DOLMEN CITY REIT. Underwriters to the Issue/Offer. S.No. Names of Underwriter Underwritten (PKR) (i) (ii) (iii) TOTAL

Transcription

1

2 Note:- This Addendum shall be published after Book Building in all those newspapers in which the Prospectus of Dolmen City REIT is published. ADDENDUM This Addendum is being published pursuant to the Prospectus of Dolmen City REIT earlier published on Month XX, Year. DOLMEN CITY REIT STRIKE PRICE OFFER PRICE Underwriters to the Issue/Offer S.No. No. of units Amount Names of Underwriter Underwritten (PKR) (i) (ii) (iii) TOTAL Underwriting Commission (in %age): Take up Commission (in %age), if any: Category wise Breakup of Successful Bidders S.No. Category No. of units provisionally allocated 1 Banks 2 High Net worth Individuals 3 Corporates 4 TREC Holders 5 Foreigners TOTAL

3 STATEMENT ON ISSUER S ABSOLUTE RESPONSIBILITY The Issuer having made all reasonable inquiries accepts responsibility for the disclosures made in this Prospectus and confirms that: This Prospectus contains all necessary information with regards to the Issuer and REIT Scheme, which is material in the context of the Issue and nothing has been concealed; The information contained in this Prospectus is true and correct to the best of our knowledge and belief; The opinions and intentions expressed herein are honestly held; All requirements of the Regulations relating to approvals, consents, no objection certificates, undertakings, appointments, disclosures including detail and location of the Real Estate and transfer thereof in the name of the Trustee have been fulfilled; and There are no other facts and information, the omission of which makes this document as a whole or any part thereof misleading. For and on behalf of Issuer, Arif Habib Dolmen REIT Management Limited -sd- Muhammad Ejaz Chief Executive Page 1 of 104

4 GLOSSARY OF TECHNICAL TERMS Auditors Means the auditor of the Trust (KPMG Taseer Hadi & Co. Chartered Accountants) appointed by the RMC in accordance with the REIT Regulations BR CDCPL CDS CNIC Commission / SECP Company / Issuer / RMC CPI Stock Exchanges FX GOP HNWI Instrument Book Runner The Central Depository Company of Pakistan Limited Central Depository System Computerized National Identity Card The Securities and Exchange Commission of Pakistan Arif Habib Dolmen REIT Management Limited Consumer Price Index Karachi Stock Exchange Limited (KSE), Lahore Stock Exchange Limited (LSE) and Islamabad Stock Exchange Limited (ISE) Foreign Exchange Government of Pakistan High Net Worth Individual ITO Income Tax Ordinance, 2001 KIBOR LM Name of the REIT Scheme Nature of the Scheme NOC O&M OMA Units of Dolmen City REIT having the face value of PKR 10/- each Karachi Interbank Offered Rate Lead Manager(s) Dolmen City REIT Perpetual, Rated, Listed, Closed-end, Shariah Compliant, Rental REIT No Objection Certificate Operations and Maintenance Operations and Maintenance Agreement Ordinance The Companies Ordinance, 1984 Par Value PKR Proxy Means the face value of a Unit that shall be PKR 10/- each Pakistan Rupee(s) Means written authority given by a Unit Holder to another Unit Holder to attend the meeting of the Unit Holders, called by the RMC or Unit Holders or Commission in accordance with the Regulations, pursuant to the Trust Deed. Proxy shall be issued in the same manner and on the same terms as provided in the Ordinance and the Regulations Register Registrar Means the Register of the Unit Holders kept pursuant to the Ordinance Means a Company (Central Depository Company of Pakistan Limited) appointed by the RMC for performing the Registrar Functions. Page 2 of 104

5 Regulations ROE SCRA TREC Unit Holder(s) Units USD Valuer WHT WPI Real Estate Investment Trust Regulations, 2015 as amended or replaced from time to time. Return on Equity Special Convertible Rupee Account Trading Right Entitlement Certificate Unit Holder means a person who is the legal owner of one or more Units and whose name appears in the Register of Unit Holders Shall mean the Units of the REIT Scheme of the par value registered and issued in the name of the Unit Holder pursuant to the provision of the Trust Deed representing undivided share in the REIT Assets US Dollars Means a company appointed by the RMC in accordance with Regulation 7 of the repealed REIT Regulations 2008 as replaced by REIT Regulations 2015 to value the REIT Assets. Withholding Tax Wholesale Price Index Page 3 of 104

6 DEFINITIONS Accounting Date Accounting Period Appendix 2 Application Money 30th day of June in each year, provided, that the RMC may, with the written consent of the Trustee and the approval of the SECP, change such date to any other date, and in case of the final Accounting Period, the date on which the money required for final distribution is transferred to the Distribution Account A period ending on, and including, an Accounting Date and commencing, in case of the first Accounting Period, on the date on which the REIT Assets are first transferred to the Trustee and, in any other case, from the end of the preceding Accounting Period, i.e. 1 st day of July to 30 th day of June. Appendix 2 of Chapter 5 of the Rule Book of the Karachi Stock Exchange which relates to Issue of Shares through Book Building and will be used as base document for issue of Units In case of bidding for Units out of the Book Building portion, the total amount of money payable by a successful Bidder which is equivalent to the product of the Strike Price and the number of Units to be allotted. AND In case of application for subscription of Units out of the general public portion, the amount of money paid along with application for subscription of Units which is equivalent to the product of the Issue Price and the number of Units applied for. Auditor of the REIT Scheme Authorized Investment Bank Bank Accounts Bid Bid Amount Bid Collection Centre KPMG Taseer Hadi & Co. Chartered Accountants An investment in Real Estate approved by the Commission and other Assets as specified by the Commission under the REIT Regulations. An institution(s) providing banking services under the Banking Companies Ordinance, 1962, or any other regulation in force for the time being in Pakistan, or if operating outside Pakistan, under the banking laws of the jurisdiction of its operation outside Pakistan. Bank accounts maintained with a Bank, the beneficial ownership of which vests in the Unit Holders of the REIT Scheme. An indication to make an offer during the Bidding Period by a Bidder to subscribe to Units of the Dolmen City REIT at a price within the price band, including all the revisions thereto. The total amount of the Bid which is equivalent to the product of the Bid price and the number of Units bid for. Pre-determined places where applications for bidding of Units are collected by the Book Runner on behalf of the Issuer and may include offices of corporate brokerage houses, scheduled banks, development financial institutions and investment finance companies, subject to appointment of these institutions as agent by the Book Runner through an agreement in writing for the purpose, with the consent of the Issuer. For this Issue, addresses of the Bid collection centers are provided at paragraph 3.5(b) (xv). Page 4 of 104

7 Bidder Bidding Form Bidding Period Bonus Units Book Building Book Building Account Book Runner CDS Eligible Security Legal Advisor Company/ Issuer / RMC Constitutive Documents Distribution Accounts Dutch Auction Method Duties and Charges Any eligible prospective investor who makes a Bid pursuant to the terms of the Prospectus and the Bidding Form. The form prepared by the Issuer for the purpose of making Bids which will be considered as an application for subscription of Units out of the Book Building portion. The period during which Bids for Units of the Scheme shall be made by institutional and HNWI Investors. The Bidding Period shall be June 08, 2015 to June 09, 2015 (Both days inclusive) (from 9:00 a.m. to 5:00 p.m.). The Units issued on distribution of the distributable income, in the form of stock dividend. A mechanism of price determination through which indication of interest for subscription of Units issued by the Issuer is collected from institutional and HNWI Investors. Through this process a book is built which gives an idea of demand for the Units at different price levels. The Strike Price is determined based on the price at which demand for Units at the end of Book Building period is sufficient to raise the required amount. An account opened by the Issuer with the Collection Bank(s). The Bidder will pay the Margin Money/Bid Amount through demand draft, pay order or online transfer in favor of this account as per the instructions given in paragraph 3.11 and the balance of the Application Money, if any, shall be paid through this account after successful allocation of Units under Book Building. Aba Ali Habib Securities Private Limited Securities defined as Eligible Securities as mentioned in Central Depository Act and Regulations Mohsin Tayebaly & Co., Advocates & Corporate Legal Consultants Arif Habib Dolmen REIT Management Limited Trust Deed, the Offering Document and other material agreements governing the formation, management or operation of the Trust. The Bank Account, which may be current, saving or deposit account, maintained by the Trustee with a Bank, approved by the RMC, in which the amount required for the distribution of dividend to the Unit Holders shall be transferred. The method through which the Strike Price is determined. Under this method, all the bids are arranged in descending order along with the number of Units bid for at each price level and the cumulative number of Units bid for. The strike price is determined by lowering the price to the extent that the total Units the Issuer intends to Issue through the Book Building process are subscribed. In relation to any particular transaction or dealing all stamps and other duties, taxes, Government charges, brokerage, bank charges, transfer fees, registration fee and other duties and charges, be it in connection with the transfer of the REIT Assets in favour of the Trustee. Page 5 of 104

8 General Public High Net worth Individual (HNWI) Institutional Investors Investment Issue All Individual and Institutional Investors including both Pakistani (residents & non-residents) and foreign investors. Individual investor who bids for Units of the value of PKR 1,000,000/- or above. Both local and foreign Institutional Investors. Any Authorized Investment forming part of the REIT Assets. Issue of 555,925,000 Units of Dolmen City REIT scheme (25% of the total REIT Fund) having Face Value of PKR 10/- each. Book Building Portion of the Issue comprises of 416,943,750 Units (75% of the total Issue) at a Floor Price of PKR 10/- per unit. General Public Portion of the Issue comprises of 138,981,250 Units (25% of the total Issue) at the Issue Price Issue Price Lead Manager Limit Bid Limit Price Margin Money Name of REIT Scheme Net Assets Prospectus/Offering Document Project Property Manager Property Valuer The price at which Units of the Dolmen City REIT scheme are issued to the General Public. The Issue Price is the Strike Price. Arif Habib Limited The Bid for a specified number of Units at the limit price. The maximum price a prospective institutional or HNWI investor is willing to pay for Units under the Book Building process. The partial or total amount, as the case may be, paid by a Bidder at the time of making a Bid. In case of bids by the institutional investors it is 25% of the Bid Amount and in case of bids by HNWI investors it is 100% of the Bid Amount. Dolmen City REIT Net Assets means difference between value of assets and liabilities of a REIT Scheme as given in the balance sheet at any given date The Prospectus containing all the information and disclosures as required under the Companies Ordinance, 1984 and Schedule IV of the Regulations. It is approved by the Commission under Chapter 7 of the Regulations and section 57 (1) of the Companies Ordinance, 1984 and circulated to the Institutional and HNWI Investors for the Book Building Process and to the General Public for subscription of retail portion along with dates for Book Building, IPO and date of publication of Prospectus. Project means Real Estate (Dolmen City Mall and Harbour Front building as approved by SECP) on a single or multiple sites having exclusive ownership, lease, utilities, and easement rights in accordance with law; Dolmen Real Estate Management (Pvt.) Limited A company appointed by the RMC to manage the Real Estate of Dolmen City REIT National Engineering Services Pakistan (Pvt.) Limited NESPAK Page 6 of 104

9 Rating Agency Regulations REIT Assets REIT Fund Rental REIT Scheme Reporting Currency JCR-VIS Credit Rating Company Limited JCR-VIS The Real Estate Investment Trust Regulations 2015, as amended or replaced from time to time. REIT Assets means all Real Estate and other assets moveable or immoveable of a REIT Scheme acquired in the name of Trustee of a Scheme including Investment and all income, profit and other benefits arising there from, including (without limitation) cash and other movable and immovable assets of every description for the time being held or deemed to be held upon trust by the Trustee for the benefit of the Unit Holders pursuant to the Trust Deed but does not include any amount standing to the credit of the Distribution Account. The monetary value of a REIT Scheme, at the time of its establishment, raised through issuance of REIT Units which shall be equal to the acquisition value of Real Estate together with all taxes and charges attached with the transfer of such Real Estate. A REIT Scheme established with the object of making investment in industrial, commercial or residential Real Estate with the purpose of generating rental income from it. Base Currency means the Pakistani Rupee in which financial reports are presented. Rules The Non Banking Finance Companies (Establishment and Regulation), Rules, 2003, as amended or substituted from time to time. RR1 SECP or Commission Shariah Advisor Shariah Compliance Certificate Shariah Compliant Shariah or Islamic Shariah Special Resolution Step Bid Funds rated in the RR1 category are judged by JCR-VIS Credit Rating Agency, to be of highest investment quality. Assurance of returns over the foreseeable horizon is excellent. The Securities and Exchange Commission of Pakistan Mufti Muhammad Ibrahim Essa (Fazil Jamiah Darool Uloom, Karachi) Dolmen City REIT has been awarded by the Certificate of Shariah Compliant by the Shariah Advisor Means any activity that is in accordance with the Islamic Shariah Means divine guidance as given by the Holy Qur an and the Sunnah of Prophet Muhammad (PBUH) and embodies all aspects of the Islamic faith, including beliefs, practices, rules and principles A resolution which has been passed by a majority of not less than three-fourth of such Unit Holders entitled to vote as are present in person or by proxy at a general meeting of which not less than twenty-one days notice specifying the intention to propose the resolution has been duly given. A series of limit price bids at increasing prices. In case of step bid the amount of any step bid shall not be less than PKR 250,000/- Page 7 of 104

10 Strategic Investor Strike Price Trust, Fund, Closed-end REIT, Scheme or Closed-end Trust Trustee Unit Registrar Units Strategic Investor means a person or a group of persons who undertake(s) to hold investment free of encumbrances in a REIT Scheme, as specified in REIT Regulations till its winding up or any person who replaces him; The price of unit determined/discovered on the basis of Book Building process in the manner provided in Chapter 5 of the Karachi Stock Exchange s Rule Book at which the Units are Issued to the successful Bidders. The Strike Price will be disseminated on the next day of conclusion of Book Building through widely circulated national news papers and also posted on the websites of Stock Exchanges, Advisor, Book Runner and Issuer. Means the Dolmen City REIT constituted by the Trust Deed, as a closed end Rental REIT Scheme, Units of which will be traded at Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange after formal listing. Central Depositary Company of Pakistan Limited CDC Central Depositary Company of Pakistan Limited CDC Units of Dolmen City REIT scheme having face value of PKR10/- each, unless otherwise specified in the context thereof. Page 8 of 104

11 TABLE OF CONTENTS 1 INTRODUCTION APPROVAL AND LISTING ON THE STOCK EXCHANGE BOOK BUILDING PROCEDURE REIT SCHEME AND RELATED MATTERS UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES HISTORY, PROSPECTS AND RISK FACTORS CRITICAL SUCCESS FACTORS & INDUSTRY REVIEW FINANCIAL INFORMATION MANAGEMENT OF THE COMPANY MISCELLANEOUS INFORMATION APPLICATION AND ALLOTMENT INSTRUCTIONS BIDDING FORM OF ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED SIGNATORIES TO THE PROPECTUS The abridged Business Plan and abridged Valuation report are appended at the end of this Prospectus. Page 9 of 104

12 PART 1 1 INTRODUCTION Arif Habib Dolmen REIT Management Limited (RMC) has included The Harbour Front and Dolmen City Mall Buildings (together referred to as subject commercial real estate); which have been transferred by International Complex Projects Limited to CDCPL, as the trustee vide a registered Indenture of Sub Lease dated May 22, 2015 in a Perpetual, Rated, Listed, Closed end, Shariah Compliant, Rental REIT scheme, by the name of Dolmen City REIT ( DCR ); with the objective of generating rental income for Unit holders. The REIT Scheme will be of PKR billion. Dolmen City REIT ( DCR ) is registered by the Securities and Exchange Commission of Pakistan on May 29, 2015 and its Trust Deed is registered on January 20, 2015.It operates under its registered Trust Deed executed between Arif Habib Dolmen REIT Management Limited (AHDRML), as the REIT Management Company and Central Depositary Company of Pakistan Limited (CDCPL), as the Trustee; and is governed under the Regulations, promulgated and amended from time to time by the Securities and Exchange Commission of Pakistan DISCLOSURE OF RELATED PARTY TRANSACTION AS PER REGULATION 30(3) OF THE REGULATIONS Name of the Related Party International Complex Projects Limited ( ICPL or the Strategic Investor) Transaction The REIT Scheme, Dolmen City REIT acquires the SECP approved real estate from ICPL Transaction Value Agreed PKR 22 Billion (Refer to section Heading Transaction Value ) Consideration The sale is partially in consideration of Units of Dolmen City REIT and partially in cash. 75% units have been issued to ICPL in lieu of real estate and the remaining 25% will be paid from IPO proceeds. (Refer to section Heading Features of Dolmen City REIT ) Page 10 of 104

13 PART 2 2 APPROVAL AND LISTING ON THE STOCK EXCHANGE 2.1. APPROVAL OF SECP FOR REAL ESTATE UNDER REGULATION, 6 OF THE REPEALED REIT REGULATIONS, 2008 (NOW REGULATION, 4 OF THE REGULATIONS) Approval of the Real Estate for DOLMEN CITY REIT scheme was obtained from Securities & Exchange Commission of Pakistan (hereinafter referred to as the SECP or the COMMISSION ) under Regulation 6 of the repealed REIT Regulations 2008 (Now REIT Regulations 2015) vide letter No.SCD/PRDD/AHDRML/DCPK/2014/05, dated July 11, 2014, subject to compliance by RMC to certain conditions SECP S APPROVAL OF NAME OF REIT, NAME OF TRUSTEE, BUSINESS PLAN AND DRAFT TRUST DEED UNDER REGULATION, 7 OF THE REPEALED REIT REGULATIONS, 2008 (NOW REGULATION, 4 OF THE REGULATIONS) Under Regulation 7 of the repealed REIT Regulations 2008 (Now REIT Regulations 2015), approval of the Name of REIT Scheme as DOLMEN CITY REIT and Name of the Trustee Central Depository Company of Pakistan Limited was obtained from SECP vide SECP s letter No. SCD/PRDD/AHRML/DCPL/2013/591 dated January 01, 2014 and approval on the Business Plan and Draft Trust Deed was obtained from SECP vide SECP s letter No.SCD/ PRDD/AHDRM/ Dolmen Reit/58 dated January 13, The Business plan can be downloaded from: The Trust Deed can be downloaded from: The Valuation Report can be downloaded from: APPROVAL OF SECP FOR THE REGISTRATION OF DOLMEN CITY REIT UNDER REGULATION, 9 OF THE REGULATIONS Approval of the Registration of DOLMEN CITY REIT has been obtained from SECP under Regulation 9 of the Regulations vide letter No.SEC/NBFC/DC/75/2015/47 dated May 29, APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN UNDER SECTION 57(1) OF THE ORDINANCE Approval of the SECP as required under section 57(1) of the Ordinance has been obtained by the Issuer for the issue, circulation and publication of this document (hereinafter referred to as the Prospectus ) 2.5. APPROVAL OF THE SECURITIES & EXCHANGE COMMISSION OF PAKISTAN UNDER REGULATION 12(7) OF THE REGULATIONS Approval of the SECP as required under Regulation 12(7) of the Regulations, has been obtained by the Issuer for the issue, circulation and publication of this document (hereinafter referred to as the Prospectus ) Page 11 of 104

14 DISCLAIMER: IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE SCHEME AND/OR RMC AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARDS TO THEM BY THE ISSUER OR THE TRUSTEE IN THIS PROSPECTUS. SECP HAS NOT EVALUATED THE QUALITY OF THE ISSUE AND ITS APPROVAL FOR ISSUE, CIRCULATION AND PUBLICATION OF PROSPECTUS SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC/INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE ISSUEBEFORE BIDDING / SUBSCRIBING. IT MUST BE UNDERSTOOD THAT ACCEPTANCE OF ANY DOCUMENT ENUMERATING THE VALUE OF THE REAL ESTATE OR ANY REIT ASSETS OR ANY APPROVALS OR ANY PERMISSIONS GRANTED BASED ON SUCH DOCUMENTS OR INFORMATION OR PROJECTIONS SHALL NOT BE CONSTRUED AS AN ENDORSEMENT BY THE COMMISSION OF THE ACCURACY OF SUCH DOCUMENT, INFORMATION, VALUATION OR PROJECTIONS. IT MUST BE UNDERSTOOD THAT THE APPROVAL OF REAL ESTATE HAS BEEN GRANTED SOLELY ON THE BASIS OF DOCUMENTS PROVIDED BY RMC TO COMMISSION AND THAT SUCH SANCTION OF THE COMMISSION SHALL NOT DEEM TO GRANT OR EXTINGUISH ANY RIGHT OF ANY PERSON AND NO SUIT PROSECUTION, PROSECUTION OR OTHER LEGAL PROCEEDINGS CAN BE INITIATED AGAINST THE COMMISSION OR EMPLOYEE OF THE COMMISSION CLEARANCE OF THE PROSPECTUS BY THE STOCK EXCHANGES The Prospectus has been cleared by the Karachi Stock Exchange Limited ( KSE ), Lahore Stock Exchange Limited ( LSE ) and Islamabad Stock Exchange Limited ( ISE ) (collectively referred to as Stock Exchanges ) in accordance with the requirements of its Listing of Companies and Securities Regulations. DISCLAIMER: THE STOCK EXCHANGES HAVE NOT EVALUATED THE QUALITY OF THE ISSUE, AND ITS CLEARANCE 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 ISSUEBEFORE BIDDING AND SUBSCRIBING. THE PUBLICATION OF THIS PROSPECTUS DOES NOT REPRESENT SOLICITATION BY THE STOCK EXCHANGES. THE CONTENTS OF THIS PROSPECTUS DO NOT CONSTITUTE AN INVITATION TO INVEST IN UNIT OR SUBSCRIBE FOR ANY SECURITIES OR OTHER FINANCIAL INSTRUMENT BY THE STOCK EXCHANGES, NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER OF THE STOCK EXCHANGES. Page 12 of 104

15 IT IS CLARIFIED THAT INFORMATION IN THIS PROSPECTUS SHOULD NOT BE CONSTRUED AS ADVICE ON ANY PARTICULAR MATTER BY THE STOCK EXCHANGES AND MUST NOT BE TREATED AS A SUBSTITUTE FOR SPECIFIC ADVICE. THE STOCK EXCHANGES DISCLAIM ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWEVER ARISING FROM OR IN RELIANCE UPON THIS PROSPECTUS TO ANY ONE, ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES, INCOMPLETENESS AND/OR MISTAKES, FOR DECISIONS AND/OR ACTIONS TAKEN, BASED ON THIS PROSPECTUS. THE STOCK EXCHANGES NEITHER TAKES RESPONSIBILITY FOR THE CORRECTNESS OF CONTENTS OF THIS PROSPECTUS NOR THE ABILITY OF THE COMPANY TO FULFILL ITS OBLIGATIONS THEREUNDER. ADVICE FROM A SUITABLY QUALIFIED PROFESSIONAL SHOULD ALWAYS BE SOUGHT BY INVESTORS IN RELATION TO ANY PARTICULAR INVESTMENT VETTING BY SHARIAH ADVISOR SHARIAH ADVISOR HAS REVIEWED THE STRUCTURE AND DOCUMENTATION INCLUDING THIS PROSPECTUS OF THE DOLMEN CITY REIT AND HE HAS ISSUED SHARIAH COMPLIANCE CERTIFICATE IN FAVOUR OF DOLMEN CITY REIT. THE CERTIFICATE IS GIVEN AT 4.20 UNDER HEADING OF INVESTMENT RATIONALE FILING OF PROSPECTUS AND OTHER DOCUMENTS WITH THE REGISTRAR OF COMPANIES The RMC has filed, with the Registrar of Companies, Companies Registration Office ( CRO ) situated in Karachi, as required under Sections 57(3) and (4) of the Ordinance, a copy of this Prospectus signed by authorized signatories of the Issuer, together with the following documents attached thereto: a) License to carry out REIT Management Services issued by the Commission dated March 13, 2014, having license No. SCD/PRDD/REIT/AHDRML/01/2014 under NBFC Rules. b) The Commission letter No SCD/PRDD/AHRML/2013/591, dated January 01, 2014, for the approval of the name of the proposed REIT Scheme and Appointment of Trustee under repealed REIT Regulations, 2008 (now REIT Regulations 2015) c) The Commission letter no. SCD/PRDD/AHDRML/DCPK/2014/05, dated July 11, 2014,for approval of Real Estate under Regulation 6 of the repealed REIT Regulations 2008 (now REIT Regulations 2015) d) The Commission letter no SCD/PRDD/AHDRML/Dolmen Reit/58, dated January 13, 2014, for approval of Business Plan and Trust Deed under Regulation 7 of the repealed REIT Regulations 2008 (now REIT Regulations 2015) e) Certificate of Shariah Compliance of Dolmen City REIT by the Shariah Advisor f) Consent of the Auditor, Legal Advisor, Banker s to the Issuer, Trustee, Property Manager, Ballotter and Transfer Agent, Directors, Secretary and Chief Executive of the RMC to their respective appointments and having been named and described as such in the Prospectus g) Copies of material contracts and agreements this Prospectus as required under Section 57(4) of the Ordinance. h) Written confirmations of 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 Companies Ordinance, Page 13 of 104

