Hallmark : Notice of Extraordinary General Meeting to be held on 15 January 2024

Notice of Extraordinary General Meeting

Notice is hereby given to the Members that the Extraordinary General Meeting of held on Monday 15th January 2024 at 02:30 p.m. at Hotel Crown Inn located Iraq, Saddar, Karachi to transact the following business:

Hallmark Company Limited will be at Plot No. 171, Off 21, Sharah - e -

1. To read and confirm the minutes of the Extraordinary General Meeting held on November 30, 2023.
2. To elect Seven (07) Directors of the Company, as fixed by the Board of Directors pursuant to Section 159 (1) of the Companies Act, 2017 for a period of three years. All seven (07) retiring Directors have filed intention to offer themselves for re-election. The names of the retiring Directors are as follows:

1.	Mr. Syed Aamir Hussain	2.	Mr. Waseem Ahmad	3.	Mr. Jamal Nasir Khan
4.	Mr. Syed Hashim Ali	5.	Mr. Asad Mujtaba Naqvi	6.	Mr. Syed Imran Haider

7. Ms. Fabzia Ahsen

3. To consider, and if deemed fit, to pass with or without modification, a special resolution in terms of Section 199 and Section 208 of the Companies Act, 2017 to approve and authorize the Company to make an equity investment in its associated company, Supernet Limited, by acquiring up to 100,216,722 shares constituting 81.18% of the issued and paid up share capital of Supernet Limited, from Telecard Limited, for an amount equivalent to the sum of PKR. 1,308,830,390/- (Pak Rupees One Billion Three Hundred Eight Million Eight Hundred Thirty Thousand Three Hundred Ninety).

" pursuant to Section 199 and Section 208 of the Companies Act, 2017, the Company is hereby authorized to make equity investment in its associated company, Supernet Limited, by acquiring up to 100,216,722 shares constituting 81.18% of the issued and paid up share capital of Supernet Limited from Telecard Limited, for an amount up to the sum of PKR. 1,308,830,390/- (Pak Rupees One Billion Three Hundred Eight Million Eight Hundred Thirty Thousand Three Hundred Ninety).

" as permitted in Regulation 6 of the Companies (Investment in Associated Companies or Associated Undertakings) Regulations 2017, the members specifically authorize the validity of the abovementioned equity investments to extend beyond 12 months and remain valid for a period of up to 18 months."

" Mr. Waseem Ahmad being Chief Executive Officer/Director or Mr. Muhammad Farhan Saeed being Company Secretary of the Company (the ''Authorized Persons'') be and are hereby singly authorized to take any and all actions as may be required from time to time for the purposes of the above resolutions, to complete all necessary legal and corporate formalities with regard to the above resolution and to do all such acts, deeds and things as may be deemed necessary or expedient for concluding the said matters."

" all actions taken by the Authorized Persons on behalf of the Company in respect of the above matters are hereby confirmed and adopted by the Company in full."

1. To consider and if thought fit, to pass the following resolutions as a special resolution, with or without any modification(s), addition(s) or deletion(s):
   the authorized share capital of the Company be and is hereby increased from PKR 1,250,000,000/- (Pak Rupees One Billion Two Hundred and Fifty Million) divided into 125,000,000 (One Hundred and Twenty-Five Million) Ordinary shares of PKR 10/- (Pak Rupees Ten) each to PKR 1,500,000,000/- (Pak Rupees One Billion Five Hundred Million) divided into 150,000,000 (One Hundred and Fifty Million) Ordinary shares of PKR 10/- (Pak Rupees Ten) each."
   the following amendments be made in the Memorandum and Articles of Association of the Company to reflect the increase in the authorized share capital:
   Clause V of the Memorandum of Association of the Company be and is hereby amended to read as follows:
   "V. The authorized share capital of the Company is PKR 1,500,000,000/- (Pak Rupees One Billion Five Hundred Million) divided into 150,000,000 (One Hundred and Twenty-Five Million) Ordinary shares of PKR 10/- (Pak Rupees Ten) each. The Company shall have the powers to increase, reduce or reorganize the capital of the Company and divide shares in the capital for the time being into several classes in accordance with the Companies Ordinance,1984."
   Article 5 of the Articles of Association of the Company be and is hereby amended to read as follows:
   "5. The authorized share capital of the Company is PKR 1,500,000,000/- (Pak Rupees One Billion Five Hundred Million) divided into 150,000,000 (One Hundred and Fifty Million) Ordinary shares of PKR 10/-
   (Pak Rupees Ten) each."
   Mr. Waseem Ahmad being Chief Executive Officer / Director or Mr. Muhammad Farhan Saeed being Company Secretary of the Company be and are hereby authorized singly to do all acts, deed and things, take any or all necessary actions to complete all legal and corporate formalities and file all requisite documents with the Registrar and get approvals from Securities Exchange and Commission of Pakistan in order to effectuate and implement this resolution.
2. To transact with the permission of the Chair any other business which may be transacted at an Extraordinary General Meeting.

