INFORMATION MEMORANDUMpibt.com.pk/download/PIBT Information Memorandum.pdfhandling capacity of up to 12 million tones of the dirty cargo which will include coal, clinker and cement

Pakistan International Bulk Terminal Limited

INFORMATION

MEMORANDUM


Page 2 of 23 Head Office 2nd Floor, Business Plaza, Mumtaz Hassan Road Karachi 74000 - Pakistan

Tel: (+9221)32400450-3 Fax: (+9221)32400281 Website: www.pibt.com.pk


Information Memorandum

1. History and Prospects

1.1 Brief History

Pakistan International Bulk Terminal Limited (the “Company” or the “PIBTL”) was incorporated in Pakistan

as a private limited company on March, 22 2010 under the provisions of the Companies Ordinance, 1984 at

Karachi and subsequently, it was converted into a public limited company on July 11, 2011.

The Company has a Build Operate Transfer (BOT) contract with Port Qasim Authority (PQA) for the exclusive

construction, development, operations and management of a coal and clinker/cement Terminal at Port

Muhammad Bin Qasim for a period of thirty years.

The authorized capital of the company is Rs. 15,000,000,000 divided into 1,500,000,000 ordinary shares of

Rs. 10/- each.

The summary of PIBTL’s current shareholding structure is as under:

Existing issued and paid up capital

of PIBTL.

Rs.545,765,830/- (54,765,583 shares

Rs. 10/- each)

Shares held by sponsors / directors

and their relatives.

21.05% shares of the total issued and

paid up capital of PIBTL.

Shares held by an associated

company and related party.

35.31% shares of the total issued and

paid up capital of PIBTL.

Shares held by general public

including corporate bodies,

institutions and individuals, etc.

43.64 % shares of the total issued

and paid up capital of PIBTL.

1.2 Object of the Company

The objects of the Company are to carry on the business of developing, managing and operating Coal,

Clinker/Cement ports and terminals worldwide, to handle all kinds and description of bulk cargo,

transshipment, bonded warehousing, anchorage services to non-containerized cargo or general cargo,

freight stations pertaining to such cargo and other related or ancillary services.

In addition to the above, the Company will also provide consultancy and advisory support services on

technical and operational issues related to domestic and international shipments and business or

operations of such terminals generally or any specific aspect(s) thereof.




1.3 The Project

The Bulk Terminal Project was approved by the Economic Co-ordination Committee of the Federal cabinet of Government of Pakistan. Accordingly, the Port Qasim Authority on behalf of the Pakistani Government launched in May 2007 a tender to grant the concession rights of this terminal on a BOT basis for a period of 30 years’ at Port Muhammad Bin Qasim. The bids were evaluated by M/s National Engineering Services of Pakistan (Private) Limited (NESPAK) and the concession was recommended for award to PICT (being the holding company of PIBT at that time) in March 2008, and approved by the Board of Port Qasim in March 2009.

PIBT has been granted, through an Implementation Agreement signed on November 6, 2010, concession

rights for 30 years by Port Qasim Authority (PQA) to build, operate and transfer state of the art fully

mechanized dirty bulk cargo handling Terminal at Port Qasim. The Terminal will have an initial annual

handling capacity of up to 12 million tones of the dirty cargo which will include coal, clinker and cement.

The Company will be the first of its type in the country, incorporating state-of-the-art bulk handling

technology. The Terminal storage area will be built on an area of 62 acre within the remits of PQA. The

storage area will be connected with a 440 meter double berth jetty with an option of the mooring

dolphins, via 2,540 meter long trestle. The jetty containing 2 Grab Cranes, 1 Ship-loader, with the

planned inclusion of mooring dolphins will be able to accommodate 2 Post Panamax vessels of 75,000

DWT each. Estimated cost of project is US$ 185 million.

The project is being implemented strictly in accordance with the project execution guidelines which are

part of the Implementation Agreement. The same is monitored and reviewed by the Port Qasim

Authority through their consultant, NESPAK on regular basis.

Under the Implementation Agreement, Port Qasim Authority has granted PIBT the effective concession

right and license;

to design, finance, insure, construct, test, commission, complete, operate, manage and maintain

the terminal to handle the import and export of the cargo.

to demand, collect and retain the Tariff charges from the Customers for usage of the Terminal

and charges for the Services.

Main particulars of the Implementation Agreement;

Phase I construction entails a minimum depth of navigation channel of 12.5 meters before

completion date and 15 meters in phase 2

PQA will also provide access road, potable water, and fuel effluent-sewage

Jetty operations will be governed by the Port Qasim Regulations, 1981

PIBT shall conform to the standards of Pakistan Environmental Protection Agency and Sindh Environment Protection Agency as well as International Maritime Organization regulations related to protection of the environment and International Maritime Dangerous Goods Code (IMDG).




1.4 Location The project is located at Port Muhammad Bin Qasim, approximately 45 kms along the Kadiro Creek channel from the Arabian Sea. 1.5 Civil Works

Storage Area

The storage area is a trapezoid shape covering approximately 62 acres. Coal will be stored in open stacks

arranged parallel to the west and east boundaries of the area; the maximum stack height will be 22m.

Clinker will also be stored in open stacks with partitions. Cement will be stored in 5 silos with a capacity

of 10,000 tons each.

The storage yard will also have gate office, administration building, workshop building and electricity

substation with generators, cement silos and compressor station.

