2013 lalpir power ltd prospectus

84
PRELIMINARY OFFER FOR SALE DOCUMENT Lalpir Power Limited Offer for Sale of Shares THIS OFFER CONSISTS OF 37,984,000 ORDINARY SHARES (10% OF THE TOTAL PAID UP SHARE CAPITAL OF LALPIR POWER LIMITED) AT AN OFFER PRICE OF PKR 15 PER SHARE (INCLUSIVE OF A PREMIUM OF PKR 5 PER SHARE) WITH A GREEN SHOE OPTION OF UP TO AN ADDITIONAL 18,992,000 ORDINARY SHARES (5% OF THE TOTAL PAID UP SHARE CAPITAL OF LALPIR POWER LIMITED) TO GENERAL PUBLIC IN CASE OF OVER SUBSCRIPTION OF THE GENERAL PUBLIC PORTION AT AN OFFER PRICE OF PKR __ PER SHARE Book Building Portion of the Offer comprises of 28,488,000 Ordinary Shares (75% of the Total Offer) at a floor price of PKR 15 per share (inclusive of a premium of PkR5 per share) General Public Portion of the Offer comprises of 9,496,000 Ordinary Shares (25% of the Total Offer) at an offer price of PKR[*] per share THIS IS NOT A PROSPECTUS BY LALPIR POWER LIMITED, BUT AN OFFER FOR SALE BY MIAN HASSAN MANSHA, NISHAT MILLS LTD, ADAMJEE INSURANCE CO LTD, SECURITY GENERAL INSURANCE CO LTD, STANHOPE INVESTMENTS & ENGEN (PVT) LTD, …..,THE SPONSORS OF LALPIR POWER LIMITED, OUT OF THEIR EXISTING SHAREHOLDINGS IN LALPIR POWER LIMITED BIDDING PERIOD DATES: From June 18, 2013 to June 19, 2013 (Both days inclusive) From 9:00 a.m. to 5:00 p.m. DATE OF PUBLIC SUBSCRIPTION: From DD/MM, 2013 to DD/MM, 2013 (Both days inclusive) During Banking Hours JOINT LEAD MANAGERS, ARRANGERS & JOINT BOOK RUNNERS: AKD SECURITIES LIMITED NEXT CAPITAL LIMITED Book Building Portion Underwritten by: AKD Securities Limited & Next Capital Limited General Public Portion Underwritten by: (To be filled in within 10 working days of closing of Bidding Period i.e. before submission of application to the Exchange for allocation of dates for publication of the final OFSD and subscription of shares by the general public as required under clause 6 of Appendix-4 of the listing regulations of Karachi & Lahore Stock Exchange Limited) The date of publication for this Offer for Sale Document is MM DD, 2013 ADVICE FOR INVESTORS 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 PARA 5.7 BEFORE MAKING ANY INVESTMENT DECISION. SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATION MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969. ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NETWORTH INDIVIDUAL INVESTORS A SINGLE INVESTOR CANNOT SUBMIT MORE THAN ONE BIDDING APPLICATION EXCEPT IN THE CASE OF REVISION OF BID. IF AN INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO REJECTION.

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Page 1: 2013 LalPir Power Ltd Prospectus

PRELIMINARY OFFER FOR SALE DOCUMENT Lalpir Power Limited

Offer for Sale of Shares

THIS OFFER CONSISTS OF 37,984,000 ORDINARY SHARES (10% OF THE TOTAL PAID UP SHARE CAPITAL OF LALPIR POWER LIMITED) AT AN OFFER PRICE OF PKR 15 PER SHARE (INCLUSIVE OF A PREMIUM OF PKR 5 PER SHARE) WITH A GREEN

SHOE OPTION OF UP TO AN ADDITIONAL 18,992,000 ORDINARY SHARES (5% OF THE TOTAL PAID UP SHARE CAPITAL OF LALPIR POWER LIMITED) TO GENERAL PUBLIC IN CASE OF OVER SUBSCRIPTION OF THE GENERAL PUBLIC PORTION AT

AN OFFER PRICE OF PKR __ PER SHARE

Book Building Portion of the Offer comprises of 28,488,000 Ordinary Shares (75% of the Total Offer) at a floor price of PKR 15 per share (inclusive of a premium of PkR5 per share)

General Public Portion of the Offer comprises of 9,496,000 Ordinary Shares (25% of the Total Offer) at an offer price of PKR[*] per share

THIS IS NOT A PROSPECTUS BY LALPIR POWER LIMITED, BUT AN OFFER FOR SALE BY MIAN HASSAN MANSHA, NISHAT MILLS LTD, ADAMJEE INSURANCE CO LTD, SECURITY GENERAL INSURANCE CO LTD, STANHOPE INVESTMENTS & ENGEN (PVT) LTD, …..,THE SPONSORS OF LALPIR POWER LIMITED, OUT OF THEIR EXISTING SHAREHOLDINGS IN LALPIR POWER

LIMITED

BIDDING PERIOD DATES: From June 18, 2013 to June 19, 2013 (Both days inclusive) From 9:00 a.m. to 5:00 p.m.

DATE OF PUBLIC SUBSCRIPTION: From DD/MM, 2013 to DD/MM, 2013

(Both days inclusive) During Banking Hours

JOINT LEAD MANAGERS, ARRANGERS & JOINT BOOK RUNNERS:

AKD SECURITIES LIMITED NEXT CAPITAL LIMITED

Book Building Portion Underwritten by:

AKD Securities Limited &

Next Capital Limited

General Public Portion Underwritten by: (To be filled in within 10 working days of closing of Bidding Period i.e. before submission of application to the Exchange for allocation of dates for publication of the final OFSD and subscription of shares by the general public as required under clause 6 of Appendix-4 of the listing regulations of Karachi & Lahore Stock Exchange Limited)

The date of publication for this Offer for Sale Document is MM DD, 2013

ADVICE FOR INVESTORS 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 PARA 5.7 BEFORE MAKING ANY INVESTMENT DECISION.

SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATION MONEY IS LIABLE TO CONFISCATION UNDER SECTION 18A OF THE SECURITIES AND

EXCHANGE ORDINANCE, 1969.

ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NETWORTH INDIVIDUAL INVESTORS A SINGLE INVESTOR CANNOT SUBMIT MORE THAN ONE BIDDING APPLICATION EXCEPT IN THE CASE OF REVISION OF BID. IF

AN INVESTOR SUBMITS MORE THAN ONE BIDDING APPLICATION THEN ALL SUCH APPLICATIONS SHALL BE SUBJECT TO REJECTION.

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STATEMENT ON OFFERERS’ ABSOLUTE RESPONSIBILITY: The Offerers’, having made all reasonable inquiries, accept responsibility for the disclosures made in this Offer for Sale Document and confirm that:

this Offer For Sale Document contains all necessary information with regard to the Issuer, the Offerer and the Offer, which is material in the context of the Offer and nothing has been concealed;

the information contained in the Offer for Sale Document is true and correct to the best of our knowledge and belief;,

the opinions and intentions expressed herein are honestly held; and there are no other facts, the omission of which make this document as a whole or any part thereof

misleading.

-Sd- ______________________ Mr. Hassan Mansha (Offerer)

On behalf of other Offerers: Lalpir Power Limited -Sd- ______________________________

Mr. Khalid Qadeer Qureshi, Director Finance -Sd- ______________________________

Mr. Khalid Mahmood Chohan, Company Secretary

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GLOSSARY OF TECHNICAL TERMS & ABBREVIATIONS AKDS AKD Securities Limited BR Book Runner CDA Central Depository Act, 1997 CDC/CDCPL The Central Depository Company of Pakistan Limited CDS Central Depository System COD Commercial Operations Date CNIC Computerized National Identity Card Commission / SECP

Securities and Exchange Commission of Pakistan

Company/Lalpir Lalpir Power Limited Dutch Auction Method

Under this Methodology, the strike price is determined by lowering the price to the extent that the total number of shares offered is subscribed

FDI Foreign Direct Investment FED Federal Excise Duty FSA Fuel Supply Agreement GoP Government of Pakistan GWh Giga Watt hour HNWI High Net Worth Individuals IA Implementation Agreement ISE Islamabad Stock Exchange Limited ITO Income Tax Ordinance, 2001 KESC Karachi Electric Supply Company Limited KIBOR Karachi Inter Bank Offer Rate KSE Karachi Stock Exchange Limited KWH Kilowatt-Hour K-12 Refers to the sum of primary and secondary education LIBOR London Inter Bank Offer Rate LSE Lahore Stock Exchange Limited MHI Mitsubishi Heavy Industries MW Megawatt NEPRA The National Electric Power Regulatory Authority NEXT Next Capital Limited NTDCL National Transmission and Dispatch Company Limited OEM Original Equipment Manufacturer OFFER Offer for Sale of Shares of the Company by the Offerers

OFFERERS

Mian Hassan Mansha Nishat Mills Limited Adamjee Insurance Company Limited Security General Insurance Company Limited Stanhope Investments (Cayman Islands) Engen (Private) Limited

OFS Offer for Sale OFSD Offer for Sale Document Ordinance The Companies Ordinance, 1984 O&M Operation and Maintenance PACRA Pakistan Credit Rating Agency Limited PKR Pakistani Rupee PKR WPI Pakistan Wholesale Price Index Power Purchaser/WAPDA

Water and Power Development Authority

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PPA Power Purchase Agreement PPIB Private Power and Infrastructure Board RFO Residual Fuel Oil SCRA Special Convertible Rupee Account US CPI United States Consumer Price Index WHT Withholding Tax WPPF Workers’ Profit Participation Fund WWF Workers’ Welfare Fund

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Definitions

Application Money 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

AND

In case of application for subscription of shares out of the general public portion, the amount of money paid along with application for subscription of shares which is equivalent to the product of the offer price and the number of shares applied for

Bid An indication to make an offer during the bidding period by a bidder to subscribe to the Ordinary Shares of Lalpir Power Limited at or above the floor price, including all the revisions thereto

Bidder Any eligible prospective investor who makes a bid

pursuant to the terms of the Preliminary OFSD and the Bidding Form

Bid Amount The total amount of the bid which is equivalent to

the product of the bid price and the number of shares bid for

Bid Collection Centre Pre-determined places where applications for

bidding of shares are collected by the Joint Book Runners on behalf of the Offerers and may include offices of Corporate Brokerage Houses, Scheduled Banks, and Development Financial Institutions subject to appointment of these institutions as agents by the Joint Book Runners through an agreement in writing for the purpose, with the consent of the Offerers

Bidding Form The form prepared by the Offerers for the purpose

of making bids which will be considered as the application for subscription of Ordinary Shares out of the book building portion

Bidding Period The period during which bids for subscription of

shares of the Company will be made by Institutional Investors and HNWI Investors. The Bidding Period commences on June 18 2013 and ends on June 19 2013 (daily from 9:00 a.m. to 5:00 p.m.)

Bidding Process Ending Date The date after which Joint Book Runners will not

accept any bid for the book building portion of the offer which shall be the last date of the Bidding Period

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Bidding Process Starting Date The date on which Joint Book Runners shall start accepting bids for the book building portion of the offer which shall be the first date of the Bidding Period

Book Building A mechanism of price determination through which

indication of interest for subscription of shares offered by the Offerers is collected from Institutional Investors and HNWI Investors. Through this process a book is built which gives an idea of demand for the shares at different price levels. The strike price is determined based on the price at which demand for shares at the end of book building period is sufficient to raise the required amount

Book Building Account An account opened by the Offerers with the

Collection Bank(s). The bidder will pay the margin money/bid amount through demand draft, pay order or cheque in favor of this account and the balance of the application money, if any, shall be paid through this account after successful allocation of shares

Company Legal Advisor Lexium - Attorneys at Law Final OFSD A document containing all the information and

disclosures as required under the Companies Ordinance, 1984 together with disclosure of the strike price, results of the Book Building process, the date of publication of OFSD and, the date(s) for subscription of shares for the general public portion

Floor Price The minimum price set by the Offerers for the Offer

for sale of shares which is PKR 15 per share. A bid placed below the floor price will not be entertained by the Joint Book Runners

General Public All individual and institutional investors including

both Pakistani (residents & non-residents) and foreign investors

Green Shoe Option An option available to the Offerers to offer

additional 18,992,000 shares (5% of the existing paid-up capital of the Company) to the general public in case the general public portion is oversubscribed. The price of shares offered under Green Shoe Option will be the same as for General Public Offer

Gross Calorific Value (GCV) The amount of heat released by a unit weight or

unit volume of a substance during complete combustion

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General Public Offer Price The price at which ordinary shares of the Company are offered to the general public. This price can be at or below the strike price

High Net worth Individual (HNWI) Individual investor who bids for shares of the value

of PKR 1,000,000/- or above Institutional Investors Both local and foreign institutional investors Joint Book Runners AKD Securities Limited & Next Capital Limited Joint Lead Managers & Arrangers AKD Securities Limited & Next Capital Limited Limit Price The maximum price a prospective institutional

investor or HNWI Investor is willing to pay for a share under the Book Building process

Margin Money The partial or total amount, as the case may be, paid

by a bidder at the time of making a bid Ordinary Shares Ordinary Shares of Lalpir Power Limited having par

value of PKR10 each Preliminary OFSD The preliminary OFSD containing all the information

and disclosures as required under the Companies Ordinance, 1984, and Listing Regulation of the Stock Exchanges approved by the Commission under section 62 read with section 57(1) of the Companies Ordinance, 1984 and circulated amongst the Institutional Investors and HNWI Investors for bidding of shares out of the book building portion through the Book Building Process

Step Bid Step Bid means a series of limit bids at increasing

prices Strike Order A bid for a specified number of shares at the strike

price to be determined through the Book Building process

Strike Price The price of share determined/discovered on the

basis of Book Building process in the manner provided in the Listing Regulations of KSE and LSE at which the shares are offered to the successful bidders. The strike price determined through the Book Building Process is PkR[*]per share

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TABLE OF CONTENTS

Section Content Page No.

1. Approvals and Listing on the Stock Exchanges Page 9 2. Book Building Procedure Page 11 3. Share Capital and Related Matters Page 25 4. Underwriting, Commissions, Brokerage and other Expenses Page 35 5. Overview, History and Prospects Page 38 6. Financial Information Page 47 7. Management and Related Matters Page 57 8. Miscellaneous Information Page 65 9. Application and Allotment Instructions Page 76 10. Signatories to the Offer for Sale Document Page 80 11. Memorandum of Association Page 81 12. Bidding form of Lalpir Power Limited Page 85

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PART 1

1. APPROVALS AND LISTING ON THE STOCK EXCHANGES

1.1 APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN

Approval of the Securities & Exchange Commission of Pakistan (the "Commission" or "SECP") as required under Section 62 read with Section 57 of the Companies Ordinance, 1984 (the "Ordinance") has been obtained by the Offerers for the issuance, circulation and publication of this Offer for Sale Document (“OFSD”). DISCLAIMER: It must be distinctly understood that in giving this approval, the 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 Offerers’ in this OFSD. SECP has not evaluated the quality of the Offer and its approval for issue, circulation and publication of OFSD 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 Offer before bidding/subscribing.

1.2 CLEARANCE OF THE OFSD BY THE KARACHI STOCK EXCHANGE LIMITED & LAHORE STOCK EXCHANGE LIMITED The OFSD has been cleared by the Karachi Stock Exchange Limited (“KSE”) and the Lahore Stock Exchange Limited (“LSE”), (collectively referred to as the “Stock Exchanges”), in accordance with the requirements of their respective Listing Regulations. DISCLAIMER: The KSE and LSE have not evaluated the quality of the Offer, and their 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 Offer before subscribing/bidding.

The publication of this document does not represent any solicitation by the Karachi Stock

Exchange or the Lahore Stock Exchange. The contents of this document do not constitute an invitation by Karachi Stock Exchange

Limited or the Lahore Stock Exchange Limited to invest in shares or subscribe for any securities or other financial instrument, 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 the Exchanges.

It is clarified that information in this OFSD should not be construed as advice on any

particular matter by the Karachi Stock Exchange or the Lahore Stock Exchange and must not be treated as a substitute for specific advice.

The Karachi Stock Exchange and Lahore Stock Exchange disclaim any liability whatsoever for

any loss howsoever arising from or in reliance upon this document to any one, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or actions taken, based on this document.

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The Karachi Stock Exchange and Lahore Stock Exchange neither take responsibility for the

correctness of contents of this document nor the ability of the Company to fulfill its obligations there under.

Advice from a suitably qualified professional should always be sought by investors in

relation to any particular investment.

1.3 FILING OF THE OFSD AND OTHER DOCUMENTS WITH THE REGISTRAR OF COMPANIES The Company has filed with the Registrar, Company Registration Office, Securities and Exchange Commission of Pakistan, Lahore as required under Section 57(3) and (4) of the Companies Ordinance 1984, a copy of this OFSD signed by authorized signatories on behalf of the Offerers’, along with the following documents attached thereto: a) Letter dated 22 January , 2013, from the Auditors of the Company, Riaz Ahmad & Company,

Chartered Accountants consenting to the publication of their names in the OFSD, which contains in Part 6 certain statements and reports issued by them as experts (for which consent has not been withdrawn), as required under Section 57(5) of the Ordinance.

b) Copies of Material Contracts and Agreements mentioned in Part 8 of this OFSD as required

under Section 57(4) of the Ordinance. c) Written confirmations of the Legal Advisor to this Offer and Bankers to this Offer, mentioned in

this OFSD consenting to act in their respective capacities, as required under Section 57(5) of the Ordinance.

d) Consents of Directors, Chief Executive and the Secretary of the Company who have consented

to their respective appointments made and their having been named or described as such Directors, Chief Executive and 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 AT KSE & LSE

Applications have been made to KSE and LSE for permission to deal in and for quotation of the shares of the Company. If for any reason, the applications for formal listing are not accepted by the Stock Exchanges, the Offerers undertake to publish immediately in the press a notice to that effect and thereafter to refund the application money to the applicants without surcharge as required under Section 72 of the Ordinance.

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PART 2

2 BOOK BUILDING PROCEDURE

2.1 BRIEF STRUCTURE OF THE OFFER

The Present Offer The Offerers are offering 37,984,000 Ordinary Shares of par value PKR 10 each at a floor price of PKR 15 per share (Inclusive of a premium of PkR 5 per share) aggregating to PKR 569,760,000 (the “Offer”). The Offer constitutes 10% of the existing paid-up capital of the Company. The Offerers are also offering a Green Shoe Option of up to an additional 18,992,000 Ordinary Shares (5% of the total paid-up share capital of the Company) to the general public in case of over subscription of the General Public Portion, at an offer price of PkR_______ per share. The Offer is being made through the Book Building process at a floor price of PKR 15 per share, whereby 75% of the total offer size i.e. 28,488,000 Ordinary Shares will be offered through the Book Building Process to Institutional Investors and High Net Worth Individuals (HNWI), while the balance 25% of the total Offer size i.e. 9,496,000 Ordinary Shares will be offered to the general public at or below the Strike Price.

