THE HUB POWER COMPANY LIMITED

CORPORATE GOVERNANCE

April 25, 2012

 THE HUB POWER COMPANY LIMITED

Board Room Protocol

1. COMPANY ORGANISATION

The Board to have a maximum of 15 members as follows:

• 12 elected Directors
• the Chief Executive;
• a nominated Director from the Government of Balochistan;
• a nominated Director from the National Bank of Pakistan ;

The Board shall have at least one and preferably one-third of the total members as
independent Directors.

The Chief Executive will then be the only company executive on the Board. He currently
has reporting to him the following company executives:

• Chief Financial Officer

• Chief Technical Officer;
• Company Secretary;
• Head of Internal Audit; (primary accountability is to Audit Committee)
• Senior Manager Human Resource & Public Relations

The role of the Chief Executive is set out in Appendix 1.

2. DIRECTORS' DUTIES

All Directors share collective responsibility for decisions of the Board and are expected
to participate in open and constructive debate. In this way differences of opinion and
approach will be exposed, aired and hopefully resolved in debate with colleagues.
Where such debate fails to achieve consensus the Board may choose to defer its
decision(s) to enable further clarification or consideration of key issues but as a last
resort the majority shall prevail. The views of dissenting Directors shall be formally
noted in the record.

Whilst it is not included in the Articles in furtherance of his duties as a Director of the
Company each Director may if he deems it necessary commission independent
professional advice at the Company's expense. Arrangements for this will be made by
the Company Secretary and Legal Manager. All Directors shall also have access to the
advice and services of the Company Secretary, who is responsible to the Board for
ensuring that Board procedures are followed and that applicable rules and regulations
are complied with.

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3. COMMITTEES OF THE BOARD

Article 88 of the Articles of Association states that the Directors shall designate from
among their number an Audit Committee and a Human Resource Remuneration
Committee. In addition there shall be an Operations Committee and a Corporate
Communications Committee. The constitution and terms of reference of these
committees are shown in Appendix 2, 3, 4, and 5 respectively.

The name of members of the Committees of the Board shall the disclosed in each
Annual Report of the Company.

The Chief Executive has formed a Management Committee to assist him in the
discharge of his responsibilities, the terms of reference of which are set out in Appendix
6. The Management Committee is not a committee of the Board.

Company Secretary shall be the Secretary of all the Committees.

4. DELEGATIONS OF AUTHORITY

The Board has ultimate responsibility for managing the Company and is the source of all
executive authority within the business. Matters which the Board reserves to itself for
consideration and approval are set out in Appendix 7.

A schedule setting out the financial and other authorities which the Board have
delegated to the Chief Executive is set out in Appendix 8 together with a guidance note
on the overall framework within which all delegated authorities operate. The Chief
Executive has responsibility for approving the secondary delegations from himself to
those reporting to him.

The Board will from time to time review and approve changes to principal business
processes and systems designed to secure appropriate internal control.

5. MEETINGS

The Board shall meet atleast four times during the year to consider the following:

i) review of progress and performance; approval of Annual Report and

Accounts and associated business;

ii) to consider performance and approve first quarter account;

iii) to approve the half year accounts, monitor performance and consider
policy matters and long term plans;

iv) to consider the performance for the current year approve the third quarter
accounts and budget for the following year;

In addition to the above the Board will hold such other meetings as are considered
appropriate.

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 Appendix 1
THE HUB POWER COMPANY LIMITED

The Role of the Chief Executive

The Company is run by its Board of Directors and its affairs are managed on a day to
day basis by the Chief Executive under the direction and control of the Directors.

In performing his task the Chief Executive is required to have a view both to the
protection and improvement of shareholders' value and to the longer term health of the
Company.

The Role of the Chief Executive is to:

(i) Undertake all work necessary or appropriate to secure the finance by way of debt
and equity needed to achieve the Company's objectives, including the
negotiation of any associated agreement, contract or other documents, on terms
specifically approved by the Board.

