Professional Documents
Culture Documents
THE INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS OFFER
FOR SALE DOCUMENT, ESPECIALLY THE RISK FACTORS GIVEN AT PARAGRAPH 4.3, BEFORE MAKING ANY INVESTMENT
DECISION.
SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATION BY SAME PERSON) IS
PROHIBITED AND SUCH APPLICATIONS MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES
AND EXCHANGE ORDINANCE, 1969.
*In order to facilitate investors, United Bank Limited (UBL) is offering electronic submission of application (e-IPO) to its account holders. UBL
account holders can use UBL Net Banking facility to submit their application online via link www.ubldirect.com/corporate/ebank. Further, please note
that online application can be submitted 24 hours a day during the subscription period which will close at 12:00 midnight on 24th September, 2014.
Underwritten by:
Date of Publication of this Offer for Sale Document: 14th September 2014
For further queries you may contact: Engro Powergen Qadirpur Limited - Mr. Ali Athar; P: +92 (21) 35297501 Ext 4021; E: aliathar@engro.com;
Habib Bank Limited - Mr. Imran Sherani; P: +92 (21) 3243 9400; E: imran.sherani@hbl.com;
Bank Alfalah Limited - Mr. M. Zeeshan; P: +92 (21) 111-777-786 Ext. 2126; E: m.zeeshan@bankalfalah.com
The Offerors, having made all reasonable inquiries, accept responsibility for the disclosures made in this
Offer for Sale Document and confirm that:
(i)
this Offer for Sale Document contains all information with regards to the Offerors and the Offer,
which is material in the context of the Offer and nothing has been concealed;
(ii)
the information contained in the Offer for Sale Document is true and correct to the best of our
knowledge and belief;
(iii) the opinions and intentions expressed herein are honestly held; and
(iv)
there are no other facts and information, the omission of which makes this document as a whole or
any part thereof misleading.
-sd________________________
Naz Khan
Chief Financial Officer
-sd________________________
Mohammed Saqib
Chief Financial Officer
Page 2 of 72
Power Purchaser
PPIB
RCOD
RFO
ROE
ROEDC
SCRA
TREC
US
USD
WHT
WPI
Page 3 of 72
DEFINITIONS
Application Money
e-IPO Facility
OFSD
Offeror
Offer
Offer Price
Ordinary Shares
Page 4 of 72
TABLE OF CONTENTS
Part
Content
Page
10
Page 5 of 72
PART 1
1
THE EXCHANGE HAS NOT EVALUATED THE QUALITY OF THE OFFER, AND
ITS CLEARANCE SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF
THE SAME. THE PUBLIC SHOULD CONDUCT THEIR OWN INDEPENDENT
INVESTIGATION AND ANALYSIS REGARDING THE QUALITY OF THE OFFER
BEFORE SUBSCRIBING.
DOES
NOT
REPRESENT
1.3. FILING OF OFFER FOR SALE DOCUMENT AND OTHER DOCUMENTS WITH THE
REGISTRAR OF COMPANIES
The Company has filed with the Registrar of Companies, Companies Registration Office (CRO)
Securities and Exchange Commission of Pakistan, Karachi, as required under Sections 57(3) and
(4) of the Ordinance, a copy of this OFSD signed by the authorized signatories of the Offerors,
together with the following documents attached thereto:
a) Letter dated September 5th, 2014 from the Auditors of the Company, M/s. A.F. Ferguson & Co.
Chartered Accountants consenting to the publication of their names in the OFSD, which
contains in Part 5 certain statements and reports issued by them as experts (which consent has
not been withdrawn), as required under Section 57(5) of the Companies Ordinance, 1984.
b) Copies of material contracts and agreements mentioned in Part 7 of this OFSD as required
under Section 57(4) of the Ordinance.
c) Written confirmations of the Legal Advisor to this Offer and the Bankers to this Offer,
mentioned in this OFSD consenting to act in their respective capacities, as required under
Section 57(5) of the Companies Ordinance, 1984.
d) Written consents of the Directors, the Chief Executive and the Company Secretary of the
Company who have consented to their respective appointments being made and their having
been named or described as such Directors, Chief Executive and Company Secretary in this
OFSD, as required under Section 57(3) of the Ordinance, read with sub-clause (1) of clause (4)
of Section 1 of Part 1 of the Second Schedule to the Ordinance.
1.4. LISTING ON THE EXCHANGE
Application has been submitted to the Exchange for permission to deal in and for quotation of the
shares of the Company.
In accordance with the Rule Book of KSE, Chapter 11 pertaining to the Future Trading in
Provisionally Listed Companies, the Company shall stand listed provisionally for trading and for
the quotation of its shares on the Karachi Stock Exchange from the date of publication of the OFSD
or a date as may be specified by the Exchange.
If for any reason the application for formal listing is not accepted by the Exchange, during and up
to the period as specified under section 72 (1) of the Companies Ordinance, 1984, the Offerors
undertake that a notice to that effect will immediately be published in the press and refund
Page 7 of 72
Application Money to the applicants without surcharge within eight (8) days from the date they
become liable to pay it.
In the event the Offerors are unable to repay the amount within the aforementioned period of eight
(8) days, the directors of the Offerors shall be jointly and severally be liable to repay the money
from the expiry of eighth day together with a surcharge of one and a half percent (1.5%) for every
month or part thereof from the expiry of the eighth day.
Page 8 of 72
PART 2
2
AUTHORIZED CAPITAL
330,000,000 Ordinary Shares of PKR 10/- each
Face value
Premium
(PKR)
(PKR)
Total (including
premium)
(PKR)
3,300,000,000
3,300,000,000
80,777,000
80,777,000
3,318,777,000
3,318,777,000
The existing issued, subscribed & paid up capital of the Company is held as follows:
SPONSORS
32,000,000 Engro Corporation Limited
320,000,000
271,999,992 Engro Powergen Limited
2,719,999,920
OTHER SHAREHOLDERS
16,000,000 International Finance Corporation(1)
160,000,000
56,511,500
DIRECTORS
1 Mr. Ruhail Mohammed
10
1 Mr. Muhammad Ali
10
1 Mr. Shabbir Hashmi
10
1 Mr. Javed Akbar
10
1 Ms. Aliya Yusuf
10
1 Mr. Vaqar Zakaria
10
1 Mr. Muhammad Aliuddin Ansari
10
1 Mr. Shahid Hamid Pracha
10
Employees under the Employee Share
3,800,000
38,000,000
24,265,500
Option Scheme(2)
323,800,000 Total Paid up Capital
3,238,000,000
80,777,000
320,000,000
2,719,999,920
216,511,500
10
10
10
10
10
10
10
10
62,265,500
3,318,777,000
(1)
In October 2008, IFC entered into an agreement with Engro Corporation Limited to subscribe for
16,000,000 shares of Company at the Rupees equivalent of USD 0.17424 per share, which was PKR
13.77/- per share (including a cash premium of PKR 3.77 per share).The aforementioned transaction
resulting in a total premium of PKR 60,377,962/- out of which PKR 3,866,463/- was deducted on
account of share issuance cost, thus a net amount of PKR 56,511,500/- was recorded in the financial
statements.
