Image Pakistan : Final Right Offer Document

Offer Document | Image Pakistan 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 987,298,500/-, CONSISTING OF 98,729,850 NEW ORDINARY SHARES BY IMAGE PAKISTAN LIMITED. A COPY OF THIS DOCUMENT HAS BEEN REGISTERED WITH THE SECURITIES EXCHANGE.

THIS OFFER DOCUMENT IS VALID TILL JUNE 23, 2024.

Image Pakistan Limited

Right Share - Offer Document

Date and place of incorporation: November 14, 1990, Pakistan, Incorporation number: 0022754.

Registered Office: F/538, SITE, Karachi-75700, Sindh.

Corporate Office: A/33, Central Commercial Area, Block 7/8, Main Shahrah-e-Faisal,Karachi-Sindh

Contact No: [phone],Website: www.imagepakistan.com, Contact Person: Mr. M. Haroon Saeed,

Phone: [phone],Email: [e-mail](To contact during business hours i.e. from Monday to Friday from 9:00 am to 5.00 pm.)

Issue Size: The Right Issue consists of 98,729,850 Right Shares (i.e. 75% of the existing paid-up capital of Image Pakistan Limited) having a face value of PKR 10/- each, at an offer price of PKR 10/- each. The total amount to be raised through the Right Issue is PKR 987,298,500/-.

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

Date of Final Offer Letter: March 1, 2024

Date of Book Closure: From March 8, 2024 to March 15, 2024

Subscription Amount Payment Dates: From March 25, 2024 to April 23, 2024

Trading Dates for Letter of Rights: From March 25, 2024 to April 16, 2024

P a g e 1 | 30

Offer Document | Image Pakistan Limited

Details of the relevant contact persons:

	Name of the	Designation	Contact	Office Address		Email ID
	Person	Number
				A/33, Central
Authorized	Mr. M. Haroon	Company	+92 21-	Commercial Area,
Officer of the	Block 7/8, Main		[e-mail]
Saeed	Secretary	32582613
Issuer	Shahrah-e-Faisal,
				Karachi
Underwriters
M. Munir M. A.				Room No. 601-
Khanani	Mr. M. Munir	Chief	+92 21-	603, 6th Floor,		[e-mail]
Securities	Khanani	Executive	36490034	Stock Exchange
Limited				Building, Karachi
				Room No. 739-
MRA Securities	Muhammad	Head of	+92 21-	741, 7th Floor,		[e-mail]
Limited	Zubair	Compliance	32410136	Stock Exchange
				Building, Karachi
				Bahria Complex-
Intermarket				IV, (Extension
	Chief	+92 21-	Block), 5th Floor,
Securities	Wajid Hussain		[e-mail]
Executive	111467000	Ch. Khalique-uz-
Limited
			Zaman Road,
				Karachi
				1709, 17th Floor,
Dawood	Abdul Aziz	Chief	+92 21-	Saima Trade
Tower "A", I.I.		[e-mail]
Equities Limited	Habib	Executive	32271985
Chundrigar Road,
				Karachi
				Room No. 806-
				814, 8th Floor,
Adam Securities			+92 21-	Main Pakistan
Noman	Director	Stock Exchange		[e-mail]
Limited			32444315	Building, Stock
				Exchange Road,
				Karachi
Banker to the Issue
		SVP-
		Capital		Meezan House,
Meezan Bank	Mirza Ayub	Markets /	+92-21-	C-25, Estate		[e-mail]
Limited	Baig	SBR	36406097	Avenue, SITE,
		Reporting		Karachi
		Unit

Website: This offer letter can be downloaded from:

www.imagepakistan.net/right-shares/

https://www.psx.com.pk

P a g e 2 | 30

March 1

Offer Document | Image Pakistan 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 madeor 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.