(ii) Negotiate or renegotiate with the Government of Pakistan or any of its agencies
all agreements, contracts, undertakings, guarantees or other documentation
included in, or related to, the Security Package for the project, on terms
specifically approved by the Board.

(iii) Ensure fulfillment by the Company of the terms of the loan agreements, the
Security Package agreements any related, connected or other documentations of
finance and enforce such terms thereof as are to be performed by others.

(iv) Approve on behalf of the Company any recommended variations in the specified
design or layout of the power station or in the design, supply or operating
characteristics of the plant components, within financial guidelines approved by
the Board.

(v) Supervise the work of the Operations and Maintenance Contractors under the
terms of the Operations and Maintenance Agreements and recommend any
variations thereto for approval of the Board.

(vi) Act as the focal point for the liaison with Government offices and their agencies,
press and environmental and other interest groups.

(vii) Implement management, financial, personnel and administrative policies and

procedures, following their approval by the Board.

(viii) Recruit, promote, reward, discipline and dismiss staff subject to the areas
reserved for the Human Resource and Remuneration Committee and the Board.

(ix) Effect disbursements and commitments within approved total capital and revenue
budgets, subject to reference to the Board for approval of specific reserved items
which have implications beyond the current financial year, and subject to
approved Company procedures.

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(x) Adjust budgetary overruns against underruns and allocate contingency
allowances within the budget, subject to total expenditures being confined within
the approved overall budget, and to such adjustments being reported to the
Board under the regular variance reports.

(xi) Supervise the work of the Company's Head Office departments.

(xii) Sign leases for premises and equipment within the approved budget.

(xiii) Dispose of assets excluding land and fuel up to an original cost of Rs. 5,000,000.

(xiv) Make all necessary security arrangements to protect the interests of the
Company.

(xv) Take whatever measures he considers necessary to ensure the safety of

employees, contractors and third parties.

(xvi) Delegate any of his financial or other powers to subordinate staff.

(xvii) Formulate and execute a detailed management development and training

programme, updated annually, within the policies and guidelines approved by the
Board.

(xviii) Within the policies and guidelines approved by the Board, manage the Company
in a manner which is calculated to ensure its efficient, economical and profitable
operation.

(xix) Determine the technical support required under the Support Services Agreement
with operations & maintenance conractors and original equipment manufacturers
through acting as Employer's Representative under that agreement within the
limit of £250,000 or USD 500,000 whichever is higher.

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 Appendix 2
THE HUB POWER COMPANY LIMITED

The Audit Committee

Constitution and Terms of Reference

1 The Audit Committee, which is a committee of the Board of The Hub Power Company
Limited, shall comprise of five directors atleast one and preferably majority of whom shall
be independent directors. Attest one of the members must have relevant financial
experience. The Chairman of the Committee shall be an independent director, who shall
not be the chairman of the Board.

The Chief Executive may attend meetings of the Audit Committee by invitation. The
Chief Financial Officer, Head of Internal Audit and a representative external auditor shall
attend meetings of the Audit Committee at which issues relating to accounts and audit
are discussed. Senior managers may also attend the meetings of the Audit Committee
by invitation when matters specific to their areas of responsibility are discussed.

Atleast once a year the Audit Committee shall meet the external auditors without the
Chief Financial Officer and Head of Internal Audit being present. Also once a year the
Audit Committee shall meet the Head of Internal Audit and other members of the internal
audit function without the Chief Financial Officer and external auditors being present.

Where a Director is unable to attend in person that Director may appoint another
Director as an alternate to act on his behalf or allot his vote to another member of the
Audit Committee.

The Chairman has the right to be 'in attendance' at meetings of the Audit Committee
should he so wish, he shall not have the right to vote unless he is also a member ex
officio of the Audit Committee.

These arrangements shall be without prejudice to:

• the Head of Internal Audit's right of direct access to the Chairman of the
Company;

• the Head of Internal Audit's right of direct access to the Chairman of the
Audit Committee;

• the external auditors' right of direct access to the Chairman of the Audit
Committee.