Approval for the Employee Share Option Scheme (Scheme) was granted by SECP vide letter
dated September 25th, 2008. Under the Scheme, senior employees of the Company were granted
options to purchase newly issued ordinary shares of the Company at an exercise price of PKR 15/per ordinary share (if exercised in 2011) and PKR 17/- per ordinary share (if exercised in 2012)
respectively. The number of options granted had been calculated in accordance with the ability and
(2)
Page 9 of 72
criticality of an employee to the business, subject to the approval of the Boards Compensation
Committee constituted for the Scheme.
Vesting period commenced from the grant date and ended on December 31st, 2010, where after the
options could be exercised within a period of two years i.e. up to December 31st 2012. Fair values
per share determined at the time of exercise of options were PKR 16.29/- per share in the year 2011
and PKR 18.29/- per share in the year 2012. Cost of the balance amount of fair value per share at
the time of exercise of the options was borne by the Company and charged to the income statement.
2.2. THE OFFERORS
The following two shareholders are jointly offering 12.5% shares out of their respective
shareholdings in the Company:
Number of shares
being Offered
32,000,000
9.88%
8,475,000
40,475,000
2.62%
12.5%
No. of
Shares
3,750,000
20,250,000
36,344,000
16,500,000
40,000,000
25,020,000
20,000,000
7,989,500
7,989,500
75,750,000
5,250,000
13,691,000
75,750,000
15,991,000
7,507,500
40,540,500
72,760,688
33,033,000
80,080,000
50,090,040
40,040,000
15,994,979
15,994,979
151,651,500
10,510,500
27,409,382
151,651,500
32,013,982
Total
[including
premium]
(PKR)
11,257,500
60,790,500
109,104,688
49,533,000
120,080,000
75,110,040
60,040,000
23,984,479
23,984,479
227,401,500
15,760,500
41,100,382
227,401,500
48,004,982
40,475,000
81,030,950
121,505,950
404,750,000
810,309,500
1,215,059,500
Face Value
(PKR)
Investors
375,000
2,025,000
3,634,400
1,650,000
4,000,000
2,502,000
2,000,000
798,950
798,950
7,575,000
525,000
1,369,100
7,575,000
1,599,100
Page 10 of 72
Premium
(PKR)
Face Value
(PKR)
Premium
(PKR)
404,750,000
810,309,500
Total
[including
premium]
(PKR)
1,215,059,500
Notes:
a. As per rule 3 (I) (iv) of the Companies (Issue of Capital) Rules, 1996, the sponsors shall
at all times retain at least 25% of the capital of the Company.
b. As per regulation No. 5.4.5 (a) of KSEs Rule Book (Chapter 5 - Listing of Companies
and Securities Regulations), sponsors shareholding in excess of 25% shall not be
saleable for a period of six months from the last date of public subscription.
c. As per regulation No. 5.4.5 (b) of KSEs Rule Book (Chapter 5 - Listing of Companies
and Securities Regulations), allocation of shares, under Pre-IPO placement (as specified
in section 2.3) including employees of company / group companies etc., shall not be
saleable for a period of six months from the last date of public subscription.
Pakistani Nationality;
b) Foreign nationals whether living in or outside Pakistan;
c) Companies, bodies corporate or other legal entities incorporated or established in or outside
Pakistan (to the extent permitted by their respective constitutive documents and existing
regulations as the case may be);
d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their respective
General documentation required for opening of SCRA account by institutional investors is:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
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 advised to request the procedure from respective
financial institution.
Payments made by foreign investors shall be supported by proof of receipt of foreign currency
through normal banking channels. Such proof shall be submitted along with the Application by the
foreign investors.
(Offer Price plus PKR 0.15 per share (Stamp duty on transfer of shares) x 500 shares) shall not
be entertained.
(b) The minimum amount of application for subscription of 500 shares is PKR 15,039/- (Offer
Price plus PKR 0.01 per share (Stamp duty on transfer of shares) plus 0.048032 per share
(CDC charges of 0.16% of the Offer Price) x 500 shares) in case shares are desired to be
transferred to a CDC account. In case physical shares are desired, minimum amount of
application for subscription of 500 shares is PKR 15,085/- (Offer Price plus PKR 0.15 per
share (Stamp duty on transfer of shares) x 500 shares) for both in physical form and shares
under the book entry system.
(c) 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.
(d) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN
ONE APPLICATION BY SAME PERSON) IS PROHIBITED AND SUCH
APPLICATIONS MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A
OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969.
(e) If the shares offered to the general public are sufficient to accommodate all applications, all
applications shall be accommodated.
(f) If the shares applied for are in excess of the shares offered, the distribution shall be made by
computer balloting, in the presence of the representative(s) of the Stock Exchange in the
following manner:
(i) If all the applications for 500 shares can be accommodated, then all such applications
shall be accommodated first. If all applications for 500 shares cannot be accommodated,
then balloting will be conducted among applications for 500 shares only.
(ii) If all the applications for 500 shares have been accommodated and shares are still
available for allotment, then all applications for 1,000 shares shall be accommodated. If
all applications for 1,000 shares cannot be accommodated, then balloting will be
conducted among applications for 1,000 shares only.
(iii) If all applications for 500 shares and 1,000 shares have been accommodated and shares
are still available for allotment, then all applications for 1,500 shares shall be
accommodated. If all applications for 1,500 shares cannot be accommodated, then
balloting will be conducted among applications for 1,500 shares only.
(iv) If all applications for 500 shares, 1,000 shares and 1,500 shares have been
accommodated and shares are still available for allotment, then all applications for 2,000
shares shall be accommodated. If all applications for 2,000 shares cannot be
accommodated, then balloting will be conducted among applications for 2,000 shares
only.
(v) After the allotment in the above mentioned manner, the balance shares, if any, shall be
allotted in the following manner:
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.
Page 13 of 72
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 each to the successful applicants.
(g) If the Offer is over-subscribed in terms of amount only, then allotment of shares shall be made
in the following manner:
(i) First preference will be given to the applicants who applied for 500 shares;
(ii) Next preference will be given to the applicants who applied for 1,000 shares;
(iii) Next preference will be given to the applicants who applied for 1,500 shares;
(iv) Next preference will be given to the applicants who applied for 2,000 shares; and then
(v) 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.
(h) Allotment of shares will be subject to scrutiny of applications for subscription of shares.
(i) Applications, which do not meet the above requirements, or applications which are incomplete,
will be rejected.
Page 14 of 72
If the Offerors make a default in complying with the above requirements, they shall pay to the
Stock Exchange a penalty of PKR 5,000/- per day for every day during which the default
continues. The Stock Exchange may also notify the fact of such default and the name of the
Company by notice and also by publication in its Ready-Board Quotation of the Stock Exchange.
The name of the Company will also be notified to the members of the Exchange and placed on the
website of the Exchange.
Number of
shares
Par
Value
Amount
(Par Value)
(per share)
Amount
(Share
Premium)
Share
Premium
Amount
(Total)
Consideration
10
20
20
Cash
1,499,998
10
14,999,980
14,999,980
Cash
11,000,000
10
110,000,000
110,000,000
Cash
December 7, 2007
152,800,000
10
1,528,000,000
1,528,000,000
Cash
September 9, 2008
138,700,000
10
1,387,000,000
1,387,000,000
Cash
16,000,000
10
160,000,000
3.77
60,377,962
220,377,962
Cash
November 4, 2011*
900,000
10
9,000,000
4,500,000
13,500,000
Cash
150,000
10
1,500,000
750,000
2,250,000
Cash
2,425,000
10
24,250,000
12,125,000
36,375,000
Cash
125,000
10
1,250,000
625,000
1,875,000
Cash
150,000
10
1,500,000
1,050,000
2,550,000
Cash
50,000
10
500,000
350,000
850,000
Cash
79,777,692
3,317,777,962
December 8, 2011*
TOTAL
323,800,000
3,238,000,000
* Shares issued under Employee Shares Option Scheme
Page 16 of 72
S. No.
Tax Year
2015
Tax Rate
Holding period of securities
more than one year and less
less than one year
than two years
12.5%
10%
Policy 2002 thus benefiting the end users in the form of lower tariff. Furthermore, the Project
was completed 3 months prior to RCOD, highlighting the managements ability to timely
execute key deliverables.