Jetty

The proposed location of the Jetty is adjacent to the Kadiro Creek, part of the main 45km navigation

channel. It will be set back from the main channel to avoid interference with ship movements in the

main channel during the construction and subsequent operational phases. The Jetty i.e. designed to be

able to accommodate two panamax vessels berthed simultaneously bow to bow. The Jetty will comprise

of two berths.

The proposed jetty, according to the final design, is a raked piled structure with deck area of 440 meter

length. A-frames assure the correct transmission of horizontal loads into the subsoil. The vertical piles

below crane tracks consist of steel pipe piles, which are proposed for the A-frames. The girder grid

consisting of transversal beams and longitudinal crane beams links all the piles and stiffens the

structure. A thick slab is disposed on top of the beams forming the deck platform.

At the seaside end the jetty is up to 29 m wide to make turning of vehicles easier. At the connection to

the trestle there is a platform for a berth office, a mini workshop and parking space for shovel-loaders

and other vehicles. Part of this platform is located below the quay conveyor gallery.

Trestle

For connecting the Jetty to the on-shore storage area a trestle bridge of approximate 2,540 meters length and 8.35 m width is proposed. It will also carry utility ducts for sweet water and electrical services. The bridge consists of a carriageway for the traffic of heavy trucks, and a girder structure to carry the conveyor and a supporting structure with a piled foundation. The bridge is divided in single span reinforced concrete beams with a grid-length of 12m.




Dredging and reclamation

PQA is to ensure that navigation channel will be dredged to CD-15.0m that will simultaneously handle

two 75,000 DWT vessels. At present, the channel depth of CD- 12.5 allows vessels of 55,000 dwt that

shall be sufficient for the initial operation of this terminal. PIBT will be responsible for dredging their

approaches immediately in front of the jetty and for routine maintenance dredging of the berth.

The preliminary design requires the storage area to be filled to a level CD +5.5 m plus some extra height

to offset expected settlement. The dredged material may be used in the reclamation of the onshore site

storage area. In the event of the material or a significant percentage is unsuitable PIBT has already

ascertained from PQA and the dumping area for this purpose has been allocated to PIBT.

Utilities

The project will have rain water drainage system installed even though rain is very rare at PQA. Drinking

water will be directly delivered to the office building via trucks. Coal must not come into contact with

sea water. Therefore sweet water will be used for dust suppression. The gate building, the office and the

workshop building will be connected to the public sewage system.

Current Status of Civil Works

Work done as verified by NESPAK is 31.03% by the ECP Contractor.

On March 15, 2012, the Company entered into an Engineering, Procurement and Construction (EPC)

Contract with a joint venture comprising of a local and a Turkish company. Pursuant to this EPC Contract

the Joint Venture Contractor had undertaken to engineer, procure, supply, construct, install, test and

commission civil works for the Company’s coal, cement and clinker bulk handling facility. Due to the

Joint Venture Contractor’s internal disputes and the consequent inability of the Joint Venture Contractor

to continue working in accordance with the EPC Contract, this contract was terminated.

Subsequently, the Company entered into a settlement agreement with the EPC contractor and the

matter was amicably settled.

The Company is now in the process of awarding the contract for residual civil works. The change in the

Contractor will bear minimal cost overruns and the Project will be completed in line with the

construction schedule projected by the company.

1.6 Plant and Machinery

Grab Crane with Hopper

Lifting capacity under ropes: 38 t

Lift/lower speed: 180 m/min

Trolley travel: 260 m/min

Gauge: 15 m




Belt width: 1600 mm 45 ° trough

Nominal capacity: 1,850 t/h

Hopper capacity: 2.5 times the grab contents (approx. 62 t)

Outreach: 28.5 m

Ship loader cement/clinker

Belt width: 1600 mm

Belt speed: Cement 1.8 m/s Clinker 2.3 m/s

Nominal capacity: Cement: 1,700 t/h, Clinker 1,500 t/h

Telescopic chute: Cleveland (or equivalent), max. length approx. 25 m

Slewing angle: 90º to the east, 70º to the west

Outreach: 27.0 m

Conveyor Belts

The connection between the jetty and the storage area requires two conveyor lanes, one for

imported coal (land direction) and the other for cement/clinker (sea direction). The capacity of

these separate conveyor belts will be in accordance with the capacity of the quayside loader/un-

loaders to negate any bottlenecks.

Ancillary Handling Equipment

Overhead conveyor for coal and clinker

Stacker for coal

Mobile hopper

Cement Silos

Sprinkling system

Current Status

Tender have been invited and the Company is currently evaluating the bids received from the

equipment manufacturers. To assist the Company in procurement process of the plant and equipment,

M/s Hamburg Port Consultancy, Germany has been appointed as consultant. LC’s will be opened in the

name of successful bidder once the bidding process is completed.




