Millat Tractors Limited’s holding of extra ordinary general meeting

Karachi, June 25, 2012 (PPI-OT): We intend to hold our Extra Ordinary General Meeting on Thursday July 19, 2012 at 4:30 P.M at the registered office of the Company, 9 K.M., Sheikhupura Road, Lahore as approved by the Company’s Board of Directors.

Pursuant to listing regulation no. 18(2), a copy of the notice of EOGM is attached.

Notice of Meeting

Notice is hereby given that Extra Ordinary General Meeting of Millat Tractors Limited will be held at the Registered Office of the Company at 9 K.M. Sheikhupura Road, Shahdara, Lahore, on Thursday, July 19, 2012 at 4:30 P.M. to transact the following business:

A. Ordinary Business

1. To confirm minutes of the 48th Annual General Meeting held on September 29, 2011.

B. Special Business

1. To consider, adopt with or without modification the following special resolution for investment in associated/subsidiary company: -

“Resolved that subject to the requisite regulatory approvals and in compliance with the laws and business norms of the United Arab Emirates (UAE), the Company be and is hereby authorized and empowered to establish UAE based Company under the proposed name of TIPEG INTERTRADE in the JLT Free Zone area of Dubai, UAE, as a subsidiary company to be incorporated under the laws of UAE for the purposes, among others, of acting as a marketing/trading hub between the foreign buyers and Millat Group of Companies/local vendors.

Resolved further that the consent and approval be and is hereby accorded to make equity investment of AED 1,500,000 equivalent to approximately USD 411,000 being 75% equity in the UAE based subsidiary company under the name and style of TIPEG INTERTRADE in the JLT Free Zone area of Dubai, UAE, by acquiring 1,500 shares of AED 1,000 each.

Resolved further that the Chief Executive and/or Company Secretary of the Company be and are hereby authorized singly to establish UAE based Company in the United Arab Emirates and to make the aforesaid investment and to dispose off a part or whole of the investment at any time as may be advised by the Board.

Resolved further that the Chief Executive and/or Company Secretary of the Company be and are hereby authorized singly and empowered to take any and all actions and to do all acts and things for the establishment of the Company and to make aforesaid investment including but not limited to filing of applications before any regulatory body for seeking necessary approvals from them and to complete all legal formalities including signing and execution of documents, instruments and other papers as may be required in connection therewith, which may be necessary under the laws of Pakistan and United Arab Emirates and for carrying out the purposes aforesaid and giving full effect to and implement the above resolution.

2. To consider, adopt with or without modification the following Special Resolution to amend Article 86, 95 and 103 (2)(iv) of the Articles of Association of the Company.

“Resolved that ArticleNo.86, 95 and 103 (2) (iv) of the Articles of Association of the Company be and are hereby amended/altered as under.

Article No.   To be Inserted/substituted

86. “The remuneration of directors for performing extra services including the holding of the office of chairman shall be determined and approved by the Board of Directors provided that no such approval will be required where the office held is that of a manager or legal or technical advisor or banker.

95. Clause “(a)” to be deleted and existing clause “(b)’ to be inserted as clause “(a)”.

To be Inserted/Substituted

103(2)(iv) “act as Chairman of Board’s Committee for Group Supervision(BCGS) and monitor the functions of units through BCGS members and n furtherance thereof, may from time to time call for information, issue directions, guidelines or assign a specific task to any member of the Committee.”

C. Any Other Business

1. To transact any other business with the permission of the Chair.

Notes:

1. The share transfer books of the Company will remain closed from Friday July 13, 2012 to Thursday July 19, 2012 (both days inclusive) and no transfer will be accepted during this period.

2. A member entitled to attend and vote at this meeting may appoint another member as his/her proxy to attend the meeting and vote for him/her. Proxies in order to be effective must be received by the Company not less than 48 hours before the meeting.

3. Shareholders are requested to notify the change of address, if any, immediately.

4. CDC shareholders or their proxies are requested to bring with them copies of their Computerized National Identity Card or Passport alongwith the participants ID number and their account number at the time of attending the Extra Ordinary General Meeting in order to facilitate their identification.

5. Members who have not yet submitted photocopy of theft computerized National identity Card (CNIC) to the company are requested to send the same at the earliest.

Statement U/S 160(1) (b) of the Companies Ordinance, 1984

This statement sets out the material facts pertaining to the special business to be transacted at the Extra Ordinary General Meeting of the Company to be held on July 19, 2012.

1. Investments in proposed subsidiary/associated company in United Arab Emirates “UAE”.

Over the years) the Company and its vending industry invested billion of Rupees to build a capacity to produce 50,000 tractors per annum The Company produced and sold 42,000 plus tractors for the year ended June 30, 2011 but local demand is not likely to cross 40000 units per anum due to market dynamics. To utilize surplus capacity, the only avenue left is export of tractors and components. Being a very attractively priced tractor, there is a lot of potential for export of tractors, components and parts thereof to different countries specially the African countries.

The foreign buyers are reluctant to travel to Pakistan due to law and order situation. Therefore the Company feels the need to have an offshore base where buyers can travel freely, have business discussions and place orders. The sponsor directors of the Company are desirous of forming an offshore company (to be a subsidiary of Millat Tractors) in the JLT Free Zone area of Dubai, UAE in the name and style “TIPEG INTERTRADE JLT” with paid up capital of AED 2,000,000 divided in to 2,000 shares of AED 1,000 each.