(Attached to this Notice is a Statement of Material Facts covering the above-mentioned special business, as required under Section 166(3) and 134(3) of the Companies Act, 2017 and the information and disclosures as required under the Companies (Investment in Associated Companies or Associated Undertakings) Regulations, 2017, the Companies (Related Party Transactions and Maintenance of Related Records) Regulations, 2018 and clause A (3), (4) & (9) of SRO 423(I)/2018 dated April 03, 2018)

	By Order of the Board
	Muhammad Farhan Saeed
Karachi: 20 December 2023	Company Secretary

The Register of Members and the Share Transfer Books will be closed from 9th January 2024 to 15th January 2024 (both days inclusive). Transfers received in order at the office of the Company's Registrar namely F.D. Registrar Services (Private) Limited, located on the 17th Floor, Trade Centre, I.I. Chundrigar Road, Karachi, by the close of business on 8th January 2024 will be considered in time to attend and vote at the meeting and for the entitlement of dividend (if any).

1. A Member entitled to attend, speak and vote at the Extraordinary General Meeting is entitled to appoint another member as his/her proxy to attend, speak and vote on his/her behalf.
2. An instrument appointing proxy and the power of attorney or other authority under which it is signed or a notarized certified copy of the power or authority must be deposited at the registered office of the Company at least 48 hours before the time of the meeting. Form of Proxy can be downloaded from Company's website:https://hiclpk.com/announcements-and-forms/
3. CDC Account Holders will further have to follow the under-mentioned guidelines as laid down in Circular 1 dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan ("SECP").

1. For Attending AGM/EOGM
2. 1. In case of individuals, the account holder or sub-account holder whose securities and their registration details are uploaded as per the CDC regulations, shall produce proof of his / her identity by showing their Computerized National Identity Card (CNIC) at the time of attending the meeting.

1. In case of a corporate entity, a Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the Meeting.

1. For Appointing Proxy

1. In case of individuals, the account holder or sub-account holder whose registration details are uploaded as per the CDC regulations shall submit the Proxy Form as per the above requirement.
2. Attested copies of CNIC of the beneficial owners and the proxy shall be furnished with the Proxy Form. The proxy shall produce his original CNIC at the time of the meeting.

Video Conference Facility can be availed by members of the Company. In this regard, please submit to the registered office address of the Company, the following request 10 days before the date of the Extraordinary General Meeting.

"I/We, ____________________ of _____________, being a member of Hallmark Company Limited, holder of

__________ ordinary share(s) as per registered Folio / CDC Account No. _______________ hereby opt for video

conference facility at _________________________."

1. In compliance with Section 119 of the Companies Act, 2017 and Regulation 19 Companies (General Provisions and Forms) Regulations, 2018 members are requested to immediately provide their mandatory information such as CNIC number, updated mailing address, email, contact mobile/telephone number and International Banking Account Number (IBAN) together with a copy of their CNIC to update our records and to avoid any non-compliance of the

law. Otherwise, all dividends will be withheld in terms of Regulation 6 of the Companies (Distribution of Dividends) Regulations, 2017;

∙	For physical shares	to	M/s F.D. Registrar Services (Private) Limited
∙	For shares in CDS	to	CDC Investors A/c Services or respective participant

1. Members are requested to submit a declaration (CZ-50) as per Zakat & Ushr Ordinance 1980 for zakat exemption and advise a change in address if any.

