Annual Report 2023

NOTICE OF THE

32ND ANNUAL GENERAL MEETING

Notice is hereby given that the 32nd Annual General Meeting of the Company will be held on Monday, October 16, 2023 at 10:00 am at Marriott Hotel, Abdullah Haroon Road, Karachi to transact the following business:

  1. ORDINARY BUSINESS
  1. To receive and adopt the Annual Audited Financial Statements of the Company for the year ended June 30, 2023, together with the Directors' and Auditor's Reports thereon.
  2. To approve and declare the final dividend of PKR 6.00 (60%) per share as recommended by the Board of Directors for the year ended June 30, 2023.
  3. To appoint A.F Ferguson & Co., Chartered Accountants as Auditors of the Company and to fix their remuneration for the year ending June 30, 2024.
  1. SPECIAL BUSINESS

To consider and if thought appropriate, to pass with or without modification, the following resolution as special resolutions:

  1. To consider and approve circulation/dissemination of Annual Audited Financial Statements through QR enabled code and weblink and to pass the following Special Resolution(s) with or without modification(s):
    "RESOLVED THAT QR enabled code and web link of the annual audited financial statements of the company be circulated to members, subject to the requirements of Notification No. S.R.O. 389(1)12023 of Securities & Exchange Commission of Pakistan dated 21st March 2023 instead of CD/DVD/ USB.
    FURTHER RESOLVED THAT, the Company shall be considered compliant with the relevant requirements of section 223(6) of the Companies Act, 2017 by sending the Audited Financial Statements through e-mail and/or sending a notice of meeting containing a QR code and the weblink address. In case a hard copy of Audited Financial Statements and/or Notice of AGM of the Company is desired, a specific request for the same will be made.
    FURTHER RESOLVED THAT the Company Secretary be and is hereby authorized to do all necessary acts, deeds and things in connection therewith and ancillary thereto as may be required or expedient to give effect to the spirit and intent of the above resolution.
  2. Availing finance facilities to meet Sponsor obligation under Sponsor Support Agreement in relation to Thar Energy Limited ("TEL"):
    "RESOLVED THAT further to the resolutions passed by the members of the Company on October 24, 2019 to provide sponsor support in relation to the Put Option / Commercial Risk Guarantee (the "TEL Put Option / CRG") provided by local banks and financial institutions (including Habib Bank Limited) ("TEL Put Option / CRG Financiers") to the foreign lenders of TEL to the extent of USD 10,000,000 (United States Dollars Ten Million), the approval of the members of the Company is hereby accorded in terms of Section 199 of the Companies Act, 2017 and the regulations made thereunder, for the Company to provide additional sponsor support, by way of cash or a standby letter of credit, up to the extent of USD 25,000,000 (United States Dollars Twenty Five Million) (or PKR equivalent) (the "TEL

Put Option / CRG Support Amount") for various exposures being assumed by the TEL Put Option

  • CRG Financiers (including any foreign exchange risk and mark-up / interest), and such sponsor support shall be called to cover any shortfall that TEL is unable to cover / provide to the TEL Put Option / CRG Financiers. Such sponsor obligation shall be valid till June 30, 2035 or such period until the liabilities / obligations of the Company remain undischarged, whichever is later.

FURTHER RESOLVED THAT the Company is authorized to provide security in form and substance acceptable to the TEL Put Option / CRG Financiers or such alternate / additional security as the TEL Put Option / CRG Financiers may require from time to time up to the TEL Put Option / CRG Support Amount with such margin and on such terms as may be deemed appropriate by the Authorized Persons (defined below).

FURTHER RESOLVED THAT the CEO, CFO and the Company Secretary of the Company (the "Authorized Persons") are jointly and/or severally authorized to negotiate, finalize and execute all necessary documents and agreements including any amendments thereto in relation to the foregoing resolutions including but not limited to the security, sponsor support and other related documents and do all other matters incidental thereto, and carry out any other act or step which may be ancillary and

  • or incidental to do the above and necessary to fully achieve the object the foregoing resolutions."

