Gatron (Industries) : Right Shares (Draft Offer Document)

Offer Document | Gatron (Industries) Limited

ADVICE FOR INVESTORS

INVESTMENT IN EQUITY SECURITIES AND EQUITY RELATED SECURITIES INVOLVES A CERTAIN DEGREE OF RISKS. THE INVESTORS ARE REQUIRED TO READ THE RIGHTS SHARE OFFER DOCUMENT (HEREIN REFERRED TO AS 'OFFER DOCUMENT') AND RISK FACTORS CAREFULLY, ASSESS THEIR OWN FINANCIAL CONDITIONS AND RISK-TAKING ABILITY BEFORE MAKING THEIR INVESTMENT DECISIONS IN THIS OFFERING.

RIGHT ENTITLEMENT LETTER IS TRADABLE ON PSX, RISKS AND REWARDS ARISING OUT OF IT SHALL BE SOLE LIABILITY OF

THE INVESTORS.

THIS DOCUMENT IS ISSUED FOR THE PURPOSE OF PROVIDING INFORMATION TO SHAREHOLDERS OF THE COMPANY AND TO THE PUBLIC IN GENERAL IN RELATION TO THE RIGHTS ISSUE OF PKR 5,600,000,000/-, CONSISTING OF 32,000,000 NEW ORDINARY SHARES BY GATRON (INDUSTRIES) LIMITED. A COPY OF THIS DOCUMENT HAS BEEN REGISTERED WITH THE SECURITIES EXCHANGE.

THIS OFFER DOCUMENT IS VALID TILL ___________________, 2024.

Gatron (Industries) Limited

Right Share - Offer Document

Date and place of incorporation: May 28, 1980, Pakistan, Incorporation number: 0007766.

Registered Office: Room No.32, First Floor, Ahmed Complex, Jinnah Road, Quetta - Balochistan.

Corporate Office: 11th Floor, G&T Tower, #18 Beaumont Road, Civil Lines-10,Karachi-Sindh

Contact No: [phone],Website: www.gatron.com , Contact Person: Mr. Shameer Haroon, Phone: +92

21 35659518, Email: [e-mail](To contact during business hours i.e. from Monday to Friday from 9:00 am to 5.15 pm and Saturday, 9:00 am to 2:00 pm.)

Issue Size: The Right Issue consists of 32,000,000 Right Shares (i.e. 41.7052% of the existing paid-up capital of Gatron (Industries) Limited) having a face value of PKR 10/- each, at an offer price of PKR 175/- each (i.e. including a premium of PKR 165/- per share). The total amount to be raised through the Right Issue is PKR 5,600,000,000/-

Date of Placing Offer Document on PSX for Public Comments: N/A (Public comments were not sought)

Date of Final Offer Letter: [●], 2024

Date of Book Closure: From [●], 2024 to [●], 2024

Subscription Amount Payment Dates: From [●], 2024 to [●], 2024

Trading Dates for Letter of Rights: From [●], 2024 to [●], 2024

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Offer Document | Gatron (Industries) Limited

Details of the relevant contact persons:

Name of the	Designation	Contact	Office Address Email ID
Person	Number

		Divisional		11th Floor, G&T	shameer@gatr
Authorized	Mr. Shameer	Head (Tax,	+92 21-	Tower, #18	onova.com
Beaumont Road,
Officer of the	Haroon	Legal and	35659518
Civil Lines-10,
Issuer		Corporate
		Karachi
		Affairs)

Underwriters

				Arif Habib
				Limited | 2/F,	taha.siddiqui@
Arif Habib	Mr. Taha	Chief Financial	+92 21	Arif Habib
arifhabibltd.co
Limited	Siddiqui	Officer	111245111	Centre | 23,
m
				M.T. Khan
				Road, Karachi
Ismail				C 94, KDA
			Scheme #1
Iqbal		Chief
Mr. Ahfaz	+92 21	KDA Scheme 1,	ahfaz.mustafa@i
Securities	Executive
Mustafa	34302172	Karachi,	smailiqbal.com
(Private)	Officer
		Karachi City,
Limited
			Sindh
Banker to the Issue
Habib	Syed	Team Leader	+92 21	Transaction	mairaj.hassan@
Mairaj	Sales (South)	32644571	Banking,	habibmetro.co
Metropolitan
Hassan			Mezzanine	m
Bank Limited	Transactio
		Floor, I.I.
		n Banking
			Chundrigar
				Road, Karachi
Meezan Bank	Mirza Ayub Baig	Senior Vice	[phone]	Meezan	ayub.baig@meeza
	President		House, C-25,	nbank.com
Limited
	Capital Markets /		Estate Avenue,
		SBP Reporting		SITE, Karachi
		Unit