The aforesaid capital is proposed to be shared by the sponsors and the Company as under.

1- Sponsors (5) AED 500,000 25%
2- Millat tractors Limited AED 1,500,000 75%
AED 2,000,000

The proposed company shall act as marketing/trading hub between the foreign buyers and Millat Group of Companies/local vendors. The products i.e. tractors, components and parts thereof shall be exported direct from Pakistan and sale proceeds remitted back to Pakistan. TIPEG INTERTRADE shall charge indenting commission from foreign buyers against orders received through it. The company has also obtained necessary approval for remittance of AED 1,500,000 from State Bank of Pakistan under Foreign Exchange Regulations.

The details as required under clause 3(1) (a), 3(3), 3(4) and 4(1) of SRO 27(1)12012 (Investment in Associated Companies or Associated Undertakings) Regulation, 2012 is as under.

3(1) (a) In case of investment in securities of its associated companies or associated undertakings.

i. Name of the associated company or associated undertaking along with criteria based on which the associated relationship is established;

TIPEG INTERTRADE JLT Common directors

ii. Purpose

To utilize surplus capacity of the Company and avail export opportunity.

Benefits

Earning of Foreign Exchange for the Country and maximizing profits for the Company.

Period of Investments

Long Term

iii. Maximum amount of investment

AED 1,500,000

iv. Maximum price at which securities will he acquired

AED 1,000 per share

v. Maximum number of securities to be acquired

1,500 shares

vi. Number of securities and percentage thereof held before and after the proposed investment.

NIL shares before and 1,500 shares after the proposed investment i.e. 75%.

vii. In case of investment in listed securities, average of the preceding twelve weekly average price of the Security intended to be acquired.

Not applicable

viii. In case of investment in unlisted securities, fair market value of such securities determined in terms of regulation 6(1).

Not Applicable as the Company is to be incorporated

ix. break-up value of securities intended to be acquired on the basis of the latest audited financial statements

Not applicable

x. Earning per share of the associated company or associated undertaking for the last three years.

Not Applicable as the Company is to be incorporated.

xi. Sources of fund from which securities will be acquired.

From Company’s own sources

xii. Where the securities are intended to he acquired using borrowed funds

-

i. Justification for investment through borrowings; and

Not Applicable

ii. Detail of guarantees and assets pledged for obtaining Such funds

Not Applicable

xiii. Salient features of the agreement(s), if any, entered into with its associated company or associated undertaking with regards to the proposed investment.

Nil

xiv. Direct or indirect interest of directors, sponsors, majority shareholders and their relatives, if any, in the associated Company or associated undertaking or the transaction under consideration.

The five sponsor directors are interested to the extent of their shareholding in the associated company i.e., 25%.

xv. Any Other important details necessary for the members to understand the transaction: and

None

xvi. In case of investment in securities of a project of an associated Company or associated undertaking that has not commenced operations, in addition to the information referred to above, the following further information, is required, namely.

-

i. Description of the project and its history since conceptualization;

Marketing/Trading Company for export of tractors and components from Pakistan.

ii. Starting and expected dated of Completion or work

Six Months from passing of Resolution.

iii. Time by which such project shall become commercially operational; and

Within one year

iv. Expected time by which the project shall start playing return on investment.

Two years.

Undertaking by Directors

3(3) “We, the undersigned Directors of Millat Tractors Limited, do hereby undertake that we have duly carried out the necessary due diligence before making investment in the associated company namely TIPEG INTERTRADE JLT Dubai, (JAE For this purpose, a feasibility report was prepared, discusses and approved by the Board.

In the opinion of the Board, the return on investment shall not be less than bank rate. The dividend for the investee company shall not only enhance the profitability of Millat Tractors but also open new avenue of business for the Company. The Board therefore recommends proposed investment in the associate’ company.’

1. Sikandar Mustafa Khan, Chairman

2. Latif Khalid Hashmi, Director

3. Sohail Bashir Rana, Director

4. Laeeq Uddin Ansari, Director

5. Syed Muhammad Irfan Aqueel, CEO

6. Mian Muhammad Saleem, Director

7. Manzoor Ahmed

8. Rana Muhammad Siddique

3(4) The Directors in its meeting held on 26-04-2012 signed the above undertaking and the signed copy of which is available with the Company Secretary for inspection of the members.

4(1) Directors/sponsors interest

The Five sponsor directors shall contribute 25% of the equity in the investee company and are interested to the extent of their shareholding.

2. Amendments in Articles of Associa6on of the Company

Article 86, 95 and 103 (2) (iv) of the Articles of Association are being amended to bring the same in conformity with the Companies Ordinance, 1984. The aforesaid amendments have been approved by the Board of Directors in their meeting held on June 25, 2012. A certified copy of the amended Articles of Association of the Company is available with the Company Secretary for inspection by the members.

The Directors of the Company are interested in the resolution to the extent of their remuneration.

For more information, Contact:
Mian Muhammad Saleem
Company Secretary
Millat Tractors Limited
P. O. Box No. 12023, Sheikhupura Road,
Shahdara, Lahore, Pakistan
Tel: 92-423-7911021-25,
UAN: 111-200-786
Fax: 92-423-7924166 / 92-42-7925835
Web: www.millat.com.pk
E-mail: info@millat.com.pk

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