2.2 BOOK BUILDING PROCEDURE

Book Building is a process whereby investors bid for a specific number of shares at various prices. The Joint Lead Managers & Joint Book Runners, with the consent of Offerers, set a floor price which is the lowest price an investor can bid at. An order book of bids from investors is maintained by the Joint Book Runners, 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 price to the extent that the total number of shares that the Offerer intends to offer through the Book Building process is subscribed. However, while determining the strike price the bids placed through strike order shall not be taken into consideration.

A bid by a potential investor can be a “Limit Bid”, “Strike Bid” or a “Step Bid”, which are explained below.

Limit Bid: Limit bid is at the limit price, which is the maximum price an investor 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 2.0 million shares at PKR 18 per share. Since the bidder has placed a limit price of PKR 18 per share, this indicates that he/she/it is willing to subscribe at or below PKR 18 per share.

Strike Order: A bid for a specified number of shares at the strike price to be determined through the Book Building Process. In Strike Order the bidder explicitly states the number of shares he/she/it is willing to subscribe at the Strike Price. For instance, a bidder may bid for 2.0 million shares at the strike price to be determined through the Book Building Process.

Step Bid: A series of limit bids at increasing prices. The aggregate amount of step bid shall not be less than PKR 1,000,000/- and the amount of any step shall not be less than PKR 250,000/-.

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Under this bidding strategy, bidders place a number of limit bids at different increasing price levels. The bidders may, for instance, make a bid for 2.0 million shares at PKR 16 per share, 1.5 million shares at PKR 17 per share and 1.0 million shares at PKR 18 per share. A SINGLE INVESTOR SHALL NOT MAKE MORE THAN ONE BID, HOWEVER, A BID CAN BE REVISED. THE INVESTORS 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 CONSOLIDATED BIDS.

Once the bid period is over and book has been built, the Joint Book Runners shall determine the strike price.

Successful bidders shall be intimated, within two (2) working days 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 seven (7) 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 him/her/it, the margin money deposited by such bidder shall be forfeited to the Joint Book Runners under clause 8.11 of Appendix 4 of the Listing Regulations of KSE & LSE.

AS PER REGULATION 8.16 OF THE LISTING REGULATIONS, THE SUCCESSFUL BIDDERS SHALL BE ISSUED SHARES IN THE FORM OF BOOK-ENTRY SECURITIES TO BE CREDITED IN THEIR CDS ACCOUNTS. ALL THE INSTITUTIONAL AND HNWI INVESTORS SHALL, THEREFORE, PROVIDE THEIR CDC ACCOUNT NUMBERS IN THE BID APPLICATION.

2.3 JOINT LEAD MANAGERS AND ARRANGERS AKD Securities Limited (“AKDS”) and Next Capital Limited (“NEXT”) have been mandated by the Offerers to act as Joint Lead Managers and Arrangers to this Offer, which is being made through the Book Building process as laid out in Appendix 4 of the Listing Regulations of the KSE & LSE.

2.4 JOINT BOOK RUNNERS AKD Securities Limited (“AKDS”) and Next Capital Limited (“NEXT”) have also been appointed as Joint Book Runners to this Offer.

2.5 ROLE AND FUNCTIONS OF JOINT LEAD MANAGERS AND JOINT BOOK RUNNERS

a) The Joint Lead Managers to the Offer shall:

i. conduct awareness campaigns through presentations, meetings, road shows etc jointly with Joint Book Runners;

ii. ensure that all disclosures as required under the Companies Ordinance, 1984 and the Appendix

4 of the Listing Regulations of the Karachi Stock Exchange and Lahore Stock Exchange have been made in the OFSD;

iii. ensure that necessary infrastructure and electronic system/software is available to collect bids and to carry out the Book Building process in a fair, efficient and transparent manner;

iv. obtain on behalf of the Offerers, all approvals/consents/NOCs relating to the Offer;

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v. publish an advertisement, approved by the Commission, in at least one Urdu and one English daily Newspaper having wide circulation in the Federal and all the provincial capitals, to invite the Institutional investor and HNWI to participate in the bidding process; and

vi. ensure that the preliminary OFSD will, after approval of the Commission, be uploaded on the

Joint Book Runners’ as well as on the Company’s website.

b) The Joint Book Runners to the Offer shall:

i. conduct awareness campaigns through presentations, meetings, road shows etc. jointly with Lead Managers;

ii. ensure that necessary infrastructure and electronic system/software is available to collect bids

and to carry out the Book Building process in a fair, efficient and transparent manner; iii. collect bid applications and applications’ money, security, margin as the case may be from the

Institutional Investors and HNWI in the manner as mentioned in the Appendix 4 of the Listing Regulations of the Karachi Stock Exchange and the Lahore Stock Exchange;

iv. put serial number, date and time on each bidding application at the time of collection of the same from the bidders;

v. vet the bidding applications;

vi. build an order book showing demand for the shares at various prices;

vii. discover the strike price at the close of the bidding period;

viii. maintain record of the bids received for subscription of the shares;

ix. use the software for Book Building process provided by the Exchange, which is based on Dutch Auction Methodology for display of the order book and determination of the strike price, on the terms and conditions as may be agreed in writing between the Exchange and the Joint Book Runners;

x. for information of investors ensure that in addition to live display of the order book on the website of the Exchanges, also make live display of the same order book simultaneously on its own website till closing of the bidding period;

xi. ensure that each bid application contains depository account number of the bidder maintained with CDCPL wherein shares shall be credited in case the bid is successful;

xii. not accept multiple bids i.e. more than one bid applications by the same person;

xiii. enter into an Underwriting Agreement with the Offerers’;

xiv. circulate copies of the preliminary OFSD cleared by the Exchange and approved by the Commission along with the bidding forms to the prospective Institutional Investor and HNWI;

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xv. Joint Book Runners have established bid collection centers at the following addresses:

Karachi Contact Officer: Mr. Syed Khurram Shahid Direct No.: +92-21-3537-4301 Mobile No.: +92-333-310-4756 PABX No.: +92-21-111-253-111 Ext. 636 Fax No.: +92-21-3586-7992, +92-21-3537-3211 Email: [email protected] Postal Address 602, Continental Trade Centre, Block 8 Clifton, Karachi Contact Officer: Ms. Sanam Khawaja PABX No.: +92-21-111-639-825 ext 114 Fax No.: +92- 21-3529-2621 Email: [email protected] Postal Address 8th Floor Horizon Tower, Plot # 2/6,

Block III, Clifton, Karachi

Lahore Contact Officer: Mr. Ehsan Ahmad Qureshi Direct No.: +92-42-3628-0742, +92-42-3628-0743, +92-42-3628-0744 Mobile No.: +92-334-411-1253 PABX No.: +92-42-111-253-111 Fax No.: +92-42-3628-0745 Email: [email protected] Postal Address: AKD Trade

Room No. 512/513, 5th Floor Lahore Stock Exchange Building, Lahore

Islamabad Contact Officer: Mr. Khalid Hussain Direct No.: +92-51-2894325 Mobile No.: +92-332-212-5525, +92-333-532-6580 PABX No.: +92-51-289-4321 Fax No.: +92-51-289-4323 Email: [email protected] Postal Address: AKD Trade

303, 3rd Floor, ISE Tower Jinnah Avenue, Blue Area, Islamabad

xvi. Ensure that all the bids received by the bid collection centers are entered into the system developed by the Exchange for the purpose of Book Building. Joint Book Runners shall not accept and ENTER any bid after 5:00 p.m. during the days of the bidding period, except the last day when no fresh bid(s) shall be collected after 5:00 p.m. and the bid(s) collected thus far, shall be entered into the system by 7:00 p.m. on the same day and thereafter no bid shall be entered into the system or be revised in any way and for any reason even if the bid applications have been received from the investors. Online revision will, however, be allowed to the bidder till 7:00 pm on the last day.

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2.6 OPENING AND CLOSING OF THE BIDDING PERIOD

The bidding period shall remain open for 2 working days commencing from the business hours at 09:00 a.m. on 18th June, 2013 and will close at 05:00 p.m. on 19th June, 2013 at the close of business hours

BIDDING PROCESS STARTS ON 18TH JUNE 5, 2013

BIDDING PROCESS ENDS ON 19TH JUNE 5, 2013

*(Both Days Inclusive)

2.7 ELIGIBILITY TO PARTICIPATE IN BIDDING Eligible investors who can place their bids in the Book Building process are “Institutional Investors” and “HNWI”.

Institutional Investors include both local and foreign institutional investors

HNWI investors are individual investors who bid for shares of value of PKR 1,000,000/- (Pak Rupees One Million Only) or above in the Book Building Process.

2.8 INFORMATION FOR BIDDERS

The Preliminary OFSD for offer of shares has been duly cleared by the Karachi Stock Exchange and Lahore Stock Exchange and approved by SECP.

The preliminary OFSD and the bidding form can be obtained from the Registered Office of Lalpir Power Limited, AKDS, Next and the bid collection centers. Preliminary OFSD and bidding forms can also be downloaded from the following website of the Joint Book Runners and the Company .i.e. http://www.lalpir.com, http://www.akdsecurities.net, and http://nextcapital.com.pk/ .

Eligible investors who are interested in subscribing to the Ordinary Shares should approach Joint Book Runners at the addresses provided in paragraph 2.5 to register their Bids.

THE BIDS SHOULD BE SUBMITTED ON THE PRESCRIBED BIDDING FORM IN PERSON OR THROUGH FAX NUMBERS GIVEN IN PARAGRAPH 2.5.

2.9 BIDDING FORM AND PROCEDURE FOR BIDDING

a) Standardized bidding form has been prescribed by the Joint Book Runners. Bids shall be submitted at the bid collection centers in person or through fax number given in paragraph 2.5 on the standard bidding form duly filled in and signed in duplicate. The bidding 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.

b) Upon completion and submission of the bidding form, the bidders are deemed to have authorized the Offerers to make necessary changes in the preliminary OFSD as would be required for finalizing and filing the final OFSD with the KSE, LSE and the SECP, without prior or subsequent notice of such changes to the bidders.

c) The bidding procedure under the Book Building Process is outlined below:

i. As required under clause 8.8 of Appendix-4 of the Listing Regulations of KSE, copy of approved preliminary OFSD shall be circulated by the Joint Book Runners to a maximum number of the institutional investors and HNWI, but not less than ten in each of the two categories inviting

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them for participation in the bidding process. Copy of the preliminary OFSD will also be placed on the websites of the Company, AKDS and Next.

ii. An advertisement, approved by the Commission, shall be published at least in one Urdu and one English daily newspaper having wide circulation in the Federal and all the provincial capitals, inviting the Institutional Investors and HNWIs for participation in the bidding.

iii. A Book Building Account shall be opened by the Offerers for collection of bid amounts.

iv. The bidding form shall be issued in duplicate signed by the bidder and countersigned by the Joint Book Runners, with first copy for the Joint Book Runners, and the second copy for the bidder.

v. Bids shall be submitted through the bid collection centers or through fax numbers given in paragraph 2.5 on the standard bidding form duly filled in and signed in duplicate. The addresses for the bid collection centers are given in paragraph 2.5.

vi. Bids can be placed at “limit price”, “strike order” or “step bid”.

vii. Bid money/margin money shall be deposited through demand draft, pay order or cheque in favor of “Offer for Sale of shares of Lalpir Power Limited – Book Building Account”.

viii. Joint Book Runners shall collect an amount of 100% of the application money as bid money in respect of bids placed by HNWIs.

ix. Joint 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.

x. Joint Book Runners may reject a bid placed by an Institutional Investor/HNWI for reasons to be recorded in writing and the reasons should be disclosed to such bidder forthwith. Decision of Joint Book Runners shall not be challengeable by the bidder or its associates.

xi. Joint Book Runners shall not accept the bids made at a bid price lower than the Floor Price.

xii. The Offerers and Joint Book Runners shall not accept bids from associated persons of the Offerers and the Company in excess of five percent (5%) of the size of the book building portion.

xiii. The bidders will receive back the duplicate form upon submission of their bids which will be proof of their bid submission. In case of facsimile, a copy of form with receiving will be faxed back to the bidder.

xiv. Bidders can revise or withdraw their bids during the bidding period (for details please refer to paragraphs 2.13 and 2.15).

xv. Joint Book Runners shall maintain a record of the bids received /rejected/revised/withdrawn along with identities of the bidder and evidence of amount received.

xvi. Joint Book Runners shall ensure that all the bids received by the bid collection centers are entered into the system developed by the Exchanges for the purpose of the book building according to the procedure given in paragraph 2.5 (b) (ix) and as per clause 8.6 of Appendix 4 of the Listing Regulations of KSE. The system shall be capable to display live an order book, in descending order with respect to the bid price, showing the demand for shares at various prices and accumulative number of shares bid for along with percentage of the total shares offered. The order book should also show the revised bids and the bids withdrawn.

xvii. At the close of the bidding period, the Joint Book Runners shall determine the strike price with the consent of the Offerer.

xviii. Successful bidders shall be intimated, within two (2) working days of the closing of the bidding period, the strike price and the number of shares provisionally allotted to each of them.

xix. The successful institutional bidders shall, within seven (7) working days of the closing of the bidding period, deposit the balance amount as consideration against allotment of shares.

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xx. Under rule 8.11 of the Listing Regulation of KSE and rule 8.10 of the Listing Regulation of LSE, where a successful institutional bidder defaults in payment of shares allotted to it, the margin money deposited by such institutional bidder shall be forfeited by Joint Book Runners.

xxi. Margin money of unsuccessful bidders will be refunded within three (3) working days of the close of the bidding period.

xxii. 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 at the time of offer of shares out of the general public portion of the offer to successful applicants.

xxiii. An associated person or any other related person or party of the Offerer and the Company shall not make bid(s) for shares in excess of 5%, in aggregate, of the book building portion of the offer.

2.10 BANK ACCOUNT FOR BOOK BUILDING AND PUBLIC PORTION

The Offerers have opened two separate bank accounts for collection of applications’ money, one each for the Book Building portion and the General Public portion of the Offer. The bidders shall draw demand draft/pay order or cheque in favor of “Offer for Sale of Shares of Lalpir Power Limited – Book Building Account” which has been opened at MCB Bank Limited (“Collection Bank”). The Collection Bank shall keep and maintain the bid money in the said account. Once the strike price is determined and list of allottees are finalized, the Joint Lead Managers, after obtaining NOC from KSE and LSE, may request in writing to the collection bank for transfer of the money of successful and accepted applications to the Offerers’ account(s) and advise for refund of the bid money to unsuccessful bidders.

2.11 PAYMENT INTO THE BOOK BUILDING ACCOUNT The bidders shall draw a demand draft/pay order or cheque favoring “Offer for Sale of Shares of Lalpir Power Limited – Book Building Account” and submit it at the designated bid collection center either in person or through facsimile along with a duly filled in bidding form. CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM AT THE BID COLLECTION CENTER. BID AMOUNT MUST BE PAID THROUGH PAY ORDER, BANK DRAFT, CHEQUE OR ANY OTHER APPROPRIATE INSTRUMENT DRAWN IN FAVOR OF “OFFER FOR SALE OF SHARES OF LALPIR POWER LIMITED – BOOK BUILDING ACCOUNT” AND ACCEPTABLE TO JOINT BOOK RUNNERS. Since the investors can bid for shares through “limit price”, “strike order” or “step bid” therefore payment procedure is explained below for all the three (3) methods.

a) PAYMENT FOR LIMIT PRICES If investors are placing their bids through “limit price” 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 5 million shares at a price of PKR 17 per share, then the total application money would amount to PKR 85 million. In such a case, (i) HNWI shall deposit PKR 85 million in the Book Building account as the bid amount which is 100% of PKR 85 million; and (ii) Institutional Investors shall deposit at least PKR 21.25 million in the Book Building account as the margin money which is at least 25% of PKR 85 million

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b) PAYMENT FOR STRIKE ORDERS

If investors are placing a “strike order”, then they shall deposit the margin money/bid amount equal to the product of the number of shares they are bidding for and the Floor Price which in this case is PKR 15 per share. For instance, if an investor is applying for 2.0 million shares then the total application money would be PKR 30 million. In such a case, (i) HNWI shall deposit PKR 30 million as bid amount which is 100% of PKR 30 million and (ii) Institutional Investors shall deposit at least PKR 7.5 million as margin money which is 25% of PKR 30 million. In the event where limit and step orders are insufficient to determine price through the Book Building mechanism, all strike orders will be considered for allocation of shares at floor price. For details please refer to paragraph 2.16.

c) PAYMENT FOR STEP BIDS

If investors are placing a “step bid”, which is a series of limit bids at increasing prices, then they shall deposit the margin money/bid money based on the total number of shares they are bidding for at their stated bid prices. For instance, if the investor bids for 0.5 million shares at PKR 16 per share, 0.4 million shares at PKR 17 per share and 0.3 million shares at PKR 18 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. 20.20 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) HNWI shall deposit PKR 20.20 million in the Book Building Account as bid amount which is 100% of PKR 20.20 million and (ii) Institutional Investors shall deposit at least PKR 5.05 million in the Book Building Account as margin money which is 25% of PKR 20.20 million.

2.12 PAYMENT BY FOREIGN INVESTORS Foreign investors may subscribe using their Special Convertible Rupee Accounts (SCRA), as set out under Chapter xx of the State Bank of Pakistan’s Foreign Exchange Manual.. 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 Bidding Application by the foreign investors.

2.13 REVISION OF BIDS BY THE BIDDER The bidders shall have the right to revise their bids any time during the bidding period up to 5.00 pm and on the last day till 07:00 pm. Online revision of the bids may be allowed to the bidders through system software. This will however be subject to the condition that the bidder shall comply with the requirements of bidding as disclosed under Appendix 4 of the Listing Regulations and any other condition or procedure disclosed in the OFSD.

2.14 REJECTION OF BIDS BY THE JOINT BOOK RUNNERS In terms of clause 8.4 of Appendix 4 of Listing Regulations of the KSE and LSE, Joint Book Runners may reject a bid placed by an Institutional Investor/HNWI for reasons to be recorded in writing and the reasons should be disclosed to such bidder forthwith. Decision of Joint Book Runners shall not be challengeable by the bidder or its associates.

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2.15 WITHDRAWAL OF BIDS BY THE BIDDER

A bidder has the right to withdraw placed bid from the bidding system any time during the bidding period and on the last day thereof until 5.00 pm. Online withdrawal of the bids may be allowed to the bidders through system software. This will however be subject to the condition that the bidder shall comply with the requirements of bidding as disclosed under Appendix 4 of the Listing Regulations of the Exchanges and any other condition or procedure disclosed in the OFSD.

