Prospectus - 2010 - SafeMix

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ADVICE FOR INVESTORS

Safe Mix Concrete Products Limited

PROSPECTUS

FOR ISSUE OF 10,000,000 ORDINARY SHARES AMOUNTING TO PKR 125 MILLION ONLY (50% OF THE TOTAL PAID UP CAPITAL) OF SAFE MIX CONCRETE PRODUCTS LIMITED AT AN ISSUE PRICE OF PKR 12.5/- PER SHARE (INCLUSIVE OF A PREMIUM

OF PKR 2.5/- PER SHARE) OUT OF TOTAL PAID UP CAPITAL OF PKR 200 MILLION DIVIDED INTO 20 MILLION ORDINARY SHARES OF PKR 10 EACH

Subscription list will open Insha-Allah at the commencement of bank ing hours on February 12,

2010 an d will close on February 13, 2010 at the close of bank ing hours

Advisor & Arranger

Lead Underwriter

Other underwrite rs include:

Allied Bank L imited Saudi Pak Industrial & Agricultural Investment Company Limited

Elixir Securities (Pvt.) Pakistan Invisor Securities (Pvt.) Limited

Cassim Investments (Pvt.) L imited

The date of publication for this Prospectus is February 01, 2010

INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY R EAD THE CONTENT S OF THIS PROSPECT US, ESPEC IALLY THE RIS K FACTORS GIVEN AT PARA 4.10

BEFOR E MAKING ANY INVESTMENT DECISION

S UBMISS IO N OF FICT IT IO US AND MULTIPLE APPLIC ATIO NS (MO RE THAN ONE APPLICATIO NS BY SAME PERSON) IS PRO HIBITED AND SUCH APPLICATIONS ’ MONEY

IS LIAB LE TO CO NFIS CATION UND ER S ECTION 18A OF THE S ECURIT IES AND EXCHANGE O RDINANCE, 1969

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GLOSSARY OF TECHNICAL TERMS & ABBREVIATIONS

CDA Central Depository Act, 1997 CDC/CDCPL The Central Depos itory Company of Pakistan Limited CDS Central Depository System CNIC Computerized National Identity Card Commission / SECP Securities and Exchange Commission of Pakistan COD Commercial Operations Date FED Federal Excise Duty FDI Foreign Direct Investment GOP Government of Pakistan IPO Initial Public Offer ITO Income Tax Ordinance, 2001 KSE Karachi Stock Exchange (Guarantee) Limited KVA Kilo Volt Ampere

m³ Cubic meter Ordinance The Companies Ordinance, 1984 PACRA The Pakistan Credit Rating Agency Limited PKR Pakistani Rupee RCC Roller Compacted Concrete SMCPL or the Company Safe Mix Concrete Products Limited WHT Withholding Tax

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TABLE OF CONTENTS

Section Content Page No.

Part 1 Approvals and Listing on the Stock Exchanges 03 Part 2 Share Capital and Related Matters 05 Part 3 Commissions, Brokerage and other Expenses 13 Part 4 History and Prospects 15 Part 5 Financ ial Information 24 Part 6 Management and Related Matters 30 Part 7 Miscellaneous Information 35 Part 8 Application and Transfer Instructions 40 Part 9 Signatories to the Prospectus 44 Part 10 Memorandum of Association 45 Part 11 Application Form 61

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PART 1 1. APPROVALS AND LISTING ON THE STOCK EXCHANGES 1.1 APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN Approval of the Securities & Exchange Commission of Pakistan (the “Commission” or the “SECP”) as required under Section 57(1) of the Companies Ordinance, 1984 (the “Ordinance”) has been obtained by Safe Mix Concrete Products Limited for the issuance, circulation and publication of this Prospectus. It must be distinctly understood that in giving this approval, the SECP does not take any responsibility for the financial soundness of any scheme stated herein or for the correctness of any of the statements made or opinions expressed with regard to them. The SECP has not evaluated the quality of the issue and its approval of the Prospectus should not be construed as any commitment of the same. The public/investors should conduct their own independent investigation and analysis regarding the quality of the issue before subscribing. 1.2 CLEARANCE OF THE PROSPECTUS BY THE KARACHI STOCK EXCHANGE

(GUARANTEE) LIMITED The Prospectus has been cleared by the Karachi Stock Exchange (Guarantee) Limited (“KSE”) (hereinafter referred to as the “Stock Exchange”), in accordance with the requirements under their respective Listing Regulations. While clearing this Prospectus, the Stock Exchange neither guarantee the correctness of the contents of the Prospectus nor the viability of the Safe Mix Concrete Products Limited (“SMCPL” or “the Company”). The Stock Exchanges have not evaluated the quality of the issue, and clearance of the Prospectus should not be construed as any commitment in respect of the same. The public/investors should conduct their own independent investigation and analysis regarding the quality of the issue before subscribing.

1.3 FILING OF THE PROSPECTUS AND OTHER DOCUMENTS WITH THE

REGISTRAR OF COMPANIES The Company has f iled with the Registrar, Companies Registration Office Karachi, as required under Section 57(3) and (4) of the Companies Ordinance 1984, a copy of this Prospectus signed on behalf of the Company, along w ith the following documents attached thereto: a) Letter dated 26 November, 2009 from the Auditors of the Company, KPMG Taseer Hadi & Co.,

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

b) Copies of Material Contracts and Agreements mentioned in Part 7 of this Prospectus as required

under Section 57(4) of the Ordinance. c) Written confirmations of the Auditors of the Company, the Legal Advisor to this Issue and

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

d) Consents of Directors and Chief Executive of the Company who have consented to their

respective appointments made and their having been named or described as such D irectors and

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Chief Executive in this Prospectus, as required under Section 57(3) of the Ordinance, read with sub-clause (1) of clause (4) of Section 1 of Part 1 of the Second Schedule to the Ordinance.

1.4 LISTING AT THE KSE Application has been made to the KSE for permission to deal in and for quotation of the shares of the Company. If for any reason, the application(s) for formal listing is/are not accepted by the Stock Exchange, the Company undertakes to publish immediately in the press a notice to that effect and thereafter to refund the application money to the applicants in pursuance of this issue, as required under Section 72 of the Ordinance.

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PART 2

2. SHARE CAPITAL AND RELATED MATTERS

2.1 SHARE CAPITAL

No. of shares Face value

(PKR) Premium

(PKR) Total

(PKR)

AUTHORIZED 25, 000,000 Ordinary shares of PKR 10/- each 250,000,000 - 250,000,000 ISSUED, SUBSCRIBED & PAID UP

CAPITAL

10,000,000 Issued for cash of PKR 10/- each 100,000,000 - 100,000,000

10,000,000 Total 100,000,000 - 100,000,000

The existing issued, subscribed & paid

up capital of the Company is held as follows:

Sponsors/ Directors

1,503,534 Sir Anw ar Pervez 15,035,340 - 15,035,340 3,052,174 Syed Yawar Ali 30,521,740 - 30,521,740 3,052,174 Mr. Bashir H. Ali Mohammad 30,521,740 - 30,521,740 1,338,144 Mr. Arif Habib 13,381,440 - 13,381,440 1,052,474 Mr. Muhammad Asim Tiw ana 10,524,740 - 10,524,740

500 Syed Maratib Ali 5,000 - 5,000 500 Mr. Ziad Bashir 5,000 5,000 500 Mr. Nasim Beg 5,000 - 5,000

10,000,000 Total 100,000,000 - 100,000,000

PRESENT ISSUE The present Issue is being made at an

Issue price of PKR 12.5/- per ordinary share of PKR 10/-each ( inclusive of a premium of PKR 2.5/- per share), as under:

10,00,000 General Public 100,000,000 25,000,000 125,000,000

10,000,000 Total 100,000,000 25,000,000 125,000,000

20,000,000 GRAND TOTAL 200,000,000 25,000,000 225,000,000

Notes:

As per para 3(I)( iv) of the Companies (Issue of Capital) Rules, 1996, the Sponsors shall, at all times, retain at least twenty five percent (25%) of the capital of the Company;

The Company shall submit progress report on utilization of the proceeds of the issue on

monthly bas is till its full utilization.

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The shares issued at par value to existing shareholders/investors of the Company shall not be

saleable and transferable for a period of two years from the date of public subscription;

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

2.2 OPENING AND CLOSING OF THE SUBSCRIPTION LIST The subscription list will Insh’Allah open at the commencement of banking hours on February 12, 2010 an d will close on February 13, 2010 at the close of banking hours. 2.3 INVESTOR ELIGIBILITY

Eligible investors include Pakistani citizens res iding in Pakistan, companies, bodies corporate or other legal entities incorporated or established in Pakistan (to the extent permitted by their constitutive documents and existing regulations as the case may be); provident/pension/gratuity funds/trusts (subject to the terms of their Trust Deed and existing regulations) and branches in Pakistan of companies and bodies corporate incorporated outs ide Pakistan.

2.4 MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF

SHARES OUT OF THE PUBLIC PORTION OF THE ISSUE

The basis and conditions of allotment to the general public shall be as follow s:

a) Application for shares below the total value of PKR 6,250 shall not be entertained. b) The minimum amount of application for subscription of 500 ordinary shares is PKR 6,250. c) Applications for shares must be made for 500 shares or in multiples of 500 shares only.

Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected. d) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN

ONE APPLICATIONS BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS ̀ MONEY SHALL BE LIABLE TO CONFISCATION UNDER SECTION 18-A OF THE SECURITIES AND EXCHANGE ORDINANCE, 1969.

e) If the shares to be issued to the general public are sufficient for the purpose, all applic ations

shall be accommodated. f) If the shares applied for by such applicants are in excess of the shares Offered, the distr ibution

shall be made by computer balloting, in the presence of the representative(s) of KSE in the following manner:

(i) If all the applications for 500 shares can be accommodated, then all such applic ations shall be accommodated f irst. If all applications for 500 shares can not be accommodated then balloting will be conducted among applications for 500 shares only.

(ii) If all the applications for 500 shares have been accommodated and shares are still available

for allotment, then all applications for 1,000 shares shall be accommodated. If all applications for 1,000 shares can not be accommodated then balloting will be conducted among applications for 1,000 shares only.

(iii) If all applications for 500 shares and 1,000 shares have been accommodated and shares are

still available for allotment, then all applications for 1,500 shares shall be accommodated. If

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all applications for 1,500 shares can not be accommodated then balloting will be conducted among applications for 1,500 shares only.

(iv) If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated

and shares are still available for allotment, then all applications for 2,000 shares shall be accommodated. If all applications for 2,000 shares can not be accommodated then balloting w ill be conducted among applications for 2,000 shares only.

