG Fibre Ltd. Asian Petroleum Ltd. UCH Power Ltd. Mr. Hamad Rasool Director WAPDA First Sukuk Company Ltd. House # 58, Mian Park Walton WAPDA Second Sukuk Company Ltd. Road, Lahore. NIC # 35201-8796737-9 Mr. Mohammad Imran Malik Chief Nil 12-C, “Q” Street, Phase-VI, Executive D.H.A., Karachi. NIC # 42301-4414587-5 6.2 OVER DUE LOANS There are no overdue loans (local or foreign currency) on the Company or its Directors. 30
  31. 31. 6.3 MANAGEMENT PROFILE Names Designation Year of Experience Mr. Shahid Anwar Khan Chairman 25 years Ch. Abdul Qadeer Director 35 years Dr. Asif A. Brohi Director 24 years Mr. Najib Tariq Director 27 years Mr. Wajahat A. Baqai Director 20 years Mr. Hammad Rasool Director 16 years Mr. Mohammad Imran Malik Chief Executive Officer 30 years Mr. Muhammad Mohsin Ali Company Secretary 18 years 6.3.1 Mr. Shahid Anwar Khan, Chairman Mr. Shahid Anwar Khan is the Chairman, Board of Directors, First Credit and Investment Bank Ltd. He is MBA in Finance from USA, DAIBP and BE in Textile. Mr. Shahid has long experience in banking field. He joined National Bank of Pakistan in 1983, where he worked on various senior assignments in Pakistan and Hong Kong. Presently, he is SEVP and Group Chief – Credit Management Group. He has attended various courses and workshops within Pakistan as well as abroad. Being a senior member of management, he is part of many important management committees of National bank of Pakistan including Credit Committee, Operation Committee, ALCO, etc. Besides First Credit and Investment Bank Ltd, he is director on the Board a number of companies including M/s. Pakistan Refinery Ltd, National Bank Modaraba Management Co. Ltd., NBP Exchange Company Ltd, National Fullerton Assets management Co. and National Agriculture Ltd. 6.3.2 Ch. Abdul Qadeer, Director Ch. Abdul Qadeer is a Fellow Member of Chartered Management Accountants (UK) and Certified Member of Business Administration (USA). Ch. Abdul Qadeer is an experienced finance professional having international exposure and experience of work in Pakistan, USA, UK, UAE, Oman, Qatar, Nigeria and Montenegro- Former Yugoslavia, on donor funded projects such as USAID, World Bank and UNDP. Assigned as Financial Advisor to Privatization Commission (PC), National Electric Power Regulatory Authority (NEPRA) and Water and Power Development Authority, Financial Control Advisor of Bearing Point (KPMG) at a US AID-Economic Reform Project for Montenegro (Yu). Also worked in the capacity of Finance Controller in the private sector with multi-natio nal companies such as Hawker Siddeley Power engineering Ltd, UK, the Hub Power Company Ltd (HUBCO) and Southern Electric Power Co. Ltd (SEPCOL). Presently, he is serving Water and Power Development Authority (WAPDA) as Member Finance. 6.3.3 Dr. Asif A. Brohi, Director An MBA in Strategic Management from Northrop University, California and Ph.D. in Public Administration. Dr. Asif A. Brohi joined National Bank of Pakistan as an Assistant Vice President in 1984. Before joining the Bank, he was a full time faculty member at Northrop as Assistant Professor of management. Since then, he has held many important, independent and diversified assignments such as Head of Information Technology, Strategic Planning & 31
  32. 32. Economic Research Group, Management Development, Personnel Administration, and has managed field operations of the bank’s largest Region. He is currently the Head of Bank’s Operations Group. Being a senior member of management, he is part of many Committees of the Bank and nominee Director of a number of companies including M/s. National Construction Co., First Credit and Investment Bank Ltd (FCIB), HUBCO (Substitute Director), NBP Modaraba Management Co. Ltd., NBP Exchange Company Ltd, Close Joint Stock Subsidiary, Almaty, Kazakhstan. Besides, he is also Chairman, National Agriculture Ltd. 6.3.4 Mr. Najib Tariq, Director Mr. Najib Tariq is a finance professional with over 27 years experience including 18 years at Water and Power Development Authority (WAPDA). Prior to that he worked on various as signments including World Bank with Private and Public sector. He has Master’s Degrees in Commerce and Business Administration. At WAPDA, he is working as Director General Finance. Mr. Najib has attended various training courses and workshops within Pakistan as well as abroad. He attended courses on Housing Projects on shelter for shelterless conducted by World Bank, World Bank assisted Seminars on procedure for reimbursement and disbursement and procurement, Senior Management Training Course, WAPDA, Computer Skills from Institute of Electrical Engineers of Pakistan, Cabinet Secretariat and management Services-S&GAD, Islamabad, Management Development Programme- PIM, LUMS and Seminar and Exhibition on awareness of Islamic Banking and Finance. He is also director of Central Pow er Generation Co. Ltd (GENCO-II) and Neelum Jhelum Hydro-Power Company. 