futura polyesters limited

Transcription

DRAFT LETTER OF OFFER
Dated: July 17, 2008
For Equity Shareholders of the Company only
FUTURA POLYESTERS LIMITED
(Originally incorporated as Indian Organic Chemicals Limited on February 10, 1960 under the Companies Act, 1956 vide Certificate of
Incorporation bearing Registration no. 11579 issued by the Registrar of Companies, Mumbai. The name of our Company was changed to
Futura Polyesters Limited vide Fresh Certificate of Incorporation dated November 05, 2002, bearing Registration no. 11-11579. The CIN
(Corporate Identification Number) of our Company is L65192MH1960PLC011579. For details of changes in our Registered Office, please
refer chapter titled “History and Other Corporate Information” beginning on page 54 of the Draft Letter of Offer)
Registered and Corporate Office: Paragon Condominium, 3rd Floor, Pandurang Budhkar Marg, Mumbai – 400 013, India.
Tel No: +91-22-24922999 Fax No. +91-22-24923142
Contact Person: Mr. S. Ramachandran, Executive Director, President (Legal), Company Secretary and Compliance Officer,
E-mail: rightsissue@futurapolyesters.com Website: www.futurapolyesters.com
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY
DRAFT LETTER OF OFFER
ISSUE OF 2,62,10,839 EQUITY SHARES WITH A FACE VALUE OF RS.10/- EACH OF FUTURA POLYESTERS LIMITED
(“COMPANY”/”ISSUER”) AT PAR (THAT IS, RS. 10/- EACH) FOR AN AMOUNT AGGREGATING TO RS. 2621.08 LACS ON RIGHTS BASIS
TO THE SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 EQUITY SHARE FOR EVERY 2 FULLY PAID UP EQUITY SHARES
HELD BY THE SHAREHOLDERS ON THE RECORD DATE, I.E. ON [●], 2008 (“ISSUE”)
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they
can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment
decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including
the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does
SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to the section titled “Risk Factors” beginning
on page viii of the Draft Letter of Offer before making an investment in this Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Letter of Offer contains all
information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in the Draft
Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions
expressed herein are honestly held and that there are no other facts, the omission of which makes the Draft Letter of Offer as a whole or any
such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares of our Company are listed on Bombay Stock Exchange Limited (“BSE”). Our Company has received in-principle
approval from BSE by its letter dated [●] granting in-principle approval for listing the Equity Shares arising from this Issue. For the purpose
of this Issue, the Designated Sock Exchange is BSE.
LEAD MANAGER TO THE ISSUE
IDBI Capital Market Services Limited
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai – 400 021, India
Tel.: +91-22-2289 7519/37
Fax: +91-22-2283 8782
E-Mail: futura.rights@idbicapital.com
Website: www.idbicapital.com
Investors Grievance ID: redressal@idbicapital.com
Contact Person: Mr. Neelabh Dubey
SEBI Registration No: INM000010866
ISSUE OPENS ON
[●]
REGISTRAR / SHARE TRANSFER AGENT TO THE ISSUE
Satellite Corporate Services Private Limited
B- 302, Sony Apt., Opposite St. Jude's High School,
Off. Andheri-Kurla Road, Jarimari,
Sakinaka, Mumbai – 400072, India
Tel: +91-22-28520461/28520462.
Fax: +91-22-28511809.
E-mail: service@scspl.net
Website: www.scspl.com
Contact Person: Mr. Michael Monterio
SEBI Registration No.: INR000003639
ISSUE PROGRAMME
LAST DATE FOR
REQUEST FOR
SPLIT APPLICATION
FORMS
[●]
ISSUE CLOSES ON
[●]
TABLE OF CONTENTS
SECTION I – DEFINITIONS AND ABBREVIATIONS ............................................................................................................................... I
DEFINITIONS AND ABBREVIATIONS .......................................................................................................................................................... I
NO OFFER IN OTHER JURISDICTIONS ........................................................................................................................................................ V
CERTAIN CONVENTIONS - PRESENTATION OF FINANCIALS ..............................................................................................................VI
AND USE OF MARKET DATA.......................................................................................................................................................................VI
SECTION II – RISK FACTORS ..................................................................................................................................................................VII
FORWARD LOOKING STATEMENTS ........................................................................................................................................................ VII
RISK FACTORS............................................................................................................................................................................................. VIII
SECTION III - INTRODUCTION ...................................................................................................................................................................1
SUMMARY.........................................................................................................................................................................................................1
THE ISSUE..........................................................................................................................................................................................................4
SUMMARY STATEMENT OF FINANCIAL INFORMATION .......................................................................................................................5
GENERAL INFORMATION ..............................................................................................................................................................................8
CAPITAL STRUCTURE...................................................................................................................................................................................12
OBJECTS OF THE ISSUE ................................................................................................................................................................................21
BASIS FOR ISSUE PRICE ...............................................................................................................................................................................24
SECTION IV – ABOUT US ............................................................................................................................................................................29
INDUSTRY OVERVIEW .................................................................................................................................................................................29
BUSINESS OVERVIEW...................................................................................................................................................................................32
FINANCIAL INDEBTEDNESS........................................................................................................................................................................46
HISTORY AND OTHER CORPORATE INFORMATION .............................................................................................................................54
OUR MANAGEMENT .....................................................................................................................................................................................61
OUR PROMOTERS ..........................................................................................................................................................................................75
OUR PROMOTER GROUP ENTITIES............................................................................................................................................................77
RELATED PARTY TRANSACTIONS ..........................................................................................................................................................110
DIVIDEND POLICY.......................................................................................................................................................................................111
SECTION V – FINANCIAL STATEMENTS .............................................................................................................................................112
FINANCIAL INFORMATION .......................................................................................................................................................................114
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ........................139
SECTION VI – LEGAL AND OTHER INFORMATION .........................................................................................................................155
OUTSTANDING LITIGATIONS, MATERIAL DEVELOPMENTS AND OTHER DISCLOSURES .........................................................155
GOVERNMENT/ STATUTORY APPROVALS ............................................................................................................................................200
SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................................210
TERMS OF THE ISSUE .................................................................................................................................................................................221
SECTION VIII: ARTICLES OF ASSOCIATION OF THE COMPANY ................................................................................................245
SECTION IX – OTHER INFORMATION..................................................................................................................................................285
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION.........................................................................................................285
DECLARATION .............................................................................................................................................................................................286
SECTION I – DEFINITIONS AND ABBREVIATIONS
DEFINITIONS AND ABBREVIATIONS
In the Draft Letter of Offer, the terms “we”, “us”, “our”, “the Company”, “our Company” or “FPL”, unless the
context otherwise implies, refer to Futura Polyesters Limited. All references to “Rs.”or “INR” refer to Rupees, the
lawful currency of India, “USD” or “US$” refer to the United States Dollar, the lawful currency of the United States
of America, references to the singular also refers to the plural and one gender also refers to any other gender,
wherever applicable, and the words “Lakh” or “Lac” means“100 thousand” and the word “million” or “mn” means
“10 lakh” and the word “crore” means “10 million” or “100 lakhs” and the word “billion” means “1,000 million” or
“100 crores”. Any discrepancies in any table between the total and the sums of the amounts listed are due to
rounding off.
Term
“The Issuer” or “The Company” or
“Futura Polyesters Limited” or “Futura”
or “FPL” “We” or “Us” or “our
Company”
Subsidiary
Promoters
Promoter Group Entities
Description
Unless otherwise specified, these references mean Futura Polyesters
Limited, a public limited company incorporated under the Companies
Act, 1956
Innovassynth Investments Limited
Mr. Shyam Bhupatirai Ghia and Mr. Mukund Dharamadas Dalal
Unless the context otherwise requires, refers to those companies/entities
mentioned in the section titled, “Our Promoter Group”
Abbreviations
Abbreviation
AGM
BSE
C&FA
CAF
CAGR
CEO
CDSL
CIN
DIN
DP
DC
ECS
EGM
EOU
EPS
ESOP
ESPS`
FDA
FDI
FEMA
FII(s)
FIPB
GAAP
GoI
HR
HUF
ICAI
IT
IMF
ISIN
ISO
Full Form
Annual General Meeting
Bombay Stock Exchange Limited
Clearing and Forwarding Agents.
Composite Application Form
Compounded Annual Growth Rate
Chief Executive Officer
Central Depository Services (India) Limited
Company Identification Number
Directors Identification Number
Depository Participant
Distribution Centres
Electronic Clearing Service
Extraordinary General Meeting
Export Oriented Unit
Earning Per Share
Employee Stock Option Plan
Employee Stock Purchase Scheme
Food & Drug Administration
Foreign Direct Investment
Foreign Exchange Management Act, 1999
Foreign Institutional Investors registered with SEBI under applicable laws
Foreign Investment Promotion Board, Ministry of Finance, Government of India
Generally Accepted Accounting Principles
Government of India.
Human Resources.
Hindu Undivided Family.
Institute of Chartered Accountants of India.
Information Technology.
International Monetary Fund
International Securities Identification Number
Indian Standard Organisation
i
MD
MIS
MoU
NAV
NGO
NEFT
NOC
NR
NRI(s)
NSDL
PAN
RBI
RoC
RTGS
SEBI
USA / US
Managing Director.
Management Information Systems.
Memorandum of Understanding.
Net Asset Value.
Non-Governmental Organisation.
National Electronic Funds Transfer
No Objection Certificate.
Non Resident.
Non Resident Indian(s).
National Securities Depository Limited.
Permanent Account Number.
The Reserve Bank of India.
The Registrar of Companies, Maharashtra, Mumbai at 100, Everest Building,
Marine Drive, Mumbai – 400 002, Maharashtra, India.
Real Time Gross Settlement
Securities and Exchange Board of India.
United States of America
General Terms / Issue Related Terms
Term
Act
Articles
Auditors
Bankers to the Issue
Board or Board of
Directors
Designated
Stock
Exchange/Stock
Exchange
Draft Letter of Offer
Equity Share(s) or
Share(s)
Equity Shareholders
Fiscal/FY
Indian GAAP
Investor (s)
Issue
Issue Closing Date
Issue Opening Date
Issue Price
IT Act
Lead Manager
Letter of Offer
Memorandum
Promoter Directors
Record Date
Registrar to the Issue
or Registrar / Transfer
Agent
Definition
The Companies Act, 1956 and amendments thereto from time to time.
Articles of Association of our Company.
Refers to M/s. N. M. Raiji & Co
[●]
Board of Directors of Our Company or a Committee(s) thereof.
BSE.
Draft Letter of Offer circulated to the Shareholders of our Company.
Equity Shares of our Company which are listed on BSE
Investors holding the Equity Shares of our Company.
Financial Year ending March 31.
Generally Accepted Accounting Principles in India.
Means the holder(s) of the Equity Shares of our Company as on the Record Date i.e. [●] and
Renouncees.
Issue of 2,62,10,839 Equity Shares with a face value of Rs. 10/- each of our Company at par
(that is, Rs. 10/- each) for an amount aggregating to Rs. 2621.08 lacs on rights basis to the
existing shareholders of our Company in the ratio of one Equity Share for every two fully
paid Equity Shares held by the shareholders on the Record Date, that is on [●], 2008. For
more details, please refer chapter titled “Terms of the Issue” beginning on page 221 of the
Draft Letter of Offer.
[●]
[●]
Rs. 10/- at par with the face value
The Income Tax Act, 1961 and amendments thereto.
Letter of Offer circulated to the Shareholders of Our Company.
Memorandum of Association of our Company.
Mr. Shyam Bhupatirai Ghia and Mr. Mukund Dharamdas Dalal
[●]
ii
Renouncees
Rights Entitlement
Rights Issue
SEBI Act, 1992
SEBI
(DIP)
Guidelines, 2000
Takeover Code
The persons who have acquired Rights Entitlements from Equity Shareholders.
The number of Equity Shares that a shareholder of our Company is entitled to in proportion
to his/her existing shareholding in our Company as on Record Date.
The issue of Equity Shares on rights basis based on terms of the Draft Letter of Offer / Letter
of Offer.
Securities and Exchange Board of India Act, 1992 and amendments thereto.
The Guidelines for Disclosure and Investor Protection issued by SEBI on January 19, 2000
read with amendments issued thereafter from time to time till the date of filing of the Draft
Letter of Offer with SEBI.
The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended
to date.
Company / Industry Related Terms
Term
ADD
ASP
BDO
BHET
CO2
Co-PET
CPET
CSD
DMT
DSIR
FIL
FPL
FRH
GDP
HDPE
IPA
IPP
LDPE
LLDPE
MEG
MT
NDC
O2
OGL
PBN
PBT
PCRPET
PCT
PCTG
PDO
PE
PEN
PET
PETG
PP
PPT
PS
PSF
PTA
PTN
PTT
POY
Definition
Anti-dumping Duty
Activated Sludge Process
Butanedoil
Bis Hydroxy Ethylene Terepthalate
Carbon dioxide
Co-Polymer PET
Crystalline Thermoplastic Polyester Resin
Carbonated Soft Drinks
Dimethyl Terephthalate
Department of Scientific and Industrial Research
Futura Industries Limited
Futura Polyesters Limited
Fast Re-heat
Gross Domestic Product
High Density Polyethelene
Isophthalic Acid
Independent Power Producer
Low Density Polyethelene
Linear Low Density Polyethelene
Mono Ethylene Glycol
Metric Tonne
Dimethyl 2.6 Naphtalene
Oxygen
Open General License
Polybutylene Napthalate
Polybutylene Terephthalate
Post Consumer Recycle PET
Polycyclohexylene dimethylene Terephthalate
Poly Cyclohexylne Dimethylene Terepthalate Glycol Modify
Propandoil
Polyethylene
Polyethylene Naphthalate
Polyethylene Terephthalate
Poly Ethylene Terepthalate Glycol modify
Polypropylene
Poly Propylene Terephthalate
Polystyrene
Polyester Staple Fibre
Purified Terephthalic Acid
Polytrimethylene Napthalate
Poly Trimethylene Terephthalate
Polyester Filament Yarn
iii
PVC
RIL
R&D
SSP
Scheme
of
Arrangement
THF
TNEB
Polyvinyl Chloride
Reliance Industries Limited
Research and Development
Solid State Polymerisation
Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 pursuant to which
there shall be a transfer of our holding of 2,38,50,070 equity shares in Innovassynth Technologies
(India) Limited to Innovassynth Investments Limited, and the shareholders of our Company shall be
entitled to receive five Equity Shares in Innovassynth Investments Limited for every eleven equity
shares held in our Company on the record date fixed for the purposes of determining entitlement of
shareholders under the said Scheme.
Tetrahydrofuran
Tamil Nadu Electricity Board
Notwithstanding the foregoing,
(i)
In the section titled ‘Articles of Association of the Company’ beginning on page 245 of the Draft Letter of
Offer, defined terms shall have the meaning given to such terms in that section;
(ii)
In the chapters titled ‘Financial Statements’ and ‘Statement of Tax Benefits” beginning on pages 112 and
26 of the Draft Letter of Offer, defined terms shall have the meaning given to such terms in those
chapters;
(iii)
In the paragraph titled ‘Disclaimer Clause of Bombay Stock Exchange Limited’ beginning on page 212 of
the Draft Letter of Offer, defined terms shall have the meaning given to such terms in that paragraph.
iv
NO OFFER IN OTHER JURISDICTIONS
The Rights Entitlement and the receipt of the Draft Letter of Offer will not constitute an offer in those jurisdictions
in which it would be illegal to make such an offer and, in those circumstances, the Draft Letter of Offer must be
treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy
of the Draft Letter of Offer should not, in connection with the Issue of Equity Shares or the Rights Entitlement,
distribute or send the same in or into any other jurisdiction where to do so would or might contravene local
securities laws or regulations. If the Draft Letter of Offer is received by any person in any such territory, or by their
agent or nominee, they may not seek to subscribe to the Equity Shares or the Rights Entitlement referred to in the
Draft Letter of Offer and if they choose to do, they will be doing it at their own risk, cost and consequence, and our
Company shall not be liable in this regard.
v
CERTAIN CONVENTIONS - PRESENTATION OF FINANCIALS
AND USE OF MARKET DATA
Unless stated otherwise, the financial data in the Draft Letter of Offer is derived from our restated financial
statements for the year ended March 31, 2008 and for the years ended March 31, 2007; 2006; 2005; and 2004;
prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with SEBI Guidelines,
as stated in the report of our statutory Auditors, M/s. N. M. Raiji & Co in the chapter titled “Financial Information”
beginning on page 114 of the Draft Letter of Offer.
Our fiscal year commences on April 01 and ends on March 31 of a particular year. Unless stated otherwise,
references herein to a fiscal year (e.g., fiscal 2008), are to the fiscal year ended March 31 of a particular year.
In the Draft Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed are
due to rounding-off.
All references to “India” contained in the Draft Letter of Offer are to the Republic of India.
All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official currency of the Republic of India.
Market Data
Market and industry data used throughout the Draft Letter of Offer has been obtained from publications (including
websites) available in public domain and internal Company reports. These publications generally state that the
information contained in those publications has been obtained from sources believed to be reliable but that their
accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that the
market data used in the Draft Letter of Offer is reliable, it has not been independently verified. Similarly, internal
Company reports, while believed to be reliable, have not been verified by any independent source.
vi
SECTION II – RISK FACTORS
FORWARD LOOKING STATEMENTS
We have included statements in the Draft Letter of Offer which contain words or phrases such as “will”, “may”,
“aim”, “is likely to result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”,
“contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or
variations of such expressions, that are “forward-looking statements”.
All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual
results to differ materially from those contemplated by the relevant forward-looking statement. Important factors
that could cause actual results to differ materially from our expectations include but are not limited to:
•
General economic and business conditions in the markets in which we operate and in the local, regional,
national and international economies;
•
Changes in laws and regulations relating to the sectors/areas in which we operate;
•
Increased competition in the sectors/areas in which we operate;
Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and
implement various projects and business plans for which funds are being raised through this Issue;
•
Our ability to meet our capital expenditure requirements;
•
Fluctuations in operating costs;
•
Our ability to attract and retain qualified personnel;
•
Changes in technology;
•
Changes in political and social conditions in India or in countries that we may enter, the monetary and
interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest
rates, equity prices or other rates or prices;
•
The performance of the financial markets in India and globally; and
•
Any adverse outcome in the legal proceedings in which we are involved.
Neither we, our Directors, the Lead Manager, nor any of their respective affiliates have any obligation to update or
otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of
underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI
requirements, our Company, the Lead Manager will ensure that investors in India are informed of material
developments until such time as the grant of listing and trading permission by the Stock Exchange for the Equity
Shares being offered on a rights basis.
For a further discussion of factors that could cause our actual results to differ, see the chapters titled “Risk Factors”
“Business Overview” and “Management Discussion and Analysis of Financial Condition and Results of Operations”
beginning on pages viii, 32 and 139 of the Draft Letter of Offer respectively. By their nature, certain market risk
disclosures are only estimates and could be materially different from what actually occurs in the future. As a result,
actual future gains or losses could materially differ from those that have been estimated.
vii
RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in
the Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our
Equity Shares. If any of the following risks actually occur, our business, results of operations and financial
condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment.
The financial and other implications of material impact of risks concerned, wherever quantifiable, have been
disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not
quantifiable and hence the same has not been disclosed in such risk factors.
The Draft Letter of Offer also includes statistical and other data regarding the Indian Manufacturing Industry. This
data was obtained from industry publications, reports and other sources that we and the Lead Manager believe to
be reliable. Neither we nor the Lead Manager have independently verified such data.
Internal Risk Factors:
1.
Our Company is involved in certain legal proceedings which could render us liable to liabilities/penalties and
have a material adverse effect on our business and profitability. We have also paid some penalties in the past
Our Company is involved in certain legal proceedings and claims in relation to certain civil, labour, criminal
and taxation matters incidental to our business and operations. These legal proceedings are pending at different
levels of adjudication before various courts and tribunals. Any adverse decision may render us liable to
liabilities/penalties and may adversely affect our business and results of operations. A classification of these
legal and other proceedings instituted against and by our Company is given in the following table:
Type of Legal Proceedings
Total number of pending cases
Civil
19
Criminal
Labour
Tax
4
9
58
Financial
Implications*
Rs. 492 Lacs and USD
6,03,330
Rs. 44.69 Lacs
Rs. 0.80 Lacs
Rs.
3677.08
lacs
(**excluding Income
Tax cases)
Penalties imposed in the past five years on our Company:
Sr.
No.
1.
Amount
of
penalty
imposed (Rs.)
Rs. 19,325
2.
Rs. 21,126
Brief particulars regarding penalty
Penalty of Rs. 19,325 imposed in the Assessment Year 2005-2006
by the Commercial Tax Officer, for late payment of monthly sales
tax under the provisions of the Tamil Nadu General Sales Tax Act,
1959.
Penalty of Rs. 21,126 imposed in the Assessment Year 2005-2006
by the Commercial Tax Officer for late payment of sales tax under
provisions of the Central Sales Tax Act, 1956 read with Tamil
Nadu General Sales Tax Act, 1959.
Remarks
(paid/
payable
and
reasons therefore)
Paid
Paid
* The amount(s) disclosed in the above tables are the amount(s) expressly claimed, being the liability and financial
impact which may be incurred if unsuccessful in legal proceedings. However, it does not include those penalties,
interests and costs, if any, which may be imposed which may have been pleaded but not quantified in the course of
legal proceedings, or which the Court/Tribunal otherwise has the discretion to impose. The imposition and amount
of such penalties/interests/costs are at the discretion of the court/tribunal where the case is pending. Such liability, if
any, would crystallize only on the order of the court/tribunal where the case(s) is/are pending.
viii
**The amount involved in the income tax cases is Rs. 14,895.75 Lacs representing the allowance/disallowance of
expenses or addition/deduction of income or penalties challenged. The actual tax liability would depend on the
relevant demand for each assessment year, which would depend on the tax rates, interest, if any, payable and
penalty, if any, leviable for that assessment year.
For further details regarding the aforesaid litigations, please refer chapter titled “Outstanding Litigations, Material
Developments and Other Disclosures” beginning on page 155 of the Draft Letter of Offer.
2.
Certain legal proceedings have been initiated against our Promoter Group Entities.
Certain legal proceedings have been initiated and claims made against our Promoter Group Entities. These
proceedings are pending at different levels of adjudication before various courts and tribunals. Any adverse
decision may render them liable to liabilities/penalties and may adversely affect their business and results of
operations. A classification of legal proceedings against our Promoter Group Entities is given in the following
table:
Type
of
Proceedings
Civil
Criminal
Labour
Tax**
Legal
Total
number
pending cases
33
2
17
20
of
Financial Implications*
Rs. 11,844.83 Lacs
Nil
Rs. 258.62 Lacs
Rs. 539.94 Lacs (excluding income tax cases for entities
stated hereinbelow)
* The amount(s) disclosed in the above tables are the amount(s) expressly claimed, being the liability and financial
impact which may be incurred if unsuccessful in legal proceedings. However, it does not include those penalties,
interests and costs, if any, which may be imposed which may have been pleaded but not quantified in the course of
legal proceedings, or which the Court/Tribunal otherwise has the discretion to impose. The imposition and amount
of such penalties/interests/costs are at the discretion of the court/tribunal where the case is pending. Such liability, if
any, would crystallize only on the order of the court/tribunal where the case(s) is/are pending.
**The amount of these aforesaid cases is detailed below, representing the allowance/disallowance of expenses or
addition/deduction of income. The actual tax liability would depend on the relevant demand for each assessment
year, which would depend on the tax rates, interest, if any, payable and penalty, if any, leviable for that assessment
year.
1.
2.
3.
Hathway Investment Private Limited
Outlook Publishing (India) Private Limited
Bhupati Investments & Finance Private Limited
: Rs. 1073.08 Lacs
: Rs. 16.6 Lacs
: Rs. 46.31 Lacs
For further details regarding the aforesaid litigations, please refer chapter titled “Outstanding Litigations, Material
Developments and Other Disclosures” beginning on page 155 of the Draft Letter of Offer.
3.
Our Directors/Promoters are involved in certain legal proceedings.
Our Directors/Promoters are involved in certain legal proceedings, which if determined against them, could have
an adverse effect on them. A classification of these legal proceedings is as follows:
Name of Director/Promoter
Mr. Shyam Bhupatirai Ghia
Type of Proceedings
1 civil case
Financial Implication
Civil case- Rs. 7.5 lacs
Show cause
quantifiable.
Mr. Mukund Dharamdas Dalal
1 show cause notice under
Foreign Trade (Development
and Regulation) Act, 1992
2 civil cases
notice-
Not
Civil cases- Rs. 7.5 lacs – one
case not quantifiable
Show
cause
notice-
Not
ix
Mr. Sharad Shreepad Marathe
Mr. Nikhil Shyam Ghia
4.
quantifiable.
Not quantifiable
Not quantifiable
Approximately 73 % of our revenue is derived from our 10 top clients. Loss of any one or more of these
clients may adversely affect our business
The revenues from our top 10 customers constitute approximately 73% of our total revenue. These customers
procure polyester, polymer and preforms from our Company. Our Company has done business with these
customers for a considerable time period. Any change in the buying pattern of these clients which is adverse to
our Company, including due to deterioration in our quality standards or decline in the level of our commitment,
may have an adverse impact on our client retention ability. The loss of major customers may have a material
adverse affect our financial condition and results of operations. .
3.
We have contingent liabilities as on March 31, 2008.
As on March 31, 2008, contingent liabilities not provided for were as follows:
(Rs. in Lacs)
As on March
Particulars
31, 2008
Claims against the Company not acknowledged as debts
173.40
Service Tax: - Penalty and interest demanded on technology transfer agreement between FPL
486.00
and IOCL and vice versa. ST demand on goods transport service at Supreme Court
Service Tax demand on Goods Transport Agency during the year 1997-98, departments
6.29
appeals pending in Supreme Court
Service tax credit denial on outward freight and canteen services 2005-06, 06-07 and 07-08
63.84
Central Excise – Claims against the company on various issues pending at CESTAT / High
493.49
Court / Supreme Court
Customs: Methods of calculation of duty under notification 2 / 95 & other valuation issues
126.33
Sales tax on Input use for Exports (1999-2000 and 2000-2001)
9.00
Sales Tax on interest collected (1997-98 & 2000-01) CST levied in interest charges collected
4.40
from customers
Guarantee given by the Company
2813.00
Total
4175.75
4.
Our applications for registration/renewal of registration of some of our trademarks and grant of patents are
pending with the relevant authorities
Our Company has applied for the registration/renewal of registration of certain trademarks under the
Trademarks Act, 1999, and for patents both in India and outside India.Our Company cannot assure that it would
be granted the trademarks/patents that it has applied for, or that the grant of the same would not be challenged
by third parties. Any such challenge by third parties, or proceedings by us to protect our intellectual property,
may entail significant time and cost commitments, and our Company cannot assure that it would be successful
in such defence/proceedings, which would entail adverse financial implications. Loss of critical intellectual
property (especially patents) would have a material adverse effect on our business, results of operations and
financial condition.
5.
Our business plans may need substantial capital and additional financing in the form of debt and/or equity to
meet our requirements.
Our business requires a substantial amount of working capital. In many cases, working capital is required to
finance the purchase of raw materials. Our working capital requirements may increase if, in certain contracts,
payment terms do not provide for advance payments to us or if payment schedules are less favorable to us. Our
x
Company may need additional financing in the future in the form of debt and/or equity to fulfill our working
capital needs. Continued increases in working capital requirements may have an adverse effect on our financial
condition and results of operations.
6.
If our Company is unable to attract and retain key employees, our operations could be adversely affected.
Our business substantially depends on the continued service of our key managerial personnel. The loss of the
services of our key managerial personnel could have a material adverse effect on us. Our future success will
also depend on our ability to attract highly skilled personnel, such as engineering, project management and
senior management professionals. Our Company could experience difficulty from time to time in hiring the
personnel necessary to support our business. If our Company does not succeed in attracting new high quality
employees, our reputation may be adversely impacted and our future earnings may be negatively impacted.
7.
Increase in the cost of raw materials, particularly petroleum-based raw materials, have put pressure on our
margins and could have a material adverse impact on our financial condition and results of operations.
Production of polyesters fibre, performs and PET requires raw materials which are procured from petroleumbased products. The cost of raw materials consumed by our Company constituted approximately 53.9% of our
Company’s net sales for FY 2008 and approximately 57.2% of our Company’s net sales for FY 2007. Constant
increase in the price of crude oil in the international market, specially in the last couple of years, has a direct
impact on our cost of manufacturing. Any increase in the cost of the raw materials can adversely impact our
profit margins if our Company is unable to pass on the increased cost on to our customers. Further, even if we
are able to pass on the increase in raw material prices to our customers, this may reduce the demand for our
products. To the extent that our Company uses virgin raw material (vis-à-vis recycled raw material), this
consequent volatility in the price of raw materials may have a material adverse impact on our business, financial
condition and results of operations.
8.
The demand for PSF is substantially dependent on the prices of other fibres (primarily cotton), and reduction
in prices of other fibres may adversely affect PSF demand.
One of our key products is PSF, which accounted for 41.42% and 46.69% of our sales in FY 2007 and FY 2008
respectively. PSF is primarily used in the textile industry, and is blended with other fibres (including cotton) in
textile production. The blending percentage in the textile industry depends, in part, upon the prices of the
respective fibres used in the blend. Any fall in the prices of other fibres (primarily cotton), on account of excess
production or otherwise, may lead to reduction of percentage of PSF in the blends, thereby adversely affecting
the demand for PSF, which would have a material adverse effect on our turnover, and consequently on our
business, results of operations and financial condition.
9.
The Registered and Corporate Office of our Company is not owned by us
The Registered and Corporate Office of our Company is not owned by us, and has been taken on lease by us,
which is currently valid till January 25, 2009. The rent payable for the occupation of this premises is Rs.
2,22,250 per month. We cannot assure that this lease would be renewed at all, or would be renewed on terms
and conditions (including rent) which would be acceptable to us. In the event of non-renewal, we may have to
shift to another premises, which may lead to higher rent/maintenance outgo, and lead to a temporary disruption
in operations till the shifting is complete. Any increase in rent/expenses in this regard could have a material
adverse effect on its financial condition and results of operations.
10. Some of our Promoter Group Companies have incurred losses in last three years.
Some of our Promoter Group Companies have incurred losses during last three years, as set forth in the table
below:
Name of the Company
Brahmasonic
Sound
Production Private Limited
Financial Performance
as on March 31, 2005
Profit After Tax
(1.35)
Profit After Tax
(0.93)
(Rs. in lacs)
Profit After Tax
(0.48)
xi
Chika
Overseas
Private
Limited
Crescent
Property
Developers Private Limited
Sea Side Exports Private
Limited
Prerna
Builders
Private
Limited
Asianet
Satellite
Communications Limited
Outlook
Publishing
(I)
Private Limited
Matsyagandha Investments
& Finance Private Limited
Brindaban Agro Industries
Private Limited
Peninsula Estates Private
Limited
Bayside Exports Private
Limited
R.B.R Construction Private
Limited
Spur Cable & Datacom
Private Limited
Colonnade Housing Private
Limited
Varahagiri Investment &
Finance Private Limited
Optimix
Technologies
Private Limited
Brindaban
Land
Development Private Limited
-
-
(98.09)
(0.12)
(0.11)
(0.11)
(0.12)
(0.11)
(0.12)
(0.12)
(0.11)
(0.12)
(2070.26)
(2432.51)
(1938.75)
-
-
(314.62)
-
-
(49.30)
(0.07)
(0.07)
(0.08)
-
(11.32)
-
(0.07)
(0.07)
(0.03)
(0.08)
(0.08)
(0.06)
(0.23)
(0.22)
(0.27)
(0.08)
(0.07)
(0.01)
-
(3.80)
-
-
(424.38)
(1920.27)
(0.09)
(0.09)
(0.03)
For detailed description of our Promoter Group Companies, please see the chapter titled “Our Promoter Group
Entities” beginning on page 77 of the Draft Letter of Offer
11. Our Company places heavy reliance on the import of raw material
Our Company has to rely heavily on the import of raw materials for manufacturing polymer. Timely
procurement of raw material is the most critical aspect of our manufacturing operation and the same is subject,
inter alia, to laws monitoring the import in India as also laws governing exports in the countries/territories from
where the exports originate, soverign and territorial factors, among others. Further, any change in the importexport policy by the Government of India may have a negative impact on the import of our raw materials.
12. At times our Company has to depend on third party manufacturers for the supply of polymer and disruption
in their operations may have a negative impact on our manufacturing operations.
Our Company has in house provision for the manufacture of polymer, which acts as a raw material for
generating performs. However, there are occasions when in order to execute orders in bulk, our Company has
to procure polymer from other manufacturers. Our Company has relied on these suppliers in times of
exigencies pertaining to the supply of polymer. Any change in the supply pattern of third party suppliers may
have a negative impact on the manufacture of performs, in case of any paucity in the in house manufacture of
polymer.
13. Potential fluctuations in future operating results on account of increase in raw material costs, transportation
costs etc.
The factors for potential fluctuations in future operating results include:
xii
a.
Cost of Raw Materials
Purified Terepthalic Acid and Mono Ethylene Glycol are the major raw materials used in the manufacturing
of our products. A major portion of the requirements of the basic raw materials by our Company is
imported. The cost of such materials to our Company depends upon the prices ruling in the international
commodity markets at the time of imports, over which our Company does not have any control. Any
increase in the price of PTA and MEG would directly affect the margins of our Company.
b. Labour Union
Our Company employs a large number of work force at its manufacturing plant. The factory workers are
affiliated to particular Trade Union(s). Any concerted industrial action could always disrupt the production
volume and consequently the sales growth of our Company.
c.
Transportation
Timely delivery of products is critical for our performance. Our Company uses third-party transporters for
the supply of raw materials to our factories and for delivery of finished products to our customers. Any
hindrance in the logistics network, serious strike, stoppage of work, etc by the fleet owners could cause an
adverse effect on our receipt of supplies and our ability to deliver our finished products in time, which
could impact our business. Further, high transportation cost and escalation thereof may affect our
profitability.
14. Any delay in timely delivery of our products will adversely impact our relations with the clients.
Typically, business in our industry is subject to specific delivery schedule requirements with liquidated
damages chargeable in the event the schedules are not adhered to. Failure to adhere to contractually agreed
timelines could cause damage to our reputation within our industry and client base, which may lead to
loss/reduction of business from exising clients and not being able to procure new clients, and cause us to pay
liquidated damages.
15. Our results of operations could be adversely affected by disputes with our employees
As of March 31, 2008, our Company has employed 827 full-time employees. While our Company believes that
itgenerally maintains satisfactory relationships with its employees and labour, there can be no assurance that
itwill not experience future disruptions in its operations due to disputes or other problems with its work force.
Further, any upward revision of wages required by the government to be paid to labourers, or offer of
permanent employment or the unavailability of the required number of contract labourers, may adversely affect
our business and results of our operations.
16. Non renewal of the statutory and regulatory permissions and approvals required to operate
may have a material adverse effect on our business.
our business
Being in the manufacturing business, our Company requires several statutory and regulatory permits, licenses
and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need
renewal from time to time. Our Company is required to renew such permits, licenses and approvals. There can
be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. Further,
these permits, licenses and approvals are subject to several conditions, and our Company cannot assure that it
shall be able to continuously meet such conditions or be able to prove compliance with such conditions to
statutory authorities, and this may lead to cancellation, revocation or suspension of relevant permits/ licenses/
approvals. Failure by our Company to renew, maintain or obtain the required permits, licenses or approvals, or
cancellation, suspension or revocation of any of the permits, licenses or approvals may result in the interruption
of our Company’s operations and may have a material adverse effect on the business. For details please refer to
chapter titled “Government/Statutory Approvals” beginning on page 200 of the Draft Letter of Offer.
17. Our existing manufacturing unit is located in Manali, Chennai. Any unrest or natural calamity in this unit
can break down our operations which will adversely affect our operations.
Our manufacturing unit at Manali, Chennai and our business operations are vulnerable to damage or
interruptions in operations due to adverse weather conditions, earthquakes, tsunami, fires, explosions, power
loss, viruses, transmission cable cuts or similar events. Any failure of our systems or any shutdown of any part
of our manufacturing units, networks, operations because of operational disruption, natural disaster such as
flood or earthquake, or otherwise, could disrupt our services and result in significant costs.
xiii
Further, there can be no assurance that business continuity plans our Company has developed to cover material
breakdowns or damage to its manufacturing units, network or critical operating equipment will be sufficient to
maintain its operations in adverse circumstances.
18. Our Company has high capital expenditure requirements.
The cost of fixed assets/equipment in our business, including replacement cost, is very high. Our Company
may need additional financing in the future in the form of debt and/or capital to fulfill its capital expenditure
needs. Our Company cannot assure that such financing would be available, or available at terms acceptable to
us, and consequently our capital expenditure plans may be adversely affected. Further, the cost of servicing
debt/capital may have a material adverse effect on our results of operations and financial condition.
19. Our funding requirements and deployment of the proceeds of the Issue are based on management estimates
and have not been verified independently.
Our funding requirements and the deployment of the proceeds of the Issue are based on management estimates
and have not been appraised by any bank or financial institution. Further, such estimates are based on market
conditions and management expectations as of the date they were made. In view of the highly competitive
nature of the industry in which our Company operates, we may have to revise our management estimates from
time to time and consequently our funding requirements may also change. We may need to borrow further/raise
further capital to meet our working capital requirements for the FY 2008-2009, meeting which is the primary
object of this Issue, and the cost of servicing debt/capital may have a material adverse effect on our results of
operations and financial condition.
20. The Issue proceeds shall be utilized for the purposes of funding working capital requirements and general
corporate purpose. Hence would not result in the creation of tangible fixed assets.
The Issue proceeds shall be primarily and significantly utilized for the funding working capital requirements
and general corporate purposes. Our business demands heavy expenditure on raw material and this leads to an
increased manufacturing cost. The money raised through present Rights Issue will be used to generate this
working capital, and thus is not expected to result in creation/acquisition of tangible fixed assets. For details,
please refer to the chapter titled on “Objects of the Issue” beginning on page 21 of the Draft Letter of Offer.
21. Our Company may not have adequate insurance to cover all probable risks in its business operations. Loss
on account of uninsured risks may affect the results of our operations.
We believe that we maintain insurance in accordance with customary industrial practices. However, the amount
of our insurance coverage may be less than replacement cost of all covered property and may not be sufficient
to cover all financial losses that we may suffer should a risk materializes. Further, there are many events that
could cause significant damages to our operations or expose us to third party liabilities, whether or not known to
us, for which we may not be adequately insured. Further, all our insurance policies have exclusion clauses and
do not cover us for certain risks and in certain circumstances. If we were to incur a significant liability for
which we were not fully insured, it could have a material adverse effect on our results of operations and
financial condition.
22. Compliance with and changes in safety, health, and environmental laws and regulations may adversely
affect our business, prospects, financial condition and results of our operations
Our Company is subject to safety and health laws and regulations such as the Environment (Protection) Act,
1986, the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution)
Act, 1981, Hazardous Wastes (Management & Handling) Rules, 1989, the Indian Explosives Act, Fire Service
Laws and the Indian Boilers Act, 1923. These laws and regulations impose controls on our Company’s safety
standards, and other aspects of its operations. Our Company has incurred and expects to continue to incur,
operating costs to comply with such laws and regulations. In addition, our Company has made and expects to
continue to make capital expenditures on an on-going basis to comply with the safety and health laws and
regulations. Our Company may be liable to the Government of India or the State Governments or Union
Territories with respect to its failures to comply with applicable laws and regulations. Further, the adoption of
new safety and health laws and regulations, new interpretations of existing laws, increased governmental
enforcement of laws or other developments in the future may require that our Company make additional capital
xiv
expenditures or incur additional operating expenses in order to maintain its current operations or take other
actions that could have a material adverse effect on its financial condition, results of operations and cash flow.
Safety, health and environmental laws and regulations in India, in particular, have been increasing in stringency
and it is possible that they will become significantly more stringent in the future. The costs of complying with
these requirements could be significant.
23. Our Promoter and Promoter Group holding is low.
Upon completion of the Issue, the Promoters and Promoter Group Entities may beneficially own at least 38.89%
of our post-Issue Equity Sharecapital. Since our Promoters and Promoter Group own less than 50% of the paid
up share capital of our Company, they may not be able to continue exercising significant control over our
Company, including being able to control the composition of our Company’s Board of Directors, determine
decisions requiring majority voting, and may be unable to affect the outcome of certain shareholder resolutions,
even though the same may be in the best interests of our Company. Further, our Company is vulnerable to
hostile takeovers, and we cannot assure that any potential acquirer would act in the best interests of our
Company or its shareholders.
24. We have entered into and shall continue to enter into Related Party Transactions
Our business model involves entering into certain related party transactions. We have entered into certain
related party transactions with our Promoters, Directors and Promoter group entities. For further details, refer to
the chapter titled “Financial Statements” beginning on page 112 of the Draft Letter of Offer
25. Any loss of or breakdown of machinery at our manufacturing facility at Manali, Chennai may have an
adverse affect on business, financial condition and results of operations
Our Company’s manufacturing facility at Manali, Chennai is subject to operating risks, such as the breakdown
or failure of equipment, power supply or processes, performance below expected levels of output or efficiency,
obsolescence, labour disputes, industrial accidents and the need to comply with the directives of relevant
government authorities. The occurrence of any of these risks could significantly affect its operating results. Our
business and operations may be adversely affected by any disruption of operations at our manufacturing facility.
26. Product innovation and research and development activities are an integral part of our business model. If
our research and product development efforts are not successful, our business may be restricted.
Growth of our future operations depends upon our ability to successfully carry out research and development of
new processes and produce new and higher quality products from a variety of raw materials. These processes
must meet quality standards where applicable and may sometimes require regulatory approvals. The
development and commercialization process would require spending of both time and money. Our ongoing
investments in research and development for future products and processes may result in higher costs without a
proportionate increase in revenues. Any failure or delay in timely development and commercialization of new
products or our inability to obtain patents or other legal protection may have a material adverse effect on our
business, results of operations and financial condition.
27. Our operations involve handling hazardous material that could expose us to the risk of liabilities, lost
revenues and increased expenses.
Our operations are subject to various hazards associated with the production of chemical products, such as the
use, handling, processing, storage and transportation of hazardous/explosive materials such as, as well as
accidents such as leakage or spillages of chemicals. Any mishandling of hazardous chemical and poisonous
substances could also lead to fatal accidents. In order to prevent such mishandling we have established various
measures including training of workers, prominent display of safety measures and precaution measures in
production areas. In addition, our employees operate heavy machinery at our manufacturing facilities and
accidents may occur while operating such machinery. These hazards can cause personal injury and loss of life,
severe damage to and destruction of property and equipment, environmental damage and may result in the
suspension of operations and the imposition of civil and criminal liabilities. As a result of past or future
operations, there may be claims of injury by employees or members of the public due to exposure, or alleged
exposure, to the hazardous materials involved in our business. In addition, we may be subject to claims of injury
from indirect exposure to hazardous materials that are incorporated into our products. Liabilities incurred as a
result of these events have the potential to adversely impact our financial position. Events like these could also
xv
adversely affect our perception with suppliers, customers, regulators, employees and the public, which could in
turn affect our financial condition and business performance. While we maintain general insurance against these
liabilities, the insurance proceeds may not be adequate to fully cover the substantial liabilities, lost revenues or
increased expenses that we might incur.
28. As per the loan agreements entered into by us with our lenders, there are certain restrictions on us, which
may hamper our future business growth and business policies.
We have entered into agreements for availing financial facilities from various lenders. Certain covenants in
these agreements require us to obtain approval/ permission from our lenders. These covenants include, amongst
others, implementation of any scheme of expansion / diversification / renovation / capital expenditure,
formulation of any scheme of amalgamation or reconstruction, undertaking of guarantee obligation, any change
in our capital structure, among others. We cannot assure that these approvals would be forthcoming when we
apply for the same.
Accordingly, we are required to obtain prior consent from our lenders for the Issue. We are yet to obtain the
consent of IDBI Bank Limited, one of our lenders, for this Issue, for which we have applied.
For further details in this regard, please refer chapter titled “Financial Indebtedness” beginning on page 46 of
the Draft Letter of Offer
29. Our agreements with certain commission agents have certain exclusivity clauses
Our agreements with certain of our commission agents bind us with exclusivity clauses. These exclusivity
clauses pertain to, among others(varying from agreement to agreement) the geographical coverage of markets,
products to be sold in certain markets or products sold to certain customers. We cannot assure that we would
continue to be compliance with the exclusivity terms in these agreements, and any breach of the same may
expose us to risk of termination of contract and legal proceedings. These exclusivity terms may adversely affect
our ability to expand our business in the areas/products covered by the relevant agreement, which may have a
consequent adverse impact on our business, financial condition and results of operations.
30. Agreements entered into by our Company with the commission agents are not stamped. Further, agreements
with commission agents outside India are enforceable outside India.
Agency agreements entered into by us with our commission agents have not been stamped. The effect of nonstamping is that the document is not admissible as evidence in legal proceedings, and parties to that agreement
may not be able to legally enforce to same, except after paying a penalty for inadequate stamping.
Further, our agreements with commission agents outside India provide for venue for arbitration and/or
jurisdiction in Courts outside India, including in the United Kingdom. The legal and other costs that we may
incur in initiating and/or defending any actions arising out of such contracts could be significantly higher
outside India than in India. Further, we may not always be able to enforce/execute judgments obtained in
foreign courts/tribunals against the counterparties.
31. Our Company has not achieved the projections as promised in our earlier rights issues
Our Company has made rights issues in the years 1988, 1993 and 2004, in which respect, certain
projections/promises made in the rights issue offer document in 1993 were not fulfilled. For futher details, refer
to paragraph titled “Details of Public / Rights Issues” beginning on 213 of the Draft Letter of Offer.
External Risk Factors:
1.
A slowdown in economic growth in India could cause our business to suffer.
Our performance and growth are dependent on the health of the Indian economy. The economy could be
adversely affected by various factors such as political or regulatory action, including adverse changes in
liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities,
interest rates, commodity and energy prices and various other factors. Any slowdown in the Indian economy
may adversely impact our business and financial performance and the price of our Equity Shares.
xvi
2.
Any downgrading of India’s debt rating by an independent agency may harm our ability to raise financing.
Any adverse revisions to India’s credit ratings for domestic and international debt by international rating
agencies may adversely affect our ability to raise additional financing and the interest rates and other
commercial terms at which such additional financing is available. This could have a material adverse effect on
our capital expenditure plans, business and financial performance and the price of our Equity Shares.
3.
Force Majeure events, terrorist attacks and other acts of violence or war involving India or other countries
could adversely affect the financial markets, result in a loss of investor confidence and adversely affect our
business, results of operations, financial condition and cash flows.
Certain events are beyond our control, such as force majeure events, terrorist attacks, and other acts of violence
or war, civil unrest and military activity. Any such event could happen at or otherwise affect one or more of our
businesses, which would adversely affect our business, results of operations and financial condition. Moreover,
these and other similar events may adversely affect worldwide financial markets and could lead to global
economic recession. Such events may also result in a loss of business confidence or have other consequences
that could adversely affect our business, results of operations and financial condition. The occurrence of any of
the foregoing could therefore adversely affect our financial performance or the market price of the Equity
Shares.
4.
An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could
have an adverse effect on our business and results of operations.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concerns could
have a negative impact on the economies, financial markets and business activities in the countries in which our
end markets are located, which could have an adverse effect on our business.
5.
We are subject to regulatory, economic and political uncertainties in India.
In the early 1990s, India experienced significant inflation, low growth in gross domestic product and shortages
of foreign currency reserves. The Indian government provided significant tax incentives and relaxed certain
regulatory restrictions in order to encourage foreign investment in specified industries of the economy. There is
no assurance that liberalization policies will continue. Furthermore, the rate of economic liberalization could
change, and specific laws and policies affecting technology companies, foreign investment, currency exchange
rates and other matters affecting investment in our Equity Shares could also change. Since 1996, the
Government of India has changed six times and the current Indian government is a coalition of many parties,
some of which may differ from India’s current economic policies. Various factors, including a collapse of the
present coalition government due to the withdrawal of support of coalition members, could trigger significant
changes in India’s economic liberalization and deregulation policies, disrupt business and economic conditions
in India generally and our business in particular. Our financial performance and the market price of our shares
may be adversely affected by changes in inflation, exchange rates and controls, interest rates, government of
India policies, social stability or other political, economic or diplomatic developments affecting India in the
future.
6.
We are subject to risks arising from exchange rate fluctuations.
The exchange rate between the Rupee and other currencies is variable and may continue to fluctuate in the
future. Fluctuations in the exchange rates may affect us to the extent of such orders being placed overseas. We
may place orders with overseas contractors and manufacturers. Such fluctuation may affect us to the extent of
increasing the cost of import of goods and services.
7.
Regional conflicts in South Asia could adversely affect the Indian economy, disrupt our Company's
operations and cause its business to suffer.
South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighbouring
countries. In recent years there have been military confrontations along the India-Pakistan border. Military
activity or terrorist attacks could adversely affect the Indian economy. This could have a material adverse effect
on the market for securities of Indian companies including the Equity Shares of our Company.
xvii
Risks Relating to the Issue of Securities:
1.
There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a
shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
We are subject to a daily “circuit breaker” imposed by all stock exchanges in India, which does not allow
transactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker
operates independently of the index-based market-wide circuit breakers generally imposed by SEBI on Indian
stock exchanges. The maximum movement allowed in the price of the Equity Shares before the circuit breaker
is triggered is determined by the Stock Exchange based on the historical volatility in the price and trading
volume of the Equity Shares. The Stock Exchange does not inform us of the triggering point of the circuit
breaker in effect from time to time, and may change it without our knowledge. This circuit breaker limits the
upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, no
assurance may be given regarding your ability to sell your Equity Shares or the price at which you may be able
to sell your Equity Shares at any particular time.
2.
Our stock price may be volatile, and you may be unable to resell your shares at or above the Issue price or at
all.
The market price of our Equity Shares after this Issue will be subject to significant fluctuations in response to,
among other factors:
1
2
3
4
5
6
7
8
9
Variations in our operating results and the performance of our business;
Adverse media reports about us;
Regulatory developments in our target markets affecting us, our clients or our competitors;
Market conditions and perception specific to the polyester and perform industry
Changes in financial estimates by securities research analysts;
Loss of one or more significant clients;
The performance of the Indian and global economy;
Significant developments in India’s economic liberalization and deregulation policies and the fiscal regime; and
Volatility in the Indian and global securities markets.
Many of these factors are beyond our control. There has been recent volatility in the Indian stock markets and
our share price could fluctuate significantly as a result of such volatility in the future.
3.
Any future issuance of Equity Shares by us or the issue of stock options under an employee stock option plan
may dilute the investor’s shareholding or adversely affect trading price of the Equity Shares.
Any future issuance of Equity Shares by us or the issue of stock options under an employee stock option plan
where ourCompany issues further Equity Shares could dilute the investor’s shareholding. Additionally, sales of
our Equity Shares by our Promoters or significant shareholders could also have an adverse affect on the trading
price of the Equity Shares. Such events could also impact our ability to raise capital through an offering of our
securities. In addition, any perception by investors that such issuances or sales might occur could also affect the
trading price of the Equity Shares.
Notes to Risk Factors:
1
Issue of 2,62,10,839 Equity Shares with a face value of Rs. 10/- each at par of our Company at par (that is,
Rs. 10/- each) for an amount aggregating to Rs. 2621.08 lacs on rights basis to the existing shareholders of
our Company in the ratio of one Equity Share for every two fully paid Equity Shares held by the shareholders
on the Record Date, that is on [●], 2008. For more details, please refer chapter titled “Terms of the Issue”
beginning on page 221 of the Draft Letter of Offer.
2
All information shall be made available by the Lead Manager and our Company to the existing shareholders
of our Company and no selective or additional information would be available only to a section of the
investors in any manner whatsoever.
3
Net worth as per the Restated Financials as on March 31, 2006, March 31, 2007 and March 31, 2008 was, Rs.
10, 972.36 lacs and Rs. 12,034.89 lacs and Rs. 10,581.21 lacs respectively.
xviii
4
Net Asset Value as per the Restated Financials as on March 31, 2006, March 31, 2007 and March 31, 2008,
was Rs. 20.80, Rs. 22.93 and Rs. 25.09 per share respectively.
5
For Related Party Transactions please refer to chapter titled “Related Party Transactions” beginning on page
110 of the Draft Letter of Offer.
6
For interest of our Promoters/Directors/key managerial personnel and other ventures promoted by Promoters,
please refer to chapters titled “Risk Factors”, “Our Promoters”, “Our Management” and “Financial
Statements” beginning on page viii, on page 75, on page 61 and 112 of the Draft Letter of Offer.
7
Investors are advised to refer to the section titled “Basis for Issue Price” beginning on page 24 of the Draft
Letter of Offer
8
Please refer to the paragraph on "Basis of Allotment" beginning on page 235 of the Draft Letter of Offer for
details of the basis of allotment.
xix
SECTION III - INTRODUCTION
SUMMARY
This is only a summary and does not contain all the information that you should consider before investing in
our Equity Shares. You should read the entire Draft Letter of Offer, including the information contained in
the sections titled “Risk Factors” and “Financial Statements” and related notes beginning on pages viii and
111 of the Draft Letter of Offer before deciding to invest in our Equity Shares.
Industry Overview:
Petrochemicals are derived from various chemical compounds, mainly from hydrocarbons. These hydrocarbons
are derived from crude oil and natural gas. Among the various fractions produced by distillation of crude oil,
petroleum gases, naphtha, kerosene and gas oil are the main feed stocks for petrochemical industry. Ethane,
propane and natural gas liquids obtained from natural gas are the other important feedstock used in the
Petrochemicals industry. Petrochemical industry plays a vital role in economic growth and development of
manufacturing sector. The value addition in the petrochemicals industry is higher than most of the other industry
sectors.
The Petrochemical industry, which entered in the Indian industrial scene in 1970s, registered a rapid growth in
the 1980s and 1990s. Petrochemical industry mainly comprise of synthetic fibre / yarn, polymers, Synthetic
Rubber, Synthetic detergent intermediates, performance plastics and plastic processing industry.
Today, petrochemical products permeate the entire spectrum of daily use items and cover almost every sphere of
life like clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture,
irrigation, packaging, medical appliances, electronics and electrical etc.
India Scenario
Consumption of PE, PP and PVC (three major polymers) in India reached 4.6 million tonnes registering a y-o-y
growth of 10% during FY 2006-07. PP and LLDPE registered a healthy growth of 15%. LDPE consumption
grew at 8% whereas HDPE grew at 9% and PVC witnessed a modest growth of 7%. The demand for PVC in
India experienced a 7% y-o-y growth.
The production performance of major petrochemicals during 2001-02 to 2005-06 is as follows:
Units in Kilo Tons
Sub-group
2001-02
2002-03
2003-04
2004-05
2005-06
Annualized
Growth Rates(%)
Synthetic Fiber
Polymers
Elastomers
Synthetic
Detergent
Intermediates
Performance
Plastics
Total
1667
3974
79
1755
4175
81
1868
4499
87
1875
4776
97
1906
4768
110
3.4
4.7
8.63
425
447
453
488
556
7.0
90
95
99
113
127
9.0
6235
6553
7007
7349
7467
4.61
Source: Ministry of Chemicals and Fertilizers-Petrochemicals
Polyester fibers are the most widely used synthetic fibers in the world today. Polyester fibers, however, have
poor elasticity and stretch recovery, do not absorb moisture, are comparatively difficult to dye, and generate
static electricity under dry conditions. However, many of the deficiencies of polyester filament yarn and staple
fibre can be reduced or overcome by fiber modification and/or by blending with cotton or other fibers. Hightenacity polyester filament yarn and staple fibre have a higher tensile strength and a lower elongation before
break than conventional polyester fiber. High-tenacity polyester fibers are used for both industrial and textile
applications for which high strength and low crimp are important.
1
PET
PET is eco-friendly and inert which has established itself as the polymer of the future in most packaging
applications, especially in food and beverage packaging. It is widely used in packaging of soft drinks, water,
edible oil, food products, juices, dairy beverages, pharmaceuticals, toiletries etc.
The overall worldwide demand of PET resin continues to grow with the increasing demand of plastic and PET
packaging. The total world demand for PET resin is estimated to be 14.6 million tons in 2010 as compared to
10.0 million tons in 2005-06. In India also the market for PET Resin is growing steadily. The demand of PET
resin is also influenced by seasonal factors and the growth pattern of the food processing and FMCG sectors.
For further information please refer to section tltled“About Us” beginning on page 28 of theDraft Letter of
Offer.
Business Overview:
Our Company was incorporated as a public limited company in Maharashtra under the name Indian Organic
Chemicals Limited in February 1960 and commenced business on April 22, 1960. We commenced
manufacturing operations at our plant at Khopoli, Maharashtra, for production of alcohol-based chemicals like
Acetic Acid, Acetic Anhydride, Acetaldehyde and Ethyl Acetate, Benzyl products, Plasticizers and Glyoxal.
In 1972, we set up a plant at Manali, Chennai, for manufacture of Polyester Fibres with an installed capacity of
6,100 MT per annum. By 1986, the capacity was expanded to 38,500 MT per annum. Subsequently, a 9,175 MT
of Polyester Filament Yarn (POY) plant was also set up. The POY business was discontinued after 1995 due to
its uneconomic size and the plant had since been disposed off.
With the launching of petro-based chemicals in 1990s and liberalization of molasses usage for potable alcohol,
our industrial alcohol-based facility at Khopoli lost its competitive edge. The chemicals business had to be
phased out gradually over a period of time. We however, succeeded in adapting and using our facilities at
Khopoli to undertake knowledge based activities like custom synthesis, contract manufacture and contract R&D.
In India skilled manpower like scientists, chemists and engineers are easily available at competitive rates. As the
new activity is “knowledge based” requiring a different focus, our Company decided to transfer the Chemicals
division at Khopoli to another entity called Innovassynth Technologies (India) Limited.
With the separation of chemical business of our Company as above, our Polyester business at Chennai started
focusing on Speciality Fibres, Speciality Polymers and Preforms. In order that the name of our Company
correctly reflects the core business in which it is engaged in, our Company changed its name to “Futura
Polyesters Limited” which became effective from November 05, 2002. (“Futura” is the registered trade mark of
our Company under which it markets its products.) For details regarding plant location, utilisation of installed
capacity and other related matters please refer to chapter titled “Business Overview” beginning on page [ ] of
the Draft Letter of Offer.
During the year 1993, our Company commenced production of PET Resin and Preforms at Manali, Chennai,
under the name Futura Polymers Limited, as a joint venture with PepsiCo, USA, through its investment arm
Transmere Inc., Mauritius. Subsequently during the year 1998, PepsiCo Inc. quit the joint venture. During the
year 2002, Futura Polymers Limited was amalgamated with our Company.
Our Company has one manufacturing facility at Chennai, currently consisting of three major activities, namely,
Polyester Staple Fibres/Chips, PET Resins and PET Preforms. The installed capacities of these as on March 31,
2008 are as under:
Product
Installed Capacity in MT per
annum
Polyester Staple Fibre / Chips
38,500
Solid State Polymers
57,000
PET Preforms
20,000
We had established a subsidiary called Futura Industries Limited (FIL) to carry out Development on PET
recycling and commercialise the technology for recycling of Polyester fibre waste and PET bottle scrap into
polyester feed stock. Initially, the factory was located at Tiruvellore, near Chennai. FIL was carrying out the
operations on job work basis for our Company for some time and the facilities were shifted, during 1997from
2
Tiruvellore to the main factory located at Manali, Chennai. In the year 2001, FIL was amalgamated with our
Company. Presently, the PET recycling activity is being carried out at our factory at Manali, Chennai.
Business Strategy
Our strategy is to consolidate and enhance our market position as a producer of Specialty Fibres, Speciality
Polymers and Speciality Preforms. We aim to achieve our strategic objective by implementing the following
strategies:
1 Continuous research and development in new speciality products to maintain a diverse product mix
2 Increase in revenues by utilising our established business relationships
3 Focus on speciality products realizing better margins
4 Strengthening our competitive edge by patenting newly developed products
5 Positioning ourselves amongst the top global brands by manufacturing diverse range of polyesters like PBT,
PTT, PBN, PTN, PEN etc.
We have been continuously developing new products to meet customised needs of our customers. With more
than three decades of experience in Polyesters supported by our established business relationships with our
customers, we believe that we are well placed to secure a significant share of Specialty Resin markets on the
strength of our customised product development.
For further information please refer to section on “About Us” beginning on page 28 of the Draft Letter of Offer.
3
THE ISSUE
Equity Shares proposed to be issued by our Company
2,62,10,839 Equity Shares of Rs. 10 each
Rights Entitlement
Record Date
One Equity Share for every two fully paid up Equity Shares
held on the Record Date
[●]
Issue Price per Equity Share
Rs. 10/-
Equity Shares outstanding prior to the Issue
Equity Shares outstanding after the Issue of Equity
Shares.
Terms of the Issue
For more information, refer to section titled “Terms of The
Issue” beginning on page 220 of the Draft Letter of Offer.
Terms of Payment
On Rights Issue application
Rs. 10/- which constitutes 100% of the full amount
of the Issue Price of Rs. 10/-
4
SUMMARY STATEMENT OF FINANCIAL INFORMATION
You should read the following information together with the information contained in the Auditors’ report
included in the section titled “Financial Statements” beginning on page 111 of the Draft Letter of Offer.
Summary Statement of Assets and Liabilities, as Restated
Rupees in lacs
Sr.
Particulars
No
1
As at
FIXED ASSETS
Gross Block
Less: Depreciation
Net Block
Add: Capital Work - in - Progress
Less: Revaluation Reserve
Net Block after adjustment for
Revaluation Reserve
2
INVESTMENTS
3
DEFERRED TAX ASSETS (NET)
4
CURRENT ASSETS, LOANS AND
ADVANCES
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
31-Mar-08
31-Mar-07
31-Mar-06
31-Mar-05
31-Mar-04
59,885.68
25,997.55
33,888.13
2,581.05
14,293.43
43,437.40
23,776.81
19,660.59
976.24
1,087.64
41,637.34
21,438.63
20,198.71
674.50
1,995.37
40,134.39
19,071.16
21,063.23
463.03
2,905.50
39,530.90
16,698.29
22,832.61
127.69
3,833.36
22,175.75
19,549.19
18,877.84
18,620.76
19,126.94
2,621.11
2,381.22
2,378.91
2,578.91
2,583.67
74.57
541.19
975.13
1,115.87
1,486.20
11,825.74
3,742.01
1,824.15
2,651.44
20,043.34
8,320.37
3,647.75
1,734.06
2,760.63
16,462.81
9,484.56
2,464.08
1,947.84
2,525.71
16,422.19
7,568.29
4,230.74
1,514.78
1,767.76
15,081.57
5,188.71
2,534.73
4,364.45
2,225.11
14,313.00
11,585.42
10,604.11
10,474.00
9,734.59
10,541.62
4,327.35
4,437.61
4,662.89
5,452.95
4,507.62
14,971.69
877.99
15,849.68
11,096.21
775.36
11,871.57
11,902.68
709.31
12,611.99
10,900.22
638.27
11,538.49
13,186.00
625.50
13,811.50
13,152.32
12,021.12
10,905.19
10,671.08
8,649.07
5,242.17
5,242.17
5,242.17
4,835.59
3,347.71
LIABILITIES AND PROVISIONS:
5
SECURED LOANS
6
UNSECURED LOANS
7
CURRENT LIABILITIES
PROVISIONS
Current Liabilities
Provisions
AND
NET WORTH (1+2+3+4-5-6-7)
NET WORTH REPRESENTED BY
8
SHARE CAPITAL
9
RESERVE AND SURPLUS
Less: Miscellaneous Expenditure
Reserves (Net of Revaluation
Reserves)
22,213.93
14,293.43
10.35
7,880.36
1,087.64
13.77
7,725.56
1,995.37
67.17
8,962.07
2,905.50
221.08
9,529.49
3,833.36
394.77
7,910.15
6,778.95
5,663.02
5,835.49
5,301.36
NET WORTH (8+9)
13,152.32
12,021.12
10,905.19
10,671.08
8,649.07
5
Summary statement of Profit & Losses, as Restated
Rupees in lacs
For the year ending 31st March
Particulars
INCOME
Sales and Services (Gross)
Manufacture
Traded
Less: - Excise Duty
Services
Other Income
(Less)/Add:
Inventories
(Increase)/Decrease
before
Tax
2006-07
2005-06
2004-05
2003-04
44,814.30
4,464.34
1,012.80
56,146.50
4,621.98
181.90
52,138.73
5,023.54
-
52,175.54
4,956.42
174.72
45,090.96
114.27
4,341.82
124.81
41,362.76
1,295.89
51,706.42
520.17
47,115.19
487.99
47,393.84
587.72
40,988.22
610.98
(1,078.40)
43,737.05
829.70
51,396.89
(1,420.22)
49,023.40
(1,482.90)
49,464.46
1,660.85
39,938.35
23,590.41
1,690.89
10,055.20
1,265.81
1,479.22
2,126.66
2,577.57
(884.15)
41,901.61
29,400.62
2,009.97
11,822.37
1,111.74
1,946.43
1,764.13
2,478.71
(907.73)
49,626.24
29,802.01
1,990.54
11,372.38
1,083.47
2,198.18
1,890.76
2,391.90
(910.15)
49,819.09
28,881.78
1,833.13
11,001.91
1,092.17
2,345.33
1,917.19
2,410.31
(937.42)
48,544.40
23,200.74
1,982.94
10,325.83
1,247.95
2,370.26
170.48
2,411.58
2,188.33
(311.76)
43,586.35
1,835.44
1,770.65
(795.69)
920.06
(3,648.00)
-
-
-
-
1,626.97
8.39
25.39
57.75
86.39
264.62
-
31.51
100.61
100.61
100.61
1,827.05
203.83
2.00
1,713.75
192.28
2.00
(954.05)
2.00
733.06
2.29
(2,386.26)
2.50
in
EXPENDITURE
Raw Material Consumed
Staff Costs
Other Manufacturing Expenses
Administration Expenses
Selling and Distribution Expenses
Purchase of Traded Items
Interest
Depreciation
Less:- Transfer from Revaluation Reserve
Net Profit /(Loss)
Extraordinary items
2007-08
and
Add: Profit on sale of Chemical Business
Less: Voluntary Retirement Scheme
Less: Deferred VRS Gratuity Payment
Profit / (Loss) after extra ordinary items
but before tax
Less: Provision for Tax
Less: Provision for Wealth Tax
Less: Provision for Fringe Benefit Tax
28.00
23.00
43.00
-
-
Add: Deferred Tax adjustment
(466.61)
(433.94)
(140.74)
(370.33)
2,188.15
Less: Excess Provision of Earlier Years
Net Profit /(Loss) after Tax
(1.17)
1,127.78
1,062.53
(1,139.79)
360.44
(200.61)
Balance brought forward
1,064.57
2.04
1,141.83
781.39
982.00
BALANCE CARRIED TO BALANCE
SHEET
2,192.35
1,064.57
2.04
1,141.83
781.39
6
Summary Statement Of Cash Flows, As Restated
Rupees in lacs
2007-08 2006-07 2005-06 2004-05
Particulars
2003-04
(A) CASH FLOW FROM OPERATIONS
1,835.44
1,770.65
(795.69)
920.06
(3,648.00)
1,693.42
(194.51)
(272.57)
2,126.66
(638.45)
59.41
(2.37)
(0.24)
4,606.79
1,570.98
(70.76)
(4.80)
1,764.13
(33.47)
165.13
(68.77)
(7.97)
5,085.12
1,481.75
(61.79)
(6.69)
1,890.76
3.58
(20.00)
23.36
(112.18)
(0.60)
2,402.50
1,472.89
(1.20)
(331.42)
1,917.19
(0.83)
(8.00)
76.49
(106.21)
(56.58)
3,882.39
1,876.57
(14.66)
2,411.58
307.33
23.17
14.59
85.63
(190.28)
(43.61)
(172.91)
(21.51)
627.90
(A)
(175.07)
(3,505.37)
4,207.17
526.73
5,133.52
(102.07)
5,031.45
(4.97)
5,026.48
(1,554.62)
1,164.19
(537.18)
(927.61)
4,157.51
(246.38)
3,911.13
(3.50)
3,907.63
891.00
(1,916.27)
1,270.59
245.32
2,647.82
49.36
2,697.18
(4.45)
2,692.73
(1,365.76)
(2,379.58)
(2,655.61)
(6,400.95)
(2,518.56)
48.33
(2,470.23)
(13.31)
(2,483.54)
662.36
2,098.72
2,542.99
5,304.07
5,931.97
(42.73)
5,889.24
(16.54)
5,872.70
(B)
(4,669.13) (2,591.14) (1,762.27) (975.55) (579.70)
987.61
382.28
19.85
9.68
4,839.04
(239.89)
(2.31)
220.00
12.76
(2,499.96)
269.22
3.80
6.62
327.57
3.35
1.00
0.07
3.85
0.36
(3,648.84) (2,206.37) (1,515.73) (621.69) 1,759.74
(3,648.84) (2,206.37) (1,515.73) (621.69) 1,759.74
Net Profit before tax and extra-ordinary item
Adjustment for
Depreciation
Foreign Exchange Fluctuation (Net)
Interest / Dividend Income
Interest Expenses
Profit / (Loss) on Sale of Fixed Assets
Profit / (Loss) on Sale of Investments
Diminution in Value of Investments
Provision for Doubtful Debts / Advances
Provision for Doubtful Debts / Advances Written - back
Provision no longer required written back
Credit balances written back
Provision for Investments Written - back
Operating Profit before working capital changes
Adjustment for
Trade and Other Receivables
Inventories
Trade Payables
Cash generated from operations
Direct Taxes (Paid)
Cash flow before extra-ordinary item
Extra Ordinary Item
NET CASH FROM OPERATING ACTIVITIES
(B) CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets
Disposal of Fixed Assets
Sale / Purchase of Investments
Interest Received
Dividend Received
Net cash used in investing activities
(C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Share Capital
Share Application Money
Proceeds from Long Term borrowings
Repayment from Short Term borrowings
Interest paid
(C)
Net increase in cash and cash activities (A + B + C)
Cash and cash equivalents (Opening Balance)
Cash and cash equivalents (Closing Balance)
NET INCREASE / (DECREASE) AS DISCLOSED ABOVE
1,219.99 1,487.88
725.02
981.31
130.11
884.84
(503.41) (2,930.46)
(249.02) (227.89) (812.90)
797.89
(207.62)
(2,019.84) (1,817.26) (2,035.87) (2,251.82) (2,145.47)
(1,287.55) (1,915.04) (743.94)
255.56 (5,283.55)
90.09
(213.78)
433.06 (2,849.67) 2,348.89
1,734.06
1,824.15
90.09
1,947.84
1,734.06
(213.78)
1,514.78 4,364.45 2,015.56
1,947.84 1,514.78 4,364.45
433.06 (2,849.67) 2,348.89
7
GENERAL INFORMATION
Our Company was incorporated as “Indian Organic Chemicals Limited” on February 10, 1960 under the
Companies Act 1956. Our Company changed its name from Indian Organic Chemicals Limited to Futura
Polyesters Limited, and pursuant to the change of our name, a fresh Certificate of Incorporation, bearing
Registration number 11-11579 was issued on November 05, 2002. Our Company is registered with the RoC. –
The CIN (Corporate Identification Number) of our Company is L65192MH1960PLC011579
Name, Registered & Corporate office of our Company
Registered and Corporate Office:
Paragon Condominium,
3rd Floor, Pandurang Budhkar Marg,
Mumbai – 400 013, India
Tel: +91-22-24922999
Fax: +91-22-24923142
Website: www.futurapolyesters.com
Email: futuraho@futurapolyesters.com
The address of the RoC is as follows:
Registrar of Companies, Maharashtra at Mumbai
100, Everest Building,
Marine Drive,
Mumbai – 400 002,
Maharashtra, India.