In addition to the above, the Company has operated the Project at par with other IPPs over the
course of its life through its in-house O&M team further highlighting its operational excellence
and commitment to quality.
Guaranteed Returns
The Project was established under the Power Policy 2002 whereby, the Company is guaranteed
a US$ IRR of ~ 15% irrespective of off take or dispatch. Under the aforementioned policy and
the PPA, tariff is determined using a cost plus fixed return of equity approach and individual
tariff components are indexed for variation in exchange rate(s) and inflation, thus hedging the
Company against exchange rate and inflation risk.
Additionally, certain variations in fuel price are also passed on to the Power Purchaser. IPPs
enjoy exemption from income tax (including turnover tax) and withholding tax on import
during project construction. Also GoP is required to reimburse the Company for certain
adverse changes in duties and taxes, and against specified political risks.
grow the business through its superior management expertise and its commitment to Pakistan,
where it has invested over USD 1.9 billion in projects from 2007 to 2011. In terms of market
capitalization, Engro Corporation is also one of the largest private sector companies listed on
the Karachi Stock Exchange.
Page 19 of 72
PART 3
Number of Shares
20,237,500
20,237,500
40,475,000
Amount (PKR)
607,529,750
607,529,750
1,215,059,500
If, and to the extent, the Ordinary Shares underwritten are not subscribed and paid for in full
by the closing date for the public subscription, the Underwriters in terms of the underwriting
agreements will, within two (2) days of being called upon to do so by the Offerors, (i)
subscribe and take up against full payment in cash or (ii) procure subscribers to subscribe and
take up against full payment in cash, the shares remained unsubscribed subject to the
maximum number of the shares underwritten by each of them.
In opinion of the Directors, the resources of the Underwriters are sufficient to discharge their
underwriting commitments.
3.5. BROKERAGE
For the public offering, the Offerors will pay brokerage to the TREC holders of the Exchange at the
rate of 1% of the value of shares (including premium) actually sold through them. No brokerage
Page 20 of 72
shall be paid to the TREC in respect of shares taken up by the underwriters by virtue of their
underwriting commitments.
Rate
Amount (PKR)
0.92%
22,357,095
0.75%
9,112,946
0.25%
3,037,649
1.00%
12,150,595
0.25%
3,037,649
3,000,000
Balloting Agent
2,220,000
Marketing Cost
5,000,000
1,500,000
Miscellaneous Cost
5,000,000
Total
3,118,012
200,000
69,733,946
Page 21 of 72
PART 4
Page 22 of 72
Engro Powergen Qadirpur Limited was established to undertake the business of power
generation and sale. The Company completed construction and testing of its 217.298 (net)
MW combined cycle power plant and commenced commercial operations on March 27, 2010.
The electricity generated is transmitted to the National Transmission and Dispatch Company
(NTDC) under the Power Purchase Agreement (PPA) dated October 26, 2007 which is
valid for a period of 25 years from the Commercial Operations Date.
4.1.3. Plant Details
The Company has set up a 217.298 (net) MW gas based thermal power project near Qadirpur,
District Ghotki, Sindh. The Company operates a plant of Chinese origin which was acquired
brand new in the years 2007-2009.
The project is unique as it converts low-BTU, high sulphur content permeate gas, which was
earlier being wasted and flared, into much needed electric power. The plant is a Combine
Cycle Plant, with 1+1+1 configuration; i.e. one gas turbine, one Heat Recovery Steam
Generator (HRSG), and one steam turbine. The plant uses permeate gas as its primary fuel
source and HSD as the startup and backup fuel. The unique fuel usage, which was previously
being flared, makes Engro Powergen Qadirpur Limited one of the lowest tariff power plant as
compared to other thermal based power plant in the economic merit order and also results in a
net saving of national energy. The low cost of fuel does not have an impact on net
profitability of the Company since it is a pass through item.
The plant operates on highly efficient technology resulting in a lower cost of power
generation. China Tianchen Chemical Engineering Corporation (TCC) was chosen as
Engineering and Procurement Contractor for the project and China National Construction and
Engineering Company (CNCEC) was chosen as construction contractor after a competitive
bidding process.
A tariff based on a net output of 217.3MW (while operating on permeate gas) and 212.9MW
(while operating on HSD) was approved by the NEPRA.
Brief synopsis of the Engro Powergen Qadirpur Limited power plant is provided in the table
below:
Location
Plot Size
Total Gross Capacity
Auxiliary Consumption
Net Capacity (with correction)
Gas Turbine Specifications
Steam Turbine Specifications
Commerical Operations Date
Total Project Cost (actual)
Fuel
Gas Supply Contract
Project Life
EPC Contractor
Construction Contractor
Page 23 of 72
4.1.4. Location
Land for the project site was purchased near OGDCLs Qadirpur gas plant in February 2007
in Qadirpur, District Ghotki, Sindh. Raw water to meet normal plant needs is drawn from the
Ghotki feeder canal located approximately 7 km south of the project site under a permit from
the Sindh Irrigation and Drainage Authority.
4.1.5. Project Construction and Implementation Status
The Engro Powergen Qadirpur Limited project was initiated with the submission of a
proposal to PPIB for approval in January 2005 and it commenced commercial operations on
March 27, 2010, in the shortest time as compared to other IPPs. Provided below are key
milestones in the projects development:
Milestones
Date
Jan 2005
Sep 2005
Sep 2006
Feb 2007
Mar 2007
July 2007
Oct 2007
Oct 2007
Apr 2008
Oct 2008
Oct 2008
Dec 2009
Dec 2009
Mar 2010
March 27, 2010
July 19, 2011
Billable Availability
Factor
99.2%
88.6%
98.1%
95.0%
99.7%
100.2%
100.1%
100.3%
100.1%
100.4%
100.0%
100.6%
101.1%
100.5%
101.1%
Page 24 of 72
Load Factor
85.3%
71.3%
89.9%
82.5%
83.0%
85.8%
87.9%
96.3%
88.1%
88.9%
96.5%
95.2%
95.3%
93.9%
97.8%
Billable Availability
Factor
100.8%
100.6%
30.5%
83.1%
98.8%
Load Factor
74.0%
99.7%
15.5%
71.7%
95.0%
*Note: The plant went into a complete shutdown on Oct 12, 2013 due to fault in gas turbine generator rotor.
This was a unique failure of GT - Gen Rotor and there was no experience / expertise available in Pakistan,
but team managed to reach out & found an expert vendor Korean Power Services, and the repair was done
at site which was the first of its kind in Pakistan. The plant was brought back online on December 27, 2013
and is functioning smoothly after repair.
Role
Engineering and
Procurement Contractor
Profile
TCC was founded in 1953
and is one of the leading
international engineering
corporations in the world.
