SCHEME OF ARRANGEMENT FOR DE-MERGER
UNDER SECTIONS 284 TO 288 OF THE COMPANIES ORDINANCE,
1984
BETWEEN
ZEAL-PAK CEMENT FACTORY LIMITED
AND
ZEAL PAK INDUSTRIES (PRIVATE) LIMITED
PAKISTAN SLAG CEMENT INDUSTRIES (PRIVATE) LIMITED
ROHRI CEMENT (PRIVATE) LIMITED
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Scheme of Arrangement for Demerger
SCHEME OF ARRANGEMENT FOR DE-MERGER
UNDER SECTIONS 284 TO 288 OF THE COMPANIES ORDINANCE,
1984
BETWEEN
ZEAL-PAK CEMENT FACTORY LIMITED
AND
ZEAL PAK INDUSTRIES (PRIVATE) LIMITED
PAKISTAN SLAG CEMENT INDUSTRIES (PRIVATE) LIMITED
ROHRI CEMENT (PRIVATE) LIMITED
PRINCIPAL OBJECT
The Principal object of this proposed Scheme is to de-merge/ separate Zeal
Pak Cement Factory Limited (“Zeal Pak”) into Zeal Pak Cement Factory
Limited, Zeal Pak Industries (Private) Limited, Pakistan Slag Cement
Industries (Private) Limited and Rohri Cement (Private) Limited
(hereinafter collectively referred to as the "De-Merging Companies") by
dividing and vesting in the De-merging Companies, the whole of
undertakings and businesses of Zeal Pak, together with all the properties,
assets, rights, liabilities, quotas and obligations of every kind and
description, in such a manner that is a complete reversal of the Merger dated
May 13, 2008 of the above named Companies, on the Effective Date.
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Scheme of Arrangement for Demerger
BENEFITS OF DE-MERGER
1.
Creation of Share-Holder Value:
The separation and division of Zeal Pak into four separate entities will
have a number of benefits that will promote increased value for
shareholders of each separate company in the long run.
2.
Independent Strategy and Financial Policy:
Zeal Pak’s manufacturing, production, packaging and sales of cement
and its allied products have different financial needs and strategic
imperatives. The Board of Directors of Zeal Pak believe that Zeal Pak’s
diverse business have now reached the point and size where these
different financial needs and strategic imperatives would be better
addressed by the separation of these businesses from cement
manufacturing, thereby creating four separate industry specific entities/
companies, each of which may pursue the financial policies and
strategies considered appropriate for the specific industry and business
in which the company operates. In addition to this, each company will
have direct access to the capital markets.
3.
Improved Market Rating:
Each of the separate de-merged companies will have increased
visibility within the financial community, enhancing the likelihood that
each will achieve appropriate market recognition by potential investors,
who have a specific understanding of, and interest in, the relevant
industry.
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Scheme of Arrangement for Demerger
Despite substantial growth in the current business structure of Zeal Pak,
the Board of Directors of Zeal Pak believes that the bifurcation of the
current structure and de-merging into four companies will enhance and
increase the visibility of each company and allow the financial
community to better evaluate the performance of each company,
increasing the prospects of each company receiving appropriate
recognition by the financial community.
Due to the conglomerated current nature of Zeal Pak’s works, it is felt
that Zeal Pak’s various businesses were not attracting potential
investors as it should and Zeal Pak have lost its share in the investor
pool because of investors wanting to invest in industry specific
companies and Zeal Pak may not have offered that exposure. The
Board of Directors of Zeal Pak strongly believe that the Proposed
Scheme of Arrangement for De-merger will rationalize the business
structure of the proposed four companies and allow an opportunity to
create transparency, value and make the separate businesses easier to
understand to potential investors and financial markets. With the four
companies operating in a specific single industry, investors having
knowledge and interest in that particular industry will be attracted.
4.
Focus on Core Competencies:
The Directors of Zeal Pak firmly believe that the creation of four
industry specific companies will permit the Board of Directors and
management of each de-merged company to focus on the core business
and core competencies of that company, without needing to consider
matters which are relevant to the other company, as is currently the
case.
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Scheme of Arrangement for Demerger
The De-merger will allow each company to more closely align future
management initiatives and incentives with the performance of the
underlying businesses and the share price of each company. The
increased link between the performance of the separate businesses and
management incentives is likely to be of benefit to the shareholders.