Board of Directors of our Company
Our Board of Directors as on the date of filing the Draft Letter of Offer with SEBI is as follows:
Sr.
No.
Name
1.
2.
3.
4.
Mr. Viren Rajan Raheja
5.
Mr. Prathipati Abraham
6.
Mr. Vispi Rusi Patel
7.
Mr. Shyam Sunder Sami
8.
9.
Mr. K. Ramasubramanian
Designation
Nature of Directorship
DIN
Chairman and Managing Executive Director
Director
Joint Managing Director
Executive Director
Director
Non-Executive Director
Director
Non-Executive
Independent
Director
Nominee Director
Non-Executive
Independent
Director
Director
Non-Executive
Independent
Director
Director
Non-Executive
Independent
Director
Additional Director
Additional Director
Non-Executive
Independent
Director
00005264
00005275
00037592
00016935
00280426
00211464
00026470
00089258
01623890
For a detailed profile of our Directors including our Executive Directors, please refer to the chapter titled ‘Our
Management’ beginning on page 60 of the Draft Letter of Offer.
Company Secretary & Compliance Officer
Mr. S. Ramachandran
8
Mumbai – 400 013
Tel: +91-22-24922999
Fax: +91-22-24923142
Email: rightsissue@futurapolyesters.com
Note: Investors are advised to contact the Registrar to the Issue and/or Compliance Officer, Mr. S.
Ramachandran, in case of any pre-Issue/post-Issue related problems such as non-receipt of Abridged Letter of
Offer/Letter of Offer/letter of allotment/ CAF/share certificate(s)/refund order(s)/demat credit/electronic refund
of funds.
The Equity Shares of our Company are listed on BSE.
Issue Management Team:
Lead Manager to the Issue
Registrars to the Issue / Share Transfer
Agents of our Company
5th Floor, Mafatlal Centre,
Nariman Point,
Mumbai – 400 021
Tel.: +91-22-2289 7519/37
Fax: +91-22-2283 8782
Website: www.idbicapital.com
E-Mail: futura.rights@idbicapital.com
Investors Grievance ID: redressal@idbicapital.com
Contact Person: Mr. Neelabh Dubey
Satellite Corporate Servies Pvt. Ltd.
B- 302, Sony Apt., Opp. St. Jude's High School,
Tel: +91-22-28520461/28520462.
Fax: +91-22-28511809.
Website: www.scspl.net
E-mail: service@scspl.net
Contact Person: Mr. Michael Monterio
Legal Advisors to the Issue
Statutory Auditors
M/s. Crawford Bayley & Co
Advocates and Solicitors
State Bank Buildings, 4th floor
N.G.N Vaidya Marg,
Fort, Mumbai - 400 023, India
Tel: +91-22-2266 8000
Fax: +91-22-2266 3978
E-mail: sanjay.asher@crawfordbayley.com
M/s. N. M. Raiji & Co
Chartered Accountants
Universal Insurance Bldg,
6th Floor, Sir. P. M. Road,
Fort, Mumbai - 400001, India.
Tel: +91-22-22870068 / 22873463
Fax: +91-22-022-22828646.
E-mail: nmraiji@mtnl.net.in
Bankers to our Company
BANK OF INDIA
INDIAN BANK
Bank of India Building,
4th Floor, 70/80, M.G. Road,
Fort, Mumbai - 400 023, India.
Tel: +91-22-2262 3656
Fax: +91-22-2269 2196
Harbour Branch,
66 Rajaji Salai,
Chennai - 600 001, India.
Tel: +91-44-2521 0313
Fax: +91-44-2521 5368
E-mail: mumbaicbb@bankofindia.co.in
E-mail: ibharbour@indianbank.co.in
9
UNION BANK OF INDIA
STATE BANK OF HYDERABAD
Union Bank Bhavan,
1st floor, 239, Vidhan Bhavan Marg,
Nariman Point, Mumbai 400 021, India.
Tel: +91-22-2202 4742
Fax: +91-22-2285 5037
1st Floor,
45, Second Line Beach,
Tel: +91-44-2539 7118
Fax: +91-44-2535 8322
E-mail: jbdave@unionbankofindia.com
E-mail: sbhifbchn@vsnl.net
STATE BANK OF INDIA
CANARA BANK
N.G.N. Vaidya Marg,
Fort, Mumbai - 400 023, India
Tel: +91-22-6450 1295
Fax: +91-22-2266 5915
Spencers Tower - I,
770, Ground Floor,
Anna Salai, Chennai - 600 002, India.
Tel: +91-44-2849 7011/ 12/ 13
Fax: +91-44-2849 7016
E-mail: chn2596@canbank.co.in
E-mail: pbp1950@hotmail.com
UCO BANK
T. Nagar
Tel: +91-44-24357476
Fax: +91-44-24357477
E-mail: ucotnagarmcu@vsnl.net
Bankers to the Issue
[●]
Refund Bankers
[●]
Inter-se Allocation of Responsibilities
Since IDBI Capital Market Services Limited is the sole Lead Manager to the Issue, all the responsibilities of the
Issue will be managed by them.
Statement of Inter se allocation of responsibility
IDBI Capital Market Services Limited is the sole Lead Manager to this Issue. However, the details of
responsibility for IDBI Capital Market Services Limited are as follows:
Sr.
No.
1.
2.
3.
Activities
Capital structuring with relative components and formalities such as type of instruments,
etc.
Drafting and Design of the Letter of Offer and of advertisement /publicity material
including newspaper advertisements and brochure / memorandum containing salient
features of the Letter of Offer. The designated Lead Merchant Banker shall ensure
compliance with theGuidelines for Disclosure and Investor Protection and other stipulated
requirements and completion of prescribed formalities with Stock Exchange and SEBI.
Marketing of the Issue which will cover, inter alia, formulating marketing strategies,
preparation of publicity budget, arrangements forselection of (i) ad-media and (ii) bankers
to the issue.
Responsibility &
Co-ordinator
IDBI
Capital
Market
Services
Limited
IDBI
Capital
Market
Services
Limited
IDBI
Market
Limited
10
Capital
Services
4.
Selection of various agencies connected with the issue, namely Registrars to the Issue,
printers, bankers and advertisement agencies.
5.
The post-issue activities will involve essential follow-up steps, which must include
finalization of basis of allotment / weeding out of multipleapplications, listing of
instruments and dispatch of certificates and refunds, with the variousagencies connected
with the work such as registrars to the issue, bankers to the issue, and bank handling
refund business. Even if many of these post-issue activities would be handled by other
intermediaries, the designated Lead Merchant Banker shall be responsible for ensuring
that these agencies fulfill their functions and enable him to discharge this responsibility
through suitable agreements with the issuer company.
IDBI
Market
Limited
IDBI
Market
Limited
Capital
Services
Capital
Services
Credit Rating Details
This being an issue of Equity Shares on rights basis, there is no credit rating required for this Issue.
IPO Grading
This being a rights issue and not an IPO, grading is not mandatory
Debenture Trustees
Since this is not a debenture issue, appointment of debenture trustee is not required.
Monitoring Agency
As the size of the Issue, will not exceed Rs. 50000 lacs, appointment of monitoring agency under clause 8.17 of
the SEBI Guidelines is not required.
Underwriting/ Standby Arrangements
The present Issue is not underwritten and our Company has not made any standby arrangements for the present
Rights Issue. Our Promoters have confirmed that they would subscribe to their respective entitlements in this
Rights Issue in full. Further, our Promoters have also confirmed that they would also subscribe to the
unsubscribed portion of this Issue, to the extent that minimum subscription of 90% of Issue size is achieved if
any, in accordance with their undertaking contained in the chapter titled “Capital Structure” beginning on page
12 of the Draft Letter of Offer.
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of this Issue on the date of closure of the
Issue, the entire subscription shall be refunded to the applicants within 42 days from the date of closure of this
Issue. If there is a delay in the refund of subscription by more than 8 days after our Company becomes liable to
pay the subscription amount (i.e. 42 days after closure of this Issue), our Company shall pay interest for the
delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act 1956.
Under-subscription in the Issue will be determined after considering the number of shares
applied as per the entitlement plus additional shares applied by existing shareholders and the
renouncees. The undersubscribed portion can be applied for only after the close of the Issue.
Our Promoters, either by themselves or through their relatives or through one or more
Promoter Group Entities, have undertaken to subscribe upto the extent of minimum
subscription, i.e. 90% of the Issue size, if the Issue is undersubscribed to ensure that the Issue is
successful. This acquisition of additional Equity Shares, if allotted as aforesaid shall be in terms
of proviso to Regulation 3(1) (b) (ii) of the Takeover Code and will be exempt from the
applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the
requirement of Regulation 3(1) (b) (ii) of the Takeover Code. Further, this acquisition will not
result in change of control of management of our Company.
In case the permission to deal in and for an official quotation of the Equity Shares is not granted by the Stock
Exchange, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance
of the Draft Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer
is liable to repay it, the Issuer shall pay interest as prescribed under Section 73(2) / 73(2A) of the Companies
Act, 1956.
11
CAPITAL STRUCTURE
Amount
(Rs.
in
lacs)
PARTICULARS AS ON THE DATE OF THE DRAFT LETTER OF OFFER
Authorised Share Capital
7,90,00,000 Equity Shares of Rs. 10/- each
7900.00
1,00,000 Cumulative Redeemable Preference Shares of Rs. 100/- each
Issued, Subscribed & Paid-up Share Capital
5,24,21,679 Equity Shares of Rs 10/-each fully paid- up
Present issue being offered to the existing Shareholders through the Letter of Offer in the ratio of
one Equity Share for every two Equity Shares held on the Record Date
2,62,10,839 Equity Shares of Rs. 10/- each issued at par
Paid-up Capital after the Rights issue
7,86,32,518 Equity Shares of Rs. 10/- each fully paid-up (Assuming full subscription)
100.00
5242.16
2621.08
7863.25
Securities Premium Account
Existing Securities Premium Account (pre-Issue)
4,441.96
On allotment of proposed Rights Issue (post-Issue)
4,441.96
Notes to capital structure
1.
Details of increase/changes in Authorised Share Capital since incorporation
Date
September
01, 1969
Authorized Capital Increased/changed from
4,00,000 Equity Shares of Rs. 100/- each
aggregating to Rs. 400 lacs.
September
08, 1976
4,00,000 Equity Shares of Rs. 100/- each and
1,00,000 Cumulative Redeemable Preference
Shares of Rs. 100/- each aggregating to Rs. 500
lacs
lacs
lacs
1,00,00,000 Equity Shares of Rs. 10/- each and
lacs
lacs
lacs
lacs
August
1979
22,
September
23, 1981
August
1985
08,
September
16, 1992
April
2005
08,
July 15,
2008
2.
,
Authorized Capital Increased/changed to
lacs
lacs
lacs
lacs
lacs
lacs
lacs
lacs
Share Capital History from Incorporation till date of filing of the Draft Letter of Offer:
12
Year/Date of
Allotment/Split
Year/Date
when
made
fully paid
up
No.
Of
Equity
Shares
Face
Value
(Rs.)
Issue
Price
(Rs.)
Value (Rs.)
Consideration
Remarks
Cumulative
number of
shares
Cumulative
Securities
Premium
(Rs.)
1960 – 61
1960 – 61
40,000
100
100
40,00,000
Cash
40,000
Nil
1962 – 63
1962 – 63
10,000
100
100
10,00,000
Cash
50,000
Nil
1969 – 70
1969 – 70
20,000
100
N.A
20,00,000
Other
Cash
70,000
Nil
1970 – 71
1971-72
2,60,725
100
100
2,60,72,500
Cash
Initial
Capital
Rights
1:4
Bonus
2:5 (by
capitalization
of General
Reserves
Public Issue
3,30,725
Nil
1976 – 77
1976 – 77
1,65,362
100
N.A
1,65,36,200
Other
Cash
than
4,96,087
Nil
1979 – 80
1979 – 80
2,48,043
100
N.A
2,48,04,300
Other
Cash
than
7,44,130
Nil
N.A
74,41,300
74,41,300
Nil
77,91,300
Nil
81,49,515
35,82,150
83,05,050
59,15,175
1,24,57,575
23,33,025
1,84,00,000
3,20,45,150
2,30,55,100
10,18,71,650
3,22,77,140
3,34,77,140
28,63,12,450
36,28,55,000
4,83,55,869
36,28,55,000
5,17,34,329
42,70,45,740
September
1981
23,
than
Bonus 1:2
(by
capitalization
of General
Reserves)
Bonus1:2
(by
capitalization
of General
Reserves)
Split of 1 share of Rs. 100 each into 10 shares of Rs.10 each
March 01, 1983
March 01,
1983
3,50,000
10
10
35,00,000
Other
Cash
1983-84
1983-84
3,58,215
10
20
71,64,300
Cash
1985 – 86
June
1985
1,55,535
10
25
38,88,375
Cash
1985-86
1985-86
41,52,525
10
N.A
4,15,25,250
Other
Cash
March 16, 1988
March 16,
1988
November
59,42,425
10
15
8,91,30,375
Cash
46,55,100
10
25
11,63,77,500
Cash
May 10, 1993
July 19, 1994
1993-94
1995-96
92,22,040
12,00,000
10
10
30
78
27,66,61,200
9,36,00,000
Cash
Cash
November 19,
2004
April 08, 2005
November
19, 2004
1,48,78,729
10
10
14,87,87,290
Cash
Shares
issued
to
shareholders
of erstwhile
Corp Bank
due
to
merger
Conversion
of
Debentures
Conversion
of
12%
convertible
debentures
issued
to
shareholders
of
Corp
Bank
Bonus1:2
(by
capitalization
of General
Reserves)
Rights
1:2
Conversion
of
Partly
Convertible
Debentures
Rights
Preferential
issue
Rights
April
33,78,460
10
29
9,79,75,340
Cash
Preferential
November
29,1992
30,
08,
than
than
13
September
2005
09,
3.
2005
September
09, 2005
6,87,350
10
34.95
2,40,22,882.50
issue
Preferential
issue
Cash
5,24,21,679
Shareholding Pattern before and the expected shareholding pattern after the Issue is as under:
4.
Shareholding Pattern of our Company as on July 04, 2008
Category of Shareholder
Shareholding of Promoter and
Promoter Group
Indian
Individuals/ Hindu Undivided Family
Bodies Corporate
Sub Total(A)(1)
Total
number
of
shares
Pre-Issue
Total
shareholding as
a percentage of
total number of
shares
Total
number
of shares
PostIssue
Total
shareholding
as
a
percentage of
total number
of shares
441228
19946864
20388092
0.84
38.05
38.89
0
0.00
157489
25821
3355114
93270
0.30
0.05
6.40
0.18
3234373
6.17
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
13231561
25.24
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
[•]
Foreign
Public shareholding
Institutions
Mutual Funds/ UTI
Financial Institutions / Banks
Insurance Companies
Foreign Institutional Investors
Non-institutions
Bodies Corporate
Individuals
Individuals –
i. Individual shareholders holding
nominal share capital up to Rs 1 lakh
ii. Individual shareholders holding
nominal share capital in excess of Rs. 1
lakh.
Any Other (specify)
Trusts
Directors & Relatives
Non resident Indians
Clearing Member
Hindu Undivided families
Overseas Corporate Bodies
Total
Public Shareholding (B)
TOTAL (A)+(B)
(C) Shares held by Custodians and
against
which Depository Receipts
have been issued
Pre & Post – Issue Capital (Total
(A)+(B)+(C))
GRAND TOTAL (A)+(B)+(C)
7411459
14.14
16277
2740
1224245
95517
892031
2293690
32033587
52421679
0.03
0.01
2.34
0.18
1.70
4.38
61.11
100.00
0
0.00
52421679
52421679
100
100
14
44,41,95,123
As on date of the Draft Letter of Offer, there are 39,364 shareholders (as per the beneficial position as on July
04, 2008), while 53,71,011 Equity Shares are held in physical form and 4,70,50,668 Equity Shares are held in
demat form.
Our Promoters have confirmed that each of them intend to subscribe to the full extent of their entitlement in the
Issue. Our Promoters reserve their right to subscribe to their entitlement in the Rights Issue either by themselves,
their relatives or through one or more Promoter Group Entities, including by subscribing for renunciation, if
any, made by any of the Promoters to any other Promoter and/ or an affiliate thereof. Our Promoters may apply
for additional Equity Shares in the Issue. As a result of this subscription and consequent allotment as stated
above, the Promoters (and others as mentioned above) may acquire shares over and above their entitlement in
the Issue, which may result in an increase of the shareholding being above the current shareholding with the
entitlement of Equity Shares under the Issue.
This subscription and acquisition of additional Equity Shares by the Promoter(s) (and others as mentioned
above), if any, will not result in change of control of the management of our Company and shall be exempt in
terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the
requirements indicated in the section on “Objects of the Issue” of the Draft Letter of Offer, there is no other
intention/ purpose for this Issue, including any intention to delist our Company, even if, as a result of allotments
to our Promoters (and others as mentioned above) in this Issue, the Promoters’ and Promoter group shareholding
in our Company exceeds their current shareholding.
Our Promoters have provided the following undertaking, in terms of the SEBI (Delisting of Securities)
Guidelines, 2003:
“We undertake that, in case the Rights Issue of Futura Polyesters Limited is undersubscribed as on the Issue
Closing Date, we shall individually, or jointly with or through our relative(s) or Promoter Group entity /
entities, subscribe over and above our entitlement in this Rights Issue to the undersubscribed portion of this
Rights Issue to the extent that minimum subscription of 90% of the Issue size is achieved, to ensure that the
Issue is successful, in compliance with the Listing Agreement and other applicable laws prevailing at that time
relating to continuous listing requirements.”
“We hereby undertake that, in case the Rights Issue of Futura Polyesters Limited is completed with the
Promoters subscribing (either by ourselves or through one or more persons / entities mentioned above) to Equity
Shares over and above their entitlement in order to meet the subscription to the extent of minimum subscription
i.e 90% of the Issue size as stated hereinabove and as a result, if the public shareholding falls below the
permissible minimum level as specified in the listing conditions or listing agreement, we shall, individually or
jointly with our relative(s) or promoter group entity/ entities who or which may have acquired shares in the
Company including pursuant to any renunciation of the whole or part of our entitlement by any Promoter(s),
make an offer for sale of our holding (including that of person/ entity refer to above), so that the public
shareholding is raised to the “permissible minimum level” within a period of three months from the date of
allotment in the proposed Issue, as per the requirements of Clause 17.1 and 17.2 of SEBI (Delisting of
Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or
any appropriate authority.”
5.
Details of shareholding of Promoters and Promoter Group as on date of filing the Draft Letter of
Offer:
S.
Name of person/entity
No.
Promoters
1.
2.
Promoter Group
Dharamdas Sitaldas Dalal
Deepika Subhash Chandratreya
Bela M Dalal
Nikhil Shyam Ghia
Rajul Shyam Ghia
Bhupati Investments and Finance
Private Limited
Number of Equity Shares
held as on date
% of pre-Issue paid up
share capital
1012
255744
0.00
0.49
22815
37155
53662
70623
217
0.04
0.07
0.10
0.13
0.00
6525471
12.45
15
Bloomingdale Investment & Finance
Private Limited
Chika Private Limited
Daltreya Investment & Finance Private
Limited
Distributors (Bombay) Private Limited
Gokul Construction Company Private
Limited
Matsyagandha Investment and Finance
Private Limited
6.
5307311
10.12
7000
26992
0.01
0.05
2144904
1500080
4.09
2.86
4435106
8.46
Capital build-up of our Promoters is as follows:
The capital build-up of our Promoters, to the extent of information available with our Company and with
them, is as follows:
(i) Mr. Shyam Bhupatirai Ghia
Opening Balance
700
Date/Year
1995
April 19, 2004
As on date
No. of Shares Purchase/Sale
0
312
0
Closing Balance
700
1,012
1,012
(ii) Mr. Mukund Dharamdas Dalal
Opening
Balance
16600
(Bonus)
(Bonus)
(Rights)
7.
Date/Year
January 11, 1982
1985
1985
1987
November 28,
1992
May 10, 1993
January 31, 1996
Sep, 1998
March 30, 2000
Sep, 2000
March 31, 2001
March 31, 2001
February 23,
2004
February 26,
2004
March 3, 2004
March 8, 2004
March 11, 2004
March 13, 2004
March 15, 2004
March 9, 2004
November 19,
2004
March 28, 2008
No. of Shares
Purchase/Sale
1800
8250
950
250
7132
Purchase /sale value
(Rs.)
61.50
0
0
42.50
25
Closing
Balance
18400
26650
27600
27850
34982
14240
6000
(6000)
(2000)
50000
(16600)
(3000)
15000
15
78
6
6.53
14
0
5.70
16.05
49222
55222
49222
47222
97222
80622
77622
92622
10000
14.05
102622
3425
5069
5121
16600
5000
3556
105851
14.05
14.00
13.91
13.50
11.94
13.75
10
106047
111116
116237
132837
137837
141393
247244
8500
255744
Details regarding Top 10 Shareholders:
16
The details of top 10 shareholders and the number of shares held by them are as below:
A.
As on date of filing the Draft Letter of Offer with the Stock Exchange*
Sr. No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of Shareholder
Bhupati Investments and Finance Private Limited
Bloomingdale Investment and Finance Private Limited
Matsyagandha Investment and Finance Private Limited
Life Insurance Corporation of India
Persiphone Investments Limited
Gokul Construction Company Private Limited
Mr. Sudhir Keshavji Sampat
United India Insurance Company Limited
Mr. Dipak Kanayalal Shah
Total
*As of the beneficial position as on July 04, 2008
B.
Name of Shareholder
Matsyagandha Investment and Finance Private Limted
Distributors (Bombay) Private Limted
Persiphone Investments Ltd
Gokul Construction Company Private Limted
Mr. Dipak Kanayalal Shah
Total
*As of the beneficial position as on June 27, 2008
Number of Shares
6525471
5307311
4435106
2410352
2144904
1683616
1500080
778727
573871
528100
25887092
% holding
12.45
10.12
8.46
4.60
4.09
3.21
2.86
1.49
1.09
1.01
49.38
Two years prior to filing the Draft Letter of Offer with the Stock Exchange*
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Name of Shareholder
Matsyagandha Investment and Finance Private Limited
Persiphone Investments Ltd
Industrial Development Bank Of India Limited
Gokul Construction Company Private Limited
HSBC Financial Services (Middle East) Limited
Total
*As of the beneficial position as on June 30, 2006
8.
% holding
12.45
10.12
8.46
4.60
4.09
3.21
2.86
1.49
1.09
1.01
49.38
10 days prior to filing the Draft Letter of Offer with the Stock Exchange*.
Sr. No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
C.
Number of Shares
6525471
5307311
4435106
2410352
2144904
1683616
1500080
778727
573871
528600
25887092
Number of Shares
6513611
5307311
4435106
2410352
1683616
1531384
1500080
1068608
887078
774052
26111052
% holding
12.43
10.12
8.46
4.60
3.21
2.92
2.86
2.04
1.69
1.69
50.03
Details of purchase and sale of securities of our Company by the Promoters, Promoter Group
Entities and Directors, in the last 6 months:
17
Other than as stated hereinbelow, there are no cases of purchase or sale of Equity Shares of our Company
by our Promoters, their immediate relatives, Directors and Promoter Group Entities in the six months
before the date of the Draft Letter of Offer:
Name
of
Promoter/Promoter
Group/immediate relative,
Directors
Mr. Mukund Dharamdas
Dalal
Ms. Deepika S. Chandratreya
Purchase/
acquisition
Sale
Price
(Rs.)
Name
of
transferor/transferee
Date of
transfer
Final
shareholding
8,500
NA
25
Transferor:
Dharamdas Dalal
March
28, 2008
2,55,744
March
28, 2008
37,155
2500
NA
25
Mr.
Transferee: Mr. Mukund
Dharamdas Dalal
Transferor: Ms. Kusum
D. Dalal
Transferee: Ms. Deepika
S. Chandratreya
9.
The present Issue being a rights issue, as per Clause 4.10.1.(c) SEBI Guidelines, the requirement of
Promoters contribution and lock-in are not applicable.
10.
Revaluation of Assets
a) Year 2003-2004:
As our Company’s Plant and Machinery were installed over a period of time during the life of our Company
since its formation, the management decided to revalue the same so as to reflect the appropriate value in the
books of accounts. Accordingly, our Company appointed a Government certified Valuer, namely, M/s
Kanti Karamsey & Co. to revalue the Plant and Machinery at both locations, namely Chennai and Khopoli.
The revaluation was carried out on November 30, 2003, with the intention to assess the intrinsic value of
the plant and machinery. The net increase in the net book value arising out of revaluation has been credited
to Revaluation Reserve Account.
Details of the Revaluation of Assets are here as under:
1
2
3
4
Gross Book Value was computed to be Rs. 38, 618.10 lacs
Accumulated Depreciation was computed to be Rs. 18, 198.34 lacs
Net Book Value was computed to be Rs. 20, 419.76 lacs
Net Revaluation was computed to be Rs. 4145.12 lacs
Total Replacement Cost as on November 30, 2003 was assessed to be Rs. 2199. 73 lacs and the Fair Market
Value then was estimated to be Rs. 1336.62 lacs
b) Year 2007- 2008:
During the year 2007-2008 our Company appointed M/s. Kanti Karamsey & Co. for the purpose of
revaluation of part of the land. The same was performed on February 16, 2008. The net increase in the net
book value arising out of revaluation has been credited to the Revaluation Reserve Account. Revaluation is
based on the Valuation Report of M/s. Kanti Karamsey & Co. dated February 18, 2008.
Details of the Revaluation of part of the land
2
3
4
1 Gross Book Value was computed to be Rs. 5.28 lacs
Accumulated Depreciation was computed to be Nil
Net Book Value was computed to be Rs. 5.28 lacs
Net Revaluation was computed to be Rs. 14, 089.94 lacs
However, our Company has not utilized the Revaluation Reserve Account for issuing any bonus shares or
declaration of dividends as on date of the Draft Letter of Offer.
11. No further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in
any other manner intended to be made by our Company during the period commencing from submission
of the Draft Letter of Offer with SEBI till the securities referred to in the Draft Letter of Offer have been
18
listed, or application money is refunded on account of failure of the Issue, except that if we enter into
acquisition(s) or joint venture(s), we may consider additional capital to fund such activities or to use Equity
Shares as a currency for such acquisition(s) or participation in such joint venture(s).
12. Our Company presently does not have any intention or proposal to alter its capital structure within a period
of six months from the date of opening the Issue by way of split/consolidation of the denominations of
Equity Shares or further issue of shares or other securities.
13. Our Company does not have any ESOP/ESPS scheme as on date.
14. If our Company does not receive the minimum subscription of 90% of this Issue, which is payable on
application), on the date of closure of the Issue, the entire subscription shall be refunded to the applicants
within 42 days from the date of closure of this Issue. If there is a delay in the refund of subscription by
more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 42 days after
closure of this Issue), our Company shall pay interest for the delayed period, at rates prescribed under subsections (2) and (2A) of Section 73 of the Companies Act 1956. For details, please refer to the paragraph
titled “Basis of Allotment” beginning on page 232 of the Draft Letter of Offer.
Under-subscription in the Issue will be determined after considering the number of shares applied as per the
entitlement plus additional shares applied by existing shareholders and the renouncees. The
undersubscribed portion can be applied for only after the close of the Issue. Our Promoters, either by
themselves or through their relatives or through one or more Promoter Group Entities, have undertaken to
subscribe upto the extent of minimum subscription, i.e. 90% of the Issue size, if the Issue is
undersubscribed to ensure that the Issue is successful. This acquisition of additional Equity Shares, if
allotted as aforesaid shall be in terms of proviso to Regulation 3(1) (b) (ii) of the Takeover Code and will be
exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms
of the requirement of Regulation 3(1) (b) (ii) of the Takeover Code. Further, this acquisition will not result
in change of control of management of our Company.
15. Our Company has 39,364 Equity Shareholders as on the date of filing of the Draft Letter of Offer (as per
beneficial position as on July 04, 2008)
16. At any given point of time there shall be only one denomination for the Shares of our Company and we
shall comply with such disclosure and accounting norms as may be prescribed by SEBI from time to time.
17. The Equity Shares would be traded in dematerialised form and the minimum trading lot for Equity Shares
shall be one
18. Our Company has not raised any bridge loan against the proceeds of this Issue.
19. Our Company, our Promoters, our Directors and the Lead Manager has not entered into any buyback or
standby arrangements with respect to Equity Shares being offered in this Issue.
20. The Rights Entitlement of our Promoters will be fully subscribed.
21. The Issue will remain open for 30 days. However, the Board will have the right to extend the Issue period
as it may determine from time to time but not exceeding 60 days from the Issue Opening Date.
22. Equity Shares offered through this Issue shall be fully paid-up on allotment and the entire amount of Rs. 10
(Face Value of Rs. 10/- each per Equity Share since the Issue is at par) is payable on application
23. All the Equity Shares of our Company issued are fully paid up as on date and there are no partly paid up
Equity Shares.
24. No payment, direct or indirect in the nature of discount, commission, and allowance or otherwise shall be
made either by us or our Promoters to the persons who receive allotments, if any, in this Issue.
19
20
OBJECTS OF THE ISSUE
Our Company intends to use the proceeds of the present Rights Issue of 2,62,10,839 Equity Shares aggregating
to Rs. 2,621.08 lacs for meeting the objectives as discussed below:
(a) Funding working capital requirements;
(b) General corporate purposes;
(c) Issue expenses.
The net proceeds of the Issue, after deduction of any Issue expenses, are estimated to be approximately Rs. [•]
lacs.
The main objects clause of the Memorandum of Association of our Company enable us to undertake our
existing activities and the activities for which funds are being raised by us through this Issue. Further we
confirm that the activities which we have been carrying out till date are in accordance with the objects clause of
the Memorandum of Association of our Company.
Fund Requirement:
The intended use of the proceeds of the Issue is as under: Sr. No
Particulars
1
2
3
Funding working capital requirements
General corporate purposes
Issue expenses
Total
Amount
(Rs. in lacs)
2,092.00
[●]
[●]
2,621.08
Means of finance:
The fund requirements hereinabove shall be met in the following manner:
Sr. No
1
2
3
Particulars
Gross proceeds of the Issue
Less: Issue related expenses
Net proceeds of the Issue
Amount
(Rs. in Lacs)
2,621.08*
[●]
[●]
* Our Promoters have confirmed that they shall subscribe to their respective entitlements in this Rights Issue in
full.
Our Promoters, either by themselves or through their relative(s) or one or more Promoter Group Entities, shall
apply for additional Equity Shares in the Issue to the extent that 90% of the Issue size i.e minimum subscrpition
is achieved to ensure that the Issue is successful. As a result of such subscription and consequent allotment, our
Promoters may acquire Equity Shares over and above their Rights Entitlement, which may result in an increase
of their shareholding being above the current shareholding with the Rights Entitlement of Equity Shares in this
Issue. Such subscription and acquisition of additional Equity Shares by our Promoter(s) (including through
persons / entities refered to hereinbove), if any, will not result in change of control of the management of our
Company and shall be exempted in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code.
Notes:
a)
The fund requirement and intended use of net proceeds of the Issue is described herein is as per our
managements’ estimate and have not been appraised by any bank or financial institution.
b)
In case of any shortfall in raising the requisite capital from the proceeds of the Issue, the extent of the
shortfall will be met by internal accruals.
c)
In case of any increase/decrease in the Issue expenses, we may use such surplus towards general
corporate purposes/meet the deficit from the amount earmarked towards general corproate purposes.
21
d)
Since the objects of the Issue are proposed to be financed out of Issue proceeds, the requirement of an
undertaking confirming that firm arrangements of finance through verifiable means towards 75% of the
stated means of finance, excluding the amount proposed to be raised through the Rights Issue, is not
applicable
e)
In case of any variations in the actual utilization of funds earmarked for the above activities, increased
fund deployment for a particular activity may be met with by other funding sources, including surplus
funds if any available in any other project of our Company and/or our Company’s internal accrual, and
/ or the term loans/working capital loans that may be availed from the banks/ financial institutions.
f)
In case the Rights Issue does not go as planned, our Company will make alternative arrangements like
availing of fresh loans from bank(s) and/or utilizing internal accruals.
Details of Use of Proceeds
1.
We need additional working capital in line with our expanding operations. We have assessed our working
capital requirement for the financial year 2008-2009 to be Rs. 6,592 lacs. The details of funding our
working capital requirement as per our estimates are as follows:
Particulars
(A) Current Assets
No. of Days
Raw materials, stock in process, finished goods
Receivables
Advances to suppliers, other advances and other current asset
Total Current Assets
49
30
-
(Rs. In lacs)
2008-2009 (Estimated)
9,782.00
5,274.00
6,184.00
21,240.00
(B) Current Liabilities
Sundry Creditors and other current liabilities
63
(C) Working Capital Gap (A-B)
Actual/ projected bank borrowing
Net working capital Gap
Rights Issue Funding
14,648.00
6,592.00
4,500.00
2,092.00
2,092.00
Presently we have been sanctioned fund based working capital limits of Rs. 4,500.00 lacs. For further
details, please refer chapter titled “Financial Indebtedness” beginning on page 45 of the Draft Letter of
Offer.
2.
General Corporate Purposes
Our Company intends to deploy the balance Issue proceeds, after meeting Issue expenses, aggregating to
Rs. [•] Lacs towards general corporate purposes, including entering into strategic alliances, partnership,
brand building, repayment of debt, human resource development and training costs, research &
development, meeting exigencies and contingencies in ordinary course of business which may not be
foreseen or any other purpose as approved by our Board of Directors from time to time.
3.
To meet Issue expenses
The total expenses of this Issue are estimated to be approximately Rs. [●]. The Issue related expenses
include, amongst others, issue management fees, brokerage (if any) and printing and distribution expenses,
legal fees, advertisement expenses, registrar and depository fees and listing expenses .
Sr. No
1
2
Particulars
Fees of Lead Manager, Registrar to Issue, Legal Advisor etc.
Advertisement and marketing expenses
Amount
(Rs. in lacs)
[●]
[●]
22
3
4
Printing, stationery, distribution, postage etc
Others (including but not limited to Stock Exchage and SEBI filing fees)
Total
[●]
[●]
[●]
Deployment of funds:
Break-up of the utilization of Issue proceeds and the year wise deployment is given below:
Sr. No.
Particulars
1
2
3
General corporate purposes
Issue expenses
Total
Amount
(Rs. in lacs)
Year ending March 31
2009
2010
Total
2,092.00
2,092.00
[●]
[●]
[●]
[●]
[●]
[●]
[●]
[●]
Deployment of Funds
Our Company has not deployed any amount towards the said objects of the Issue as on date.
Interim Use of Proceeds:
Our management, in accordance with the policies established by the Board, will have flexibility in deploying the
proceeds received from the Issue. Pending utilization of the proceeds out of the Issue for the purposes described
above, our Company intends to temporarily invest the funds in high quality interest bearing liquid instruments
including money market mutual funds, deposits with banks for necessary duration and other interest bearing
securities as may be approved by the Board. Such investments would be in accordance with the investment
policies approved by our Board from time to time.
Monitoring Utilization of Funds
As our Issue size is less than Rs. 50,000 lacs, we have not appointed any monitoring agency to monitor the
utilization of Issue proceeds, as the same is not required as per SEBI Guidelines. Our Board of Directors will
monitor the utilization of proceeds of this issue on a regular basis.
We will disclose the utilization of the Issue proceeds including interim use, under a separate head in our balance
sheet or otherwise if required for the applicable fiscal periods clearly specifying the purpose for which such
proceeds have been utilized as per the disclosure requirements of listing agreement with the Stock Exchange.
23
BASIS FOR ISSUE PRICE
The Issue Price has been determined in consultation with the Lead Manager to the Issue considering following
qualitative and quantitative factors. Investors should also refer to the section titled “Risk Factors” and
“Financial Statements” beginning on page viii and 111 respectively to get a more informed review before
making the investment division.
Qualitative factors
1
2
3
4
5
Experienced Promoters supported by qualified management team
In-house research and development facilities
Established marketing network
Diverse product mix
Focus on specialty segment
For more details, please refer to the chapter titled “Business Overview” beginning on page 31 and section titled
“Risk Factors” beginning on page viii of the Draft Letter of Offer respectively.
Quantitative factors
Information presented in this section is derived from our Company’s restated, financial statements prepared in
accordance with Indian GAAP.
Weighted average earnings per share (EPS)
Financial period
Financial year 2006
Financial year 2007
Financial year 2008
Weighted average
EPS (Rs.)
(1.89)
2.14
2.17
1.48
Weight
1
2
3
Notes:
1
The earnings per share has been computed on the basis of adjusted profits and losses for the respective
years / periods after considering the impact of accounting policy changes, prior period adjustments /
re-groupings pertaining to earlier years as per the auditors report.
2
The denominator considered for the purpose of calculating Earnings Per Share is the weighted
average number of Equity Shares outstanding during the year.
3
The face value of each equity share is Rs. 10.
Price/earning (P/E) ratio
1
Based on the financial year ended March 31, 2008, EPS is Rs. 2.17.
2
P/E based on EPS, for the year ended March 31, 2008 is 4.61.
3
Industry P/E*:
(a)
Highest: 49.90
(b)
Lowest: 3.70
(c)
Average: 24.60
(*Source: Capital Market – Vol. XXIII/08 June 16 – June 29, 2008, Segment – Textile - Manmade)
Weighted average return on net worth*
Financial period
Financial year 2006
Return on average net worth
(%)
(10.45)
Weight
1
24
Financial year 2007
Financial year 2008
Weighted average
8.84
8.57
5.49
2
3
* Net worth has been computed by aggregating share capital, reserves and surplus and adjusting for revaluation reserves, intangible assets and
deferred tax assets as per our audited restated financial statements.
Minimum return on increased net worth required to maintain pre-Issue EPS
The minimum return on increased net worth required to maintain pre-Issue EPS as on March 31, 2008 is 9.24 %.
NAV per Equity Share
NAV per Equity Share represents shareholders’ equity less miscellaneous expenses as divided by weighted
average number of Equity Shares. The NAV per Equity Share at March 31, 2008 is Rs. 25.09.
NAV per Equity Share after the Issue
The NAV per Equity Share after the Issue is Rs. 20.06.
The Issue Price per Equity Share is Rs. 10 / -.
Comparison of accounting ratios as of March 31, 2008
EPS
(Rs.)
2.17
6.60
0.80
Company
Century Enka
Indo Rama Synthetic India Limited
P/E
4.610
16.00
16.60
Return on average
net worth (%)
8.57
3.30
2.70
Book value per
share (Rs.)
25.09
225.10
37.20
(*Source: Capital Market – Vol. XXIII/08 June 16 – June 29, 2008, Segment – Textile - Manmade)
*Our EPS, return on average net worth and book value per share have been calculated from our audited financial statements.
The Face Value of the shares is Rs. 10 /- per share and the Issue Price of Rs. 10 is 1 time the face value of
Equity Shares.
Based on the above mentioned qualitative, quantitative factors and market price of the Equity Shares of our
Company, we and the Lead Manager to the Issue, are of the opinion that the Issue Price of Rs. 10 per Equity
Shares is reasonable and justified.
Share Prices of Futura Polyesters Limited
Weekend prices of Equity Shares of our Company for the last four weeks on BSE along with the highest and the
lowest prices are as below:
Week ended on
July 04, 2008
June 27, 2008
June 20, 2008
June 13, 2008
Closing Price
23.10
22.00
23.00
23.95
Highest Price
23.70
22.50
25.90
24.60
Lowest Price
21.00
20.80
22.90
23.70
Market Price as on May 30, 2008 is 28.30.
25
STATEMENT OF TAX BENEFITS
The Board of Directors,
Futura Polyesters Limited,
Paragon Condominium, 3rd Floor,
Pandurang Budhkar Marg,
Mumbai 400 013
Dear Sirs,
BENEFITS UNDER THE INCOME TAX ACT, 1961 (hereinafter referred to as the ‘Act’)
TO THE COMPANY
1) In accordance with the provisions of section 10(38) of the ‘Act” the long-term capital gains arising
from the transfer of securities / units in a transaction entered into in a recognized stock exchange in
India (such transaction is chargeable to Securities Transaction Tax under Chapter VII of the Finance
(No.2) Act, 2004), shall be exempt from income tax. However, the said exemption will not be
allowable as deduction from Book Profits under Section 115 JB of the Act.
2) The long-term capital gains accruing to the Company otherwise than as mentioned in A. 1) above, shall
be chargeable to tax in accordance with and subject to the provisions of section 112 of the Act as
follows:
i. If long-term capital gain is computed after indexation @ 20% (plus applicable Surcharge and
Education Cess).
ii. If long-term capital gain is computed without indexation @ 10% (plus applicable Surcharge and
Education Cess).
3) The short-term capital gains accruing to the Company, from the transfer of a short-term capital asset,
being securities, in a transaction entered into in a recognized stock exchange in India (such transaction
is chargeable to Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be
chargeable to tax at the rate of 15% [plus applicable Surcharge and Education Cess] as per the
provisions of section 111A of the Act.
4) The Company is eligible to claim exemption in respect of tax on long term capital gains under sections
54EC of the Act, if the amount of capital gains is invested in certain specified bonds/securities subject
to the fulfillment of the conditions specified in those sections upto a ceiling of fifty lakh rupees.
5) The Company is eligible to exemption under section 10(34) of the Act in respect of income by way of
dividend received from other Domestic Companies.
6) The Company is eligible to exemption under section 10(35) of the Act in respect of income by way of
dividend received from mutual fund specified under Section 10(23D) of the Act and other specified
undertakings/companies.
TO THE MEMBERS OF THE COMPANY
B I – RESIDENTS
1) Members will be entitled to exemption, under section 10(34) of the Act in respect of the income by
way of dividend received from the Company.
2) The long-term Capital gains accruing to the members of the Company on sale of the Company’s shares
in a transaction entered into in a recognized stock exchange in India (such transaction is chargeable to
Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be exempt from
tax as per the provisions of section 10(38) of the Act.
3) The long term capital gains otherwise than as mentioned in (2) above, shall be chargeable to tax in
accordance with and subject to the provisions of Section 112 of the Act as follows:
i. If long term capital gain is computed after indexation @ 20% (plus applicable surcharge and
education cess).
26
ii. If long term capital gain is computed without indexation @ 10% (plus applicable surcharge
and education cess)
4) The short-term Capital gains accruing to the members of the Company on sale of the Company’s shares
in a transaction entered into in a recognized stock exchange in India (such transaction is chargeable to
Securities Transaction Tax under Chapter VII of the Finance (No.2) Act, 2004) shall be chargeable to
tax @ 15% [plus applicable surcharge and education cess] as per the provisions of section 111A of the
Act.
5) The members are entitled to claim exemption in respect of tax on long term capital gains under sections
54EC of the Act, if the amount of capital gains is invested in certain specified bonds/securities subject
to the fulfillment of the conditions specified in those sections upto a ceiling of fifty lakhs rupees.
6) Individuals or HUF members can avail exemption under section 54F of the Act by utilization of the
sales consideration for purchase/construction of a residential house within the specified time period and
subject to the fulfillment of the conditions specified therein.
II – NON-RESIDENTS
1.
Non-resident members will be entitled to exemption, under section 10(34) of the Act in respect of
the income referred to in Section 115-O of the Act, by way of dividend received from the
Company.
2.
Benefits outlined in Paragraph B I (2) above are also available to a non-resident/non-resident
Indian shareholder to Section 48 of the Act
3.
Benefits outlined in Paragraph B I (4) above are also applicable to the non-resident / non-resident
Indian shareholder:
4.
Where shares have been subscribed in convertible foreign exchange, the non-resident Indians [as
defined in Section 115C(e) of the Act], being shareholders of an Indian Company, have the option
of being governed by the provisions of Chapter XII-A of the Act, which inter alia, entitles them to
the following benefits in respect of income from shares of an Indian Company acquired, purchased
or subscribed to convertible foreign exchange:
•
As per the provisions of Section 115D read with Section 115E of the Act and subject to the conditions
specified therein, long term capital gains (in cases not covered under Section 10(38) of the Act) arising on
transfer of an Indian Company’s shares, will be subject to tax at the rate of 10 percent (plus applicable
surcharge on tax and education cess on tax and surcharge), without indexation benefit.
•
As per the provisions of Section 115F of the I.T.Act and subject to the conditions specified therein, gains
arising on transfer of a long term capital asset (in cases not covered under Section 10 (38) of the Act) being
shares in an Indian Company shall not be chargeable to tax if the entire net consideration received on such
transfer is invested within the prescribed period of six months in any specified asset or savings certificates
referred to in Section 10(4B) of the Act. If part of such net consideration is invested within the prescribed
period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the Act,
then such gains would not be chargeable to tax on a proportionate basis. For this purpose, net consideration
means full value of the consideration received or accrued as a result of the transfer of the capital asset
(being shares in the Indian Company) as reduced by any expenditure incurred wholly and exclusively in
connection with such transfer.
5.
As per the provisions of Section 115G of the Act, non-resident Indians are not obliged to file a
return of income under Section 139(1) of the Act, if their only source of income is income from
investments or long term capital gains earned on transfer of such investments or both, provided,
tax has been deducted at source from such income as per the provisions of chapter XVII-B of the
Act.
6.
Under Section 115H of the Act, where the non-resident Indian becomes assessable as a resident in
India, he may furnish a declaration in writing to the Assessing Officer, along with his return of
income for that year under Section 139 of the I.T. Act to the effect that the provisions of the
Chapter XII-A shall continue to apply to him in relation to such investment income derived from
the specified assets for that year and subsequent assessment years until such assets are converted
into Indian Currency.
27
7.
As per the provisions of Section 115 I of the Act, a non-resident Indian may elect not to be
governed by the provisions of chapter XII-A for any assessment year by furnishing his return of
income for that assessment year under Section 139 of the Act, declaring therein that the provisions
of chapter XII-A shall not apply to him for that assessment year and accordingly his total income
for that assessment year will be computed in accordance with the other provisions of the Act.
8.
Benefits outlined in Paragraph B I (5), (6) above are also available to a non-resident/non-resident
Indian shareholder.
III. Foreign Institutional Investors (FIIs)
1.
Dividend income, received from the domestic Company shall be exempt under Section 10(34) of the Act.
2.
Capital Gains
Under Section 115AD, income (other than income by way of dividends referred in Section 115-O) received
in respect of securities (other than units referred to in Section 115A) shall be taxable at the rate of 20%
(plus applicable surcharge on tax and education cess on tax and surcharge).
Under Section 115AD, capital gains arising from transfer of securities (other than units referred to in
Section 115AB) which are not exempt under Section 10(38), shall be taxable as follows:
Securities which are held for the period of upto or less than twelve months and where such transaction is
chargeable to securities Transaction Tax, capital gain shall be taxable at the rate of 15% (plus applicable
surcharge on tax and education cess on tax and surcharge). Securities other than those held for the period of
upto or less than twelve months and where such transaction is not chargeable to Securities Transaction Tax,
capital gain shall be taxable at the rate of 30% (plus applicable surcharge on tax and education cess on tax
and surcharge);
Securities which are held for the period of more than twelve months shall be taxable at the rate of 10% (plus
applicable surcharge on tax and education cess on tax and surcharge). Such capital gains would be
computed without giving effect of first proviso and without indexation as provided in the second proviso to
Section 48.
3.
Long-term capital gains arising on transfer of equity shares in our Company, which is held for the period of
more than twelve months and where such transaction is chargeable to Securities Transaction Tax, shall be
exempt from tax under Section 10(38) of the Act.
4.
Benefit of exemption under Section 54EC shall be available as outlined in Paragraph B (I) (5) above.
BENEFITS UNDER THE WEALTH TAX ACT, 1957
‘Asset’ as defined under section 2(ea) of the Wealth Tax Act, 1957, does not include shares in Companies and
hence, shares are not liable to wealth tax.
BENEFITS UNDER THE GIFT-TAX ACT, 1958
Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore any gift of shares will
not attract gift tax.
Note
1
2
Our comments are based on the law as of date. Tax rates mentioned above are that which are currently
applicable. Tax laws are subject to changes from time to time and as such any changes may affect the
advice contained in our opinion. We have no responsibility to update our advice for events and
circumstances occurring after the date of this opinion, unless specifically requested by you.
In respect of non-residents, the tax rates and the consequent taxation above shall be subject to any
further benefits available under the double taxation avoidance agreements, if any, between India and
the country in which the non-resident has fiscal domicile.
For N. M. Raiji and Co.,
Place: Mumbai
Date: June 10, 2008
CA. Y. N. Thakkar
Partner
Membership No. 33329
28
SECTION IV – ABOUT US
INDUSTRY OVERVIEW
Petrochemicals are derived from various chemical compounds, mainly from hydrocarbons. These hydrocarbons
are derived from crude oil and natural gas. Among the various fractions produced by distillation of crude oil,
petroleum gases, naphtha, kerosene and gas oil are the main feed stocks for petrochemical industry. Ethane,
propane and natural gas liquids obtained from natural gas are the other important feedstock used in the
Petrochemicals industry. Petrochemical industry plays a vital role in economic growth and development of
manufacturing sector. The value addition in the petrochemicals industry is higher than most of the other industry
sectors.
The Petrochemical industry, which entered in the Indian industrial scene in 1970s, registered a rapid growth in
the 1980s and 1990s. Petrochemical industry mainly comprise of synthetic fibre / yarn, polymers, Synthetic
Rubber, Synthetic detergent intermediates, performance plastics and plastic processing industry.
Today, petrochemical products permeate the entire spectrum of daily use items and cover almost every sphere of
life like clothing, housing, construction, furniture, automobiles, household items, agriculture, horticulture,
irrigation, packaging, medical appliances, electronics and electrical etc.
Global Scenario
The world is witnessing a gradual shift in the production and demand for petrochemicals from West to East.
Availability of abundant cheap raw material in Middle East and emergence of Asia as the major consumption
centre had witnessed an enhanced investment flow to these regions. India and China are expected to be the
major growth centres in the course of next two decades.
The global ethylene capacity in 2006 increased at 4.4% whereas the demand grew by a healthy 5.6%. During
2006, five new crackers were brought on stream with one each in Brazil and the Middle East and three in China.
In addition, six crackers have undergone major de-bottlenecking / expansions.
A strong global economy supported by robust growth in two of the largest economies, China and India will also
help to swiftly absorb the additional products coming out of these new capacities in the Middle East and Asia.
IMF predicts the global GDP to maintain a healthy growth of 5.1% during 2007 as well as through 2008. A
major impetus to this growth will come from the Asian region with China and India being the main contributors.
This will support a healthy demand growth for petrochemical products.
Global Polymer Market
Globally demand for all polymers reached 175 million tonnes of which PE, PP and PVC accounted for 142
million tonnes showing a healthy growth of 5.9%. The growth was mainly driven by LLDPE (7%), HDPE
(6.1%) and PP(6.4%). Asia, Africa and other developing regions had been the primary contributors to this
growth. The global production capacity of PE, PP and PVC touched 162 million tonnes with growth of 5.2%.
Globally, 8 million tonnes of capacity was added during 2006 of which 6 million tonnes was Polyolefins and 2
million tonnes of PVC. The major capacity additions were in China and in the Middle East.
Global Polyester Market
The year 2006-07 was a challenging one for the polyester industry. Rising crude oil prices impacted an increase
in the cost of raw materials while a bumper cotton crop accompanied by subsidised cotton prices exerted
pressure on polyester margins. Stand-alone polyester producers across the world were affected substantially
during the year. The demand in Asia is estimated to grow by 2.4 million tonnes or by 6% in 2007 and 2008
while capacity will increase by only 1.7 million tonnes. The ability of polyester producers across Asia to
successfully pass through higher costs in 2006 gives an early indication of the emerging strength of the sector.
The slow-down in the new polyester capacity expansions accompanied by increase in the demand is expected to
improve the capacity utilisation in polyester operations. The industry is at an early stage of a multi-year upcycle.
29
India Scenario
Consumption of PE, PP and PVC (three major polymers) in India reached 4.6 million tonnes registering a y-o-y
growth of 10% during FY 2006-07. PP and LLDPE registered a healthy growth of 15%. LDPE consumption
grew at 8% whereas HDPE grew at 9% and PVC witnessed a modest growth of 7%. The demand for PVC in
India experienced a 7% y-o-y growth.
The production performance of major petrochemicals during 2001-02 to 2005-06 is as follows:
Units in Kilo Tons
Sub-group
2001-02
2002-03
2003-04
2004-05
Synthetic Fiber 1667
1755
1868
1875
Polymers
3974
4175
4499
4776
Elastomers
79
81
87
97
Synthetic
425
447
453
488
Detergent
Intermediates
Performance
90
95
99
113
Plastics
Total
6235
6553
7007
7349
2005-06
Annualized
Growth Rates(%)
1906
4768
110
3.4
4.7
8.63
556
7.0
127
9.0
7467
4.61
Polyester fibers are the most widely used synthetic fibers in the world today. Polyester fibers, however, have
poor elasticity and stretch recovery, do not absorb moisture, are comparatively difficult to dye, and generate
static electricity under dry conditions. However, many of the deficiencies of polyester filament yarn and staple
fibre can be reduced or overcome by fiber modification and/or by blending with cotton or other fibers. Hightenacity polyester filament yarn and staple fibre have a higher tensile strength and a lower elongation before
break than conventional polyester fiber. High-tenacity polyester fibers are used for both industrial and textile
applications for which high strength and low crimp are important.
Textile exports from India to the developed countries have increased in the post quota regime. A rise in the
domestic textile consumption with the aid of a high GDP growth and changing lifestyle patterns is helping the
consumption of polyester. The emergence of retail boom is boosting the demand for innovative products from
the end consumers who have not experienced such products earlier. Cotton prices are expected to remain firm in
the year ahead with limited growth in crop production thereby leading to a higher cotton-price environment.
This typically has a positive impact on the polyester business both from a demand perspective (higher polyester
blending) and pricing perspective.
The current capacities of Synthetic Fibre and Commodity Polymers are depicted below:
Synthetic Fibre Capacities July 2007 (3168 kilo tons)
1%
4%
33%
60%
2%
AF
NFY
NY/TC
PFY
PSF
30
3000
2509
Kilo Tons
2500
2000
1395
1500
1005
1000
500
0
1181
800
640
48 68 1 114 17
50 121 12 120 25
38 87 5 100 13
2005-06
2006-07
PFY
PSF
NFY
NIY/TC
2011-12
PIY
AF
PPFY
Synthetic Fibre Demand Projections
PET
PET is eco-friendly and inert which has established itself as the polymer of the future in most packaging
applications, especially in food and beverage packaging. It is widely used in packaging of soft drinks, water,
edible oil, food products, juices, dairy beverages, pharmaceuticals, toiletries etc.
The overall worldwide demand of PET resin continues to grow with the increasing demand of plastic and PET
packaging. The total world demand for PET resin is estimated to be 14.6 million tons in 2010 as compared to
10.0 million tons in 2005-06. In India also the market for PET Resin is growing steadily. The demand of PET
resin is also influenced by seasonal factors and the growth pattern of the food processing and FMCG sectors.
31
BUSINESS OVERVIEW
As this new activity is “knowledge based”, requiring a different focus, our Company decided to transfer the
chemicals division at Khopoli to another entity called Innovassynth Technologies (India) Limited. The term
“knowledge based” means any activity, which requires use of specialised knowledge of the employees. In India
skilled manpower like scientists, chemists and engineers are easily available at competitive rates. Innovassynth
Technologies (India) Limited is engaged in Customs Synthesis, Contract manufacture and Contract R&D work
which requires specialised knowledge of Chemistry and as such it has to rely on the specialist employees having
the requisite qualifications and experience.
Polyesters Limited” which became effective from November 05, 2002. (“Futura” is the registered trade mark of
our Company under which it markets its products.)
Our Company has one manufacturing facility at Chennai, currently consistingof three major activities, namely,
2008 are as under:
Product
annum
38,500
57,000
PET Preforms
20,000
operations on job work basis for our Company for some time and the facilities were shifted, during 1997 from
Our Competitive Strengths
1
Our Promoters Mr. Shyam Bhupatirai Ghia and Mr. Mukund Dharamdas Dalal are well qualified and
possess vast industry experience of more than three decades. Our management team also possesses the
requisite qualifications and experience commensurate with their responsibilities. As of March 31, 2008
our total employee strength is 827. We aim to recruit talented employees and assist them in further
development of their skills and expertise.
32
2
Inhouse Research and Development facilities
Our inhouse Research and Development (R&D) facilities enable us to produce innovative and quality
products. Experts in the relevant fields are employed to carryout continuous development activity to
produce specialty products to cater to varied customers’ needs. Our R&D efforts have led us in the
development of products such as Special Hot Fill Resin for fruit juice application, Special Wave-PET
Resin for dual ovenable trays, Special Jar PET Resin as Poly Carbonate substitute for five gallon water
jars, Beer PET Resin for tunnel pasteurisable Beer with CO2, O2 barrier, Easy Dyeable Resin/V-Flex
Resin for textile applications, Green PET Resin with 20% recycled content, Heavy metal free Resin
and Resin for pasteurisable juice containers and such specialised applications. Our R&D efforts have
led us to patenting process for producing Fast Reheat Bottle Grade PET Resin and product patent
pertaining to Thermo Plastic Crystalline PET. Since we operate in a dynamic industry, our R&D efforts
are continuous so as to supplement our product base with newer and quality products.
3
We have a well-established marketing network present in India and abroad. We market our Preforms
and Resin products directly to our customers and Fibre products primarily through commission agents.
Presently, we have eleven commission agents in India and nine outside India. We market our products
in Europe, Middle East, USA and South East Asian countries. We interact with our customers on a
regular basis to understand their specific needs and latest trends in the industry so as to serve them
better.
4
Diverse product mix
Our diverse product mix enables us to serve varied customers’ needs in a short span of time. We have
presence in Polyester Fibres, PET Resins and Preforms products. Our Polyester fibre products are
speciality coloured fibres. We are able to change our product mix to suit our customers’ needs quickly
due to our flexible batch product lines. We have through our R&D efforts developed speciality fibres
like V-Flex High Shrink, Flame retardant moisture management and special effects fibres. We also
manufacture products like Polyester Tow, Tops and Low Pill Fibres. Polymer products cover the entire
range of Polyesters namely, PET, PEN, PTT, PBT, PTN, PBN. Our PET Preforms are used by bottling
units for blowing into bottles of different sizes for filling juices, carbonated beverages and water. We
have developed speciality performs for small Carbonated Soft Drink, beer and Pasteurable containers.
5
Focus on Specialty segment
We are focused on specialty niche segment, as we believe that our margins can improve by targeting
customers in that segment. Based on our understanding of the dynamic nature of the industry in which
we operate, we devise our business strategy accordingly. It is realized that the Commodity PET Resin
market is increasingly turning regional and exports are going to be increasingly difficult. Nevertheless,
we have completed R&D initiative to launch a wide range of Speciality PET Resins such as Fast
Reheat Resin for High Speed blow moulding, Hot Fill Resin for fruit juice application, Wave PET
Resin for dual ovenable trays, Jar PET Resin as Poly Carbonate substitute for five gallon water jars,
Beer PET Resin for Beer with C02 /02 barrier, cationic dyeable resin easy dyeable resin for textile
applications, Green PET Resin, with 20% recycled content for US eco-label compliance and heavy
metal free Resin.
Collaborations/tie-ups/associations
As on the date of the Draft Letter of Offer, we have not entered into any collaboration/tie-ups/association
33
Manufacturing Process
Polyester Staple Fibres/Chips
The main raw materials used are PTA, MEG, PET/PTT Chips and Alloys thereof. The manufacturing process
consists of three stages, viz., Polymerization, Spinning and Draw Line. In Polymerization, the major raw
materials are mixed in specific ratio and catalysts are added to produce Polyester Chips. PET/PTT Chips and
other resins in primary forms are obtained from Polymer Division in the same location. In the spinning stage,
these Polyester Chips/Polyester Melt are extruded and sent through spinnerets and spun tow is produced and
collected in tow cans. The spun tow collected in tow cans are drawn further in the draw-line and finally crimped
into various out lengths of fibre to suit the requirements.
Raw Materials
Mixing
Polymerisation
Extrusion
Spinning
Draw Line
Catalysts
The main raw materials used are PTA, NDC, MEG, PDO and BDO. The plant comprises of two sections, one is
the Amorphous Section for Melt Poly Condensation and the other is for Solid-state polymerisation of
Amorphous Chips. The product range has been diversified to cover the entire range of Polyesters, namely PET,
PEN, PTT, PBT, PTN, PBN and allied Co-polyesters.
Raw Materials
Melt Poly
Condensation
Solid State
Polymerisation
PET Preforms
The main raw material used for manufacturing Preforms is PET Resin. PET Resin is processed through state-ofthe-art Husky Injection Moulding Systems for production of Preforms, which is primarily sold to
bottling/beverage companies.
Our R&D facilities are approved by Department of Scientific and Industrial Research (“DSIR”) . Experts in the
relevant fields are employed to carryout continuous development activity to produce specialty products to cater
to varied customers’ needs. We also have ISO 9001:2000 certification for our factory operations and ISO 14001
for our environmental management system.
Raw materials and Utilities
The information below pertains to our production facilities located at Manali in Chennai, as follows:
Sr. No.
1
2
3
Manufacturing Location
1, Kamarajar Salai, Manali, Chennai
1-A, Kamarajar Salai, Manali, Chennai
1-A/1, Kamarajar Salai, Manali, Chennai
Product Manufactured
Polyester Fibre
Polymer
Preforms
Polyester Staple Fibre (PSF)
34
The major raw materials used in the manufacture are PTA, MEG and Polyester Chips. We also use PET
Polymers in other primary forms. PTA and MEG are available in the domestic market, but are generally
imported from Middle East and other countries.
Polyester Polymers
The basic raw materials are PTA, NDC, MEG, PDO and BDO besides Isophthalic. NDC, PDO and BDO are
imported, as they are not available in India.
PET Preforms
The raw material for the Perform business is the PET Resin which is produced in-house as well as procured
from other sources. Speciality resins are produced in-house as and when required.