On the international front,
TCC is ranked as a top
225 Global International
Contractor in the
American "Engineering
News Records" (ENR).
TCC is ISO 9001 quality
system certified. In 2002,
TCC also passed the
certification for ISO
14001, GB/T28001
Occupational Safety &
Health and Environmental
Management system.
CNCEC, a large
corporation directly
administrated by the State
Council of China, acted as
Construction Contractor
for the project.
Construction Contractor
Page 25 of 72
Role
Long-Term Service
Agreement-Maintenance
Support
Profile
contracts with a
cumulative value
exceeding USD 4,000
million in over 40
countries
EPQL has entered into
maintenance support
contract with Masaood
John Brown International
(MJBI) and Harbin
Hanghao Power Station
Equipment Science and
Technology Co. Ltd.
MJBI is a world
renowned service
provider for Frame 9E gas
turbine. Harbin Hanghao
is the maintenance
support arm of Harbin
Turbine Company, OEM
of steam turbine. Both the
contractors have
mobilized during the first
maintenance outage in
March 2011.
Agreement Date
19/12/2007
19/12/2007
19/12/2007
19/12/2007
19/12/2007
19/12/2007
USD million
Amount
Amount
Committed
Utilized
57
53.1
20
18.7
28
26.0
23
21.9
13
12.2
13
12.1
154
144.0
Ultimately only USD 144 million of debt financing was utilized and these international
lenders are scheduled to be completely repaid by the year 2020. As of December 31, 2013 the
current outstanding amount is USD 105 million.
Page 26 of 72
4.1.10. Tariff
The power purchaser ensures guaranteed returns through a tariff structure covering all fixed
and variable costs. Summarized tariff structure is presented below:
Tariff structure is classified into two components; (a) cash outflows linked with capacity
utilization of the plant such as fuel price, variable O&M, etc. (referred as Energy
Purchase Price) and (b) cash outflows independent of capacity utilization of the plant
such as debt servicing, return on equity, fixed O&M costs etc. (referred as Capacity
Purchase Price). Hence, equity returns are assured regardless of capacity utilization of
the plant provided the plant is made available for dispatch.
The equity investors are guaranteed a US dollar based equity IRR of 15% provided that
the company is making dependable power capacity available. The table below illustrates
the tariff structure applicable to all thermal IPPs.
Engro Powergen Qadirpur Limited has one of the lowest tariffs amongst other thermal IPPs
bringing it on higher priority in the merit order of dispatch.
Engro Powergen Qadirpur Limiteds tariff (excluding fuel cost component) has been trued-up
by NEPRA and is shown below:
Year 1 (2010
2011 ) to 10 (20202021)
Capacity charge for Operation on Gas (PKR/kW/Hr)
Fixed O&M Foreign
US$/PKR& US CPI
0.0096
Fixed O&M Local*
CPI (General) - Local
0.1796
Insurance
Actual on yearly basis
0.0630
Cost of Working Capital
KIBOR Variation
0.0537
ROE
US$/PKR
0.3438
ROEDC
US$/PKR
0.1265
Libor & Exchange rate
Debt Servicing
0.7121
Variation
Total Capacity Charge
1.4883
Energy charge for Operation on Gas (PKR/kWH)
Variable O&M Foreign US$/PKR& US CPI
0.1917
Variable O&M Local*
CPI (General) - Local
0.0501
Total Variable O&M
(PKR/ KWh)
0.2418
*Reference values revised by NEPRA for April 2011 onwards
Tariff Component
Indexation
Page 27 of 72
Year 11 (20212022) to 25
(2034-2035)
0.0096
0.1796
0.0630
0.0537
0.3438
0.1265
0.7762
0.1917
0.0501
0.2418
Tariff Components
Capacity Charge (PKR/kW/Hour)
Fixed O&M Foreign
Fixed O&M Local
Insurance
Cost of Working Capital
ROE
ROEDC
Debt Servicing
Total Capacity Charge (PKR/kW/Hour)
0.0121
0.2194
0.0687
0.0455
0.3997
0.1471
0.8252
1.7177
0.2414
0.0612
0.3026
The aforementioned tariff is subject to quarterly revision. For future reference, latest tariff of
the Company can be found at http://www.nepra.org.pk/tariff_ipps.htm. The tariff applicable in
Q2 including fuel cost was of PKR 7.0666 per kW/Hour.
4.2. Power Industry Overview
The Power Sector of Pakistan is primarily operated through the Water and Power Development
Authority (WAPDA) which distributes electricity across Pakistan except for the metropolitan
city of Karachi (and its surrounding areas) which are distributed electricity via K-Electric.
However, given the dearth of electricity and due to the Government of Pakistans initiative to boost
investment in this sector, private sector participation in power generation has increased in recent
years with establishment of 35 Independent Power Projects (IPPs) contributing a total of ~43% to
the total electricity generation in Pakistan.
As of 2013, the total electricity generation capacity of Pakistan was 23,663 MW, of which thermal
contributed 16,000 MW (67.62%), hydroelectric contributed 6,826 MW (28.85%), nuclear
contributed 787 MW (3.33%) and 50 MW (0.2%) was contributed by wind power. Domestic users
are the largest consumers of electricity consuming ~46%; followed by the industrial sector ~30%,
agriculture ~11% and the commercial sector ~8% respectively.
Pakistan finds itself very short in terms of power supply, with supply unable to keep pace with
demand which is expected to increase in a range of 5-7% per annum, with the domestic power
industry unable to generate enough electricity to meet the countrys needs resulting in a supply
deficit of more than 5,000 MW at peak demand levels. This situation is expected to persist in the
short to medium term. The spike in shortfall is primarily due to following reason:
-
Page 28 of 72
Units in MW
Generation Capability
Peak Demand
Deficit
25,000
8,000
20,000
6,000
15,000
4,000
10,000
2,000
5,000
-
FY09
FY10
FY11
FY12
FY13
Chronic power deficit in the country has been regarded as one of the most significant challenges
facing the country, particularly in the manufacturing sector. With limited addition to the power grid
during FY08-FY13, the deficit is currently estimated to be over 5, 000MW while circular debt leads
to further under-utilization of resources. The gross amount of circular debt, at present, is estimated
to be at the levels PKR300bn (May14).
Electricity Generation By Source
(FY05)
1%
16%
31%
36%
30%
52%
27%
Oil
Gas
Hydel
Nuclear
Others
Oil
Gas
Hydel
Nuclear
Coal
Source: NEPRA
Page 29 of 72
Page 30 of 72
Mitigating Factor:
Subject to the terms of the PPA, the Power Purchaser is obligated to purchase power from the
Company for a term of 25 years with predefined return on equity. The PPA also stipulates a
regressive efficiency structure which accounts for loss of efficiency due to usage.
4.3.6. Interest Rate Risk
Fluctuation in interest rate may have an adverse effect on the Companys profitability.
Mitigating Factor:
Cost of financing constitutes part of capacity payments in the PPA. Interest payment
components are indexed to variations in the respective benchmark interest rates i.e. KIBOR or
LIBOR.
4.3.7. Inflation Risk
Inflationary pressure will increase the operating costs for the Company thus reducing its
profitability.
Mitigating Factor:
Under the PPA, certain effects of inflation are adjusted for when determining the amount of
payments to be made to the Company by the Power Purchaser.
4.3.8. Liquidity Risk
Build-up of circular debt and the resultant liquidity constraint may render the Company unable
to honor its financial commitments.