6.3.5 Mr. Wajahat A. Baqai, Director Mr. Wajahat A. Baqai is a seasoned banker with over 20 years of banking and credit experience at National Bank of Pakistan. He has Master’s Degree in Management Science from USA. At NBP, he is Senior Vice President and Head of Credit Management Group North Wing comprising 21 domestic and 3 overseas regional offices. He has strong relationship with banking and corporate sector. He has attended various courses and workshops within Pakistan as well as abroad. He attended courses on Project Finance conducted by Asian Development Bank, Manila, Credit Risk Management conducted by ADFIMI, Lebanon, Intensive Credit Program by Fitch Training, London to name a few. Besides FCIBL, he is on the Board of several well known companies such as Pioneer Cement Ltd, Asian Petroleum Ltd, Pak Elektron Ltd, Galadari Cement Ltd, Dewan Cement Ltd, Uch Power, JJVL, etc. 6.3.6 Mr. Hamad Rasool, Director Mr. Hamad Rasool is a professional accountant having more than 16 years of Public and Private sector experience in the field of accounts, finance, economics, system development, money and capital markets, Islamic finance and investments, mergers and restructuring. He is Fellow member of Institute of Cost and management Accountants of Pakistan (ICMAP) and Pakistan Institute of Public Finance Accountants (PIPFA). Besides being a Member of Management Association of Pakistan (MAP) and Institute of Corporate Secretaries of Pakistan (ICSP). Presently, he is currently serving WAPDA as Director Finance. 32
  33. 33. Mr. Hamad has conducted over fifty trainings on workshops and seminars as Director Research and Trainings of ALHUDA-CIBE (an institution for promotion, training and awareness in Islamic Banking). He has also conducted various courses on Accounting and Finance at National Institute of Public Administration (NIPA), Lahore and Pakistan Administrative Staff College (PASC). He has been visiting faculty member at Institute of Cost and Management Accountants of Pakistan (ICMAP), Institute of Bankers Pakistan(IBP), Audit and Accounts Training Institute, Lahore, Pakistan Institute of Public Finance Accountants. Mr. Hamad has organized various conference/ seminars convened by ICMAP, ICAP and MAP on various national, economic and financial issues. 6.3.7 Mr. Mohammad Imran Malik, Chief Executive Officer Mr. Malik is the Chief Executive and President of FCIB. He has over 30 years experience in the areas of Investment Banking, Development Banking and Commercial Banking. He has done his MBA from IBA Karachi. He is an associate of Institute of Bankers in Pakistan (DAIBP). He started his banking career with Habib Bank Limited where he worked in the areas of commercial banking and branch management. He then moved to NDFC where he held key positions including in the areas of banking, treasury, financing. Under his stewardship, FCIB, with a small team of officers, emerged as one of the most viable and financially sound financial institution. He has been instrumental in development of secondary market of debt instruments in the country. He has experience in dealing with regional and international financial institutions like World Bank and South Asian Development Fund (SADF) amongst others. He represented Pakistan on various regional forums of SAARC as GoP delegate. Mr. Malik has attended a number of local and foreign professional training programs, which include courses conducted by Harvard University, Euro-money Institute of Finance, and the Association of DFIs in Asia and the Pacific (ADFIAP), etc. He has also delivered lectures on various areas of Banking and Finance to professionals and MBA students as visiting faculty. 