Kot Addu Power Company Limited (KAPCO)

Kot Addu Power Plant (the "Power Plant") was built by the Pakistan Water and Power Development Authority ("WAPDA") in five phases between 1985 and 1996 at its present location in Kot Addu, District Muzaffargarh, Punjab. In April 1996, Kot Addu Power Company Limited ("KAPCO") was incorporated as a public limited company under the Companies Ordinance, 1984 with the objective of acquiring the Power Plant from WAPDA. The principal activities of KAPCO include the ownership, operation and maintenance of the Power Plant.

Shareholding Structure

On June 27, 1996, following international competitive bidding by the Privatisation Commission Government of Pakistan (the "Privatisation Commission"), the management of KAPCO was transferred to National Power (now International Power) of the United Kingdom, which acting through its subsidiary National Power (Kot Addu) Limited ("NPKAL"), bought shares representing a 26% stake in KAPCO. Later, NPKAL bought a further 10% shareholding in KAPCO increasing its total shareholding to 36%.

The other majority shareholder in KAPCO is WAPDA with a presentshareholding of 46%.

Following the successful completion of the Offer for Sale by thePrivatisation Commission (on behalf of WAPDA) in February 2005, 18% of KAPCO's shareholding is now held by the General Public.

On April 18, 2005 KAPCO was formally listed on all three Stock Exchanges of Pakistan.

Vision Statement

To be a leading power generation company, driven to exceed our shareholders' expectations and meet our customer’s requirements.

Mission Statement

To be a responsible corporate citizen

To maximise shareholders' return

To provide reliable and economical power for our customer

To excel in all aspects relating to safety, quality and environment

To create a work environment which fosters pride, job satisfaction and equal opportunity for career growth for the employees

Directors

Board of Directors

Syed Raghib Abbas Shah,esq.Chairman, Board of Directors

Syed Raghib Abbas Shah is Chairman of the Pakistan Water and Power Development Authority (“WAPDA”). He holds a Bachelor of Civil Engineering, Post Graduate Diploma in Civil Engineering and Bachelor of Law. He has 36 years of diverse experience in management, construction and O&M of Irrigation, Drainage & Reservoirs and Hydropower works alongwith Environmental safeguard of Projects.

Syed Raghib Abbas Shah is the Member of Institute of Engineers Pakistan, Pakistan Engineering Council, PANCID and Permanent Finance Committee of International Commission on Irrigation & Drainage (ICID). He also represented Pakistan National Committee on Irrigation & Drainage in Moscow, China, Malaysia & USA. Over the years he has attended high profile training courses in Pakistan and abroad.

Mr. Aftab Mahmood ButtChief Executive Officer

Mr. Aftab Mahmood Butt is the Chief Executive Officer of the Company since August 1, 2008. Prior joining to KAPCO, Mr. Butt was the General Manager Finance, Corporate Planning & Performance Monitoring in Pakistan Electric Power (Private) Limited and was the Nominee Director by WAPDA on the Company’s Board of Directors. Mr. Butt has also held Directorship in Lahore Electric Supply Company Limited, Peshawar Electricity Supply Company Limited, Tribal Area Electricity Supply Company Limited and Quetta Electricity Supply Company Limited. Mr. Butt is the Fellow Member of the Institute of Chartered Accountants of Pakistan. Mr. Butt has more than 15 years’ experience in Corporate and Finance Sector and has held various senior management positions in Pakistan and abroad. Mr. Butt is also on the Board of Directors of Central Power Purchasing (Guarantee) Limited and the Lahore Stock Exchange (Guarantee) Limited. He is a certified Director from the Pakistan Institute of Corporate Governance.

Syed Nizam Ahmad Shah,esq. Director

Mr. Nizam Shah has over 50 years of high professional experience in the fields of Industrial Management and Finance. He has held key positions leading to the Chief Executive ships of the largest Private Sector Multinational Company operating in Pakistan and the largest development Financial Institution of the Government of Pakistan in the Public Sector. He is former Chairman and Chief Executive of National Development Finance Corporation Limited. He is also the former Chairman and Chief Executive of Pakistan Tobacco Company Limited.

Mr. Nizam Shah holds directorship in Pakistan International Container Terminal Limited (P.I.C.T) and Pakistan International Bulk Cargo Terminal.

Mr. Malcolm Peter ClampinDirector

  Mr. Clampin has been associated with the Company since 2002. He served as Chief Executive of the Company from February, 2002 to September, 2006. Mr. Clampin is currently the Executive Managing Director of Arabian Power Company, UAE.

Mr. Clampin is a mechanical engineer with 40 years experience in the power sector. During the last 20 years he has held various senior management and executive positions in the U.K. and overseas.