Mitigating Factor:
The Company keeps a close watch on its liquidity through stringent internal controls. Financial
obligations are projected to determine the level of liquidity required which is arranged through
either internal cash generation or available credit lines.
4.3.9. Exchange Rate Risk
Risk of PKR depreciating against USD may result in variability of the Companys
profitability.
Mitigating Factor:
The tariff is adjusted by NEPRA to take into account fluctuations of USD/PKR exchange
rate during construction.
Foreign currency component of O&M costs, return on equity, interest payment and
principal repayment component are indexed to variations in the USD/PKR exchange rate.
GOP provides guarantee on availability of foreign currency, free transfer and repatriation
of funds under the Implementation Agreement.
Page 31 of 72
Under Power Policy 2002, the company is guaranteed a US dollar equity Internal Rate of
Return (IRR) of approximately 15%. Pakistans IPPs have a unique return structure
in which they are insulated from fluctuations in fuel prices, interest rates and foreign
exchange rates. The tariff structure outlined in the Power Purchase Agreement (PPA)
ensures the IPPs of US dollar-denominated revenue streams, with equity returns pegged to
the US dollar, insulating cash flows from exchange rate movements.
drain channels which collect the flood water at a common water pit built at the lowest
elevation of the plant.
4.3.14. Recovery of Insurance Claims
Timing and amount of insurance claim recovery may affect projected cash flows.
Mitigating Factor:
The insurance company was brought onboard from the onset of the problem to minimize their
turnaround time and all steps were taken after their concurrence of the malfunction of rotor in
2013. Accordingly, the Company is confident that the insurance claim will be recovered
during 2014.
4.3.15. Political Risk
Uncertain political conditions / political force majeure events may pose a threat to the
Companys profitability.
Mitigating Factor:
Pursuant to the Implementation Agreement, the Company is not liable for failure or delay in
performing certain obligations in case of certain political force majeure events.
Note:
Page 33 of 72
PART 5
5 FINANCIAL INFORMATION
5.1. AUDITORS REPORT UNDER SECTION 53(I) READ WITH CLAUSE 28 OF
SECTION 2 OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES
ORDINANCE, 1984, FOR THE PURPOSE OF INCLUSION IN THE OFFER FOR
SALE DOCUMENT
Page 34 of 72
Page 35 of 72
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Page 40 of 72
Page 41 of 72
Page 42 of 72
5.4. HALF YEAR AUDITED ACCOUNTS FOR THE PERIOD ENDED 30TH JUNE 2014
Page 43 of 72
Page 44 of 72
Jun14 (HY)
6,516
5,068
1,448
1,421
333
1,088
Dec13
8,665
7,014
1,652
1,934
476
1,458
Dec12
11,666
9,033
2,633
2,510
404
2,101
Dec11
8,338
6,050
2,288
2,216
429
1,786
Dec10
5,727
4,120
1,607
1,544
432
1,111
Jun14 (HY)
6,075
14,416
6,281
20,697
6,324
8,298
14,622
Dec13
5,523
15,337
3,696
19,033
3,923
9,586
13,510
Dec12
6,758
14,969
9,396
24,365
7,474
10,133
17,607
Dec11
5,110
14,564
6,048
20,611
5,038
10,464
15,502
Dec10
4,193
14,393
4,228
18,621
3,464
10,964
14,427
Dec13
19%
22%
17%
4.5
0.9
1.99
2.15
8%
26%
17.06
17.06
Dec12
23%
22%
18%
6.49
1.3
1.68
2.03
9%
31%
20.87
20.87
Dec11
27%
27%
21%
5.58
1.2
2.25
2.83
9%
35%
15.79
15.78
Dec10
28%
27%
19%
3.47
1.2
2.83
3.27
6%
26%
13.10
12.96
BALANCE SHEET
PKR in Million
Equity
Non-Current Assets
Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
FINANCIAL RATIOS
PKR in Million
Gross Margin
Operating Margin
Net Margin
EPS
Current Ratio
Long Term Debt to Equity Ratio
Total Debt to Equity Ratio
Return on Assets
Return on Equity
Break Value per share
Break Value per share - Adjusted*
Jun14 (HY)
22%
22%
17%
3.36
1.0
1.59
2.02
5%
18%
18.76
18.76
Page 45 of 72
PART 6
6 MANAGEMENT OF THE COMPANY
6.1. POLICY MATTERS
All policy-related matters are managed by the Board of Directors, headed by the Chairman of the
Board. At present, the Board comprises of 8 Directors including the CEO. The Directors are
elected by the shareholders in accordance with the relevant provisions of the Ordinance.
BOARD OF DIRECTORS & COMPANY SECRETARY OF THE COMPANY
S. No.
Name
Mr.
Muhammad
Aliuddin
Ansari
Mr. Syed
Muhammad
Ali
Mr. Ruhail
Mohammed
Address
Designation
Director
CEO/Director
Director
Page 46 of 72
S. No.
Name
Address
Ms. Aliya
Yusuf
Orr. Dignam
& Co. Bldg
No. 1-B, State
life Sq. I.I
Chundrigar
Road,
Karachi
Mr. Vaqar
Zakaria
Hagler Bailly
Pakistan (Pvt)
Ltd, 39, Street
3, E7,
Islamabad
Mr. Shabbir
Hashmi
Mr. Shahid
Hamid
Pracha
Mr. Javed
Akbar
Ms. Faryal
Mazhar
Habib
House No.
90/1
Street No. 11
Kh-e- Sehar,
DHA, Phase 6
Karachi
16-B, 3rd
Central Lane,
Phase II,
DHA,
Karachi
75/1/1 Street
15,
Kh-e-Sehar,
Phase 6, DHA
Karachi.
8th Floor, The
Harbour Front
Building
HC # 3,
Marine Drive
Block 4,
Clifton,
Karachi
Designation
Director
Director
Director
Director
Company
Secretary
Director
Page 47 of 72
Cash Dividend
Bonus
Payout Ratio
Jun14 (HY)
15.4%
46%
Dec13
61.7%
137%
Dec12
35.5%
55%
Dec11
28.6%
51%
Dec10*
-
Page 48 of 72
areas. He holds a bachelors and masters degrees in Chemical Engineering from the
Massachusetts Institute of Technology (MIT), USA.
Ms. Aliya Yusuf - Director
Ms. Aliya Yusuf is a Partner of Orr Dignam & Co. based in the Firms Karachi office. She obtained
her law degree from the University of Cambridge and is a Barrister from Grays Inn. As with other
Partners of the Firm, she deals with a wide range of corporate, financial and commercial matters.
Her focus areas are M&A (including privatization) and project work, joint ventures and in the
energy, pharmaceutical and communication sectors and real estate development.
Mr. Shabbir Hashmi - Director
Mr. Shabbir Hashmi has more than 30 years of project finance and private equity experience. He
had led the Pakistan operations at Actis Capital, one of the largest private equity investors in the
emerging market.
Prior to Actis, he was responsible for a large regional portfolio of CDC Group Plc for Pakistan and
Bangladesh. He also had a long stint with USAID and later briefly with the World Bank in Pakistan,
specializing in planning and development of energy sector of the country. Apart from holding more
than 24 board directorships as a nominee of CDC/Actis in the past, he is currently serving as an
independent director on several companies from manufacturing to financial services. He is also on
the board of governors of The Help Care Society which is operating K-12 schools in Lahore for
underprivileged children.