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

allotted in the follow ing manner:

(a) If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then 2,000 shares shall be allotted to each applicant and remaining shares shall be allotted on prorate basis.

(b) If the remaining shares are not sufficient to accommodate all the remaining

applications for over 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares each to the successful applic ants.

g) If the Issue is over subscribed in terms of amount only, then allotment of shares shall be made

in the following basis :

(i) First preference w ill be given to the applicants who applied for 500 shares; (ii) Next preference will be given to the applicants who applied for 1,000 shares; (iii) Next preference will be given to the applicants who applied for 1,500 shares; and then (iv) Next preference will be given to the applicants who applied for 2,000 shares.

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

i) Allotment of shares w ill be subject to scrutiny of applications for subscription of shares. j) Applications, which do not meet the above requirements, or applications which are incomplete,

will be rejected. 2.5 REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS The Company shall take a dec ision within ten (10) days of the closure of subscription list as to which applications have been accepted or are successful and refund the money in cases of unaccepted or unsuccessful applic ations w ithin ten (10) days of the date of such decis ion, as required under Section 71 of the Ordinance. As per sub-section (2) of Section 71 of the Ordinance, if refund as required under sub-section (1) of Section 71 of the Ordinance is not made w ithin the time specif ied therein, the Directors of the Company shall be jointly and severally liable to repay that money with surcharge at the rate of one and a half percent for every month or part thereof from the expiration of the 15 th day and, in addition, to a f ine not exceeding f ive thousand rupees and in case of continuing offense to a further f ine not exceeding one hundred rupees for every day after the said 15 th day on which the default continues. Provided that a Director shall not be liable if he/she proves that the default in making the refund was not due to any misconduct or negligence on his/her part.

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2.6 MINIMUM SUBSCRIPTION FOR ALLOTMENT The minimum subscription on which the directors will proceed to allot shares is Rupees 125,000,000 which has been fully underwritten, and in the opinion of the directors, must be raised in order to raise the capital required to the Company. 2.7 ISSUE AND DISPATCH OF SHARE CERTIFICATES The Company w ill dispatch share certif icates to successful applicants through their Bankers to the Issue or by crediting the respective Central Depos itory System (“CDS”) accounts of the successful applicants within thirty (30) days of the close of public subscription, as per Listing Regulations of KSE. Shares w ill be issued either in scrip-less form in the CDS or in the shape of physical scrips on the bas is of option exercised by the successful applicants. Shares in the phys ical form shall be dispatched to the successful applicants through their Bankers to the Issue whereas scrip less shares shall be credited through book entries in the respective accounts maintained with the Central Depository Company of Pakistan Limited (“CDCPL”). The applicants who opt for receipt of shares in scrip-less form in CDS should f ill in the relevant columns of the Application Form. In order to exercise the scrip-less option, the applicant(s) should have CDS account at the time of subscription. If the Company makes a default in complying with the above requirements, it shall pay to the Stock Exchanges a penalty of Rupees 5,000 per day for every day during which the default continues. The Stock Exchanges may also notify the fact of such default and the name of the Company by notice and also by publication in the Ready-Board Quotation of the Stock Exchanges. The name of the Company be notif ied to the members of the Stock Exchanges and placed on the web sites of the Stock Exchanges. 2.8 TRANSFER OF SHARES

(a) Physical Scrips

Under the provis ions of Section 77 of the Companies Ordinance, 1984, the Directors of the Company shall not refuse to transfer any fully paid share unless the transfer deed is, for any reason, defective or invalid. Provided that the Company shall within 30 days from the date on which the instrument of transfer was lodged with it, notify the defect or invalidity to the transferee who shall, after the removal of such defect or invalidity, be entitled to re-lodge the transfer deed with the Company.

(b) Transfer under book entry system

The shares maintained with the CDS in the book entry form shall be transferred in accordance with the provis ions of the Central Depos itories Act, 1997 and the CDC Regulations.

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2.9 SHARES ISSUED IN PRECEDING YEARS An aggregate of 100,000,000 fully paid ordinary shares of the face value of PKR10/- each have been issued till November, 2009. The details are as follow s:

No of shares

Par value (Rupees)

Amount (Rupees)

Consideration Date of issue

10 10 100 Cash Initial Subscription March 2005 6,999,900 10 69,999,000 Cash 14 Feb 2006 3,000,000 10 30,000,000 Cash 06 Nov 2009

10,000,000 100,000,000 No shares have been issued or agreed to be issued for consideration ot her than cash.

2.10 PRINCIPAL PURPOSE OF THE PUBLIC ISSUE The principal purpose of the public issue is to raise funds to finance the existing operations of the Company i.e. purchase of machinery & equipment and to meet the Company’s w orking capital requirement. For detail break up please see Para 4.8. Further the management has dec ided to list the shares of the Company on the Stock Exchanges to broaden its investor base. 2.11 INTEREST OF SHAREHOLDERS

None of the holders of the issued shares of the Company have any special or other interest in the property or profits of the Company other than as holders of the ordinary shares in the capital of the Company. 2.12 DIVIDEND POLICY

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

2.13 ELIGIBILITY FOR DIVIDEND The Company in this matter will follow the provis ions of Section 92 (2) of the Companies Ordinance, 1984, which reads as under: “The new shares issued by a company shall rank pari-passu with the existing shares of the class to which the new shares belong in all matters, including the right to such bonus or right issue and dividends as may be declared by the Company subsequent to the date of issue of such new shares.” The Company has paid 20% cash dividend for the year ended June 30, 2009 to its existing shareholders.

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2.14 DEDUCTION OF ZAKAT Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat and Ushr Ordinance, 1980. (XVIII of 1980) as may be applicable from time to time. 2.15 EXEMPTION FROM CAPITAL GAINS Capital gains derived from the sale of listed securities are not liable to income tax pursuant to Clause (110) of Part 1 of the Second Schedule of the Income Tax Ordinance, 2001. This exemption is presently available up to the income year ending June 30, 2010. 2.16 WITHHOLDING TAX ON DIVIDENDS Dividend distr ibution to shareholders will be subject to withholding tax at a reduced rate of 10 percent specif ied in Clause 20 of Part 2 of the Second Schedule to the Income Tax Ordinance, 2001. 2.17 DEFERRED TAXATION Deferred tax is recognized using the balance sheet liability method on all temporary differences between the amounts attr ibuted to assets and liabilities for f inancial reporting purposes and amounts used for taxation purposes. 2.18 FEDERAL EXCISE DUTY & WITHHOLDING TAX ON SALE/PURCHASE OF

SHARES

a) Federal Excise Duty (FED) of 16 percent is charged on brokerage commiss ion on purchase / sale of shares on a Stock Exchange.

b) Withholding Tax of 0.01 percent on sale/purchase value is charged on the purchase / sale of

shares / Modaraba certif icates / instruments of redeemable capital.

2.19 JUSTIFICATION FOR THE PREMIUM The premium of PKR 2.5/- per share on the face value of PKR 10/- per share is considered adequately justified, based on the following:

Attractive Valuation Based on the discounted cash flow method, the fair value of the scrip works out to be PKR 18.23/share, that offers an attractive discount of 31 percent to the Issue price of PKR 12.50/share.

Valuation summary

Expected return on equity 19%Expected pre tax return on debt 15%Weighted average cost of capital 18%Terminal growth rate 3%ValuationTotal equ ity value (PKR in 000's) 364,555 Outstanding number of shares (in thousand) 20,000 Fair value per share (PKR) 18.23 Source: AHL

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Striking demand outlook Contribution of construction to the Gross National Product has grown by Compounded

Annual Growth Rate (CAGR) of 21 percent during FY2004-FY20091. Despite lower GDP growth in FY2009, construction sector managed to register YoY grow th of 13 percent which highlights the res ilience of the construction sector;

The economy is flooded with foreign workers’ remittance particularly after global

financial meltdown. As we have witnessed in the past that expatriates prefer to invest in real estate which paints a rosy picture on the construction canvas of the country

The economy is witnessing a rising trend in per capita income which has jumped

from US$ 669 in FY2004 to US$ 1,046 in FY20092, marking an improvement at a 5 year CAGR of 9 percent;

Rising population and rapidly emerging middle and upper middle class is creating

unprecedented housing demand which is likely to keep construction activities buoyant;

Rising trend in the infrastructural development by the government is likely to keep concrete demand robust;

There has been a gradual shift from traditional ‘construction s ite concrete manufacturing’

to modern ready mix concrete due to its uniform material composition, flexible manufacturing site and exquisite quality are rapidly making ready mix concrete the prime choice for the construction companies.

Shorter payback period The main objective of IPO is to buy transit mixers and concrete pumps which the Company is currently renting. The Company paid PKR 51 million as rentals during FY2009. After purchas ing the said equipments, the Company is likely to save PKR 51 million per annum that would recover the IPO proceeds in only 2.45 years. Strong sponsors’ profile of the Company The Company enjoys a strong sponsors’ profile of seasoned entrepreneurs having diversif ied expertise in the field of asset management, cement manufacturing, textile composite, steel, food and construction etc. Following is a summary of the sponsors and their affiliated companies: Name Companies

Mr. Arif Habib Arif Habib Securities Limited

Arif Habib Investments Limited Arif Habib REIT Management Lim ited

Arif Habib Bank Lim ited Fatima Fertilizer Company Limited

Pak Arab Fertilizer Company Limited Aisha Steel Mills

Thatta Cement Company Lim ited

1 Pakistan Economic Survey 2008-2009 2 Pakistan Economic Survey 2008-2009

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Sir Anwar Perveiz Bestway Cash & Carry, UK United Bank Limited

Bestway Cement Company Limited Mr. Bashir H. Ali Muhammad Gul Ahmed Textile Mills

Syed Yawar Ali Nestle Pakistan

IGI Insurance Mr. Asim Tiwana Kaizen Construction (Pvt) Ltd

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PART 3 3. UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES 3.1 UNDERWRITING The issue of 10,000,000 ordinary shares at an Issue pric e of P KR 12.5/- per share (inclusive of a premium of PKR 2.5/- per share) has been fully underw ritten as under:

Names of Underwriters No. of Shares Premium (Rupees)

Amount (Rupees)

National Bank of Pakistan 4,300,000 2.5/- 53,750,000 Allied Bank Limited 1,200,000 2.5/- 15,000,000 Saudi Pak Industrial & Agricultural Company Limited 800,000 2.5/- 10,000,000 Elixir Securities (Pvt.) Pakistan 1,500,000 2.5/- 18,750,000 Invisor Securities (Pvt.) Limited 1,200,000 2.5/- 15,000,000 Cassim Investments (Pvt.) Limited 1,000,000 2.5/- 12,500,000

Total 10,000,000 125,000,000

If, and to the extent, the Shares Underw ritten are not subscribed and paid for in full by the Closing date for the public subscription, the Underwriters in terms of the underwriting agreements w ill, within 15 (fifteen) days of being called upon to do so by the Company, ( i) subscribe and take up against full payment in cash or ( ii) procure subscribers to subscribe and take up against full payment in cash, the shares remained unsubscribed subject to the maxim um of the Shares Underw ritten. 3.2 BUY BACK/REPURCHASE AGREEMENT THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY BACK/RE-PURCHASE AGREEMENT WITH THE SPONSORS OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC ISSUE. ALSO, NEITHER THE ISSUER NOR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY BACK/REPURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ASSOCIATES. THE ISSUER AND ITS ASSOCIATES SHALL NOT BUY-BACK/REPURCHASE SHARES FROM THE UNDERWRITERS AND THEIR ASSOCIATES. 3.3 UNDERWRITING COMMISSION The underwriters have been paid an underw riting commission at the rate of 2.00 percent of the amount of the Issue underwritten by them. In addition, a take up commission at the rate of 2.00 percent shall be paid to the underwriters on the value of shares required to be subscribed by them by virtue of their respective underwriting commitments. 3.4 COMMISSION TO THE BANKERS TO THE ISSUE Commission at the rate of 0.50 percent of the amount collected on allotment in respect of successful applicants will be paid by the Company to the Bankers to this Issue for services to be rendered by them in connection with this Public Issue, plus out-of-pocket expenses, if any.