2 The Audit Committee shall meet as appropriate, but at least once every quarter before
the Board meeting, preferably not more than one week before a Board meeting. A
quorum shall be three members or their alternates. The Chairman of the Audit
Committee shall report to the Board after each Audit Committee meeting the
proceedings of the meeting.

3 The Committee shall have the following functions:

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3.1 The Audit Committee shall recommend to the Board the appointment of external
auditors, their removal, audit fees, the provision by the external auditors of any
service to the Company in addition to audit of its financial statements.

3.2 The Committee shall also consider the following:

• determination of appropriate measures to safeguard the Company’s

assets;

• discussions with the external auditors on the scope of internal audit and
matters arising therefrom.

• review the quarterly, half-yearly and annual financial statements prior to

their approval by the Board taking into account the views of the external
auditors and focusing on:

- major judgmental areas;

- significant adjustments resulting from the audit;
- the going-concern assumption;
- any changes in accounting policies and practices;
- compliance with applicable standards;
- Compliance with listing regulations and other statutory and
regulatory requirements; and
- significant related party transactions.
-
• review preliminary announcements of results prior to publication;

• facilitating the external audit and discussion with external auditors of

major observations arising from interim and final audits and any matter
that the auditors may wish to highlight (in the absence of management,
where necessary);

• review of management letter issued by external auditors and

management’s response thereto;

• ensuring coordination between the internal and external auditors of the

Company;

• review of the scope and extent of internal audit and ensuring that the
internal audit function has adequate resources and is appropriately
placed within the Company;

• consideration of major findings of internal investigations and

management's response thereto;

• ascertaining that the internal control systems including financial and

operational controls, accounting systems for timely and appropriate
recording of purchases and sales, receipts and payments, assets and
liabilities and the reporting structure are adequate and effective;

• review of the listed company’s statement on internal control systems prior

to endorsement by the Board of Directors;

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 • instituting special projects, value for money studies or other investigations
on any matter specified by the Board of Directors, in consultation with the
Chief Executive and to consider remittance of any matter to the external
auditors or to any other external body;

• determination of compliance with relevant statutory requirements;

• monitoring compliance with the best practices of corporate governance

and identification of significant violations thereof; and

• consideration of any other issue or matter as may be assigned by the

Board of Directors.

3.3 Compliance

• to keep under review legislative and regulatory compliance activities,

including the development of appropriate procedures, periodically
monitoring the adequacy of compliance arrangements within the
Company.

3.4 Declaration of interests

• to manage the declaration of Directors' interests as required by Article 68

of the Articles of Association.

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 Appendix 3

THE HUB POWER COMPANY LIMITED

The Human Resource and Remuneration Committee

Constitution and Terms of Reference

1. The Human Resource and Remuneration (HR&R) Committee, which is a committee of
the Board of The Hub Power Company Limited, shall comprise of five members of which
atleast one and preferably two shall be independent Directors.

One of the Directors shall act as Chairman of the Human Resource and Remuneration
Committee. The Chief Executive, Company Secretary and Senior Manager Human
Resources may attend meetings of the Human Resource and Remuneration Committee
by invitation.

Where a Director is unable to attend in person that Director may appoint another
Director as an alternate to act on his behalf or allot his vote to another member of the
Committee.

The Chairman has the right to be 'in attendance' at meetings of the Committee should he
so wish, he shall not have the right to vote unless he is also a member ex officio of the
Human Resource and Remuneration Committee.

2. The Human Resource and Remuneration Committee shall meet as appropriate, but at
least two times each financial year, preferably not more than one week before a Board
meeting. A quorum shall be three members or their alternates. The Chairman of the
Committee shall report to the Board after each Committee meeting the proceedings of
the meeting.

3. The Committee shall have the following functions:

3.1 Responsible for recommending human resource management policies to the

Board including executive Human Resource and Remuneration and succession
planning.