He worked for the Central Electricity Generating Board, the U.K’s public utility, during the privatization of the electricity industry and subsequently has been actively involved in the transfer of power generation assets from the public to the private

sector in Poland, Malaysia and Turkey.

Mr. Anwar Ul HaqDirector

Mr. Anwar-ul-Haq has been on the Board of Directors of the Company since August, 2008. Mr. Haq is the Fellow of the Institute of Cost & Management Accountants of Pakistan. Mr. Haq is the General Manager Finance (Power), WAPDA. He has more than 30 years rich and varied managerial experience in the fields of Budgeting, financing, accounting, auditing, taxation and tariff modulation of WAPDA/Ex WAPDA corporate entities.

Mr. Haq also holds the Directorship in Lakhra Coal Development Company Limited, First Credit and Investment Bank Limited, WAPDA First Sukuk Company Limited and WAPDA Second Sukuk Company Limited.

Mr.Muhammad Zia Ur RehmanDirector

Mr. Zia-ur-Rehman has been on the Company’s Board of Directors since November, 2011. Mr. Zia-ur-Rehman is an Electrical Engineer and has a Post graduated diploma in Electric Power Distribution System from Norwegian Institute of Technology (NTH), University of Trondheim, Norway. Mr. Zia-ur-Rehman has 35 years diversified experience in different management position in WAPDA. Mr. Zia-ur-Rehman has attended high profile training courses in Pakistan and abroad. He is a certified Director from the Pakistan Institute of Corporate Governance.

Mr. MIchel Gantois Director

Mr. Gantois is the Executive Vice President & CFO of IPR- GDF Suez Asia. He has Master in Business kAdministration from Leuven, Belgium. He has 24 years Multilingual MBA senior financial executive with experience in energy and investment banking and track record in general management, strategy, corporate finance, project finance, structured finance, treasury, M&A, securitization, valuation, due diligence, risk management, accounting, audit, budgeting, reporting, tax, internal control.

Mr. Gantois is the Founder and Chairman of Utility Working Group of European Union Chamber of Commerce in China. He is the Member of American Chamber of

Commerce in China.

Directors Office Addresses

Name of Director Office Address

Syed Raghib Abbas Shah,esq. 701 WAPDA House, Lahore

Mr. Aftab Mahmood Butt 5 B/3, Gulberg III, Lahore

Syed Nizam Ahmad Shah,esq. 4 Mary Road, Bath Island, Karachi

Mr. Malcolm P. ClampinArabian Power CompanySas Al Nakhl Island Abu Dhabi, U.A.E.

Mr. Anwar-ul-Haq 713 WAPDA House, Lahore

Mr. Muhammad Zia-Ur-Rehman 722 WAPDA House, Lahore

Mr. Michel Jean Gilbert737/135 The Medison Unit 29D2 Sukhumvit Soi 41, Sukhumvit Road Klongton Sub-district, Klongtoey District Bangkok 10110, Thailand

.

Note: The above persons have been elected as Directors of the Company at the 7th Extraordinary General Meeting held on September 25, 2012

Power plant technology

KAPCO is Pakistan's largest Independent Power Producer (IPP) with a name plate capacity of 1600 MW. The Power Plant comprises of 10 multi fuel fired gas turbines and 5 steam turbines installed in 5 phases between 1985 and 1996. These turbines are divided into 3 energy Blocks with each Block having a combination of gas and steam turbines. The Power Plant's combined cycle technology enables KAPCO to use the waste heat from the gas turbine exhaust to produce steam in the Heat Recovery Steam Generator, which in turn is used to run the steam turbines thereby resulting in fuel cost efficiency and minimum wastage.

The Power Plant is a multi-fuel gas-turbine power plant with the capability of using 3 different fuels to generate electricity, namely: Natural Gas, Low Sulphur Furnace Oil and High Speed Diesel to generate electricity. The Power Plant is also the only major plant in Pakistan with the ability to self start in case of a country wide blackout.