16 i) Written consents of the directors, the chief executive and the Company secretary of the Company, who have consented for their respective appointments being made and having been named or described as the directors, chief executive and Company secretary in the 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 LISTING ON THE KSE, LSE AND ISE Application has been submitted to KSE, LSE and ISE for permission to deal in and for quotation of the UNITS of the DOLMEN CITY REIT scheme. If for any reason the application for formal listing is not accepted by the Stock Exchanges, the Issuer undertakes that a notice to that effect shall be immediately published in the press, and thereafter the Issuer undertakes to refund the Application Money to the applicants within eight days as required under the provisions of Section 72 of the Ordinance. If any such money is not refunded within eight days after the Issuer becomes liable to refund it, the Issuer shall be liable to refund from expiration of the said eighth day together with surcharge at the rate of 1.50% per month as required under Section 72 of the Ordinance. However as per Shariah guidelines, any over and above amount received as surcharge is not Shariah compliant income, therefore, the Issuer hereby advises the unsuccessful applicants to donate the same for charitable purposes CONDITIONS IMPOSED BY THE SECP WHILE GRANTING THE LICENSE TO CARRY OUT REIT MANAGEMENT SERVICES TO THE ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED (THE COMPANY) SECP has renewed the license of Arif Habib Dolmen REIT Management Limited to carry out REIT Management Services under Rule 5 of the Rules vide License No. SCD /PRDD/REIT/ AHDRML/01 /2014 dated, March 13, 2014, subject to the following conditions stated herein below or as may be prescribed or imposed hereafter by SECP: 1. Arif Habib Dolmen REIT Management Limited and the REIT Schemes under its management shall comply with the Companies Ordinance, 1984, the Rules, Real Estate Investment Trust Regulations, 2015 (as amended or replaced) and any directives, circulars, codes, notifications and guidelines issued by the Commission to regulate the business of REIT Management Services; 2. Arif Habib Dolmen REIT Management Limited shall submit annual, half yearly, quarterly or such other reports as specified in the applicable laws; and 3. The license is valid for a period of three years w.e.f. September 03, 2013 and shall be renewable every three years as specified in the Rules OBLIGATIONS OF THE RMC: Following are the obligations of the RMC as per Real Estate Investment Trust Regulations, 2015: (1) An RMC shall: (i) conduct due diligence to certify and ensure that the title to the Real Estate to be acquired for the purposes of the REIT Scheme is free from all defects, encroachments and encumbrances, etc. except to the extent specified in the Regulations; (ii) (iii) (iv) ensure that the REIT assets are vested in the name of Trustee for the benefit of Unit Holders of a REIT Scheme; arrange transfer of Real Estate approved by the Commission in the name of Trustee of the REIT Scheme; ensure that all material contracts, including agreement for purchase of Real Estate, rental agreements, service providers agreements entered into for furtherance of the objects of the Page 14 of 104

17 (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) (xvii) (xviii) (xix) (xx) (xxi) (xxii) (xxiii) (xxiv) REIT Scheme are legitimate, valid, binding,shariah compliant and enforceable by or on behalf of the Trustee in accordance with the stipulated terms of such contracts and agreements and wherever relevant are backed by performance bonds and bank guarantees and contingency plans; ensure that a REIT Scheme does not comprise of more than one Project and that the trust deed provides for this restriction; manage the REIT Scheme in the best interest of Unit Holders, in accordance with the Trust Deed and all applicable laws, rules, regulations including notifications, circulars, guidelines and directives issued thereunder; with the consent of the Trustee, appoint a Development Advisor in the case Developmental REIT and a Property Manager in the case of Rental REIT; ensure that the REIT Scheme is dissolved only after the disposal of the Real Estate; ensure that the Trust Deed is in accordance with Schedule II of repealed REIT Regulation 2008, (now Schedule I of the Regulations) and provides for the time and modality of extinguishment of the REIT Scheme and the manner in which the proportionate shares of the sale proceeds shall be transferred to Unit Holders; ensure that profits arising out of the REIT Scheme are distributed to the Unit Holders as dividends and that the Trust Deed and offering document provide for the same; ensure that Units are listed in accordance with the listing regulations of the stock exchanges and the Trust Deed provides for the same; ensure that running bills in respect of payments made on account of a Project are countersigned by the Development Advisor or the Property Manager, as the case may be; carry out all transactions involving REIT Scheme managed by it on an arm s length basis; arrange insurance / Takaful coverage in relation to the Real Estate and comply with all requirements of the Commission in this behalf; be responsible for development, refurbishment, sale and renting of the Real Estate according to the Business Plan; obtain written approval of the Commission before issuing units and making a public offer of the Units; issue units of the REIT fund under these Regulations; ensure that the issue and transfer of the Units is carried out, after registration of the REIT Scheme, in accordance with provisions of the trust deed and offering document and as per any directions, guidelines and circulars issued by the Commission; ensure that the Offering Document contains summary information of the valuation report and the Business Plan of the REIT scheme; maintain the Register of Unit Holders or appoint an agent for the purpose and comply with Schedule V of REIT Regulations, 2015; obtain the written approval of the Commission before delegating one or more of its functions in relation to the REIT Scheme and comply with Schedule V of REIT Regulations, 2015; ensure that in cases where the RMC delegates any of its functions, the delegated person has sufficient experience and financial resources to carry out the delegated function and comply with Schedule V of REIT Regulations, 2015; be responsible for the acts, omissions, defaults and negligence of all persons, along with resultant losses, to whom it delegates any of its functions; maintain at its registered office proper books of account and record of the activities undertaken in connection with the REIT Scheme in order to enable a true and fair view to be formed of the,- (a) REIT assets and liabilities; Page 15 of 104

18 (xxv) (xxvi) (xxvii) (xxviii) (xxix) (xxx) (xxxi) (xxxii) (xxxiii) (xxxiv) (xxxv) (xxxvi) (b) profit and loss accruing on account of operation of the REIT Scheme; (c) transactions undertaken with respect to the REIT Scheme; (d) amounts received in respect of issue of Units; (e) pay-outs, if any, by way of distributions to the Unit Holders; within four (4) months of close of the financial year prepare, and transmit to the Unit Holders, the Trustee, the Commission and the stock exchange(s) on which the Units of a REIT Scheme are listed, the balance sheet, profit and loss statement, cash flow statement and statement of the movement in NAV along with the report of the Trustee, the report of the auditor or Shariah Auditor (if available), report of Shariah Adviser (wherever relevant) the valuation report of the Real Estate and any other document as specified by the Commission; prepare and transmit to the Unit Holders, the Trustee, the Commission and the stock exchange(s) on which the Units are listed, within one (1) month of the close of the first and third quarter and two (2) months of the close of second quarter of the financial year of the REIT Scheme, a balance sheet of the REIT Scheme as at the end of that quarter along with profit and loss statement, a cash flow statement and a statement of changes in NAV: Provided that the Commission may, subject to such conditions as it may consider necessary, allow an RMC to transmit the accounts to the Unit Holders by placing them on its website; preserve books of account of a REIT Scheme for at least five (5) years after the extinguishment or revocation of the REIT Scheme; with the consent of the Trustee appoint an auditor or Shariah Auditor for the REIT Scheme; obtain rating for itself and for the REIT Scheme as per the rating criteria of a rating company and such rating shall be updated annually, or at such other time as may be specified by the Commission; publish rating of a RMC and REIT Scheme in the annual and quarterly accounts and publish in all advertising and marketing materials of the REIT Scheme; furnish in respect of a REIT Scheme, to the Commission and the stock exchange(s) on which the Units are listed, such information within such time as the Commission may specify; ensure that a director immediately vacates his position if he becomes disqualified as per the Fit and Proper Criteria and inform the Commission of such compliance; before making any major change in the Business Plan of the REIT Scheme ensure that it has: (a) informed the Commission in writing and (b) obtained approval of the Unit Holders through a Special Resolution, if directed by the Commission: cause to happen a determination of the NAV of the REIT Assets on quarterly basis; ensure that it conforms to the provisions of the Code of Corporate Governance; maintain adequate financial, technical, organizational and human resources, and employ appropriate systems, procedures, processes and personnel to provide REIT Management Services in a proper and efficient manner on an on-going basis; (xxxvii) maintain satisfactory controls and written compliance procedures which address all applicable regulatory requirements; (xxxviii) pay or arrange to pay such non-refundable application fees as specified in the relevant Schedule III; (xxxix) hold units acquired as strategic investment as specified in these Regulations or such higher per cent of units of a REIT Scheme, as the Commission may specify, and such units shall Page 16 of 104

19 (xl) (xli) (xlii) (xliii) (xliv) (xlv) be held with the Central Depository Company of Pakistan Limited (CDC) in an account marked as blocked and shall not be sold, transferred or encumbered throughout the life of the REIT Scheme without prior written approval of the Commission; appoint Valuer in consultation with trustee of the REIT Scheme and inform the Commission within two (2) working days of such appointment; prepare marketing material, advertisements and invitations to invest in REIT units with appropriate disclaimers as approved by the Commission in relation to REIT Scheme; arrange transfer of real estate to the REIT Scheme as per binding purchase agreement; in case of a Shariah compliant REIT Scheme, obtain clearance from the Shariah advisor in respect of all documents, investments, borrowing, trust deed, sub-lease deed, binding purchase agreement, tenancy agreements, etc.; solicit all monies only in the name of Trustee of a REIT Scheme; and issue Units for cash consideration only except for the Units issued in lieu of the Real Estate; (2) An RMC shall comply with listing regulations of the stock exchange where the units of the REIT Scheme are listed. (3) An RMC shall not obtain, acquire or takeover the management of another REIT Scheme, without prior written approval of the Commission; OBLIGATIONS OF THE TRUSTEE Following are the obligations of the Trustee as per Real Estate Investment Trust Regulations, 2015: (1) The Trustee shall: (i) exercise due diligence and vigilance in carrying out its functions and duties under the trust deed, rules and the Regulations and all other applicable laws; (ii) ensure that the REIT Assets are held by it on behalf of the Unit Holders; (iii) not legally or beneficially own, either directly or indirectly, any Units of the REIT Scheme in relation to which it is acting as a Trustee; (iv) ensure that the title to all REIT Assets is lawfully vested in it; (v) deposit the money received by it in a scheduled bank which has a minimum long term AA- rating; (vi) confirm to the Commission that the RMC has appointed a Development Advisor or a Property Manager, as the case may be; (vii) confirm to the Commission that all insurance premiums have been paid by the RMC and the insurance policies are up to date; (viii) not delegate any of its duties unless the Trust Deed allows for the delegation; (ix) make payments to the delegatee from its own account, if it has delegated any of its functions; (x) be liable for any negligent act or omission, on its part or on the part of any of its delegates; (xi) carry out the instructions of the RMC unless such instructions are in conflict with the trust deed, offering document, these Regulations, directions, guidelines, circulars or any other applicable laws; (xii) carry out instructions of the RMC with respect to the Project payments after the bills are counter-signed by the Development Advisor and verified by the project accountant in case of a Developmental REIT Scheme or by the Property Manager in case of a Rental REIT Scheme; (xiii) ensure that the Trust Deed, the offering document and the conditions of registration of a REIT Scheme, are complied with; (xiv) issue a report indicating the level of compliance and the extent of violations, in comparison to Business Plan. The report shall be included in the quarterly and the annual accounts of the REIT Scheme; (xv) immediately inform the Commission, of any action of the RMC that contravenes the Ordinance, the Rules, these Regulations, guidelines, codes, circulars, directives or any other applicable laws; (xvi) verify the offering document for correctness and authenticity with regard to acquisition of the REIT Assets and agreements; Page 17 of 104

20 (xvii) ensure that the Valuer performs its obligations, prepares and submits valuation reports as per Regulations CONDITIONS IMPOSED BY THE SECP ON THE RMC SECP approved the Real Estate for inclusion in the REIT Scheme, namely Dolmen City Mall and The Harbour Front Building located on Plot No. HC-3, Block 4, Scheme No. 5 Clifton, Karachi, under Regulation 6 of the REIT Regulations 2008 on the conditions (which have been duly met by the RMC) that before applying for registration of proposed Dolmen City REIT, the RMC shall: 1. Submit completion certificates in respect of the properties to be included in REIT Scheme. 2. Get all financial encumbrances/charges vacated on the real estate proposed for REIT. 3. Arrange transfer of property along with proportionate land area based on 1:7.37 Floor to Area Ratio (FAR), in the name of Trustee of the proposed REIT Scheme. (This is the actual FAR (Floor to Saleable/Leasable Area) of the Dolmen City project based on building plans approved by the land authority) 4. Ensure that the transfer instrument expressly vests the proportionate land area (15, sq. yards) out of total area of 37, square yards of Plot No. HC-3, Block 4, Scheme 5, Clifton, Karachi, in the name of trustee of the REIT Scheme along with all rights including but not limited to the right to use FAR, use of roof, carry out any alteration/construction and construction of any additional area. 5. Ensure that the interests of unit holders of the proposed REIT Scheme are not compromised due to any agreement with existing tenants or the owners of non-reit property of the Dolmen City Project. 6. Submit a copy of amended agreement with Hyperstar (MAF Hypermarkets Pakistan Private Limited) or a substitute thereof so as to allow transfer of real estate to the proposed REIT Scheme and onward transfer by the proposed REIT scheme to third parties. 7. Pay all cost to be incurred by the trustee for verification of title and seeking an independent, external opinion to confirm that all legal formalities have been met. 8. Submit valuation report of proposed real estate carried out not later than three months of applying for registration of the proposed REIT Scheme DECLARATION OF TRUST DEED The registered Trust Deed dated January 20, 2015, created a Closed-ended Trust in the name and title of the Dolmen City REIT and the RMC shall manage, operate and administer the said Closed-ended trust and the Trustee has been nominated and appointed as the trustee of the Closed-ended Trust. The RMC and the Trustee agreed to such appointment and further declared in the Trust Deed that: 1. The terms and conditions of the Trust Deed and any deed supplemental hereto shall be binding on each Unit Holder, as if he has been a party to it and so to be bound by its provisions and each Unit Holder authorizes and requires the Trustee and the RMC to do as required of them by the terms of the Trust Deed and each Unit Holder accepts the Trustee and RMC to do things as required in the terms of the Trust deed. 2. The Unit Holder will not be liable to make any payment after he has paid the purchase price of the Unit(s) and that no further liability can be imposed on him in respect of Unit(s), which he holds. Page 18 of 104

21 3. The Trustee, on behalf of Unit Holders, shall hold and stand possessed of the REIT Assets that may from time to time hereafter be vested in the Trustee upon trust as a single common fund for the benefit of the Unit Holders ranking pari-passu inter se according to the number of Unit(s) held by each Unit Holder OBJECTIVE OF THE TRUST 1. The Objective of the trust is to make investment in commercial Real Estate with the purpose of generating rental income from it. In case if any investor(s) wants to view the Trust Deed, the investor can view the same at Arif Habib Dolmen REIT Management Limited (RMC) website i.e. and TRANSFER AND GRANT OF REIT ASSETS 1. The Real Estate (Dolmen City Mall and Harbour Front) has been acquired by the Trust on May 22, In lieu of payment, Units have been issued as consideration to the seller and partial payment will be made from the proceeds of the Units as per the Offering Document. ALL UNIT HOLDERS ACCEPT THE TERMS AND CONDITIONS OF TRUST DEED AND AUTHORIZE THE TRUSTEE TO HOLD THE REIT ASSET ON THEIR BEHALF ACCORDING TO THEIR SHARE/UNIT(S).FURTHER THE UNIT HOLDERS ARE IN AGREEMENT TO PURCHASE THE UNIT(S) FROM THE SAID TRUST. 2. The Investment and all income, profit and other benefits arising there from being held or deemed to be held upon trust by the Trustee shall constitute part of the REIT Assets. 3. The Trustee shall hold the REIT Assets in its name in trust for the benefit of the Unit Holders in accordance with the provisions of the Regulations and the Trust Deed. The REIT Assets shall not be used for any other purpose by the Trustee or by the RMC, other than for the purposes of the REIT Scheme as specified in the approved Business Plan and the Regulations. 4. Save, as herein expressly provided, the REIT Assets shall always be held as separate property free from any mortgages, charges, liens or for any other encumbrances whatsoever and the Trustee shall not create any mortgages, charges, liens or any other circumstances whatsoever to secure any loan, guarantee, or any other obligation actual or contingent incurred, assumed or undertaken by the Trustee or any other person. 5. In the event of any loss arising as a result of any act and/or omission of the Trustee in violation of the terms of the Trust Deed, the Trustee shall have an obligation to replace the lost Investment forthwith with similar investment of the same class and issue together with all rights and privileges pertaining thereto or compensate the Trust to the extent of such loss. 6. Transaction cost relating to the transfer of the Real Estate i.e. all duties and expenses (Stamp Duty, Registration Fee, Capital Value Tax, Mutation Fee) incurred by the Trust effecting the registration of all register able property in the Trustee s name and other related costs shall constitute part of the REIT Fund. 7. All cash forming part of the REIT Assets shall be deposited by the Trustee in a separate Shariah compliant account, in the name of the Trustee with a Bank, approved by the RMC having a minimum AA- rating in the long term as per REIT Regulations (1) (v), as per the criteria laid down by a credit rating agency registered with the SECP. The Bank shall Page 19 of 104

22 be caused to allow profit thereon in accordance with the rules prescribed by the Bank sharing of profits on deposits, as may be allowed. 8. The REIT Assets of the Closed-end Scheme are held by the Trustee on trust for the Unit Holders pari-passu according to the number of physical Units and Units held in book entry form. Page 20 of 104

23 2.17. CERTIFICATE BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE ISSUER We, being the chief executive officer and chief financial officer of the Issuer certify that the Prospectus constitutes of full, true and plain disclosure of all material facts relating to the Units being issued through this Prospectus and that nothing has been concealed. The information provided and disclosures made in this Prospectus contain no misleading material. All requirements of the Regulations relating to approvals, consents, no objection certificates, undertakings, appointments, disclosures including detail and location of the Real Estate and transfer thereof in the name of the Trustee have been fulfilled For and on behalf of the Issuer Arif Habib Dolmen REIT Management Limited -sd- Muhammad Ejaz Chief Executive Officer -sd- Zia ur Rahim Khan Chief Financial Officer Page 21 of 104

24 PART 3 3 BOOK BUILDING PROCEDURE 3.1 BRIEF ISSUE STRUCTURE The Present Issue The Issue comprises of 555,925,000 Units having face value of PKR 10/- each which constitutes 25% of the total REIT Fund of the DOLMEN CITY REIT. The Issue is being made through the Book Building process at Floor Price of PKR 10.00/- per unit. Whereby 75% of the total Issue size i.e. 416,943,750 Units having face value of PKR 10/- each are being Issued through the Book Building process to institutional and HNWI investors. 25% of the total Issue Size i.e. 138,981,250 Units will be issued to the general public (retail investors) at the Strike Price, which will be determined through the Book Building Process. If the units of the Funds will be sold at premium in Book Building mechanism, the said amount will be utilized by the RMC as per section 83 of the Ordinance. 3.2 BOOK BUILDING PROCEDURE Book Building is a process whereby investors bid for a specific number of Units at various prices. The Lead Managers and Book Runner with the consent of Issuer has set the Floor Price which is the lowest price an investor can bid at. An order book of bids from investors is maintained by the Book Runner, which is then used to determine the strike price through the Dutch Auction Method. Under the Dutch Auction Method, the strike price is determined by lowering the price to the extent that the total number of units that the Issuer intends to issue through the book building process is subscribed. A Bid by a potential investor can be a Limit Bid, or a Step Bid, each of which are explained below. Limit Bid: Limit Bid is placed at a price, which is the maximum price an investor is willing to pay for a specified number of Units. In such a case, a Bidder explicitly states a price at which he/she/it is willing to subscribe to a specific number of Units. For instance, a Bidder may bid for 5.0 million Units at PKR 13 per unit, then the total Application Money would amount to PKR 65,000,000/-.The Bid Amount will be PKR 65,000,000/-.Since the Bidder has placed a limit price of PKR 13 per unit, this indicates that he/she/it is willing to subscribe at or below PKR 13 per unit. Step Bid: A series of Limit Bids at increasing prices. The aggregate amount of step Bid shall not be less than PKR 1,000,000/- and the amount of any individual step shall not be less than PKR 250,000/-. Under this bidding strategy, Bidders place a number of limit Bids at different increasing price levels. The Bidders may, for instance, make a Bid for 0.5 million unit at PKR 10 per unit, 0.4 million Units at PKR 11 per unit and 0.3 million Units at PKR 12 per unit, then in essence the investor has placed one Step Bid comprising three limits bids at increasing prices. The Application Money would amount to PKR. 13,000,000/-. The Bid Amount will be PKR 13,000,000/-. In such a case, investors shall deposit PKR 13,000,000/- in the Book Building Account as bid amount which is 100% of PKR 13,000,000/-. Page 22 of 104

25 A SINGLE INVESTOR SHALL NOT MAKE MORE THAN ONE BID, HOWEVER, A BID CAN BE REVISED. THE INVESTORS SHALL NOT PLACE CONSOLIDATED BIDS. A BID APPLICATION WHICH IS FULLY OR PARTIALLY BENEFICIALLY OWNED BY PERSONS OTHER THAN THE ONES NAMED THEREIN IS TO BE CONSIDERED AS A CONSOLIDATED BID. Once the Bidding Period is over and the book has been built, the Strike Price will be determined in the manner provided in Chapter 5 of the Karachi Stock Exchange s Rule Book. Successful Bidders shall be intimated, within two (2) working days of the closing of the Bidding Period, about the Strike Price and the number of Units provisionally allotted to each of them. The successful institutional Bidders shall, shall deposit the balance amount as consideration against allotment of Units before 5.00 PM on Wednesday, June 17, AS PER CLAUSE 8.16 OF APPENDIX 2 OF CHAPTER 5 OF THE KSE S RULE BOOK, THE SUCCESSFUL BIDDERS SHALL BE ISSUED UNITS IN THE FORM OF BOOK- ENTRY SECURITIES TO BE CREDITED IN THEIR RESPECTIVE CDS ACCOUNTS. ALL THE INSTITUTIONAL AND HNWI INVESTORS SHALL, THEREFORE, PROVIDE THEIR CDC ACCOUNT NUMBERS IN THE BID APPLICATION. 3.3 LEAD MANAGER AND ARRANGER Arif Habib Limited ( AHL ) has been mandated by the Issuer to act as Lead Manager and Arranger in respect of the Issue, which is being made through the Book Building Process as laid out in Appendix 2 of Chapter 5 of the KSE s Rule Book. 3.4 BOOK RUNNER Aba Ali Habib Securities Private Limited has been appointed as the Book Runner to the Issue. 3.5 ROLE AND FUNCTIONS OF LEAD MANAGER AND BOOK RUNNER a) The Lead Manager of the Issue shall: i. Conduct awareness campaigns through presentations, meetings, road shows etc. jointly with the Book Runner; ii. Ensure that all disclosures as required under the Companies Ordinance,1984 and Appendix 2 of Chapter 5 of the KSE s Rule Book have been made in the Prospectus; iii. Ensure that necessary infrastructure and electronic system/software is available to collect Bids and to carry out the Book Building process in a fair, efficient and transparent manner; iv. Ensure that they have obtained on behalf of the Issuer, all approvals/consents/nocs relating to the Issue; v. Publish an advertisement, approved by the Commission, in at least one Urdu and one English daily newspaper having wide circulation in the federal capital and all the provincial capitals of Pakistan, in order to invite the institutional and HNWI investors to participate in the bidding process; and vi. Ensure that the Prospectus will, after approval of the Commission, be uploaded on the Book Runner s as well as on the Issuer/Company s website. Page 23 of 104