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3.5 BROKERAGE Brokerage shall be paid to the members of KSE, LSE and ISE at the rate of 1.0 percent of the value of shares actually sold through them. 3.6 EXPENSES TO THE ISSUE

Expenses Rate Amount (PKR)

Underwriting commiss ion 2.00% 2,500,000 Take up commiss ion 2.00% 2,500,000 Bankers to the Issue commission 0.50% 625,000 Brokerage commiss ion 1.00% 1,250,000 Consultant to the Issue fees 1,875,000 Printing, publication 1,500,000 KSE listing fee and charges : - Initial lis ting fee 200,000 - Annual listing fee 50,000 - Service charges 50,000 CDC fees and depos its 500,000 SECP application and process ing fees 100,000 Legal advisor fee 500,000 Balloters, transfers agents and share registrar fees 1,000,000 Miscellaneous costs 500,000 Total 13,150,000*

* T hese amounts represent t he estimated costs relat ing t o t he subscription am ount, which m ay alter post-IPO.

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PART 4 4. HISTORY AND PROSPECTS 4.1 THE COMPANY 4.2 BRIEF HISTORY Safe Mix Concrete Products Limited (“SMCPL” or “the Company”) is one of the pioneer companies providing ready mix concrete for construction projects in Pakistan. The Company was incorporated on 04 April 2005 as a private lim ited company. Subsequently, it has been converted into public limited company on 21 February 2007. The principal activity of the Company is production and supply of ready mix concrete, building blocks and construction of prefabricated buildings. The Company has undertaken numerous large scale projects, some of them are as follow ing Lahore Projects Packages Bulleh Shah Nestle Kabirwala factory Bab-e-Pakistan Mubarak Center DHA Riya Golf & Country Club Lahore Ring Road Karachi Projects Creek Marina Emaar Crescent Bay Creek Lodge Gizri Flyover Dawood Islamic Tower The Company is spec ialized in providing high quality ready mix concrete to construction companies at affordable pric es while maintaining topmost quality standards. The Company has come a long way to symbolize commitment, distinction and profess ional excellence by meeting the str ingent, demanding and extraordinary requirements of engineering w orks for the last 5 years. Thus, SMCPL is known to have a reputation of delivering supplies in advance w ithout having to comprise on quality. It is the trait that has consolidated trust and confidence linking the Company and its business entrepreneurs. Having reputable clientele retention services a benchmark, Safe Mix is a sense of reliance and a symbol of diligent assurance. 4.3 INTRODUCING TO READY MIX CONCRETE In its basic form, ready mix concrete is a mixture of cement, water, sand and stone (Bajri). The cement, a dry fine powder, is combined w ith w ater to form a paste and then mixed with fine and coarse aggregated (sand and stone) respectively. The cement and concrete used in today’s construction is similar to that used by the anc ient Romans. The cement and water form a paste that binds the other materials together as the concrete cures or hardens a process in the etymology of the term itself. The paste which is made of w ater and cement is the foundation or bas is of strength of the concrete. The paste is quantif ied by the w ater/cement ratio. The low er the water/cement ratio, the stronger the concrete mix.

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4.4 READY MIX CONCRETE APPLICATIONS Ready mix concrete is one of the most versatile materials available to the construction industry. Its application can range from a side walk way or stoop in a res idential home to foundations and floors in an urban high rise. The following is only a partial list of ready mix concrete applic ations :

High strength concrete of consistency Side walks, drivew ays, patios, stoops

Decorative-stamped, colored and exposed aggregate Foundation and footings for high r ises and homes

Highway pavements for roads and overpasses Bridges, tunnels and subways Retaining walls, trenches, encas ing for electrical ,

gas, water, fiber optic lines and cables RCC concrete for floors, ceilings and roofs

Grouting of pre-caste concrete slabs

4.5 THE PROCESS A ready mix concrete plant, called Batching Plant, produces concrete in as much the same manner as a chef prepares a recipe. All the required ingredients/materials i.e. Sand, Stone (Bajri), Cement, Water etc., are stored in holding bins, silos and tanks. Concrete Mix designs are stored in the computer of the Batching Plant by the cubic meter. The plant has scale to measure the dry quantities and meter to measure the liquids. The plant discharges the material into the trunk of the plant followed by liquid material and blends them to a spec ific time limit after w hich the mixture is poured into the drum of the truck. The entire batching or loading process, from the pulling of truck under the plant to the truck leaving from the yard, takes 10 to 15 minutes, depending upon the quantity of order.

4.6 THE PROJECT 4.6.1 Plant & Machinery The Company has setup s ix production facilities at different locations in Karachi and Lahore. Production fac ilities are equipped with state of the art batching plants, generators and loaders. The Company also maintains its own transit mixers and concrete pumps but due to increasing demand the Company has to rent a number of mixers and 2 pumps on annual bas is.

Order Received

Mix des ign fed to plant comput er

system

Arrival at Client Side

Concrete Batched

Poured M anually

Poured via Concrete Pump

Transfer to T ransit M ixers

Production Flow Chart

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List of Plant and Machinery

No of unit No of unit Total

Parti cul ars Make Lahore Karachi no of units

New Old New O ld

Capacity Cost Useful life

Owne d Batching plant Beijing flying international China 2 60M3 12,415,000 15 Years

Beijing flying international China 1 30M3 2,688,000 15 Years

St etter Germany 1 56M3 29,573,601 15 Years Simem Italy 1 120M3 37,016,958 15 Years

Arbou Italy 1

6

20M3 4,072,005 15 Years

Generator Cummins England 1 250 Kva 950,000 10 Years Nippon Japan 1 37 Kva 475,000 10 Years Cummins England 1 175 Kva 508,700 10 Years Cummins England 1 125 Kva 953,580 10 Years Chinese China 1

5

10 Kva 189,000 10 Years Concrete pum p

Nagata China 1 3,260,840 15 Years St ationary (sunny) China 1

2

4,996,000 15 Years

Loader Catter Piller USA 3 1

4 7,301,596 10 Years

Transit mixe r Nissan Japan 3 1 8,331,809 15 Years Hino Japan 2 5

11 15,719,576 15 Years

Chiller plant Attique Electric

Pakist an 1 1 2,095,007 5 Years

Leased Loader Catter Piller USA 1

1 1,880,000 10 Years

Generator Cummins England 1 300 Kva 2,070,000 10 Years Parkin Spain 1 350 Kva 2,650,000 10 Years Catter Piller USA 1

3

365 Kva 2,699,300 10 Years 139,845,972 Rented Batching plant Beijing flying international China 1 60M3

Generating Parkin Spain 1 150 Kva

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Chinese China 1 10 Kva Concrete pum p

Nissan Japan 1 Mercedes Germany 1

4.6.2 Capacity & utilization Batching Plants: Available capacity (m3) Actual production Capacity utilization

FY2006 48,000 4,638 9.7 percent FY2007 254,400 13,830 5.4 percent FY2008 482,400 93,902 19.5 percent

FY2009 770,400 124,094 16.1 percent Transit Mixers:

Available capacity (m3) Actual production Capacity utilization FY2006 12,000 4,638 38.7 percent FY2007 30,000 13,830 46.1 percent

FY2008 94,500 93,902 99.4 percent FY2009 94,500 124,094 131.1 percent

As the capacity utilization is 100 percent, during these conditions, the Company use to rent 4 trans it mixers on annual basis and also takes up 2 to 3 on daily basis if there are large orders to fulfill. 4.6.3 Concrete pumps Concrete can either be poured at the c lient’s site manually/conventional method or pumped through truck mounted/stationary pump. This is an additional service provided by the Company. Since its incorporation, the Company has w itnessed an increase in the demand of pumping by clients. The Company owns 1 mobile pump and 1 stationary pump. However due to the increase in demand, the management dec ided to rent the latest pumps to reduce the risk of loss occurrence due to pump failures during concreting. The Company pays a rent of PKR 2,000,000 m inimum per month for these rented pumps. By owning them the Company will save this cost.

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4.6.4 Plant location Given the str iking construction outlook, the Company has build s ix concrete plants in strategically positioned s ites in Karachi and Lahore.