Any person who seeks to contest election to the office of Director shall, whether he is a retiring director or otherwise, file with the Company at its Registered Office, Hallmark Company Limited, 4th Floor, Tower B, World Trade Center, Khayaban - E - Roomi, Block 05, Clifton, Karachi, not later than fourteen days before the date of the meeting, the following documents:

1. Notice of his/her intention to offer himself/herself for the election of directors in terms of Section 159(3) of the Act, together with the consent to act as a director in Form 28 prescribed under the Companies Act, 2017;
2. A detailed profile along with office address as required under SECP's SRO 634 (I)/2014 dated 10 July 2014;
3. A director must be a member of the Company at the time of filing of his/her consent for contesting the election of directors except a person representing a member, which is not a natural person.
4. A declaration confirming that:
5. • He/she is aware of his/her duties and powers under the relevant laws, Memorandum and Articles of Association of the Company and listing regulations of the Pakistan Stock Exchange Limited;
   • He/she is not ineligible to become a director of a listed company under any provisions of the Act, the Listed Companies (Code of Corporate Governance) Regulations, 2019, and any other applicable law, rules and regulations.

The members are hereby notified that pursuant to Section 143-145 of the Companies Act, 2017 and Companies (Postal Ballot) Regulations, 2018 amended through Notification dated December 05, 2022, issued by the SECP, SECP has directed all listed companies to provide the members with the right to vote through electronic voting facility and by postal ballot, on all matters classified as special business.

Accordingly, members of the Company will be allowed to exercise their right to vote through electronic voting facility for the special business and Election of Directors if the number of persons who offer themselves to be elected is more than the number of directors fixed under sub-section (1) of section 159 of the Act in the forthcoming Extraordinary General Meeting to be held on Monday 15 January 2024 at 02:30 p.m., in accordance with the requirements and subject to the conditions contained in the aforesaid Regulations.

The voting facility through Postal Ballot will be provided for special business and election of Director if the poll is demanded in accordance with Section the 143 and 144 of the Companies Act, 2017 and the Ballot Paper will be disseminated in accordance with the Regulation No. 08 of Companies (Postal Ballot) Regulations, 2018 amended through Notification dated December 05, 2022

Procedure for E - Voting:

1. Details of the e-voting facility will be shared through an e-mail with those members of the Company who have their valid CNIC numbers, cell numbers, and e-mail addresses available in the register of members of the Company by the close of business on 8th January 2024.
2. The web address and login details, will be communicated to members via email. The security codes will be communicated to members through SMS from web portal through the e-voting service provider.
3. Identity of the members intending to cast vote through e-voting shall be authenticated through electronic signature or authentication for login.
4. E-votinglines will start from 12th January 2024 at 09:00 a.m. and shall close on 14th January 2023 at 5:00 p.m. Members can cast their votes at any time during this period. Once the vote on a resolution is cast by a member, he / she shall not be allowed to change it subsequently.

This statement is being furnished in terms of the requirement under Section 166(3) and 134 (3) of the Companies Act, 2017 ("Companies Act"), setting out material facts (including as required pursuant to Section 199 and 208 of the Companies Act) concerning the Special Business to be transacted at the Extraordinary General Meeting of Hallmark Company Limited ("Company") which will be held at Monday 15 January 2024 at 02:30 p.m. at Hotel Crown Inn located at Plot No. 171, Off 21, Sharah - e - Iraq, Saddar, Karachi.

Section 166(3) of the Companies Act, 2017 (the Act) requires that a statement of material facts be annexed to the notice of the general meeting called for the purpose of election of Directors which shall indicate the justification for choosing independent directors.

The term of office of the present Directors of the Company has expired on November 26, 2023. In terms of Section 159(1) of the Companies Act, 2017 (the "Act"), the directors have fixed the number of elected Directors at Seven (07) to be elected in the EOGM for a period of three years.

The present Directors are interested to the extent that they are eligible for re-election as Directors of the Company.

Independent directors will be elected through the process of election of directors in terms of Section 159 of the Act and they shall meet the criteria as laid down under Section 166(2) of the Act and the Companies (Manner and Selection of Independent Directors) Regulations, 2018 and his/her name is included in the data bank of independent directors maintained by Pakistan Institute of Corporate Governance (PICG) duly authorized by Securities and Exchange Commission of Pakistan. Further, their selection will be made due to their respective competencies, skill, knowledge and experience.

Additional documents are to be submitted by the candidates intending to contest election of directors as independent director:

1. Declaration by Independent Director(s) under Clause 6(3) of the Listed Companies (Code of Corporate Governance) Regulations, 2019; and
2. Undertaking on non-judicial stamp paper that he/she meets the requirements of Regulation 4(1) of the Companies (Manner and Selection of Independent Directors) Regulations, 2018.