26 b) The Book Runner to the Issue shall: i. Conduct awareness campaigns through presentations, meetings, road shows etc. jointly with Lead Manager; ii. Ensure that necessary infrastructure and electronic system/software is available to collect Bids and to carry out the Book Building process in a fair, efficient and transparent manner; iii. Collect Bid applications and applications money, security, margin as the case may be from the institutional and HNWI investors in the manner as mentioned in Appendix 2 of Chapter 5 of the KSE s Rule Book; iv. Place serial numbers, date and time on each bidding application at the time of collection of the same from the bidders; v. Vet the bidding applications; vi. Build an order book showing demand for the Units at various prices; vii. Determine the strike price at the close of the bidding period; viii. Maintain record of the Bids received for subscription of the Units; ix. Use the software for Book Building process provided by KSE, which is based on Dutch Auction Methodology for display of the order book and determination of the strike price, on the terms and conditions as may be agreed in writing between the KSE, the Issuer and the Book Runner; x. Ensure that in addition to live display of the order book on the website of KSE, also live display the same order book simultaneously on its own website till closing of the Bidding Period; xi. Ensure that each Bid application contains depository account number of the bidder maintained with CDCPL wherein Units shall be credited in case the bid is successful; xii. Not accept multiple Bids i.e. more than one bid application by the same person; xiii. Enter into underwriting agreement with the Issuer; xiv. Circulate copies of the Prospectus cleared by the KSE, LSE, ISE and approved by the Commission along with the bidding forms to the prospective institutional and HNWI investor; xv. BR has established bid collection centers at the following addresses: Contact Officer: Abdul Qadir Direct No.: Fax No: Mobile No.: confirmation@abaalihabib.com Postal Address: Trading Room, Karachi Stock Exchange Building Page 24 of 104

27 Lahore Contact Officer: Amir Mobile No.: Postal Address: Auditorium, Lahore Stock Exchange, Khayaban- e-awan-iqbal Lahore Islamabad Contact Officer: Faisal Mobile No.: Postal Address: Auditorium Islamabad Stock Exchange Limited, ISE Towers, 55-B, Jinnah Avenue, Islamabad xvi. Ensure that all the Bids received by the bid collection centers are entered into the system developed by the KSE for the purpose of Book Building. Book Runner shall not accept and enter any Bid after 5 pm during the days of bidding period. Bids received shall be entered into the KSE s Book Building system till 5:00 pm on both days and no new bid including those received in the bid collection centers shall be entered into the system after 5:00 pm. Further, bidders can withdraw their bids any time till 5:00 pm but after 5:00 pm withdrawal shall not be allowed. However, bidders can revise their bids till 5.00 pm on first day and on last day any time till 7:00 pm. 3.6 OPENING AND CLOSING OF THE BIDDING PERIOD The Bidding Period shall remain open for two working days during business hours i.e. will commence at 9.00am on June 08, 2015 and will close at 5.00pm on June 09, 2015 BIDDING PROCESS STARTS ON June 08, 2015 BIDDING PROCESS ENDS ON June 09, ELIGIBILITY TO PARTICIPATE IN BIDDING Eligible investors who can place their Bids in the Book Building process are institutional and HNWI investors. Institutional investors include both local and foreign institutional investors. HNWI investors are individual investors who bid for Units of value of PKR 1,000,000/- (Pak Rupees One Million Only) or above in the Book Building process. 3.8 INFORMATION FOR BIDDERS a) The Prospectus has been duly cleared by the KSE, LSE, and ISE and also approved by SECP. The Prospectus and the Bidding Form can be obtained from the registered office of the Issuer, the Lead Manager, Book Runner and the Bid collection centers. Prospectus and Bidding Forms can also be downloaded from the following websites of the RMC, Lead Manager and the Book Runner i.e. and b) Eligible investors who are interested in subscribing to the Units should approach the Book Runner at the addresses provided in paragraph 3.5 for submitting their Bids. c) THE BIDS SHOULD BE SUBMITTED ON THE PRESCRIBED BIDDING FORM IN PERSON OR THROUGH FAX NUMBERS GIVEN IN PARAGRAPH 3.5. Page 25 of 104

28 3.9 BIDDING FORM AND PROCEDURE FOR BIDDING a) A Standardized Bidding Form has been prescribed by the Book Runner. Bids shall be submitted at the Bid collection centers in person or through fax number given in paragraph 3.5 on the standard Bidding Form duly filled in and signed in duplicate. The Bidding Form shall be serially numbered at the Bid collection centers and date and time stamped, at the time of collection of the same from the Bidders. b) The bidding procedure under the Book Building Process is outlined below: i. As required under clause 8.8 of Appendix 2 of Chapter 5 of the KSE s Rule Book, copy of the approved Prospectus shall be circulated by the Issuer through Book Runner to a maximum number of the institutional investors and HNWI, but not less than fifty (50) in each of the two categories for participation in the bidding process and a copy will also be placed on the websites of the RMC and the Book Runner. ii. An advertisement, approved by the Commission, shall be published in at least one Urdu and one English daily newspaper having wide circulation in the federal capital and all the provincial capitals of Pakistan, inviting the institutional and HNWI investors for participation in the bidding. iii. A Book Building Account shall be opened by the Issuer for collection of Bid amount. The bid money of all the successful bids shall remain in the respective IPO accounts specifically opened for this purpose till completion of the IPO and issuance of NOC by the concerned stock exchange. iv. The Bidding Form shall be issued in duplicate signed by the Bidder and countersigned by the Book Runner, with first copy for Book Runner and the second copy for the Bidder. v. Bids shall be submitted through the Bid collection centers or through fax numbers given in paragraph 3.5 on the standard Bidding Form duly filled in and signed in duplicate. The addresses for the Bid collection centers are given in paragraph 3.5. vi. Bids can be placed as limit bid, or step bid. vii. Bid money/margin Money shall be deposited through demand draft or pay order in favor of Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT Book Building Account or online transfer into the respective IPO account of the Issuer, A/C No Summit Bank Limited, Clifton Branch, Karachi. viii. Book Runner shall collect an amount of 100% of the Application Money as Bid money in respect of bids placed by HNWIs. ix. Book Runner shall collect an amount of not less than 25% of the Application Money as Margin Money in respect of bids placed by institutional investors. x. Book Runner may reject a bid placed by institutional/hnwi investors for reasons to be recorded in writing and the reasons should be disclosed to such Bidder forthwith. Decision of Book Runner shall not be challengeable by the Bidder or its associates. xi. Book Runner shall not accept the Bids made at below the floor price i.e. PKR10/- per unit. xii. The Issuer and Book Runner shall not accept Bids from any person other than an associated person or any other related person or party of the Issuer for more than 10% of the Book Building portion. Whereas, Bids from associated persons or other Page 26 of 104

29 related persons or parties of the Issuer, shall not be accepted for Units in excess of 5%, in aggregate, of the book building portion. To check this threshold, the Issuer shall provide the Book Runner and the Book Runner shall obtain from the Issuer, list of associated persons of the Issuer before commencement of the bidding period and the Book Runner shall make sure that the said list has been provided to the employees deployed at the collection centers for collection of bids and entry thereof in the system. xiii. Book runner shall ensure that all the bids received by the bid collection centers are entered into the system developed by KSE for the Purpose of the Book Building according to the procedure as per clause 8.6 of Appendix 2 of Chapter 5 of the KSE s Rule Book. The system shall be capable to display live an Order Book, in descending order with respect to the bid price, showing the demand for units at various prices and accumulative number of units bid for along with percentage of the total units offered. The ordered book shall also shows the revised bids and bids withdrawn xiv. The Bidders will receive back the duplicate form upon submission of their Bids which will be proof of their Bid submission. The bidders shall not be provided with any receipt if a duly filled duplicate form is not submitted along with the bid. In case of facsimile, a copy of form with receiving will be faxed back to the Bidder. xv. Bidders can revise their Bids during the bidding period on first day till 5 pm and on last day till 7:00 pm, however, after 5:00 pm withdrawal of bids will not be allowed (for details please refer to paragraphs 3.13 and 3.15). xvi. The Bidder shall provide a valid address in the bid form so that the relevant id, password and the form no can be ed to them upon placement of the bid. xvii. Book Runner shall maintain record of the Bids received / rejected / revised/ withdrawn along with identities of the Bidder and evidence of amount received. xviii. At the close of Bidding Period, the Issuer, in consultation with LM & BR shall determine the Strike Price on the basis of Dutch Auction Method. xix. Successful Bidders shall be intimated, within two (2) working days of the closing of the Bidding Period, the Strike Price and the number of Units provisionally allotted to each of them. xx. The successful institutional Bidders shall deposit the balance amount as consideration against allotment of Units before 5.00 PM on Wednesday, June 17, xxi. Margin money of unsuccessful Bidders will be refunded within three (3) working days of the close of the Bidding Period. xxii. Final allotment of Units out of the Book Building portion shall be made after receipt of full subscription money from the successful Bidders; however, Units to such Bidders shall be transferred at the time of transfer of Units out of the General Public portion of the Issue to successful applicants. Page 27 of 104

30 3.10 BANK ACCOUNT FOR BOOK BUILDING The Trustee on the instructions of the Issuer has opened two separate Shariah compliant bank accounts for collection of applicants money, one each for the Book Building portion and the general public portion of the Issue. The Bidders shall draw demand draft or pay order in favor of Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT Book Building Account or online transfer into the respective IPO account of the Trustee, A/C No , which has been opened at Summit Bank Limited, Clifton Branch, Karachi. The collection bank shall keep and maintain the bid money in the said account. Once the Strike Price is determined and list of successful bidders is finalized, the Lead Managers, after obtaining NOC from KSE may request in writing to the collection bank for transfer of the money of successful and accepted applications to the Trustees account(s) and advice for refund of the bid money to unsuccessful Bidders PAYMENT INTO THE BOOK BUILDING ACCOUNT The Bidders shall draw a demand draft or pay order favoring Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT Book Building Account or online transfer into the respective IPO account of the Trustee, A/C No , Summit Bank Limited, Clifton Branch, Karachi and submit the demand draft, pay order or evidence of online transfer at the designated Bid collection center either in person or through facsimile along with a duly filled Bidding Form. CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM AT THE BID COLLECTION CENTER. PAY ORDER, OR DEMAND DRAFTDRAWN IN FAVOR OF Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT Book Building Account OR ONLINE TRANSFER INTO THE RESPECTIVE IPO ACCOUNT A/C NO , SUMMIT BANK LIMITED, CLIFTON BRANCH, KARACHI OF THE TRUSTEE ARE ACCEPTABLE TO THE BOOK RUNNER. Since the investors can bid for Units through limit bid, or step bid therefore payment procedure is explained below for these methods. a) PAYMENT FOR LIMIT BID If investors are placing their Bids through Limit Bid then they shall deposit the Margin Money based on the number of Units they are bidding for at their stated Bid Price. For instance, if an investor is applying for 5.0 million Units at a price of PKR 13/- per unit, then the total Application Money would amount to PKR 65,000,000. In such a case, (i) HNWI shall deposit PKR 65,000,000 in the Book Building account as the Bid amount which is 100% of PKR 65,000,000; and (ii) Institutional Investors shall deposit PKR 16,250,000 in the Book Building account as the margin amount which is at least 25% of PKR 65,000,000. b) PAYMENT FOR STEP BIDS If investors are placing a Step Bid, which is a series of limit Bids at increasing prices, then they shall deposit the Margin Money/ Bid money based on the total number of Units they are bidding for at their stated Bid prices. For instance, if the investor Bids for 0.5 million Units at PKR 10/- per unit, 0.4 million Units at PKR 11/- per unit and 0.3 million Units at PKR 12/- per unit, then in essence the investor has placed one Step Bid comprising three limit Bids at increasing prices. The Margin Money would amount to PKR 13,000,000, which is the sum of the products of the number of Units Bid for and the Bid price of each limit Bid. In such a case, (i) HNWI shall deposit PKR 13,000,000 Page 28 of 104

31 in the Book Building Account as Bid amount which is 100% of PKR 13,000,000 and (ii) Institutional investors shall deposit at least PKR 3,250,000 in the Book Building Account as Margin Money which is 25% of PKR 13,000, PAYMENT BY FOREIGN INVESTORS Foreign investors may subscribe using their special convertible rupee accounts ( SCRA ), as set out under Chapter XX of the State Bank of Pakistan s Foreign Exchange Manual Under Para 7(i) of Chapter XX, Companies issuing Units out of new public Issues on repatriable basis, as permitted under sub para (B) (I) of paragraph 6, may open foreign currency collection accounts with banks abroad or in Pakistan for receiving the subscription in foreign currency. They may also allow refunds from these accounts to unsuccessful applicants. Foreign investors do not require any regulatory approvals to invest in the Units being issued through this Prospectus. Payment in respect of investment in the Units of the DOLMEN CITY REIT has to be made in foreign currency through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no restriction on repatriation of sale proceeds of and the dividend yield on the Units of the DOLMEN CITY REIT. Underlying client names/beneficial owners are required to be disclosed at depository level. Key Documents required for individual(s): 1. Account opening request 2. Passport / ID General documentation required for opening of SCRA account by institutional investors are: 1. Account opening request 2. Board Resolution & Signatories list 3. Passport/ID of Board of Directors 4. Passport/ID of all authorized signatories 5. Certificate of Incorporation (COI) or equivalent document (like Trade Registry Certificate, Business Registration Certificate, and Certificate of Commencement of Business) 6. Memorandum & Articles of Association 7. Withholding tax registration certificate / Certificate of country of domicile of client 8. Latest Annual Report 9. List of Board of Directors 10. List of Unit holders (greater than 10% holdings) and key officers It is however pertinent to note that the procedure and requirements of each financial institution with respect to opening of SCRA differs, hence it is advised to request the procedure from respective financial institution. Payments made by foreign investors shall be supported by proof of receipt of foreign currency through normal banking channels. Such proof shall be submitted along with the Application by the foreign investors REVISION OF BIDS BY THE BIDDER The Bidders shall have the right to revise their Bids any time during the Bidding Period i.e. on the first day till 5.00pm and on the last day up to 7:00 pm. Online revision of the Bids may be allowed to the Bidders through system software. This will however be subject to the condition that the Bidder shall comply with the requirements of bidding as stipulated under Appendix 2 of KSE s Rule Book and any other condition or procedure disclosed in the Prospectus. Page 29 of 104

32 3.14 REJECTION OF BIDS BY THE BOOK RUNNER In terms of clause 8.4 of Appendix 2 of KSE s Rule Book, Book Runner may reject a Bid placed by an institutional/hnwi investor for reasons to be recorded in writing and the reasons should be disclosed to such Bidder forthwith. Decision of the Book Runner shall not be challengeable by the Bidder or any of its associates WITHDRAWAL OF BIDS BY THE BIDDER A Bidder has the right to withdraw a Bid from the bidding system any time during the Bidding Period till 05:00 pm. Online withdrawal of the Bids may be allowed to the Bidders through system software. This will however be subject to the condition that the Bidder shall comply with the requirements of bidding as disclosed under Appendix 2 of KSE s Rule Book and any other condition or procedure disclosed in the Prospectus WITHDRAWAL OF ISSUE BY THE ISSUER a) According to clause 3.10 of Appendix 2 of Chapter 5 of the KSE s Rule Book and the criteria for Book Building issued by SECP on July 24, 2014 vide its letter No. SMD/CIW/Misc 14/2007, in case the Issuer does not receive Bids on floor Price for the minimum number of Units offered for sale under the Book Building Portion, they may withdraw the Issue. The decision of withdrawal shall be taken within a period of not more than three (3) working days from the closing of Bidding Period. However, if the Issuer decides to go ahead with the Issue then the unsubscribed units of the Book Building portion shall be made part of the General Public portion and shall be offered to the General Public at the Floor Price of PKR per unit. These units will be underwritten as per the Book Building criteria of SECP. The units subscribed under the Book Building portion will also be offered to the bidder at the Floor price of PKR per unit. b) The Issuer shall withdraw the Issue if the total bids received are less than twenty five. c) The withdrawal shall be immediately intimated to the Commission and the Exchanges. d) In case the Issue is withdrawn the Margin Money/ Bid money will be refunded to Bidders within three (03) working days of the decision of withdrawal without any markup, interest etc MECHANISM FOR DETERMINATION OF STRIKE PRICE a) At the close of the Bidding Period, the Issuer, in consultation with the Lead Manager and the Book Runner shall determine the Strike Price on the basis of Dutch Auction Method. Under this Methodology, the Strike Price is determined by lowering the price to the extent that the total number of Units Issued is subscribed. b) The order book shall display the Bid prices in a descending order along with the quantity for each price level as well as the cumulative quantity at each price level. c) For the purpose of allotment of Units, the limit Bid(s) entered at the price determined/discovered as Strike Price through the Book Building Process shall be ranked equally and preference will be given to Bidder who has made the bid earlier. d) Once the Strike Price is determined all those Bidders whose bids have been found successful shall become entitled for allotment of Units. The Bidders, who have made bids at prices above the Strike Price, will be issued Units at the Strike Price and the differential will be refunded. The Bidders, who have made bids below the Strike Price, shall not qualify for allotment of Units and their Margin Money shall be refunded. Page 30 of 104

33 The mechanism for determination of Strike Price can be understood by the following illustration. a) Number of Units being Issued through the Book Building: 416,943,750 Units b) Lower Limit Price: 10.00/- per unit c) Bidding Days: June 08, 2015 to June 09, 2015 (both days inclusive) d) Bidding Time: 9:00 AM 5:00 PM e) Bid Withdraw Time: 9:00 AM 5:00 PM f) Bidding Revision Time: On 1 st day 9:00 AM 5:00 PM On 2 nd day 9:00 AM 7:00 PM At PKR per unit, investors are willing to buy only million Units. Since million Units are still available, therefore the price will set lower. At PKR per unit, investors are willing to buy million Units. Since million Units are still available, therefore, the price will set lower. At PKR12.25 per unit, investors are willing to buy million Units. Since million Units are still available, therefore, the price will set lower. At PKR per unit, investors are willing to buy million Units. Since million Units are still available, therefore, the price will set lower. At PKR12.00 per unit, investors are willing to buy million Units. Since million Units are still available; therefore, the price will set lower. At PKR11.00 per unit, investors are willing to buy million Units. Since after bidding for million Units at PKR per Units no unit will be available, therefore, the Strike Price will be set at PKR per unit for the entire lot of 416,943,750 million Units. The Bidders, who have placed bids at prices above the Strike Price (which in this illustration is PKR per unit), will become entitled for allotment of Units at the Strike Price. Page 31 of 104

34 The Bidders, who have placed bids below PKR per unit, will not qualify for allotment of Units. After allotment in the aforementioned manner, million Units are still available for allotment. These Units will be allotted to the Bidders who have placed bid(s) at PKR 11.00, however, for the purpose of allotment of these million Units preferences will be given to the Bidder who has placed the bid earlier BASIS OF ALLOTMENT OF UNITS After closure of the Bidding Period, the Book Runner will analyze the demand generated at various price levels. Only successful Bidders shall be eligible for allotment and transfer of Units. Final allotment of Units out of the Book Building portion shall be made after receipt of full subscription money from the successful Bidders; however, Units to such Bidders shall be dispatched or credited, as the case may be, at the time of transfer of Units out of the public portion of the Issue to successful applicants. Please also refer to section 3.17 for details of allotment of Units REFUND OF MARGIN MONEY Investors that place Bids lower than the Strike Price shall not be eligible for allotment of Units. Margin Money of the unsuccessful Bidders shall be refunded within three (3) working days of the close of the bidding period as required under clause 8.12 of Appendix 2 of Chapter 5 of the KSE s Rule Book. The bidders, who have made bids at prices above the strike price, will be issued Units at the strike price and the differential will be refunded within three (3) working days of the close of bidding period UNDERWRITING After determination of the Strike Price the Book Runner shall within two (2) working days of the closing of the bidding period enter into an underwriting agreement with the Issuer indicating the number of Units that Book Runner would underwrite at the Strike Price and the underwriting Commission/Fee to be charged ADDRESSES OF BID COLLECTION CENTRES Bid collection centers have been established at Karachi, Lahore and Islamabad to collect the Bids for the Book Building portion of the Issue by the Book Runner in order to provide convenient access to Bidders to participate in the bidding process. Addresses, detail of contact persons and fax numbers of the Bid Collection Centers are given in paragraph 3.5. Page 32 of 104

35 3.22 STATEMENT BY THE ISSUER April 13, 2015 The Managing Director, The Managing Director, The Managing Director, Karachi Stock Exchange Limited Lahore Stock Exchange Limited Islamabad Stock Exchange Limited Stock Exchange Building 19 Khayaban-e-Awan-e-Iqbal 55-B, ISE Tower, Stock Exchange Road Lahore Jinnah Avenue, Karachi Islamabad On behalf of the Issuer, I confirm that all material information as required under the Companies Ordinance, 1984 and the Listing Regulations of the Karachi Stock Exchange Limited has been disclosed in the Prospectus and that whatever is stated in the Prospectus and the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. It is also confirmed that all requirements of the Real Estate Investment Trust Regulations, 2015 relating to approvals, consents, no objection certificates, undertakings, appointments, disclosures including detail and location of the Real Estate and transfer thereof in the name of the Trustee have been fulfilled. For and on behalf of: Issuer -sd- Muhammad Ejaz Chief Executive Arif Habib Dolmen REIT Management Limited Page 33 of 104

36 3.23 STATEMENT BY LEAD ADVISOR AND MANAGER April 13, 2015 The Managing Director, The Managing Director, The Managing Director, Karachi Stock Exchange Limited Lahore Stock Exchange Limited Islamabad Stock Exchange Limited Stock Exchange Building 19 Khayaban-e-Awan-e-Iqbal 55-B, ISE Tower, Stock Exchange Road Lahore Jinnah Avenue, Karachi Islamabad Being mandated as Lead Advisor and Manager to this Issue for Sale of Units of DOLMEN CITY REIT through the Book Building process, we confirm that all material information as required under the Companies Ordinance, 1984 and Appendix (2)of the Listing of Companies and Securities Regulations of the Karachi Stock Exchange has been disclosed in this Prospectus and that whatever stated herein and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. It is also confirmed that all requirements of the Real Estate Investment Trust Regulations, 2015 relating to approvals, consents, no objection certificates, undertakings, appointments, disclosures including detail and location of the Real Estate and transfer thereof in the name of the Trustee have been fulfilled. On behalf of: Arif Habib Limited -sd- Zeshan Afzal Executive Director and Head Corporate Finance Page 34 of 104

37 3.24 STATEMENT BY BOOK RUNNER June 02, 2015 The Managing Director, The Managing Director, The Managing Director, Karachi Stock Exchange Limited Lahore Stock Exchange Limited Islamabad Stock Exchange Limited Stock Exchange Building 19 Khayaban-e-Awan-e-Iqbal 55-B, ISE Tower, Stock Exchange Road Lahore Jinnah Avenue, Karachi Islamabad Being mandated as Book Runner to this Issue for Sale of Units of DOLMEN CITY REIT through the Book Building process, we confirm that all material information as required under the Companies Ordinance, 1984 and Appendix (2) of the Listing of Companies and Securities Regulations of the Karachi Stock Exchange has been disclosed in this Prospectus and that whatever stated herein and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed. It is also confirmed that all requirements of the Real Estate Investment Trust Regulations, 2015 relating to approvals, consents, no objection certificates, undertakings, appointments, disclosures including detail and location of the Real Estate and transfer thereof in the name of the Trustee have been fulfilled. On behalf of: Aba Ali Habib Securities (Pvt) Limited -sd- Zahid Ali Habib Managing Director Page 35 of 104