2.16 WITHDRAWAL OF OFFER BY THE OFFERER

a) According to clause 3.10 of Appendix 4 of the listing regulations of KSE and LSE, in case the Offerer does not receive bids at or above the floor price for the minimum number of shares offered, it may withdraw the Offer. The decision of withdrawal shall be taken within a period not more than three (3) working days of the closing of bidding period.

b) The Offerer shall withdraw the offer if the total bids received are less than fifteen.

c) The withdrawal shall be immediately intimated to the Commission and the Exchanges.

d) In case the offer is withdrawn the margin money/bid amount will be refunded to the bidders within three (03) working days of the decision of withdrawal without any markup, interest etc.

2.17 MECHANISM FOR DETERMINATION OF STRIKE PRICE

a) At the close of the bidding period, the Offerers’, in consultation with the Joint Book Runners shall

determine the strike price on the basis of “Dutch Auction Method”. Under this Methodology, the strike price is determined by lowering the price to the extent that the total numbers of shares offered are subscribed. However, while determining the strike price, the bids placed through strike order(s) shall not be taken into consideration.

b) The order book shall display the bids 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. The bids at strike orders shall, however, be displayed in the order book in the following manner: i. after the lowest limit bid, in case the limit bids placed are not sufficient for full allotment of the

shares offered, or, ii. immediately, after the limit bid at which all the shares offered can be allotted, in case the limit

bids placed are sufficient for full allotment of the shares offered.

c) For the purpose of allotment of shares, the limit bid(s) entered at the price determined/discovered as Strike Price through Book Building Process and the bids placed as strike order shall be ranked equally and preference will be given to the bidder who has made the bid earlier. Once the strike price is determined all those bidders whose bids have been found successful shall become entitled for allotment of shares. The bidders, who have made bids at prices above the strike price, will be offered shares at the strike price and the differential 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.

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BidderPrice

(PKR /Share)

Quantity

(Shares in Million)

Cumulative

Number of Shares

(Shares in million)

Category

of orderDay

Institution A 20.00 5.00 5.00 Limit Price Day 1

Institution E 18.50 5.00 10.00 Limit Price Day 2

Institution B 18.00 3.00 8.00 Limit Price Day 2

HNWI A 17.50 2.00 10.00 Step Bid Day 3

Institution C 17.00 7.50 17.50 Step Bid Day 1

Institution D X 3.00 20.50 Strike bid Day 1

HNWI B 16.50 4.00 24.50 Limit Price Day 2

Institution E 16.00 7.00 31.50 Limit Price Day 3

Institution F X 5.00 36.50 Strike bid Day 2

HNWI C X 0.75 37.25 Strike bid Day 3

Institution C 15.75 1.00 38.25 Step Bid Day 1

Institution B 15.70 3.50 41.75 Limit Price Day 1

HNWI A 15.65 0.20 41.95 Step Bid Day 3

Institution C 15.50 1.50 43.45 Step Bid Day 1

Bid

WithdrawnStrike Price

determined through Dutch Auction Method

Bid has been

revised and placed at PKR

18.00/share

Total

Shares

The mechanism for determination of strike price can be understood by the following illustration. a) Number of shares being offered through the Book Building is 28,488,000 ordinary shares b) Floor price: PKR 15 per share c) Bidding Period: June 18, 2013 – June 19, 2013

At PKR 20 per share, investors are willing to buy only 5.00 million shares. Since 23.48 million shares are still available, therefore the price will set lower. At PkR 18 per share, investors are willing to buy 3.00 million shares. Since 20.48 million shares are still available, therefore, the price will set lower. At PkR 17.5 per share, investors are willing to buy 2 million shares. Since 18.48 million shares are still available, therefore, the price will set lower. At PkR 17 per share, investors are willing to buy 7.50 million shares. Since 10.98 million shares are still available, therefore, the price will set lower. At PkR 16.5 per share, investors are willing to buy 4 million shares. Since 6.98 million shares are still available, therefore, the price will set lower. At PkR 16 per share, investors are willing to buy 7 million shares. Since after bidding for 6.98 million shares at PKR 16 per share no share will be available therefore shares based on the above illustration and according to the Dutch Auction Method, the strike price would be set at PKR 16.00 per share to sell the required quantity of 28.488 million ordinary shares, the strike price will be set at PKR 16 per share for the entire lot of 28.48 million shares The bidders who have placed bids at prices above the strike price (which in this illustration is PkR 16.00 per shares), will become entitled for allotment of shares at the strike price and the differential would be refunded. Investors, who have bid below PKR 16.00/- per share, do not qualify for allotment and their money would be refunded

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After allotment in aforementioned manner 6.98 million shares are still available for allotment. These shares will be allotted to the bidders who have placed bids at PKR 16 and who have placed bids at the strike order, however for the purpose of allotment of these 6.98 million shares preference will be given to the bidder who has placed the bid earlier

2.18 BASIS OF ALLOTMENT OF SHARES

After the closure of bidding period, the Joint Book Runners will analyze the demand generated at various price levels. Only successful bidders shall be eligible for allotment and issue of shares. 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 dispatched or credited, as the case may be, at the time of issue of shares out of the public portion of the offer to successful applicants.

2.19 REFUND OF MARGIN MONEY Investors who have bid lower than the strike price are not eligible for allotment of shares. Margin money of the unsuccessful bidders shall be refunded within three (3) working days of the close of the bidding period as required under clause 8.12 of Appendix 4 of the KSE Listing Regulations and clause 8.11 of LSE Listing Regulations.

2.20 UNDERWRITING After determination of the strike price Joint Book Runners shall within two (2) working days of the closing of the bidding period enter into an underwriting agreement with the Offerers indicating the number of shares that Joint Book Runners would underwrite at the strike price and the underwriting Commission/Fee to be charged.

2.21 PUBLICATION OF THE FINAL OFFER FOR SALE DOCUMENT

The underwriting agreement for the public portion shall be finalized within ten (10) working days from closing of the bidding period. Upon finalization of the underwriting agreements, the Joint Lead Managers shall, within ten (10) working days from the date of closing of the bidding period, submit an application to KSE and LSE for allocation of dates for publication of the final OFSD and subscription of shares by the general public. The final OFSD in full or in abridged form must be published within seventeen (17) working days of the closing of the bidding period in the manner as specified in Section 53 of the Companies Ordinance, 1984. Public subscription for the shares shall be held at any date(s) within thirty days (30) of the publication of the final OFSD but not earlier than seven (7) days of such publication.

2.22 ADDRESSES OF BID COLLECTION CENTRES

Bid Collection Centers have been established at Karachi, Lahore and Islamabad to collect the bids for the Book Building portion of Lalpir Power Limited in order to provide convenient access to bidders to participate in the bidding process. Addresses, details of contact persons and fax numbers of the Bid Collection Centers are given in paragraph 2.5.

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2.23 STATEMENT BY OFFERER

The General Manager, Karachi Stock Exchange Limited, Stock Exchange Building, Stock Exchange Road, Karachi.

The General Manager, Lahore Stock Exchange Limited, Lahore Stock Exchange Building, 19, Khayaban-e-Aiwan-e-Iqbal, Lahore. On behalf of the Offerers, I confirm that all material information as required under the Companies Ordinance, 1984 and the Listing Regulations of the Karachi Stock Exchange Limited and the Lahore Sock Exchange Limited has been disclosed in the Offer for Sale Document and that whatever is stated in the Offer for Sale Document 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 Offerers’, Lalpir Power Limited

-Sd- ______________________ Mr. Hassan Mansha (Offerer)

On behalf of other Offerers: Lalpir Power Limited

-Sd- ______________________________

Mr. Khalid Qadeer Qureshi, Director Finance -Sd- ______________________________

Mr. Khalid Mahmood Chohan, Company Secretary

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2.24 STATEMENT BY JOINT LEAD MANAGERS

Dated: Feb 21, 2013 The General Manager, Karachi Stock Exchange Limited, Stock Exchange Building, Stock Exchange Road, Karachi. The General Manager, Lahore Stock Exchange Limited, Lahore Stock Exchange Building, 19, Khayaban-e-Aiwan-e-Iqbal, Lahore. Being mandated as Joint Lead Managers and Arrangers to this Offer for Sale of Shares of Lalpir Power Limited through the Book Building process, we confirm that all material information as required under the Companies Ordinance, 1984 and Appendix 4 of the Listing Regulations of the Karachi Stock Exchange Limited and the Lahore Stock Exchange Limited has been disclosed in this Offer for Sale Document and that whatever is stated in OFSD and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. On behalf of:

-Sd- -Sd-

Umair Aijaz, FCCA Sanam Khawaja SVP / Head VP Investment Banking Next Capital Limited AKD Securities Limited

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2.25 STATEMENT BY THE JOINT BOOK RUNNERS

Dated: Feb 21, 2013 The General Manager, Karachi Stock Exchange Limited, Stock Exchange Building, Stock Exchange Road, Karachi. The General Manager, Lahore Stock Exchange Limited, Lahore Stock Exchange Building, 19, Khayaban-e-Aiwan-e-Iqbal, Lahore. Being mandated as Joint Book Runners to this Offer for Sale of Shares of Lalpir Power Limited through the Book Building process, we confirm that all material information as required under the Companies Ordinance, 1984 and Appendix 4 of the Listing Regulations of the Karachi Stock Exchange Limited and Lahore Stock Exchange Limited has been disclosed in this Offer for Sale Document and that whatever is stated in OFSD and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. On behalf of:

-Sd- -Sd-

Umair Aijaz, FCCA Sanam Khawaja SVP / Head VP Investment Banking Next Capital Limited AKD Securities Limited

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PART 3

3. SHARE CAPITAL AND RELATED MATTERS

No. of Shares Par Value (PKR)

Premium (PKR)

Total (PKR)

The Present Offer of 37,984,000 ordinary shares (10.00% of the paid-up capital) having par value of PKR10/- each is being made by the existing Sponsors (detail may be seen at para 3.2)

28,488,000 Allocation to Institutions/HNWIs investors through book building process at a strike price of PKR___ each

284,880,000

142,440,000 427,320,000

9,496,000 General Public 94,960,000 [X] [X] 37,984,000 Total Present Offer 379,840,000 [X] [X]

No. of shares Par value(PKR) Premium(PKR)

Total (PKR)

AUTHORIZED CAPITAL

500,000,000 Ordinary shares of par value PkR 10/- each 5,000,000,000 - 5,000,000,000

ISSUED, SUBSCRIBED, & PAID UP CAPITAL

342,458,215 Issued for Cash: Ordinary shares of PkR 10/- each 3,424,582,150 - 3,424,582,150

34,530,793 Issued for Bonus: Ordinary shares of PkR10/- each 34,5,307,930 - 345,307,930

2,849,724

Issued for Other than Cash: Ordinary Shares of PkR 10/- each 28,497,240 - 28,497,240

379,838,732 Total 3,798,387,320 - 3,798,387,320

No. of shares Par value(PkR) Premium

(PkR) Total (PkR)

THE EXISTING ISSUED, SUBSCRIBED & PAID UP

CAPITAL OF THE COMPANY IS HELD AS FOLLOWS:

Directors of the Company

30,386,599 Mian Hassan Mansha 303,865,990 - 303,865,990

550 Aurangzeb Firoz (Part of Engen Holding) 5,500 - 5,500

550 Khalid Qadeer (NML Holding) 5,500 - 5,500

550 Mahmood Akhtar (SGI Holding) 5,500 - 5,500

500 Kamran Rasool 5,000 - 5,000

30,388,749 Sub-total 303,887,490 - 303,887,490

Shares held by Sponsors

121,547,844 Nishat Mills Limited 1,215,478,440 - 1,215,478,440

30,387,098 Adamjee Insurance Company Limited 303,870,980 - 303,870,980

7,596,225 Security General Insurance Company Limited 75,962,250 - 75,962,250

113,951,619 Stanhope Investments (Cayman Islands) 1,139,516,190 - 1,139,516,190

75,967,197 Engen (Private) Limited 759,671,970 - 759,671,970

349,449,983 Sub-total 3,494,499,830 - 3,494,499,830

379,838,732 Total 3,798,387,320 - 3,798,387,320

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SHARES OFFERED

OFFERORS FACE VALUE (PkR 10)

PREMIUM (PkR 5) TOTAL VALUE (PkR)

3,038,837 Mian Hassan Mansha 30,388,370 15,194,185 45,582,555

12,154,839 Nishat Mill Limited 121,548,390 60,774,195 182,322,585

3,038,710 Adamjee Insurance Company 30,387,100 15,193,550 45,580,650

759,677 Security General Insurance Limited 7,596,770 3,798,385 11,394,420

11,395,162 Stanhope Investments 113,951,620 56,975,810 170,927,430

7,596,775 Engen (Private) Limited 75,967,750 37,983,875 113,951,625 37,984,000 TOTAL 379,840,000 189,920,000 569,759,265

Notes: (i) The Sponsors shall, at all times, retain at least twenty five percent (25%) of the capital of the

company.

(ii) As per Regulation No. 6(A)(7)(i) of the KSE Listing Regulations and LSE Listing Regulations, sponsors’ shareholding in excess of 25% shall not be saleable for a period of six months from the date of public subscription.

(iii) Shares issued for consideration other than cash worth PKR28,497,240 were issued during FY1999 against Project Development Expenses.

(iv) The Company has never issued shares against goodwill and intangible assets except services.

(v) In case of oversubscription in the general public portion of the offer, the Offerers have the right to exercise the Green Shoe Option, and offer up to 18,992,000 additional ordinary shares at PKR ___ to the General Public.

3.2 Offerers The following shareholders are divesting 10% of their shareholding in Lalpir, the details of which are given below:

3.3 OPENING AND CLOSING OF THE SUBSCRIPTION LIST

The subscription list will open at the commencement of banking hours on DD MM, 2013 and will close on DD MM, 2013 at the close of banking hours.

3.4 INVESTOR ELIGIBILITY Eligible investors include: a) Pakistani citizens resident in or outside Pakistan or persons holding two nationalities including

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 constitutive documents and existing regulations, as the case may be);

d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their Trust Deed and existing regulations); and

e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

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3.5 FACILITIES AVAILABLE TO NON-RESIDENT PAKISTANI AND FOREIGN INVESTORS

Non-resident Pakistani investors and foreign investors may subscribe for the shares being offered through this OFSD by using their Special Convertible Rupee Account (“SCRA”) as set out in Chapter 20 of the Foreign Exchange Manual of the State Bank of Pakistan.

3.6 MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF SHARES OUT OF THE

PUBLIC PORTION OF THE OFFER The basis and conditions for allotment of shares to the general public shall be as follows:

(a) Application for shares below the total value of PkR [*] (offer price plus PkR0.01/- per share transfer fee * 500 Shares) shall not be entertained in case of shares transferred to CDC account. In case physical shares are desired application for shares below the total value of PkR [*] (Offer price plus PkR0.05/- per share transfer fee * 500 shares) shall not be entertained.

(b) The minimum amount of application for subscription of 500 ordinary shares is PkR [*]/- (Offer price plus PkR0.01/- per share transfer fee * 500 Shares) in case of shares that are desired to be transferred to CDC account. In case physical shares are desired minimum amount of application for subscription of 500 ordinary Shares is PkR [*] (Offer price plus PkR0.05/- per share transfer fee * 500 shares).

(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) Transfer fee shall be borne by the investors including investors mentioned in sub paragraph 4 of paragraph 3.8.

(e) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY THE SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS’ MONEY SHALL BE LIABLE TO CONFISCATION UNDER SECTION 18-A OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969

(f) If the shares offered to the general public are sufficient to accommodate all applications, all applications shall be accommodated.

(g) If the shares applied for by the general public are in excess of the shares offered to them, the distribution shall be made by computer balloting, in presence of the representatives of the Stock Exchanges in the following manner:

1. 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.

2. 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.

3. 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.

4. 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

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will be conducted among applications for 2,000 shares only.

(h) After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in

the following manner:

1. If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then 2,000 shares shall be allotted to each applicant and the remaining shares shall be allotted on pro rata basis.

2. If the remaining shares are not sufficient to accommodate all the remaining applications for at least 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to each of the successful applicants.

(i) If the Offer is oversubscribed in terms of amount only then the allotment of shares shall be made on the following basis:

First preference will be given to the applicants who applied for 500 shares; 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; and then; Next preference will be given to the applicants who applied for 2,000 shares;

After allotment of the shares in the above mentioned manner, the balance shares, if any, shall be allotted on a pro rata basis to the applicants who applied for more than 2,000 shares.

(j) Allotment of shares will be subject to scrutiny of the applications for subscription.

(k) Applications which do not meet with the above requirements or which are incomplete will be

rejected.

3.7 REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS On behalf of the Offerers, the Company shall take a decision within ten (10) days of the closure of subscription list as to which applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful applications within ten (10) days of the date of such decision, as required under Section 71 of the Ordinance.

As per sub-section (2) of Section 71 of the Ordinance, if refund as required under sub-section (1) of Section 71 of the Ordinance is not made within the time specified therein, the Offerers shall be jointly and severally liable to repay that money with surcharge at the rate of one and a half percent (1.5%) for every month or part thereof from the expiration of the 15th day and, in addition, to a fine not exceeding five thousand rupees and in case of continuing offense to a further fine not exceeding one hundred rupees for every day after the said 15th day on which the default continues. Provided that a Director shall not be liable if he/she proves that the default in making the refund was not due to any misconduct or negligence on his/her part.

3.8 CREDIT AND DISPATCH OF SHARE CERTIFICATES On behalf of the Offerers’, the Company will dispatch share certificates to successful applicants through their Bankers to the Offer or by crediting the respective Central Depository System ("CDS") accounts of the successful applicants within thirty (30) days of the close of public subscription, as per Listing Regulations of the Stock Exchanges. Shares will be transferred either in scrip-less form in the CDS or in the shape of physical scrip on the basis of option exercised by the successful applicants. Shares in the physical form shall be dispatched to the successful applicants through their Bankers to the Offer within 30 days from the date of close

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of subscription list whereas scrip less shares shall be directly credited through book entries in the respective accounts maintained with the Central Depository Company of Pakistan Limited ("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. STAMP DUTY ON TRANSFER OF SHARES IN THE NAMES OF THE SUCCESSFUL APPLICANTS SHALL NOT BE BORNE BY THE OFFERERS’ OF THE COMPANY BUT SHALL BE PAID BY THE INVESTOR HIMSELF/ITSELF. If the Company defaults in complying with the above requirements, it shall pay to the Stock Exchanges a penalty of Rupees 5,000 per day for every day during which the default continues. The name of the Company shall be notified to the members of the Stock Exchanges and placed on the web sites of the Stock Exchanges.