Water
Our water requirement is about 3,19,000 Kilo Litres. We draw water from Chennai Metropolitan Water Supply
and Sewearage Board as well as from 22 borewells located in our facility which is sufficient for our
requirement.
Power
Particulars
Capacity
Maximum Demand (MD)
7.50 MVA
Stand by DieselGenerator sets
3.90 MW
G.T. Unit co-generation
4 MW
Total Power Consumption
7 MM Units / Month
Sourced from IPP through TNEB Grid
3.75 MM Units / Month
Steam
Particulars
Capacity
Bio Mass Steam Boiler
24 Tons / hour
Bio Mass Heater for Thermic Energy
13 MKCal / hour
Back up available with Furnace Oil based boiler
Manpower
As on March 31, 2008, our Company has 827 employees.
Details of Manpower in our Plant in Chennai:
Division-wise break-up of manpower is as under:
Divisions
Fibres
Polymers
Preforms
Common
Total
No. of Employees
440
167
43
153
803
35
Details of Employees in the Corporate Office situated at Mumbai:
Apart from the Chairman and the Joint Managing Director, the employees in the corporate office are 22 in number
as per the details given below:
Particulars
Administration
Finance and Accounts
Secretarial and Legal
Total
No. of Employees
12
7
3
22
Environmental Aspects
Our Company has Environment Health and Safety procedure in place. It has a zero effluents discharge system
in operation and no effluent discharges into land or out of the factory. The effluents generated, both industrial
and sewage are treated in the Effluent Treatment Plant, employing the Activated Sludge Process (ASP). The
treated effluent meets all the parameters as prescribed by Environment Protection Act, 1986 and the Tamil Nadu
Pollution Control Board. The Treatment of Effluent through the use of Ultra Filteration / RO Unit and the
treated effluent is used as feed water for process and boiler feed water applications. The excess treated effluents
is transferred to Tamil Nadu Petro Products Limited, which is 4 Kms away from the facility through pipeline for
use in their manufacture in place of fresh water, duly approved by Tamil Nadu Pollution Control Board
The effluent treatment is based on activated sludge process. The basic principle of this process is that a part of
the treated sludge is returned to the aerator to maintain the sludge density. The system consists of:
1
2
3
4
5
6
7
8
Collection tank
Oilsump
Equalisation Tank
Recycle Sump
High Rate Bio-filter
Aeration Tank
Clarifier Tank
Sludge Drying Bed
Capacity and its utilisation
Following table summarises the production capacities for the year 2007-08:
Sr.
No.
1.
2.
3.
4.
Goods Produced
Unit
Polyester Staple Fibre/Chips
Amorphous Grade
Solid State Polymer
PET Preforms
M.Ts.
M.Ts.
M.Ts.
M.Ts.
Installed
Capacity p.a.
38,500
58,000
57,000
20,000
Production
for the year*
31,301
6,036
17,080
14,196
Sr.
No.
1.
2.
3.
4.
5.
M.Ts.
M.Ts.
Installed
Capacity p.a.
38,500
58,000
Production
for the year*
31,296
6,103
M.Ts.
M.Ts.
M.Ts.
57,000
20,000
--
25,311
12,307
273
Goods Produced
Unit
Amorphous Grade
Solid State Polymer
PET Preforms
Ciba Products
Sr.
No.
Goods Produced
Unit
Installed
Capacity p.a.
Production
for the year*
36
1.
2.
Amorphous Grade
M.Ts.
M.Ts.
38,500
58,000
31,353
3,411
3.
4.
5.
Solid State Polymer
PET Preforms
Ciba Products
M.Ts.
M.Ts.
M.Ts.
57,000
20,000
--
27,433
9,812
178
Sr.
No.
1.
2.
3.
4.
5.
6.
Goods Produced
Unit
Amorphous Grade
Solid State Polymer
PET Preforms
Custom Synthetics
Ciba Products
M.Ts.
M.Ts.
M.Ts.
M.Ts.
M.Ts.
M.Ts.
Installed
Capacity p.a.
38,500
58,000
57,000
20,000
---
Production
for the year*
35,243
3,005
17,087
13,016
1
226
Sr.
No.
1.
2.
3.
4.
Goods Produced
Unit
Amorphous Grade
Solid State Polymer
PET Preforms
M.Ts.
M.Ts.
M.Ts.
M.Ts.
Installed
Capacity p.a.
38,500
44,000
57,000
20,000
Production
for the year*
29,975
694
28,530
10,143
* Production column indicates finished goods for sale but excludes production for conversion/internal
consumption, damages, wastages and samples.
Business Strategy
Our strategy is to consolidate and enhance our market position as a producer of Specialty Fibres, Speciality
Polymers and Speciality Preforms. We aim to achieve our strategic objective by implementing the following
strategies:
1.
2.
3.
4.
5.
Continuous research and development in new speciality products to maintain a diverse product mix
Increase in revenues by utilising our established business relationships
Focus on speciality products realizing better margins
Strengthening our competitive edge by patenting newly developed products
Positioning ourselves amongst the top global brands by manufacturing diverse range of polyesters like
PBT, PTT, PBN, PTN, PEN etc.
We have been continuously developing new products to meet customised needs of our customers. With more
than three decades of experience in Polyesters supported by our established business relationships with our
customers, we believe that we are well placed to secure a significant share of Specialty Resin markets on the
strength of our customised product development.
Product Portfolio
Polyester Fibres
We produce a wide range of Polyester Fibres. We are a supplier of variety of specialty polyester fibres due to
our flexible batch product lines, which enable us to make small volume fibres required by customers. We are a
known producer of specialty coloured fibres in India. We also manufacture and market Polyester Tow, Tops and
Low Pill Fibres. We have recently developed several other specialty fibres such as V-Flex High Shrink, Flame
retardant moisture management and special effects fibres.
37
Polymers
Futura Polymers is 100% Export Oriented Unit (EOU). Depending upon the export market, part of the
production of resin is sold in the local market or used, for captive consumption in preforms or fibres. The
products cover the entire range of Polyesters namely, PET, PEN, PTT, PBT, PTN, PBN .
PET Preforms
PET Preforms are used by beverage/water bottlers for blowing into bottle of different sizes for filling
juices/carbonated beverage/water as the case may be. The division has mould capacity to supply different sizes
ranging from 17 grams to 54 grams to meet specific requirements of our customers. We have recently
developed speciality performs for small Carbonated Soft Drinks, beer and containers for pasteurized products
Our product wise sales for the last five years has been as under:
Rs. in lacs.
Product 2003-04
2004-05
2005-06
2006-07
2007-08
Resin
13,503.28 12,414.43 20,997.11 23,780.16 15,235.26
Preform
8,425.50 10,843.28
7,617.24
8,022.95
8,641.21
Fibre
21,181.60 26,839.49 22,433.09 22,486.94 20,911.66
Total
43,110.38 50,097.20 51,047.44 54,290.05 44,788.13
Export Obligations
As on May 31, 2008 we have export obligations for an amount of Rs. 200.21 lacs as mentioned below:
Particulars
Advance License
Export Obligation (Rs. in lacs)
200.21
Marketing and Marketing Strategy (Domestic and exports)
1
Polyester Fibres
Textile mills manufacturing blended polyester and worsted fabrics are our main customers. The major
producers of PSF in India are Reliance Industries Ltd, Indo–Rama Synthetics (India) Limited, and
Bombay Dyeing India Limited who have large capacities of Fibre and Filament Yarn. Their main
product is semi-dull white fibre in the predominantly commodities segment.
We are focussed on specialty and coloured fibres, Tow, Tops, Low Pill and new specialities, High
Shrink, V-Flex, Flame Retardant and Moister Management and Special effects fibre. Our fibre sales are
predominantly to domestic textile mills. We also cater to export markets in Europe, Middle East, USA
and South East Asian countries. Our products and prices are internationally competitive which vary
according to market conditions.
We lay emphasis on development of new products. We have developed more than three hundred shades
of colours in fibres. Recently, we have launched specialities such High Shrink Fibres, V-Flex Fibres,
Flame Retardant Fibres, and Moisture Management Fibres.
2
Polymers
Futura Polymers is a 100% Export Oriented Unit. The PET Resin and allied products are primarily
exported to various countries. There is currently an anti-dumping duty (ADD) against imports of PET
Resin from India into the European Union to mitigate which we have executed a price undertaking with
the European Commission, which facilitates the exports of Speciality Resin. We have completed a
R&D initiative to launch a wide range of Specialty Resins such as Special Hot Fill Resin for fruit juice
application, Special Wave-PET Resin for dual ovenable trays, Special Jar PET Resin as Poly Carbonate
substitute for five gallon water jars, Beer PET Resin for tunnel pasteurisable Beer with C02,O2 barrier,
Easy Dyeable Resin/V-Flex Resin for textile applications, Green PET Resin with 20% recycled
content, Heavy metal free Resin and Resin for pasteurisable juice containers. Our Company has also
diversified into production of entire range of polyesters such as PEN, PTT, PBT, PTN, PBN and CoPolyesters.
38
3
PET Preforms
PET Preforms are sold predominantly in the domestic market to multinational beverage/water
marketing companies. Our Company exports about 100 to 200 tons per month to various countries. The
export market is growing rapidly and our Company hopes to increase its share of exports in the coming
years. Our Company has installed a stretch blow-moulding machine, which is used to blow the bottles
from the newly developed specialty resin for filling juices, beer and pharma products. Our Company is
diversifying into Specialty Preforms for Hotfill / Beer / Liquor / Pharmaceutical segments by using
specialty resins developed in-house.
Competition
i.
Polyester Fibres
Three major producers of PSF in India are Reliance Industries Limited, Indo Rama Synthetics (India)
Limited, and Bombay Dyeing India Limited. They have large capacities with main product range as
semi-dull white fibre and black fibre. Our Company is looking to consolidate its position in the niche
segment of specialty and coloured fibres, tow, tops, low pill, etc. Our Company also exports fibres to
several countries with focus on customised colour fibre business with over three hundred shades and
have recently launched a range of speciality fibres such as High Shrink, V-Flex, Flame Retardant,
Moisture Management and Special effects fibres. With continuous R&D and focus on speciality
segment we believe that we can adequately withstand the competition in the segment.
ii.
Polymers
The polymer products are mainly exported and there is limited sale in the domestic market except
captive consumption for preforms. Reliance Industries Limited and South Asian Petrochem Limited are
the major producers of PET resin in India. Large-scale producers in USA, China, Korea and Taiwan
offer stiff competition in the world market. There is currently anti-dumping duty against import from
India of PET resin in European Union countries. There are further large capacities being created, which
would result in competition getting more intense.
iii. PET Preforms
There are many medium and small sized manufacturers of preforms in the domestic market. We are
diversifying into specialty Preforms for small Carbonated Soft Drink, hot fill juices, tunnel
pasteurisable containers, beer and pharmaceutical segments using specialty polymers to effectively
handle competition.
INTELLECTUAL PROPERTY
Patents
Details of the patents received by our Company are as follows:
Patent
Number
US 7,199,210
B2
Date
of
application
October 19,
2004
US
B2
June 17, 2004
Process patent for Controlled
Polymerization of a Mixed
Polymer
EP 1 535 944
B1
November
19, 2004
EP 1640408
March
2006
972/CHE/2003
November
28, 2003
Process patent for Preparation
of Fast Reheat Bottle Grade
PET Resin
Product patent for the invention
of
Oxygen
Scavenging
Composition
Process patent for preparation
of Fast Reheat Bottle Grade
PET Resin
7,297,721
29,
Description
Issued by & Date
Duration
Process patent for preparation
of PE T Polyester using NonAntimony Catalysts
The patent was issued by the
Director of United States, Patent and
Trademark Office, dated April 03,
2007
Director of United States, Patent and
Trademark Office, dated November
20, 2007
President of the European Patent
Office, dated October 18, 2006
President of the European Patent
Office
Examiner of Patents and Designs,
dated May 09, 2007
20 years
39
20 years
20 years
20 years
20 years
973/CHE/2003
November
28, 2003
Product patent for Thermoplastic Crystalline PET
Examiner of Patents and Designs,
dated April 24, 2007
20 years
Details of the provisional and non provisional patent applications filed by our company
1.
Final Non Provisional Patent Applications filed by our Company are hereunder:
Sr. Date of Filing
Application
No.
Number
1. June 3, 2004 511/CHE/2004
2.
June 14, 2006 935/MUM/2006
June 22, 2006 06253222.1
June 21, 2006 11/471764
Application with
Controller
India
of
Controller
India
of
President of
Patent Office
Nature of
Patent
Patents, Process
Patent
Patents, Process
Patent
European Process
Patent
Director of United States,
Patents and Trademarks Process
Patent
Office
Japan
Tokyo
Patent
June 22, 2006 2006-172286
Office,
Process
Patent
Patents, Product
Patent
3.
June 22, 2006 981/MUM/2006
Controller
India
of
4.
July 14, 2006 1119/MUM/2006
Controller
India
of
July 14, 2006 EP20060253693
President of the European
Product
Patent Office
Patent
July 13, 2006 11/485753
5.
Description of Invention for which
the patent applied
3-POT PROCESS. Process for
producing Polyethylene Terephthalate
(PET) with 3 reactors
FRH (Clear) TUNGSTEN OXIDE.
Polyester Resin and Process for the
preparation thereof
Patents, Product
Patent
HOT PET.
Polyester
Composition
having
improved heat stability
CLEAR
CPET.
Crystalline
Thermoplastic
Polyester
Resin
Composition for clear transparent
products and process thereof
Patents and Trademark Product
Patent
Office
of
Patents, Product
Patent
October
2005
18, 1297/MUM/2005
Controller
India
October
2005
17, 11/252339
Director of United States, Product
Patents and Trademark Patent
Office
October
2005
19, EP 20050256471
President of the European Product
Patent
Patent Office
PET-PTN/PBN/PBT Alloy Blends.
Gas Barrier PET Composition for
Pasteurizable Monolayer Beer Bottle
and Process thereof
40
6.
of
Patents, Process
Patent
December 22, 2120/MUM/2006
2006
Controller
India
November 21, 11/603266
2006
Patents and Trademark Process
Patent
Office
President of
Patent Office
December, 22 06256551.0
2006
December 20, 2006-343231
2006
Japan
Tokyo
Patent
European
Office,
Process
Patent
China Patent & Trade
Mark Offfice, Shanghai
Process
Patent
December 26, 200610064189.6
2006
7.
8.
9.
January
2007
January
2007
January
2007
13, 56/MUM/2006
22, 124/MUM/2007
24, 11/657413
Process
Patent
Controller of Patents, Product
India
Patent
India
Patent
Patent and Trademark Patent
Office
Controller
India
10.
of
29, 158/MUM/2007
February
2007
19, 316/MUM/2007
Controller
India
February
2007
13, 11/706138
Office
Patent
India
Patent
Patent
India
April 28, 2007 676/MUM/2006
12.
November 28, 1953/MUM/2007
2007
November 27, 11/986908
2007
of
Flame
Retardant
Polyester
Composition.
Naphthalate Based Barrier Resins.
Naphthalate Based Resin Preforms and
Monolayer & Multilayer Containers.
Patents,
January
2007
11.
Method of Manufacturing PTN.
Product
Patent
Patents, Product
Patent
Polyethylene Naphthalate (PEN).
Engineering Plastics.
Polyester Staple Fibre/Filament Yarn
for Textile Application.
Patent
Office
President of the European
Patent Office
November 28, 07254614.6
2007
China Patent & Trade
Mark Offfice, Shanghai Product
Patent
November 28, 200710306144.X
2007
13.
April 7, 2008 705/MUM/2008
Controller
India
of
Product
Patent
Patents, Product
Patent
Polyester Gas Barrier Resin.
41
April 8, 2008 12/080978
Patents and Trademark Patent
Office
April 8, 2008 10-2008-0032693
The Korean Intellectual
Property Office, Govt.
Complex, Daejeon, Korea Product
2008-099731
April 7, 2008
*
*
April 8, 2008 097112649
Japan
Tokyo
Patent
Office,
Patent
Product
China Patent & Trade Patent
Mark Office, Shanghai
The Intellectual Office, Product
MOEA, Taipei City, Patent
Taiwan R.O.C
European Patent Office
April 09, 2008
Product
Patent
08251385.4
Product
Patent
* Application filed and details yet to be recieved
2.
Preliminary Provisional Patent Applications filed by our Company are hereunder:
Sr. No. Date of Filing
Application
Number
2007
2007
July 31, 2007 1457/MUM/2007
Nature of
Patent
Controller
of Process
Patents, India
Patent
Controller
of Product
Patents, India
Patent
Controller
of Product
Patents, India
Patent
4.
September 20, 1837/MUM/2007
2007
Controller
of Product
Patents, India
Patent
5.
December 10, 2415/MUM/2007
2007
March
04, 449/MUM/2008
2008
Controller
of Process
Patents, India
Patent
Controller
of Product
Patents, India
Patent
1.
2.
3.
6.
Filed in
Invention
Polyesters (other than PET) using Tungsten
compound as a cocatalyst
Polyester resin for high shrinkage film
PET and PEN/PTN copolyester resin for
pasteurizable containers for juices, beverages
etc.
Polyester Resin composition of PET+IPA
along with PEN and nucleating agents for
Heat Seal films
PCRPET with Granulated Flakes
PTT-CoPET modified resin with superior
properties
Trademarks
Our Company has registered 40 trademarks under various classes in India, whose registration is valid as on date.
INSURANCE
42
We have obtained insurance policies that cover standard industrial risks and workmens’ compensation for our
principal places of business including our factory.at Manali, Chennai. We believe that we maintain insurance in
accordance with customary industrial practices. However, the amount of our insurance coverage may be less
than the replacement cost of all covered property and may not be sufficient to cover all financial losses that we
may suffer should a risk materializes. Further, there are many events that could cause significant damages to our
operations or expose us to third party liabilities, whether or not known to us, for which we may not be
adequately insured. Further, all our insurance policies have exclusion clauses and do not cover us for certain
risks and in certain circumstances. If we were to incur a significant liability for which we were not fully insured,
it could have a material adverse effect on our results of operations and financial condition.
PROPERTIES
Property owned and leased by our company
Particulars of owned property
Sr.
No.
1
Details of Agreement
Assignment Deed dated February 1, 1971
. between Governor of Tamil Nadu (the
“Assignor”) and Indian Organic Chemicals
Limited [now Futura Polyesters Limited] (the
“Assignee”)
2 Assignment Deed dated May 26, 1976 between
. Governor of Tamil Nadu (the “Assignor”) and
Indian Organic Chemicals Limited [now Futura
Polyesters Limited] (the “Assignee”)
Particulars of the Property,
Description & Area
Land and Building in survey
numbers 21/1 to 71/7, 75/1 to 75/3
admeasuring 192 acres and 72 cents
Land and Building in survey
numbers 169/5C 2A2, 169/5C 3B,
169/5C 4A2 and 169/5C 5
admeasuring 2 acres and 21 cents
-
Consideration
Rupees three lacs
and fifty thousand
only
Rupees ten thousand
and four hundred
only
43
PARTICULARS OF LEASED PROPERTY
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
Details of Agreement
Property Details
Consideration [Rs.]
Tenure
Lease Agreement dated
December
9,
2005
between Mr. Shirish
Shankarrao Wagholikar
and
Mr.
Sudhir
Shankarrao Wagholikar
(the “Licensors”) and
Futura
Polyesters
Limited (the “Licensee”)
March 29, 2005 between
M/s
Central
Warehousing
Corporation
(the
“Lessor”)
and
M/s
Futura Preforms [a
division
of
Futura
Polyesters Limited] (the
“Lessee”).
Property admeasuring 3000 square feet
situated at Survey number 214,
Wagson Wagons Warehouse of
revenue village Phursungi within the
registration division and district Pune,
sub-division and taluka haveli within
the grampanchayat Phursungi
Rupees
sixteen
thousand nine hundred
and eighty only per
month and interest free
security deposit of
Rupees one lac and two
thousand only
33
months
commencing
from December
1,
2005
to
August 31, 2008
Godown number 1 compartment A
admeasuring 4760 square feet (442.5
square meter) situated at Central
Warehouse, Kanjikode, Palakkad 678 621
Rupees thirty thousand
five hundred and thirty
three only per month
and
interest
free
advance of Rupees
thirty thousand five
hundred and thirty three
only
1
Year
commencing
from April 12,
2008
Godown number H3 admeasuring 271
square meter situated at Central
Warehouse,
APMC
Yard,
Yaswanthpur, Bangalore 560022
Rupees twenty one
thousand six hundred
eighty only per month
and refundable interest
free advance of Rupees
sixty five thousand
hundred and forty only
1
Year
commencing
from April 08
onwardsS
Godown premises measuring 500
square feet located at D, number 4-132
(Shop numbers 2,3 and 4), GNT Road,
Sullurpet – 524121, Nellore District,
Andhra Pradesh.
Rupees three thousand
only per month and
refundable advance of
Rupees thirty thousand
only
12
months
commencing
from October 1,
2006
to
September 30,
2007.
Warehouse premises measuring 335 Sq
mt located at Central Warehouse,
panchpara, Satyen bose road, DistHowrah, 711103, West Bengal.
Rs.75 per Sq mt per
month exclusive of
Service
Tax
Plus,
education cess.
12
months
commencing
from April 1,
2008 to March
31, 2009
Property admeasuring 3600 square feet
situated at number 30, Rukmini Salai,
Kalakshtra Colony, Chennai 600 090
Rupees
seventy
thousand only per
month and interest free
rental deposit Rupees
seven lacs only
32
months
commencing
from
January
20, 2008.
Apartment numbers 31, 32 and 33
admeasuring 460.37 square meters
Rupees two lacs twenty
two
thousand
two
33
months
commencing
* Renewed vide letter
dated April 11, 2008.
March
25,
2006
between M/s Central
Warehousing
Corporation
(the
“Lessor”) and Futura
Polyesters Limited (the
“Lessee”)
September 22, 2006
between
Mrs.
G.
Venkatamma
(the
“Lessee”).
* Applied for renewal
vide
letter
dated
September 15, 2007
Lease agreement dated
September 14, 2005 by
and between Central
Warehousing
Corporation
(the
Polyester Limited (the
Lesse”).
* Renewed vide letter
dated March 31, 2008.
January
3,
2008,
between Mrs. Jayashree
Ananth (the “Lessor”)
and Futura Polyesters
Limited (the “Lessee”)
April 26, 2006 between
44
Paragon Textile Mills
Private Limited (the
“Lessee”)
8.
January
15,
2007
between NRB Bearings
Limited (the “Licensor”)
and Futura Polyesters
Limited (the “Licensee”)
equivalent to 4949 square feet of built
up area on the 3rd floor in building ‘B’
of the Paragon Condominium bearing
Cadastral Survey numbers 787 (part),
3/787, 1/790, 791 and 1/792 of Lower
Parel Division at Pandurang Budhkar
Marg, Mumbai – 400 013.
Flat number 4-A and 4-B together with
a covered raking garage number 4 and
open car parking space in the
compound of the building known as
“Shangri-la” situate on the plot of land
bearing Cadastral Survey number
8/723, Malabar and Cumbala Hill
Division in the registration District and
Sub-district of Mumbai City and
municipal Ward number D at 27A,
Carmichael Road, Mumbai 400 026
hundred per month and
fifty onl and a security
deposit of Rupees ten
lacs only
from April 26,
2006 to January
25, 2009
Rupees five lacs only
per month and interest
free refundable security
deposit of and Rs.
15,00,000
Rupees
fifteen lacs only
36 months from
January
16,
2007 to January
15, 2010.
45
FINANCIAL INDEBTEDNESS
Secured
Following are the details of the existing secured fund based and non fund based working capital facilities
availed by our Company.
(Rs. In lacs)
Name of the Amount
Nature
of Utilisation of Fund Based Facilities Utilisation
of
Bank
Sanctioned
Facility
Non- Fund Based
Facilities as on
March 31, 2008
Canara Bank 1800.00
Fund
based/ Vide Sanction Letter June 11, 2007, a 1,742.00
non fund based fund based working capital facility of
working capital Rs. 300 lacs was offered to our
Company. However, the facility was
facilites
not availed and therefore, the
utilisation is Nil.
1,813.33
Fund
based/ 1,539.36
State Bank of 3975.00
non fund based
India,
working capital
Mumbai
facilities
Bank of India 4248.00
Fund
based/ 1,104.52
1,713.89
non fund based
working capital
facilities
431.62
Union Bank 1332.00
Fund
based/ 313.19
of India
non fund based
working capital
facilities
1,126.00
UCO Bank
1775.00
Fund
based/ 632.95
non fund based
working capital
facilities
549.00
Indian Bank
1485.00
Fund
based/ 152.10
non fund based
working capital
facilities.
State Bank of 1450.00
Fund
based/ 198.60
1,229.00
Hyderabad
non fund based
working capital
facilities.
Following are the details of the existing secured term loan facilities availed by our Company:
(Rs. In lacs)
Name of the Bank Amount Sanctioned Balance Outstanding As on March 31, 2008
Canara Bank
1250.00
1,117.50
Axis Bank Limited 2000.00
1,250.00
Yes Bank Limited
2000.00
2,000.00
IDBI Bank Limited 6000.00
3,204.00
In respect of various agreements entered into by our Company with our lenders as mentioned above, we are
bound by certain restrictive covenants. Pursuant to these covenants, we require written consent from our lenders
before making / effecting the following changes:
1
Change(s) in capital structure;
46
2
Implementation of any scheme of expansion / diversification / renovation / capital expenditure;
3
Formulation of any scheme of amalgamation or merger or reconstruction;
4
Investment by way of share capital in or lend or advance funds to or place deposit with any other concern;
5
Entering into borrowing or non-borrowing arrangements either on secured or unsecured basis with any
other bank, financial institutions, company, firm or otherwise or accepting deposits in excess of the limits
laid down by Reserve Bank of India;
6
Undertaking guarantee obligations on behalf of any other borrower /organization;
7
Declaring dividends for any year out of profits relating to that year after meeting all the financial
commitments to the bank and making all due and necessary provisions;
8
Making any drastic change in the management set up;
9
Approaching the capital market for mobilising additional resources either in the form of debts or equity;
10 Repaying monies brought in by the promoters, partners, directors, shareholders, their relatives and friends
in the business of our company by way of deposits, loans, share application money, etc;
11 Withdrawing monies brought in by principal shareholders / directors / depositors
12 Creating any charge, lien or encumbrance over our undertaking or any part thereof in favour of any other
financial institution, bank, firm or persons;
13 Selling or disposing off or creating security or encumbrances on the assets charged to the bank in favour of
any other bank, financial institution, company, firm, individual;
In aforesaid to the aforesaid and other applicable terms, we have received the following No Objection
Certificates (NOCs) from our lenders for this Issue:
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10
Name of the Lender
State Bank of India
Union Bank of India
State Bank of Hyderabad
Indian Bank
Bank of India
UCO Bank
Yes Bank Limited
Axis bank Limited
HDFC Limited
Canara Bank
Date of the NOC
May 16, 2008
June 7, 2008
May 30, 2008
May 16, 2008
June 10, 2008
June 12, 2008
June 15, 2008
June 11, 2008
June 10, 2008
June 17, 2008
We have applied for the following NOC from our lenders for this Issue:
Sr. No.
1.
Name of the Lender
IDBI Bank Limited
Date of the Application
June 9, 2008
47
Unsecured/Inter-Corporate Deposits
Following are the details of the unsecured debts/loans availed by our Company as on March 31 2008
Type of Debt/Loan
Fixed Deposits from Public, Shareholders & Employees
Inter Corporate Deposits
Deposits from Directors & former Directors (including the interest accrued
and due thereon)
Total
Balance as on March 31, 2008 (Rs.
In lacs)
477.06
2388.00
1462.29
4327.35
Vehicle Loans
Our Company has further availed vehicle loans, secured by lien on vehicles purchased under hire purchase
agreement. As at March 31, 2008, the aggregate outstanding on the said loans is Rs. 2,124,855.74
48
KEY INDUSTRY REGULATIONS
Our Company is engaged in the business of manufacturing Polyester Stable Fibre, Polyethylene Terepthalate
Resins and Polyethylene Terepthalate Preforms. Our business is subject to central and state legislation, which
regulates substantive and procedural aspects of manufacturing and exporting Fibre, Preforms and Polymer. The
following is an overview of the important laws and regulations which are relevant for our business as a
manufacturing and an export oriented industry
I.
Regulations govering business
1.
The Factories Act, 1948
The Factories Act, 1948 (“Factories Act”) defines a factory to cover any premises which employs ten (10) or
more workers and in which the manufacturing process is carried on with the aid of power and any premises
where there are at least twenty (20) workers even though there is no electricity aided manufacturing process
being carried on. The Factories Act which is a social legislation provides that an occupier of a factory i.e. the
person who has ultimate control over the affairs of the factory and in case of a company, any of the directors,
must ensure the health, safety, welfare, working hours, leave and other benefits for workers employed in
factories. It was enacted primarily with the object of protecting workers from industrial and occupational
hazards. Under this statute, an approval must be granted prior to the setting up of the factory and a license must
be granted post the setting up of the same, by the Chief Inspector of Factories. In case of contravention of any
provision of the Factories Act or rules framed there under, the occupier and the manager of a factory may be
punished with the imprisonment for a term of up to two (2) years or with a fine of up to Rs. 100,000 or with
both, and in case of a contravention continuing after conviction, with a fine of up to one thousand rupees per day
of the contravention
2.
Shops and Establishments Acts
Our Company is governed by various Shops and Establishment Acts as applicable in the states where it has
offices, factories and sales depots. These Acts regulate the conditions of work and employment in shops and
commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and
closing hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for
overtime work. The following acts are applicable to our offices, factories and sales depots:
2.
3.
4.
1. West Bengal Shops and Commercial Establishment Act, 1963
Bombay Shops and Establishments Act, 1948
Andhra Pradesh Shops and Establishments Act, 1988
Kerala Shops and Establishment Act, 1960
For details of our Company’s registration under the applicable Shops and Establishment Acts, please refer to the
chapter tiltled “Government/Statutory Approvals” beginning on page 199 of the Draft Letter of Offer.
3.
The Electricity Act, 2003
The Electricity Act, 2003 (hereinafter referred to as the “Act”) was enacted with effect from June 10, 2003
repealing and replacing all the three Acts i.e. Indian Electricity Act, 1910, Electricity (Supply) Act, 1948 and
Electricity Regulatory Commissions Act, 1998. The Act seeks to provide for demarcation of the roles of
generation, transmission and distribution to provide for individual accountability of each. Some of the major
provisions of the Act include inter alia the following:
1.
2.
3.
4.
De-Licenses generation, makes captive-generation freely permissible;
Provides open access for transmission, distribution and trading;
Specifies technical standards, grid standards and safety requirements; and
Introduces power trading as a distinct activity from power generation, transmission and distribution.
As regards captive power generation, Section 7 of the Act provides that a generating company may establish,
operate and maintain a generating station without obtaining a license under this Act if it complies with
prescribed technical standards. Section 9(1) of the Act allows any person to construct, maintain or operate a
captive generation plant and dedicated transmission lines, subject to the condition that supply of electricity from
the captive generating plant through the grid shall be regulated in the same manner as the generating station of a
generating company. Section 9(2) of the Act further states that every person who has constructed a captive
generating plant and maintains and operates such plant shall have the right to open access for the purposes of
carrying electricity from captive generating plant to the destination of his use, subject to availability of adequate
transmission facility.
49
4.
The Indian Boilers Act, 1923
The Indian Boilers Act, 1923 and the rules made thereunder are meant to regulate and ensure proper design,
manufacture, operation and maintenance of boilers, in order to prevent safety hazards. This legislation requires
that any boiler in use, in India, must be certified or registered, and that no boiler may function without the same.
5.
The Indian Explosives Act, 1884
The purpose of the statute is to regulate the manufacture, possession, use, sale, transport and importation of
explosives. The Central Government has the power to make rules with respect to regulation or prohibition, the
manufacture, possession, use and sale of explosives. The statute requires that any person who intends to engage
in any of the above mentioned activities with regard to explosives must apply for a license under the Indian
Explosives Act,
II. Environment related regulations
6.
The Water (Prevention and Control of Pollution) Act, 1974
The Water ( Prevention and Control of Pollution) Act, 1974 (“Water Act”) prohibits the use of any stream or
well for disposal of polluting matter, in violation of standards set down by the State Pollution Control Board
(“SPCB”). This statute provides that prior permission from the relevant SPCB is required for the setting up of
any industry, which is likely to discharge effluents.
The functions of the Central Board include coordination of activities of the State Boards, collecting data relating
to water pollution and the measures for the prevention and control of water pollution and prescription of
standards for streams or wells. The State Pollution Control Boards are responsible for the planning for
programmes for prevention and control of pollution of streams and wells, collecting and disseminating
information relating to water pollution and its prevention and control; inspection of sewage or trade effluents,
works and plants for their treatment and to review the specification and data relating to plants set up for
treatment and purification of water; laying down or annulling the effluent standards fro trade effluents to be
discharged. This legislation debars any person from establishing any industry, operation or process or any
treatment and disposal system, which is likely to discharge trade effluent into a stream, well or sewer without
taking prior consent of the State Pollution Control Board.
7. The Air (Prevention and Control of Pollution) Act, 1981
The Air (Prevention and Control of Pollution) Act, 1981, aims for the prevention, control and abatement of air
pollution. It is mandated under this Act that no person can, without the previous consent of the State Board,
establish or operate any industrial plant in an air pollution control area.
This statute seeks to prevent and abate the level of air pollution and grants certain powers to the SPCB to ensure
the same. Under the provisions of this legislation, every facility has to obtain a consent order from the relevant
SPCB in order to carry on its industrial operations. The SPCB is required to grant consent within four months of
receipt of the application. The consent may contain conditions relating to specifications of pollution control
equipments to be installed.
8.
The Environment (Protection) Act, 1986
The Environment (Protection) Act, 1986 and the rules made thereunder provides for ambient standards in
respect of noise for different categories of areas (residential, commercial, and industrial) and silence zones have
been notified. Noise limits have been prescribed for automobiles, domestic appliances and construction
equipment at the manufacturing stage. The Noise Pollution (Regulation and Control) Rules 2000 (as amended in
2002) provides that the owner of any diesel generator set with upto 1000 KVA requires an acoustic chamber and
must have a conformance certificate.
The Environment Act has been enacted for the protection and improvement of the environment. The Act
empowers the central government to take measures to protect and improve the environment such as by laying
down the standards for emission or discharge of pollutants, providing for restrictions regarding areas where
industries may operate and so on. The Central Government may make rules for regulating environmental
pollution.
50
9.
Hazardous Wastes (Management and Handling) Rules, 1989
The Hazardous Wastes (Management and Handling) Rules, 1989 fix the responsibility of the occupier and the
operator of the facility that treats hazardous wastes to properly collect, treat, store or dispose the hazardous
wastes without adverse effects on the environment. It must also be ensured that the persons working on the site
are given adequate training and equipment for performing their tasks.
III. Fiscal regulations
10. Service Tax
Chapter V of the Finance Act 1994 (as amended), and Chapter V-A of the Finance Act 2003 requires that where
provision of certain listed services, whole taxable services exceeds Rs. 400,000, a service tax with respect to the
same must be paid. Every person who is liable to pay service tax must register himself for the same.
11. Central Excise
Excise duty imposes a liability on a manufacturer to pay excise duty on production or manufacture of goods in
India. The Central Excise Act, 1944 is the principal legislation in this respect, which provides for the levy and
collection of excise and also prescribes procedures for clearances from factory once the goods have been
manufactured etc. Additionally, the Central Excise Tariff Act, 1985 prescribes the rates of excise duties for
various goods.
12. Value Added Tax Act
VAT is a system of multi-point levy on each of the entities in the supply chain with the facility of set-off input
tax whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw materials by a
manufacturer. Only the value addition in the hands of each of the entities is subject to tax. VAT is based on the
value addition of goods, and the related VAT liability of the dealer is calculated by deducting input tax credit for
tax collected on the sales during a particular period. VAT, is essentially a consumption tax applicable to all
commercial activities involving the production and distribution of goods and the provisions of services, and
each State that has introduced VAT has its own VAT Act, under which, persons liable to pay VAT must register
themselves and obtain a registration number from the Excise Tax Officer of that respective State.
13. Central Sales Tax Act
The tax on sale of movable assets within India is governed by the provisions of the Central Sales Tax (CST)
Act, or the state legislations depending upon the movement of goods pursuant to such sale. If the goods move
inter-state pursuant to a sale arrangement, then the taxability of such sale is determined by the CST Act. On the
other hand, when the taxability of an arrangement of sale of movable assets which does not contemplate
movement of goods outside the state where the sale is taking place is determined as per the local sales tax/VAT
legislations in place within the states
14. The Income Tax Act, 1961
The Income Tax Act provides that any company deducting tax must apply to the assessing officer for the
allotment of a tax deduction account number. Furthermore, the legislation requires every tax payer and certain
other persons to apply to the assessing officer for a permanent account number.
IV. Employment related regulations
15. The Employee’s State Insurance Act, 1948
The Employees State Insurance Act, 1948 is applicable to all factories and to such establishments as the Central
Government may notify, unless a specific exemption has been granted. The employers in such factories and
establishments are required to pay contributions to the Employees State Insurance Corporation, in respect of
each employee at the rate prescribed by the Central Government. Companies which are controlled by the
Government are exempt from the aforesaid requirement if the employees are receiving benefits which are
similar or superior to the benefits prescribed under the Employees State Insurance Act, 1948.
16. Employee’s Provident Funds and Miscellaneous Provisions Act, 1952
51
Under the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952, compulsory provident fund,
family pension fund and deposit linked insurance is payable to employees in factories and other establishments
for their benefit. The legislation provides that an establishment employing more than twenty (20) persons, either
directly or indirectly, in any capacity whatsoever, is either required to constitute its own provident fund or
subscribe to the statutory employee’s provident fund. The employer of such establishment is required to make a
monthly contribution to the provident fund equivalent to the amount of the employee’s contribution to the
provident fund, subject to a minimum contribution of 12% of the basic wages, dearness allowance and retaining
allowance, if any, payable to each employee.
17. Payment of Bonus Act, 1965
An employee in a factory who has worked for at least thirty (30) days in a year is eligible to be paid bonus.
‘Allocable surplus’ is defined as 67% of the available surplus in the financial year, before making arrangements
for the payment of dividend out of profit. The minimum bonus fixed by the statute must be paid irrespective of
the existence of any allocable surplus. If allocable surplus exceeds minimum bonus payable, then the employer
must pay bonus proportionate to the salary or wage earned during that period, subject to a maximum of twenty
per cent of such salary or wage. Contravention of the provision of the legislation is punishable by imprisonment
up to six (6) months or a fine up to one thousand rupees or both.
18. Payment of Gratuity Act, 1972
Under the Payment of Gratuity Act, 1972 an employee in a factory is deemed to be in ‘continuous service’ for a
period notwithstanding that his service has been interrupted during that period by sickness, accident, leave,
absence without leave, lay-off, strike, lock out or cessation of work not due to the fault of the employee, or the
employee has worked at least two hundred and forty (240) days in a period of twelve (12) months or one
hundred and twenty (120) days in a period of six (6) months immediately preceding the date of reckoning. An
employee, who after having completed at least five (5) continuous years of service in an establishment resigns,
retires, or is disabled due to an accident or disease, is eligible to receive gratuity. To meet this liability,
employers of all establishments, to which the legislation applies, are liable to contribute towards gratuity.
V. Labour related regulations
19. The Trade Unions Act, 1926
The Trade Unions Act, 1926 was enacted to provide for the registration of trade unions and for defining the law
in relation to trade unions. This legislation sets out the procedure for registration of trade unions and also
provides the rights and liabilities of registered trade unions. The statute also provides immunity to registered
trade unions from civil suits in certain cases. This legislation is of great significance for those organizations
whose workers have organized and formed registered trade unions.
20. The Contract Labour (Regulation and Abolition) Act, 1970
The Contract Labour (Regulation and Abolition) Act, 1970 applies to those establishments where twenty (20) or
more workmen are employed or were employed on any day of the preceding twelve (12) months as contract
labour and to every contractor or sub-contractor who employs or who employed twenty (20) or more workmen
on any day of the preceding twelve (12) months, provided they were not employed in the core activities as
notified. The legislation seeks to regulate the working conditions of the contract labour and to provide for its
abolition in certain cases. This statute provides that any employer seeking to employ contract labour must
register his establishment to the appropriate authority, which is the Joint Labour Commissioner of that particular
state
VI. Regulations related to intellutual property rights
21. Trade Marks Act, 1999
The Indian law on trademarks is enshrined in the Trade Marks Act, 1999. The Act was introduced in the place
of Trade and Merchandise Marks Act, 1958, which laid down the laws pertaining to the registrations and
protection of trademarks in India. For the purpose of the Trademarks Act, 1999, “existing registered trademark”
means a trademark registered under the Trade and Merchandise Marks Act, 1958. Under the existing legislation,
a trademark is a mark used in relation to goods so as to indicate a connection in the course of trade between the
goods and some person having the right as proprietor to use the mark. A ‘mark’ may consist of a word or
invented word, signature, device, letter, numeral, brand, heading, label, name written in a particular style and so
forth. The trademark once applied for, is advertised in the trademarks journal, oppositions, if any are invited and
52
after satisfactory adjudications of the same, a certificate of registration is issued. The right to use the mark can
be exercised either by the registered proprietor or a registered user. The present term of registration of a
trademark is ten years, which may be renewed for similar periods on payment of prescribed renewal fee.
22. Patents Act, 1970
The laws on patents in India are governed by the Patents Act, 1999. Under the existing legislation, two types of
patents are granted, i.e. Product Patent and Process Patent. An application is made for the grant of patent is
made under Section 24 (2) is made before the Controller of Patents. The application contains in detail the
specifications of the invention or the innovation, as the case may be. The applicant must make out a prima facie
case for the grant of patent. The same is investigated by the Controller. If upon the investigation of the evidence,
a prima facie case for the grant of patent is made out, then the applicant receives the patent under the Act, or
else the application is rejected. The patent is granted by the Controller of patents. Once granted, the
infringement is a punishable offence under Sections 58 and 59 of the Act. The patent is granted for a period of
twenty years.
VII. Export promotion capital goods scheme (“EPCG”)
This scheme framed under the Foreign Trade Policy facilitates import of capital goods at a concessional rate of
duty coupled with an appropriate export obligation to be fulfilled by the person availing the benefits under the
scheme within a designated period of time.
VIII.Other regulations
In addition to the above, our Company is required to comply with the provisions of the Companies Act, 1956,
the Foreign Exchange Management Act, 1999, various sales tax related legislations and other applicable statutes
53
HISTORY AND OTHER CORPORATE INFORMATION
History
Our Company was incorporated in the year 1960 under the name of Indian Organic Chemicals Limited. The
name of our Company was changed to Futura Polyesters Limited with effect from November 05, 2002.
Our Company was promoted by the Late Mr. Bhupatirai Maganlal Ghia, a noted industrialist. The Late Mr.
Bhupati Maganlal Ghia and the Late Mr. Dharamdas Sitaldas Dalal were our Company’s Managing Director
and Joint Managing Director from January 01, 1970 until August, 1990 and December 31, 1987, respectively.
After the demise of Mr. Bhupatirai Maganlal Ghia and retirement of Mr. Dharamdas Sitaldas Dalal, Mr. Shyam
Bhupatirai Ghia (son of late Mr. Bhupatirai Maganlal Ghia) and Mr. Mukund Dharamdas Dalal (son of late Mr.
Dharamdas Sitaldas Dalal) are considered as Promoters of our Company. Presently, our Company is managed
by Mr. Shyam Bhupatirai Ghia in the capacity as Chairman & Managing Director and by Mr. Mukund
Dharamdas Dalal in the capacity as Joint Managing Director.
Consequent upon the nationalisation of various banks the erstwhile Corporation Bank Limited had received
compensation of Rs. 180 lacs from the Government of India. Corporation Bank Limited was not under the
control or ownership of the promoters of our Company. At that time our Company needed funds for the
Polyester projects expansion at Chennai. Hence, after negotiation it was agreed that the erstwhile Corporation
Bank Limited would be amalgamated with our Company so that our Company could utilize the compensation
amount received by Corporation Bank Limited for its expansion project and that the shareholders of Corporation
Bank would receive shares in our Company. Accordingly, the amalgamation scheme was prepared and approved
by the respective shareholders of both the companies and the High Court of Karnataka and Mumbai. Upon
amalgamation, our Company issued Equity Shares of Rs. 10/- each credited as fully paid, one convertible
debenture at a face value of Rs. 125/- credited as fully paid and one convertible secured debenture of face value
of Rs. 150/- credited as fully paid against every five ordinary shares of Rs. 50/- each fully paid held by such
members in Corporation Bank Limited.
In the year 1986, our Company formed a separate software division called Sonata Software Division which was
engaged in development, consultancy and marketing of software products. After eight years of its existence and
in view of the opportunities available for software business, the management decided that this activity needed
separate focus and management techniques different from manufacturing activities. The business needed
recruitment of large number of personnel to be trained in software companies, which did not match with the
existing pay structure and prerequisites given by our Company. It was, therefore, decided to spin off this activity
to a separate company formed for this purpose, namely, Sonata Software Limited. Hence, by means of an
agreement in the year 1994 the division was transferred to Sonata Software Limited.
In the face of competition from large manufacturers, a number of polyester manufacturing companies had either
to close down their operations or allow acquisition by other large companies. One of the problems of the
Polyester industry is the high cost of raw materials namely, PTA, MEG, etc. Companies which had integrated
facilities for manufacturing both, the raw materials as well as polyester and fabrics, had a competitive
advantage. In order to overcome this challenge our Company decided to experiment in recycling of polyester
fibre waste and PET bottle scrap into polyester feed stock so as to develop substitute for the high cost raw
material. This needed separate research and development and manufacturing facility distinct from Company’s
operations. Hence, our Company formed a subsidiary called Futura Industries Limited (FIL) for the purpose.
Initially, a factory was located at Tiruvellore, near Chennai, where the bottle washing/crushing/flaking facilities
were designed and developed, based on years of research and development. FIL had also patented the
technology for recycling (developed as above). FIL was carrying out the operation on job work basis for
sometime and the facilities were later shifted from Tiruvellore to the main factory location at Manali, Chennai to
avoid transportation cost. Having perfected the technology for recycling it was considered unnecessary to have
separate establishment for this activity since it involved additional expenditure in terms of administrative costs,
maintenance of separate books of accounts, compliance with various formalities under the laws governing direct
and indirect taxes. Hence in the year 2001 FIL was amalgamated with our Company after getting the required
approvals from the High Courts of Chennai and Bombay.
In the year 1992-93, our Company was approached by PepsiCo international, U.S.A., (PepsiCo) to explore the
possibilities of forming a Joint Venture (JV), to manufacture PET Resin for use by PepsiCo to make bottles for
its packaged beverage/water businesses in U.S.A. After negotiations, a separate JV was formed, namely, Futura
Polymers Limited, with PepsiCo through its investment company. Transmere Inc. Mauritius. In this Futura
Polymers Limited, Transmere Inc. held 70% of the equity and our Company held the remaining 30% of the
Equity Share capital. As per the JV arrangement, PepsiCo through its bottling companies purchased the PET
Resin manufactured by the Joint Venture. In the year 1998, PepsiCo took corporate decision to concentrate only
on its core business, namely, beverages and food products and decided to exit the Joint Venture and sold its
entire stake of 100% in Transmere Inc. to our Company. This resulted, in our Company holding the entire 100%
54
(70% through Transmere and 30% directly) of the Equity Shares of Futura Polymers Limited. In order to avoid
additional expenditure in terms of administrative cost, maintaining separate books of accounts, need for
compliance with various laws including direct and indirect laws etc. it was decided to merge Transmere Inc.,
and the JV Company with our Company. Transmere was amalgamated in 1999 and JV Company was
amalgamated in 2002.
our industrial alcohol-based facility at Khopoli lost its competitive edge. Hence, the Chemical division at
Khopoli became unviable and had to be gradually closed down over a period of time. Thereafter, the
infrastructure and facilities available at Khopoli were utilized for new lines of business consisting of contract
chemicals, customs synthesis, contract R&D and other related areas based on specialized scientific skills
available in this country. Since these new activities required special focus, as distinct from the core business of
our Company, namely, manufacture of Polyester Staple fibre, PET Resin and preforms, it was decided to hive
off the Khopoli division to another Company. Hence in the year 2001, our Company incorporated a new
company under the name Innovassynth Technologies (India) Limited as its wholly owned subsidiary. In the year
2004 our Company transferred its entire Chemicals division at Khopoli to Innovassynth Technologies (India)
Limited for a consideration of Rs. 50 crores consisting of Rs. 25 crores of fully paid up Equity Shares and Rs.
25 crores as debt, which has since been repaid. Thereafter, Innovassynth Technologies (India) Limited raised
further capital to meet its expansion requirements. Consequently, the shareholding of our Company in
Innovassynth Technologies (India) Limited stood at 42.5% of the paid up share capital of Innovassynth
Technologies (India) Limited.
Our Company decided to transfer its entitre shareholding of 2,38,50,070 equity shares in Innovassynth
Technologies (India) Limited to a new company namely Innovassynth Investments Limited which was
incorporated on February 15, 2008. It was decided to carry out this transfer through a Scheme of Arrangement
and accordingly, our Company filed in the High Court of Bombay a Scheme of Arrangement under Sections 391
to 394 of the Companies Act, 1956. Pursuant to the Scheme of Arrangement our Company divested its entire
shareholding in Innovassynth Technologies (India) Limited to, Innovassynth Investments Limited, and pursuant
to the said Scheme of Arrangement, shareholders of our Company shall be entitled to receive five equity shares
in Innovassynth Investments Limited for every eleven equity shares held on the record date fixed for the
purposes of determining entitlement of shareholders under the said Scheme. The said Scheme was sanctioned by
the High Court of Bombay on July 04, 2008. The Scheme of Arrangement becomes effective when a copy of the
order of the High Court is filed with with the RoC. Our Company has filed the copy of the order of the High
Court with RoC July 15, 2008, .
In the year 2004, our Company raised additional equity share capital through rights issue at par. The funds
raised by the Rights Issue were fully utilized as working capital.
In the year 2005, our Company incorporated Futura Polyesters Inc. U.S.A as a Subsidiary. Since there were no
operations and no transactions by our company, it was dissolved in the year 2006.
In 2006-2007, our Company was granted its first patent by the President of the European Patent Office for a
period of twenty years.
Main Objects of our Company
Main objects of our Company as set out in the Memorandum of Association inter alia are:
1.
To carry on business as manufacturers of and dealers in all kinds and forms of polymers, plastics, plastic
polymerized products, intermediaries, performs and end products including containers, bottles, tubes,
wrapping, packaging and insulating materials of all kinds and descriptions and all other blow moulded, the
injection moulded, polymerized, formed or extruded goods, articles and products.
2.
To carry on the business of manufacturing, buying, selling, exchanging, converting, altering, importing,
exporting, processing, twisting or otherwise handling or dealing in rayon yarn (also known as Continental
rayon or artificial silk yarn) including synthetic fibres, whatsoever for textile use, staple fibres yarn (also
known as spun rayons) and such other fibre, fibres or fibrous materials or allied products, by products or
substances or substitutes for all or any of them, or yarn or yarns for textile or other use as may be
practicable or deemed expedient.
55
The main objects clause and the objects incidental or ancillary to the main objects of the Memorandum of
Association of our Company enable us to undertake our existing activities and the activities for which the
funds are being raised through this Issue.
Key Milestones/Significant Events in our Company’s history
Date of
change
1960
1963
1971
1972
1978
1982
1986
1986
1986
1988
1988
1993
1993
1994
1998
1999
1999
2000
2001
2001
2001
2002
2002
2002
2002
2002
2003
2004
2004
2004
2005
2006
2008
2008
Remarks
Incorporation of our Company
Beginning of alcohol based manufacturing at Khopoli
Public Issue made by our Company of Rs. 260.72 lacs, consisting of 2,60,725 Equity Shares of Rs. 100/each at par
Beginning of Polyester Staple Fibre manufacturing at Chennai
Commercialization of Polyester Waste Recycling process
Amalgamation of Corporation Bank Limited with our Company
Beginning of Sonata Software Division
Incorporation of Futura Industries Limited, as a subsidiary
Expansion of Polyester Fibre reaches 38,500 TPA
Launch of Specialty Fibres and Dope Dyed Fibres
Rights Issue made by our Company of Rs. 891.30 lacs, consisting of 59,42,425 Equity Shares of Rs. 10/each at a premium of Rs. 5/- per Share
Incorporation of Futura Polymers Limited, pursuant to a Joint Venture between PepsiCo Investment
subsidiary (Transmere Inc.) and our Company to manufacture PET Resin
Rights Issue made by our Company of Rs. 2766.61 lacs, consisting of 92,22,040 Equity Shares of Rs.
10/- each at a premium of Rs. 20/- per share
Sonata Software division was transferred to Sonata Software Limited
Termination of the Joint Venture by PepsiCo; Futura Polymers became a Subsidiary of our Company
Introduction of Contract Manufacture, Custom Synthesis and Contract Research and Development at
Khopoli
Transmere Inc. was amalgamated with our Company.
Expansion of Preform reaches 6000 TPA
Amalgamation of Futura Industries Limited with our Company
Preform expansion reaches 12000 TPA
Launching of Innovassynth Technologies India Limited as a wholly owned Subsidiary
Amalgamation of Futura Polymers Limited with our Company
Expansion of Preform reaches 20000 TPA
Closure of Chemicals business at Khopoli
Change of name of our Company from Indian Organic Chemicals Limited to Futura Polyesters Limited
Expansion of PET Resin reaches 57000 TPA from 28000 TPA
Revaluation of Plant and Machinery at Manali and Khopoli for the reflection of their fair value
Transfer of Chemicals business at Khopoli to Innovassynth Technologies India Limited
Introduction of new speciality product range for packaging certain products
Rights Issue made by our Company of Rs. 1487.87 lacs, consisting of 1,48,78,729 Equity Shares of Rs.
10/- each at par
Launching of Futura Polyesters Inc. U.S.A as a subsidiary
Dissolution of Futura Polyesters Inc. U.S.A
Revaluation of land at Chennai for reflection of its fair value
Transfer of our holding of 2,38,50,070 equity shares in Innovassynth Technologies (India) Limited to
Innovassynth Investments Limited as per the Scheme of Arrangement
Awards, Achievements and Certifications:
Year
February 2005
October 18, 2006
October 18, 2006
Particulars
Recycling Award for pioneering the production of PET and reclamation and chemical
recycling of post consumer PET for food grade applications by Global Plastics
Environmental Conference
Grant of Process Patent by the President of the European Patent Office for the process
of fast heat reheat bottle grade polyethleneterephthlate resin. The duration of the patent
is twenty years.
Grant of Process Patent by the Examiner of Patents and Designs for the process of fast
heat reheat bottle grade polyethleneterephthlate resin. The duration of the patent is
56
April 03, 2007
April 24, 2007
November 20, 2007
twenty years.
Grant of Process Patent by the Director of United States of America, Patents and
Trademark Office for Antimony free polyester resin. The duration of the patent is
twenty years.
Grant of Process Patent by the Director of United States of America, Patents and
Trademark Office for controlled polymerization of a mixed polymer. The duration of
the patent is twenty years.
Grant of Product Patent by the Examiner of Patents and Designs for Thermo-plastic
Crystalline PET. The duration of the Patent is for twenty years.
Changes in the Memorandum of Association of our Company since Incorporation
Date of change
September 01. 1969
September 08, 1976
September 08, 1976
September 30, 1978
August 22, 1979
September 23, 1981
September 07, 1983
August 08, 1985
August 14, 1985
September 08, 1986
September 16, 1992
July 25, 2002
November 05, 2002
April 08, 2005
July 15, 2008
Events
Increase in the Authorized Share Capital from Rs. 400 lacs to Rs. 500 lacs, divided into
4,00,000 equity shares of Rs. 100/- each and 100,000 Cumulative Redeemable Preference
shares of Rs. 100/- each.
6,50,000 equity shares of Rs. 100/- each and 1,00,000 Cumulative Redeemable Preference
Amendment of the Object Clause by inserting a new clause to carry on activities in lending
money, giving guarantees and acquire shares and securities
Amendment of the Object Clause by inserting a new clause to undertake, promote or sponsor
any activity for the promotion and growth of national economy and for discharging social and
moral responsibilities
Amendment of the Object Clause by inserting a new clause to undertake, promote or sponsor
any program on rural health or development
Increase in the Authorised Share Capital to Rs. 1100 lacs, divided into 10,00,000 Equity
Shares of Rs. 100/- each and 1,00,000 Cumulative Redeemable Preference shares of Rs. 100/each.
Sub-division of face value of Equity Shares from Rs. 100/- to Rs. 10/- and the Authorised
Share Capital changed to 1,00,00,000 Equity Shares of Rs. 100/- each and 1,00,000
Cumulative Redeemable Preference Shares each aggregating to Rs. 1100 lacs
Amendment of the Object Clause by inserting a new clause to manufacture and deal in food
and edible products
Increase in the Authorised Share Capital to Rs. 2500 lacs, divided into 2,40,00,000 Equity
Shares of Rs. 10/- each and 1,00,000 Cumulative Redeemable Preference shares of Rs. 100/each.
Amendment of the Object Clause by carry on the business of electronic and electrical goods
Amendment of the Object Clause by inserting a new clause to acquire and hold shares in
another Company
Amendment of the Object Clause by inserting a new clause to carry on business of assisting
any Company by issuing/subscribing/guaranteeing subscription of shares and securities.
Amendment of the Object Clause by inserting a new clause to promote and form new
companies
Amendment to the Object Clause by inserting a new clause to invest and deal with monies of
our Company
Amendment to the Object Clause by inserting a new clause to carry on experimenting and
testing new process or patent or invention
49,000,000 Equity Shares of Rs. 10/- each and 100,000 Cumulative Redeemable Preference
Inserting a new clause to carry on business and dealers in all kinds and forms of polymers.
Change in the name of our Company from Indian Organic Chemicals Limited to Futura
Polyesters Limited
Increase in Authorized Share Capital from Rs. 5000 lacs to Rs. 5500 lacs, divided into
54,000,000 Equity Shares of Rs. 10/- each and 100,000 Cumulative Redeemable Preference
shares of Rs. 100/- each
Increase in authorised share capital from Rs. 5500 Lacs to Rs. 8000 Lacs divided into
7,90,00,000 Equity Shares of Rs. 10/- each and 100,000 Cumulative Redeemable Preference
shares of Rs. 100/- each
57
Changes in Registered Office of our Company
Date
1960
1961-1962
1975-1976
January 25,
1994
October 19,
1994
October 06,
1997
October 06,
2003
Registered Address
Industrial Assurance Building,
5th Floor, Churchgate
Bombay 1 (Rental)
28, Apollo Street Fort
Bombay 1
(Rental)
New Excelsior Building
6th Floor, Wallace Street, Fort
Bombay 400001
(Ownership)
Bhupati Chambers
4th Floor, 13, Mathew Road,
Bombay 400004
(Rental)
Chemtex House,
2nd Floor,
Main Street, Sector 12,
Hiranandani Gardens, Powai
Bombay 400076 (Rental)
Bhupati Chambers,
3rd Floor, 13, Mathew Road
Bombay 400004 (Rental)
3rd Floor, Pandurang Budhkar
Marg
Mumbai 400013
Reasons
Incorporated
Due to spaces constraint, it was decided to move to a bigger premises
belonging to Promoter Group in Apollo Street
Due to rearrangement in Promoter’s Group, our Company moved to
its own premises in New Excelsior building
Our Company decided to sell its premises and moved to a rental
premises
As owner if the rented premises required the premises for own use,
our Company shifted to a bigger premises in Hirananadani Complex
Since owner, sold the premises our Company shifted it office to
Bhupati Chambers
Owner sold the premises. Our Company shifted its office to (rented
premises) present location.
Our Subsidiary
Brief History
Innovassynth Investments Limited was incorporated on February 15, 2008 under the Companies Act, 1956, with
its registered office situated at 3rd Floor, Paragon Condominium, P.B. Marg, Worli, Mumbai - 400013. The
shares of Innovassynth Investments Limited are not listed on any of the stock exchanges in India.The certificate
of commencement of business of Innovassynth Investment Limited was issued on March 04, 2008.
Nature of Activities
This company has been incorporated to carry on business of an investment company and / or holding company,
to buy, sell, deal, hold, invest, disinvest, exchange and surrender stocks, shares, securities, scrips, derivatives,
debt instruments, bonds, debentures, policies, book debts and claims and commercial papers, government or
commercial security or any other financial investment instruments of any company, banks whether government
or non-government, public or private or any local authority whether in India or abroad, and to promote,
subsidize and assist companies and syndicates in order to promote the business of company.
Board of Directors
The Board of Directors of Innovassynth Investments Limited as on March 31, 2008 consists of
Name
Dr. B. Sahu
Mr. S. Ramachandran
Position
Chairma
n and
Director
Director
Director
Shareholding Pattern
58
The shareholding pattern of this company as on March 31, 2008 is as under
Category
Dr. Bhabatosh Sahu
Mr. Sankaran Ramachandran
Mr. S.B. Chatterjee
Mr. A.R. Gadkari
Mr. A.G. Shenoy
Total
No. of Shares held
49, 940
10
10
10
10
10
10
50,000
Percentage of Holding
99.88
0.02
0.02
0.02
0.02
0.02
0.02
100
Particulars
Total Revenue
Profit After Tax
Equity Share Capital
Reserves (exclusion revaluation
reserves)
Net Worth
EPS per share of Rs. 10
NAV per share of Rs. 10
(Rs in lacs)
For the year ending
on March 31, 2008
NIL
NIL
5.00
NIL
2.29
NIL
4.58
Note: Pursuant to the implementation of the Scheme of Arrangement shareholders of our Company would
receive five equity shares in Innovassynth Investments Limited for every eleven Equity Shares held in our
Company on the record date fixed for the purposes of determining entitlement of shareholders under the said
Scheme. Upon the aforesaid allotment becoming effective, Innovassynth Investments Limited would cease to be
a subsidiary of our Company. However, it is a subsidiary of our Company as on date of the Draft Letter of
Offer.
Shareholders Agreements
There are no subsisting shareholders agreements among our shareholders in relation to our Company, of which
our Company is aware.
Scheme of Arrangement
Our Company decided to transfer its entitre shareholding of 2,38,50,070 equity shares in Innovassynth
Technologies (India) Limited to a new company, namely, Innovassynth Investments Limited which was
incorporated on February 15, 2008. It was decided to carry out this transfer through a Scheme of Arrangement
and accordingly, our Company filed in the High Court of Bombay a Scheme of Arrangement under Sections 391
to 394 of the Companies Act, 1956 whereby our Company divested its entire shareholding in Innovassynth
Technologies (India) Limited to, Innovassynth Investments Limited, and pursuant to the said Scheme of
Arrangement, the shareholders of our Company would be entitled to receive five equity shares in Innovassynth
Investments Limited for every eleven equity shares held on the record date fixed for the purposes of determining
entitlement of shareholders under the said Scheme. The said Scheme was sanctioned by the High Court of
Bombay on July 04, 2008.
Increase in Authorised Share Capital pursuant to the Scheme of Arrangement
On the Scheme of Arrangement becoming effective, the authorised share capital of Innovassynth Investments
Limited shall be increased to Rs.25,00,00,000 (Rupees Twenty five crores only) divided into 2,50,00,000 equity
shares of Rs.10/- each.
Other Agreements
Our Company has not entered into any other material contracts, not being a contract entered into in the ordinary
course of business carried on by our Company or intended to be carried on by our Company, or a contract
entered into more than two years before the date of the Draft Letter of Offer.
59
Strategic Partners
Our Company does not have any strategic partners.
Financial Partners
Our Company does not have any financial partners.
60
OUR MANAGEMENT
BOARD OF DIRECTORS
As per our Articles of Association we cannot have less than five or more than fifteen directors. Currently, we
have nine directors on our Board. Our Chairman and Managing Director, Mr. Shyam Bhupatirai Ghia and Joint
Managing Director, Mr. Mukund Dharamdas Dalal manage our day to day operations under the supervision,
direction and control of our Board of Directors. The constitution of our Board of Directors meets the
requirements of corporate governance, as it comprises of five independent directors, which accounts for more
than half of the strength of the Board.
Details of our Directors are given below:
Sr.
No.
Name, Father's name, Designation,
Address, Occupation, Nationality,
Tenure & DIN
1.
S/o. Mr. Bhupatirai Maganlal Ghia
Age
61
Date
Appointment
Director
October 18, 1973
Chairman and Managing Director
Address:
Ghia Mansion,
18 Carmichael Road,
Mumbai – 400 026
Occupation: Industrialist
Nationality: Indian
Tenure as Director: Not subject to
retirement by rotation
DIN: 00005264
2.
S/o. Mr. Dharamdas Sitaldas Dalal
51
January 1, 1988
Public Companies:
1. Sonata Software Limited.
2. Alkyl Amines Limited.
3. A.V.T
Natural
Products
Limited.
4. Innovassynth
Technologies
(India) Limited
5. Innovassynth
Investments
Limited
Public Companies:
1. Sonata
Software
Private Companies:
1. Actis
Biologics
Limited
Address:
Sital Sagar,
64, Walkeshwar Road,
Mumbai – 400 006
3.
Other Directorships
Private Companies:
1. Brahmasonic
Sound
Production Private Limited.
2. Chika Private Limited.
3. Chika
Overseas
Private
Limited
4. Kika Investments & Finance
Private Limited
5. Viraj Investments Private
Limited
Occupation: Company Executive
Nationality: Indian
Tenure as Director: Not subject to
retirement by rotation
DIN: 00005275
S/o. Mr. Rajan Raheja
of
as
23
April 15, 2008
Private
Public Companies
1.
Asianet
Satellite
Communications Limited.
2.
Sonata Software Limited.
3.
Supreme Petrochem Limited.
4.
Innovassynth
(India) Limited
Director
Address:
“Rahejas”, Corner of Main Avenue
and V.P. Road, Santacruz West,
Mumbai – 400 049
Limited
Technologies
61
Nationality: Indian
Tenure: Additional Director – holds
office till the date of next AGM
DIN: 00037592
Private Companies
1. Abu
Developers
Private
Limited
2. Akalpitam Land Developers
Private Limited
3. Ala Mona Contractors &
Developers Private Limited.
4. Ameeta Grihnirman Private
Limited.
5. Ananya Construction Company
Private Limited
6. Arjun Housing Private Limited
7. ARKO Dealers Private Limited
8. ARKO Enterprises Private
Limited
9. Bellvne Constructions Private
Limited
10. Bellvne
Contractors
&
11. Bestow
Contractors
&
12. Bay-Side
Exports
Private
Limited
13. Bay-Side Constructions Private
Limited
14. Bay-Side
Contractors
&
15. Bloomingdale Investment and
Finanace Private Limited
16. Bloomingdale
Trading
Company Private Limited.
17. Brindaban Agro Industries
Private Limited
18. Brindaban Land Development
Private Limited.