A valuation of the different aspects of the business of Zeal Pak will
have a positive effect on the Price/ Earnings Ratio (PE) of the demerged companies’ shares.
The proposed de-merger will allow each separate company to manage
its own operations and finance separately, thereby enabling them to
improve their performance management and devote all their resources
towards implementing their own individual business strategies and
forge their own alliances and partnerships.
5.
Increased Investment Choice for Shareholders:
The principal advantage of the proposed de-merger is that it will
enhance investment flexibility of the current Zeal Pak shareholders and
potential shareholders in the individual de-merged companies. The
creation of four industry specific companies will provide a greater
investment choice and opportunity to the shareholders of Zeal Pak.
The benefits and risks associated with an investment in a company
such as Zeal Pak, with such diverse businesses, such as production
and sales of cement and its allied products, manufacture of papersacks and packages, manufacture of fire clay bricks, manufacture
slag cement and its allied products differ from those of an investment
made in one particular industry. The de-merger will provide Zeal
Pak Shareholders an increased opportunity to manage their
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Scheme of Arrangement for Demerger
investment in these industry sectors as they will have the choice of
investing in Zeal Pak Cement Factory Limited, Zeal Pak Industries
(Private) Limited, Pakistan Slag Cement Industries (Private) Limited
and Rohri Cement (Private) Limited or all four.
Zeal Pak recognizes that many investors prefer to seek diversification
through their own investment portfolios rather than to invest in a
diversified company. Accordingly, the proposed de-merger scheme
should increase aggregate investor interest in the de-merged
companies in comparison with current investor interest in Zeal Pak.
6.
Restructure of Organization:
The proposed Scheme of Arrangement for De-merger will facilitate
the commencement of a restructuring of Zeal Pak’s businesses of
production and sales of cement and its allied products, manufacture
of paper-sacks and packages, manufacture of fire clay bricks,
manufacture slag cement and its allied products; with these
businesses being subject to several important initiatives. These
include the implementation of a more streamlined organizational
structure, an extensive operational improvement program and to
manage divestment program. The pursuit of disciplined growth
strategies is a key part of Zeal Pak’s plans. The Directors of Zeal Pak
consider the full implementation of this restructure to be a key
benefit resulting from the de-merger if it is allowed to take place.
7.
Financial Viability:
Following the implementation of the de-merger scheme, each of the
new companies, Zeal Pak Cement Factory Limited, Zeal Pak
Industries (Private) Limited, Pakistan Slag Cement Industries
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Scheme of Arrangement for Demerger
(Private) Limited and Rohri Cement (Private) Limited, will be
smaller in size and with a lower market capitalization than that of
Zeal Pak as it is presently constituted. Nevertheless, each company
will be a substantial organization in its own right. The Directors of
Zeal Pak believe that following the implementation of the de-merger,
each of the new separate entities will be viable companies in their
own right, who will be appropriately capitalized and will have
suitable management structures and business plans in place. This will
consequently lead to good prospects of success in each of their
respective industry sectors.
8.
Implementation without Capital Raising:
A desirable aspect of the proposed de-merger is that it will be
implemented without the need to raise additional equity capital either
from existing Zeal Pak shareholders or from other sources.
9.
Overall benefits:
The de-merger will be to the advantage of shareholders and employees
of the proposed companies, alike. Due to technological advancements,
changing characteristics of competition and evolving market patterns,
the benefit of proposed de-merger is avoidance of stagnation, which
will lead to innovative business strategies, which in effect will lead to
the increased likelihood of enhanced profitability with its attendant
consequences of better dividends to shareholders may be expected.
The aforesaid advantages and benefits are sought to be achieved
through the proposed Scheme, subject to sanction by the Honorable
High Court of Sindh at Karachi. The proposed Scheme shall be
submitted to the Honorable High Court of Sindh at Karachi seeking
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Scheme of Arrangement for Demerger
its sanction to the Scheme for carrying it into effect and taking such
actions as it may consider necessary and conducive to the attainment of
the aforesaid objectives.
ARTICLE 1
DEFINITIONS
Unless the context requires otherwise, the following terms stated in this
Scheme shall have the meanings assigned thereto:
1.1
“Zeal Pak” means Zeal Pak Cement Factory Limited, a public
company limited by shares, incorporated under the provisions of the
Companies Ordinance, 1984, with its Registered Office situated at 4th
Floor, Panorama Centre, Building No. 2, Doctors Plaza, Raja
Ghazanfar Ali Khan Road, Saddar - Karachi and listed on the Karachi
Stock Exchange. The principal business of Zeal Pak is the production,
manufacturing, sale and marketing of cement and its allied products.