Facility Capacity m3/ hour City

Walton Road 30 Lahore

New Air Port Road 60 Lahore DHA Phase VI 60 Lahore DHA Phase VIII 120 Karachi

Korangi Industrial Area 56 Karachi Yas in Abad 20 Karachi

4.6.5 Plant flexibility It is economically viable to dismantle the concrete plant from one location to another. This characteristic makes the production fac ility f lexible enough to transfer at any location where the opportunities exit. So far the Company has dominated its presence in Karachi and Lahore; however, if any attractive opportunity heads up in Islamabad or any other city of the country, the Company has the economic viability to relocate its production facility. 4.6.6 Power facilities The Company has installed 8 generators on different production facilities out of which 5 are ow ned and 3 are leased, w hich results in lesser dependency on the national transmission grid for its power needs. The Company’s existing installed power capacity is 1,612 KVA. 4.6.7 Availability of raw material As mentioned in the process above, cement is the chief raw material for the concrete mix which constitutes around 63 percent of the raw material cost and 45 percent of the total manufacturing cost. Cement and other aggregates are readily available in the market besides; the Company has established long term relationships with cement suppliers to ensure timely delivery of the raw material. The Company has the capac ity to store 450 tons loose cement in s ilos and 200 tons in 50kg bags in containers to ensure smooth operations. 4.7 CLIENTELE Key c lients of the Company are as follows:

Lahore Bauer International Bina Puri Packages Limited Condrill Maaksons Divine Developers Izhar Group Hasnain Cotex DHA Construction Kaizen Construction Karachi Sky Construction Principal Builders Maqbool Associates Engro Pakistan

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Shalimar Construction ACL Railcop Machiyara Builders Shaikhani group China Beijing Corporation Bahria foundation Amreli Steel

4.8 UTILIZATION OF PROCEEDS The additional cost of machinery to be purchased out of IPO proceeds is estimated at PKR 125,000,000. The Company will utilize these proceeds for the purchase of concrete pumps, transit mixers, and to meet its w orking capital requirements. Breakup of the above said is mentioned below: Utilization of proceeds

Name of machinery Quantity Amount (PKR)

Concrete pumps 02 65,000,000 Transit Mixer 10 40,000,000 Working capital - 20,000,000 Total 125,000,000

The Company shall be buying the required machinery subsequent to public offer through the IPO proceeds.

4.9 SECTOR DYNAMICS

Ready Mix Concrete (RMC) industry is well established in developed countries and becoming a rapidly growing industry in developing nations. For instance, in UAE alone, there are over 50 RMC manufacturing companies. Even less developed Colombo have 9 RMC companies in operation, however in Pakistan there was not even a s ingle RMC company till 2005. Nonetheless in past five years RMC has made its presence felt as there are 5 RMC companies operating in Lahore & Karachi with a total capacity of 1.7 million cubic meters per annum.

Following is the table showing the detail of RMCs operating in Pakistan:

Company Plant location Capacity m3 /hour

Commercial Operation

Safe Mix Concrete Product Limited Karachi-Lahore 346 July -2005 Lucky Paragon Ready Mix Limited Karachi 112 January 2007 IJM Construction Pak (Pvt.) Limited Karachi 120 April 2008 C Mix Concrete Pakistan Lahore 50 June 2006 Atlas Pakistan Karachi 50 September 2008 Source: SMCPL

Striking demand outlook

Contribution of construction to the Gross National Product has grown by Compounded Annual Growth Rate (CAGR) of 21 percent during FY2004-FY20093. Despite lower

3 Pakistan Economic Survey 2008-2009

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GDP growth in FY2009, construction sector managed to register YoY grow th of 13 percent which highlights the res ilience of the construction sector;

The economy is flooded with Pakistani workers’ remittance particularly after global

financial meltdown. As we have witnessed in the past that expatriates prefer to invest in real estate which paints a rosy picture on the construction canvas of the country;

The economy is witnessing a r ising trend in per capita income w hich has jumped from

US$ 669 in FY2004 to US$ 1,046 in FY20094, marking an improvement at a 5 year CAGR of 9 percent;

Rising population and rapidly emerging middle and upper middle class is creating

unprecedented housing demand which is likely to keep construction activities buoyant; Rising trend in the infrastructural development by the government is likely to keep

concrete demand robust;

There has been a gradual shift from traditional ‘construction site concrete manufacturing’ to modern ready mix concrete due to its uniform material composition, flexible manufacturing site and exquisite quality. These characteristics are rapidly making ready mix concrete the prime choice for constructors. 4.10 RISK FACTORS In making the investment decision, the investor may take into consideration the following risk factors:

Company Risks Regulatory Risk (level- low)

Regulatory risk emanates from any change in the fiscal and regulatory regime which might adversely affect the performance of the industry or may lead to reduced competitiveness.

Mitigant: This risk is s ignificantly mitigated by various factors including sector performance, competitive standing, government’s focus on infrastructure and incentive programs continuing on a sustainable bas is. Given all these factors, any adverse regulatory event is highly unlikely.

Force Majeure/Political Risk (Level –Low) Force Majeure includes events that are beyond reasonable control of the Company.

Mitigant: Some of the events under Force Majeure are covered by insurance contract that provides cover against unforeseen circumstances i.e. bus iness interruptions, machinery breakdown and etc. 4 Pakistan Economic Survey 2008-2009

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Economic Slowdown (level- high) The growth of the construction industry is largely dependent upon the economic conditions prevailing in the country. An economic slow down in the country / region may adversely affect the grow th and performance of the sector.

Mitigant: Every business inherits a business r isk and Pakistan is also entering the phase of large development in the construction sector & need for ready-mix concrete is growing on a day-by-day basis. The presently booming construction industry, w ith several mega projects being launched throughout the country, requires a reliable and continuous supply of quality concrete. Pakistan is expected to carry the momentum of economic grow th in the medium term. Therefore demand of concrete mix is expected to post a pos itive growth likely.

Technological Obsolescence Risk (level – low) The concrete mix companies’ profitability and competitiveness can be adversely affected by potential obsolescence of etymology process technology.

Mitigant: The concrete used in today’s construction is similar to that used by the anc ient Romans. The cement and w ater form a paste that binds the other materials together as the concrete cures or hardens a process in the etymology of the term itself. The process through w hich concrete is manufactured is being used since roman times so chances of becoming this process is very much negligible, therefore the company faces no obsolescence threat.

Raw Material Supply / Price Risk

This risk emanates from the possibility of disruption in the supply of raw material and / or volatility in raw material prices which may adversely affect the performance of the industry / company.

Mitigant:

This risk is mitigated by the fact that Pakistan has significant supply of cement and aggregates (sand, stone etc) which reduces the raw material availability risk to minimum. Further, existing supply glut of cement and w atchful stance of competition regulator of the country is likely to keep raw material price volatility to the minimum.

Investment Risks Valuation risk (Level – Low)

The company has used assumptions for f inanc ial projections which are subject to change depending on the industry, economic and political dynam ics. This can serious ly impact the actual future results of the company.

Mitigant:

SMPCL has used conservative assumptions; therefore we believe probability of overturning our projections which w ill negatively impact our valuation is minimal on the back of str iking construction demand outlook.

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Liquidity and Marketability Risk The investors / shareholders may face liquidity and marketability risk pertaining to shares of the Bank whereby they may not be able to sell these shares in large volumes eas ily or w ithout materially affecting the price.

Mitigant: This risk is how ever considerably mitigated by the fact that 50% of the outstanding shares of the Company are being offered to general public and the shares are expected to remain liquid and actively traded on the exchange.

Capital Market Risk The share of the Company is exposed to capital market risk whereby a general stock market meltdown may adversely affect the share price of the Company regardless of its underlying fundamentals.

Mitigant: The Company has a profitable track record and aggress ive grow th prospectus in the coming future, which will help in mitigating the risk of adverse share price movement at the stock exchange. Note: It is stated that all material risk factors have been disclosed and that nothing has been concealed in this respect.

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PART 5

5. FINANCIAL INFORMATION 5.1 AUDITORS REPORT UND ER SECTION 53(1) READ WITH CLAUSE

28(1) AND 28(2) OF SEC TION 2 OF PART I OF THE SEC OND SC HED ULE TO THE CO MPA NIES OR DINANCE, 1984 FOR THE PURPO SE O F INCLUSION IN THE PRO SPECTUS OF SA FE MIX CONCRETE PR ODUC TS LIMITED

The Board of Directors Safe Mix Concrete Products Limited 25-A, Syed Maratib Ali Road Gulberg IV Lahore.

21 October 2009 Gentlemen Safe Mix Concrete Products Limited (“the Company”) Auditor’s report under Section 53(1) read with Clause 28(1) and 28(2) of Section 2 of Part 1 of the Second Schedule to the Companies Ordinance, 1984 We have examined the audited accounts of the Company for the period ended June 30, 2006, for the year ended 30 June 2007, 30 June 2008 and 30 June 2009 and in accordance with section 53(1) read with clauses 28(1) and 28(2) of Section 2 of Part 1 of the Second Schedule to the Companies Ordinance, 1984, w e report that:

2 a summary of assets, liabilities and share holders’ equity of Safe Mix Concrete Products Limited as at 30 June 2006, 30 June 2007, 30 June 2008 and 30 June 2009 is as follows:

Account head 30 June 2009

30 June 2008

30 June 2007

30 June 2006

Rupees ASSETS Non current assets Property, plant and equipment 132,867,192 145,522,018 104,581,604 47,980,184 Long term deposits 6,532,475 6,127,490 3,282,840 3,220,840 Current assets Store, spare parts and loose tools 947,994 325,539 62,349 979,768 Trade debts 90,342,317 62,757,172 4,965,855 2,124,223 Stock in trade 28,779,724 14,717,619 3,730,680 - Advances, prepayments and other receivables 5,941,810 11,999,123 9,833,659 3,280,835 Tax refund due from Government 11,821,723 7,828,738 - - Cash and bank balances 9,557,690 19,885,753 3,918,940 20,000,705 147,391,258 117,513,944 22,511,483 26,385,531 Total assets 286,790,925 269,163,452 130,375,927 77,586,555

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LIABILITIES Non current liabilities Long term loan – unsecured 27,000,000 30,000,000 - - Liabilities against assets subject to finance lease 7,715,834 6,835,321 - -

Deferred liability – taxation 14,186,877 14,193,588 251,259 - Current liability Trade and other payables 61,565,530 61,803,118 4,806,241 1,571,381 Accrued markup 5,406,267 3,609,580 - - Short term running finance – secured 49,969,881 49,969,881 29,758,534 - Current portion of liabilities against assets subject to finance lease 1,572,871 992,106 - -

Provision for taxation - - - 1,974,836 118,514,549 116,374,685 34,564,775 3,546,217 Total liabilities 167,417,260 167,403,594 34,816,034 3,546,217 Shareholder equity 119,373,665 101,759,858 95,559,893 74,040,338 Contingencies and commitments None None None None b) The Company was incorporated on 04 April 2005 and first accounts of the Company w ere prepared from the period from 04 April 2005 to 30 June 2006. c) a summary of the profit and loss accounts of Safe Mix Concrete Products Limited for the period from 04 April 2005 to 30 June 2006, years ended 30 June 2007, 30 June 2008 and 30 June 2009 is as follows:

Account head 30 June 2009

30 June 2008

30 June 2007

04 April 2005 to 30 June

2006 Rupees Revenue 707,464,827 433,244,601 57,448,217 20,408,587 Cost of sales 651,559,203 398,339,783 50,711,973 10,654,641 Gross profit 55,905,624 34,904,818 6,736,244 9,753,946 Administrative expenses 25,926,399 15,311,491 8,694,636 5,233,185 Operating profit 29,979,225 19,593,327 (1,958,392) 4,520,761 Finance cost 14,563,776 6,756,667 1,721,814 666,153 Other operating expenses - - 415,063 - Other operating income 11,609,196 2,855,634 853,324 2,160,566 Profit before taxation 27,024,645 15,692,294 (3,241,945) 6,015,174 Provision for taxation 9,410,838 13,942,329 538,500 1,974,836 Profit after taxation 17,613,807 1,749,965 (3,780,445) 4,040,338 Profit/Loss per share – basic and diluted 2.52 0.25 (0.54) 1.82

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d) The Company declared a 20 percent cash dividend in respect of year ended 30 June 2009. No dividend was declared in respect of years proceeding to 30 June 2009. e) Financial Statements of the Company The financial statements of the Company for the period from 04 April 2005 to 30 June 2006 and years ended 30 June 2007, 30 June 2008 and 30 June 2009 w ere audited by us and we have issued unqualif ied opinion in the respective period/year.