1.7 Project Cost and Means of Finance

Break- up of Project Cost Estimated Cost

Status of Cost Incurred as at September 30, 2013

US$ 'million' PKR 'million' %

US$ 'million'

PKR 'million'

Percentage w.r.t Total Estimated

Cost

Land 4.76 523.82 2.58%

3.51 386.10 73.71%

Equipment - (Note 2) 67.05 7,375.94 36.34%

- - 0.00%

Civil Work - (Note 3) 92.60 10,186.44 50.19%

25.99 2,859.10 28.07%

Interest During Construction 16.66 1,832.60 9.03%

- - 0.00%

Miscellaneous 3.43 377.74 1.86%

0.96 105.56 27.95%

Total 184.51 20,296.54 100.00%

30.46 3,350.76 16.51%

Equipment - (Note 2)

US$ 'million' PKR 'million'

Bulk Handling Equipment 24.33 2,677.07

Conveyor Systems 26.86 2,954.27

Power Installations 15.86 1,744.60

67.05 7,375.94

Civil Work - (Note 3)


Back-up Storage yard and related infrastructure on shore 50.34 5,537.18

Marine Structure 42.26 4,649.26

92.60 10,186.44


US$ 'million'

PKR 'million'

Percentage w.r.t. Total Estimated

Finance

Project Financing (Capital Structure) Debt (Note – 3) 90.20 9,922.00 48.89%

- - -

Equity (Note – 4) 94.31 10,374.54 51.11%

30.46 3,350.76 32.30%

Total 184.51 20,296.54 100.00%

30.46 3,350.76 16.51%




Means of Financing

Current Status of Debt

Debt (Note – 3)


US$ 'million'

PKR 'million'


Finance Foreign Lenders

International Finance Corporation (IFC) 26.50 2,915.00 29.38% - - - OPEC Fund for International Development (OFID) 20.00 2,200.00 22.17%

- -

Local Lenders

Conventional Banks 32.50 3,575.00 36.03% - - - (Faysal Bank Limited, JS Bank Limited, NIB Bank Limited & The Bank of Punjab)

Islamic Banks 11.20 1,232.00 12.42% - - - (Meezan Bank Limited, Al-Baraka Bank Limited & Bank Islami Pakistan Limited)

Total Debt 90.20 9,922.00 100.00%

- - -

Means of Financing

Current Status of Equity Injected

Equity (Note – 4)


US$ 'million'

PKR 'million'


Finance Local Sponsors and other share holders as per current shareholding

Sponsors* 41.69 4,585.55 44.20% 24.61 2,707.07* 59.03%

Banks, DFI 's, NBFI's, Insurance Companies, Modarabas & Mutual Funds 1.08 118.27 1.14%

0.07 7.83 6.62%

Joint Stock Companies, Investment Companies, Foreign Investors & Others* 21.00 2,310.41 22.27%

5.02 552.22* 23.90%

Individuals 11.54 1,269.84 12.24%

0.76 83.64 6.59% International Finance Corporation

(IFC)** 19.00 2,090.47 20.15%

- - -

Total Equity 94.31 10,374.54 100.00%

30.46 3,350.76 32.30%

*The advance given by the shareholders against future issue of right shares is included in the existing capital here.

**As per the agreement signed with IFC, equity of US$ 19 million will be issued under the provisions of section 86 of

the Companies Ordinance, 1984 subject to all corporate and regulatory approvals.




1.8 Risk Factors The sponsors of the company wish to highlight the various risks that might affect the profitability of the company. The major risk factors which may affect the projected profitability of the company are:

Imposition of levies by the Government, in future

Economic and political factors and changes in Pakistan laws, fiscal regulation.

Entry of new market participants.

1.9 LABOUR AND TECHNICAL KNOW-HOW Sponsors have been handling cargo in Pakistan ports since 1964. They, along with Management team

have successful track record of establishing and operating modern container terminal at KPT since 2002.

With successful and ahead of time completion of Phase II, III and IV of PICT in 2006, 2007 and 2009

respectively, the capacity of PICT has increased to 750,000 TEUs. The partners include IFC that has a vast

portfolio of port assets around the globe, and they will be stakeholders in PIBT with 20% of total equity

and 29.38% of total debt in the project, providing further credibility to the project.

Apart from extensive experience in similar projects along with in house technical expertise for such

projects, Director’s, Sponsors and Management team have already engaged reputed external

consultants for this project, such as;

1. Project company consultants:

Hamburg Port Consulting GmbH for business plan and Equipment Procurement

Assistance

Sellhorn for Design and Engineering

EA Consulting for Design and Construction Supervision

NESPAK for Quality Assurance Audit of Construction Work

IUCN (International Union for Conservation of Nature) for Plantation of Mangroves

Environment Management Consultants for Independent Environmental Monitoring

Kabraji and Talibuddin as Borrower`s legal counsel.

PACRA Analytic (Private) Limited for Corporate Governance Assessment

2. Lenders consultants:

URS Scott Wilson for technical and market review

Moffatt & Nichol for basic engineering design and desk top market review

Fulbright & Jaworski as foreign legal counsel for lenders

Haidermota & Co. as local legal counsel for the lenders.

Shaw Consultants for technical advisory for local lender




1.10 COMMERCIAL OPERATIONS

The operation of the Terminal will be governed by an Operation Manual which will be developed by the

Company and approved by PQA by the Completion Date. The Operations Manual will also describe the

detailed methodology of the operation of the Terminal and the interfaces of the Company’s procedure

with PQA’s operational procedures and regulations.