He is an engineer from Dawood College of Engineering & Technology, Pakistan and holds an MBA
from J.F. Kennedy University, USA. He has been serving as an independent director on the board
since 2006.
Mr. Shahid Hamid Pracha - Director
Mr. Pracha is Chief Executive of Dawood Hercules Corporation Limited and Chairman of DH
Fertilizers Limited, Dawood Lawrencepur Limited, and Tenaga Generasi Limited. He is also a
Director on the Boards of HUBCO, Engro Corporation Limited, Engro Fertilizers Limited, e2e
Business Enterprises (Private) Limited, Engro Powergen Limited and Engro Powergen Qadirpur
Limited He previously served as Chief Executive of the Dawood Foundation, the philanthropic arm
of the Dawood Hercules Group.
Mr. Pracha is a graduate electrical engineer from the University of Salford, UK and prior to joining
the Dawood Group, spent a major part of his career with ICI Plcs Pakistan operations in a variety
of senior roles including a period of international secondment with the parent company in the UK.
He is also a founding member of the Pakistan Society for Human Resource Managers and
previously served as the first CEO of the Karachi Education Initiative, the sponsoring entity of the
Karachi School for Business & Leadership. He joined the Engro Fertilizers Board in 2012.
Mr. Javed Akbar - Director
He has a Masters degree in Chemical Engineering from United Kingdom and has over 35 years
experience in fertilizer and chemical business with Exxon, Engro and Vopak. He has managed
Exxon and Engro Fertilizer plants and their expansions in Pakistan, worked in Exxons Chemical
Technology divisions in USA and Canada, and served as HR Manager in Exxon Pakistan. He was
part of the buyout team when Exxon divested its stake in Engro.
Prior to his retirement in 2006, Javed Akbar was Chief Executive of Engro Vopak Terminal
Limited, a joint venture between Engro and Royal Vopak of Holland. After his retirement, he
established a consulting company specializing in analyzing and forecasting petroleum,
petrochemical and energy industry trends and providing strategic insight.
Page 50 of 72
He also serves on the Board of Directors of Dawood Hercules Corporation Limited, DH Fertilizers
Limited, Engro Fertilizers Limited, Engro Powergen Limited, Engro Powergen Qadirpur Limited,
Engro Vopak Terminal Limited, Javed Akbar Associates (Private) Limited, Pakistan Petroleum
Limited and is also on the panel of environmental experts of Sindh Environmental Protection
Agency.
Page 51 of 72
6.10. BENEFITS OF PROMOTERS AND OFFICERS DURING THE LAST TWO YEARS
No amount or benefit has been paid or given within the last two years or is intended to be given to
any promoter/ or officer of the Company otherwise than as remuneration for services rendered as
full-time executives of the Company.
Page 52 of 72
The audit committee meetings are held on a quarterly basis, as per provisions of the Code of
Corporate Governance. The Committee has its terms of reference which were determined by the
Board of Directors in accordance with the guidelines provided in the Listing Regulations.
6.19. INDEMNITY
Every Director or officer of the Company and every person employed by the Company as auditor
shall be indemnified out of the funds of the Company against all liability incurred by him as such
Director, officer or auditor in defending any proceedings, whether civil or criminal, in which
judgment is given in his favor, or in which he is acquitted, or in connection with any application
under the relevant provisions of the Ordinance in which relief is granted to him by the court.
Page 53 of 72
Page 54 of 72
PART 7
7 MISCELLANEOUS INFORMATION
Engro Powergen Qadirpur Limited
4th Floor, The Harbor Front Building
HC-3, Marine Drive, Block 4, Clifton
Karachi - 75600, Pakistan
Website: www.engropowergen.com
7.
7.1. REGISTERED OFFICE
7.4. AUDITORS
7.5. LEGAL ADVISOR TO THE COMPANY & THE Haidermota BNR& Co.
D-79, Block 5
OFFER
Clifton, Karachi
7.6. COMPUTER
REGISTRAR
BALLOTER
AND
Page 55 of 72
Email: khurram.khan@hbl.com
Website: www.hbl.com
Bank Alfalah Limited
B.A. Building
I.I. Chundrigar Road,
Karachi.
Email:Imitiaz.gadar@bankalfalah.com
Website: www.bankalfalah.com
No. of shares
20,237,500
20,237,500
Amount (PKR)
607,529,750
607,529,750
Date
th
28 July, 2014
28th July, 2014
Date
28th July, 2014
28th July, 2014
Date
September 22, 2008
July 22nd, 2014
July 22nd, 2014
July 22nd, 2014
July 23rd, 2014
July 23rd, 2014
July 23rd, 2014
July 23rd, 2014
July 23rd, 2014
July 23rd, 2014
July 23th, 2014
July 24th, 2014
July 24th, 2014
July 24th, 2014
July 24th, 2014
August 7th, 2014
Counter Party
International Finance Corporation
Swift Textile Mills (Pvt.) Ltd.
Jubilee Life Insurance Co. Ltd.
Metro Securities (Pvt.) Ltd.
Moosani Securities (Pvt.) Ltd.
Liberty Mills Ltd.
Liberty Power Tech Ltd.
Shakoo (Pvt.) Ltd.
Westbury (Pvt.) Ltd.
Bulk Management (Pakistan) Pvt. Ltd.
Bank Alfalah Limited
Habib Bank AG Zurich
Habib Bank AG Zurich,UAE
Elahi Electronics
Almurtaza Machinery (Pvt.) Limited
Employees of the Company and Engro Group
Date
Counterparty
Generation License
Power Purchase Agreement
Implementation Agreement
NEPRA
NTDC
President, Islamic Republic of
Pakistan
Sui Northern Gas Company
Limited
China Tianchen Chemical
Procurement) Contract
Construction Contract
Engineering Corporation
China National Construction and
Engineering Company
Oct 4, 2007
Date
International
Facility
Amount
(USD in
Millions)
Balance as
of 31
Dec13
19/12/2007
53.1
39.21
19/12/2007
18.7
13.50
19/12/2007
26
18.76
19/12/2007
21.9
15.81
19/12/2007
12.2
8.8
19/12/2007
12.1
8.93
Mark-up
Rate
6M LIBOR
+ 3%
6M LIBOR
+ 3%
6M LIBOR
+ 3%
6M LIBOR
+ 3%
6M LIBOR
+ 3%
6M LIBOR
+ 3%
Note: The borrowing is secured by an equitable mortgage on the immovable property and the hypothecation of current and future
assets of the company, expect receivables from NTDC in respect of Energy Purchase Price.
Facility Amount
(PKR in
Millions)
Balance as of
31 Dec13
1,000
50
500
500
50
300
250
500
182
50
300
50
50
250
-
Mark-up
Rate
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
3M KIBOR + 2%
Note: The facilities are secured by, (i) lien over Energy Purchase Price (EPP) account and charge over present and future receivables
from the Power Purchaser in respect of EPP, and (ii) first charge over current assets of the Company and subordinated charge over
present and future plant, machinery, equipment and other movables assets and immovable properties of the Company.
For each month, Capacity Payment is to be paid in advance equal to the Capacity Purchase Price
(CPP) in effect for that month at 70% of the Tested Capacity. The remaining 30% Capacity is
billed in following month for the actual capacity established.