19. Beach Plaza Contractors &
20. Chandramouli Finance and
Estates Private Limited.
21. Colonnade Contractors and
22. Colonnade Housing Private
Limited
23. Crescent Property Developers
Private Limited
24. Coronet Investments Private
Limited.
25. Chevy Trading Private Limited.
26. Excelsior Construction Private
Limited
27. Fortune Films Private Limited
28. Globus Stores Private Limited.
29. Gstaad Estates Private Limited.
30. Gstaad Investment and Finance
Private Limited.
31. Gstaad
Trading
Company
Private Limited.
32. Hathway Cable & Datacom
Private Limited
33. Kaunteya
Contractors
&Developers Private Limited.
34. Kaunteya Builders Private
Limited.
35. Kuntinandan Contractors and
62
36. Kuntiputra Properties Private
Limited
37. Kalpitam Premises Private
Limited.
38. Kanyakumari
Contractors
39. Lavina
Contractors
&
40. Manali Investment & Finance
Private Limited.
41. Manali
Builders
Private
Limited
42. Manali Estate Private Limited
43. Matsyagandha Estates. Private
Limited
44. Matsyagandha Investment. and
Finance. Private Limited.
45. Meenakshi Builders Private
Limited.
46. Outlook Publishing (India)
Private Limited
47. Panchali
Builders
Private
Limited.
48. Prerana
Builders
Private
Limited.
49. Peninsula
Estates
Private
Limited.
50. R.Raheja Property Private
Limited
51. R.Raheja Investments Private
Limited
52. R.B.R. Construction Private
Limited
53. R.B.R. Estates and Finance
Private Limited.
54. Rajan Estates and Finance
Private Limited
55. Raghukul Developers Private
Limited.
56. Sea Side Exports Private
Limited
57. Shiraz
Realators
Private
Limited.
58. Shoreline Constructions Private
Limited
59. Shoreline
Exports
Private
Limited
60. Spur Cable & Datacom Private
Limited
61. Sonal
Properties
Private
Limited.
62. Shalilni Construction Company
Private Limited
63. Shalini Developers Private
Limited.
64. Suchetan
Construction
Company Private Limited
65. Trophy Investment and Finance
Private Limited
66. Vidur Construction Private
Limited
67. Varahagiri Investments and
Finance Private Limited.
63
4.
S/o. Shreepad Govind Marathe
85
August 20, 1986
Director
Address:
Vinay, 9, Sahajeevan
Co-operative Housing Society, Off.
Ganeshkhind Road,
Pune – 411 007
Occupation:
Retired
from
Government service
Nationality: Indian
Tenure: Subject to retirement by
rotation
DIN: 00016935
5.
S/o. Mr. P.Sundaram
Private Companies:
1. GDA Trustee & Consultancy
Private Limited
2. Life & General Associates
Private Limited
3. Tata
Asset
Management
Private Limited
4. Pan Gulf Group Limited St.
Peters Port Guernsey, Channel
Islands
68
July 2, 2003
Nominee Director
Address:
D-71, Nivedita Kunj,
Sector 10, R. K. Puram,
New Delhi - 110022
6.
Occupation: Retired IAS officer
Nationality: Indian
Tenure: Not subject to retirement by
rotation.
DIN: 00280426
S/o. Mr. Rusi Hormusgi Patel
68. Villa-Capri Developers Private
Limited
69. Villa-Capri Estates Private
Limited
70. Whitsun
Contractors
and
builders Private Limited.
71. Windsor Realty Private Limited
72. Wren
Contractors
&
73. Zillion
Contractors
&
74. Zircon consultants Private
Limited
Public Companies:
1. Automotive Axles Limited
2. Bharat Forge Limited
3. Deepak Fertilizers & Petro
Chemicals
Corporation
Limited
4. Finolex Industries Limited
5. Force Motors Limited
6. Kinetic Motor Limited
7. Kirloskar Brothers Limited
8. Sandvik Asia Limited
9. Sunrise Technologies Limited
45
July 27, 2001
Public Companies:
1. Maharashtra
State
Power
Generation Company
2. Uflex Industries Limited
3. GVK Power and Infrastructure
Company Limited
4. PTC Limited
5. JSW Energy Limited
6. Vijay Electricals Limited
7. Lanco Infratech Limited
8. Nagarjuna
Construction
Company Limited
9. PTC
Financial
Services
Limited
NIL
Director
Address:
B-21, Acropolis,
Little Gibbs Road,
Malabar Hill,
Mumbai – 400 006
Occupation: Company executive
64
7.
Nationality: Indian
Tenure: Balance tenure
DIN: 00211464
S/o. Vidhyawath Swami
68
July 31, 2002
Public Company
Innovassynth Technologies (India)
Limited
35
May 30, 2008
66
May 30, 2008
Private Companies:
1. Chika Private Limited
2. Chika
Overseas
Private
Limited
3. Meridion Overseas Private
Limited
4. Viraj
Investments
Private
Limited
5. Brahmasonic Sound Production
Private Limited
6. Kika Investments & Finance
Private Limited
7. Bhupati Investments & Finance
Private Limited
8. Kika Dyechem Exports Private
Limited
Public Company:
1. Mirae Asset Trust Company
Limited
Director
Address:
C-203, Golden Oak,
High Street,
Hiranandani Gardens, Powai,
Mumbai – 400 076
8.
Occupation:
Retired
company
executive
Nationality: Indian
Tenure: Balance tenure
DIN : 00026470
S/o. Mr. Shyam Bhupatirai Ghia
Director
Address:
Ghia Mansion,
18, Carmichael Road
Mumbai -400 026
Nationality: Indian
DIN: 00089258
9.
S/o. Mr. N. Kuppusubramanian
Director
Address:
403, Patel New Building,
Patel Estate, Jogeshwari
Mumbai – 400 012
Private Company:
1. PMC Medicals Private Limited
(West),
Occupation: Retired RBI executive
Nationality: Indian
DIN: 1623890
Note: None of the above mentioned Directors are on the RBI List of willful defaulters as on date.
Brief Biography of Our Directors
Mr. Shyam Bhupatirai Ghia, is 61 years old and is a resident of India. He holds a Bachelor’s Degree in
Chemistry from the University of Mumbai and Master’s Degree in Business Administration from Bowling Green
State University, Ohio, United States of America. Further, he has also undergone practical training in
Administration and Commerce at Bayer’s offices in New York, United States of America and Leverkusen in
Germany. Mr. Shyam Bhupatirai Ghia, has extensive experience spanning over thirty years, in industry. He joined
our Company from March 01, 1972 as Director, Administration and was elevated to the Board as a Whole-time
Director with effect from October 18, 1973. Subsequently, elevated to the position of Joint Managing Director
with effect from January 01, 1988 and as Managing Director with effect from August 23, 1990
65
Mr. Mukund Dharamdas Dalal, is 51 years old and is a resident of India. He holds a Bachelor’s Degree in
Chemical Engineering from Salford University, United Kingdom and Master of Science Degree in Chemical
Engineering from Massachusetts Institute of Technology (MIT), United States of America. Further, he has
undergone extensive training in the production plants of Chemische Werke Huls, AG, West Germany and has also
been associated with various research projects.. Mr. Mukund Dharamdas Dalal joined the services of our Company
with effect from December 11, 1980, as Manager Projects and Planning. He was promoted to the position of
General Manager, Futura Synthetics Division with effect from August 01, 1983 till December 31, 1987. With
effect from January 01, 1988, he was elevated to the Board as a Whole-Time Director and was designated as
Director-Technical. Thereafter, he was promoted to the position of a Joint Managing Director from April 01, 1992.
Mr. Viren Rajan Raheja, is 23 years old and is a resident of India. He holds a Bachelor’s degree in Commerce
from the University of Mumbai. He has cleared three levels of Chartered Financial Analysis and has pursued
Master’s in Business Administration from London Business School.
Mr. Sharad Shreepad Marathe, is 85 years old and is a resident of India. He has obtained his education from
London School of Economics and Political Science. He was an Economist by profession and Administrator in the
Central Government. He was a member of the Indian Economic Service since its inception and retired as Secretary
to the Government of India, Ministry of Industry (Department of Industrial Development). He has chaired the
Bureau of Industrial Costs and Prices, Government of India. He was an Alternate Executive Director for India on
‘International Monetary Fund’ and has concurrently served the Ministry for Economics and Commercial Affairs,
Embassy of India, Washington. He was also an Economic Advisor to the Government of India. He is well
experienced in the fields of Finance and Industry. He was a Director on the Central Board of the Reserve Bank of
India for ten years. He was a Director on the Industrial Development Bank of India and Chairman of the National
Productivity Council, New Delhi. He was the first Chairman of IDBI Bank and also Chairman of SICOM. He was
the Chairman/Member of several committees including Committee on Indirect Taxation, Fertilizers Price
Committee and National Committee on Science and Technology. He is a visiting Professor at the Center for Policy
Research, New Delhi and a Member of the Investment Advisory Board for Army Group Insurance.
Mr. Prathipati Abraham, is 68 years old and is a resident of India. He holds a Master’s degree in Arts and
Diploma in System Management. He is a retired officer of the India Administrative Service and has held a series
of important responsible executive positions in the Centre as well as State level. He was the first Chairman of
Maharashtra State Electricity Board. He was awarded the Unido fellowship to study promotion of industries with
special emphasis on export-oriented industries in Europe. Besides, he has also penned a book on the Reforms in
the Power Sector named ‘Focused on Distribution’.
Mr. Vispi Rusi Patel, is 46 years old and is a resident of India. He holds a Master’s degree in Management
Studies from the University of Bombay. He began his career with Hong Kong Bank. In 1993 he joined the Mohit
Diamonds Group (a sightholder of the Diamond Trading Company, London) as the Chief Operating Officer. He
was responsible for Mohit Group’s foray into the luxury watch and jewellery business by facilitating Piaget,
Cheopard and Vacheron Constantin’s entry into India. Mr. Vispi Rusi Patel is currently a Group Director, Moet
Hennessy Louis Vuitton (LVMH), India.
Mr. Shyam Sunder Sami, is 67 years old and is a resident of India. He holds a Bachelor’s Degree in Arts from
the University of Bombay. He is a retired senior executive of Wimco Limited and has a wide experience at a
senior level in various companies like J.K. Helene Curtis Limited, Parle Products Limited, Geoffrey Manners
Limited and Hindustan Unilever Limited, among others
Mr. Nikhil Shyam Ghia, is 35 years old and is a resident of India. He holds a Bachelor’s Degree in Arts in
Economics and Management from Ohio Wesleyan University, Delaware, Ohio in June 1997. He has also
completed his Masters in Business Administration in General Business from Bryant College, Smithfield, Rhode
Island, in May 1999. Further, he was inducted into Beta Gamma Sigma National Honor Society and Who’s Who
in America.
Mr. K. Ramasubramanian, is 66 years old and is a resident of India. He holds a Master’s Degree in Science
from University of Kerala, a Post Graduate Diploma in Management and Diploma in Computer Science. He joined
RBI in 1967 as a probationary officer and served in various capacities, and retired as General Manager - Foreign
Exchange Department of RBI in 2002.
BORROWING POWERS OF BOARD OF DIRECTORS
Pursuant to an ordinary resolution passed at the Annual General Meeting of our Company held on September 6,
1995, our Directors were authorised to borrow money(s) on behalf of our Company in excess of the paid up
share capital and the free reserves of our Company from time to time, pursuant to the provisions of Section 293
(1) (d) of the Companies Act, subject to an amount not exceeding Rs. 400 Crores.
66
For further details of the provisions of our Articles of Association regarding borrowing powers, please refer to
the section titled ‘Articles of Association of the Company’ beginning on page 244 of the Draft Letter of Offer.
COMPENSATION OF DIRECTORS
Non – Executive Directors
Non-Executive Directors are paid sitting fees for attending meetings of the Board and of Committees of the Board.
Details of the sitting fees/compensation paid to Directors for the year ended March 31, 2008 are as under:
Names of the Directors
TOTAL
Commission
NIL
Sitting Fees
30,000
40,000
40,000
40,000
150,000
Total (Rs.)
30,000
40,000
40,000
40,000
150,000
Executive Directors
Mr. Shyam Bhupatirai Ghia was re-appointed as Chairman and Managing Director of our Company for a period of
five years from April 1, 2004 to March 31, 2009, and Mr. Mukund Dharamdas Dalal was re-appointed as the Joint
Managing Director of our Company for a period of five years from April 1, 2004 to March 31, 2009, both at the
AGM held on September 28, 2004.
The salient terms of their appointment, as contained in the agreements entered into with each of them by our
Company, are summarized hereinbelow:
Name of Director
Remuneration
Rs. 65,000/ per month as basic
pay in the grade of 50,0005,000-1,00,000 with liberty to
the Board to grant additional
increments in the scale as
above
Rs. 55,000/ per month as basic
pay in the grade of 50,0005,000-1,00,000 with liberty to
the Board to grant additional
increments in the scale as
above
And to each of them:
i.
Commission at the rate of 1% of the net profits of our Company computed in the manner laid down in
Sections 349 and 350 of the Companies Act, 1956;
ii. A city compensatory allowance of Rs. 1800 per month while the Managing Director/Joint Managing
Director is based in Mumbai;
iii. Fully furnished residential accommodation or in lieu of the said accommodation the Managing
Director/Joint Managing Director be paid a house rent allowance at the rate of 50% of
iv. the Managing Director’s monthly salary;
v. Reimbursement of gas, electricity and water charges as also furnishings evaluated as provided for in the
Income-tax Rules, 1962;
vi. One motor car with driver for ourCompany’s business, all running operation and maintenance expenses
therefore, to be borne and paid by our Company;
vii. Benefit of our Company’s Provident Fund Scheme, and the Superannuation or Annuity Fund Scheme, for
the time being in force together with the benefit of any retirement Fund or Scheme which our Company
may introduce in future;
viii. Gratuity in accordance with the rules of our Company for the time being in force;
ix. Reimbursement of actual medical expenses incurred for self and family (i.e. wife, dependant children and
dependant parents);
x. Benefit of sick leave accordance with the rules of our Company for the time being in force;
xi. 30 days privilege leave with full pay and allowances for each completed year of service, the said leave
being accumulatable and encashable in accordance with the rules of our Company for the time being in
force.;;
xii. Benefit of 1st class air/air-conditioned train, and/or such other mode of conveyance as may be opted while
proceeding on privilege leave, together with hotel/board and lodging expenses incurred at actuals;
xiii. Personal accident insurance cover at the cost of our Company provided the actual premium thereof does not
exceed Rs. 4,000 per year;
xiv. One telephone for our Company’s business at the Managing Director’s residence;
67
xv. Fees of Clubs the Managing Director is or may become, a member of (subject to a maximum of two)
together with the benefit of all expenses incurred there at in or onwards the business of our Company;
The above remuneration is however subject to the ceiling of 5% of the net profits of our Company where our
Company has only one managerial personnel and 10% of the net profits of our Company where our Company has
more than managerial personnel for all such managerial personnel put together.
No sitting fees shall be paid to our Managing Director and Joint Managing Director for attending any meetings of
the Board or any Committee thereof.
The agremements entered into by our Company with our Chairman and Managing Director dated and our Joint
Managing Director, both dated March 31, 2004 has certain other salient terms in relation to their respective
appointments. These include, among others, remuneration in case of absence/inadequacy of profits,
confidentiality, non-compete, confidentiality, etc. these agreements are available for inspection as stated in the
chapter titled “Material Contracts and Documents for Inspection” beginning on page 284 of the Draft Letter of
Offer.
SHAREHOLDING OF OUR DIRECTORS
As per our Articles, our Directors are not required to hold any qualification Equity Shares in our Company. Save
and except as below, our Directors do not hold any Equity Shares in our Company as on the date of filing of the
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Name of the Directors
No. of Equity Shares
1,012
255,744
723
1,806
70,623
-
None of our Directors or key managerial personnel are “relatives” within the meaning of Section 6 of Act,
except as stated below:
Name of the Director
Relation
Son of Mr. Shyam Bhupatirai Ghia
Father of Mr. Nikhil Shyam Ghia
INTEREST OF DIRECTORS
None of our Directors or key managerial personnel have been appointed pursuant to any understanding or
arrangement with major shareholders, customers, suppliers or others. However, Mr. Prathipati Abraham is a
nominee Director of IDBI Bank Limited. All of our Directors may be deemed to be interested to the extent of
fees payable to them for attending meetings of the Board and to the extent of remuneration payable to our
Executive Directors for their services as executive directors of our Company and reimbursement of expenses
payable to them under our Articles of Association.
All our Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by
them or their relatives or bodies corporate in which they have interest in our Company, or Equity Shares that
may be subscribed for and allotted to them, out of the present Issue in terms of the Draft Letter of Offer and also
to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares.
Except as stated above and transactions disclosed in the chapter titled “Related Party Transaction” on page 109
of the Draft Letter of Offer, our Directors do not have any other interest in our business.
We have not acquired any property from our Directors in the last two years.
68
CHANGES IN OUR BOARD OF DIRECTORS DURING THE LAST THREE YEARS
The following are the changes in our Board of Directors during the last three years:
Name of our Director
Mr. F. A. A. Jasdanwala
Mr. Rajan Raheja
Date of Appointment Date of Cessation
May 20, 1960
July 31, 2007
February 14, 1994
April 9, 2008
April 15, 2008
January 24, 2000 December 31, 2005
May 30, 2008
May 30, 2008
-
Reasons
Resignation
Resignation
Resignation
Appointment
Appointment
MANAGEMENT ORGANISATION STRUCTURE
Chairman & Managing Director
S.T. Kulkarni
Ramachandran
Director &
Director
President
(Legal)
G. Venkatesh
S. Rangarajan
Dr. B. Sahu
S.B. Chatterjee
S.
Executive
Chief Operating
Executive
Executive
Executive
Director –
Officer & Exe-
Director &
Director &
&
Marketing &
cutive President
President --
President --
and
HRD &
Admn.
Finance
Secretary
President
Company
Manufacturing
CORPORATE GOVERNANCE
The guidelines in respect of corporate governance are applicable to our Company as its Equity Shares are listed
on BSE. Our Company is ensuring on-going compliance with all requirements pertaining to corporate
governance.
69
Our Company has regularly complied with all mandatory and also some of non-mandatory requirements of
corporate governance norms as enumerated in Clause 49 of the Listing Agreements with Stock Exchange.
SEBI (Prohibition of Insider Trading) Code
Our Company has adopted the code of conduct for prevention of insider trading at its Board meeting held on
April 29, 2002 pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992. Mr. S.
Ramachandran, our Company Secretary, is the Compliance Officer under this code.
Pursuant to the provisions of Clause 49 of the Listing Agreement, we have constituted the following committees
of the Board, that is, Audit Committee, Remuneration committee and Investor Grievances Committee, in
accordance with the said provisions.
Audit Committee
Composition:
The Audit Committee presently comprises of five Directors. Four of them are independent Directors and one is
a non-executive Director.
The constitution of Audit Committee is as follows:
70
Designation in the
Committee
Chairman
Member
Member
Member
Member
Nature
of
Directorship
Independent Director
Terms of reference:
The terms of reference of the audit committee includes the matters specified under Clause 49 (II) (D) of the
Listing Agreement as well as in Section 292A of the Companies Act, 1956.
Number of meetings:
During the financial year 2007-2008, six meetings were held. The dates of the meeting were April 25, 2007;
June 21, 2007; July 25, 2007; September 19, 2007; October 31, 2007 and January 29 2008.
Remuneration Committee
Composition:
The Remuneration Committee comprises of three Directors members and all the three members are Independent
Directors.
The constitution of the Remuneration Committee is as follows:
Designation in the
Committee
Chairman
Member
Member
Nature
of
Directorship
Terms of reference:
To periodically review the remuneration package of executive whole-time directors and recommend suitable
revision to the Board.
Remuneration policy:
The remuneration policy is directed towards rewarding performance. It takes into account our Company’s
results, the grade and the position held by the incumbent concerned and his overall performance.
Number of meetings:
No meetings were held during the financial year 2007-2008 as no revision was made in the managerial
remuneration during the year.
Investor Grievances Committee
Composition:
The Investor Grievances Committee comprises of three members.
The constitution of the Investor Grievances Committee is as follows:
Designation in the
Committee
Chairman
Member
Member
Nature
of
Directorship
Executive Director
Executive Director
71
Terms of reference:
The Shareholders’ Investors Grievance was constituted specifically to look into the redressal of shareholders
grievances.
Complaints:
Details of Complaints received and redressed are as follows:
Sr. No
1.
2.
3.
Details of Investor Complaints
Complaints received from April 01, 2007 to July 04, 2008
Complaints redressed during the period
Complaints pending
No. of Complaints
19
19
Nil
Number of meetings: During the financial year 2007-2008,four meeting were held. The dates of the meeting
are April 05, 2007; July 16, 2007; October 23, 2007 and January 15, 2008.
KEY MANAGERIAL PERSONNEL
The key managerial personnel of our Company (other than ourwhole-time Directors as on the date of the Draft
Letter of Offer are as follows.
Name
Mr. Srinivasan
Rangarajan
Mr.
Sanjay
Tammaji
Kulkarni
Age
(in
years)
59
51
Date of
Joining
Designation
Qualifications
Experience
(in years)
October
31,
1986
Chief
Operating
Officer
and
Executive
President
Bachelor
in
Engineering
(Mechanics)
from
University of
Madras
38
Remuneration
Received in
last FY (Rs.)
33,32,000
29
40,45,000
March
10,
2002
Director
President
and
Diploma
in
Materials
Management
from
University of
Madras
and
Executives’
Masters’
in
International
Trade
from
Indian
Institute
of
Foreign Trade,
New Delhi
Bachelor
of
Technology
(Chemical
Engineering)
from
Karnataka
Regional
Engineering
College,
Surathkal
Previous
Employment
Kunal
Machinery
Manufacturers
Limited
Pearl
Engineering
Polymers
Limited, Pune
72
Mr. Gopalan
Venkatesh
46
October
6, 2006
Executive
Director
[Marketing and
Manufacturing]
B.Tech from
Anna
University,
Madras
and
PG Diploma
in
Business
Management
from
Pune
University
24
Dr. B. Sahu
57
April 2,
1985
Executive
Director
and
President [HR
and
Administration]
32
Mr. S. B.
Chatterjee
54
October
7, 1994
Executive
Director
and
President
[Finance]
Mr.
S.
Ramachandran
64
June 2,
1995
Executive
Director
and
President
[Legal]
&
Company
Secretary
Master
of
Arts,
Personnel
Management
and Industrial
Relations and
Directorate in
Management
and
Organizational
Behaviour.
Bachelor
of
Commerce
(Hons.),
Associate
Chartered
Accountant,
Associate
Company
Secretary
Bachelor
of
Arts, Bachelor
of
General
Laws, Master
of
Administrative
Management,
Fellow
Company
Secretary.
25,40,000
25,04,789
Tuntex
Thailand
N.I.T.I.E.
Bombay
22
22,41,038
AMP Tools
(I)
Private
Limited.
32
18,27,680
Cables
Corp
of
India
Limited.
Notes:
2.
3.
4.
1. The remuneration of all key managerial personnel is for the period April 1, 2007 to March 31, 2008.
All the employees have adequate experience to discharge the responsibilities assigned to them.
All key managerial personnel are permanent employees of our Company.
None of the key managerial personnel are relatives of our Directors or Promoters.
Shareholding of Key Managerial Personnel
The following is the shareholdings of our key managerial personnel as on date the Draft Letter of Offer.
Name
Mr. Srinivasan Rangarajan
Mr. Sanjay Tammaji Kulkarni
Mr. Gopalan Venkatesh
Dr. B. Sahu
Mr. S. B. Chatterjee
Mr. S. Ramachandran
Number of Shares Held
200
50
The aggregate shareholding of the key managerial personnel of our Company as on date of filing of the Draft
Letter of Offer is 250 Equity Shares of our Company.
73
Interest of key managerial personnel
Our key managerial personnel do not have any interest in our Company other than to the extent of the
remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of
expenses incurred by them during the ordinary course of business and to the extent of the Equity Shares held by
them in our Company, if any.
Bonus or Profit Sharing Plan for the Key Managerial Personnel
We do not have any specific bonus or profit sharing plan for our key managerial personnel.
Changes in the Key Managerial Personnel in the last three years
Following are the changes in key managerial personnel in the last three years :
Name
Mr. J. Panneerselvam
Mr.
Gopalan
Ventakesh
Designation
Executive Director and Joint President
Executive
Director
[Marketing
Manufacturing]
and
Date of retirement /
appointed
July 31, 2007
October 06, 2006
Reason
Retired
Appointed
EMPLOYEES
We believe that a motivated and empowered employee base is integral to our competitive advantage. Our
Company has 827 employees as on March 31, 2008. For details regarding the break-up of employees among our
offices and divisions, please refer chapter titled “Business Overview” beginning on page 31 of the Draft Letter of
Offer.
Employee Stock Options
As on date of the Draft Letter of Offer, our Company does not have any employee stock option scheme or
employee stock purchase scheme.
Non salary related payment or benefit to our employees / key managerial personnel
There has been no other payment or benefit given to the employees / key managerial personnel of our Company
other than in accordance with their respective terms of employment.
74
OUR PROMOTERS
Our Company has two Promoters, namely Mr. Shyam Bhupatirai Ghia and Mr. Mukund Dharamdas Dalal.
Their details are as follows:
1.
Driving License Number: 0107219
Voter Identity Card Number: MT/04/024/231484
Permanent Account Number: AACPG6187A
Passport Details: Z1J88787
Mr. Shyam Bhupatirai Ghia is 60 years old and is a resident of India. He holds a Bachelor’s Degree in
Chemistry from the University of Mumbai and Master’s Degree in Business Administration from Bowling
Green State University, Ohio, United States of America. Further, he has also undergone practical training in
Administration and Commerce at Bayer’s offices in New York, United States of America and Leverkusen in
Germany. Mr. Shyam Bhupatirai Ghia, has extensive experience spanning over thirty years, in industry. He
joined our Company from March 01, 1972 as Director, Administration and was elevated to the Board as a
Whole-time Director with effect from October 18, 1973. Subsequently, elevated to the position of Joint
Managing Director with effect from January 01, 1988 and as Managing Director with effect from August 23,
1990
2.
Driving License Number: 515889
Voter Identity Card Number: MT/04/024/069953
Permanent Account Number: AAAPD8330Q
Passport Details: F4200973
Mr. Mukund Dharamdas Dalal, is 51 years old and is a resident of India. He holds a Bachelor’s Degree in
Chemical Engineering from Salford University, United Kingdom and Master of Science Degree in Chemical
Engineering from Massachusetts Institute of Technology (MIT), United States of America. Further, he has
undergone extensive training in the production plants of Chemische Werke Huls, AG, West Germany and has
also been associated with various research projects. Mr. Mukund Dharamdas Dalal joined the services of our
Company with effect from December 11, 1980, as Manager Projects and Planning. He was promoted to the
position of General Manager, Futura Synthetics Division with effect from August 01, 1983 till December 31,
1987. With effect from January 01, 1988, he was elevated to the Board as a Whole-Time Director and was
designated as Director-Technical. Thereafter, he was promoted to the position of a Joint Managing Director
from April 01, 1992.
Other Confirmations
We confirm that the details of the permanent account numbers, bank account numbers and passport numbers of
our Promoters will be submitted to the Stock Exchange at the time of filing the Draft Letter of Offer with the
Stock Exchange.
Further, our Promoters have not been identified as wilful defaulters by Reserve Bank of India or any other
Government Authority and there are no violations of securities laws committed by our Promoters in the past or
any such proceedings are pending against our Promoters.
Interest of Promoters
75
Save and except as stated otherwise in the chapters titled “Business Overview”, “Our Management” and
“Financial Information” beginning on pages 31, 60 and 113, respectively, of the Draft and section titled Letter
of Offer, and to the extent of Equity Shares held by them, our Promoters do not have any other interests in our
Company as on the date of filing of the Draft Letter of Offer with SEBI.
Our Promoters do not have any interest in:
a)
The promotion of our Company; or
b) Any property acquired by our Company within two years of the date of the draft Letter of Offer or
currently proposed to be acquired by our Company.
Payment or Benefit to our Promoters
No payment has been made or benefit given to our Promoters in the two years preceding the date of the Draft
Letter of Offer except as mentioned/referred to in this section and in the chapters titled “Business Overview”
“Our Management” “Financial Information” beginning on pages 31, 60 and 113 respectively, of the Draft
Letter of Offer.
Common Pursuits
Our Promoters are not currently engaged in the areas in which our Company operates through any other person
or entity other than our Company, and therefore there are no common pursuits as on date of the Draft Letter of
Offer.
Related Party Transactions
For details on our related party transactions please refer to the chapter titled ‘Financial Information’ beginning
on page 113 of the Draft Letter of Offer.
Relationship between PromotersOur Promoters are not ‘relatives’ within the meaning of that term contained in Section 6 of the Companies Act.
76
OUR PROMOTER GROUP ENTITIES
Note: All financial information of Promoter Group Entities appearing in this section are in Rs. Lacs, unless
stated otherwise.
Details of our listed Promoter Group Entities are mentioned as hereunder
1.
Sonata Software Limited
Brief History
Sonata Software Limited was incorporated on October 18, 1994, under the Companies Act, 1956, having its
registered office situated at 208, T V Industrial Estate, S.K. Ahire Marg, Worli, Mumbai-400030. Sonata
Software Limited was formed for the purpose of taking over the software division of our Company. The shares
of Sonata Software Limited are listed on the Bombay Stock Exchange, National Stock Exchange and Bangalore
Stock Exchange.
The company was incorporated with the main object of carrying on software development and programming
including systems implementation for data processing equipments and acting as consultants.
Board of Directors
The Board of Directors of Sonata Software Limited as on March 31, 2008 consists of
Name
Shyam Bhupatirai Ghia
Mukund Dharamdas Dalal
Viren Rajan Raheja
Pradip P. Shah
B. Ramaswamy
P Srikar Reddy
S.N. Talwar
B.K. Syngal
Position
Chairman
Executive Vice Chairman
Director
Director
Managing Director & President
Executive Vice President & Chief Operating Officer
Director
Director
Category
Promoters
Banks, FIS, MFs etc.
FIIs/NRIs
Bodies Corporate
Public
Total
No. of Shares held
47,747,850
847,054
6,286,414
9,093,430
41,184,558
105,159,306
45.41
0.80
5.98
8.65
39.16
100.00
The financial performance of this company for last three years is as below
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Revaluation Reserves)
Networth
Basic EPS per share of
Rs. 1
For the year ending
on March 31, 2006
15207.98
777.99
1051.59
14626.36
For the year ending
on March 31, 2007
18823.42
3512.91
1051.59
16801.54
For the year ending
on March 31, 2008
20110.28
3668.93
1051.59
18871.68
15677.95
2.49
17853.13
3.34
19923.27
3.49
14.91
16.98
18.95
77
Price of the Scrip for the last six months for the BSE
Month
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
High (Rs. )
64.50
58.50
45.25
41.95
44.65
41.00
35.50
Low (Rs. )
41.00
32.10
36.40
27.10
32.50
30.80
26.00
Price of the Scrip for the last six months for the National Stock Exchange of India Limited
Month
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
High (Rs. )
64.70
58.20
45.40
41.70
44.80
41.50
35.30
Low (Rs. )
41.80
32.20
36.50
27.50
32.50
32.65
26.00
Stock Market Data
Stock Market Data
Market Price as on July 08, 2008 with Stock Exchange
Bombay Stock Exchange
Rs. 26.00
Stock Exchange Data
Market Price as on July 08, 2008 with Stock Exchange
National Stock Exchange
Rs. 26.00
Details of our Unlisted Corporate Promoter Group Entities are mentioned as hereunder
1.
Viraj Investments Private Limited
Brief History
Viraj Investments Private Limited was incorporated on January 29, 1979, under the Companies Act, 1956,
having its registered office situated at B-34/35, 3rd Floor, Paragon Condominium, P.B. Marg, Worli, Mumbai400013. The shares of Viraj Investments Private Limited are not listed on any of the stock exchanges in India.
The company is a Non-Banking Financial Company and with its main object of investing funds in shares,
securities, units of mutual funds and lending funds to the group companies.
Board of Directors
The Board of Directors of Viraj Investments Private Limited as on March 31, 2008 consists of
Name
V.D. Ghia
R.S. Ghia
Nikhil Shyam Ghia
Position
Director
Director
Director
Director
78
Category
Ghia Family
Total
No. of Shares held
14,566
14,566
100
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
revaluation reserves)
Net Worth
EPS per share of Rs.
100
NAV per share of Rs.
100
2.
For the year ending
on March 31, 2005
9.77
8.20
14.57
101.22
For the year ending
on March 31, 2006
22.97
21.62
14.57
122.84
For the year ending
on March 31, 2007
0.50
(0.96)
14.57
121.89
115.78
56.33
137.41
148.46
136.45
(6.57)
794.89
943.35
936.78
Brief History
Bhupati Investments & Finance Private Limited was incorporated on November 08, 1974, under the Companies
Act, 1956, having its registered office situated at B-34/35, 3rd Floor, Paragon Condominium, Pandurang
Budhakar Marg, Worli, Mumbai-400013. The shares of Bhupati Investments & Finance Private Limited are not
listed on any of the stock exchanges in India.
The company was incorporated with the main object of investment in securities and lending of funds.
Board of Directors
The Board of Directors of Bhupati Investments & Finance Private Limited as on March 31, 2008 consists of
Name
Rajul S Ghia
Vishakha D. Ghia
Paresh B. Parekh
Rusi H Patel
Basu T. Chaterjee
Sunil P. Sheth
Position
Chairperson and Director
Director
Director
Director
Director
Director
79
Category
Nikhil Shyam Ghia
Bodies Corporate
Foreign Bodies Corporate
Total
No. of Shares held
1665
19,165
7890
28,720
5.80
66.73
27.47
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Networth
100
100
3.
For the year ending
on March 31, 2005
216.29
159.17
24.97
2,691.32
For the year ending
on March 31, 2006
256.11
222.79
24.97
3,043.67
For the year ending
on March 31, 2007
407.24
381.71
24.97
3,447.78
2,717.79
637.43
3,070.14
892.23
3,474.25
1,527.85
10,884.22
12,295.31
13,913.71
Brief History
Distributors (Bombay) Private Limited was incorporated on October 11, 1941, having its registered office
situated at B-34/35, 3rd Floor, Paragon Condominium, P.B. Marg, Worli, Mumbai-400013. The shares of
Distributors (Bombay) Private Limited are not listed on any of the stock exchanges in India.
The company was registered as a Non-Banking Financial Corporation with the main objects of investments of
its funds in mutual funds, shares and securities, financing and to manage the immovable property of the
company.
Board of Directors
The Board of Directors of Distributors (Bombay) Private Limited as on March 31, 2008 consists of
Name
V.D. Ghia
R.S. Ghia
Nikhil Shyam Ghia
P.B Parekh
S.D. Shah
Position
Chairperson
Managing Director
Director
Director
Director
Category
Ghia Family
Bodies Corporate
Total
No. of Shares held
61,406
42,860
1,04,266
58.90
41.10
100
80
Particulars
For the year ending
on March 31, 2005
46.37
24.61
48.20
Total Revenue
Profit After Tax
Reserves
(Excluding
Networth
100
4.
200.53
For the year ending
on March 31, 2006
56.94
45.87
48.20
246.40
For the year ending
on March 31, 2007
28.18
4.50
104.27
231.23
334.60
95.16
694.19
785.50
0
753.36
288.73
51.05
599.02
Brief History
Chika Private Limited was incorporated on September 25, 1973, under the Companies Act, 1956, having its
registered office situated at Industrial Assurance Building, 5th Floor, Churchgate, Mumbai-40020. The shares of
Chika Private Limited are not listed on any of the stock exchanges in India.
The company was incorporated with the main object of carrying on the business as shippers including ship
designing and other allied activities.
Board of Directors
The Board of Directors of Chika Private Limited as on March 31, 2008 consists of
Name
Nikhil Shyam Ghia
R.H. Patel
V.C. Vaidya
A.K. Hirjee
D.G. Sinh
S. Uttamsingh
A.H. Parpia
Position
Chairman
Managing Director
Director
Director
Director
Director
Director
Director
Category
Bhupati Investments & Finance Private Limited and
its nominees
No. of Shares
held
8,24,242
Percentage of
Holding
100.00
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
For the year ending
on March 31, 2005
641.96
33.33
82.42
183.50
For the year ending
on March 31, 2006
1111.28
185.16
82.42
368.66
For the year ending
on March 31, 2007
1068.71
140.52
82.42
509.19
81
Net Worth
100
5.
242.10
4.04
437.43
22.46
588.11
17.05
29.37
53.07
71.35
Meridion Overseas Private Limited
Brief History
Meridion Overseas Private Limited was incorporated on March 04, 1993 under the Companies Act, 1956 having
its registered office situated at Industrial Assurance Building, 5th Floor, Churchgate, Mumbai-400020. The
shares of Meridion Overseas Private Limited are not listed on any of the stock exchanges in India.
The company was incorporated with the main object of acquiring the business of Meridion Private Enterprises, a
partnership concern, and subsequently carrying on the activity of dealing in dyes, dyestuffs, chemicals and other
products.
Board of Directors
The Board of Directors of Meridion Overseas Private Limited as on March 31, 2008 consists of
Name
V.D. Ghia
N.N. Ghia
Nikhil Shyam Ghia
R.S Ghia
Position
Managing Director
Director
Director
Category
Ghia Family
Total
No. of Shares held
252,000
252,000
100
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
6.
For the year ending
on March 31, 2005
423.45
30.81
25.25
512.14
For the year ending
on March 31, 2006
481.50
51.07
25.25
535.56
For the year ending
on March 31, 2007
283.01
42.40
25.25
544.85
537.39
12.20
212.83
560.81
20.22
222.10
570.10
16.79
225.78
Brahmasonic Sound Production Private Limited
Brief History
Brahmasonic Sound Production Private Limited was incorporated on January 27, 1993, under the name of Bachi
Investments & Finance Private Limited and later on changed its name to Brahmasonic Sound Production Private
Limited with effect from April 08, 2003, under the Companies Act, 1956, having its registered office situated at
Paragon Condominium, 3rd Floor, Pandurang Budhakar Marg, Worli, Mumbai-400013. The shares of
Brahmasonic Sound Production Private Limited are not listed on any of the stock exchanges in India.
82
The company was originally incorporated with the main object of carrying on Finance and Investment activities
which has been subsequently changed to carry out the business of producers, manufacturers, distributors etc. of
sound recordings.
Board of Directors
The Board of Directors of Brahmasonic Sound Production Private Limited as on March 31, 2008 consists of
Name
R.H. Patel
Nikhil Shyam Ghia
Position
Director
Director
Director
Category
Ghia Family
Bodies Corporate
Total
No. of Shares held
86
44,914
45,000
0.20
99.80
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
7.
For the year ending
on March 31, 2005
5.81
(1.35)
45.00
7.61
For the year ending
on March 31, 2006
6.86
(0.93)
45.00
6.68
For the year ending
on March 31, 2007
8.27
(0.48)
45.00
6.21
52.61
(3.00)
51.68
(2.06)
51.21
(1.06)
116.91
114.85
113.79
Chika Overseas Private Limited
Brief History
Chika Overseas Private Limited was incorporated on February 23, 1989, under the Companies Act, 1956,
having its registered office situated at Industrial Assurance Building, 5th Floor, Opposite Churchgate Station,
Mumbai-400020. The shares of Chika Overseas Private Limited are not listed on any of the stock exchanges in
India
The company was incorporated with the main object of dealing in real estate including agricultural and other
lands.
Board of Directors
The Board of Directors of Chika Overseas Private Limited as on March 31, 2008
Name
Nikhil Shyam Ghia
Position
Chairman
Managing Director
83
R.H. Patel
S.D. Shah
V.D. Ghia
R.S. Ghia
R.U. Singh
Director
Director
Director
Director Finance
Director Marketing
The shareholding pattern of this company as on March 31, 2008
Category
Ghia Family
Bodies Corporate and their Nominees
Total
No. of Shares held
20
2,033,800
2,033820
0.001
99.999
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
10
8.
For the year ending
on March 31, 2005
2339.82
66.37
203.38
2040.17
For the year ending
on March 31, 2006
2,231.66
70.85
203.308
2,064.06
For the year ending
on March 31, 2007
2,182.18
(98.09)
203.38
1907.99
2243.55
3.26
110.31
2,267.44
3.48
111.49
2,111.38
(4.82)
103.81
Kika Dye Chem Exports Private Limited
Brief History
Kika Dye Chem Exports Private Limited was incorporated on December 02, 1993 under the Companies Act,
1956, having its registered office situated at Chemtex House, First Floor, Hiranandani Gardens, Powai,
Mumbai- 400 076. The shares of Kika Dye Chem Exports Private Limited are not listed on any of the stock
exchanges in India.
The company was incorporated with the main object of dealing in dyes, dyestuffs, chemicals and related
products.
Board of Directors
The Board of Directors of Kika Dye Chem Exports Private Limited as on March 31, 2008 consists of
Name
N.N. Ghia
V.D. Ghia
R.S. Ghia
Position
Managing Director
Director
Director
Category
Ghia Family
Bodies Corporate including their nominees
Total
No. of Shares held
3520
46,890
50,410
6.98
93.02
100
84
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
9.
For the year ending
on March 31, 2005
94.40
7.34
5.04
102.79
For the year ending
on March 31, 2006
99.62
8.25
5.04
111.04
For the year ending
on March 31, 2007
101.82
5.13
5.04
116.16
107.83
14.58
213.90
116.08
15.87
230.27
121.21
10.17
240.44
Kika Investments & Finance Private Limited
Brief History
Kika Investments & Finance Private Limited was incorporated on March 18, 1992, under the Companies Ac,
1956, having its registered office situated at B-34/35, 3rd Floor, Paragon Condominium, P.D. Marg, Worli,
Mumbai-400013. The shares of Kika Investments & Finance Private Limited are not listed on any of the stock
exchanges in India.
The company is a non-banking financial company and with the main object of investing funds in shares,
securities, units of mutual funds and giving intercorporate deposits.
Board of Directors
The Board of Directors of Kika Investments & Private Limited as on March 31, 2008 consists of
Name
S.D. Shah
Nikhil Shyam Ghia
Position
Director
Director
Director
Category
Ghia Family
Bodies Corporate
Total
No. of Shares held
86
20,104
20,190
0.42
99.58
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
For the year ending
on March 31, 2005
17.38
15.70
20.19
36.81
For the year ending
on March 31, 2006
44.02
43.03
20.19
79.84
For the year ending
on March 31, 2007
1.93
0.33
20.19
80.18
57.00
77.78
100.03
213.12
100.37
1.66
85
100
100
282.33
495.45
497.11
10. Kharsundi Chemicals Private Limited
Brief History
Kharsundi Chemicals Private Limited was incorporated on November 15, 1984, under the Companies Act,
1956, having its registered ffice situated at 3rd Floor, Paragon Condominium, P.B. Marg, Worli, Mumbai400013. The shares of Kharsundi Chemicals Private Limited are not listed on any of the stock exchanges in
India.
The company was incorporated with the main object of manufacturing various chemicals. At present the
company is not doing any business.
Board of Directors
The Board of Directors of Kharsundi Chemicals Private Limited as on March 31, 2008 consists of
Name
Paresh Parekh
S. Ramachandran
Position
Director
Director
Category
Bhupati Investments Finance Limited
Individuals
Total
No. of Shares held
134,000
66,000
200,000
67
33
100
Particulars
Total Revenue
Profit After Tax
Reserves
(exclusion
Net Worth
10
For the year ending
on March 31, 2005
7.10
(1.34)
20.00
53.83
For the year ending
on March 31, 2006
6.65
2.16
20.00
56.00
For the year ending
on March 31, 2007
6.57
2.68
20.00
58.67
73.83
(0.67)
36.91
76.00
2.01
38.00
78.67
1.34
39.34
11. Daltreya Investment & Finance Private Limited
Brief History
Daltreya Investment and Finance Private Limited was incorporated on October 27, 1987, under the Companies
Act, 1956 having its registered office situated at 7, Sital Baug, 64, Walkeshwar Road, Mumbai-400006. The
shares of Daltreya Investment & Finance Private Limited are not listed on any of the stock exchanges in India
86
The company was incorporated with the main object of carrying out business as an investment including
underwriting, acquisition of bullion and dealing in securities.
Board of Directors
The Board of Directors of Daltreya Investment & Finance Private Limited as on March 31, 2008 consists of
Name
Ms. K.D. Dalal
Ms. B.M. Dalal
Dr. Deepika Subhash Chandratreya
Position
Director
Director
Director
Category
Dalal Family
Friends & Relatives
Others
Total
No. of Shares held
7525
970
8000
16495
45.62
5.88
48.50
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
20.61
18.89
16.50
27.18
For the year ending
on March 31, 2006
32.19
28.20
16.50
55.38
For the year ending
on March 31, 2007
24.18
16.77
16.50
72.15
43.68
114.48
71.88
170.91
88.65
101.64
264.73
435.64
537.27
12. Bloomingdale Investments & Finance Private Limited
Brief History
Bloomingdale Investments & Finance Private Limited was incorporated on July 25, 1986 under the Companies
Act, 1956, having its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz
(West), Mumbai-400054. The shares of Bloomingdale Investments & Finance Private Limited are not listed on
any of the stock exchanges in India
The company was incorporated with the main object of carrying on the business as an investment and finance
company including venture funding, seed capital funding, underwriting and dealing in securities.
Board of Directors
The Board of Directors of Bloomingdale Investment & Finance Private Limited as on March 31, 2008 consists
of
Name
Rajan Raheja
Position
Director
87
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Director
Director
Director
Category
Crescent Property Developers Private Limited
Sea Side Exports Private Limited
Prerana Builders Private Limited
Total
No. of Shares held
14,850
15,075
15,075
45,000
33
33.50
33.50
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
241.72
95.39
45.00
7613.94
For the year ending
on March 31, 2006
15.37
5.60
45.00
7619.72
For the year ending
on March 31, 2007
16.70
5.13
45.00
7623.67
7658.94
211.97
7664.72
12.45
7668.67
11.39
17019.87
17032.71
17041.48
13. Crescent Property Developers Private Limited
Brief History
Crescent Property Developers Private Limited was incorporated on June 01, 1990 under the Companies Act,
1956 having the registered office situated at Rahejas, 4th Floor, Corner of Main Avenue & V.P. Road, Santacruz
(West), Mumbai-400054. The shares of Crescent Property Developers Private Limited are not listed of any of
the stock exchanges in India
The company was incorporated with the main object of carrying on real estate developers and investment
activities.
Board of Directors
The Board of Directors of Crescent Property Developers Private Limited as on March 31, 2008 consists of
Name
Rajan B. Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Sanjay Johar
Position
Director
Director
Director
Director
Director
Category
Kuntinandan Contractors & Developers Private
No. of Shares
held
4980
Percentage of
Holding
33.20
88
Limited
Kuntiputra Properties Private Limited
Villa Capri Developers Private Limited
Total
5010
5010
15,000
33.40
33.40
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
(0.12)
15.00
0.88
For the year ending
on March 31, 2006
(0.11)
15.00
0.77
For the year ending
on March 31, 2007
(0.11)
15.00
0.66
15.88
(0.82)
15.77
(0.73)
15.66
(0.75)
105.86
105.12
104.38
89
14. Sea Side Exports Private Limited
Brief History
Sea Side Exports Private Limited was incorporated on June 04, 1990, under the Companies Act, 1956, having its
registered office situated at Rahejas, 4th Floor, Corner of Main Avenue & V.P. Road, Santacruz (West),
Mumbai-400054. The shares of Sea Side Exports Private Limited are not listed on any of the stock exchanges in
India
The company was incorporated with the main object of carrying on the business of real estate development and
investment in securities
Board of Directors
The Board of Directors of Sea Side Exports Private Limited as on March 31, 2008 consists of
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
A. Castelino
Position
Director
Director
Director
Director
Director
Category
Limited
Total
No. of Shares
held
5010
Percentage of
Holding
33.40
5010
4980
15,000
33.40
33.20
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
(0.12)
15.00
0.43
For the year ending
on March 31, 2006
(0.11)
15.00
0.32
For the year ending
on March 31, 2007
(0.12)
15.00
0.20
15.43
(0.79)
15.32
(0.73)
15.20
(0.83)
102.90
102.16
101.34
15. Prerana Builders Private Limited
Brief History
Prerna Builders Private Limited, was incorporated on June 09, 1982, under the Companies Act, 1956, having its
registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400054.
The shares of Prerna Builders Private Limited are not listed on any stock exchanges in India.
90
The company was incorporated with the main object of carrying on real estate development and investment
activities.
Board of Directors
The Board of Directors of Prerana Builders Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Sanjay Johar
Position
Director
Director
Director
Director
Director
Category
Limited
Total
No. of Shares
held
5010
Percentage of
Holding
33.40
4980
5010
15,000
33.20
33.40
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
(0.12)
15.00
0.33
For the year ending
on March 31, 2006
(0.11)
15.00
0.22
For the year ending
on March 31, 2007
(0.12)
15.00
0.10
15.33
(0.83)
15.22
(0.74)
15.10
(0.78)
102.20
101.46
100.69
16. Asianet Satellite Communications Limited
Brief History
Asia Satellite Communications Limited was incorporated on September 29, 1992, under the Companies Act,
1956, having its registered office situated at 3rd Floor, Karimpanal Arcade, East Fort, Thirvananthapuram695023. The shares of Asia Satellite Communications Limited are not listed on any stock exchanges in India
The company was incorporated with the main object of distribution of satellite and other video sourced signals
through cable networks, satellite receivers and other media and engage in the procurement of all types of film
productions for distribution.
Board of Directors
The Board of Directors of Asianet Satellite Communications Limited, as on March 31, 2008, consists of
91
Name
Rajan Raheja
Rajesh G. Kapadia
K. Jayaraman
Vijay Aggarwal
Akshay Raheja
Viren Rajan Raheja
Vinayak Aggarwal
Position
Director
Director
Director
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
3,03,48,924
5,39,51,943
8,43,00,867
36
64
100
Particulars
Total Revenue
Profit After Tax
Preference
Share
Capital
Reserves
(excluding
Net Worth
10
10
For the year ending
on March 31, 2005
11149.27
(2070.26)
8430.09
0.00
For the year ending
on March 31, 2006
13,625.50
(2,432.51)
8,430.09
300.00
For the year ending
on March 31, 2007
15,128.20
(1,938.75)
8,430.09
300.00
(9265.33)
(8,404.26)
(9,824.09)
(835.24)
(2.46)
325.83
(2.89)
1,094
(2.30)
(0.99)
0.39
(1.30)
17. Hathway Investments Private Limited
Brief History
Hathway Investments Private Limited was incorporated on July 06, 1993 under the Companies Act, 1956,
having its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West),
Mumbai-400054. The shares of Hathway Investments Private Limited are not listed on any stock exchanges in
India
The company was incorporated with the main object of carrying out the activities of investing in securities.
Board of Directors
The Board of Directors of Hathway Investments Private Limited as on March 31, 2008, consists of
Name
Rajan Raheja
Vinayak Aggarwal
Akshay Raheja
A. Unnikrishnan
Sanjay Johar
Position
Chairman
Managing Director
Director
Director
Director
92
The shareholding pattern of this company as on March 31, 2008, is as under
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
2,917030
7,082,970
10,000,000
29.17
70.83
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
542.72
466.66
1000.00
13627.58
For the year ending
on March 31, 2006
145.49
96.50
1000.00
13724.08
For the year ending
on March 31, 2007
301.30
307.83
1000.00
14031.91
16866.14
4.67
16962.64
0.96
17270.47
3.08
168.66
169.63
172.70
18. Outlook Publishing (I) Private Limited
Brief History
Outlook Publishing (I) Private Limited was incorporated on April 23, 1992 under name of Bandra Investments
& Finance Private Limited and later on its name was changed with effect from September 11, 2000 to Bandra
Contractors and Developers Private Limited which was then changed to Outlook Publishing (I) Private Limited,
with effect from November 05, 2002 under the Companies Act, 1956 having its registered office situated at
Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400 054. The shares of Outlook
Publishing (I) Private Limited are not listed on any stock exchanges in India
The company was incorporated with the main object of carrying on the business in print media. The company is
currently publishing magazines such as Outlook, Outlook Money, Outlook Traveller, Outlook Saptahik, Outlook
Business, Outlook Profit, Marie Claire etc.
Board of Directors
The Board of Directors of Outlook Publishing (I) Pvt. Ltd. as on March 31, 2008, consists of
Name
Rajan Raheja
Akshay Raheja
Suman Raheja
Viren Rajan Raheja
A. Unnikrishnan
Gopal Narang
Position
Chairman
Vice Chairman
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
3,208,733
7,791,267
11,000,000
29.17
70.83
100
93
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
For the year ending
on March 31, 2005
6137.79
487.55
110.00
(7228.62)
For the year ending
on March 31, 2006
6,733.22
168.38
110.00
(6,994.34)
For the year ending
on March 31, 2007
8,782.76
(314.62)
110.00
(7,327.62)
(7118.62)
4.43
(64.71)
(6,884.34)
1.53
(62.58)
(7,217.62)
(2.86)
(65.61)
19. Matsyagandha Investments & Finance Private Limited
Brief History
Matsyagandha Investments & Finance Private Limited was incorporated on June 04, 1990, under the Companies
Act, 1956, having its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road Santacruz
(West), Mumbai-400054. The shares of Matsyagandha Investments & Finance Private Limited are no listed on
any stock exchange in India.
The company was incorporated with the main object carrying on the business as an investment and Finance
Company including venture funding, seed capital funding, underwriters and dealing in securities.
Board of Directors
The Board of Directors of Matsyagandha Investments & Finance Private Limited as on March 31, 2008, consists
of
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
94
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
812.83
218.07
15.01
3569.16
For the year ending
on March 31, 2006
32.38
17.97
15.01
3587.14
For the year ending
on March 31, 2007
239.49
(49.30)
15.01
3533.70
3584.17
1452.86
3602.15
119.73
3548.71
(328.43)
23878.58
23,998.31
23,642.30
20. Brindaban Agro Industries Private Limited
Brief History
Brindaban Agro Industries Private Limited was incorporated on June 01, 1990, under the Companies Act, 1956,
having its registered office situated at Rahejas, 4th Floor, Corner of Main Avenue & V.P. Road, Santacruz
(West), Mumbai-400054. The shares of Brindaban Agro Industries Private Limited are not listed on any stock
exchange in India
The company was incorporated with the main object of carrying on activities of investing in securities.
Board of Directors
The Board of Directors of Brindaban Agro Industries Private Limited as on March 31, 2008, consists of
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Aziz Parpia
Viren Rajan Raheja
Position
Director
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5,010
10,000
15,010
33.38
66.62
100
95
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
0.05
(0.07)
15.01
1.85
For the year ending
on March 31, 2006
0.04
(0.07)
15.01
1.78
For the year ending
on March 31, 2007
0.04
(0.08)
15.01
1.70
16.86
(0.48)
16.79
(0.46)
16.71
(0.52)
112.30
111.84
111.32
21. Peninsula Estates Private Limited
Brief History
Peninsula Estates Private Limited was incorporated on June 01, 1990 under the Companies Act, 1956, having its
registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400054.
The shares of Peninsula Estates Private Limited are not listed on any stock exchange in India.
The company was incorporated with the main object of carrying on construction and investment activities.
Board of Directors
The Board of Directors of Peninsula Estates Private Limited as on March 31, 2008 consists of
Name
Rajan B Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5,010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
186.40
168.83
15.01
1940.01
For the year ending
on March 31, 2006
5.26
(11.32)
15.01
1928.58
For the year ending
on March 31, 2007
63.28
36.02
15.01
1964.51
1955.02
1124.81
1943.59
(75.41)
1979.52
239.97
13023.49
12948.62
13188.03
22. Bayside Exports Private Limited
96
Brief History
Bay Side Exports Private Limited was incorporated on June 01, 1990 under the Companies Act, 1956, having its
registered office situated at Rahejas, 4th Floor, Corner of Main Avenue & V.P. Road, Santacruz (West),
Mumbai-400054. The shares of Bayside Exports Private Limited are not listed on any stock exchange in India.
The company was incorporated with the main object of carrying on activities of investing in securities.
Board of Directors
The Board of Directors of Bayside Exports Private Limited as on March 31, 2008 consists of
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Aziz Parpia
Position
Director
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5,010
10,000
15,100
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2006
0.04
(0.07)
15.01
1.85
For the year ending
on March 31, 2006
0.04
(0.07)
15.01
1.77
For the year ending
on March 31, 2007
0.09
(0.03)
15.01
1.74
16.86
(0.50)
16.78
(0.48)
16.75
(0.22)
112.30
111.82
111.60
97
23. R.B.R Construction Private Limited
Brief History
R.B.R Constructions Private Limited is incorporated on June 05, 1982, under the Companies Act, 1956 having
its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West) Mumbai400054. The shares of R.B.R Construction Private Limited are not listed on any stock exchange in India.
The company was incorporated with the main object of carrying on investment activities.
Board of Directors
The Board of Directors of R.B.R. Construction Private Limited as on March 31, 2008, consists of
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Aziz Parpia
Position
Director
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5,010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
0.04
(0.08)
15.01
1.14
For the year ending
on March 31, 2006
0.04
(0.08)
15.01
1.06
For the year ending
on March 31, 2007
0.07
(0.06)
15.01
1.01
16.15
(0.54)
16.07
(0.51)
16.02
(0.38)
107.60
107.09
106.70
24. R. Raheja Properties Private Limited
Brief History
R. Raheja Properties Private Limited was incorporated on August 17, 1981 under the name of Gokul
Construction Company Private Limited and later on its name was changed R Raheja Properties Private Limited
with effect from January 04, 2008, under the Companies Act, 1956, having its registered office situated at
Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400 054. The shares of R.Raheja
Properties Private Limited are not listed on any stock exchanges in India.
98
The company was incorporated with the main object of carrying on construction and investment activities
Board of Directors
The Board of Directors of R.Raheja Properties Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
5423.79
1320.50
15.01
3455.44
For the year ending
on March 31, 2006
7521.55
314.51
15.01
3769.95
For the year ending
on March 31, 2007
2967.68
3.70
15.01
3725.00
3470.45
8797.48
3784.96
2095.32
3740.01
24.68
23,120.91
25,216.23
24,916.82
25. Spur Cable and Datacom Private Limited
Brief History
Spur Cable and Datacom Private Limited was incorporated on May 06, 1994 under the name of Hathway
Securities Private Limited and later on its name was changed to Spur Advertising Private Limited having effect
from May 26, 1999 which was then changed to Spur Cable and Datacom Private Limited with effect from
November 08, 1999, under the Companies Act, 1956, with its registered office situated at Rahejas, 4th Floor,
Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400 054. The shares of Spur Cable and
Datacom Private Limited are not listed on any of the stock exchanges in India.
99
The company was incorporated with the main object of carrying on business of broking, investment,
underwriters, advisors to public issues and advertising and publicity.
Board of Directors
The Board of Directors of Spur Cable and Datacom Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Vinayak Aggarwal
Viyay Aggarwal
K. Jayaraman
Position
Director
Director
Director
Director
Director
Director
Director
Category
R Raheja Properties Private Limited
Peninsula Estates Private Limited
Excelsior Construction Private Limited
Gstaad Investment & Finance Private Limited
Trophy Investment & Finance Private Limited
Total
No. of Shares held
200,000
20
200,000
200,000
200,000
200,000
10,00,000
20
20
20
20
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
0.02
(0.23)
100.00
498.52
For the year ending
on March 31, 2006
(0.22)
100.00
498.29
For the year ending
on March 31, 2007
(0.27)
100.00
498.03
598.52
(0.02)
598.29
(0.02)
598.03
(0.03)
59.85
59.83
59.80
26. Varahagiri Investment & Finance Private Limited
Brief History
Varahagiri Investment & Finance Private Limited was incorporated on May 31, 1990 under the Companies Act,
1956, having its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West),
Mumbai-400 054. The shares of Varahagiri Investment & Finance Private Limited are not listed on any stock
exchanges in India.
100
The company was incorporated with the main object carrying on the business as an Investment and Finance
Company including venture funding, seed capital funding, underwriting and dealing in securities
Board of Directors
The Board of Directors of Varahagiri Investment & Finance Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
545.21
501.77
15.01
3748.22
For the year ending
on March 31, 2006
14.91
(3.80)
15.01
3744.50
For the year ending
on March 31, 2007
33.56
8.47
15.01
3752.97
3763.23
3342.88
3759.51
(25.34)
3767.98
56.41
25071.46
25046.73
25103.14
27. Colonnade Housing Private Limited
Brief History
Colonnade Housing Private Limited was incorporated on June 1, 1990 under the Companies Act, 1956 having
its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400
054. The shares of Colonnade Housing Private Limited are not listed on any of the stock exchanges in India
The company was incorporated with the main object of carrying on Real estate Development and Investment
activities.
Board of Directors
The Board of Directors of Colonnade Housing Private Limited as on March 31, 2008
101
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
0.05
(0.08)
15.01
6.26
For the year ending
on March 31, 2006
0.05
(0.07)
15.01
6.17
For the year ending
on March 31, 2007
0.12
(0.01)
15.01
6.28
21.27
(0.52)
21.18
(0.46)
21.29
(0.08)
141.69
141.09
141.82
28. Gstaad Trading Company Private Limited
Brief History
Gstaad Trading Company Private Limited was incorporated on July 24, 1986 under the Companies Act, 1956
having itsregistered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai
-400 054. The shares of Gstaad Trading Company Private Limited are not listed on any stock exchanges in
India.
The company was incorporated with the main object of carrying on business of exporters and importers and
Investment activities.
Board of Directors
The Board of Directors of Gstaad Trading Company Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
102
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
0.15
0.02
15.01
6.50
For the year ending
on March 31, 2006
0.15
0.03
15.01
6.51
For the year ending
on March 31, 2007
0.21
0.08
15.01
6.73
21.51
0.13
21.52
0.22
21.74
0.53
143.29
143.37
144.81
29. Brindaban Land Development Private Limited
Brief History
Brindaban Land Development Private Limited was incorporated on June 5, 1982 under the Companies Act,
1956, having its registered office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West),
Mumbai-400 054. The shares of Brindaban Land Development Private Limited are not listed on any of the stock
exchanges in India.
The company was incorporated with the main object of carrying on real estate development and investment
activities.
Board of Directors
The Board of Directors of Brindaban Land Development Private Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Viren Rajan Raheja
Position
Director
Director
Director
Director
Category
Raheja Family
Bodies Corporate
Total
No. of Shares held
5010
10,000
15,010
33.38
66.62
100
103
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
For the year ending
on March 31, 2005
0.04
(0.09)
15.01
5.80
For the year ending
on March 31, 2006
0.04
(0.09)
15.01
5.69
For the year ending
on March 31, 2007
0.09
(0.03)
15.01
5.79
20.81
(0.63)
20.70
(0.58)
20.80
(0.22)
138.61
137.91
138.57
30. Optimix Technologies Private Limited
Brief History
Optimix Technologies Private Limited was incorporated on July 18, 2005 under the Companies Act, 1956
having its registered office situated at Wockhardt Towers, West Wing, Level 2, Bandra Kurla Complex,
Mumbai-400 051. The shares of Optimix Technologies Private Limited are not listed on any of the stock
exchanges in India
The company was incorporated with the main object of carrying on the business of providing, selling and
processing of Information Technology enabled services, design, develop all kinds of computer software
systems, related to banks, mutual funds, Investment advisors, stock market intermediaries, and work relating to
web site designing, web solutions, internet and e-commerce products and to provide value added services and
computer consultancy services.
Board of Directors
The Board of Directors of Optimix Technologies Private Limited as on March 31, 2008
Name
Rajan Raheja
Vineet K. Vohra
Vinayak Aggarwal
Rahmi Mehta
Michael Ferreira
Bhavin Mehta
Position
Chairman
Managing Director
Director
Director
Director
Alternate Director to Mr. Rashmi Mehta
Category
ING Insurance International B.V.
Kirti Equities Private Limited
R. Raheja Properties Limited
Other Individuals
Total
No. of Shares held
27525854
11981843
25259022
3
64766722
42.50
18.50
39.00
0
100
The financial performance of this company for last two years is as below
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
For the year ending on
March 31, 2006
64.76
(424.38)
640.76
(424.38)
March 31, 2007
312.54
(1920.27)
6476.67
(2344.65)
104
Net Worth
216.29
(9.79)
3.38
4132.02
(18.04)
6.38
31. H & R Johnson (India) Limited
Brief History
H & R Johnson (India) Limited was incorporated on January 25, 1958, under the Companies Act, 1956 having
its registered office situated at Windsor 7th Floor, C.S.T. Road, Santacruz (East), Mumbai-400 098. The shares
of H&R Johnson (India) Limited are not listed on any stock exchanges in India.
The company was incorporated with the main object of carrying on business of manufacture of Ceramic Glazed
Tiles, Sanitary-ware and other allied products and services.
Board of Directors
The Board of Directors of H&R Johnson (India) Limited as on March 31, 2008
Name
Rajan Raheja
Suman Raheja
Akshay Raheja
Aziz Parpia
Rajesh Kapadia
Joseph Mathews
Vijay Aggarwal
Position
Chairman
Director
Director
Director
Director
Director
Managing Director
Category
Raheja Family
Bodies Corporate controlled by Raheja Family
Other Bodies Corporate
Total
No. of Shares held
2376
12,36,669
2,81,534
1520579
0.16
81.33
18.52
100
Particulars
Total Revenue
Profit After Tax
Reserves
(excluding
Net Worth
100
100
For the year ending
on March 31, 2005
52665.14
2975.19
1267.15
15590.70
For the year ending
on March 31, 2006
71,628.35
1674.31
1267.15
17,242.01
For the year ending
on March 31, 2007
90,914.52
1006.58
1267.15
18,227.40
16330.87
234.15
18,180.22
131.46
19,279.67
78.93
1288.79
1434.73
1521.50
32. Innovassynth Technologies (India) Limited
Brief History
105
Innovassynth Technologies (India) Limited was incorporated on December 4, 2001 under the Companies Act,
1956, with its registered office situated at 3rd Floor, Paragon Condominium, P.B. Marg, Worli, Mumbai-400013.
The shares of Innovassynth Technologies (India) Limited are not listed on any of the stock exchanges in India.
The company was incorporated with the object of carrying business as manufacturers, processors and dealers of
specialty chemicals, fine chemicals, custom synthesis of all kinds and descriptions and to act as manufacturers
of and dealers in intermediate, by-products and end products ad to carry on business of toll manufacturing and
contract manufacturing of chemicals, all kinds and descriptions, as well as to do marketing and research and
development of aforesaid products.