The terminal is designed handle up to 12 million tones of dirty cargo. Two 38 ton capacity grab cranes

will unload the coal from the vessels. One overhead conveyor will move coal to open stacks from where

shovel loaders will load the coal to trucks or railway wagons (for overland transport). The un-loaders will

have a reach of 28 m (fully loaded) or 44 m (at 30 tons) and will be capable of barge operations. All

required buildings and utilities are planned to be built in the first phase. Upon arrival at the gate, clinker

will be stored also on open yards whereas bulk cement will be stored in silos. Both Cement and clinker

will be transferred to the ship-loader via the trestle conveyor and the jetty gallery conveyor. These rail

mounted loaders will have capacities of 1,800 tph for bulk cement or 1,200 tph for clinker and an

outreach of 27m.

Presently, with the available water depths in the main navigation channel, ships up to 55,000 DWT are

able to approach the Port Qasim with flood tide. This ship size shall be sufficient for the operations of

phase 1 of the Project. However, in the future the navigation channel is planned to be deepened by Port

Qasim Authority for access of ships of 75,000 DWT, and to achieve that, the PQA will have to dredge the

channel up to CD -15.00 m.

The project will have two berths of total length of 440 m; sufficient to accommodate two Post Panamax

vessels at the same time with a distance bow to bow of 30 m. Night navigation will be available for all

vessels. The extension of the rails to cover both berths also allows handling of coal ships at two berths

when no cement or clinker vessels are in port, which effectively increases berth throughput potential.

Road access to the proposed terminal will be via the existing road network i.e. from the National

Highway down the main approach road leading to Port Qasim, with an access road leading towards the

onshore dry bulk material stockyard. It is intended that the imported coal will be delivered from the

stockyard into road vehicles for distribution to Karachi and surrounding areas, as well as for distribution

up country. Similarly exports of cement and clinker will be delivered by road vehicles and combined with

the delivery of coal, these commodities are expected to exceed 8 million tons per annum, before PIBT

considers the possible introduction of a new rail link development. As part of the IA, PQA is responsible

for providing the site access road.

To minimize dust escape a dust suppression system by water spray will be installed. At transfer stations

between conveyors there will be also water spray. It is worth mentioning that vacuum dust filters would

not work with wet coal and create an explosion hazard with dry coal dust.




Platform scales with load cells will be located at the gate to register the weight of incoming and

outgoing trucks. Belt scales are used to control the amount of cargo handled, although final cargo

quantities are estimated by ship survey. Cement trucks are unloaded pneumatically. A large compressor

station supplies the compressed air. Vacuum dust bag filters are used to clean the air escaping on top of

the cement silos and at conveyors transfer stations. The filters are cleaned by compressed air impulses.

Sample taking equipment is used to collect cargo for the quality control. A fleet of shovel loaders is

required to load coal into trucks, to clean the ship holds and reload clinker to the conveyors for export.

Commercial operations are expected to commence from Second Quarter 2015.

2. Management The management of PIBT have over 40 years of experience in ports and shipping sector wherein they

have successfully developed, operated and managed a number of companies including Pakistan

International Container Terminal Limited (PICT), which is the 3rd largest container terminal operator in

Pakistan. Over the years the sponsors have done well to recruit and train a highly rated workforce with

effective policies and benefits. The management has been able to attract and retain talent through

various incentives and policies such as share ownerships in the company.

Marine Group came into inception over four decades ago, with a vision to be of service to Pakistan’s

economy, through the provision of a variety of superior services to a cross-section of clientele, both

locally and globally.

With the Group’s first company, Premier Mercantile Services (Pvt.) Ltd., established in 1964, it has

progressively grown manifold. Today, it is diversified into Maritime Services, Stevedoring, Terminal

Operations, Chartering of ships, Global Logistics, Agency Services and Insurance Cover to the

International Maritime Industry, Information Technology and Travel and Tourism. Led by a team of

highly dedicated and experienced professionals, the Marine Group continues to set new standards of

excellence in the local economy, through satisfying its customers with world-class state-of-the-art

products and services. The Group’s prestigious position is testimony of the visionary foresight and

relentless efforts of the Group’s leadership, which have led it to achieve many milestones and landmarks

over the years, thus making it a benchmark in the economy of Pakistan.

Over the years, this group grew, which now comprises of:

Premier Mercantile Services (Private) Limited

Marine Services (Private) Limited.

Pakistan International Container Terminal Limited

Premier Software (Private) Limited

Pegasus Consultancy (Private) Limited

Port Link International Services (Private) Limited

AMI Pakistan (Private) Limited

Travel Club (Private) Limited




Cargo Link (Private) Limited

Libaz Sourcing (Private) Limited

Exhibition Services (Private) Limited

Marine Logistics (Private) Limited

Marine International Container Terminal (Private) Limited

2.1 Board of Directors’

Capt. Haleem A. Siddiqui - Chairman

Sharique Azim Siddiqui - Chief Executive Officer / Director

Aasim Azim Siddiqui - Director

Capt. Zafar Iqbal Awan - Director

Syed Nizam A. Shah - Director

Ali Raza Siddiqui - Director

M. Masood Ahmed Usmani, FCA - Director

Captain Haleem Ahmed Siddiqui - Chairman

Mr. Haleem is the chairman of Marine Group of Companies and PICT. He founded the first stevedoring

company in the country, PMS. He was also instrumental in making Marine Group a one stop shop for all

ship related services in the country. He joined Pakistan Merchant Navy in February 1959 as Cadet Officer

on Pakistani Flag Vessel and served in various capacities on Pakistani Flag Vessel as well as on British

Ship after obtaining the required qualifications. He got first command in June 1968 after obtaining the

qualification of Master Marine from U.K. and commanded various vessels till 1971. He is a Fellow

Member of Chartered Management Institute of U.K, Chartered Institute of Logistics & Transport of U.K,

International Federation of Shipmasters’ Associations, U.K, SAARC Chamber of Commerce & Industry,

and Lifetime Special Member of the Confederation of Asia-Pacific Chambers of Commerce and Industry.