38 4 REIT SCHEME AND RELATED MATTERS 4.1 UNIT CAPITAL PART 4 Dolmen City REIT Scheme has a total REIT Fund of Rupees 22,237 Million which is divided into 2,223,700,000 Units having face value of PKR 10/- each, the breakup of which is given below: No. of Units Face value Premium Total (including premium) (PKR) (PKR) (PKR) 1,556,590,000* 111,185,000** International Complex Projects Ltd (ICPL) (which is also the strategic investor) Arif Habib Dolmen REIT Management Ltd (RMC) 15,565,900,000-15,565,900,000 1,111,850,000-1,111,850,000 1,667,775,000 Total Unit holding by Strategic Investor and 16,677,750,000-16,677,750,000 RMC IPO 416,943,750 Allocation to Institutions / HNWIs investors through book building 4,169,437,500-4,169,437,500 process at the Strike Price. 138,981,250 General Public 1,389,812,500-1,389,812, ,925,000 Total IPO 5,559,250,000-5,559,250,000 2,223,700,000 Total REIT FUND 22,237,000,000-22,237,000,000 *Out of above 20% units will be kept in blocked account throughout the life of the REIT Scheme, as Strategic Investor, till it s winding up and these units shall not be sold, transferred or encumbered as per provisions of Regulation 11 of the REIT Regulation 2015 **To be kept in blocked account throughout the life of the REIT Scheme till it s winding up and these units shall not be sold, transferred or encumbered as per provisions of Regulation 11 of the REIT Regulation 2015 Note: If the units of the Funds are sold at premium through this prospectus, the premium amount will be utilized by the RMC as per section 83 of Ordinance. Page 36 of 104

39 4.2 OPENING AND CLOSING OF THE SUBSCRIPTION LIST The subscription list will open for one (1) day at the commencement of banking hours on June 12, 2015 and will close at the close of banking hours*. *In order to facilitate investors, United Bank Limited is providing facility electronic submission of application (e IPO) to its account holders. United Bank Limited account holders can use United Bank Limited Net Banking to submit their application via link Further, please note that online applications can be submitted 24 hours a day during the subscription period which will close at midnight on June 12, INVESTOR ELIGIBILITY FOR PUBLIC ISSUE Eligible investors include: a) Pakistani citizens residing in or outside Pakistan or persons holding two 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 outside Pakistan (to the extent permitted by their respective constitutive documents and existing regulations as the case may be); d) Mutual funds, provident/pension/gratuity funds/trusts (subject to the terms of their respective trust deeds and existing regulations); and e) Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan. 4.4 FACILITIES AVAILABLE TO NON-RESIDENT PAKISTANI AND FOREIGN INVESTORS Non-resident Pakistani investors and foreign investors may subscribe for the Units being issued through this Prospectus by using their SCRA. For details please see Chapter 20 of the Foreign Exchange Manual of the State Bank of Pakistan. Under Section 7(i) of Chapter 20 of the said manual, Companies issuing Units out of new public Issues on repatriable basis, as permitted under sub para (B) (I) of paragraph 6, may open foreign currency collection accounts with banks abroad or in Pakistan for receiving the subscription in foreign currency. They may also allow refunds from these accounts to unsuccessful applicants. Foreign investors do not require any regulatory approvals to invest in the Units being issued through this Prospectus. Payment in respect of investment in the Units of the Company has to be made in foreign currency through an inward remittance or through surplus balances in SCRA. Local currency cash account(s) opened for the purpose of Foreign Portfolio Investment (FPI) is classified as SCRA. There is no restriction on repatriation of sale proceeds and dividend payouts on Units. Underlying client names/beneficial owners are required to be disclosed at depository level. Key Documents required for individual(s): 1. Account opening request 2. Passport / ID General documentations required for opening of SCRA account by institutional investors are: 1. Account opening request 2. Board Resolution & Signatories list 3. Passport / ID of Board of Directors 4. Passport/ID of all authorized signatories 5. Certificate of Incorporation (COI) or equivalent document like Trade Registry Certificate, Business Registration Certificate, and Certificate of Commencement of Business Page 37 of 104

40 6. Memorandum & Articles of Association 7. Withholding tax registration certificate / Certificate of country of domicile of client 8. Latest Annual Report 9. List of Board of Directors 10. List of Unit holders (greater than 10% holdings) and key officers It is however pertinent to note that the procedure and requirements of each financial institution with respect to opening of SCRA differs, hence it is advised to make a prior request for the procedure from concerned financial institution. Payments made by foreign investors shall be supported by proof of receipt of foreign currency through normal banking channels. Such proof shall be submitted along with the Application by the foreign investors. 4.5 MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF UNITS OUT OF THE PUBLIC PORTION OF THE ISSUE The basis and conditions of allotment to the general public shall be as follows: (a) Application for Units below the minimum value, which will be calculated as Issue Price x 500 Units shall not be entertained. (b) Application for Units must be made for 500 Units or in multiple of 500 Units only. Applications which are neither for 500 Units nor for multiples of 500 Units shall be rejected. (c) SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATION BY SAME PERSON) IS PROHIBITED AND SUCH APPLICANTS MONEY IS LIABLE TO CONFISCATION. (d) If the Units Issued to the general public are sufficient to accommodate all applications, all applications shall be accommodated. (e) If the Units applied for are in excess of the Units Issued, the distribution shall be made by computer balloting, in the presence of the representative(s) of the Stock Exchanges in the following manner: (i) If all the applications for 500 Units can be accommodated, then all such applications shall be accommodated first. If all applications for 500 Units cannot be accommodated, then balloting will be conducted among applications for 500 Units only. (ii) If all the applications for 500 Units have been accommodated and Units are still available for allotment, then all applications for 1,000 Units shall be accommodated. If all applications for 1,000 Units cannot be accommodated, then balloting will be conducted among applications for 1,000 Units only. (iii) If all applications for 500 Units and 1,000 Units have been accommodated and Units are still available for allotment, then all applications for 1,500 Units shall be accommodated. If all applications for 1,500 Units cannot be accommodated, then balloting will be conducted among applications for 1,500 Units only. (iv) If all applications for 500 Units, 1,000 Units and 1,500 Units have been accommodated and Units are still available for allotment, then all applications for 2,000 Units shall be accommodated. If all applications for 2,000 Units cannot be accommodated, then balloting will be conducted among applications for 2,000 Units only. Page 38 of 104

41 (v) After the allotment in the above mentioned manner, the balance Units, if any, shall be allotted in the following manner: o If the remaining Units are sufficient to accommodate each application for over 2,000 Units, then 2,000 Units shall be allotted to each applicant and remaining Units shall be allotted on pro-rata basis. o If the remaining Units are not sufficient to accommodate all the remaining applications for over 2,000 Units, then balloting shall be conducted for allocation of 2,000Units each to the successful applicants. (f) If the Issue is over-subscribed in terms of amount only, then allotment of Units shall be made in the following manner: (i) First preference will be given to the applicants who applied for 500 Units; (ii) Next preference will be given to the applicants who applied for 1,000 Units; (iii) Next preference will be given to the applicants who applied for 1,500 Units; (iv) Next preference will be given to the applicants who applied for 2,000 Units; and then (v) After allotment of the above, the balance Units, if any, shall be allotted on pro rata basis to the applicants who applied for more than 2,000 Units. (g) Allotment of Units will be subject to scrutiny of applications for subscription of Units. (h) Applications, which do not meet the above requirements, or applications which are incomplete, will be rejected. 4.6 REFUND OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS The Company shall take a decision 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 applications within ten (10) days of the date of such decision, 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 within the time specified therein, the Issuer shall be liable to repay the money with surcharge at the rate of 1.5%, for every month or part thereof from the expiration of the 15th day and in addition to a fine not exceeding PKR 5,000/- and in case of continuing offense to a further fine not exceeding PKR 100/- per day after the 15th day of which the default continues. Provided that the Issuer shall not be liable if it proves that the default in making the refund was not on its own account and was not due to any misconduct or negligence on its part. However as per Shariah guidelines, any over and above amount received as surcharge is not Shariah compliant income, therefore, the Issuer hereby advises the unsuccessful applicants to donate the same for charitable purposes. 4.7 CREDITAND DISPATCH OF UNIT CERTIFICATES The Company, will dispatch Unit certificates to successful applicants through their Banker to the Issue or by crediting the respective Central Depository System ( CDS ) accounts of the successful applicants within thirty (30) days of the close of public subscription, as per listing of Companies and Securities Regulations of the Stock Exchanges. Units will be issued either in scrip-less form in the CDS of CDCPL or in the shape of physical scripts on the basis of option exercised by the successful applicants. Units in the physical scripts shall be dispatched to the Bankers to the Issue within thirty (3 0) days from the date of close of subscription Page 39 of 104

42 list, whereas scrip-less Units shall be directly credited through book entries in the respective accounts maintained with the CDCPL. The applicants who opt for receipt of Units in scrip-less form in CDS should fill 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 Issuer makes a default in complying with the above requirements, they shall pay to the KSE a penalty of PKR 5,000/- per day for every day during which the default continues. The KSE may also notify the fact of such default and the name of the Company by notice and also by publication in its ready-board quotation of the KSE. The name of the Company be notified to the members of the KSE and placed on the website of the KSE. 4.8 TRANSFER OF UNITS a) Physical Scrips: Under the provisions of Section 77 of the Ordinance, the directors of the Company shall not refuse to transfer any fully paid Unit unless the transfer deed is, for any reason, defective or invalid or is not accompanied by the relevant Unit certificate. Provided that the Company shall within thirty (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 Units maintained with the CDS in the book entry form shall be transferred in accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations. 4.9 PRINCIPAL PURPOSE OF THE ISSUE The principal purpose of the Issue is to list the Scheme on the KSE,LSE and ISE in compliance to Regulation 14(1)(xi) of the REIT Regulations 2015 and raise partial funds required for the acquisition of the SECP approved Real Estate in the REIT Scheme (SECP approval letter No. SCD/PRDD/AHDRML/DCPK/2014/05 dated July 11, 2014) INTEREST OF UNITHOLDERS None of the subscribers of the issued Units of the Scheme have any special or other interest in the property or profits of the Scheme other than as Unit holders of the Units in the capital of the Scheme DIVIDEND POLICY The Dolmen City REIT scheme proposes to distribute at least 90% of its income as dividends to its Unit holders on an annual basis ELIGIBILITY FOR DIVIDEND The Units being issued shall rank pari-passu with the existing Units in all matters, including the right to such bonus or right issue and dividend as may be declared by the Scheme subsequent to the Issue of such Units. Page 40 of 104

43 4.13 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 (except where the Ordinance does not apply to any Unit holder or where such Unit holder is otherwise exempt or has claimed exemption from payment/deduction of Zakat in terms of and as provided in that Ordinance) CAPITAL GAIN TAX (SECTION 37-A OF THE INCOME TAX ORDINANCE) Capital gains derived from the sale of listed securities are taxable under Section 37A of the Income Tax Ordinance, 2001 in the following manner: S. No. Tax Year less than twelve months Tax Rate Holding period of securities more than twelve months and less than twenty four months more than twenty four months % 10.0% 0% 4.15 WITHHOLDING TAX ON DIVIDENDS Dividend distribution to shareholders will be subject to withholding tax under section 150 of the Income Tax Ordinance, 2001 specified in Part 1 Division III of the First Schedule of the said Ordinance or any time to time amendments therein. In terms of the provision of Section 8 of the said Ordinance, said deduction at source, shall be deemed to be full and final liability in respect of such profits in case of individuals only. The following are the rates: (a) For filer of Income Tax Returns: 10 % (b) For non-filer of Income Tax Return: 15% 4.16 TAX ON BONUS UNITS As per section 236M of the Income Tax Ordinance 2001, tax at the rate of 5% of the value of bonus units determined on the basis of the day end ex-price on the first day of book closure shall be collected by the REIT SCHEME issuing the bonus units, which will be the final tax liability on such income of the unit holder SALES TAX ON SALE/PURCHASE OF UNITS Under the Constitution of Pakistan and Articles 49 of the 7th NFC Award the Government of Sindh, Government of Punjab and the Government of Khyber Pakhtunkhwa have promulgated the Sindh Sales Tax through Services Act, 2011, Punjab Sales Tax through Services Act, 2012 and the Khyber Pakhtunkhwa Sales Tax through Khyber Pakhtunkhwa Finance Act, 2013 respectively. The Sindh Revenue Board, the Punjab Revenue Authority and the Khyber Pakhtunkhwa Revenue Authority administer and regulate the levy and collection of the Sindh Sales Tax ( SST ), Punjab Sales Tax ( PST ) and Khyber Pakhtunkhwa Sales Tax ( KST ) respectively on the taxable services provided or rendered in Sindh, Punjab or Khyber Pakhtunkhwa respectively. The value of taxable services for the purpose of levy of sales tax is the gross commission charged from clients in respect of purchase or sale of shares in a Stock Exchange. The Second Schedule of the above mentioned Acts levy a sales tax on Brokerage at the rate of 15%. Sales tax charged under the aforementioned Acts is withheld at source under statutory requirements. Page 41 of 104

44 4.18 CAPITAL VALUE TAX (CVT) ON PURCHASE OF UNITS Pursuant to amendments made in the Finance Act, 1989 through Finance (Amendments) Ordinance, 2012 promulgated on April 24, 2012, 0.01% Capital Value Tax will be applicable on the purchase value of Units TAX CREDIT FOR INVESTMENT IN IPO Under Section 62 of the Income tax Ordinance, 2001, a resident person other than a company, shall be entitled to a tax credit for a tax year in respect of the cost of acquiring in the year new Units Issued to the public by a public company listed on a stock exchange in Pakistan, provided the resident person is the original allottee of the Units or the Units are acquired from the Privatization Commission of Pakistan. Time Limit for holding Units has been designated as 24 months to avail tax credit. The amount of investment, eligible for tax credit, is prescribed in Section 62 of the said Ordinance INVESTMENT RATIONALE REITs provide access to quality real estate (new asset class) at low risk. It is generally challenging for small investors to access real estate individually due to the large capital required, however REITs allow investors to buy and sell a portion of real estate exposure in line with their financial capacity. Some key investment considerations are: Unique Investment Opportunity The SECP approved real estate (Harbour Front and Dolmen City Mall) is fully operational and the lettable space is occupied. Majority of the existing tenancy agreements have a 10% annual rent escalation clause. Dolmen City Occupancy Level (percentage) 55% 77% 92% Rent Revenue (PKR Billion) In 2014, Dolmen City Mall had 89% occupancy (presently occupied at 94%), whereas Harbour Front had 100% occupancy, which on weighted average basis translates into occupancy of 92% on the subject property. Dividend Yield on the Units of Dolmen City REIT (based on 100% occupancy and payout) is expected to increase from 9.49% in the first year to 22.55% in the tenth year. Average Dividend Yield for the first ten years of operations is expected to be 15.20%. Additionally, the total return from the REIT instrument will be augmented by a capital appreciation component. The Subject real estate is conservatively projected to grow in value by 5% per annum. This appreciation will be reflected in the Net Asset Value (NAV) and can be realized by selling unit holding in the secondary market. Dolmen City REIT Total Builtup Total Leasable Total Leased out Area Area Area Dolmen City Mall 1,297,407 sq.ft 559,166 sq.ft 525,969 sq.ft Harbour Front 270,273 sq.ft 250,963 sq.ft 250,963 sq.ft Debt Free Investment REITs are wholly equity financed and borrowing is not permitted under the Regulations. Hence, The Dolmen City REIT has a debt free structure and free from related cash flow distress and default risks. Page 42 of 104

45 Favorable Dividend Pay-out Policy The business plan envisages distributing at least 90% of its profits as dividends to the unit holders. High dividend payout reduces the risk of management for investors. Hedge against Inflation and declining Interest rates The annual escalation in rental income in REITs hedges the investment against inflation and decline in the interest rates. Liquidity The instrument will be listed at the KSE, LSE, ISE which provides investors the option to exit anytime. Moreover, REIT Units are priced by the stock market each day and readily respond to the changes in market sentiments. Diversification Diversification aims to reduce portfolio volatility for investors. Adding REITs to an investment portfolio reduces risk since REITs have little correlation with other assets, including stocks and bonds. Sharia Compliant Investment When comparing REITs to conventional debt instruments, an important factor to be considered is that this Rental REIT is Sharia compliant as opposed to traditional debt instruments. Hence it provides investment option that complies to the faith/belief of a large number of investors. Copy of the Certificate of Shariah Compliance is as under: Page 43 of 104

46 The relationship between Unit holders and RMC is based on Wakalahtul Istismar. The model of the REIT Scheme is based on Shirkah and Ijarah. Comparison with other instruments Exposure on plain vanilla debt issues is significantly different from exposure in REITs. A novel feature in Rental REITs is the avoidance of double taxation which is a hall mark of conventional debt issues. In a REIT, taxes are applied only up to the extent of withholding tax and the resultant yield is shielded from all other taxes, thereby increasing effective yield of the investor. Dividend income on investment in Units of REIT Scheme has a withholding tax of 10% as full and final settlement, whereas, bond coupon has both corporate tax and withholding tax, which means despite having the same yield as debt instruments, a REIT would have a higher yield net of all taxes for corporate entities. Comparison with other Instruments Year 1 Year 2 Year 3 Year 5 Year 10 Dolmen City REIT (MADY)* 9.49% 9.95% 10.45% 11.56% 15.20% Bond Equivalent Yield of REIT (MADY)* 12.94% 13.57% 14.25% 15.77% 20.73% Special Savings Certificates 1 Year** 7.60% Special Savings Certificates 2 Years** 7.60% Special Savings Certificates 3 Years** 8.80% Treasury Bill 1 Year*** 6.73% Pakistan Investment Bond 3 Years*** 7.26% Pakistan Investment Bond 5 Years*** 7.93% Pakistan Investment Bond 10 Years*** 9.06% KIBOR 1 Year*** 7.12% KIBOR 2 Years*** 7.32% KIBOR 3 Years*** 7.56% * Moving Average Dividend Yield ** National Savings Rates applicable from April 1, 2015 *** Secondary Market Rates for T Bill and PIB and Offer rates for KIBOR as on May 25, 2015 A Moving Average or rolling average is a series of averages of different subsets from the full data set. MADY for Year 2 is the average of dividend yield in Year 1 and 2, similarly for Year 10 it is the average of dividend yield between Year 1 to Year 10. Bond Equivalent Yield of REIT is calculated by dividing the Dividend Yield derived from Dolmen City REIT with the post tax fraction of corporate tax rate applicable on bonds over withholding tax rate applicable on dividends. i.e. Bond Equivalent Yield = Dividend Yield / [ (100%-Corporate Tax Rate) / (100%-Withholding Tax Rate) ] For Year 1, it is calculated as: 9.49% / [(100%-34%) / (100%-10%)] = 12.94% Page 44 of 104

47 4.21 AUDITOR S CERTIFICATE UNDER SCHEDULE IV, 7(G), OF REIT REGULATION 2015 Page 45 of 104

48 4.22 AUDITOR S CERTIFICATE UNDER SCHEDULE IV, 8(D), OF REIT REGULATION 2015 Page 46 of 104

49 4.23 AUDITOR S CERTIFICATE UNDER SCHEDULE IV, 8(E), OF REIT REGULATION 2015 Page 47 of 104

50 PART 5 5 UNDERWRITING, COMMISSIONS, BROKERAGE AND OTHER EXPENSES 5.1 UNDERWRITING Book Building Portion Aba Ali Habib Securities Private Limited has been mandated to act as the Book Runner to the Issue. The Book Runner shall underwrite the Book Building Portion of the Issue of 416,943,750 Units within two (2) working days of the closing of the bidding period as required under clause 5 of Appendix 2 of the Rule Book of the Karachi Stock Exchange at the Strike Price determined through the Book Building process. In the opinion of the Directors, the resources of the Underwriter are sufficient to discharge its underwriting obligations/commitments. Public Portion As required under clause 6 of Appendix 2 of the KSE Rule Book, the Public Portion of the Issue of 138,981,250 Units will be underwritten. The names of the Underwriters will be disseminated on the next day of conclusion of Book Building through widely circulated national news papers and also posted on the websites of Stock Exchanges, Book Runner and Issuer. 5.2 UNDERWRITING COMMISSION No underwriting commission will be paid to the Book Runner For general public portion, the underwriters will be paid an underwriting commission at the rate of 1.0% of the amount of Issue underwritten by them. In addition, a take up commission at the rate of 0.5% shall be paid to the underwriters on the value of Units required to be subscribed by them by virtue of their respective underwriting commitments. 5.3 BUY BACK/REPURCHASE AGREEMENT THE UNDERWRITERS HAVE NOT ENTERED INTO ANY BUY BACK/RE-PURCHASE AGREEMENT WITH THE ISSUERS OR ANY OTHER PERSON IN RESPECT OF THIS PUBLIC ISSUE. ALSO, NEITHER THE ISSUERS NOR ANY OF THEIR ASSOCIATES HAVE ENTERED INTO ANY BUY BACK/REPURCHASE AGREEMENT WITH THE UNDERWRITERS OR THEIR ASSOCIATES. THE ISSUERS AND THEIR ASSOCIATES SHALL NOT BUY- BACK/REPURCHASE UNITS FROM THE UNDERWRITERS AND THEIR ASSOCIATES. 5.4 COMMISSION TO THE BANKERS TO THE ISSUE A commission at the rate of 0.25% of the amount collected on allotment in respect of successful applicants will be paid by the Issuer to the Bankers for services rendered by them in connection with this Issue for Sale of Units plus Out of Pocket expenses, if any. 5.5 BROKERAGE For the public Issuing, the Issuer will pay brokerage to the TREC holder of KSE, LSE and ISE at the rate of 0.50% of the value of Units (including premium) actually sold through them. No brokerage shall be paid to the TREC holders in respect of Units taken up by the underwriters by virtue of their underwriting commitments. Page 48 of 104

51 5.6 EXPENSES TO THE ISSUE FOR SALE The expenses of this Issue are estimated not to exceed PKR 239,660,993/-. All such expenses are to be borne by the Issuer and reimbursable from the REIT Scheme. Details of the approximate expenses are mentioned below: EXPENSES TO THE ISSUE DESCRIPTION RATE AMOUNT (PKR) Underwriters Commission - General Public 1.00% 13,898,125 Take-up Commission 0.50% 27,796,250 Commission to Bankers to the Offer 0.25% 13,898,125 Bankers to the Offer Out of Pocket PKR 1,200,000 1,200,000 Brokers' Commission 0.50% 27,796,250 KSE Listing Fees (initial) Maximum 2,500,000 KSE Listing Fees (Annual)(Above PKR10bn) 575, % 612,986 KSE Services Fee PKR 50,000 50,000 KSE Book Building Software charges PKR 500, ,000 LSE Annual Listing Fees PKR 262, ,662 ISE Annual Listing Fees PKR 80,000 80,000 Lead Financial Advisor's & Book Runner s Fee 1.25% 69,490,625 Underwriting Arrangement Fee IPO 0.50% 6,949,063 Transfer Agent and Balloting Agent PKR 2,000,000 2,000,000 Marketing & Printing Expenses Lump sum 26,547,787 SECP REIT Registration Fee PKR 1,000,000 1,000,000 CDC - Fresh Issue Fees 0.16% 35,579,200 CDC - Annual Listing Fees PKR 67,500 67,500 SECP IPO Application Processing Fee PKR 200, ,000 Shariah Advisory PKR 350, ,000 Legal Advisory and Documentation PKR 6,500,000 6,500,000 Trustee s Legal Advisory for REIT PKR 800, ,000 Rating Agency Fee PKR 800, ,000 Annual Ground Rent and Sub Lease fee PKR 182, ,420 Valuer Fee PKR 600, ,000 Total 239,660,993 The above expenses are indicative under various heads. These may be re-allocated with the various heads. However, the total shall not exceed PKR 208,576,936/-. Page 49 of 104