3. Availing finance facilities to meet Sponsor obligation under Sponsor Support Agreement in relation to ThalNova Power Thar (Private) Limited ("TN"):

"RESOLVED THAT further to the resolutions passed by the members of the Company on April 16, 2019 to provide sponsor support in relation to the Put Option / Commercial Risk Guarantee (the "TN Put Option / CRG") provided by local banks and financial institutions (including Habib Bank Limited) ("TN Put Option / CRG Financiers") to the foreign lenders of TN to the extent of USD 7,000,000 (United States Dollars Seven Million), the approval of the members of the Company is hereby accorded in terms of Section 199 of the Companies Act, 2017 and the regulations made thereunder, for the Company to provide additional sponsor support, by way of cash or a standby letter of credit, up to the extent of USD 20,000,000 (United States Dollars Twenty Million (or PKR equivalent) (the "TN Put Option / CRG Support Amount") for various exposures being assumed by the TN Put Option / CRG Financiers (including any foreign exchange risk and mark-up / interest), and such sponsor support shall be called to cover any shortfall that TN is unable to cover / provide to the TN Put Option / CRG Financiers. Such sponsor obligation shall be valid till July 30, 2034 or such period until the liabilities / obligations of the Company remain undischarged, whichever is later.

FURTHER RESOLVED THAT the Company is authorized to provide security in form and substance acceptable to the TN Put Option / CRG Financiers or such alternate / additional security as the TN Put Option / CRG Financiers may require from time to time up to the TN Put Option / CRG Support Amount with such margin and on such terms as may be deemed appropriate by the Authorized Persons (defined below).

FURTHER RESOLVED THAT the CEO, CFO and the Company Secretary of the Company (the "Authorized Persons") are jointly and/or severally authorized to negotiate, finalize and execute all necessary documents and agreements including any amendments thereto in relation to the foregoing resolutions including but not limited to the security, sponsor support and other related documents and do all other matters incidental thereto, and carry out any other act or step which may be ancillary and

  • or incidental to do the above and necessary to fully achieve the object the foregoing resolutions."

Annual Report 2023

4. Providing Security for the Standby Letter of Credit issued for and on behalf of Thar Energy Limited ("TEL") under its Power Purchase Agreement executed with the Central Power Purchasing Agency (Guarantee) Limited ("CPPA-G")

"RESOLVED THAT the approval of the members of the Company be and is hereby accorded in terms of Section 199 of the Companies Act, 2017 and the regulations made thereunder, to create a charge on assets of the Company, of up to an amount of USD 7,500,000/- (United States Dollars Seven Million Five Hundred Thousand) (or PKR equivalent), or to provide such security as may be required by lenders / banks / financial institutions up to the aforementioned amount, for the purpose of securing the obligations of TEL under a letter of credit issued for and on behalf of TEL in favour of the Central Power Purchasing Agency (Guarantee) Limited under its Power Purchase Agreement with TEL. Such obligation shall be valid for a period of 10 (ten) years, or such period until the liabilities / obligations of the Sponsors remain undischarged, whichever is later.

FURTHER RESOLVED THAT the CEO, CFO and the Company Secretary ("Authorized Persons"), acting jointly and/or severally are authorized to negotiate and finalize the terms of such agreements and security documents and to execute all necessary documents and agreements in relation to the creation

and perfection of same including but not limited to the security, and other related documents, and filings, and do all other matters incidental thereto, and carry out any other act or step which may be ancillary and / or incidental to do the above and necessary, including any amendments, restatements, extensions, addenda or supplementals to such documents as may be required from time to time, to fully achieve the object of the aforesaid resolutions."

5. Providing Security for the Standby Letter of Credit issued for and on behalf of ThalNova Power Thar (Private) Limited ("TN") under its Power Purchase Agreement executed with CPPA-G

"RESOLVED THAT the approval of the members of the Company be and is hereby accorded in terms of Section 199 of the Companies Act, 2017 and the regulations made thereunder, to create a charge on assets of the Company, of up to an amount of USD 5,250,000/- (United States Dollars Five Million Two Hundred Fifty Thousand) (or PKR equivalent), or to provide such security as may be required by lenders / banks / financial institutions up to the aforementioned amount, for the purpose of securing the obligations of TN under a letter of credit issued for and on behalf of TN in favour of the Central Power Purchasing Agency (Guarantee) Limited under its Power Purchase Agreement with TN. Such obligation shall be valid for a period of 10 (ten) years, or such period until the liabilities / obligations of the Sponsors remain undischarged, whichever is later.

FURTHER RESOLVED THAT the CEO, CFO and the Company Secretary ("Authorized Persons"), acting jointly and/or severally are authorized to negotiate and finalize the terms of such agreements and security documents and to execute all necessary documents and agreements in relation to the creation and perfection of same including but not limited to the security, and other related documents, and filings, and do all other matters incidental thereto, and carry out any other act or step which may be ancillary and / or incidental to do the above and necessary, including any amendments, restatements, extensions, addenda or supplementals to such documents as may be required from time to time, to fully achieve the object of the aforesaid resolutions."