Website: This offer letter can be downloaded from https://www.gatron.comand https://www.psx.com.pk

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Offer Document | Gatron (Industries) Limited

UNDERTAKING ON RS.100/- STAMP PAPER

UNDERTAKING BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

WE, SHABBIR DIWAN, THE CHIEF EXECUTIVE OFFICER AND MUSTUFA BILWANI, THE CHIEF FINANCIAL OFFICER OF GATRON (INDUSTRIES) LIMTIED CERTIFY THAT;

1. THE OFFER DOCUMENT CONTAINS ALL INFORMATION WITH REGARD TO THE ISSUER 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 OFFER DOCUMENT IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF;
3. THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD;
4. THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THE OFFER DOCUMENT AS A WHOLE OR ANY PART THEREOF MISLEADING; AND
5. ALL REQUIREMENTS OF THE COMPANIES ACT, 2017, THE COMPANIES (FURTHER ISSUE OF SHARES) REGULATIONS, 2020, THE CENTRAL DEPOSITORY COMPANY AND THAT OF PSX PERTAINING TO THE RIGHT ISSUE HAVE BEEN FULFILLED.
   FOR AND ON BEHALF OF GATRON (INDUSTRIES) LIMITED

SHABBIR DIWAN	MUSTUFA BILWANI
Chief Executive Officer	Chief Financial Officer

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Offer Document | Gatron (Industries) Limited

UNDERTAKING ON RS.100/- STAMP PAPER

UNDERTAKING BY THE BOARD OF DIRECTORS (BOARD)

WE, THE BOARD OF DIRECTORS OF GATRON (INDUSTRIES) LIMITED HEREBY CONFIRM THAT:

1. ALL MATERIAL INFORMATION AS REQUIRED UNDER THE COMPANIES ACT, 2017, THE SECURITIES ACT, 2015, COMPANIES (FURTHER ISSUE OF SHARES) REGULATIONS, 2020, THE LISTING OF COMPANIES AND SECURITIES REGULATIONS OF THE PAKISTAN STOCK EXCHANGE LIMITED HAS BEEN DISCLOSED IN THIS OFFER DOCUMENT AND THAT WHATEVER IS STATED IN OFFER DOCUMENT AND IN THE SUPPORTING DOCUMENTS IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF AND THAT NOTHING HAS BEEN CONCEALED.
2. WE UNDERTAKE THAT ALL MATERIAL INFORMATION, INCLUDING RISKS THAT WOULD ENABLE THE INVESTOR TO MAKE AN INFORMED DECISION, HAS BEEN DISCLOSED IN THE OFFER DOCUMENT.
3. RIGHT ISSUE IS THE DISCRETION OF BOARD OF THE ISSUER AND IT NEITHER REQUIRE APPROVAL OF THE COMMISSION NOR THE SECURITIES EXCHANGE.
4. THE DRAFT OFFER DOCUMENT WAS PLACED ON THE WEBSITE OF THE SECURITIES EXCHANGE AND THE ISSUER ON ________ (I.E. WITHIN 45 DAYS OF THE DATE OF ANNOUNCEMENT BY THE BOARD).
5. COMMENTS FROM SECURITIES EXCHANGE AND THE SECP WERE RECEIVED ON _______________
6. THE BOARD HAS ENSURED THAT DRAFT OFFER DOCUMENT IS UPDATED IN LIGHT OF THE SECURITIES EXCHANGE AND SECP COMMENTS.
7. THE FINAL OFFER DOCUMENT WAS PLACED ON SECURITIES EXCHANGE WEBSITE ON ____________
   ALONG WITH THE BOOK CLOSURE DATES AND RELEVANT RIGHT ISSUANCE TIMELINES. (I.E. WITHIN 20 WORKING DAYS FROM THE DATE OF RECEIPT OF COMMENTS OF PSX & SECP).
8. THE STATUTORY AUDITOR M/s KRESTON HYDER BHIMJI & CO., CHARTERED ACCOUNTANTS, WILL MONITOR THE PROCEED UTILIZATION IF THE ISSUANCE PROCEEDS EXCEED RS.750 MILLION OR 50% OF THE PAID UP CAPITAL OF THE LISTED COMPANY ISSUING RIGHT SHARES, WHICHEVER IS HIGHER.

