PAKISTAN STOCK EXCHANGE LIMITED Stock Exchange Building, Stock Exchange Road, Karachi UAN:

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1 PAKISTAN STOCK EXCHANGE LIMITED Stock Exchange Building, Stock Exchange Road, Karachi UAN: PsX/N-320- TICE` May 12, 2017 Seeking Public Comments on Draft Prospectus of Inbox Business Technologies Limited It is hereby informed to all concerned that Inbox Business Technologies Limited has applied for Listing on the Exchange and has submitted the draft Prospectus for issue of shares to High Net-worth Individual / Institutional Investors through Book Building followed by issue of shares of the Company to the General Public / Retail Investors. The draft Prospectus of the Company is hereby placed on the Website of the Exchange under caption "Public Comments on Draft Prospectus" for seeking public comments as required under the Regulation No (ac) of Listing of Companies and Securities Regulations of PSX. It is requested to submit written comments on the draft Prospectus, if any, either in hard form or through at comments.draftprospectus(äpsx.com.pk addressed to the undersigned latest by May 22, MUHM1D GHUFRAN DepuQ General Manager - Operations Copy to: 1. The Executive Director (PRDD), SMD, SECP 2. The Director (Cl), Public Offering & Regulated Persons Department, SECP 3. The Managing Director, PSX 4. Deputy Managing Director - PSX 5. The Chief Executive Officer, CDC 6. The Chief Executive Officer, NCCPL 7. Acting Chief Regulatory Officer- PSX 8. All Head of Departments - PSX 9. PSX Notice Board & Website

2 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 4.11 BEFORE MAKING ANY INVESTMENT DECISION. SUBMISSION OF FALSE AND FICTITOUS APPLICATIONS ARE PROHIBITED AND SUCH APPLICATIONS MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NET WORTH INDIVIDUAL INVESTORS UNDER REGULATION 1(ii) OF THE FIRST SCHEDULE TO THE PUBLIC OFFERING REGULATIONS, 2017, A SINGLE INVESTOR CANNOT SUBMIT MORE THAN ONE BIDDING APPLICATION, EXCEPT IN THE CASE OF UPWARD REVISION OF BID. IF AN INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO REJECTION. SUBMISSIONS OF CONSOLIDATED BIDS ARE PROHIBITED UNDER THE PUBLIC OFFERING REGULATIONS, A BID APPLICATION WHICH IS BENEFICIALLY OWNED (FULLY OR PARTIALLY) BY PERSONS OTHER THAN THE ONE NAMED THEREIN SHALL BE DEEMED TO BE A CONSOLIDATED BID. PLEASE NOTE THAT AS PER THE PUBLIC OFFERING REGULATIONS, 2017, A SUPPLEMENT TO THE PROSPECTUS SHALL BE PUBLISHED WITHIN THREE WORKING DAYS OF THE CLOSING OF THE BIDDING PERIOD WHICH SHALL CONTAIN INFORMATION RELATING TO THE STRIKE PRICE, OFFER PRICE, NAMES OF THE UNDERWRITERS OF THE RETAIL PORTION OF THE ISSUE IF ANY, UNDERWRITING COMMISSION, BIFURCATING AS TAKE UP COMMISION OR ANY OTHER, COMMITMENT BY THE SUCCESFUL BIDDERS FOR SUBSCRIBING THE UNDERSUBSCRIBED RETAIL PORTION IN CASE OF HUNDRED PERCENT BOOK BUILDING, CATEGORY WISE BREAKUP OF THE SUCCESSFUL BIDDERS ALONG WITH NUMBER OF SHARES Inbox ALLOCATED Business TO THEM, Technologies DATES OF PUBLIC Limited SUBSCRIPTION AND SUCH OTHER INFORMATION AS SPECIFIED BY THE COMMISSION. INBOX BUSINESS TECHNOLOGIES LIMITED PROSPECTUS This Issue consists of 45,400,000 ordinary shares (39% of the post issued paid up capital of Inbox Business Technologies Limited) of face value of PKR 10 each. The Issue is being made through the Book Building process at a Floor Price of PKR 30/- per share (including a premium of PKR 20/- per share). The bidders shall be allowed to place bids for one hundred percent (100%) of the issue size and the strike price shall be the price at which the hundred percent (100%) of the issue is subscribed. However, the successful bidders shall be allotted and issued only seventy-five percent (75%) of the issue size i.e. 34,050,000 and the remaining twenty five percent (25%) i.e. 11,350,000 shall be offered to the retail investors. (Justification of premium is given under Valuation Section in paragraph 2.1) REGISTERATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00 am on DD/MM/2017 and will close at 3:00 pm on DD/MM/2017 BIDDING PERIOD DATES: From DD/MM/2017 to DD/MM/2017 From: 9:00 am to 5:00 pm DATE OF PUBLIC SUBSCRIPTION: From DD/MM/2017 to DD/MM/2017 (both days inclusive) From: 9:00 am to 5:00 pm CONSULTANT TO THE ISSUE BOOK RUNNER Bankers to the Book Building portion of the Issue: The Bank of Punjab & MCB Bank Limited Bankers for the Retail portion of the Issue: Askari Bank Limited Al Baraka Bank Limited Bank Alfalah Limited Bank Al Habib Limited Bank Islami Pakistan Limited The Bank of Punjab Habib Bank Limited MCB Bank Limited NIB Bank Limited Summit Bank Limited* United Bank Limited* *In order to facilitate investors, United Bank Limited ( UBL ) & Summit Bank Limited ( SMBL ) are offering electronic submission of application (e-ipo) to their account holders. UBL account holders can use UBL Net Banking to submit their application via link SMBL account holders can use SMBL Net Banking to submit their application via link Furthermore, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on DD/MM/2017. BOOK BUILDING PORTION WILL BE UNDERWRITTEN BY For investor education please visit Jama Punji is an investor education initiative of the Securities & Exchange Commission of Pakistan Date of Publication of this Prospectus: DD MM, 2017 Prospectus and Subscription Form can be downloaded from the following websites For further queries you may contact Inbox Business Technologies Limited: Asad Warsi, Shakeel Farooq; Phone: ; asad.warsi@inboxbiz.com / shakeel.farooq@inboxbiz.com Next Capital Limited: Umer Habib; Phone: , umer.habib@nextcapital.com.pk Arif Habib Limited: Yasir Abbas; Phone: ; yasir.abbas@arifhabibltd.com

3 UNDERTAKING BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER April 20, 2017 WE MIR MUHAMMAD NASIR, THE CHIEF EXECUTIVE OFFICER AND ASAD WARSI, THE CHIEF FINANCIAL OFFICER OF INBOX BUSINESS TECHNOLOGIES LIMITED CERTIFY THAT: 1. THE PROSPECTUS 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 PROSPECTUS IS TRUE AND CORRECT TO THE BEST OF THEIR 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 PROSPECTUS AS A WHOLE OR ANY PART THEREOF MISLEADING; AND 5. ALL REQUIREMENTS OF THE SECURITIES ACT, 2015; THE DISCLOSURES IN PUBLIC OFFERING REGULATIONS, 2017 FOR PREPARATION OF PROSPECTUS, RELATING TO APPROVAL AND DISCLOSURES HAVE BEEN FULFILLED. 6. NO CHARGES, FEE, EXPENSES, PAYMENTS ETC. HAVE BEEN COMMITTED TO BE PAID TO ANY PERSON IN RELATION TO THIS PUBLIC OFFERING EXCEPT FOR THOSE AS DISCLOSED IN PART 3.7 OF THE PROSPECTUS. For and behalf of Inbox Business Technologies Limited -Sd- Mir Muhammad Nasir Chief Executive Officer -Sd- Asad Warsi Chief Financial Officer Page 1 of 145

4 Note: This Supplement shall be published within 3 working days of the close of Bidding Period in at least all those newspapers in which the Prospectus of Inbox Business Technologies Limited is published. SUPPLEMENT TO THE PROSPECTUS This Supplement is being published pursuant to The Public Offering Regulations, 2017 and in continuation of the Prospectus of Inbox Business Technologies Limited earlier published on DD/MM/2017 FLOOR PRICE : PKR 30/- PER SHARE STRIKE PRICE : PKR XX/- PER SHARE ISSUE PRICE: PKR XX/- PER SHARE Inbox Business Technologies Limited Underwriters to the retail portion of the Issue if any No. of shares S. No. Names of Underwriter Underwritten (i) (ii) (iii) TOTAL Amount (PKR) Underwriting Commission (in % age): Take up Commission (in % age), if any: Category wise Breakup of Successful Bidders S. No Category No. of Bidders No. of shares provisionally allocated 1 Commercial Banks 2 Development financial institutions 3 Mutual Funds 4 Insurance Companies 5 Investment Banks 6 Employees Provident / Pension Funds 7 Leasing Companies 8 Modarabas 9 Securities Brokers 10 Foreign Institutional Investors 11 Any other Institutional Investors Institutional Investor 12 Individual Investors: Foreign Investors Local Individual Investors TOTAL The bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by the retail investors, if any, to them on pro-rata basis. In case the retail portion is fully subscribed, the bid money shall be immediately refunded or unblocked. Page 2 of 145

5 Glossary of Technical Terms ACT Securities Act, 2015 AHL Arif Habib Limited BR Book Runner BVPS Book Value Per Share CAGR Compound Annualized Growth Rate CDA Central Depository Act, 1997 CDC / CDCPL Central Depository Company of Pakistan Limited CDC Regulations Central Depository Company of Pakistan Limited Regulations CDS Central Depository System CNIC Computerized National Identity Card COI Certificate of Incorporation Collection Banks (Book Building) The Bank of Punjab and MCB Bank Limited Commission / SECP Securities and Exchange Commission of Pakistan CRO Company Registration Office CUIN Computerized Unique Identification Number CVT Capital Value Tax EPS Earnings Per Share FBR Federal Board of Revenue FED Federal Excise Duty GDP Gross Domestic Product GOP Government of Pakistan ITO Income Tax Ordinance, 2001 Mn Million NCL Next Capital Limited NICOP National Identity Card for Overseas Pakistani NOC No Objection Certificate Ordinance The Companies Ordinance, 1984 PKR or Rs. Pakistan Rupee(s) PSX / Exchange Pakistan Stock Exchange Limited SCRA Special Convertible Rupee Account SST Sindh Sales Tax UIN Unique Identification Number WHT Withholding Tax Page 3 of 145

6 DEFINITIONS Act Securities Act, Application Money Banker(s) to the Book Building In case of bidding for shares out of the Book Building portion, the total amount of money payable by a successful Bidder which is equivalent to the product of the Strike Price and the number of shares to be allotted. Means any bank(s) with whom an account is opened and maintained by the Issuer for keeping the bid amount. The Bank of Punjab & MCB Bank Limited have been appointed as Bankers to the Book Building. Bid Bid Amount Bid Collection Center Bid Price Bid Revision An indication to make an offer during the Bidding Period by a Bidder to subscribe to the Ordinary Shares of Inbox Business Technologies Limited at a price at or above the floor price, including upward revisions thereto. An Eligible Investor shall not make a bid with price variation of more than 10% of the prevailing indicative strike price. Please refer to paragraph for details. The amount equal to the product of the number of shares Bid for and the Bid price. Designated offices of the Book Runner, specified branches of any of the Scheduled Bank and offices of any other institutions specified by the Commission where bids are received and processed. For this Issue, addresses of the Bid Collection Centers are provided in paragraph of this Prospectus. The price at which bid is made for a specified number of shares. The Eligible Investors can revise their bids upward subject to the provision of Regulation 10(2)(iii) of the Regulations. The bids can be revised with a price variation of not more than 10% from the prevailing indicative Strike Price in compliance with Regulation 10(2)(iii) of the Regulations. As per the Regulation 10(2)(vi) of the Regulations, the bidder shall not make downward revision or withdraw their bids Bidder Bidding Form Bidding Period An Eligible Investor who makes bids for shares in the Book Building process. The form prepared by the Issuer for the purpose of making bids. The period during which bids for subscription of shares are received. Page 4 of 145

7 The Bidding Period shall be of two days, from DD/MM/2017 to DD/MM/2017 both days inclusive (daily from 9:00 a.m. to 5:00 p.m.). Book Building Book Building Account Book Building Portion Book Runner A process undertaken to elicit demand for shares Issued through which bids are collected from the Bidders and a book is built which depicts demand for the shares at different price levels. An account opened by the Issuer with the Collection Bank(s). The Bidder will pay the Margin Money / Bid Amount through demand draft, pay order or online transfer in favor of this account as per the instructions given in paragraph of this Prospectus and the balance of the Application Money, if any, shall be paid through this account after successful allocation of shares under Book Building. The part of the total Issue allocated for subscription through the Book Building. A securities broker or a scheduled bank who holds a valid license from the Commission to act as an Underwriter and has been appointed as Book Runner by the Issuer. Arif Habib Limited has been appointed as Book Runner for this Issue. Book Building System Centralized E-IPO System Collection Banks Company An online electronic system operated by the Designated Institution for conducting Book Building. Centralized E-IPO System ( CES ) means a centralized system through which applications for subscription of securities through Public Offering can be made electronically through internet, Automated Teller Machines ( ATM ) and mobile phones. The Bank of Punjab and MCB Bank Limited are collection banks for the Book Building portion. For this purpose, The Bank of Punjab has opened an account titled IPO of Inbox Business Technologies Limited Book Building Account, Number: [xxx] at its [xxx] Branch, [City] and MCB Bank Limited has also opened an account with the same title bearing Number: [xxx] at its [xxx] Branch, [City]. The Collection Banks shall keep and maintain the bid money in the said account. Once the Strike Price is determined and lists of successful bidders and successful applicants/allottees are finalized and shares are credited/dispatched to the successful bidders and applicants, the Consultant to the Issue, after obtaining NOC from PSX, may request in writing to the Collection Banks for transfer of the money of successful and accepted applications to the Issuer s account(s). Inbox Business Technologies Limited (the Company ) or ( IBTL ) or ( Inbox ). Page 5 of 145

8 Company s Legal Advisor Commission Consolidated Bids Consultant to the Issue Aziz Malik Law Associates. Securities & Exchange Commission of Pakistan. A bid which is fully or partially beneficially owned by persons other than the one named therein. Any person licensed by the Commission to act as a Consultant to the Issue. Next Capital Limited has been appointed as Consultant to the Issue by Issuer for this issue. Designated Institution Includes securities exchange, central depository or clearing house approved by the Commission to provide a system for conducting Book Building. PSX will act as the Designated Institution for this Issue. Dutch Auction Method e-ipo facility The method through which Strike Price is determined by arranging all the Bid Prices in descending order along with the number of shares and the cumulative number of shares bid for at each Bid Price. The Strike Price is determined by lowering the price to the extent that the total number of shares Issued under the Book Building Portion are subscribed. E-IPO is the facility through which investors can make applications for subscription of shares of the Company online. In order to facilitate the investors, the Issuer has arranged provision of this facility through Summit Bank Limited and United Bank Limited, who are among the Bankers to the Issue. United Bank Limited ( UBL ) account holders can use UBL net-banking to submit their applications online via link: Summit Bank Limited ( SMBL ) account holders can use SMBL netbanking to submit their application via link: Account holders of UBL and SMBL can submit their applications through the above mentioned link 24 hours a day during the subscription period which will close at midnight on DD/MM/2016. Eligible Investor Floor Price An Individual and Institutional Investor whose Bid Amount is not less than the minimum bid size of PKR 1,000,000 (One Million Rupees only). The minimum price per share set by the Issuer in consultation with Consultant to an Issue. For this Issue, Floor Price is PKR 30/- per share. Page 6 of 145

9 General Public All Individual and Institutional Investors including both Pakistani (residents & non-residents) and foreign investors. Initial Public Offer (IPO) Institutional Investors Initial Public Offering or IPO means first time offer of securities to the general public. Any of the following entities: A financial institution; A company as defined in the Ordinance; An insurance company established under the Insurance Ordinance, 2000; A securities broker A fund established as Collective Investment Scheme under the Non- Banking Finance Companies and Notified Entities Regulations, 2008; A fund established as Voluntary Pension Scheme under the Voluntary Pension System Rules, 2005; A private fund established under Private Fund Regulations, 2015; Any employee s fund established for beneficial of employees; Any other fund established under any special enactment; and Any other entity as specified by the Commission. Issue Issue of 45,400,000 Ordinary Shares representing 39% of Post IPO Paid Up Capital having a Face Value of PKR 10.00/- each. Book Building Portion of the Issue comprises 34,050,000 Ordinary Shares (being 75% of the total Issue) at a Floor Price of PKR 30/- per share (including a premium of PKR 20/- per share). General Public Portion of the Issue comprises 11,350,000 Ordinary Shares (being 25% of the total Issue) at the Issue Price. Issue Price The price at which Ordinary Shares of the Company are issued to the General Public. The Issue Price will be the Strike Price. Issuer Key Employees Limit Bid Limit Price Inbox Business Technologies Limited (the Company ) or ( IBTL ) or ( Inbox ). Chief Executive Officer, Directors, Chief Financial Officer and Company Secretary of the Company. The bid at a Limit Price. The maximum price a prospective Bidder is willing to pay for a share under Book Building Page 7 of 145

10 Listing Committee Margin Money Listing Committee, shall mean a committee comprising of at least seven members including at least three external members for review and approval of the prospectus and the listing application. The partial or total amount, as the case may be, paid by a bidder at the time of registering as an Eligible Investor. The Book Runner shall collect full amount of the bid money as Margin Money in respect of bids placed by an individual investor and not less than twenty five percent (25%) of the bid money as Margin Money in respect of bids placed by an institutional investors. Minimum Bid Size The Bid amount equal to One Million Rupees (PKR 1,000,000/-). Ordinary Shares Prospectus Registration Form Ordinary Shares of Inbox having face value of PKR 10.00/- each. Prospectus means any document described or issued as a prospectus and includes any document, notice, circular, material, advertisement, offer for sale document, publication or other invitation offering to the public (or any section of the public) or inviting offers from the public for the subscription or purchase of any securities of a company. The form which is to be submitted by the Eligible Investors for registration to participate in the Book Building process. The registration period shall commence three days before the start of the Bidding Period from DD/MM/2017 to DD/MM/2017 from 9:00 am to 5:00 pm and shall remain open till 3:00 pm on the last day of the Bidding Period. Regulations The Public Offering Regulations, 2017 Related Employees Securities Regulations Shari ah Advisor Shari ah Certificate Sponsor Related Employees mean such employees of the Issuer, the Book Runner, the Underwriters, and the Consultants to the Issue, who are involved in the Issue. Please refer to paragraph for further details. Chapter 5 of the Rule Book of the Pakistan Stock Exchange Limited, titled Listing of Companies and Securities Regulation. A firm or a company who / that meets the fit and proper standards specified by the Commission or the State Bank of Pakistan for Shari ah advisory services. Shari ah certificate includes a Shari ah pronouncement or fatwa by the Shari ah Advisor. 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 Company directly or indirectly; Page 8 of 145

11 A person who replaces the person referred above; and A person or group of persons who has control of the Company whether directly or indirectly. Step Bid Strike Price Step Bid means a series of limit bids at increasing prices. In case of a step bid the amount of each step will not be less than Rupees One Million (PKR 1,000,000/-). The price per ordinary share of the Issue determined / discovered on the basis of Book Building process in the manner provided in the Regulations, at which the shares are Issued to the successful bidders. The Strike Price will be disseminated after conclusion of Book Building through publication in at least all those newspapers in which the Prospectus was published and also posted on the websites of the Securities Exchange, Consultant to the Issue, Book Runner and the Company. Supplement to the Prospectus The Supplement to the Prospectus shall be published within three (3) working days of the closing of the Bidding Period at least in all those newspapers in which the Prospectus was earlier published and disseminated through the Securities Exchange where shares are to be listed. System Transaction Legal Counsel An online electronic system operated by the Designated Institution for conducting Book Building. Mohsin Tayebaly & Co. Interpretation: ANY CAPITALIZED TERM CONTAINED IN THIS PROSPECTUS, WHICH IS IDENTICAL TO A CAPITALIZED TERM DEFINED HEREIN, SHALL, UNLESS THE CONTEXT EXPRESSLY INDICATES OR REQUIRES OTHERWISE AND TO THE EXTENT AS MAY BE APPLICABLE GIVEN THE CONTEXT, HAVE THE SAME MEANING AS THE CAPITALIZED / DEFINED TERM PROVIDED HEREIN. Page 9 of 145

12 Table of Contents 1 APPROVALS AND LISTING ON THE STOCK EXCHANGE BOOK BUILDING PROCEDURE... ERROR! BOOKMARK NOT DEFINED. 3 SHARE CAPITAL AND RELATED MATTERS UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES OVERVIEW, HISTORY AND PROSPECTS FINANCIAL INFORMATION MANAGEMENT MISCELLANEOUS INFORMATION APPLICATION AND ALLOTMENT INSTRUCTIONS REGISTRATION FORM DUPLICATE REGISTRATION FORM BIDDING FORM ADDITIONAL PAYMENT FORM BID REVISION FORM SIGNATORIES TO THE PROSPECTUS MEMORANDUM OF ASSOCIATION APPLICATION FORM Page 10 of 145

13 1 APPROVALS AND LISTING ON THE STOCK EXCHANGE 1.1 APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN Approval of the Securities & Exchange Commission of Pakistan (the "Commission" or the "SECP") under Section 19(1) and 87(2) of the Securities Act, 2015 read with Section 88(1) of the Securities Act, 2015 and Regulation 3(15) of the Regulations has been obtained by Inbox Business Technologies Limited (the Company or IBTL ) for the issue, circulation and publication of this offering document (hereinafter referred to as the Prospectus ) vide their letter No. [xxx] Dated [dd/mm/2017]. DISCLAIMER: IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARD TO THEM BY THE COMPANY IN THIS PROSPECTUS. SECP HAS NOT EVALUATED QUALITY OF THE ISSUE AND ITS APPROVAL FOR ISSUE, CIRCULATION AND PUBLICATION OF THE PROSPECTUS SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE BIDDING / SUBSCRIBING. 1.2 APPROVAL OF PROSPECTUS BY PSX The Prospectus of the Company has been approved by PSX in accordance with the requirements of the Regulations and its regulations for Listing of Companies and Securities. DISCLAIMER: PSX HAS NOT EVALUATED THE QUALITY OF THE ISSUE AND ITS CLEARANCES SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND ANALYSIS REGARDING THE QUALITY OF THE ISSUE BEFORE SUBSCRIBING. THE PUBLICATION OF THIS DOCUMENT DOES NOT REPRESENT SOLICITATION BY PSX. THE CONTENTS OF THIS DOCUMENT DOES NOT CONSTITUTE AN INVITATION TO INVEST IN SHARES OR SUBSCRIBE FOR ANY SECURITIES OR OTHER FINANCIAL INSTRUMENT BY PSX, NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER OF PSX. IT IS CLARIFIED THAT INFORMATION IN THIS PROSPECTUS SHOULD NOT BE CONSTRUED AS ADVICE ON ANY PARTICULAR MATTER BY PSX AND MUST NOT BE TREATED AS A SUBSTITUTE FOR SPECIFIC ADVICE. PSX DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS ARISING FROM OR IN RELIANCE UPON THIS DOCUMENT TO ANYONE, ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES, INCOMPLETENESS AND / OR MISTAKES, FOR DECISIONS AND /OR ACTIONS TAKEN, BASED ON THIS DOCUMENT. PSX NEITHER TAKES RESPONSIBILITY FOR THE CORRECTNESS OF CONTENTS OF THIS DOCUMENT NOR THE ABILITY OF THE COMPANY TO FULFILL ITS OBLIGATIONS THEREUNDER. ADVICE FROM A SUITABLY QUALIFIED PROFESSIONAL SHOULD ALWAYS BE SOUGHT BY INVESTORS IN RELATION TO ANY PARTICULAR INVESTMENT. Page 11 of 145

14 1.3 LISTING AT PSX Application has been made to the PSX for permission to deal in and for quotation of the shares of the Company. If for any reason the application for formal listing is not accepted by PSX, the Issuer undertakes that a notice to that effect will immediately be published in the press and will refund Application Money to the applicants without surcharge as required under the provisions of Section 72 of the Ordinance. However, and, if any such money is not repaid within eight (08) days after the Company becomes liable to repay it, the Directors of the Company shall be jointly and severally liable to repay that money from the expiration of the eight day together with surcharge at the rate of one and a half per cent (1.50%) for every month or part thereof from the expiration of the eight day and, in addition, to a fine not exceeding five thousand rupees and in the case of a continuing offence to a further fine of one hundred rupees for every day after the said eight day on which the default continues in accordance with the provisions of Section 72(2) of the Ordinance. Page 12 of 145

15 1.4 CERTIFICATE BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE ISSUER April 20, 2017 The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi We being the Chief Executive Officer and Chief Financial Officer of the Issuer accept absolute responsibility for the disclosures made in this Prospectus. We hereby certify that the Prospectus contains all necessary information with regard to the Issuer and the Issue and constitutes full, true and plain disclosures of all material facts relating to the shares being offered through this Prospectus and that nothing has been concealed. The information contained in this Prospectus is true and correct to the best of our knowledge and the opinions and intentions expressed herein are honestly held. There are no other facts, the omission of which makes this Prospectus as a whole or any part thereof misleading. For and behalf of Inbox Business Technologies Limited -Sd- Mir Muhammad Nasir Chief Executive Officer -Sd- Asad Warsi Chief Financial Officer Page 13 of 145