3.9 TRANSFER OF SHARES

(a) Physical Scrips

Under the provisions of Section 77 of the Companies Ordinance, 1984, 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. Provided that the Company shall within 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 re-lodge the transfer deed with the Company.

(b) Transfer under book entry system

The shares maintained with the CDS in the book entry form shall be transferred in accordance with the provisions of the Central Depositories Act, 1997 and the Central Depository Company of Pakistan Regulations.

3.10 SHARES ISSUED IN PRECEDING YEARS

No of shares Par value (PKR) Amount (PKR) Consideration Date of issue

3,500 10 35,000 Initial Subscription In Cash May 08, 1994 26,500 10 265,000 Cash July 24, 1994

94,785,275 10 947,852,750 Cash June 17, 1995 3,291,909 10 32,919,090 Cash October 9, 1995 1,078,349 10 10,783,490 Cash November 25, 1995

11,867,142 10 118,671,420 Cash June 30, 1996 48,480,891 10 484,808,910 Cash September 30, 1996

7,615,181 10 76,151,810 Cash October 31, 1996 9,681,320 10 96,813,200 Cash November 5, 1997 4,400,600 10 44,006,000 Cash December 12, 1997

148,437,556 10 1,484,375,560 Cash December 31, 1997 2,788,506 10 27,885,060 Other than in Cash* July 21, 1999

61,218 10 612,180 Other than in Cash* December 24, 1999 12,789,992 10 127,899,920 Cash June 28, 2001 34,530,793 10 345,307,930 Bonus January 15, 2013

379,838,732 3,798,838,320

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* These shares were issued to sponsors of Lalpir, M/s AES Transpower Inc during preceding years against Project Development Expenses of Rs 28,497,240 incurred by them on behalf of the Company. There has been no other issue of shares during the preceding years other than those mentioned above.

3.11 PRINCIPAL PURPOSE FOR THE OFFER FOR SALE OF SHARES The principal purpose of the Offer for Sale is to list the company on the stock exchanges and to expand the ownership base of the Company, improving the governance structure of the Company and access to alternate capital resources.

3.12 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. Adamjee Insurance Company Limited and Security General Insurance Company limited participate in the insurance of the Company’s assets and they are interested to the extent of the premium income received from the Company.

3.13 DIVIDEND POLICY

The rights in respect of capital and dividends attached to each share are and will be the same. The Company in its general meeting may declare dividends but no dividends shall exceed the amount recommended by the Directors. Dividend, if declared in the general meeting, shall be paid according to the terms of the provisions of the Ordinance. The Directors may from time to time pay to the members such interim dividends as appear to the Directors to be justified by the profits of the Company. No dividends shall be paid otherwise than out of the profits of the Company for the year or any other undistributed profits. No unpaid dividends shall bear interest or mark-up against the Company. The dividends shall be paid within the period laid down in the Ordinance.

3.14 ELIGIBILITY FOR DIVIDEND

The shares being offered for sale shall rank pari-passu with the existing Ordinary shares of the Company in all matters including the right to such bonus or right issue and dividend as may be declared by the Company subsequent to the offer of such shares.

3.15 DEDUCTION OF ZAKAT

Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat and Ushr Ordinance, 1980. (XVIII of 1980) 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.

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3.16 CAPITAL GAINS TAX

Capital gains derived from the sale of listed securities are taxable in the following manner under section 37A of the Income Tax Ordinance, 2001;

Tax Rate

Holding period of securities

S. No. Tax Year less than six

months more than six months

and less than 12 months more than 12

months 1 2011 10.0% 7.5% 0%

2 2012 10.0% 8.0% 0%

3 2013 10.0% 8.0% 0%

4 2014 10.0% 8.0% 0%

5 2015 17.5% 9.5% 0%

6 2016 - 10.0% 0%

3.17 WITHHOLDING TAX ON DIVIDENDS

Dividend distribution to shareholders will be subject to withholding tax at the reduced rate of 7.5% as specified in Clause 20 of Part 2 of the Second Schedule to the Income Tax Ordinance, 2001.

3.18 SINDH SALES TAX ON SALE/PURCHASE OF SHARES

Under the Constitution of Pakistan and Articles 49 of the 7th NFC Award the Government of Sindh has promulgated the Sindh Sales Tax on Services Act, 2011 (Sindh Act No. XII of 2011) (the Act) which has taken effect from 01 July 2011. The Sindh Revenue Board constituted under the Act (Sindh Act No. XI of2010) administers and regulates the levy and collection of the Sindh Sales Tax (SST) on the taxable services provided or rendered in Sindh. 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 under section 41(1) of the Sindh Sales Tax Rules, 2011, dated 30th June 2011 The Second Schedule of the Act levies a sales tax on Brokerage at the rate of 16%. The sales tax is withheld as per the requirements of Sindh Sales Tax Special Procedure (Withholding) Rules, 2011.

3.19 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.

3.20 TAX CREDIT FOR INVESTMENT IN OFFER FOR SALE Under section 62 of the Income Tax Ordinance, 2001, a resident person other than a company, shall be entitled to a tax credit 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. Time limit for holding of shares has been designated as 36 months to avail tax credit. The amount of investment, eligible for tax credit, is prescribed in section 62 of the said Ordinance.

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3.21 EXEMPTION FROM INCOME TAX

Income of the company derived from the electric power generation project is exempted from income tax under clause 132 of Part-I of the Second Schedule to the Income Tax Ordinance, 2001.

3.22 DEFERRED TAXATION The profits and gains of the company derived from electric power generation are exempt from tax under terms of clause 132 of Part 1 of the Second Schedule to the Income Tax Ordinance, 2001 therefore no provision for deferred taxation is required to be made by the Company.

3.23 JUSTIFICATION FOR THE PREMIUM Guaranteed Off-take: Lalpir Power Limited has entered into a 30 year Power Purchase Agreement (“PPA”) dated November 03, 1994 with WAPDA (the 30-year period took effect from commencement of commercial operations in November 1997), which guarantees the purchase of power generated by Lalpir Power Limited. The GoP has guaranteed Capacity Payment at 60% Plant load factor to cover the financing costs, fixed operating costs and equity return; payable on the dependable power generation capacity irrespective of the level of dispatch.

Fixed Rate of Return: Under the PPA, WAPDA has contracted to pay Lalpir a fixed return over the life of the project. Under the terms of the PPA, WAPDA has guaranteed reimbursement of 229.64 gm/kwh of fuel against energy produced. Furthermore WAPDA has also guaranteed Capacity Payment at 60% Plant load factor to cover the financing costs, fixed operating costs and equity return; payable on the dependable power generation capacity irrespective of the level of dispatch. The tariff structure outlined in the 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 thus providing a hedge against exchange rate fluctuations. The contracts also have full provisions to cover foreign currency loans and currency indexation for foreign currency expenses. For further detail please refer Power Purchase Agreement which shall remain available at the Company’s registered office from the date of publication of OFSD till the closing of the subscription list. Successful Operational History: Lalpir Power Limited has a past record of 15 years of successful commercial operations, having officially started operations on November 6, 1997. The Plant total potential capacity generation is 3,066 mn kwh although it generated 1,686 mn kwh of energy as demanded by WAPDA thus its capacity utilization was 55% for the year ended Dec 31, 2012. The generation is dependent on demand from WAPDA. Furthermore the plant operated at an efficiency level of 37% for the year ended Dec 31, 2012. The efficiency level is calculated as calorific value of the electricity generated over caloric value of the furnace oil consumed multiplied by 100. Dividend history: The Company has a strong dividend payout history with an average dividend payout of 104.94% over the period FY08 to FY12. The floor price of PkR15 per share offers a CY12 dividend yield of 18.79% (post bonus) versus a CY12 dividend yield of 6.42% of KSE 100 Index. We have also given below a detailed comparison of dividend payout by Lalpir Power Limited and leading power sector Companies namely Pak Gen Power Limited, Hub Power Company Limited, Nishat Chunian Power Limited, Nishat Power Limited and Kot Addu Power Company Limited. Based on the CY12 results, the Lalpir Power Limited is offering dividend yield of 18.79% (post bonus) in comparison to the average Dividend yield of 12.11% of sample power sector Companies.

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Source: Financial Statements of the Company Sparse Competition: The total energy requirement of Pakistan stands at 20,300MW (FY 2012)1 with an energy deficit in the country stands at around 4,000 MW. Given the industry structure with earnings based on availability coupled with energy dearth in the country, competition among existing players remains thin. Reduced bargaining power of Suppliers: The current stream of operations is backed by a GoP guarantee reducing bargaining power of suppliers as contracts are backed by sovereign guarantee. Strong Sponsor Profile: The group of sponsors is very stable and strong with 32% held by Nishat Mills Limited, 8% each by Adamjee Insurance Company Limited and Mian Hasan Mansha, 2% by Security General Insurance Company Limited, 30% by Stanhope Investments of Abu Dhabi Investment Council and the remaining 20% by Engen (Private) Limited, a City School Group Company. The sponsor also own and operates 3 more power projects namely Pak Gen Power Limited, Nishat Chunian Power Limited and Nishat Power Limited. Attractive Floor Price: The floor price of PkR15 per share represents an attractive discount of 50.9 % based on CY12 P/E ratio of Lalpir of 3.94 times versus the P/E ratio of KSE 100 Index of 8.03 times. Furthermore we also undertaken relative valuation based on comparison of Lalpir Power Limited with leading power sector Companies. For relative valuation we have considered the following Companies:

Kot Addu Power Company Limited

Hub Power Company Limited

Nishat Chunian Power Limited

Nishat Power Limited

Pak Gen Power Limited

The following table highlights the trading multiples of the above mentioned Companies:

1 ADB, NEPRA

Lalpir Power Limited FY08 FY09 FY10 FY11 FY12 FY12

Pre Bonus Post Bonus

No. of shares ('000) 345,307.94 345,307.94 345,307.94 345,307.94 345,307.94 379,838.73

Earning per share (PkR) 3.34 5.30 4.37 4.15 4.19 3.81

Dividend per share (PkR) 8.55 1.09 0.75 6.50 3.10 2.82

Payout ratio (%age) 256.33% 20.58% 17.16% 156.63% 73.99% 73.99%

Floor Price (PkR per share) 15.00 15.00 15.00 15.00 15.00 15.00

Trailing dividend yield (%age) 57.00% 7.27% 5.00% 43.33% 20.67% 18.79%

Trailing simple average dividend yield (%age) 26.65%

Simple Average payout ratio (%age) 104.94%

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Sample Power Sector Companies (CY12) PKGN HUBCO NCPL NPL KAPCO

No. of shares ('mn) 372.08 1,157.15 367.35 354.09 880.25

Earning per share (PkR) 5.46 8.92 6.58 7.13 8.01

Dividend per share (PkR) 3.00 6.50 3.50 2.00 6.80

Payout ratio (%age) 54.96% 72.89% 53.16% 28.05% 84.87%

Book Value 37.43 27.69 18.20 23.05 27.90

Market Price (PkR) - 29th March 2013 20.33 50.26 29.36 25.14 52.42

P/E 3.72 5.64 4.46 3.53 6.54

P/B 0.54 1.82 1.61 1.09 1.88

Trailing dividend yield (%age) 14.76% 12.93% 11.92% 7.96% 12.97%

Average Dividend Yield (%) 12.11%

Average Multitple P/E (x) 4.78

Average Multiple P/B (x) 1.39

Source: Financial Statements of the Company Based on the floor price of PkR15 per share represents an attractive discount of 17.5 % based on CY12 P/E ratio of Lalpir of 3.94 times versus the Average P/E Multiple of sample Power Sector Companies of 4.78 times. Furthermore when we compare the CY12 P/B ratio of Lalpir Power Limited of 0.47 with Average P/B Multiple of sample Power Sector Companies of 1.39 times, the Lalpir Power Limited P/B ratio presents a discount of 66.18%.

Relative Multiples CY12

Power Sector MultiplesAverage P/E multiple (x) 4.78 Average P/B multiple (x) 1.39 Average Dividend Yield (%) 12.11%

Lalpir Power Limited

No of Shares (mn) 379.80

Earning per share (PkR) 3.81

Dividend Yield (%) 18.79%

Book Value (post bonus) 32.13

Floor Price per share (PkR) 15.00

P/E multiple (x) 3.94

P/B multiple (x) 0.47

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PART 4

4. UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES

4.1 UNDERWRITING

BOOK BUILDING PORTION

AKD Securities Limited and Next Capital Limited have been mandated as the Joint Book Runners to the Offer. The Joint Book Runners will underwrite the Book Building portion of the offer which comprises of 28,488,000 Ordinary Shares within two (2) working days of the closing of the bidding period as required under clause 5 of Appendix 4 of the Listing Regulations of the Karachi Stock Exchange Limited and the Lahore Stock Exchange Limited at the strike price determined through the book building process. In the opinion of the Offerers, the resources of the Underwriters are sufficient to discharge their underwriting commitments/obligations. PUBLIC PORTION As required under clause 6 of Appendix 4 of the Listing Regulations of the Karachi & Lahore Stock Exchange Limited, the public portion of the issue 9,496,000 ordinary shares will be underwritten as follows:

Name of Underwriter Number of Shares Underwritten Amount (PKR) TOTAL

Names of the underwriters and number of shares underwritten by each of them along with amount shall be disclosed in the final Offer for Sale Document If, and to the extent, the 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 ____ days of being called upon to do so by the Offerers, (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 of the Shares Underwritten. In opinion of the Offerers, the resources of the Underwriters are sufficient to discharge their underwriting commitments.

4.2 UNDERWRITING BOOK BUILDING PORTION The Joint Book Runners will be paid book running and underwriting commission at the rate of 0.3% of the Book Building portion of the issue. In addition to the underwriting commission, the Joint Book Runners will be paid a take -up commission at the rate of 1.5% of the amount taken up.

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GENERAL PUBLIC PORTION The underwriters will be paid an underwriting commission at the rate of 1.5% of the amount underwritten by them. In addition, a take-up commission at the rate of 1.5% shall be paid to the underwriters on the value of the shares to be taken-up by virtue of their respective underwriting commitments/obligations.

4.3 BUY BACK/REPURCHASE AGREEMENT

THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY BACK/RE-PURCHASE AGREEMENT WITH THE OFFERORS OR ANY OTHER PERSON IN RESPECT OF THIS OFFER.

ALSO, NEITHER THE OFFERORS NOR ANY OF THEIR ASSOCIATES HAVE ENTERED INTO ANY BUY BACK/REPURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ASSOCIATES. THE OFFERRERS AND THEIR ASSOCIATES SHALL NOT BUYBACK/REPURCHASE SHARES FROM THE UNDERWRITERS AND THEIR ASSOCIATES.

4.4 COMMISSION TO THE BANKERS TO THE OFFER

Commission at the rate of 0%-1.0% of the amount collected on allotment in respect of successful applicants will be paid by the Offerers to the Bankers to this Offer for services to be rendered by them in connection with this Public Offer, plus out-of-pocket expenses, if any.

4.5 BROKERAGE

Brokerage shall be paid to the members of KSE, LSE and ISE at the rate of 1.0% of the value of shares actually sold through them. No Brokerage shall be payable in respect of shares taken up by the Underwriters by virtue of their underwriting commitments.

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4.6 EXPENSES OF THE OFFER

The expenses of this Offer for Sale are estimated not to exceed PKR 39,874,339. The breakup of these preliminary expenses is given below:

Expense Rate Amount (Rupees) Underwriting Commission – Book Building 0.3% 1,281,960 Underwriting Commission – General Public 1.50% 2,136,600 Take-up commission – Book Building* 1.50% 6,409,800 Take-up commission – General Public* 1.50% 2,136,600 Bankers to the Offer commission 0.50% 1,312,200 Brokerage to the members of KSE, LSE & ISE 1.00% 5,697,600 Joint Book Runners Fee 0.50% 2,136,600 Joint Lead Managers & Arrangers fee 1.50% 8,546,400 Printing, publication of OFSD & Application Forms etc. 2,000,000 KSE listing fee and charges: Initial Listing Fee 2,500,000 Annual Listing Fee 467,440 Service Charges 50,000 KSE Software Charges 500,000 LSE listing fee and charges: Initial Listing Fee 2,500,000 Annual Listing Fee 231,639 Service Charges 50,000 CDC fees and deposits 67,500 SECP Application and processing Fees 200,000 Legal & Professional Charges 500,000 Balloters, Transfers Agents and Share registrars fees 150,000 Miscellaneous costs 1,000,000

Total 39,874,339

* These amounts represent the maximum possible costs under these heads.

Out of the above expenses, the listing fees of KSE and LSE and processing fees of SECP will be borne by the Company while the balance expenses shall be borne by the Offerers.

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PART 5

5. OVERVIEW, HISTORY AND PROSPECTS

5.1 THE COMPANY Brief History Lalpir Power Limited (formerly AES Lalpir (Private) Limited) was incorporated in Pakistan on 08 May 1994 under the Companies Ordinance, 1984 by AES Corporation of USA. Lalpir was established under Government of Pakistan’s Policy for Power Generation Projects of 1994 as an Independent Power Producer (“IPP”) to own, operate and maintain an oil fired power station ("the Complex"), having gross capacity of 362 MW in Mehmood Kot, Muzaffargarh, Punjab, Pakistan. It commenced commercial operations in November 1997. The electricity generated is purchased by WAPDA under the Power Purchase Agreement (“PPA”) executed with the Company on November 3, 1994 for a period of 30 years (with effect from commencement of commercial operations in November 1997). In 2010, the Company was acquired by a consortium comprising of Nishat Mills Limited, Adamjee Insurance Company Limited, Security General Insurance Company Limited, Mian Hassan Mansha, Engen (Private) Limited and Stanhope Investments (Cayman Islands). The Company under the new management converted itself from a private limited company into a public limited company and the name of the Company was also changed from AES Lalpir (Private) Limited to Lalpir Power Limited. Objective of the Company The Company’s objective is to operate a power generation plant for generation, distribution, sale and supply of electricity to WAPDA and perform all acts directly or indirectly related or incidental to run the affairs of the Company.