1.2
“Assets” means, unless the context otherwise permits or requires, all
properties and rights of every description of Zeal Pak and or related
thereto or connected therewith (whether present or future) and shall
include, all rights, titles, interests, permits, authorities, privileges,
benefits, facilities, licenses and properties of all kinds and by whatever
title held and whether moveable or immoveable, tangible or intangible,
leasehold or freehold, including, but not limited to, stock-in-trade,
stock-in-transit, inventories, raw materials, ingredients, office supplies,
spares,
consumable stores,
works-in-progress, finished goods,
actionable claims, cash and bank balances, investments, receivables,
book debts, advances and deposits, prepayments and all other rights
and interest in and arising out of such properties in the ownership,
possession, power or control of Zeal Pak, whether within or outside
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Scheme of Arrangement for Demerger
Pakistan, and all books of account, registers, records and all other
documents of whatever nature relating or belonging thereto, and plants
and machinery of Zeal Pak, together with all plants and equipment,
spare parts, tools, equipment, motor vehicles, furniture, fixtures and
fittings, office and storehouses/ warehouses, and all proprietary rights,
titles and interests of Zeal Pak in any product registrations, trademark,
service mark, design including but not limited to product pack design
and product label design, patent, copyright, whether registered or by
way of passing-off, used exclusively in the business of Zeal Pak.
1.3
“Claims" means all present or future, actual or contingent, current or
deferred claims, counter-claims, demands or causes of action by or
against Zeal Pak.
1.4
“Completion Date” means the day on which the proposed Scheme
becomes effective.
1.5
"Contracts" means agreements, deeds, trusts, leases, conveyances,
grants, undertakings, and/or contracts of every description related to or
connected with Zeal Pak.
1.6
“Court” means the Honorable High Court of Sindh at Karachi or
any other Court for the time being having jurisdiction under Sections
284 to 288 of the Companies Ordinance, 1984.
1.7
"Effective Date" means the date on which this Scheme becomes
Effective.
1.8
"Employees" mean all permanent employees of Zeal Pak.
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Scheme of Arrangement for Demerger
1.9
"Existing" means existing, outstanding or in force immediately prior
to the Effective Date.
1.10
"Liabilities" means and includes all borrowings, duty drawbacks,
debts, all sums of money payable including duties and obligations of
every description (whether present or future, actual or contingent,
current or deferred) whether incurred solely or jointly, including
amounts owing to banks and financial institutions and other creditors,
of Zeal Pak.
1.11 “De-merged Company” means Zeal Pak as the de-merged entity after
the separation/ de-merger of Zeal Pak into Zeal Pak Cement Factory
Limited, Zeal Pak Industries (Private) Limited, Pakistan Slag
Cement Industries (Private) Limited and Rohri Cement (Private)
Limited.
1.12
“De-merging Companies” means Zeal Pak and Zeal Pak Industries
(Private) Limited, Pakistan Slag Cement Industries (Private)
Limited and Rohri Cement (Private) Limited that are proposed to
be de-merged in terms of the Scheme with an effect of constituting a
De-merged Company.
1.13
“Merger” means the amalgamation and consolidation through a
Scheme of Arrangement, under Section 284 to 288 of the Companies
Ordinance, 1984, of Zeal Pak with Zeal Pak Industries (Private)
Limited, Pakistan Slag Cement Industries (Private) Limited and
Rohri Cement (Private) Limited, vide J.M No. 39 of 2007 moved
before the High Court of Sindh, and approved vide Order dated May
13, 2008.
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Scheme of Arrangement for Demerger
1.14
"Ordinance" means the Companies Ordinance, 1984 or any statutory
modification or re-enactment thereof for the time being in force.
1.15
“Pakistan Slag Cement” means Pakistan Slag Cement Industries
(Private) Limited, a private company limited by shares, incorporated
under the provisions of the Companies Ordinance, 1984, with its
Registered Office at 4th Floor, Panorama Centre, Building No. 2,
Doctors Plaza, Raja Ghazanfar Ali Khan Road, Saddar - Karachi. The
principal business of Pakistan Slag Cement is the production,
manufacturing, sale and marketing of slag cement and related products.