16 PKR million Prospectus Inbox Business Technologies Limited 2 VALUATION, BOOK BUILDING PROCEDURE AND SHARE CAPITAL 2.1 VALUATION SECTION The Ordinary shares of Inbox are being issued at Floor Price of PKR 30/- per share which is at a premium of PKR 20/- per Ordinary share to the face value of PKR per Ordinary share. The Consultant to the Issue has reviewed the business performance of the Company and in their opinion the Floor Price of PKR 30 per share is justified based on: Largest IT Company in Pakistan Inbox is the largest IT Company in Pakistan in terms of domestic revenue as recognized and awarded by Pakistan Software Export Board ( PSEB ), Government of Pakistan and Rawalpindi Chamber of Commerce & Industry (RCCI). It is among the leading Managed Services Providers ( MSP ) in the Country and MSP is the main business category within IT that is expected to experience tremendous growth in the coming years. With 16 years of experience and extensive skill sets/expertise in-house, Inbox is well positioned to maintain its market leading position in the Country. Additionally, Inbox has Tier 1 partnerships with all large OEMs like Huawei, Oracle and Microsoft Successful Operational History Inbox was incorporated in Pakistan under the Ordinance, as a private limited company on December 26, 2001 by acquisition of business carried earlier by the directors in the name of Inbox Business Technologies, a firm registered under Partnership Act, It started as an entrepreneurial venture in 2001 and set out to redefine Pakistan s computing industry with the first local computer brand the Inbox PC. Initially formed as a computer assembly company, Inbox has experienced transformations brought on by various challenges. Inbox has evolved into an end-to-end IT solutions provider with a focus on giving clients unparalleled operational efficiency, giving them the competitive edge required in the progressive market. The Company has a successful track record and sales have experienced tremendous growth in last few years. The sales increased by a CAGR of 19% from 2013 to Sales 5,000 4,000 CAGR 19% 3,000 2,000 1,000 - FY13 FY14 FY15 FY16 Page 14 of 145

17 PKR million Prospectus Inbox Business Technologies Limited 700 EBIT CAGR 24% FY13 FY14 FY15 FY Strong Sponsor / Group Profile The Dawood Hercules Group owns majority stake in IBTL through Patek (Pvt.) Limited. The Group is one of the largest conglomerates in Pakistan, with over three generations of experience in commercial and social enterprises. The Group has investments in fertilizers, food, energy, chemicals, IT, retail and real estate. The Group has rich heritage dating back to the era of pre-partition. The Group initially served the textile sector of the Country and later on diversified in to range of businesses. Today, the Group s major holdings include: Engro Corporation, Hub Power Company, Cyan Limited, Dawood Lawrencepur, Tenaga Generasi, Reon Energy, Pebbles Pvt. Limited and Inbox Clientele and Strong Customer Relationships IBTL has serviced over 300 clients in Pakistan among public and private sector. The Company has blue chip clientele currently comprising of large government and private sector enterprises. The Company gives great importance to maintaining and fostering its relationships with customers. The Company has been able to retain satisfied customers due to its commitment towards providing cutting edge technologies and best customer service. The expertise that IBTL has developed over the years has resulted in a 95% renewal rate in contracts where contracts are renewed for second time Management Quality The Company has dedicated key individuals pertaining to each Line of Business who have multi-year experience and expertise to undertake projects in their respective fields. The team consists of technical experts who are able to plan and execute each contract in the most efficient and cost-effective manner Exposure to Information Technology Sector Pakistan currently spends lowest in the region on Information and Communication Technology. With increasing focus on digitization and fast changing technology space, the IT companies will be at a forefront of transformation in the public and private sector. IBTL is among the most experienced IT players in the industry and will benefit from increasing IT spend in the Country. With the advent of the new Digital Pakistan Policy 2017, Inbox s business dominance in the public sector is well Page 15 of 145

18 positioned to take advantage of all the digitization that is mandated to take place in the coming years within the Federal and Provincial Governments Justification Based on their review, the Consultant to the Issue is of the opinion that the historical performance of the Company, the sponsor s profile, quality of management and relationship with the clients indicate sustainability of business performance in the future. Furthermore, with increasing focus on digitization and continued improvement in the IT sector, the Company is sitting in a position to take advantage of such expansion in IT. In light of the above and Price-to-Earnings ( PE ) multiple of 7.98x at Floor Price of PKR 30/- per Ordinary Share based on the earnings for the year ended 31 st, December 2016 offer a substantial discount to P/E multiple of Systems Limited and Netsol Technologies Limited which operate in the similar domain i.e. the IT sector. 2.2 BOOK BUILDING PROCEDURE Brief Structure The Present Issue The Issue comprises 45,400,000 Ordinary Shares of face value of PKR 10.00/- each which constitutes 39% of the Post IPO paid up capital of the Company. The Issue is being made through the Book Building process at a Floor Price of PKR 30/- per Ordinary Share (including a premium of PKR 20/- per Ordinary Share). The bidders shall be allowed to place bids for one hundred percent (100%) of the offer size and the strike price shall be the price at which one hundred percent (100%) of the offer size is subscribed. However, the successful bidders would be allotted and issued only seventy-five percent (75%) of the offer size i.e. 34,050,000 and the remaining twenty five percent (25%) i.e. 11,350,000 would be offered to the retail investors. The bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by the retail investors, if any, to them on pro-rata basis. Within 3 working days from the close of the Bidding Period, a Supplement to the Prospectus will be published in at least all those newspapers in which the Prospectus is published. The Supplement will contain information related to the Strike Price, the Issue Price, names of the Underwriters, if any, for the General Public Portion, Underwriting Commission, Take-up Commission and category wise break-up of the successful bidders. Format of the Supplement is given on page 2 of this Prospectus Types of Bids and Procedure for making a Bid Book Building is a process whereby investors bid for a specific number of shares at various prices. The Issuer set a Floor Price, which is the minimum / lowest price a Bidder can bid at. An order book of bids is maintained by the Book Runner, which is then used to determine the Strike Price through the Dutch Auction Method. Under the Dutch Auction Method, the Strike Price is determined by lowering the Bid Price to the extent that the total number of shares issued through the Book Building process is subscribed. A bid by a Bidder can be a Limit Bid, or a Step Bid, each of which are explained below: Page 16 of 145

19 Limit Bid: Limit bid is at the Limit Price, which is the maximum price a Bidder is willing to pay for a specified number of shares. In such a case, a Bidder explicitly states a price at which he / she / it is willing to subscribe to a specific number of shares. For instance, a Bidder may bid for 2 million shares at PKR per share, based on which the total Application Money would amount to PKR 60 million. In this case the Bid Amount will be also PKR 60 million. Since the Bidder has placed a Limit Bid of PKR per share, this indicates that he / she / it is willing to subscribe the shares at a price up to PKR per share. Step Bid: A series of Limit Bids at increasing prices. The amount of any individual step shall not be less than PKR. 1,000,000. Under this bidding strategy, Bidders place a number of Limit Bids at different increasing price levels. A Bidder may, for instance, make a bid for 0.5 million shares at PKR per share, 1 million shares at PKR per share and 1.5 million shares at PKR per share. Therefore in essence the Bidder has placed one Step Bid comprising of three Limit Bids at increasing prices. The Bid amount will be PKR 98 million. In case of individual Bidder, the Margin Money will be 100% i.e. PKR 98 million whereas in case of Bidders being Institutional Investor the Margin Money shall be 25% of the Bid amount i.e. PKR 24.5 million. AN ELIGIBLE INVESTOR SHALL NOT MAKE A BID WITH A PRICE VARIATION OF MORE THAN 10% OF THE PREVAILING INDICATIVE STRIKE PRICE. AN ELIGIBLE INVESTOR SHALL NOT MAKE MORE THAN ONE BID SEVERALLY OR JOINTLY, HOWEVER, A BID CAN BE REVISED UPWARDS ONLY TILL 5.00 PM ON THE LAST OF BIDDING PERIOD. BID WITHDRAWAL OR DOWNWARD REVISION OF BID PRICE SHALL NOT BE ALLOWED. FOR FURTHER DETAILS, PLEASE SEE PARAGRAPH AN ELIGIBLE INVESTOR SHALL NOT PLACE CONSOLIDATED BIDS. A BID APPLICATION WHICH IS FULLY OR PARTIALLY BENEFICIALLY OWNED BY PERSONS OTHER THAN THE ONE NAMED THEREIN IS TO BE CONSIDERED AS A CONSOLIDATED BID. RELATED EMPLOYEES OF THE ISSUER AND THE BOOK RUNNER CANNOT PARTICIPATE IN THE BIDDING PROCESS. AS PER REGULATION 7(9) OF THE REGULATIONS, THE ASSOCIATES OF THE CONSULTANT TO THE ISSUE AND THE BOOK RUNNER SHALL NOT IN AGGREGATE MAKE BIDS FOR SHARES IN EXCESS OF TWO (2) PERCENT OF THE BOOK BUILDING PORTION. NAMES OF RELATED EMPLOYEES OF THE ISSUER, BOOK RUNNER ARE PROVIDED IN SECTION Once the Bidding Period has lapsed and the book has been built, the, Strike Price shall be determined on the basis of Dutch Auction Method. Successful Bidders shall be intimated, within one (1) working day of the closing of the Bidding Period, about the Strike Price and the number of shares provisionally allotted to each of them. The bid money of bidders who have undertaken to subscribe the unsubscribed retail portion shall remain deposited or blocked till allotment of unsubscribed retail portion, if any, to them on pro-rata basis. The successful institutional Bidders shall be informed of their final allocation within two (2) working days within the close of public subscription and thereafter requested to deposit their balance margin within three (3) days of such intimation. Where a successful Bidder defaults in payment of shares allotted to him / her / it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner. As per Regulation 9(16) of the Regulations, the successful bidders shall be issued securities only after the end of the public subscription, in the form of book-entry to be credited in their respective accounts. All the bidders shall, therefore, provide number of their accounts in the bid application (Investors Account or Sub-Account). The Bidders are encouraged to fill-in the part of the Bidding Form under the heading, Dividend Mandate to enable the Company to directly credit their cash dividend, if any, in their respective Bank Accounts. Page 17 of 145

20 2.2.3 Mechanism for Determination of Strike Price 1. At the close of the bidding period, the Strike Price shall be determined on the basis of Dutch Auction Method by the System. Under this methodology, the Strike Price is determined by lowering the price to the extent that the total number of shares issued is subscribed. 2. The Order Book shall display the bid prices in a tabular form in descending order along with the number of shares bid for and the cumulative number of shares at each price level. 3. In case all the bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly on time priority basis. The mechanism for determination of the Strike Price can be understood by the following illustration: 1. Number of shares being Issued through the Book Building: 45,400,000 Ordinary Shares 2. Floor Price: PKR 30 per Ordinary Share 3. Bidding Period: From DD/MM/2017 to DD/MM/ Bidding Time: 9:00am 5:00pm 5. Bidding Revision Time (Upward Revision only): 9:00am 5:00pm on all days Page 18 of 145

21 Bidder Price Cumulative Number Quantity (PKR/share) of shares Category of Order Institution A ,800,000 3,800,000 Limit Price Institution B ,600,000 7,400,000 Limit Price HNWI A ,700,000 11,100,000 Step Bid Institution C ,900,000 15,000,000 Limit Price Institution D ,700,000 18,700,000 Limit Price HNWI B ,800,000 22,500,000 Limit Price HNWI A ,900,000 26,400,000 Step Bid Institution E ,600,000 30,000,000 Limit Price HNWI C ,800,000 33,800,000 Limit Price Institution F ,800,000 37,600,000 Step Bid Institution G ,900,000 41,500,000 Limit Price HNWI D ,000,000 41,600,000 Step Bid HNWI E ,400,000 46,000,000 Limit Price Institution F ,000,000 49,000,000 Step Bid HNWI D ,200,000 52,200,000 Step Bid HNWI F ,300,000 55,500,000 Limit Price Strike Price determine through Dutch Auction Method Bid has been revised upwards and placed at PKR 37.5 Total shares subscribed On the basis of the figures provided in the above illustration, according to the Dutch Auction Method, the Strike Price would be set at PKR 35.0 per share to sell the required quantity of 45,400,000 ordinary shares. At PKR 41.0 per share, investors are willing to buy 3,800,000 shares. Since 41,600,000 shares are still available, therefore the price will be set lower. At PKR 40.5 per share, investors are willing to buy 3,600,000 shares. Since 38,000,000 shares are still available, therefore the price will be set lower. At PKR 40.0 per share, investors are willing to buy 3,700,000 shares. Since 34,300,000 shares are still available, therefore the price will be set lower. Page 19 of 145

22 At PKR 39.5 per share, investors are willing to buy 3,900,000 shares. Since 30,400,000 shares are still available, therefore the price will be set lower. At PKR 39.0 per share, investors are willing to buy 3,700,000 shares. Since 26,700,000 shares are still available, therefore the price will be set lower. At PKR 38.5 per share, investors are willing to buy 3,800,000 shares. Since 22,900,000 shares are still available, therefore the price will be set lower. At PKR 38.0 per share, investors are willing to buy 3,900,000 shares. Since 19,000,000 shares are still available, therefore the price will be set lower. At PKR 37.5 per share, investors are willing to buy 3,600,000 shares. Since 15,400,000 shares are still available, therefore the price will be set lower. At PKR 37.0 per share, investors are willing to buy 3,800,000 shares. Since 11,600,000 shares are still available, therefore the price will be set lower. At PKR 36.5 per share, investors are willing to buy 3,800,000 shares. Since 7,800,000 shares are still available, therefore the price will be set lower. At PKR 35.5 per share, investors are willing to buy 4,000,000 shares. Since 3,800,000 shares are still available, therefore the price will be set lower. At PKR 35.0 per share, investors are willing to buy 4,400,000 shares. Since after bidding for 4,400,000 shares at PKR 35.0 per share, no shares will be available therefore the Strike Price will be set at PKR 35.0 per share for the entire lot of 45,400,000 shares. The bidders who have placed bids at prices above the Strike Price (which in this illustration is PKR 35.0 per share), will become entitled for allotment of shares at the Strike Price and the differential would be refunded. Investors who have bid below PKR 35.0 per share do not qualify for allotment and their money would be refunded. Only 75% of the total shares offered through book building shall provisionally be allocated to the successful bidders. The bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by the retail investors, if any, to them on pro-rata basis Timeframe for intimation to the successful bidders. Mechanism for payment of the balance amount by the successful bidders Successful bidders shall be intimated, within one (1) working day of the closing of the bidding period, the Strike Price and the number of shares provisionally allotted to each of them. The successful institutional bidders shall, within three (3) working days of the closing of the bidding period, deposit the balance amount as consideration against allotment of shares. Where a successful Bidder defaults in payment of shares allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner Consultant to the Issue Next Capital Limited ( NCL ) has been appointed by the Issuer as Consultant to this Issue. As per Regulation (3) of Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, if a person providing services as a Consultant to the Issue at the time of coming into force of these Regulations shall obtain license under these Regulations within a period of six months from the date of notification of these Regulations. A person which is compliant with the eligibility criteria mentioned in these Regulations and has not yet obtained a license under these Regulations may provide services as Consultant to the Issue during this six-month period. Page 20 of 145

23 2.2.6 Interest of Consultant and Book Runner to the Issue and the Issuer other than their Role as Consultant and Book Runner to the Issue The Consultant and Book Runner are deemed to be interested to the extent of fees payable to them by the Issuer for the services of Consultant and Book Runner to the Issue. The Consultant and Book Runner have no other interest in any property or profits of the Company Book Runner Arif Habib Limited ( AHL ) has been appointed by the Issuer as the Book Runner to this Issue. As per the Regulation (3) of Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, if a person registered as an underwriter prior to coming into force of Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, shall be deemed to be licensed as an underwriter under these Regulations and shall comply with all the requirements of these Regulations within a period of one year from the date of coming into force of these Regulations. Roles and Responsibilities of the Book Runner The Book Runner to the issue shall be responsible to: 1. ensure that necessary infrastructure and electronic system is available to accept bids and to conduct the whole Book Building process in a fair, efficient and transparent manner; 2. ensure blocking of bid and margin money of the Bidders in their respective accounts; 3. the Book Runner must be financially capable for honouring its commitments arising out of defaults by their investors, if any; 4. use the software provided by the Designated Institution for the Book Building on such terms and conditions as may be agreed through an agreement in writing; 5. ensure that the software used for Book Building is based on Dutch Auction Method for display of the order book and determination of the strike price; 6. ensure that the bidders can access to the System and can revise their bids electronically using the user ID and the password; 7. underwrite the Book Building Portion; 8. ensure that it has obtained list and Unique Identification Numbers of the associates of the Issuer and the consultant to the issue; 9. ensure that names and Unique Identification Numbers of all the persons are entered and capped in a manner as prescribed in the Regulations before commencement of the Bidding Period; 10. ensure that no bid or bids exceeding five per cent (5%), in aggregate, is or are made by the associated companies and associated undertakings of the Issuer; 11. ensure that it blocked all Unique Identification Numbers and names of all related employees for participation in the bidding. 12. enter into an underwriting agreement with the Issuer with respect to underwriting of the Book Building portion for covering the default risk. 13. at least establish bid collection centres in Islamabad, all the provincial capitals, Azad Kashmir and Gilgit/ Baltistan. 14. maintain record of all the bids received; and Page 21 of 145

24 15. ensure that all the Bids received in the Bid Collection Centers are entered into the system developed by the Designated Institution for the purpose of Book Building within the prescribed time. The Book Runner have established bid collection centers at the following addresses (direct & fax numbers in all centers). Bid Collection Centres The Book Runner has established bid collection centres at the following addresses (direct & fax numbers in all centers): Karachi Contact Officer: Yasir Abbas Abdul Qadir Direct No.: PABX No.: Fax No.: Postal Address: Arif Habib Center, 23 MT Khan Road, Karachi Naya Nazimabad, Mangophir Road, Karachi Lahore Contact Officer: Direct No.: Fax No.: Postal Address: Room # 220, Arif Habib Limited, Lahore Stock Exchange, Lahore Islamabad Peshawar Contact Officer: Muhammad Shafqat Abbas Farhan Yousaf Mobile No.: Direct: Fax No: mcb1390@mcb.com.pk ops0277@mcb.com.pk Postal Address: MCB Bank Limited, Office No.I, Ground+Mezzanine Floor, Islamabad Stock Exchange Tower, Blue Area, Islamabad Quetta Contact Officer: Mrs. Humaira Rafiq / Ammad Lodhi Mobile No.: Direct: bop0249@bop.com.pk Postal Address: The Bank of Punjab, Jinnah Road, Quetta MCB Bank Limited, Saddar Road, Peshawar Cantt., Tehsil & District Peshawar Contact Officer: Mobile No.: Direct: Postal Address: Azad Kashmir Gilgit / Baltistan Page 22 of 145

25 2.2.8 Roles and Responsibilities of the Designated Institution PSX will act as the Designated Institution for this Issue. The PSX in case of book building system shall perform following functions: 1. Record name, Unique Identification Number (UIN), National Tax Number (NTN), postal and addresses, land line and cell numbers, bank account Number and branch address and Investor Account Number or Sub- Account Number of the bidder with participant account number; 2. Provide a mechanism for registration of the bidders before commencement of the bidding period till 03:00 p.m. on the last day of the Bidding Period and require the investors to provide at least such information as mentioned above; 3. Generate bidders Internet Protocol (IPs) address and keep record of all IP addresses from where the bids are placed; 4. Record the number of shares bid for, the Bid Price, type of the bid i.e. Limit Bid or Step Bid, date and time of the entry of the bid; 5. Display the bids revised, and date and time of upward revision; 6. Not accept the bids placed at a Bid Price that is below the Floor Price; 7. Display live the total number of shares offered for sale, the Floor Price, total number of bids received, total number of shares bid for and indicative Strike Price; 8. Build an order book showing demand for the shares at various price levels in a descending order along with the accumulated number of shares bid for and percentage of total shares offered under the Book Building Portion; 9. Discover the strike price at the close of the Bidding Period; 10. Generate alerts for the Bidders via Short Message Service through cell phones and s upon entry of the bid, at the time of upward revision of the bid, and upon discovery of the strike price; and 11. Ensure that system must provide the bidders the option to upward revise their bids online or through the Book Runner during the period permitted under these Regulations. PSX shall ensure that: identity of the bidder is not displayed; and no bid is entered into the System after closing of the Bidding Period Roles and Responsibilities of the Issuer An issuer shall make a public offer of securities, subject to the following condition: 1. the Issuer, its sponsors, promoters, substantial shareholders, directors and associates have over dues or defaults, irrespective of the amount, appearing in the report obtained from the credit information bureau; 2. the Issuer or its directors, sponsors or substantial shareholders have been holding the office of the directors, or have been sponsors or substantial shareholders in any company, I. which had been declared defaulter by the securities exchange or futures exchange; or II. whose TRE certificate has been cancelled or forfeited by the securities exchange; or III. which has been de-listed by the securities exchange due to non-compliance of its regulations. 3. The Issuer shall appoint Consultant to the Issue, Book Runner, Underwriter, Balloter and Share Registrar and Banker to an Issue, where required, through separate agreements in writing. 4. The Issuer through its Consultant to the Issue, shall submit an application along with draft prospectus for listing of its securities to the securities exchange Page 23 of 145

26 Opening and Closing of the Registration Period The Registration period shall be for Five (5) working days i.e. DD/MM/2017 to DD/MM/2017 from 9:00 AM to 5:00 PM and from 9:00 AM to 3:00 PM on DD/MM/2017. DD/MM/2017 DD/MM/2017 DD/MM/2017 DD/MM/2017 DD/MM/2017 REGISTRATION PERIOD 9:00am to 5:00pm 9:00am to 5:00pm 9:00am to 5:00pm 9:00am to 5:00pm 9:00am to 3:00pm Opening and Closing of the Bidding Period The Bidding Period shall be for Two (2) working days i.e. DD/MM/2017 and DD/MM/2017. The bidding will commence at 09:00 am and shall close at 05:00 pm on both days. BIDDING PROCESS STARTS ON BIDDING PROCESS ENDS ON DD/MM/2017 (9:00 AM to 5:00 PM) DD/MM/2017 (9:00 AM to 5:00 PM) In order to facilitate the investors, the Issuer has arranged provision of e-ipo facility through United Bank Limited ( UBL ) and Summit Bank Limited ( SMBL ) that is among the Bankers to the Issue. The accountholders of UBL can use UBL net-banking to submit their applications online via link: The accountholders of SMBL can use SMBL net-banking to submit their applications online via link: The accountholders of UBL & SMBL can submit their applications through these links 24 hours a day during the subscription period which will close at 12:00 midnight on DD/MM/ Eligibility to Participate in Bidding Eligible Investors who can place their bids in the Book Building process include local and foreign Individual and Institutional Investors whose Bid Amount is not less than PKR 1,000,000/- (Rupees One Million only) Information for Bidders 1. The Prospectus for Issue of Shares has been approved by PSX and SECP. 2. The Prospectus, Registration Forms and the Bidding Forms can be obtained from the Registered Office of Inbox Business Technologies Limited, NCL and AHL and the designated Bid Collection Centers. Prospectus, Registration Page 24 of 145

27 Forms and Bidding Forms can also be downloaded from the following websites of the Book Runner and the Company i.e. and 3. Eligible Investors who are interested in subscribing to the Ordinary Shares should approach the Book Runner at the addresses provided in paragraph for registration for submitting their Bids. 4. THE REGISTRATION FORMS SHOULD BE SUBMITTED ON THE PRESCRIBED FORMAT AT THE ADDRESSES PROVIDED IN PARAGRAPH FOR DETAILS ON THE PROCEDURE OF REGISTRATION PLEASE REFER TO PARAGRAPH THE BIDS SHOULD BE SUBMITTED ON THE PRESCRIBED BIDDING FORM IN PERSON, THROUGH FAX NUMBERS GIVEN IN PARAGRAPH OR THROUGH THE ONLINE SYSTEM USING THE USER ID AND PASSWORD ISSUED AT THE TIME OF REGISTERATION OF ELIGIBLE INVESTOR. 6. REGISTERED INVESTORS CAN PLACE AND REVISE THEIR BIDS UPWARDS BY ACCESSING THE DESIGNATED INSTITUTIONS ONLINE PORTAL FOR BOOK BUILDING BY USING THE USER ID AND PASSWORD COMMUNICATED TO THEM VIA BY PSX. 7. EACH ELIGIBLE INVESTOR SHALL ONLY SUBMIT A SINGLE PAY ORDER, DEMAND DRAFT OR EVIDENCE OF ONLINE TRANSFER OF MONEY ALONG WITH THE REGISTRATION FORM. IT MAY ALSO BE NOTED THAT ONLY A SINGLE PAY ORDER, DEMAND DRAFT OR EVIDENCE OF ONLINE TRANSFER OF MONEY SHALL BE ACCEPTED BY THE BOOK RUNNER ALONG WITH EACH ADDITIONAL PAYMENT FORM. 8. ELIGIBLE INVESTORS WHO ARE ACCOUNT HOLDERS OF THE BANK OF PUNJAB AND MCB BANK LIMITED (BOTH THE BANKERS TO THE BOOK BUILDING PORTION OF THE ISSUE) CAN USE THE ONLINE TRANSFER FACILITY PROVIDED BY BOP AND MCB TO DEPOSIT THEIR BID MONEY TO THE BOOK BUILDING ACCOUNT OPENED AT THE BANK OF PUNJAB AND MCB BANK LIMITED RESPECTIVELY Registration form and Procedure for Registration 1. A standardized Registration Form has been prescribed by the Issuer. The Registration Form shall be submitted, duly filled in, at the Bid Collection Centers in person on addresses given in paragraph on the standard Registration Form. The Registration Form shall be serially numbered at the bid collection centers and date and time stamped at the time of collection of the same from the Bidders. 2. Upon completion and submission of the Registration Form, the Bidders are deemed to have authorized the Issuer to make necessary changes in the Prospectus as would be required for finalizing and publishing the Supplement to the Prospectus in the newspapers in which Prospectus was published and filing the Supplement with the PSX and the SECP, without prior or subsequent notice of such changes to the Bidders. 3. The registration procedure under the Book Building process is outlined below: The Registration period shall be for Five (5) working days i.e. DD/MM/2017 to DD/MM/2017 from 9:00 AM to 5:00 PM and from 9:00 AM to 3:00 PM on DD/MM/2017. The Registration Form shall be issued in duplicate signed by the Bidder and countersigned by the Book Runner, with the first copy for the Book Runner and the second copy for the Bidder. The Registration Form shall be submitted at the Bid Collection Centers in person, through representative or through fax on addresses and numbers given in paragraph on the Registration Form duly filled in and signed in duplicate. Upon registration of the bidders in the System, PSX shall assign and communicate the User ID and Password to the Bidders via on the address provided by them in the Registration Form. The Book Runner may reject any bid for reasons to be recorded in writing provided the reason of rejection is disclosed to such bidder. Decision of the Book Runners shall not be challengeable by the Bidder or its associates. Page 25 of 145