P a g e 5 | 30

Offer Document | Image Pakistan Limited

GLOSSARY OF TECHNICAL TERMS AND DEFINITIONS

	Any bank with whom an account is opened and maintained by the Issuer
Banker to the Issue	for keeping the issue amount.
Meezan Bank Limited has been appointed, in this Right Issue, as the
	Banker to the Issue.
CDC	Central Depository Company of Pakistan Limited
CDS	Central Depository System
Company / Image /	Image Pakistan 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 PKR 10/- each.
PSX	Pakistan Stock Exchange Limited
PKR / Pak Rupees	Pakistani Rupees
Regulations	Companies (Further Issue of Shares) Regulations, 2020
Right Issue / Issue	98,729,850 Right Shares representing 75% 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.
	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
	company directly or indirectly;
Sponsors	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.

P a g e 6 | 30

Offer Document | Image Pakistan Limited

Table of Contents
1	SALIENT FEATURES OF THE RIGHT ISSUE	8
	1.1. BRIEF TERMS OF THE RIGHT ISSUE	8
	1.2. PRINCIPAL PURPOSE OF THE ISSUE AND FUNDING ARRANGEMENTS	10
	1.3. FINANCIAL EFFECTS ARISING FROM RIGHT ISSUE	10
	1.4. TOTAL EXPENSES TO THE ISSUE	11
	1.5.	DETAILS OF UNDERWRITERS	11
	1.6. COMMITMENTS FROM SUBSTANTIAL SHAREHOLDERS/DIRECTORS:	11
	1.7.	FRACTIONAL SHARES	12
	1.8.	IMPORTANT DATES	12
2	SUBSCRIPTION AMOUNT PAYMENT PROCEDURE	13
3	PROFILES OF THE BOARD OF DIRECTORS OF THE COMPANY AND SPONSORS	14
	3.1. PROFILE OF THE BOARD OF DIRECTORS OF THE COMPANY	14
	3.2. DIRECTORS DIRECTORSHIP IN OTHER COMPANIES	15
4	FINANCIAL DETAILS OF THE ISSUER	16
	4.1. FINANCIAL HIGHLIGHTS OF THE ISSUER FOR THE LAST THREE YEARS	16
	4.2.	FINANCIAL HIGHLIGHTS FOR PRECEDING ONE YEAR OF CONSOLIDATED
		FINANCIAL STATEMENTS……………………………………………………………………………………………….16
	4.3. DETAILS OF ISSUE OF CAPITAL IN PREVIOUS FIVE YEARS	16
	4.4.	AVERAGE MARKET PRICE OF THE SHARE OF THE ISSUER DURING THE LAST SIX MONTHS
	…………………………………………………………………………………………………………………………………………………17
	4.4. SHARE CAPITAL AND RELATED MATTERS	17
5	RISK FACTORS	18
	5.1. RISK ASSOCIATED WITH THE RIGHT ISSUE	18
	5.2. RISK ASSOCIATED WITH ISSUER	18
6	LEGAL PROCEEDINGS	21
	6.1. OUTSTANDING LEGAL PROCEEDINGS OF THE COMPANY	21

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

21

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	21
7 SIGNATORIES TO THE OFFER DOCUMENT	22

8 Annexure A………………………………………………………………………………………………………………………….23

P a g e 7 | 30

Offer Document | Image Pakistan 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
		PKR	987,298,500/- is being raised via issuance of
b)	Size of the proposed Issue:	98,729,850 ordinary shares at an issue price of PKR 10/-
		per share.
c)	Face Value of the share:	PKR 10/-
		The Board of Directors of the company decided the price
d)	Basis of determination of price of	of Right Issue is reasonable, considering various factors
the right issue:	including current market value of the Company's shares
		and break-up value per share1.
	Proportion of new issue to	75 right shares for every 100 ordinary shares held i.e.
e)	existing shares with any condition
75% of the existing paid-up capital of the company.
	applicable there to:
	Date of meeting of Board of Directors
f)	(BoD) wherein the right issue was	Friday, January 19, 2024
	approved:
		1.	Mr. Asad Ahmad
		2.	Ms. Farnaz Ahmad
	Name of directors attending the	3.	Ms. Uzma Ahmad
g)	4.	Ms. Marium Ahmad
Board Meeting:
	5.	Mr. Jawed Ahmed Siddiqui
		6.	Mr. S. Hussam Ashraf Subzwari
		7.	Mr. M. Ziyad Akhtar Syed