1.16
“Rohri Cement” means Rohri Cement (Private) Limited, a private
company limited by shares, incorporated under the provisions of the
Companies Ordinance, 1984, with its Registered Office at 4th Floor,
Panorama Centre, Building No. 2, Doctors Plaza, Raja Ghazanfar Ali
Khan Road, Saddar - Karachi. The principal business of Pakistan Slag
Cement is the production and cement.
1.17
"Scheme” means the Scheme of Arrangement for De-merger
contained herein for the de-merger/ separation of Zeal Pak into Zeal
Pak Cement Factory Limited, Zeal Pak Industries (Private)
Limited, Pakistan Slag Cement Industries (Private) Limited and
Rohri Cement (Private) Limited in terms of the Ordinance for
transferring and vesting of Zeal Pak into Zeal Pak Cement Factory
Limited, Zeal Pak Industries (Private) Limited, Pakistan Slag
Cement Industries (Private) Limited and Rohri Cement (Private)
Limited and constituting the de-merged Companies as Zeal Pak
Cement Factory Limited, Zeal Pak Industries (Private) Limited,
Pakistan Slag Cement Industries (Private) Limited and Rohri
Cement (Private) Limited.
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Scheme of Arrangement for Demerger
1.18
"Security” or “Securities" means interests, rights or titles in and to
any or all mortgages or charges (whether legal or equitable),
debentures, bills of exchange, promissory notes, guarantees, liens,
pledges (whether actual or constructive), hypothecations, assignments
by way of security, rights of set-off, or other means of securing
payment or discharge of any liability relating to and connected with
Zeal Pak.
1.19
“Zeal Pak Industries” means Zeal Pak Industries (Private)
Limited, a private company limited by shares, incorporated under the
provisions of the Companies Ordinance, 1984, with its Registered
Office at 4th Floor, Panorama Centre, Building No. 2, Doctors Plaza,
Raja Ghazanfar Ali Khan Road, Saddar - Karachi. The principal
business of Zeal Pak Industries is the production and manufacturing
of paper-sacks and packages and manufacture of fire brick clays.
The headings are inserted for convenience and shall not affect the
construction of the Scheme and shall not be construed ejusdem generis.
ARTCILE 2
CAPITAL OF ZEAL PAK
The authorized share capital of Zeal Pak is Rs. 4,278,385,260/- divided into
427,838,526 ordinary shares of Rs. 10 each.
ARTICLE 3
SCHEME OF ARRANGEMENT FOR DE-MERGER
This Scheme is proposed pursuant to the provisions of Sections 284 to 288 of
the Ordinance to reconstruct Zeal Pak by separating it into four separate
entities. The Assets, Claims, Contracts, Liabilities and Securities of the De-
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Scheme of Arrangement for Demerger
merged Company shall and be deemed to have been transferred at book value,
as of the Effective Date. Physical delivery and transfer of such assets including
registration and mutation, thereof where applicable or necessary shall be made
or procured within a reasonable time but not later than 365 days from the date
of the order of the Court sanctioning this Scheme. This Scheme shall be subject
to sanction of the Court with such modifications and or additions or deletions
herein as may be ordered by it. This Scheme shall, subject to the sanction by
the Court, become effective and come into operation from the Effective Date
as specified hereunder, unless otherwise determined by the Court. The terms of
this Scheme are set-forth hereunder.