Yours truly, Sd/- KMPG Taseer Hadi & Co. Chartered Accountants

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5.2 SHARE BREAK-UP VALUE CERTIFICATE The Board of Directors Safe Mix Concrete Products Limited 25-A, Syed Maratib Ali Road Gulberg IV Lahore.

21 October 2009 Gentlemen, Safe Mix Concrete Products Limited (“the Company”) Auditor’s Certificate on Break-up value per share As requested, we confirm that the break-up value of the ordinary shares of PKR 10/- each of Safe Mix Concrete Products Limited based on the audited f inanc ial statements as at 30 June 2009 has been worked out as follows: 30 June

2009 Rupees Issued, subscribed and paid up capital 70,000,000 Share deposit money 29,750,000 Reserves 19,623,665 Total share holder’s equity 119,373,665 Number of ordinary shares 7,000,000 Break-up value per ordinary share of PKR 10 each 17.05 Very faithfully,

-Sd- KMPG Taseer Hadi & Co. Chartered Accountants

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Management Note: The revised break up value of the Company is given under two scenarios below . The “Present Revised Capital Scenario” gives the break-up value on the basis of the 10,000,000 shares subscribed as at the publication of this Prospectus. The “Post IPO Scenario” gives the break-up value on the bas is of 20,000,000 shares subscribed. Both scenarios use un-appropriated profit of the Company as at June 30, 2009. Present Revised Capital Scenario: Rupees Issued, subscribed and paid up capital 100,000,000 Reserves 19,623,665 119,623,665 Number of Ordinary Shares Issued 10,000,000 Break-up Value per Ordinary Share PKR 11.96 Post-IPO Scenario: Rupees Issued, subscribed and paid up share capital 200,000,000 Share premium 25,000,000 Reserves 19,623,665 244,623,665 Number of Ordinary Shares Issued 20,000,000 Break-up Value per Ordinary Share PKR 12.23

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

The Board of Directors Safe Mix Concrete Products Limited 25-A, Syed Maratib Ali Road Gulberg IV Lahore.

19 November 2009 Gentlemen Safe Mix Concrete Products Limited (“the Company”) Auditor’s Certificate on Issued, Subscribed and Paid u p Capital AUDITORS’ CERTIFICATE ON ISSUED, SUBSCRIBED AND PAID UP CAPITAL We have confirmed from the books of account and related records of the Company and report that the issued, subscribed and paid up capital of the Company as at 06 November 2009 is PKR 100,000,000 divided into 10,000,000 Ordinary shares of PKR 10/- each fully paid in cash. The break-up of the shareholding as at 06 November 2009 is as follow s: Number of

shares Rupees

Syed Yawar Ali 3,052,174 30,521,740 Mr. Bashir H. Ali Mohammad 3,052,174 30,521,740 Mr. Arif Habib 1,338,144 13,381,440 Mr. Asim Tiw ana 1,052,474 10,524,740 Sir Anwar Pervez 1,503,534 15,035,340 Mr. Maratib Ali 500 5,000 Mr. Nasim Beg 500 5,000 Mr. Ziad Bashir 500 5,000 10,000,000 100,000,000 Yours faithfully,

-Sd- KMPG Taseer Hadi & Co. Chartered Accountants

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PART 6 6. MANAGEMENT 6.1 BOARD OF DIRECTORS OF THE COMPANY

Name, address, personal details Designation Directorship in other listed companies

Mr. Arif Habib 86/2, Street No. 10, Khayaban-e-Sehar, Phase VI, DHA, Karachi.

Chairman Arif Habib Securities Lim ited Arif Habib Bank Limited Thatta Cement Company Limited Pakistan Engineering Co. Limited Javedan Cement Limited Attock Refinery Limited

Syed Maratib Ali Shadad House, Aziz Avenue, Canal Bank, Lahore.

Chief Executive Officer ZIL Limited (formerly Zulif iqar Industries Limited)

Syed Yawar Ali Shadad House, Aziz Avenue, Canal Bank, Lahore.

Director Nestle Pakistan Limited Wazir Ali Industr ies Limited International General Insurance

Company Limited Alpha Insurance Company Limited

Mr. Bashir H. Ali Mohammad B-37, KDA Scheme No. 1, Karsaz Road, Karachi.

Director Habib Metropolitan Bank Limited Gul Ahmed Textile Mills Limited

Mr. Nasim Beg F-61/6, Block – 4, Clifton, Karachi.

Director Arif Habib Bank Limited Arif Habib Securities Limited Arif Habib Investments Lim ited

Mr. Muhammad Asim Tiwana Main G.T. Road, Jhangi Syeden Tarnol, Islamabad.

Director Nil

Mr. Ziad Bashir B-37, KDA Scheme No. 1, Karsaz Road, Karachi.

Director Gul Ahmed Textile Mills Limited

6.2 OVER DUE LOANS There are no overdue loans (local or foreign currency) on the Company or its Directors. 6.3 DIRECTORS PROFILE 6.3.1 Mr. Arif Habib Mr. Arif Habib is the Chairman and Chief Executive Officer of Arif Habib Securities Limited—the Arif Habib Group’s holding company. He is recognized as one of the most astute investors in Pakistan. Over the past decade, he has lead his business from a securities brokerage operation to a divers ified financial and industrial conglomerate now worth around the USD 2 billion mark. Mr. Habib is one of the pioneers of private equity in Pakistan and an active participant in the

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government’s privatization program. He w as responsible for key modernizations in the Pakistani securities markets, including the introduction of highly successful automated trading and electronic central depository systems. He was elected Chairman and President of the Karachi Stock Exchange—Pakistan’s premier bourse—on six different occas ions and was the founding Chairman of the Central Depository Company of Pakistan. He is also the Chairman of the boards of Arif Habib Bank Limited, Pakarab Fertilizers Limited and Thatta Cement Company Limited. Mr. Habib holds a degree in commerce. 6.3.2 Syed Maratib Ali Syed Maratib Ali is the Chief Executive Officer of Safe Mix Concrete Products Limited since its incorporation. He is also the Chief Executive Officer of Abepak (Pvt) Limited and a director of ZIL Limited. Mr. Ali in the last 4 years has developed the ready mix concrete market from scratch with the aid of a profess ional team and now has made into an industry. He has over 8 years experience and holds a Bachelors degree. 6.3.3 Mr. Nasim Beg Mr. Nasim Beg is the Chief Executive Officer of Arif Habib Investments Limited (AHIL). He is one of the most respected profess ionals in the Pakistani mutual funds industry, having nearly forty years of domestic and international experience in the f inanc ial services industry. Before assum ing responsibility as the Chief Executive Officer of AHIL, Mr. Beg served as the Deputy Chief Executive Officer of National Investment Trust and played an instrumental role in its modernization and turn-around. He is a pioneer in the fund management industry in Pakistan, having introduced the f irst money market fund and the first fund to invest abroad. Mr. Beg is a Fellow of the Institute of Chartered Accountants of Pakistan, Director of Mutual Fund Association of Pakistan (MUFAP), Chairman of Institute of Capital Market, member of the Economic Advisory Council of the Government of Pakistan, and Chairman of REIT Management Limited. 6.3.4 Mr. Bashir Ali Mohammad Mr. Bashir Ali Mohammad is the Chairman of Gul Ahmed Textile Mills. He is also a director of Gul Ahmed Energy Limited and Habib Metropolitan Bank Limited. He has served as Chairman of All Pakistan Textile Mills Association, Pakistan Swiss Trade and Industry Committee, Pakistan Britain Advisory Counc il. He has also been a member of Export Promotion Board Government of Pakistan and currently is a member of the Economic Advisory Counc il of the Government of Pakistan. He has over 35 years of experience. Mr. Bashir is a Fellow of the Chartered Institute of Management Accountants (CIMA). United Kingdom and also was awarded Sitara –e- Imtiaz by the Government of Pakistan. 6.3.5 Syed Yawar Ali Syed Yawar Ali is the Chairman of Nestle Pakistan, Wazir Ali Industr ies and Lahore Electr ic Supply Company (LESCO). He is also a D irector of International General Insurance (IGI) and Alpha Insurance Company. In the past Mr. Ali has served as Chairman of the Pakistan Dairy Association on a number of occasions and has been a member of the board of PIA (1991-93 & 1998-2000) and State Bank of Pakistan (1993-1996). He has 40 years working experience and holds a Master of Management Sciences degree from USA. 6.3.6 Mr. Muhammad Asim Tiwana Mr. Muhammad Asim Tiwana is the CEO of Kaizen Construction (Pvt) Ltd. He is also the Director of Prosperity Securities (SMC-Pvt) Ltd. A member of Islamabad Stock Exchange. He has over 12 years

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of experience in managing Construction Company. Mr. Tiw ana has Masters Degree in Finance from University of Exeter, UK. 6.3.7 Mr. Ziad Bashir Mr. Ziad Bashir is the Chairman of Arwen Tech (Pvt) Limited and Swisstex Chemicals (Pvt.) Ltd. He is also a director of Gul Ahmad Textile Mills. He has over ten years of experience and w as the founder of IDEAS By Gul Ahmed (Home Stores).He holds a BSC Degree in Entrepreneurial Studies from Babson College, USA. 6.3.8 Mr. Wasiq Ilyas – Company Secretary Wasiq I lyas is Manager Finance, Safe Mix Concrete Products Limited since December 2006. He has 13 years’ extens ive experience of working in different renowned organizations in Pakistan. He is an Associate Member of Institute of Cost and Management Accountants of Pakistan, and also holds a masters degree in Finance from Karachi University. 6.4 NUMBER OF DIRECTORS Pursuant to Section 174 of the Companies Ordinance, 1984 the Company shall not be less than seven directors. At present the Board consists of (7) Directors including the Chief Executive. 6.5 QUALIFICATION OF DIRECTORS A director must be a member unless he is a person representing the Government or an institution or authority that is a member, or is a whole time working director w ho is an employee of the Company, or a Chief Executive or a person representing a creditor. In case of directors representing special interests holding shares of the requisite value, no such share qualif ication shall be required provided intimation in writing as to such representation is lodged with the Company within two months of the appointment of such directors. 6.6 REMUNERATION OF THE DIRECTORS Pursuant to clause no. 88 of the Artic les of Association of the Company “The remuneration of the Directors shall form time to time determined by the Company in General Meeting but the remuneration of a Director for attending meeting of the Board shall not exceed PKR 500 for each meeting attended by him. A Director shall be entitled to be paid his reasonable traveling expenses, traveling charges and other expenses incurred by him for attending meetings”. 6.7 BENEFITS TO THE PROMOTERS AND OFFICERS No amount of benefits has been paid or given during the last year or is intended to be paid or given to any promoter or to any officer of the Company other than as remuneration for services rendered as whole-time executive of the Company and the remuneration for services shall be borne by the Company. 6.8 INTEREST OF DIRECTORS The directors may be deemed to be interested to the extent of fees payable to them for attending board meetings. The directors performing whole time service to the Company may also be deemed interested in the remuneration payable to them by the Company. The directors may also be deemed to be interested in, to the extent of any shares held by each of them in the Company, the dividends to be declared by the Company.

