EGM NOTICE

Members of APITCO Limited are hereby given notice for the Extraordinary General Meeting of the Company, the schedule of which and business to be transacted therein, are given below:

Day and Date    : Monday, February 08, 2010  

Time                 : 11.00 A.M.

Venue               : Registered Office: 8th Floor, Parisrama Bhavanam, Basheerbagh, Hyderabad-500 004

SPECIAL BUSINESS

To Consider and if thought fit, to pass with or without modification(s), the following resolution as Special Resolution:

“RESOLVED pursuant to Section 31 of the Companies Act, 1956, and other applicable provisions, if any, of the Companies Act, 1956, approval be and is hereby accorded for amending the following Articles of Articles of Association of the Company by inserting SIDBI’s name in place of IDBI’s name in all clauses of the Articles of Articles of Association of the Company:

ARTICLE - 3

RIGHTS OF SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA

Rights conferred on the Small Industries Development Bank of India, when exercisable

It is hereby declared by way of clarification that all the rights and powers conferred by these Articles on the Small Industries Development Bank of India (in these Articles, referred to as the "The SIDBI") shall be exercised and the references herein to the SIDBI shall have application only after it becomes a member and only so long as it continues to be a member with not less than 40% of the subscribed capital of the Company.

ARTICLE – 104 sub-clause (3)

Subject to provisions of section 255 of the Companies act, 1956 as long as Sidbi continues to hold not less than 40% of the subscribed capital of Company, Sidbi shall be entitled to nominate upto 1/3rd of the total number of Directors of the Company and shall be entitled to remove any or all of the Directors so nominated by it and to nominate any other persons(s) thereto from time to time. The Directors so appointed shall not be liable to retire by rotation. Out of the Directors so appointed, the Sidbi may designate one as the Chairman and the same or one other as the Managing Director of the Company.

ARTICLE – 136 sub-clause (1)

Managing Director

Subject to the provisions of the Act, the SIDBI shall have the power to appoint and to re-appoint one Managing Director of the Company for a term not exceeding five years at a time and upon such terms and conditions as the SIDBI thinks fit.

POWER OF SIDBI TO GIVE DIRECTIVES AND OF CHAIRMAN TO RESERVE IMPORTANT DECISIONS FOR SIDBI

ARTICLE – 178

Power of SIDBI to give Directives

Notwithstanding anything contained in any of these Articles, so long as the SIDBI holds not less than 40% of the subscribed capital of the Company, the SIDBI may, from time to time, issue such directives as it may consider necessary in regard to the conduct of the business of the Company of Directors thereof and in like manner may vary and annul any such directive. The Directors shall give immediate effect to the directives so issued.

ARTICLE – 179

Chairman to reserve certain important decisions for SIDBI

The Chairman shall reserve for the approval of the SIDBI any proposals to or decisions of the Board of Directors in respect of any matter which, in the opinion of the Chairman, are of such importance as should be reserved for such approval.

No action shall be taken by the Company in respect of any proposals or decisions of the Board of Directors reserved for the approval of the SIDBI as aforesaid until its approval for the same has been obtained.

Notes

1. A member entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote instead of himself and such a proxy need not be a member of the Company.
2. Proxies in order to be effective must be received at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.
3. An explanatory statement in respect of the above special business pursuant to the provisions of Section 173(2) of the Companies Act 1956 is annexed hereto.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACTS, 1956

Item No. 1:

As you are aware, pursuant to the provisions of Industrial Development Bank of India Act, 1964 (IDBI Act), erstwhile Industrial Development Bank of India (IDBI) was vested with the powers and authority to act as a principal financial institution was inter alia, in promoting and associating in promotion of companies to provide consultancy services etc. to industrial concerns for accelerating the pace of industrialization.  In pursuance of the said powers and authority IDBI, as a principal financial institution was associated with ICICI Bank Ltd (formerly known as Industrial Credit and Investment Corporation Ltd. (ICICI Bank), IFCI Ltd (formerly known as Industrial Financial Corporation Ltd.) and other Banks in promoting APITCO Limited (formerly known as Andhra Pradesh Industrial and Technical Consultancy Organisation Ltd.) (APITCO) inter alia, to provide consultancy services to Small and Medium Enterprises.  For the purpose, IDBI subscribed to 1335 number of equity shares of face value of Rs.1,000/- each, aggregate nominal value of Rs.13,35,000/- in the capital of APITCO Limited (i.e. 41.29% of total subscribed and paid-up equity capital).