Capacity Payment is also payable for the capacity then unavailable during any period during which
the Complex is undergoing a forced or partial forced outage up to 348 hours in a year and during
the period when it is undergoing an approved schedule outage. The allowed schedule outages to the
Company in each year is 21 Days for the combustion inspection, 26 Days for the hot gas path
inspection (every third year), except in any year in which a Major Overhaul (every sixth year) is
required in which case the Company is entitled to 60 Days.
For each month, Energy Payment is to be paid equal to the product of Energy Purchase Price (EPP)
and the number of KWh of electricity delivered to NTDC during that month.
Implementation Agreement (IA) with GOP/ PPIB dated 29th October 2007
The Implementation Agreement has been signed between the Islamic Republic of Pakistan (GoP)
through Private Power Infrastructure Board (PPIB) and Engro Powergen Qadirpur Limited
(previously Engro Energy Ltd.) on 29th October 2007. IA provides the following provisions:
Taxation:
No income tax
No Sales Tax on Imports before COD
Gas Supply Agreement (GSA) with SNGPL / OGDCL dated 22nd April 2008
The Gas Supply Agreement GSA had been signed between the Sui Northern Gas Pipelines
Limited SNGPL referred to as Seller and Engro Powergen Qadirpur Limited (previously
Engro Energy Ltd.) referred to as Buyer on 22nd April, 2008. SNGPL in turn has a back to back
agreement with Oil and Gas Development Company Limited OGDCL referred to as Gas
Producer for the supply of 75 MMSCFD gas from Qadirpur Gas Field.
The term of this agreement is for a period of 25 years, subject to availability of Permeate gas.
An Amendment No 1 to GSA has been executed out on 8th October, 2008 for adjustments in
calorific value of gas then made available to the power plant.
The gas is a low BTU gas having high contents of Hydrogen Sulphide permeate gas and was
previously being flared at the Qadirpur gas field.
The Daily Contract Quantity (DCQ) is 46,000MMBTU/Day. The contract allows 36 days of
outage allowance for schedule and unscheduled outages of Seller & Gas Producer. Subject to a
cap, the Company is financially protected against non-supply of gas beyond the allowed outage
allowance.
Page 58 of 72
EPQL vs. Federation of Pakistan, through Ministry of Law and Justice [WP 847 of 2014]
pending before the Lahore High Court.
The Respondents have claimed an amount of PKR 1,462,314,674 as Gas Infrastructure
Development Cess for the billing period 1.1.13 to 31.12.13. Levy of GIDC and the recovery
for the referred period is under challenge and due to the stay order granted by the Court, the
Respondents have been restrained from recovering GIDC from the consumers. Interim stay
order has been granted and is intact. However, GIDC if charged will be recovered by the
Company as pass through item from NTDC under the approved tariff.
EPQL & Others vs. Federal Board of Revenue pending before the Sindh High Court at
Karachi.
Writ Petition filed in the Sindh High Court challenging the levy of WWF. All Engro petitions
have been clubbed together. Orders have also been passed restraining the FBR from recovery
of demands.
7.13. CAPITALIZATION
The Company has not capitalized any profits till the date of publication.
Page 59 of 72
PART 8
8.1.2
8.1.3
Copies of this OFSD and applications forms can be obtained from members of Karachi
Stock Exchange Limited, Lahore Stock Exchange Limited and Islamabad Stock Exchange
Limited, the Bankers to the Offer and their Branches, the Lead Managers and the registered
office of the Company. The OFSD and the Application Form can also be downloaded from
the following website: www.engropowergen.com.
8.1.4
The applicants opting for scripless 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
applicants own CDC account. In case of discrepancy between the information provided in
the application form and the information already held by CDS, the Company reserves the
right to issue shares in physical form.
8.1.5
Name(s) and address(es) must be written in full block letters, in English and should not be
abbreviated.
8.1.6
All applications must bear the name and signature corresponding with that recorded with
the applicant's banker. In case of difference of signature with the bank and Computerized
National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP)
or Passport both the signatures should be affixed on the application form.
8.1.7
Page 60 of 72
8.1.9
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.
8.1.10 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/Passport. The Shares 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.
8.1.11 Subscription money must be paid by cheque drawn on applicant's own bank account or pay
order/bank draft payable to one of the Bankers to the Offer in favor of account PUBLIC
OFS OF SHARES OF EPQL and crossed A/C PAYEE ONLY.
8.1.12 For the applications made through pay order/bank draft, it would be permissible for a
Banker to the Offer to deduct the bank charges while making refund of subscription money
to unsuccessful applicants through pay order/bank draft individually for each application.
8.1.13 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.
Page 61 of 72
8.1.14 Applications are not to be made by minors and/or persons of unsound mind.
8.1.15 Applicants should ensure that the bank branch, to which the application is submitted,
completes the relevant portion of the application form.
8.1.16 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.
8.1.17 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.
8.1.18 Bankers to the Offer 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 Offer.
8.1.19 It would be permissible for a Banker to the Offer 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.
8.1.20 Submission of fictitious and multiple applications (more than one application by same
person) is prohibited and such Application Money shall be liable to confiscation under
Section 18A of the Securities and Exchange Ordinance, 1969.
ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS
8.1.21 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.
8.1.22 Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as
set out under the State Bank of Pakistan's Foreign Exchange Manual.
BASIS OF ALLOTMENT
8.1.23 The basis and conditions of transfer of shares to the General Public shall be as follows:
a) The minimum amount of application for subscription of 500 shares is PKR 15,039/- (Offer
Price plus PKR 0.01 per share (Stamp duty on transfer of shares) plus 0.048032 per share
[CDC charges of 0.16% of the Offer Price] x 500 shares) in case shares are desired to be
transferred to a CDC account. In case physical shares are desired, minimum amount of
application for subscription of 500 shares is PKR 15,085/- (Offer Price plus PKR 0.15 per
share (Stamp duty on transfer of shares) x 500 shares).
b) Application for Shares must be made for 500 Shares or in multiple thereof only.
Applications, which are neither 500 Shares nor for multiple thereof, shall be rejected.
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Bank
Code No.
07
08
09
10
11
12
Bank
JS Bank Limited
MCB Bank Limited
NIB Bank Limited
Samba Bank Limited
Silk Bank Limited
United Bank Limited
In order to facilitate investors, the Offerors have arranged provision of e-IPO facility through
UBL that is among the Bankers to the Offer. UBL account holders can use their Internet
Banking
facility
to
submit
their
application
online
via
link
www.ubldirect.com/corporate/ebank. The account holders of UBL can submit their
applications through these links 24 hours a day during the subscription period which will
close at 12:00 midnight on 24th September 2014.
Occupation
Business
Business Executive
Service
Housewife
Household
Code No.
06
07
08
09
10
Occupation
Professional
Student
Agriculturist
Industrialist
Others
Name of country
U.S.A
U.K
U.A.E
K.S.A
Oman
Code No.
006
007
008
009
Name of country
Bangladesh
China
Bahrain
Other
Page 63 of 72
PART 9
-sdNaz Khan
Chief Financial Officer
-sdMohammed Saqib
Chief Financial Officer
Witness 2
-sd___________________________
Name: Mohammed Faizan Khan
Address: C/O Engro Corporation Limited
CNIC # 42301-6380655-5
-sd__________________
Name: Humair Abdul Rasheed
Address: C/O Engro Powergen Limited
CNIC # 42301-1113622-5
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PART 10
10 MEMORANDUM OF ASSOCIATION
THE COMPANIES O RDINANCE , 1984
(COMPANY LIMITED BY SHARES)
Memorandum of Association
OF
ENGRO POWERGEN QADIRPUR LIMITED
(FORMERLY ENGRO ENERGY LIMITED)
I.