28 Bid Amount / Margin Money shall be deposited along with the Registration Form through demand draft, pay order and online transfer. In case of Online Transfer, the Bidders are requested to submit a bank receipt evidencing transfer of the bid money into the Issuer s designated bank account. Please note that cash must not be deposited either directly or through online transfer in the Issuer s designated bank account. The pay order shall be made in favor of IPO of Inbox Business Technologies Limited Book Building Account. For online transfer the payment shall be made into [Account Number] being maintained in The Bank of Punjab [Branch] and [Account Number] being maintained in MCB Bank Limited [Branch]. The Account Title for the Book Building shall be IPO of Inbox Business Technologies Limited Book Building Account. Please note that online transfer facility shall only be allowed to The Bank of Punjab and MCB Bank Limited. Please note that third party instruments will not be accepted for Margin Money. o In case of intra city payment instruments, the bidders shall ensure that the payment instruments are made Payable at any Branch. Intra city payment instruments that are not made Payable at any Branch will not be accepted. The Book Runners shall collect an amount of 100% of the Application Money as Margin Money in respect of bids placed by Individual Investors. The Book Runners shall collect an amount of not less than 25% of the Application Money as Margin Money in respect of bids placed by Institutional Investors. The Bidder shall provide a valid address in the Registration Form so that the relevant ID and password can be ed to them upon registration. The Bidders can use the User ID and Password to independently place, revise or withdraw their bids online. The successful Bidders shall be issued shares only in the form of book-entry to be credited in their respective CDS accounts. All the bidders shall, therefore, provide their CDC account numbers in the bid application and Registration form Procedure for Bidding 1. A standardized Bidding Form has been prescribed by the Issuer. 2. Registered Investors can submit their bids in person or through representatives at the Bid Collection Centers during the bidding dates or can place their bids online at using the user ID and Password received by them over upon registration with the Book Runner. 3. The bidding procedure under the Book Building process is outlined below: Bids can be placed at either at the Limit Price or as a Step Bid. The minimum size of a Limit Bid by an Eligible Investor shall not be less than PKR 1,000,000/- (Rupees One Million) and in case of a Step Bid, the amount of any step shall also not be less than PKR 1,000,000/- (Rupees One Million). In addition to the arrangement as required under Regulation 8(10) of the Regulations, the investors may place their bids through any of the Bid Collection Centers. The persons at the Bid Collection Centers shall vet the bid applications and accept only such bid applications that are duly filled in and supported by pay order, demand draft or a bank receipt evidencing transfer of the bid money into the Issuer designated bank account. On receipt of bid application in accordance with aforementioned Regulation, the Book Runner shall enter Bid into the System and issue to the Bidder an electronic receipt bearing name of the Book Runner, name of the bidding center, date and time. Page 26 of 145

29 The bidding shall commence from 09:00 a.m. and close at 05:00 p.m. on all days of the Bidding Period. The bids shall be collected and entered into the system by the Book-Runner till 05:00 p.m. on the last day of the bidding period. The Bidders shall have the right; o to revise their bids upwards any time either manually through the Bid Collection Centers or electronically through direct access to the system till 05:00 p.m. on the last day of the Bidding Period. The Bidders shall NOT make any downward revision or withdraw their bids as per Regulation 10(2) (vi) of the Regulations; The Book Runner shall collect full amount of the Bid Amount as Margin Money in respect of bids placed by the individual investors and not less than twenty five percent (25%) of the Bid Amount as Margin Money in respect of bids placed by the Institutional Investors. Payment of Margin Money shall be accepted only through demand draft, pay order or online transfer and third party payment instruments shall not be accepted. The Book Runner may on its own discretion accept a bid without Margin Money, provided the Book Building Portion is fully underwritten at least at the Floor Price by the Book Runner. The Book Runner may reject any bid for reasons to be recorded in writing provided the reason of rejection is disclosed to such bidder. The decision of the Book Runner shall not be challengeable by the Bidder or its associates. PSX shall, through the system, display live throughout the bidding period an order book in descending order showing demand for shares at various prices and the accumulated number of shares bid for along with percentage of the total shares issued (the Order Book ). The Order Book should also show the revised bids and the bids withdrawn. The Order Book shall be accessible through websites of PSX. At the close of the Bidding Period, the Strike Price shall be determined on the basis of the Dutch Auction Method. Once the Strike Price is determined, all those Bidders whose bids are found successful shall become entitled for allotment of shares. The Bidders who have made bids at prices above the Strike Price shall be allotted shares at the Strike Price and the differential shall be refunded. In case all the bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly on time priority basis as per First Schedule Regulation 7(xix)(b) of the Regulations. The procedure for allotment of shares to successful Bidders is mentioned in sections and of the Prospectus. The Bidders who have made bids below the Strike Price shall not qualify for allotment of any Ordinary Shares and the Book Runner shall intimate their respective banks for unblocking their Bid Money within one (1) working day of the close of the bidding period. Successful bidders shall be intimated, within one (1) working day of the closing of the bidding period, the Strike Price and the number of shares provisionally allotted to each of them. The successful institutional bidders shall, within three (3) working days of the closing of the bidding period, deposit the balance amount as consideration against allotment of shares. Where a successful Bidder defaults in payment of shares allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner. Final allotment of shares out of the Book Building Portion shall be made after receipt of full subscription money from the successful Bidders; however, shares to such Bidders shall be credited at the time of credit and dispatch of shares out of the retail portion. The successful Bidders shall be issued shares only in Book Entry Form to be credited in their respective CDS accounts. All the bidders shall, therefore, provide their CDC account numbers in the Registration Form. Page 27 of 145

30 The Designated Institution shall continue to display on its website, the data pertaining to the Book Building and determination of the Strike Price for a period of at least three working days after closure of the Bidding Period. The Book-Runner shall ensure that subscription money received against the bids accepted shall not be released to the Issuer by the Banker to the Book Building Portion until: o o credit or dispatch of all shares allocated under the retail portion of the Issue; and issuance of NOC by the PSX Bank Account for Book Building and Public Portion The Issuer has opened two separate bank accounts for collection of applications money, one each for the Book Building Portion and the General Public Portion of the Issue. The Bidders shall draw demand draft or pay order in favor of IPO of Inbox Business Technologies Limited Book Building Account. For online transfer facility (pay order or demand draft may be deposited at any branch of The Bank of Punjab & MCB Bank Limited and evidence to be submitted to the Book Runner), the payment shall be made into Account Number [Account Number] which has been opened at The Bank of Punjab and Account Number [Account Number] which has been opened at MCB Bank Limited (the Collection Banks ). The Collection Banks shall keep and maintain the bid money in the said account. Once the Strike Price is determined and list of successful bidders/allottees is finalized, the Consultant to the Issue, after obtaining NOC from PSX, may request in writing to the collection banks for transfer of the money of successful and accepted applications to the Issuer s account(s). Please note that third party payment instruments will not be accepted Payment into the Book Building Account The Bidders shall draw a demand draft, pay order favoring IPO of Inbox Business Technologies Limited Book Building Account or Online Transfer of the bid money into the Book Building account [Account Number] maintained at The Bank of Punjab and account [Account Number] maintained at MCB Bank Limited and submit the demand draft, pay order or bank receipt at the designated Bid Collection Centers either in person or through facsimile along with a duly filled in Registration Form. For online transfer the payment shall be made into the Account [Account Number] being maintained at The Bank of Punjab [Branch] & Account [Account Number] being maintained at MCB Bank Limited [Branch] with the Account Title IPO of Inbox Business Technologies Limited Book Building Account. Please note that online transfer facility shall only be allowed for The Bank of Punjab & MCB Bank Limited customers. CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM/REGISTRATION FORM AT THE BID COLLECTION CENTER NOR DEPOSITED DIRECTLY OR VIA ONLINE TRANSFER IN THE ISSUER S DEISGNATED BANK ACCOUNT. BID AMOUNT MUST BE PAID THROUGH PAY ORDER, BANK DRAFT OR ONLINE TRANSFER DRAWN / TRANSFER IN FAVOR OF IPO OF INBOX BUSINESS TECHNOLOGIES LIMITED BOOK BUILDING ACCOUNT IN A MANNER ACCEPTABLE TO THE BOOK RUNNER. The payment procedures for a Limit Bid or a Step Bid are explained below: PAYMENT FOR LIMIT BID If investors are placing their bids as a Limit Bid then they shall deposit the Margin Money based on the number of shares they are bidding for at their stated bid price. For instance, if an investor is applying for 2 million shares at a price of PKR per share, then the total Application Money would amount to PKR 60 million. In such a case, (i) Individual Investor shall deposit PKR 60 million in the Book Building account as the bid amount which is 100% of PKR 60 million; and (ii) Institutional Investor shall deposit at least PKR 15 million in the Book Building account as the Margin Money which is 25% of PKR 60 million. Page 28 of 145

31 PAYMENT FOR STEP BID If an investor is placing a Step Bid which is a series of Limit Bids at increasing prices, then he/she/it shall deposit the Margin Money / bid money based on the total number of shares he/she/it is bidding for at his/her/its stated bid prices. For instance, if the investor bids for 0.50 million shares at PKR per share, 1.00 million shares at PKR per share and 1.50 million shares at PKR per share, then in essence the investor has placed one Step Bid comprising three limit bids at increasing prices. The Application Money would amount to PKR 98 million, which is the sum of the products of the number of shares bid for and the bid price of each limit bid. In such a case, (i) Individual Investors shall deposit PKR 98 million in the Book Building Account as Margin Money which is 100% of PKR 98 million and (ii) Institutional Investors shall deposit at least PKR 24.5 million in the Book Building Account as Margin Money which is 25% of PKR 98 million Payment by Foreign Investors Foreign investors may subscribe using their Special Convertible Rupee Accounts ( SCRA ), as set out under Chapter 20 of the State Bank of Pakistan s Foreign Exchange Manual (the Manual ). Under paragraph 7(i) of Chapter 20, Companies issuing shares out of the new public offers on repatriable basis as permitted under sub para (B) of paragraph 6 of the Manual may open foreign currency collection accounts with Banks abroad or in Pakistan for receiving the subscription in foreign currency. This may also allow refunds from these accounts to unsuccessful applicants. Payment in respect of investment in the shares of the Company has to be made in foreign currency through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened for the purpose of Foreign Portfolio Investment ( FPI ) is classified as SCRA. There are no restrictions on repatriation on sale (disinvestment) and dividend proceeds. Underlying client names / beneficial owners are required to be disclosed at depository level. Key Documents required for individual(s) are: 1. Account opening request 2. Passport / ID General documentation required for opening of SCRA account by Corporate Bidders is: 1. Account opening request 2. Board Resolution & Signatories list 3. Passport / ID of Board of Directors 4. Passport / ID of all authorized signatories 5. Certificate of Incorporation ( COI ) or equivalent documents like Trade Registry Certificate, Business Registration Certificate, and Certificate of Commencement of Business 6. Memorandum & Articles of Association 7. Withholding tax registration certificate / Certificate of country of domicile of client 8. Latest Annual Report 9. List of Board of Directors 10. List of Shareholders (greater than 10% holdings) and key officers Page 29 of 145

32 It is however pertinent to note that the procedure and requirements of each institution differs, hence it is advised to request the procedure from each relative institution. Payments made by foreign investors shall be supported by proof of receipt of foreign currency through normal banking channels. Such a proof shall be submitted along with the application by the foreign investors Procedure for Rejection of Bids In terms of Regulation 9(7) of the Regulations, the Book Runner may reject any Bid placed by a Bidder for reasons to be recorded in writing provided the reason of rejection is disclosed to such Bidder. Decision of the Book Runner shall not be challengeable by the Bidder or any of its associates Time frame for upward revision of Bids by the Bidders The registered investors may revise their Bids upwards any time either manually through the Bid Collection Centres or electronically through direct access to the system till 05:00 p.m. on the last day of the Bidding Period. An investor will not be allowed to place or revise a bid with a price variation of more than 10% of the prevailing indicative strike price. NO WITHDRAWL OF BID OR DOWNWARD REVISION SHALL BE ALLOWED Procedure for Withdrawal of Issue 1. In accordance with Regulation 8(16) of the Regulations, in case the Issuer does not receive bids for the number of shares allocated under the Book Building Portion at the Floor Price, the Issue shall be cancelled and the same shall be immediately intimated to the Commission, PSX and the Designated Institution and the Margin Money shall be refunded to the bidders immediately but not later than three (3) working days of the closing of the Bidding Period. 2. In accordance with Regulation 8(17) of the Regulation, the Book Building process will be considered as cancelled if the total number of bids received is less than forty (40) Basis of Allotment of Shares Once the Strike Price is determined all those Bidders whose bids have been found successful shall become entitled for allotment of Ordinary shares. For allocation of shares priority shall be given to the bids placed at the highest price. The bidders, who have made bids at prices above the Strike Price, will be issued Ordinary shares at the Strike Price and the differential, if any, will be refunded. The bidders, who have made bids below the Strike Price, shall not qualify for allotment of shares and their Margin Money shall be refunded. In case the Bids received are sufficient to allot the total number of shares issued under the Book Building Portion, the allotment shall be made on the basis of highest bid priority, that is, the bid made at the highest price shall be considered first for allotment of shares. In case all the bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly on time priority basis. In case bids received at the Strike Price exceeds the number of shares allocated under the Book Building, then preference will be given to the Bidders who have made the bid earlier. The Issue is being made through the Book Building process at a Floor Price of PKR 30/- per share (including a premium of PKR 20/- per share). The bidders shall be allowed to place bids for one hundred percent (100%) of the issue size and the strike price shall be the price at which one hundred percent (100%) of the issue is subscribed. However, the successful bidders would be allotted and issued only seventy-five percent (75%) of the issue size i.e. 34,050,000 and the remaining twenty five percent (25%) i.e. 11,350,000 would be offered to the retail investors. Page 30 of 145

33 As per the Regulation 7(3) of the Regulations, in case retail portion of the offer size is oversubscribed, the portion allocated to book building investors at strike price shall be allotted to the retail investors in the manner given below: # Times retail portion oversubscribed Percentage of the offer size to be allotted to retail investors out of book building portion on proportionate basis 1 10 to 20 times 10% 2 21 to 30 times 15% 3 31 times or more 30% Final allotment of shares out of the Book Building portion shall be made after receipt of full subscription money from the successful bidders; however, shares to such bidders shall be issued securities only after the end of the public subscription, in the form of book-entry to be credited in their respective accounts. All the bidders shall, therefore, provide number of their accounts in the bid application as per Regulation 9(16) of the Regulations Refund of Margin Money The bidders who have made bids below the Strike Price shall not qualify for allotment of securities and the book runner shall intimate their respective banks for unblocking their Bid Money within one (1) working day of the close of the bidding period as required under Regulation 9(13) of the Regulations. The Bidders who have made bids at prices above the Strike Price, will be issued shares at the Strike Price and the differential will be refunded, where required. The bid money of bidders who have undertaken to subscribe the unsubscribed retail portion shall remain deposited or blocked till allotment of unsubscribed retail portion, if any, to them on pro-rata basis Publication of Supplement to the Prospectus In accordance with the Regulation 11(1) of the Regulations within three (3) working days of the closing of the Bidding Period, the Supplement to the Prospectus shall be published at least in all those newspapers in which the Prospectus was earlier published and also disseminated through PSX. The Supplement to the Prospectus would contain information relating to the Strike Price, the Issue Price, names of the Underwriters for the Retail Portion of the Issue, Underwriting Commission, and Category-wise breakup of the successful bidders along with the number of shares provisionally allocated to them. Format of the Supplement is given on page 2 of this Prospectus. Public subscription for the shares shall be held at any date(s) within thirty days (30) of the publication of the Prospectus but not earlier than seven (7) days of such publication Procedure for allotment of Shares in case of 100% Book Building The bidders may be allowed to place bids for one hundred percent (100%) of the offer size and the Strike Price shall be the price at which the hundred percent (100%) of the offer size is subscribed. However, the successful Bidders would be allotted and issued only seventy-five percent (75%) of the issue size and the remaining twenty five percent (25%) would be offered to the retail investors. The Bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by the retail investors, if any, to them on pro-rata basis. In case the retail portion is fully subscribed, the bid money shall be immediately refunded or unblocked. In this case, the retail portion may not be underwritten Page 31 of 145

34 Restrictions 1. Restriction on Related Employees. 2. Related Employees are not allowed to participate in the bidding for shares. Related Employees include the employees of the Issuer and the Book Runner who are directly involved in the Issue. (A list of Related Employees can be seen at para ). 3. Restriction on Eligible Investors An Eligible Investor shall not make: bid below the Floor Price; a bid for more than 10% of the shares allocated under the Book Building Portion; a bid with price variation of more than 10% of the prevailing Indicative Strike Price, subject to the provision as above; a consolidated bid; and / or more than one bid, either severally or jointly; downward revision or withdraw the bid. Bids from associated companies and associated undertakings of the Issuer, shall not be accepted for shares in excess of five percent (5%), in aggregate, of the Book Building Portion. To check this threshold, the Issuer shall provide to the Book Runner and the Book Runner shall obtain from the Issuer, list of associated companies and associated undertakings of the Issuer before commencement of the Bidding Period along with their respective Unique Identification Numbers, to be entered and capped at five percent (5%) cumulatively in the Book Building system before commencement of the Bidding Period. The Book Runner shall make sure that the said list has been provided to the Designated Institution for entry and capping in the Book Building system and to the employees deployed at the Bid Collection Centres for collection and entry of bids thereof in the system. The associates of the Consultant to the Issue and the Book Runner shall not in aggregate make bids for shares in excess of two percent (2%) of the Book Building Portion Ten Percent (10%) Price Band Mechanism An investor will not be allowed to place or upward revise a bid with a price variation of more than ten percent (10%) of the prevailing Indicative Strike Price subject to floor price i.e. Bid Price must not be below the Floor Price. Please note that the Indicative Strike Price may not be constant and may keep on changing during the bidding period. Therefore, the 10% range will also change with the Indicative Strike Price. For Example, if the floor price is PKR 30.0 per share and Indicative Strike Price at any given point in time during the bidding period is PKR 30.0 per share, registered bidders may place or revise their bids from PKR 30.0 per share to PKR 33 per share. If at any given point in time during the bidding period, the Indicative Strike Price changes from PKR 30.0 per share to PKR 32.0 per share, the registered bidders may place or revise their bids from PKR 32.0 per share to PKR 35.2 per share. Please note that the 10% range on the lower side cannot go below the floor price. The price range of 10% applicable at any given point in time during the bidding period will also be displayed on the bid screen available at the website of PSX. Page 32 of 145

35 Restriction of Downward revision or withdrawal of Bids by the Bidder The Bidders shall not make downward revision or withdraw their bids as per Regulation (10)(2)(vi) of the Regulations Underwriting After determination of the Strike Price the Book Runner shall within two (2) working days of the closing of the bidding period enter into an Underwriting Agreement with the Issuer indicating the number of shares that the Book Runner would underwrite at the Strike Price and the Underwriting Commission / Fee to be charged Interest of the Consultant to the Issue and Book Runner The Consultant to the Issue and Book Runner have no interest in the Issue and the Company other than their role as Consultant to the Issue and Book Runner Associated Undertakings and Companies Associated Companies S. No Name of Company / Undertakings Status CUIN NTN 1. Patek (Private) Limited Holding Company Dawood Hercules Corporation Limited Associate Dawood Corporation (Private) Limited Associate Engro Vopak Terminal Limited Associate Engro Polymer & Chemicals Limited Associate Sirius (Private) Limited. Associate Dawood Lawrencepur Limited Associate The Hub Power Company Limited Associate The Dawood Foundation Associate KAR NO of Sind Paper Mills Pvt Limited. Associate Engro Corporation Limited Associate E2e Business Enterprise Associate 13 Salt Arts (Private) Limited Associate Careem Networks Pakistan (Private) Limited Associate Tenaga Generasi Limited Associate Reon Energy Limited Associate Sach International (Private) Limited Associate Engro Powergen Qadirpur Limited Associate Digitz (Private) Limited Associate All Pakistan Music Conference Associate International Advertising (Private) Limited Associate Inbox Consulting (Private) Limited Associate Note: As required under Regulation 7(8) of the Regulations, the Associated Companies and Associated Undertakings of the Issuer shall not in aggregate make bids for shares in excess of 5% of the Book Building Portion. Page 33 of 145

36 Related Employees of the Company (Inbox Business Technologies Limited) S. No Name Designation 1 Mr. Mir Muhammad Nasir CEO and Executive Director 2 Mr. Shahzada Dawood Non-Executive Director 3 Mr. Shan-e-Elahi Non-Executive Director 4 Ms. Kanza Afzal Non-Executive Director 5 Mr. Junaid Iqbal Non-Executive Director 6 Mr. Mujtaba Haider Khan Non-Executive Director 7 Mr. Imtisal Abbasi Independent Director 8 Mr. Shahid Paracha Non-Executive Director 9 Ms. Fatima Ahmed Company Secretary 10 Mr. Asad Warsi Chief Financial Officer 11 Mr. Shakeel Farooq General Manager Head of Financial Planning & Analysis. 12 Mr. Umais Ahmed Mushtaq General Manager Finance 13 Mr. Muhammad Fahim Senior Manager Finance 14 Ms. Mehvish Maqbool Senior Manager Finance 15 Ms. Faria Hameed Manager - Finance 16 Ms. Hannia Ehtiasham Assistant Manager Legal Affairs 17 Mr. Aurangzaib Ahmed Assistant Manager - Finance 18 Mr. Mohammad Tahir Assistant Manager Finance 19 Mr. Muzaffar Rasheed Share Officer Related employees of the Consultant to the Issue (Next Capital Limited) S. No Name Designation 1 Muhammad Najam Ali Chief Executive Officer 2 Syed Hussain Haider, CFA, CIPM Head of Equity Strategy 3 Umer Habib Head of Investment Banking 4 Humaira Asad Associate, Investment Banking 5 Muhammad Talha Azhar Analyst, Investment Banking Related employees of the Book Runner (Arif Habib Limited) S. No Name Designation 1 Mr. Shahid Ali Habib Chief Executive Officer 2 Mr. Syed Kashif ul Hassan Shah MD, Investment Banking 3 Mr. Rafique Bhundi Sr. Vice President, Investment Banking 4 Mr. Ahmed Rajani Vice President, Investment Banking 5 Mr. Syed Saquib Ali Vice President, Investment Banking 6 Mr. Dabeer Hasan Sr. Associate, Investment Banking 7 Mr. Ammad Tahir Sr. Associate, Investment Banking 8 Mr. Abdul Qadir Associate, Investment Banking 9 Ms. Hamda Senior Analyst, Investment Banking 10 Mr. Yasir Abbas Senior Analyst, Investment Banking 11 Mr. Omair Talib Marghoob Analyst, Investment Banking 12 Mr. Mohsin Javed Management Trainee Officer 13 Mr. Saeed Ahmed Officer, Investment Banking Note: Page 34 of 145

37 1. As per Regulation 7(9) of the Regulations the associates of the Consultant to the Issue and the Book Runner shall not in aggregate make bids for shares in excess of two (2) percent of the Book Building portion. 2. As required under Regulation 20(10) of the Regulations, Related Employees of the Issuer and the Book Runner shall not participate in the bidding for shares. Page 35 of 145

38 Statement by the Issuer April 20, 2017 The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi On behalf of Inbox Business Technologies Limited ( IBTL or the Company ), we hereby confirm that all material information as required under the Companies Ordinance, 1984, the Securities Act, 2015, the Public Offering Regulations, 2017 and the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited has been disclosed in the Prospectus and that whatever is stated in Prospectus and the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. For and on behalf of Inbox Business Technologies Limited -Sd- Mir Muhammad Nasir Chief Executive Officer -Sd- Asad Warsi Chief Financial Officer Page 36 of 145

39 Statement by Consultant to the Issue April 20, 2017 The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi Being mandated as the Consultant to this Initial Public Offering of Inbox Business Technologies Limited through the Book Building process, We hereby confirm that all material information as required under the Companies Ordinance, 1984, the Securities Act, 2015, the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited and the Public Offering Regulations, 2017 has been disclosed in this Prospectus and that whatever is stated in Prospectus and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. For and behalf of Next Capital Limited -Sd- Umer Habib Head of Investment Banking Page 37 of 145

40 Statement by the Book Runner April 20, 2017 The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi Being mandated as the Book Runner to this Initial Public Offering of Inbox Business Technologies Limited through the Book Building process, We confirm that all material information as required under the Companies Ordinance, 1984, the Securities Act, 2015, the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited and the Public Offering Regulations, 2017 has been disclosed in this Prospectus and that whatever is stated in Prospectus and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. For and on behalf of Arif Habib Limited -Sd- Ahmed Rajani Vice President Investment Banking Page 38 of 145