The Company seeks approval from its shareholders to pass the Special Resolutions provided in item No. 3 of the Notice allowing acquisition of up to 100,216,722 shares constituting 81.18% of the issued and paid up capital of Supernet Limited, an associated company of the Company, from Telecard Limited for an amount equivalent to the sum of up to PKR. 1,308,830,390/- (Pak Rupees One Billion Three Hundred Eight Million Eight Hundred Thirty Thousand Three Hundred Ninety) (the "Proposed Transaction").

As the Proposed Transaction constitutes a related party transaction and as majority of the Board of Directors of the Company have an interest in the Proposed Transaction, the Proposed Transaction is required to be approved by the shareholders of the Company in accordance with Section 207 and 208 of the Companies Act. Accordingly, the Board of Directors vide resolution by circulation passed on 19 December 2023 have passed directions for convening of such shareholders meeting.

Furthermore, for the purposes of compliance with Section 199 of the Companies Act read with Regulation 3(3) of the Companies (Investment in Associated Companies or Associated Undertakings) Regulations, 2017, the Board of Directors of the Company have in any case carried out necessary due diligence for the Proposed Transaction.

Accordingly, in compliance with the relevant provisions of the Companies Act and the Companies (Investment in Associated Companies or Associated Undertakings) Regulations, 2017, the requisite information/disclosure about the Proposed Transaction is as under:

(A)

Regarding associated company or associated undertaking:

(i)

name of associated company or associated

Supernet Limited

undertaking

(ii)

basis of relationship

Associated Company (Subsidiary of Holding Company)

(iii)

earnings per share for the last three years

2023

2022

2021

PKR. 0.41/-

PKR. 1.52/-

PKR.1.82/-

(Restated)

(Restated)

(iv)

break-up value per share, based on latest

PKR. 13.06/- per share (as of 30 June 2023)

audited financial statements

(v)

financial position, including main items of

Financial Position as of and for the year ended 30 June, 2023.

statement of financial position and profit and

Main items of Balance Sheet:

loss account on the basis of its latest

Name of Item

Amount in PKR

financial statements

Total Assets

3,262.425 million

Non-current Assets

487.999 million

Current Assets

2,774.426 million

Net Assets

1,612.668 million

Current Liabilities

1,639.503 million

Main items of Profit and Loss Account:

Name of Item

Amount in PKR

Revenue

3,427.923 million

Profit before taxation

133.090 million

Profit after taxation

50.803 million

(vi)

in case of investment in relation to a project

of associated company or associated

undertaking that has not commenced

N/A

operations

(B)

General Disclosures:

(i)

maximum amount of investment to be made

PKR. 1,308,830,390/- (Pak Rupees One Billion Three Hundred

Eight Million Eight Hundred Thirty Tthousand Three Hundred

Ninety)

(ii)	purpose, benefits likely to accrue to the		Purpose		The purpose of acquisition is
	investing company and its members from					to achieve	internal	group
	such investment and period of investment					restructuring in order to add
						value	to	the	group
						companies.
			Benefit		As above
			Period		The equity investment by the
						Company in Supernet Limited
						is a long term investment.
(iii)	sources of funds to be utilized for investment	The Company will undertake a rights issue for raising investment
	and where the investment is intended to be	funds and will issue right shares to its members, strictly in
	made using borrowed funds:	proportion to their respective shareholding.
	(I) justification for investment through			N/A
	borrowings;
	(II) detail of collateral, guarantees provided
	and assets pledged for obtaining such funds;			N/A
	and
	(III) cost benefit analysis.			N/A
(iv)	salient features of the agreement(s), if any,
	with associated company or associated	A Share Purchase Agreement will be executed by and between
	undertaking with regards to the proposed	the Company and Telecard Limited pursuant to which the
	investment	Company shall acquire up to 100,216,722 shares, constituting
		81.18% of the issued and paid up share capital of Supernet
		Limited, from Telecard Limited against a consideration of up to
		PKR. 1,308,830,390/- (Pak Rupees One Billion Three Hundred
		Eight Million Eight Hundred Thirty Thousand Three Hundred
		Ninety).
(v)	direct or indirect interest of directors,	Hallmark Company Limited and Supernet Limited are under
	sponsors, majority shareholders and their	common directorship of following Directors:
	relatives, if any, in the associated company		∙ Mr. Syed Aamir Hussain
	or associated undertaking or the transaction		∙	Mr. Waseem Ahmad
	under consideration		∙ Mr. Syed Hashim Ali
			∙ Mr. Asad Mujtaba Naqvi
			∙ Mr. Jamal Nasir Khan
		Hallmark Company Limited and Telecard Limited are under
		common directorship of following Directors:
			∙ Mr. Syed Aamir Hussain
			∙	Mr. Waseem Ahmad
			∙ Mr. Syed Hashim Ali
			∙ Mr. Asad Mujtaba Naqvi
			∙	Ms. Fabzia Ahsen