6. Initial Debt Service Reserve Account ("DSRA") Shortfall and Subsequent DSRA Letter of Credit in respect of ThalNova Power Thar (Private) Limited ("TN")

"RESOLVED THAT the approval of the members of the Company be and is hereby accorded in terms of Section 199 of the Companies Act, 2017 and the regulations made thereunder, to authorize the Company, as a sponsor of TN, to procure issuance of a sponsor standby letter of credit to cover for the Initial Debt Service Reserve Account Shortfall, of an amount estimated not to exceed USD 20,000,000 (United States Dollars Twenty Million) (or PKR equivalent). Such SBLC shall be valid for the tenure of the project loan of TN.

FURTHER RESOLVED that the Company is hereby authorized to issue a sponsor standby letter of credit to cover for the Debt Service Reserve Account, of an amount estimated not to exceed USD 20,000,000 (United States Dollars Twenty Million) (or PKR equivalent). Such sponsor obligation shall be valid for the tenure of the project loan of TN or such other date as may be prescribed under the Sponsor Support Agreement dated July 22, 2019 entered into between the Sponsors of TN (including HUBCO), the Shareholders of TN, TN and Habib Bank Limited as the intercreditor agent.

FURTHER RESOLVED that the CEO, CFO and the Company Secretary, acting jointly and/or severally are authorized to negotiate and procure the Standby Letter of Credit from banks/ financial institution(s); provide security as required by lenders on such terms and conditions as may be deemed appropriate for the issuance of Standby Letter of Credit and for the said purpose negotiate and execute agreements, security documents, confirmations, notices, filings and certificates as may be agreed with the lenders including any amendments, extensions, restatements, addenda or supplementals thereto, or required by law."

By Order of the Board

Date: September 22, 2023

Faiza Kapadia Raffay

Place: Karachi

Company Secretary

NOTES:

  1. All members are entitled to attend and vote at Meeting.
  2. The Share Transfer Books of the Company will remain closed from Tuesday, October 10, 2023 to Monday, October 16, 2023 (both days included) and the final dividend will be paid to the shareholders whose names appear in the Register of Members on Monday, October 9, 2023.
  3. A member entitled to attend and vote at the meeting may appoint a proxy in writing to attend the meeting and vote on the member's behalf. A Proxy need not be a member of the Company.
  4. Duly completed forms of proxy must be submitted with the Company Secretary at the Head Office of the Company no later than 48 hours before the time appointed for the meeting.
  5. Shareholders (Non-CDC) are requested to promptly notify the Company's Registrar of any change in their addresses and submit, if applicable to them, the Non-deduction of Zakat Form CZ-50 with the Registrar of the Company M/s. Famco Associates (Pvt.) Ltd, 8F, Next to Hotel Faran, Nursery, Block 6, PECHS, Shahra-e-Faisal, Karachi. All the Shareholders holding their shares through the CDC are requested to please update their addresses and Zakat status with their Participants. This will assist in the prompt receipt of Dividend.

Annual Report 2023

  1. For Attending the Meeting
    1. In case of individuals, the Account Holders of Sub-account Holders and / or the persons whose securities are in group account and their registration details are uploaded as per the Regulations, shall authenticate their identity by showing original Computerized National Identity Card (CNIC) or original passport at the time of attending the Meeting.
    2. In case of a corporate entity, the Board of Directors resolution / Power of Attorney with specimen signature of the nominee shall be produced (if it has not been provided earlier) at the time of attending the Meeting.
  3. For Appointing Proxies
    1. In case of individuals, the Account Holders of Sub-account Holders and / or the persons whose securities are in group account and their registration details are uploaded as per the Regulations, shall submit their proxy forms as per the above mentioned requirements.
    2. The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be stated on the form.
    3. Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be provided with the proxy form.
    4. In case of a corporate entity, the Board of Directors resolution / Power of Attorney with specimen signature shall be submitted (unless it has been provided earlier) along with proxy form to the Company.
  5. Consent for Video Conference Facility
    In compliance with Section 134(1)(b) of the Companies Act, 2017, if the Company receive consent from members holding aggregate 10% or more shareholding residing at geographical location to participate in the meeting through video link facility at least 10 days prior to the date of general meeting, the Company will arrange video link facility in that city. To avail this facility, please provide following information and submit to registered address of the Company.
    The Company will intimate members regarding venue of video conference facility at least 5 days before the date of the general meeting along with complete information necessary to enable them to access the facility

I/We, ____________________ of _____________ being a member of The Hub Power Company Limited,

holder of __________ Ordinary Shares as per Register Folio No. ______ hereby opt for video conference

facility at ____________

Signature of member

STATEMENT PURSUANT TO SECTION 134(3) OF THE COMPANIES ACT, 2017

Pursuant to Section 134(3) of the Companies Act, 2017, this Statement sets forth the material facts concerning the special business listed hereinabove, to be transacted at the AGM of the Company to be held on 16 October 2023.