Name, Address Occupation Directorship in other Companies

Capt. Haleem Ahmed Siddiqui SS-5A, DHA, Phase-II, Ext. Karachi

Business

EPICAIR (Private) Limited


Marine Services (Private) Limited





Guardian Risk Services (Private) Limited

Premier Tracking Solution (Private) Limited


Interactive Cells (Private) Limited

Pakistan Intermodal (Private) Limited




Sharique Azim Siddiqui - Chief Executive Officer / Director

Mr. Sharique is the CEO of PIBT. He joined Marine Group in 1997 and was involved in various Group

Ventures. He served as Director Project and Chief Operating Officer at PICT and was in-charge of

container terminal project planning, coordination and implementation. He led the team for the initial

bidding for PIBT terminal and was instrumental in IA negotiations with PQA for the same project. He also

heads Marine International Container Terminal (MICT) project, an Inland Container Depot in Lahore with

direct Railways connectivity for operating dedicated freight trains between Karachi and Lahore. The

Project is spread over 30 acres and is on public-private partnership basis with Pakistan Railways. He did

his Master of Arts in Economics from Tufts University, Boston, USA.


Sharique Azim Siddiqui 10-A,/II, Sunset Street, DHA, Phase-II, Ext., Karachi

Business




Global Sourcing (Private) Limited

Libas Sourcing (Private) Limited

Marine & Trading Agencies (Private) Limited




Millennium Technologies (Private) Limited

Pollux & Castor Shipping (Private) Limited











Aasim Azim Siddiqui- Director

Mr. Aasim is the managing director of Marine Group of Companies. He founded corporate sector’s first

and leading exhibition organizing company in Pakistan, the Pegasus. He also founded Organization for

Social Development Initiatives (OSDI). OSDI has formed with an objective to improve living conditions for

the poorest communities in the rural areas of Pakistan through sustainable poverty reduction strategies.

He has been engaged with marine and shipping industry over the last twenty (20) years and has been

with PICT since its inception. He was instrumental in arranging financing from IFC and OFID for PICT and

has played instrumental role in project roll out of PICT. Further he played pivotal role in arranging




financing of USD 53 million for PICT from IFC & OFID. Mr. Aasim did his Master of Business

Administration from Clark University, Worcester, MA USA.


Aasim Azim Siddiqui 10-A,/I, Sunset Street, DHA, Phase-II, Ext., Karachi

Business





Global Sourcing (Private) Limited

Libas Sourcing (Private) Limited

Marine & Trading Agencies (Private) Limited



Millennium Technologies (Private) Limited



Pollux & Castor Shipping (Private) Limited











Capt. Zafar Iqbal Awan – Director

Mr. Awan joined the Marine Group in 1991 and worked in various venture of the group in the shipping

sector. He posses over 30 years of experience in the field of shipping. He is currently working as the CEO

of PICT. He is a member of International Federation of Shipmasters’ Association (IFSMA) UK, Institute of

Chartered Ship Brokers, Royal Institute of Navigation, Chartered Institute of Logistics & Transport,

Nautical Institute, Master Mariners Society of Pakistan, Pakistan Belgium Business Forum. He graduated

from Pakistan Marine Academy in 1974. He qualified Master Mariner Class 1 (F.G.) Examination in the

year 1985.





Capt. Zafar Iqbal Awan P-9, 8the Street, DHA, Phase-I, Karachi

Business


Pakistan Intermodal Limited

Syed Nizam Ahmed Shah – Founder Independent Director

He is a Founder Independent Director on the Board of PIBT. He has vast experience in the corporate

sector in Pakistan leading to Chief Executive of the largest multinational company operating in Pakistan,

Pakistan Tobacco Company, and the largest development finance institution of the Government of

Pakistan (NDFC). He has served on the Boards of major multinational companies and Boards of Public

Sectors Corporations including Habib Bank Limited and Civil Aviation Authority. He served as the

President of Overseas Chamber of Commerce & Industry (1985-88) and on the advisory councils of

Ministry of Commerce and Finance and the Privatization Commission. He was also on the Board of PICT,

the Hub Power Company Limited and Laraib Energy Limited.


Syed Nizam Ahmed Shah 4, Mery Road, Bath Island Karachi

Business


Kot Addu Power Company Limited

Ali Raza Siddiqui – Director

Mr. Ali Raza is the director of Bank Islami Pakistan Limited, UG Foods (Private.) Limited, R&R (Private)

Limited and Mahvash & Jahangir Siddiqui Foundation. Mr. Ali Raza Siddiqui joined JS-Investments as an

Executive Director in 2005. Previously, he was Assistant Vice President at AIM Investments, a wholly-

owned subsidiary of AMVESCAP Plc in Houston, U.S.A. At AIM, he was part of a five-person team

responsible for the management of USD 60 billion in mutual fund assets. He did is Bachelor of Arts

Degree from Cornell University, USA with double majors in Economics and Government.