41 2.3 SHARE CAPITAL AND RELATED MATTERS Share Capital No. of shares Shareholders Face Value (PKR) Premium (PKR) Total (PKR) AUTHORIZED CAPITAL 150,000,000 Ordinary shares of PKR 10/- each 1,500,000,000-1,500,000,000 ISSUED, SUBSCRIBED, & PAID UP CAPITAL 7,101,230 Issued for Cash: Ordinary Shares of PKR. 10/- each 71,012,300-71,012,300 63,911,070 Issued as Bonus: Ordinary Shares of PKR. 10/- each 639,110, ,110,700 71,012,300 Total 710,123, ,123,000 ISSUED, SUBSCRIBED & PAID-UP CAPITAL OF INBOX BUSINESS TECHNOLOGIES LIMITED IS HELD AS FOLLOWS: No. of shares Shares held by Directors / Sponsors of the Company Face Value (PKR) Percentage held (%) 7,100,000 Mr. Mir Muhammad Nasir 71,000,000 10% 1 Mr. Shahzada Dawood 10 0% Shares held by Sponsors 36,502,253 Patek (Private) Limited 365,022,530 51% 7,000,000 Mr. Muhammad Ali 70,000,000 10% 10,655,000 Mr. Ghias Uddin Khan 106,550,000 15% 1,320,000 Mr. Nadir Feroze Nazim 13,200,000 2% 5,709,220 Mrs. Razia Ghulam 57,092,200 8% 1,000,000 Mrs. Sanober Yousuf 10,000,000 1% 480,000 Mr. Zafar Nazim 4,800,000 1% 882,070 Mr. Moin Iqbal 8,820,700 1% Shares held by Directors 1 Mr. Junaid Iqbal 10 0% 1 Mr. Shahid Pracha 10 0% 1 Mr. Mujtaba Haider Khan 10 0% 1 Mr. Imtisal Abbasi 10 0% 1 Mr Shan-e-Elahi 10 0% 1 Ms. Kanza 10 0% Shares held by Other Shareholders 363,750 Mr. Mobin Ansari 3,637,500 1% 71,012,300 Total Paid up Capital 710,123, % Page 39 of 145

42 PRESENT ISSUE OF ORDINARY SHARES No. of shares Allocation Face Value (PKR) Premium (PKR) Total Value (PKR) 34,050,000 Allocations to Institutions / Individual Investors through Book Building process at 340,500,000 [X] [X] Strike Price 11,350,000 General Portion 113,500,000 [X] [X] 45,400,000 Total Issue size 454,000,000 [X] [X] 116,412,300 Grand Total (Post-IPO) Paid-up Capital 1,164,123,000 [X] [X] 1. As per Regulation 5(1) of the Regulations, the sponsors of the Issuer shall retain their entire shareholding in the Company for a period of not less than twelve months from the last date for public subscription; 2. As per Regulation 5(2) of the Regulations, the sponsors of the Issuer shall retain not less than twenty five percent of the paid up capital of the Company for not less than three financial years from the last date for the public subscription; 3. As per Regulation 5(3) of the Regulations, the shares of the sponsors mentioned at (1) and (2) above shall be kept unencumbered in a blocked account with central depository; 4. Subject to compliance with sub-regulation 5(1) and 5(2) above, and with the approval of the securities exchange, the sponsors of the Issuer may sell their shareholding through block-sale to any other person who shall be deemed sponsor for the purposes of these Regulations Opening and Closing of the Subscription List The subscription list will open at the commencement of banking hours on DD/MM/2017 and will close on DD/MM/2017 at the close of banking hours. Please note that online applications can be submitted 24 hours during the subscription period which will close at 12:00 midnight on DD/MM/2017. E-IPO FACILITY In order to facilitate the investors, the Issuer has arranged provision of e-ipo facility through United Bank Limited ( UBL ) & Summit Bank Limited ( SMBL ) that is among the Bankers to the Issue. The accountholders of UBL can use UBL net-banking to submit their applications online via link SMBL account holders can use SMBL Net Banking to submit their application via link Page 40 of 145

43 2.3.3 Investor Eligibility for the Public Issue Eligible investors include: 1. Pakistani citizens resident in or outside Pakistan or persons holding dual nationalities including a Pakistani Nationality; 2. Foreign nationals whether living in or outside Pakistan; 3. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their respective constitutive documents and existing regulations, as the case may be); 4. Mutual Funds, Provident / Pension / Gratuity Funds / Trusts (subject to the terms of their respective Trust Deeds and existing regulations); and 5. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan Facilities available to Non-Resident Pakistani and Foreign Investors Non-resident Pakistani investors and foreign investors may subscribe for the shares being issued through this Prospectus by using their SCRA. For details please see Chapter 20 of the Foreign Exchange Manual of the State Bank of Pakistan. Under paragraph 7(i) of Chapter 20 of the said Manual, Companies issuing shares out of new public Issue on repatriable basis, as permitted under sub para (B) of paragraph 6, may open foreign currency collection accounts with banks abroad or in Pakistan for receiving the subscription in foreign currency. They may also allow refunds from these accounts to unsuccessful applicants. Payment in respect of investment in the shares of the Company has to be made in foreign currency through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened for the purpose of Foreign Portfolio Investment ( FPI ) is classified as SCRA. There is no restriction on repatriation of sale proceeds and dividend payouts on shares. Underlying client names/beneficial owners are required to be disclosed at depository level. Key Documents required for individual(s): 1. Account opening request; and 2. Passport / ID. General documentations required for opening of SCRA account by institutional investors are: 1. Account opening request; 2. Board Resolution & Signatories list; 3. Passport / ID of Board of Directors; 4. Passport/ID of all authorized signatories; 5. Certificate of Incorporation ( COI ) or equivalent document (like Trade Registry Certificate, Business Registration Certificate, and Certificate of Commencement of Business); 6. Memorandum & Articles of Association; 7. Withholding tax registration certificate / Certificate of country of domicile of client; 8. Latest Annual Report; 9. List of Board of Directors; and 10. List of Shareholders (greater than 10% holdings) and key officers. Page 41 of 145

44 It is however pertinent to note that the procedure and requirements of each financial institution with respect to opening of SCRA differs, hence it is advisable for Investors / Bidders to make a prior request for the procedure from concerned financial institution. Payments made by foreign investors must be supported by proof of receipt of foreign currency through normal banking channels. Such proof must be submitted along with the Application by the foreign investors Minimum amount of Application and Basis for Allotment of Shares Out of the General Public Portion of the Issue The basis and conditions of allotment to the general public shall be as follows: 1. Application for shares must be made for 500 shares or in multiples of 500 shares only. Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected. 2. The minimum amount of application for subscription of 500 shares is the Issue Price x 500 shares. Any cost incurred in transfer of shares as part of the Issue shall be borne by Issuer. 3. Application for shares below the minimum amount shall not be entertained. 4. SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS PROHIBITED AND SUCH APPLICATIONS MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, If the shares issued to the general public are sufficient to accommodate all applications, all applications shall be accommodated. 6. If the shares applied for by the general public are in excess of the shares being issued to them, the distribution shall be made by computer balloting, in the presence of the representative(s) of PSX in the following manner: 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. 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. 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. 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. After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in the following manner: o If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then 2,000 shares shall be allotted to each applicant and remaining shares shall be allotted on pro-rata basis. o If the remaining shares are not sufficient to accommodate all the remaining applications for over 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to each successful applicant. 7. If the Issue is over-subscribed in terms of amount only, then allotment of shares shall be made in the following manner: First preference will be given to the applicants who applied for 500 shares; Page 42 of 145

45 Next preference will be given to the applicants who applied for 1,000 shares; Next preference will be given to the applicants who applied for 1,500 shares; Next preference will be given to the applicants who applied for 2,000 shares; and then After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the applicants who applied for more than 2,000 shares. 8. Allotment of shares will be subject to scrutiny of applications for subscription of shares. 9. Applications, which do not meet the above requirements, or applications which are incomplete, will be rejected Refund/Unblocking of Subscription Money to Unsuccessful Applicants As per the Regulation 11(4) of the Regulations, within 10 days of the close of public subscription period or such shorter period of time as may be specified by the Commission from time to time, the Ordinary Shares shall be allotted and issued against the accepted and successful applications and the subscription money of the unsuccessful applicants shall be unblocked/ refunded. As per sub-section (2) of Section 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 Issuer shall be 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 exceeding PKR 5,000/- and in case of continuing offense to a further fine not exceeding PKR 100/- per day after the 15th day of which the default continues. Provided that the Issuer shall not be liable if it proves that the default in making the refund was not on its own account and was not due to any misconduct or negligence on its part. In case retail portion of the issue, if any, remains unsubscribed, the unsubscribed shares shall either be taken up by the underwriters or allotted to successful bidders at the strike price determined in the book building process on prorata basis Basis of Allotment of Shares In case the bids received are sufficient to allot the total number of shares offered for sale under the Book Building Portion, the allotment shall be made on the basis of highest bid priority that is the bid made at the highest price shall be considered first for allotment of the shares. In case all the bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted against the bids made at the Strike Price strictly on time priority basis In case bids received at the Strike Price exceeds the number of shares allocated under the Book Building, then preference will be given to the Bidders who have made the bid earlier. Final allotment of shares out of the Book Building portion shall be made after receipt of full subscription money from the successful bidders; however, shares to such bidders shall be issued securities only after the end of the public subscription, in the form of book-entry to be credited in their respective accounts. All the bidders shall, therefore, provide number of their accounts in the bid application as per Regulation 9(16) of the Regulations Issue, Dispatch Credit of Share Certificates The Company shall credit and dispatch all shares certificates, in marketable lots, within ten (10) days of the closing of subscription list to all the successful applicants under intimation to the Exchange as per Listing of Companies and Securities Regulations clause (e) of the PSX Rule Book. Within 10 days of the close of public subscription period, the Company shall allocate shares against the accepted and successful applications and the subscription money of the unsuccessful applicants shall be refunded. Page 43 of 145

46 Shares will be issued either in scrip-less form in the CDS of CDCPL or in the shape of physical scrip on the basis of option exercised by the successful applicants. Shares in the physical scrip shall be dispatched to the Bankers to the Issue within ten (10) days from the date of close of subscription list, whereas scrip less shares shall be directly credited through book- entry in the respective accounts maintained with CDCPL. 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 defaults in complying with the above requirements, it shall pay the PSX a penalty of PKR 5,000 per day for every day during which the default continues. The PSX 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 of the Stock Exchange. The name of the Company will also be notified to the member of the PSX and placed on the web site of the PSX Transfer of Shares PHYSICAL SCRIPS The shares shall be transferred under Section 76 of the Ordinance. Under the provisions of Section 77 of the Ordinance, the Directors of the Company shall not refuse to transfer any fully paid share unless the transfer deed is, for any reason, defective or invalid or is not accompanied by the relevant share certificate. Provided that the Company shall within thirty (30) days from the date on which the instrument of transfer was lodged with it, notify the defect or invalidity to the transferee who shall, after the removal of such defect or invalidity, be entitled to relodge the transfer deed with the Company. TRANSFER UNDER BOOK-ENTRY SYSTEM The shares maintained in the CDS in the book-entry form shall be transferred in accordance with the provisions of Section 76 of the Ordinance read with Section 77 thereof and the Central Depositories Act, 1997 and the CDCPL Regulations Shares Issued in Preceding Years S. No No. of Shares Issued Consideration Total Value (PKR) Date of Issuance / Allotment 1 5 Cash December ,799,995 Cash 17,999, August ,900,230 Cash 19,002, February ,200,000 Cash 12,000, June ,000,000 Cash 10,000,000 8-May ,201,000 Cash 12,010, November ,911,070 Bonus 639,110, February-2017 Total 71,012, ,123,000 Other than the above mentioned shares, there has been no issuance of shares since the incorporation of the Company. Page 44 of 145

47 Principal Purpose of the Issue Inbox Business Technologies Limited intends to issue 45,400,000 shares at a floor price of PKR. 30 per share to raise PKR 1,362 million through this IPO at the Floor Price. The purpose of this issue and utilization of proceeds are given below: Purpose of the Issue Fund Allocated Share of Allocation IPO Proceed PKR 1,362 million 100% Investment in Project Assets PKR 1,060 million 78% Working Capital Financing PKR 302 million 22% 1. Investment in Project Assets The business model of Inbox Business Technologies Limited uses Managed Services Provider ( MSP ) model which assumes responsibility for providing a defined set of IT services. Under the said model, the Company operates by successfully engaging and executing IT related contracts from the public and private Sector. In order to obtain a public contract, IBTL has to bid for it in view of all associated costs and the margin that the Company intends to earn. A cost sheet is prepared encompassing all the associated outlays that shall be incurred during the course of the contract. Owing to transformation and development of the ICT sector of Pakistan, the Company based on its extensive experience and industry knowledge anticipates several potential projects to come online during the next couple of years. The Management of the Company believes that some of those contracts / projects shall require upfront investment in Project Related Assets. The Company intends to invest around PKR 1,060 million (generated from the IPO proceeds) in the expected projects from the Public and Private Sector. Some of the expected upcoming projects fall under various departments of the government. All these potential projects are expected to have multi-year Service Level Agreement ( SLA ) between IBTL and its clients. Details of potential projects which Company intends to bid for in the future, are given below: Description of Potential Projects Customer Experience and Citizens Service ( CSX ): Customer Experience Projects Expected Outlay 1. The project would involve establishment of centralized facility for Automated Vehicle Registration System. Nature of Project Asset A centralized printing facility for NFC based Automated Registration Cards will be required which will include hardware as well as software for the management of complete lifecycle of Automated Registration Cards for printing, storage and delivery. Capex will include establishment of a secure facility for printing, storage and delivery of ARCs and integration with Motor Transport Management Information System ( MTMIS ), provision of hardware and software at 42 district offices for updating NFC cards and provision of a mobile application for verification of ARCs by Excise field officers. PKR 457 million Page 45 of 145

48 The project involves digital platform and hardware for the agriculture sector thereby providing support to the farmer community. Nature of Project Asset Digital Platform will be acquired for the development of content to fulfill the requirements of the project. Along with this hardware will be acquired to support the platform. Urban Mass Transportation: Automated Fare Collection, Bus Scheduling and Vehicle Location Tracking Systems along with monitoring of the same. The project(s) will include all the necessary hardware and software along with operational management of the solution Nature of Project Asset The CAPEX required for this project will cover software for automated fare collection and bus scheduling system, along with hardware to support the operations of the system which would include validators, BUS OBUs etc. In addition to these, assets will be required to develop and maintain stations and offices to support the bus operations; these assets will include office equipment, computer accessories and fixtures and fitting. Urban Security: Camera systems with controllers, close circuit radio system and support system for law enforcement agencies. This project supports the government s vision of safe cities. PKR 393 million PKR 21 million 4. Nature of Project Asset Assets to be acquired include: Camera systems, controllers for cameras, close circuit radio system & fabrication to support the overall system. Internet of Things: Servers and Censors to manage and control any losses arising from spillage or theft, along with efficient management, in the logistics sector. Nature of Project Asset The CAPEX requirements of this project include: 1. Front end assets - sensors on equipment's and on trucks and tankers. 2. Back end assets - control center equipment including servers etc. Cloud and Converged Systems: Hyper- Converged Infrastructure Hardware and Software for international internet traffic management. Nature of Project Asset Soft switches (hardware) based on application (software) will be deployed. Software Defined Wide Area Network ( SD WAN ): Hardware and integrated software will be provided to the clients to connect to their worldwide offices / branches. Access points, aggregation switches and controllers will be provided to the clients to convert Wide Area Network ( WAN ) to SD WAN. PKR 28 million PKR 75 million PKR 68 million Page 46 of 145

49 Nature of Project Asset Configured boxes will be provided by Inbox i.e. hardware which will consist of integrated software; which client will distribute to different offices worldwide. These configured boxes would have to be plugged in and played in order to connect all sites under the contract. 7. Further assets to be acquired include SD WAN solution access points, aggregation switches and controllers. Cloud Solution Virtual Customer Premises will be used to provide broadband connectivity on a cloud platform. Nature of Project Asset Virtual CP boxes will be the major portion of CAPEX. Total PKR 18 million PKR 1,060 million Utilization of Proceeds The Issue is expected to generate PKR 1,362 million at floor price of PKR 30 per share. As per the fund utilization given above following will be the allocation of funds generated through initial Public Offerings. Allocation of IPO funds 22% 78% Investment in Project Assets Working Capital Financing The utilization of proceeds mentioned above are based on projects either announced or are expected to be announced in the forthcoming future based on the best judgement of the Company s management. It is imperative to mention here that the Company has a strong track record of delivering large scale IT infrastructure projects and thereby feels confident about bidding successfully for these upcoming projects. However, if for some reason, the Company is not successful in any of the above mentioned projects or the mentioned projects are deferred or postponed, the Company anticipates that there would be many other project development opportunities available given considerable focus towards automation and digitization both in the public and the private sector within the Country. In addition, the Company, as per the Regulation 16(i)(ii) of the Regulations, will: Report detailed break-up of the utilization of the proceeds of the issue in its post issue quarterly / half-yearly and annual accounts for three years; and Page 47 of 145

50 Submit a quarterly report providing the status of the commitments mentioned in the prospectus. The above utilization of funds is based on the subscription at the Floor Price of PKR 30 per share. Any excess funds received above the Floor Price shall be utilized by the Company in either (i) bidding for new projects, (ii) pay down its financing and/or (iii) in any other activity related to the Company s ongoing operations. This decision will be taken by the Board of Directors as deemed necessary 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, except to the extent of loans provided by the Company to the shareholders as provided below: Mr Mir Muhammad Nasir, CEO of the Company had taken an interest free house loan of PKR 50 million on February 01, Mr. Ghias Uddin Khan (sponsor), had taken an interest free loan of PKR 60 million on 13 th Nov, 2014 from Inbox Business Technologies Limited in his capacity as the CEO of the Company. Since then, Mr. Ghias Uddin Khan has resigned from his role as the CEO and is currently only a shareholder. Henceforth, the loan will be repaid before 30 th June, Dividend Policy The Company intends to follow a consistent profit distribution policy for its members, subject to profitability, availability of adequate cash flows, the Board s recommendation and shareholders approval. The rights in respect of capital and dividends attached to each ordinary share are and will be the same. The Company in its general meeting may declare dividends but no dividend shall exceed the amount recommended by the Directors. Dividend, if declared in the general meeting, shall be paid according to the provisions of the Ordinance. The Directors may from time to time declare interim dividends as appear to the Directors to be justified by the profits of the Company. No dividend shall be paid otherwise than out of the profits of the Company for the year or any other undistributed profits. No unpaid dividend shall bear interest or mark-up against the Company. The dividends shall be paid within the period laid down in the Ordinance. Those applicants who intend that their cash dividend, if any, is directly credited in their Bank Account, must fill-in the relevant part of the Shares Subscription Form under the heading, Dividend Mandate Option. The Company has issued no dividends over the past five years but has issued an interim stock dividend (bonus shares) in the ratio of 9 shares per 1 share for the year ending December, Particulars FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017(1 st Quarter) Dividend Bonus % Covenants / Restriction on Payment of Dividends: It is stated that there is no restriction on Inbox by any regulatory authority, creditor, stakeholder etc. on the distribution and capitalization of its profits. Page 48 of 145

51 Eligibility for Dividend The ordinary shares issued shall rank pari-passu with the existing shares in all matters of the Company, including the right to such bonus or right issues, and dividend as may be declared by the Company subsequent to the date of issue of such shares 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) as may be applicable from time to time except where the Ordinance does not apply to any shareholder or where such shareholder is otherwise exempt or has claimed exemption from payment / deduction of Zakat in terms of and as provided in that Ordinance Capital Gains Tax Capital gains derived from the sale of listed securities are taxable in the following manner under section 37A of Income Tax Ordinance, 2001: Category Tax Year Less than twelve months Tax Rate FY 2017 Holding Period of Securities Twelve months or more but less than twenty four months Twenty four months or more but acquired on or after 1 st July, 2012 Before 1 st July, 2012 Filer % 12.50% 7.50% 0% Non Filer % 16.00% 11.00% 0% Withholding Tax on Dividends Dividend distribution to shareholders will be subject to withholding tax under section 150 of the Income Tax Ordinance, 2001 as specified in Part III Division I of the First Schedule of the said Ordinance or any time to time amendments therein. In terms of the provision of Section 8 of the said Ordinance, said deduction at source, shall be deemed to be full and final liability in respect of such profits in case of individuals only. The following are the rates: For filers of Income Tax Returns: 12.50% For non-filers of Income Tax Return: 20.00% Tax on Bonus Shares As per section 236M of the Income Tax Ordinance 2001, tax at the rate of 5.00% of the value of bonus shares determined on the basis of the day end ex-price be collected by the Company issuing the bonus shares, which will be the final tax liability on such income of the shareholder Income Tax The income of the Company is subject to Income Tax under the Income Tax Ordinance, Page 49 of 145

52 Deferred Taxation Deferred tax is provided using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts, for financial reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry forwards of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become probable that future taxabale profits will allow deferred tax asset to be recovered. 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 tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset only if there is a legally enforceable right to offset current tax assets and liabilities and they relate to the income tax levied by the same tax authority. As of December 31 st, 2016, Company has reported deferred tax asset of PKR million Sales Tax General Sales Tax is applicable as per Sales Tax Act, 1990 on supplies and services. Sales tax on services as per Punjab Sales Tax on Services Act, 2012 by Punjab Revenue Authority. Sales tax on services as per Sindh Sales Tax on Services Act, 2011 by Sindh Revenue Board Sales Tax on Sale / Purchase of Shares Under the Constitution of Pakistan and Articles 49 of the 7 th NFC Award, the Government of Sindh, Government of Punjab, Government of Khyber Pakhtunkhwa and Government of Baluchistan have promulgated the Sindh Sales Tax on Services Act, 2011, Punjab Sales Tax on Services Act, 2012, Khyber Pakhtunkhwa Sales Tax on services through Khyber Pakhtunkhwa Finance Act, 2013 and the Baluchistan Sales Tax on services Act, 2015 respectively. The Sindh Revenue Board, the Punjab Revenue Authority, and the Khyber Pakhtunkhwa Revenue Authority and the Baluchistan Revenue Authority administer and regulate the levy and collection of the Sindh Sales Tax ( SST ), Punjab Sales Tax ( PST ), Khyber Pakhtunkhwa Sales Tax ( KST ) and Baluchistan Sales Tax ( BST ) respectively on the taxable services provided or rendered in Sindh, Punjab or Khyber Pakhtunkhwa provinces respectively. The value of taxable services for the purpose of levy of sales tax is the gross commission charged from clients in respect of purchase or sale of shares in a Stock Exchange. The above mentioned Acts levy a sales tax on Brokerage at the rate of 13% in Sindh, 16% in Punjab and in Baluchistan and Khyber Pakhtunkhwa the rate is 15%. Sales tax charged under the aforementioned Acts is withheld at source under statutory requirements Capital Value Tax ( CVT ) on Purchase of Shares Pursuant to amendments made in the Finance Act, 1989 through Finance (Amendments) Ordinance, 2012 promulgated on April 24, 2012, 0.01% Capital Value Tax will be applicable on the purchase value of shares. Page 50 of 145

53 Tax Credit for Investment in IPO Under Section 62 of the Income tax Ordinance, 2001, a resident person other than a Company, shall be entitled to a tax credit, as mentioned in the said section, for a tax year in respect of the cost of acquiring in the year, new shares offered to the public by a public company listed on a stock exchange in Pakistan, provided the resident person is the original allottee of the shares or the shares are acquired from the Privatization Commission of Pakistan. As per section 62(3)(b) of the Income Tax Ordinance, 2001, the time limit for holding shares has been designated as 24 months to avail tax credit Tax Credit for Enlistment On enlistment under Section 65C of the Income Tax Ordinance, 2001, tax credit at 20% of the tax payable shall be allowed for the tax year in which a Company is listed on a Stock Exchange in Pakistan and also extended for following year of enlistment through Finance Bill Page 51 of 145

54 3 UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES 3.1 UNDERWRITING Book Building Portion Arif Habib Limited have been mandated as the Book Runner to the Issue. The Book Runner will underwrite the 45,400,000 shares subscribed through the book building representing 100% of the Issue as required under Regulation 7(6) of the Regulations, with the limitations in effect that the Book Runner shall only underwrite the default portion of the Book Building, if any, at the Strike Price determined through the Book Building process. General Public Portion The General Public Portion of the Issue of 11,350,000 Ordinary Shares (25%) shall not be underwritten in terms of Regulation 7(4) of the Regulations. 3.2 OPINION OF DIRECTORS REGARDING RESOURCES OF THE UNDERWRITERS In the opinion of the Directors, the resources of the Book Runner are sufficient to discharge its underwriting commitments / obligations. 3.3 UNDERWRITING COMMISSION Book Building Portion Underwriting commission at the rate of 0.1% of the Book Building portion will be paid as underwriting commission. The amount of security deposited by the defaulting Bidder shall however, be forfeited to the Book Runner. 3.4 BUY BACK / REPURCHASE AGREEMENT THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY BACK / RE-PURCHASE AGREEMENT WITH THE COMPANY OR ANY OTHER PERSON IN RESPECT OF THIS ISSUE OF SHARES. ALSO, NEITHER THE COMPANY NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY BACK / RE-PURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ASSOCIATES. THE COMPANY AND ITS ASSOCIATES SHALL NOT BUY BACK / RE-PURCHASE SHARES FROM THE UNDERWRITERS AND THEIR ASSOCIATES. 3.5 COMMISSION OF THE BANKERS TO THE ISSUE Commission at the rate of 0.5% (inclusive of all taxes) of the amount collected on allotment in respect of successful applicants will be paid by the Company to the Bankers to the Issue for services to be rendered by them in connection with the general public offering. 3.6 BROKERAGE For this Issue, brokerage shall be paid to the TRE Certificate Holders of PSX at the rate of 1.00% of the value of shares (including premium, if any) on successful applications for Book Building and General Public Portion. No brokerage shall be payable in respect of shares taken up by the Underwriters by virtue of their underwriting commitments. Page 52 of 145