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Offer Document | Gatron (Industries) Limited

ABDUL RAZAK DIWAN

SHABBIR DIWAN

ZAKARIA BILWANI

MUHAMMAD IQBAL BILWANI

SAQIB HAROON BILWANI

MUHAMMAD TAUFIQ BILWANI

MUHAMMAD ALTAF BILWANI

TALAT IQBAL

MUHAMMAD TUFAIL IQBAL

HUMA RAFIQUE

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Offer Document | Gatron (Industries) Limited

DISCLAIMER:

1. In line with Companies Act, 2017 and Companies (Further Issue of Shares) Regulations, 2020, this document does not require approval of the Securities Exchange and the Securities Exchange Commission of Pakistan (SECP).

1. The Securities Exchange and the SECP disclaims:
2. 1. Any liability whatsoever for any loss however 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.
   2. Any responsibility for the financial soundness of the Company and any of its schemes/projects stated herein or for the correctness of any of the statements made or opinions expressed with regards to them by the Company in this Offer document.
   3. Any responsibility w.r.t quality of the issue.

1. It is clarified that information in this Offer document should not be construed as advice on any particular matter by the SECP and the Securities Exchange and must not be treated as a substitute for specific advice.

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Offer Document | Gatron (Industries) Limited

GLOSSARY OF TECHNICAL TERMS AND DEFINITIONS

	Any bank with whom an account is opened and maintained by the Issuer
	for keeping the issue amount.
Banker to the Issue
	Habib Metropolitan Bank Limited and Meezan Bank Limited have been
	appointed, in this Right Issue, as the Bankers to the Issue.
CDC	Central Depository Company of Pakistan Limited
CDS	Central Depository System
Company / Gatron /	Gatron (Industries) Limited
Issuer
Companies Act	Companies Act, 2017
Commission / SECP	Securities & Exchange Commission of Pakistan
Ordinary Shares	Ordinary Shares of the Company having a face value of PKR10/- each.
PSX	Pakistan Stock Exchange Limited
PKR / Pak Rupees	Pakistani Rupees
Regulations	The Companies (Further Issue of Capital) Regulations, 2020
Right Issue / Issue	32,000,000 Right Shares representing 41.7052% of total paid-up capital of
the Company.
Right Shares	Shares offered by a company to its members strictly in proportion to the
	shares already held in respective kinds and classes.
SHC	The Honourable High Court of Sindh at Karachi
	A person who has contributed initial capital in the issuing company or has
	the right to appoint majority of the directors on the board of the issuing
Sponsors	company directly or indirectly;
	A person who replaces the person referred to above; and
	A person or group of persons who has control of the issuing company
	whether directly or indirectly.
USD	United States Dollar
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Offer Document | Gatron (Industries) Limited

Table of Contents
1	SALIENT FEATURES OF THE RIGHT ISSUE	9
	1.1. BRIEF TERMS OF THE RIGHT ISSUE	9
	1.2. PRINCIPAL PURPOSE OF THE ISSUE AND FUNDING ARRANGEMENTS:	11
	1.3. FINANCIAL EFFECTS ARISING FROM RIGHT ISSUE	12
	1.4. TOTAL EXPENSES TO THE ISSUE	12
	1.5.	DETAILS OF UNDERWRITERS	13
	1.6. COMMITMENTS FROM SUBSTANTIAL SHAREHOLDERS/DIRECTORS:	13
	1.7.	FRACTIONAL SHARES	14
	1.8.	IMPORTANT DATES	14
2	SUBSCRIPTION AMOUNT PAYMENT PROCEDURE	15
3	PROFILES OF THE BOARD OF DIRECTORS OF THE COMPANY AND SPONSORS	15
	3.1. PROFILE OF THE BOARD OF DIRECTORS OF THE COMPANY	16
	3.2. DIRECTORS DIRECTORSHIP IN OTHER COMPANIES	17
	3.3. PROFILE OF SPONSOR OF THE COMPANY	19
4	FINANCIAL DETAILS OF THE ISSUER	20
	4.1. FINANCIAL HIGHLIGHTS OF THE ISSUER FOR THE LAST THREE YEARS	20