6.3.8 Mr. Muhammad Mohsin Ali, Chief Financial Officer/Company Secretary Mr. Ali is the Chief Financial Officer & Company Secretary of FCIB. He has over 18 years of experience in accounts, finance, costing, financing, investment banking, fund management, risk analysis and interpretation of financial statements. He has in-depth knowledge of corporate and income tax laws, Prudential Regulations and NBFC Rules. He has graduated from Karachi University and is a fellow member of Institute of Cost & Management Accountants of Pakistan, Karachi. He has attended various seminars and courses relating to information technology, capital markets, foreign exchange, financing, corporate governance and corporate and income tax laws. He joined FCIB in 1995. 6.4 NUMBER OF DIRECTORS Pursuant to Section 17 4 of the Ordinance, the number of directors of the Company shall not be less than seven. At present, the Company’s Board of Directors consists of seven directors including the chief executive. 6.5 QUALIFICATION OF DIRECTORS The qualification of a director of the Company shall from time to time be determined by the Directors. A Director who is required to hold qualification to act as a Director before acquiring his qualification but shall in any case acquire the qualification within two months from appointment. 33
  34. 34. 6.6 REMUNERATION OF THE DIRECTORS Pursuant to the Articles of Association of the Company, remuneration of Director for performing extra services, including holding of the office of the Chairman, and the remuneration to be paid to any Director for attending the Meeting of the Directors or a committee of Directors shall from time to time be determined by the Board of Directors in accordance with the law. 6.7 BENEFITS TO THE PROMOTERS AND OFFICERS No amount of benefits has been paid or given during the last year or is intended to be paid or given to any promoter or to any officer of the Company other than as remuneration for services rendered as whole-time executive of the Company and the remuneration for services shall be borne by the Company. 6.8 INTEREST OF DIRECTORS The directors may be deemed to be interested to the extent of fees payable to them for attending Board meetings. The Directors performing whole time service to the Company may also be deemed interested in the remuneration payable to them from the Company. The Directors may also be deemed to be interested, to the extent of any shares held by each of them in the Company, the dividends to be declared on their shareholding in the Company. 6.9 INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY None of the Directors of the Company have or had any interest in any property acquired by the Company. 6.10 ELECTION OF DIRECTORS The Directors shall subject to the provision of Section 178 of the Ordinance fix the number of directors and the Directors shall be elected by the members of the Company in General Meeting in th e following manner, namely: (a) each member shall have such number of votes as is equal to the product of the number of voting shares held by him and the number of Directors to be elected, (b) a member may give all his votes to a single candidate or divide them between more than one of the candidates in such manner as he may choose; and (c) the candidate who gets the highest number of votes shall be declared elected as Director and then the candidate who gets the next highest number shall be declared and so on until the total number of Directors to be elected has been so elected. The present Directors of the Company were elected on 23.04.2008 for the period of three (3) years. 6.11 VOTING RIGHTS On a show of hands, every member present in person shall have one vote except for election of Directors in which case the provisions of Section 178 of the Ordinance shall apply. On a poll, every member shall have voting rights as laid down in Section 160 of the Ordinance. 34