55 3.7 ESTIMATED EXPENSES OF THE ISSUE Expenses to the Issue are estimated not to exceed PKR 53,906,101/-. The break-up of these preliminary expenses is given below: Particulars Rate Expense Consultant to the Issue Fee 10,000,000 Book Runner Fee % 10,215,000 Underwriting fee of the Book Building portion % 1,362,000 Commission to Bankers for General Public % 1,702,500 e-ipo Facility Charges 475,000 Bankers to the Issue Out of Pocket 29,000 TREC Holders' Commission % 13,620,000 PSX Initial Listing Fees 1,164,123 PSX Annual Listing Fees 412,309 PSX Services Fee 50,000 PSX Book Building Software charges 500,000 Transfer Agent and Balloting Agent 731,500 Marketing & Printing Expenses 6,000,000 CDC - Fresh Issue Fees % 2,179,200 CDC - Annual Listing Fees 320,000 SECP IPO Application Processing Fee 791,031 SECP Supervisory Fee 157,643 Legal Advisory 3,146,795 Shari ah Advisor Fee 50,000 Miscellaneous Expenses 1,000,000 Total 53,906,101 1 Represent the maximum amount that is expected to be paid based on the Floor Price of PKR 30/- per share Page 53 of 145

56 4 OVERVIEW, HISTORY AND PROSPECTS 4.1 COMPANY HISTORY & OVERVIEW Inbox Business Technologies Limited, bearing incorporation number , was incorporated in Pakistan under the Companies Ordinance, 1984 (the Ordinance) as a private limited company on December 26, 2001 by acquisition of business carried earlier by the directors in the name of Inbox Business Technologies, a firm registered under Partnership Act, It started as an entrepreneurial venture in 2001 and set out to redefine Pakistan s computing industry with the first local computer brand the Inbox PC. IBTL emerged as a computer assembling company and was awarded as the highest selling PC brand in Pakistan by International Data Corporation ( IDC ) in Later the Company evolved into a Systems Integrator taking up the role of building computing systems for client combining hardware and software components provided by different vendors. Systems Integration allows the clients to meet their business goals efficiently without expensive and customized implementation. As a Systems Integrator, IBTL undertook key public projects like establishment of 1,317 IT labs in Sindh and Punjab and implementation of Internet Traffic Management Systems for Pakistan Telecom Authority. Experiencing further transformation, IBTL has evolved into an end-to-end IT solutions provider with a focus on giving clients unparalleled operational efficiency, giving them the competitive edge required in the progressive market. The Company currently provides IT Infrastructure enablement and services under Managed Services Provider ( MSP ) model to public and private sector clients. The MSP model allows the Company to manage a customer s IT infrastructure and systems. Under this arrangement, IBTL is responsible for the functionality of IT equipment and services which is governed by the Service Level Agreement ( SLA ). Few flagship projects of IBTL under MSP model include establishment of Automatic Number Plate Recognition ( ANPR ) system which enabled number plate production and system integration. Another important MSP model is Urban Mass Transport system implemented for Punjab Metro bus Authority which involves installation and maintenance of Automated Fare Collection System ( AFC ), Bus Scheduling System ( BSS ) and Vehicle Monitoring System ( VMS ). The first Metro bus project was awarded to IBTL in 2012 and it has since then become the trusted partner in Urban Mass Transport Solutions and currently has 100% market share in Metrobus Projects. In the private sector, IBTL has allowed its clients to focus on their core operations by providing essential back-office IT services. One of the key projects in private sector involve giving critical IT support to PTCL in 389 sites across the country which involves end user management for client s IT hardware. IBTL has also played a pivotal role in other areas of public services including building Pakistan s first ever national level Data Centre for National Telecommunication Company which is a step towards implementation of E- Governance in the Country. IBTL also took part in digital transformation of Centralized Command and Control Centre for Lahore. The Company has positioned itself to reap the benefits of increasing digitization in the Country and increasing IT spending by government and private institutions. The Company s head office is located at Dawood Centre, Karachi. 51% of the ordinary shares are owned by Patek (Private) Limited. The Company has state of the art facilities including Digital Operating Center ( DOC ) for 24/7 remote monitoring and managed services delivery. The Company has branch offices in Lahore and Islamabad and currently employs nearly 1800 employees. Inbox has served over 300 clients in the Country from the private and public sector and has technical reach in 70 cities of Pakistan. Page 54 of 145

57 4.1.1 Patek (Private) Limited Patek (Private) Limited is a company incorporated on July 17, 1999 under the Companies Ordinance, The Company registered office is situated at Dawood Centre MT Khan Road, Karachi, Pakistan. The principal activity of the Company is to make investments. Following is a list of shareholders of Patek: Name of Shareholders Share holding Mr. Hussain Dawood 41.9% Mr. Shahzada Dawood 14.5% Mr. Samad Dawood 14.5% Mrs. Kulsum Dawood 14.5% Ms. Sabrina Dawood 14.5% Current position of the Company s long term investment portfolio includes: Investment Percentage holding Inbox Consulting (Private) Limited % Inbox Business Technologies Limited 51.28% Engro Corporation Limited 6.13% Dawood Lawrencepur Limited 5.93% Hub Power Company Limited 0.09% Key Milestones Years Events 2001 The Company was incorporated as a private limited company on December 26, The Dawood Hercules Group acquired majority shares in Inbox, giving it the resources to truly evolve into an organization that can play a dominant role in the local IT industry. The Company was awarded Top Selling PC Brand in Pakistan by International Data Corporation. The Company revised its business model from a PC assembler and retailer to a business model built around reselling IT equipment. The Company established 206 IT labs in Sindh along with deployment of 3,296 computers, mandated by the Provincial Governments. Deployed solutions for Internet Traffic Management System for Pakistan Telecom Authority. The Company established 1,111 IT labs in Punjab, mandated by the Provincial Government Started providing support to Standard Chartered Bank branches located in 227 locations, incorporating 4,676 end users. Inbox won and successfully delivered 110,000 laptops under Shahbaz Sharif eyouth scheme. In the same year, Inbox won its first Metro bus contract for Lahore. Page 55 of 145

58 Upgraded the solutions for Internet Traffic Management System for Pakistan Telecom Authority. IBTL established a state of the art Automatic Number Plate Recognition enabled number plate production and system integration facility for Excise & Taxation, Punjab. IBTL demerged into Inbox Consulting (Private) Limited ( ICPL ) and Inbox Business Technologies Limited ( IBTL ) with the applications segment being parked under ICPL. This has allowed IBTL to focus on IT Infrastructure and Services. Further expanded Metro bus services to Rawalpindi and Islamabad. Built first ever National Level Data Centre for National Telecommunication Company ( NTC ) as part of federal government s agenda of E-governance. Inbox also signed Metro bus service for Multan coupled with Feeder Router for both Lahore and Multan. IBTL was sub contracted for establishment of a data center by the Punjab Safe City Authority for Safe City Lahore. IBTL also signed a contract with PTCL and Ufone collectively to expand their internet bandwidth 4.2 PATTERN OF SHAREHOLDING The major shareholders of the Company includes Patek (Private) Limited which owns around 51%, Mr. Gias Uddin Khan holding 15%, Mr. Muhammad Ali holding 10% and Mr. Mir Muhammad Nasir holding 10% of the total paid up capital. A summary of shareholding pattern according to different categories of shareholders is given below: Description Number of shares Face Value Percentage holding Total Paid Up Capital 71,012, ,123, % Shares held by Directors / Sponsors of the Company 7,100,001 71,000,010 10% Share held by Sponsors 63,548, ,485,430 89% Share held by Directors % Shares held by Other Shareholders 363,750 3,637,500 1% 4.3 REVENUE AND COST DRIVERS KEY REVENUE DRIVERS 1. GDP Growth The Country is expected to post a growth of 5% for the current fiscal year after an increase from 4.7% in FY16. The GDP is expected to increase further as gains from CPEC will start to materialize, coupled with gains derived from higher investment inflows due to better security situation. The businesses are expected to ride on the high growth rate by expanding which would increase their technological requirement for operations and better decision making. With billions of dollars expected to be spent on CPEC related projects, IBTL expects significant demand for IT services in Pakistan. 2. Digitization of the Economy The broadband penetration in the last three years has jumped from 2.6 million subscribers to around 40 million since the launch of 3G / 4G in 2014 with cellular penetration at 69% from 60% in Increasing digitization drives the growth for technology based products and services in public and private sector. Page 56 of 145

59 3. Private Sector Spending Realizing the importance of technological advancement to remain competitive, the private sector is heavily investing to upgrade their technology ranging from cloud solutions to interconnectivity. Businesses in the current age want to operate on a leaner model where they are able to outsource their IT operations and focus on their core business. IBTL s EMS and CSI business will particularly benefit from increasing private sector spending. 4. Public Sector Spending The public sector has witnessed a surge in spending led by the Punjab Government which has earmarked PKR 13.9 billion for Governance and IT spending for the current fiscal year. IBTL generates more than half of its revenue from the public sector and has delivered key projects in the past making it the frontline contender for future projects. Furthermore, The Company also has a 100% market share in the Metrobus projects which are expected to expand to other cities as well. 5. Technological Advancement The rate of technological advancement is increasing with time and this rapid advancement in technology requires upgradation to keep pace with the new needs. Better technology helps businesses make better decisions, thereby, but requires an upfront cost. With rapidly changing business needs, IBTL will provide up-todate solutions to its clients KEY COST DRIVERS 1. Human Resource Human Resource is a key cost in IT projects where implementation and operations of sophisticated IT equipment and software requires technically sound personnel. IBTL will be required to spend well on their key staff in terms of remuneration and trainings in order to retain them and also keep them motivated. 2. IT Equipment The Company deploys Project Assets which majorly comprise of IT equipment. The IT equipment is usually imported and is one of the major costs for the Company. 3. Research and Development Finding customized solutions for clients requires research & development activity. The activities entail production of prototypes to demonstrate the effectiveness of the solution offered. Depending on complexities involved in the solution, this cost can vary considerably from project to project 4.4 PROJECTS UNDERTAKEN BY THE COMPANY The Company has worked on a variety of projects over the last 16 years. Highlights of a few major ones are mentioned below: ONGOING PROJECTS National Telecommunication Corporation ( NTC ) Data Center In 2016, NTC signed a contract with IBTL for establishment of a Cloud based data center. The data center will enable government entities to offer variety of services in the field of data communication, which were previously being offered by the private service providers. Page 57 of 145

60 4.4.2 PTCL Ufone Synergy Project In 2016, IBTL signed Ufone Synergy Project which is an extension of the PTCL Broadband Traffic Management Solutions ( BTMS ) Project. The core purpose of the Project was that PTCL along with Ufone, intended to collectively expand their internet bandwidth Punjab Police Integrated Command, Control & Communication Center In 2016, Huawei subcontracted IBTL for establishment of a data center for the Punjab Police Department. The overall objective of the Punjab Police Integrated Command and Control Centre ( PP-IC3 ) Program is to modernize the infrastructure, systems and capabilities for the police to proactively manage the security situation and to professionalize the police response to incidents by moving towards directed and mission-focused deployment of resources Automated Fare Collection and Bus Scheduling System of Metro bus Lines and Feeder Routes In 2012, IBTL won its first ever Automated Fare Collection and Bus Scheduling System ( AFC BSS ) contract. The solution entailed installation, operations and maintenance of deployed Automated Fare Collection & Bus Scheduling System for the Metro bus Line in Lahore, Pakistan. Building on from there, IBTL now holds a praiseworthy portfolio of AFC BSS projects in three major locations of Punjab. With the Punjab Mass Transit Authority ( PMA ), it holds the contracts for AFC BSS of the Metro bus line in Rawalpindi / Islamabad (6 years), both Metro bus Line & Feeder Routes (6 years) in Multan, and both Metro bus Line (3 years) & Feeder Routes (6 years) in Lahore. In these projects, IBTL was responsible for providing all necessary AFC-BSS services, which include furnishing, installing and operating all hardware, software, networking, fare media etc. In addition, it is responsible for configuring, customizing, deploying, and maintaining the entire AFC-BSS solution; and managing the ticketing operations at PMA stations and sale points on feeder routes by fully utilizing the deployed AFC-BSS solution, carrying out bank transactions, managing ticket sales and refunds, and offering customer facilitation at turnstiles etc. It is important to note that these contracts will be up for renewal at the end of their respective periods and are also subject to expansion based on the plans of the Punjab Mass Transit Authority IT Help Desk In 2010, IBTL started providing valuable support to Standard Chartered Bank s 227 branches, incorporating 4,676 end users. The services include; System Support, Internet and , Devices Support, Services Support and monitoring of the same, resulting in outsourcing of the Banks IT needs. IBTL takes pride in its systems which ensure smooth functioning of the operations along with minimum lead time between notification of issue and its resolution. PROJECTS UNDERTAKEN IN THE PAST Automatic Number Plates Recognition ( ANPR ) In 2014, IBTL provided Excise and Taxation, Punjab a state of the art ANPR enabled number plate production and system integration facility. The facility is located in Lahore and provides number plates to all districts of Punjab till date. Page 58 of 145

61 ,000 Laptops eyouth Scheme In 2012, IBTL was awarded the first ever contract for 110,000 laptops under the Chief Minister e-youth Initiative. Inbox being the Tier 1 partner of Dell provided the laptops within the stipulated timeframe across Punjab Punjab IT Labs In 2009, IBTL set up computer labs in 1,111 higher secondary schools in the Punjab province. The scope of this project included supply, installation and after sales services for all the IT labs across Punjab.Pakistan Telecommunication Authority Internet Traffic Management System In 2008, IBTL successfully deployed a comprehensive end to end solution for Internet Traffic Management System for Pakistan Telecom Authority ( PTA ). The solution was deployed at three major Point of Presence ( POP ) sites and covered the entire international traffic coming into Pakistan. The system yielded significant results and reduced unwanted voice traffic with a 100% success rate in identification / detection. This in turn resulted in significant increase in the revenue streams of the telecom operators. To cope with the increasing traffic requirements, later, PTA identified the need of an upgraded system which could provide the flexibility and scalability to cater the traffic forecast for the years to come. IBTL again provided PTA with a state of the art solution to cater to the existing and future expansion needs of PTA. The new solution featured advanced level management, analytics and heuristics Sindh IT Labs In 2006, IBTL established 206 IT Labs & deployed 3,296 computers in Sindh under the IT / Computer Science Teachers, Lab Incharge and Computer Labs Project Matching Program with the Government of Sindh. This Project was executed under the supervision of Education Department Government of Sindh and computers were deployed at 16 different locations across Sindh. These locations included places like Karachi, Hyderabad, Badin, Shikarpur, Mirpurkhas, Thatta, Larkana, Sukkur, Ghotki, Jacobabad, Dadu, Nawabshah, Tharparkar, Khirpur, Sanghar, and Naushero Feroz.STATE OF THE ART FACILTIES Digital Operating System/Customer Engagement Center Customer Engagement Center ( CEC ) is the nerve center for the country wide Managed Services Operations for Inbox Business Technologies. Centrally located in Karachi and having a Disaster Recovery & Business Continuity Site in Islamabad, the CEC work 24/7 to monitor the operations and respond to incidents & events. CEC focuses not only on resolving the customer issues but also improve customer satisfaction, drive loyalty through value creation and provide proactive engagement with customers for long term relationship. The CEC distinguishes the Managed Services Program of Inbox Business Technologies from any other player in the market. The setup uses state of the art and integrated technologies to bring efficiency and visibility for the overall process and comprises of: 1. Support Management System Customized on Information Technology Infrastructure Library based processes and procedures 2. Call Management System with service level management 3. 24/7 Operations With experienced technical staff & managers Page 59 of 145

62 Support Management System The Support Management System is built on the foundation & best practices around Information Technology Infrastructure Library to provide prompt services to customers. Leading software HEATsoft is used to manage the day to day operations related to incidents and events. From opening of a ticket till the closure, the system helps the engineers keeping a complete record of all the activities and tasks, measure the service levels and create a knowledge base for future reference. The reporting engine provides a customizable dashboard which enables the on ground operational staff and senior leadership team to monitor the health of the overall support infrastructure and take preemptive approach to avoid incidents and keep the organization optimized and keep injecting the required skills and resources for customer facilitation Calls Management System With the help of a Genesis Workspace, a leading software with presence on Gartner s Magic Quadrant the traditional contact center has been transformed into an integrated operations center for enhanced customer satisfaction. Through the advanced modules, the setup helps in proactively identifying the customer, information data base and the customer history giving a personalized support to the end user and automatically routing the call to the engineers having the related skill set. The reporting engine is capable of showing the real time statistics of customer s engagement, inbound and outbound calls, queue handling and the Key Performance Indicators monitoring. Apart from this, the Calls Management Systems manages the outbound reach to handle customer feedback sessions and satisfaction levels. This operation is done through random sampling on the tickets closed along with purpose build surveys, gauging the satisfaction level and improvement areas. The Customer Engagement Center ( CEC ) not only enables the product & sales team to cross sell & upsell to the existing clients but also engage new customers through product introductory calls. 4.5 MAJOR LINES OF SERVICES Citizen Services & Customer Experience (CSX) CSX services help the federal government, provincial governments and city governments realize the vision of smart governance while doing more with less. With focused offerings and demonstrated expertise in Urban Mass Transportation, Integrated Payment Solutions, Urban Security, Customer Experience and the Internet of Things, IBTL is the national leader in providing technology enabled government services. The Company helps the Government using disruptive integrated technologies to scale & optimize their citizen services. IBTL intends to plan, execute and manage smart city and government services using the Internet of Things as a differentiator. Competitive Edge Credibility as a result of successfully executed mega scale projects. First mover s advantage is massive because of integration needs. Page 60 of 145

63 Powerful alliances available in key areas. Target Market Governments Retail Real Estate Solutions Offered I. Urban Mass Transport Inbox offers end to end ecosystem services and products employing latest technologies in GPS tracking, Radio Frequency Identification ( RFID ) and Near Field Connectivity ( NFC ) payments as well outsourcing of mega city transportation projects as a managed service. We are already running operations responsible for efficient travel with extremely high satisfaction of over 100 million passengers a year. Inbox has already implemented following systems for Punjab Metro Bus: Automated Fare Collection Systems Bus Scheduling Systems II. Urban Security With specialized surveillance solutions and consultancy services for schools, universities, community centers, shopping malls, and office campuses, Inbox aims to take physical security awareness and threat recognition to unprecedented levels by mixing cutting edge analytics with innovative perimeter based defenses. The Company s innovative solutions not only help existing security become significantly more effective they also enable threat teams based on a hub spoke model to respond much faster providing a valuable window of opportunity in which valuable lives can be saved. III. Customer Experience Inbox enables government offices with feedback platforms, for citizens, using the process knowledge and latest technology. IV. Internet of Things ( IoT ) IoT enables the third wave of innovation as cheap sensors relay data to the cloud for predictive and prescriptive analytics. Effective control, monitoring, tracking and management of city systems, products and services utilizing the Internet of Things is now possible in real time. Inbox expertise in citizen services, sensors, cloud applications, analytics etc. provides an edge in Internet of Things for the Public and Private Sector Enterprise Management Service (EMS) EMS allow customers to focus on their core business workflows, innovation and differentiation to compete with the peace of mind that IBTL is managing essential back office services. Some of the largest businesses including several multinationals rely on IBTL as the leader for managed services in the Enterprise. The business services offered under EMS cover the areas of IT Services Management, IT Operations Management, Resource Outsourcing, Remote Management & Maintenance and Digital Content Management. Competitive Edge Page 61 of 145

64 Established and reputable clients in key verticals. 24/7 IT Management nerve center capability. Return on Investment ( ROI ) and Total Cost of Ownership ( TCO ) based business case expertise. Target Market Telecoms Banks Other Large Enterprises Solution Offered I. IT Services Management IBTL enables higher productivity and efficiencies in IT department of clients with standards based IT services management. IBTL manages the entire IT services management lifecycle of request, plan, approve, change, audit and control. II. IT Operations Management IBTL gathers performance, capacity utilization, and availability status data for the server, networking and application domains and gives health and performance metrics in a unified view simplifying IT operations management. Using trends analysis and correlation engine results in proactive stance allowing for optimal uptime and IT operations health. III. Remote Management Provides 24/7 proactive support to client, reducing downtime and is the fastest way to respond to events and incidents in client s IT operations across server, storage, networking and application domains. IV. Digital Content Management IBTL enables a content management solution for clients that maximizes a paperless environment and creates an optimal flow for faster processes and automatic processing of tasks that would otherwise be manual and slower Digital Security & Intelligence ( DSI ) The Company has two state of the art Managed Security Operating Centers ( MSOC ) in Islamabad and Karachi. The Company act as an extension of client s security team and provide 24/7 threat assessment for a proactive and adaptive security posture. Penetration Testing, Security Platform Management, Endpoint Management, Vulnerability Assessment and Management at both applications & devices level and Security information and event management ( SIEM ) are some of the services MSOC provides to customers. Competitive Advantage First 24/7 Managed Services Security Center in two locations. Capability to create Proof of concept for clients. Computer Security Incident Response Team based on international standards. Target Market Telecoms Page 62 of 145

65 Banks Other Large Enterprises Solutions Offered I. Threat Monitoring and Intelligence Threat monitoring is an effective proven tool that works as part of a broader technology enabled proactive security posture that can utilize this intelligence and act on it. Advanced analytics ensure that threat intelligence data related to threats that endanger clients network is given to security teams. This allows them to detect and respond to threats effectively and efficiently. II. Endpoint Management IBTL securely manages and continually monitors clients endpoints giving full visibility into how they are being used. IBTL uses technology that breaks the exploit cycle of sophisticated attacks on endpoints utilizing the most advanced cyber security techniques available. III. Vulnerability Management IBTL identify critical flaws and exposure that hackers can exploit in clients operating systems and applications. The solution uses external and internal scans to detect, identify and fix vulnerabilities. By automating vulnerability management, IBTL mitigates risks to critical assets and have a simplified focused approach to security that works. IV. Platform Management IBTL s platform management service supports all industry-leading security platforms and helps clients manage them efficiently. This offering utilizes global best practices and policies to optimize the security environment for clients data and information technology assets. IBTL s consultants look at clients existing security environment, business strategy goals and IT s operational plan and technology roadmap to support them. IBTL then recommends a strategy and work with clients to implement this plan as a managed or co-managed solution Cloud & Converged Systems Integration ( CSI ) CSI offers customers the ability to avail from the most advanced data center technologies in existence. IBTL helps IT departments become service brokers to their organizations by partnering them on their journey to the hybrid cloud with extreme efficiencies and savings. The business services IBTL offers under CSI are in the areas of Cloud, Software Defined Data Centers, Software Defined Networking, Hyper-convergence infrastructure for Enterprise IT and next generation Packet Core Solutions for Telecom. Competitive Edge No large cloud focused System Integrator in Country. Alliances are key in this space. IBTL has alliances with Tier I names. Target Market Public Sector Telecoms Page 63 of 145

66 Banks Other Large Enterprises Solutions Offered I. Software Defined Networking ( SDN ) Within the Cloud Management layer, IBTL provides SDN solutions and services for wide-area, cloud, and data center networks. For the Application and Control layer, IBTL offers network function virtualization using cloud solutions. IBTL helps customers implement new services on various SDN Controllers, enable SDN support for transport networks, and provide conformance testing of multi-vendor SDN/hybrid networks. II. Software Defined Wide Area Network ( SD-WAN ) This solution allows clients to leverage existing transport networks to provide connectivity across branch and remote networks. Automatic and orchestrated provisioning of WAN connectivity and control is enabled using existing underlay networks. This is done with a real time dashboard showing network health. III. Hyper- Converged Infrastructure IBTL helps Integrating computer and storage into a single server deployed in scale-out clusters. This allows operational simplicity using one click infrastructure management, and seamless identification & remediation of problems becomes proactive and seamless. IV. Cloud Solutions IBTL offers the latest solutions for enterprises and Cloud Service Providers for their internal private cloud, hybrid cloud or public cloud offerings. V. Packet Core Network Solutions This solution is focused towards telecom companies. IBTL helps to route traffic efficiently, ensure fair use, optimize media and content delivery. Clients subscribers get better quality of experience without adding commensurate bandwidth. Traffic classification via Deep-Packet Inspection ( DPI ) ensures bleeding edge networking intelligence for better decision making and compliance purposes. Meanwhile our caching solutions take frequently accessed content off clients WAN infrastructure for tremendous savings Revenue Break Down by Major Lines of Business % 10% 56% 90% CSX Total CSI and Others CSX Total CSI and Others Page 64 of 145