52 PART 6 6 HISTORY, PROSPECTS AND RISK FACTORS 6.1 BRIEF PROFILE The Mangers of DOLMEN CITY REIT Arif Habib Dolmen REIT Management Limited Arif Habib Dolmen REIT Management Limited AHDRML (formerly Arif Habib REIT Management Limited) is established with the objective to launch REIT Schemes and provide REIT Management Services in accordance with REIT Regulations. The company is one of the first REIT management companies to incorporate in Pakistan. It was launched as a public limited company on April 08, 2009 under Companies Ordinance, 1984 and registered with SECP under the NBFC Rules, The combined experience of its Management and Leadership from the Sponsors and Board of Directors enables AHDRML to carry out efficient REIT Management operations. AHDRML aspires to develop the REIT industry in Pakistan with multiple projects in the pipeline Sponsors Arif Habib Group With its entrepreneurial spirit and passion to undertake business projects that are transformational in nature, the Arif Habib Group (AHG) has built prosperous businesses in the areas of fertilizer, financial services, cement, steel, energy/wind power and real estate amongst others. AHG is amongst the eminent corporate groups of Pakistan and is in the process of expanding business collaborations around the world. Over the last few years, the Group has diversified into emerging business areas contributing notably to the Pakistan s economy. The group has the ability to forge and leverage from strong partnerships. Over the years some leading names such as Mitsubishi, Metal-One Corporation, MCB Bank, Fatima Group, Al Abbas Hum Group and Dolmen have partnered with the Arif Habib Group. Following are the companies of Arif Habib Group: Arif Habib Corporation Limited Fatima Fertilizer Company Limited Power Cement Company Arif Habib Commodities (Pvt.) Limited Name of Companies Pakarab Fertilizers Limited Arif Habib Limited Sachal Energy Development (Pvt.) Limited Arif Habib DMCC Javedan Corporation Limited Arif Habib Consultancy (Pvt.) Limited Aisha Steel Mills Limited Arif Habib Dolmen REIT Management Limited Dolmen City Project MCB Arif Habib Savings Page 50 of 104

53 Performance of Arif Habib Group Companies: Arif Habib Corporation Limited FY12 FY13 FY14 Paid up capital (PKR mn) 4,125 4,538 4,538 Equity (PKR mn) 24,245 24,685 25,751 Profit After Tax (PKR mn) 4,254 1,366 2,306 Break up value per share Earnings per share Rate of Profit / Dividends Paid 20%-10% B 25%-D 25%-D Arif Habib Limited FY12 FY13 FY14 Paid up capital (PKR mn) Equity (PKR mn) 1,096 1,343 2,012 Profit After Tax (PKR mn) Break up value per share Earnings per share Rate of Profit / Dividends Paid 30%-11.1%B 30%-10% B 50% - D Fatima Fertilizer Company Limited CY12 CY13 CY14 Paid up capital (PKR mn) 21,000 21,000 21,000 Equity (PKR mn) 28,948 32,759 36,757 Profit After Tax (PKR mn) 6,111 8,022 9,258 Break up value per share Earnings per share Rate of Profit / Dividends Paid 20% D 25% D 27.5% D Pakarab Fertilizers Limited CY12 CY13 6mCY14 Paid up capital (PKR mn) 4,500 4,500 4,500 Equity (PKR mn) 7,932 6,200 6,288 Profit After Tax (PKR mn) (240) (1,825) 27 Break up value per share Earnings / Loss per share (0.53) (4.06) 0.06 Rate of Profit / Dividends Paid 49% SD - Power Cement Limited FY12 FY13 FY14 Paid up capital (PKR mn) 3,657 3,657 3,657 Equity (PKR mn) 1,125 1,495 1,429 Profit After Tax (PKR mn) (74) Break up value per share Earnings / Loss per share (0.20) Rate of Profit / Dividends Paid Page 51 of 104

54 Javedan Corporation Limited FY12 FY13 FY14 Paid up capital (PKR mn) Equity (PKR mn) 4,743 5,454 6,903 Profit After Tax (PKR mn) (336) Break up value per share Earnings / Loss per share (5.78) Rate of Profit / Dividends Paid % at Par RS Aisha Steel Mills Limited FY12 FY13 FY14 Paid up capital (PKR mn) 2,680 2,704 2,710 Equity (PKR mn) 2,998 2,252 1,905 Profit After Tax (PKR mn) (86) (746) (347) Break up value per share Loss per share (0.32) (3.15) (1.62) Rate of Profit / Dividends Paid MCB - Arif Habib Savings FY12 FY13 FY14 Paid up capital (PKR mn) Equity (PKR mn) 1,282 1,273 1,354 Profit After Tax (PKR mn) Break up value per share Earnings per share Rate of Profit / Dividends Paid 22.5%D 25%D 27.5%D Dolmen Group The Dolmen Group is one of Pakistan s leading real-estate groups engaged in the development, construction and management of prime commercial real-estate. The group comprises of a) International Complex Projects Limited, b) Dolmen Private Limited, c) Dolmen Real Estate Management (Pvt) Limited, and d) Al Feroze (Pvt) Limited. Since its inception in 1984, Dolmen has been the transcendent developer of quality real estate in the country, continually setting new standards of excellence while expanding its portfolio and pushing the implementation of architectural distinction and experiences with every new project. The Group currently owns and manages the largest portfolio of shopping malls in the country which includes Dolmen City Mall, Dolmen Mall Hyderi and Dolmen Mall Tariq Road, Karachi. Dolmen has redefined the Pakistani shopping experience. With the creation of major shopping malls across Karachi that attract a multitude of local and international retail brands and eateries, the Dolmen Group has pioneered organized retail in the country. By establishing secure, superior spaces that merge the best in retail and entertainment, Dolmen s contribution goes beyond simply reshaping Karachi s shopping culture Shareholding Pattern Page 52 of 104

55 Arif Habib Dolmen REIT Management Limited is jointly held in the ratio of 50%:50% by the Arif Habib Group and the Dolmen Group. The joint ownership provides the RMC with financial and operational synergies to carry out effective REIT Management services. Shareholding Pattern S. No. Name Designation # of shares Value of Shares at Par % shareholding 1 Muhammad Arif Habib Shareholder/Sponsor/Promoter 3,800,000 38,000, % 2 Nadeem Riaz Shareholder/Promoter/Director/Promoter 10,000, ,000, % 3 Muhammad Ejaz Shareholder/Promoter/Exe-Director % 4 Nasim Beg Shareholder/Promoter/Director % 5 Asadullah Khawaja Shareholder/Promoter/Director % 6 Abdus Samad A. Habib Shareholder/Promoter/Director 6,199,994 61,999, % 7 Syed Yawar Abbas Jilani Shareholder/Promoter/Director/5 years exp % 8 Qamar Hussain Shareholder/Promoter/Director/Independent % 20,000, ,000, % Sponsors Profile Mr. Arif Habib - Chairman, Arif Habib Group Mr. Arif Habib is the Chief Executive of Arif Habib Corporation Limited. He is also the Chairman of Pakarab Fertilizers Limited, Fatima Fertilizer Company Limited, and Arif Habib DMCC Dubai. He also serves as a Director in various companies including Sui Northern Gas Pipelines Limited. Mr. Arif Habib has been the elected President/Chairman of Karachi Stock Exchange six times and was a Founding Member and Chairman of the Central Depository Company of Pakistan Limited. He has served as a Member of the Privatization Commission, Board of Investment, Tariff Reforms Commission and Securities & Exchange Ordinance Review Committee. Over the years he has been nominated on the Board of Directors of a number of companies by the Government of Pakistan. Mr. Habib participates with significant dedication in welfare activities of different organizations. To quote a few, he remains one of the trustees of Fatimid Foundation and Memon Health & Education Foundation as well as a director at Pakistan Centre for Philanthropy and Karachi Education Initiative. Mr. Nadeem Riaz - Chairman, Dolmen Group Mr. Nadeem Riaz has experience of over 30 years in the real estate market. He has developed and managed renowned and award winning residential, commercial and retail projects. He is a pioneer in developing state of art retail shopping malls in Pakistan, which transformed the dynamics of the retail industry. He also leads the mall management industry through his diversified skills in facilities management, retail management and leisure retail development. Mr. Riaz is the Chairman of Dolmen Group and is also a member of both International Council of Shopping Centers (ICSC) and Middle East Council of Shopping Centers (MECSC). He is serving as a non-executive director at Arif Habib Dolmen REIT Management Limited. 6.2 DOLMEN CITY PROJECT Business Case Evolving Trend Page 53 of 104

56 The heavy contribution of the services sector to Pakistan s GDP signifies a broad consumer base with growth in income and subsequently purchasing power. Within the services sector, the wholesale and retail trade sector has gained vast momentum in the past decade. Major office related employment in Pakistan is concentrated in the finance, professional and business services sectors creating demand for smart, secure and modern office spaces. The cost of land and construction under the current erratic market conditions however poses a significant cost challenge to organizations in this regard. Demand is now focused on quality, value for money rental accommodation at decentralized locations. Increasing urbanization, traffic congestion, parking shortages and central business district CBD saturation has created a need for mixed-use developments that provide a one-stop solution to address commercial, leisure and business needs. Concept Identification Shopping malls provide an assortment of stores and merchandise at one location combining shopping with leisure. Not only do they provide an inexpensive form of entertainment but also make a large intangible contribution to the surrounding community and trade area. As Pakistan s retail consumption becomes more composite, it needs a transition from small retail clusters to big box stores and shopping malls. Awareness stemming from foreign travel and social influences has attracted an array of international brands. Resultantly, international standards modern real estate developments are needed to accommodate these brands. The gradual evolution started in the retail industry with the inception of big box chains (like Metro, Makro and Hyperstar). This was followed by new supply of malls built to meet international standards with adequate parking, well planned circulation, comprehensive building management systems and centralised amenities. Seizing the Opportunity Having closely observed the commercial evolution, the need for a lifestyle development to meet retail and office space requirements was identified as an opportunity and the Dolmen City Project emerged as Pakistan s first international standard mixed use development PROJECT COMPONENTS Dolmen City, located at the scenic coastline of Karachi integrates multiple components catering to the social and commercial needs of the city. It has five components: Harbour Front: Nineteen storey state-ofthe art Office building; with a built up area of approximately 270,273 square feet Dolmen City Mall: Multi storey regional mall of international standards with a built up area of more than 1.29 million square feet Executive Tower: Sea-facing multi storey office building (Not part of the REIT Scheme); and Envisaged (Tower A and Tower B): Two towers of thirty five stories each to accommodate hospitality and office space (Not part of the REIT Scheme) Page 54 of 104

57 6.3 DOLMEN CITY REIT REIT Objective Arif Habib Dolmen REIT Management Limited (AHDRML, the REIT Management Company) proposes inclusion of only the Harbour Front and the Dolmen Mall (together referred to as the subject real estate); in a Perpetual; Rated; Listed; Closed end; Shariah Compliant; Rental REIT scheme, with the objective of generating rental income for Unit holders. The REIT Scheme may also generate gains for the Unit holders from selling the real estate or parts thereof, with prior written approval from the Commission (Securities & Exchange Commission of Pakistan or the SECP ). The subject real estate has been approved by the SECP for inclusion in the REIT scheme under Regulation 6 of the repealed REIT Regulations 2008 (now REIT Regulations 2015) vide letter no. SCD/PRDD/AHDRML/DCPK/2014/05, dated July 11, SECP has granted Approval of Name of Scheme and Trustee, Business Plan and Trust Deed under Regulation 7 of the repealed REIT Regulations 2008 (now REIT Regulations 2015). Page 55 of 104

58 6.3.2 REIT Property Details Specifications S. No. Real Estate area description Built up Area Lettable Area (square feet) (square feet) 1 Lower Basements 186,153-2 Upper Basements 274,285 5,585 3 Ground floor 241, ,928 4 Mezzanine floor 19,879-5 First floor 275, ,156 6 Second floor 272, ,497 7 Plant and Transformer Rooms Third floor 27,667-8 Floors 3 to , ,963 Total 1,567, ,129 The Harbour Front Salient features State-of-the-art Security System The building is monitored 24x7 via a digital CCTV system, while all access points of the building including lobbies and parking areas are being controlled via speed-gates, parking barriers and highly trained personnel. Integrated Building Management System (IBMS) All sub-systems of the complex including Heating, Ventilation and Air-conditioning HVAC, Health & Safety (Fire, Access Control, CCTV), Mechanical, Electrical, Elevators, etc. are controlled by the country s first truly 'Integrated Building Management System'. This system enables operators to achieve the maximum degree of energy management, while giving a high degree of control over all operational aspects of building in a unified manner. Fibre-Optic Communication System The building is equipped with an in-house fibre-optic network ensuring high-bandwidth/highavailability, end-to-end fibre optic data connectivity. The building infrastructure accommodates all high-demand applications required by the tenant e.g. Video Conferencing. Voice Data Infrastructure The building has a Tier-2 data center with a capacity to be scaled to a Tier-3 facility. This data centre hosts all the building sub-systems. The building also has a dedicated Optical Network Unit to provide maximum flexibility and reliability catering to all kinds of voice circuits required by the tenants. Page 56 of 104

59 Uninterrupted Power Supply Uninterrupted power supply is ensured via a continuous system of power generation. Centrally Air-Conditioned The building is centrally air conditioned with IBMS climate controlled system. Specific provisions have also been made for uninterrupted server room air conditioning complete with back up facilities. Centralized Mail Room and Cargo Delivery Area The building is equipped with a centralized mail room and cargo delivery area. Mail collections and cargo deliveries are received at one point to avoid unauthorized access to the tenant offices and ensure the safety and convenience for the building occupants. National Fire Protection Association (NFPA) Compliant Fire Alarm/Suppression System Each tenant floor has its own integrated fire alarm and fire suppression system consisting of smoke detectors, voice evacuation system, sprinkler system, smoke extraction system and two fireproof exit doorways to stair ways. Reserved Tenant and Visitor Parking Facility The Harbour Front s parking is especially managed and maintained for the occupants of the building. The parking area is fully illuminated, fire-controlled and access to the reserved parking area is filtered by means of electronic vehicle tags. Valet Parking Facility Valet parking is available for tenants and authorized visitors. High-Speed Elevator Access to tenant floors is via six high-speed, large capacity Mitsubishi elevators. Direct Access to the Food court & Shopping Mall Direct access is available to Dolmen Mall Clifton through a secure dedicated entrance at Level 2. Fact sheet Operational Since April 2008 Built-Up Area 270,273 SFT. Leasable Area (excluding 300 sq. ft. for TCS in upper basement and 5,581 sq. ft. for Summit Bank on Ground Floor; which are part of Harbour Front) 250,963 SFT. Total Floors (excluding 1 mezzanine level on 19 th floor) 19 Office Floors 17 High Speed Elevators 6 Page 57 of 104

60 The Dolmen Mall Salient features Tenancy Mix: Retails Outlets: Special consideration has been given to the tenancy mix at Dolmen Mall Clifton. An effective tenancy mix ensures that the mall has the right combination of outlets with the right placement to enhance the shopping experience for its patrons. Anchors Stores: Apart from 130 retail outlets, the mall has strategically placed multiple departmental and anchor stores which attract a large footfall and maximize shopper circulation throughout the mall. F&B Outlets: The mall has over 30 different options in the food & beverages category, which includes coffee shops, diners, fast food chains, dessert shops and fine dining restaurants. Prominent retail outlets in the Mall include Debenhams, Mango, Toni & Guy, Charles & Keith, Next, Nine West, Timberland, Mothercare, Khadi, Hub and Jafferjees. Most prominent anchor tenant in the Mall is Hyperstar. Prominent F&B outlets in the Mall include The Fat Burger, Johnny Rocket, Gun Smoke, Burger King, Espresso, Gloria Jeans, Noodle House, PappaRoti, McDonalds and Bombay Chowpatti. Spacious walkways and atriums: The layout of the mall not only ensures a smooth pedestrian traffic flow, but also provides shoppers with pleasant open atriums which frequently host brand activation events. Amusement Centres Two family amusement centres are available at the mall including Sindbad s Wonderland and KidzDunya. Handicap accessibility The entire shopping mall is accessible by handicapped shoppers. Special measures have been taken in this regard which include dedicated car parking spaces, ramps, wheel chair accessible toilets, large elevators and moving walkways. Multi-level basement and surface parking A sophisticated car parking management system is installed at the multi-level basement cark park to assist visitors. Page 58 of 104

61 Plant & Equipment Utilities and sub-systems supporting the Dolmen City complex comprise of: plant & equipment for Power Generation, Heating Ventilation and Air conditioning HVAC, Security, Health & Safety (Fire, Access Control, CCTV), Mechanical, Electrical, Elevators, etc. Operational Since November 2011 Built-Up Area 1.29 Million Sq. Ft. Leasable Area (including 300 sq. ft. for TCS in upper basement and 5,581 sq. ft. for Summit Bank on Ground Floor; which are part of Harbour Front) Footfall (Approx. Per Annum) 559,166 Sq. Ft. 9 Million Dept. / Anchor Stores 7 Retail Outlets 127 F & B Outlets 23 Amusement Centre 2 Valuation of Real Estate According to the REIT Regulations, the fair market value determination of the real estate must be based upon at least two prescribed approaches. The approaches are: Cost Approach Sales Comparison Approach; and Income Capitalization Approach The subject real estate has been valued by a Pakistan Bank s Association (PBA) approved panelist - National Engineering Services Pakistan (Pvt.) Limited NESPAK in November The Valuation report can be downloaded from: The Valuer used all prescribed approaches to value the real estate and has arrived at the following valuation: Value of Real Estate assessed by NESPAK (figures rounded to nearest decimal place) PKR Cost Approach 18,161,000,000 Sales Comparison Approach 51,400,000,000 Income Capitalization Approach (Valuer s assessment) 43,208,000,000 Income Capitalization Approach (On project rentals) 33,362,000,000 Cost Approach: The fundamental premise of the cost approach is the estimated present cost of construction plus land value of real estate. It provides bases for determining replacement value for properties with no readily available comparison; A shortcoming of this approach to valuation is that it does not take into account the loss of income during construction and till the time project achieves desired occupancy. NESPAK has assessed the following value of the project based on cost approach: Page 59 of 104

62 Value of Real Estate by Cost Approach Rate Value (PKR) (PKR) Cost of Construction - Shopping Mall 1,297,407 9,000 11,700,000,000 (per sq. ft.) Cost of Construction - Harbour Front (per 270,271 7,000 1,900,000,000 sq. ft.) Land Value (per sq. yd.) 15, ,000 4,561,000,000 Total Value of the proposed Real Estate(rounded to nearest hundred 18,161,000,000 million) Sales Comparison Approach: The Sales Comparison Approach (SCA) compares the subject property characteristics with those of comparable properties which have recently been sold. The process adjusts the prices of comparable transactions according to the presence, absence, or degree of characteristics, which influence value. This approach is commonly used in real estate appraisals and it is closer to market value. It ignores the duration and cost involved in converting the property in cash. Many a times there is no readily comparable property available to use this approach. As such, there is presently no similar size or scale real estate transaction in Karachi for comparison with Dolmen City. Value of Real Estate by Sales Comparison Approach Rate per sq.ft. (PKR) Value (PKR) (square feet) Shopping Mall (net covered area) 836,969 55,000 46,000,000,000 Harbour Front (covered area) 270,271 20,000 5,400,000,000 Total Value of the proposed Real Estate (rounded to nearest hundred million) 51,400,000,000 Value based on Income Capitalization Approach (Valuer s Assessment): Income Capitalization is a valuation method used by appraisers and real estate investors to estimate the value of income producing real estate. It is based upon the premise of anticipation i.e., the expectation of future benefits. It converts anticipated cash flows into present value by "capitalizing" net operating income NOI (which accounts for the operating expenses on the property) by a market derived "capitalization rate". It is a better valuation benchmark for income producing real estates. Slight changes in the net operating income or in the capitalization rate make a huge difference in the true value of the property under valuation. NESPAK has arrived at the following value based on Income Capitalization Approach: Fair Value of Real Estate by Income Capitalization Approach Estimated Gross Rent (First Year) PKR 3,360,600,000 Operating Costs (as percentage of gross rent) 10% Estimated Net Operating Income (First Year) PKR 3,024,540,000 Industry Capitalization Rate (NOI/Sale value) 7% Total Value of the proposed Real Estate (rounded to nearest hundred million) PKR 43,208,000,000 Page 60 of 104

63 Value based on Income Capitalization Approach (on projected rentals): NESPAK has arrived at the following value based on Income Capitalization Approach: Fair Value of Real Estate by Income Capitalization Approach Income Statement Year 1 Revenue: Gross Rental Revenue PKR 2,475,044,876 Ancillary Income PKR 85,000,000 Sub-Total Revenue (A) PKR 2,560,044,876 Less Operating Costs: SECP Monitoring Fee PKR 23,025,540 Property Manager Fee PKR 148,502,693 Ancillary Income Collection Fee PKR 12,750,000 Insurance Expense PKR 64,076,070 Property Tax PKR 21,368,876 Other Recurring Expense PKR 5,479,077 Marketing Expense PKR 49,500,898 Sub-Total Operating Cost (B) PKR 324,703,154 NOI (A-B) PKR 2,235,341,722 Capitalization Rate 7% Total Value of the proposed Real Estate (rounded to nearest PKR 33,362,000,000 hundred million) Transaction Value: The subject real estate is proposed to be purchased as a single, mixed-use, managed property in the first REIT scheme of Pakistan. Its returns to Unit holders should be comparable to that available from the Capital Markets. The capitalization rates for rented properties in general are in the range of 4% to 6%, however due to the size of the property the valuer has used 7% as their basis to assess value using Income Capitalization Approach. The NOI ignores the size of the property and its relative valuation, therefore determining the capitalization rate which captures the true valuation is challenging. On application of 7% capitalization rate to the net operating income based on ICPL s last year financials (2014), we arrive at the property value of PKR 22 Billion. When we apply 7% cap rate to the projected NOI, we arrive at the property value of PKR 33 Billion. These are substantially lower than the assessment of valuer above, we have agreed with the seller at the property valuation of PKR 22 Billion based on 10% capitalization rate on the projected NOI REIT Structure Name of the Proposed Scheme As approved by the SECP vide its letter No. SCD/PRDD/AHRML/DCPL/2013/591 dated January 01, 2014, the proposed scheme shall be called Dolmen City REIT. Registered Address of RMC Arif Habib Centre, 23 M.T. Khan Road, Karachi Registered Address of the Trustee CDC House, 99-B, Block B S.M.C.H.S., Main Shahra-e-Faisal, Karachi Page 61 of 104

64 REIT Fund / Fund Size Dolmen City REIT will have fund size of PKR billion inclusive of transfer fee of approximately (PKR 237 Million). Tenure The Scheme is perpetual. However, the trust may be revoked by the Commission on the occurrence of the events stated under Regulation 40 of the Regulations or a replacement thereof. Dolmen City REIT aims to provide steady annual dividends through rental income from the REIT property (Dolmen City Mall and Harbour Front) with additional benefit to investors from capital appreciation of the real estate which shall be passed on to them if REIT sells the real estate or part thereof. Investors may also realize the appreciation in value by selling Units in the secondary market through the stock exchanges. Trustee Central Depository Company of Pakistan Limited has consented and approve by the Commission vide its letter no. SCD/PRDD/AHRML/DCPL/2013/591 dated January 01, 2014, for appointment as the Trustee of Dolmen City REIT. Property Manager Dolmen Real Estate Management (Pvt) Limited will be the Property Manager of Dolmen City REIT and will provide Facilities / Common Area Management, Leasing services and Marketing Services to the REIT Project. Valuer National Engineering Services Pakistan (Pvt.) Limited NESPAK (for a period of two years) Shariah Advisor Shariah Advisor of Dolmen City REIT is Mufti Ibrahim Essa who has completed his Darse Nizami (Masters in Quran and Sunnah) and Takhassus Fil Fiq (Specialization in Islamic Jurisprudence) from Jamiah Darul Uloom Karachi under the supervision of Mufti Muhammad Taqi Usmani. He is also a Teacher and Member of Darul Ifta Darul Uloom Karachi (September 2006 to date). Mufti Ibrahim Essa is also associated as Shariah Advisor with different Islamic Financial Institutions, an Islamic Bank, Mudarabas and an auditing Firm. He has written more than Two thousand Fatawa on different topics. The Key responsibilities of Shariah Advisor include Shariah advisory in finalization of all constitutive documents of REIT Scheme and tenancy/leasing agreements, Shariah advisory in relation to real estate takaful, accounting and to provide advice to the RMC for all REIT related matters from time to time and carry out Shariah compliance review of Dolmen City REIT every six months and issue certification thereon. Any dispute between Shariah Advisor and RMC in respect of any Shariah matter will be referred to Islamic Finance Department (IFD) of SECP for final resolution. Income Purification & Charity guidelines In an inadvertent circumstance that the Shariah Advisor discover any part of the Income of Dolmen City REIT non-shariah compliant, it will immediately be transferred into a dedicated charity account and subsequently (within one year) it will be paid to any recognised charitable institution on the advice of Shariah Advisor. Such income can be non-shariah compliant due to occupancy of leasable space by non-shariah compliant tenants as assessed by Shariah Advisor or investment of REIT Asset in non-sharia compliant securities or instruments. Page 62 of 104