3.2 Taking proper and professional advice, to ensure that in relation to the Chief
Executive and senior managers:

• salaries are maintained at a level which allows the organisation to

compete effectively for good calibre management;

• pay is adjusted at appropriate intervals, normally annually, both in relation

to performance and to an assessment of market movement based on
data from one or more reputable sources;
• the basis, targets and rewards of both long and short term executive
incentive schemes, as appropriate, serve the needs of the business;

• the balance of pay and benefits is maintained on a sensible, competitive

and defensible basis;

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 • contractual obligations to the Chief Executive and senior managers are
honoured and the contracts themselves are reviewed from time to time to
ensure they remain up to date and defensible.

3.3 Responsible for recommendation to the Board the selection, evaluation, Human
Resource and Remuneration (including retirement benefits) and succession
planning of the Chief Executive Officer .

3.4 To ensure that the Chief Executive discharges his delegated authority in
establishing the basis for terms and conditions of employment in respect of
senior managers below Board level in order to consider the cost implications for
the company and to provide the Chief Executive with appropriate guidance.

Senior managers currently include:

• Chief Financial Officer;

• Chief Technical Officer;
• Company Secretary;
• Head of Internal Audit;
• Sr. Manager Human Resource & Public Relations;

The Human Resource and Remuneration Committee will also ensure that management
succession planning relevant to these posts is regularly reviewed.

3.5 To select and make recommendations to the Board for appointments of the Chief
Financial Officer, Chief Technical Officer Director, Company Secretary and Head
of Internal Audit. Ensuring that candidates recommended are selected following
appropriate search and interview processes both external and internal.

The Human Resource and Remuneration Committee will have sole responsibility for
making recommendation to the Board for these appointments and their removal.

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 Appendix 4

THE HUB POWER COMPANY LIMITED

The Operations Committee

Constitution and Terms of Reference

1. The Operations Committee, which is a committee of the Board of The Hub Power
Company Limited, shall comprise of five members of which atleast one and preferably
two shall be independent Directors.

One of the Directors shall act as Chairman of the Committee. The Chief Executive,
Chief Technical Officer, Chief Financial Officer and the Company Secretary may attend
meetings of the Committee by invitation. The Station Manager of the plants may also
attend the meeting by specific invitation.

Where a Director is unable to attend in person that Director may appoint another
Director as an alternate to act on his behalf or allot his vote to another member of the
Committee.

The Chairman has the right to be 'in attendance' at meetings of the Committee should he
so wish, he shall not have the right to vote unless he is also a member ex officio of the
Operations Committee.

2. The Operations Committee shall meet as appropriate, but at least once in a quarter in
each financial year, preferably not more than one week before a Board meeting. A
quorum shall be three members or their alternates. The Chairman of the Committee
shall report to the Board after each Committee meeting the proceedings of the meeting.

3. The Committee shall have the following functions:

3.1 Timely approvals of expenditure as identified by Hubco Operations Department

for undertaking new / exceptional items and plants improvement/betterment
projects;

3.2 Review plants operational issues on a regular basis as reported in the

Operations monthly reports (prior to Board meeting);

3.3 Review all the contractual issues, amendments to, and any interpretation issues
related to the O&Ms and other contracts related to the Plant operators and make
recommendations to the Board;

3.4 Review the procedures for procurement used by the O&M contractors for plants
and related purchases.

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 Appendix 5

THE HUB POWER COMPANY LIMITED

The Corporate Communications Committee

Constitution and Terms of Reference

1. The Corporate Communications Committee is a Committee of the Board of Directors of
The Hub Power Company Limited and shall comprise of five members of which atleast
one and preferably two shall be independent Directors.

One of the Directors shall act as Chairman of the Committee. The Chief Executive,
Senior Manager Public Relations and the Company Secretary may attend meetings of
the Committee by invitation. The Corporate Relations consultants and / or advisors to
the Company, if appointed, may attend the meeting by specific invitation.

Where a Director is unable to attend in person that Director may appoint another
Director as an alternate to act on his behalf or allot his vote to another member of the
Committee.