Board of Directors
The Board of Directors of Innovassynth Technologies (India) Limited as on March 31, 2008 consists of
Name
Mr. Shyam Bhupatirai
Ghia
Mr. Rajan Raheja
Mr
Rakesh
Jhunjhunwla
Mr. Rakesh Kapadia
Mr. ShyamSunder Sami
Mr. B.K. Kulkarni
Mr. S.C. Nanda
Dr. B. Sahu
Position
Director
Director
Director
Director
Director
Whole-time Functional Director, Designated as Director-R&D,
Business Development
Whole-time Functional Director, Designated as Director-Finance,
Supply Chain & Works
C.E.O & Director
Category
Promoter & Promoter Group
Bodies Corporate
Trusts
Directors and Relatives
NRIs
Individuals
Total
No. of Shares held
2,83,68,911
31,280
20,00,000
31,50,000
2,11,36,236
8,57,276
5,55,43,703
51.08
0.05
3.60
5.67
38.05
1.55
100
The financial performance of this company for last three years is as below: -
106
Particulars
Total Revenue
Profit After Tax
Reserves
(exclusion
Net Worth
10
10
For the year ending
on March 31, 2005
1915.95
(647.23)
2505.01
21.31
For the year ending
on March 31, 2006
1924.12
(1241.92)
3905.51
2122.06
For the year ending
on March 31, 2007
2440.84
(971.28)
4904.37
2122.06
2526.32
(2.58)
6027.57
(3.18)
7026.43
(1.98)
10.09
15.43
14.33
Details of Partnership Firms constituting Our Promoter Group
33. Manali Investments
Brief History
Manali Investments was formed on March 05, 1992, under the Indian Partnership Act, 1932 having its principal
situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai
This partnership firm was formed with the main object of carrying on investment activity.
Names of the Partners as on March 31, 2008
Name
Manali Investments & Finance Private Limited
Bloomingdale Investments & Finance Private Limited
Coronet Investments Private Limited
Varahagiri Investments & Finance Private Limited
Rajan Raheja
Matsyagandha Investments &Finance Private Limited
% Holding
25.00
25.00
25.00
5.00
5.00
10.00
5.00
Position
Partner
Partner
Partner
Partner
Partner
Partner
Partner
The financial performance of this partnership firm for last three years is as below: Particulars
Total
Revenue
Profit After
Tax
Partners
Capital
March 31, 2005
146.95
March 31, 2006
0.22
March 31, 2007
2.15
93.00
44.84
0.88
4.22
41.06
(4.06)
34. Peninsula Developers
Brief History
Peninsula Developers was formed on September 28, 1992, under the Indian Partnership Act, 1932 having its
principal office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai-400054.
This partnership firm was formed with the main object of carrying on construction activity.
107
Name
Coronet Investments Private Limited
Bloomingdale Investment & Finance Private Limited
Matsyagandha Investment & Finance Private Limited
% Holding
25.00
25.00
25.00
25.00
Position
Partner
Partner
Partner
Partner
Total
Revenue
Profit After
Tax
Partners
Capital
March 31, 2005
250.00
March 31, 2006
0.00
March 31, 2007
0.07
4.55
(0.63)
1.78
504.28
509.15
515.44
35. R & S Business Centre
Brief History
R & S Business Centre was formed on December 01, 1997, under the Indian Partnership Act, 1932 having its
principal office situated at Rahejas, Corner of Main Avenue & V.P. Road, Santacruz (West), Mumbai 400054.
This partnership firm was formed with the main object of carrying on business support activities.
Name
R. Raheja Properties Private Limited
Varahagiri Investment & Finance Private Limited
Bloomingdale Investment & Finance Private Limited
Matsyagandha Investment & Finance Private Limited
Manali Investment & Finance Private Limited
Coronet Investments & Private Limited
Shalini Construction Co. Private Limited
Excelsior Construction Private Limited
Shalini Developers Private Limited
% Holding
14.00
15.00
8.00
7.00
8.00
7.00
11.00
15.00
8.00
7.00
Position
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Partner
Total
Revenue
Profit After
Tax
Partners
Capital
March 31, 2005
25.20
March 31, 2006
25.20
March 31, 2007
25.20
13.70
14.68
14.27
40.97
35.66
24.92
Companies having negative networth
Except for the following, none of the companies being our Promoter Group entities have incurred losses in the
last three financial years or has a negative net worth:
108
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Brahmasonic Sound Production Private Limited;
Chika Overseas Private Limited;
Crescent Property Developers Private Limited;
Sea Side Exports Private Limited;
Prerna Builders Private Limited;
Asianet Satellite Communications Limited;
Outlook Publishing (I) Private Limited;
Matsyagandha Investments & Finance Private Limited
Brindaban Agro Industries Private Limited
Bayside Exports Private Limited
R.B.R Construction Private Limited
Spur Cable & Datacom Private Limited
Colonnade Housing Private Limited
Varahagiri Investment & Finance Private Limited
Optimix Technologies Private Limited
Brindaban Land Development Private Limited
None of the above are sick companies within the meaning of Sick Industrial Companies (Special Provisions)
Act, 1985.
Companies under winding up
None of the companies forming a part of our Promoter Group Entities are under winding up.
Disassociation by our Promoters
There are no companies/firms/ventures with which our promoters have disassociated themselvesduring the last
three years
Common Pursuits
Our Promoters are not currently engaged in the areas in which our Company operates through any other person
or entity other than our Company, and therefore there are no common pursuits as on date of the Draft Letter of
Offer.
Related Party Transactions
For details on our related party transactions with our Promoter Group Entities, please refer to the chapter titled
“Related Party Transactions” beginning on page 109 of the Draft Letter of Offer.
109
RELATED PARTY TRANSACTIONS
Save and except as stated otherwise in the chapters titled “Business Overview” and “Our Management” and
“Financial Statements” beginning on page 31, 60 and 111, respectively, of the Draft Letter of Offer, there have
been no sales or purchases between our Company, our Promoters and our Promoter Group Entities exceeding
the aggregate value of 10% of the total sales or purchases of our Company.
For further details of our related party transactions, please refer to the section titled “Financial
Statements” beginning on page 111 of the Draft Letter of Offer.
110
DIVIDEND POLICY
Dividends, other than interim dividends, will be declared at the annual general meeting of the shareholders
based on the recommendation of the Board of Directors. Our Company does not have any specific dividend
policy. The Board may, at its discretion, recommend dividends to be paid to our shareholders. Generally, the
factors that may be considered by the Board of Directors before making any recommendations for the dividend
include, without limitation, our future expansion plans and capital requirements, profits earned during the fiscal
year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend,
as well as exemptions under tax laws available to various categories of investors from time to time and general
market conditions.
We have not declared any dividends in the last five years.
111
SECTION V – FINANCIAL STATEMENTS
AUDITORS’ REPORT
The Board of Directors
Futura Polyesters Limited,
P.B. Marg,
Mumbai - 400 013
Dear Sirs,
We have examined the Books of account of Futura Polyesters Limited, for the five financial years ended 31st
March 2008, and its wholly owned subsidiary company Innovassynth Investments Limited being the last date
upto which the accounts of the Companies, have been made up and audited by us for presentation to the
members.
In terms of requirements of:
(A) Paragraph B (1) of the part II schedule II of the Companies Act 1956
(B) The Securities & Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 Issued
by SEBI on 19th January 2000 in pursuance of section 11 of SEBI Act, 1992 "the SEBI Guidelines"
and,
(C) The instruction dated 1st June 2008, received from the Company, requesting us to issue report as
Statutory Auditor of the Company, relating to the offer document in connection with the Right Issue
offer of Equity Shares by the Company.
We report as under:
In our opinion, the financial information of the Company, setout in reports, read with respective significant
accounting policies, subject to notes given thereon, have been prepared in accordance with part II –B of the
Schedule II of the Companies Act, 1956 and the SEBI Guidelines.
We have examined the following financial information relating to the company prepared by the management for
the purpose of inclusion in the Offer document.
a)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Summary statement of Fixed Assets and Liabilities as per Annexure I
Statement of Profit and Losses as per Annexure II
Significant Accounting Policies as per Annexure III
Dividend declared by the Company as per Annexure IV
Other Income as per Annexure V
Accounting Ratios as per Annexure VI
Capitalisation statement as per Annexure VII
Secured Loans- Term Loans as per Annexure VIIIA
Secured Loans – Working Capital as per Annexure VIIIB
Secured Loans – Others as per Annexure VIIIC
Tax Shelter Statement as per Annexure IX
Unsecured Loans as per Annexure X
Schedule of Investments as per Annexure XI
Sundry Debtors as per Annexure XII
Loans and Advances as per Annexure XIII
Statement of Capital Commitments and Contingent Liabilities as per Annexure XIV
Related Parties as per Annexure XV
Related Parties Transactions as per Annexure XV - A,B and C
Cash Flow Statement as per Annexure XVI
Note on Consolidation of Accounts of Subsidiary as per Annexure XVII
b) Innovassynth Investments Limited
112
1.
2.
3.
Balance Sheet as per Annexure XVIII
Significant Accounting Policies as per Annexure XIX
Cash Flow Statement as per Annexure XX
Consolidated accounts have not been prepared since the Company’s Subsidiary Innovassynth Investments
Limited is covered by Clause 11 (a) of Accounting Standard 21 issued by the Institute of Chartered Accountants
of India.
This report is being provided solely for the use of Company for the purpose of inclusion of the said offer
document in connection with Right Issue offer of the Equity Shares of the Company.
This report may not be used or relied upon by, or disclosed, referred to or communicated by yourself (in whole
or in part) to, any third party for any purpose other than the stated use, except with our written consent in each
instance, and which consent, may be given, only after full consideration of the circumstances at that time.
For N.M. Raiji and Co,
Dated: 10th June 2008
Place: Mumbai
Y.N. Thakkar
Partner
MembershipNo. 33329
113
FINANCIAL INFORMATION
A) FUTURA POLYESTERS LIMITED
SUMMARY STATEMENT OF FIXED ASSETS AND LIABILITIES
Annexure - I
(Rupees in Lacs)
Sr.
No
Particulars
As at
31-Mar-08
1
FIXED ASSETS
Gross Block
Less: Depreciation
Net Block
Add: Capital Work - in - Progress
Net Block after adjustment for
Revaluation Reserve
2
INVESTMENTS
3
DEFERRED TAX ASSETS (NET)
4
CURRENT ASSETS, LOANS AND
ADVANCES
Inventories
Sundry Debtors
Loans and Advances
31-Mar-07
31-Mar-06
31-Mar-05
31-Mar-04
59,885.68
25,997.55
33,888.13
2,581.05
14,293.43
43,437.40
23,776.81
19,660.59
976.24
1,087.64
41,637.34
21,438.63
20,198.71
674.50
1,995.37
40,134.39
19,071.16
21,063.23
463.03
2,905.50
39,530.90
16,698.29
22,832.61
127.69
3,833.36
22,175.75
19,549.19
18,877.84
18,620.76
19,126.94
2,621.11
2,381.22
2,378.91
2,578.91
2,583.67
74.57
541.19
975.13
1,115.87
1,486.20
11,825.74
3,742.01
1,824.15
2,651.44
20,043.34
8,320.37
3,647.75
1,734.06
2,760.63
16,462.81
9,484.56
2,464.08
1,947.84
2,525.71
16,422.19
7,568.29
4,230.74
1,514.78
1,767.76
15,081.57
5,188.71
2,534.73
4,364.45
2,225.11
14,313.00
11,585.42
10,604.11
10,474.00
9,734.59
10,541.62
4,327.35
4,437.61
4,662.89
5,452.95
4,507.62
14,971.69
877.99
15,849.68
11,096.21
775.36
11,871.57
11,902.68
709.31
12,611.99
10,900.22
638.27
11,538.49
13,186.00
625.50
13,811.50
13,152.32
12,021.12
10,905.19
10,671.08
8,649.07
5,242.17
5,242.17
5,242.17
4,835.59
3,347.71
LIABILITIES AND PROVISIONS:
5
SECURED LOANS
6
UNSECURED LOANS
7
CURRENT LIABILITIES
PROVISIONS
Current Liabilities
Provisions
AND
NET WORTH (1+2+3+4-5-6-7)
NET WORTH REPRESENTED BY
8
SHARE CAPITAL
9
RESERVE AND SURPLUS
Reserves (Net of Revaluation
Reserves)
22,213.93
14,293.43
10.35
7,880.36
1,087.64
13.77
7,725.56
1,995.37
67.17
8,962.07
2,905.50
221.08
9,529.49
3,833.36
394.77
7,910.15
6,778.95
5,663.02
5,835.49
5,301.36
NET WORTH (8+9)
13,152.32
12,021.12
10,905.19
10,671.08
8,649.07
114
STATEMENT OF PROFIT & LOSSES
Annexure - II
(Rupees in lacs)
Particulars
2006-07
2007-08
INCOME
Manufacture
Traded
Less: - Excise Duty
Services
2004-05
2005-06
2003-04
44,814.30
4,464.34
1,012.80
56,146.50
4,621.98
181.90
52,138.73
5,023.54
-
52,175.54
4,956.42
174.72
45,090.96
114.27
4,341.82
124.81
41,362.76
1,295.89
51,706.42
520.17
47,115.19
487.99
47,393.84
587.72
40,988.22
610.98
(1,078.40)
43,737.05
829.70
51,396.89
(1,420.22)
49,023.40
(1,482.90)
49,464.46
1,660.85
39,938.35
23,590.41
1,690.89
10,055.20
1,265.81
1,479.22
2,126.66
2,577.57
(884.15)
41,901.61
29,400.62
2,009.97
11,822.37
1,111.74
1,946.43
1,764.13
2,478.71
(907.73)
49,626.24
29,802.01
1,990.54
11,372.38
1,083.47
2,198.18
1,890.76
2,391.90
(910.15)
49,819.09
28,881.78
1,833.13
11,001.91
1,092.17
2,345.33
1,917.19
2,410.31
(937.42)
48,544.40
23,200.74
1,982.94
10,325.83
1,247.95
2,370.26
170.48
2,411.58
2,188.33
(311.76)
43,586.35
1,835.44
1,770.65
(795.69)
920.06
(3,648.00)
-
-
-
-
1,626.97
8.39
25.39
57.75
86.39
264.62
-
31.51
100.61
100.61
100.61
1,827.05
203.83
2.00
1,713.75
192.28
2.00
(954.05)
2.00
733.06
2.29
(2,386.26)
2.50
28.00
23.00
43.00
-
-
(466.61)
(433.94)
(140.74)
(370.33)
2,188.15
Less: Excess Provision of Earlier Years
Net Profit /(Loss) after Tax
(1.17)
1,127.78
1,062.53
(1,139.79)
360.44
(200.61)
Balance brought forward
1,064.57
2.04
1,141.83
781.39
982.00
BALANCE CARRIED TO BALANCE
SHEET
2,192.35
1,064.57
2.04
1,141.83
781.39
Other Income
(Less)/Add:
Inventories
(Increase)/Decrease
in
EXPENDITURE
Staff Costs
Interest
Depreciation
Less:- Transfer from Revaluation Reserve
Net Profit /(Loss)
Extraordinary items
before
Tax
and
Add: Profit on sale of Chemical Business
Less: Deferred VRS Gratuity Payment
Profit / (Loss) after extra ordinary items
but before tax
Less: Provision for Fringe Benefit Tax
115
Notes Forming Part of the Accounts
Annexure – III
1.
SIGNIFICANT ACCOUNTING POLICIES
A.
System of Accounting
The financial statements are prepared under Historical cost convention on an accrual basis except for
certain fixed assets, which have been revalued.
B.
Fixed Assets and Depreciation
I. Fixed Assets
Fibre, Resin and Preforms Divisions.
Fixed Assets are stated at cost less depreciation. Cost comprises of Cost of acquisition, cost of
improvements and any attributable cost of bringing the asset to condition for its intended use. Interest
on loans taken for the procurement of specific assets accrued upto the date of acquisition/ installation of
the said assets is capitalised along with the cost of the assets.
II. Depreciation
Fibre Division:
Depreciation has been provided on Plant and Machinery and Research and development facilities on
straight line basis and on other assets on written down value basis at the rates specified in Schedule
XIV of the Companies Act, 1956 as amended from time to time. Certain Plants have been treated
continuous process Plants based on technical and other evaluation. However, higher rate of
depreciation has been provided on certain Plant and Machinery ranging from 6.75% -12.50% compared
to 5.28% of Schedule XIV rate, based on technical evaluation. The total accumulated depreciation is
restricted up to 95% of the Gross Block Value.
Resin and Preforms Divisions:
Depreciation has been provided on all assets on straight line basis at the rates specified in Schedule
XIV of the Companies Act, 1956 as amended from time to time. However, higher rate of depreciation
has been provided on certain Plant and Machinery ranging from 6.75%-12.50% compared to 5.28% of
Schedule XIV rate, based on technical evaluation. The total accumulated Depreciation is restricted up
to 95% of the Gross Block Value.
C.
Investments
116
Investments are classified into current and long term investments. Current investments are stated at the
lower of cost and fair value, Long term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in value of long term investments.
Income on Investments:
Dividend income is accounted when right to receive payment is established. Interest income is
accounted on accrual basis.
D.
Inventories
Inventories are valued as under:
(i) Fibre Division and Chemical Division
Raw materials, packing materials, stores and spares: at Cost (Weighted average method) Materials-intransit and semi finished goods: at Cost. (Weighted average method)
Finished goods: at lower of cost or net realisable value. (Weighted average method)
Traded items: at lower of cost or net realisable value. (Weighted average method)
(ii) Resin and Preforms Divisions:
Raw materials: At Cost (FIFO)
Semi finished Goods: At Cost (FIFO)
Finished goods: At lower of cost or net realisable value (Cost FIFO Basis)
E.
Stores, Spares and Packing Materials: At Cost (FIFO).
Sales and Services
Sale of goods is recognised on despatch to customers. Sales include amounts recovered towards excise
duty, but exclude amounts recovered towards sales tax. Service income is recognised as per terms of
agreements.
F.
Export Incentives
Export Incentives are accounted on an accrual basis.
G.
Foreign Currency Transactions
Transactions in foreign currencies are recorded at current rates except transactions covered by forward
contracts. Assets and Liabilities denominated in foreign currency are restated at the year end rates. All
exchange gains and losses except those relating to acquisition of fixed assets which are adjusted to the
carrying cost of such assets, are accounted for in the Profit and Loss Account.
H.
Revenue expenditure on research and development is charged as an expense in the year in which they
are incurred. Capital expenditure is shown as an addition to Fixed Assets.
New Product Development Expenditure
Expenditure incurred on development of new products are amortised over a period of 10 years.
I.
Employee Benefits
(i) Defined Contribution Plan
Company’s contributions paid /payable during the year to Superannuation Fund, ESIC and Labour
Welfare Fund are recognized in the Profit and Loss Account. There are no other obligations other than
the contribution payable to the respective trust / Fund. Company’s Contribution towards
Superannuation and ESIC is based on a percentage of salary which is made to an approved fund.
117
(ii) Defined Benefit Plan
Company’s Contribution towards Provident Fund is based on a percentage of salary which is made to
an approved fund.
Company’s Contribution towards Gratuity is made to an approved fund as per actuarial valuation
certificate obtained from an actuary which is determined using projected unit credit method.
(iii) Short term compensated absences are provided as per actuarial valuation certificate obtained from
an actuary which is determined using projected unit credit method.
(iv) Long term employee benefit
Long term compensated absences are provided as per actuarial valuation certificate obtained from an
actuary which is determined using projected unit credit method.
(v) Actuarial gains / losses are immediately taken to profit and loss account and are not deferred.
J.
Deferred Revenue Expenses:
Voluntary Retirement Scheme related payments are amortised over a period of 5 years
K.
Taxes on Income
(a) Current Tax: Provision for Income Tax is determined in accordance with the provision of Income
Tax Act, 1961.
(b) Deferred Tax Provision: Deferred tax is recognised on timing differences between the accounting
income and the taxable income for the year and quantified using the tax rates and laws enacted or
subsequently enacted on the Balance Sheet date. Deferred tax assets are recognised and carried
forward to the extent that there is a reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets can be realised.
118
DIVIDEND DECLARED BY THE COMPANY
Annexure IV
(Rupees in Lacs)
Dividend for the year ended
Details
Dividend for the year
31-Mar08
31-Mar07
NIL
NIL
31-Mar06
NIL
31-Mar05
31- Mar04
NIL
NIL
119
OTHER INCOME
Annexure –
V
(Rupees in Lacs)
Particulars
2007-08
Dividend on Investments:
From Subsidiary Company
Others
Interest Others (Gross)
Profit on sale of Fixed Assets (Net)
Profit on sale of Investments
Provision for Doubtful Debts/ Advances Written Back
Sales Tax Set-off
Miscellaneous Income:
Prior Period Adjustments
Sundry Credit Balances written back
2006-07
2005-06
2004-05
2003-04
187.61
0.14
194.51
1.00
3.80
33.47
68.77
308.57
25.83
70.76
0.07
6.62
20.00
112.18
286.73
61.79
3.85
327.57
0.83
8.00
106.21
6.91
76.57
1.20
0.36
30.88
3.44
7.18
248.22
19.70
113.63
14.66
0.24
1,295.89
7.97
520.17
0.60
487.99
56.58
587.72
172.91
610.98
3.35
269.22
638.45
2.37
120
ACCOUNTING RATIOS
Annexure – VI
Details
Earning Per Share (in Rs.) (Basic)
Earning Per Share (in Rs.) (Diluted)
Net Asset Value Per Share (Rs.)
Return on Net Worth (RONW)
Mar-08
2.17
2.17
25.09
8.57%
As at the year ending 31st
Mar-07
Mar-06
Mar-05
2.14
(1.89)
(1.81)
2.14
(1.89)
(1.76)
22.93
20.80
22.07
8.84%
-10.45%
3.38%
Mar-04
0.49
0.49
25.84
-2.32%
Definition of Ratios:
Earnings Per Share (EPS) =
Net Asset Value =
Net Profit After Tax / No. of Equity Shares
Net worth (excluding Revaluation Reserve & Miscellaneous
expenditure to the extent not written off) / No. of Equity Shares
Return on Net Worth =
Net Profit after Tax / Net worth (excluding Revaluation Reserve &
Miscellaneous expenditure to the extent not written off)
Net Profit After Tax / No. of Equity Shares
Earnings Per Share (EPS) =
Net worth (excluding Revaluation Reserve & Miscellaneous
expenditure to the extent not written off) / No. of Equity Shares
Net Asset Value =
Return on Net Worth =
Net Profit after Tax / Net worth ( excluding Revaluation Reserve
& Miscellaneous expenditure to the extent not written off)
121
CAPITALISATION STATEMENT AS ON 31.03.2008
Annexure – VII
(Rupees in Lacs)
Sr. No
Details
1
2
3
4
5
Secured Loan
Unsecured Loan
Total Debt
Less: Short Term Debts
Total Long Term Debts
Share Holders Funds
Share Capital
Reserves (Excluding Revaluation Reserve)
Miscellaneous Expenditure (not written off)
Total Share holders Fund
Long Term Debt/Equity (5/8)
6
7
8
Pre-issue as
on 31-03-2008
11,585.42
4,327.35
15,912.77
6,642.04
9,270.73
5,242.17
7,920.50
(10.35)
13,152.32
0.70
Post Issue
11,585.42
4,327.35
15,912.77
6,642.04
9,270.73
7,863.26
7,920.50
(10.35)
15,773.41
0.59
122
SECURED LOANS - TERM LOANS AS ON 31ST MARCH, 2008
Annexure –
VIIIA
(Rupees in lacs)
Sr. Name of the Institution
No
/ Bank
Sanctioned
Amount
Outstanding
amount as
on 31-03-2008
TERM LOANS
1 Industrial Development
Bank of India Limited
4,000.00
1,850.00
2 Industrial Development
Bank of India Limited
2,000.00
1,354.00
3 Axis Bank Limited
2,000.00
1,250.00
4 Canara Bank
1,250.00
1,117.50
5 Yes Bank Ltd.
2,000.00
2,000.00
Rate of
Interest
11.00%
Security
Repayment
Schedule
First Pari Passu charge and 6
Quarterly
mortgage of all immovable Installments
of
properties situate at Manali, Tamil Rs.275 Lacs each
Nadu first charge by way of from 1st April,2008
hypothecation
on
Company's to 1st July,2009. 1
of
movables including machinery Installment
spares and accessories (excluding Rs.200 Lacs on 1st
book debts) subject to prior charges October,2009.
created in favour of other lenders.
Quarterly
11.00% First Pari Passu charge and 5
of
mortgage of all immovable Installments
Nadu first charge by way of from 1st April,2008
hypothecation
on
Company's to 1st April,2009. 2
movables including machinery Quarterly
of
spares and accessories (excluding Installments
book debts) subject to prior charges Rs.248 Lacs each
created in favour of other lenders. from 1st July,2009
and 1st October,2009.
1
Installment
of
Rs.238 Lacs on 1st
January,2010.
BPLR - 2 First Pari Passu charge and 10
Quarterly
.50% mortgage of all immovable Installments
of
Nadu first charge by way of from April,2008 to
hypothecation
on
Company's July,2010.
movables including machinery
spares and accessories (excluding
book debts) subject to prior charges
BPLR - Exclusive
Charge
on
the 16
Quarterly
1.00% machineries acquired, to be Installment
of
acquired out of this Loan.
Rs.78.13 Lacs each
from October, 2008
to July, 2012.
Quarterly
BPLR - First Pari Passu charge and 16
of
0.25% mortgage of all immovable Installments
Nadu first charge by way of from August,2008 to
hypothecation
on
Company's May,2012.
movables including machinery
spares and accessories (excluding
book debts) subject to prior charges
* Bank Prime lending Rate
123
SECURED LOANS - WORKING CAPITAL AS ON 31ST MARCH, 2008
Annexure – VIIIB
(Rupees in Lacs)
Sr.
No
Name of the Institution / Bank
WORKING CAPITAL LOANS
Cash Credit / Working Capital
Demand Loan, Packing Credit and
facilities from Banks
1 Bank of India
2
3
4
5
6
7
State Bank of India
Indian Bank
UCO Bank
Union Bank of India
State Bank of Hyderabad
Canara Bank
Total
Sanctioned
Amount
Outstanding
amount as on
31-03-2008
1,208.00
1,104.52
1,600.00
250.00
635.00
307.00
200.00
300.00
4,500.00
1,539.36
152.10
632.95
313.19
198.60
3,940.72
Rate of Interest
Security
BPLR + 1.50 % * Hypothecation of the Company’s entire
Stock of Raw Materials, Finished Goods,
Stocks in Process, Consumable Stores and
Spares at Company’s factory and book
debts on pari passu basis; second charge on
movable and immovable properties at
Manali, Chennai, Tamil Nadu of the
Company
SBAR+ 0.75 % ** ------------- same as above -----------------BPLR + 4.00 % * ------------- same as above -----------------BPLR + 0.50 % * ------------- same as above -----------------BPLR + 3.50 % * ------------- same as above -----------------BPLR + 1.5 % * ------------- same as above -----------------BPLR - 0.25 % * ------------- same as above ------------------
* Bank Prime lending Rate
** State Bank of India Bench Mark Prime Lending Rate
124
SECURED LOANS OTHERS ON 31ST MARCH, 2008
Annexure – VIIIC
(Rupees in Lacs)
Sr.
No
1
OTHER LOANS
Citi Bank N.A. / HDFC Bank Ltd.
Outstanding
Sanctioned
amount as on
Amount
31-03-08
113.42
73.20
Rate of Interest
10% to 12%
Security
Repayment Schedule
Secured by Specific Repayable by 31st March
Assets taken on Hire '09 Rs. 39.77
Purchase basis.
Repayable by 31st March
'10 Rs. 32.33
Repayable by 31st March
‘11 Rs.1.10
73.20
125
TAX SHELTER STATEMENT
Annexure – IX
(Rupees in Lacs)
Particulars
Profit / (Loss) as
per Profit and
Loss account (A)
Tax at Notional
Rate
Add: Difference
between
tax
depreciation and
book depreciation
Add: VRS claim
u/s.35DD (Net)
Add:
43
B
disallowance
(Net)
Add:
Others
(Net)
Net
Additions
(B)
Tax Savings
Business Profit /
(Loss) for tax
purpose (A+B) =
(C)
Carry
forward
Loss as per return
(D)
Cumulative carry
forward Loss
(C + D) = (E)
2004
(2386.26)
2005
2006
(954.04)
733.06
2007
1713.75
2008
1827.05
-
268.24
-
576.85
621.01
(145.52)
(181.13)
481.21
268.15
116.55
180.95
(0.60)
-
-
-
(226.64)
17.78
170.16
67.32
(48.56)
97.93
1148.43
108.55
170.70
59.41
(93.28)
(34.13)
984.88
360.39
759.92
255.79
506.17
170.38
127.40
43.30
(2479.54)
1717.94
(194.13)
2219.92
1954.45
(7855.93)
(10335.47)
(8617.53)
(8811.66)
(6591.75)
(10,335.47)
(8617.53)
(8811.66)
(6591.75)
(4637.30)
126
UNSECURED LOANS AS ON 31ST MARCH, 2008
Annexure – X
(Rupees in Lacs)
Sr.
Amount
Rate of Interest
Repayment Schedule
No
Outstanding
1 Fixed
Deposits
from
Public,
477.06
9% to 11% Payable by March, 2009 Rs.240.26 Lacs
Shareholders, Employees
Payable by March, 2010 Rs.138.01 Lacs
Payable by March, 2011 Rs. 98.79 Lacs
2 Fixed Deposits from Director
17.00
11.00% Payable on 11th June, 2008
Fixed Deposits from Directors
6.00
12.00% Payable at Call
Fixed Deposits from - Ex Director
750.00
Interest accrued & due on Ex Director
689.29
3
Short Term Deposits
Total
1,800.00
88.00
33.00
230.00
237.00
4,327.35
14.50%
9% to 10%
9% to 15%
13% to 15%
13% to 15%
Repayable by 31.03.2009
Repayable at call
Repayable by April,2008
Repayable by May,2008
Repayable by June,2008
127
SCHEDULE OF INVESTMENTS AS ON 31.03.2008
Annexure – XI
(Rupees in Lacs)
Description
LONG TERM (At Cost)
Fully Paid
QUOTED
Non Trade:
Equity Shares
The Arvind Mills Limited
Face
Holdings
As at
Holdings
As at
Holdings
As at
Holdings
As at
Holdings
As at
Value
Numbers 31.03.2008 Numbers 31.03.2007 Numbers 31.03.2006 Numbers 31.03.2005 Numbers 31.03.2004
Per Unit
Rs.10
18,241
72.97
18,241
60.20
Less:
Provision
for
Diminution in the value of
Investments
72.97
18,241
60.20
72.97
18,241
60.20
72.97
18,241
60.20
72.97
60.20
Rs.10
7,200
12.77
3.24
7,200
12.77
3.24
7,200
12.77
3.24
7,200
12.77
3.24
7,200
12.77
3.24
UNQUOTED
6.75 % Tax Free US 64
Bonds **
Rs.100
57,345
57.34
57,345
57.34
57,345
57.34
57,345
57.34
57,345
57.34
Equity Shares
The Pen Urban Cooperative Bank Limited
Rs.250
-
-
120
0.30
1,200
0.30
1,200
0.30
1,200
0.30
Rs.25
Rs.25
1,015
0.25
1,015
0.25
1,015
0.25
1,015
0.25
1,015
0.25
2,505.01 25,050,070
2,505.01
Bank of India
The Shamrao Vithal Cooperative Bank Limited
Innovassynth Technologies
(India) Limited
Arkay
Energy
(Rameshwaram) Limited
In Foreign Holdings:
Offshore Digital Services,
Inc., California
In subsidiary
Innovassynth Investments
Limited
Futura Polyesters Inc USA
Rs.10 23,850,070
Rs.10
1,575,000
Rs.10
50,000
$1
-
2,385.01 23,050,070
2,305.01 23,050,070
2,305.01 25,050,070
157.50
-
-
-
-
-
-
-
5.00
-
-
-
-
2.31
-
-
-
2,381.22
2,378.91
2,578.91
2,583.67
5,000
2,621.11
-
15,000
128
4.76
SUNDRY DEBTORS
Annexure - XII
(Rupees in Lacs)
Particulars
Over Six months
Considered Good
Considered Doubtful
Others: Considered Good
Less: Provision for doubtful debts
31-Mar-08
31-Mar-07
752.14
514.52
1,266.66
2,989.87
4,256.53
514.52
3,742.01
713.65
582.00
1,295.65
2,934.10
4,229.75
582.00
3,647.75
31-Mar-08
207.11
4,049.42
4,256.53
31-Mar-07
634.39
3,595.36
4,229.75
Sundry Debtors
Secured
Unsecured
31-Mar-06
434.76
438.96
873.72
2,029.32
2,903.04
438.96
2,464.08
As at
31-Mar-06
73.81
2,829.23
2,903.04
31-Mar-05
31-Mar-04
366.50
428.31
794.81
3,864.24
4,659.05
428.31
4,230.74
140.12
428.51
568.63
2,394.61
2,963.24
428.51
2,534.73
31-Mar-05
161.03
4,498.02
4,659.05
31-Mar-04
247.74
2,715.50
2,963.24
129
LOANS AND ADVANCE
Annexure - XIII
(Rupees in Lacs)
Particulars
Advances recoverable in Cash or in kind or for
value to be received:
Due from Subsidiary
Considered good
Considered doubtful
Less : Provision for Doubtful Advances
Advance Payment of Tax (Net of Provisions)
Balance with Excise, Customs, etc.
31-Mar-08
31-Mar-07
31-Mar-06
31-Mar-05
31-Mar-04
2,345.43
156.96
2,502.39
156.96
2,345.43
2,342.64
175.60
2,518.24
175.60
2,342.64
2,122.46
175.63
2,298.09
175.63
2,122.46
1,268.02
179.12
1,447.14
179.12
1,268.02
552.53
1,201.29
141.67
1,342.96
141.67
1,201.29
-
130.59
101.49
195.85
246.47
306.01
2,651.44
287.40
2,760.63
301.76
2,525.71
303.89
1,767.76
224.82
2,225.11
130
STATEMENT OF CAPITAL COMMITMENT AND CONTINGENT LIABILITIES
Annexure - XIV
CAPITAL COMMITMENTS
Sr.
No
1.
2007-08
Estimated amount of contracts remaining to be
executed on capital account (net of advance paid)
and not provided for
2006-07
219.21
2005-06
1194.07
2004-05
44.17
2003-04
143.62
185.52
CONTINGENT LIABILITIES
(Rupees in Lacs)
Sr.
No
1.
(i) Regarding Income Tax on account of disputes
raised by the Income Tax Department under the
Income Tax Act 1961, there are decisions of
Appellate Authorities in the case of other assesses,
which appears to sustain most of the contentions of
the Company on disputed points.
(ii) Claims against the Company not acknowledged as
debts.
(iii) Service Tax - Penalty and interest demanded on
technology transfer agreement between FPL and
IOCL and vice versa. ST demand on goods transport
service at Supreme Court.
Service Tax demand on Goods Transport Agency
during the Year 1997-98, departments' appeals
pending in Supreme Court.
Service Tax credit denial on outward freight and
canteen services 2005-06, 2006-07 and 2007-08.
(iv) Central Excise - Claims against the company on
various issues pending at CESTAT / High Court /
Supreme Court.
(v) Custom : Method of calculation of duty under
notification 2 / 95 & other valuation issues.
Custom duty on outstanding export obligations
under DEEC license.
(vi) Sales Tax on Input use for Exports (1999-2000 and
2000-2001).
(vii) Sales Tax on Interest collected (1997-98 & 20002001) CST levied on Interest charges collected from
customers.
(viii) Guarantee given by the Company.
2007-08
2006-07
2005-06
2004-05
2003-04
-
766.38
674.70
123.11
143.14
173.40
173.40
763.43
557.16
1,239.31
486.00
486.00
486.00
486.00
-
6.29
6.29
6.29
6.29
-
63.84
-
-
-
-
493.49
493.49
478.17
33.88
-
126.33
126.33
129.11
197.82
-
-
-
17.49
30.15
59.22
9.00
9.00
9.00
9.00
-
4.40
4.40
4.40
4.40
-
2,813.00
3,113.00
313.00
300.00
-
131
RELATED PARTY TRANSACTION
Annexure – XV
2007-08
Related Party Transactions:
1
2.
Relationships
a)
Subsidiary Companies
1.
b)
Associates
c)
Key Management Personnel
1.
Mr. S. B. Ghia
Mr. M. D. Dalal
d)
Companies in which Key Management Personnel have Significant Influence
1.
Innovassynth Technologies (India) Limited
2.
Directors
3.
Sonata Information Tech.Limited
4.
5.
Viraj Investments Pvt Ltd
6.
7.
8.
Brahamasonic Sound Production Private Limited
9.
10. Kharsundi Chemicals Pvt Ltd
Mr. S. B. Ghia is a Common Director
Mr.S.B.Ghia , Mr.M.D.Dalal & Mr.Rajan Raheja are
common
Subsidiary of Sonata Software Limited
Significant influence of Mr.S.B.Ghia
Subsidiary of Viraj Investments Private Limited
Subsidiary of Bhupati Investments & Finance Private Limited
2006-07
1. Relationships
2.
a)
1.
Futura Polyesters Inc.
b)
Associates
1.
c)
1.
Mr. S. B. Ghia
Mr. M. D. Dalal Joint Managing Director
d)
1.
2.
3.
4.
5.
6.
7.
8.
Viraj Investments Pvt Ltd
Brahamasonic Sound Production Private Limited
Mr.S.B.Ghia, Mr.M.D.Dalal and Mr.Rajan Raheja are common Directors
Subsidiary of Viraj Investments Private Limited
2005-06
1. Relationships
a)
1.
2.
Futura Polyesters Inc.
b)
132
1.
2.
Mr. S. B. Ghia
Mr. M. D. Dalal
c)
1.
Mr.S.B.Ghia, Mr.M.D.Dalal and Mr.Rajan Raheja are
common Directors
2.
Mr.S.B.Ghia , Mr. N.S. Ghia are common Directors
Bhupati Investments & Finance Private Limited Significant Influence (through Viraj Investments Private Limited)
Spouse, Mrs.R.S.Ghia and Mrs.V.D.Ghia are Directors
5. Distributors (Bombay) Private Limited
3.
4.
d)
Relative of Key Management Personnel
1.
Mr. N.S.Ghia
Son of Mr. S.B.Ghia
2004-05
1. Relationships
a)
1.
b)
1.
2.
Mr. S. B. Ghia
Mr. M. D. Dalal
e)
1.
Mr.S.B.Ghia, Mr.M.D.Dalal and Mr.Rajan Raheja are
common Directors
2.
3.
4.
Bhupati Investments & Finance Private Limited Significant Influence (through Viraj Investments Private Limited
2003-04
1.
Relationships
A)
1.
b)
1.
2.
3.
Mr. S. B. Ghia
Mr. M. D. Dalal Joint Managing Director
Mr. M. N. Tumbe
Joint Managing Director and C.E.O
f)
1.
3.
4.
5.
Mr.S.B.Ghia, Mr.M.D.Dalal and Mr.Rajan Raheja are common
Directors
2.
Sonata Information Tech. Limited
Kharsundi Chemicals Private Limited
Mr. M. N. Tumbe is a common Director
Bhupati Investments & Finance Private Limited Significant Influence (through Viraj Investments Private Limited)
133
STATEMENT OF CASH FLOWS
Annexure - XVI
(Rupees in lacs)
Particulars
2007-08
2006-07 2005-06
2004-05 2003-04
(A) CASH FLOW FROM OPERATIONS
1,835.44 1,770.65 (795.69)
920.06 (3,648.00)
Net Profit before tax and extra-ordinary item
Adjustment for
Depreciation
Interest / Dividend Income
Interest Expenses
Profit / (Loss) on Sale of Fixed Assets
Profit / (Loss) on Sale of Investments
Diminution in Value of Investments
Provision for Doubtful Debts / Advances
Provision for Doubtful Debts / Advances Written - back
Credit balances written back
Provision for Investments Written - back
Operating Profit before working capital changes
Adjustment for
Trade and Other Receivables
Inventories
Trade Payables
Cash generated from operations
Direct Taxes (Paid)
Cash flow before extra-ordinary item
Extra Ordinary Item
NET CASH FROM OPERATING ACTIVITIES
(B) CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets
Disposal of Fixed Assets
Sale / Purchase of Investments
Interest Received
Dividend Received
Net cash used in investing activities
(C) CASH FLOW FROM FINANCING ACTIVITIES
Share Application Money
Proceeds from Long Term borrowings
Repayment from Short Term borrowings
Interest paid
1,693.42 1,570.98 1,481.75 1,472.89 1,876.57
(194.51) (70.76) (61.79)
(1.20)
(14.66)
(272.57) (4.80)
(6.69) (331.42)
2,126.66 1,764.13 1,890.76 1,917.19 2,411.58
(638.45) (33.47)
3.58
(0.83)
307.33
(20.00)
(8.00)
23.17
14.59
59.41
165.13
23.36
76.49
85.63
(190.28)
(2.37)
(68.77) (112.18) (106.21) (43.61)
(0.24)
(7.97)
(0.60)
(56.58) (172.91)
(21.51)
4,606.79 5,085.12 2,402.50 3,882.39 627.90
(175.07) (1,554.62) 891.00 (1,365.76)
(3,505.37) 1,164.19 (1,916.27) (2,379.58)
4,207.17 (537.18) 1,270.59 (2,655.61)
526.73 (927.61) 245.32 (6,400.95)
5,133.52 4,157.51 2,647.82 (2,518.56)
(102.07) (246.38) 49.36
48.33
5,031.45 3,911.13 2,697.18 (2,470.23)
(4.97)
(3.50)
(4.45)
(13.31)
5,026.48 3,907.63 2,692.73 (2,483.54)
(4,669.13) (2,591.14) (1,762.27)
987.61
382.28
19.85
(239.89) (2.31)
220.00
269.22
3.80
6.62
3.35
1.00
0.07
(3,648.84) (2,206.37) (1,515.73)
(3,648.84) (2,206.37) (1,515.73)
(975.55)
9.68
12.76
327.57
3.85
(621.69)
(621.69)
662.36
2,098.72
2,542.99
5,304.07
5,931.97
(42.73)
5,889.24
(16.54)
5,872.70
(579.70)
4,839.04
(2,499.96)
0.36
1,759.74
1,759.74
1,219.99 1,487.88
725.02
981.31
130.11
884.84 (503.41) (2,930.46)
(249.02) (227.89) (812.90) 797.89 (207.62)
(2,019.84) (1,817.26) (2,035.87) (2,251.82) (2,145.47)
(1,287.55) (1,915.04) (743.94) 255.56 (5,283.55)
90.09 (213.78) 433.06 (2,849.67) 2,348.89
Net increase in cash and cash activities (A + B + C)
1,734.06 1,947.84 1,514.78 4,364.45 2,015.56
Cash and cash equivalents (Opening Balance)
1,824.15 1,734.06 1,947.84 1,514.78 4,364.45
Cash and cash equivalents (Closing Balance)
NET INCREASE / (DECREASE) AS DISCLOSED ABOVE 90.09 (213.78) 433.06 (2,849.67) 2,348.89
134
NOTE ON CONSOLIDATION OF ACCOUNTS OF SUBSIDIARY
Annexure
XVII
Consolidated accounts have not been prepared since the Company’s Subsidiary Innovassynth
Investments Limited is covered by Clause 11 (a) of Accounting Standard 21 issued by the Institute of
Chartered Accountants of India.
135
B)
INNOVASSYNTH INVESTMENTS LIMITED
STATEMENT OF ASSETS AND LIABILITIES FOR YEAR ENDED MARCH 31, 2008
Annexure XVIII
Particulars
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Total (A)
Investments (B)
Current Assets, Loans & Advances
Inventory
Sundry Debtors
Loans and Advances
Total (C)
Total Assets (A+B+C) = D
Liabilities and Provisions
Current Liabilities
Provisions
Secured Loans
Unsecured Loans
Deferred Tax (Asset)/Liabilities (net)
Total (E)
Net Worth (D-E)
Net Worth represented by
Reserve and Surplus
Securities Premium Account
Profit & Loss account
Sub-Total
adjusted)
Net Worth
(Rupees in Lacs)
31st March,
2008
2.29
2.29
2.29
2.29
5.00
(to the extent not written off or
2.71
2.29
136
Annexure XIX
Significant accounting policies: a.
System of Accounting:
The Financial statements are prepared under historical cost convention on an accrual concept in
accordance with the applicable Accounting Standards.
b.
Miscellaneous Expenditure
Preliminary Expenses will be amortized from the Commencement of the Business.
137
CASH FLOW STATEMENT FOR THE PERIOD FEBRUARY 15, 2008 TO MARCH 31, 2008
Annexure XX
(Rupees in Lacs)
Particulars
Cash flows from Operating Activities
Net Cash from Operating Activities (A)
Cash flows from Investing Activities
Preliminary Expenses
Net cash from Investing Activities (B)
Cash flows from Financing Activities
Net cash used from Financing Activities (C )
Net increase in Cash and Cash Equivalents (A+B+C)
Cash and cash equivalents as on February 15, 2008 (Opening Balance)
Cash and cash equivalents as on March 31, 2008 (Closing Balance)
Net Increase / Decrease as disclosed above
31st March, 2008
(2.71)
(2.71)
5.00
5.00
2.23
2.29
2.29
138
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You should read the following discussion of our financial condition and results of operations together with our
audited financial statements for the fiscal years ended March 31, 2004, 2005,2006,2007, 2008 and including the
significant accounting policies and notes thereto and reports thereon which appear elsewhere in the Draft
Letter of Offer. These financial statements have been prepared in accordance with Indian GAAP, the Companies
Act and as required under the SEBI DIP Guidelines.
Unless indicated otherwise, the financial data in this section is derived from our financial statements prepared
in accordance with Indian GAAP and included in the draft Letter of Offer. The following discussion is also
based on internally prepared statistical information and publicly available information. You are also advised to
read the section titled “Risk Factors” beginning on page viii of the Draft Letter of Offer, which discusses a
number of factors and contingencies that could affect our financial condition, results of operations and cash
flows.
Our fiscal year ends on March 31of each year. All references to a particular fiscal year are therefore to the 12month ending March 31 of that year. Please refer to the chapter titled “Definitions and Abbreviations”
beginning on page i of the Draft Letter of Offer to refer to certain industry, technical and financial terms with
initials capitalised in this section.
Overview of the business of our Company
In India skilled manpower like scientists, chemists and engineers are easily available at competitive rates. As the
new activity is “knowledge based” requiring a different focus, our Company decided to transfer the Chemicals
division at Khopoli to another entity called Innovassynth Technologies (India) Limited. The term “knowledge
based” means any activity, which requires use of specialised knowledge of the employees. Innovassynth
Technologies (India) Limited is engaged in Customs Synthesis, Contract manufacture and Contract R&D work
which requires specialised knowledge of Chemistry and as such it has to rely on the specialist employees having
the requisite qualifications and experience.
Polyesters Limited” which became effective from November 05, 2002. (“Futura” is the registered trademark of
our Company under which it markets its products.)
Our Company has one manufacturing facility at Chennai, currently consistingof three major activities, namely,
2008 are as under:
Product
annum
139
38,500
57,000
PET Preforms
20,000
operations on job work basis for our Company for some time and the facilities were shifted, during 1997from
Our Competitive Strengths
6
Our Promoters Mr. Shyam Bhupatirai Ghia and Mr. Mukund Dharamdas Dalal are well qualified and
possess vast industry experience of more than three decades. Our management team also possesses the
requisite qualifications and experience commensurate with their responsibilities. As of March 31, 2008 our
total employee strength is 827. We aim to recruit talented employees and assist them in further development
of their skills and expertise.
7
Inhouse Research and Development facilities
Our inhouse Research and Development (R&D) facilities enable us to produce innovative and quality
products. Experts in the relevant fields are employed to carryout continuous development activity to
produce specialty products to cater to varied customers’ needs. Our R&D efforts have led us in the
development of products such as Special Hot Fill Resin for fruit juice application, Special Wave-PET Resin
for dual ovenable trays, Special Jar PET Resin as Poly Carbonate substitute for five gallon water jars, Beer
PET Resin for tunnel pasteurisable Beer with CO2, O2 barrier, Easy Dyeable Resin/V-Flex Resin for textile
applications, Green PET Resin with 20% recycled content, Heavy metal free Resin and Resin for
pasteurisable juice containers and such specialised applications. Our R&D efforts have led us to patenting
process for producing Fast Reheat Bottle Grade PET Resin and product patent pertaining to Thermo Plastic
Crystalline PET. Since we operate in a dynamic industry, our R&D efforts are continuous so as to
supplement our product base with newer and quality products.
8
We have a well-established marketing network present in India and abroad. We market our Preforms and
Resin products directly to our customers and Fibre products primarily through commission agents.
Presently, we have eleven commission agents in India and nine outside India. We market our products in
Europe, Middle East, USA and South East Asian countries. We interact with our customers on a regular
basis to understand their specific needs and latest trends in the industry so as to serve them better.
9
Diverse product mix
Our diverse product mix enables us to serve varied customers’ needs in a short span of time. We have
presence in Polyester Fibres, PET Resins and Preforms products. Our Polyester fibre products are speciality
coloured fibres. We are able to change our product mix to suit our customers’ needs quickly due to our
flexible batch product lines. We have through our R&D efforts developed speciality fibres like V-Flex High
Shrink, Flame retardant moisture management and special effects fibres. We also manufacture products like
Polyester Tow, Tops and Low Pill Fibres. Polymer products cover the entire range of Polyesters namely,
PET, PEN, PTT, PBT, PTN, PBN. Our PET Preforms are used by bottling units for blowing into bottles of
different sizes for filling juices, carbonated beverages and water. We have developed speciality performs
for small Carbonated Soft Drink, beer and Pasteurable containers.
10 Focus on Specialty segment
We are focused on specialty niche segment, as we believe that our margins can improve by targeting
customers in that segment. Based on our understanding of the dynamic nature of the industry in which we
operate, we devise our business strategy accordingly. It is realized that the Commodity PET Resin market is
increasingly turning regional and exports are going to be increasingly difficult. Nevertheless, we have
completed R&D initiative to launch a wide range of Speciality PET Resins such as Fast Reheat Resin for
140
High Speed blow moulding, Hot Fill Resin for fruit juice application, Wave PET Resin for dual ovenable
trays, Jar PET Resin as Poly Carbonate substitute for five gallon water jars, Beer PET Resin for Beer with
C02 /02 barrier, cationic dyeable resin easy dyeable resin for textile applications, Green PET Resin, with
20% recycled content for US eco-label compliance and heavy metal free Resin.
Collaborations/tie-ups/associations
As on the date of Draft Letter of Offer, we have not entered into any collaboration/tieups/association
Factors affecting our results of operations
Our business, results of operations and financial conditions are affected by the following factors: Our business plans may need substantial capital and additional financing in the form of debt and/or equity to
meet our requirements.
Our business requires a substantial amount of working capital. In many cases, working capital is required to
finance the purchase of materials. Our working capital requirements may increase if, in certain contracts,
payment terms do not provide for advance payments to us or if payment schedules are less favorable to us. We
may need additional financing in the future in the form of debt and/or equity to fulfill our working capital needs.
Continued increases in working capital requirements may have an adverse effect on our financial condition and
results of operations.
If we are unable to attract and retain key employees, our operations could be adversely affected.
Our business substantially depends on the continued service of our key managerial personnel. The loss of the
services of our key managerial personnel could have a material adverse effect on us. Our future success will also
depend on our ability to attract highly skilled personnel, such as engineering, project management and senior
management professionals. We could experience difficulty from time to time in hiring the personnel necessary
to support our business. If we do not succeed in attracting new high quality employees, our reputation may be
adversely impacted harmed and our future earnings may be negatively impacted.
Increase in the cost of raw materials, particularly petroleum-based raw materials, have put pressure on our
margins and could have a material adverse impact on our financial condition and results of operations.
Volatility of raw material prices may have a negative impact on the financial performance of our Company.
The raw materials required to manufacture polyester; preforms and PET resins are procured from
petrochemicals, which are derived from hydrocarbons. These hydrocarbons are further extracted from crude oil
and natural gas. Constant fluctuation in the price of crude oil in the international market has a direct impact on
our cost of manufacturing. This consequent volatility in the price of our raw material may exercise a negative
impact on the profitability of our product and financial performance of our Company.
Production of polyesters, performs and PET requires raw materials which are procured from petroleum-based
products. The cost of raw materials consumed by our Company constituted approximately 53.9% of our
Company’s net sales for FY 2008 and approximately 57.2% of our Company’s net sales for FY 2007. Constant
increase in the price of crude oil in the international market, specially in the last couple of years, has a direct
impact on our cost of manufacturing. Any increase in the cost of the raw materials can adversely impact our
profit margins if we are unable to pass on the increased cost on to our customers. Further, even if we are able to
pass on the increase in raw material prices to our customers, this may reduce the demand for our products. To
the extent that our Company uses virgin raw material (vis-à-vis recycled raw material), this consequent volatility
in the price of raw materials may have a material adverse impact on our business, financial condition and results
of operations.
The demand for PSF is substantially dependent on the prices of other fibres (primarily cotton), and reduction
in prices of other fibres may adversely affect PSF demand.
One of our key products is PSF, which accounted for 41.42% and 46.69% of our sales in FY 2007 and FY 2008.
PSF is primarily used in the textile industry, and is blended with other fibres (including cotton) in textile
production. The blending percentage in the textile industry depends, in part, upon the prices of the respective
fibres used in the blend. Any fall in the prices of other fibres (primarily cotton), on account of excess production
or otherwise, may lead to reduction of percentage of PSF in the blends, thereby adversely affecting the demand
for PSF, which would have a material adverse effect on our turnover, and consequently on our business, results
of operations and financial condition.
141
Our Company places heavy reliance on the import of raw material
Our Company has to rely heavily on the import of raw materials for manufacturing polymer. Timely
Pprocurement of raw material is the most critical aspect of our manufacturing operation and the same is subject,
inter alia, to laws monitoring the import in India as also laws governing exports in the countries/territories from
where the exports originate, soverign and territorial factors, among others. Further, aAny change in the importexport policy by the Government of India may have a negative impact on the import of our raw materials.
At times our Company has to depend on third party manufacturers for the supply of polymer and disruption
in their operations may have a negative impact on our manufacturing operations.
Our Company has in house provision for the manufacture of polymer, which acts as a raw material for
generating performs. However, there are occasions when in order to execute orders in bulk, our Company has to
procure polymer from other manufacturers. Our Company has relied on these suppliers in times of exigencies
pertaining to the supply of polymer. Any change in the supply pattern of third party suppliers may have a
negative impact on the manufacture of performs, in case of any paucity in the in house manufacture of polymer.
Potential fluctuations in future operating results on account of increase in raw material costs, transportation
costs etc.
The factors for potential fluctuations in future operating results include are:
a.
Cost of Raw Materials
Purified Terepthalic Acid and Mono Ethylene Glycol are the major raw materials used in the manufacturing
of our products. A major portion of the requirements of the basic raw materials by our Company is
imported. The cost of such materials to ourour Company depends upon the prices ruling in the international
commodity markets at the time of imports, over which our Company do not have any control. Any increase
in the price of PTA and MEG would directly affect the margins profitability of our Company.
b.
Labour Union
Our Company employs a large number of work force at its manufacturing plant. The factory workers are
affiliated to particular Trade Union(s). Any concerted industrial action could always disrupt the production
volume and consequently the sales growth of our Company.
c.
Transportation
Timely delivery of products is critical for our performance. We use third-party transporters for the supply of
raw materials to our factories and for delivery of finished products to our customers. Any hindrance in the
logistics network, serious strike, stoppage of work, etc by the fleet owners could cause an adverse effect on
our receipt of supplies and our ability to deliver our finished products in time, which could impact our
business. Further, high transportation cost and escalation thereof may affect our profitability. Our Company
engages a large number of heavy and light commercial trucks for movement of both raw materials to its
manufacturing plants and finished products to its distribution centers and thereafter to its end customers.
Any serious strike, stoppage of work, etc by the fleet owners could disrupt the production and sales volume
of our Company.
Our existing manufacturing unit is geographically located in Manali, Chennai. Any unrest or natural
calamity in this unit can break down our operations which will adversely affect our operations.
Our manufacturing units at Manali, Chennai and our business operations are vulnerable to damage or
interruptions in operations due to adverse weather conditions, earthquakes, tsunami, fires, explosions, power
loss, software flaws, viruses, transmission cable cuts or similar events. Any failure of our systems or any
shutdown of any part of our manufacturing units, networks, operations because of operational disruption, natural
disaster such as flood or earthquake, or otherwise, could disrupt our services and result in significant costs.
While our Company has not in the past experienced any interruptions, either due to a natural disaster or a
systems failure, tFurther, there can be no assurance that business continuity plans we have developed to cover
material breakdowns or damage to our manufacturing units, network or critical operating equipment will be
sufficient to maintain our operations in all adverse circumstances.
Any loss of or breakdown of machinery at any of the our manufacturing facility at Manali, Chennai may
have an adverse affect on business, financial condition and results of operations
142
Our Company’s manufacturing facility at Manali, Chennai is are subject to operating risks, such as the
breakdown or failure of equipment, power supply or processes, performance below expected levels of output or
efficiency, obsolescence, labour disputes, industrial accidents and the need to comply with the directives of
relevant government authorities. The occurrence of any of these risks could significantly affect its operating
results. Our business and operations may be adversely affected by any disruption of operations at our
manufacturing facilities.
Our significant accounting policies
System of Accounting
The financial statements are prepared under Historical cost convention on an accrual basis except for certain
fixed assets which have been revalued.
Fixed Assets and Depreciation
Fixed Assets
Fibre, Resin and Preforms Divisions.
Fixed Assets are stated at cost less depreciation. Cost comprises of Cost of acquisition, cost of
improvements and any attributable cost of bringing the asset to condition for its intended use. Interest on
loans taken for the procurement of specific assets accrued upto the date of acquisition/ installation of the
said assets is capitalised along with the cost of the assets.
Depreciation
Fibre Division:
Depreciation has been provided on Plant and Machinery and Research and development facilities on
straight line basis and on other assets on written down value basis at the rates specified in Schedule XIV of
the Companies Act, 1956 as amended from time to time. Certain Plants have been treated continuous
process Plants based on technical and other evaluation. However, higher rate of depreciation has been
provided on certain Plant and Machinery ranging from 6.75% -12.50% compared to 5.28% of Schedule
XIV rate, based on technical evaluation. The total accumulated depreciation is restricted up to 95% of the
Gross Block Value.
Depreciation has been provided on all assets on straight line basis at the rates specified in Schedule XIV of
the Companies Act, 1956 as amended from time to time. However, higher rate of depreciation has been
provided on certain Plant and Machinery ranging from 6.75%-12.50% compared to 5.28% of Schedule XIV
rate, based on technical evaluation. The total accumulated Depreciation is restricted up to 95% of the Gross
Block Value.
143
Investments
Investments are classified into current and long term investments. Current investments are stated at the
lower of cost and fair value, Long term investments are stated at cost. A provision for diminution is made to
recognise a decline, other than temporary, in value of long term investments.
Income on Investments:
Dividend income is accounted when right to receive payment is established.
Interest income is accounted on accrual basis.
Inventories
Inventories are valued as under:
i.
Fibre Division and Chemical Division
Raw materials, packing materials, stores and spares: at Cost (Weighted average method) Materials-in-transit
and semi finished goods: at Cost. (Weighted average method)
Finished goods: at lower of cost or net realisable value. (Weighted average method)
Traded items: at lower of cost or net realisable value. (Weighted average method)
ii.
Raw materials: At Cost (FIFO)
Semi finished Goods: At Cost (FIFO)
Finished goods: At lower of cost or net realisable value (Cost FIFO Basis)
Stores, Spares and Packing Materials: At Cost (FIFO).
Sales and Services
Sale of goods is recognised on despatch to customers. Sales include amounts recovered towards excise
duty, but exclude amounts recovered towards sales tax. Service income is recognised as per terms of
agreements.
Export Incentives
Export Incentives are accounted on an accrual basis.
Foreign Currency Transactions
Transactions in foreign currencies are recorded at current rates except transactions covered by forward
contracts. Assets and Liabilities denominated in foreign currency are restated at the year end rates. All
exchange gains and losses except those relating to acquisition of fixed assets which are adjusted to the
carrying cost of such assets, are accounted for in the Profit and Loss Account.
Revenue expenditure on research and development is charged as an expense in the year in which they are
incurred. Capital expenditure is shown as an addition to Fixed Assets.
New Product Development Expenditure
Expenditure incurred on development of new products are amortised over a period of 10 years.
Employee Benefits
i.
Defined Contribution Plan
144
Company’s contributions paid /payable during the year to Superannuation Fund, ESIC and Labour
Welfare Fund are recognized in the Profit and Loss Account. There are no other obligations other than
the contribution payable to the respective trust / Fund. Company’s Contribution towards Superannuation
and ESIC is based on a percentage of salary which is made to an approved fund.
ii.
Defined Benefit Plan
Company’s Contribution towards Provident Fund is based on a percentage of salary which is made to an
approved fund.
Company’s Contribution towards Gratuity is made to an approved fund as per actuarial valuation
certificate obtained from an actuary, which is determined using projected unit credit method.
iii. Short term compensated absences are provided as per actuarial valuation certificate obtained from an
iv. Long term employee benefit
Long term compensated absences are provided as per actuarial valuation certificate obtained from an
v.
J.
Actuarial gains / losses are immediately taken to profit and loss account and are notdeferred.
Deferred Revenue Expenses:
Voluntary Retirement Scheme related payments are amortised over a period of 5 years
K. Taxes on Income
i. Current Tax: Provision for Income Tax is determined in accordance with the provision of Income Tax
Act, 1961.
ii. Deferred Tax Provision: Deferred tax is recognised on timing differences between the accounting
income and the taxable income for the year and quantified using the tax rates and laws enacted or
subsequently enacted on the Balance Sheet date. Deferred tax assets are recognised and carried
forward to the extent that there is a reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
Overview of our Results of Operations
Income
We derive our income from (i) Sales income and (ii) other income.
Sales income
The following table sets forth our product wise income i.e., PSF, PET Resin and PET Preform for the periods
FY 2008, FY2007, FY 2006, & FY2005.
(Rs. in lacs)
Particulars
Polyester Staple Fibre
PET Resin
PET Preforms
Total income
2007-08
Amount
%
20,911.66
46.69
15,235.26
34.02
8,641.21
19.29
44,788.13
100.00
2006-07
Amount
%
22,486.94
41.42
23,780.16
43.80
8,022.95
14.78
54,290.05
100.00
2005-06
Amount
%
22,433.09
43.95
20,997.11
41.13
7,617.24
14.92
51,047.44
100.00
2004-05
Amount
%
26,839.49
53.57
12,414.43
24.78
10,843.28
21.65
50,097.20
100.00
145
Other Income
Other income includes income from dividend on investments, profit on sale of fixed assets, income from interest
and other miscellaneous income. Other income as a percentage of total income was 3.04 %, in the fiscal 2008.
Expenditure
The major components of expenditure of our Company are raw materials consumed, personnel expenses,
administrative and selling expenses, finance expenses, depreciation, and preliminary expenses written off. The
following table shows various expenses for past 5 years.
a. Expenses as a % of Total Expenses
(Rs. In lacs)
Particulars
EXPENDITURE
Raw material consumed
Staff Costs
Other Manufacturing Exp.
2007-08
2006-07
2005-06
2004-05
2003-04
Amount
%
Amount
%
Amount
%
Amount
%
Amount
%
23,590.41 56.30 29,400.62 59.24 29,802.01 59.82 28,881.78 59.49 23,200.74 53.23
1,690.89 4.03 2,009.97 4.05 1,990.54 4.00 1,833.13 3.78 1,982.94
4.55
10,055.20 24.00 11,822.37 23.82 11,372.38 22.83 11,001.91 22.66 10,325.83 23.69
Administration Exp.
1,265.81
Selling & DistributionExp 1,479.22
3.02
3.53
Purchase of traded items
0.00
0.00
Interest
2,126.66 5.08
Depreciation
2,577.57 6.15
Less: - Transfer from
(884.15) (2.11)
Revaluation Reserve
Total
41,901.61 100.00
1,111.74
1,946.43
2.24
3.92
0.00
1,764.13
2,478.71
(907.73)
1,083.47
2,198.18
2.17
4.41
1,092.17
2,345.33
2.25
4.83
0.00
0.00
3.56
4.99
1,890.76
2,391.90
0.00
0.00
3.80
4.80
1,917.19
2,410.31
(937.42)
(1.83) (910.15) (1.83)
1,247.95
2,370.26
2.87
5.44
0.00
170.48
0.39
3.95
4.97
2,411.58
2,188.33
5.53
5.02
(1.93)
(311.76)
(0.72)
49,626.24 100.00 49,819.09 100.00 48,544.40 100.00 43,586.35 100.00
b. Expenses as a % of Total Income
(Rs. In lacs)
Particulars
2007-08
EXPENDITURE
Amount
%
23,590.41 53.94
Staff Costs
1,690.89
3.87
Other Manufacturing Exp. 10,055.20 22.99
Administration Exp.
1,265.81
2.89
Selling & DistributionExp
1,479.22
Purchase of traded items
Interest
0.00
2,126.66
2006-07
Amount
%
29,400.62 57.20
2,009.97
3.91
11,822.37 23.00
1,111.74
2.17
3.38 1,946.43
0.00
0.00
4.86 1,764.13
2005-06
Amount
%
29,802.01 60.79
1,990.54
4.06
11,372.38 23.20
1,083.47
2.21
3.79 2,198.18
0.00
0.00
3.43 1,890.76
2004-05
Amount
%
28,881.78 58.39
1,833.13
3.71
11,001.91 22.24
1,092.17
2.21
4.48 2,345.33
0.00
0.00
3.86 1,917.19
2003-04
Amount
%
23,200.74 58.09
1,982.94
4.97
10,325.83 25.85
1,247.95
3.12
4.74 2,370.26
0.00 170.48
3.88 2,411.58
5.93
0.43
6.04
Depreciation
2,577.57
5.48
5.89 2,478.71
4.82 2,391.90
4.88 2,410.31
4.87 2,188.33
Less: - Transfer from
(884.15) (2.02) (907.73) (1.77) (910.15) (1.86) (937.42) (1.90) (311.76) (0.78)
Revaluation Reserve
Total
41,901.61 95.80 49,626.24 96.55 49,819.09 101.62 48,544.40 98.14 43,586.35 109.13
Profit before Tax
1835.44 4.20 1770.65 3.45 (795.69) (1.62) 920.06
1.86 (3648.00) (9.13)
The raw material consumed comprises of a significant portion of the expenditure. The main raw material used in
our business is Purified Terephtalic Acid (PTA) and Mono – Ethylene Glycol (MEG). In the fiscal year 2008,
raw material expenses were 56.30 % of the total expenditure.
Manufacturing and other expenses
Manufacturing expenses comprises of manufacturing fees, material handling charges, power and fuel, stores,
spares, packaging material, and repair and maintenance. Power and fuel are the major component of the
manufacturing expenses. In the fiscal year 2008, power and fuel expenses were approximately 57 % of the total
manufacturing expenses and stores, spares and packaging material accounted for approximately 31 % of the
manufacturing expenses.