65 DOLMEN CITY REIT WILL BE COMPLIANT WITH ANY SHARIAH RULES AND REGULATIONS PROMULGATED BY SECP AS APPLICABLE Acquisition of Real Estate A binding purchase agreement has been executed between Central Depository Company of Pakistan Limited, CDC being the Trustee of Dolmen City REIT and International Complex Projects Limited ICPL being the owner of the real estate for the purchase of Harbour Front and Dolmen Mall by the REIT scheme. The sale has been executed through the registry and microfilming of the Sub-Lease Deed with Sub-Registrar and Photo-Registrar; and the properties have been vested to the Trustee. Attornment of tenancy agreements will be undertaken between the existing tenants and the Trustee of the Dolmen City REIT, after the transfer of real estate in the name of Trustee. Key Service Providers Arif Habib Dolmen REIT Management Limited (the RMC) appoints the following parties, wherever required, to provide services to Dolmen City REIT under the REIT Regulations: Central Depository Company of Pakistan Limited (CDC) as the Trustee of the REIT scheme; NESPAK as the Valuer for the first two years; Dolmen Real Estate Management (Pvt) Limited as the Property Manager; JCR-VIS Credit Rating Co. as the Rating firm to provide fund stability rating; Mufti Muhammad Ibrahim Essa (Fazil Jamiah Darul Uloom, Karachi) as Shariah Advisor KPMG as auditors to Dolmen City REIT for the first year; and Central Depository Company of Pakistan Limited (CDC) as the Unit Registrar which has the necessary experience and capacity The project is covered through Takaful from Jubilee General Takaful Page 63 of 104

66 Dolmen City REIT Model Summary ICPL (In lieu of Real Estate, including 20% Unit holding as strategic investor) 70% Units RMC (Regulatory) 5% Units HNWIs, Inst. Investors (75%) General Public (25%) (IPO) 25% Units International Complex Projects Ltd. (ICPL) Harbourfront & Dolmen Mall via Sub-Lease Cash equal to 25% property value DOLMEN CITY REIT Cash Arif Habib Dolmen REIT Management Limited (REIT Management Company RMC ) Dolmen Real Estate Management (Pvt.) Limited Central Depository Company, CDC Mufti Muhammad Ibrahim Essa NESPAK Property Manager Trustee Shariah Advisor Valuer Feature of Dolmen City REIT 1) International Complex Projects Limited ICPL has sold the Harbour Front Building and the Dolmen Mall to the Trustee of Dolmen City REIT, Central Depository Company of Pakistan Limited, CDC. The sale has been executed through the registry and micro-filming of the Sub-Lease Deed with Sub-Registrar and Photo-Registrar; and the real estate have been vested to the Trustee; 2) The sale is partially in consideration of Units of Dolmen City REIT and partially in cash. 25% Units will be offered in the IPO phase through Book Building mechanism. 75% units have been issued to ICPL in lieu of real estate. Out of which 20% Units will be kept by ICPL as Strategic Investor in the blocked account as per Regulation 11(1) of the REIT Regulations % has been acquired by the RMC from ICPL which will also be kept in the blocked account, as per Regulation 11(1) of the REIT Regulations 2015; 3) Attornment of existing tenancy agreements in the name of Trustee has been done through letter/intimation of transfer of ownership to all tenants, after the real estate is transferred in the name of Trustee of Dolmen City REIT; Page 64 of 104

67 REIT Operations Unit Holders RMC DOLMEN CITY REIT Provides REIT Management Services Annual Rating Fee RATING AGENCY SHARIAH ADVISOR AUDITOR Dividends UNIT REGISTRAR RMC Fee TRUSTEE Fee Fee Fee Six monthly Valuation Rent Income RMC will operate the REIT Scheme as per the Trust Deed approved by SECP. Trustee will be custodian of funds and property title documents and will ensure distribution of income to the Unit holders. Property manager will provide and manage all facility management services and rent collection. Valuer will provide 6 monthly valuation of real estate to the SECP and RMC. Shariah Advisor check Shariah Compliance, Rating Agency Rate the Scheme and Auditor audit accounts Valuer Fee Asset Valuation PROPERTY VALUATOR PROJECT REAL ESTATE PROPERTY MANAGER Facility Management & Rent Collection Property Manager Fee The RMC will operate the REIT Scheme as per the Trust Deed approved by SECP. Property Manager will provide Common Area Management or facilities management services, Leasing and Marketing services and shall ensure rent collection. Valuer will update valuation of real estate every six months as per Regulations. The Trustee will be the custodian of funds, interests of Unit holders and property title documents. Page 65 of 104

68 6.3.4 Investment Policy REIT Fund The investment objective is to invest the REIT Fund to purchase the subject real estate approved by the SECP for inclusion in the REIT scheme, under Rule 6 of the repealed REIT Regulations 2008 (now REIT Regulations 2015), vide its letter No. SCD/PRDD/AHDRML/DCPK/2014/05, dated July 11, Surplus Cash The investment objective of the fund is to invest the surplus cash available to the REIT Scheme e.g. cash available after dividends distribution and capex in the following Shariah compliant asset classes: Shariah Compliant Asset Category Minimum Acceptable Rating Maximum Allocation %age of the total Bank Deposits AA (Double A) Long term 100% Government Securities 100% Dividend Distribution Policy Dolmen City REIT proposes to distribute at least 90% of its income as dividend to its unit holders on an annual basis Asset Replacement and Refurbishment The fixtures and plant & equipment supporting the Shopping Mall and Harbour Front building in Dolmen City REIT shall be replaced or refurbished as and when required or at the end of their useful life. Such requirements shall be intimated by the Property Manager to the RMC and shall also be highlighted in the annual project health survey. Under the Property Management Agreement PMA, the responsibility of maintaining the facility s common areas, plant & equipment supporting the project and associated revenue expenditures rests with the Property Manager. The revenue of Dolmen City REIT is adequate to cover foreseeable capital expenditure requirements. However in an event where after distribution of 90% profits, sufficient cash is not available, Bonus Units will be issued as per Regulation25(4) of the Regulations and subject to specific SECP approval Termination and winding up of the REIT Scheme REIT Scheme may be terminated as per the provisions of the Registered Trust Deed of Dolmen City REIT, or when the RMC sells all the underlying assets with the approval of SECP and consent of unit holders and as per Regulations 40 of the Regulations, which states: (1) A REIT Scheme may be extinguished by the occurrence of any one or combination of the following events,- (i) (ii) (iii) (iv) The REIT Scheme has reached end of its life as specified in the Trust Deed; or where the unit holders pass a special resolution as defined in the Ordinance, demanding revocation of the Trust; or where the RMC goes into liquidation, becomes bankrupt or has a liquidator appointed over its assets, or its license has been cancelled or does not hold valid license unless the management rights have been transferred in conformity with these regulation; or in the opinion of the RMC the REIT Scheme is not commercially viable or the purpose of the scheme cannot be accomplished or its objective cannot be achieved and the unit holders have consented to such an action through a special resolution as defined in the Ordinance: Page 66 of 104

69 (v) (vi) Provided that the RMC shall not vote at such meetings and their presence shall not be counted towards requisite voting for special resolution; in the opinion of trustee and on occurrence of any event or circumstances which, as per Trust Deed, triggers conditions that require the REIT Scheme to be revoked; or where the Commission deems it necessary to revoke the REIT Scheme and directs so to the Trustee or the RMC in the interest of unit holders. (2) RMC sells the underlying assets with the approval of SECP and consent of unit holders Accounting Policy International Accounting Standard (IAS 40), Investment Property, as defined in the standard, Investment property is property (land or a building or part of a building or both) held (by the owner or by the lessee under a finance lease) to earn either rentals or capital appreciation or both (IAS 40.5). Fair value model is used for Financial Reporting purpose, as allowed under the standard. According to IAS 40, Fair Value Method: Gains or losses arising from changes in the fair value of investment property must be included in net profit or loss for the period in which it arises. (IAS 40.35) Where a property has previously been measured at fair value, it should continue to be measured at fair value until disposal 6.4 RISK FACTORS Market Risk The Fund s NAV may react to the stock market movements. The investor could experience fluctuation in the unit trading price in response to factors such as economic and political developments, changes in interest rates and perceived trends in the stock and real estate market prices. Real Estate being the underlying asset, the volatility in NAV and resultantly in Unit prices is likely to be low, thereby giving reasonable assurance to investors of a steady return Credit Risk Credit risk is the risk of loss arising from default by a creditor or counterparty. In this case, default may occur due to the tenants non-payment of rent. Existing long-term tenancy agreements with corporations and business which possess strong brand names will be novated to Dolmen City REIT for the subject property. Further the existing tenancy agreements provide for the landlord to terminate agreement in case of non-payment of rent. Furthermore, all tenants of Harbour Front and the Shopping Mall are well-reputed, international, multinational and local brands/corporate, capable of honoring their obligations towards rental payments of the property Liquidity Risk By investing in the REIT Units, investor assumes the risk of not being able to sell the REIT unit without adversely affecting the price of the instrument. Listing on the Stock Exchanges where adequate liquidity is available, provides the investor a chance to sell the Units at a fair value. Page 67 of 104

70 Economic Risk The growth in real estate sector is largely dependent upon the economic conditions prevailing in the country. An economic slowdown in the country may adversely affect the growth and performance of the real estate sector. Pakistan s economy has rebounded from recent fluctuations and macro indicators are positive calling for a healthy recovery. Similar trends are expected in real estate, which usually has cycles with the present scenario being considered as a trough. Revenue of Dolmen City REIT is dependent on both offices and retail tenants who are capable of honoring their obligations towards rental payments. This diversifies the revenue pool and mitigates risk on of real estate performance Country or Political Risk Country or Political risk is the uncertainty of returns by the possibility of a major change in the political or economic environment of the country such as: Break down of law and order, war, disaster Any governmental actions, legislative changes or court orders restricting payment of rents or dividends or sale / transfer of property or imposition of taxes Expropriation of assets Pakistan s government has shown consistent resilience to threats arising from conflict or political pressures and is expected to keep Pakistan s asset safe. In case of transfer of power, the shift is expected to be smooth without causing any interruption in the process. Moreover, change in government is less likely to affect the revenue from property Substantial Discount Risk The Fund s market price may be valued at a substantial discount to its NAV Due to numerous factors ranging from the opportunity available to investors of closed end funds to book direct exposures in equity stocks which form part of the fund portfolio to the lack of demand of such funds, there is usually a trading discount on the fund s net asset value. However, historic global data suggests that on average, REITs have traded roughly at parity relative to asset value/nav over the last twenty plus years. Unlike prevailing closed end funds listed on the stock exchange, REIT offers exposure to an exclusive asset class (real estate), which otherwise is not available to investors through the stock exchange. Dolmen City REIT offers one of its kind investment opportunities and it is expected that the market price will trail its NAV Occupancy Risk Risk of occupancy levels dropping in the future There is a high switching cost involved for tenants to relocate. Moreover, Dolmen City carries strong brand image as the premier mall in Karachi with widespread interest in potential tenancy in the pipeline Natural Calamity Risk The risk that an earthquake, fire or any other natural disaster may affect the project The building structure of Dolmen City project is earthquake resistant to UBC 2B level (moderate to severe seismic risk, up to 7.5 on Richter scale). It complies with all structural standards and the project real estate assets are covered by comprehensive insurance Risk of Shariah Non-Compliance The Dolmen City REIT may become non-shariah compliant in future Page 68 of 104

71 RMC is committed to keep the fund (Dolmen City REIT) Shariah Compliant in perpetuity. Shariah review after every six months will be conducted by Shariah Advisor and all constitutive aspects of Dolmen City REIT will be ensured to remain Shariah compliant. Note: IT IS STATED THAT ALL MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING HAS BEEN INTENTIONALLY CONCEALED IN THIS RESPECT. Page 69 of 104

72 PART 7 7 CRITICAL SUCCESS FACTORS & INDUSTRY REVIEW 7.1 Dolmen City REIT Critical Success Factors Location & Area Profile of the Real Estate Dolmen City is at a prime location away from the congestion of the traditional business district with easy access to business and financial districts. The development is at the cusp of the affluent Clifton and Defense Housing Authority residential and commercial areas. The traditional business districts of Shahrah-e-Faisal, Saddar and Tariq Road are a 20 minute drive away while the financial district of I.I. Chundrigar Road is at approximately a 15 minutes drive. Dolmen City is located in Block 4 of Clifton, which is one of the older affluent areas of the city. The municipality of Clifton Cantonment has a population of about 80,000 residents and is located on the southwest Karachi bordering Saddar Town and the Port area. The Sea View beach, which is the most popular open air recreational area in Karachi, is adjacent to Dolmen City. Block 7 Block 8 Block 6 Block 9 Block 5 Block 1 Block 2 Block 3 Block 4 The primary trade area (2km radius) comprises various DHA phases and Clifton, both of which are affluent residential areas at either side to the project. Page 70 of 104

73 2km Boating Basin Bin Qasim Park Dolmen City Arabian Sea 2km Area Status Jurisdiction Income Clifton Nearly all built up, slowly commercializing; total area of Clifton is estimated at about 3,000 Acres. Cantonment Wealthy Defence Housing Authority Phases 1-7 are nearly 85% built. Total DHA Area, including Phase VIII, is about 8,000 Acres DHA Wealthy DHA Phase VIII Phase 8 (50% of entire DHA) is less than 25% built DHA Wealthy Planning & Development Page 71 of 104

74 The developers of Dolmen City have established a reputation for premium commercial and retail property development over the last 30 years. For commercial real estate to be successful a perfect mix of timely execution, quality development, optimal space utilization and attractive building features are integral to the planning stage. Harbour Front and Dolmen Mall perfectly combine these essential ingredients of success. Its architects are Arshad Shahid Abdulla (Pvt.) Limited, contractors are Paragon Constructors (Pvt.) Limited and property managers are Dolmen Real Estate Management (Pvt) Limited Multiple Options to Customers / Visitors Dolmen City offers multiple options to its visitors and customers ranging from retail and leisure, to business. The retail space is designed as a lifestyle centre offering the best of retail and a multipurpose leisure destination including restaurants, kids fun areas, brand activation and entertainment in the retail atriums, hypermarket and a distinctive design ambience conducive to casual browsing. The Harbour front offers a signature address for office space in Karachi. Customers benefit from adequate parking in the two basement levels including valet parking, easy access to the mall atriums, high speed elevators, state of the art security and building management systems. The Mall has 130 retail outlets, a multi-level departmental store, and a food court that accommodates nearly 1,200 customers High Profile Tenants Existing occupancy of the subject real estate is held by credible tenants (mostly international brands and multinational corporations) generating steady cash flow stream. Dolmen Mall Anchored by Hyperstar and Debenhams, Dolmen Mall Clifton has a strong mix of local and international brands including Mango, Next, Nike, Mothercare, Khadi, Nine West, Timberland, Toni & Guy and Charles & Keith. Total Outlets: 189 including vacant stores Spread over 3 storeys (Ground plus two) Occupancy: 94% Profile: As seen in the adjacent chart, the highest occupancy by tenant retail category is apparel (39%) while food (21%) is the runner-up. Other categories represent an even tenancy mix. Approximately 6% of the mall is currently vacant, which essentially comprises of an anchor store. Negotiations are underway with a leading international branch and the space is expected to be occupied in a short period. The mall provides a strong eco-network as it accommodates all top local and international brands currently operating in the city. The Harbour Front The current tenant portfolio of The Harbour Front boasts leading companies such as Engro Corp, Phillip Morris, Mitsubishi Corp., Procter & Gamble, City Bank, Q-Mobile, Chevron, Asia Petroleum and Byco. Page 72 of 104

75 Total: 17 lettable floors Current Occupancy: 100% Profile: The Harbour Front enjoys 100% occupancy from some of the top companies operating in the country. The largest single occupant is Engro with 32% while Philip & Morris, P&G and Byco occupy an equal share of 11% each. Unique security features and extensive screening make the building the top contender for multinational companies and those employing expats Attractive Yield The prevalent average rental yield for real estate investment in Pakistan is in the range of 4% to 6% of the property value. Dolmen City REIT will acquire the real estate at half the market value which results in an attractive yield of more than 9% for the Unit holders. Inclusion of this landmark real estate project in a REIT Scheme will generate investor interest and would be a trendsetter for Rental REIT Schemes Tenants Retention / Maintenance Strategy The property manager has been operating in the local retail real estate market for over 30 years and has developed long-term relationships with local and international retailers. This relationship is constantly reinforced with regular meetings and detailed discussions with regards to outlet performance, marketing plans and future real estate requirements. In addition to a continuous customer footfall tracking process, customer feedback is regularly obtained to develop an understanding of property performance and demand inclination. Regular brand activation events and promotional activities take place at the mall to increase customer footfall. A highly qualified maintenance team is responsible for overall operation and maintenance of the facility. Using an automated system to monitor the premises, maintenance is carried out at regular intervals to ensure that asset is impeccably maintained. Page 73 of 104

76 7.1.7 Experienced Property Manager Dolmen Real Estate Management (Pvt) Limited Dolmen Real Estate Management (Pvt) Limited is incorporated on March 17, 2015, and has acquired the management and operations of Dolmen (Pvt.) Limited. The company has deployed the best property management solutions available in the country. The company enjoys the goodwill of being the present property manager of Dolmen City project and provides a complete range of project management solutions to address client requirements from leasing and facilities management to project marketing. Professional Services Facilities Management Complete facility management of all back and front end services pertaining to operation of the building including housekeeping, security, operations, maintenance and IT. Leasing The RMC has appointed Dolmen Real Estate Management (Pvt) Limited for Tenant prospecting, designing retail tenancy mix, lease/contract management, legal affairs and casual leasing. Marketing The promotion function of the property, aims to increase the profile of the mall and increase footfall levels via events, promotions and PR generating activities. The company has an illustrious portfolio of clientele and is also the property manager of Dolmen Mall Tariq Road, Karachi and Dolmen Mall Hyderi, Karachi. Dolmen Real Estate Management (Pvt) Limited has an extensive team of professionals and internal collaborations with various subcontractors to ensure quality execution and business continuity while meeting international standards of property management. Dolmen Real Estate Management (Pvt) Limited - Team Mr. Nadeem Riaz Chief Executive Officer Mr. Nadeem Riaz has experience of over 30 years in the real estate market. He has developed and managed renowned and award winning residential, commercial and retail projects. He is a pioneer in developing state of art retail shopping malls in Pakistan, which transformed the dynamics of the retail industry. He also leads the mall management industry through his diversified skills of facilities management, retail management and leisure retail development. Mr. Riaz is the Chairman of Dolmen Group and is also a member of both International Council of Shopping Centres (ICSC) and Middle East Council of Shopping Centres (MECSC). Mr. Faisal Nadeem Chief Operating Officer Mr. Faisal is a director at the Dolmen Group, one of Pakistan s leading real estate organizations. He has been involved in the development, marketing and management of prime commercial and retail real estate projects including Dolmen Mall Clifton, currently the largest shopping center in Pakistan. Page 74 of 104

77 Mr. Faisal started his career at Al Feroz (Private) Limited as Manager Special Projects in 2008 and was associated with the development of Dolmen Mall Tariq Road, Dolmen Mall Hyderi, Dolmen Food Courts, The Harbour Front Office Tower and Dolmen Mall Clifton. He later served in the capacity of Director Leasing, for the Dolmen property portfolio. He is currently serving as the Chief Operating Officer at DPL property management, which manages over 1.5 million square feet of prime retail and commercial space. Mr. Motiur Rehman Head of HR Mr. Motiur Rehman has over 25 years of professional experience in the HR industry. He started his career with Glaxo Smith Kline and later moved to Unilever where he served for over 20 years leaving as a member of Senior Management. He is a Certified Master Trainer from the Management Training and Development Institute, Washington DC. He is also visiting faculty member of IBA and Iqra University. His core responsibilities include the design and implementation of Human Resource strategy, actions and milestones, monitoring of performance and attracting, developing and retaining, top talent. Mr. Sajid Ullah Sheikh Head of Finance Mr. Sajid Ullah Sheikh is member of the Institute of Chartered Accountants of Pakistan and has experience of over 10 years in finance. Before joining the Dolmen Group, he was associated with a US multinational manufacturing concern and prior to which he served at KPMG Taseer Hadi and Co. Chartered Accountants. He is responsible for the financial controllership, treasury management, and corporate finance. Mr. Zia Naqi Head of Systems and IT Mr. Zia graduated from NED University with a degree in Electrical Engineering and has professional experience spanning over 28 years with several industry certifications and trainings to his credit. He is an experienced Project Manager having handled several large IT, infrastructure and other technology driven projects. Page 75 of 104

78 7.2 Industry Review Market Analysis Pakistan s real estate market has consistently proven itself to be an inflation beating sector with increase in property values across the board despite economic fluctuations and their subsequent effect on traditional sectors. As seen in the chart below, the construction sector has generally shown an upward trend since onwards despite economic or political oscillation with a slight dip in 08/09 due to the global property market crash. The general view of real estate as a hedge against inflation and rupee depreciation coupled with the trend towards urbanization creates a real demand for real estate. At present 34% of Pakistan s population resides in urban areas and by year 2025 it is expected that about 50% of the country s population will be residing in cities, which has an impact on property demand and subsequently pricing across the board, i.e. housing, retail and commercial segments. Urbanization Trend (%) The analysis above is based on in-house study conducted by Arif Habib Dolmen REIT Management Limited. Page 76 of 104

79 7.2.2 Real Estate in Karachi Commercial Office Space in Karachi Major Office Districts Traditional CBD Areas I.I.Chundrigar Rd. Saddar Beaumont Rd. Satellite Business Districts Shahrah-e-Faisal Clifton Mai Kolachi / M.T.Khan Rd Shahrah-e-Faisal Saddar MT Khan Rd Clifton Clifton Dolmen City The traditional CBD area for Karachi is predominantly Saddar and I.I.Chundrigar Road. These areas are now nearing saturation and office space has moved to surrounding areas. The office space supply in Karachi thus saw decentralization with certain outlying areas emerging as satellite office business districts. Lack of quality new supply and severe traffic congestion in the traditional CBD has led to popularity of the secondary office areas such as M.T. Khan Road and Clifton. Quality office space started moving closer to relatively higher income populations (Clifton and DHA) which have seen generally better quality developments. Over recent years the trend of office space which was traditionally purchased has moved to rented accommodation in well managed and more secure buildings. The higher competition as new supply entered the market has resulted in slow movement and low take up in poorly designed buildings. In addition, the rising price of commercial real estate has created a demand for smaller offices with optimal space utilization. Security is now a major concern for office space occupants particularly for multinational companies and large local companies. In terms of basic security requirements, very few buildings in Karachi are cleared for occupancy by security screening of multinational companies with established developments such a Harbour Front at Dolmen City taking a major slice of the market remaining unchallenged. Recent developments in the area such as Bahria IV (at Gizri) in a bid to win tenants are offering highly negotiable rental terms to compete for survival. Page 77 of 104