The Chairman has the right to be 'in attendance' at meetings of the Committee should he
so wish, he shall not have the right to vote unless he is also a member ex officio of the
Corporate Communications Committee.

2. The Corporate Communications Committee shall meet as appropriate, but at least two
times each financial year, preferably not more than one week before a Board meeting. A
quorum shall be three members or their alternates. The Chairman of the Committee
shall report to the Board after each Committee meeting the proceedings of the meeting.

3. The Committee shall have the following functions regarding the Company’s Corporate
Affairs / Relations and the Company’s Social Action Programme:

3.1 To assist the Chief Executive in formulating recommendations regarding and

after Board’s approval assisting in steering the short and long term plans;
3.2 To review with the Chief Executive additional proposals pre submission for Board
approval;
3.3 To develop an integrated approach in respect of the Company’s relationships
with its customer and regulatory authorities;
3.4 To review and advise on Press Releases / Company Announcements (other than
routine before they are issued;
3.5 To co-ordinate corporate responsibility with the O&M contractors;
3.6 To liaise on related social action issues with the O&M contractors;
3.7 To review the work of the Corporate Relations consultants and / or advisors to
the Company and to make recommendations regarding renewal / awarding of
contracts and terms;
3.8 To review the scope and extent of positive / negative effects of the Company’s
corporate and social plans and suggest remedies;
3.9 To keep under review any legislative and regulatory compliance activities;
3.10 To review the content of the annual and the bi-annual report of the Company.

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 Appendix 6

THE HUB POWER COMPANY LIMITED

The Management Committee

Constitution and Terms of Reference

1. The Management Committee initially shall be composed of:

• Chief Executive (Chairman)

• Chief Financial Officer;
• Chief Technical Officer;
• Company Secretary;
• Senior Manager Human Resource & Public Relations.

The Head of Internal Audit shall have the right to attend as an observer. Other staff may
attend the meetings of the Management Committee by invitation when matters specific
to their areas of responsibility are discussed.

2. The Committee shall meet as appropriate, but at least fortnightly. A quorum at any
meeting shall be at the discretion of the Chairman of the Committee, dependent on the
nature of the business to be considered. The Chief Executive will regularly report the
decisions of the Committee to members of the Board. The minutes of these meetings
will be available to the members of the Board.

3. The role of the Committee is to assist the Chief Executive to manage and run the
Company and assist in the discharge of such of his duties as are not required to be
exercised personally. The Committee is the mechanism whereby action necessary to
advance the Company's affairs is coordinated and pursued corporately and following the
appropriate degree of consultation. It provides a forum for the regular exchange and
review of information and preparation of business for the Board.

The Committee has no formally delegated powers and is not intended to detract from the
Chief Executive's individual accountabilities. It does not therefore process or collectively
determine executive business unless company-wide issues are involved or proposals
are outside the agreed framework within which the authority to act is given.

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 Appendix 7

THE HUB POWER COMPANY LIMITED

Matters Reserved for the Board

The Company is run by its Board of Directors and its affairs are managed on a day to day basis
by the Chief Executive under the direction and control of the Directors. However, there are
duties reserved for the Board.

The duties reserved to the Board are to consider reports on the conduct of the Company's
affairs and to take decisions on any of the following matters:

(i) all powers of the Company required to be exercised by the Directors at their
meeting under Section 196(2) of the Companies Ordinance 1984;

(ii) those required to be placed before the Board under the Code of Corporate
Governance of the Karachi Stock Exchange Listing Rules;

(iii) to make calls on shareholders;

(iv) to issue shares;

(v) to issue commercial papers, sukuks, term certificates etc. as allowed under
Section 120 of the Companies Ordinance;

(vi) to borrow moneys and create security;

(vii) to invest the funds of the Company;

(viii) to approve loans, advances and credits by the Company;

(ix) to approve the annual report and accounts and the directors' and auditors'
reports thereon following the report of the Audit Committee on the Annual
Accounts;