Staff Costs
Our staff costs consist of salaries, wages and bonus. These expenses are approximately 4 % of the total
expenditure for the fiscal year 2008.
146
Administration, selling and distribution expenses
Our administration expenses comprise of insurance charges, rent, rates and taxes, audit fees, fees for taxation
matters, certification services etc. Our selling expenses comprises of travelling and conveyance, freight,
commission on brokerage and sales etc. These expenses vary from 6 % to 8 % of the total expenditure in past
few years. For the fiscal year 2008, these expenses were 6.55 % of total expenditure.
Finance Expenses
Finance expenses comprise of the interest on term loan, fixed deposits, short-term deposits and other bank
charges. For the fiscal year 2008, these expenses were 5.08 % of total expenditure.
Taxes
Income Taxes are accounted for in accordance with Accounting Standard – 22 issued by the ICAI on
“Accounting for Taxes on Income”. Taxes comprises of both current and deferred taxes. Provision for current
taxes is made at the current tax rates after taking into consideration the benefits admissible under the provisions
of the Income Tax Act 1961. For further details of our tax benefits, please refer to section titled "Statement of
Tax Benefits" on page no 25 in the draft Letter of Offer.
Deferred tax arises from the timing differences between book profits and taxable profits that originate in one
period and are capable of reversal in one or more subsequent periods and is measured using the tax rates and
laws that have been enacted or subsequently enacted as on date of financial statements. We provide for deferred
tax liability on such timing differences subject to prudent considerations in respect of deferred tax assets. The
significant timing differences include the difference in depreciation as per books of accounts and Income Tax
Act 1961. Deferred tax arising on timing differences between book profits and tax profits has not been
accounted as the same are reversing within the tax holiday period.
Earning before interest, depreciation, tax and amortization (EBIDTA)
The EBIDTA of our company is 12.93 % for the fiscal 2008. EBIDTA has increased from Rs. 5105.76 lacs in
the fiscal year 2007 to Rs. 5655.52 lacs in the fiscal year 2008.
Review of Financial Position
Fixed Assets
Fixed assets of our Company comprises of land, building, plant and machinery, furniture, fixture, vehicles etc
used in our construction business. In the year 2008, the plant and machineries were 41.12 % of the fixed assets
of our Company. As mentioned in the table below, there has been a consistent growth in the fixed assets in tune
with increased operations.
(Rs. In lacs)
Particulars
Fixed Assets
Gross Block
Less: Depreciation
Net Block
2007-08
59,885.68
25,997.55
33,888.13
2006-07
43,437.40
23,776.81
19,660.59
2005-06
41,637.34
21,438.63
20,198.71
2004-05
40,134.39
19,071.16
21,063.23
2003-04
39,530.90
16,698.29
22,832.61
Current Assets
Our Current assets comprise of inventory, sundry debtors, cash and bank balances, loans and advances. The
current assets are increasing every year with the growth in the business. Inventory comprises of stores, spares,
packaging materials, raw materials, semi finished goods and finished goods. Loans and advances mainly
comprise of advances recoverable in cash, advance payment of tax, balances with excise, customs etc.
(Rs. In lacs)
Particulars
Inventory
Sundry Debtors
Loans and Advances
Total
2007-08
2006-07
11,825.74
8,320.37
3,742.01
3,647.75
1,824.15
1,734.06
2,651.44
2,760.63
20043.34
16,462.81
2005-06
9,484.56
2,464.08
1,947.84
2,525.71
16,422.19
2004-05
2003-04
7,568.29
5,188.71
4,230.74
2,534.73
1,514.78
4,364.45
1,767.76
2,225.11
15,081.57 14,313.00
147
Current liabilities and provisions
Current liabilities and provisions mainly comprises of sundry creditors, advance from customers and other
liabilities.
(Rs. In lacs)
Particulars
Liabilities
Provisions
Total
2007-08
2006-07
14,971.69
11,096.21
877.99
775.36
15,849.68
11,871.57
2005-06
11,902.68
709.31
12,611.99
2004-05
10,900.22
638.27
11,538.49
2003-04
13,186.00
625.50
13,811.50
Non-Current liabilities
Secured loans are mainly term loans and working capital loans. Unsecured loan is the loan from financial
institutions, banks, employees, shareholders and inter corporate deposits.
(Rs. In lacs)
Particulars
2007-08
Secured Loans
11,585.42
Unsecured Loans
4,327.35
Deferred
Tax
74.57
(Asset)/Liabilities (net)
2006-07
10,604.11
4,437.61
2005-06
10,474.00
4,662.89
2004-05
9,734.59
5,452.95
2003-04
10,541.62
4,507.62
541.19
975.13
1,115.87
1,486.20
Summary Statement of Profits and Losses
(Rs. In lacs)
For the year ending 31st march
Particulars
2007-08
2006-07
2005-06
2004-05
2003-04
INCOME
Less: - Excise Duty
Service Income
44,814.30
4,464.34
1,012.80
56,146.50
4,621.98
181.90
52,138.73
5,023.54
-
52,175.54
4,956.42
174.72
45,205.23
4,341.82
124.81
Total
Other Income
(Less)/Add: (Increase)/Decrease in
Inventories
41,362.76
1,295.89
51,706.42
520.17
47,115.19
487.99
47,393.84
587.72
40,988.22
610.98
-1,078.40
-829.70
-1,420.22
-1,482.90
-1,660.85
EXPENDITURE
Staff Costs
23,590.41
1,690.89
29,400.62
2,009.97
29,802.01
1,990.54
28,881.78
1,833.13
23,200.74
1,982.94
Interest
10,055.20
1,265.81
1,479.22
2,126.66
11,822.37
1,111.74
1,946.43
1,764.13
11,372.38
1,083.47
2,198.18
1,890.76
11,001.91
1,092.17
2,345.33
1,917.19
10,325.83
1,247.95
2,370.26
170.48
2,411.58
2,577.57
2,478.71
2,391.90
2,410.31
2,188.33
(884.15)
(907.73)
(910.15)
(937.42)
(311.76)
1,835.44
1,770.65
(795.69)
920.06
(3,648.00)
8.39
25.39
57.75
86.39
1,626.97
264.62
-
31.51
100.61
100.61
100.61
1,827.05
203.83
2.00
1,713.75
192.28
2.00
(954.05)
2.00
733.06
2.29
(2,386.26)
2.50
Depreciation
Less:- Transfer from Revaluation
Reserve
Net Profit /(Loss) before Tax and
Extraordinary items
Add: Profit on sale of Chemical
Business
Less: Deferred VRS Gratuity
Payment
Profit / (Loss) after extra ordinary
items but before tax
148
Less: Provision for Fringe Benefit
Tax
Less: Excess Provision of Earlier
Years
NET
TAX
PROFIT/(LOSS)
Balance brought
Previous Year
23.00
(433.94)
43.00
(140.74)
(370.33)
2,188.15
(1.17)
-
-
-
-
1,127.78
1,062.53
(1,139.79)
360.44
(200.61)
1,064.57
2.04
1,141.83
781.39
982.00
2,192.35
1,064.57
2.04
1,141.83
781.39
AFTER
forward
BALANCE
CARRIED
BALANCE SHEET
28.00
(466.61)
from
TO
Comparison of fiscal year 2007 with 2008
Sales Income
Sales income decreased by 20.18 % from Rs. 56,146.50 lacs in fiscal year 2007 to Rs. 44,814.30 lacs in fiscal
year 2008. The decrease in sales income has been primarily due to debottlenecking of plant to achieve high
margin low volume specialty products, shifting to tolling business and operating some part of the specialty
chemical business through Innovasynth Technologies (India) Limited.
Other Income
Other income increased by 149.13 % from Rs. 520.17 lacs in fiscal year 2007 to Rs. 1,295.89 lacs in fiscal year
2008. The increase in other income has been due to profit on sale of land and building of Rs. 649 lacs and
interest on income tax refund of Rs. 265 lacs.
Raw material consumed decreased by 19.76 % from Rs. 29,400.62 lacs in fiscal year 2007 to Rs. 23,590.41 lacs
in fiscal year 2008. The raw materials have contributed 53.94 % to the sales revenue generated by the Company.
This has decreased in proportion to sales.
Staff Costs
Staff costs have decreased from Rs. 2,009.97 lacs in the fiscal year 2007 to Rs. 1,690.89 lacs in the fiscal year
2008, showing a decrease of 15.87 %. The decrease was primarily due to expenses capitalised.
Manufacturing expenses
Manufacturing expenses have decreased from Rs. 11,822.37 lacs in the fiscal year 2007 to Rs. 10,055.20 lacs in
the fiscal year 2008, showing a decrease of 14.95 %. The decrease was due to transfer of business to
Innovasynth Technologies (India) Limited.
Administrative, selling and distribution expenses
The administrative, selling and distribution expenses decreased from Rs. 3,058.17 lacs in the fiscal year 2007 to
Rs. 2,745.03 lacs during the fiscal year 2008 showing a decrease of 10.24 %. This decrease is mainly due to
resin turnover business going down and sales to Pepsico being made on FOB basis from CIF. It was also due to
reduction in freight due to tolling business of preforms
Financial expenses
Financial expenses increased from Rs. 1,764.13 lacs for the fiscal year 2007 to Rs. 2,126.66 lacs for the fiscal
year 2008 showing an increase of 20.55 %. The increase in financial cost is due to increase in secured
borrowings and interest rates.
Depreciation
149
The depreciation has increased from Rs. 2,478.71 lacs for the fiscal year 2007 to Rs. 2,577.60 lacs for the fiscal
year 2008 showing a increase of 3.99 %. This has been due to increase in depreciation on intangible assets.
Earning before Interest, Depreciation, Tax and Amortization (EBIDTA)
Earning before interest, depreciation, tax and amortisation has increased from Rs. 5,105.76 lacs for the fiscal
year 2007 to Rs. 5,655.52 lacs during the fiscal year 2008 showing an increase of 10.77 %.
Profit / (Loss) after tax
As a result of foregoing, our Company has grown from Rs. 1,062.53 lacs for the fiscal year 2007 to Rs. 1,127.78
lacs for the fiscal year 2008 showing an increase of 6.14 %.
Sales Income
Sales income increased by 7.69 % from Rs. 52,138.73 lacs in fiscal year 2006 to Rs. 56,146.50 lacs in fiscal
year 2007. The increase in sales income has been primarily due to increase in sales volume, particularly in
specialty resin.
Other Income
Other income increased by 6.59 % from Rs. 487.99 lacs in fiscal year 2006 to Rs. 520.17 lacs in fiscal year
2007. The increase in other income has been due to profit on sale of fixed assets.
Raw material consumed decreased by 1.35 % from Rs. 29,802.01 lacs in fiscal year 2006 to Rs. 29,400.62 lacs
in fiscal year 2007. The direct expenses have contributed 57.20 % to the sales revenue generated by the
Company. This has decreased due to disproportionate price increase in raw materials vis-à-vis finished products
Staff Costs
Staff costs have increased from Rs. 1,990.54 lacs in the fiscal year 2006 to Rs. 2,009.97 lacs in the fiscal year
2007, showing a increase of 0.98 %. The increase was is due to routine salary increase to employees.
Manufacturing expenses have increased from Rs. 11,372.38 lacs in the fiscal year 2006 to Rs. 11,822.37 lacs in
the fiscal year 2007, showing an increase of 3.96 %. The increase was due to increase in manufacturing fees
and other expenses.
Rs. 3,058.17 lacs during the fiscal year 2007 showing a decrease of 6.81 %. This decrease is mainly due to
decrease in freight charges and miscellaneous expenses.
Financial expenses
Financial expenses decreased from Rs. 1,890.76 lacs for the fiscal year 2006 to Rs. 1,764.13 lacs for the fiscal
year 2007 showing a decrease of 6.70 %. The decrease in financial cost is due to marginal utilization of cash
credit.
Depreciation
year 2007 showing an increase of 3.63 %.
Earning before interest, depreciation, tax and amortisation has increased from Rs. 2,576.82 lacs for the fiscal
year 2006 to Rs. 5,105.76 lacs during the fiscal year 2007 showing an increase of 98.14 %.
150
Profit / (Loss) after tax
As a result of foregoing, our Company has grown from a loss Rs. 1,139.79 lacs for the fiscal year 2006 to a
profit of Rs. 1,062.53 lacs for the fiscal the year 2007showing an increase of 193.22 %.
Sales Income
Sales income has decreased by 0.07 % from Rs. 52,175.54 lacs in fiscal year 2005 to Rs. 52,138.73 lacs in fiscal
year 2006. The decrease in sales income has been due to decrease in sale of fibre and perform which was offset
partly by increase in sales of polymer.
Other Income
Other income decreased by 16.97 % from Rs. 587.72 lacs in fiscal year 2005 to Rs. 487.99 lacs in fiscal year
2006. The decrease in other income has been primarily due to reduction in interest receipts.
Raw material consumed increased by 3.19 % from Rs. 28,881.78 lacs in fiscal year 2005 to Rs. 29,802.01 lacs
in fiscal year 2006. The raw materials consumed have contributed 60.79 % to the sales revenue generated by the
Company. This has been in line with the increase in sales volumes for specialty resin.
Staff Costs
Staff costs have increased from Rs. 1,833.13 lacs in the fiscal year 2005 to Rs. 1,990.54 lacs in the fiscal year
2006, showing an increase of 8.59 %. The increase was primarily due to increase in number of employees and
increase in their salaries and wages.
the fiscal year 2006, showing an increase of 3.37 %. The increase was primarily due to increase on power and
fuel.
Rs. 3,281.65 lacs during the fiscal year 2006 showing a decrease of 4.53 % mainly due to income in brokerage
on sales.
Financial expenses
year 2006 showing a decrease of 1.38 %. The decrease in financial cost is due to decrease in unsecured loans.
Depreciation
The depreciation has decreased from Rs. 2,410.31 lacs for the fiscal year 2005 to Rs. 2,391.90 lacs for the fiscal
year 2006 showing a decrease of 0.76 %.
Earning before interest, depreciation, tax and amortisation has decreased from Rs. 4,310.14 lacs for the fiscal
year 2005 to Rs. 2,576.82 lacs during the fiscal year 2006 showing a decrease of 40.21 %.
Profit (Loss) after tax
The Company has incurred a loss of Rs. 1,139.79 lacs for the fiscal the year 2006 as compared to a profit of Rs.
360.44 lacs for the fiscal year 2005 showing a decrease of 416.22 %.
151
Sales Income
Sales income increased by 15.71 % from Rs. 45,090.96 lacs in fiscal year 2004 to Rs. 52,175.54 lacs in fiscal
year 2005. The increase in sales income has been due to increase is sales volume from the preforms segment and
due to continued thrust on the specialty polymers.
Other Income
Other income decreased by 3.81 % from Rs. 610.98 lacs in fiscal year 2004 to Rs. 587.72 lacs in fiscal year
2005. The decrease in other income has been primarily due to decrease in provision no longer required written
back, sundry balances written back and decreases in miscellaneous income.
Raw material consumed increased by 24.49 % from Rs. 23,200.74 lacs in fiscal year 2004 to Rs. 28,881.78 lacs
in fiscal year 2005. The raw materials consumed have contributed 58.39 % to the sales revenue generated by the
Company. This has been in line with the growth in sales income.
Staff Costs
Staff costs have decreased from Rs. 1,982.94 lacs in the fiscal year 2004 to Rs. 1,833.13 lacs in the fiscal year
2005, showing a decrease of 7.55 %. The decrease was primarily due to savings in staff welfare expenses.
the fiscal year 2005, showing an increase of 6.55 %. The increase was primarily due to significant increase in
effluent disposal charges.
Rs. 3,437.50 lacs in the fiscal year 2005 showing a decrease of 4.99 %. This decrease was primarily due to
decrease in trading expenses.
Financial expenses
year 2005 showing a decrease of 20.50 %. The decrease in financial cost is due to reduction in secured loans.
Depreciation
year 2005 showing an increase of 10.14 %. The increase is primarily due to higher rate of depreciation being
charged on certain plant and machinery.
Earning before interest, depreciation, tax and amortisation has increased from Rs. 810.63 lacs for the fiscal year
2004 to Rs. 4,310.14 lacs for the fiscal year 2005 showing an increase of 431.70 %.
Profit (Loss) after tax
The Company has incurred a loss of Rs. 200.61 lacs for the fiscal year 2004 as compared to a profit of Rs.
360.44 lacs for the fiscal the year 2004 showing an increase of 279.67 %.
Cash flows
The table below summarizes our cash flows for the periods FY2004, FY2005, FY2006, FY2007 and FY2008
(Rs. In lacs)
Particulars
2007-08
2006-07
2005-06
2004-05
Net Cash used / from Operating Activities 5,026.48
3,907.63
2,692.73 (2,483.54)
Net cash from Investing Activities
(3,648.84) (2,206.37) (1,515.73)
(621.69)
2003-04
5,872.70
1,759.74
152
Net cash from/used in Financing Activities
Net increase in Cash and Cash Equivalents
(1,287.55) (1,915.04)
90.09
(213.78)
(7,43.94)
255.56 (5,283.55)
433.06 (2,849.67)
2,348.89
Cash flow from operating activities:
Fiscal 2008: The net cash used in operating activities was Rs. 5,026.48 lacs, which was primarily due to cash
generated from operations of Rs. 5,133.52 lacs and adjusted for depreciation of Rs. 1,693.42 lacs and further
adjusted for interest expense for an amount of Rs. 2,126.66 lacs.
adjusted for interest expense for an amount of Rs. 1,764.13 lacs.
adjusted for an interest expense of Rs. 1,890.76 lacs.
Fiscal 2005: The net cash used in operating activities was Rs. (2,483.54) lacs, which was primarily due to cash
generated from operations of Rs. (2,518.56) lacs and adjusted for depreciation of Rs. 1,472.89 lacs and further
Cash flow from investing activities
Fiscal 2008: Net cash used in investing activities was Rs. (3,648.84) lacs in fiscal year 2008, which was
primarily for purchase of fixed assets of Rs. (4,669.13) lacs and partly offset by interest receipt of Rs. 269.22
lacs and dividend receipt of Rs. 3.35 lacs.
Fiscal 2007: Net cash used in investing activities was Rs. (2206.37) lacs in fiscal year 2007, which was
primarily for purchase of fixed assets of Rs. (2,591.14) lacs and partly offset by interest receipt of Rs. 3.80 lacs
and dividend receipt of Rs. 1.00 lacs.
primarily for purchase of fixed assets of Rs. (1,762.27) lacs, purchase of investment of Rs. 220.00 lacs and
partly offset by interest receipt of Rs. 6.62 lacs and dividend receipt of Rs. 0.07 lacs.
Fiscal 2005: Net cash used in investing activities was Rs. (621.69) lacs in fiscal year 2005, which was primarily
for purchase of fixed assets of Rs. (975.55) lacs and purchase of investment of Rs. 12.76 lacs and partly offset
by interest receipt of Rs. 327.57 lacs and dividend receipt of Rs. 3.85 lacs.
primarily for purchase of fixed assets of Rs. (579.70) lacs and purchase of investment of Rs. (2,499.96) lacs and
a dividend receipt of 0.36 lacs.
Cash flow from financing activities
Fiscal 2008: Net cash from financing activities was Rs. (1,287.55) lacs in fiscal year 2008 which was primarily
proceed received from long term borrowings of Rs. 981.31 lacs and repayment of short term borrowing of Rs.
(249.02) lacs and partially offset by interest payment of Rs. (2,019.84) lacs.
Fiscal 2007: Net cash from financing activities was Rs. (1,915.04) lacs in fiscal year 2007 which was primarily
proceed received from long term borrowings of Rs. 130.11 lacs and repayment of short term borrowing of Rs.
Fiscal 2006: Net cash from financing activities was Rs. (743.94) lacs in fiscal year 2006 which was primarily for
proceed received on account of issue of equity shares of our Company of Rs. 1,219.99 lacs, net proceeds from
long term borrowing of Rs. 884.84 lacs, proceeds from short term borrowings of Rs. (812.90) lacs and partially
offset by interest payment of Rs. (2,035.87) lacs
Fiscal 2005: Net cash from financing activities was Rs. 255.56 lacs in fiscal year 2005 which was primarily for
proceed received on account of issue of equity shares of our Company of Rs. 1487.88 lacs, proceeds from long
153
term borrowing of Rs. (503.41) lacs, proceeds from short term borrowings of Rs. 797.89 lacs and partially offset
by interest payment of Rs. (2,251.82) lacs.
Fiscal 2004: Net cash from financing activities was Rs. (5,283.55) lacs in fiscal year 2004, which was primarily
for net proceeds from long-term borrowings of Rs. (2,930.46) lacs, proceeds from short term borrowings of Rs.
Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign
exchange rates of financial instruments. We are exposed to various types of market risks, in the normal course
of business. For instance, we are exposed to market interest rates and operating expenses risks. The following
discussion summarizes our exposure to different market risks.
Unforeseen conditions
Apart from the risks as disclosed under heading "Risk Factors" appearing on page viii of the draft Letter of
Offer, there are no other known trends or uncertainties that have had or are expected to have a material adverse
impact on revenue or income from continuing operations.
Transactions with Related Parties
We have certain transactions with our Promoter Group Companies. For details, please refer to the “Related
Party Transactions” under the section titled “Financial Statement” beginning on page 113 of the draft Letter of
Offer.
Status of any publicly announced new products or business segment
Other than as described in chapter titled “Business Overview” on page 31 of this Draft Letter of Offer, there are
no new products or business segments.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL STATEMENT
The Directors of the company confirm that in their opinion, no circumstances have arisen since the date of the
last financial statements as disclosed in this Draft Letter of Offer and which materially and adversely affect the
profitability of the Company, or the value of its assets or its ability to pay its liabilities within the next twelve
months.
154
SECTION VI – LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS, MATERIAL DEVELOPMENTS AND OTHER DISCLOSURES
Except as stated below, there are no outstanding litigations, suits, civil or criminal prosecutions, proceedings
before any judicial, quasi-judicial, arbitral or administrative tribunals, including pending proceedings for
violation of statutory regulations or alleging criminal or economic offences or tax liabilities, penalties imposed
in last five years against our Company, our Promoters, our Directors, our Subsidiary, our Promoter Group
Entities that would have a material adverse effect on our business and there are no defaults, non-payments or
overdue of statutory dues, institutional / bank dues and dues payable to holders of debentures or fixed deposits
and arrears of cumulative preference shares that would have a material adverse effect on our business.
Further, except as stated below, our Company, our Directors, our Subsidiary, our Promoter and Promoter Group
Entities have not been declared as willful defaulters by the Reserve Bank of India, have not been debarred from
dealing in securities and/or accessing capital markets by SEBI and no disciplinary action has been taken against
them by SEBI or any stock exchanges.
Note: In relation to Promoter Group entities, we have disclosed outstanding litigations only against the
respective Group Entities, and not by the Promoter Group Entities, as these litigations by Promoter Group
Entities are in relation to matters pertaining to their rights and liabilities, and have no bearing on the
performance or otherwise of the issuer company. Further, in relation to one of our Promoter Group Entities, H &
R Johnson (India) Limited, we have detailed litigations against that company of only Rs. 10/- lakhs and above,
and cases below that amount have been stated in a summarized manner, putting in cumulative amount involved.
Contingent liabilities
As on March 31, 2008, contingent liabilities not provided for were as follows:
Particulars
Claims against the Company not acknowledged as debts
Service Tax: - Penalty and interest demanded on technology transfer agreement between
FPL and IOCL and vice versa. ST demand on goods transport service at Supreme Court
Service Tax demand on Goods Transport Agency during the year 1997-98, departments
appeals pending in Supreme Court
Service tax credit denial on outward freight and canteen services 2005-06, 06-07 and 07-08
Central Excise – Claims against the company on various issues pending at CESTAT / High
Court / Supreme Court
Customs: Methods of calculation of duty under notification 2 / 95 & other valuation issues
Sales tax on Input use for Exports (1999-2000 and 2000-2001)
Sales Tax on interest collected (1997-98 & 2000-01) CST levied in interest charges collected
from customers
Guarantee given by the Company
Total
As on March
31, 2008
173.40
486.00
6.29
63.84
493.49
126.33
9.00
4.40
2813.00
4175.75
155
PART I – OUTSTANDING LITIGATIONS INVOLVING OUR COMPANY
A.
Civil Cases
Cases filed by our Company
Sr.
No.
Parties
1.
Futura
Polyesters
Limited
(the
“Plaintiff”) v/s
Gor
Leather
Industries
Private Limited
(the
“Defendant”)
Futura
Polyesters
Limited
(the
“Petitioner”) v/s
Metroni Drugs
Private Limited
(the
“Respondent”)
2.
3.
4.
5.
6.
Authority
before
which
pending
High Court
of
Judicature
at Bombay
Case
Number
Brief
Particulars
of
Suit/Appeal/Case/Notice/Proceeding
Amount of
claim
involved (Rs.
in lacs)
21.51
and
28% interest
on principal
amount of Rs.
7,31,836 till
payment
Suit
number
688
of
1998
This suit has been filed by the Plaintiff
for the recovery of Rs. 21,51,478.50
arising out of the alleged default in
payment by the Defendant for the sale
and delivery of the goods to the
Defendant.
High Court
of
Judicature
at Bombay
Company
Petition
number
331
of
1996
38.87
and
28% interest
on principal
amount of Rs.
25,33,436.41
till payment
Futura
Polyesters
Limited
(the
M/s
Premier
Poly
Coaters
(the
“Respondent ”)
Indian Organic
Chemicals
Limited
[now
known as Futura
Polyesters
Limited]
(the
Ganan
Industries Sales
and
Services
Private Limited
(the
“Defendant”)
Futura
Polyesters
Limited
(the
Unipon (India)
Limited
(the
“Defendant”)
High Court
of
Judicature
at Kerala
Company
Petition
number 6
of 1995
This petition has been filed by the
Petitioner for the winding up of the
Respondent Company. The Petitioner has
alleged that the Respondent is liable to
pay a sum of Rs. 38,87,954.99 along with
interest computed at the rate of 28% per
annum on Rs. 25,33,436.41 arising due to
the non - payment for the goods
purchased by the Respondent.
Petitioner for the recovery of Rs.
2,51,160 towards the alleged debt for the
supply of goods.
High Court
of
Judicature
at Bombay
Suit
number
4308 of
1995
for the recovery of Rs. 1,87,67,676.71.
The Plaintiff alleges that the Defendant
has misappropriated the amount to be
recovered by the Defendant from one of
its customers.
187.67 and
28% interest
on principal
amount of Rs.
1,06,97,143
till payment.
High Court
of
Judicature
at Bombay
Suit
number
3430 of
1994
This suit is filed by the Plaintiff for the
recovery of Rs. 56,53,411 arising out of
the alleged default of payment by the
Defendant for the sale and delivery of the
goods to the Defendant.
Futura
Polyesters
Limited
(the
Nutan
Mills
Limited
(the
“Respondent”)
High Court
of
Judicature
at Bombay
Company
Petition
number
64
of
1993
Petitioner for the recovery of Rs.
74,98,880 towards the alleged debt
outstanding towards the sale of Polyester
Staple Fibre.
56.53
and
21% interest
per annum on
the principal
amount of Rs.
28,06,226 till
payment or
realisation.
74.99
2.51
156
7.
8.
9.
10.
11.
Indian Organic
Chemicals
Limited
[now
Futura
Polyesters
Limited]
(the
Amrapali
Industries
Limited and Mr.
Yashwant
Amratlal
Thakkar
(the
“Defendants”)
Indian Organic
Chemicals
Limited
[now
Futura
Polyesters
Limited]
(the
Reliable
Texturising
Private Limited
(the
“Defendant”)
Futura
Polyesters
Limited
(the
Chemstar
Organics (India)
Limited
(the
“Defendant”)
Futura
Polyesters
Limited
(the
Libra Filaments
(the
“Defendant”)
City Civil
Court,
Ahmedabad
Summary
Suit
number
2664 of
1994
for the recovery of Rs. 11,37,169 arising
out of the alleged default in payment by
the Defendant for the sale and delivery of
the goods to the Defendant.
11.37
and
24% interest
per annum till
the date of
realisation
Court
of
Civil Judge,
Surat
Summary
Suit
number 5
of 1992
5.13 and 18%
interest per
annum on the
principal
amount of Rs.
3,89,010 till
payment or
realisation.
High Court
of
Judicature
at Bombay
Summary
Suit
number
500
of
2005
20.73
and
24% interest
per annum till
the date of
realisation
High Court
of
Judicature
at Bombay
Original
Suit
number
451
for the recovery of Rs. 13,61,919.64
arising out of the alleged default in
payment by the Defendant for the sale
and delivery of the goods to the
Defendant.
Futura
Polyesters
Limited
and
Innovassynth
Technologies
(India) Limited
(the “Plaintiffs”)
v/s
Poly
Finechem Inc,
Polytech Fine
Chemicals Inc
and Mr. Subir K
Chakraborty
(the
“Defendants”)
Superior
Court, State
of
New
Jersey,
Passaic
County,
USA
PAS-L4209-07
for the recovery of 3,91,330 US $ arising
13.62
and
18% interest
per annum on
the principal
amount of Rs.
8,88,914 till
payment or
realisation.
3,91,330 US
$
and
2,12,000 US
$ as penalties
and interest
Cases filed against our Company
Sr.
No.
Parties
Authority
before
which
pending
Case
Number
Brief
Particulars
of
Amount of
claim
involved
(Rs.
in
157
1.
2.
3.
4.
5.
Parikh
Enterprises
Limited
(the
Indian Organic
Chemicals
Limited [now
Futura
Polyesters
Limited] (the
“Defendant”)
Ganan
Industrial Sales
and
Services
Limited
(the
Indian Organic
Chemicals
Limited [now
Futura
Polyesters
Limited] (the
“Defendant”)
Canara Bank
(the “Plaintiff”)
v/s
Indian
Organic
Chemicals
Limited [now
Futura
polyesters
Limited] and
M/s
Atul
Transport
Company (the
“Defendants”)
Bank of India
(the
“Applicant”)
v/s M/s. Enarai
Finance
and
others
including
Futura
Polyesters
Limited
as
Defendant no. 5
(the
“Defendants”)
Court
of
Civil Judge,
Ahmedabad
Summary
Suit
number 677
of 1996
This suit has been filed by the Plaintiff for
the recovery of Rs. 79,249 arising out of
the alleged default in payment by the
Defendant for the sale and delivery of the
goods to the Defendant.
High Court
of
Judicature
at Bombay
Suit
number
3841
of
1995
the recovery of Rs. 41,70,062 arising out
of alleged default in payment of agency
commission by the Defendant for the
canvassing services rendered by the
Plaintiff.
High Court
of
Judicature
at Bombay
Suit
number
4287
of
1994
the recovery of Rs. 3,24,823 arising out of
alleged default in payment by the
Defendant No.1 to the Plaintiff for the
goods sold and delivered to the
Defendant no. 1 by the Defendant No. 2
under the 11 supply bills discounted with
and purchased by the Plaintiff.
Debt
Recovery
Tribunal,
Pune
Original
Application
number 413
P 2001
R.K. Gupta (the
Futura
Polyesters
Limited
through
Mr.
S.B.Ghia, Mr.
S. Rangarajan,
Mr. M.D. Dalal
and Mr. R.B.
Court
of
District
Judge, Tis
Hazari
Courts,
Delhi
Suit
number 266
of 2007
This suit has been filed as per the
provisions of Recovery of Debts due to
Banks and Financial Institutions Act. The
Applicant has filed a suit against Enarai
Finance Limited. Futura Polyesters
Limited (Defendant No. 5) had availed
lease finance facilities from Enarai
Finance Limited for its plant in Chennai.
The repayment of lease finance facilities
was scheduled to be distributed in 18
installments of Rs. 14.12 lacs together
with an amount of Rs 1.5 crores
commencing from July 1997 to August
2002. Defendant No. 5 has fully
discharged its liability to Enarai Finance
Limited and has therefore contested the
claim made by the Plaintiff.
declaration and the recovery of Rs.
7,50,000 arising out of the alleged unfair
dismissal of the Plaintiff by the Defendant
Company
lacs)
0.79
and
18%
interest per
annum till
the date of
payment or
realisation
41.70 and
18%
interest per
annum on
the
principal
amount of
Rs.
29,06,371
till payment
or
realisation.
3.25
and
18%
interest per
annum on
the
principal
amount of
Rs.
2,36,100 till
the date of
payment or
realization.
No
monetary
liability for
our
Company
7.50
and
12%
interest per
annum till
the date of
payment or
realization
158
Raheja
(the
“Defendants”)
6.
Ms. Roopinder
Singh
(the
Futura
Polyesters
Limited
(the
“Defendant”)
Court
of
District
Judge, New
Delhi
Suit
number 64
of 2008
7.
Ms. Roopinder
Singh
(the
Futura
Polyesters
Limited
(the
“Defendant”)
Court
of
District
Judge, New
Delhi
Suit
number 65
of 2008
8.
Mr.
Jatinder
Singh
(the
Futura
Polyesters
Limited
(the
“Defendant”)
Court
of
District
Judge, New
Delhi
Suit
number 66
of 2008
B.
ejection of the Defendant from the
property situated at flat number 511
having an area 585 square feet, 5th Floor,
Gagan Deep, 12, Rajendra Place, New
Delhi - 110008 belonging to the Plaintiff.
The plaintiff has further prayed for the
recovery of mesne profits / damages for
the use and occupation of the aforesaid
property and for permanent injunction
restraining the Defendant from possession
of the aforesaid property.
property situated at flat number 509 and
510 having an area 366 square feet each,
5th Floor, Gagan Deep, 12, Rajendra
Place, New Delhi - 110008 belonging to
the Plaintiff. The Plaintiff has further
prayed for the recovery of mesne profits /
damages for the use and occupation of the
aforesaid property and for permanent
injunction restraining the Defendant from
possession of the aforesaid property.
property situated at flat number 507
having an area 443 square feet, 5th Floor,
Gagan Deep, 12, Rajendra Place, New
Delhi - 110008 belonging to the Plaintiff.
The Plaintiff has further prayed for the
recovery of mesne profits / damages for
the use and occupation of the aforesaid
property and for permanent injunction
restraining the Defendant from possession
of the aforesaid property.
1.93
and
24%
interest per
annum till
the date of
payment or
realisation
2.43
and
24%
interest per
annum till
the date of
payment or
realisation
1.47
and
24%
interest per
annum till
the date of
payment or
realisation
Criminal Cases
All the complaints as stated below have been filed under Section 138 of Negotiable Instruments Act, 1881
Sr.
No.
Parties
Authority
before
which
pending
Case
Number
Brief
Particulars
of
1.
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Complainant”)
v/s M/s Venfarm
Agencies,
Mr.
Nakula Sambasiva
Rao,
Mrs.
Chaluvadi
Sita
Mahalaxmi
Additional
Chief
Metropolitan
Magistrate at
Mumbai
Criminal
Complaint
number
948/S
of
2002
The Complainant in this complaint has
alleged that the cheques issued by the
Accused towards the part payment of the
goods were dishonored
Amount
of claim
involved
(Rs. in
lacs)
9.00
159
2.
3.
4.
Kumari and Mr.
Irri
Venkata
Ramana Rao, (the
“Accused”)
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Complainant”)
v/s M/s Venfarm
Agencies,
Mr.
Nakula Sambasiva
Rao,
Mrs.
Chaluvadi
Sita
Mahalaxmi
Kumari and Mr.
Irri
Venkata
Ramana Rao, (the
“Accused”)
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Complainant”)
v/s Mr. P. Kainiki
Reddy,
(the
“Accused”)
Futura Polyesters
Limited
(the
“Applicant”) v/s
Libra Filaments,
Omprakash Jogani
Lalit
Joganiand
the
State
of
Maharashtra (the
“Respondent”)
Additional
Chief
Metropolitan
Magistrate at
Mumbai
Criminal
Complaint
number
947/S
of
2002
goods were dishonored.
5.00
Judicial
Magistrate
First Class at
Khalpur
Criminal
Complaint
number 803
of 2001
goods were dishonored
14.69
High Court
of Judicature
at Bombay
Criminal
Application
number
2424
of
2000
This Application has been filed by the
Applicant against the order dated May
25, 2000 passed by the Metropolitan
Magistrate acquitting the respondents
number 1 to 3 for the alleged dishonor of
cheques issued by the respondent
number 1.
16.00
160
C.
Sales Tax
Sr.
No.
Parties
Authority
before which
pending
Case
Number
Brief
Particulars
of
1.
Futura
Polyesters
Limited
(the
“Appellant”)
v/s.
Commercial
Tax
Officer,
Chennai (the
“Respondent”)
Assistant
Commissioner
of
Commercial
Taxes,
Chennai
Appeal
number AP
10/2008 for
the
Assessment
Year 20032004
2.
Futura
Polyesters
Limited
(the
“Appellant”)
v/s.
Commercial
Tax
Officer,
Chennai (the
“Respondent”)
Assistant
Commissioner
of
Commercial
Taxes,
Chennai
Appeal
number AP
11/2008 for
the
Assessment
Year 20042005
3.
Futura
Polyesters
Limited
(the
“Appellant”)
v/s.
Commercial
Tax
Officer,
Chennai (the
“Respondent”)
Assistant
Commissioner
of
Commercial
Taxes,
Chennai
Appeal
number AP
12/2008 for
the
Assessment
Year 20052006
4.
Futura
Polyesters
Limited
(the
“Applicant ”)
v/s
Commercial
Tax
Officer,
Chennai (the
“Respondent”)
Deputy
Commissioner
of
Commercial
Taxes
Revision
Application
number RP
10/2008 for
the
Assessment
Year 20062007
This appeal has been filed against the
notice of demand dated March 12, 2008
issued by the Respondent. The Appellant
has disputed the imposition of entire
penalty of Rs. 6,61,661 for the alleged
delay in the payment of sales tax and
filing of monthly returns under section 12
(3) (c) of TNGST Act read with section 9
(2-A) of CST Act by Commercial Tax
Officer.
issued by the Respondent. The Appellant
penalty of Rs. 9,78,697 for the alleged
delay in the payment of sales tax and
filing of monthly returns under section 12
(3) (c) of TNGST Act read with section 9
(2-A) of CST Act by Commercial Tax
Officer.
issued by the Respondent The Appellant
penalty and interest on sales tax
amounting to Rs. 5,04,641 for the alleged
delay in payment of sales tax and filing of
monthly returns under Section 12(3)(c) of
the Tamil Nadu General Sales Tax, 1959
read with Section 9(2-A) of Central Sales
Tax, 1956.
This revision application has been filed
against the order dated December 31,
2007 passed by the Respondent on
account of the claim of Input Tax Credit
(“ITC”) of Rs. 42,40,824 being restricted
to Rs. 8,31,758 on grounds inter alia of
non-submission of bills, reversal of ITC
on capital goods and on PET Bottle scrap
content in Finished goods/semi-finished
goods held in stock as on December 31,
2006.
Amount
of claim
involved
(Rs. in
lacs)
6.61
9.78
5.05
34.09
Sr.
No.
Parties
Authority
before
which
pending
Case
Number
Brief
Particulars
of
Amount
of claim
involved
(Rs. in
161
This notice of demand dated March 12, 2008
is issued by the Assessor imposing a penalty
of Rs. 14,906. The Assessor vide the notice
of demand has imposed penalty and interest
on sales tax under Section 12(3)(c) of the
Tamil Nadu General Sales Tax, 1959 read
with Section 9(2-A) of Central Sales Tax Act,
1956 for the alleged delay in payment of
sales tax and filing of monthly returns
The Assessor has issued the present notice of
demand dated March 12, 2008 for the alleged
non-payment of additional tax amounting to
Rs. 10,86,499 under Section 2(1)(aa) of the
Tamil Nadu Additional Sales Tax, 1970.
lacs)
0.15
1.
Commercial
Tax Officer,
Chennai (the
“Assessor”)
v.
Futura
Polyesters
Limited (the
“Assessee”)
Commercial
Tax Officer,
Chennai
Assessment
number
49999
for
the
Assessment
Year 20022003
2.
Commercial
Tax Officer,
Chennai (the
“Assessor”)
v.
Futura
Polyesters
Limited (the
“Assessee”)
Commercial
Tax Officer,
Manali v/s.
Futura
Polyesters
Limited
Commercial
Tax Officer,
Chennai
Assessment
number
1080067 for
the
Assessment
Year 20022003
Sales Tax
Appellate
Tribunal
NA
The Commercial Tax Officer states that the
interest collected from the customers for late
payment and for the credit period is
chargeable to sales tax and the same has to be
paid by our Company.
5.00
Commercial
Tax Officer,
Manali v/s.
Futura
Polyesters
Limited
Sales Tax
Appellate
Tribunal
NA
The differential sales tax is demanded on the
raw material purchased within the state and
the finished goods (manufactured from the
raw material so purchased) sold outside the
state.
9.00
3.
4.
D.
10.86
Export related
Cases against our Company
Sr.
No.
Parties
1.
Foreign
Trade
Development
Officer v/s
Indian
Organic
Chemicals
Limited
[now Futura
Polyesters
Limited],
Mr. Shyam
Bhupatirai
Ghia
,
Sharad
Shreepad
Marathe,
Nikhil Ghia
and Mukund
Dharamdas
Dalal
(the
“Company”)
Authority
before
which
pending
Officer of
Joint
Director
General
of Foreign
Trade
Show Cause Number
Brief
Particulars
of
Show cause notice
number
030100200093AM09/20
It has been alleged that our Company
has not utilisied the goods imported
against the export license. It has been
further alleged that the license has
been obtained on the basis of
misrepresentation and mis-declaration
of facts. Our Company has been asked
to justify why an action to impose
fiscal penalty should not be taken on
our Company and its directors under
Section 11 of the Foreign Trade
(Development and Regulation) Act,
1992.
Amount
involved
(Rs.
in
Lacs)
Not
quantifiable
162
E.
Income Tax
Sr.
No.
Parties
1.
Indian Organic
Chemicals
Limited [now
Futura
Polyesters
Limited]
(the
the
Commissioner
of Income Tax
(the
“Respondent”)
Indian Organic
Chemicals
Limited [now
Futura
Polyesters
Limited]
(the
“Appellant”) v/s
Assistant
Commissioner
of Income Tax
(the
“Respondent”)
2.
3.
Futura
Polyesters
Limited
(the
Additional
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
Authority
before which
pending
High Court of
Judicature at
Bombay
Income Tax
Appellate
Tribunal,
Mumbai
Income Tax
Appellate
Tribunal,
Mumbai
Case Number
Brief
Particulars
of
Reference Application
number 1533/Bom/1991
for the Assessment Year
1981-82
This reference application has been filed
by the Applicant for seeking opinion as
to whether the commission of Rs.
1,02,000 paid to the directors is to be
treated as part of salary for the purpose
of disallowance under Section 40(c) of
the Income Tax Act, 1961.
Appeal
number
3734/M/2004 for the
Assessment Year 19992000
order dated March 9, 2004 passed by the
Commissioner
of
Income
Tax
(Appeals)on the following grounds:
The Appeal number for
the Assessment Year
2000-2001
is
not
available as the same is
at pre-admission stage
1.
Addition of unutilised Modvat
Credit amounting to Rs. 3,74,89,699
and amount of Rs. 1,544 received as
contribution to Labour Welfare
Fund;
2.
Allowance
depreciation
9,96,17,284;
3.
Addition of Rs. 8,50,30,000 and Rs.
8,75,00,000 as revenue receipt and;
4.
Disallowance of provision for
doubtful debts amounting to Rs.
3,87,72,851
5.
Disallowance of advances of Rs.
51,54,070
6.
Disallowance of 5% of Motor Car
expenses
7.
Disallowance of prior period
expenses of Rs. 1,02,04,000
of
unclaimed
amounting to Rs.
order dated August 5, 2003 passed by the
Commissioner
of
Income
Tax
(Appeals)on the following grounds:
1.
Addition of unutilised Modvat
Credit
amounting
to
Rs.
3,05,63,493;
2.
Allowance
depreciation
of
unclaimed
amounting to Rs.
163
7,48,28,671;
3.
Disallowance of penalty under
Employees State Insurance Act
amounting to Rs. 1,54,365;
4.
Disallowance as capital receipt of
non-compete compensation of Rs.
16,12,00,000; and
5.
Disallowance of provision of
doubtful debts of Rs. 3,00,84,414;
6.
Disallowance of 5% of motor car
expenses;
7.
Disallowance of Rs. 1,02,04,000
being payment for the prior period
expenses;
8.
Disallowance
under
Section
36(1)(v)(a) of the Income Tax Act,
1961 and
9.
4.
Futura
Polyesters
Limited
(the
Additional
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
Income Tax
Appellate
Tribunal,
Mumbai
Appeal
number
3735/M/04
for
the
Disallowance of deduction for
export profits while computing the
book-profit under Section 115J of
the Income Tax Act, 1961.
This appeal has been filed by the
Appellant against the order dated March
9, 2004 passed by the Commissioner of
Income Tax (Appeals) on the following
grounds:
1.
Addition of the unutilised Modvat
Credit
amounting
to
Rs.
3,91,35,775;
2.
Allowance of the unclaimed
depreciation amounting to Rs.
10,56,07,869;
3.
Disallowance
of
repair
and
maintenance expenses of Rs.
4,18,269 to be treated as revenue
expenditure;
4.
Disallowance of club
amounting to Rs. 16,905;
5.
Disallowance of 5% of motor car
expenses ;
6.
doubtful debts amounting to Rs.
32,01,424 and
expenses
7.
5.
Futura
Polyesters
Limited
(the
Commissioner
of Income Tax
(Appeals),
Mumbai
the Assessment Year
2005-2006
is
not
Disallowance of Rs. 10,82,447
under Section 43B of the Income
Tax Act, 1961.
order dated December 31, 2007 passed
by the Deputy Commissioner of Income
Tax on the following grounds:
164
Deputy
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
1.
An amount of Rs. 18.33 lacs is
considered as income being credit
balances not written off at the year
end
2.
Disallowance of Rs. 145.43 lacs
being interest accrued on secured
loan under Section 43B of the
Income Tax Act, 1961.
3.
considered as income being the
credit balance not written off at the
year end.
4.
6.
7.
8.
Futura
Polyesters
Limited
(the
Deputy
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
Deputy
Commissioner
of Income Tax
(Appeals),
Mumbai
Futura
Polyesters
Limited
(the
Deputy
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
Income Tax
Appellate
Tribunal,
Mumbai
Futura
Polyesters
Limited
(the
Deputy
Commissioner
of Income Tax,
Mumbai
(the
“Respondent”)
Appeal
number
CIT(A)/V/5(1)/121/0607 for the Assessment
Year 2003-2004
considered as income being the
amounts payable at the year end.
order dated February 27, 2005 passed by
the Deputy Commissioner of Income
Tax on the following grounds:
1. Disallowance of prior period
expenses of Rs. 33,43,346 and
2.
Income Tax
Appellate
Tribunal,
Mumbai
Appeal
number
4705/Mum-2006 for the
Appeal
number
5596M/04
for
the
Rejecting the Appellant’s claim for
depreciation of Rs. 38,12,00,619
and allowing it to the extent of Rs.
28,21,93,101.
order dated March 10, 2005 passed by
the Deputy Commissioner of Income
Tax (Appeals) on the following
grounds:
1.
doubtful debts and advances of Rs.
1,83,34,650; and
2.
Disallowance of prior
expenses of Rs. 40,41,790.
period
However, a penalty of Rs. 79,88,389 has
been imposed vide order dated March
31, 2008 for furnishing inaccurate
particulars of income, against which
appeal has been filed before the
Commissioner of Income Tax (Appeals)
and the same is pending.
order dated June 09, 2004, passed by the
on the following grounds:
1. Allowance of depreciation of Rs.
10,09,95,134 not claimed by the
Appellant
2.
Disallowance of the provision for
doubtful debts and advances of Rs.
2,56,98,381
165
3.
Disallowance of prior
expenses of Rs. 35,75,454
period
4.
9.
Indian Organic
Chemicals
Limited [now
Futura
Polyesters
Limited]
(the
Deputy
Commissioner
of Income Tax
(the
“Respondent”)
Income Tax
Appellate
Tribunal
the Assessment Year
1989-1990
is
not
and our Company has
not received any notice
of hearing.
Disallowance of of Rs. 1,02,92,681
being (eligible) export profits under
Section 80HHC while computing
the book profit under section 115 JA
of the Income Tax Act, 1961.
order dated July 07, 1992 passed by the
on the following grounds:
1. Disallowance
of
conference
expenses amounting to Rs. 7,849
2. Disallowance of R&D
expenses of Rs. 8,584
Agro
3. Disallowance of payment clubs
amounting to Rs. 19,837
4. Disallowance of expenses of Rs.
5,86,789 under Section 37(4) of the
Income Tax Act, 1961 (“Act”)
5. Disallowance of repair expenses of
Rs. 25,209 under Section 37(4) of
the Act
6. Disallowance of rent expenses of
Rs. 2,36,760 and insurance expenses
of
Rs. 274 under
Section 37(4) of the Act
7. Disallowance of training expenses
of Rs. 20,951 under Section 37(4) of
the Act
8. Disallowance of Rs. 1,55,844 under
Rule 6B of the Income Tax Rules,
1962
9. Disallowance of amounts of Rs.
10,400, Rs. 29,854 and Rs. 18,000
under Section 40A(9) of the Act
10. Disallowance of Rs. 2,49,477 under
Rule 6B of the Income Tax Rules,
1962
11. Disallowance
of
legal
and
professional fees of Rs. 15,000
12. Disallowance of prior period
expenses under Rs. 35,81,772
13. Disallowed premium on redemption
of Debentures of Rs. 74,69,000
14. Disallowance for doubtful debts /
advances
amounting
to
Rs.
2,60,43,718
166
15. Disallowance in respect of purchase
tax of Rs. 84,000
16. Adding the provision for doubtful
debts / avances of Rs. 2,60,43,718
10.
Futura
Polyesters
Limited
(the
Additional
Commissioner
of Income Tax
(the
“Respondent”)
Income Tax
Appellate
Tribunal,
Mumbai
Appeal number ITA
1841/M/2002 for the
17. Disallowance of Rs. 1,63,73,976
under proviso 4 to Section 115J
(1A) of the Act.
order dated October 18, 2002 passed by
the Commissioner of Income Tax
(Appeals) on the following grounds:
1.
Treatment of 25% of
disallowance under Rule 6B
Income Tax Rules, 1962 as
incurred exclusively for
business.
the
of
not
the
2.
Disallowance of Rs. 1538438 under
Rule 6B of Income Tax Rules, 1962
3.
Disallowance of Rs. 971579 under
Section 37(4) of the Income Tax
Act, 1961 (“Act”)
4.
Disallowance of Rs. 14,37,240
under Section 35(2)(ia) of the Act.
5.
Disallowance of notional interest of
Rs. 15,29,700
6.
Disallowance of Rs. 7,49,535 under
Section 37(2A) of the Act
7.
Disallowance of motor car expenses
to the extent of 5% of such expenses
8.
Disallowance of provision for
doubtful debts / advances of Rs.
11,99,357
9.
Addition of interest on delayed
payment of ESIC amounting to Rs.
18,349
10. Disallowance of Rs. 5,42,924 being
payment
made
to
Khopoli
Municipal Corporation
11. Disallowance of prior
expenses of Rs. 59,825
period
Case Number
Brief
Particulars
of
Appeal
numbers
357, 358, 359 and
360 of 2008 for the
Assessment Years
These Appeals have been filed against order
dated October 31, 2007 passed by the
holding that the relief under section 80HHC of
Cases filed against our company
Sr.
No.
Parties
1.
The
Assistant
Commissioner of
Income
Tax,
Chennai
(the
Authority
before
which
pending
Income
Tax
Appellate
Tribunal,
167
2.
3.
4.
Chennai
1998-1999, 19992000, 2000-2001
and 2001-2002.
the Income Tax Act, 1961 has to be computed
on the basis of book profits as against the
normal computation of income.
High Court
of
Judicature
at Bombay
Income
Tax
Appeal
number
949 of 2007 for the
Assessment Years
1985-86, 1986-87
and 1987-88
Deputy
Commissioner of
Income
Tax,
Mumbai
(the
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Respondent”)
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
number
1179/Mum/1998
for the Assessment
Year 1994-95
This appeal has been filed against the order
dated August 25, 2006 passed by Income Tax
Appellate Tribunal holding that the sales tax
set-off does not come under the perview of
Section 43B of the Income Tax Act, 1961.
Further, the Appellant has raised questions of
law on the scope and correct interpretation of
Section 43B of the Income Tax Act, 1961 and
the jurisdiction of the Tribunal in setting aside
the disallowance of the sales tax set off made
by the Assessing Officer under Section 43B of
the Income Tax Act, 1961
dated November 28, 1997 passed by the Deputy
Commissioner of Income Tax (Appeal),
Mumbai on the following grounds:
Deputy
Commissioner of
Income
Tax,
Mumbai
(the
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Respondent”)
Income
Tax
Appellate
Tribunal,
Mumbai
Futura Polyesters
Limited
(the
“Respondent”)
Commissioner of
Income
Tax,
Mumbai
(the
Futura Polyesters
Limited
(the
“Respondent”)
Appeal
number
3799/Mum/1994
for the Assessment
Year 1990-91
1.
Allowance of the Respondent’s claim of
Guest House expenses;
2.
Allowance of proportionate premium on
redemption of debentures;
3. Disallowance of the MODVAT addition.
dated March 11, 1994 passed by the Deputy
Commissioner of Income Tax (Appeal) on the
following grounds:
1.
Allowance of relief of Rs. 348,573 out of
the total disallowance of Rs. 8,06,634
under Section 37(4) of the Income Tax Act,
1961;
2.
Allowance of relief of Rs. 1,62,924 out of
the total disallowance of Rs. 549,383 under
Rule 6D of the Income Tax Rules and
3.
5.
Commissioner of
Income
Tax,
Mumbai
(the
Indian
Organic
Chemicals
Limited
[now
Futura Polyesters
Limited]
(the
“Respondent”)
F.
Labour Cases
High Court
of
Judicature
at Bombay
Appeal
number
1614 of 2005 for
the
Assessment
Year 1997-98
Disallowance of the addition made to part
provision against premium on debentures
Rs. 29,82,141.
dated April 1, 2005 passed by the Income Tax
Appellate Tribunal. The Commissioner of
Income Tax through this Appeal has sought the
opinion of the High Court of Bombay, whether
Income Tax Appellate Tribunal was right in
confirming the decision of the Commissioner of
Income Tax (Appeals) on the allowance of
depreciation not claimed by the Respondent.
Sr.
No.
Parties
Authority
before
which
Case
Number
Brief
Particulars
of
Amount
claimed
(Rs.
in
168
1.
2.
3.
4.
Indian
Organic
Chemicals Limited
[now
Futura
Polyesters Limited]
(the “Appellant”)
v/s Madras Metro
General Workers
Union,
Government
of
Tamil Nadu, Naidu
Engineering
Corporation
Limited,
Mr.
Ravindra
(Contractor), Mr. K
V
S
Mani
(Contractor)
and
N.S.R.
Raja
Kumaran Brothers
(the
“Respondents”)
Futura Polyesters
Limited
(the
“Plaintiff”)
v/s.
The
Chairman,
Manali
Town
Panchayat,
Palli
Street,
Manali,
Chennai
(the
“Defendant”)
The management
of
Futura
Polyesters Limited
(the “Petitioner”)
v/s the Presiding
Officer
IAdditional Labour
Court and Mr. A.
Manoharan
(the
“Respondents”)
The management
of
Futura
Polyesters Limited
(the “Petitioner”)
v/s the Presiding
Officer
IAdditional Labour
Court and Mr. A.
Manoharan
(the
“Respondents”)
pending
High Court
of
Judicature
at Madras
Lacs)
Not
quantifiable
Writ
appeal
number
1870 of
2000
This writ appeal has been filed against
the order dated July 14, 2000 passed by
the High Court of Madras quashing the
government order number 1873 dated
October 27, 1989 wherein the contract
labour system in the canteen of the
Appellant was not prohibited.
District
Munsif
Court,
Tiruvottiyur
Original
Suit No.
231 of
2004
This suit has been filed against the
Defendant alleging that the Defendant
has attempted to trespass the properties
of the Plaintiff situated at Chinnasekkadu
and Sathanagadu Villages on September
20, 2004 with a view to plant trees and
fence in and around the aforesaid
property.
Not
quantifiable
High Court
of
Judicature
at Madras
Writ
petition
number
23446 of
2007
This writ petition has been filed against
award dated May 10, 2007 passed in
Complaint number 1 of 2007 directing
the petitioner to reinstate the second
respondent in service with backwages
and attended benefits.
Not
quantifiable
High Court
of
Judicature
at Madras
Writ
Petition
number
3758 and
3760 of
2008
This writ petition has been filed against
the order passed by the first Respondent
awarding a sum of Rs. 79,666 to the
second Respondent.
0.80
Sr.
No.
Parties
1.
Mr.
M.
Mahalingam (the
“Petitioner”)
v/s
The State of Tamil
Nadu,
Municipal
Administration and
Authority
before
which
pending
High
Court of
Judicature
at Madras
Case
Number
Brief
Particulars
of
Writ
Petition
number
15644 of
2007
The Petitioner has approached the Court
under Article 226 of the Constitution.
This petition is filed for an ad-interim
injunction order restraining the second
and fourth respondent from discharging
the sewage water into the Sathanakadu
Amount
claimed
(Rs.
in
Lacs)
Not
quantifiable
169
2.
3.
Water
Supply,
Tamil
Nadu
Pollution Control
Board,
Commissioner of
Thiruvotriyur
Municipality (the
“Respondents”) and
Manali
Petrochemicals
Limited, Balmier
Lawrie
and
Company Limited,
Cetex
Petrochemicals
Limited,
Futura
Polyesters Limited
and Kothari Sugars
and
Chemicals
Limited
(the
“Proposed
Respondents”)
Mr.
N.
Chidambaram
Kuttalam Pillai (the
“Petitioner”)
v/s
Indian
Organic
Chemicals Limited
(the “Respondent”)
Mr. S. Kamaraj (the
“Petitioner”)
v.
Futura Polyesters
Limited
(the
“Respondents”)
Lake. The petitioner alleges that due to
continuous silting of the lake, the villagers
are deprived of storm water and the basic
right for ground water recharge. The
Petitioner has further alleged that the
factories in the Manali Industrial Area
have added to the difficulty by letting the
effluents into the lake.
Labour
Court,
Chennai
Industrial
Dispute
number
832 of 93
Petitioner alleging illegal termination of
the services on the grounds of indiscipline
and unauthorized absence from duty
Not
quantifiable
Labour
Court,
Chennai
Industrial
Dispute
number
250
of
2005
Petitioner for declaring the dismissal of
petitioner on the grounds of alleged
absence from duty and management as
unjustified and an unfair labour practice
under Section 5 and 7 and Schedule 5 of
the Industrial Dispute Act, 1947.
Petitioner against the order dated August
29, 2005 pertaining to the dismissal of the
Petitioner from the employment on the
grounds that the dismissal is allegedly
disproportionate
to
the
alleged
misconduct.
This application has been filed against the
Respondent alleging illegal termination of
services and subsequent alleged violation
of the provisions of the Industrial
Disputes Act, 1947 relating to unfair
labour practice
Not
quantifiable
4.
Mr. M. Pethurajan
(the “Petitioner”) v.
Futura Polyesters
Limited
(the
“Respondents”)
Labour
Court,
Chennai
Industrial
Dispute
number
122
of
2006
5.
Mr. S. Jayaraj (the
“Applicant”)
v.
Futura Polyesters
Limited
(the
“Respondents”)
Labour
Court,
Chennai
Industrial
Dispute
number
214
of
2005
G.
Central Excise
Not
quantifiable
Not
quantifiable
Sr.
No.
Parties
Authority
before which
pending
Case
Number
Brief
Particulars
of
1.
Indian Organic
Chemicals
Limited
(the
Customs,
Excise and Gold
High Court of
Judicature at
Delhi
Civil Writ
Petition
number
3738
of
1991
The Petitioner in this case had claimed
the benefit under Notification No. 43/80
which exempted it, from the duty under
Central Excise Act. The same was
rejected by the Assistant Collector and
the Petitioner was asked to pay Rs. 5.65
Amount
claimed
(Rs. in
Lacs)
5.65
170
2.
Appellate
Tribunal [now
Customs,
Excise, Service
Tax Appellate
Tribunal
(CESTAT)] and
the Collector of
Central Excise
(the
“Respondent”)
Indian Organic
Chemicals
Limited
(the
Commissioner
of
Central
Excise
(the
“Respondent”)
3.
Indian Organic
Chemicals
Limited
(the
Commissioner
of
Central
Excise
(Appeals) (the
“Respondent”)
4.
Futura Polymers
Limited
[a
division
of
Futura
Polyesters
Limited]
(the
Commissioner
of
Central
Excise, Chennai
(the
“Respondent”)
Futura Polymers
Limited
(a
division
of
Futura
Polyesters
Limited)
(the
Commissioner
of Customs (the
“Respondent”)
Futura Polymers
Limited
(a
division
of
Futura
Polyesters
Limited)
(the
Assistant
Commissioner
of
Central
Customs
(the
5.
6.
lacs as duty. The Petitioner had appealed
before the before the Collector (Appeal)
which upheld the order of the Assistant
Collector. The Appellant further
appealed along with the application for
condonation of delay before the
Respondent Tribunal. The same was
rejected by the Tribunal. This petition
has thus, been filed against the order
dated March 6, 1991 passed by the
Tribunal refusing to condone the delay.
order-in-appeal number 35 of 2002 dated
June 3, 2002 passed by the
Commissioner of Central Excise
(Appeals) rejecting the refund claim
made by the Appellant for credit of Rs.
1,00,471.
1.00
Customs,
Excise
and
Gold Appellate
Tribunal,
Chennai [now
Customs,
Excise, Service
Tax Appellate
Tribunal
(CESTAT)]
Customs,
Excise
and
Service
Tax
Appellate
Tribunal,
Chennai
Appeal
number
35/02
2002
Customs,
Excise
and
Service
Tax
Appellate
Tribunal, New
Delhi
Appeal
number
E/5179/2004
Customs,
Excise
and
Service
Tax
Appellate
Tribunal,
Chennai
The Appeal
number has
not
been
provided
This appeal has been filed by the
Appellant against the order-in-appeal
number C3/225,311 and 346/ D/06/SEA;
C. Cus. Number 696/2006 dated
September 14, 2006 passed by the
Commissioner of Customs (Appeals)
demanding a duty amounting to Rs.
314,250
3.14
Commissioner
of
Customs
(Appeals),
Chennai
The Appeal
number has
not
been
provided
This appeal has been filed for setting
aside the order-in-original number 6109
of 2007 dated March 28, 2007 passed by
the Respondent imposing a duty
amounting to Rs. 136,904 and a penalty
of Rs. 14,000.
1.50
of
Appeal
number
E/37/2003
This appeal is filed against the order-inappeal number 84 of 2002 dated October
29, 2002 passed by the Commissioner of
Central Excise (Appeals) disallowing the
credit of Rs. 9,45,067 availed on capital
goods. The Customs, Excise and Service
Tax Appellate Tribunal has passed an
order dated April 11, 2005 for stay of the
recovery till the final disposal of the
case.
This application has been filed for setting
aside the order-in-original number 109 of
2004 dated July 26, 2004 passed by the
(Appeals) demanding duty of Rs.
49,21,772 under Section 11A of the
Central Excise Act, 1944 and imposing a
penalty of Rs. 50,000 under Rule 25 of
the Central Excise No. (2) Rules, 2001.
9.45
49.71
171
7.
8.
9.
10.
“Respondent”)
M/s
Futura
Fibres
(a
division
of
Futura
Polyesters
Limited)
(the
Assistant
Commissioner
of
Central
Excise
(the
“Respondent”)
M/s
Futura
Fibres
[a
division
of
Futura
Polyesters
Limited]
(the
Commissioner
of
Central
Excise, Chennai
(the
“Respondent”)
M/s
Futura
Fibres
[a
division
of
Futura
Polyesters
Limited]
(the
Commissioner
of
Central
Excise, Chennai
(the
“Respondent”)
M/s
Futura
Fibres
[a
division
of
Futura
Polyesters
Limited]
(the
Commissioner
of
Central
Excise, Chennai
(the
“Respondent”)
order-in-original number RF-2 of 2008
dated February 4, 2008 wherein the
Respondent credited the refund amount
allegedly due to our company of Rs.
1,539,603 to the Consumer Welfare
Fund.
15.40
order-in-appeal numbers 101 and 102
(Appeals) wherein the matter was
remanded to the lower authority to
rework the liability of interest at
appropriate rate. The amount involved in
this case is Rs. 10,46,525.
10.47
Appeal
number
E/302/06
order-in-appeals dated January 16, 2006
passed by Commissioner of Central
Excise (Appeals) for adjustment of the
refund of Rs. 2,27,616 against arrears of
Rs. 3,10,318 and rejection of the refund
claim of Rs. 77,010
3.04
Appeal
number 146
of 2005
order-in-original number RF 38 of 2005
dated October 18, 2005 wherein the
Respondent ordered the adjustment of
pre-deposit of Rs. 80,000 against the
arrears of Rs. 82,902.
0.80
Commissioner
of
Central
Excise
(Appeals),
Chennai
Appeal
number
of 2008
Customs,
Excise
and
Service
Tax
Appellate
Tribunal,
Chennai
Appeal
number
E/87/06
2006
Customs,
Excise
and
Service
Tax
Appellate
Tribunal,
Chennai
Commissioner
of
Central
Excise
(Appeals),
Chennai
11
of
Sr.
No.
Parties
Authority
before which
pending
Case Number
Brief
Particulars
of
1.
Show Cause
Notice issued
by Assistant
Commissioner
Assistant
Commissioner
of
Central
Excise,
Chennai
Show
Cause
Notice number
365 of 1997
2.
Show
Superintendent
Show
Our Company through this show
cause notice dated March 26, 1997
has been asked to justify why a sum
Rs. 13,33,828.91 which is alleged to
have been utilised in contravention of
Rule 57C of Central Excise Rules,
1944 should not be demanded.
Cause
Cause
Amount
claimed
(Rs. in
Lacs)
13.33
7.99
172
Notice issued
by
Supreintendent
of
Central
Excise
3.
Show Cause
Notice issued
by
Superintendent
of
Central
Excise
of
Central
Excise
Chennai
Superintendent
of
Central
Excise,
Chennai
Notice number
412 of 1999
Show
Cause
Notice number
365 of 2000
4.
Show Cause
Notice issued
by Additional
Director
of
Anti -Evasion
Directorate
General
of
Anti-Evasion
(Central
Excise),
Chennai
Show
Cause
Notice number
39 of 2000
5.
Show Cause
Notice issued
by
the
Superintendent
of
Central
Excise
Superintendent
of
Central
Excise
Show
Cause
Notice number 6
of 2000
6.
Show Cause
Notice issued
by
the
Superintendent
of
Central
Excise
Superintendent
of
Central
Excise,
Chennai
Show
Cause
Notice number
469 of 2001
7.