II.
The Registered Office of the Company will be situated in the Province of the SIND,
Pakistan.
III. The objects for which the Company is established are all or any of the following: 1.
2.
3.
4.
To construct and maintain roads, bridges, wharves, quays, jetties and piers,
pipelines and storage tanks for water, petroleum products, natural gas and other
substances, gas processing and compression plants, water desalination and
treatment plants and such other works as may be required for all or any of the
above purposes.
5.
6.
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7.
To buy, sell, import, hire, manufacture, deal in, and turn to account plant,
machinery, implements, conveniences, provisions, articles, and products
capable of being used in connection with the operations of or required by
workmen and others employed by the Company or incidentally or conveniently
connected with any such business as aforesaid.
8.
To explore for, produce, import or otherwise obtain any fuel or other raw
materials for use in connection with the generation of electricity or any other
form of energy and to process and deal in any such raw materials or any by products thereof and to process and deal in any by-products which may be
obtained from the activities of generating, transmitting, distributing or
supplying electricity or any other form of energy.
9.
10. To conduct, promote and commission research of all kinds and research and
development activities of all kinds, whether related to the generation,
transmission, distribution and supply of electricity or other form of energy or
otherwise, and to exploit and turn to account the results of any such research or
research and development carried out by or for the Company.
11. To acquire by any means and hold and deal with any heritable, real or personal
property or corporeal or incorporeal rights whatsoever, whether or not for the
purposes of or in connection with any of the foregoing activities, and (without
prejudice to the generality of the foregoing) to purchase, take on lease or in
exchange, hire or otherwise acquire and hold any heritable or real property and
any estate or interest in such property, including without limitation any lands,
buildings, installations, structures, servitudes, easements, privileges and
concessions and to use, exploit and develop the same.
12. To abstract and divert water from any appropriate source for use in connection
with the generation of electricity.
13. To carry on any other trade or business whatever which, in the opinion of the
Directors of the Company, can be advantageously carried on in connection with
or ancillary to any of the above mentioned businesses or is calculated directly
or indirectly to enhance the value of, or render profitable any of, the property or
rights of the Company.
14. To carry on any other trade, commerce, industry and/or business whatsoever,
which, in the opinion of the Directors of the Company, is or may be capable of
being carried on directly or indirectly for the benefit of the Company.
15. To purchase or by any other means acquire and take options over any property
whatever, and any rights or privileges of any kind over or in respect of any
property.
16. To apply for, register, purchase, or by other means acquire and protect, prolong
and renew, whether in Pakistan or elsewhere, any trademarks, patents,
copyrights, trade secrets, or other intellectual property rights, licences, secret
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otherwise pertaining to trade and commerce and for that purpose to remunerate
them and to open and maintain depots and branches.
24. To purchase, take on lease or in exchange, hire, apply for or otherwise acquire
and hold any interest, any rights, privileges, lands, building, easements,
trademarks, patents, patent rights, copyrights, licences, machinery, plants,
stock-in-trade and any movable and immovable property of any kind necessary
or convenient for the purposes of or in connection with the Company's business
or any branch or department thereof and to use, exercise, develop, grant
licences in respect of or otherwise turn to account any property, rights and
information so acquired, subject to any permission required under the law.
25. To acquire by concession, grant, purchase, barter, licence either absolutely or
conditionally and either solely or jointly with others any lands, buildings,
machinery, plants, equipments, privileges, rights, licences, trademarks, patents,
and other movable and immovable property of any description which the
Company may deem necessary or which may seem to the Company capable of
being turned to account, subject to any permission as required under the law.
26. To act as representatives, for any person, firm or company and to undertake and
perform sub-contracts, and also act in the business of the Company through or
by means of agents, sub-contractors and to do all or any of the things mentioned
herein in any part of the world and either alone or in collaboration with others
and by or through agents, sub-contractors or otherwise.
27. To establish, promote or assist in establishing or promoting and subscribe to or
become a member of any other company, association or club whose objects are
similar or in part similar to the objects of this Company or the establishment or
promotion of which may be beneficial to the Company or its employees.
28. To open accounts with any Bank or Banks and to draw, make, accept, endorse,
execute, issue, negotiate and discount cheques, promissory notes, bills of
exchange, bills of lading, warrants, deposit notes, debentures, letter of credit
and other negotiable instruments and securities.
29. To arrange local and foreign currency loans from scheduled & other banks,
leasing companies and modarbas and other financial institutions for the purpose
of purchase, manufacture, market, supply, export and import of machinery,
construction of factory, building and for the purpose of working capital or for
any other purpose.
30. To sell or otherwise dispose of the whole or any part of the undertaking of the
Company, either together or in portions for such consideration as the Company
may think fit and in particular, for shares, debenture-stock or securities of any
Company purchasing the same.
31. To borrow or raise money by means of loans or other legal arrangements from
banks, or other financial institutions, or Directors in such manner as the
Company may think fit and in particular by issue of debentures, debenture
stock, perpetual or otherwise convertible into shares and to mortgage, or charge
the whole or any part of the property or assets of the Company, present or
future, by special assignment or to transfer or convey the same absolutely or in
trust as may seem expedient and to, purchase, redeem or payoff any such
securities.
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32. To pay all costs, charges, and expenses preliminary or incidental incurred in
formation or about the promotion and establishment of the Company and to
remunerate any person, firm or company for services rendered or to be rendered
in or about the formation or promotion of the Company or the conduct of its
business.
33. To give any servant or employee of the Company commission in the profits of
the Company's business or any branch thereof and for the purpose to enter into
any agreement or scheme of arrangement as the Company may deem fit and to
procure any servants or employees of the Company to be insured against risk of
accident in the course of their employment by the Company.
34. To establish and support or aid in the establishment and support of associations,
trusts, institutions, funds and conveniences calculated to benefit persons who
are or have been Directors of or who have been employed by or who are serving
or have served the Company or any other Company which is a subsidiary or
associate of the Company or the dependents of such persons and to grant
pensions, gratuities, provident funds, allowances, relief and payments in any
other manner calculated to benefit the persons described herein.
35. To distribute any of the Company's property and assets among the members in
specie or in any manner whatsoever in case of winding up of the Company.
36. To guarantee the performance of contracts and obligations of the Company or
any of its associated companies or persons or any other person or company
whatsoever.
37. To cause the Company to be registered or recognised in any foreign country.
38. To do and perform all other acts and things as are incidental or conducive to the
attainment of the above objects or any of them.
39. To apply for and obtain necessary consents, permissions and licences from any
Government, State, Local and other Authorities for enabling the Company to
carry on any of its objects into effect as and when required by law.
40.
41. Notwithstanding anything stated in any object clause, the company shall obtain
such other approval or license from Competent Authority, as may be required
under any law or the time being in force, to undertake a particular business.
IV. The liability of the members is limited.
V.
The authorised share capital of the Company is Rs. 3,300,000,000/- (Rupees Three
billion three hundred million) divided into 330,000,000, (three hundred and thirty
million) shares of the nominal value of Rs. 10.00 (Rupees ten) each with the rights,
privileges and conditions attached thereto as are provided for the time being, with
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power to increase and reduce the capital of the Company and to divide the shares in
the capital for the time being, into several classes.
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