Section B2: Availing finance facilities to meet Sponsor obligation under the Sponsor Support Agreement in relation to Thar Energy Limited ("TEL")

TEL was incorporated in Pakistan on May 17, 2016 as a wholly owned subsidiary of the Company under the repealed Companies Ordinance, 1984. The principal activities of TEL are to develop, own, operate and maintain a 330 MW mine-mouth coal fired power plant established at Thar Block II, Thar Coal Mine, Sindh ("Project").

TEL is a subsidiary of the Company. The Company presently holds 60% shares in TEL, and has appointed

  1. Mr. Aly Khan, (2) Mr. Muhammad Kamran Kamal, (3) Mr. Saleemullah Memon, and (4) Mr. Amjad Ali Raja as directors on the Board of Directors of TEL.

The Company, along with Fauji Fertilizer Company Limited and China Everbest Development International Limited (collectively, the "Sponsors"), and Habib Bank Limited (the "Purchaser") have entered into a Sponsor Support Agreement with TEL dated December 20, 2018 (the "Put Option SSA"). Pursuant to the Put Option SSA, the Company is obligated to inter alia cover any exchange risk shortfall by giving cash / issuing a Standby Letter of Credit to the Purchaser for the put option facility, in proportion to its shareholding, up to the extent of USD 25,000,000 (United States Dollars Twenty Five Million) or PKR equivalent. Such sponsor obligation shall be valid till June 30, 2035 or such period until the liabilities / obligations of the Company remain undischarged, whichever is later.

Information pursuant to the Companies (Investment in Associated Companies or Associated Undertakings) Regulations 2017 (the "Regulations").

  1. Disclosures required under Regulation 3(a):

Information

Information Provided

Required

Name of the "associated

Thar Energy Limited

company"

Basis of relationship;

TEL is a subsidiary of the Company. The Company presently holds 60%

shares in TEL, and has appointed (1) Mr. Aly Khan, (2) Mr. Muhammad

Kamran Kamal, (3) Mr. Saleemullah Memon, and (4) Mr. Amjad Ali Raja

as directors on the Board of Directors of TEL.

Earnings per share for the last

2023

3.78

three years;

2022

(0.04)

2021

(0.05)

Annual Report 2023

Break-up value per share,

Rs 14.04 per share as of June 2023

based on latest audited

financial statements;

Financial position, including

Rs in '000

main items of statement of

Total Assets

141,803,408

financial position and profit

Equity

26,956,562

and loss account on the basis

of its latest financial statements

Long term loan

82,815,782

Current Liabilities

32,031,064

Turnover

37,868,759

Profit for the year

7,251,822

In case of investment in relation

N/A

to a project of associated

company or associated

undertaking that has not

commenced operations,

following further information,

namely,-

(i)

Description of the project

and its history since

conceptualization;

(ii)

Starting date and

expected date of

completion of work;

(iii) Time by which such

project shall become

commercially operational;

(iv) Expected time by

which the project shall

start paying return on

investment; and

(v)

Funds invested or to

be invested by the

promoters, sponsors,

associated company or

associated undertaking

distinguishing between

cash and non-cash

amounts;

Maximum amount of

USD 25,000,000/- (United States Dollars Twenty Five Million)

investment to be made;

or PKR equivalent

Purpose and benefits

The Company is required to provide the aforementioned additional

likely to accrue to the

sponsor support pursuant to its obligations under the Put Option SSA,

investing company and

as detailed in the preamble above.

its members from such

investment and period of

With respect to benefits likely to accrue to the Company in respect

investment

of the additional sponsor support, it may be noted that TEL achieved

Commercial Operations Date on October 1, 2022 and is anticipated to

offer an internal rate of return of up to 20% in USD.

Sources of funds to be utilized

(I) The cost of funds if provided through borrowings would be much

for investment and where the

less than 20% IRR in USD. Further, where the Company takes long

investment is intended to be

term debt to fund such investments, the Company is able to share

made using borrowed funds,-

the risk of loss with the lenders.