THE SPONSORS

Nishat Mills Limited

Nishat Mills Limited, a major shareholder in Lalpir, has an asset base of over PKR 66.87 Billion and shareholders’ equity of more than PKR 45.92 Billion as at Dec 31st, 2012. As per the latest audited accounts for the period ended Dec 31st, 2012, its turnover and net profitability exceeds PKR 26.32 Billion and PKR 2.86 Billion respectively. It has a consistent record of rewarding shareholders through cash dividends and / or bonus shares. The shares of Nishat Mills Limited are traded as blue-chip scrip and are liked by both the local and international investors for its liquidity and potential capital gains. Nishat Power Limited, a subsidiary of Nishat Mills Limited got listed on stock exchanges in 2009. The principal activity of Nishat Power Limited is to build, own, operate and maintain a fuel fired power station based on Reciprocating Engine Technology having gross capacity of 200 MW ISO in Jamber Kalan, Tehsil Pattoki, District Kasur, Punjab, Pakistan. The shares of Nishat Power Limited were offered for Sale to the Public in August 2009 at a par value of PkR 10 each. Its closing price on KSE as at 12th March 2013th was PkR24.57 per share, over 140% gain in 3 years’ time.

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Mian Hassan Mansha

Mr. Hassan Mansha is the Chief Executive of Nishat Power Limited. He has over 11 years’ professional managerial experience. He has completed his education from USA.

Adamjee Insurance Company Limited

Adamjee Insurance Company Limited (AICL) was incorporated as a Public Limited Company on September 28, 1960 and is listed on all three stock exchanges of Pakistan. The Company commenced operations with a Paid-up Capital of PkR 2.5 million, which has grown phenomenally to PkR 1.24 billion as of December 31, 2012. The market price of AICL is PKR 70.25 per share as at 29th March 2013. AICL enjoys a competitive edge in the insurance industry due to its strong asset base, paid-up capital, substantial reserves and balanced portfolio mix. AICL broadly is involved in underwriting the following classes of businesses: Fire and Property Engineering Health Marine Motor In addition AICL insures sensitive Petrochemical and complex Industrial Risk projects of great value. AICL specializes in insuring Engineering and Telecom concerns, whereby it has secured the greatest share of clients in those sectors. On the other end of the spectrum, AICL services the primary industries of Pakistan by covering several Cement Factories, as well as numerous Textile and Sugar Mills. Assuming the role of a leader in Pakistan's Insurance Industry, AICL pioneered the coverage of Energy Risks.

The shares of AICL are actively traded and are liked by the local and international investors for AICL’s professional management, consistent growth, profitability and dividend distribution.

Security General Insurance Company Limited

Security General Insurance Company Limited was incorporated in 1996 with a paid up capital of PkR25 million which was increased from time to time and as of December 31, 2012, it stands at PkR 680 million. It is engaged in the business of non-life insurance coverage and operates through 8 branches in the country.

It is an unlisted company which has consistent record of growth, profitability and dividend payouts. The Company is an ISO 9001:2000 certified company from Moody International Certification Limited in underwriting risk and selling insurance.

Stanhope Investments

Stanhope Investments is a company formed under and by virtue of the laws of the Cayman Islands. It is a wholly owned subsidiary of a sovereign wealth fund in the GCC and has no shareholders or beneficial owners other than the fund.

Engen (Private) Limited:

Engen (Private) Limited belongs to the City Schools (Private) Limited (“City Schools”) group of companies. Engen has been primarily established to carry on business of power generation and distribution as independent power producer. City Schools is a private limited company incorporated

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in Pakistan on September 20, 1980 under the Companies Act, 1913 (now the Companies Ordinance, 1984) in the name of BPS (Karachi) Limited. The name was subsequently changed to City Schools (Private) Limited on February 24, 1986. City Schools is in the business of setting up and operating educational institution. City Schools is a pioneer in English medium private sector K-12 education in the region. Group Companies of City Schools: Engen (Private) Limited City Hospitality Management Services (Private) Limited Education System (Private) Limited Shalimar Construction Company (Private) Limited City APIIT Pakistan (Private) Limited

5.2 REGULATORY APPROVALS/OPERATIONAL CONTRACTS

Lalpir Power Limited has been issued a Generation License by National Electric Power Regulatory Authority (“NEPRA”). Other Key approvals/operational contracts are listed below:

Key Contracts Counter Party Execution Date

Implementation Agreement (IA) President, Islamic Republic of Pakistan September 24, 1994 Power Purchase Agreement (PPA) WAPDA November 3, 1994 Fuel Supply Agreement (FSA) Pakistan State Oil Company Limited November 6, 1994 GOP Guarantee Government of Pakistan May 16, 1995

5.3 LOCATION OF THE PLANT

Lalpir’s power generation plant is located in Mehmood Kot, Muzaffargarh, Punjab, Pakistan. The location of the plant has developed infrastructure with all the supporting facilities for smooth operations of the plant.

5.4 PLANT

The power project set up by the Company has a gross generation capacity of 362 MW with a net generation dependable capacity of 350 MW. It is a residual furnace oil based power project. The Plant has operated at a capacity of 55% during the year 2012. Plant Type Conventional Fuel Fired Thermal Power Station Manufacturers Boiler / Turbine - MHI Japan Generator - Parsons Inc Model Boiler A-701

Turbine N-1341 Generator NE62YL – 7091

Remaining Useful Life 14 years

The main power block consists of a single, residual fuel oil-fired 1,200,000 Kg/h, forced draft boiler and a single 362 MW reheat, condensing, two casing, double flow type steam turbine generator. The fuel supply to the Complex is via rail road to Mahmud Kot and an approximately 1.50 Km pipeline to the Site. Plant construction started in 1995 and completed in Nov 1997. Commercial operations started on Nov 05, 1997. Complete plant and equipment was brand new. The plant and equipment was supplied, erected and constructed by the original manufacturer Mitsubishi Heavy Industries of Japan.

Interconnection with the WAPDA system is via a 220 Kv, conventional type, 5- circuit breaker outdoor substation. The Company’s fuel supplier is Pakistan State Oil (PSO), the leading local oil

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marketing company. The Fuel Supply Agreement (FSA) is backed by a government guarantee, which mitigates the reliance on a single fuel supplier. RFO is delivered to the Company through pipelines as agreed in FSA.

The plant got submerged in 2010 floods in Pakistan. The rehabilitation of plant was completed as per the recommendation of investigation report by the engineers of Mitsubishi Heavy Industries Limited and the operations of plant were resumed on 22 December 2010, after remaining closed for 139 days. Some of the key information regarding the plant is given below:

Location Mehmood Kot, Muzaffargarh, Punjab, Pakistan Total Gross Capacity 362 MW Net Dependable Capacity 350 MW Plant Configuration 1x362 MW steam turbine Technology Oil-Fired Steam Turbine Commercial Operations Date November 6, 1997 Fuel Residual Furnace Oil (RFO) Fuel Supply Agreement Pakistan State Oil Company Limited (“PSO”) Power Purchase Agreement 30 Years

Under the terms of the PPA with WAPDA, any variation in the fuel price is to be passed on to WAPDA so variation in fuel price does not pose any risk to the project profitability based on a fixed fuel consumption of 229.64 gm/kwh allowed under the PPA. Actual fuel consumption varies with the capacity and load factor of the plant thus resulting in loss at lower load factor. The average fuel consumption for FY11 and FY12 has remained at around 241.20 gm/kwh and 240.69 gm/kwh which results in an average fuel efficiency loss of 5.2% from the benchmark PPA efficiency. In order to mitigate the fuel losses due to lower than contractual efficiency, the Company has undertaken Balance Modernization and replacement (BMR). BMR will help improve the Heat Rate and the fuel efficiency thereby improving profitability of the Company. The Company is installing variable frequency drives for improving the auxiliary load and the heat rate. Furthermore, the Company is also undertaking initiative for improvement in fuel efficiency by replacing the turbine rotar using the latest technology available from the original equipment manufacturer. The BMR will help bring down the fuel losses. The Company will be incurring capex amounting to more than PKR 3 billion over the next 2 years as part of the BMR initiative. BMR will be partly financed through the Debt and partly through internal cash flow. The Company has already established Letter of Credit (LC) with the Banks for the same. These Projects will be completed by 2013-14. Some of the efficiency improvement projects are already in the installation stages.

5.5 CAPACITY & UTILIZATION

Capacity and Utilization CY2008 CY2009 CY2010 CY2011 CY2012 Net Generation (GWH) 1,824.3 1,995.3 1,439.4 1,767.6 1,686.39 Utilization (%) 59.3 65.4 75.9 57.7 54.8 Available (%) 90.9 90.6 95.1 97.5 98.9 Unutilized Capacity (%) 31.6 25.2 19.2 39.8 44.1

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5.6 DEMAND & SUPPLY DYNAMICS – POWER SECTOR

Pakistan has 22,477 MW2 installed power generation capacity, but only 10,775 MW is produced in the system. Of the 10,775 MW that is generated, the largest proportion of this capacity is generated by thermal plants (62.5%), followed by hydel (33.6%) and nuclear (3.9%). Domestic users are the largest consumers of electricity comprising (46.5%), followed by the industrial sector (27.5%), agriculture (11.6%) and the commercial sector (7.5%). At present, Pakistan finds itself very short of a sufficient power supply and faces an average deficit of about 4,000 MW – 5,000 MW. The average supply shortfall is expected to at hover around 4,700 – 5,000 MW for FY2012 – 2013.

This spike in shortfall is primarily due to the following reasons:

Inadequate investment in the power sector Non-Optimal capacity utilization of the existing power plants Significant generation and transmission losses Increase in consumption and usage pattern

The following graph depicts the disparity between demand and supply of electricity: 3

Source: NEPRA State of Industry Report 2012 The Government of Pakistan is focused on tackling the power crisis in the country. Its Policy for Power Generation Projects of 1994 and subsequently of 2002 aimed to promote private investment in the sector. As a result, 28 IPPs are currently operating in the country with gross installed capacity of 8,386 MW (39% of total production capacity). To cope with the severe power shortages anticipated in the near future, the Government of Pakistan has introduced extensive plans to develop hydropower, coal and wind resources and introduce more gas-fired generation. But due to time constraints, the Government of Pakistan has requested the IPP’s to make proposals to expand their capabilities on a fast track basis under the framework of the Policy for Power Generation Projects 2002.

2 Pakistan Energy Yearbook 2011

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The Government of Pakistan has initiated a number of measures to incentivize IPP’s, which include:

Guaranteed USD based returns

One window operation through PPIB to facilitate the investors

Adequate cost indexations

4Monthly review of fuel charges

Fiscal incentives

Guaranteed off-take of power produced

Fast tracked regulatory approvals

5.7 RISK FACTORS

In making the investment decision, the investor may take into consideration the following risk factors:

5.7.1 CAPITAL MARKET RISK Price of shares will depend on the stock market behavior and performance of the Company. Hence, price may rise or fall and result in increase or decrease in the value of shares.

MITIGANT

Although the rise or fall in market price is mainly governed by market forces, however from a fundamental point of view, the investor’s sentiment is mainly driven by strong financial performance. We believe that the Company is likely to perform in future due to its experienced management, strong group profile & proven track record.

5.7.2 UNDER SUBSCRIPTION RISK There is a risk that the Public Issue may get under-subscribed on account of lack of investors’ interest

MITIGANT

The floor price is attractively set at PkR15 per share. The cut-off price of the offer will be determined by demand for the shares in the book building process. This coupled with the strong profile of the sponsors, management profile and performance of the Company, reduces the probability of under-subscription. The public issue is fully underwritten by Commercial Banks and Other Financial Institutions

5.7.3 REGULATORY RISK This is the risk that the regulatory policies unfavorable for the power sector are imposed.

MITIGANT

The Company always ensures that it complies with the regulatory requirements. However Pakistan has witnessed a continued phase of economic growth, supported inter alia by continuity in

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investment and economic growth friendly policies. These policies are expected to continue and adverse shift in regulatory and policy framework is considered unlikely

5.7.4 OFF-TAKE RISK

Uncertainty of selling the power generated. Risk of variation in dispatch from the Project MITIGANT

Lalpir Power Limited has entered into a 30 years Power Purchase Agreement (PPA) with WAPDA, which guarantees purchase of power generated by the Company. WAPDA is contractually obligated to pay the Capacity Payments to cover the financing costs, fixed operating costs and equity return; payable on the available capacity irrespective of the level of dispatch. PPA is effective from 1997 and will expire in 2027.

5.7.5 INTEREST RATE Fluctuation in interest rate may result in variability in the Company’s profitability MITIGANT

The interest payment component of the Capacity Payment is indexed to variations in the respective benchmark interest rate .i.e. KIBOR

5.7.6 EXCHANGE RATE Risk of PKR depreciating against USD may result in variability in the Company’s profitability MITIGANT

Foreign currency component of O&M costs, interest payment and principal repayment component are indexed to variations in the USD/PKR exchange rate. Exchange rate risk is thus effectively a pass-through to the Power Purchaser. GoP provides guarantee on availability of foreign currency, free transfer and repatriation of funds under the Implementation Agreement

5.7.7 FUEL PRICE RISK

Increase in the fuel price may result in variability in the Company’s profitability due to efficiency losses. Actual fuel consumption varies with the capacity and load factor of the plant thus resulting in loss at lower load factor. The average fuel consumption for FY11 and FY12 has remained at around 241.20 gm/kwh and 240.69 gm/kwh which results in an average fuel efficiency loss of 5.2% from the benchmark PPA efficiency MITIGANT

Under the terms of the PPA with WAPDA, any variation in the fuel price is to be passed on to WAPDA so variation in fuel price does not pose any risk to the project profitability based on a fixed fuel consumption of 229.64 gm/kwh allowed under the PPA. In order to mitigate the fuel losses due to lower than contractual efficiency, the Company has undertaken Balance Modernization and replacement (BMR). TheFurther Company has signed a contract with MHI (OEM of Turbine) for installation of Rotar Blade in the turbine to improve efficiency. The OEM has guaranteed 1.5% improvement in the turbine cycle heat rate with reference to the turbine heat rate determined in the performance test of January 25th, 2011. In addition, the management is undertaking various other capital projects to improve the project efficiency which will be completed in 2013-14.

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5.7.8 CIRCULAR DEBT RISK

Risk that WAPDA is unable to clear its dues to the Company and the Company in turn is unable to pay its obligations. MITIGANT

Resolving the circular debt issue is the top priority of GoP. This is a credible risk confronting the whole Energy Sector and its stake holders. The Government has injected PkR500bn through Term Finance Certificate financing over the past 4 years. Furthermore, GoP has also increased focus towards rationalization of power tariffs to match generation cost in a phased manner. We believe that the initiatives taken by the GoP will help reduce the circular debt issue in medium to long term as it’s the most important sector of the economy. However, it may take a few years to overcome the issue completely subject to the steps in the right direction. The Company has sufficient working capital lines to meet its fixed obligations for a short to medium term. Company is obliged to pay in advance to the fuel supplier. Hence, it produces power to the extent WAPDA pays for its Energy Payments else it does not operate the plant. WAPDA is obliged to pay capacity charges regardless of the dispatch.

5.7.9 ECONOMIC RISK Demand and supply dynamics for the power generation can pose threat to Company’s profitability

MITIGANT

As per the PPA, WAPDA is bound to pay the fixed costs of the project along-with the return of equity regardless of the variation in the dispatch requirements of WAPDA. Hence project profitability is ensured.

5.7.10 POLITICAL / COUNTRY RISKS Uncertain political conditions can pose threat to Company’s profitability

MITIGANT

Protection has been provided to the Company by the Government of Pakistan under the Implementation Agreement

5.7.11 RISK OF FLOODS Risk that any floods may cause interruption in the operations of plant and damage the plant and machinery

MITIGANT

In order to protect the company the plant from floods in future, the Company has constructed a 20 ft concrete wall around the plant.

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5.7.12 RISK OF LIQUIDATION DAMAGES

The risk of non-availability of Plant for electricity generation

MITIGANT

Provisions of the Power Purchase Agreement include imposition of Liquidated Damages. If for a period of 18 consecutive days, the Company is unable to deliver Net Electrical Output in an amount exceeding 50% of the Dispatch levels requested by WAPDA beyond Force Majure reasoning and are within the Technical Limits of the Complex and are not caused by Maintenance Outage or a Scheduled Outage (or a breach or default by the GoP under the Implementation Agreement or the Guarantee) then WAPDA shall be entitled to suspend the payment of Capacity Payments. Any Capacity Payments or portions thereof not paid by WAPDA shall be credited towards the payment of any liquidated damages payable by the Company. The Company as per CY12 end has disputed Liquated Damages of PkR1.39bn due to non-payment of dues by WAPDA amounting to PkR 10.590bn as at 31 December 2012.

NOTE: IT IS STATED THAT ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING HAS BEEN CONCEALED IN THIS RESPECT.