Investor guide line:

 All queries relating to KAPCO may be addressed to:  Mr. A. Anthony Rath  Company Secretary & Legal Counsel  5-B/3, Gulberg-III  Lahore 54660, Pakistan  Tel: +92 (0)42 35772912 - 20  UAN: +92 (0)42 1111-KAPCO  Fax: +92 (0)42 35772907  Email: anthony.rath@kapco.com.pk  SECP :http://www.secp.gov.pk/complaintForm1.asp

Company Information Board of Directors

Syed Raghib Abbas Shah, esq. ChairmanMr. Aftab Mahmood Butt Chief Executive OfficerSyed Nizam Ahmad Shah, esq. DirectorMr.Malcolm Peter Clampin Director

Mr.Anwar Ul Haq DirectorMr. Muhammad Zia Ur Rehman DirectorMr. Michel Jean Gilbert Gantois Director

Audit CommitteeSyed Nizam Ahmad Shah,esq. ChairmanMr. Malcolm P. Clampin MemberMr. Anwar-ul-Haq MemberMr. Muhammad Zia ur Rehman MemberMr. Michel Jean Gilbert Gantois Member

HR CommitteeMr. Malcolm P. Clampin Chairman

Mr. Anwar-ul-Haq Member

Mr. Aftab Mahmood Butt Member

Company SecretaryMr. A. Anthony Rath

AuditorsA. F. Ferguson & Co., Chartered Accountants, Lahore, Pakistan

Legal AdvisorsKabraji & TalibuddinAdvocates and Legal Counsellors, Karachi, Pakistan

Bankers

Citibank, N.A National Bank of Pakistan

Habib Bank Limited Faysal Bank Limited

Allied Bank Limited Bank Islami Pakistan Limited

Bank Alfalah Limited Samba Bank Limited

MCB Bank Limited Meezan Bank Limited

Standard Chartered Bank (Pakistan) Limited

Corporate Office5-B/3, Gulberg-IIILahore 54660 PakistanTel: +92 (0)42 3577 2912 - 20UAN: +92 (0)42 1111-KAPCOFax: +92 (0)42 3577 2907, 3577 2922

Power PlantKot Addu Power Complex, Kot AdduDistrict Muzaffargarh (P.C. 34060), PakistanUAN: +92 (0)66 1111-KAPCOTel. +92 (0)66 230 1041, +92 (0)66 1111-KAPCOFax:+92 (0)66 230 1025

Registered OfficeHouse No. 4, Street No. 54-AF-7/4, Islamabad, Pakistan

Shares RegistrarTHK Associates (Private) LimitedGround Floor, State Life Building No. 3Dr. Ziauddin Ahmed RoadKarachi 75530, PakistanTel: +92 (0)21 111 000 322 (UAN)

Associated Companies

Pakistan Water and Power Development Authority("WAPDA")www.wapda.gov.pkNational Power (Kot Addu) Limitedwww.iprlc-gdfsuez.com

Registration/NTNRegistration Number: 0035513NTN: 0708010-7

Symbol: KAPCOKSE: www.kse.com.pkLSE: www.lse.com.pkISE: www.ise.com.pk

Rating of CompanyJCR-VIS Credit Rating Company LimitedAffiliate of Japan Credit Rating Agency ,LtdAs of February 21,2011Rating Type: EntityMedium to Long Term:AA+Short Term:A-1+

Associate Membership1- Overseas Chamber of Commerce and Industry2- Islamabad Chamber of Commerce and Industry3- Pakistan Institue of Corporate Governance4- Employers Federation of Pakistan

ISO CertificationISO-9001:2000, Quality Management SystemISO-14001:2004, Environment Management SystemOHSAS-18001:1999, Occupational Health and Safety Assesment Series

Material information

KAPCO is managed through a suite of agreements signed between it and its customer (WAPDA), Government of Pakistan, and fuel suppliers. These include:

Power Purchase Agreement ("PPA")The PPA is between WAPDA and KAPCO. Inter alia, the PPA determines the tariff structure and principles of operating the Power Plant. The PPA includes an implicit return built into the tariff provided. KAPCO maintains its available capacity at the contractual level identified in the PPA. KAPCO has robust and effective engineering, financial, procurement and HR strategies in place to ensure that contractual capacity levels are maintained. Over the last two years, dependable capacity levels have been significantly above the contracted levels.

Gas Supply Agreement ("GSA")The GSA is between Sui Northern Gas Pipelines Limited ("SNGPL") and KAPCO. Inter alia, the GSA guarantees a certain quantity of gas deliveries during off peak months from SNGPL.

Oil Supply Agreement ("OSA")The OSA is between KAPCO and Pakistan State Oil Company Limited ("PSO"). PSO is the largest oil marketing company in Pakistan and is engaged in the nationwide storage, distribution and marketing of various petroleum, oil and lubricant products. Inter alia, the OSA covers the supply to KAPCO of fuel, diesel, oil, greases, lubricants and additives for the requirement of the Power Plant.

Ehs

Integrated Management System (IMS)

KAPCO is the first company in

Pakistan to be awarded three simultaneously accreditations

under the title of the Integrated Management

System. For its achievements in areas of quality, environment and safety, KAPCO was awarded in

July 2004 certificates of ISO

19001 - 2000 Quality

Management System; ISO

14001 - 1996, Environment

Management; and OHSAS 18001 -

1999 Occupational

Health & Safety Management.