67 4.6 MAJOR CUSTOMERS Following are some of the key customers of the Company: Sr. No. 1. Key Customers Punjab Metro Bus Authority Year of Association 2012 Nature of Services Development, Implementation, Operations and Long-Term Maintenance of globally proven Deployed Automated Fare Collection and Bus Scheduling System ( AFC-BSS ) for the: 1. Lahore Metro bus System and Feeder Routes 2. Rawalpindi Islamabad Metro bus System 3. Multan Metro bus System and Feeder Routes Status Existing 2. Pakistan Telecommunication Company Limited Provided operation & maintenance support, helpdesk support on turnkey basis. 2. De-packet Inspection & Policy Control and Reporting Function Services for PTML from PTCL Broadband Traffic Management Network Existing 3. Mobilink 2009 Provided IT help desk service Existing 4. United Bank Limited Huawei Technologies (Pakistan) Private Limited Standard Chartered Bank Excise & Taxation, Govt. of Punjab Dawood Hercules Corporation Limited Akzo Nobel Pakistan Limited 2016 Provided maintenance support on Next Generation Firewall (Palo Alto Network Equipment). Provided services for an integrated Command and Control Centre for Punjab police Existing Existing 2010 Provided desktop support services + LAN setup. Existing 2014 Provided Automatic Number Plate Recognition Closed 2005 Provided support and services on hardware. Existing ICI Pakistan Limited Engro Corporation Limited State Life Insurance Corporation of Pakistan Institute of Business Administration 2008 Provided support and services on hardware and helpdesk support services. Provided support and services on hardware and helpdesk support services. Provided support and services on network cabling and helpdesk support services. Existing Existing Existing 2009 Provided support and services on hardware. Existing 2010 Provided support and services on hardware. Existing 14. Meezan Bank Limited 2008 Provided IT helpdesk support services. Existing 15. Pakistan Telecommunication Authority 2007 Provided Internet Traffic Management System. Closed Page 65 of 145

68 Association of Customers with IBTL 46.67% 26.67% 26.67% 5 years or less 10 years or less 15 years or less 4.7 AWARDS AND RECOGNITION Year Awarding Company Award Title 2001 First Intel Premier Provider 2002 Volume Sales Achievement Award by Intel 2002 Server Achievement Award by Intel 2005 Rated as the highest selling PC Brand in Pakistan 2005 ISO 9000 : 2001 Certification 2006 Achievement Award for Highest Year-on-Year Revenue Increase 2007 Microsoft Partner Program Award 2007 Recognized by Super Brands, UK as the leading IT brand in Pakistan 2008 IBM Fastest Growing Business Partner 2008 Microsoft Partner Program Award 2009 ISO 9000 : 2008 Certification 2011 IBM Large Transaction Award 2011 Microsoft Country Partner of the year Page 66 of 145

69 2013 Microsoft Partner Network Excellence Award 2013 Oracle Partner of the year across Asia Pacific 2014 Oracle Excellence Award 2016 ITIL Certification 2016 Awarded largest IT company in Pakistan in terms of Domestic Revenue by Pakistan Software Export Board 2017 ISO & ISO Certification (In progress) 2017 Best IT firm in terms of domestic revenue by Rawalpindi Chamber of Commerce & Industry 2017 ISO 9000 : 2015 Certification (In Progress) 4.8 GLOBAL AND REGIONAL PARTNERSHIPS Principle Relationship Enterprise Management Services ( EMS ) Heat Software OP5 Authorized Partner and Reseller (only authorized exclusive partner in Pakistan) Authorized Reseller Centrify Authorized Reseller Cloud and Converged Systems Integration ( CSI ) Viptela Partner/Technology Alliance Nutanix Authorized Reseller Huawei Value Added Tier 1 Partner CISCO Registered Partner Lenovo Tier 1 Partner Oracle Gold Partner Page 67 of 145

70 Microsoft Cloud Services Provider Dell Tier 1 Partner Vmware Standard Partner Sandvine Foreign Supplier Westcon Distributor Mindware Distributor Greaves Pakistan Local Supplier PaloAlto Tier 1 Partner Digital Security and Intelligence ( DSI ) Intel Security McAfee MSSP Partners Symantec Bluecoat Registered Partner ObserveIT Exclusive Partners Imperva Exclusive Partners WurldTech Exclusive Partners Kaspersky Standard Partner SnoopWall Standard Partner MobileIron Exclusive Partners Citizen Services and Customer Experience ( CSX ) Telenor Application Development Partner Easy Paisa Mobile Financial Services Partner for Transportation Sector Kentkart Tier I Partner Asis Tier I Partner Page 68 of 145

71 Shopper Trak Authorized Partner Wavetech Authorized Partner Data Log Authorized Reseller 4.9 DAWOOD HERCULES GROUP OVERVIEW Dawood Hercules Group (the Group ) is one of the largest conglomerates in Pakistan, with over three generations of experience in commercial and social enterprises, has investments in fertilizers, food, energy, IT, retail and real estate. The Group has rich heritage dating back to the era of pre-partition, initiated by the Group Founder, Mr. Ahmed Dawood who formed the Dawood Group in The holding company initially served the textile sector of the Country by establishing the Dawood Cotton Mills Limited in 1952, Burewala Textile Mills in 1954 and acquisition of Lawrencepur Woolen & Textile Mills in In momentous moment, the Company also established Pakistan s first ever Nylon Yarn Producer factory by the name of Dilon Limited. Major footprint was also established in the chemical sector with the establishment of Dawood Hercules Chemicals Limited in 1968, acquisition of Engro Chemical Pakistan in 2006 and HUBCO in Furthermore, the Group also expanded into other sectors with the establishment of Central Insurance Company Limited in 1960 (subsequently converted to Cyan Limited in 2011), Elixir Securities in 2002 and Inbox Business Technologies in Currently, the Group s major holdings include Engro Corporation, Hub Power Company, Cyan Limited, Dawood Lawrencepur, Tenaga Generasi, Pebbles Pvt. Limited and Inbox Business Technologies. The Group owns majority stake in IBTL through Patek (Pvt.) Limited. The Group is a partner in Pakistan s growth and prosperity, and this ethos serves as the foundation of its business operations INDUSTRY OVERVIEW Worldwide Information and Communication Technology ( ICT ) is proving instrumental in modernizing governance, increasing transparency, improving public service delivery, and reducing information costs along the value chain for businesses. The Government is mindful of these global changes and is proposing interventions to keep the Country abreast with these changes Technology and Communication Sector of PSX 1 Company Name Last year Avg. Price 2 Market Cap (mn) 3 LTM EPS 4 BVPS 5 LTM P/E 6 P/B 7 TRG Pak Limited , Telecard Limited ,254 (0.73) 7.94 NA 0.53 Systems Limited , Pak DataCom Limited Netsol Technologies Limited , Page 69 of 145

72 Avanceon Limited , Average Median These are not necessarily direct competitors of IBTL, but a list of all the technology companies that form part of the Technology & Communication sector of PSX. The communication companies have not been stipulated in this comparison. 1 All financial information is sourced from audited / unaudited financial accounts of the respective companies 2 Price calculated as average of closing prices from January 1 st, 2016 to December 30 th, 2016 as listed on the PSX 3 Market Capitalization is based on share price as at 27 th March, Last twelve months earnings are calculated as last twelve months from December, 2016 except for Systems Limited and Avanceon Limited whose earnings are for the yar ended December Book value per share is calculated as at December, Last twelve month P/E is calculated as the day end closing price of March 27 th, 2017 divided by last twelve months profit from December Price / Book is calculated as the day end closing price of March 27 th, 2017 divided by book value as of December Average LTM P/E does not include TRG Pakistan and Telecard Limited Major Unlisted Competitor There is limited organized or structured competition for IBTL in most of the line of services it operates in. However the Company faces sporadic competition in certain projects and face none in others. Major reason for this occurrence is because IBTL has a collectively extensive portfolio of solutions, skill set or expertise that are required to undertake and deliver large scale managed services contracts today. Some of the notable competitors are as follows: 1. Techaccess Pvt Ltd Techaccess is a local organization and has been predominantly a Sun Microsystems hardware partner and have branched into Oracle solutions and Data centers amongst other areas. They compete with Inbox in certain bids especially when data centers or Oracle technology stack is a major component. 2. Infotech Pvt Ltd Infotech Pvt Ltd are partners with IBM, Oracle and Microsoft and has been involved in data centers and oracle applications projects. They are believed to have projects outside of Pakistan in Africa and Middle East and are known to have developed certain IP on trading software. They normally compete with Inbox on large infrastructure projects. They were recently awarded the 2 nd largest IT firm in terms of domestic revenue at the time when Inbox was awarded the largest IT firm in the country. 3. Jaffer Business Systems Jaffar Business Systems are a large Oracle platform player amongst other offerings and have also undertaken managed services contracts in the Country. 4. Document World Pakistan ( DWP ) DWP competes against Inbox in some of the large managed service projects. These are among the large IT players in the Country. As far as IBTL s forte of managed services projects are concerned, it doesn t face a major competition. Even in ever growing Cloud convergence and System Integration (CSI) space, including software defined networks and managed security services, IBTL has the experience base and skill set to deliver on potential projects. Page 70 of 145

73 Pakistan ICT Spending Total domestic Information and Communications Technology spending is USD 2,078 million. ICT Spending of Pakistan is 0.7% of GDP currently which is well below the spending in regional countries. Majority of the local hardware demand is met through imports. Pakistan ICT Spending (USD million) Domestic revenue 500 Imports 1,578 Total spending 2,078 Sources: State Bank of Pakistan, Pak. Software Export Board, Ministry of Information Technology Pakistan ICT Revenue Total Information and Communications Technology revenue of local industry is USD 3,000 million. Majority of revenue is in the form of export of IT services. IBTL has a market share of approximately 9% in domestic revenues. Annual Revenue of IT industry is expected to exceed USD 5 billion by 2020 (PSEB) suggesting CAGR of ~14% in next 4 years. Pakistan ICT Revenue (USD million) Exports 2,400 Domestic revenue 500 Freelancers 100 Total revenue 3,000 Sources: State Bank of Pakistan, Pak. Software Export Board, Ministry of Information Technology Recent Developments in IT Sector of Pakistan Information and Communications Technologies ( ICT ) are a key driver of innovation, economic competitiveness and greater social inclusion. Pakistan Vision 2025 seeks to lay the foundation of a knowledge economy by promoting efficient, sustainable and effective ICT initiatives through synergic development of industrial and academic resources. Due to the large youth bulge, Pakistan has strong digital potential to develop a knowledge-based industry fostering innovation and entrepreneurship. According to Vision 2025, urgent attention will be paid to computer literacy, and strengthening Pakistan s IT infrastructure. Pakistan will drive wider Broadband Internet access, facilitate access to computers, and ensure the requisite education and training in schools to improve technological readiness. Pakistan cannot rely on ICT infrastructure development alone. A holistic strategy will be followed to create conditions for skills, innovation and entrepreneurship to flourish alongside modern infrastructure. Strengthening data protection and Intellectual Property rights laws will be a key component of this strategy. Introduction of e-education, e-commerce, e-health and e-government, in addition to improving governance, will increase the adoption and promotion of technology in the Public Sector. Pakistan is poised to move to the next level in ICT sector with a very talented youth and workforce. Visioning the growth of IT sector, Government plans to establish ICT parks all over the Country. Page 71 of 145

74 National IT Policy 2016 Pakistan with 60% of its 200 million population in the 15 to 29 age group represents an enormous human and knowledge capital potential. Pakistan has more than 2000 IT companies & call centers and the number is growing every year. Pakistan has 14 Software Technology Parks covering an area of one million square feet. A number of world class technology parks are already in the advance stages of development. Pakistan s IT exports have grown twenty folds over the past decade to $2.4 billion. In addition, annual revenues from freelancing and the domestic markets are $ and $500 million respectively. The policy will serve as the foundation pillars for the construction of a holistic Digital Ecosystem with advanced concepts and components for the rapid delivery of next generation digital services, applications and content Smart Cities Pakistan Vision 2025 aims at transforming urban areas into creative, eco-friendly sustainable cities through improved city governance, effective urban planning, efficient local mobility infrastructure (mass transit systems) and better security to make urbanization an important driver of growth. These improvements will be the first step in developing smart cities - that are capable of adapting to increasing complexity and demand for knowledge communication given urban expansion. To be able to cope adequately to increasing populations and city size with respect to providing public services, real-time updates on city traffic patterns, pollution, crime, parking spaces, water and power will be required. Therefore, the cities must be equipped to transfer such vast amounts of data instantaneously. Vision 2025 seeks to ensure that Pakistan s cities are digitally connected, equipped with wireless network sensors and there is e-connectivity in all parts where the free flow of information is possible, thereby laying the foundations for the cities of Pakistan to be smart and creative Establishment of Technological Parks Government intends to establish technological parks to enhance the national technology base, develop efficient systems in public and private sectors, promote R&D, produce goods and services of global standards, develop a regional innovation system, facilitate the transfer of knowledge and technology from universities and public research centers to the business sector, stimulate quality in all management processes, and to oversee the quality of the research, development and innovation activities carried out. The parks will contribute, through technology and innovation, to increasing business competitiveness and development in Pakistan. The parks will provide a platform for Government, academia and private sector collaboration to capitalize on and intensify existing research & development in order to create competitive products and services in a global context, and act as a point of convergence for science, technology and innovation policies in the pursuit of the development of knowledge based society Modernizing Transportation Infrastructure Development of modern transportation infrastructure plays a pivotal role in economic development and attracting investments. Pakistan Vision 2025 seeks to establish an efficient and integrated transportation system that will facilitate the development of a competitive economy IT Sector Spending Punjab leads the way with highest IT and governance expenditure. Following table depicts the IT sector spending province wise for the FY Page 72 of 145

75 Province Expected IT and Governance Expenditure Expenditure (PKR million) Punjab 13,950 Sindh 698 Baluchistan 300 KPK 689 Source: Budget Document, Punjab IT Board Punjab is anchoring the IT sector with the highest spending among other provinces. It is noteworthy that Punjab spends a significant portion of its Governance budget on IT related services. During FY it is expected to spend more than PKR 10 billion on Police command and control center. Since Government of Punjab is focusing towards innovation, modernization and its spending is inclined towards IT related expenditure, this transformation presents a tremendous opportunity for the Company to capitalize its future growth Historical IT Sector Spending Pakistan has increased its expenditure on IT and Governance during the last few years with Punjab leading the way with an increase of 63% in expenditure as compare to the last year. Similarly, Sindh and Baluchistan have also increased their spending by 33% and 18% respectively. Historical IT and Governance Expenditure (PKR million) Province Punjab 13,950 8,540 7,393 Sindh Baluchistan KPK 689 1,154 1,058 Source: Budget Document, Punjab IT Board Global and Regional IT Trends The global managed services market is valued at USD billion in 2016 and is expected to reach USD billion by 2022, at a CAGR of 11.4% and Asia-Pacific is expected to post the highest growth during the same period. Trends in the MENA region highlight the following: 1. Public Cloud market in Middle East North Africa is expected to grow at more than 20% per year, increasing to USD 1.45 billion by Managed Services market is expected to be USD 3 billion plus in Middle East by 2018 growing roughly 19% a year 1. Pakistan s ICT spending as a % of GDP is 0.7% compared to average Emerging Market Spending of 4.9%. This suggests significant room for improvement in the country especially in light of Pakistan s incumbent induction in the Emerging Markets ( MSCI ). 1 Frost & Sullivan, Gartner, McKinsey, International Data Corporation Page 73 of 145

76 4.11 RISK FACTORS Operational Risk / Concentration Risk A major portion of the Company s revenue is generated from the public sector. Any cuts in the public spending for IT may have negative consequences for IBTL s business. However, it is added that large government projects that Inbox is involved in are mainly at a provincial level and have been running smoothly since Additionally, it is expected that provincial governments will continue with automation which Inbox is in a good position to capitalize on. The mitigation strategy for this is two pronged: 1. Many contracts are long term in nature and are relatively extensive, providing substantial risk mitigation. Secondly, the nature and significance of contracts (for example Metro bus contracts) reduces the risk of midway termination. 2. The Company is actively developing business in the private sector in order to mitigate the concentration risk posed by the public sector Sector Risk Sector Risk is the risk that macroeconomic conditions deteriorate and IT sector as a whole suffers due to lower spending by public and private organizations. Risk associated with local technology industry at a macro level are low as the overall economy is progressing with private companies and public organizations turning towards the digital eco-system to help them achieve their goals of efficiency, customer experience and scale. New entrants are also coming into the market, and like in any growing economy in the world, IT spend also grows as part of GDP. Hence, a steady growth in the overall IT spend in the country is expected with organizations investing more in technology to keep pace with the ever rapidly changing environment and to keep their bottom lines profitable Foreign Exchange Risk The Company is exposed to foreign currency risk on purchase and sales that are entered in a currency other than Pakistan Rupees. As the Company imports items of stock and software licenses, any appreciation in foreign currencies can have an adverse impact on the Company s operations and cash flows Liquidity Risk Inbox Business Technologies Limited utilizes various financing facilities during the regular course of business operations, which opens it up to risk of not being able to meet its financial obligations on time using internal liquidity. Failure to pay dues on time may result in weakening creditability, higher costs of future financing, and damage to reputation. However due to efficient working capital management, the Company has been able to meet its liquidity requirements and has been making regular repayments against its financial obligations Technology and Obsolescence Risk IBTL is exposed to technology risk being an IT based Company and technology redundancy can create operational difficulties for the Company. IBTL has transformed its business offerings from time to time in order to keep pace with the market demands. IBTL s current portfolio has a basket of offerings that helps Company offer the accurate managed services solutions to its customers for their rapidly changing digital needs. Page 74 of 145

77 The Company will need to maintain investment in expanding, modernizing and upgrading its IT facilities and keep pace with advancements in technology in order to remain competitive in the future. A failure to do so may result in lower efficiency relative to the industry, leading to diminishing sales and market share Working Capital Management Risk Since a major portion of the Company s revenue is driven by Public Sector, delays in payment from the Government will make it difficult for the Company to finance its working capital requirements Capital Market Risk After being listed on the securities exchange, the price of the Company s shares will be determined by market behavior, wider macroeconomic events and the Company s performance. Hence, the value of shares will fluctuate based on movements in the securities market Legal Risk There is a risk that unanticipated changes in regulations could have an adverse impact on the Company. However, such regulatory changes could reasonably be expected to affect all players within the sector and would therefore not affect the Company s position or business in isolation Interest Rate Risk The Company has entered into various types of long term and short term loans / financing in order to finance its projects and meet working capital requirements. Any unforeseen increase in interest rates will increase the cost of borrowing for the Company and may adversely affect its profitability, as existing debts are based on floating rates Under-Subscription Risk The issue of shares of Inbox Business Technologies Limited may get under-subscribed due to lack of interest on part of the investors. In such a case, the book building process shall be considered as cancelled if the Company does not receive bids for the number of shares allocated under the Book Building Portion and the bid money submitted by investors shall be refunded accordingly. Note: IT IS STATED THAT ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING HAS BEEN INTENTIONALLY CONCEALED IN THIS RESPECT. Page 75 of 145

78 5 FINANCIAL INFORMATION 5.1 SHARIAH COMPLIANCE The Company has been declared as Shari ah compliant by Mufti Ibrahim Essa. The Company s debt profile as of 31 st, 2016 including short and long term is given in the below table: Description Outstanding Amount (PKR) Long-term loans 346,846,829 Short term borrowings 1,751,101,125 During the first quarter of 2017, the Company has converted its conventional financing facility to Islamic financing. Details of the conversion into Islamic financings are given below: Description Outstanding Amount (PKR) Facility (a) - IJARAH- (Sale and Lease Back) 68,892,225 Facility (b) - IJARAH- (Sale and Lease Back) 350,710, Total 419,603, Based on the screening performed by Mufti Ibrahim Essa, all the required criteria for being a Shari ah compliant company were met. Please refer to Section 5.2 for the Shari ah Certificate. Profile of Shari ah Advisor Mufti Ibrahim Essa is a well-known recognized Shari ah Scholar in the field of Islamic Banking and Takaful. He has completed his Darse Nizami (Masters in Quran and Sunnah) and Takhassus fil Ifta (Specialization in Islamic Jurisprudence) from Jamiah Darul Uloom Karachi. Currently he is working as teacher and Member of Darul Ifta Jamiah Darul Uloom Karachi. Mufti Ibrahim Essa is also associated as Chairman Shari ah Supervisory Board Sind Bank Limited and Member Shari ah Board Habib Metropolitan Bank Limited. He was associated with Ernst & Young Ford Rhodes Sidat Hyder & Co as Shari ah advisor from 2007 to He is also the Shari ah advisor of number of Islamic Financial Institutions including National and International including Equitable Financial Solutions (Australia), ORIX Leasing Pakistan Limited, EFU Takaful etc. Number of Charitable Institutions including The Indus Hospital, The Citizens Foundation, Layton Rehmatullah Benevolent Trust, The Hunar Foundation, etc. take Shari ah advices from him on their Zakat and Donation matters. He has also written more than two thousand Fatwa on different topic Page 76 of 145

79 5.2 SHARI AH CERTIFICATE Page 77 of 145

80 5.3 AUDITORS REPORT UNDER 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 OF INBOX BUSINESS TECHNOLOGIES LIMITED Page 78 of 145

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86 5.4 AUDITOR CERTIFICATE ON ISSUED, SUBSCRIBED, AND PAID-UP-CAPITAL OF THE COMPANY Page 84 of 145

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91 5.6 MANAGEMENT ACCOUNTS FOR THE QUARTER ENDING 31 ST MARCH, 2017 Page 89 of 145

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95 5.7 SUMMARY FINANCIAL HIGHLIGHTS OF INBOX BUSINESS TECHNOLOGIES LIMITED 1 (Amounts in PKR millions) As at and for the year ended December 31 st Income Statement 3 Revenue 6,069 2,612 3,439 3,648 4,445 Cost of Goods Sold 5,380 2,079 2,660 2,624 3,174 Gross Profit ,024 1,272 Operating Profit Depreciation and Amortization EBITDA Financial Charges Profit before Taxation Profit after Taxation Balance Sheet 4 Non-Current Assets ,098 Current Assets 2,805 2,983 3,937 3,321 4,154 Total Assets 3,127 3,333 4,658 4,254 5,252 Equity Long-Term Debt Short-Term Borrowings ,441 1,751 Non-Current Liabilities Current Liabilities 2,043 2,334 3,334 3,396 4,006 Net Debt ,435 1,902 Stock-in-trade Trade debts 2,206 2,342 2,801 2,291 2,718 Trade and other payables 1,270 1,596 2,203 1,876 2,152 Cash Flow Statement Cash Flow from Operating Activities (273) (312) (13) Cash Flow from Investing Activities (89) 63 (422) (424) (410) Cash Flow from Financing Activities 367 (109) Net increase in cash and cash equivalents 5 (6) 253 (82) (19) Cash and cash equivalents at the beginning of the year Net Cash Balance Fixed Capital Expenditure Growth Sales Growth (%) - -57% 32% 6% 22% EBITDA Growth (%) - -26% 69% 42% 5% Profit after Taxation Growth (%) - -13% 75% 13% -26% Margins Gross Profit Margin (%) 11% 20% 23% 28% 29% EBITDA Margin (%) 8% 13% 17% 23% 20% Profit after Taxation Margin (%) 3% 7% 9% 10% 6% Earnings Ratios Earnings per Share Basic Page 93 of 145

96 Earnings per Share Restated Break-up Value per Share Basic Break-up Value per Share Restated Return on Equity (%) 33% 34% 43% 59% 30% Return on Assets (%) 7% 6% 7% 9% 5% Balance Sheet Ratios Fixed Asset Turnover (x) 18.9x 7.5x 4.8x 3.9x 4.0x Asset Turnover (x) 1.9x 0.8x 0.7x 0.9x 0.8x Capex to Total Assets (%) 3% 1% 7% 14% 8% Current Ratio (x) 1.4x 1.3x 1.2x 1.0x 1.0x Inventory Turnover (days) Receivables Turnover (days) Payables Turnover (days) Leverage Ratios Long-Term Debt to EBITDA (x) 0.8x 1.1x 0.9x 0.2x 0.4x Net Debt to EBITDA (x) 1.5x 1.9x 1.5x 1.7x 2.1x Long-Term Debt to Equity (x) 0.6x 0.7x 0.7x 0.3x 0.4x Long-Term Debt to Total Assets (x) 0.1x 0.1x 0.1x 0.0x 0.1x Total Debt to Equity (x) 1.2x 1.3x 1.6x 2.7x 2.4x Total Debt to Asset (x) 0.2x 0.2x 0.3x 0.4x 0.4x EBITDA/Interest (x) 2.7x 2.6x 3.0x 3.1x 2.7x (EBITDA Capex) (EBITDA Capex)/Interest (x) 2.3x 2.3x 1.3x 0.9x 1.4x Number of Shares Outstanding ( 000) 5,900 5,900 7,101 7,101 7,101 Number of Shares Outstanding ( 000) post issue of bonus Restated 6 59,002 59,002 71,012 71,012 71, As a result of approval of Scheme of Arrangement for Demerger (the demerger scheme) dated June 29, 2015 by Honorable High Court of Sindh under Sections 284 to 288 of the Companies Ordinance, 1984, Inbox Business Technologies Limited (IBTL) transferred its net assets of the Applications Undertaking (valuing approximately PKR. 300 million) to Inbox Consulting (Private) Limited effective from 30 th September The revenue for the year FY12 included a one off contract pertaining to Laptop Scheme introduced by Higher Education Commission (HEC) 3. Special purpose Income Statement to reflect the status of splitted financial performance of existing business after demerger 4. The figures for Balance Sheet and Cash flow Statement for the year ended December 2015 and 2016 reflects the position on stand-alone basis, whereas preceding years figures reflect the collective position prior to demerger 5. EPS and BVPS are restated for 2016 and prior years based on the number of shares post bonus issue of 63.9 million shares 6. The Company capitalized its reserve by issuance of 63,911,070 ordinary shares of PKR 10/- each as bonus shares in the ratio of 900:100, 900% on ordinary shares held by existing members Page 94 of 145

97 5.8 FINANCIAL ANALYSIS OF PEER GROUP LISTED COMPANIES The Companies listed on Pakistan Stock Exchange Limited under Technology & Communication sector are not direct competitor of the Company. However Systems Limited and Netsol Technologies are deemed to be the closest competitor. Earnings per Share Netsol Systems Inbox Return on Equity % 17.7% 1.0% Netsol Systems Inbox Page 95 of 145