(x) to recommend the payment of dividends;

(xi) following receipt of the recommendations and reports of the Human Resource
and Remuneration Committee to appoint the Chief Executive and oversee his
duties;

(xii) following receipt of the recommendations and reports of the Human Resource
and Remuneration Committee to appoint the Chief Financial Officer, Chief
Technical Officer, Company Secretary and Head of Internal Audit. Any question
of their removal should be matter referred to the Board as a whole;

(xiii) to approve the appointment of advisers, loan agreements, contracts, or other

legal documents;

(xiv) to approve any changes (other than minor) to any contracts;

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(xv) to establish policies and guidelines for the management of the Company and
approve manuals for each functional area;

(xvi) to create any committees of the Board and appoint the members thereof;

(xvii) to approve changes to the structure of the Company or changes in the business
of the Company;

(xviii) to approve the disposal of the capital assets of the company subject to the power
delegated to the Chief Executive to dispose of assets excluding land up to an
original cost of Rs. 5,000,000;

(xix) to approve the annual capital and revenue budgets and long term estimates and
plans of the Company;

(xx) to institute litigation on behalf of the Company and/or the defence or settlement
of any lawsuits or claims filed against the Company;

(xxi) to approve the establishment of bank accounts;

(xxii) following receipt of the recommendations of the Audit Committee to recommend

the appointment of auditors;

(xxiii) to approve the execution of instruments under common seal and other matters
requiring Board approval under the Articles;

(xxiv) to approve the financial and other delegations to the Chief Executive;

(xxv) authorisation of expenditure is in general delegated to the Chief Executive within

the agreed capital and revenue budgets but with the following requiring specific
Board approval:

• unbudgeted capital expenditure above Rs. 5,000,000;

• unbudgeted revenue items with a contractual commitment of greater than
one year.

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 Appendix 8

THE HUB POWER COMPANY LIMITED

Delegations of Authority to the Chief Executive

The attached schedule set out delegations of authority which have been approved by the Board
for operation within the Company. The delegations are commensurate with the efficient conduct
of the Company's activities and are designed to facilitate devolved decision making and
personal accountability.

However, the delegations of authority are exercisable only in accordance with the Company's
arrangements for the proper conduct of its business. Regarding the financial delegations, it is
emphasised that the delegations in themselves give no power to act. The power to act, up to
the limits prescribed, derives from the approved operating plans and capital and revenue
budgets. The Chief Executive may not allow the Company to exceed agreed budgets or deviate
from approved plans without prior consultation with the Board of Directors. Delegations
therefore set limits of authority beyond which commitments cannot be made without consulting
the Board.

The Chief Executive may, at his discretion, make further delegations to senior managers that
are within his own delegated authority. The principles applied to delegations from the Board to
the Chief Executive will apply in a similar way to delegations from the Chief Executive to senior
managers.

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 THE HUB POWER COMPANY LIMITED
Guidance Note
Delegations of Authority

Nature of authority Delegation to the Chief Executive

COMMERCIAL/FINANCIAL MATTERS
All expenditure within approved capital and revenue budgets subject to the
following which are reserved to the Board
1 Capital and revenue commitment including approval of award of • unbudgeted capital expenditure above Rs.5,000,000;
contract • unbudgeted revenue items with a contractual
Commitment of greater than one year;
.

2 Fuel purchases Unlimited

3 Electricity sales Unlimited

4 Sale of company services Equivalent US$0.50 million

5 Land
• land sales No delegation
• land purchases No delegation
• rent agreements Unlimited if for less than three years in accordance with Budget

6 Sale/disposal of scrap or any assets other than fuel or land, approval of Assets up to an original cost of Rs. 5,000,000
gifts of obsolete equipment

OTHER DELEGATIONS
1 Appointments Any apart from those reserved for the Human Resource and
Remuneration Committee
2 Ex gratia severance payments As per Severance Policy
3 Minor discretionary grants to employees suffering financial hardship Rs.500,000