Show Cause
Notice issued
by
the
Assistant
Commissioner
of
Central
Excise
Assistant
Commissioner
of
Central
Excise,
Chennai.
Show
Cause
Notice number
IV/16/41/2001 –
Adj
8.
Show Cause
Notice issued
by
the
Superintendent
of
Central
Excise
Show Cause
Notice issued
by
the
Superintendent
of
Central
Excise
Superintendent
of
Central
Excise,
Chennai
Show
Notice
number 413 of
2002
Superintendent
of
Central
Excise,
Chennai
Show
Cause
Notice number
106 of 2002
Show
Assistant
Show
9.
10.
Cause
Cause
cause notice dated June 4, 1999 has
been asked to justify why a sum Rs.
7,99,418.64 which is alleged to have
been utilised in contravention of Rule
57C of Central Excise Rules, 1944
should not be demanded.
cause notice dated July 4, 2000 has
been asked to justify why a sum Rs.
1,94,498 which is alleged to have
been utilised in contravention of Rule
57C of Central Excise Rules, 1944
cause notice dated September 2, 2000
of Rs.
19,50,46,129 being duty
concession which is alleged to have
been wrongly availed should not be
demanded under Section 11A Central
Excise Act, 1944 .
cause notice dated January 4, 2000
Rs. 2,37,904.16 which is alleged to
have been utilised in contravention of
Rule 57C of Central Excise Rules,
1944 should not be demanded.
cause notice dated September 7, 2001
Rs. 4,33,753 which is alleged to have
been availed in contravention of Rule
57AD of Central Excise Rules, 1944
should not be recovered.
cause notice dated May 7, 2000 has
been asked to justify why the benefit
of concessional rates of duty should
not be denied for non-fulfillment of
the net foreign exchange earning as a
percentage of exports and a
consequential differential duty of a
sum of Rs. 7,70,87,818 should not be
demanded under Section 11A Central
Excise Act, 1944.
cause notice dated July 11, 2002 has
been asked to justify why the
disallowance of Rs. 1,71,89,579
should be permitted under Rule 12 of
the Cenvat Credit Rules, 2001
cause notice dated February 20, 2002
has been asked to justify why Rs.
2,78,28,745.50
should
not
be
disallowed out of the credit of Rs.
5,56,57,491 under Rule 12 of the
Cenvat Credit Rules 2001. Further,
our Company has been asked to
justify why the penalty which the
show cause notice proposes to impose
should not be levied on it.
1.94
1950.46
2.37
4.33
770.88
171.90
278.29
3.90
173
Notice issued
by
the
Superintendent
of
Central
Excise
Commissioner
of
Central
Excise,
Chennai
Notice number
30 of 2002
11.
Commissioner
of
Central
Excise
(Appeals) (the
“Appellant”)
v/s
Indian
Organic
Chemicals
Limited (the
“Respondent”)
Customs,
Excise
and
Service
Tax
Appellate
Tribunal,
Chennai
Appeal number
E/305/2006
12.
Commissioner
of
Central
Excise
Chennai (the
“Appellant”)
v/s
Indian
Organic
Chemicals
Limited and
Customs,
Excise
and
Service
tax
Appellant
Tribunal,
Chennai (the
“Respondent”)
Commissioner
of
Central
Excise,
Chennai (the
“Appellant”)
v/s M/s Futura
Fibres, Futura
Polymers (the
“Respondent”)
High Court of
Judicature at
Madras
CM
appeal
number 1641 of
2005
Supreme
Court of India
Civil
appeal
number 427-428
of 2006
Show Cause
Notice issued
by
the
Additional
Commissioner
of
Central
Excise
Office of the
Commissioner
of
Central
Excise,
Chennai
Show
Cause
Notice Number
V/15/55/45/2007Adj
13.
14.
cause notice dated January 21, 2002
been availed in contravention of Rule
57AD of Central Excise Rules, 1944
order-in-appeal number 02 of 2006
dated January 16, 2006 passed by the
(Appeals) wherein payment of Rs.
43,74,354 has been imposed as
Cenvat credit on furnace oil is not
eligible to be availed and a penalty of
Rs. 10,00,000 has been imposed for
credit availed under Rule 13 of the
Central Excise Rules, 1944.
This appeal is filed against the final
order number 1018 of 2003 dated
November 28, 2003 passed by the
Customs, Excise and Service Tax
Appellate Tribunal, Chennai. The
Appellant has alleged that the first
respondent has suppressed the fact of
supplying steam to Futura Industries
Limited Further the Appellant has
alleged that the first respondent has
fraudulently evaded the excise duty by
concealing the supply of steam to
Futura Industries Limited.
These civil appeals are filed against
the impugned final orders 1000 and
1001 of 2004 dated November 18,
2004 passed by the Customs, Excise
and Service Tax Appellate Tribunal
(“CESTAT”) holding that the demand
of Rs. 470,178 is not affected by the
amendments made to Section 65 by
Parliament under Section 116 of the
Finance Act, 2000. The appeal is filed
on the grounds that the CESTAT
failed to consider that a combined
reading of Section 116 and 117 of the
Finance Act, 2000 makes the
respondent to pay service tax as per
Section 66 of Finance Act, 1994. The
Appellant has therefore prayed for the
admission and allowance of the appeal
against the final order number 1000
and 1001 of 2004 dated November 18,
2004.
cause dated August 23, 2007 has been
asked to justify why a sum of Rs.
36,14,972 alleged to have been
availed as service tax credit on
outward transport of finished goods
for the period from May 2005 to 2007
under Rule 14 of the Cenvat Credit
Rules read with proviso to Section
11A of the Central Excise Act, 1944
53.74
1.81
4.7
36.14
174
15.
Show Cause
Notice issued
by
the
Assistant
Commissioner
of
Central
Excise
Office of the
Assistant
Commissioner
of
Central
Excise,
Chennai
Show
Cause
Notice Number
IV/16/60/2007Adj.
16.
Show Cause
Notice issued
by
the
Additional
Commissioner
of
Central
Excise
Office of the
Commissioner
of
Central
Excise,
Chennai
Show
Cause
Notice number
V/15/55/3/08 Adj
17.
Show Cause
Notice issued
by
the
Assistant
Commissioner
of
Central
Excise
Office of the
Commissioner
of
Central
Excise,
Chennai
Show
Cause
Notice number
V/16/16/2008Adj
18.
Show Cause
Notice issued
by
the
Assistant
Commissioner
of
Central
Excise
Office
of
Commissioner
of Customs,
Chennai
Show
Cause
Notice number
S4/47/2005Bonds
19.
Commissioner
of
Central
Excise
v/s.
Futura
Polyesters
Limited
Supreme
Court of India
C.A.No.
4522/2003
20.
Superintendent
Additional
NA
should not be levied
cause notice dated December 27, 2007
been availed as service tax credit on
outdoor catering service for the period
from December 2006 to February
2007 under Section 65 (76 a) of the
Finance Act, 1994 should not be
demanded under Rule 14 of the
Cenvat Credit Rules, 2004 read with
the extended proviso to Section 11A
of the Central Excise Act, 1944.
of Rs. 8,44,718 which is alleged to
have been availed as service tax credit
on outdoor catering service for the
period from March 2007 to December
2007 under Section 65 (76 a) of the
Finance Act, 1994 should not be
demanded under Rule 14 of the
Cenvat Credit Rules, 2004 read with
the extended proviso to Section 11A
of the Central Excise Act, 1944.
cause notice dated March 19, 2008
of Rs. 53,214 availed as service tax
credit on outdoor catering service
under Section 65 (76 a) of the Finance
Act, 1994 should not be demanded
under Rule 14 of the Cenvat Credit
Rules, 2004 read with the extended
proviso to Section 11A of the Central
Excise Act, 1944
was asked to justify the following
(a) The grounds for not treating M/s
Futura Polymers and M/s Futura
Preforms as related persons in terms
of Rule 2(2) of the Customs Valuation
Rules;
(b) The grounds for not levying Rs.
30, 48, 175 as differential duty
(C) The grounds for not the levying
penalty under the Central Excise
Rules
The department of Central Excise has
filed an appeal before the Supreme
Court of India against the order
passed
by
CEGAT.
The
claimed 50% concessional duty on
goods transferred from EOU to DTA
on the aggregate of all duties payable
by EOU, Our Company has paid the
duty on 50% on each of such duties
payable by EOU.
Superintendent of Central Excise
2.49
8.44
0.53
30.48
121
17.83
175
21.
of
Central
Excise
v/s.
Futura
Polyesters
Limited
Superintendent
of
Central
Excise
v/s.
Futura
Polyesters
Limited
Commissioner
of
Central
Excise,
Central Excise
Service
Tax
Appellate
Tribunal
NA
22.
Superintendent
of
Central
Excise
v/s
Futura
Polyesters
Limited
High Court of
Judicature at
Madras
RCP number 32
of 2000
23.
Superintendent
of
Central
Excise
v/s
Futura
Polyesters
Limited
High Court of
Judicature at
Madras
RCP number 37
of 2001
claims that the preforms divisions can
claim only 50% of Central Value
added Tax (CENVAT) in respect of
goods supplied to preforms division
from EOU.
The Superintendent of Central Excise
has appealed against the order of the
Commissioner of Central Excise,
which allowed our Company to be
entitled to CENVAT credit on
purchase of furnace oil used for
generation of steam diverted to EOU.
has appealed against order of
entitled to input credit in respect of
polyester staple fibre supplied to
ultimate exporter.
has appealed against order of
entitled to input credit in respect of
polyester staple fibre supplied to
ultimate exporter.
8.00
3.68
2.15
176
PART II – OUTSTANDING LITIGATIONS IN RELATION TO OUR DIRECTORS/PROMOTERS
In addition to suit number 266 of 2007 and show cause notice number 030100200093AM09/20as referred to in
the tables above in this section, following are the litigations in relation to our Directors/Promoters
Civil Case file against Mr. M. D. Dalal in his capacity as a director of Sitladas Estate Private Limited
Parties
Bharat
R.
Javeri,
Deviben S.
Dalal
v/s.
Sitaldas
Estate
Private
Limited
Authority
Brief
Particulars
before which Suit/Appeal/Case/Notice/Proceeding
pending
Small Causes
Court,
Maharashtra
of
The Plaintiff have filed this case for possession of
an open space (garage) used for parking by the
defendant. The plaintiffs pray for ad-interim
injunction to be passed restraining the defendant
from using space for parking its cars.
Status
Pending
Amount of
Liability
involved
(Rs. In lacs)
Not
quantifiable as
there is no
direct
monetary
claim
involved.
177
PART III– OUTSTANDING LITIGATIONS IN RELATION TO OUR PROMOTER GROUP
ENTITIES
1.
Cases filed against Sonata Software Limited
Sr.
No.
Parties
Authority before
which pending
Case
Number
Brief
Particulars
of
1.
Mrs. Uma Jain
(the
“Complainant”)
v/s
Sonata
Software
Limited, New
Delhi, Hewlett
Packard India
Limited,
Rajendra
Palace,
New
Delhi, Sonata
Software
Limited,
Bangalore,
Hewlett
Packard India
Limited,
Kasturba
Gandhi Marg,
New Delhi and
Sonata
Software
Limited,
Mumbai (the
“Opposite
Parties”)
Calcutta
Creative
Printers Private
Limited
(the
“Plaintiff”) v/s.
Sonata
Software
Limited
(the
“Defendant No.
1”) and NICCO
UCO Financial
Service
Limited
(the
“Defendant No.
2”)
District Consumer
DisputesRedressal
Forum, Jagdalpur
Consumer
Complaint
number
68/95
This complaint has been filed by the
Complainant alleging a deficiency in
service on the part of the Opposite
Parties. Vide order dated December
21, 2000 the District Forum directed
the Opposite Parties to replace the
product
purchased
by
the
Complainant for deficiency in
service. An order has been passed by
the
State
Consumer
Disputes
Redressal
Commission
dated
September 27, 2002 directing the
District Forum to decide the case
afresh.
High Court
Judicature
Calcutta
Suit No.
227
of
1997
This suit has been filed by the
Plaintiff for the alleged damages
sustained due to non-performance of
the Pressmate. Further, the Plaintiff
has alleged that the Defendant No. 1
has failed to supply the equipment and
subsequently did not integrate the
system. Consequently, the Plaintiff
could not carry on the business and
sustained losses.
2.
of
at
Amount
claimed
(Rs.
in
Lacs)
Not
quantifiable
68.86
178
2.
Hathway Investment Private Limited
Income tax cases filed against Hathway Investment Private Limited
Sr.
No.
Parties
1.
Additional
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Deputy
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Deputy
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Deputy
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
2.
3.
4.
5.
Assistant
Deputy
Commissioner
of Income Tax
(the
Authority
before
which
pending
Income
Tax
Appellate
Tribunal,
Mumbai
Case number
Brief
Particulars
Appeal number
2406/Mum/2001 for the
dated February 14, 2001 passed by the
praying for restoration of the assessment
order passed by the Appellant for the
Assessment Year 1994-1995 and for
allowing the disallowance of depreciation
on office and residential premises
amounting to Rs. 18,74,110
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
number
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
number7318/Mum/2002
for the Assessment Year
1996-1997
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
number
dated December 10, 2002 passed by the
Assessment Year 1997-1998, and for
allowing:
1.
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
numbers
6531/Mum/2003
and
of
The disallowance of Rs. 26,043 made
under Rule 6B,
2. The addition of Rs. 2,04,000 being
expenditure on maintenance of the
guest house,
3. The addition
on
account of
depreciation claimed on cost of land
and FSI included in office and
residential premises and
4. The addition of Rs. 44,27,019 being
the lease equalization amount
dated July 22, 2003 passed by the
Assessment Year 1998-1999, and for:
179
Hathway
Investments
Private Limited
(the
“Respondent”)
6.
7.
8.
9.
1.
Appeal
number
Assistant
Deputy
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Income
Tax
Appellate
Tribunal,
Mumbai
Assistant
Commissioner
of Income Tax
Central Circle
34, Mumbai (the
Hathway
Investments
Private Limited
(the
“Respondent”)
Assistant
Commissioner
of Income Tax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Assistant
Deputy
Commissioner
of IncomeTax
(the
Hathway
Investments
Private Limited
(the
“Respondent”)
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
number
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
Number
Income
Tax
Appellate
Tribunal,
Mumbai
Appeal
Number,
5085/Mum/2005
Disallowing the depreciation of Rs.
12,80,640 in respect of land of the
office and residential premises,
2. Disallowing the claim of deduction of
the principal amount of Rs. 85,67,847
and Rs. 1,10,54,201 received from
Rajasthan State Electricity Board and
Gujarat State Electricity Board and
3. Disallowing the relief of Rs, 87,47,268
on the ground that the credit to lease
equalization reserve and consequent
reduction from net profit is not
permissible.
dated July 22, 2003 passed by the
Assessment Year 1999-2000,for:
1.
Disallowing the depreciation of Rs.
11,65,696 in respect of land of the
office and residential premises
2. Disallowing the claim of deduction of
the principal amount of Rs. 92,08,337
and Rs. 4,99,68,076 received from
Rajasthan State Electricity Board and
Gujarat State Electricity Board
respectively
dated November 22, 2004 passed by the
allowing the disallowance of the
depreciation of Rs. 10,61,592 in respect of
land of office and residential premises
which includes the cost of land/FSI.
dated November 22, 2004 passed by the
of Rs. 10,61,592 in respect of land of office
and residential premises which includes the
cost of land/FSI.
dated May 19, 2005 passed by the
of Rs. 10,61,592 in respect of land of office
and residential premises which includes the
cost of land/FSI.
Commercial case against Hathway Investments Private Limited
180
Sr.
No.
Parties
1.
Kapesh
R.
Shah
(Plaintiff) v/s
Larsen Toubro
(the
“Defendant
No.
1”),
Pravinsingh
Chhanubha
Jhala
(the
“Defendant
No. 2”) and
Hathway
Investment
Private
Limited (the
“Defendant
No. 3”)
Authority
before
which
pending
High
Court of
Judicature
at Bombay
Case
Number
Brief
Particulars
of
Chamber
Summons
No. 1029
of 1997 in
suit
number
4992
of
1994
This suit has been filed for the recovery 250
equity shares arising on conversion 50,
12.5% fully convertible secured debentures.
The Plaintiff in this suit has alleged that he
had purchased 50, 12.5% fully convertible
secured debentures of Defendant No. 1 from
Defendant No. 2 which at that time were
partly paid up by Defendant No. 2.
Defendant No. 1 issued a notice for the
pending call money which was sent to
Defendant No. 2, who in turn allegedly gave
it to the Plaintiff, since the Defendant No. 2
had sold the shares to the Plaintiff. The
Plaintiff has alleged that he duly paid the
entire pending call money on the said
debentures, but did not send the said
debentures, for transfer in his own name. At
the time of conversion of the said
debentures, into 250 equity shares, they were
converted and equity shares were issued in
the name of the Defendant No. 2 by
Defendant No. 1 The Plaintiff has thus
alleged that the Defendant No. 2 received
250 equity shares; he in turn sold them in the
open market out of which 200 shares were
purchased by Defendant No. 3 and 50 shares
by someone else.
Amount of
Claims
Involved
(Rs. in lacs)
Not
quantifiable
Labour Case filed against Hathway Investments Private Limited
Sr.
No.
Parties
1.
Mr. Ashok Yadav
(the
“Complainant”)
v/s.
Hathway
Investments
Private Limited
(the “Respondent
No. 1”) and Mr.
Rajan Raheja (the
“Respondent No.
2”)
3.
Authority
before
which
pending
Labour
Court,
Mumbai
Case
Number
Brief
Particulars
of
Complaint
(ULP) No.
539
of
2003
This suit has been filed against the
alleged illegal termination of the
Complainant. The Complainant has
alleged that bonus and other statutory
emoluments have not been paid to him.
The Complainant has thus prayed for
reinstatement with the payment of entire
back wages.
Amount of
Claims
Involved
(Rs. in lacs)
Entire back
wages from
the date of
Termination
till
the
resumption
of Services.
Outlook Publishing (India) Private Limited
Income tax cases filed against Outlook Publishing (India) Private Limited
Sr.
No
Parties
1.
Deputy
Commissioner of
Income
tax
(the “Appellant”)
Authority
before
which
pending
Income
Tax
Appellate
Tribunal,
Case Number
Brief
Particulars
of
Appeal Number.
6862/Mum/2006
for
the
Assessment Year
dated September 18, 2006 passed by the
praying for restoration of the assessment order
181
v/s.
Outlook
Publishing (India)
Private
Limited
(the
“Respondent”)
Mumbai
2003-2004
passed by the appellant for the Assessment Year
2003-2004 and for allowing the disallowance of
Rs. 16,59,835 which were classified as personal
expenses.
Civil cases filed against Outlook Publishing (India) Private Limited
Sr.
No
Parties
Authority
before
which
pending.
Case
Number
Brief
Particulars
of
1.
Indira Ray (the
“Plaintiff”)
v/s
Vinod Mehta (the
“Defendant
No.1”),
Maheshwari Puri
(the “Defendant
No.2”)
and
Jaideep
Mazumdar (the
“Defendant
No.3”)
Abhishek Verma
v/s. Saikat Datta
(the “Defendant
No. 1”), Outlook
Publishing (India)
Private Limited
(the “Defendant
No. 2”), Vinod
Mehta
(the
“Defendant No.
3”)
and
Maheshwar Peri
(the “Defendant
No. 4”)
Thales S.A. (the
Outlook
Publishing (India)
Private Limited &
Others
(the
“Defendants”)
Court of
Civil
Judge,
Senior
Division,
Puri
Civil suit
no.
330/2007
This suit has been filed for damages and
compensation for the alleged defamation
of the Plaintiff caused by the Defendants.
The cause of action as alleged by the
Plaintiff arose on the publication of an
article in the weekly magazine,
“Outlook”, which is edited, published and
authored by the Defendants.
High
Court of
Judicature
at
New
Delhi
CS (OS)
No.
290/2006
and
461/2006
25.00
High
Court of
Judicature
at
New
Delhi
CS (OS)
No.
350/2006
100.00
4.
Jean Paul Perrier
v/s.
Outlook
Publishing (India)
Private Limited &
Others
(the
“Defendants”)
High
Court of
Judicature
at
New
Delhi
CS (OS)
No.
388/2006.
5.
Gwendolyn
Berger
(the
Outlook
Publishing (India)
Private Limited &
Others
(the
High
Court of
Judicature
at
New
Delhi.
CS (OS)
No. 1185
/2007
2.
3.
Amount of
Claim
Involved
(Rs.
in
lacs).
1005.00
100.00
50.00
182
6.
7.
“Defendants”)
T.V.
Today
Network Limited
v/s.
Hathway
Investments
Private Limited &
Others
(the
“Defendants”)
Mrs.
Supriya
Aggarwal
(the
“Petitioner” v/s.
India Today &
Others
(the
“Respondents”)
High
Court of
Judicature,
at
New
Delhi
High
Court of
Judicature
at
New
Delhi.
8.
M/s.
Tosiba
Appliances (the
“Plaintiff”)
v/s
M/s. Kabushiki
Kaisha Toshiba &
Others
(the
“Defendants”)
High
Court of
Judicature
at
New
Delhi
9.
Ms.
Nisha
Somaiya
(the
Outlook
Publishing (India)
Private Limited &
Others
(the
“Defendants”)
High
Court of
Judicature
at
New
Delhi
10.
Mr.
Rajinder
Kumar Gupta (the
“Plaintiff”)
v/s
Shri
Kalathil
Palankandi Shiv
Keshvan
&
Others
(the
“Defendants”)
Court of
District
Judge,
Delhi
11.
Mr.
Balasaheb
Keshav
Thackeray
(the
“Plaintiff”)
v/s
Hathway
Investments
Limited & Others
(the
“Defendants”)
High
Court of
Judicature
atBombay
and libel of the Plaintiff caused by the
Defendants. The cause of action as alleged
by the Plaintiff arose on the publication of
an article in the weekly magazine,
Civil Writ
This writ petition has been filed in the
Petition
nature of public interest litigation against
No.
the Defendants. The Petitioner has alleged
19085/2005. the Respondents of publishing article in
their Weekly magazine “Outlook” that
contained discussion on sexually explicit
material which was very embarrassing.
The Petitioner has prayed for a writ of
mandamus to be issued to the Union of
India (Respondent No. 3) and Press
Council of India (Respondent No. 4) for
the formulation of a comprehensive set of
laws to regulate the publication of
sexually explicit material in the
magazines.
Suit
No. This suit has been filed for damages and
2356
of 1998
CS (OS) This suit has been filed for damages and
No. 2132 compensation for the alleged defamation
of 2006.
and breach of confidence of the Plaintiff
caused by the Defendants. The cause of
action as alleged by the Plaintiff arose on
the publication of the interview of the
Plaintiff in the weekly magazine,
Civil Suit This application has been filed for
No. 125 of restoration of the suit which was filed for
2006.
the recovery of damages on account of
alleged defamation of the Plaintiff caused
by the Defendants. The cause of action
as alleged by the Plaintiff arose on
publication of an interview of the Plaintiff
in the weekly magazine, “Outlook” which
is edited, published and authored by the
Defendants.
Suit No. 246 This suit has been filed for recovery of
of 2001
damages on account of alleged defamation
Plaintiff arose on
publication of an
article in the weekly magazine, “Outlook”
which is edited, published and authored
by the Defendants.
Suit No.
1753/2002
20.50
Not
quantifiable
10.00
10.00
20.00
10,000.00
Criminal Cases filed against the Outlook Publishing (India) Private Limited
Sr.
Parties
Authority
Case
Brief
particulars
of
the
Amount of
183
No.
1.
2.
Air
Marshal
Harish
Masand
(the
“Complainant”)
v/s. “The Weekly
news
magazine
Outlook”
(the
“Accused No. 1”),
“Vinod
Mehta,
Editor-in-Chief”
(the “Accused No.
2”),
“Sandipen
Deb, Managing
Editor”
(the
“Accused No. 3”)
and “Saikat Dutta
, Author of Air of
Uncertainty” (the
“Accused No.4”)
Vinod
Mehta,
Editor-in-Chief of
Outlook
Magazine&
Others
(the
“Applicants”) v/s.
State
of
Maharashta and
C. Antony Louis
(the
“Respondents”)
Before
which
Pending
High
Court of
Judicature
at
New
Delhi
High
Court of
Judicature
at
New
Delhi
Number
Claimed
involved
1168/1/2005
of 2005
This complaint has been filed under
Sections 500, 501 and 502 under the
Indian Penal Code on the charges of
alleged defamation. The cause of action
as alleged by the Plaintiff rose on the
publication of an article in the weekly
magazine, “Outlook”, which is edited,
published and authored by the
Defendants.
Not
quantifiable
Criminal
Application
No. 2240 of
2007
This application has been filed against
the order of the Sessions Court. The
application has been filed to get the FIR
No. 03/2007 quashed which was lodged
against an article in the Weekly
magazine “Outlook” which is run by the
Applicants.
Not
quantifiable
Labour Cases filed against the Outlook Publishing (India) Private Limited
Sr.
No.
Parties
1
Mr.
Venu
Menon (the
“Worker”) v/s
Outlook
Publishing
(India) Private
Limited (the
“Company”)
4.
Authority
Before
which
Pending
Industrial
Court,
Kollam
Case
Number
Brief
particulars
of
the
Amount
Claimed
involved
of
Industrial
Dispute
number 1
of 2003
The worker has filed this suit against the
company for reinstatement in services with
back wages after being dismissed from
services by payment of three months
wages on account of closure of business in
Trivandrum district. The suit is pending
before the Industrial Court.
2.00
(approximately)
Innovassynth Technologies (I) Limited
Labour cases filed against Innovassynth Technologies (India) Limited
Sr.
No.
Parties
1.
M/s
Shree
Enterprises
&
Innovassynth
Technologies
(India)
Limited
(the “First Party”)
Authority
Before
Which
Pending
Labour
Court at
Mahad.
Case
Number
Brief
Particulars
of
Amount
Claim
Involved
Reference
application
number
REF (IDA)
5/20
This case has been filed by the Second
Party on the alleged illegal termination
of the Second Party by the First Party
with effect from December 23, 2004.
The Second Party has thus prayed that
the alleged illegal termination by the
Not
quantifiable
184
of
2.
v/s
Gautam
Kashinath Rokde
(the
“Second
Party”)
Mr.
Sanjay
Sadanand
Patil
and Mr. Aziz
Hasan Khot (the
“Complainants”)
v/s
M/s
Innovassynth
Technologies
(India)
Limited
and others (the
“Respondent”)
Industrial
Court,
Thane
Complaint
number
(U.L.P.)
No. 327 of
2001
3.
Innovassynth
Technologies
(India)
Limited
(the “First Party”)
v/s
Hemant
Balkrishna
Nalavade
(the
“Second Party”)
Labour
Court,
Mahad
REF (IDA)
No.
226/2001.
4.
Pandurang
Raghunath Patil
(the
“Complainant”)
v/s
Futura
Polyesters
,Limited
(the
“Respondent”)*
Industrial
Court at
Kolhapur
Complaint
(ULP) No.
261/2002.
High
Court of
Judicature
Contempt
Petition
no. 276 of
5.
*The
case
mentioned above
is
currently
pending against
Innovassynth
Technologies
(India)
Limited
since it was filed
when
Innovassynth
Technologies
(India)
Limited
was
Khopoli
division of our
Company and not
a separate entity.
The same was
transferred
pursuant to the
incorporation of
Innovassynth
Technologies
(India) Limited as
a
seperate
company.
Praful
Anant
Gaikwad
(the
First Party be set aside and the Second
Party be reinstated and the back wages
from the date of termination till the
resumption of his service be paid
This Complaint has been filed against
the alleged illegal termination of the
Complainants by the Respondents with
effect from February 12, 2000. The
Complainants thus pray for the alleged
illegal termination to be set aside and
the Complainants be reinstated in their
services and the back wages from the
date of termination till the resumption
of his service be paid along with the
arrears arising from the revision in pay
and other benefits be paid to the Second
Party
This case has been filed against the
alleged illegal termination of the
Second Party by the First Party with
effect from April 09, 1997. The Second
Party has thus prayed that the alleged
illegal termination be set aside and the
Second Party be reinstated in the
service and the back wages be paid to
the Second Party
This complaint has been filed against
Complainants by the Respondents. The
Complainant has alleged that the
Respondent has indulged in Unfair
Labour Practices by allegedly denying
the compensation under the voluntary
retirement scheme as promised to the
Complainant. The Complainant has thus
prayed that the Respondent be directed
to pay the benefits of voluntary
retirement scheme.
This application for contempt has been
filed against the alleged disobedience
of the orders passed by the Labour and
Not
quantifiable
Not
quantifiable
3.50
Not
quantifiable
185
Innovassynth
Technologies
(India)
Limited
(the
“Respondent”)
at
Bombay
2007
6.
Anil Pandurang
Gaikwad & others
(the
“Complainants”)
v/s Innovassynth
Technologies
(India) Limited &
others
(the
“Respondents”)
Industrial
Court,
Thane
Complaint
(U.L.P) no.
574
of
2000
7.
Innovassynth
Technologies
(India)
Limited
(the “Applicant”)
v/s
Rajendra
Vasant Chorge &
S.M
More,
Presiding officer,
Labour
Court,
Mahad
(the
“Respondent 1&
2”)
High
Court of
Bombay
Letter
Patent
Appeal No
29 of 2008
in
Writ
Petition
No5016 of
2006.
the Industrial Court. The Labour Court
through its order dated April 27, 2006
had ordered for the reinstatement of the
Petitioner into his service. The same
was upheld by the Industrial Court
through its order dated April 09, 2007.
The Petitioner has thus alleged that he
has not been reinstated even after the
court orders have been passed in his
favour.
This complaint has been filed against
Complainants by the Respondent. The
Complainants have alleged that the
Respondent has indulged in unfair
labour practices by denying the
compensation under the voluntary
retirement scheme as claimed to be
promised to the Complainant. The
Complainant
thus
prays
for
reinstatement in his service.
This Appeal has been filed against the
order dated December 27, 2005 passed
by Respondent No.2. The Respondent
No.2 has passed an order to reinstate
Respondent no.1 who was allegedly
terminated illegally. The Appellant has
filed this appeal to set aside the order of
the Respondent no.2.
Entire back
wages from
the date of the
said
termination
till
the
resumption of
his
services/Nonquantifiable
Entire back
wages from
the date of the
said
termination
till
the
resumption of
his
services/Not
quantifiable
Tax cases filed against Innovassynth Technologies (India) Limited
Sr.
No
Parties
1.
Innovasynth
Technologies
(India) Limited
(the
“Appellant”)
v/s
The
Commissioner
of
Central
Excise
(the
“Respondent”)
2.
Futura
Polyesters
Limited
(the
“Appellant”)
v/s
Commissioner
of
Central
Excise
(the
“Respondent”)
Authority
Before Which
Pending
Customs,
Excise
and
Service
Tax
Appellate
Tribunal (the
“CESTAT”)
Customs,
Excise
and
Service
Tax
Appellate
Tribunal
Case
Number
Brief
Particulars
of
Appeal
number
E/629/07
This Appeal has been filed against the
order-in-appeal
number
AT/831/RGD/2006 dated February 5,
2007 passed by the Commissioner of
Central Excise (Appeals)challenging the
decision that the Appellants was liable
to pay a differential duty under Rule
3(4) of Cenvat Credit Rules, 2002
However, the CESTAT vide order
number S/538/2007/CI/EB has waived
and stayed the recovery of pre-deposit
of interest and penalty pending the
appeal as the duty demand of Rs.
1,92,824 has been duly paid.
order in appeal number RJB/MIII/265/2003 dated August 28, 2003
passed by the Commissioner of Central
Excise (Appeal). The alleged grounds of
the appeal are stated herein below
Appeal
number
3677/03
2003
of
Amount
of Claim
Involved
1.93
13.48
1. The duty amount of Rs. 13,48,142
cannot be demanded in absence of
recovery provisions.
186
2. The Respondent has failed to
consider that Rule 57CC of Central
Excise Rules, 1944 envisages the
reversal of MODVAT credit taken in
respect of duty paid inputs, which
are subsequently utilised in the
manufacture of the exempted goods.
3. Since there is no existence of sale,
provisions of Rule 57CC of the
Central Excise Rules, 1944 does not
apply.
4. Value under Rule 57CC cannot be
determined as per Section 4 of 4A of
the Central Excise Act
3.
4.
5.
Innovasynth
Technologies
(India) Limited
(the
“Appellant”)
v/s
Khopoli
Municipal
Council,
Khopoli (the
“Respondent”)
Superintendent
of
Central
Excise
(the
“Assessor”) v/s
Innovasynth
Technologies
(India) Limited
(the “Assesse”
)
Court
of
Judicial
Magistrate
First
Class,
Khalapur.
Miscellaneous
Appeal No.
25/2006
of
2006
Superintendent
of
Central
Excise,
Khopoli Range
-I
F No. V/.ADj
(SCN)
15480/MVII/01/1543
5. The circular number 591/28/2001CX dated October 16, 2001 is
applicable
This application has been filed for the
readmission of the appeal originally
numbered M.A No. 1/99. The appeal
was filed for the setting aside of the Bill
No. 4134 dated April 19, 1999 served
on the Appellant by the Respondent for
the outstanding Octroi duty. The same
was alleged to be illegal by the
Appellant.
The Assesse through this show cause
notice dated January 1, 2002 has been
asked to justify why a sum of Rs.
3,08,810 should not be demanded and
recovered from them in contravention of
Rule 9(2) of the Central Excise Rules,
1944.
7.74
3.80
Income tax cases filed against Chika Private Limited
Sr.
No
Parties
1.
Commissioner of
Income Tax (the
“Appellant”) v/s.
Chika
Private
Limited
(the
“Respondent”)
6.
Authority
Before
Which
Pending
High Court
of
Judicature
at Bombay
Case
number
Brief
Particulars
of
Reference
Application
Number
1704/M/98
This reference application has arisen out of the order
dated August 31, 1998, passed by the Income Tax
Appellate Tribunal. The Income Tax Appellate
Tribunal through this application has sought the
opinion of the High Court of Judicature at Bombay,
whether it was right in holding the indenting
commission to be includible in export profits under
Section 80HHC of the Income Tax Act, 1961
Income tax cases filed against Distributors (Bombay) Private Limited
Sr.
No
Parties
Authority
Before
Case number
Brief
Particulars
of
187
1.
7.
Commissioner of
Income Tax (the
“Appellant”) v/s.
Distributors
(Bombay) Private
Limited
(the
“Respondent”)
Which
Pending
High Court
of
Judicature
at Bombay
Appeal number
ITXAL/1604/2006
This appeal has been filed against the order dated
March 10, 2006 passed by the Income Tax
Appellate Tribunal. The Tribunal had upheld the
order passed by the Commissioner of Income-Tax
(Appeals) in relation to the assessment order for
the year 2002-2003 wherein the taxable income of
the respondent was calculated at Rs. 21,11,120/-.
This Appeal is for the Restoration of the
Assessment order for the year 2003-2004.
Bhupati Investment & Finance Private Limited
Income tax cases filed against Bhupati Investment & Finance Private Limited
Sr.
No
Parties
1.
Additional
Commissioner
of
Income Tax (the
“Appellant”)
v/s.
Bhupati Investment
& Finance Private
Limited
(the
“Respondent”)
Authority
Before
which
Pending
Income Tax
Appellate
Tribunal,
Case
Number
Brief
particulars
of
the
Income tax
appeal
number ITA
No.
3098/M/02
This appeal has been filed against the order dated
March 11, 2002 passed by Commissioner of
Income Tax (Appeals) praying for the restoration
of the assessment order passed by the Appellant
for the Assessment Year 1988-1989, and for the:
1.
Addition of long term capital loss on the sale
of shares. Amount to be mentioned
2.
Deletion of the deemed interest of Rs.
46,31,471
188
8.
Asianet Satellite Communications Limited
Civil cases filed against Asianet Satellite Communications Limited
Sr.
No
Parties
Authority before
which pending
Case
Number
Brief
Particulars
of
1.
Roy Morera and
Startech
Network
(the
Asianet Satellite
Communications
Limited
(the
“Respondent”)
Court of District
Judge,
Thiruvananthapuram
OP [ARB]
281/2006
2.
Poornima Rao
(the
Asianet Satellite
Communications
Limited
(the
“Respondent”)
Court of District
Judge,
Thiruvananthapuram
A. S No.
28/2006
3.
K. G Sabu and
others
(the
“Plaintiffs”) v/s
C.S Satheesan
and others (the
“Defendants”)
Court
of
Subordinate Judge,
Paravor.
I. A No
2878/2006
in O.S No.
383/2006
4.
Elsy Yohannan,
Aroma Yohanna
and
Abiya
Yohanna
(the
“Appellants”)
v/s
Asianet
Satellite
Communications
Limited
and
New
India
Assurance
Company
Limited
(the
“Respondents”)
Court
of
Subordinate Judge,
Kottarakara.
A.S
100
2006
This petition has been filed for setting
aside the award dated August 3, 2006
passed by the sole arbitrator. The
Petitioner has alleged that the
Petitioner and the Respondent had
entered into a franchisee agreement
dated June 28, 2000 wherein it was
agreed that the Petitioner would wind
up his own cable network and would
convert as a franchisee of the
Respondent, subsequent to the
establishment of the cable network by
the Respondent The Petitioner has
further alleged that the Respondent
has acted in contravention of the
covenants of the agreement.
order of the Munsiff Court dated April
6, 2005. The Appellant in this appeal
has alleged that that the Respondent
had violated the license agreement
dated December 04, 2000 pursuant to
which a suit for recovery and
mandatory injunction was filed before
the Munsif Court which was decreed
in favour of the Respondents. The
Appellant thus prays that order of the
lower court be set aside and the claim
of the Appellant be accepted.
This plaint has been filed for an
interim injunction, to restrain the
Defendants from receiving the money
due to Globe Vision, a partnership
firm formed between the Plaintiffs
and the Defendants. Asianet Satellite
Communications Limited (Defendant
No. 4) is a proforma party and no
relief is sought against it.
This appeal has been filed for setting
aside the order of the Munsiff Court
in O.S No 605 of 2004 dated June 28,
2006 The Appellant no. 1 in this
appeal has claimed that she was made
the nominee in the insurance policy
subscribed by her husband and thus
she was entitled to receive a sum of
Rs. 50,000 after the death of her
husband which was denied to the
Appellant, pursuant to which a suit for
recovery was filed before the Munsif
Court which was decreed in favour of
the Respondents.
It has been
therefore, prayed by the Appellants,
that the order of the lower court be set
aside.
No
of
Amount of
claim
involved
(Rs. In Lacs)
274.00
4.64
Not
quantifiable
0.65
189
5.
Manikandan (the
“Plaintiff’) v/s
Praseed Kumar
(the “Defendant
No.1”)
and
Asianet Satellite
Communications
Limited
(the
“Defendant
No.2”)
Court
of
the
Munsiff, Palakkad
IA
1918/07
in
OS
340/07
6.
K.J Prakash (the
Asianet Satellite
Communications
Limited
(the
“Respondent”)
Arbitral
Tribunal,
Ernakulam
A.R No. 8
of 2007
7.
Jojen
T.
Mukkadan (the
“Claimant”) v/s
Asianet Satellite
Communications
Limited
and
Others
(the
“Respondents”)
Sole Arbirator
A.R No.
31
of
2004
8.
Titus
George,
Proprietor
of
Vaniya
Satvision,
Tiruvandoor
Municipal
Court,
Chengannur.
O.S No.
367/2006
This suit has been filed by the
Plaintiff for the recovery of an amount
of Rs. 35,000 from the Defendant
No.1 which he is alleged to have
borrowed from the Plaintiff. The
Plaintiff has further alleged that
Defendant No.1 is a franchisee of the
Defendant No.2 (Asianet Satellite
Communications Limited) and has
deposited an amount of Rs 40,000 for
obtaining the franchisee rights from
Defendant No. 2. The Plaintiff has
claimed that since it is the only
realizable asset, the same be awarded
to the Plaintiff.
This arbitral proceeding has been
initiated for the claim of Rs.
14,66,750 allegedly
due to the
Petitioner by the Respondent.. The
Petitioner has alleged that it entered
into a franchisee agreement with the
Respondent dated November 25,
1999,
which
was
unilaterally
terminated by the Respondent after
denying the Petitioner the bill books
for monthly collection from the cable
subscribers, in contravention of the
franchisee agreement. Further, it has
been alleged by the Petitioner that
despite repeated demands the
Respondents did not settle the
amounts with the Petitioner.
This arbitral proceeding has been
initiated for the claim of Rs.5,29,523
due to the Claimant by the
Respondent no.1. The Claimant has
alleged that he had entered into a
license
agreement
with
the
Respondent no.1 dated December 04,
2000, wherein it was agreed that the
Claimant would wind up his existing
cable TV network thereby relying on
the assurance that the Respondents
would provide connections to the
subscribers of the Claimant. The
Claimant has alleged that he had
remitted an amount of Rs. 15,88,570
upto January 2002 in the account of
the
Respondents
towards
the
subscription charges out of which Rs.
5,29,523 had to be paid to the
Claimant as his share of subscription
fee in accordance with the terms of
the agreement. The Claimant has
further alleged that the Respondents
have acted in contravention of the
agreement and his share of
subscription fee was not paid to him
despite repeated requests.
This complaint has been filed for the
permanent injunction to restore the
cable signal provided by the
Defendant no.1. The Complainant and
the Defendant No.1 had tied up for the
Not
quantifiable
14.67
and
18% interest
on
the
amount
aggregating
to Rs. 21.04
115.00
Not
quantifiable
190
9.
10.
Village
(the
“Complainant”)
v/s
Asianet
Satellite
Communications
Limited
&
Another
(the
“Defendants”)
G
Anitha
Prakash
and
others
(the
“Appellants”)
v/s Kerala State
Electricity
Board and others
(the
“Respondents”).
Praveen
Mathew
(the
Kerala
State
Electricity
Board and others
(the
“Respondents”)
cable transmission business. The
Defendant No.1 had allegedly
withdrawn the signal provided to the
Complainant in contravention of the
order passed by the High Court
High
Court
of
Judicature at Kerala,
Ernakulam.
Original
Petition
No. 32144
of 2002.
The original petition was filed against
the
Respondents
for
alleged
dismantling of the cable TV lines
drawn by the Appellant No.1 through
electric poles. The original petition
and the subsequent revision petition
were dismissed, hence this restoration
petition.
Not
quantifiable
High
Court
of
Ernakulam.
WP (C)
No. 17057
of 2005.
This petition challenges the right of
Asianet Satellite Communications
Limited to draw the cable TV lines
through the electric poles after the
expiry of the agreement to the effect
between Kerala State Electricity
Board (Respondent no.1) and Asianet
Satellite Communications Limited
(Respondent No.3).
This petition has been filed for a writ
of mandamus to be issued to Kerala
State Electricity Board (Respondent
no.1) to stop Asianet Satellite
Communications
Limited
(Respondent no.5) from allegedly
drawing cable TV lines through
electric poles without entering into a
valid agreement and vitiating the
procedure of competitive tenders.
This petition has been filed to issue a
writ of mandamus directing Kerala
no.1) to prevent Asianet Satellite
Communications
Limited
(Respondent no.5) from drawing
cable TV lines from electric poles
without paying the pole rental and to
ensure that the Respondent no. 5 does
not draw cable TV lines through poles
already allotted to other cable TV
operators.
of mandamus to be issued to Kerala
No. 1) to prevent Asianet Satellite
Communications
Limited
(Respondent no.5) from allegedly
drawing cable TV lines :
i) without due authorisation and;
ii) without participating in the
auction cum tender.
of Mandamus to be issued to the
Respondents 1 to 6 to intimate the
Petitioner of the rental arrears in
relation to the drawing of the cable
TV lines from the electric poles. The
No
quantifiable
11.
Cable
TV
Operators
Association (the
Kerala
State
Electrcity Board
and Others (the
“Respondents”).
High
Court
of
Ernakulam.
WP (C)
No. 11455
of 2006
12.
Cable
TV
Operators
Association (the
Kerala
State
Electrcity Board
and Others (the
“Respondents”)
High
Court
of
Ernakulam.
WP (C)
No. 36521
of 2005
13.
`R. B Anilkumar
(the
Kerala
State
Electricity
Board and others
(the
“Respondents”)
High
Court
of
Ernakulam
W.P No.
7709/2006
14.
P.
Surendran
(the
“Petitioner”)v/s
Kerala
state
Electricity
Board and others
High
Court
of
Ernakulam
W.P No.
7690/2006
Not
quantifiable
Not
quantifiable
Not
quantifiable
Not
quantifiable
191
(the
“Respondents”).
15.
Rajalakshmi
Ragunath (the
Asianet Satellite
Communications
Limited
and
others
(the
“Respondent”)
High
Court
of
Ernakulam.
Regular
Second
Appeal
no. 1100
of 2006.
16.
Vasantha Sekhar
(the
“Complainant”)
v/s
The
Chairman
of
Asianet Satellite
Communications
Limited and The
Manager of New
India Assurance
Company
Limited
(the
“Opposite
Parties”)
K.M
Sreedevikutty
(the
“Complainant”)
v/s
Asianet
Satellite
Communications
Limited and The
Senior
Divisional
Manager, New
India Assurance
Company
Limited
(the
“Respondents”)
Narayanan
Payyamballi (the
“Complainant”)
v/s
The
Manager, Indian
Overseas bank
(the
“First
Opposite Party”)
and
The
DistrictConsumer
Disputes Redressal
Forum,
Thiruvananthapuram
Consumer
Complaint
No. 382
of 2005
District Consumer
Disputes Redressal
Forum,
Thiruvananthapuram
Complaint
No. 87 of
2005
Consumer Disputes
Redressal
Forum,
Kannur
Original
Petition
number
327
of
2003
17.
18.
Petitioner alleges the Respondent no.
1 to 5 of acting in contravention of the
guidelines for allotting electric poles
for drawing cable TV lines framed as
per the directions of the High Court of
Judicature at Kerala. It has been
further alleged by the Petitioner that
the Respondent No. 1 has permitted
Respondent No. 6 (Asianet Satellite
Communications Limited) to draw
lines using electric poles but refused
to permit other cable TV operators,
thereby indicating the biasness in the
allotment of electric poles.
orders of the Munsiff Court dated
June 21, 2003 in the O.S No. 25/2002
and Additional District and Sessions
Court in A.S No. 54/2003 dated
September 15, 2006. This appeal
arises from the suit filed for a
prohibitory
injunction
thereby
restraining the Respondent No. 1 from
disconnecting the cable connection
which the Appellant in the present
appeal had subscribed for.
This complaint dated October 27,
2005 has been filed for the recovery
of the amount accrued to the
Complainant under the insurance
scheme introduced by the Opposite
parties. The Complainant has alleged
that she was made the nominee in the
insurance scheme subscribed by her
daughter. Further, it has been alleged
that she was entitled to receive a sum
of Rs. 50,000 after the death of the
daughter which was not disbursed to
the Complainant and therefore
amounted to deficiency in service.
This complaint dated March 04, 2005
has been filed for the recovery of the
amount allegedly accrued to the
Complainant under the insurance
scheme introduced by the Opposite
parties. The Complainant has alleged
that she was made the nominee in the
insurance scheme subscribed by her
husband. Further, it has been alleged
that she was entitled to receive a sum
of Rs. 50,000 after the death of her
husband which was not disbursed to
the Complainant and therefore,
resulted in mental agony to the
Complainant
This complaint has been filed on
account of the alleged negligence by
the First Opposite Party. The
Complainant was an employee in
Kuwait and in order to subscribe to
the NRI privilege scheme introduced
by the Second Opposite party had sent
an application form along with a bank
authorisation form authorising the
Not
quantifiable
0.50 and 0.25
as
compensation
for
deficiency in
service.
0.50 and 0.50
as
compensation
for
mental
agony
and
loss
Nil
192
First Opposite Party to pay a sum of
USD 500 towards the subscription
fees for the said scheme to the Second
Opposite Party on April 9, 1994. The
same as alleged by the Complainant
was not remitted to the Second
Opposite
Party.
Thus,
the
Complainant has prayed for a sum of
Rs. 79,350/- towards losses sustained,
compensation for mental agony and
the original amount of subscription
fee to be paid by the First Opposite
Party. The Second Opposite party has
been impleaded as a proforma party
and no relief is claimed against the
Second Opposite party.
Managing
Director,
Asianet Satellite
Communication
Limited
(the
“Second
Opposite Party”)
Tax cases filed against Asianet Satellite Communication Limited
Sr.
No
Parties
1.
Asianet Satellite
Communications
Limited
(the
“Petitioner”)
v/s
Settlement
Commission
&
Others
(the
“Respondents”)
Authority
Before
which
Pending
High Court
of
Judicature
Kerala,
Ernakulam
Case
number
Brief
Particulars
of
O.P No
27493
of 2002
This writ petition dated September 24, 2002
has been filed by the Petitioner following the
order dated August 13, 2002 passed by the
Respondent No. 1. The Respondent No. 1 vide
the said order directed the Petitioner to pay a
differential duty of Rs. 1,94,00,860 on account
of the alleged default by the Petitioner in
fulfilling its export obligation under the
Export Promotion Capital Goods (EPCG)
license within the stipulated time. The
Petitioner has prayed that a writ of Certiorari
thereby quashing the above mentioned order
be passed
Amount
of
Claim.
194.00
193
9.
H&R Johnson (India) Limited
Cases filed against H&R Johnson (India) Limited involving monetary liability of Rs. 10 Lacs and above
Consumer cases filed against H&R Johnson (India) Limited
Sr.
No.
Parties
Authority
before
which
pending
Case
number
Brief
Particulars
of
1.
Shabeer Mandoli
(the
“Complainant”)
v/s M/s Kalliyath
Sanitary Centre,
H&R
Johnson
(India) Limited
and
Mr.
C.
Upendran
(the
“Opposite
Parties”)
Consumer
Dispute
Redressal
Forum,
Kozikhode,
Consumer
Complaint
number
196
of
2006
alleged that the second Opposite Party has
supplied tiles to the Complainant which are
of defective and inferior quality. Further, it
has been alleged by the Complainant that
he has sustained loss, injury and hardship
on the account of negligence, deficiency in
service and unfair trade practice on the part
of the second Opposite Party.
2.
V. Jaya (the
“Complainant”)
v/s H&R Johnson
(India) Limited
and
Sabari
Enterprises (the
“Opposite
Parties”)
District
Consumer
Dispute
Redressal
Forum,
Chennai
(South)
Consumer
Complaint
number 23
of 2008
alleged that the first Opposite Party has
manufactured and supplied tiles to the
Complainant through the second Opposite
party which are of defective and inferior
quality. Further, it has been alleged by the
Complainant that he has sustained loss,
injury and hardship on the account of
negligence, deficiency in service and unfair
trade practice on the part of the Second
Opposite Party.
Amount
of claim
involved
(Rs. in
lacs)
10.00
14.76
Labour cases filed against H&R Johnson (India) Limited.
Sr. No.
Parties
Authority
before
which
pending
Case
Number
Brief
Particulars
of
1.
Shankar
Sanjeeva
Poojary (the
H&R Johnson
(India)
Limited (the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
55
of
2001
2.
Bhaskar
Dnyanoba
Raul
(the
H&R Johnson
(India)
Limited (the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
283 of
2004
the recovery of money and damages
aggregating to Rs. 58,15,786 arising out of
the alleged default in payment by the
Defendant for providing industrial canteen
service to the Plaintiff. Further, it has been
alleged by the Plaintiff that the Defendant
had entered into an agreement with the
Plaintiff for providing industrial canteen
service, which had been illegally and orally
terminated by the Defendant, thereby
causing huge loss to the Plaintiff.
alleging
that
Defendant
company
compelled the Plaintiff to accept the
Voluntary Retirement Scheme (“VRS”)
due to the alleged unlawful closure of the
factory at Thane. The Plaintiff has further
alleged that the prime intention behind the
closure was to raise a commercial and
Amount
of claim
involved
(Rs.
in
lacs)
58.15 and
18%
interest till
realization
of entire
amount
28.15 and
18%
interest till
realization
of entire
amount
194
residential township on the factory land.
The Plaintiff has instituted suit claiming
for:
1. A declaration that the consent of the
Plaintiff for the VRS was obtained by
fraud and misrepresentation; and
3.
Nandakumar
Gajanan
Brahme (the
“Plaintiff“) v/s
H&R.
Johnson
(India)
Limited (the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
284 of
2004
2. A temporary injunction restraining the
Defendant from proceeding further with
the development and construction on the
factory land
alleging
that
Defendant
company
for:
28.95 and
18%
interest till
realization
of entire
amount
4.
Mahadeo
Soma
Venurlekar
(the
H&R.
Johnson
(India)
Limited (the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
285 of
2004
factory land
alleging
that
Defendant
company
for:
1.
30.19 and
18%
interest till
realization
of entire
amount
A declaration that the consent of the
2.
5.
Ankush
Vishnu
Vichare (the
H&R Johnson
(India)
Limited (the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
287 of
2004
A temporary injunction restraining the
Defendant in proceeding further with
the development and construction on
the factory land.
alleging
that
Defendant
Company
for:
25.11and
18%
interest till
realization
of entire
amount
195
plaintiff for the VRS was obtained by
6.
Arun Ladoba
Talashilkar
(the
H&R Johnson
(the
“Defendant”)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
286 of
2004
factory land
alleging
that
Defendant
company
for:
28.58 and
18%
interest till
realization
of entire
amount
7.
Deepak
Shankar
Rahatwal (the
H&R Johnson
(India)
Limited (the
“Defendant’)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
288 of
2004
factory land
alleging
that
Defendant
company
for:
29.84 and
18%
interest till
realization
of entire
amount
plaintiff for the VRS was obtained by
8.
Ramachandra
Raghu
Ghodke (the
H&R Johnson
(India)
Limited (the
“Defendant’)
Court of
Civil
Judge,
Senior
Division,
Thane
Special
Civil
Suit
number
289 of
2004
factory land
alleging
that
Defendant
company
company. The Plaintiff has further alleged
that the prime intention behind the closure
was to raise a commercial and residential
township on the factory land. The Plaintiff
has instituted suit claiming for:
24.15 and
18%
interest till
realization
of entire
amount
A declaration that the consent of the
plaintiff for the VRS was obtained by fraud
and misrepresentation; and
A temporary injunction restraining the
196
factory land
Income tax cases filed against H&R Johnson (India) Limited
Sr.
No.
Parties
Authority
before which
pending
Details of the
case
Brief
Particulars
of
1.
Commissioner
of Income Tax
(the
“Assessor”)
v/s
H&R.Johnson
(India) Limited
(the
“Company”)
Commissioner
of Income tax
CIT(C)III/ShowCause
Notice/200708/121
against
Assessment
Order dated
December 29,
2006 for the
Assessment
Year 2004-05
Our company through this show cause
notice dated December 3, 2007, has been
asked to justify why the Assessment
Order dated December 29, 2006 passed
by the Deputy Commissioner of Income
Tax, should not be cancelled and a fresh
assessment be directed to be framed.
This show cause notice has been served
by the Commissioner of Income Tax
against the Assessment Order dated
December 29, 2006 on the following
grounds:
1.
Incorrect computation of long term
capital loss as Rs. 8539 pertaining to
mines /mines equipment
2.
Incorrect valuation of fair market
value of the property at Rs.
1,85,35,726
3.
Non-compliance of the provisions of
Section 80IA(3) of the Income Tax
Act, 1961 (the “IT Act”) prior to
allowing deduction claimed under
Section 80IB of the Act.
4.
Disallowance of excess deduction
under Section 80HHC /80IA of the
IT Act.
5.
Reducing the deduction under
Section 80HHC of the IT Act from
Rs. 1,07,37,062/- to Rs. 23,07,986/-
6.
Allowance
of
writing
off
miscellaneous expenses substantially
pertaining to non-revenue expenses
amounting to Rs. 17.43 Lacs
7.
2.
Joint
Commissioner
of
Central
Excise
(the
“Assessor”)
v/s.
H&R
Johnson
(India) Limited
Joint
Commissioner
Central
Excise,
Customs and
Servise Tax,
Raigad
V/Adj/SCN15101/Rgd/06
dated
September
19, 2006
Allowance of expenses of designing
and
integration
of
website
amounting to Rs. 1.33 Lacs and the
depreciation thereof.
This show cause notice dated October
20, 2006 has been served upon our
company to justify:
Amount
of claim
involved
(Rs. in
lacs)
305.59
13.40
Why a sum of Rs. 13,40,819 which is
alleged to have been utilised in
contravention of Rule 9 of Central
Excise Rules, 2004 read with proviso to
197
(the
“Company”).
Section 11A should not be disallowed
and recovered
Penalty should not be imposed on the
company under Section 11AC and
Interest should not be demanded and
recovered from the company under
Section 11AB of the Central Excise Act,
1994.
Given below is a summation of the cases filed against H&R Johnson (India) Limited involving a monetory
liability of less than Rs. 10 Lacs each / where the same is not quantifiable
i.
There are 18 consumer cases pertaining to claims aggregating to approximately Rs. 28,00,000 (to the
extent quantifiable) filed against H&R Johnson (India) Limited.
ii.
There are 30 labour cases pertaining to claims aggregating to approximately Rs.. 24,00,000 (to the
extent quantifiable) filed against H&R Johnson (India) Limited.
iii.
There is 1 civil case aggregating to approximately Rs. 3,00,000 filed against H&R Johnson (India)
Limited.
iv.
There are 7 tax cases, pertaining to claims aggregating to apprximately Rs. 39,00,000, filed against
H&R Johnson (India) Limited.
PART IV- OUTSTANDING LITIGATIONS IN RELATION TO OUR SUBSIDIARY
Outstanding litigations of Innovassynth Investments Limited
Nil
PART V - PAST PENALTIES LEVIED IN THE LAST FIVE YEARS
Other than as stated below there are no penalties imposed on our Company, Promoters, Directors and our
Subsidiary in the last five years:
The past cases in which penalties have been imposed on our Company in the last five years are as follows:
Sr.
No.
Brief particulars regarding penalty
1.
Amount
of
penalty
imposed (Rs.)
Rs. 19,325
2.
Rs. 21,126
Penalty of Rs. 21,126 imposed in the Assessment Year 20052006 by the Commercial Tax Officer for late payment of sales
tax under provisions of the Central Sales Tax Act, 1956 read
with Tamil Nadu General Sales Tax Act, 1959.
Penalty of Rs. 19,325 imposed in the Assessment Year 20052006 by the Commercial Tax Officer, for late payment of
monthly sales tax under the provisions of the Tamil Nadu
General Sales Tax Act, 1959.
Remarks
(paid/
payable
and
reasons therefore)
Paid
Paid
Amounts Owed to Small Scale Undertakings
As on March 31, 2008, there is no amount more than Rs. 1 lac outstanding for more than 30 days tosmall scale
undertakings.
The information regarding small scale industrial undertakings has been determined to the extent such parties
have been identified on the basis of information available with our Company.
198
Material Developments after date of last balance sheet:
Except for the Scheme of Arrangement, there have been no material developments concerning our Company
from the date of the last balance sheet i.e. March 31, 2008.
There are no subsequent developments after the date of the last balance sheet i.e.March 31, 2008, which we
believe is expected to have a material adverse impact on the reserves, profit, earnings per share and book value
of our Company.
199
GOVERNMENT/ STATUTORY APPROVALS
Except for pending approvals mentioned under this heading, our Company has received the necessary material
consents, licenses, permissions and approvals from the Government/RBI and various Government agencies
required for our present business.
It must, however, be distinctly understood that in granting the above approvals, the Government and other
authorities do not take any responsibility for the financial soundness of our Company or for the correctness of
any of the statements or any commitments made or opinions expressed.
GENERAL
1.
Certificate of Incorporation issued by the Assistant Registrar of Companies, Maharashtra for “Indian
Organic Chemicals Limited” bearing Registration number “11579” dated February 10, 1960.
2.
Fresh Certificate of Incorporation issued pursuant to the change of name of our Company to ‘Futura
Polyesters Limited’, bearing Registration number “11-11579” by the Deputy Registrar of Companies
dated November 05, 2002
3.
Certificate of Commencement of Business issued by the Registrar of Companies, Maharashtra for
“Indian Organic Chemicals Limited” bearing Registration number “11579” dated April 22, 1960.
4.
Our Company’s PAN (Permanent Account Number) under the Income Tax Act is AAACCI3404K,
issued by Assistant Commissioner of Income Tax.
5.
Our Company’s TAN (Tax Deduction Account Number) in Chennai under the Income Tax Act is
CHE102036G and our Company’s TAN (Tax Deduction Account Number) in Mumbai is
MUMF03450G
6.
Our Company’s TIN (Tax Payers Identification Number) in under the Central Sales Tax (Registration
and Turnover) Rules, 1957 is 49999.
7.
Certificate of Registration bearing no. MH01 V 074971, dated April 01, 2006, for the registration under
Maharashtra Value Added Tax Act, of our Company, with the principal place of business situated at
Paragaon Condominium, 3rd Floor, Pandurang Budhakar Marg, Mumbai-400013.
8.
Certificate of Enrolment under Maharahstra State Tax on Profession, Trades, Callings and Employments
Act, 1975, bearing no. 1/1/27/18/5428.
9.
Our Company’s TIN (Tax Payers Identification Number) under the Tamil Nadu Value Added Tax Act,
2002 is 33571080067.
10.
Our Company’s Service Tax Number for its fibre division is AAACI3404KST001
11.
Our Company’s Service Tax Number for its polymer division is AAACI3404KST003
12.
Our Company’s Service Tax Number for its preforms division is AAACI3404KST002
13.
Our Company’s Importer-Exporter Code granted by Ministry of Commerce, Government of India is
0388022515
14.
Certificate of Registration under Central Excise, for the polymers, fibres and preforms divisions of our
Company, bearing nos. AAACI2404KXM003, AAACI3404KXM002 and AAACI3404KXM004
respectively, dated January 01, 2003, issued by Deputy Commissioner of Central Excise, under Rule 9
of Central Excise Rules, 2002.
200
Shops and Establishment Act
1.
Certificate of Registration of Establishment bearing no. GS010812 dated January 17, 2004 issued under
the Bombay Shops and Establishment Act, 1948 for our Company's premises situated at B-31-33,
Paragaon Condominium, 3rd Floor, P. Worli, Mumbai-400013. The same is valid till December 31,
2010.
Value Added Tax Registrations for the godowns of our Company
1.
Certificate of Registration bearing no. 400705/V/0213, dated August 22, 2005, for the registration under
Maharashtra Value Added Tax Act, 2002 of our Company, with the principal place of business situated
at Plot No., Unit D91100M, T.T.C Industrial Area, Navi Mumbai. The Tax Identification Number for
the same is 27790317819V. The same is valid until cancellation.
2.
Certificate of Registration bearing no. AAAC13404KXD014, dated December 14, 2005, for registration
under the Central Excise Rule, 2002, of our Company,for operating as an excisable dealer at S.No. 214,
next to IBM Computers, Bhegari Nagar, Phursungi, Pune, Maharashtra. The same is valid till
cancellation.
3.
Certificate of Registration bearing no. 19704035055, dated December 30, 2005, for registration under
West Bengal Value Added Tax Rules, 2005, of our Company, with the principal of business situated at
CWC godown No. 9, Part 1, Panchpara Satyen Bose Road, Radhadasi, Howrah. The same is valid until
cancellation.
4.
Certificate of Registration bearing no. 19704035249, dated December 30, 2005, for the registration
under the Central Sales Tax Act, 1956, of our Company, with the principal of business situated at CWC
godown No. 9, Part 1, Panchpara Satyen Bose Road, Radhadasi, Howrah. The same is valid until
cancellation.
5.
Certificate of Registration bearing no. AAAC13404KXD015, dated January 13, 2006, for registration
under the Central Excise Rules, 2002, of our Company, for operating as an excisable dealer at Godown
No. 9, Satyen Bose Road, Radhadasi, Panchpara, Botanic Garden, Howrah, West Bengal. The same is
valid till cancellation.
6.
Certificate of Registration bearing no. 29230376197, dated June 16, 2006, for registration under
Karnataka Value Added Tax Act, 2003, of our Company, with the principal place of business situated at
Shed No. 68, HOSKOT, Industrial Area, Bangalore-562114
7.
Certificate of Regsitration bearing no. 27230376197, dated June 16, 2006, for registration under Central
Sales Tax Act, of our Company, with the principal place if business situated at Shed No. 68, HOSKOT
Industrial Area, Banagalore-562114.
8.
Certificate of Registration bearing no. AAAC13404KXD016, dated March 31, 2006, for registration
under the Central Excise Rules, 2002, of our Company, for operating as an excisable dealer at Central
Warehousing Corporation, Godown No. H3, A.P.M.C. Yard, Yeshwanthpur, Bangalore, Karnataka. The
same is valid till cancellation
9.
Certificate of Registration, dated July 15, 2005, for registration under the Kerala Value Added Tax Act,
2004 of our Company, with the principal place of business situated at Godown 1A, Central Ware
Housing Corporation, Wise Park, Kanjikkode, Palakkad. The Tax Identification Number for the same is
32090628734. The same is valid until cancellation.
10.
Certification of Registration, bearing no. 0906C216164, for registration under the Central Sales Tax
Act, 1956, of our Company with the principal place of business situated at Godown 1A, Central Ware
Housing Corporation, Wise Park, Kanjikkode, Palakkad. The Tax Identification Number for the same is
32090628734. The same is valid until cancellation.
11.
Certificate of Registration bearing no. AAAC13404KXD008, dated March 31, 2005, for registration
under the Central Excise Rules, 2002, of our Company, for operating as an excisable dealer at Central
Warehousing Corporation, Godown No. 1A, Wise Park Area, Pudussey Central, Kanjikoda, Palghat,
Kerala. The same is valid till cancellation.
12.
Certificate of Registration, bearing no. 130406VAT10502054129, dated September 19, 2006, for
registration under the Andhra Pradesh Value Added Tax Act, 2005, of our Company, with the principal
201
place of business situated at Survey No. 58, G.N.T Road, Tada, Nellore, Andhra Pradesh. The Tax
Identification Number for the same is 28400241905. The same is valid until cancellation.
13.
Certificate of Registration, bearing no. 28400241905, dated October 09, 2006, for registration under the
Central Sales Tax (Registration and Turnover) Rules, 1957of our Company, with the principal of
business situated at 4-132, Shop No. 2, 3, 4, G.N.T. Road, Sullurpeta Nellore, Andhra Pradesh. The
same is valid until cancellation.
14.
Certificate of Registration bearing no. AAAC13404KXD013, dated November 02, 2005, for registration
under the Central Excise Rules, 2002, of our Company, for operating as an excisable dealer at S.NO.
58/1, National Highway No. 5, Tada, Sullurpet, Nellore, Andhra Pradesh. The same is valid till
cancellation.
15.
Certificate of Registration bearing no. MH 01 C 033938, dated April 01, 2006 for registration under the
Central Sales Tax Rules, 1957, of our Company, as a registered dealer for the principal place of business
situated at Paragon Condominium, 3rd Floor, Pandurang Budhakar Marg, Mumbai. The same is valid
until cancellation.