80 Enclosed Retail in Karachi Enclosed retail in Karachi is currently in the evolving stage with most malls located in proximity to high density or high income residential areas (the area boxed in red represents the traditional retail CBD). The older malls around Saddar and Tariq Road were strategically located in centralized retail hotspots with a 360 degree catchment. More recent quality supply however is located in relation to the income stratification of the immediate catchments. The concept of commuting for shopping is ebbing away due to the general traffic congestion in the city. In response to this, it would be prudent for mall developers to offer enclosed retail at multiple locations, however only Dolmen has reacted to this sentiment with multiple sites at Clifton, Tariq road and Hydery (not depicted in this image) Having responded to market changes; Dolmen is also the only mall developer / operator to have evolved in terms of quality with the first and largest international standard enclosed retail development in Pakistan offered as part of this REIT scheme. Dolmen Mall has also retained the top spot in terms of performance and occupancy accommodating the top brands in Karachi as detailed in the tenancy profile section of this document. Independent to this exception, the retail market generally has displayed restrained growth with very few new brands entering the city. This is reflected in the development of malls which has virtually slowed to a standstill and also in terms of the performance of new supply. Case in point are recent entrants to enclosed retail located close to Dolmen City, namely Emerald Towers and Ocean Towers. Page 78 of 104

81 PART 8 8 FINANCIAL INFORMATION 8.1 AUDITORS REPORT UNDER SECTION 53(I) READ WITH CLAUSE 28 OF SECTION 2 OF PART I OF THE SECOND SCHEDULE TO THE COMPANIES ORDINANCE, 1984, FOR THE PURPOSE OF INCLUSION IN THE ISSUE FOR SALE DOCUMENT Page 79 of 104

82 Page 80 of 104

83 Page 81 of 104

84 8.2 UNIT BREAK-UP VALUE CERTIFICATE Page 82 of 104

85 8.3 AUDITORS CERTIFICATE ON ISSUED, SUBSCRIBED, AND PAID UP CAPITAL OF THE COMPANY Page 83 of 104

86 8.4 FINANCIAL PROJECTIONS DOLMEN CITY REIT - INCOME STATEMENT (PKR) DCR - Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Gross Rental Revenue 2,475,044,876 2,701,665,094 2,957,882,557 3,240,050,899 3,550,292,200 5,631,063,634 Ancillary Income 85,000,000 93,500, ,850, ,135, ,448, ,425,554 Monitoring Fees 22,237,000 22,237,000 22,237,000 22,237,000 22,237,000 22,237,000 Property Manager Fees 148,502, ,099, ,472, ,403, ,017, ,863,818 Ancilliary Income C.Fees 12,750,000 14,025,000 15,427,500 16,970,250 18,667,275 30,063,833 CAM Expense on Vacancies Insurance Expense 63,063,000 66,216,150 69,526,958 73,003,305 76,653,471 97,831,411 Property Tax 21,368,876 21,368,876 21,368,876 21,368,876 21,368,876 21,368,876 Ground Rent on Sub-Lease 182, , , , , ,420 Other Recurring Expense 5,821,873 6,404,958 7,046,441 7,752,172 8,528,584 13,744,998 Marketing Expense 49,500,898 54,033,302 59,157,651 64,801,018 71,005, ,621,273 NOI 2,236,618,117 2,448,597,483 2,688,312,758 2,952,467,804 3,243,079,699 5,195,575,559 RMC Fees 67,098,544 73,457,924 80,649,383 88,574,034 97,292, ,867,267 Trustee Fees 11,183,091 12,242,987 13,441,564 14,762,339 16,215,398 25,977,878 Preliminary Expense 47,932,199 47,932,199 47,932,199 47,932,199 47,932,199 - Fair Value Adjustment 1,111,835,842 1,167,427,634 1,225,799,016 1,287,088,966 1,351,443,415 1,724,822,313 Return on Surplus Cash 16,990 16,990 16,990 16,990 16,990 16,990 Net Income 3,222,257,116 3,482,408,996 3,772,105,619 4,088,305,188 4,433,100,116 6,738,569,717 Dividend 2,110,421,275 2,314,981,362 2,546,306,603 2,801,216,222 3,081,656,701 5,013,747,404 Retained Earnings 1,111,835,842 1,167,427,634 1,225,799,016 1,287,088,966 1,351,443,415 1,724,822, % 100% 100% 100% 100% 100% Dividend Yield 9.49% 10.41% 11.45% 12.60% 13.86% 22.55% Page 84 of 104

87 8.4.2 DOLMEN CITY REIT - BALANCE SHEET (PKR) DCR - Balance Sheet Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Assets Cash 283, , , , , ,165 Land & Building 22,236,716,835 22,236,716,835 22,236,716,835 22,236,716,835 22,236,716,835 22,236,716,835 Preliminary Expense 191,728, ,796,596 95,864,397 47,932, Fair Value Adjustment - Land and Building 1,111,835,842 2,279,263,476 3,505,062,491 4,792,151,457 6,143,594,872 13,984,551,734 Total Assets 23,540,564,636 24,660,060,071 25,837,926,888 27,077,083,656 28,380,594,872 36,221,551,734 Liabilities Payable to RMC 191,728, ,796,596 95,864,397 47,932, Un earned income Total Liabilities 191,728, ,796,596 95,864,397 47,932, Equities Paid-up Capital 22,237,000,000 22,237,000,000 22,237,000,000 22,237,000,000 22,237,000,000 22,237,000,000 Retained Earnings 1,111,835,842 2,279,263,476 3,505,062,491 4,792,151,457 6,143,594,872 13,984,551,734 Total Equity 23,348,835,842 24,516,263,476 25,742,062,491 27,029,151,457 28,380,594,872 36,221,551,734 Total Liabilities & Equities 23,540,564,636 24,660,060,071 25,837,926,888 27,077,083,656 28,380,594,872 36,221,551,734 Net Asset Value 23,348,835,842 24,516,263,476 25,742,062,491 27,029,151,457 28,380,594,872 36,221,551, DOLMEN CITY REIT - CASH FLOW STATEMENT (PKR) DCR - Cashflows Year 1 Year 2 Year 3 Year 4 Year 5 Year 10 Net Income 3,222,257,116 3,482,408,996 3,772,105,619 4,088,305,188 4,433,100,116 6,738,569,717 Non-cash preliminary Expense 47,932,199 47,932,199 47,932,199 47,932,199 47,932,199 - Unrealized (Gain)/Loss (1,111,835,842) (1,167,427,634) (1,225,799,016) (1,287,088,966) (1,351,443,415) (1,724,822,313) Funds Flow from Operations 'FFO' 2,158,353,473 2,362,913,561 2,594,238,802 2,849,148,421 3,129,588,900 5,013,747,404 Land (22,236,716,835) Building Dividend Paid (2,110,421,275) (2,314,981,362) (2,546,306,603) (2,801,216,222) (3,081,656,701) (5,013,747,404) Payment of Advances for Pexp. (47,932,199) (47,932,199) (47,932,199) (47,932,199) (47,932,199) - Cash flow from un earned income Paidup Capital 22,237,000, Chg in Cash 283, Cash Beginning - 283, , , , ,165 Cash End 283, , , , , ,165 Page 85 of 104

88 PART 9 9 MANAGEMENT OF THE COMPANY 9.1 POLICY MATTERS All policy-related matters are managed by the board of directors of the Arif Habib Dolmen REIT Management Limited (the Board ), headed by the chairman of the Board. At present, the Board comprises of seven (7) directors including the CEO. The directors are elected by the shareholders in accordance with the relevant provisions of the Ordinance. BOARD OF DIRECTORS OF THE COMPANY Name Designation Other Directorships Mr. Nasim Beg Chairman/Director MCB-Arif Habib saving and Investments Ltd Pakarab Fertilizers (Pvt.) Ltd Summit Bank Ltd Pakistan Opportunities Limited Arif Habib Corporation Ltd Safemix Concrete Products (Pvt.) Ltd Power Cement Limited (Formerly Al-Abbas Cement) Arif Habib Consultancy (Pvt) Ltd Aisha Steel Mills Limited International Complex Projects Ltd Al-Feroz (Pvt.) Ltd Mr. Nadeem Riaz Non Dolmen (Pvt.) Ltd Sindbad Wonderland (Pvt.) Ltd Executive/Director Amusement Services (Pvt.) Ltd Retail Avenue (Pvt) Limited Grove (Pvt.) Limited Mr. Asadullah Khawaja, Mr. Abdus Samad A. Habib Mr. Qamar Hussian Mr. Syed Yawar Abbas Jilani Mr. Muhammad Ejaz Non Executive/Director Non Executive/Director Independent Director Independent Director Chief Executive Summit Bank Ltd Arif Habib Corporation Ltd Pakistan Opportunities Limited Aisha Steel Mills Limited Arif Habib Equity (Pvt.) Ltd MCB-Arif Habib Savings & Investments Limited International Complex Projects Ltd Nooriabad Spinning Mills (Pvt.) Ltd Pakarab Fertilizers Ltd Pakistan Opportunities Limited Power Cement Limited (Formerly Al-Abbas Cement) Real Estate Modaraba Management Company Ltd Rotocast Engineering (Pvt.) Ltd Safemix Concrete Products Limited Javedan Corporation Limited Arif Habib Corporation Limited NIL Arcop (Pvt.) Ltd Arif Habib Corporation Ltd Aisha Steel Mills Ltd Javedan Corporation Ltd Dolmen Arif Habib Real Estate Services (Pvt.) Ltd Sachal Energy Development Ltd Power Cement Limited (Formerly Al-Abbas Cement) Page 86 of 104

89 9.2 OVER DUE LOANS There are no overdue loans (local or foreign currency) on the Company or its directors. 9.3 DIVIDEND RECORD OF ASSOCIATED COMPANIES LISTED ON STOCK EXCHANEG(S) Following is the dividend history of the listed companies in which directors are holding directorships: Dividend Jun 11 Jun 12 Jun 13 Jun 14 MCB-Arif Habib Saving and Investments Ltd. 15% 22.5% 25% 27.5% Summit Bank Ltd Arif Habib Corporation Ltd. 20% 20% 25% 25% Aisha Steel Mills Limited Javedan Corporation Ltd Pakarab Fertilizers Ltd. 49% Bonus KEY MANAGEMENT PROFILE Mr. Muhammad Ejaz - Chief Executive Officer Mr. Ejaz has over 20 years of experience in the fields of financial services and general management. Ejaz is a Certified Director and serves on the boards of several Arif Habib Group companies. He has served in senior positions at leading local and international banks and institutions including American Express, Engro, Emirates NBD, Union Bank, Faysal Bank and Saudi Pak Bank. Mr. Ejaz is a certified Financial Risk Manager (FRM) and holds an MBA degree from the Institute of Business Administration (IBA), Karachi where he is also a regular visiting faculty member Mr. Zia ur Rahim Khan - Chief Financial Officer & Company Secretary Mr. Zia has over 14 years of professional experience in the field of Management Sciences including Accounts, Finance, Secretarial Compliances, Audit and Administration. He has been allied with Arif Habib group since 2008, where he served on the leading positions in different group companies. Presently he is the CFO & Company Secretary at Arif Habib Dolmen REIT Management Limited, Pakistan Opportunities Limited and Dolmen Arif Habib Real Estate Services. Beside the working experience with this prestigious group, he was also associated on the senior positions at leading organizations both local and MNC. Mr. Zia holds an MBA degree from PAF-Karachi Institute of Economics and Technology with majors in Accounting and Finance Syed Adnan Ali Rizvi Head of Investments Mr. Adnan is a Fellow Member of the Association of Chartered Certified Accountants (FCCA) and holds an MBA in Banking & Financial Services from the Institute of Business Administration (IBA, Karachi). He has over 10 years of diversified experience in the financial services industry and had worked with Equities Research of MCB Arif Habib Savings (formerly Arif Habib Investments Management Limited) and Securities Markets Division of SECP. Prior to joining Arif Habib Dolmen REIT Management Limited, he was part of Faysal Bank Limited in the Investment Banking Group. His experiences include transaction structuring and project monitoring, financial modeling, due diligence and corporate relationship management Mr. Faraz Arif Head of Research & Marketing Mr. Faraz is a Masters in Management from University of Hertfordshire de Havilland Business School and holds Bachelors in Business Studies and Marketing from Middlesex University. Equipped with a strong research background of over 10 years in the real estate Page 87 of 104

90 sector in the United Kingdom and Pakistan, his experience includes being Head of Research at Colliers International and prior to joining Arif Habib Dolmen REIT Management Limited, he was Manager Transaction Advisory Services at Ernst & Young. Faraz has also served for 5 years at the United Kingdom s largest property renovation products and services provider, Block and Quail PLC (Kingfisher Group) as Lead Design Consultant specialising in residential refurbishment services. His experience includes real estate research, urban space review, strategy development and marketing Mr. Burhan Ali Head of Projects Mr. Burhan has over 16years of experience in the industrial sector where he managed capital projects, construction contracts and supply chain functions. Prior to joining Arif Habib Dolmen REIT Management Limited he was Advisor to the CEO of Aisha Steel Mills Limited and a part of Arif Habib Group s Private Equity arm Pakistan Private Equity Management Limited where he also monitored the construction progress of the Dolmen City project Mr. Sarwar Khan- Head of Risk & Compliance Mr. Sarwar is an ACCA Member and CFA level III candidate. He has over seven years of experience and previously was engaged with Deloitte Touché Tohmatsu, Pakistan Chapter. His role encompasses a wide range of matters including reviewing and evaluating compliance with the applicable legal and regulatory requirements, providing an independent and objective analysis of the Company s financial and operational status. He also oversees the governance processes M/s Junaidy Shoaib Asad, Chartered Accountants - Internal Audit M/s Junaidy Shoaib Asad, Chartered Accountants was established as Shoaib Asad & Co in 2007 and was later renamed as Junaidy Shoaib Asad (JSA).The firm delivers value added professional services to its clients including Assurance, Tax Consultancy, Financial Consultancy and Business Process Outsourcing. It is lead by its Partners and professional staff through its offices in Karachi and Lahore. The function is internally represented by Mr. Sarwar Khan. Page 88 of 104

91 9.5 ORGANIZATIONAL STRUCTURE HR & Remuneration Committee Board of Directors Audit Committee CEO (Muhammad Ejaz) Coordinator (Afshan Aziz) Internal Audit (Sarwar Khan) M/s Junaidy Shoaib Asad, Chartered Accountants CFO & Company Secretary (Zia ur Rahim) Head of Research & Marketing (Faraz Arif) Head of Investments (Adnan Rizvi) Head of Projects (Burhan Ali) Head of Risk & Compliance (Sarwar Khan) Manager Accounts (Azfar Altaf) Accounts Officer (Toufique Ahmed) Accounts Assistant (Muhammad Qamar) Admin Assistant (Fayyaz Shah) Office Assistants (Muhammad Zubair, Shakeel Yousuf, Ovais Usmani) 9.6 PROFILE OF DIRECTORS Mr. Nasim Beg Chairman Mr. Nasim Beg is the Chairman of the Company. He is also the founder Chief Executive of Arif Habib Consultancy and was the founder Chief Executive of MCB-Arif Habib Savings and Investments (formerly Arif Habib Investments Limited) and currently is its Vice Chairman. Mr. Beg serves on the Board of Summit Bank Limited, as well as on the Boards of several Arif Habib Group companies. He has extensive experience of over forty five years in industry and the financial sector, in both domestic and international markets. He is a member of the Non-Banking Financial Sector Reform Committee of the SECP and was part of its task force to develop the Voluntary Pension System. He was the founder Chairman of the SECP sponsored Institute of Page 89 of 104

92 Capital Markets and has also been a Member of the Prime Minister s Economic Advisory Council. Mr. Beg, a Fellow Member of the Institute of Chartered Accountant of Pakistan, qualified in 1970; he also holds a Bachelor s degree in Commerce from Karachi University Mr. Nadeem Riaz Non Executive Director Mr. Nadeem Riaz has experience of over 30 years in the real estate market. He has developed and managed renowned and award winning residential, commercial and retail projects. He is a pioneer in developing state of art retail shopping malls in Pakistan, which transformed the dynamics of the retail industry. He also leads the mall management industry through his diversified skills of facilities management, retail management and leisure retail development. Mr. Riaz is the Chairman of Dolmen Group and is also a member of both International Council of Shopping Centres (ICSC) and Middle East Council of Shopping Centres (MECSC) Mr. Asadullah Khawaja - Non Executive Director Mr. Asadullah Khawaja is currently the Chairman of Arif Habib Corporation Limited. He started his professional career with United Bank Limited where he served at various senior executive positions. Mr. Khawaja also held the additional charge as Chief Executive of Bankers Equity Limited (BEL) and National Investment Trust Limited (NITL). His foreign assignments include five years at Pakistan Embassy in London as Investment Counsellor. During his professional career he has served as Chairman Packages Ltd., Chairman Pakistan Industrial Credit and Investment Corporation (PICIC) and also the Executive Director of Pakistan Credit Rating Agency. Mr. Khawaja completed his Bachelor of Arts in 1964 from Forman Christian College, Lahore. Subsequently, he completed several local and foreign courses on banking, securities, industries management, investment analysis and portfolio management Mr. Samad A. Habib Non Executive Director Mr. Samad is currently the Chief Executive of Javedan Corporation Limited. Mr. Samad has more than 15 years of experience, including 9 years of working in the financial services industry at various senior management roles. He began his career with Arif Habib Corporation Limited (the holding company of Arif Habib group) as an Investment Analyst, following which he served the company in various executive positions including Executive Sales and Business Promotions, Company Secretary, Head of Marketing, etc. In September 2004, he was appointed the Chairman and Chief Executive of Arif Habib Limited. As Chairman he was responsible for the strategic direction of the company and was actively involved in capital market operations and corporate finance activities such as serving corporate clients, institutional clients, high net worth individuals, and raising funds for clients through IPO's, private placements etc. He resigned from that position in January Mr. Samad A. Habib holds a Master's degree in Business Administration from the Institute of Business Management (IoBM) Mr. Qamar Hussain Independent Director Mr. Qamar Hussain had served as the President of National Bank of Pakistan (NBP), the largest Commercial Bank of the country. He holds an MBA degree in International Business & Finance from McGill University, Montreal, Canada and has undergone extensive training in business leadership abroad. Mr. Hussain started his banking career from Bank of America N.T. & S.A., Pakistan in the year Prior to joining NBP in 2009, he worked with American Express Bank Limited as Senior Director Global Credit, New York and earlier as Senior Director Country Manager, Bangladesh. He had also been associated with the CHASE MANHATTAN BANK in Pakistan and USA Mr. Syed Yawar Abbas Jilani Independent Director Mr. Jilani is a renowned architect and has designed several landmark projects. He has been in practice for over 27 years and is a partner at Arcop, a firm, which he helped establish in Page 90 of 104

93 His background in Planning & Architectural design is extensive covering the fields of hospitality, institutional, educational, commercial, residential and religious projects. He is a founding member of PANI, People and Nature Initiative. He has remained on the Board of Governors of Indus Valley School of Art & Architecture and The National College of Arts. His involvement in the project extends from strategic planning, through to concept design and construction administration. A commitment to design, quality, innovation and delivery is illustrated in his completed projects Mr. Muhammad Ejaz Chief Executive Mr. Ejaz has over 20 years of experience in the fields of financial services and general management. Mr. Ejaz is a certified director and serves on the boards of several Arif Habib Group companies. He has served in senior positions at leading local and international banks and institutions including American Express, Engro, Emirates NBD, Union Bank, Faysal Bank and Saudi Pak Bank. Mr. Ejaz is a certified Financial Risk Manager (FRM) and holds an MBA degree from the Institute of Business Administration (IBA), Karachi. He is also a regular visiting faculty member at IBA, Karachi NUMBER OF DIRECTORS Pursuant to Section 174 of Ordinance, the Company shall not have less than seven (7) directors. At present the Board consists of 7 directors including the CEO. 9.8 QUALIFICATION OF DIRECTORS No person shall be appointed as a director of the Company who is ineligible to be appointed as director on any one or more of the grounds enumerated in Section 187 of the Ordinance or any other law for the time being in force. 9.9 REMUNERATION OF THE DIRECTORS As per article 64 of the Articles of Association of the Company, the remuneration of the Directors shall from time to time be determined by the Board of Directors subject to approval by Company in general meeting. The remuneration of a Director for performing extra services, including holding of the office of chairman, and the remuneration to be paid to any Directors for attending the meetings of the Directors or a Committee of Directors shall from time to time be determined by the Board of Directors BENEFITS TO THE PROMOTERS AND OFFICERS No amount of benefits have 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 INTEREST OF DIRECTORS IN THE COMPANY The directors performing whole time service to the Company may also be deemed interested in the remuneration payable to them from the Company. The directors may also be deemed to be interested, to the extent of any Units held by them in the DOLMEN CITY REIT and the dividends to be declared on their unit holding in the DOLMEN CITY REIT APPOINTMENT/ ELECTION OF DIRECTORS The directors shall, subject to the provisions of Section 178 of the Ordinance, fix the number of directors to be elected and the directors shall be elected to office by the members in general meeting. Page 91 of 104

94 The present directors of the Company were elected in the general meeting of the Company held on October 26, The next election of directors is due on or before October 26, VOTING RIGHTS The rights and privileges, including voting rights, attached to the Units of the Company are equal. In the case of any equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place, or at which the poll is demanded, shall have and exercise a second or casting vote AUDIT COMMITTEE / CONSTITUTION OF AUDIT COMMITTEE Auditors of the Company are appointed and their duties are regulated in accordance with Section 252 to Section 260 of the Ordinance. Accordingly, the Audit Committee of the Board has been formed to comply with the Code of Corporate Governance, which comprises of the following directors: i. Mr. Qamar Hussain (Chairman) ii. Mr. Abdus Samad A. Habib iii. Mr. Asadullah Khawaja 9.15 HUMAN RESOURCE AND REMUNERATION COMMITTEE The Company has formed Human Resource and Remuneration Committee comprising of the following members: i. Mr. Nadeem Riaz (Chairman) ii. Mr. Abdus Samad A. Habib iii. Mr. Muhammad Ejaz 9.16 INTERNAL AUDIT The Board has setup an effective internal audit function managed by suitable qualified 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 basis BORROWING POWERS OF DIRECTORS Subject to the provisions of the Ordinance, and pursuant to article 31 of the Company s article of association, the directors may from time to time at their discretion borrow or raise money and secure the payment of any sum or sums of money for the purposes of the Company on such terms and conditions as they may consider expedient provided that the amount for the time being remaining undischarged of moneys borrowed shall not at any time without the previous sanction of any Ordinary Resolution of the Company in general meeting exceed the issued share capital for the time being of the Company 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 articles of association, required to be exercised by the Company in general meeting. Page 92 of 104

95 9.19 INDEMNITY Pursuant to Article 122 of the Company s articles of association, every director, chief executive and other officer or servant of the Company shall be indemnified by the Company against any liability incurred by him in defending any proceedings, whether civil or criminal, except those brought by the Company against him, arising out of his dealing with affairs of the Company in which judgment is given in his favor or in which he is acquitted. Such indemnification shall be carried out also in respect of any related and reasonable costs, losses and expenses (including traveling expenses) which such officer or servant may incur by reason of any contract entered into or any act or thing done or omitted to be done by him as such officer or servant in the course of his duties and in particular, but without prejudice to the generality of the foregoing, proceedings under Section 488 of the Ordinance in which relief is granted to him, either wholly or partly, from his liability on terms specified by the Court, Authority, an officer authorized by Authority or the Registrar, as the case may be 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 INVESTMENT IN SUBSIDIARIES The Company has not sponsored nor acquired any subsidiaries nor has any resolution been passed for sponsoring or acquiring any subsidiaries REIT KEY RECURRING EXPENSES REIT - Annual Expense Monitoring Fees payable to SECP 0.10% % of initial REIT Fund per annum RMC Fees 3.00% % of annual Operating Income Trustee Fees 0.60% %of the annual Operating Income Property Manager Fee 6.00% % of Gross Rental Income 9.23 REIT OTHER RECURRING EXPENSES Other Recurring Expenses (PKR) with assumed growth of 10% per annum Auditor Fees 1,000,000 ICPL s existing Audit fee Shariah Review Fee 200,000 Legal retainer Fee 500,000 KSE - Listing Fees (Renewal) 611,711 reg32 ISE - Listing Fees (Renewal) 80,000 LSE - Listing Fees (Renewal) 262,662 CDC - (Renewal) 67,500 CDC schedule of fee Rating Agency Fee - Updating 800,000 Annual Project Health Survey Fee 1,500,000 Valuer Updating 800,000 PKR 0.2M per quarterly report Total 5,821,873 Page 93 of 104