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6.9 INTEREST OF DIRECTORS IN PROPERTY ACQUIRED BY THE COMPANY None of the Directors of the Company had or has any interest in any property acquired by the Company or proposed to be acquired by the Company. 6.10 ELEC TION OF DIRECTORS The directors shall comply with the provisions of sections 174 to 178, 180, and 184 of the Ordinance, relating to the election of directors and matters ancillary thereto. The present Directors of the Company w ere elected on October 23, 2009 for the period of three (3) years. 6.11 VOTING RIGHTS On a show of hands, every member present in person shall have one vote except for election of Directors in w hich case the provisions of section 178 of the Ordinance shall apply. On a poll, every member shall have voting r ights as laid down in Section 160 of the Ordinance. 6.12 AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE Audit committee of the board has been formed to comply with the Code of Corporate Governance, which comprises of the following three non-executive/ executive directors :

i. Mr. Maratib Ali (Chairman of Committee) ii. Mr. Asadullah Tawana iii. Mr. Najeeb Sadiq

The audit committee meeting shall be held after the Company is listed on the Stock Exchange, as per provis ions of the Code of Corporate Governance. The Committee has its terms of reference which were determined by the Board of Directors in accordance with the guidelines provided in the Listing Regulations. 6.13 INTERNAL AUDIT

The board has setup an effective internal audit function managed by suitable qualif ied and experienced personnel who are conversant with the policies and procedures of the Company and are involved in the internal audit function on a full time bas is.

6.14 BORROWING POWERS The Directors may from time to time at their discretion borrow and secure the payment of any sum or sums of money for the purposes of the Company and may themselves lend to the Company on security or otherw ise subject to the provisions of the Companies Ordinance, 1984. 6.15 POWERS OF DIRECTORS The business of the Company shall be managed by the Directors, who may pay all expenses incurred in promoting and registering the Company, and may exercise all such powers of the Company as are not by the Ordinance or any statutory modification thereof for time being in force, or by the Artic les of Association, required to be exercised by the Company in General Meeting.

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6.16 INDEMNITY Section 153 of the Company’s Article of Association reads as follow s: “Every Director, Manager, Auditor, Secretary and other officer or servant of the Company shall be indemnified by the Company against and it shall be the duty of the D irector out of the funds of the Company to pay all costs, losses and expenses w hich any such officer or servant may incur, or become liable to by reason of any contract entered into or thing done by him as such officer or servant or any w ay in the discharge of his duties; and the amount for which such indemnity is provided shall immediately attach a lien on the property of the Company and have priority as betw een the members over all other claims.” 6.17 INVESTMENTS IN ASSOCIATED COMPANIES The Company has not made any investment in any of associated companies nor has any resolution been passed for investment in associated companies under Section 208 of the Ordinance. 6.18 INVESTMENT IN SUBSIDIARIES The Company has not sponsored nor acquired any subs idiaries nor has any resolution been passed for sponsoring or acquiring any subs idiaries under Section 208 of the Ordinance.

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PART 7 7. MISCELLANEOUS INFORMATION 7.1 REGISTERED OFFICE/ HEAD OFFICE/CORPORATE OFFICE Plot No. 1-6 Sector No. 26, Bilal Chowrangi Korangi Industrial Area, Karachi. Ph: 021 – 3507 4581 Fax: 021 – 3507 4603 7.2 BANKERS TO THE ISSUE Arif Habib Bank Limited Bank Alfalah Lim ited Bank Al-Habib Limited Faysal Bank Limited Habib Bank Limited Habib Metropolitan Bank Limited J.S. Bank Limited MCB Bank Limited The Bank of Punjab United Bank Limited 7.3 AUDITOR OF THE COMPANY KPMG Taseer Hadi & Company Chartered Accountants 201-Office Block Siddiq Trade Centre 72-Main Boulevard Gulberg II, Lahore. 7.4 LEGAL ADVISOR OF THE ISSUE Ebrahim Hosain Associate & Corporate Counsel 156-1, Scotch Corner, Upper Mall, Lahore. 7.5 ADVISOR & ARRANGER TO THE ISSUE Arif Habib Limited Arif Habib Centre 23, M.T. Khan Road Ph# 021 – 3241 5213 Fax # 021 – 3242 9653 7.6 COMPUTER BALLOTER & SHARE REGISTRAR THK Associates (Pvt.) Limited Ground Floor, State Life Building-3, Dr. Ziauddin Ahmed Road, Karachi. Ph: 021 – 111-000-322 Fax: 021 – 3565 5595

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7.7 MATERIAL CONTRACTS / DOCUMENTS

S.No Particulars Date Parties Brief Description Features 1 Public Private

Partnership (PPP) Rs.10,000,000

21/10/2006 SMPCL City District

Government, Karachi – CDGK

Public Private Partnership (PPP) w ith SMCPL for setting up of a Batching Plant at Karachi

Valid & Renew able for 5 years

2 Agreement Rs 325,000

31/07/2007 Ahbab Pakistan SMCPL

Agreement for hiring one unit Kyokuto truck PY 21-51 Chassis no FH262B-21120

Renew able

3 Agreement of sale Rs.450,000

08/06/2009 Techni Style Engineering Services

SMCPL

Agreement for sales of Shahzore

N/A

4 Equipment rental agreement Rs. 75,000

04/07/2008 ORIX Leasing Pakistan Ltd

SMCPL

Rental agreement for 365 Kva generator

Renew able

5 Equipment rental agreement Rs. 10,000

25/04/2008 ORIX Leasing Pakistan Ltd

SMCPL

Rental agreement for 365 Kva generator

Renew able

6 Agreement Rs. 175,000

20/09/2008 Orion International Co

SMCPL

Agreement for hiring one unit Nissan Mixer Truck Reg no TKP-519 Chassis no: 450VC-03929

Till the completion of the project

7 Agreement Rs. 80,000


SMCPL

Agreement to hire 100 KVA diesel generator set Cummins Engine Model 6BT5.9 (UK)


8 Agreement Rs 65,000


SMCPL

Agreement to hire 50 KVA sound proof diesel generator, ISUZU eneine model (Japan)


9 Agreement N/A


SMCPL

Agreement to hire one silo 50 ton as per standard API 650 for cement storage

Valid for 2 years from the date of signing.

10 Lease Facility Rs. 2,650,000

24/01/2008 Security Leasing Company Limited

SMCPL

Lease agreement for 01 unit brand new 365 KVA Caterpillar generator set

Valid for 5 years from the signing date

Prospectus

37

11 Finance Lease Rs. 261,693

17/12/2007 Habib Metropolitan Bank Limited

SMCPL

Finance Lease Auto Valid for 5 years from the signing date



SMCPL

Lease fac ility of 01 unit brand new 365 KVA Caterpillar generator set

Lease period of 5 years



SMCPL

Lease fac ility of 01 unit brand new 300 KVA diesel generator set

Lease period 3-5 years



SMCPL

Lease fac ility of 01 unit brand new Caterpillar Wheel Loader

Lease period 3-5 years

15 Running Finance Facility

07/05/2009 The Bank of Punjab

SMCPL

Offer letter for renewal of running finance facility Rs. 50 million & non-fund based fac ility of Rs 20.00 million

3M KIBOR + 250 bps Valid till 31 Dec, 2009

16 Ready mix concrete supply contract 1500 PSI PKR 3,292.37/m3; 3000 PSI PKR 5,258.05/m3; 4000 PSI PKR 5,748.65/ m3

04/12/2008 Husnain Cotex Limited

& SMCPL

Supply of ready mix concrete for Bab-e-Pakistan project

N/A

17 Ready mix concrete supply contract PKR 5,500,000

01/10/2007 Bina Puri Holdings BHD

& SMCPL

Sale of ready mix concrete for defence Raya Golf & Country Club, Lahore

N/A

18

Ready mix concrete supply contract PKR 5400/m3 ; PKR 5100/m3

25/01/2008 M/S Bauer International

& SMCPL

Sale of ready mix concrete for Mabarak centre, Lahore

Valid till 1st March 2009.

19 Ready mix concrete supply contract 3000 PSI PKR 5,191/m3; 4000 PSI PKR 5,596/ m3

24/07/2009 Xinhua Mall, Lahore

& SMCPL

Sale of ready mix concrete Products for Xinhua Mall, Lahore

Valid for 7 days after the date of issue of quotation

7.8 UND ERWRITING AGREEMENTS

Prospectus

38

Names of Underwriters No. of Shares Premium

(Rupees) Amount (Rupees)

National Bank of Pakistan 4,300,000 2.5/- 53,750,000 Allied Bank Limited 1,200,000 2.5/- 15,000,000 Saudi Pak Industrial & Agricultural Company Limited 800,000 2.5/- 10,000,000 Elixir Securities (Pvt.) Pakistan 1,500,000 2.5/- 18,750,000 Invisor Securities (Pvt.) Limited 1,200,000 2.5/- 15,000,000 Cassim Investments (Pvt.) Limited 1,000,000 2.5/- 12,500,000

Total 10,000,000 125,000,000

7.9 DUE DILIGENC E REPORT

National Bank of Pakistan Allied Bank Limited Saudi Pak Industrial & Agricultural Company Limited Elixir Securities (Pvt.) Pakistan Invisor Securities (Pvt.) Limited Cassim Investments (Pvt.) Limited

7.10 INSPECTION OF DOCUMENTS AND CONTRACTS Copies of Memorandum and Articles of Association, Audited Financial Statements of the Company, Auditors’ Certif icates, Agreements / Material Contracts and feas ibility report referred to in this prospectus and related information may be inspected during the usual business hours on any working day at the Registered Office of the Company, from the date of publication of this prospectus till the clos ing of subscription list.