98 GP Margin % 29.00% 28.61% Netsol Systems Inbox NP Margin 19.22% 2.00% 6.00% Netsol Systems Inbox Page 96 of 145

99 5.9 MANAGEMENT NOTE ON BREAK-UP VALUE PER SHARE As of 31 st December, 2016 Subsequent to 31 st December, 2016 Inbox Business Technologies Limited issued 63,911,070 ordinary shares by way of bonus issue to its existing shareholders. Thus, the total paid-up capital of the Company increased from PKR. 71,012,300 to PKR. 710,123,000. Below is a management note that calculates the break-up value per share on audited financials as of fiscal year ended 31 st December, 2016 based on the revised paid up capital post issuance of bonus shares: Inbox Business Technologies Limited (PKR) Issued, Subscribed and Paid up Capital 71,012,300 Reserves 805,914,795 Total shareholders equity 876,927,095 Ordinary shares of Rs. 10/- Post Bonus Issue 71,012,300 Break-up value per ordinary share of Rs. 10/- each Page 97 of 145

100 6 MANAGEMENT 6.1 BOARD OF DIRECTORS OF THE COMPANY S. N o. 1 Name Address Designation CNIC Mr. Shahzada Dawood F-6, Dawood Colony, National Stadium Road, Karachi Chairman Partnership/Directorships in Other Companies Dawood Hercules Corp. Ltd. Dawood Corporation (Pvt.) Ltd. Engro Vopak Terminal Ltd. Patek (Pvt) Ltd. Engro Polymer & Chemicals Ltd. Sirius (Pvt) Ltd. Dawood Lawrencepur Ltd. The Hub Power Co. Ltd. The Dawood Foundation (Trustee) Sind Paper Mills Pvt Ltd. Engro Corp. Ltd. 2 Mr. Junaid Iqbal 40/2, Street 30, Phase 5, DHA, Karachi Non Executive Director E2e Business Enterprise Salt Arts (Pvt.) Limited Careem Networks Pakistan (Pvt.) Limited 3 Mr. Shahid Hamid Pracha House No. 16-B, 3 rd Central Street, Phase 2, DHA, Karachi Non Executive Director Dawood Lawrencepur Ltd. Tenaga Generasi Ltd. Reon Energy Ltd. Sach International (Pvt) Ltd. Engro Powergen Qadirpur Ltd Mr. Mujtaba Haider Khan Mr. Syed Hassan Imtisal Abbasi Ms. Kanza Afzal Bhayani Sunview, Gulshan-e-Iqbal, House No. 124, Block 11, Karachi President Apartment, House No. G-10, Sunny side Road, Civil Line, Karachi House No. 136, Block E-1, Gulberg III, Lahore House No. 27-B/II, 1 st Central Lane, D.H.A, Phase II, Karachi Non Executive Director Independen t Director Mr. Shane-Elahi Non- Executive Director Non- Executive Director Tenaga Generasi Limited Dawood Lawrencepur Limited Reon Energy Limited Digitz (Pvt) Limited All Pakistan Music Conference International Advertising (Pvt) Limited Inbox Consulting (Pvt) Limited None Page 98 of 145

101 8 Mr. Mir Muhamm ad Nasir Flat No. 13/C, Gold Field Apartments, Clifton Block 8, Karachi Chief Executive Officer Dawood Lawrencepur Tenaga Generasi Inbox Consulting (Pvt.) Limited 6.2 UNDERTAKING BY THE COMPANY AND ITS SPONSORS The Company and its sponsors undertake: 1. That neither Issuer nor its directors, sponsors or substantial shareholders have been holding the office of the directors, or have been sponsors or substantial shareholders in any company, which: (i) which had been declared defaulter by the securities exchange or futures exchange; or (ii) whose TRE Certificate has been cancelled or forfeited by the Exchange, PMEX or any other registered stock exchange of Pakistan that existed prior to integration of stock exchanges pursuant to Integration Order number 01/2016 dated January 11, 2016 issued by the Commission due to noncompliance of any applicable rules, regulations, notices, procedures, guidelines etc. which has been de-listed by the securities exchange due to non-compliance of its regulations. (iii) was de-listed by the Exchange due to its non-compliance of any applicable provision of PSX Regulation. 2. That none of the Sponsors, Major Shareholders, Directors or Management of the Company as well as the Company itself or its Associated Company / Entity have been found guilty of being engaged in any fraudulent activity. The Company have made full disclosure regarding any / or all cases in relation to involvement of the person named above in any alleged fraudulent activity i.e., pending before any Court of Law / Regulatory Body / Investigation Agency in or outside of the Country. 6.3 OVERDUE LOANS There are no overdue loans (local or foreign currency) on the Company, its directors and its sponsors. The Company, its CEO, its directors and its sponsors, under the oath, undertakes that they have no overdue payment to any financial institutions 6.4 DIVIDEND PAYOUT BY LISTED GROUP / ASSOCIATED COMPANIES Name of Companies FY12 FY13 FY14 FY15 FY16 Dividend Per Share Dawood Lawrencepur Engro Corp Ltd Dawood Hercules Hub Power Company Engro Polymer & Chemicals Ltd PROFILES OF DIRECTORS Page 99 of 145

102 6.5.1 Mr. Shahzada Dawood Chairman Tertiary Education Details MSc in Global Textile Marketing from Philadelphia University LLB from Buckingham University School of Law Professional Experience Mr. Dawood currently serves as the Managing Director at Lawrencepur Woolen. He is also serving as the Chief Executive Officer of Dawood Hercules Corporation Ltd since He has been the Chairman of Cyan Limited since February 22, He served as the Chairman of Dawood Lawrencepur Ltd. He has been the Vice Chairman of Dawood Hercules Corporation Ltd since Mr. Dawood has a vast experience of directorships with several other companies as well. He is a trustee of The Dawood Foundation, which is one of the largest public charitable trusts in Pakistan, supporting education and health initiatives. He is an M.Sc. in Global Textile Marketing from Philadelphia University, USA, and an LLB from Buckingham University, UK and a Certified Director of Corporate Governance from the Pakistan Institute of Corporate Governance. Notable Memberships Member, World Economic Forum Young Global Leaders Member, The Marketing Association of Pakistan Member, Arabian Sea Country Club Ltd. Member Governors Board, National Management Foundation Member, Board of Trustees, Lahore University of Management Sciences, Pakistan Trustee, The Dawood Foundation Mr. Junaid Iqbal Non Executive Director Qualification Harvard Business School Executive Education Leadership in Financial Organizations LUMS Generational Transition of Family Business University of Michigan BA, Economics Professional Experience and Notable Memberships Managing Director - Careem (2015 Present) Chief Executive Officer Elixir Securities ( ) Associate Director / Head of Retail and Commodity Brokerage BMA Capital Management Limited ( ) Chief Executive Officer BMA Financial Services Limited. ( ) Anchor / Head of Research CNBC Pakistan ( ) Head of research / official spokesperson Securities and Exchange Commission of Pakistan (July 2005 Dec 2005) Anchor / Producer / Market Analyst - GEO TV Network ( ) Power Trader / Energy Analyst American Electric Power ( ) Page 100 of 145

103 6.5.3 Mr. Shahid Hamid Pracha Non Executive Director Mr. Shahid Hamid Pracha has been associated with the Dawood Hercules Group since 2007 and served as its Chief Executive until his retirement in October, He currently chairs the boards of Dawood Lawrencepur Limited, Tenaga Generasi Limited, Reon Limited and Sach International (Pvt) Limited and is also a board director of Engro Powergen Qadirpur Limited. He has previously served as a director on the boards of Dawood Hercules Corporation, Engro Corporation, Engro Fertilizers, Engro Powergen, Dawood Hercules Fertilizers, Hubco, Cyan Limited, Inbox Business Technologies and e2e BE (Pvt) Limited. He led the Dawood Foundation, the philanthropic arm of the Dawood Hercules Group as its CEO and was concurrently the first CEO of the Karachi Education Initiative, the sponsoring entity of the Karachi School of Business & Leadership. Prior to joining the Dawood Hercules Group, he spent a major part of his career with ICI Pakistan operations in a variety of senior roles including a period of international secondment with the parent company in the UK. Qualification Graduation in electrical engineer from the University of Salford, UK Certified director from the PICG Mr. Mujtaba Haider Khan Non Executive Director Mr. Haider areas of expertise includes growth strategy, startups and cost transformation. He has worked for British Telecom in a range of commercial and transformation roles including as Project Director in Global Services Division and as the Head of Procurement for the UK wide fiber rollout program. Qualification MBA from Cranfield School of Management B.S. in Computer Systems Engineering Professional Experience and Notable Memberships Chief Executive Officer Dawood Lawrencepur Limited & Reon Energy Limited (2016 present) Head of Strategy Dawood Hercules Corporation (2015 present) Head of Strategy & Transformation, BT Fleet, a wholly-owned subsidiary of British Telecom in London ( ) Mr. Syed Hassan Imtisal Abbasi Independent Director Qualification BA, Communication University of Southern California Professional Experience and Notable Memberships Managing Partner IAL Saatchi & Saatchi (2016 Present) Chief Operating Officer - IAL Saatchi & Saatchi (2006 Present) Creative Director IAL Saatchi & Saatchi ( ) Creative Manager Manhattan Leo Burnette ( ) Associate Creative Director Maxim Advertising Pakistan ( ) Conceptualizer Orient McCann Erickson ( ) Page 101 of 145

104 6.5.6 Mr. Shane-Elahi Non-Executive Director Mr. Elahi was gold & silver medalist and also the Certificate of Honor recipient by Becon House School during his A & O levels. He represented the province Punjab in the 3 rd National Science Talent Contest in Mathematics held in year 2006 by Higher Education Commission of Pakistan. During his time at CureMD Healthcare as assistant manager, he led a team of 25 individuals tasked with demand generation and marketing funnel optimization using inbound marketing strategies & techniques. Qualification BSc Accounting and Finance from LUMS Pakistan A Levels University of Cambridge International Examinations, Pakistan Professional Experience and Notable Memberships Dawood Hercules Corporation Limited (DH Corp) July 2016 to present Assistant Manager Marketing CureMD Healthcare May 2015 June 2016 Team Lead Marketing CureMD Healthcare May 2013 April 2015 Business Development Manager Plastics International Petrochemicals August 2011 April Ms. Kanza Afzal Non-Executive Director Ms. Afzal is currently serving as Senior Analyst at Dawood Hercules Corporation and has been associated with the Group for around 3 years. Qualification Graduate in finance from Institute of Business Administration (IBA) Karachi Chartered Financial Analyst (CFA) Professional Experience and Notable Memberships In her current and prior roles, she has led corporate restructuring efforts, supported management in defining and implementing Group s strategy, overseen performance management functions for business units and assisted in delivering and executing M&A deals primarily in telcom, Independent Power Producer and retail space. Her engagement with Dawood Group also extends to capacity building and succession planning efforts through actively leading recruitment and training processes. Prior to joining the Group, she served as Vice President for AIESEC s legal and financial committee and volunteered with institutions working towards equal opportunity through training and education reforms, namely Shell Tameer, Reading Room Project and Teach for Pakistan. 6.6 PROFILES OF KEY MANAGEMENT Mir Muhammad Nasir Tertiary Education Details Bachelors in Finance from South Eastern University Professional Experience Page 102 of 145

105 Mr. Nasir currently serves as the Chief Executive Officer of Inbox Business Technologies Limited. He co-founded the company and has been involved in multiple entrepreneurial ventures in Information Technology, having an overall experience of 14 years managing product development, strategic financial planning, sales and operations. Mr. Nasir started a small business setup which provided the basis for formation of Inbox Business Technologies which set out to redefine Pakistan s computing industry with the first local computer brand, The Inbox PC. From fifteen people, today Inbox has grown to an end-to-end solutions provider company having strategic partnerships with leading international brands Mr. Zaheer Farooqi Mr. Zaheer currently serves as Country Manager, Special Projects. He joined Inbox in July 2000 and previously served as Executive Vice President of the Company. Mr. Zaheer is one of the founders of Inbox Business Technologies providing his lead since its inception. He has over 18 years of extensive and multi-dimensional experience in operations, Supply Chain, Business Development, Administration, Customer Support and Information Technology. Mr Farooqi also served as Partner in Virtual Services and IBS. Qualification He is a graduate in commerce from the University of Karachi. He is also an A+ COMPTIA certified professional and holds a diploma in Industrial Electronics Mr. Asad Warsi Mr. Warsi is currently serving as Chief Financial Officer at Inbox Business Technologies. He joined the Company in January Mr. Warsi has over 20 years of extensive professional experience in various industries. He last served as Chief Operating Officer at Elixir Securities Pakistan Private Limited. Prior to that, he served in the same capacity at MAGM Holdings Private Limited and AEMIL Group of Companies and as Director Finance & Legal Affairs at TMT Ventures Limited. Qualification: Mr. Warsi is a Fellow Member of Institute of Chartered Accountants of Pakistan and Institute of Cost and Management Accountants of Pakistan Mr. Shahzad Naseem Akbani Mr. Akbani joined Inbox in February 2009 and currently serves as Chief Commercial Officer. Previously, he served as VP Solution Design. Mr. Akbani has 17 years of diverse experience in Business Development, Revenue Management, Consultancy and Software Development. Prior to joining Inbox, he served as Revenue Management Analyst at Starwood Hotel & Resorts, Brussels and served at Sheraton Hotel & Towers Karachi in the capacity of Director Revenue Management. He also worked as Vice President Business Development and Business Development Manager at Rkaz Technology Partners and Real Financial Solutions respectively. Qualification Page 103 of 145

106 He holds MBA in International Marketing from Institute of Business Administration, Karachi and Bachelors in Computer Engineering from Sir Syed Institute of Science & Technology Mr. Faez Itrat Mr. Faez serves as Head of Cloud & Converged Systems Integration at Inbox. He joined Inbox in January Mr Faez has an extensive experience of over seventeen years in Sales & Presales of Network Architecture at local and international organizations. Prior to joining Inbox, he served as Technology Consultant at IBM Pakistan and as Senior Solutions Architect at Nokia Siemens Networks. Qualification: He holds BE from Sir Syed University of Engineering and also holds professional certification of CISCO Certified Network Professional Mr. Zia Saleem Mr. Saleem joined Inbox in December 2013 and currently serves as Head of Citizen Services and Customer Experience and Enterprise Management Services. Prior to joining Inbox, he served as Head of Information Technology at Al-Shaheer Corporation, as Managing Director at Reputage Communications, and as Communications Manager at KASB. Qualification: He holds a Bachelor s degree in Business and Information Technology from Curtin University Australia Mr. Shakeel Durrani Mr. Shakeel joined Inbox in 2015 and currently serves as the Head of Digital Security & Intelligence. Mr. Shakeel brings with him an extensive experience of over twelve years in leading projects and introducing innovative procedures in developing & promoting products. Prior to joining Inbox, he served as Grade Staff Officer II at a public sector organization. He has foreign experience of working at Massachusetts General Hospital, USA. Qualification: Mr. Shakeel holds BS in Electrical Engineering from Lafayette College, Pennsylvania, USA Mr. Abdul Bari Abdul Bari joined Inbox in April 2006 and currently serves as the General Manager Human Resources & Information Services. Mr. Bari has an 18 years of extensive experience in Human Resources, Information Technology & Services, Business Process Redesign and Administration. He set up HR department at Inbox and led the development of Inbox s HR framework, systems, policies and procedures. Prior to joining Inbox, he served ThreeSixtyDegreez Pakistan, Sattech Pakistan (SATNET) and Bankers Equity Limited. Qualification: Abdul Bari did his graduation in Science from University of Karachi. Page 104 of 145

107 6.6.9 Ms. Fatima Ahmed Ms Fatima is serving as General Manager Legal Affairs & Company Secretary. She joined Inbox in November Ms Fatima has an extensive professional experience of over 14 years and has held various advisory roles in legal affairs at Engro Corporation, Shell Pakistan, Citibank N.A and Pakistan Petroleum Limited. She is an Advocate at Sindh High Court and member of Sindh Bar Council and All Pakistan Professional Women Association. Qualification: Ms. Fatima did her LLM from University of Aberdeen, UK Mr. Haris Shamsi Mr. Haris joined Inbox in July, 2016 and currently serves as the Vice President of Professional Services & Project Management. Mr. Haris has extensive experience of over 15 years in Technical Operations Management, IT Product Development, Pre-Sales Consulting, Service Delivery and Support and Program & Performance Management. Prior to joining Inbox, he served as Director of Products & Service Delivery at Emitac Mobile Solutions, U.A.E. Qualification: Mr. Haris holds a Bachelor s Degree in Electrical Engineering from NED University of Engineering & Technology Mr. Shakeel Farooq Mr. Shakeel Farooq joined Inbox in January 2007 and currently serves as General Manager Head of Financial Planning & Analysis. Mr. Farooq has extensive professional experience of 18 years in Accounts and Finance. Previously he worked at ArwenTech Private Limited from May 2003 till December 2006 and at Next Century Software from March 2001 to December Qualification: Shakeel did Bachelors in Commerce from Karachi University in 2003 and is currently pursuing ACCA and MBA Ms. Seemeen Aijaz Ms. Seemeen is serving as Digital Content Manager. She joined Inbox in April Before joining Inbox, Ms. Seemeen had a commendable experience of more than 12 years of Technical Writing with reputable organizations like LMK Resources, EnterpriseDB and DBS Inc. Qualification: BS (Computer Science), NUCES, Islamabad, Pakistan Mr. Khalid Jumra Mr Khalid Rashid Jhumra joined Inbox in August 2013 and serves as the Chief Internal Auditor. Mr. Jhumra has an extensive experience of over 21 years in Audit, Accounting, Finance and Taxation functions at renowned local and international organizations in UK and Canada. Prior to joining Inbox, he served as Head of Internal Audit at Institute of Business Administration, Karachi. Formerly, he was associated with Habib Bank Limited Page 105 of 145

108 as Deputy General Manager and Financial Controller, International Banking and Vice President, Treasury & Management Audit. Qualification Mr. Jhumra holds a Certified Public Accountant license from Colorado, USA, is a fellow member of the Association of Chartered Certified Accountants UK, and Chartered Global Management Accountant. He is currently a member of Audit & Assurance Subcommittee at ACCA Pakistan and member of the Institute of Internal Auditors, USA Mr. Umais Ahmed Mushtaq Mr. Umais is currently serving as General Manager Finance and head of the treasury team. He joined Inbox in Before joining Inbox, Mr. Umais briefly worked at MCB Central Cash House as Vault Supervisor. Mr. Umais has been a loyal employee to the Company for nearly 12 years and has seen his role evolved significantly since his induction into the Company as Procurement Coordinator. Qualification He is an MBA (Accounting & Finance) Preston University Ms. Mehvish Maqbool Ms. Mehvish is currently serving as Senior Manager Finance. She joined Inbox in October Before joining Inbox, she was associated with IBL Group. She also has more than 5 years of experience at A. F. Ferguson & Co., a member firm of PricewaterhouseCoopers in Assurance & Business Advisory providing services to a diversified portfolio of clients. Qualification She is a Chartered Accountant (ACA) from Institute of Chartered Accountants of Pakistan Mr. Muhammad Fahim Mr Fahim is currently serving as Senior Manager Finance as head of the accounting team. He joined Inbox in November Before joining Inbox, he had a professional experience of nearly 9 years with reputed organizations including Habib Oil Mills, A. F. Ferguson & Co. & AJ Mirza Pharma. Qualification Mr. Fahim is a Professional Accounting Affiliate & a Chartered Accountant (Finalist) from The Institute of Chartered Accountants of Pakistan. 6.7 NUMBER OF DIRECTORS Pursuant to Section 174 of the Companies Ordinance, 1984 a listed Company shall not have less than seven (7) directors. At present, the Board consists of 8 directors, including the Chief Executive Officer. 6.8 QUALIFICATION OF DIRECTORS No person shall be appointed as a Director of the Company who is ineligible to be appointed as Director on any one or more of the grounds enumerated in Section 187 of the Ordinance or any other law for the time being in force. Page 106 of 145

109 6.9 REMUNERATION OF THE DIRECTORS According to Article 91 of the Articles of Association, subject to any approval or limits required by law, the remuneration of the Chief Executive and other full time working Directors shall be fixed by the Board. The expenses of travel, board and lodging of Directors required to attend a Board Meeting of the Company shall be borne by the Company. The Directors shall be entitled to such remuneration for attending each meeting as the Board from time to time approve BENEFITS TO PROMOTERS AND OFFICERS No benefit has been given or is intended to be given by the Company to the promoters and officers of the Company other than remuneration for services rendered by them as full time executives of the Company INTEREST OF DIRECTORS The directors may deemed to be interested to the extent of fees payable to them for attending the Board meetings. The Directors performing whole time services in the Company may also be deemed interested in the remuneration payable to them by the Company. The nominee directors have interest in the Company to the extent of representing the sponsors in the capital of the Company. Following directors are holding ordinary shares of the Company: Name of Shareholder Designation Numbers of Shares held Value of Shares held Mir Muhammad Nasir CEO 7,100,000 71,000,000 Shahzada Dawood Chairman 1 10 Junaid Iqbal Director 1 10 Shahid Pracha Director 1 10 Mujtaba Haider Khan Director 1 10 Imtisal Abbasi Director 1 10 Shan-e-Elahi Director 1 10 Kanza Afzal Director INTEREST OF CHIEF EXECUTIVE OFFICER The CEO of the Company is paid a salary and the following benefits: 1. Company maintained car with fuel & driver 2. Mobile allowance 3. Provident Fund 4. Comprehensive health insurance for self and immediate family members 5. Group life insurance 6. Company maintained Residence Mr. Mir Muhammad Nasir (the CEO) had taken a house loan amounting to PKR. 50 million from the Company on February 01, Page 107 of 145

110 6.13 INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY None of the Directors of the Company had or has any interest in any property acquired by the Company or proposed to be acquired by the Company ELECTION OF DIRECTORS The Directors of the Company are elected for a term of three years in accordance with the procedure laid down in section 178 of the Ordinance. The Directors shall comply with the provisions of Sections 174 to 178 and Sections 180 and 184 relating to the election of Directors and matters ancillary thereto. Subject to the provisions of the Ordinance, the Company may from time to time increase or decrease the number of Directors. Any casual vacancy occurring on the Board of Directors may be filled up by the Directors, but the person so appointed shall be subject to retirement at the same time as if he / she had become a Director on the day on which the Director in whose place he / she is chosen was last elected as Director. The Company may remove a Director in accordance with the provisions of the Ordinance. Mr. Shahzada Dawood (Chairman) was appointed on April 7, 2016 whereas the other directors were appointed on March 14, VOTING RIGHTS As per the article 73, every member shall be entitled to be present and to speak and vote in any General Meeting and shall, when present in person or represented by an agent duly authorized under a power of attorney or in case of a company, by its representatives duly authorized under Section 162 of the Ordinance have one vote on a show of hands and shall, on a poll when present in person or represented by an agent duly authorized under a power of attorney or, in the case of company by a representative duly authorized under Section 162 of the Ordinance or by proxy have one vote in respect of each shares held. Members may exercise voting rights at general meetings through electronic means if the Company receives the requisite demand for poll in accordance with the applicable laws. Votes may be given either personally or by proxy or, in case of a company, by a representative duly authorized as aforesaid under the Provisions of Section 162 of the Ordinance INTERNAL AUDIT The Board of Directors has set up 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. The audit committee comprises of the following members: 1. Mr. Mujtaba Khan (Chairman) 2. Mr. Syed Hassan Imtisal Abbasi 3. Mr. Shan-e-Elahi 4. Mr. Junaid Iqbal Page 108 of 145

111 6.17 HUMAN RESOURCE AND REMUNERATION COMMITTEE The Board of Directors has set up an effective Human Resources function managed by suitable and qualified personnel who are conversant with the policies & procedures of the Company and are involved in Human Resources function on a full time basis. The human resource and remuneration committee comprises of the following members: 1. Mr. Shahid H. Paracha 2. Ms. Kanza Afzal 3. Mr. Imtisal Abbasi 6.18 BORROWING POWERS OF DIRECTORS Subject to the provisions of the Ordinance and Article V of the Article of Association the Directors may, from time to time, raise, borrow or obtain finance and financial accommodation for any sum or sums of money for the purpose of the Company from any Member or Director or from any other person, banks, firms, corporations, financial institutions or other companies and may secure the repayment of such money together with return or mark-up or charges or, in the case of any foreign currency, interest and payment of any other dues in such manner and upon such terms and conditions in all respects as they think fit and, in particular, by the issue of convertible or nonconvertible debentures stock of the Company, charged or not charged upon the undertaking and all or any part of the property and assets of the Company (both present and future) or by making, drawing, accepting or endorsing on behalf of the Company and promissory notes or bills of exchange or giving and issuing any guarantee, share option certificate, undertaking or other security or by creating mortgage, hypothecation or change on all or any part of the properties, assets and rights of the Company, both present and future, and the Directors may guarantee the whole or any part of any loans or debts raised or incurred by or on behalf of the company or any return, mark-up, interest or charges payable thereon and give all undertakings in connection therewith with power for the guarantors (notwithstanding that they may be Directors) against liability in respect of such loans or guarantees by means of mortgage or hypothecation of or charge upon, any property or assets of the Company otherwise. The Directors, Members or other persons shall be entitled to receive such return, markup or interest on loans made by them to the Company as may be agreed between them and the Company. In regard to the issue of securities the directors may exercise all or any of the powers of the Company arising under Sections 87 and 120 of the Ordinance and in particular the directors may issue any security as defined in Section 2(1) (34) of the Ordinance or may issue any instrument or certificate representing redeemable capital as defined in section 2(1) (30A) of the Ordinance or participatory redeemable capital as defined in section 2(1) (25) of the Ordinance POWERS OF DIRECTORS The directors shall have all the power to run and manage the Company as per the Articles of Association subject to any restrictions under the Ordinance ASSOCIATE LISTED COMPANIES Name of Company Date of Incorporation Registration Number Dawood Hercules Corp. Ltd. 17/04/ Engro Polymer & Chemicals Ltd. 20/10/ Dawood Lawrencepur Ltd. 10/04/ The Hub Power Co. Ltd. 1/08/ Engro Corp. Ltd. 28/09/ Page 109 of 145