(vi)	In case any investment in associated
	company or associated undertaking has
	already been made, the performance review
	of such investment including complete
	information/justification for any impairment				Not applicable.
	or write offs
(vii)	any other important details necessary for the
	members to understand the transaction				None
(b)	In case of equity investment, following disclosures in addition to those provided under clause (a)
	above:
(i)	maximum price at which securities will be
	acquired			PKR. 13.06/- per share.
(ii)	in case the purchase price is higher than
	market value in case of listed securities and	Not Applicable as the maximum purchase price at which the
	fair value in case of unlisted securities,	shares will be acquired (as specified above) is lower than the
	justification thereof	market value of Supernet Limited's shares.
(iii)	maximum number of securities to be		100,216,722 ordinary shares
	acquired
(iv)	number of securities and percentage thereof		Before and after		Before and after		Before and after
	held before and after the proposed		proposed		proposed		proposed
	investment		investment		investment		investment
			Before		Nil		Nil
			After		Up to 100,216,722		Up to 81.18%
(v)	current and preceding twelve weeks'
	weighted average market price where		Current market price: PKR. 12.80/- per share
	investment is proposed to be made in listed	Approx. Twelve weeks weighted market price: PKR. 12.145/- per share
	securities;
(vi)	fair value determined in terms of sub-
	regulation (1) of regulation 5 for investments
	in unlisted securities				Not applicable

Further, in compliance with the relevant provisions of the Companies Act and the Companies (Related Party Transactions and Maintenance of Related Records) Regulations, 2018 the requisite information/disclosure about the Proposed Transaction is as under:

S.

Description

Information Required

No.

(a)

Name of related party:

Telecard Limited

(b)

Names of the interested or

1. Syed Aamir Hussain (Director)

concerned persons or directors:

2. Mr. Waseem Ahmad (Director)

3. Syed Hashim Ali (Director)

4. Mr. Asad Mujtaba Naqvi (Director)

5. Ms. Fabzia Ahsen (Director)

(c)

Nature of relationship, interest or

The abovementioned directors are also shareholders in

concern

along

with

complete

Telecard Limited with the following shareholding:

information of financial or other

interest or concern of directors,

Sr.

Name of Director

No. of Shares in

No.

Telecard

managers

or

key

managerial

1.

Syed Aamir Hussain

27,439 shares

personnel in the related party:

2.

Mr. Waseem Ahmad

564 shares

3.

Syed Hashim Ali

14,539 shares

4.

Mr. Asad Mujtaba Naqvi

537 shares

5.

Ms. Fabzia Ahsen

537 shares

(d)

Detail,

description,

terms

and

The details and terms and conditions of the transaction will be

conditions of transaction:

set forth in the Share Purchase Agreement which will be

finalized after obtaining shareholders' approval. However, up

to 100,216,722 shares i.e. 81.18% of the issued and paid up

share capital of Supernet Limited will be acquired and

transferred to Hallmark Company Limited by Telecard Limited

against a consideration of up to PKR. 1,308,830,390/- (Pak

Rupees One Billion Three Hundred Eight Million Eight

Hundred Thirty Thousand Three Hundred Ninety) in either

one or multiple phases.

(e)

Amount of transactions:

Up to PKR. 1,308,830,390/- (Pak Rupees One Billion Three

Hundred Eight Million Eight Hundred Thirty Thousand Three

Hundred Ninety)

(f)

Timeframe or duration of the

The Share Purchase Agreement will continue to remain in

transaction

or

contracts

or

effect until the acquisition is completed. It is anticipated that

arrangements:

the transaction will conclude within 18 months, subject to

receipt of all necessary corporate and regulatory approvals.

(g)

Pricing policy:

The shares of Supernet Limited will be acquired at PKR

13.06/- per share i.e. the break-up value per share, based on

the latest audited financial statements. (i.e. 30 June 2023)

(h)

Recommendations

of

the audit

The Board Audit Committee has recommended the aforesaid

committee, where applicable:

transaction to the Board.

(i)

Any other relevant and material

information that is necessary for

The rationale of acquisition is to achieve internal group

the Board to make a well-

restructuring in order to add value to the group companies.

informed decision regarding the

approval of the related party

transactions