Dewas Metal Sections Limited :-

Extract of Resolution passed in Extraordinary General Meeting held at its Registered Office situated at Gram Amona, A. B. Road, Dewas (M.P.) on Thursday the 25th day of August, 2009 at 11.00 A.M.

 

1)   To consider and, if thought fit, to pass, following resolutions as a SPECIAL RESOLUTION:

“RESOLVED AS A SPECIAL RESOLTION THAT pursuant to the provisions of Section 81, 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 (including any amendment thereto or re-enactment thereof), and in accordance with the provisions of the Memorandum and Articles of Association of the company, and as per the guidelines of Securities and Exchange Board of India and the Stock Exchanges on which shares of the company are listed or any other relevant statutory, governmental and other authorities and Departments, from time to time, to the extent applicable and subject to approvals, consents, permissions and sanctions as might be required and subject to such conditions and modifications which may be agreed to, by the Board of Directors (hereinafter referred to as the “Board”, which term shall, include any Committee (s) constituted/ to be constituted by the Board to exercise its powers including the power conferred by this Resolution) consent of the members be and is hereby accorded to the board on behalf of the company to create, offer and issue following securities (on such terms as is permitted by applicable law), to the existing equity shareholders of the company as on the record date (to be fixed for the purpose) to issue 13 Lac  Equity Shares of Rs.10/- each on Right basis in the ratio of 1 : 1 at a premium of Rs.2/- per share aggregating Rs.156 Lacs.  The payment terms for the said issue will be Rs.6/- on application (towards share capital) and Rs.6/- (Rs.4/- towards share capital and Rs.2/- towards share premium) payable on first and final call to be made by company within six months from the date of allotment.

“RESOLVED FURTHER THAT each new equity share to be issued pursuant to the aforesaid right issue, shall have one detachable warrant entitling  the holder thereof to apply for one equity share of Rs.10 each at the premium of Rs. 2 per  share for every warrant held, within a period of 18 months from date of allotment of warrants on such further terms and at such time as may be decided by the Board and notified by the company in this behalf.

“RESOLVED FURTHER THAT the equity shares issued pursuant to the rights issue and on conversion of warrants as aforesaid shall rank pari passu with the existing equity shares of the company in all respects.”

“RESOLVED FURTHER THAT the unsubscribed portion portion, if any, of the shares after considering the applications received from Right Issue noted above shall be disposed of in such manner, as the Board deems fit and proper at its absolute discretion and as most beneficial to the company.”

“RESOLVED FURTHER THAT the Board shall be entitled to issue in consultation with and subject to the approval, if necessary, of any concerned authority, appropriate Letter Of Offer (LOO) including abridged Letter Of Offer, Prospectus/Circular, to the persons stipulated above containing the terms & conditions of such issue as the Board to renunciation, eligibility or otherwise ‘to apply for additional shares in the event of renouncement by the member, eligibility or otherwise of renouncee to apply for additional shares, payment of subscription monies by installments, listing of the new Equity Shares and equity shares resulting on conversion of warrants, with the Stock Exchanges, restriction as to subscription and transfer as provided in the Articles of Association of the Company, order of preference of allotment in the event of over subscription, premium to be charged on the shares, to vary the size of the issue, appoint lead Managers, banks and other intermediaries, or other agencies concerned, to fix the record date in consultation with the Stock Exchange and to finalise such other terms & conditions as may be necessary or stipulated in such LOO/Prospectus/Circular and such other documents as may be permitted by the concerned authority in accordance with the law and the Board be and is hereby expressly authorized and empowered to accept such variations and modifications as the SEBI, Stock Exchange or any other concerned authority may stipulate in that behalf and also at its discretion to amend, modify, vary or alter all or any other terms of the issue including the right to increase, decrease or recalculate the number of Equity Shares to be created, offered and alter the terms as to premium, detachable warrant and their entitlement thereto and to include in the LOO/Prospectus/Circular or such other documents they offer for subscription, all such other terms and conditions of offer as are necessary or expedient in the discretion of the Board and/or may have to be incorporated on account of any modifications or amendments required or accepted by any concerned authority.”

“RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of equity shares and / or warrants, the Board be and is hereby authorized on behalf of the company to do all such acts, deeds, matters and things as it may, in its absolute discretion, deemed necessary or desirable for such purpose, including without limitation, the entering into arrangements for managing, marketing, listing, trading and to issue any documents and writing and to pay any fees, commission, remuneration, expenses relating thereto and with power on behalf of the company to settle all questions, difficulties or doubts that may arise in regard to such offer (s) or issue (s) or allotment (s) as it may, in its absolute discretion, deem fot.”

“RESOLVED FURTHER THAT Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of Directors constituted/ to be constituted or the Chairman and the Chief Executive Officer of the company or any other officer or officers of the company to give effect to the aforesaid resolution.”

 

2)    To consider and, if thought fit, to pass, following resolution as an ORDINARY RESLUTION:

“RESOLVED THAT consent of the Company be and is hereby accorded to the Board of Directors in terms of Section 293(1) (d) and other applicable provisions if any, of the companies Act. 1956, for borrowing monies from time to time for the business and purpose of the company, notwithstanding that the monies to be borrowed (apart from temporary loans obtained / to be obtained from the company and its free reserves, that is to say, reserves not set apart for nay specific purpose, provided, however, that the aggregate amount of monies which may be borrowed shall not at any time exceed the limit of Rs.100 Crores (Rupees One Hundred Crores Only)”

3)   To consider and, if thought fit, to pass, following resolution as an ORDINARY  RESOLUTION:

“RESOLVED THAT, consent of the company be and is hereby accorded in terms of section 293 (1)  (a) and other applicable provisions, if nay, of the Companies Act, 1956 to the Board of Directors for mortgaging and / or changing in such form and manner and on such time(s) as the Board may deem fit, the whole or substantially the whole of the undertaking of the Company wherever situated, present and future whether belonging to the company or not, with a right to take over the management of the business and undertaking of the Company in certain events, in favour of any lender including financial/investment institution(s), bank(s), insurance company(ies) or others as may be required and approved by the lead instituion in order to secure the payment of interest at the respective letter of Sanction/Offer, Prospectus or any other offer document, Loan Agreement, Agreement/Deeds of Hypothecation, etc, executed / to be executed by the Company in respect of the said loans/credit facilities/debentures.”