  35. 35. 6.12 AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE Audit Committee of the Board has been formed to comply with the Code of Corporate Governance which comprises of the following three non-executives : § Mr. Najib Tariq § Mr. Wajahat A. Baqai § Mr. Hammad Rasool 6.13 INTERNAL AUDIT The board has setup an effective internal audit function managed by suitable qualified and experienced personnel who are conversant with the policies and procedures of the Company and are involved in the internal audit function on a full time basis. 6.14 BORROWING POWERS Subject to the provisions of the Ordinance the Board of Directors may from time to time borrow any money for the purposes of the Company from its members or from any other person, firms, companies, corporations, Government Agencies, institutions or the Directors may themselves lend moneys to the Company. 6.15 POWERS OF DIRECTORS The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company, and may exercise all such powers of the Company as are not by the Ordinance or any statutory modification thereof for time being in force, or by the Articles of Association, required to be exercised by the Company in General Meeting. 6.16 INDEMNITY Section 116 of the Company’s Article of Association reads as follows: “Every Director, Managing Director, Chairman, Manager or Officer of the company or any person (whether an officer of the company or not) employed by the company as Auditor or Advisor, shall be indemnified out of the funds of the company against any liability incurred by him as such Director, Managing Director, Chairmen, Manager , Officer, Auditor, or Advisor in defending any proceedings, whether civil or c riminal, in which judgment is given in connection with any application of a provision of the Ordinance in which relief is granted to him by court.” 6.17 INVESTMENTS IN ASSOCIATED COMPANIES The Company has not made any investment in any of associated companies nor has any resolution been passed for investment in associated companies under Section 208 of the Ordinance. 6.18 INVESTMENT IN SUBSIDIARIES The Company has not sponsored nor acquired any subsidiaries nor has any resolution been passed for sponsoring or acquiring any subsidiaries under Section 208 of the Ordinance. 35
  36. 36. PART 7 7 MISCELLANEOUS INFORMATION 7.1 REGISTERED OFFICE/ HEAD OFFICE First Credit and Investment Bank Limited 2nd Floor, SIDCO Avenue Center, Stratchen Road, Karachi. Phone: (021) - 5658750 Fax: (021) - 5658752 7.2 BANKERS TO THE ISSUE § Askari Bank Limited § Arif Habib Bank Limited § Bank Alfalah Limited § Faysal Bank Limited § Habib Metropolitan Bank Limited § MCB Bank Limited § Soneri Bank Limited § The Bank of Punjab § The Bank of Khyber § United Bank Limited 7.3 BANKERS TO THE COMPANY § Allied Bank Limited § Askari Commercial Bank Limited § First Women Bank Limited § MCB Bank Limited § National Bank of Pakistan § United Bank Limited 7.4 AUDITORS OF THE COMPANY M. Yousuf Adil Saleem & Co. Chartered Accountant. 7.5 LEGAL ADVISOR OF THE COMPANY Zahid Hamid-Advocate. 7.6 LEGAL ADVISOR TO THE ISSUE Mohsin Tayebaly & Co. 2nd Floor Dine Centre, BC -4, Block 9, Kehkashan, Clifton, Karachi. Phone: (021) - 5375658-59 Fax: (021) - 58770240 36
  37. 37. 7.7 ADVISOR & ARRANGER TO THE ISSUE AKD Securities Limited 6th Floor, Continental Trade Centre, Block 8, Clifton, Karachi. Phone: (021) - 111-253-253 Fax: (021) - 5867992 www.akdsecurities.net 7.8 COMPUTER BALLOTER AND SHARES REGISTRAR THK Associates (Pvt.) Limited Ground Floor, State Life Building – 3, Dr. Ziauddin Road, Karachi. Phone: (021) – 111-000-322 Fax: (021) – 5655595 7.9 MATERIAL CONTRACTS / DOCUMENTS 7.9.1 Underwriting Agreements Names of Underwriter No. of Amount Date Shares (Rs.) Allied Bank Limited 5,000,000 50,000,000 Feb 01, 2008 The Bank of Punjab 5,000,000 50,000,000 Feb 01, 2008 AKD Securities Limited 4,000,000 40,000,000 Feb 01, 2008 Faysal Bank Limited 5,000,000 50,000,000 Feb 01, 2008 Saudi Pak Industrial & Agricultural 2,000,000 20,000,000 Feb 01, 2008 Investment Company (Pvt.) Limited Pak-Libya Holding Co. (Pvt.) Limited 4,000,000 40,000,000 Feb 14, 2008 TOTAL 25,000,000 250,000,000 7.9.2 Due-diligence Reports Names of Institution Allied Bank Limited The Bank of Punjab AKD Securities Limited Faysal Bank Limited Saudi Pak Industrial & Agricultural Investment Co (Pvt.) Ltd 7.9.3 Term Finance Agreements Term finance agreements have been executed between the Company and: Institution Date of Disbursement Amount Tenor (Rs.) Allied Bank Limited June 30, 2007 200,000,000 3 Years Allied Bank Limited December 01, 2005 200,000,000 3 Years National Bank of Pakistan May 11, 2005 250,000,000 5 Years 37

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