7.11 LEGAL PROCEEDINGS

There are no legal proceeding pending against the Company involving f inancial implications and the Company has not initiated any legal proceedings against any party or person. 7.12 MEMORANDUM OF ASSOCIATION The Memorandum of Association, inter alias, 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 has been published with all issues thereof except those released as new spaper advertisement. 7.13 REVALUATION OF ASSETS The Company has not carried out any revaluation of assets in terms of assets in terms of clause 22(2) of Section 1 of part I of the second Schedule to the Ordinance.

Prospectus

39

7.14 FINANCIAL YEAR OF THE COMPANY

The financial year of the Company commences from 1 st day of July and ends on the 30th day of June each year.

7.15 CAPITALIZATION OF PROFITS The Company has not capitalized any profits till the date of public ation.

Prospectus

40

PART 8

8. APPLICATION AND ALOTMET INSTRUCTIONS

GENERAL INSTRUCTIONS

8.1 Eligible investors include: a. Pakistani citizens resident in or outside Pakistan or Persons holding tw o nationalities

including Pakistani nationality; b. Foreign Nationals whether living in or outside Pakistan c. Companies, bodies corporate or other legal entities incorporated or established in or

outs ide Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be);

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

e. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. 8.2 APPLICATION MUST BE MADE ON THE COMMISSION’S APPROVED

APPLICATION FORM OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING ATLEAST 62 GM.

8.3 Copies of Prospectus and application forms can be obtained from the members of Karachi

Stock Exchange (Guarantee) Limited, the Bankers to the Issue and their branches, the Financ ial Advisor/Arranger and the registered office of the Company. The Prospectus and the application forms can also be downloaded from the website: www.arifhabibltd.com and www.safe mixltd.com.

8.4 The applicants opting for scripless form of Shares are required to complete the relevant

sections of the application. In accordance with provis ions of the Central Depos itories Act, 1997 and the CDC Regulations, credit of such Shares is allowed ONLY in the applicant’s own CDC Account. In case of discrepancy between the information provided in the application form and the information already held by CDS, the Company reserves the r ight to issue shares in phys ical form.

8.5 Name (s) and address (es) must be written in full block letters, in English and should not be

abbreviated. 8.6 All applications must bear the name and signature corresponding with that recorded w ith the

applicant’s banker. In case of difference of signature w ith the bank and Computerized National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) or Passport both the signatures should be aff ixed on the application form.

8.7 APPLICATIONS MADE BY INDIVIDUAL INVESTORS

(i) In case of individual investors, an attested photocopy of CNIC (in case of Resident Pakistanis)/Passport (in case of Non-Res ident Pakistanis) as the case may be, should be enclosed and the number of CNIC/ Passport should be written against the name of the applicant. Copy of these documents can be attested by any Federal/Provincial Government Gazetted Officer, Counc ilor, Oath Commissioner or Head Master of High School or bank manager in the country of applicant’s residence;

(ii) Original CNIC/Passport, along with one attested photocopy, must be produced for

verification to the banker to the offer and the applicant’s banker ( if different from the

Prospectus

41

banker to the Issue) at the time of presenting the application. The attested photocopy will, after verific ation, be retained by the bank branch along with the application.

8.8 APPLICATIONS MADE BY INSTITUTIONAL INVESTORS

(i) Applications made by companies, corporate bodies, mutual funds, provident/pension/gratuity funds/trusts and other legal entities must be accompanied by an attested photocopy of their Memorandum and Articles of Assoc iation or equivalent instrument / document. Where applications are made by virtue of Power of Attorney, the same should also be submitted along with the applic ation. Any Federal/Provincial Government Gazetted Officer, Councilor, Bank Manager, Oath Commissioner and Head Master of High School or bank manager in the country of applicant’s residence can attest copies of such documents;

(ii) Attested photocopies of the documents mentioned in 8(i) must be produced for

verification to the banker to the offer and the applicant’s banker ( if different from the banker to the Issue) at the time of presenting the application. The attested copies, will after verification, be retained by the bank branch along with the application.

8.9 Only one application will be accepted against each account, however, in case of joint account,

one application may be submitted in the name of each joint account holder. 8.10 Joint application in the name of more than two persons will not be accepted. In case of joint

application each applicant must sign the application form and subm it attested copies of their CNICs//Passport. The shares/certificates will be dispatched to the person whose name appears first on the application form while in case of CDS, it will be credited to the CDS account mentioned on the face of the form and w here any amount is refundable, in whole or in part, the same w ill be refunded by cheque or other means by post, or through the bank where the application was submitted, to the person named first on the applic ation form, w ithout interest, profit or return. Please note that joint application will be considered as a s ingle application for the purpose of allotment of Shares.

8.11 Subscription money must be paid by cheque drawn on applicant’s ow n bank account or pay

order/bank draft payable to one of the Bankers to the Issue “A/C INITIAL PUBLIC OFFERING OF SAFE MIX CONCRETE PRODUCTS LIMITED” and crossed “A/C PAYEE ONLY”.

8.12 For the applications made through pay order/bank draft, it would be permiss ible for a banker

to the Issue to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order/bank draft individually for each application.

8.13 The applicant should have at least one bank account with any of the commercial banks.

The applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of Shares/Certificates.

8.14 Applications are not to be made by minors and/or persons of unsound mind. 8.15 Applicants should ensure that the bank branch, to w hich the application is submitted,

completes the relevant portion of the application form. 8.16 Applicants should retain the bottom portion of their application forms as provisional

acknowledgement of submiss ion of their applic ations. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of Shares/Certificates for which the application has been made.

Prospectus

42

8.17 Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action.

8.18 Bankers to the Issue are prohibited to recover any charges from the subscribers for collecting

subscription applications. Hence, the applicants are advised not to pay any extra charges to the bankers to the Issue.

8.19 It would be permissible for a Banker to the issue to refund subscription money to

unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers.

8.20 Submission of Fictitious and multiple applications (more than one application by a

single applicant) is prohibited and such application money shall be liable to confiscation under section 18A of the Securities and Exchange Ordinance, 1969.

8.21 ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS 8.22 In case of foreign investors who are not individuals, applications must be accompanied with a

letter on applicant’s letterhead stating the legal status of the applicant, place of incorporation and operations and line of bus iness. A copy of memorandum of association or an equivalent document should also be enc losed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged w ith the application. Copies of these documents can be attested by the bank manager in the country of applicant’s res idence.

8.23 Applicants may also subscribe us ing their Special Convertible Rupee Account (SCRA) as set

out under the State Bank of Pakistan’s Foreign Exchange Manual. BASIS OF ALLOTMENT

1. The minimum amount of application for subscription of 500 Shares is Rs. 6,250. Application for Shares below the total value of Rs. 6,250 shall not be entertained.

2. Application for Shares must be made for 500 Shares or in multiple thereof only. Applications,

which are neither for 500 Shares nor for multiple thereof, shall be rejected. 3. Allotment/Transfer of Shares to successful applicants shall be made in accordance with the

allotment criteria/ instructions disclosed in the Prospectus. 4. Allotment of Shares shall be subject to scrutiny of applications in accordance w ith the criteria

disc losed in the Prospectus and/or the instructions by the Securities & Exchange Commiss ion of Pakistan.

5. Applications, which do not meet the above requirements, or applications w hich are

incomplete will be rejected. The applicants are, therefore, required to fill in all data f ields in the Application Form.

6. The Company will dispatch shares to successful applicants through their Bankers to the Issue

or credit the respective CDS accounts of the successful applicants (as the case maybe).

Prospectus

43

8.24 Bankers to the Issue

Code No. Bank 01 Arif Habib Bank Limited 02 Bank Alfalah Limited 03 Bank Al-Habib Limited 04 Faysal Bank Limited 05 Habib Bank Limited 06 Habib Metropolitan Bank Limited 07 J.S. Bank Limited 08 MCB Bank Limited 09 The Bank of Punjab 10 United Bank Lim ited

8.25 Code of Occupation

Code No. Occupation Code No. Occupation 01 Business 06 Professional 02 Business Executive 07 Student 03 Service 08 Agriculturist 04 Housewife 09 Industr ialist 05 Household 10 Others

8.26 Nationality Code

Code No. Name of country Code

No. Name of country

001 U.S.A 006 Iran 002 U.K 007 Bangladesh 003 U.A.E 008 China 004 K.S.A 009 Bahrain 005 Oman 010 Other

Prospectus

44

PART 9

9. SIGNATORIES TO THE PROSPECTUS Signed, as required by section 57 of the Companies Ordinance, 1984, by:

1

Sd/-

____________ Mr. Arif Habib

2

Sd/-

____________ Syed Maratib Ali

3

Sd/-

____________ Syed Yawar Ali

4

Sd/-

____________ Mr. Nasim Beg

5

Sd/-

____________ Mr. Bashir H. Ali Mohammad

6

Sd/-

____________ Mr. Ziad Bashir

7

Sd/-

____________ Mr. Muhammad Asim Tiwana

Witnesses:

Sd/- Sd/- 1. ______________________ 2. _____________________ Name: Syed Abid Ali Name: Mr. Kashif Suhail Address Address CNIC # CNIC #

Date: -------------- Place: --------------

Prospectus

45

PART 10

COMPANIES ORDINANCE, 1984

(COMPANY LIMITED BY SHARES)

Memorandum of Association

Of

SAFE MIX CONCRETE PRODUCTS (PVT.) LIMITED

I. NAME: The name of the Company is "SAFE MIX CONCRETE PRODUCTS (PVT.) LIMITED".

II. REGISTERED OFFICE:

The Registered Office of the Company w ill be situated in the Province of the Sind, Pakistan.

III. OBJECTS:

The objects for which the Company is established are to undertake in and outs ide Pakistan all or any of the follow ing:-

1. To manufacture/produce ready m ix concrete and building blocks and to engage in the construction of prefabricated buildings.

2. To carry on the bus iness of construction of buildings, factories, dams generally.

3. To carry on the business of manufacturers, producers, buyers, sellers, importers, exporters,

dealers, distributors, agents, wholesalers and retailers of products used in the construction business in Pakistan, Azad Jammu Kashmir and/or anywhere else in the world.