Ali Raza Siddiqui H. No. D-185, Blcok-5, Shahra-e-Firdousi, Clifton, Karachi

Business

Bank Islami Pakistan Ltd

EFU General Insurance Limited

Mehvish & Jehangir Siddiqui Foundation




M. Masood Ahmed Usmani – Director

Mr. Masood Usmani has over twenty (20) years of experience in dealing with the financial matters of the

marine and shipping industry. He is Group Director Finance of Marine Group of Companies and served

as director and Chief Financial Officer of PICT. He was part of the team which negotiated & concluded

the financing deal with IFC and OFID for financing of PICT and arranged floatation of PICT’s shares at

KSE. He supervise all financial and treasury activities including taxation & corporate functions, ensuring

full compliance with the statutory and regulatory provisions applicable to the group’s operation in

Pakistan of Marine Group of Companies. He is also responsible for overall administration, HR, IT and

procurement department of the organization. He is fellow member of the Institute of Chartered

Accountants of Pakistan (ICAP) and of Institute of Corporate Secretaries of Pakistan (ICSP).


M. Masood Ahmed Usmani 111/II, Khayaban-e-Ameer Khusro DHA,Phase-VI, Karachi

Business


2.2 Secretary and Chief Financial Officer Arsalan Iftikhar Khan

Mr. Khan has over 10 years of experience in the field of accounting, taxation and corporate finance. He

also served as Finance Manager and company secretary of PICT. He has been working with Marine

Group since 2008, supervising the financial and treasury activities of the organization and presenting

and reporting accurate and timely financial information of the company. Prior to joining PICT he was

working with a telecom company as financial controller after his training from Ernst & Young Ford

Rhodes Sidat Hyder. He is an Associate Member of the Institute of Chartered Accountants of Pakistan

(ICAP) and of Institute of Corporate Secretaries of Pakistan (ICSP).

2.3 Information In Respect Of Associated Company Premier Mercantile Services (Private) Limited (PMS)

PMS has been engaged in providing cargo handling services at the Karachi Port since its inception in

1964. PMS is one of the first stevedoring companies in Pakistan to invest in modern container handling

equipment and state of art, fully mechanized dirty bulk cargo terminal and is currently one of the

leading stevedores at the Karachi Port. It is equipped with the latest container handling equipment and

provides on-board stevedoring services and container handling services to several shipping lines.

PMS offers state of the art stevedoring services and has leading share of the market. Keeping pace with

the technological development in cargo handling sector, PMS was the first company in Pakistan to install




fully, mechanized container handling equipment at Karachi Port in the early 1980’s. PMS was awarded the BOT contract by Karachi Port Trust to establish and run a container terminal, as part of the agreement PMS incorporates PICT as terminal operating company and the Implementation agreement (between KPT and PMS) was novated to PICT in 2003. PMS is currently the largest shareholder of PIBT with 35% of the paid up capital of PICT. 2.4 Chief Executive Officer Sharique Azim Siddiqui

Mr. Sharique has been appointed as the Chief Executive Officer of the company with effective from March 30, 2010 and is also an elected director of the company. He has considerable experience in the field of terminal operations, corporate financing and people oriented management style organizations. He is also managing various companies of the group. 2.5 Number of Directors Pursuant to Section 178 of the Companies Ordinance, 1984, the number of Directors of the Company shall not be less than seven. 2.6 Qualification of Directors Save as provided in Section 187 of the Companies Ordinance, 1984 no person shall be appointed as Director

unless he is a member of the Company except for the nominee Directors of banks and financial institutions.

2.7 Remuneration of the Directors Other than the working directors including CEO who are compensated with remuneration, house rent,

retirement benefits, medical, utilities and company maintained cars, all the directors are only remunerated

for attending Board meeting. Remuneration of Directors, CEO and other executives are disclosed in annual

report of the company.

2.8 Interest of Directors The directors may also be regarded to be interested to the extent of loans advanced to the company from time to time by them. The directors may also be interested to the extent of fee, if any, payable to them for attending the board meetings. The directors performing whole time service to the Company may also be deemed interested in the remuneration payable to them by the Company. The directors may also be regarded as interested to the extent of shares that held by them or by the companies in which they are directors and the dividends to be declared on their shareholding in the Company.




2.9 Interest of Directors in Property Acquired By the Company

None of the Directors of the Company had or have any direct interest in any property acquired or now proposed to be acquired by the Company. 2.10 Benefits to Promoters and Officers No benefit has been given to the promoters and officers of the company otherwise than remuneration for services rendered as full time executives of the Company. 2.11 Dividend Policy The Policy of directors about distribution of profits will be to maintain a fair balance between cash dividend to the shareholders and earnings retained to improve and enlarge the business, thus increasing capital value of the shareholders’ investments. The rights in respect of capital and dividends attached to each share would be the same. The Company in General Meeting may declare dividends but no dividends shall exceed the amount recommended by the Directors. 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 profits of the Company of the year or any other undistributed profits. No unpaid dividends shall bear interest against the Company. No dividend shall be declared by the Company for any financial year out of the profits of the Company made from the sale or disposal of any immovable property or assets of capital nature comprised in the undertaking or any of the undertaking of the Company. 2.12 Deduction of Zakat & Withholding Tax Income distribution will be subject to deduction of Zakat at source under the Zakat and Ushr Ordinance,

1980, where applicable along with Withholding tax to be deducted from dividend at the prevailing rate as

per Income Tax Ordinance 2001.