ARTICLE 4
ASSETS, CLAIMS, CONTRATCS, LIABILITIES AND SECURITIES
4.1
The Assets, Claims, Contracts, Liabilities and Securities of the Demerged Company shall and be deemed to have been transferred at book
value, as of the Effective Date. Physical delivery and transfer of such
assets including registration and mutation, thereof where applicable or
necessary shall be made or procured within a reasonable time but not
later than 365 days from the date of the order of the Court sanctioning
this Scheme. This Scheme shall be subject to sanction of the Court with
such modifications and or additions or deletions herein as may be
ordered by it. The De-merging Companies’ Undertaking shall comprise
the following:
(a)
Assets
The assets and properties of Zeal Pak, that prior to the Merger dated
May 13, 2008 exclusively or primarily belonged to the De-merging
Companies, including without limitation, properties of all kinds and by
whatever title held and whether movable or immovable or tangible or
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Scheme of Arrangement for Demerger
intangible, and without limiting the generality of the foregoing in
particular:
(i)
The entire estate, right, title and interest of Zeal Pak, in the
pieces or parcels of land which were amalgamated and added to
its assets through the Merger and factories, warehouses,
buildings and other structures, together with all rights,
easements, privileges and advantages appurtenant thereto or for
the benefit thereof;
(ii)
All plants and equipment, spare parts, tools, equipment, motor
vehicles, furniture, fixtures and fittings, including without
limitation, those described in Annex 1;
(iii)
All stock-in-trade, inventory, stocks, raw materials, ingredients,
packaging, office supplies, engineering spares, consumable
stores, work-in-progress, finished goods;
(b)
Contracts
(i)
To the extent the same relates to and belonged to the business
activities of the De-merging Companies, all contracts that
remain in whole or in part to be performed at the Completion
Date entered into or subsisting in favour of Zeal Pak inclusive
of all rights and obligations of Zeal Pak arising thereunder;
(ii)
To the extent the same relate to the business activities of the
De-merging Companies, all agreements, trusts, leases,
conveyances, grants, instruments of transfer, engagements,
commitments and arrangements entered into by or subsisting in
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Scheme of Arrangement for Demerger
favour of Zeal Pak, inclusive of all rights and obligations of
Zeal Pak arising thereunder;
(iii)
All past and current documents, customer lists, product and
supplier lists, catalogues, literature, employee records,
documents of title, sales targets, sales statistics, market share
statistics, market surveys and reports, marketing research any
other advertising or other promotional materials and accounting
(including management account records) and other financial
data whether in hard copy or in computer held form;
(c)
Claims
All claims, book trade and other debts or sums (including supplier’s
credit notes) due, owing, accrued or payable to Zeal Pak (whether
invoiced or not, and whether or not due and payable), advances,
deposits, prepayments and other receivables, investments, cash in hand
and at Bank, or other depositories; but the transfer and vesting of such
assets shall be subject to mortgages or charges or other encumbrances
subsisting thereon as security for the liabilities and obligations of Zeal
Pak pertaining to the business activities of the De-merging Companies,
a list of such mortgages and charges as at 2013 is set forth in Annex 2.
(d)
Telecommunication Facilities
All connections and facilities of telecommunications owned or leased
or licensed including telephones and mobile telephones, telexes and
facsimiles and benefits of all payments and deposits utilized for the
business activities of the De-merging Companies and located at sites
and office of Zeal Pak and the benefit of all payments and deposits
made by Zeal Pak in connection therewith;
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Scheme of Arrangement for Demerger
(e)
Utility Connections
Meter connections and other installations owned or leased or licensed
to Zeal Pak for business activities of the De-merging Companies and
located at the plants, factories and sites of Zeal Pak for the supply of
electricity, gas and water and the benefit of all payments and deposits
made by Zeal Pak in connection therewith;
(f)
Intellectual Property and Records
(i)
All rights, title interests, patents, trade marks, service marks,
designs, copyrights and inventions used exclusively in the
business of the De-merging Companies’ business activities,
including without limitation, any licenses (including the
benefits and burdens of such licenses) for the same and any
applications or the rights to apply for protection or registration
of any of the same having an effective filing date or priority
date on or earlier that the Completion Date and any continuing,
reissue, divisional and reexamination patent application;
(ii)
All technical data and know-how, industrial and technical
information, trade secrets, processes, confidential information,
drawings, formulations, technical reports, operating and testing
procedures, instruction manuals, raw material or production
specifications, results of research and development works (in
hard copy or computer held form) and all other such intellectual
property in the cement manufacturing business owned by Zeal
Pak;
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Scheme of Arrangement for Demerger
(g)
Outstanding Amounts
(i)
All amounts owing (whether or not due for payment) or payable
by Zeal Pak and which are unpaid at the Completion Date in