1 Last six months' average share price is PKR 14.14 per share (From July 1, 2023 to December 31, 2023)

P a g e 8 | 30

Offer Document | Image Pakistan Limited

			The purpose of the Right Issue is to finance the
			expansion of existing production capacity and
	Brief purpose of utilization of right	Company's working capital requirements, which is
	essential for sustained business growth. This aligns
h)	issue proceeds:
	with the Company's broader strategy to fortify its
			financial position in order to enhance profitability and,
			consequently, provide greater shareholders return.
			The Company intends to issue rights to raise funds for
			purchase of land, expansion of existing production
			capacity through installation of new Multihead
			machines so as to reduce reliance on outsourcing
	Purpose of the Right Issue - Details	embroidery for manufacturing quality product and
	cost saving, opening of more new outlets in different
i)	of the main objects	for raising
cities and to meet the working capital requirements
	funds through present right issue:
	and reducing Diminishing Musharika finance. Thus, to
			increase Company's profitability. Detail of which is
			given below:
j)	Minimum level of subscription	None.
(MLS):
	"Application Supported by Blocked
k)	amount" (ASBA) facility, if any, will be	Not Applicable.
provided for subscription of right
	shares

P a g e 9 | 30

Offer Document | Image Pakistan Limited

1.2 PRINCIPAL PURPOSE OF THE ISSUE AND FUNDING ARRANGEMENTS:

A	Details of the principal purpose of the Right Issue
	The Company intends to issue rights to meet the capital requirements of the Company to
	effectively implement its BMR & Expansion plan with the objective to increase the
	company's profitability. The item-wisebreak-up is given below:
		Purpose of the Issue	Amount (PKR)	% of Right Issue
			Proceeds
		Working Capital		397,298,500		40%
		Multihead Machines		120,000,000		12%
		Purchase of Land*		300,000,000		31%
		Reduction of Diminishing Musharika	170,000,000		17%
		Total		987,298,500		100%
		* Suitable land will be purchased at S.I.T.E., Karachi and the valuation shall be carried out by PBA
		approved valuer.
B	Additional disclosure relating to purpose of the Right Issue
	Activities that are		The following are the broad activities that	are classified as
	classified as working		working capital,based on the Company's business / operations
	capital		and requirements from time to time:
				Procurement of raw and packing materials including		300,000,000
				Inventory and Vendors / Customers payables
				Manufacturing Overheads			97,298,500
				The working capital requirements are based on Company's
				historical data of operations, current inflation, market
				conditions, etc.

1.3 FINANCIAL EFFECTS ARISING FROM RIGHT ISSUE

Description	Measurement	Pre-Issue	Post-Issue
Unit
Authorized Capital	PKR	3,000,000,000	3,000,000,000
Paid-up Capital*	PKR	1,316,398,000	2,303,696,500
Number of Shares	Unit	131,639,800	230,369,650
Total Equity	PKR	2,562,590,200	3,549,888,700
Net Assets / Breakup value per share*	PKR	19.47	15.41
Gearing Ratio **	Percentage	7.79%	5.75%
Production Capacity	Multihead	40	60
Machines
Market Share***	Percentage

Foot Note:

• These numbers are taken from the audited financial statements of the Company for the year ended June 30, 2023. The break-up value is calculated as follows: Total Equity ÷ No. of Shares.
• Expected / Estimated: Net Debt (Total Borrowings - Cash & Bank Balances) ÷ Total Capital (Net Debt + Total Equity)
• Expected / Estimated

P a g e 10 | 30