 

“RESOLVED THAT, the Board be and is hereby authorized to finalize the form, extent and manner of, and the documents and deeds, where applicable, for creating the appropriate mortgages and / or charges on such of the immovable and / or movable properties of the company on such terms and conditions as may be decided by the Board in consultation with the Lenders for reserving the aforesaid right and for performing all such acts and things as may be necessary for giving effect to this resolution.”

 

4)    To consider and, if thought fit, to pass, following resolution as a SPECIAL RESOLUTION

“RESLVED AS A SPCIAL RESOLUTION THAT the new set of Articles of Association of the company, a copy of which is placed before the meeting, duly initiated by the chairman, be and are hereby approved and adopted as the Articles of Association of the company in substitution of the existing articles.”

“RESOLVED FURTHER THAT Mr. L. K. Shah the Managing Director of the company be and is hereby authorized to take all necessary steps for giving effect to the resolution.

                       By Order of the Board of Directors

L. K. Shah

Managing Director

N O T E S :

1.      A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend & vote on his/her behalf in a poll and proxy need not be a member of the Company.  Proxies in order to be effective much be received by the Company not less than 48 hours before Extra-Ordinary General Meeting.

2.      The relevant Explanatory Statement Pursuant to Section 173 (2) of the Companies Act, 1956 are annexed hereto and form part of the notice.

3.      The copy of Memorandum and Articles of Association of the Company is open for inspection at the registered office of the Company on any working day during business hours till the date of EGM.

By Order of the Board of Directors

L. K. Shah

Managing Director

Place : Dewas.

 

EXPLANATORY STATEMENT FOR THE AFORESAID RESOLUTION PURSUANT TO SECTION 173 (2) OF THE COMPNAIES ACT, 1956

ITEM NO. 1

The Board of Directors of the company in their meeting held on 29.07.2009 have proposed that a Rights Issue of the Equity shares of the company be carried out with the objective of raising additional capital for the company.

The Company requires infusion of additional equity capital in order to enjoy enhanced working capital facilities from its bankers.  For this purpose, the company has proposed rights issue of equity shares entitling the equity shareholder to further equity shares in the ratio of one equity share for every share held on a record date to be finalized in consultation with the Stock Exchange where shares of the company are listed.  Further, in order to provide for future fund requirements of the company, it has also been proposed to offer a detachable warrant along with each equity share now offered and allotted on rights basis, entitling the warrant holder  to apply for one equity share per warrant, at a price of Rs.12 per share.  This will economize the cost involved in the company’s fund raising programme and also provide an opportunity to equity shareholders to acquire further equity in the company at a later time, not exceeding 18 months.  The detailed terms and conditions will be finalized in consultation with merchant bankers and intimated to shareholders through the Letter Of Offer proposed to be issued in this regard.

The porposed special resolution, if approved by the shareholders, will enable the board to determine timing and pricing of the proposed issue, taking into account all relevant factors.

The Directors are hereby seeking an approval of the shareholders of the company for the proposed Rights Issue.

None of the directors of the company may be deemed to be concerned or interested in the Special Resolution except to the extent of any shares or warrants that are, or may be issued and allotted to them or their associates.

ITEM NO. 2

Section 293 (1) (d) of the Companies Act, 1956, provide that the Board of directors of a public company shall not, except with the consent of the Company in general meeting, borrow which together with the monies already borrowed (apart from the temporary loans obtained from the company’s bankers in the ordinary courses of business) exceed the aggregate of the paid up capital and free reserves, that is to say, reserves not set apart for any purpose.  At present the company has authority to borrow upto Rs.30 Crores.

Looking to the expansion/diversification plans it is desirable for the company to give borrowing powers to the Board of Directors upto Rs.100 Crores excluding temporary loans obtained from the company’s bankers in the ordinary course of business.

Yours Directors recommend passing of this resolution.

None of the director of the Company is concerned or interested in the above resolution.

ITEM NO. 3

Since Section 293 (1) (a) of the company provides that the Board of directors of a public company shall not, except with the consent of the Company in general meeting, mortgage / charge the whole or substantially the whole of the undertaking of the company wherever situated, present and future.

Since our company is a Public Limited Company therefore, it is necessary to give a comfortable authority to the Board of Directors mortgage / charge the whole or substantially the whole of the undertaking of the company wherever situated, present and future in order to borrow the money from time to time, taking into account, the expansion/diversification plans which would require the company to resort to substantially higher borrowing.

Yours Directors recommend passing of this resolution. 

None of the director of the Company is concerned or interested in the above resolution.

ITEM NO.4

The present Articles of Association of the company is quite old and does not contain many of the provisions due to recent changes in the Companies Act, 1956 and other applicable laws.  It is therefore desirable to substitute the present Articles of Association of the company with a new set of Articles of Association containing provisions applicable to a listed Company.  A copy of the new set  of Articles of Association of the Company is open for inspection at the Registered Office of the Company.

None of the directors are concerned or interested in the above resolution.

By Order of the Board of Directors

L. K. Shah

Managing Director

Place: Dewas.