(i)

justification for

(ii) Ranking charge to be upgraded to pari-passu charge on fixed and

investment through

/ or current assets of the Company;

borrowings;

ii)

detail of collateral,

(iii) Project is anticipated to offer an IRR of up to 20% in USD.

guarantees provided

and assets pledged for

obtaining such funds;

and

iii)

cost benefit analysis;

Salient features of the

The salient features of the Put Option SSA are as follows:

agreement(s), if any, with

associated company or

•

The parties to the Put Option SSA are the Sponsors, the

associated undertaking with

Purchaser and TEL; and

regards to the proposed

investment

• Under the Put Option SSA, each of the Sponsors (including

HUBCO) are required to contribute proportionately for their

respective obligations.

Direct or indirect interest

Mr. Muhammad Kamran Kamal is a CEO of the Company and also holds

of directors, sponsors,

directorship in TEL.

majority shareholders and

their relatives, if any, in

Mr. Aly Khan is a director of the Company and also holds directorship

the associated company

in TEL.

or associated undertaking

or the transaction under

Mr. Saleemullah Memon is an employee of the Company and also holds

consideration;

directorship in TEL. He has been seconded as the CEO of TEL.

Annual Report 2023

In case any investment in

This additional support intended to be provided is part of the investment

associated company or

made by the Company in TEL, as a sponsor and shareholder of TEL.

associated undertaking has

The initial approval of the shareholders of the Company to provide sponsor

already been made, the

performance review of such

support was accorded on October 24, 2019, in relation to the Put Option

investment including complete

/ Commercial Risk Guarantee (the "TEL Put Option / CRG") provided

information/justification for

by local banks and financial institutions (including the Purchaser) (the

any impairment or write offs;

"TEL Put Option / CRG Financiers") to the foreign lenders of TEL to the

extent of USD 15,000,000/- (United States Dollars Fifteen Million) or

PKR equivalent, as primary obligor. Furthermore, approval for additional

sponsor support, by way of cash or a standby letter of credit, up to the

extent of USD 10,000,000 (United States Dollars Ten Million) was also

provided for various exposures being assumed by TEL Put Option / CRG

Financiers (including any foreign exchange risk and mark-up / interest),

and such sponsor support shall be called to cover any shortfall that TEL

is unable to cover / provide to the TEL Put Option / CRG Financiers.

The above-mentioned USD 10,000,000 (United States Dollars Ten

Million) is now required to be enhanced to USD 25,000,000 (United

States Dollars Twenty Five Million) or PKR equivalent for the above-

mentioned exposures being assumed by TEL Put Option / CRG

Financiers (including any foreign exchange risk and mark-up / interest).

With respect to the investment made in TEL, it may be noted that the

Company has invested approximately USD 79,000,000 (United States

Dollars Seventy Nine Million) or PKR equivalent to date. TEL achieved

financial close on January 30, 2020 and Commercial Operations Date

on October 1, 2022.

In terms of the benefits to the Company, the Company was set up under

the 2015 Power Policy. TEL is expected to offer an IRR of up to 20% in

USD to the Company.

No impairment conditions exist on the investment; accordingly, no

charge/write offs have been made till date.

Any other important details

N/A

necessary for the members to

understand the transaction;

  1. Disclosures required under Regulation 3(b):
  2. Disclosures required under Regulation 3(c):

Category-wise amount of

The additional support is intended to be provided through cash or a

investment;

standby letter of credit issued to the Purchaser, up to the extent of

USD 25,000,000 (United States Dollars Twenty Five Million) or PKR

equivalent.

Average borrowing cost of

In the event the SBLC is called and not settled by the Company in cash,

the investing company, the

the same will convert into a funded facility, carrying a profit rate of

Karachi Inter Bank Offered

3month KIBOR +3%, till such time that the same is settled.

Rate (KIBOR) for the relevant

period, rate of return for

Shariah compliant products

Rate of interest, mark up,

N/A

profit, fees or commission etc.

to be charged by investing

company

Particulars of collateral or

No specific collateral / security is intended to be obtained from TEL, as

security to be obtained in

this is part of the obligations of the Company under the Put Option SSA.

relation to the proposed

investment

If the investment carries

N/A

conversion feature i.e. it is

convertible into securities,

this fact along with terms and

conditions including conversion

formula, circumstances in

which the conversion may take

place and the time when the

conversion may be exercisable;

Repayment schedule and

No repayment schedule has been determined with TEL in respect of

terms and conditions of loans

this additional sponsor support. The terms of release of the additional

or advances to be given to

sponsor support are covered under the Put Option SSA, as more

the associated company or

particularly detailed above.

associated undertaking

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Hub Power Company Limited published this content on 22 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 September 2023 10:55:07 UTC.