2.13 Election of Directors Directors of the company are elected in accordance with the provisions of Section 178 of the Companies Ordinance 1984, for a period of three years. 2.14 Voting Rights On a show of hand every member present in person shall have one vote except for election of Directors in which case the provisions of Section 178 of the Companies Ordinance, 1984 shall apply. On a poll every member present in person or by proxy shall have voting rights as laid down in Section 160 of the Companies Ordinance, 1984. 2.15 Borrowing Powers The Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (both present and future) and to issue debentures, debenture stock, FTC's and other securities whether outright or collateral security for any debt, liability or obligation of the Company as provided for in the Articles of Association of the Company.




3. Miscellaneous

Registered Office

2nd Floor, Business Plaza, Mumtaz Hassan Road Karachi 74000 Telephone No. (021) 32400450-3 Fax No. 32400281

Bankers of the Company

Al-Baraka Bank Limited Bank Islami Pakistan Limited Faysal Bank Limited Js Bank Limited Meezan Bank Limited National Bank Limited Nib Bank Limited Samba Bank Limited The Bank Of Punjab

Auditors

Ernst & Young Ford Rhodes Sidat Hyder - Chartered Accountants 6th Floor, Progressive Plaza Beaumont Road Karachi.

Legal Advisors

Khalid Anwer & Co. 153-K , Sufi Street, Block-2, PECHS, Karachi. Kabraji & Talibuddin Advocates & Solicitors 64-A/1, Gulshan-E-Faisal Bath Island, Karachi. The Continental Law Associates Panorama Centre Saddar, Karachi.

Registrar/Transfer Agent

Technology Trade (Private) Limited 241-C, Block-2 PECHS, Karachi. Telephone No. (021) 34391316-7




4. Material Documents and Contracts

Implementation Agreement signed with Port Qasim Authority for the establishment and operating of Coal, Cement and Clinker Terminal at Port Qasim.

Allotment letter of Back-up Storage Yard of 62 acre and Water Front Area of 9.72 acre issued from PQA.

Possession Letter of Back-up Storage Yard of 62 acre and Water Front Area of 9.72 acre issued from PQA.

Indenture of Lease of Back-up Storage Yard of 62 acre signed with PQA.

Agreement to lease of Water Front Area of 9.72 acre signed with PQA.

Approval for Coal, clinker/cement terminal at Port Qasim from Economic Co-ordination Committee.

NOC from Ministry of Defence.

NOC from Sind Environment Protection Agency.

Exemption Certificate from Competition Commission of Pakistan on Section 4 of the Competition Act, 2010

Equity Agreement with IFC.

Loan Agreement with IFC.

Loan Agreement with OFID.

Term Facility Agreement with Local Conventional Banks.

Musharka Agreement with Local Islamic Banks. 5. Inspection of Documents and Contracts Copies of the Memorandum and Articles of Association, Auditor's Certificates, feasibility report information

memorandum and copies of the agreements referred to in this Prospectus may be inspected during the

usual business hours on any working day at the Registered Office of the Company in accordance with the

provisions of the Companies Ordinance, 1984.

6. Legal Proceedings On March 15, 2012, the Company entered into an Engineering, Procurement and Construction (EPC)

Contract with a joint venture comprising of a local and a Turkish company. Pursuant to this EPC Contract

the Joint Venture Contractor had undertaken to engineer, procure, supply, construct, install, test and

commission civil works for the Company’s coal, cement and clinker bulk handling facility. Due to the

Joint Venture Contractor’s internal disputes and the consequent inability of the Joint Venture Contractor

to continue working in accordance with the EPC Contract, the duly appointed representative of the Joint

Venture Contractor notified the Company that the EPC Contract was being terminated. While the

Company accepted that the Joint Venture Contractor had ceased to continue any further work on the

project and that the EPC Contract stood terminated by the Joint Venture Contractor, the Company

disputed the grounds on which the termination notice had been issued. Consequently, the Company

instituted proceedings under Section 20 of the Arbitration Act, 1940 (Suit No. 568 of 2013) against the

Joint Venture Contractor in the High Court of Sindh at Karachi praying that the said dispute be referred

to arbitration in accordance with the parties’ arbitration agreement set out in the EPC Contract.




Separate proceedings were also instituted against the Company under Section 20 of the Arbitration Act,

1940 (Suit No. 670 of 2013) in the High Court of Sindh at Karachi. Subsequently, in terms of the EPC

Contract, the Company entered into a Settlement Agreement . Which was filed before the Court. Orders

from the Court are awaited.

The amount which the Company agreed to pay to the Joint Venture Contractor in full and final

settlement of its claims after due verification is Rs. 620 million.

7. INDEMNITY Article 128 of the Articles of Association of the Company provides that;

“Every officer or agent for the time being of the Company may be indemnified out of the assets of the

company against any liability incurred by him in defending any proceedings, whether civil or criminal, arising

out of his dealings in relation to the affairs of the company, except those brought by the company against

him, in which judgment is given in his favour or in which he is acquitted or connection with any application

under section 488 in which relief is granted him by the Court.”

8. VENDORS The Company has no vendors within the meaning of Clause 12 of Section 1 of Part-1 of the Second Schedule to the Companies Ordinance, 1984. 9. 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 Prospectus and is being published with all issues thereon except those released as newspaper advertisements. 10. SUBSIDIARY COMPANIES The Company has no subsidiary Company.