112 Financial Performance of Associated Listed Companies under same Management Dawood Hercules Corporation Limited (Consolidated) (Amounts in PKR 000) FY14 FY15 FY16 Paid-up Capital 4,812,871 4,812,871 4,812,871 Equity 74,459,305 92,866, ,962,421 Total Assets 230,944, ,463, ,316,529 Total Liabilities 156,485, ,596, ,354,108 Non-Controlling Interest 46,743,143 59,901, ,277,999 Profit Before Tax 10,867,441 30,385,411 82,543,930 Profit After Tax 7,454,713 21,364,737 73,438,345 Earnings Per Share Break-up Value Per Share Dividends Per Share Current Ratio(x) 0.87x 0.91x 2.06x ROE 10% 23% 42% ROA 3% 10% 24% Dawood Lawrencepur Limited (Consolidated) (Amounts in PKR 000) FY14 FY15 FY16 Paid-up Capital 590, , ,578 Equity 4,574,096 6,830,141 10,603,431 Total Assets 5,948,566 10,958,985 21,888,966 Total Liabilities 924,470 4,128,844 11,285,535 Non-Controlling Interest - 301, ,256 Profit Before Tax 149,086 1,234,453 3,631,741 Profit After Tax 221,400 1,634,552 3,113,911 Earnings Per Share Break-up Value Per Share Dividends Per Share Current Ratio(x) 1.55x 7.58x 1.02x ROE 5% 24% 29% ROA 4% 15% 14% Engro Corporation Limited (Consolidated) (Amounts in PKR 000) FY14 FY15 FY16 Paid-up Capital 5,237,848 5,237,848 5,237,848 Equity 68,024,512 85,672, ,090,756 Total Assets 217,086, ,291, ,333,307 Page 110 of 145

113 Total Liabilities 149,062, ,618, ,242,551 Non-Controlling Interest 10,847,266 16,431,445 35,253,333 Profit Before Tax 10,982,755 25,784,845 81,909,448 Profit After Tax 7,800,846 17,268,396 73,598,129 Earnings Per Share Break-up Value Per Share Dividends Per Share Current Ratio(x) 0.88x 0.90x 2.21x ROE 11% 20% 44% ROA 4% 9% 25% The Hub Power Company Limited (Consolidated) (Amounts in PKR 000) FY14 FY15 FY16 Paid-up Capital 11,571,544 11,571,544 11,571,544 Equity 34,601,712 36,839,773 33,244,610 Total Assets 155,204, ,116, ,848,136 Total Liabilities 120,603, ,277, ,603,526 Non-Controlling Interest 1,486,794 1,910,156 2,038,687 Profit Before Tax 7,821,074 12,160,823 12,771,253 Profit After Tax 7,817,035 12,000,734 12,500,594 Earnings Per Share Break-up Value Per Share Dividends Per Share Current Ratio(x) 1.07x 1.11x 1.04x ROE 23% 33% 38% ROA 5% 8% 8% Engro Polymer and Chemicals Limited (Amounts in PKR 000) FY14 FY15 FY16 Paid-up Capital 7,598,717 7,598,717 7,598,717 Equity 5,965,034 5,333,728 6,004,179 Total Assets 26,336,715 24,211,764 24,420,761 Total Liabilities 20,371,681 18,878,036 18,416,582 Non-Controlling Interest Profit / (Loss) Before Tax (1,528,269) (360,071) 1,187,297 Profit / (Loss) After Tax (1,109,318) (644,124) 659,933 Earnings Per Share (1.67) (0.97) 0.99 Break-up Value Per Share Dividends Per Share Current Ratio(x) 0.59x 0.51x 0.80x ROE -19% -12% 11% Page 111 of 145

114 ROA -4% -3% 3% Subsidiaries and Associate of Companies under same Management Name of Company Dawood Hercules Corp. Ltd. Engro Polymer & Chemicals Ltd. Dawood Lawrencepur Ltd. The Hub Power Co. Ltd. Engro Corp. Ltd. Subsidiary Companies Associate Companies Investments Engro Corporation Ltd Engro Polymer Trading (Private) Ltd. Reon Energy Ltd. Tenaga Generasi Ltd. Mozart (Private) Ltd. Laraib Energy Ltd. Hub Power Services Ltd. Hub Power Holdings Ltd. Narowal Energy Ltd. Thar Energy Ltd. Engro Powergen Ltd. Engro Eximp Agriproducts (Private) Ltd. Elengy Terminal Pakistan Ltd. Engro Fertilizes Ltd. Engro Polymer and Chemicals Ltd. Engro Vopak Terminal Ltd. The Hub Power Co. Ltd Engro Foods Ltd GEL Utility Limited Sindh Engro Coal Mining Company N/A Dawood Hercules Corporation Ltd. Sindh Engro Coal Mining Company Ltd. China Power Hub Generation Company (Private) Ltd. GEL Utility Limited Sindh Engro Coal Mining Company Engro Foods Ltd. Engro Vopak Terminal E2e Business Enterprises Limited Arabian Sea Country Club Limited Magboro Power Company N/A N/A N/A Arabian Sea Country Club Limited Magboro Power Company 6.21 CORPORATE GOVERNANCE The Company shall comply with all the rules and regulations applicable to the Company with regards to the Code of Corporate Governance of Listed Companies. Furthermore, the Company will also ensure that at least half of the board of directors will have fulfilled the requirement of the director s training by June 2018 as required under the PSX regulations. The Company shall also encourage representation of minority shareholders on the board of directors INVESTMENT IN ASSOCIATED COMPANIES Inbox Business Technologies Limited has made no investment in any associated companies REVALUATION OF FIXED ASSETS Page 112 of 145

115 No revaluation of the fixed assets has been carried out. Company s operating property plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses CAPITALIZATION OF RESERVES Inbox Business Technologies Limited capitalized share premium and unappropriated profits of amount totaling PKR 639,110,700 which translated into 63,911,070 ordinary shares of PKR 10/- each on February 16 th, 2017 as part of a bonus shares issuance out of unappropriated profits. Other than that there has been no capitalization of reserves since the incorporation of Inbox Business Technologies Limited. Page 113 of 145

116 7 MISCELLANEOUS INFORMATION 7.1 REGISTERED OFFICE / CORPORATE OFFICE Inbox Business Technologies Limited, 5 th Floor, Dawood Centre, MT Khan Road, Karachi, Pakistan Phone: Website: info@inboxbiz.com 7.2 BANKER TO THE ISSUE FOR BOOK BUILDING 1. The Bank of Punjab 2. MCB Bank Limited 7.3 BANKERS TO THE ISSUE FOR GENERAL PORTION 1. Askari Bank Limited 2. Al Baraka Bank Limited 3. Bank Alfalah Limited 4. Bank Alhabib Limited 5. Bank Islami Pakistan Limited 6. Habib Bank Limited 7. MCB Bank Limited 8. NIB Bank Limited 9. Summit Bank Limited 10. The Bank of Punjab 11. United Bank Limited 7.4 BID COLLECTION CENTERS Karachi Contact Officer: Yasir Abbas Abdul Qadir Direct No.: PABX No.: Fax No.: yasir.abbas@arifhabibltd.com abdul.qadir@arifhabibltd.com Postal Address: Arif Habib Center, 23 MT Khan Road, Karachi Naya Nazimabad, Mangophir Road, Karachi Page 114 of 145

117 Contact Officer: Direct No.: Fax No.: Postal Address: Lahore Room # 220, Arif Habib Limited, Lahore Stock Exchange, Lahore Islamabad Peshawar Contact Officer: Muhammad Shafqat Abbas Farhan Yousaf Mobile No.: Direct: Fax No: mcb1390@mcb.com.pk ops0277@mcb.com.pk Postal Address: MCB Bank Limited, Office No.I, Ground+Mezzanine Floor, Islamabad Stock Exchange Tower, Blue Area, Islamabad Quetta Contact Officer: Mrs. Humaira Rafiq / Ammad Lodhi Mobile No.: Direct: bop0249@bop.com.pk Postal Address: The Bank of Punjab, Jinnah Road, Quetta MCB Bank Limited, Saddar Road, Peshawar Cantt., Tehsil & District Peshawar Contact Officer: Mobile No.: Direct: Postal Address: Azad Kashmir Gilgit / Baltistan 7.5 BANKERS AND FINANCIAL INSTITUTIONS TO THE COMPANY 1. Al Baraka Bank Limited 2. Bank Islami Pakistan Limited 3. First Habib Modaraba 4. Habib Bank Limited 5. KASB Modaraba 6. NIB Bank Limited 7. Orix Leasing Pakistan Limited 8. The Bank of Punjab 9. Summit Bank Limited Page 115 of 145

118 7.6 AUDITORS OF THE COMPANY EY Ford Rhodes Chartered Accountants Progressive Plaza, Beaumont Road P.O. Box 15541, Karachi Pakistan 7.7 LEGAL ADVISOR OF THE COMPANY Aziz Malik Law Associates 301 Landmark Plaza, I.I Chundrigar road, Karachi TRANSACTION LEGAL COUNCIL Mohsin Tayebaly & Co. 1 st Floor, Dime Center, BC-4 Block 9, Kehkashan, Clifton, Karachi CONSULTANT TO THE ISSUE Next Capital Limited 8th, Floor, Horizon Tower, Plot No 2/6, Block -3, Clifton, Karachi Tel: Fax: umer.habib@nextcapital.com.pk Website: BOOK RUNNER TO THE ISSUE Arif Habib Limited Arif Habib Center 23, MT Khan Road, Karachi Tel: Fax: yasir.abbas@arifhabibltd.com Website: COMPUTER BALLOTER & SHARES REGISTRAR Central Depository Company of Pakistan Limited CDC House, 99-B, Block-B, S.M.C.H.S Main Shahrah-e-Faisal, Karachi Tel: (021) Page 116 of 145

119 7.12 UNDERWRITING RELATED INFORMATION Within three (3) working days of the closing of the Bidding Period, a Supplement to the Prospectus shall be published at least in all those newspapers in which the Prospectus was earlier published and also disseminated through Stock Exchange where the shares are to be listed. The Supplement to the Prospectus would contain among other information, the names of the Underwriters, if any for the General Public Portion of the Issue and the Underwriting Commission DUE DILIGENCE REPORTS The Due Diligence Reports prepared by the underwriters will be furnished along with the Underwriting Agreements for the General Public Portion within three (3) working days of the closing of the Bidding Period MATERIAL CONTRACTS & DOCUMENTS OF INBOX BUSINESS TECHNOLOGIES LIMITED Details of Short-Term Financing Facilities Bank Facility Limit (PKR) Mark-up Commission Date Sanctioned Expiry / Review Date The Bank of Punjab NIB Bank Limited Habib Bank Limited Bank Islami Pakistan Limited Al-Baraka Bank Pakistan Limited Running Finance 1,400 3 Months 31-Jul-17 KIBOR + 2.5% 26-Dec-16 Running Finance 120 p.a 30-Jun-17 3 Months Running Finance 100 KIBOR + 2% 14-Jun May-17 p.a 1 Month Running Finance 75 KIBOR + 1.5% 01-July Jun-17 p.a. Murabaha / Import Respective* Murabaha / Karobar 450 KIBOR + 3.0% 10-Nov Oct-17 Finance p.a Murabaha / Tijarah Finance (One-off Limit) Murabaha / Tijarah Finance Import Murabaha / Tijarah Finance Related** KIBOR + 3.0% p.a. Related** KIBOR + 3.5% p.a. Related** KIBOR + 3.5% p.a. 26-Aug Aug Aug days from last facility availed 31-Aug Aug-17 *The respective KIBOR rate will be decided based on the tenor of the short-term borrowing drawn. For example, the one month KIBOR rate will be applicable on a one month borrowings whereas the three months or Six Months KIBOR will be applicable on a three or Six months borrowing respectively. ** Application of Related KIBOR Transaction Period (No. of Days) Up to 30 Days Related KIBOR 1 Month KIBOR Page 117 of 145

120 31 Days to 90 Days 91 Days to 180 Days 3 Month KIBOR 6 Month KIBOR Details of Long-term Financing Facilities Bank The Bank of Punjab (TAQWA Islamic Banking) Facility IJARAH (Sale & Lease back) Limit (PKR million) Amount Disbursed (PKR million) Mark-up Commission 1 Year KIBOR + 2.5% p.a. Date Sanctioned 20-March-17 Expiry / Review Date 5-May Details of Lease Agreement (Ijarah) Bank The Bank of Punjab (TAQWA Islamic Banking) Facility IJARAH (Lease Agreement) Amount Outstanding (PKR million) Mark-up Commission 1 Year KIBOR + 2.5% p.a. Date Sanctioned 29-March Expiry / Review Date 13 months from date of disbursement Details of Non-Fund Based Financing Facilities Bank Facility Limit (PKR millions) Mark-up Commission Date Sanctioned Expiry / Review Date The Bank of Punjab NIB Bank Habib Bank Limited Summit Bank Limited (Islamic) Bank Islami Pakistan Limited Letter of Credit / Bank Guarantee Letter of Credit / Bank Guarantee Bank Guarantee Letter of Credit / Bank Guarantee Letter of Credit / Bank Guarantee , Commission 0.25% per quarter Commission 0.30% per quarter for Letter of Credit & 0.4% per quarter in case of Bank Guarantee Commission 1.5% per anum Commission 0.10% per quarter Letter of Credit commission is 0.10% per quarter & Bank 26-Dec Jun-16 1-Jul Jul Nov Jul May Jun May Oct-17 Page 118 of 145

121 Al-Baraka Bank Pakistan Limited Bank Guarantee (One off limit) Guarantee Commission is as per Schedule of Charges As per Schedule of Charges 26-Aug days from last availed facility Details of Other Financing Facilities Financial Institution Nature of Agreement Particular First Habib Modaraba Diminishing Musharaka Agreement Diminishing Musharaka for various cars KASB Modaraba Diminishing Musharaka Agreement Diminishing Musharaka for various cars Equipment Lease Agreement & Vehicle Various Lease Agreements for Vehicles Orix Leasing Finance Agreement & Equipment Details of Other Rental Agreement Title of Agreement Rental Agreement Party to the Agreement Punjab Information Technology Board From To Particular 01-Jul Dec-2018 Lease Agreement Horizon Developers 01-Feb Jan-2019 Tenancy Agreement Lease Agreement Islamabad Stock Exchange Limited Individual Counterparty 15-Jan Nov Jan Nov-2018 Rent agreement for Arfa Software Technology Park, Lahore Office Rent agreement for Salar Centre, Lahore Office Rent agreement, Islamabad Main Office Rent agreement for House No. 241, Islamabad Details of Related Party Agreements Title of Agreement Tenancy Agreement Hardware Maintenance Agreement Service Level Agreement Master Services Agreement Party to the Agreement The Dawood Foundation Dawood Hercules Corporation Limited Engro Corporation Limited Engro Corporation Limited From To Particular 01-Jul-15 Will be automatically renewable for each further period of eleven months Rent agreement for 5th Floor of Dawood Center Hardware Maintenance Contract Engro - Cable Management Engro Corp - Support Services Page 119 of 145

122 Sale / Services Agreement Dawood Hercules Corporation Limited IT Infrastructure Revamp Project (Data & Voice) 7.15 INSPECTION OF DOCUMENTS AND CONTRACTS Copies of the Memorandum and Articles of Association, the Audited Financial Statements, the Auditor s Certificates, Information Memorandum and copies of the agreements referred to in this Prospectus may be inspected during usual business hours on any working day at the registered office of the Company from the date of publication of this Prospectus until the closing of the subscription list LEGAL PROCEEDINGS There are ordinary litigations incidental to the business, to which the Company is a party. However, none of them have any material impact on the Company or its shareholders except for the following: Deputy Commissioner Inland Revenue, through a show cause notice dated March 13, 2015 demanded the amount of Rs million and Rs million for sales tax and withholding income tax respectively on the project between the Company and Higher Education Department ( HEC ) for 110,000 Laptops having the project amount of Rs. 4,147 million. The project was executed and laptops delivered to HEC in financial year 2012 and all the facts reported in corresponding sales tax and income tax returns of the Company accordingly. Simultaneously sales tax and income tax audit of Company conducted by Federal Board of Revenue ( FBR ) in financial years 2012 and 2014 for which assessment orders for both audits were issued by FBR after examination of the audited financial statements of said year. The Company s management preferred to challenge the show cause notice in the Honorable High Court of Sindh, in response to which the Honorable High Court of Sindh vide CP# 1528/2015 dated April 06, 2015, restrained the authorities from passing any adverse order under the show cause notice. The Company legal advisors consider that reasonable grounds exist to support the Company s stance in the appeal and are of the view that the decision would be in the Company s favour. Consequently, no provision has been made in these financial statements MEMORANDUM OF ASSOCIATION The Memorandum of Association, inter alia, contains the objects for which the Company was incorporated and the business which the Company is authorized to undertake. A copy of the Memorandum of Association is annexed to this Prospectus and with every issue of the Prospectus except the one that is released in newspapers as advertisement FINANCIAL YEAR OF THE COMPANY The financial year of the Company commences on 1 st January and ends on 31 st December each year. Page 120 of 145

123 8 APPLICATION AND ALLOTMENT INSTRUCTIONS 8.1 ELIGIBLE INVESTORS INCLUDE: 1. Pakistani citizens resident in or outside Pakistan or Persons holding dual nationalities including a Pakistani nationality; 2. Foreign Nationals whether living in or outside Pakistan 3. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be); 4. Mutual Funds, Provident / Pension / Gratuity Funds / Trusts, (subject to the terms of the Trust Deed and existing regulations); and 5. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. 8.2 APPLICATION MUST BE MADE ON THE COMMISSION S APPROVED APPLICATION FORM OR ALEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING AT LEAST 62 GM 8.3 COPIES OF THE PROSPECTUS Copies of this Prospectus and Applications Forms can be obtained from members of PSX, the Bankers to the Issue and their branches, the Consultant to the Issue & Book Runner and the registered office of the Company. The Prospectus and the Application Form can also be downloaded from the following websites: The applicants opting for scrip-less form of shares are required to complete the relevant sections of the application. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations, credit of such shares is allowed ONLY in the applicant s own CDC account. In case of discrepancy between the information provided in the application and the information already held by CDS, the Company reserves the right to issue shares in physical form. 8.4 NAMES(S) AND ADDRESS (ES) MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH AND SHOULD NOT BE ABBREVIATED 8.5 ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THE ONE RECORDED WITH THE APPLICANT S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED NATIONAL IDENTITY CARD (CNIC) OR THE NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANI (NICOP) OR PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFIXED ON THE APPLICATION FORM. 8.6 APPLICATIONS MADE BY INDIVIDUAL INVESTORS 1. In case of individual investors, an attested photocopy of CNIC (in case of Resident Pakistanis) / NICOP or Passport (in case of Non-Resident Pakistanis) as the case may be, should be enclosed and the number of CNIC / NICOP / Passport should be written against the name of the applicant. Copy of these documents can be attested by any Federal / Provincial Government Gazette Officer, Councilor, Oath Commissioner or Head Master of High School or bank manager in the country of applicant s residence. 2. Original CNIC / NICOP / Passport, along with one attested photocopy, must be produced for verification to the Banker to the Issue and the applicant s banker (if different from the Banker to the Issue) at the time of Page 121 of 145

124 presenting the application. The attested photocopy will, after verification, be retained by the bank branch along with the application. 8.7 APPLICATIONS MADE BY INSTITUTIONAL INVESTORS 1. Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by an attested photocopy of their Memorandum and Articles of Association or equivalent instrument / document. Where applications are made by virtue of Power of Attorney, the same should also be submitted along with the application. Any Federal / Provincial Government Gazette Officer, Councilor, Bank Manager, Oath Commissioner and Head Master of High School or bank manager in the country of applicant s residence can attest copies of such documents. 2. Attested photocopies of the documents mentioned in 8.7 (i) must be produced for verification to the Banker to the Issue and the applicant s banker (if different from the Banker to the Issue) at the time of presenting the application. The attested copies, will after verification, be retained by the bank branch along with the application. 8.8 ADDITIONAL INSTRUCTIONS FOR INVESTORS 1. Only one application will be accepted against each account, however, in case of joint account, one application may be submitted in the name of each joint account holder. 2. Joint application in the name of more than two persons will not be accepted. In case of joint application each applicant must sign the application form and submit attested copies of their CNICs / NICOP / Passport. The share certificates will be dispatched to the person whose name appears first on the application form while in case of CDS, it will be credited to the CDS account mentioned on the face of the form and where any amount is refundable, in whole or in part, the same will be refunded by cheque or other means by post, or through the bank where the application was submitted, to the person named first on the application form, without interest, profit or return. Please note that joint application will be considered as a single application for the purpose of allotment of shares. 3. Subscription money must be paid by check drawn on applicant s own bank account or pay order / bank draft payable to one of the Bankers to the Issue IPO of Inbox Business Technologies Limited General Portion Account and crossed A/C PAYEE ONLY. 4. For the applications made through pay order / bank draft, it would be permissible for a Banker to the Issue to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order / bank draft individually for each application. 5. The applicant should have at least one bank account with any of the commercial banks. The applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of shares. 6. Applications are not to be made by minors and / or persons of unsound mind. 7. Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the Application Form. 8. Applicants should retain the bottom portion of their Application Forms as provisional acknowledgement of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of shares for which the application has been made. 9. Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action. 10. Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting subscription applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the Issue. Page 122 of 145

125 11. It would be permissible for a Banker to the Issue to refund subscription money to unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers. 12. Submission of false and fictitious applications is prohibited and such applications money may be forfeited under section 87(8) of the Securities Act, ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON-RESIDENT INVESTORS 1. In case of foreign investors who are not individuals, applications must be accompanied with a letter on applicant's letterhead stating the legal status of the applicant, place of incorporation and operations and line of business. A copy of Memorandum of Association or an equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copies of these documents can be attested by the bank manager in the country of applicant's residence. 2. Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the State Bank of Pakistan's Foreign Exchange Manual. 3. Foreign / Non- resident investors should follow payment instructions given in Section of this Prospectus BASIS OF ALLOTMENT The basis and conditions of transfer of shares to the General Public shall be as follows: 1. The minimum value of application will be calculated as Issue Price x 500 shares. Application for amount below the minimum value shall not be entertained. 2. Application for shares must be made for 500 shares or in multiple of 500 shares only. Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected. 3. Allotment / Transfer of shares to successful applicants shall be made in accordance with the allotment criteria / instructions disclosed in the Prospectus. 4. Allotment of shares shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and / or the instructions by the Securities & Exchange Commission of Pakistan. 5. Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all data fields in the Application Form. 6. The Company will dispatch shares to successful applicants through their Bankers to the Issue or credit the respective CDS accounts of the successful applicants (as the case maybe). Page 123 of 145

126 8.11 LIST OF BANKERS TO THE ISSUE Code Name of Bank 01 Askari Bank Limited 02 Al Baraka Bank Limited 03 Bank Alfalah Limited 04 Bank Alhabib Limited 05 Bank Islami Pakistan Limited 06 Habib Bank Limited 07 MCB Bank Limited 08 NIB Bank Limited 09 Summit Bank Limited 10 The Bank of Punjab 11 United Bank Limited 8.12 CODE OF OCCUPATION OF INVESTORS / APPLICANTS Code Occupation 01 Business 02 Business Executive 03 Service 04 Housewife 05 Household 06 Professional 07 Student 08 Agriculturist 09 Industrialist 10 Other 8.13 NATIONALITY CODE Code Name of Country 001 U.S.A 002 U.K 003 U.A.E 004 K.S.A 005 Oman 006 Bangladesh 007 China 008 Bahrain 009 Other 8.14 E-IPO FACILITIES In order to facilitate the investors, the Issuer has arranged provision of e-ipo facility through United Bank Limited ( UBL ) and Summit Bank Limited ( SMBL ) that is among the Bankers to the Issue. The accountholders of UBL can use UBL net-banking to submit their applications online via link: Page 124 of 145

127 The accountholders of SMBL can use SMBL net-banking to submit their applications online via link: The accountholders of UBL & SMBL can submit their applications through these links 24 hours a day during the subscription period which will close at 12:00 midnight on DD/MM/2017. Page 125 of 145

128 9 REGISTRATION FORM Page 126 of 145

129 10 DUPLICATE REGISTRATION FORM Page 127 of 145

130 11 BIDDING FORM Page 128 of 145

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132 12 ADDITIONAL PAYMENT FORM Page 130 of 145

133 13 BID REVISION FORM Page 131 of 145

134 14 SIGNATORIES TO THE PROSPECTUS -sd- Shahzada Dawood Chairman / Director -sd- Syed Hassan Imtisal Abbasi Director -sd- Shahid Hamid Pracha Director -sd- Mujtaba Haider Khan Director -sd- Junaid Iqbal Director -sd- Shan-e-Elahi Director -sd- Kanza Afzal Director -sd- Mir Muhammad Nasir Chief Executive Officer SIGNED BY THE ABOVE IN PRESENCE OF WITNESSES: Witness 1: Witness 2: -sd- Asad Warsi Chief Financial Officer Witness 3: -sd- Muhammad Fahim Senior Manager Finance Date: April 20, sd- Fatima Ahmed Company Secretary Page 132 of 145

135 15 MEMORANDUM OF ASSOCIATION Page 133 of 145

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