4. To import, export, buy, sell, exchange, manufacture, prepare process and deal in products used in

the construction business of all kinds and descriptions, including but not limited to ready mix concrete and building blocks.

5. To carry on in or outside Pakistan the bus iness of manufacturers, importers, exporters, indentures,

transporters, dealers, act as consultants in all products/articles and commodities akin to or connected with any of the business of the Company capable of being conveniently carried on or necessary for the promotion of the objects herein contained, as permissible, under law.

6. To carry on agency business and obtain licenses for shipping agents, clearing agents and

forwarding agents, purchasing and indenting agents, selling agents (except managing agents) on such terms and conditions as the Company may think proper subject to any permission as required under law.

7. To appoint distributors and representatives of the Company in Pakistan and/or anyw here else in

the world for the purposes of marketing, distr ibuting, advancing, selling the product

Prospectus

46

manufactured/produced by the Company, on such terms and conditions as may be deemed fit and appropriate.

8. To purchase, take on lease or in exchange, hire, apply, for or otherw ise acquire and hold for any

interest, any rights, privileges, lands, building, easements, trade marks, patents, patent rights, copyrights, licenses, secret processes, machinery, plants, stock-in-trade, and any moveable and immovable property of any kind necessary or convenient for the purposes of or in connection with the Company’s bus iness or any branch or department thereof and to use, exercise, develop, grant licences in respect of or otherwise turn to account any property, rights, and information so acquired, subject to any permission required under law.

9. To act as representatives, for any person, firm or company and to undertake and perform sub-

contractors, and also act in the business of the Company through or by means of agents, sub-contractors and to do all or any of the things mentioned herein in any part of the w orld and either alone or in collaboration with others and by or through agents, sub-contractors, or otherw ise.

10. To go in for, buy or otherwise acquire and use patent design, copyrights, license, concession,

convenience, innovation, invention, trade marks, secret device, or process, rights, or privileges, plants, tools or machinery and the like in Pakistan or elsew here, which may for the time being appear to be useful or valuable for adding to the effic iency or productivity of the Company’s w ork or business, as permissible under the law.

11. To establish, promote or assist in establishing or promoting and subscribe to or become a member

of any other company, association or c lub w hose objects are similar or in part similar to the objects of this company or the establishment or promotion of which may be beneficial to the Company, as permissible under the law .

12. To acquire know -how, inventions, copyrights by research, purchase, exchange, royalty or lease or

in any other law ful manner w hatsoever, regarding machinery, equipments, materials, process or any other subject connected w ith objects of the Company and to turn to account this know-how independently or in association w ith other person, firm or corporation or any Government Authority or with any body else in or outside Pakistan and to preserve and defend such right against any infringement.

13. To sell or dispose of the undertaking of the Company or any part the undertaking for such

consideration as the Company may deem fit and in particular for shares, debentures or other securities of any other company.

14. To make known or give publicity to the bus iness and products of the Company by means of

advertisement, posters, cinema slides or publication of books or by granting rewards, prizes and donations or in any other suitable mode.

15. To procure the incorporation, registration or any other form of recognition of the Company in any

country, state or place outside Pakistan.

16. To take part in the promotion, floatation, management, supervision, acquisition or control of the business or operation of any company or undertaking having or propos ing to have similar objects as of the Company.

17. To amalgamate with any person or company w hether by sale, purchase for fully paid shares of the

undertaking subject to liabilities of this or any such other company or in any other lawful manner. 18. To draw, accept, endorse, discount, execute, issue, negotiate and deal in hundies, cheques,

promissory notes, bill of exchange, bills of lading, warrants, debentures and to open banking

Prospectus

47

accounts and give instructions for their operation for and in connection w ith the business of the Company.

19. To pay all expenses, give remuneration or other compensation or reward for services rendered

or to be rendered in or about the formation of the Company for the conduct of its business. 20. To open accounts of the Company w ith any individual, firm or company or with any bank or

banks and to pay into and to withdraw moneys from such account or accounts for the purpose of Company's business.

21. To create any reserve fund, sinking fund, insurance fund or any other spec ial fund whether for

depreciation or for repair ing, insuring, improving, extending, maintaining any of the property of the Company or for any other purpose conducive to the interest of the Company as permissible under law.

22. To foster, encourage and conduct research w ork in the field or operation of the Company and with

that end to establish, maintain, and run laboratories, to give, subs idies and aid to research institutions whether private or public and to award scholarships to students and research w orkers on certain conditions or unconditionally.

23. To grant pensions, gratuities, bonus, or other payment to any employees of the Company or their

relatives or dependents or connections and to contribute to welfare institutions, medical assistance, provident funds which may be created to benefit such persons or to grant loans to such persons with or without interest and contribution to soc ial, religious or charitable works and organization to advance the interest of the Company or its members.

24. To obtain local and/or foreign currency loans from scheduled banks, industrial banks and financial

institutions for the purposes of purchase, manufacture, market, supply, export, and import of machinery, construction of factory, building and for the purpose of w orking capital or for any other purpose.

25. To borrow or raise money by means of loans or other legal arrangements from banks, or other

financ ial institutions, or Directors in such manner as the Company may think f it and in particular by issue of debenture stock, perpetual and to mortgage, or charge the whole or any part of the property, assets or revenue of the Company, present or future, by special assignment or transfer or convey the same absolutely or in trust as may seem expedient and to purchase, redeem or pay off any such securities.

26. To guarantee the performance of contracts and of obligations of any person or Company on a

reciprocal basis and to give any guarantee in relation to the payment of any loan, debenture stock, finance, bonds, obligations and securities issued by such person or company.

27. To borrow or raise money from time to time required for manufacturing or trading purposes of the

Company with or without security upon such terms as may deem expedient and in particular by cash credits or current or overdraft account w ith any individual, firm or company including the Agents of the Company or any banker or bankers (w hether with or w ithout giving security) or by mortgaging or selling or receiving advances on the sale of any lands, buildings, machinery, goods or other property of the Company, or by the issue of debentures or debenture stock, perpetual or otherwise charged upon all or any of the Company's properties, (both present and future) except doing the business of banking, pre-payment or lottery scheme.

28. To import machinery, equipments, technical know -how, maps, designs or any other material

necessary for erecting, construction, managing, running and maintaining factories, mills, workshops, industries, research laboratories projects necessary/required/ancillary/incidental to the

Prospectus

48

objects of the Company and to export products manufactured/produced by the Company and products of all other kinds.

29. To carry out joint ventures with other companies, firms in Pakistan and/or other countries. 30. To cause the Company to be registered or recognized in any part of the world. 31. To apply for and obtain necessary consents, permissions and licences from any Government,

State, Local and other Authorities for enabling the Company to carry on any of its objects into effect as and when required by law.

32. To carry on any other business w hich seem to the Company capable of being conveniently carried

on in connection w ith its business or calculated directly or indirectly to enhance the value of or render profitable any of the Company’s property or rights.

33. To do all or any of the above things and all such other things as are incidental or may be thought

conducive to the attainment of the above objects or any of them or are calculated to add the income or value of assets of the Company connected with these objects in any part of the world, and as principals, agents, contractors, or trustees and by or through trustees, or agents, and either alone or in conjunction with others, and the intention is that the objects set forth in each of the several paragraphs of this Memorandum are independent of each other, shall have the widest possible construction and shall not be limited or restricted by reference to or inference from the terms of any other paragraph of this clause or the name of the Company.

34. It is hereby declared that not-with-standing anything contained in any foregoing object clauses of

this Memorandum of Association, nothing shall construe and empower the Company to indulge or undertake directly or indirectly, banking business, managing agency business, leasing business, Insurance business or business of any investment company and other unlaw ful operation.

35. Notw ithstanding anything stated in any object clause, the company shall obtain such other

approval or licence from the competent authority, as may be required under any law for the time being in force to undertake a particular business.

IV. LIABILITY The liability of the members is limited. V. SHARE CAPITAL The Authorized Capital of the Company is PKR 350,000,000/- (Rupees Three Hundred and

Fifty Million) divided into 35,000,000 ordinary shares of PKR10/- each with power to increase, consolidate, sub-divide, reduce or otherwise reorganize the capital of the Company subject to any permission required under law .

Prospectus

49

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

Name and S urname (Present Forme r) i n Full (In Block Le tte rs)

Fathe r’s /Husband’s Name in Full

Nationality With any Former Nationality

Occupation

Resi dential Address (In Full)

Number of Shares

Taken by Each

sub-Scribe r

Signature

Sir Anwar Parvez 61101-6731745-3 Syed Yawar Ali 35202-2818500-1 Mr. Bashir H. Ali Moham mad 42201-3554500-1 Mr. Arif Habib 42301-1015651-1 Mr. Asim Tiwana 272-66-272013 Syed M aratib Ali 35200-1501367-9 Mr. Ziad Bashir 42201-2038588-5

S/O Chaudry Khuda Buksh S/O Sy ed Am jad Ali S/O Haji A li Mohamm ad S/O Mr. Habib Haji Shakoor S/O Mr. Muhamm ad Saeed Tiwana S/O Sy ed Yawar Ali S/O Mr. Bashir H. Ali Mohamm ad

Pakist ani Pakist ani Pakist ani Pakist ani Pakist ani Pakist ani Pakist ani

Businessman/ Industrialist Businessman/ Industrialist Businessman/ Industrialist Businessman/ Industrialist Businessman/ Industrialist Businessman/ Industrialist Businessman/ Industrialist

‘Fulmer Court’ Fram ewood R oad, Wexham, Buckinghamshire, SL2 4QS England. Shadab, Canal Bank, Aziz Avenue, Gulberg 5, Lahore. B-37, K.D.A Scheme No.1 Karsaz R oad, Karachi 86/2, 10th Street, Khay aban-e- Sehar, Phase VI, D.H.A Karachi. Main G.T Road, Jhangi Sy eden, Tarnol, Islam abad Shadab, Canal Bank, Aziz Avenue, Gulberg 5, Lahore. B-37, K.D.A Scheme No.1 Karsaz R oad, Karachi..

14

28

28

13

15 1 1

Dated this: 9t h day of February 2007 Total Shares Taken 100 (One Hundred Only) Witness to the above Signatures Full Name: Mr. Fazal Rehman Nationality: Pakistani Father’s Full Name: Mr. Abdul Rehman Occupation: Private Service Signature: ___________________ Full Address: 3-C, LDA

Flats, Lawrence C.N.I.C 35202-2301862-9 Road, Lahore.

Documents

Prospectus - 2010 - SafeMix