Owing to the energy shortages and power crises in the country and to get power supply through cheaper means and
to economise heavily incurred fuel cost on in-house power generation, the Board of Directors of the Company have
explored various feasible and economical options of power supply. An associated company namely Rupafil PowerGen
(Pvt) Limited (“RGL”) a newly formed company is going to set-up power generation project(s) in two phases. The
Company intends to participate in equity of RGL as major shareholder alongwith M/s. Rupafil Limited in the ratio of
50:50 shareholding in share capital of RGL. Thus the main equity holders of RGL shall be Rupali Polyester Limited
(“RPL”) and Rupafil Limited (“RFL”) . After generation of power the same shall be sold at an agreed sale price per kwh
to RPL and RFL to meet their power requirement. In case of surplus power available after selling to RPL and RFL the
same can also be sold to DISCOs subject to prior permission of NEPRA/other authority, if required.
The associated company Rupafil PowerGen (Pvt) Limited will be setting-up power generation project(s) based on coal
fired in phases. The estimated initial project cost will be around Rs.2.0 billion. The negotiations are underway with
various Chinese firms for procurement/import of required plant and machinery. The first phase of the project is
expected to be completed in one and a half year time, approximately by January 2015.
The directors have carried out their due diligence for the proposed investments and a signed recommendation of due
diligence report shall be available for inspection of members in the general meeting.
The associated company is newly formed and its financial statements are not yet available. However, as stated in due
diligence report, the directors are satisfied that power generation project will prove to be very cost conservative for the
Company as compared to in-house generation using costly furnace oil and power requirement will be fulfilled at
cheaper rates and will yield much cost savings.