96 9.24 FINANCIAL HIGHLIGHTS OF THE TRUSTEE Central Depositary Company of Pakistan Limited Un- audited Audited Balance Sheet Item Half Year Annual December 31, Jun-14 Paid up capital (PKR mn) Total Equity (PKR mn) 1,881 1,873 Surplus on Revaluation of Property & Equipment - net Total Assets 2,836 2,814 Break up value per share before surplus on revaluation Of P&E Half Year Half Year Profit & Loss Item December 31, 2014 December 31, 2013 Operating Income Profit Before Income Tax Profit for the Period Earnings per share BOARD OF DIRECTORS OF THE TRUSTEE S.no Name of Directors Designation 1 Mr. Hussain Lawai Director 2 Mr. Muhammad Hanif Jakhura Chief Executive Officer 3 Mr. Abid Ali Habib Director 4 Mr. Muhammad Sohail Director 5 Mr. Omar Khalil Malik Director 6 Mr. Ayaz Ahmed Director 7 Mr. Kamal Afsar Director 8 Mr. Muhammad Tariq Rafi Director 9 Mr. Muhammad Aslam Director 10 Mr. Ahsan Muhammad Saleem Director 11 Syed Majid Ali Director 12 Mr. Shahid Ghaffar Director Page 94 of 104

97 PART MISCELLANEOUS INFORMATION AUDITORS (REIT SCHEME) AUDITORS (RMC) BANKER TO ISSUE (BOOK BUILDING PORTION) BANKERS TO ISSUE (GENERAL PUBLIC PORTION) BANKERS TO THE COMPANY BOOK RUNNER THE BALLOTTER AND TRANSFER AGENT LEAD ADVISORS AND ARRANGER KPMG Taseer Hadi & Co. Chartered Accountants First Floor Sheikh Sultan Trust Building No 2 Beamount Road, Karachi Tel: Fax: Haroon Zakaria & Company Chartered Accountants Room 211, 2 nd Floor, Progressive Plaza Plot no 5-CL-10, Civil lines quarter Beamount road near Dawood Center, Karachi Summit Bank Limited United Bank Limited Habib Bank Limited Summit Bank Limited Allied Bank Limited Bank Al Habib Limited Habib Metropolitan Bank Limited Silkbank Limited Dubai Islamic Bank Pakistan Limited Bank Alfalah Limited Meezan Bank Limited Bank of Punjab Summit Bank Limited Aba Ali Habib Securities (Pvt) Ltd Room No. 419, Karachi Stock Exchange Building, Karachi Tel: Fax: info@abaalihabib.com Website: www. abaalihabib.com Central Depository Company of Pakistan Limited CDC CDC House, 99-B, Block B, S.M.C.H.S., Main Shahra-e-Faisal, Karachi Tel: (92-21) Fax: (92-21) Arif Habib Limited Arif Habib Center, 23, MT Khan Road, Karachi Tel: Fax: Page 95 of 104

98 Website: LEGAL ADVISOR TO THE COMPANY & THE ISSUE PROPERTY MANAGER PROPERTY VALUER REGISTERED OFFICE OF THE RMC SHARIAH ADVISOR Mohsin Tayebaly & Co., Advocates and Corporate Legal Consultants Barristers & Advocates 2 nd Floor, Dime Centre, BC-4 Block 9 KDA Scheme 5, Clifton, Karachi Tel: , Fax: contact@mtclaw.com.pk Website: Dolmen Real Estate Management (Pvt) Limited Dolmen Group 17 th Floor, the Harbour Front, Dolmen City, HC-3, Block-4, Marine Drive, Clifton, Karachi National Engineering Services Pakistan (Pvt). NESPAK 1-C, Block-N, Model Town Extension, Lahore 54700, Pakistan Tel: Fax: Arif Habib Dolmen REIT Management Limited Arif Habib Centre, 23 M.T. Khan Road, Karachi Website: Tel: Fax: reit@arifhabib.com.pk Mufti Muhammad Ibrahim Essa (Fazil Jamiah Darul Uloom, Karachi) STRATEGIC INVESTOR TRUSTEE International Complex Projects Limited 17 th Floor, the Harbour Front, Dolmen City, HC-3, Block-4, Marine Drive, Clifton, Karachi Central Depository Company of Pakistan Limited CDC CDC House, 99-B, Block B, S.M.C.H.S., Main Shahra-e-Faisal, Karachi Tel: (92-21) Fax: (92-21) Page 96 of 104

99 10.1. MATERIAL CONTRACTS / DOCUMENTS Sr. no Name of Agreement or Contract Between (Party A & B) A B Date Particulars 1 Valuer Agreement Arif Habib Dolmen REIT Management Limited (RMC) National Engineering Services Pakistan Limited 'NESPAK' (Valuer) 06-Feb-14 Agreement for Valuation of Real Estate of Dolmen City REIT on Six monthly basis as per REIT Regulations. 2 REIT Rating Agreement 3 Trust Deed Binding Purchase Agreement Property Management Agreement Sub-Lease Deed Shariah Advisory Agreement Arif Habib Dolmen REIT Management Limited (RMC) Arif Habib Dolmen REIT Management Limited (RMC) Central Depository Company of Pakistan Limited 'CDC' (Trustee) Arif Habib Dolmen REIT Management Limited (RMC) Central Depository Company of Pakistan Limited 'CDC' (Trustee) Arif Habib Dolmen REIT Management Limited (RMC) JCR-VIS Credit Rating Company (Rating Agency) Central Depository Company of Pakistan Limited 'CDC' (Trustee) International Complex Projects Limited 'ICPL' (Sponsor/ Property seller) Dolmen Real Estate Management (Pvt) Limited (Property Manager) International Complex Projects Limited 'ICPL' (Sponsor/ Property seller) Mufti Muhammad Ibrahim Essa 'Darul Uloom' (Shariah Advisor) 22-Jan Jan Apr May May Apr-15 Agreement for the fund stability rating of Dolmen City REIT on annual basis by the Rating Agency Constitutive Document / Deed for the establishment of Trust and covers the rights and obligations of Trustee and RMC, process of issuance of Units, determination of distributable income and extinguishment etc. in compliance to REIT Regulations Binding Agreement for the purchase of Real Estate by Dolmen City REIT from ICPL in partial consideration of issuance of Units and partial cash consideration Agreement that the Property Manager will be responsible for the Leasing Services, Marketing Services and Common Area Management (Facilities Management Services) Property Transfer / Title document Agreement to appoint Shariah Advisor to review REIT documentation, agreements, structure in compliance to Shariah and issue certification thereto Page 97 of 104

100 10.2. INSPECTION OF DOCUMENTS AND CONTRACTS Copies of the memorandum and articles of association, the audited financial statements, the Auditor s certificates, information memorandum and copies of agreements referred to in this Prospectus may be inspected during usual business hours on any working day at the registered office of the Company from the date of publication of this Prospectus until the closing of the subscription list LEGAL PROCEEDINGS Currently there are no legal matters pending in relation to the Company FINANCIAL YEAR OF THE COMPANY The financial year of the Company and the Fund commences on July1 st and ends on June30 th each year. Page 98 of 104

101 PART APPLICATION AND ALLOTMENT INSTRUCTIONS GENERAL INSTRUCTIONS Eligible investors include: a. Pakistani citizens resident in or outside Pakistan or persons holding two 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 outside 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 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 Copies of this Prospectus and applications forms can be obtained from members of KSE, LSE and ISE, the Bankers to the issue and their Branches, the Lead Managers and the Book Runner, and the registered office of the Company. The Prospectus and the Bidding Form can also be downloaded from the following websites: and and The applicants opting for scripless form of Units are required to complete the relevant sections of the application. In accordance with the provisions of the Central Depositories Act, 1997 and the CDCPL Regulations, credit of such Units 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 right to issue Units in physical form Name(s) and address (es) must be written in full block letters, in English and should not be abbreviated All applications must bear the name and signatures corresponding with that recorded with the applicant's banker. In case of difference of signatures with the bank and computerized national ID entity card (CNIC) or national identity card for overseas Pakistanis (NICOP) or passport both the signatures should be affixed on the application form 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-resident 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 gazette officer, councilor, 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 Issue and the applicant's banker (if different from the Banker to the Issue) at the Page 99 of 104

102 time of presenting the application. The attested photocopy will, after verification, be retained by the bank branch along with the application APPLICATIONS MADE BY INSTITUTIONAL INVESTORS 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 association or equivalent instrument/document. Where applications are made by virtue of power of attorney, the same should also be submitted along with the application. Any federal/provincial government gazette officer, councilor, bank manager, oath Commissioner and head master of high school in the country of applicant's residence can attest copies of such documents Attested photocopies of the documents mentioned in paragraph 8.1 must be produced for verification to the Banker to the Issue 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 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 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 submit attested copies of their CNICs/passport. The Units 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 where any amount is refundable, in whole or in part, the same will 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 application form, without interest, profit or return. Please note that joint application will be considered as a single application for the purpose of allotment of Units Subscription money must be paid by cheque drawn on applicant's own bank account or pay order/bank draft payable to one of the Bankers to the Issue in favor of account Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT General Public Account and crossed A/C PAYEE ONLY For the applications made through pay order/bank draft, it would be permissible 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 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 Units Applications are not to be made by minors and/or persons of unsound mind Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the application form Applicants should retain the bottom portion of their application forms as provisional acknowledgement of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of Units for which the application has been made. Page 100 of 104

103 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 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 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 Submission of Fictitious and multiple applications (more than one application by same person) is prohibited and such Application Money shall be liable to confiscation. ADDITIONAL INSTRUCTIONS FOR FOREIGN/NON-RESIDENT INVESTORS In case of foreign investors that are not individuals, applications must be accompanied with a letter on the applicant's letterhead stating the legal status of the applicant, place of incorporation and operations and line of business. A copy of memorandum of association or an equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copies of these documents can be attested by the bank manager in the country of applicant's residence Applicants may also subscribe using their Special Convertible Rupee Account (SCRA) as set out under the State Bank of Pakistan's Foreign Exchange Manual. BASIS OF ALLOTMENT The basis and conditions of transfer of Units to the General Public shall be as follows: a) Application for Units below the minimum value, which will be calculated as Strike Price x 500 Units shall not be entertained. b) Application for Units must be made for 500 Units or in multiple thereof only. Applications, which are neither 500 Units nor for multiple thereof, shall be rejected. c) Allotment/Transfer of Units to successful applicants shall be made in accordance with the allotment criteria/instructions disclosed in the Prospectus. d) Allotment of Units shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and / or the instructions by the Securities and Exchange Commission of Pakistan. e) Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all the data fields in the Application Form. f) The Company will dispatch Units to successful applicants through their Bankers to the Issue or credit the respective CDS accounts of the successful applicants (as the case may be). Page 101 of 104

104 BANKERS TO THE ISSUE Code No. Bank Code No. Bank 01 Allied Bank Limited 07 Habib Metropolitan Bank Limited 02 Bank Alfalah Limited 08 Meezan Bank Limited 03 Bank Al Habib Limited 09 Silk Bank Limited 04 Bank of Punjab 10 Summit Bank Limited 05 Dubai Islamic Bank Limited 11 United Bank Limited 06 Habib Bank Limited 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 Industrialist 05 Household 10 Others NATIONALITY CODE Code No. Name of country Code No. Name of country 001 U.S.A 006 Bangladesh 002 U.K 007 China 003 U.A.E 008 Bahrain 004 K.S.A 009 Other 005 Oman Page 102 of 104

105 PART BIDDING FORM OF ARIF HABIB DOLMEN REIT MANAGEMENT LIMITED (This space has been left intentionally blank) Page 103 of 104

106 PART SIGNATORIES TO THE PROPECTUS Signed, as required by section 57 of the Companies Ordinance, 1984 by: -sd Chairman/Director Nasim Beg -sd Non Executive Director Asadullah Khuwaja -sd Independent Director Qamar Hussian -sd Non Executive Director Nadeem Riaz -sd Non Executive Director Abdus Samad A. Habib -sd Independent Director Syed Yawar Abbas Jilani -sd Chief Executive Muhammad Ejaz Signed by the above in presence of witnesses: Witness 1 Witness 2 -sd- Name: Address: Dated: Place: -sd- Name: Address: Page 104 of 104

107 SUBMISSION OF FICTITIOUS AND MULTIPLE APPLICATIONS (MORE THAN ONE APPLICATIONS BY SAME PERSON) IS PROHIBITED AND SUCH APPLICATIONS' MONEY IS LIABLE TO CONFISCATION. INVESTMENT IN SECURITIES IS A HIGHLY RISKY BUSINESS. INVESTORS ARE, THEREFORE, ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THE PROSPECTUS ESPECIALLY THE RISK FACTORS BEFORE MAKING ANY INVESTMENT DECISION. DOLMEN CITY REIT APPLICATION FOR SUBSCRIPTION OF UNITS For the applicant(s) opting for credit of their account in the Central Depository Company of Pakistan Limited (Refer to instruction No.4 on the reverse hereof) SUBSCRIPTION DATE 12 June 2015 during banking hours Broker s Stamp & Code Units Delivery/Credit Options (Please Tick One) CDC Physical The Directors, Arif Habib Dolmen REIT Management Ltd Plot no. 23, M.T. Khan Road, Arif Habib Centre Karachi, Pakistan CDC PARTICIPANT / ACCOUNT HOLDER ID CDC INVESTOR ACCOUNT SERVICES ID OR SUB ACCOUNT NUMBER CDC INVESTOR ACCOUNT NO. HOUSE A/C NO. For Brokers KSE 01 LSE 02 ISE 03 Code 1) I/We apply for the following number of Units at Issue Price for the value indicated below: Banker's Stamp No. of Units Applied For Amount Payable in PKR Cheque/ Demand Draft/Pay Order No. 2) I/We agree to accept the same or any smaller number of units that may be allotted to me/us upon the terms as stated in the Prospectus. I/We authorize you to send the units to me/us pursuant to this application and if no Units or a smaller number of Units are allotted to me/us you are hereby authorized to return to me/us by cheque or other means my/our application money for the amount of Units not delivered by post at my/our risk to the address written below, or to the Banker to the Issue through which I/we have submitted this application. For Pakistanis Resident 01 For Bankers Bank Code Branch Code Application Serial No. Non-resident 02 3) DECLARATION I/We declare that: i) I am/we are national(s) of ; ii) I am/we are not minor(s); iii) I/We have not made nor have I/we instructed any other person(s)/institution(s) to make any other application(s) in my/our name(s) or in the name of any other person on my/our behalf or in any fictitious name; iv) I/We agree to abide by the instructions provided with this application and in case of any information given herein being incorrect I/we understand that I/we shall not be entitled to the allotment of Units if successful rather the applicationmoney shallbe liable to confiscation if this declaration proves to be incorrect at any time. Yours faithfully, Signature(s) a) b) 4) ALL DETAILS MUST BE WRITTEN IN B L O C K - L E T T E R S IN THE SPACES PROVIDED, LEGIBLY IN BLACK PEN a) Name in Full (as per CNIC) Mr. Ms. Mrs Co. Please Tick Father's/Husband's Name (as per CNIC) Identity Number (CNIC/ Passport/ Registration No.) Identity Number (NTN*) *INVESTORS ARE ENCOURAGED TO DISCLOSE THEIR NTN NUMBERS TO FACILITATE THE COMPANY TO CHECK STATUS OF THE UNITHOLDERS AS TAX RETURN FILER OR NON FILER FROM THE ACTIVE TAXPAYERS LIST (ATL) AVAILABLE ON THE WEBSITE OF FBR. PLEASE NOTE THAT REDUCED TAX RATE OF 10% APPLIES TO FILERS INSTEAD OF 15% FOR NON FILERS ON PAYMENT OF CASH DIVIDEND DECLARED, IF ANY, DY THE COMPANIES. Full Address Phone No., if any Occupation Code Muslim Non Muslim Bank Account No. Bank Name Branch Name & Address Additional Information - For Non-Resident Pakistanies and Foreign Investors Only Place of Issue of Passport Date of Issue of Passport (DD-MM-YYYY) Corporate Business Letter enclosed Yes No Nationality Code Country of Residence 5) FOR JOINT HOLDER, IF ANY b) Name in Full (as per CNIC) Mr. Ms. Mrs Co. Identity Number (CNIC/ Passport/ Registration No.) 6) DIVIDEND MANDATE (Optional): Mark tick [ ] in the appropriate boxes Yes [ ] No [ ] Incase the Applicant intends that if Units applied for are issued to him/it and the dividend declared by the scheme, if any, is credited directly in his/it bank account, instead of issue of dividend warrants, then please fill in the following boxes: Title of Account Account Number Bank Name Please Tick Branch Name and Address (TO BE FILLED IN BY THE APPLICANT S BANKER) Signature of the Applicant as per the Bank account 7) It is certified that the above-mentioned applicant(s) is/are maintaining account number as mentioned above at this bank branch and his/her/their particulars and signature(s) are correct and verified as per the bank's record and thier CNIC/Passport. It is further certified that only one application has been made in the name of the above account holder through this branch. We also confirm that the original CNIC/Passport has been seen by us. Note: In case the subscription money is paid through a bank other than the Bankers to the Issue (through pay order or bank draft), this certification shall be provided by the manager of the bank where the applicant maintains his/her bank account. SPECIMEN SIGNATURE(S) OF THE APPLICANT NAME OF THE APPLICANT IN BLOCK LETTERS (AS PER CNIC) Bank s Authorized Signatory Bank s Rubber Stamp SPECIMEN SIGNATURE(S) a) b) Bankers to the Issue's Provisional acknowledgement of application for Units of Dolmen City REIT Received from Mr/Ms/Mrs. application for Units/Certificates. Name of Bank Branch Code Application Serial No. IMPORTANT: (i) This slip must be retained by the Applicant ii) Please read instructions provided with this application Date of Receipt Signature & Rubber Stamp of Receiving Bank

108 GENERAL INSTRUCTIONS 1. Eligible investors includes: APPLICATION INSTRUCTIONS FOR INVESTORS a. Pakistani citizens resident in or outside Pakistan or Persons holding two 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 outside 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. 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. 3. Copies of the Prospectus and application forms can be obtained from the members of Karachi Stock Exchange Limited, and office of Lahore Stock Exchange Limited, Islamabad Stock Exchange Limited, the Bankers to the Issue and their branches, the Lead Advisors & Arrangers and the registered office of the RMC. The Prospectus and the application forms can also be downloaded from the website: & 4. The Applicants opting for scripless form of Units are required to complete the relevant sections of the application. In accordance with provisions of the Central Depositories Act, 1997 and the CDC Regulations, credit of such Units 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 Issuer reserves the right to issue Units in physical form. 5. Name(s) and address(es) must be written in full block letters, in English and should not be abbreviated. 6. All applications must bear the name and signature corresponding with that recorded with the applicant s banker. In case of difference of signature with the bank and Computerized National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) or Passport both the signatures should be affixed on the application form. 7. APPLICATIONS MADE BY INDIVIDUAL INVESTORS (i) (ii) In case of individual investors, an attested photocopy of CNIC (in case of RPs)/Passport (in case of NRPs and FIs) 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, Councilor, Oath Commissioner or Head Master of High School or bank manager in the country of applicant s residence. Original CNIC/Passport, along with one attested photocopy, must be produced for verification to the Banker to the Issue and the applicant s banker (if different from the Banker to the Issue) at the time of presenting the application. The attested photocopy will, after verification, be retained by the bank branch along with the application. 8. APPLICATIONS MADE BY INSTITUTIONAL INVESTORS (i) (ii) 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 Association or equivalent instrument / document. Where applications are made by virtue of Power of Attorney, the same should also be submitted along with the application. 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. Attested photocopies of the documents mentioned in 8(i) must be produced for verification to the Banker to the Issue 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. 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. 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 submit attested copies of their CNICs//Passport. The Units/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 where any amount is refundable, in whole or in part, the same will 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 application form, without interest, profit or return. Please note that joint application will be considered as a single application for the purpose of allotment of Units. 11. Subscription money must be paid by cheque drawn on applicant s own bank account or pay order/bank draft payable to one of the Bankers to the Issue Initial Public Offer for Sale of Units of CDC Trustee Dolmen City REIT General Public Account and crossed A/C PAYEE ONLY. 12. For the applications made through pay order/bank draft, it would be permissible 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. 13. The applicant should have at least one bank account with any of the commercial banks. Applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of Units. 14. Applications are not to be made by minors and/or persons of unsound mind. 15. Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the application form. 16. Applicants should retain the bottom portion of their application forms as provisional acknowledgement of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of Units for which the application has been made. 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. 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. 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. 20. Submission of Fictitious and multiple applications (more than one applications by same person) is prohibited and such applications money is liable to confiscation. ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON-RESIDENT INVESTORS 21. 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 business. A copy of memorandum of association or an equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copies of these documents can be attested by the bank manager in the country of applicant s residence. 22. Applicants may also subscribe using 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 Units multiplied by Issue Price. Application for Units below this total value shall not be entertained. 2. Application for Units must be made for 500 Units or in multiple thereof only. Applications, which are neither for 500 Units nor for multiple thereof, shall be rejected. 3. Allotment/Transfer of Units to successful applicants shall be made in accordance with the allotment criteria/ instructions disclosed in the Prospectus. 4. Allotment of Units shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Prospectus and/or the instructions by the Securities & Exchange Commission of Pakistan. 5. Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all data fields in the Application Form. 6. The Company will dispatch Units to successful applicants through their Bankers to the Issue or credit the respective CDS accounts of the successful applicants (as the case maybe). 7. BANKERS TO THE OFFER 9. OCCUPATION CODE Code Name of Banks Code Name of Banks Code Occupation Code Occupation 01 Allied Bank Limited 07 Habib Metropolitan Bank Limited 01 Business 06 Professional 02 Bank Alfalah Limited 08 Meezan Bank Limited 02 Business Executive 07 Student 03 Bank Al Habib Limited 09 Silk Bank Limited 03 Service 08 Agriculturist 04 Bank of Punjab 10 Summit Bank Limited 04 Housewife 09 Industrialist 05 Dubai Islamic Bank Limited 11 United Bank Limited 05 Household 10 Other 06 Habib Bank Limited In order to facilitate investors, United Bank Limited UBL is offering electronic submission of application (e-ipo) to its account holders. UBL account holders can use UBL Net banking to submit their application online via link Further, please note that online applications can be submitted 24 hours a day during the subscription period which will close at 12:00 midnight on June 12, OVERSEAS BANKERS TO THE OFFER 10. NATIONALITY CODE Code Name of Banks Code Name of Banks Code Name of Banks Code Name of Banks 01 n/a 06 n/a 001 U.S.A 006 Bangladesh 02 n/a 07 n/a 002 U.K 007 China 03 n/a 08 n/a 003 U.A.E 008 Bahrain 04 n/a 09 n/a 004 K.S.A 009 Other 05 n/a 10 n/a 005 Oman For further queries you may contact: RMC - Mr. Adnan Rizvi; P: +92 (42) ; E: adnan.rizvi@arifhabib.com.pk; Arif Habib Limited - Mr. Rafique Bhundi; P: +92 (21) ; E: rafique.bhundi@arifhabibltd.com

109 Appendix 1 Abridged Business Plan Dolmen City REIT

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125 Appendix 2 Abridged Valuation Report Dolmen City REIT

126

127

128

129

130

131

132

133

134

135

136

137

138