4.2. FINANCIAL HIGHLIGHTS OF PRECEDING ONE YEAR OF CONSOLIDATED FINANCIAL

STATEMENTS………	20
4.3. DETAILS OF ISSUE OF CAPITAL IN PREVIOUS FIVE YEARS	21

4.4. AVERAGE MARKET PRICE OF THE SHARE OF THE ISSUER DURING THE LAST SIX MONTHS

…………………………………………………………………………………………………………………………………………………21

	4.5. SHARE CAPITAL AND RELATED MATTERS	21
5	RISK FACTORS	23
	5.1. RISK ASSOCIATED WITH THE RIGHT ISSUE	23
	5.2. RISK ASSOCIATED WITH ISSUER	23
6	LEGAL PROCEEDINGS	26
	6.1. OUTSTANDING LEGAL PROCEEDINGS OF THE COMPANY	26

6.2.	ACTION TAKEN BY THE SECURITIES EXCHANGE AGAINST THE ISSUER OR ASSOCIATED
	LISTED COMPANIES OF THE ISSUER DURING THE LAST THREE YEARS DUE TO
	NONCOMPLIANCE OF THE ITS REGULATIONS	26
6.3.	ANY OUTSTANDING LEGAL PROCEEDING OTHER THAN THE NORMAL COURSE OF
	BUSINESS INVOLVING THE ISSUER, ITS SPONSORS, SUBSTANTIAL SHAREHOLDERS,
	DIRECTORS AND ASSOCIATED COMPANIES, OVER WHICH THE ISSUER HAS CONTROL,
	THAT COULD HAVE MATERIAL IMPACT ON THE ISSUE	26
7 SIGNATORIES TO THE OFFER DOCUMENT	27
8 Annexure A…	28
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Offer Document | Gatron (Industries) Limited

1 SALIENT FEATURES OF THE RIGHT ISSUE

1.1. BRIEF TERMS OF THE RIGHT ISSUE

a) Description of Issue:	Issuance of Right Shares to existing shareholders
b) Size of the proposed Issue:	The Company shall issue 32,000,000 (Thirty Two Million)
	ordinary shares at a price of PKR 175/- (Pak Rupees One
	Hundred Seventy Five) per share, aggregating to PKR
	5,600,000,000/- (Pak Rupees Five Billion Six Hundred
	Million).

c)	Face Value of the share:	PKR 10/-
d)	Basis of determination of price of	The Right Issue is being carried out at a premium.
theright issue:	Considering the current market price of the Company's
		shares, the premium charged over the par value is
		justified and is in line with market practice, in fact the
		same constitutes an approximate 26.47% discount on the
		last 3 (three) months (from the date of the decision of the
		Board to carry out the Issue) average trading share price1.
	Proportion of new issue to existing	41.7052 right shares for every 100 ordinary shares held
e)	shares with any condition	i.e. 41.7052% of the existing paid-up capital of the
	applicablethereto:	company.
	Date of meeting of Board of
f)	Directors(BoD) wherein the right	Thursday, December 14, 2023
	issue was
	approved:

1. Mr. Abdul Razak Diwan, Chairman
2. Mr. Shabbir Diwan, Chief Executive Officer
3. Mr. Zakaria Bilwani, Non-Executive Director

g)	Name of directors attending the	4.	Mr. Usman Habib Bilwani, Non-Executive Director
BoardMeeting:
	5.	Mr. Muhammad Iqbal Bilwani, Non-Executive Director

1. Mr. Saqib Haroon Bilwani, Non-Executive Director
2. Mr. Muhammad Taufiq Bilwani, Executive Director
3. Mr. Muhammad Waseem, Independent Director
4. Mr. Talat Iqbal, Independent Director

1 Last three months' average share price is PKR 224.4122 per share (From September 1, 2023 to November 30, 2023)

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