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PART 6

6 FINANCIAL INFORMATION

6.1 AUDITORS REPORT UNDER SECTION 53(1) READ WITH CLAUSE 28 (1) AND 28(2) OF SECTION 2 OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES ORDINANCE, 1984 FOR THE PURPOSE OF INCLUSION IN THE OFSD OF LALPIR POWER LIMITED

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6.2 SHARE BREAK-UP VALUE CERTIFICATE

Note–The Company has issued 10% Bonus as at 15th Jan 2013. Based on the post bonus no

of shares i.e. 379,838,732 Ordinary Shares, the Book value of Lalpir power Limited amounts to PKR 32.13 per share

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6.3 AUDITORS CERTIFICATE ON ISSUED, SUBSCRIBED, AND PAID -UP-CAPITAL OF THE

COMPANY

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6.4 REVIEWED MANAGEMENT ACCOUNT FOR THE PERIOD ENDED 31 S T March 2013

Profit and Loss Account

Revenue 8,076,031

Cost of Sales (7,455,710)

Gross Profit 620,321

Administrative Expenses (34,310)

Other Operating Expenses (1,368)

584,643

Other operating Income 7,792

Profit from operations 592,435

Finance Cost (253,774)

Profit before Taxation 338,661

Provision for Taxation -

Profit After Taxation 338,661

Other Comprehensive Income -

Total Comprehesive Income for the year 338,661

Earning per share basic and Diluted (PKR) 0.89

Un-Audited

31-March -2013

(Rupees in '000)

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Balance Sheet

EQUITY AND LIABILITIES

Issued, subscribed and paid up share capital 3,798,387

Capital reserve 107,004

Revenue Reserves 8,255,319

Total equity 12,160,710

LIABILITIES

NON-CURRENT LIABILITIES

Deferred liabilities 20,065

CURRENT LIABILITIES

Trade and other payables 781,493

Interest accrued on short-term borrowings 237,959

Short-term borrowings-Secured 9,238,024

10,257,476

Total liabilities 10,277,541

Total Equity and Liability 22,438,251

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 8,306,431

Long-term loans 49,041

8,355,472

CURRENT ASSETS

Stores, spare parts and other consumables 673,153

Fuel stock 326,052

Trade debts 10,664,640

Advances and short-term prepayments 501,602

Other receivables 385,864

Sales tax recoverable 1,212,631

Cash and bank balances 318,837

14,082,779

Total Assets 22,438,251

Un-Audited

31-March -2013

(Rupees in '000)

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6.5 SUMMARY OF FINANCIAL HIGHLIGHTS

Lalpir Power Limited (Amount in 'mn)

FY2008 FY2009 FY2010 FY2011 FY2012

Revenue 20,880 19,390 17,968 29,670 32,907

Gross Profit 2,556 2,634 1,624 2,386 2,491

Profit Before Taxation 1,156 1,840 1,478 1,432 1,446

Profit After Taxation 1,152 1,829 1,508 1,432 1,446

Non Current Assets 8,008 7,544 7,624 7,872 8,394

Current Assets 7,701 8,282 9,868 11,640 14,440

Total Assets 15,710 15,826 17,492 19,512 22,834

Total Equity 9,594 11,050 12,262 11,967 12,205

Long Term Liabilities 44 21 10 13 14

Current Liabilities 6,071 4,754 5,220 7,532 10,615

Total Equity & Liabilities 15,709 15,825 17,492 19,512 22,834

Earning per share (PKR) 3.34 5.30 4.37 4.15 4.19

Book Value per share (PKR) 27.78 32.00 35.51 34.66 35.34

No of Shares 345.31 345.31 345.31 345.31 345.31

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Lalpir Power Limited

FY2008 FY2009 FY2010 FY2011 FY2012

EPS (PKR) 3.34 5.30 4.37 4.15 4.19

Break up value per share (PKR) 27.78 32.00 35.51 34.66 35.34

ROE (%) 12.00% 16.55% 12.30% 11.96% 11.85%

ROA (%) 7.33% 11.55% 8.62% 7.34% 6.33%

Dividend per share (PKR) 8.55 1.09 0.75 6.50 3.10

No of Shares (mn) 345.31 345.31 345.31 345.31 345.31

6.6 FINANCIAL RATIOS

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PART 7

7 MANAGEMENT AND RELATED MATTERS 7.1 BOARD OF DIRECTORS OF THE COMPANY

Name and Address Designation Other Directorships

Mian Hassan Mansha House no. 28 main Gulberg, Lahore

Director/ Chairman

Nishat Power Limited Pakistan Aviators & Aviation (Pvt) Ltd. Nishat Hotels & Properties Limited Nishat Automobiles (Pvt) Ltd Nishat Mills Limited Security General Insurance Co. Ltd. Pakgen Power Limited Nishat Hospitality (Pvt) Limited Nishat Dairy (Pvt) Limited Nishat Agriculture Farming (Pvt) Limited Nishat Real Estate Development Co (Pvt.) Limited

Mr. Aurangzeb Firoz House no. 90, Khayaban-e-Hafiz, DHA, Karachi

Director/ Chief

Executive Officer

Pakgen Power Ltd Educational System (Pvt) Ltd City Asia Pacific Institute of Information City Hospital Management Services (Pvt) Ltd Engen (Private) Ltd

Mr. Mark Nicholas Cuits Georgia USA

Director Pakgen Power Ltd

Mr. Omar Liaqat 9th Aziz Bhatti Road, Lahore Cantt, Lahore

Director Pakgen Power Ltd

Mr. Kamran Rasool 1 Golf Lane, GOR 1, Lahore

Director Pakgen Power Ltd Adamjee Insurance Co. Ltd Pakistan Agricultural Storage and Services

Corporation Ltd Hameed Latif Medical College Bakhtiwar Ameen Trust Hospital

Mr. Khalid Qadeer Qureshi House No. 128-III, Block F, Model Town, Lahore

Director D.G. Khan Cement Co. Ltd Nishat Power Ltd Nishat Mills Ltd Pakgen Power Ltd Nishat Paper Products Co. Ltd Pakistan Aviators and Aviation (Pvt) Ltd

Mr. Mahmood Akhtar House No. 91-4-E, Block F, Model Town ,Lahore

Director Pakgen Power Ltd Security General Insurance Co. Ltd Nishat Hospitality (Pvt) Ltd

Mr. Samir Hammami Abu Dhabi UAE , Abu Dhabi Investment Council PO Box 61999

Alternate Director to Mr. Mark Nicholas

Pakgen Power Ltd

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7.2 OVER DUE LOANS

There are no overdue loans (local or foreign currency) on the Company or its Directors.

7.3 DIVIDEND RECORD OF ASSOCIATED COMPANIES – LISTED ON STOCK EXCHANGE(S)

Name of the Company 2012 2011 2010 2009 2008

Nishat Mills Limited Cash Dividend 35% 33% 25% 20% 25%

Bonus - - - - -

Adamjee Insurance Limited Cash Dividend 25% 10% 25% 30% 25%

Bonus - - - 10% 10%

DG Khan Cement Company Limited Cash Dividend 15% - - - -

Bonus - - - - -

Pak Gen Power Limited Cash Dividend 30% 65% - - -

Bonus - - - - - Nishat Power Limited Cash Dividend 20% - - - -

Bonus - - - - -

7.4 MANAGEMENT PROFILE Mr. Aurangzeb Firoz – Chief Executive Officer

Mr. Firoz is currently heading the organization as the Chief Executive Officer of Lalpir Power Limited. He is a graduate of the Lahore American School and University of London and has played a fundamental role in the planning and operations of the Company. His prime expertise is focused in the areas of Finance, Business Strategy and Operations Management. Apart from Lalpir Power Limited, Mr. Firoz is also the Director of The City Schools Group and has been instrumental in providing strategic and operational support in driving business expansion into the Arab States for ‘City Schools’ (Pvt) Ltd.

Mr. Firoz also holds directorships of Educational System (Pvt.) Limited, City APIIT (Pakistan) (Pvt.) Limited, Engen (Pvt.) Limited, Pakgen Power Limited and City Hospitality Management Services (Pvt.) Limited. His primary interest remains in the development of new projects especially in Power & Energy and the Education sector of Pakistan.

Mr. Shahid Zulfiqar Khan – Executive Director Mr. Khan is a Cost & Management Accountant by profession. He is serving as the Executive Director of Lalpir. He brings on board experience of 23 years primarily in the power sector. He has been associated with the project for the past 17 years. Mr. Khalid Qadeer Qureshi –Director Finance

Mr. Qureshi is a Fellow member of the Institute of Chartered Accountants of Pakistan. He has more than 45 years’ experience of comprehensive in-depth financial management across corporate, finance, accounting, treasury and information systems development and implementation. During his professional tenure he has been actively associated in mergers, IPOs, developing feasibilities reports, private placement of debt & equity as well as restructuring.

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Mr. Khalid Mahmood Chohan – Company Secretary

Mr. Khalid Mahmood Chohan has 30 years of experience in Accounts, Taxation and particularly shares and corporate. He joined Nishat Group in 1982 and is presently working as Company Secretary of Nishat Mills Limited, D. G. Khan Cement Company Limited and other non-listed Group Companies. Mr. Syed Arshad Ali Zaidi – Head of Internal Audit Mr. Syed Arshad Ali Zaidi is a fellow member of Association of Chartered Certified Accountants (UK). He has more than 12 years’ experience of audit, implementation of internal control charter, risk assessment and measures to mitigate risks. He is serving in NISHAT GROUP since 2005. He is actively providing his valuable input in evaluation and recommendations for improvement in Accounting and Internal Control Systems. Mr. Tanveer Nazar – Manager Commercial

Mr. Nazar is a Manager Commercial at Lalpir Power Limited. He is a Chemical Engineer by qualification and has 35 years’ of experience in Power and Cement Industry. Mr. Naveed Ahmed – Manager Electrical & Instrumentation

Mr. Naveed is a graduate in Electrical Engineering. He holds 8 years’ experience in Instrumentation and Electrical field. He was a lead person in DCS Replacement Project at Lal Pir and Pak Gen.

Mr. Abdul Quddus Abbasi- Manager Mechanical Maintenance

Mr. Abbasi is a manager Mechanical Maintenance. He brings 32 years of experience of Power Industry. By qualification he is DAE Mechanical, LLB and have advance Power Plant O&M Certificate from UK. He was a Director Generation at Bin Qasim Power Plant in 2008-2009. Mr. Faqir Muhammad – Manager Central Control Room

Mr. Muhammed is a B Tech Electrical Engineering. He is responsible for managing the Plant operation and its performance at Lalpir Power Limited. He has 27 years of professional experience in Power Industry.

Mr. Muhammad Yasin Ahmed – Manager Turbine Area Mr. Yasin is a Manager Turbine Area. He has 33 years of experience in Power Industry. By qualification he holds DAE – Mechanical BSE. Muhammad Yunas – Manager Boiler Area Mr. Yunas is a Graduate in Mechanical Engineering and has also completed MBA in Corporate Finance. He has versatile experience of Power Industry over a decade. He is managing Boiler Operation.

Farhan Javed – Manager Balance of plant (BOP) Mr. Javed is a Graduate in Chemical Engineering and also holds additional qualification of MBA and L.L.B. Mr. Farhan is working with LalPir as Manager Balance of plant. He possesses 10 years of experience in Power and oil sector. Mr. Javed also has international memberships for Institution of Chemical Engineers UK and Environment Institute of Australia and New Zealand (EIANZ). He is also

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RCA UK certified lead auditor for ISO 14001 environment standard. Mr. Javed experience includes power plant operations, business development, commercial and EHS.

7.5 PROFILE OF DIRECTORS

Mr. Hassan Mansha – Director/Chairman

Mr. Hassan Mansha has over 11 years of professional managerial experience. He has completed his education from USA and is presently serving on the Board of Nishat Mills Limited, Security General Insurance Company Limited , Pakistan Aviators & Aviation (Private) Limited, Adamjee Insurance Company Limited and Lalpir Power Limited (Formerly AES Lalpir (Private) Limited). He is also the Chief Executive of Nishat Power Limited.

Mr. Kamran Rasool - Director Mr. Kamran Rasool holds a Post Graduate Diploma in Development Administration from Manchester University and M.A in English from Punjab University. He was associated with the Govt. of Pakistan as Secretary Defense (2007-08), Cabinet Secretary (2006-07), Secretary Industries & Production (2005-06). Mr. Rasool is also acting as the Advisor to President at MCB Bank Limited. He also hold directorship in Pakistan Agricultural Storage and Services Corporation Limited.

Mr. Omar Liaqat - Director Mr. Liaqat is a Chartered Accountant and a Fellow member of the Institute of Chartered Accountants in England and Wales. He is the Chief Operating Officer at the sovereign wealth fund in the GCC and has spent over 20 years in the asset management industry. He currently serves on the boards / audit committees of several organizations. He is also a director at Lalpir Power Limited.

Mr. Mark Nicholas Cutis – Director

Mr. Cutis holds an MBA from Wharton Business School, USA. His professional experience involves working for global investment banks in various capacities. He joined sovereign wealth fund in the GCC in March 2008. Prior to that, he was associated with the Shinsei Bank as a Chief Investment Officer. He has worked in NY, London, Frankfurt, Tokyo and Moscow.

Mr. Aurangzeb Firoz – Director/Chief Executive Officer

Mr. Firoz is a graduate of the Lahore American School and University of London. He has been instrumental in providing strategic and operational support in driving business expansion into the Arab States for ‘City Schools’ (Pvt) Ltd. As Director, he monitors the monthly review of group's key financial statements and assists the Board of Directors in assessing returns and managing the group’s various investment holdings. He holds directorship of Educational System (Pvt) Limited, City APIIT (Pakistan) (Pvt) Limited, Engen (Pvt) Limited, Lalpir Power Limited and City Hospitality Management Services (Private) Limited.

Mr. Mahmood Akhtar – Director

Mr. Akhtar holds an MBA from Punjab University and brings on board with him over 35 years of managerial experience spread across various industries.

Mr. Khalid Qadeer Qureshi – Director Mr. Qureshi is a Fellow member of the Institute of Chartered Accountants of Pakistan. He has more than 45 years’ experience of comprehensive in-depth financial management across corporate, finance, accounting, treasury and information systems development and implementation. During his

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professional tenure he has been actively associated in mergers, IPOs, developing feasibilities reports, private placement of debt & equity as well as restructuring. Mr. Samir Hammami – Alternate Director to Mr. Mark Nicholas Cutis

Samir Hammami, is an investment Analyst since 2008 at a sovereign wealth fund in the GCC. He has led some of the fund’s investment efforts mostly in private investments in the financial, natural resource, real estate, and power sectors, with a particular focus on emerging and frontier markets. Prior to joining the fund, he has held teaching and research positions at academic institutions in the United States (University of Chicago and Kennedy School of Government, Harvard University) in his capacity as financial economist. He was also an economic consultant to clients based in United States and the Middle East. Mr. Samir holds a Phd in Economics from Brown University.

7.6 NUMBER OF DIRECTORS Pursuant to Section 174 of the Companies Ordinance, 1984 a listed Company shall have not less than seven directors. At present the Board consists of 7 Directors including the Chief Executive.

7.7 QUALIFICATION OF DIRECTORS

Pursuant to the Article 89 of Articles of Association of the Company “The qualification of an elected director, in addition to his being a member, where required, shall be his holding share of the nominal value of PKR 5,000 at least in his own name, but a director representing the interests of a member or members holding share of the nominal value of PKR 5,000 at least shall require no such share qualification. A director shall not be qualified as representing the interests of a member or members holding shares of the requisite value unless he is appointed as such representative by the member or members concerned by notice in writing addressed to the company specifying the shares of the requisite value appropriated for qualifying such director. Shares thus appropriated for qualifying a director shall not, while he continues to be such representative, be appropriated for qualifying any other director. A director shall acquire his share qualification within two (2) months from the effective date of his appointment as director.

7.8 REMUNERATION OF THE DIRECTORS

Pursuant to Clause 87 of the Articles of Association of the Company, “ Any director who serves on any committee or who devotes special attention to the business of the company, or who otherwise performs services which in the opinion of the directors are outside the scope of the ordinary duties of a director, may be paid such extra remuneration as the directors may determine from time to time. The remuneration of a director for attending meetings of the board shall from time to time be determined by the directors”.

Pursuant to Clause 88 of the Articles of Association of the Company, “ Each director of the company may, in addition to any remuneration receivable by him, be reimbursed his reasonable travelling and hotel expenses incurred in attending meetings of directors or of the company or otherwise whilst employed on the business of the company “. Pursuant to Clause 85 of the Articles of Association of the Company, “Chief Executive of the Company shall receive such remuneration as the directors may determine and it may be made a term of his appointment that has to be paid a pension and/or gratuity and/or other benefits on retirement from his office”. The remuneration of Executive and Non-Executive directors is subject to board approval.

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7.9 BENEFITS TO THE PROMOTERS AND OFFICERS

No amount of benefits has been paid or given during the last year or is intended to be paid or given to any promoter or to any officer of the Company other than as remuneration for services rendered as whole-time executive of the Company and the remuneration for services shall be borne by the Company

7.10 INTEREST OF DIRECTORS The directors may be deemed to be interested to the extent of fees payable to them for attending Board meetings. The Directors performing whole time service to the Company may also be deemed interested in the remuneration payable to them from the Company.

The Directors may also be deemed to be interested, to the extent of any shares held by each of them in the Company, the dividends to be declared on their shareholding in the Company.

7.11 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.

7.12 ELECTION OF DIRECTORS

The directors shall subject to the provisions of Section 178 of the Companies Ordinance, 1984 fix the number of directors to be elected and the directors shall be elected to office by the members in general meeting in the following manner, namely:

a) a member present in person or by proxy shall have such number of votes as is equal to the product

of voting shares held by him and the number of directors to be elected

b) a member may give all his votes to a single candidate or divide them between more than one of the candidates in such manner as he may choose, and

c) the candidate who gets the highest number of votes shall be declared elected as director and then

the candidate who gets the next highest number of votes shall be so declared, and so on until the total number of directors to be elected has been so elected.

If the number of persons who offer them to be elected as directors is not more than the number of vacancies for which elections are being held, such persons being otherwise eligible shall be deemed to have been elected as directors from the date on which the election was proposed to be effective.

The present Directors of the Company were elected on 26 April 2011for the period of three years.

7.13 VOTING RIGHTS On a show of hands, every member present in person shall have one vote except for election of Directors in which case the provisions of section 178 of the Ordinance shall apply. On a poll, every member shall have voting rights as laid down in Section 160 of the Ordinance.

7.14 AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE

Audit Committee of the Board has been formed to comply with the Code of Corporate Governance which comprises of the following non-executives:

Mr. Aurangzeb Firoz Mr. Mark Nicholas Cutis Mr. Mahmood Akhtar

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The audit committee meeting is held regularly as per provisions of the Code of Corporate Governance.

The committee will have its terms of reference as determined by the Board of Directors in accordance with the guidelines provided in the Listing Regulation.

7.15 INTERNAL AUDIT

The board has setup an effective internal audit function managed by suitable qualified and experienced personnel who are conversant with the policies and procedures of the Company and are involved in the internal audit function on a full time basis. Internal Audit department is headed by Mr. Syed Arshad Ali Zaidi who is a fellow member of Association of Chartered Certified Accountants (UK). He has more than 12 years’ experience of audit, implementation of internal control charter, risk assessment and measures to mitigate risks.

7.16 HUMAN RESOURCE AND REMUNERATION COMMITTEE The Company has formed Human Resource and Remuneration Committee comprising of the following members: Mian Hassan Mansha Member/Chairman Mr. Kamran Rasool Member Mr. Shahid Zulfiqar Khan Member The Committee is responsible for:

i. Recommending human resource management policies to the Board ii. Recommending to the Board the selection, evaluation, compensation (including retirement

benefits) and succession planning to the CEO iii. Recommending to the Board the selection, evaluation, compensation (including retirement

benefits) of the COO, CFO, Company Secretary and Head of Internal Audit and iv. Consideration and approval on recommendation of CEO on such matters for key management

positions who report directly to CEO and COO

7.17 BORROWING POWERS

The Directors may from time to time at their discretion borrow and secure the payment of any sum or sums of money for the purposes of the Company and may themselves lend to the Company on security or otherwise subject to the provisions of the Companies Ordinance, 1984.

7.18 POWERS OF DIRECTORS

The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company, and may exercise all such powers of the Company as are not by the Ordinance or any statutory modification thereof for time being in force, or by the Articles of Association, required to be exercised by the Company in General Meeting, subject to the regulations of the Articles of Association, the Ordinance and any regulations prescribed by the Company in the General Meeting.

7.19 INDEMNITY

Clause 183 of the Company's Article of Association reads as follows:

"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

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judgment is given in his favor, or in which he is acquitted, or in connection with any application under section 488 of the ordinance in which relief is granted to him by the court."

