The Karachi Stock Exchange (Guarantee) Limited’s order about Amalgamation of MCB Asset Management Company Limited and Arif Habib Investment Limited

Karachi: Securities and Exchange Commission of Pakistan Specialized Companies Division

1. MCB Asset Management Company Limited (“MCB-AMCL”) a non-banking finance company limited by shares (unlisted), incorporated under the Companies Ordinance, 1984 (the “Ordinance”), engaged in the business of providing asset management and investment advisory services pursuant to Securities and Exchange Commission of Pakistan (the””Commission”) license No. NBFC-II/12/MCBAMC/AMS/07/2011 and No. NBFC-II/13/MCBAMC/IA/06/2011 dated March 2, 2011, having its registered office at 8th Floor, Techno City Corporate Tower, Hasrat Mohani Road, Karachi, 74000, Pakistan and Arif Habib Investment Limited (“AHIL”), a non-banking finance company Limited by shares (listed), incorporated under the Ordinance, engaged in the business of providing asset management and investment advisory services pursuant to the Commission licenses No, NBFC-II/38/AHIL,/AMS/20/2010 and No. NBFC II/39/AHIL/IA/17/2010 dated September 29, 2010 and also registered as a pension fund manager under the Voluntary Pension System Rules, 2005, pursuant to the Commissions registration letter No. SECP/PW/Reg-01/2007 dated January 8, 2007, having its registered office at Arif Habib Centre, 23 M.T. Khan Road, Karachi, 74000, Pakistan have submitted joint application to the Commission for sanction of’ a Scheme of Amalgamation/Merger (the “Scheme”) of MCB-AMCL with and into AHIL in terms of Section 282L of the Ordinance.

2. The principal object of the Scheme is to amalgamate and merge MCB-AMCL by transfer to and vesting in AHIL, of the entire undertaking of MCB-AMCL at the effective date, against allotment/issuance of 1.2 fully paid ordinary shares of AHIL to the shareholders of MCB-AMCL in exchange for every 1 share of MCB-AMCL held by them in accordance with a swap ratio determined by A.F. Ferguson which works out to be 50:50.i.e MCB Bank Limited will have 50% shareholding in the merged entity while the rest 50% will be held, by the Shareholders of AHIL. Among other things, the rights of MCB-AMCL to manage the Collective Investment Schemes currently managed by it and all discretionary and non-discretionary accounts managed by it shall stand transferred to AHIL on and from the effective date. MCB-AMCL shall be dissolved without winding up, in accordance with and subject to the procedure for amalgamation provided wider Section 282L of the Ordinance.

3. Extra Ordinary General Meeting (“EOGM”) of the shareholders of MCB-AMCL under section 159 of the Ordinance was held on May 21, 2011 for seeking the approval of the shareholders to the Scheme. Two (2) shareholders holding 29,999,000 shares and representing 99.99% of the total paid-up capital of MCB-AMCL attended the EOGM either in person or through proxies. In terms of Section 282L of the Ordinance, approval by a majority in number representing two third in values of the shareholders present either in person or through proxy in the meeting is required. In the said EOGM, two (2) shareholders holding 29,999,000 shares or 100% of the value of shareholders present in the meeting voted in favour of’ the Scheme.

4. Extra Ordinary General Meeting (“EOGM”) of the shareholders of AHIL under section 159 of the Ordinance was held on May 21, 2011 for seeking the approval of the Shareholders to the Scheme. Thirty Five (35) shareholders holding 29,297,786 shares and representing 81.38% of the total paid-up capital of AHIL attended the EOGM either in person or through proxies. In terms of Section 282L of the Ordinance, approval by a majority in number representing two third in values of the shareholders present either in person or through proxy in the meeting is required. In the said EOGM, Thirty Five (35) shareholders holding 29,297,786 shares or 100% of the value of shareholders present in the meeting voted in favour of the Scheme.

5. No shareholder of MCB-AMCL or AHIL has either voted against the Scheme of Amalgamation at the EOGMs or given notice in writing at or prior to the said EOGMs to MCB-AMCL or AHIL regarding their dissent to the Scheme of Amalgamation. Hence the need does not arise to determine value of the shares to be paid to the dissenting shareholders by the concerned NBFC i.e. MCB-AMCL and AHIL in terms of sub-section (3) of section 282L of the Ordinance.