11. ECONOMIC JUSTIFICATION The PIBT project fits in very well in terms of the requirement of the economy to overcome power shortage while importing coal to be used as alternate fuel for electricity production as well as increased production of cement in addition to increase exports of cement. It will provide a cost effective and efficient infrastructure to import coal (a cheaper and reliable form of fuel) to reduce reliance on expensive imported coal. It will also provide infrastructure for export of cement in the bulk form that generates better overall margins for the manufactures.




Potential destinations for the Pakistani cement for the coming years are expected to be Iraq, Sri Lanka,

South Africa and East African countries, like Uganda, Kenya and Tanzania.

Recent Government Plans are targeting IPP Conversion to Coal in the next five years of over 10,000 MW.

Most of the indicators and policies point to increase in demand of imported coal. Coal plays a vital role in electricity generation worldwide and for the Cement Kilns in Pakistan. Coal-fired power plants currently fuel 41% of global electricity. USA generated 49% of its electricity from coal whereas India generated up to 46% of its electricity from coal last year. Government of Pakistan has also recognized this fact and has announced a very ambitious power generation target based on coal. On the supply side, there is very little being done to explore coal in the country. Pakistan has 21 coal mines, of which 13 are developed. 98% of Pakistan’s coal resources are based in the Sindh region, the largest being the Thar coalfield. Coal produced in Pakistan is in general high in sulphur and ash content, and coal mined in Sindh also has high moisture content. The ranking of Pakistani coals ranges from lignite to high volatile bituminous. The low thermal content / high ash content makes domestic coal less suitable for cement production and other industrial uses than higher quality imported coal. Cement producers are able to utilize a blend of domestic coal and higher quality imported coal to meet the requirements of coal-fired cement mills. The recent policies of Government of Pakistan for power production based on renewable fuels such as bagasse and other waste products also support coal as alternative/back up fuel. This is due to the fact that coal based power generation is economical than RFO. Availability of furnace oil is also an issue in the medium term as most of its extractable reserves lie in politically troubled areas of the world.

Foreign firms are interested in the Pakistan energy sector, mainly to convert current power plants

(belonging to both public companies and private sector) into coal-fired plants.

The increase in demand of imported coal appears reasonable given that the key advantage offered by

PIBT is the higher productivity which allows vessels to be discharged in a faster time. This should

translate into lower shipping costs for cargo imported via the terminal; either via lower charter costs or

by allowing customers with vessels on a time charter to achieve a greater number of round trip voyages

with the same vessel.

Overall contribution to the country

The Project is expected to:

(i) facilitate overall economic growth by further augmenting Pakistan's transport and logistics infrastructure through development of the country's first multi-purpose non-food dry bulk cargo terminal;

(ii) significantly improve overall efficiency in handling, storage and transportation of non-food dry bulk cargo by way of faster turnaround of vessels at the port as well as increased efficiency in inland transportation of cargo through road and rail networks;

(iii) enable handling and storage of imported coal in Pakistan in an environmentally responsible manner while ensuring high level of safety as per international standards;

(iv) provide requisite infrastructure to local cement producers for export of cement in bulk form thus facilitating access to new markets;




(v) generate additional revenue for the Government through taxation and royalty and lease payments to Port Qasim Authority (a government owned entity); and

(vi) send an important signal of support to local sponsors for development of sustainable businesses in Pakistan during a challenging economic environment.

12. MARKETING AND PROFITABILITY Imports of coal in the country are expected to increase owing to construction of coal fired power plants

and possible conversion of existing RFO based machines, as electricity generated through coal costs

roughly half as compared to the electricity generated through furnace oil. Government of Pakistan has

taken various steps on this front. Power Policy is about generating 20,000 MW on coal and the

government has provided policy incentive for coal conversion for existing industrial plants, allowance for

coal to be used as alternative fuel for renewable based power plants; amongst other initiatives. The

private sector is not far behind as evident by KESC MOU to handle coal for its upcoming 1,200 MW coal

conversion plant. PIBT is constantly receiving queries by textile sectors and other such interested parties

to handle coal import requirements for their power plants.

Faced by power shortages amid high energy costs, the country will have to add power plants to the

national grid to keep up with the required population and GDP growth and all the factors point to coal

as the main fuel for these new power projects going forward as coal is readily available from various

parts of the worlds, easily transportable and storable as well.

Sea based exports of cement is also likely to increase due to excess capacity in the country and stagnant

local demand. Due to high economies of scale, the manufacturers have every reason to increase

capacity utilization once a decent terminal facility is available for export. The target markets for

Pakistan’s sea based cement exports are likely to rebound going forward, post war reconstruction in Iraq

and soccer world cup in Qatar to name a few triggers. There is a definite trend towards investment in

bulk cement import facilities in key markets (Middle East, Africa).

Also, most cement plants operate on coal and hence higher exports of cement will further increase the

demand for imported coal. These factors combine to provide healthy economics for the project. Hence

there is reasonable assurance in terms of business volumes.

As per the business plan issued by HPC the Internal Rate of Return (IRR) is estimated to be 19.1% with a

Payback Period of 9 years.

13. CDS ELIGIBILITY

The Central Depository Company via its notice dates August 13, 2012 declared Ordinary shares of

Pakistan International Bulk Terminal Limited Eligible Security for the purposes of Central Depository

System (CDS) with effective from August 15, 2012.