7.20 INVESTMENTS IN ASSOCIATED COMPANIES The authority to give Loan/Advance upto an amount of PKR 500 Million to Pakgen Power Limited, an associated company, was given by the shareholders of the Company in their annual general meeting held on April 26, 2011, under Section 208 of the Companies Ordinance, 1984. This facility is for a period of one year and renewable for a period of further four years on the same terms and conditions. The Company is authorized to charge markup from Pakgen on the amount outstanding at not less than the average borrowing cost of the Company. As per audited accounts of December 31, 2012, no amount is outstanding against the associated company.

7.21 INVESTMENT IN SUBSIDIARIES

The Company has not sponsored nor acquired any subsidiaries nor has any resolution been passed for sponsoring or acquiring any subsidiaries under Section 208 of the Ordinance.

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PART 8

8 MISCELLANEOUS INFORMATION

8.1 REGISTERED OFFICE

Lalpir Power Limited 53-A Lawrence Road, Lahore Head Office 1-B, Aziz Avenue Canal Bank, Gulberg V, Lahore.

8.2 PLANT ADDRESS

Lalpir Power Limited Mehmood Kot Muzaffargarh, Punjab Pakistan

8.3 BANKERS TO THE OFFER FOR BOOK BUILDING

MCB Bank Limited

8.4 BID COLLECTION CENTRES

Karachi Contact Officer: Mr. Syed Khurram Shahid Direct No.: +92-21-3537-4301 Mobile No.: +92-333-310-4756 PABX No.: +92-21-111-253-111 Ext. 636 Fax No.: +92-21-3586-7992, +92-21-3537-3211 Email: [email protected] Postal Address 602, Continental Trade Centre, Block 8 Clifton, Karachi Contact Officer:

Ms. Sanam Khawaja

PABX No.: +92-21-111-639-825 ext 114 Fax No.: +92- 21-3529-2621 Email: [email protected] Postal Address 8th Floor Horizon Tower, Plot # 2/6,

Block III, Clifton, Karachi

Lahore Contact Officer: Mr. Ehsan Ahmad Qureshi Direct No.: +92-42-3628-0742, +92-42-3628-0743, +92-42-3628-0744 Mobile No.: +92-334-411-1253 PABX No.: +92-42-111-253-111 Fax No.: +92-42-3628-0745 Email: [email protected] Postal Address: AKD Trade

Room No. 512/513, 5th Floor Lahore Stock Exchange Building, Lahore

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Islamabad

Contact Officer: Mr. Khalid Hussain Direct No.: +92-51-2894325 Mobile No.: +92-332-212-5525, +92-333-532-6580 PABX No.: +92-51-289-4321 Fax No.: +92-51-289-4323 Email: [email protected] Postal Address: AKD Trade

303, 3rd Floor, ISE Tower Jinnah Avenue, Blue Area, Islamabad

8.5 BANKERS OF THE COMPANY

Habib Bank Limited Allied Bank Limited MCB Bank Limited Bank Islami Pakistan Limited Bank Alfalah Limited Faysal Bank Limited NIB Bank Limited Habib Metropolitan Bank Limited Askari Bank Limited KASB Bank Limited Al-Baraka Bank Pakistan Limited National Bank of Pakistan United Bank Limited Bank of Punjab Standard Chartered Bank Pakistan Limited

8.6 BANKERS TO THE OFFER

Code No. Bank

01 MCB Bank Limited

02 Habib Bank Limited

03 United Bank Limited

04 Faysal Bank Limited

05 Bank Al Habib Limited

06 Habib Metropolitan Bank Limited

07 Bank Alfalah Limited

08 Askari Bank Limited

09 Silk Bank Limited

10 NIB Bank Limited

11 KASB Bank Limited

12 JS Bank Limited

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8.7 AUDITORS OF THE COMPANY Riaz Ahmad & Company Chartered Accountants 10-B Saint Marry Park Gulberg III Lahore Pakistan Phone No - 04235718137-9 Fax – 04235718136 Email – [email protected]

8.8 LEGAL COUNSEL TO THE OFFER

Lexium Attorneys At Law 61-C Main Gulberg Lahore Pakistan Phone No – 04235870961-2 Fax – 04235870960 Emal – [email protected]

8.9 LEGAL ADVISOR TO THE COMPANY

Lexium Attorney At Law 61-C Main Gulberg Lahore Pakistan Phone No – 04235870961-2 Fax – 04235870960 Emal – [email protected]

8.10 JOINT LEAD MANAGERS & ARRANGERS TO THE OFFER

AKD Securities Limited 6th Floor Continental Trade Center Block 8 Clifton Karachi PABX No - +92-21-111-253-111 Ext. 636 Fax No - +92-21-3586-7992, +92-21-3537-3211 Email [email protected] Next Capital Limited 8th Floor Horizon Tower, Plot # 2/6, Block III, Clifton, Karachi PABX No - +92-21-111-639-825 ext 114 Fax No - +92- 21-3529-2621 Email - [email protected]

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8.11 JOINT BOOK RUNNERS TO THE OFFER

AKD Securities Limited 6th Floor Continental Trade Center Block 8 Clifton Karachi PABX No - +92-21-111-253-111 Ext. 636 Fax No - +92-21-3586-7992, +92-21-3537-3211 Email [email protected]

Next Capital Limited 8th Floor Horizon Tower, Plot # 2/6, Block III, Clifton, Karachi PABX No - +92-21-111-639-825 ext 114 Fax No - +92- 21-3529-2621 Email - [email protected]

8.12 COMPUTER BALLOTER & SHARE REGISTRAR

Central Depository Company of Pakistan Limited CDC House 99-B Block B, SMCHS, Shahra-e-Faisal Karachi Phone No – 92-21-111-111-500 Fax No -92-21-34326053 Email – [email protected]

8.13 MATERIAL CONTRACTS / DOCUMENTS

8.13.1 DETAILS OF SHORT TERM RUNNING FINANCE

Running Finance Facility

The running finance facility is available from a consortium of commercial Banks as at 31st Dec 2012.

S. No Bank Facility

Amount (PKR in mn)

Rate Date

Sanctioned

1 Habib Bank Limited 1,268 1MK+ 2.5% 1-Oct-12 2 Allied Bank Limited 2,000 1m KIBOR + 2.5% 2-Oct-12 3 MCB Bank Limited 2,000 1m KIBOR + 2.5% 21-May-12 4 Faysal Bank Limited 850 Relevant

KIBOR+1.75% 11-Jun-12

5 Bank Islami Pakistan Limited 200 Respective KIBOR + 2.5%

16-Jul-12

6 Askari Bank Limited 1,000 3MK + 2% 20-Jul-12 7 Bank Alfalah Limited 1,000 3MK + 2.50% 12-Nov-12 8 NIB Bank Limited 500 3MK + 1.95% 24-Feb-12 9 Habib Metropolitan Bank Limited 200 3M Kibor+2.5 % 29-Jun-12

10 KASB Bank Limited 300 3MK+2% 16-Apr-12 11

Al-Baraka Bank Pakistan Limited 350 Matching KIBOR + 1.75%

02-May-12

Total 9,668

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8.13.2 Standby Letter of Credit (SBLC) & Letter of Credit (LC)

S. No Bank Facility

Amount (PKR in mn)

Rate Date

Sanctioned

1 Allied Bank Limited 100 0.3% per Qtr 2-Oct-12 2 Allied Bank Limited 200 0.25% Per Qtr 2-Oct-12 2 Habib Metropolitan Bank Limited 500 0.10% 29-Jun-12 3 Habib Bank Limited 231.59 0.2% per Qtr 20-Feb-04 4 National Bank of Pakistan 181.31 0.2% per Qtr 20-Feb-04 5 Faysal Bank Limited 121.87 0.2% per Qtr 20-Feb-04 6 Silk Bank Limited 60.874 0.2% per Qtr 20-Feb-04

Total 1395.64 8.13.3 DETAILS OF LONG TERM RUNNING FINANCE

S. No Bank Facility

Amount (JPY in mn)

Rate Date Sanctioned

1 Standard Chartered Bank Pakistan 2,000 Base Rate +2.25%

31-Jul-12

Total 2,000

8.13.1 UNDERWRITING AGREEMENTS

8.13.2 DUE DILIGENCE REPORTS

8.13.3 SHARE PURCHASE AGREEMENT (ESCROW AGREEMENT) WITH EX SPONSORS OF LALPIR POWER LIMITED

Name of Seller Date of

Agreement No of Shares Purchase Price

(USD) Name of Buyer

AES TransPower Inc 4th June 2010 110,498,540 20,712,868 Nishat AES TransPower Inc 4th June 2010 27,624,635 5,178,217 Adamjee AES TransPower Inc 4th June 2010 6,906,159 1,294,554 SGI AES TransPower Inc 4th June 2010 27,624,635 5,178,217 Mr Mansha AES TransPower Inc, AES Lalpir (UK) Limited, IFC 4th June 2010

69,061,588

12,945,543 Engen

AES Lalpir (UK) Limited, AES TransPower Inc 4th June 2010

103,592,382

19,418,314 Stanhope

Total 345,307,939 64,727,713

8.14 COMPANY RELATED AGREEMENTS

Key Contracts/Agreements Counter Party Execution Date

Implementation Agreement (IA) President, Islamic Republic of Pakistan September 24, 1994 Power Purchase Agreement (PPA) WAPDA November 3, 1994 Fuel Supply Agreement (FSA) Pakistan State Oil Company Limited November 6, 1994 GOP Guarantee Government of Pakistan May 16, 1995

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Fuel

Variable

O&M Total

Escalable

Component

Non Escalable

Component

15 2012 0.653 0.03 0.683 0.359 0.624 0.983 1.6660

16 2013 0.653 0.03 0.683 0.359 0.378 0.737 1.4200

17 2014 0.653 0.03 0.683 0.359 0.04 0.399 1.0820

18 2015 0.653 0.03 0.683 0.359 0.04 0.399 1.0820

19 2016 0.653 0.03 0.683 0.359 0.04 0.399 1.0820

20 2017 0.653 0.03 0.683 0.359 0.04 0.399 1.0820

21 2018 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

22 2019 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

23 2020 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

24 2021 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

25 2022 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

26 2023 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

27 2024 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

28 2025 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

29 2026 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

30 2027 0.653 0.03 0.683 0.359 0.009 0.368 1.0510

Total Tariff

(PKR/ Kwh)

Capacity Purchase Price (PKR/ Kwh)Energy Purchase Price (PKR/ Kwh)Year

Calendar

Year

Total Capacity

Purchase Price

(PKR/ Kwh)

Contract for HIP & LIP Steam Turbine Upgrade

Sojitz Machinery Corporation May 31st, 2012

Technical Proposal Specification for HIP & LP Steam Turbine Upgrade

Mitsubishi Industries Ltd/ MHI Power Systems/ Nagasaki Power System Service Department

Feb 2012

EPC Contract The Plant was commissioned 15 years back. There is no EPC Contract

N/A

Dispute Resolution Settlement Agreement

WAPDA May 4th, 2005

SUMMARY OF KEY MATERIAL CONTRACTS Power Purchase Agreement (“PPA”) with WAPDA The PPA was signed between WAPDA (“the Power Purchaser”) and Lalpir Power Limited on November 3, 1994. Through this agreement, Lalpir Power Limited has been granted a generation license and the sale and delivery of electric energy produced has been restricted to the Power Purchaser only. Under the PPA, it is the responsibility of Lalpir Power to generate power and supply electricity to WAPDA as per its demand. The supply of electricity should be up to the Dependable Capacity prevailing at that time. WAPDA has allowed certain maintenance outage allowances for the planned / forced outages. Any outages in excess of these allowances would result in liquidated damages to be paid by the company. The PPA shall continue in full force and effect for a period of 30 years (with effect from commencement of commercial operations in November 1997). The Contract capacity of the plant is 362 MW as per the PPA. The power purchaser shall take delivery and pay the Company for the dispatched and delivered net electrical output. The Power Purchaser is liable to pay for the capacity payments and energy payments on monthly basis on the premises of monthly available capacity as shown in the tariff table set out below.

Source: Power Purchase Agreement The power purchaser will also reimburse the company for certain pass through items such as:

- Payments into WWF and WPPF - Reasonable costs approved by WAPDA for modification or expansion - Customs Duties on permanent equipment which are levied on the Company prior to the Commercial

Operations Date and which are not refunded to the Company by Central Board of Revenue ("CBR")

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after the issuance of the consent of the CBR specified in Schedule 2 of the Implementation Agreement

- Turnover tax of 0.5% - Any variations in expenditure or the withholding tax payable - Any damages charged for changes in fuel delivery

Major Provisions of the PPA are as follows:

a. The Gross generation capacity of Lalpir is 362 MW whereas net capacity currently is 350MW b. The PPA shall continue in full force and effect for a period of thirty (30) years (with effect from the

commencement of commercial operations in November 1997) c. The Company shall sell the agreed net contract capacity to the Power Purchaser at the

interconnection point d. The Company may undertake scheduled outages only according to the schedule which has been

proposed by the Company e. The power purchaser shall be responsible for the design, construction, installation (excluding the

Metering System), commissioning, operation and maintenance of the Interconnection Facilities and the Transmission whereas the Company shall carry out the Company’s interconnection works with proper skill and care in all material respects

f. The power purchaser shall at its expense procure, own and maintain the metering system whereas the Company shall at its own expense, procure, install, own and maintain the back-up metering system for determining Net Electrical Output for the Complex

g. From and after the commercial operation date, the power purchaser shall pay the company the capacity payments for the available capacity for each month and energy payments for dispatched and delivered net electrical output for the relevant month Implementation Agreement (“IA”) with the GOP

The Implementation Agreement was signed between the Islamic Republic of Pakistan (“GoP”) and Lalpir Power Limited on September 24, 1994. The salient features of the IA are as follows:

a. The Company shall design, insure, finance, acquire, construct, complete and commission the

Complex and shall own, operate and maintain the Complex in accordance with all applicable laws of Pakistan, all applicable consents, the IA and the PPA

b. The Company shall obtain and maintain insurance from financially strong and internationally reputable insurance companies

c. During the term of the IA, the Company shall not be subject to taxation in Pakistan on its income from Capacity Payments and Energy Payments and other payments under the PPA

d. Local investors will be taxed according to the applicable laws of Pakistan while foreign investors will be governed by the Bilateral Tax Treaties, if any. Where no such treaty exists with the respective countries, foreign investor shall be taxed in accordance with the applicable laws of Pakistan

e. The Company shall be entitled to export any items of plant and machinery for the purpose of repair outside Pakistan and to re-import the same without restriction and without payment of custom duties

f. The exchange and transfer abroad of all foreign currency related to the project shall be governed by the Laws of Government of Pakistan

g. Neither the GoP nor any public sector entity shall take any discriminatory action which materially and adversely affects the project or the performance of the Company’s obligations.

h. The GoP undertakes to the Company that neither it nor the Power Purchaser or any Public Sector Entity will expropriate, compulsorily acquire, nationalize, or otherwise compulsorily procure any Ordinary share capital or material assets of the Company

Fuel Supply Agreement (“FSA”) with Pakistan State Oil Company Limited (“PSO”)

The Fuel Supply Agreement was signed between Lalpir and Pakistan State Oil Company Limited (“Fuel Supplier”) on November 06, 1994. The locked in FSA guarantees provision of fuel and diesel

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oil to the company at the site under this agreement. The company is bound to fulfill all the fuel requirements only through the fuel supplier. The price of RFO shall be set out in HSFO Price Notification applicable on the date of the fuel supplier’s relevant invoice as per guidelines approved by NEPRA, whereas price of diesel oil shall be determined by GoP from time to time pursuant to the Petroleum Products (Development Surcharge) Ordinance, 1961. The salient features of the FSA are as follows:

a. The agreement shall commence and be in force immediately upon the date of financial closing and remain valid till the expiry of Power Purchase Agreement.

b. Lalpir shall purchase all its requirements of RFO and Diesel Oil for the Complex from the fuel supplier

c. Lalpir shall provide the necessary facilities such as truck decanting, storage tanks for storing at least 30 day fuel stock, adequate and proper warehouses and all requisite internal pipelines and pipeline termination flange(s) as specified by the fuel supplier

d. The Fuel Supplier shall at its own cost and expenses develop, design, insure, construct, complete, own, operate and maintain a pipeline (the "Pipeline") connecting the Fuel Supplier's Terminal with the Company's storage tank(s) located on Site at the Complex necessary to deliver Fuel to the Delivery Point

e. RFO and diesel oil delivered to the company shall meet the relevant specification as defined in the FSA. Upon acceptance of delivery of RFO or diesel oil by Lalpir not meeting the relevant standards, the delivered RFO or diesel (as the case may be) shall be considered as meeting the relevant specifications.

f. Fuel storage tanks have a capacity equal to at least thirty days of operation of the complex at one hundred percent of the contract capacity.

g. The Fuel Supplier shall at its own cost design, construct, install and maintain to have in place all such facilities, equipment’s or arrangements as the Fuel Supplier deems necessary in order to be able to effect deliveries of Fuel and Diesel Oil at the delivery point.

h. The price payable by Lalpir for fuel delivery by the Fuel Supplier to the complex shall be that set out in the HSFO price notification applicable on the date of fuel supplier’s relevant invoice

i. The price for diesel oil shall be as determined by GoP from time to time pursuant to the Petroleum Products Ordinance, 1961.

j. The Fuel Supplier may increase the gross margin on the basis of a directive from the GoP and subject to NEPRA’s approval.

Contract of HIP & LP steam turbine upgrade This contract has been signed between Lalpir Power Limited & Sojitz Machinery for the replacement of Steam Turbine Rotors of improved technology for total cost of JPY 2.0 Billion.

The replacement will have guaranteed improvement of 1.5 % in the efficiency and is expected to be completed before august 2014.

Dispute Resolution settlement agreement

This agreement is entered for settlement of disputed on technical testing procedure of Dependable capacity on 4th May 2005 between Lalpir Power Limited and Pakistan Water and Power Development Authority. In this agreement dependable capacity is capped upto 347.3 MV. It is

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agreed that upto capped capacity of 347.3 MW reference tariff of PPA will be applicable and for capacity over and above capped capacity new tariff of Rupees 0.31 per kwh will be applied which will be indexed as per provisions of the PPA. The testing from time to time to determine the Dependable capacity will be in accordance with Article X of the PPA and the technical test procedure used for AIDC. GOP Guarantee The GOP Guarantee was signed between Government of Pakistan and Lalpir Power Limited on 16th May 1995. Under this agreement the GOP irrevocably and unconditionally guarantees and promises to pay the Company any and every sum of money WAPDA and Fuel Supplier are obligated to pay to the Company under or pursuant to the Power Purchase Agreement and Fuel Supply Agreement that WAPDA and the Fuel Supplier has failed to pay when due in accordance with the terms of those agreements.