6. In support of the Scheme, MCB-AMCL and AHIL have submitted the following information and documents:

a) Joint application by MCB-AMCL and AHIL for approval of the Scheme;

b) Scheme of Amalgamation;

c) Copies of Memorandum and Article of Association;

d) Copies of Notices of EOGMs of MCB-AMCL and AHIL accompanies by the Scheme and statement under section 160(1)(b) of the Ordinance;

e) Certified true copies of minutes and resolutions of EOGMs of MCB-AMCL and AHIL;

f) Copy of the Master Agreement between sponsors of MCB-.AMCL and AHIL;

h) Confirmation from Khalid Anwer and Co vide letter dated May 26, 2011 and Akhund Forbes vide letter dated May 28, 2011, the legal advisors of MCB-AMCL and AHIL respectively regarding compliance with all legal formalities for the purpose of ama1gsmatIon/merger;

i) Affidavits from Chief Executive Officers of MCB-AMCL and AHIL that no provisions of the Ordinance have been violated during the amalgamation process;

j) Amalgamated balance sheet along with notes and statement of equity of AHIL;

k) Copy of the approval/NOC from Competition Commission of Pakistan and State Bunk of Pakistan; and

l) Calculation of Swap Ratio by M/s A.F. Ferguson and Co. Chartered Accountants.

7. The Commission has considered the joint application submitted by MCB-AMCL and AHIL for sanction of a Scheme of MCB-AMCL with and into AHIL in terms of section 282L of the Ordinance. In view of the foregoing and compliance of the requisite legal formalities, the Scheme submitted by MCB-AMCL and AHIL is hereby sanctioned by the Commission in terms of section 282L of the Ordinance subject to following conditions:

i) The Scheme sanctioned by the Commission shall be effective from June 27, 2011 as mentioned in the joint application.

ii) The directors/Chief Executive Officer of MCB-AMCL as on the effective date of amalgamation/merger will cease to hold their respective offices in MCB-AMCL as a result of amalgamation/merger and such respective offices shall stand relinquished. No compensation shall be payable to any of these directors and Chief Executive Officer on account of relinquishing their offices as directors and Chief Executive Officer of MCB-AMCL consequent upon amalgamation/merger;

iii) At the effective date, the entire undertaking of MCB-AMCL shall be amalgamated with, transferred to, vest in and belong to AHIL;

iv) At the effective date, the rights of MCB-AMCL to manage the Collective Investment Schemes currently managed by it and all discretionary and non- discretionary accounts managed by it shall stand transferred to AHIL.

v) At the effective date all the assets of MCB-AMCL shall immediately, without any further act or deed, be vested in, transferred to, belong to and become the undertaking and assets of AHIL, and AHIL shall have hold and enjoy the assets in its own right as fully as the same were possessed, held and enjoyed by MCB-AMCL prior to the amalgamation but transfer of assets shall be subject to all mortgages, charges or other encumbrances subsisting thereon, if any;

vi) At the effective date, all contracts, deeds, bonds, agreements, arrangements, constitutive documents and other instruments (including all tenancies, leases, licences and other assurances in favour of MCB-AMCL or powers or authorities granted by or to it) of whatsoever nature to which MCB-AMCL is a party or to the benefit of which the MCB-PMCL may be eligible, and which axe subsisting or having effect immediately before the effective date, shall, without any further act, instrument or deed, be in full force and effect in favour of or against AHIL, as the case may be, and may be enforced as fully and effectually as if, in lieu of MCB-AMCL, AHIL bad been a party or beneficiary or oblige thereto;

vii) At the effective date, all the liabilities and obligations of MCB-AMCL, shall immediately and without any further act or deed be assumed by and become the liabilities and obligations of AHIL, which shall pay, undertake; satisfy, discharge and perform, when due, all of the liabilities and obligations, in the respective terms thereof;

viii) The terms of amalgamation as laid down in the Scheme and approved by the Commission shall be binding on MCB-AMCL and AHIL. on all the shareholders of MCB-AMCL, shareholders of AHIL, unit holders of the funds managed by MCB-AMCL and AHIL, and on any other person having any right or liability in relation to either of them;

ix) All the promoters, majority shareholders and directors of the merged entity shall deposit their share with Central Depository Company of Pakistan Limited in an account marked as blocked within thirty days of the effective date of merger and such shares shall not be sold or transferred without prior approval of the Commission;

x) Licences issued by the Commission in favour of MCB-AMCL to carry out the business of Asset Management and Investment Advisory Services shall stand cancelled from the effective date of the merger; and

xi) MCB-AMCL shall be dissolved, without winding up, on the date on which the shares of AHIL arc allotted/ issued to the shareholders of MCB-AMCL in terms of swap ratio as given in the Scheme.

8. In case, subsequent to sanctioning of the Scheme by the Commission, any fact is found to have been misrepresented to the Commission by the amalgamating entities, the Commission shall have the right to take any appropriate measures as it deems fit, which include but not be confirmed to the cancellation of license of the merged NBFC.

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