respect of supply of goods, raw materials, utilities and services
(including, without limitation, credit notes granted and
advances received from suppliers or customers) to the extent
arising exclusively or primarily in the ordinary course of
business in relation to or in connection with or from the
operations of that business activities undertaken by the Demerging Companies;
(ii)
Cash in the Bank or other accounts of Zeal Pak maintained
exclusively or primarily for or in connection with the business
activities of the De-merging Companies;
(h)
Rights
All type of rights, powers, authorities and privileges of Zeal Pak
relating exclusively or primarily to the business activities of the Demerging Companies, including without limitation:
(i)
The contracts of employment of the Employees and all rights,
obligations and liabilities of Zeal Pak arising after the
Completion Date under such contracts or otherwise in relation
to the Employees, including such liabilities payable on
termination of service by way of gratuity, provident fund,
pension or otherwise;
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Scheme of Arrangement for Demerger
(ii)
All other rights to the extent they relate to the business that falls
under the ambit of the De-merging Companies’ sectors and
areas of work;
(iii)
All registrations, licenses, permits, authorizations, sanctions,
permissions and approvals issued or granted by any
government, governmental department or agency or any
statutory or local authority or any municipal corporation to Zeal
Pak; and
(iv)
All concessions, entitlements, tariff protections and duty and
tax exemptions and remissions including, without limitation
those listed in Annex 3; and
(v)
All credits and refunds on account of sales tax, customs duty,
octori and other duties, taxes, levies, fee charges or imposts
paid on account of or in connection with the purchase,
acquisition or import of plant, machinery, equipment and other
materials comprised in this proposed Scheme and inclusive of
the right to adjust the amount of sales tax paid on the purchase
acquisition or import thereof (input tax) against sales tax
payable by the De-merging Companies on the products sold by
them (output tax); and
(vi)
Rights against third parties (including sub-contracts and any
retention of title rights).
But excluding all other undertakings and businesses and all other
properties, assets, rights, liabilities, obligations and debts of Zeal Pak,
and without limiting the generality of the foregoing, the following:
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Scheme of Arrangement for Demerger
(i)
all liabilities arising as a result of Zeal Pak’s failure to comply
with any relevant and legally enforceable corporate or other
laws, rules, ordinances or other regulations prior to the
Completion Date;
(ii)
all liabilities arising as a result of Zeal Pak’s failure to obtain
any required relevant governmental or regulatory permit,
license, consent or other authorization or renewal or variation
thereof prior to the Completion Date;
(iii)
all liabilities in respect of any breach of contract, tort, product
liability or other claim relating to the period up to and including
the Completion Date, whether asserted by any creditor,
customer, distributor, employee, claimant or any other party;
(iv)
any suit, action arbitration, charge, governmental investigation,
claim, litigation or proceedings, costs, demands and expenses
relating to Clauses (i) to (iii) above;
(v)
the corporate names, trademarks
(other than those limited
exclusively to the business works of the De-merging
Companies) and service names used by Zeal Pak;
(vi)
the benefits of any policies of insurance issued to or otherwise
available to Zeal Pak, save to the extent that cover extends to
the business activities of the De-merging Companies, under
such policies;
(vii)
any liabilities for salaries or wages due to Employees arising
prior to and remaining outstanding on the Completion Date;
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Scheme of Arrangement for Demerger
(viii)
any non-operational provisions including, without limitation,
provisions for corporate and income taxes or dividends; or
(ix)
any provisions for liabilities and charges which are anticipated
to be paid more than one year after the Completion Date, any
environmental creditors, contingent liabilities and any accruals
for interest payable which is not reflected in the financial debt
and any liabilities under guarantees for customs clearance of
plant and machinery which will expire upon delivery of an
installation certificate to the custom authorities
All of which shall remain with Zeal Pak and shall continue to be dealt
with by Zeal Pak as its own undertakings, businesses, properties,
assets, rights, liabilities, obligations and debts.
4.2
The entire Undertaking for De-merger of the De-merging Companies,
as subsisting immediately preceding the Completion Date without
further act or deed, matter or thing, process or procedure shall be
separated from Zeal Pak and shall be transferred to and vested in the
De-merging Companies on the Completion Date.
4.3
The separation from Zeal Pak and the transfer to and vesting in the
De-merging Companies of the De-merger Undertaking in accordance
with this Scheme shall be treated to having taken effect from the
Effective Date and as from that time and until the Completion Date the
De-merger Undertaking shall be deemed to have been carried on for
and on account and for the benefit of the De-merging Companies. All
profit and losses accruing or arising or incurred by Zeal Pak through
the operations of the De-merging Companies’ De-merger Undertaking,
from the Effective Date, shall be treated as the profits or losses, as the
case may be, of the De-merging Companies.