Quality Management SystemKAPCO Quality Management System ensures that processes of the organisation are defined in accordance with recognised international standards. This system serves as a tool for providing confidence to management (Internal Quality Assurance) and to customers & shareholders (External Quality Assurance).

Environment Management System

Environment Management System provides a systematic approach to comply with National Environmental Quality Standards (NEQs). Plans have been established for monitoring and continuous improvement in our environmental performance.

Occupational Health and Safety Management SystemBeing a Safety conscious company, KAPCO has implemented an Occupational Health and Safety Management (OH&S) System. This system has enabled the Organisation to control OH&S risks and improve health and safety performance.

The System has been planned on the basis of OH&S hazards & risk assessment and relevant legal requirements of the Country. For operation of the System, responsibilities, awareness & training, documentation operational control, departmental objectives and emergency preparedness/ response have been implemented at all levels in the company. Performance of the System is

monitored, measured and recorded and actions are planned accordingly. Consistent adherence with the System and continual improvement is ensured by periodic management reviews and internal/external audits.

Hr

KAPCO with its broad vision of Human Resource Management provides life-long career development opportunities for qualified, competent and hard-working professionals. Currently the employee strength is approximately 588. All of the employees are well-trained and committed to their jobs.

KAPCO endeavours to create a conducive work environment which fosters pride, job satisfaction and equal opportunity for career growth of the employees.

KAPCO owns and maintains housing facilities for its employees and their families. The residential colony is spread over 170 acres and comprises over 900 houses, a ten bed hospital, staff and officers' recreation facilities, two shopping centres, a bachelors hostel, a guest house, secondary schools for boys and girls and three mosques. The employees and their dependants are provided with full medical cover.

Well-being of the employees families along with ample recreationalactivities is essential for employees in order to deliver optimumcapabilities with complete peace of mind. Fully understanding thisimportance, KAPCO promotes sports and recreation activities amongstemployees and their families.

KAPCO is an equal opportunity employer. KAPCO maintains a strict induction standard and uses a merit base when hiring new employees to ensure the concept of the "Right Person for the Right Job".

Human Resource DevelopmentKAPCO greatly values its employees and therefore Human Resource Development ("HRD") is a high priority in KAPCO's corporate objectives. HRD programmes are developed, from time to time, with a view not only to enhance essential business and professional skills but also to focus on the personal development of employees.

A long-term view has been established to address personal development and succession planning through effective training programmes.

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Community

KAPCO as a responsible Corporate Citizen not only generates electricity, but is also dedicated to improve the well-being of the community it operates in. Since its inception in June 1996, KAPCO has initiated a comprehensive Social Action Programme with special emphasis on basic health and education facilities in order to improve the quality of life of the local people.

KAPCO's primary objectives are as follows:

Health CareProvision of health care equipment, infrastructure facilities to up-grade the standard of local government hospitals, primary and preventative medical care including free consultation, medicines, vaccinations, eye operations, surgeries and complete treatment of diseases like Tuberculosis for deserving patients. Enhance awareness among the local community in preventative health care.

EducationProvision of

Key Statistics for KAPCO

Current P/E Ratio (ttm) 7.0145

Estimated P/E(06/2013) -

Relative P/E vs. KSE100 0.8559

Earnings Per Share (ttm) 6.9000

Est. EPS (06/2013) -

Est. PEG Ratio -

Market Cap (M PKR) 42,604.26

Shares Outstanding (M) 880.25

30 Day Average Volume 435,400

Price/Book (mrq) 1.8015

Price/Sale (ttm) 0.4239

Dividend Indicated Gross Yield 14.26%

Cash Dividend (PKR) 3.1500

Last Dividend 10/12/2012

5 Year Dividend Growth 2.83%

Next Earnings Announcement 02/15/2013mrq = Most Recent Quarter; ttm = Trailing Twelve Months

Income Statement for KAPCO

Revenue

Net Income (M/PKR)

Profit Margin (%)

Jun 2011Jun 2012050,000100,000150,000200,0005.00 %6.00 %7.00 %8.00 %9.00 %Revenue (M): 100,504.3040Net Income (M): 6,071.2870Profit Margin (%): 6.0408

Company Profile & Key Executives for KAPCO

Kot Addu Power Company Limited owns, operates, and maintains a power station and generating units.

Aftab Mahmood ButtChief Executive Officer A Anthony RathSecretary

More Company Profile & Key Executives for KAPCO

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