REGULATORY APPROVALS/OPERATIONAL CONTRACTS

Lalpir Power Limited has been issued a Generation License by National Electric Power Regulatory Authority (“NEPRA”) via license number IPGL/06/2003 dated 26th August, 2003.

8.15 INSPECTION OF DOCUMENTS AND CONTRACTS

Copies of Memorandum and Articles of Association, Audited Financial Statements of the Company, Auditors’ Certificates, Agreements / Material Contracts referred to in this OFSD and related information may be inspected during the usual business hours on any working day at the Registered Office of the Company, from the date of publication of this OFSD till the closing of subscription list.

8.16 LEGAL PROCEEDINGS

The Inspecting Additional Commissioner of Income Tax (IACIT) passed reassessment orders under section 66A of the Income Tax Ordinance, 1979 (ITO, 79) for the assessment years 1995-1996, 1996-1997 and 1997-1998 creating tax demands aggregating of Rupees 781 million by treating the assessment orders earlier passed by the Deputy Commissioner of Income Tax (DCIT), as erroneous and prejudicial to the interest of Federal Board of Revenue (FBR). The said reassessments made by IACIT were contested by the Company in Income Tax Appellate Tribunal (ITAT), Lahore. The ITAT remanded back the case to the IACIT for re-examination with specific directions which was decided against the Company. Thereafter, the Company preferred an appeal with ITAT which was decided in favor of the Company which is being challenged by the department. No provision is being created against Tax demand amounting to PKR 781 million as it is being shown as contingency in the audited financial statement for the year ended 2012. Securities and Exchange Commission of Pakistan has passed an order dated July 23, 2012 under Section 231 of the companies Ordinance, 1984 for inspection of the Company which has been challenged by the Company in writ jurisdiction in the honorable Lahore High Court Lahore which has granted a stay order dated July 30, 2012 and the case is pending before the Court. The Company had recorded and paid to the Federal Treasury contributions on its annual profit as per the provisions of the Companies Profits (Workers' Participation) Act, 1968 (the Act).up to year ended Dec 31st, 2002. Based on legal advice, the Company filed a petition on 15 April 2004 in the Lahore High Court challenging the application of the Act to the Company on the grounds that since inception the Company has not employed any person who falls within the definition of the term "Worker" as per the provisions of the Act. The Company asserts that it had erroneously deposited in

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the past certain sums with Federal Treasury as contributions of Workers' Profit Participation Fund (WPPF) and Workers' Welfare Fund (WWF), although it was not obligated to make such payments. The petition was filed subsequent to the Company's receipt of the Federal Board of Revenue's Income Tax I Wealth Tax Circle's letter dated 30 March 2004 directing the Company to allocate five percent of its net profit towards the WPPF and deposit the un-utilized amount of the WPPF in the Federal Treasury. The petition had been filed against the Labour, Manpower and Overseas Pakistani Division of Ministry of Labour, Manpower and Overseas Pakistanis. The management, based on legal advice, asserts that if the Company does not succeed in the above petition and it is held that the scheme is applicable to the Company, any payments that the Company is ultimately required to make under the provision of the Act are considered as pass through items recoverable from Water and Power Development Authority (WAPDA) under the provisions of the Power Purchase Agreement (PPA). Consequently, there will be no impact on its financial position and its results of operations, even if it does not succeed in the above petition. The changes to the law will not affect the aforementioned petition filed by the Company. The Company expects a favourable outcome of the matter.

There are no other legal proceedings pending in the Court of Law which may have adverse material impact on the business of the Company.

8.17 DISPUTE WITH WAPDA Provisions of the Power Purchase Agreement include imposition of Liquidated Damages. If for a period of 18 consecutive days, the Company is unable to deliver Net Electrical Output in an amount exceeding 50% of the Dispatch levels requested by WAPDA beyond Force Majure reasoning and are within the Technical Limits of the Complex and are not caused by Maintenance Outage or a Scheduled Outage (or a breach or default by the GoP under the Implementation Agreement or the Guarantee) then WAPDA shall be entitled to suspend the payment of Capacity Payments. Any Capacity Payments or portions thereof not paid by WAPDA shall be credited towards the payment of any liquidated damages payable by the Company. The Company as per CY12 end has disputed Liquated Damages of PkR1.39bn due to non-payment of dues by WAPDA amounting to PkR 10.590bn as at 31 December 2012.

8.18 MEMORANDUM OF ASSOCIATION The Memorandum of Association, inter alia, sets forth 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 OFSD and has been published with all issues thereof except those released as newspaper advertisement.

8.19 REVALUATION OF ASSETS The Company has not carried out any revaluation of assets in terms of assets in terms of clause 22(2) of Section 1 of part I of the second Schedule to the Ordinance.

8.20 FINANCIAL YEAR OF THE COMPANY

The financial year of the Company commences from Jan 01 and ends on the Dec 31st each year.

8.21 CAPITALIZATION OF PROFITS

The Company has issued 34,530,793 Ordinary shares as Bonus issue on 15th Jan 2013 on the basis of financial year ending Dec 31st 2012.

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PART 9

9 APPLICATION AND ALLOTMENT INSTRUCTIONS

9.1 Eligible investors include:

a) Pakistani citizens resident in or outside Pakistan or persons holding two nationalities

including 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 constitutive documents and existing regulations, as the case may be);

d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their Trust Deeds and existing regulations); and

e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

9.2 APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED APPLICATION FORM OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING ATLEAST 62 GM.

9.3 Copies of OFSD and application forms can be obtained from members of Karachi Stock Exchange Limited, Lahore Stock Exchange Limited, and Bankers to the Offer and their Branches, the Advisor & Arranger and the registered office of the Company. The OFSD and the Application Forms can also be downloaded from the following websites: http://www.lalpir.com, http://www.akdsecurities.net, & http://nextcapital.com.pk/

9.4 The applicants opting for scripless form of shares are required to complete the relevant sections of the application. In accordance with provisions of the Central Depositories Act, 1997 and the CDC 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 form and the information already held by CDS the Company reserves the right to offer share in physical form.

9.5 Name(s) and Address (es) must be written in block letters, in English, and should not be abbreviated.

9.6 Application 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.

9.7 Application made by individual investor

(i) Incase of individual investors, an attested copy of the CNIC, should be enclosed and the number of CNIC / Passport should be written against the name of the applicant. Copy of these documents can be attested by any Federal / Provincial Government gazetted officer, Councilor, Oath Commissioner or Head Master of High School or Bank Manager in the Country of the Applicant’s residence.

(ii) Original CNIC / Passport, along with one attested photocopy, must be produced for verification to the banker to the offer and the applicant’s banker (if different from the banker to the offer) at the time of presenting the application. The attested photocopy will, after verification, be retained by the bank branch along with the application.

9.8 Applications made by institutional investors

i) 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

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Memorandum and Articles of Association or equivalent instrument / document. Where applications are made by virtue of a Power of Attorney, the same should also be submitted along with the Application. Any Federal/Provincial Government Gazetted 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. ii) Attested copies of the documents mentioned in 9.8(i) must be produced for verification to the banker to the offer and the applicant’s banker (if different from the banker to the offer) at the time of presenting the application. The attested copies, will after verification, be retained by the bank branch along with the application.

9.9 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 holders.

9.10 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 CNIC’s / Passports. The shares/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 banks 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 single application for the purpose of allotment of shares.

9.11 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 “OFFER FOR SALE OF SHARES - LALPIR POWER LIMITED” and crossed “A/C PAYEE ONLY””.

9.12 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

9.13 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

9.14 Applications are not to be made by minors or persons of unsound mind.

9.15 Applicants should ensure that the bank branch, on which their application is submitted, completes the relevant portion of the application form.

9.16 Applicants should retain the bottom portion of their application form as provisional acknowledgement of submission of their application. 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.

9.17 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.

9.18 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.

9.19 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

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cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers.

9.20 Submission of Fictitious and multiple applications (more than one applications by same person) is prohibited and such applications’ money shall be liable to confiscation under section 18A of the Securities and Exchange Ordinance, 1969.

9.21 ADDITIONAL INFORMATION FOR FOREIGN, NON-RESIDENT INVESTORS

9.22 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.

9.23 Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the State Bank of Pakistan’s Foreign Exchange Manual.

9.24 For the allotment of share to the general public, the procedure disclosed in part 3.6 of the OFSD shall be followed.

9.25 Bankers to the Offer

Code No. Bank

01 MCB Bank Limited

02 Habib Bank Limited

03 United Bank Limited

04 Faysal Bank Limited

05 Bank Al Habib Limited

06 Habib Metropolitan Bank Limited

07 Bank Alfalah Limited

08 Askari Bank Limited

09 Silk Bank Limited

10 NIB Bank Limited

11 KASB Bank Limited

12 JS Bank Limited

9.26 Code of Occupation

Code No. Occupation Code No. Occupation 01 Business 06 Professional

02 Business Executive 07 Student

03 Service 08 Agriculturist

04 Housewife 09 Industrialist 05 Household 10 Others

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9.27 Nationality Code

Code No. Name of Country Code No. Name of Country 001 U.S.A 006 Iran

002 U.K 007 Bangladesh

003 U.A.E 008 China

004 K.S.A 009 Bahrain

005 Oman 010 Other

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PART 10

10 SIGNATORIES TO THE OFSD Signed, as required by section 57 of the Companies Ordinance, 1984, by

-Sd- Mr. Hassan Mansha (Offerer)

On behalf of other Offerers: -Sd- ______________________________

Mr. Khalid Qadeer Qureshi, Director and Director Finance -Sd- ______________________________

Mr. Khalid Mahmood Chohan Witnesses:

1. –Sd- 2. –Sd- Name: Sajjad Mahmood Name: Muhammad Iqbal Address: 53-A Lawrence Road, Lahore Address: 53-A Lawrence Road, Lahore CNIC #: 35202-8352452-9 CNIC #: 35102-4369816-3

Date: Place:

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PART 11

MEMORANDUM OF ASSOCIATION

OF LALPIR POWER LIMITED

I. The name of the Company is LALPIR POWER LIMITED II. The Registered Office of the Company shall be situated in the Province of Punjab, Pakistan

III. The objects for which the Company is established are all or any of the following (and in construing the following sub – clauses, the scope of no one of such sub clauses shall be deemed to limit or affect the scope of any other such sub – clauses):-

1. To design, insure, construct, acquitted own, operate and maintain power generation

complexes and to carry on the business of electricity generation, power transmission and distribution services, over hauling and re-powering of power plants and to deal in electrical and other appliances cables, dry cells accumulators, lamps and to work, generate, accumulate, distribute and supply electricity for the purpose of light, heat, motive power and for all other purposes for which electrical energy can be employed and to manufacture and deal in all apparatuses and things required for or capable of being used in connection with the generation, distribution, supply, accumulation and employment of electricity, including in the term electricity all power that may be incidentally hereafter discovered in dealing with electricity.

2. To engage in reforestation, and other works relating to pollution abatement and to acquire land for this purpose.

3. To adopt such means of making known the products and business of the Company as may seem expedient and in particular by advertisement and publicity in the presss or otherwise exhibitions publication of books and periodicals and by granting prizes, rewards and donations.

4. To purchase or acquire, protect, prolong and renew, whether, whether in Pakistan or elsewhere, any patent rights, brevetted, inventions, licenses, protections, concessions, and the like, which may appear to be advantageous or useful to the Company and to use, turn to account and / or manufacture under or grant licenses or privileges in respect of the same and to spend money in experimenting upon and testing in or improving or seeking to improve any patents, inventions or rights which the Company may acquire or propose to acquire.

5. To acquire, hold or dispose of investments in shares, modaraba certificates, term finance certificates, muaharika certificates, unit trust certificates, mutual fund certificates, debentures, debenture stocks, bonds, obligations and securities issued or guaranteed by any company, any Government, commission, public body, authority, supreme, municipal, local or otherwise.

6. To borrow, raise or secure the payment of money by the issue of musharika certificates, unit trust certificates, mutual fund certificates, debentures, debenture-stocks, bonds, obligations and securities of all kinds, and secure the same as may seem expedient with full power to make the same transferable by delivery or by instrument of transfer or otherwise on the undertaking of the Company or upon any specific property and rights present and future of the Company including its capital or otherwise, however collaterally or further to secure any securities of the Company by a trust deed or any other assurance.

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7. To pay for any property or rights acquired by the Company, either in cash or fully paid shares or by the issue of securities, or partly in one mode and partly in another and generally on such terms as may be determined

8. To draw, make, accept, endorse, discount, execute and issue cheque’s, promissory notes, bills of exchange, bills of lading, warrants, debentures and other negotiable or transferable instruments but not to act as a banking company.

9. To support and subscribe to any charitable or public object including donations to charitable and benevolent foundations and any institution, society, or club or for any purpose which may be for the benefit of the Company or its employees or maybe connected with or for the benefit and welfare of any town or place where the Company carries on business, to give pensions, gratuities or charitable aid to any persons who may have been Directors of or may have served the Company, or the wives, children, or other relatives or dependents of such persons to make payments towards insurance, and to form and contribute to provident and benevolent funds for the benefit of any such persons, or of their wives, children or other relatives or dependents.

10. To deal with the surplus monies of the Company not immediately required in such lawful form as may be thought expedient.

11. To open an account or accounts with any Bank or Banks and to pay into and to withdraw monies from such account or accounts.

12. To promote a Company to be registered or recognised in any foreign country or any place for the promotion of any business of the Company.

13. To enter into partnership or arrangement in the nature of a partnership, cooperation or union of interest, with any person or persons, company or corporation engaged or interested or about to become engaged or interested in the carrying on or conduct of any business or enterprise which the Company is authorized to carry on or conduct or from which the Company would or might derive any benefit

14. To sell or dispose of the undertaking of the Company or any part thereof in such manner and for such consideration as the Company may think fit and in particular for shares, debentures, debenture stock, or securities of any other company whether promoted by this Company for the purpose or not, and to improve, manage, develop, exchange, lease, dispose of urn to account or otherwise deal with all or any part of the property and rights of the Company.

15. To pay all preliminary expenses of any kind and incidental to the formation and incorporation of the Company out of the funds of the Company.

16. To distribute any of the Company’s property among the members in specie or many manner whatsoever

17. To accept shares, modaraba certificates, term finance certificates, musharika certificates, bonds, debentures or other securities of any other Company in payment or part payment of any services rendered or for any sale made to or debt owing from any such company.

18. To advance money to staff members, customers and obligations of the Company in relation to the payment of any loan, debenture stock, bonds, obligations or securities by or in favour of the Company and to guarantee the payment or return on such investments or of dividends on any share of the Company.

19. To guarantee the performance of the contacts and obligations of the Company in relation to the payment of any loan, debenture stock, bonds, obligations or securities by or in favor of

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the Company and guarantee the payment or return on such investments or of dividends on any share of the Company.

20. To underwrite, acquire, hold or dispose of any shares, debentures, debenture stocks, modaraba certificates, unit trust certificates, mutual fund certificates, term finance certificates, bonds, obligations or securities by original subscriptions, participation in syndicate, tender, purchase, exchange or otherwise and to guarantee the subscription thereof and to exercise and enforce all rights and powers conferred by or incidental to the ownership thereof.

21. To create any reserve fund, sinking fund, insurance fund or any other special fund whether for depreciation or for repairing, insuring, improving, extending, or maintaining any of the property of the Company or for any other purpose conducive in the interests of the Company.

22. To issue any share of the Company at par or at premium or at a discount subject to any permission required by law

23. To remunerate any person or company for services rendered or to be rendering in placing or assisting to place or guaranteeing the placing of the underwriting of any of the shares in the Company’s capital or any debentures, debenture stocks or other securities of the Company, or in or about the formation and promotion of the Company or the conduct of this business.

24. To enter into any arrangement with any Government or authority, supreme, municipal, local or otherwise that may seem conducive to the Company’s objects or any of them and to obtain from any such Government or authority all rights, concessions and privileges which the Company may think fit and desirable to obtain and to carry out, exercise and comply with any such arrangements, rights, privileges and concessions

25. And generally to do all such other things as are incidental or conducive to the attainment of the above objects or any of them.

26. It is declared that notwithstanding anything contained in the foregoing object clauses of the Memorandum of association nothing contained therein shall be construed as empowering the Company to undertake or indulge in the business of a banking company, leasing, investment managing agency or insurance business directly or indirectly as restricted under the law or any other unlawful business operations.

IV. The liability of members is limited

V. The Authorized Capital of the Company is Rs. 5,000,000,000/- (Rupees Five Billion only) divided into 500,000,000 ordinary shares of Rs. 10/- each, with powers to the Company to increase or reduce, consolidate, sub – divide or otherwise reorganize the share capital of the Company in accordance with the provisions of the Companies Ordinance, 1984 and subject to any permission required under the law.

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We, the several persons, whose names and addresses are subscribed, are desirous of being formed into a Company in pursuance of this Memorandum of Association, and we respectively agree to take the number of shares in the Capital of the Company as set opposite our respective names.

Dated this ……………… day of …………. 1995 Signature: ………………………………. Witness to the above Signatures: Nationality: …………………………….. Occupation: ………………………….... Full Name: Full Address: ………………………….. Father’s / Husband’s Full Name: ………………………………………

Names, addresses and Description of each

subscriber

Father’s / Husband’s Name (in

Full)

Nationality with any former

Nationality

Occupation Residential Address (in full)

Number of shares taken

by each subscriber

Signature

ROGER WEST SANT

S/o Merlin Sant

U.S.A Business Executive

1001 North 19

th Street

Arlington Cirgina, U.S.A

500 Five Hundred

DENNIS WAYNE BAKKE

S/o Tollef Bakke

U.S.A Business Executive

1001 North 19

th Street

Arlington Cirgina, U.S.A

500 Five Hundred

JOHN STUART RYAN

S/o John W.

Ryan

U.S.A Engineer 1001 North 19

th Street

Arlington Cirgina, U.S.A

500 Five Hundred

ROBERT FREDERICK HEMPHILL, JR.

S/o Robert F.

Hemphill Sr.

U.S.A Business Executive

1001 North 19

th Street

Arlington Cirgina, U.S.A

500 Five Hundred

SHAHZAD SYED QASIM

S/o Brig. (Retd) Syed Shah

Abdul Qasim

U.S.A Engineer 2 – Mayo Garden, Lahore

500 Five Hundred

GARY MICHAEL JUNGERS

S/o Frank

Jungers

U.S.A Engineer 1707 OKA Lane Mclean

VA 22101. U.S.A.

500 Five Hundred

WALTER WARREN SCHROEDER

S/o Walter

Schroeder II

U.S.A Business Executive

1001 North 19

th Street

Arlington Cirgina, U.S.A

500 Five Hundred

Total Number of Shares

Taken

3500 Thirty Five Hundred

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Bidding Form of Lalpir Power Limited

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