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Scheme of Arrangement for Demerger
4.4
Notwithstanding anything contained in paragraph 3 above, the debts,
liabilities and obligations excluded from the De-merger Undertaking in
paragraph 1 above whether arising before or after the Effective Date,
shall not at any time, be transferred or vested in the De-merging
Companies.
4.5
The profits, reserves and surpluses (if any) of Zeal Pak to the extent
they relate to the operations of the De-merger Undertaking during the
period from the Effective Date to the Completion Date shall not be
utilized by Zeal Pak for or in connection with the declaration of
dividends or the issuance of bonus shares or otherwise than in the
operation of the De-merger Undertaking in the ordinary course of
business.
ARTICLE 5
EMPLOYEES
5.1
All the employees of the Zeal Pak, employed for the manufacturing of
paper sacks and packages, and for carrying out business as
manufactures of fire brick clays shall from the appointed date become
the employees of Zeal Pak Industries on the same terms and conditions
on which they were employed by Zeal Pak immediately prior to the
appointed date without being required to be paid any terminal or other
benefits (other than accrued salaries and wages) by Zeal Pak.
5.2
All the employees of the Zeal Pak employed for the manufacturing of
slag cement and its allied product, shall from the appointed date
become employees of Pakistan Slag Cement on the same terms and
conditions on which they were employed by Zeal Pak immediately
prior to the appointed date without being required to be paid any
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Scheme of Arrangement for Demerger
terminal or other benefits (other than accrued salaries and wages) by
Zeal Pak.
5.3
All the employees of the Zeal Pak employed for the purpose of the
manufacturing cement and to purchase and take on lease or otherwise
acquire property of any other company for growth and expansion, shall
become employees of Rohri Cement.
ARTICLE 6
DETERMINATION of De-merger Undertaking
Balance sheets shall be prepared of the properties, assets, rights, liabilities
and obligations of Zeal Pak comprised in the De-merger Undertaking, as
reflected in the books of Zeal Pak immediately preceding the Effective Date
and the Completion Date, which shall be audited by Chartered Accountants,
within sixty days from the Completion Date. Such balance sheets shall be
prepared in accordance with accounting principles generally accepted in
Pakistan and shall include notes setting out the methodology and
assumptions used in identifying the properties, rights, liabilities and
obligations of Zeal Pak relating to the nature of business undertaken by the
De-merging Companies.
ARTICLE 7
ISSUANCE OF SHARES BY ZEAL PAK
For Zeal Pak transferring to and vesting in the De-merging Companies, the
De-merger Undertaking, the swap ratio determined by M/s Hameed Khan and
Company, Chartered Accountants, under the Merger dated May 13, 2008 will
be completely reversed.
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ARTICLE 8
MISCELLANEOUS
All suits, appeals, arbitrations, governmental investigations and other legal
proceedings instituted by or against Zeal Pak in respect of the De-merger
Undertaking pending on or immediately before the Completion Date shall be
treated as suits, appeals and legal proceedings by or against the De-merging
Companies and may be continued, prosecuted and enforced by or against the
De-merging Companies accordingly.
23
Scheme of Arrangement for Demerger
Annex 1
LIST OF ASSETS:
W.D.V
(Rupees in '000)
1) PLANT AND MACHINAERY
542,312
2) FITTING AND INSTALLATION
i)
Electric installation
ii)
Gas installation
iii)
Generator
1,985
18
1,641
3) FURNITURE AND FIXTURES & EQUIPMENTS
2,057
4) MOTORS VEHCILES
i)
Cars and jeeps
686
ii)
Locomotives, dumpers, shovels & trucks
269
5) STORE, SPARES AND LOOSE TOOLS
107,091
24
Scheme of Arrangement for Demerger
Annex 2
(Rupees in '000)
1) Trade debts
10,000
2) Trade creditors
856,738
3) Accrued expenses
93,768
4) Loan and Advances
86,381
5) Trade Deposit and short term pre-payments
15,783
6) Other receivables
85,918
7) Cash in Bank Balances
6,594
8) Mortgage and charges
–
25
Scheme of Arrangement for Demerger
Annex 3
1) Mining lease for lime stone over an area 1693.9 acres of land situated near Husri
(R.S) District Hyderabad.
2) Mining lease of lime stone over an area of 1755 acres in Deh Ganjo Takkar
District Hyderabad.
3) Mining lease for lime stone over an area of 793.38 of land situated Ganju Takkar
District Hyderabad.
26
Scheme of Arrangement for Demerger