Pursuant to the Industrial Development Bank (Transfer of Undertaking and Repeal) Act, 2003 (hereinafter referred to as “the Transfer Act”) read with the Notification dated September 29, 2004 issued by Central Government, with effect from October 1, 2004) IDBI Act has been repealed and the undertaking of IDBI has been transferred to, and vested in, the Industrial Development Bank of India Ltd., a Company incorporated under the Companies Act, 1956 and having its Registered Office at IDBI Tower, WTC Complex, Cuffe Parade, Mumbai – 400 005 (hereinafter referred to as “IDBI Ltd.”).  Further in terms of Section 4(4) of the Transfer Act, any proceedings or cause of action pending or existing immediately before the appointed day by or against IDBI in relation to its undertaking may, as from the appointed day, be continued and enforced by or against IDBI Ltd. By virtue of said Transfer Act all the investments / subscriptions made by IDBI stands transferred and vested with IDBI Ltd.

You are also aware that the name of IDBI Ltd., has, subsequently, been changed to IDBI Bank Limited (IDBI Bank) pursuant to section 21 of the Companies Act 1956 with effect from May 7, 2008.

In terms of section 19 (2) of Banking Regulation Act 1949, (BR Act), IDBI Bank, being a banking company, cannot hold shares in any Company, whether as pledge, mortgagee or absolute owner, of an amount exceeding thirty percent of the paid-up share capital of that company or thirty percent of its own paid-up share capital and reserves, whichever is less.  Therefore, a decision has been taken by IDBI Bank to sell the entire shareholding of IDBI Bank in all the TCOs.

You are also aware that Small Industries Development Bank of India (SIDBI) has been established on April 2, 1990 pursuant to the Small Industries Development Bank of India Act, 1989 as the principal financial institution was for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto.

As TCOs has been promoted with the object to provide the consultancy services, inter alia, to small and medium scale sector and as SIDBI is also associated with promotion of the similar activities IDBI Bank has decided to transfer it’s entire shareholding in TCOs to SIDBI for the consideration and on the terms and conditions mutually agreed between IDBI Bank and SIDBI for which SIDBI has also agreed. 

IDBI Bank presently holds 19.21% of equity share capital of SIDBI.  Entire shareholding of SIDBI is held and owned by Government of India owned Banks/Financial Institutions.

IDBI Bank Limited vide letter no. F&AD(Invt.Cell) 3647/ TCO(APITCO) dated July 31, 2009, has requested to register the transfer of shareholding of IDBI in APITCO to SIDBI on receipt of required documents (duly signed and adequately stamped transfer deed with share certificates etc.).  In order to reflect the changes in shareholding, IDBI has requested to take necessary steps to get the resolutions passed in the respective meetings of Board of Directors and Shareholders to make necessary alterations in Articles of Association of APITCO to replace the word IDBI with SIDBI, wherever it appears. Further, IDBI has requested to ensure that all powers and privileges vested with IDBI stands transferred to SIDBI.

The Board of Directors at its 152nd meeting held on August 13, 2009 discussed IDBI’s request for transfer of its entire shareholding in APITCO Limited to Small Industries Development Bank of India. The Board while discussing on the said issue felt that they need to consult with their respective institutions before approving the said resolution. The Board after detailed discussions asked the Managing Director to circulate the said resolution for Directors approval. With the concurrence of the Chairman of APITCO, the proposal was circulated to all the Directors of APITCO “To consider and approve for transfer of entire shareholding of IDBI in APITCO Limited to SIDBI” on August 17, 2009. The Circular Resolution was approved by the Chairman of the Company and Seven Directors. Only one Director did not approve. Since majority of the Directors have given their consent for transfer of entire shareholding of IDBI in APITCO Limited to SIDBI, the said resolution stands approved and IDBI has since transferred the shares to SIDBI. The Board of Directors has taken note of the circular resolution and its approval at its 153rd meeting held on November 10, 2009.

The Board of Directors of APITCO at its 153rd meeting held on November 10, 2009 had unanimously approved amending Articles of Association of the Company to replace the word IDBI with SIDBI, wherever it appears.

The resolution is recommended for the approval of the Members.

None of the Directors of the Company is in any way concerned or interested in the Resolution.