16.
Certificate of Registration bearing no. 312177, dated May 23, 2006 for registration under the Central
Sales Tax Rules, 1957, of our Company, as s registered dealer for the principal place of business
situated at 511, Gagandeep, 12, Rajendra Place, New Delhi. The same is valid till cancellation.
17.
Certificate of Registration bearing no. 07400309779, dated May 23, 2006, for the registration under
Delhi Value Added Tax Act, 2005, of our Company, with the principal place of business situated at 511,
Gagandeep, 12, Rajendra Place, New Delhi.
Environment related approvals
1.
Authorization by Tamil Nadu Pollution Control Board, bearing Registration no. T9/TNPCB/HWM/F23313/TLR/07, dated September 10, 2007, granted to our Company for operating facility for collection,
storage and disposal of hazardous waste under Rule 3 (c) and 5 (5) of Hazardous Wastes (Management
& Handling) Rules, 1989. Authorization is valid for five years, i.e. up to September 09, 2012.
Licenses under Tamil Nadu Factory Rules/Factories Act
1.
Certificate of Stability bearing Approval no. H1/45512/2005, dated January 17, 2006, issued by the
Engineer, approved by the Chief Inspector of Factories, Government of Tamil Nadu under Indian
Factories Act and Tamil Nadu Factories Rules,. The same is valid up to August 19, 2009.
2.
License to run a factory in the name of Futura Polyesters Limited, bearing Registration no. TVR 1044,
dated December 31, 2004, issued by Deputy Chief Inspector of Factories, Chennai, under Factories Act,
1948. The same is valid up to December 31, 2008
Boiler Licenses
1.
Certificate of permission for Boiler no. T/4203 bearing Registration no. 2/Chc/2007-2008, dated April
19, 2007, issued by Deputy Director of Boilers, Government of Tamil Nadu, under Section 7/8 of the
Indian Boilers Act, 1923. The same is valid up to April 15, 2009.
2.
Certificate of permission for Boiler no. T/4913 bearing Registration no. 105/Chc/2007-2008, dated
March 19, 2008, issued by Deputy Director of Boilers, Government of Tamil Nadu, under Section 7/8
of the Indian Boilers Act, 1923. The same is valid up to March 18, 2009
3.
Certificate of permission for Boiler no. T/4203 bearing Registration no. 02/Chc/89, dated April 16,
2008, issued by Deputy Director of Boilers, Government of Tamil Nadu, under Section 7/8 of the
Indian Boilers Act, 1923. The same is valid up to April 15, 2009.
Explosive Licenses
202
1.
Letter of renewal of license for importation of 480 KL of petroleum in installation, bearing Registration
no. P/HQ/TN/15/148(P12837), dated November 23, 2007, by Joint Chief Controller of Explosives,
under the provisions of the Petroleum Act, 1934. The same is valid up to December 31, 2010.
2.
no. P/HQ/TN/15/1984(15671), dated November 23, 2007, by Joint Chief Controller of Explosives,
3.
no. P/HQ/TN/15/113(P12805), dated June 05, 2006, by Joint Chief Controller of Explosives, under the
provisions of the Petroleum Act, 1934. The same is valid up to December 31, 2008.
4.
5.
6.
7.
8.
Licenses under the Electricity Rules
1.
Letter of permission bearing no. 37320/EI (T)/T3/76 dated December 27, 1976, issued by Chief
Electrical Inspector, Government of Tamil Nadu, for the installation and commission of 1100 KVA
Diesel Generator set.
2.
Certificate of safety bearing Registration no. MES (N) 1040/D4/97, dated January 08, 1997 issued by
Chief Electrical Inspector, Government of Chennai, under Rule 63 of the Indian Electricity Rules, 1956,
203
for installation of three 11 KV, 1750 KVA Diesel Generator sets and one 4.75 MW Gas Turbine
Generator.
3.
Certificate of safety bearing Registration no. 373320/EI/Fac/JEI/74, dated October 22, 1974 issued by
Chief Electrical Inspector, Government of Tamil Nadu under Rule 63 of the Indian Electricity Rules,
1956, for the installation of one 1100 KVA Diesel Generator set.
4.
Letter of permission bearing no. MES (N)/1040/D2/83-2, dated April 04, 1983 issued by Chief
Electrical Inspector, Government of Tamil Nadu, for the installation and commission of one1100 KVA,
Diesel Generator set.
5.
Letter of permission bearing number MES (N)/1040/D2/87, dated February 25, 1987 for
the
installation and commission of eleven transformers, by Chief Electrical Inspector, under Rule 63 of the
Indian Electricity Rules, 1956.
6.
Letter of permission bearing number MES (N) 1040/D2/86 dated September 28, 1986 for the
installation and commission of one 1000 KVA, transformer, by Chief Electrical Inspector, under Rule
63 of the Indian Electricity Rules, 1956.
7.
Letter of permission bearing number MES (N) 1040/D2/87, dated March 06, 1987, for the installation
and commission of four transformers, by Chief Electrical Inspector under Rule 63 of the Indian
Electricity Rules, 1956.
8.
Letter of permission bearing Registration no. CN 6760/71/D 3923 dated November 30, 1971, by Tamil
Nadu Electricity Board for the supply of electricity, to the polyester fibre plant situated at Manali.
9.
Certificate of Safety bearing Registration no. 37320/EIT/Y4/73, dated July 17, 1973, for operating the
lift in the factory, situated at Manali, Chennai, by the Chief Electoral Inspector, Government of Tamil
Nadu.
Agreements for the Supply of Energy
1.
Agreement entered into between Tamil Nadu Electricity Licensee, through Superintending Engineer and
our Company, dated March 31, 2005 for the supply of 12500 KVA of electrical energy.
License from Fire Department
204
1.
License bearing no. 809/05, dated October 26, 2005, issued by Divisional Officer, Tamil Nadu Fire
Department, under Section 13 of the Tamil Nadu Fire & Rescue Services Act, 1985 for selling, storing,
processing, pressing, transporting of works, petroleum items and petroleum product storage..
Licenses related to the Export Oriented Unit
1.
Letter of permission bearing Registration no. F.No. 19/105/93-EOU/TN from Ministry of Commerce,
Government of India to change the name from Futura Polymers Limited to Futura Polyesters Limited
2.
Letter of permission bearing Registration no. 19/105/93-EOU-TN-Vol-VI dated January 02, 2002, from
Ministry of Commerce, Government of India, for the establishment of Export-Oriented Unit by way of
merger of three existing Export Oriented Units with their locations in the State of Tamil Nadu.
3.
Green Card No. 1241/MEPZ, dated April 01, 2004, issued by Ministry of Commerce for the approval to
receive priority treatment from all the State Governments, as an Export Oriented Unit for the
manufacturing of PET Chips, Polyester Polymer Flakes, Polyester Filament Yarn, Poly Trimethylene
Terephthalate (PTT). The same is valid up to March 31, 2009.
4.
Registration-Cum-Membership Certificate, bearing no. RCMC No. 0465/2006-2007, issued by
Federation of Indian Export Organization, dated April 04, 2006. Our Company was registered as a large
scale manufacturer, with the Registration no. FIEO/WR/0465/2006-2007/0465. The same is valid up to
March 31, 2009
5.
Certificate of Recognition bearing no. 015947, issued by the Office the Joint Director, General of
Foreign Trade, dated January 13, 2003, awarded to our Company, awarding it the status of one star
Export House, in accordance with the provisions of the Exim Policy. The same is valid up to March 31,
2009.
6.
Acknowledgement bearing no. 1401/SIA/IMO/2003, by Secretariat of Industrial Assistance, dated May
28, 2003, for acknowledging the manufacture of Pet Preforms, Pet Chips, Polyester Master Batch Chips,
Polyester Staple Fibre, Polyester Tops and Polyester TOW by our Company.
Other Licenses
1.
Certificate of Registration bearing Code no. 511597418 under Employees State Insurance Act, issued in
the name of our Company for our employees at Manali, Chennai..
2.
Certificate of Registration bearing EST Code no. TN/9614 under Employee’ Provident Fund and
Miscellaneous Provisions Act, 1932 issued in the name of our Company.
205
3.
Certificate of Registration bearing Code no. 31-18004-102 under Employees State Insurance Act, dated
May 14, 1981, issued in the name of our Company for our employees employed with the office situated
at Paragon Condominium, 3rd Floor, Pandurang Budhakar Marg, Mumbai.
4.
Certificate of Verification bearing Registration no. TN. 341, dated March 03, 2007, issued by Deputy
Inspector of Labor, Government of Tamil Nadu, under the Standards of Weights and Measures
(Enforcement) Act, 1985. The same is valid up to January 22, 2009.
5.
Certificate of Registration bearing Registration no. R.C.no. 12/2004, dated February 07, 2007, issued by
Chief Inspector of Factories, Government of Tamil Nadu, under the Contract Labor (Regulation and
Abolition) Act, 1970 and Tamil Nadu Contract Labor Rules, 1975.
6.
Permission bearing no. GS/55/F of 2004-2005, under Bombay Municipal Corporation Act, dated March
22, 2005, to establish computer data processing unit at the office situated at Paragaon Condominium, 3rd
Floor, Pandurang Budhakar Marg, Mumbai. The same is valid up to March 31, 2009
ISO Certification
1.
ISO 9001:2000 Certification, bearing no. 217938, dated September 10, 2007, awarded by Bureau
Veritas Certification (India) Private Limited for satisfactory operation of the Company’s Management
System. The same is valid up to June 22, 2010.
2.
ISO 14001:2004 Certification, bearing no. 185630, dated February 23, 2006, awarded by BVQI for
satisfactory operation of the Company’s Environmental Management System. The same is valid up to
September 27, 2008.
Safety Inspection Reports
1.
Report of Examination dated June 18, 2008 of 4 Electric Hoist under Section 29 of Factories Act, 1948
and Rule 55A of Tamil Nadu Factory Rules, 1950. The same is valid up to June 17, 2009.
2.
Report of Examination dated June 19, 2008 of 5 Fork Lifts under Section 29 of Factories Act, 1948 and
Rule 55A of Tamil Nadu Factory Rules, 1950. The same is valid up to June 18, 2009.
3.
Report of Examination dated June 23, 2008 of 4 Fork Lifts and 4 Electric Hoist under Section 29 of
Factories Act, 1948 and Rule 55A of Tamil Nadu Factory Rules, 1950. The same is valid up to June 22,
2009.
206
4.
Report of Examination dated June 24, 2008 of 2 Fork Lifts, 1 Four Wheeled Troley and 1 Wire Rope
Sling under Section 29 of Factories Act, 1948 and Rule 55A of Tamil Nadu Factory Rules, 1950. The
same is valid up to June 23, 2009.
Reports of Examination of Pressure Vessels
1.
Reports of examination bearing no. TVR 1044/PV; 01/ET/2007-II, dated October 05, 2007 of 79
pressure vessels under Rule 56 of Tamil Nadu Factories Rules, by Deputy Chief Inspector of Factories,
certifying that the relevant pressure vessel is in a satisfactory working condition.
2.
Reports of examination bearing no. TVR 1044/PV; 02/ET/2007-II, dated March 26, 2007 of 2 pressure
vessels under Rule 56 of Tamil Nadu Factories Rules, by Deputy Chief Inspector of Factories, certifying
that the relevant pressure vessel is in a satisfactory working condition.
3.
Reports of examination bearing no. TVR 1044/PV; 03/ET/2007-II, dated October 08, 2007 of 58
2.
Reports of examination bearing no. TVR 1044/PV; 04/ET/2007-II, dated September 24, 2007 of 57
Approvals applied for but not received
Sr.
No
License expired, applied for renewal
Details of application.
Authority
before
which
pending.
1.
Renewal of consent by Tamil Nadu
Pollution
Control
Board,
bearing
Registration
no.
T9/TNPCBD/F2787/W/RL/04 for the
polymer and preform division for the
discharge of sewage and/or trade effluent
under Section 25/26 of the Water
(Prevention and Control of Pollution) Act,
1974 valid upto March 31, 2008
Our Company has made an
application for the renewal of
the consent vide letter dated
February 20, 2008, bearing
number
HR/MISC/TNPCB/694/2008.
Tamil Nadu
Pollution
Control
Board.
2.
Pollution
Control
Board
bearing
Registration
no.
T9/TNPCBD/F2787/TVLR/RL/A/04 for
the polymer and preform division for the
exsisting plant operation under Section 21
of the Air (prevention and Control of
pollution) Act, 1981 valid upto March 31,
2008
number
Tamil Nadu
Pollution
Control
Board.
3.
Pollution
Control
Board,
bearing
Registration
no.
Tamil Nadu
Pollution
Control
207
T9/TNPCBD/F2788/W/RL/04 for the
fibre division for the discharge of sewage
and/or trade effluent under section 25/26
of the Water (prevention and Control of
pollution) Act, 1974 valid upto March 31,
2008
number
Board
4.
Pollution
Control
Board
bearing
Registration
no.
T9/TNPCBD/TVLR/F2788/A/RL/04 for
the fibre division for the exsisting plant
operation under Section 21 of the Air
(Prevention and Control of Pollution) Act,
1981 valid upto March 31, 2008
number
Tamil Nadu
Pollution
Control
Board.
5.
Pollution
Control
Board,
bearing
Registration no. DEE/TNPCB/TLR/OL50/W/07 for the ARM(Alternate Raw
Material) division issued by the District
Enviornmental Engineer for the discharge
of sewage and/or trade effluent under
Section 25 of the Water (Prevention and
Control of Pollution) Act, 1974 valid upto
March 31, 2008
number
Tamil Nadu
Pollution
Control
Board.
6.
Pollution
Control
Board,
bearing
Registration no. DEE/TNPCB/TLR/OL50/A/07 for the ARM(Alternate Raw
Material) division issued by the District
Enviornmental Engineer for the exsisting
operation of the plant under Section 21 of
the Air (Prevention and Control of
Pollution) Act, 1981 valid upto March 31,
2008
number
Tamil Nadu
Pollution
Control
Board.
7.
Renewal of license issued by Tamil Nadu
Fire Department under Section 13 of
Tamil Nadu Fire & Rescue Services Act,
1985 for selling, storing, processing,
pressing, transporting of works, petroleum
items and petroleum product storage.
the license vide letter dated
January 04, 2007 bearing no.
HR/MISC/FIRE
LICENSE/578/2007.
Tamil Nadu
Fire
Department.
8.
Renewal of license issued by Tamil Nadu
Fire & Rescue Services, under Section 13
of Tamil Nadu Fire & Rescue Services
Act.
the license vide letter dated
May 02, 2008, bearing no.
HR/MISC/FIRE
LICENSE/817/2008
Tamil Nadu
Fire
Department.
9.
Renewal of provisional order of
permission for Boiler no. T/8085 issued
by Deputy Director of Boilers,
Government of Tamil Nadu, under Section
9 of the Indian Boilers Act, 1923 which
was valid upto July 4, 2008.
application for carrying out
inspection vide letter dated
June 27, 2008.
Deputy
Director of
Boilers
Note
License bearing no. D.L.2.No. 35/2007-2008, dated October 30, 2007, issued by Commissioner of Prohibition
and Excise, Chennai, under Section 18 of the Tamil Nadu Prohibition Act, 1937 for the possession and use of
Methyl Alcohol was valid upto March 31, 2008. Renewal of this license has not been applied for since the
208
renewal of the same can be applied for after our Company has received the license issued by Tamil Nadu Fire &
Rescue Services Act for which application has been made but license has not been received as stated under the
head, “Approvals applied for but not received”.
Licenses in relation to objects of the Issue
a.
The objects of this Issue (other than meeting the issue expenses) are funding the working capital
requirements & general corporate purposes as on chapter titled “Objects of the Issue” page 20 of the Draft
Letter of Offer.
b.
We do not currently envisage any specific government approvals required by us for the aforesaid objects.
We have thus not applied for government approvals, if any, which may be required in relation to the objects
of the Issue.
209
SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority of the Issue
Our Board has, pursuant to a resolution passed at its meeting held on May 30, 2008 has decided to make this
Issue to the Equity Shareholders of our Company with right to renounce.
Prohibition by SEBI
Our Company, our Directors, our associate and group companies, our Promoter Group Entities, our Promoters,
our Directors, firms and companies with which our Company’s Directors are associated as directors or
promoters have not been prohibited from accessing or operating in the capital markets or restrained from
buying, selling or dealing in securities under any order or direction passed by SEBI.
Further, our Promoters and Promoter Group entities and associate companies are not detained as willful
defaulters by RBI/ Government authorities and there are no violations of securities law committed by them in
the past or pending against them.
Eligibility for the Issue
Our company is an existing listed company registered under the Act, whose Equity Shares are listed on BSE. It
is eligible to offer this Issue in terms of clause 2.4.1(iv) of the SEBI DIP guidelines.
Disclaimer Clause
AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI.
IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT LETTER OF
OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED TO MEAN THAT
THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY
RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR FOR THE
CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT
LETTER OF OFFER. THE LEAD MANAGER IDBI CAPITAL MARKET SERVICES LIMITED
HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE
GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND
INVESTOR PROTECTION) GUIDELINES AS FOR THE TIME BEING IN FORCE. THIS
REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR
MAKING AN INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY
UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE
CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE
DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE
DILIGENCE TO ENSURE THAT THE ISSUER COMPANY DISCHARGES ITS RESPONSIBILITY
ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER, HAS
FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED JULY 17, 2007 IN
ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS
AS FOLLOWS:
i.
WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIALS MORE PARTICULARLY
REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE
FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE,
ii. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE
COMPANY, IT’S DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,
INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS
OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE
CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER
PAPERS FURNISHED BY THE COMPANY,
WE CONFIRM THAT:
A.
THE DRAFT LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY
WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
210
B.
ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE
GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE GOVERNMENT
AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY
COMPLIED WITH; AND
C.
THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND
ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION
AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN
ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT 1956, THE SEBI
(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER
APPLICABLE LEGAL REQUIREMENTS.
iii. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN
THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE
SUCH REGISTRATIONS ARE VALID;
iv. WE HAVE SATISFIED OUR SELVES ABOUT THE WORTH OF THE UNDERWRITERS TO
FULFILL THEIR UNDERWRITING COMMITMENTS – NOT APPLICABLE;
v.
WE CERTIFY THAT THE WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN
OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO FOR
PART OF PROMOTERS CONTRIBUTION SUBJECT LOCK-IN, WILL NOT BE DISPOSED
/ SOLLED / TRASFERED BY THE PROMOTERS DURING THE PERIOD STARTING
FROM THE DATE OF FILING OF THE DRAFT LETTER OF OFFER WITH BOARD TILL
THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT
LETTER OF OFFER – NOT APPLICABLE;
vi. WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR
PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE
FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED
WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE
HAVE BEEN MADE IN THE DRAFT PROSPECTUS/LETTER OF OFFER – NOT
APPLICABLE.
vii. WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI
(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE
COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO
ENSURE THAT PROMOTERS’ CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM
ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF
THE ISSUE .WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT
SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT
ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’
CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED
COMMERCIAL BANK AND SHALL BE RELEASED TO THE COMPANY ALONG WITH
THE PROCEEDS OF THE PUBLIC ISSUE – NOT APPLICABLE.
viii. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT
APPLICABLE TO THE ISSUER, WE CERTIFY THE REQUIREMENTS OF PROMOTERS’
CONTRIBUTION UNDER CLAUSE 4.10 {SUB-CLAUSE (A), (B) OR (C), AS MAY BE
APPLICABLE} ARE NOT APPLICABLE TO THE ISSUER – NOT APPLICABLE.
ix. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN
OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF
ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES
WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE
OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.
x.
WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES
211
ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK
ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES
MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT THE
AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE
ISSUER SPECIFICALLY CONTAINS THIS CONDITION.
xi. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION,
ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE
PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES
SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE.
xii. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF
OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN
DEMAT OR PHYSICAL MODE.
xiii. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE
DRAFT LETTER OF OFFER:
a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE
SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY
AND;
b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM
TIME TO TIME.
The filing of the Draft Letter of Offer does not, however, absolve our Company from any liabilities under
Section 63 or Section 68 of the Act or from the requirement of obtaining suchstatutory and other clearances as
may be required for the purpose of the proposed Issue. SEBI further reserves the right to takeup, at any point of
time, with the Lead Manager any irregularities or lapses in the Draft Letter of Offer. In addition to the Lead
Manager, the Issuer is also obligated to update the Draft Letter of offer and keep the public informed of any
material changes till the date of listing and commencement of trading of the Equity Shares offered under the
Caution
Our Company and Lead Manager accept no responsibility for statements made otherwise than in the Draft Letter
of Offer or in the advertisements or any other material issued by or at the instance of our Company and that
anyone placing reliance on any other source of information, including our website www.futurapolyesters.com,
would be doing so at his/her/their own risk.
All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective
or additional information would be made available for a section of the shareholders or investors in any manner
whatsoever including at presentations, research or sales reports etc.
Investors that invest in the Issue will be deemed to have represented to our Company and Lead Manager and
their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable
laws, rules, regulations, guidelines and approvals to acquire Equity Shares of our Company, and are relying on
independent advice / evaluation as to their ability and quantum of investment in this Issue.
Disclaimer in Respect of Jurisdiction
The Draft Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and
regulations hereunder.
The distribution of the Draft Letter of Offer and the offering of the Equity Shares on a rights basis to persons in
certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions.
Persons into whose possession the Draft Letter of Offer may come are required to inform themselves about and
observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the
appropriate court(s) in Mumbai, India only.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for
that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations and SEBI has given
its observations. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or
indirectly, and the Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with the
212
legal requirements applicable in such jurisdiction. In this respect investors are advised to refer to the paragraph
tiltled “No Offer in Other Jurisdictions” on page v of the Draft Letter of Offer. Neither the delivery of the Draft
Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been
no change in our affairs from the date hereof or that the information contained herein is correct as of any time
subsequent to this date.
The Designated Stock Exchange for the purpose of this Issue will be BSE.
Disclaimer clause of the BSE
As required, a copy of the Draft Letter of Offer has been submitted to The Bombay Stock Exchange Limited,
(hereinafter referred to as “BSE” or the “Exchange”). BSE has given vide its letter dated [●] permission to our
Company to use the Exchange’s name in the Draft Letter of Offer as one of the stock exchanges on which this
Company’s Equity Shares are proposed to be listed. The Exchange has scrutinized the Draft Letter of Offer for
its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The
Exchange does not in any manner: (i) Warrant, certify or endorse the correctness or completeness of any of the
contents of the Draft Letter of Offer; or (ii) Warrant that this Company’s securities will be listed or will continue
to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of this
Company, its promoters, its management or any scheme or project of this Company; and it should not for any
reason be deemed or construed that the Draft Letter of Offer has been cleared or approved by the Exchange.
Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant
to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever
by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other
reason whatsoever.
Filing
The Draft Letter of Offer has been filed with Securities Exchange Board of India, SEBI Bhavan, Plot No C-4A,
G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, for its observations and also with BSE where
the Equity Shares to be issued in terms of the Draft Letter of Offer are proposed to be listed.
Dematerialised Dealing
Our Company has entered into agreement dated March 24, 2005 and March 03, 2005 with NSDL and CDSL
respectively and its Equity Shares bear the ISIN No. INE 564A01017
Listing
The existing Equity Shares of our Company are listed on BSE. Our Company has paid the current annual listing
fees to BSE. Our Company will apply for in-principle approval from BSE for the Equity Shares proposed to be
issued through the Draft Letter of Offer and has received in-principle approval from BSE by its letter dated [●]
granting the same for listing the Equity Shares arising from this Issue.
Consent
Consent in writing of the Auditors, Lead Manager, Legal Advisor to the Issue, Registrar to the Issue to act in
their respective capacities and of the bankers to our Company and Directors for their names to appear as such in
the Draft Letter of Offer have been obtained and filed with SEBI, along with a copy of the Draft Letter of Offer
and such consents have not been withdrawn up to the time of delivery of the Draft Letter of Offer for
registration with the Stock Exchange.
M/s N. M. Raiji & Co., the Auditors of our Company have given their written consent for the inclusion of their
Report in the form and content as appearing the Draft Letter of Offer and such consents and Reports have not
been withdrawn upto the time of delivery of the Draft Letter of Offer for registration to the Stock Exchange. M/s
N. M. Raiji & Co., the Auditors of our Company have given their written consent for inclusion of statement of
tax benefits in the form and content as appearing in the Draft Letter of Offer accruing to our Company and its
members. To the best of our knowledge there are no other consents required for making this issue, however,
should the need arise, necessary consents shall be obtained by us.
Impersonation
Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act,
which is reproduced below:
“Any person who
213
a) Makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares
therein, or
b) Otherwise induces a company to allot, or register any transfer of shares therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years.”
Expert Opinion
Save and except as stated in the section titled “Financial Statements” and chapter titled “Statement of Tax
Benefits” beginning on pages 111 and 25 respectively of the Draft Letter of Offer, our Company has not
obtained any expert opinions in relation to the Draft Letter of Offer.
Option to Subscribe
Please refer paragraph titled “Option to receive Equity Shares in Dematerialised Form” in the chapter titled
“Terms of the Issue” beginning on page 220 of the Draft Letter of Offer.
Underwriting Commission, Brokerage and Selling Commission.
No underwriting commission, brokerage and selling commission will be paid for the Issue.
DETAILS OF PUBLIC / RIGHTS ISSUES
a)
Rights Issue in the year 2004
Our Company had undertaken a Rights Issue of 1,48,78,729 Equity Shares of Rs. 10 each for cash at par
aggregating to Rs. 1487.87 lacs to the existing shareholders of our Company in the proportion of four Equity
Shares for every nine Equity Shares to those members whose name appeared on the register of members as on
September 14, 2004. The issue opened on September 30, 2004 and closed on October 29, 2004.
Promise vs. Performance
For Rights Issue made in 2004 main objects of the Issue were as follows:
To fund the working capital needs
After reworking the capital needs and subsequently taking into account the growth in business turnover, the
product manufactured, cost of manufacture, inflation etc. our Company came to the conclusion that the net
working capital gap shall be funded through the proceeds of the Issue. Therefore, the main object of the Rights
Issue made in 2004, was to utilize the proceeds as working capital.
214
Promise vs. performance
The objective for which the Issue was made was fulfilled
b)
Our Company had undertaken a Rights Issue of 92,22,040 Equity Shares of Rs. 10 each at a premium of Rs. 20/per share aggregating to Rs. 27,66,61,200 lacs to the existing shareholders of our Company in the proportion of
two Equity Shares for every five Equity Shares. The issue was made to strengthen the capital base of our
Company and to bring about better balance between our Company’s borrowings and paid up capital and
reserves.
The issue was made to strengthen the capital base of our Company and to bring about better balance between
our Company’s borrowings and paid up capital and reserves.
As against the above, our Company has achieved the following:
(Rs. In Lacs)
Equity Capital
Reserves
Sales and Other Income
PBIDT
Interest
Depreciation
Tax
PAT
Dividend
EPS
Book Value
c)
1992-93
Promised
2320
3950
28447
2754
1778
1296
0
(320)
10%
(1.38)
27.03
Actual
2305.51
3650.93
25635
2351.96
1826.34
1392.52
0
(866.90)
Nil
(3.78)
25.83
1993-94
Promised
3248
6218
42246
5350
2382
1906
0
1062
20%
3.27
29.14
Actual
3191.99
7773.64
29861.90
5460.56
1750.84
959.50
5.00
2745.22
12%
8.60
34.35
1994-95
Promised
3248
7573
50328
6764
2505
2092
0
2167
25%
6.67
33.32
Actual
3237.63
8816.24
36471.85
4039.23
1515.10
1073.84
5.00
1445.29
15%
4.46
37.23
Our Company had undertaken a Rights Issue of 59,42,425 Equity Shares of Rs. 10 each at a premium of Rs. 5/per share aggregating to Rs. 8,91,36,375 to the existing shareholders of our Company in the proportion of two
Equity Shares for every one Equity Share.
The object of the issue was to augement the long term resources of our Company for the then going operations
and to strengthen the equity base of our Company.
Since the promised future performance of our Company was not presented in the offer document, a
comparison of our Company’s actual performance vis-à-vis the projections made in the Offer Document
was not possible.
Issue Programme
The subscription list will open upon the commencement of the banking hours and will close upon the close of
banking hours on the dates mentioned below or on such extended date (subject to a maximum of 60 days) as may
be determined by the Board, subject to necessary approvals:
Issue opens on Last date for receiving requests for Split Issue closes on
Application Forms
215
[●]
[●]
[●]
Issue expenses
The total expenses of this Issue are estimated to be approximately Rs. [●]. The Issue related expenses include,
amongst others, issue management fees, brokerage (if any) and printing and distribution expenses, legal fees,
advertisement expenses, registrar and depository fees and listing expenses.
Sr. No
Particulars
Amount
(Rs. in lacs)
1
Fees of Lead Manager, Registrar to Issue, Legal Advisor etc.
[●]
2
Advertisement and marketing expenses
[●]
3
Printing, stationery, distribution, postage etc
[●]
4
Others (including but not limited to Stock Exchage and SEBI filing fees)
[●]
Total
[●]
Details of Fees Payable
1
Fees Payable to the Lead Manager.
The total fees payable to the Lead Manager will be as per the Engagement Letter dated January 10, 2008 and as
stated in the Memorandum of Understanding executed between our Company and Lead Manager dated June 30,
2008, copy of which is available for inspection at our Registered Office.
1
Fees Payable to the Registrar to the Issue.
The Fees Payable to the Registrar to the Issue is set out in relevant documents, copies of which are available for
inspection at the Registered Office of our Company at Paragaon Condominium, 3rd floor, Pandurang, Budhkar
Marg, Mumbai-400013 from 10.00 a.m. to 1.00 p.m., from the date of filing of the Draft Letter of Offer until the
date of closure of the Subscription List.
Companies Under the same Management within the meaning of Section 370(1)(B) of the Act.
There are no listed companies within the same management within the meaning of Section 370(1)(B) of the
Companies Act, 1956.
Stock Market Data for the Equity Shares of our Company
The Equity Shares of our Company are listed on the BSE. The stock market data for BSE, as extracted from its
website, is given below:
i.
The following table sets forth, the high and low of daily closing prices of our Equity Shares on BSE
along with the number of Shares traded and the value traded in lacs of Rupees on these days, for a
period of five years to filing of the Draft Letter of Offer, for the periods indicated:
216
High
Date
200708
200607
200506
200405
200304
ii.
January
02, 2008
February
08, 2007
July 22,
2005
February
24, 2005
January
5, 2004
Low
Price
(in
Rs.)
Value
No. of
for the
Shares
day (Rs.
Traded
lacs)
46.35
488749
217.00
29.60
139318
37.56
39.50
1781436
667.13
30.90
2441849
709.63
29.45
190089
55.26
Date
April 03,
2007
July 24,
2006
February
07, 2006
June 24,
2004
March
31, 2003
Price
(in
Rs.)
Value
No. of for the
Shares
day
Traded (Rs.
lacs)
16.30
16831
2.85
25.67
10.50
17773
2.03
17.32
18.70
10859
20.87
26.54
8.08
4200
0.35
16.18
4.95
3050
0.16
12.98
The following table sets forth, the total value traded in lacs of Rupees of our Equity Shares on BSE, for
a period of five years to filing of the Draft Letter of Offer, for the periods indicated:
Financial Year
2007-08
2006-07
2005-06
2004-05
2003-04
BSE
3270.38
12186.45
3624.83
27372.40
5897.95
iii. The following table sets forth, the high and low prices of our Equity Shares on BSE, the number of
Equity Shares traded and the value traded in million of Rupees, in the last six months, for the periods
indicated:
High
Date
December
January
February
March
April
May
June
December
13, 2007
January
02, 2008
February
04, 2008
March
12, 2008
April
09, 2008
May 13,
2008
June 2,
2008
Low
Price
(in
Rs.)
Value
for
No. of
the
Shares
day
traded
(Rs.
lacs)
46.10
410643
177.86
46.35
488749
217.00
29.95
56298
16.16
23.95
366463
75.57
24.85
119701
28.08
34.90
488620
159.42
30.00
70705
20.27
Date
December
04, 2007
January
23, 2008
February
29, 2008
March
24, 2008
April
07, 2008
May 06,
2008
June 25,
2008
Price
(in
Rs.)
No. of
Shares
traded
Value
for
the
day
(Rs.
lacs)
30.20
105750
32.80
6041557
24.35
161089
44.20
4078428
22.00
48607
11.12
1152591
13.55
251945
36.27
2795519
20.50
28113
5.93
1369892
21.65
29190
6.40
1108.94
19.40
47495
10.15
326.82
iv. The closing market price of our Equity Shares on BSE as on May 30, 2008 after the approval of this
issue by our Board of Directors on May 30, 2008 was Rs. 28.50
Issues for consideration other than cash
217
Except as stated in chapter titled “Capital Structure” beginning on page 12 of the Draft Letter of Offer, our
Company has not issued Equity Shares for consideration other than cash or out of revaluation reserves.
Outstanding Debentures, Bonds and Preference Shares
Our Company has no outstanding debentures, bonds or preference shares.
Investor Grievances and Redressal System
Our Company has adequate arrangements for redressal of investor complaints. Well-arranged correspondence
system developed for letters of routine nature. The share transfer and dematerialization for our Company is
being handled by registrar and share transfer agent. Letters are filed category wise after having attended to
redressal norm for response time for all correspondence including shareholders complaints is 15 days.
Investor Grievances arising out of this Issue
Our Company’s investor grievances arising out of the Issue will be handled by Satellite Corporate Services Private
Limited, the Registrar to the Issue. The Registrar will have a separate team of personnel handling only our postIssue correspondence.
The agreement between our Company and the Registrar provides for retention of records with the Registrar for a
period of at least one year from the last date of dispatch of Letter of Allotment/ share certificate / refund order to
enable the Registrar to redress grievances of investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio
no. name and address, contact telephone / cell numbers, email id of the first applicant, number and type of
shares applied for, Application Form serial number, amount paid on application and the name of the bank and
the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of
renunciation, the same details of the Renouncee should be furnished.
The average time taken by the Registrar for attending to routine grievances will be 15 days from the date of
receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the
endeavour of the Registrar to attend to them as expeditiously as possible. We undertake to resolve the Investor
grievances in a time bound manner.
Investors may contact the Company Secretary and Compliance Officer in case of any pre-Issue/ post -Issue
related problems such as non-receipt of letters of allotment/share certificates/demat credit/refund orders etc. His
address is as follows:
Mr. S. Ramachandran
Futura Plyesters Limited
Mumbai – 400 013
Tel: +91-22-24922999
Fax: +91-22-24923142
Email: rightsissue@futurapolyesters.com
Allotment Letters / Refund Orders
Our Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of regret
along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a
period of six weeks from the Issue Closing Date. Such refund orders, in the form of MICR warrants/cheque/pay
order, marked “Account payee” would be drawn in the name of a sole/first applicant and will be payable at par
at all the centers where the applications were originally accepted, except for those who have opted to receive
refunds through the ECS facility or RTGS or Direct Credit. If such money is not repaid within eight days from
the day our Company becomes liable to pay it, our Company shall pay that money with interest at the rate of
15% p.a. as stipulated under Section 73 of the Act. Letter(s) of Allotment/Refund Order(s) above the value of
Rs. 1500 will be dispatched by registered post to the sole/first applicant’s address. However, Refund Orders for
values not exceeding Rs.1,500/- shall be sent to the applicants under Certificate of Posting at the applicant’s sole
risk at his address. Our Company would make adequate funds available to the Registrar to the Issue for this
purpose. Adequate funds would be made available to the Registrar to the Issue for dispatch of the letters of
allotment/ share certificates/ demat credit/ refund orders.
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In case our Company issues letters of allotment, the corresponding share certificates will be kept ready within
three months from the date of allotment thereof or such extended time as may be approved by the Companies
Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Allottees are
requested to preserve such Letters of Allotment, which would be exchanged later for the share certificates.
Status of Complaints
Details of Complaints received for the period April 1, 2007 to July 04, 2008 are as follows:
Sr. No
1.
2.
3.
4.
Details of Investor Complaints
Complaints pending as from on April 01, 2007
Complaints received from April 01, 2007 to July 04, 2008
Complaints redressed during the period
Complaints pending at the end of period
No. of Complaints
Nil
19
19
Nil
Changes in Auditors during the last three years
There has been no change in our Statutory Auditors in last three financial years.
Capitalisation of Reserves or Profits
Our Company has not capitalized any of its reserves or profits for the last five years other than those mentioned
in the chapter titled“Capital Structure” beginning on page 12 of the Draft Letter of Offer.
a) Revaluation of Assets
As our Company’s Plant and Machinery were installed over a period of time during the life of the Company
since its formation, the management decided to revalue the same so as to reflect the appropriate value in the
books of accounts. Accordingly, our Company appointed a Government certified Valuer, namely, M/s Kanti
Karamsey & Co. to revalue the Plant and Machinery at both locations, namely Chennai and Khopoli. The
revaluation was carried out on November 30, 2003, with the intention to assess the intrinsic value of the plant
and machinery. The net increase in the net book value arising out of revaluation has been credited to
Revaluation Reserve Account.
Details of the Revaluation of Assets are here as under:
1.
2.
3.
4.
Gross Book Value was computed to be Rs. 38, 618.10 lacs
Accumulated Depreciation was computed to be Rs. 18, 198.34 lacs
Net Book Value was computed to be Rs. 20, 419.76 lacs
Net Revaluation was computed to be Rs. 4145.12 lacs
Total Replacement Cost as on November 30, 2003 was assessed to be Rs. 2199.73 lacs and the Fair Market
Value then was estimated to be Rs. 1336.62 lacs
b) Revaluation of part of land
During the year 2007-2008 our Company appointed M/s. Kanti Karamsey & Co. for the purpose of revaluation
of part of the land. The same was performed on February 16, 2008. The net increase in the net book value
arising out of revaluation has been credited to the Revaluation Reserve Account. Revaluation is based on the
Valuation Report of M/s. Kanti Karamsey & Co. dated February 18, 2008.
Details of the Revaluation of part of the land
1.
2.
3.
4.
Gross Book Value was computed to be Rs. 5.28 lacs
Accumulated Depreciation was computed to be Nil
Net Book Value was computed to be Rs. 5.28 lacs
Net Revaluation was computed to be Rs. 14, 089.94 lacs
IMPORTANT
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1
This Issue is pursuant to the resolutions passed by the Board of Directors at its meeting held on May 30,
2008 wherein issue of Equity Shares on rights basis was approved.
2
This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners as per the
list to be furnished by the depositories in respect of the shares held in the electronic form, and on the
Register of Members of our Company in case of Equity Shares held in physical form at the close of
business hours on the Record Date i.e. [●].
3
Your attention is drawn to the chapter titled ‘Risk Factors’ beginning on page viii of the Draft Letter of
Offer.
4
Please ensure that you have received the Composite Application Form (“CAF”) with the Draft Letter of
Offer.
5
Please read the Draft Letter of Offer and the instructions contained herein and in the CAF carefully before
filling in the CAF. The instructions contained in the CAF are an integral part of the Draft Letter of Offer
and must be carefully followed. An application is liable to be rejected for any non-compliance of the
provisions contained in the Draft Letter of Offer or the CAF.
220
TERMS OF THE ISSUE
The Equity Shares are now being issued pursuant to the Rights Issue and the Equity Shares to be allotted are
subject to the terms and conditions contained in the Draft Letter of Offer, the enclosed Composite Application
Form (“CAF”), the Memorandum and Articles of Association of our Company, the provisions of the Act,
guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of
securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms
and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may
be applicable and introduced from time to time.
Authority for the Issue
This Issue is being made pursuant to the resolution passed at the meeting of the Board of Directors of our
Company under Section 81(1)(a) of the Companies Act,1956 as on May 30, 2008
Basis for the Issue
The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held
in the electronic form and on the Register of Members of our Company in respect of shares held in the physical
form at the close of business hours on the Record Date, i.e., [●] fixed in consultation with the Designated Stock
Exchange, BSE.
Rights Entitlement Ratio:
As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the
register of members as an equity shareholder of our Company as on the Record Date i.e. [●]. You are entitled to
the number of shares in Block I of Part A of the enclosed in the Composite Application Form.
The eligible shareholders shall be entitled to the following:
1
One Equity shares for every two Equity Shares held as on the Record Date
Rights Entitlement on Equity Shares held in the pool account of the clearing members on the Record Date shall
be considered, and such claimants are requested to:
1.
Approach the concerned depository through the clearing member of the Stock Exchange with requisite
details; and
2.
Depository in turn should furnish details of the transaction to the Registrar.
Market lot
The securities of our Company are tradeble only in dematerialized form. In case of holding in physical form, our
Company would issue to the allottees separate certificate for the Equity Shares allotted on rights basis with a
split performance.
Our company would issue one certificate for the entire allotment. However, our Company would issue split
certificates on written requests from the shareholders.
Investors may please note that the Equity Shares of our Company can be traded on the Stock Exchange
in dematerialized form only.
Nomination facility
In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can
nominate any person by filling the relevant details in the CAF in the space provided for this purpose.
A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being
individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the jointholders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming
entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the
same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the
221
nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed
manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the
minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person
nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity
Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the
demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the
Registered Office of our Company or such other person at such addresses as may be notified by our Company.
The applicant can make the nomination by filling in the relevant portion of the CAF.
Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has/have
already registered the nomination with our Company, no further nomination needs to be made for Equity Shares
to be allotted in this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination
for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant
would prevail. If the applicant requires tochange the nomination, they are requested to inform their respective
DP.
Joint-Holders
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the
same as joint-holders with benefits of survivorship subject to provisions contained in the Articles of Association
of our Company.
Offer to Non-Resident Equity Shareholders/Applicants
As per regulation 6 of Notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general
permission to Indian companies to issue rights shares to non-resident shareholders including additional shares.
Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to
the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999
(FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment /
notification No. FEMA 20/200-RB dated May 3, 2000. The Board of Directors may at its absolute discretion,
agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares,
payment of dividend etc. to the non-resident shareholders. The rights shares purchased by non-residents shall be
subject to the same conditions including restrictions in regard to the repatriability as are applicable to the
original shares against which rights shares are issued.
By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”)
have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign
Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations,
2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified
in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated
and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated
non-resident entities. Further, the RBI in its Master Circular dated July 1, 2007 has stated that OCBs are not
permitted to subscribe to Equity Shares of Indian companies on rights basis under the automatic route. OCBs
shall not be eligible to subscribe to the Equity Shares pursuant to the Draft Letter of Offer unless prior approval
of the RBI is obtained in this regard.
In this respect, our Company had applied to the RBI for permission for certain named erstwhile OCB
shareholders, which were its shareholders on the date of application to RBI, and the RBI has vide its letter no.
FE.CO.FID/1494/11.01.020(XXX)2008-09 dated July 16, 2008 issued the following clarifications in respect of
the above:
“Please refer to your letter dated June 25, 2008 on the captioned subject.
2. Our clarification seriatim, to the issues raised is as under;
a)
The erstwhile OCB shareholders, Persephone Investments Limited, Newbridge Holdings Inc., Morton
Enterprises Inc. and Banabhai Finance Limited are not under adverse notice of RBI and right equity
shares can be offered to them by the company as non-resident entities provided the entities are
incorporated or registered under the relevant statutes, laws of the host country and the share
subscription is received from them by the way of foreign inward remittance through normal banking
channel.
222
b) They can renounce their right shares in part or in full in favour of resident or in favour of person resident
outside India, who is eligible to invest in the company under the FDI Policy. However, if the renouncee is
an entity reckoned as OCB then the company will have to ensure that such incorporated/registered entity
has not availed of benefits as an OCB and confirm from RBI that the entity is not under adverse notice or
they can apply for additional shares under the Right Issue as incorporated non-resident entities, provided the
share subscription has been received by way of foreign inward remittance and the overall issue of shares by
the company to non-residents in the total paid –up capital does not exceed the sectoral cap for the company.
c) The company can allot the right shares including additional shares subscribed by the above mentioned
erstwhile shareholders subject to conditions specified in Regulation 6(2) of Notification no. FEMA
20/2000-RB dated May 3, 2000.”
A copy of this approval is available for inspection at the Registered Office of our Company as a material
document, as contained in the section tiled “Material Contracts and Documents for Inspection” beginning on
page 284 of the Draft Letter of Offer.
Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares, shall,
inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund
of application moneys, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of
dividends etc.
In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened
for the purpose. DETAILS OF SEPARATE COLLECTING CENTRES FOR NON-RESIDENT
APPLICATIONS SHALL BE PRINTED ON THE CAF.
Mode of Payment of Dividend
Dividend, if any declared by the Board and approved by our shareholders, will be paid in any of the modes
permitted by the Companies Act, 1956.
I.
Principal Terms of this Rights Issue of Equity Shares
The Equity Shares, now being issued, subject to the provisions of the Act , terms and conditions contained in the
Draft Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of
Association of our Company, guidelines issued by SEBI, Foreign Exchange Management Act 1999 (“FEMA”),
guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of
India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the
allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from
time to time.
Face value
Each Equity Share shall have the face value of Rs. 10.
Issue Price
Each Equity Share is being offered at a price at par.
Terms of payment
The entire amount of Rs. 10/- per Equity Share shall be payable on application.
The payment on Application would be applied as under:
On Application
Towards Share Capital
Rs. 10 per Equity Share
A separate cheque/ draft must accompany each Application form.
Payment should be made in cash (not more than Rs.20,000) or by cheque/bank demand draft/ drawn on any
bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers
223
clearing house located at the center where the CAF is accepted. Outstation cheques /money orders/postal orders
will not be accepted and CAFs accompanied by such cheque/money orders/postal orders are liable to be
rejected.
Where an applicant has applied for additional shares and is allotted lesser number of shares than applied for, the
excess application money shall be refunded. The monies would be refunded within 42 days from the closure of
the Issue, and if there is a delay beyond 8 days from the stipulated period, our Company will pay interest on the
monies in terms of sub-sections (2) and (2A) of section 73 of the Companies Act, 1956.
Ranking of the Equity Shares
The Equity Shares shall be subject to the Memorandum and Articles of Association of our Company. The
dividend payable on Equity Shares allotted in this Issue shall rank for dividend in proportion to the amount paid
up. The Equity Shares allotted in this Issue, shall be pari passu with the existing Equity Shares in all respects
including dividend. For more details see section titled “Articles of Association of the Compnay” beginning on
page 244 of the Draft Letter of Offer.
Rights of Equity Shareholders
Subject to applicable laws, Equity Shareholders shall have the following rights:
1
2
3
4
5
6
7
Right to receive dividend, if declared
Right to attend general meetings and exercise voting power, unless prohibited by law;
Right to vote on poll, either in person or proxy;
Right to receive offer for right shares and be allotted bonus shares if announced;
Right to receive surplus on liquidation;
Right of free transferability of share; and
Such other rights as may be available to a shareholder of a listed public company under the Companies Act
and our Memorandum and Articles of Association of our Company and the terms of the listing agreement
with the Stock Exchange.
For further details on the main provisions of our Company’s Articles of Association dealing with voting rights,
dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, please refer section titled
“Articles of Association of the Company” beginning on page 244 of the Draft Letter of Offer.
Fractional entitlements
For Equity Shares being offered on rights basis under this Issue, if the shareholding of any of the Equity
Shareholders is less than two or is not in the multiples of two, the fractional entitlement of such holders shall be
ignored. Shareholders whose fractional entitlements are being ignored would be given preferential allotment of
ONE additional Equity Share each if they apply for additional Equity Shares. The Equity Shares needed for such
rounding off shall be adjusted from the Promoter and Promoter Group’s entitlement at the time of allotment.
Those Equity shareholders having holding less than two Equity Shares and therefore entitled to zero Equity
Shares under this Issue shall be despatched a CAF with zero entitlement. Such Equity Shareholders would be
given preferential allotment of ONE additional Equity Share each. However, they cannot renunciate the same to
third parties. CAF with zero entitlement will be non-negotiable /non-renunciable.
Notices
All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English
national daily with wide circulation, one Hindi national daily with wide circulation and one regional language
daily newspaper in Mumbai with wide circulation and/or, will be sent by ordinary post/ to the registered holders
of the Equity Share at the address registered with the registrar from time to time.
Procedure for Application
The enclosed CAF for Equity Shares should be completed in all respects in its entirety before submission to the
Bankers to the Issue or their designated branches as they appear in the CAF. The forms of the CAF should not
be detached under any circumstances otherwise the application is liable to be rejected.
The CAF would be sent to all shareholders, with a additional separate advise as may be required for Nonresident shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant,
the applicant may request the Registrars to the Issue, Satellite Corporate Services Private Limited, for issue of a
224
duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name
and address.
Non-resident shareholders can obtain a copy of the CAF from the Registrars to the Issue, Satellite Corporate
Services Private Limited, from their office situated at B-302, Sony Apt., Opposite St. Jude’s High School, Off.
Andheri-Kurla Road, Jarimari, Sakinaka, Mumbai-400072 by furnishing the registered folio number, DP ID
number, Client ID number and their full name and address. Equity Shares offered to you can be renounced
either in full or in part in favour of any other person or persons. The renounces shall be entitled to apply for
Equity Shares being offered through the Issue. Such renouncees can only be Indian Nationals/limited companies
incorporated under and governed by the Act, statutory corporations/institutions, trusts (unless registered under
the Indian Trust Act), minors (through their legal guardians), societies (unless registered under the Societies
Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its
constitution/bye laws to hold Equity Shares in a company and cannot be a partnership firm, more than three
persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities)
or to any person situated or having jurisdiction where the offering in terms of the Draft Letter of Offer could be
illegal or require compliance with securities laws.
The CAF consists of four parts:
Part A:
Part B:
Part C:
Part D:
Form for accepting the Equity Shares offered and for applying for additional Equity Shares
Form for renunciation
Form for application for renouncees
Form for request for split application forms
Option available to the Equity Shareholders
The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is
entitled to.
If the Equity Shareholder applies for an investment in Equity Shares, then he can:
1
2
3
4
5
Apply for his entitlement in part;
Apply for his entitlement in part and renounce the other part;
Renounce the entire entitlement
Apply for his entitlement in full;
Apply for his entitlement in full and apply for additional Equity Shares.
Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional
Equity Shares. If you renounce your Rights Entitlement, in whole or in part, you shall not be entitled to apply
for additional Equity Shares in this Issue.
The shareholders with zero entitlement can apply for ONE additional Equity Share and they cannot renuounce
the same to third party.
The summary of options available to the Equity Shareholder is presented below. You may exercise any of the
following options with regard to the Equity Shares offered, using the enclosed CAF:
Option
Option Available
Action Required
A.
Accept whole or part of your
entitlement
without
renouncing the balance.
Fill in and sign Part A (All joint holders must sign)
B.
Accept your entitlement in full
and apply for additional
Equity Shares
Fill in and sign Part A including Block III relating to
the acceptance of entitlement and Block IV relating
to additional Equity Shares (All joint holders must
sign)
C.
Renounce your entitlement in
full to one person (Joint
renouncees not exceeding
three are considered as one
renouncee).
Fill in and sign Part B (all joint holders must sign)
indicating the number of Equity Shares renounced
and hand over the entire CAF to the renouncee. The
renouncees must fill in and sign Part C of the CAF
(All joint renouncees must sign)
225
D.
1. Accept a part of your
entitlement and renounce the
balance to one or more
renouncee(s)
Fill in and sign Part D (all joint holders must sign)
requesting for Split Application Forms. Send the
CAF to the Registrar to the Issue so as to reach them
on or before the last date for receiving requests for
Split Forms. Splitting will be permitted only once.
OR
2.Renounce your entitlement
to all the Equity Shares
offered to you to more than
one renouncee
On receipt of the Split Form take action as indicated
below.
(i) For the Equity Shares you wish to accept, if any,
fill in and sign Part A of one split CAF (only for
option 1).
(ii) For the Equity Shares you wish to renounce, fill
in and sign Part B indicating the number of Equity
Shares renounced and hand over the split CAFs to
the renouncees.
(iii) Each of the renouncees should fill in and sign
Part C for the Equity Shares accepted by them.
E.
Introduce a joint holder or
change the sequence of joint
holders
This will be treated as a renunciation. Fill in and sign
Part B and the renouncees must fill in and sign Part
C.
Option A: Acceptance of the Issue in full or in part
You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filing part A of the
enclosed CAF. For details of submission of CAF and mode of payment please refer to paragraph titled
“Submission of Application and Mode of Payment for Rights Issue of Equity Shares” beginning on page 231 of
the Draft Letter of Offer.
Option B: Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are
entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or
in part in favor of any other person(s). The application for additional Equity Shares shall be considered and
allotment shall be made at the sole discretion of the Board and in consultation if necessary with the Designated
Stock Exchange. This allotment of additional Equity Shares will be made on an equitable basis with reference to
number of Equity Shares held by you on the Record Date.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for
additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and
allotment shall be in the manner prescribed under the paragraph titled “Basis of Allotment” under chapter titled
“Terms of the Issue” beginning on page 220 of the Draft Letter of Offer. The renouncees applying for all the
Equity Shares renounced in their favor may also apply for additional Equity Shares.
In case of application for additional Equity Shares by Non-Resident Equity Shareholders, the allotment of
additional securities will be subject to the applicable provisions of FEMA.
Where the number of additional Equity Shares applied for exceeds the number available for allotment, the
allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened
for the purpose.
Option C & D: Renunciation
This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in
part in favour of any other person or persons subject to the approval of the Board. The Right of Renunciation is
attached to the Equity Shares, with one being allotted for every two Equity Shares. Such renouncees can only be
Indian Nationals (including minor through their natural/legal guardian)/limited companies incorporated under
and governed by the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act),
societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such
226
trust/society is authorised under its constitution/bye laws to hold Equity Shares in a company and cannot be a
partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant
authorities) or to any person situated or having jurisdiction where the offering in terms of the Draft Letter of
Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not
approved by the Board.
Renunciation in favour of non residents / FIIs
Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian
Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident
Indian(s) is subject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary
permission of the RBI, if and to the extent required, under the Foreign Exchange Management Act, 1999
(FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not
accompanied by the aforesaid approval(s), wherever the same are liable to be rejected.
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies
(“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the
Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)
Regulations, 2003. Accordingly, the existing Equity shareholders of our Company who wish to renounce the
same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of
OCB(s) except with the prior permission of RBI.
Your attention is drawn to the fact that our Company shall not allot and/or register any Equity Shares in favor
of:
1 More than three persons including joint holders;
2 Partnership firm(s) or their nominee(s);
3 Minors;
4 Hindu Undivided Family; and
5 Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any other
applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company).
The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be
entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason
thereof.
Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made.
If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its
collecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly
filled in shall be conclusive evidence for our Company of the person(s) applying for Equity Shares in Part C to
receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their
favour may also apply for additional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will
render the application invalid. Renouncee(s) will also have no further right to renounce any shares in favour of
any other person.
Procedure for renunciation
To renounce all the Equity Shares offered to a shareholder in favour of one renouncee
If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of
joint holding, all joint holders must sign Part B of the CAF. The person in whose favor renunciation has been
made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign
this part of the CAF.
Renouncee(s) shall not be entitled to further renounce their entitlement in favour of any other person.
To renounce in part/or renounce the whole to more than one person(s)
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of
two or more renouncees, the CAF must be first split into requisite number of forms. For this purpose you shall
have to apply to the Registrar to the Issue.
227
Please indicate your requirement of Split Application Forms in the space provided for this purpose in Part D of
the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of
business hours on the last date of receiving requests for Split Application Forms.
On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph
above shall have to be followed.
In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the
specimen registered with our Company, the application is liable to be rejected.
228
Renouncee(s)
The person(s) in whose favour the offer is renounced should fill in and sign Part C of the Application Form and
submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with
the application money.
Option E: Change and/ or introduction of additional holders
If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not
already a joint holder with you, it shall amount to renunciation and the procedure as stated above for
renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount
to renunciation and the procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that the Board shall be entitled in its
absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason
thereof.
Please note that:
3
Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been
made. If used, this will render the application invalid.
4
Request for split application form should be made for a minimum of one (1) Equity Share or in multiples of
one (1) Equity Share;
5
Request by the applicant for the Split Application Form should reach our Company on or before [●].
6
Only the person to whom the Draft Letter of Offer has been addressed to and not the renouncee(s) shall be
entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.
7
Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.
Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a
duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID
number and his/ her full name and address to the Registrar to the Issue. Please note that those who are making
the application in the duplicate form should not utilize the original CAF for any purpose including renunciation,
even if it is received/ found subsequently. Thus in case the original and duplicate CAFs are lodged for
subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.
Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of duplicate CAF in
transit, if any.
Application on Plain Paper
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate
CAF may make an application to subscribe to the Issue on plain paper, along with an Account Payee Cheque
drawn on a local bank / Demand Draft payable at Mumbai which should be drawn in favor of "FPL-Rights
Issue" in case of resident shareholders and non-resident shareholders applying on nonrepatriable basis and in
favour of " FPL-Rights Issue - NR" in case of non-resident shareholders applying on repatriable basis and
marked “A/c Payee Only” and send the same by registered post directly to the Registrar to the Issue so as to
reach them on or before the closure of the Issue. The envelope should be superscribed " FPL-Rights Issue " in
case of resident shareholders and non-resident shareholders applying on nonrepatriable basis, and in favour of "
FPL-Rights Issue - NR" in case of non-resident shareholders applying on repatriable basis.
The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per
specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue
Closing Date and should contain the following particulars:
8
Name of Issuer, Futura Polyesters Limited
229
9
Name and address of the Equity Shareholder including joint holders
10
Registered Folio Number/ DP ID No. and Client ID No.
11
Number of shares held as on Record Date
12
Certificate numbers and distinctive numbers, if held in physical form.
13
Number of Rights Equity Shares entitled
14
Number of Rights Equity Shares applied for
15
Number of additional Equity Shares applied for, if any
16
Total number of Equity Shares applied for
17
Total amount paid on application at the rate of Rs. 10/- per Equity Share
18
Particulars of cheque/demand draft
19
Savings/Current Account Number and name and address of the bank where the Equity Shareholder will
be depositing the refund order.
20
PAN/GIR number, Income Tax Circle/Ward/District, photocopy of the PAN card/ PAN
communication / Form 60 / Form 61 declaration where the application is for Equity Shares
21
Signature of Equity Shareholders to appear in the same sequence and order as they appear in the
records of our Company.
22
In case of Non Resident Shareholders, NRE/ FCNR/ NRO A/c No. Name and Address of the Bank and
Branch;
23
If payment is made by a draft purchased from NRE/ FCNR/ NRO A/c No., as the case may be, an
Account debit certificate from the bank issuing the draft, confirming that the draft has been issued by
debiting NRE/ FCNR/ NRO Account.
Attention of the shareholders is drawn to the fact that those shareholders making the application otherwise than
on the CAF (i.e. on a plain paper as stated above) shall not be entitled to renounce their rights and should not
utilise the CAF for any purpose including renunciation even if it is received subsequently. In case the original
and duplicate CAFs and application on the plain paper or any two of these applications are lodged or if any
shareholder violates any of these requirements, our company will have the absolute right to reject any one or
both of his/her/their application and refund the application money received. However, our Company is not liable
to pay any interest whatsoever on money so refunded. Please refer to paragraph titled “Submission of
Application and Mode of Payment for Rights Issue of Equity Shares” on page 231 of the Draft Letter of Offer.
230
SUBMISSION OF APPLICATION & MODE OF PAYMENT FOR RIGHTS ISSUE OF EQUITY
SHARES
Resident Equity Shareholders/ Applicants
1
Applicants who are applying through CAF and residing at places where the bank collection centres
have been opened by our Company for collecting applications, are requested to submit their
applications at the corresponding collection centre together with a local cheque/Demand Draft of
amount net of bank charges, for the full application amount favouring "[●]" and marked ‘A/c Payee
only’.
2
Applicants who are applying through CAF and residing at places other than places where the bank
collection centres have been opened for collecting applications, are requested to send their applications
together with a cheque/demand draft of amount net of bank and postal charges, for the full application
amount favouring "[●]" and marked ‘A/c Payee only’ payable at Mumbai directly to the Registrar to
the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or
the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if
any.
3
Applicants who are applying on plain paper, are requested to send their applications on plain paper
together with a local cheque/demand draft of amount net of bank and postal charges, for the Equity
Shares favouring "[●]" and marked ‘A/c Payee only’ payable at Mumbai directly to the Registrar to
the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or
the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if
any.
Non-Resident Equity Shareholders / Applicants
Application with repatriation benefits
Non-Resident Equity Shareholders / Applicants, applying on a repatriation basis, are required to submit the
completed CAF / application on plain paper, as the case may be, alongwith the payment made through any of
the following ways:
4
By Indian Rupee drafts purchased from abroad or funds remitted from abroad (submitted along with
Foreign Inward Remittance Certificate); or
5
By cheque / bank drafts remitted through normal banking channels or out of funds held in Non-Resident External Account (NRE) or FCNR Account maintained with banks authorized to deal in
foreign currency in India, along with documentary evidence in support of remittance; or
6
FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.
1
For Equity Shareholders / Applicants , applying through CAF, the CAF is to be sent at the bank
collection centre specified in the CAF along with cheques/drafts in favour of "[●]" payable at
Mumbai and crossed ‘A/c Payee only’ for the amount payable.
2
For Equity Shareholders / Applicants, applying on a plain paper, the applications are to be directly sent
to the Registrar to the Issue by registered post along cheques/drafts in favour of "[●]" payable at
Mumbai and crossed ‘A/c Payee only’ for the amount payable so as to reach them on or before the
Issue Closing Date.
A separate cheque or bank draft must accompany each application form. Applicants may note that where
payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit
Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR
account should be enclosed with the CAF. In the absence of the above the application shall be considered
incomplete and is liable to be rejected.
In the case of NRIs who remit their application money from funds held in FCNR/NRE Accounts, refunds and
other disbursements, if any shall be credited to such account details of which should be furnished in the
appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee
Drafts from abroad, refunds and other disbursements, if any will be made in any convertible foreign currency at
231
the rate of exchange prevailing at such time subject to the permission of RBI. Our Company will not be liable
for any loss on account of exchange rate fluctuation for converting the Rupee amount into any convertible
foreign currency or for collection charges charged by the applicant’s Bankers.
Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of application in
transit, if any
Payments through Non Resident Ordinary Account [NR(O)a/c] will not be permitted.
Application without repatriation benefits
For non-residents Equity Shareholders / Applicants applying on a non-repatriation basis, in addition to the
modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary)
Account or Rupee Draft purchased out of NRO Account. In such cases, the allotment of Equity Shares will be
on non-repatriation basis.
For Equity Shareholders/Applicants, applying through CAF, the CAF is to be sent at the bank collection centre
specified in the CAF along with cheques/demand drafts drawn net of bank and postal charges in favor of "[●]"
payable at Mumbai and crossed ‘A/c Payee only’ for the amount payable.
For Equity Shareholders/Applicants, applying on a plain paper, the applications are to be directly sent to the
Registrar to the Issue by registered post along with cheques/demand drafts net of bank and postal charges drawn
in favor of "[●]" payable at Mumbai so as to reach them on or before the Issue Closing Date.
If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank
issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed
with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be
rejected.
Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of application in
transit, if any
Note:
1
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to
Income Tax Act, 1961.
2
In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity
Shares cannot be remitted outside India.
3
The CAFs duly completed together with the amount payable on application must be deposited with the
collecting bank indicated on the reverse of the CAFs before the close of business hours on or before the
Issue Closing Date. Separate cheque or bank draft must accompany each CAF.
4
In case of an application received from non-residents, allotment, refunds and other distribution, if any,
will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of
making such allotment, remittance and subject to necessary approvals.
Last date of Application
The last date for submission of the duly filled in CAF is [●]. The Issue will be kept open for a minimum of 30
(thirty) days and the Board or any committee thereof will have the right to extend the said date for such period
as it may determine from time to time but not exceeding 60 (sixty) days from the Issue Opening Date.
If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on
or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board, the
offer contained in the Draft Letter of Offer shall be deemed to have been declined and the Board shall be at
liberty to dispose off the Equity Shares hereby offered, as provided under the section chapter “Basis of
Allotment” beginning on page 233 of the Draft Letter of Offer.
232
General
Applications should be made only on the prescribed CAFs provided by our Company and should be complete in
all respects. Applications which are not complete or which are not accompanied with remittance of the proper
amount calculated as aforesaid are liable to be rejected and the money paid in respect thereof will be refunded
without interest.
Our Company will not allot any Equity Shares in favour of:
1 more than three persons as joint holders (including the first holder), in the case of renouncees
2 a partnership firm
3 a trust or society (unless such trust or society is registered under the Societies Registration Act, 1860 and it
is authorised under its Memorandum & Articles of Association and/or its Rules & Bye Laws to hold shares
in a company)
4 a minor (unless application is made through a guardian)
5 HUF
6 any renouncee(s) whom the Board may not approve of
In case the applicants in the above categories are already shareholders of our Company, they will be eligible for
their entitlement. In case of applications made under a Power of Attorney (POA) or by Limited Companies or
Bodies Corporate or Societies, a certified true copy of the relevant POA or the relevant resolution or authority to
make the application as the case may be, along with the copy of the Memorandum & Articles of Association
and/or Bye laws must be lodged for scrutiny giving the serial number of the CAF with the Registrars to the
issue, simultaneously with the submission of the CAF failing which the application is liable to be rejected. In
case the POA is already registered with our Company, the same need not be furnished again. However, the serial
number under which the POA has been registered with our Company, must be mentioned below the signature(s)
of the concerned applicants(s).
The CAF must be filled in English in BLOCK LETTERS.
In case of joint holders, all joint holders must sign the CAF at the appropriate places in the same order as per
specimen signatures recorded in the Register of Members of our Company / Depository.
Signatures in languages other than those prescribed in the 8th Schedule of the Constitution of India and thumb
impressions must be attested by a Magistrate or a Notary Public or a Special Executive magistrate under his/her
official seal.
In case of renouncee(s), the name of the applicant(s), details of occupation, address and father’s/husband’s name
must be filled in Block Letters.
The CAF must be submitted to the Collection Centres as mentioned in the CAF/ Registrar to the Issue, as the
case may be, in its entirety. If any of the parts A, B, C, D and the acknowledgement of the CAF is/are detached
or separated, such applications will be rejected forthwith.
Any dispute or suit or action or proceeding arising out of or in relation to the Draft Letter of Offer or this Issue
or in respect of any matter or thing contained therein and any claim by either party against the other shall be
instituted or adjudicated upon or decided solely by the appropriate Court in Mumbai.
All communications in connection with your application for the Equity Shares should be addressed to the
Registrars to the Issue.
Basis of Allotment
Subject to the provisions contained in the Draft Letter of Offer, the Articles of Association of our Company and
the approval of the Designated Stock Exchange, the Board will proceed to allot our Equity Shares in the
following order of priority:
(a)
Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full
or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their
favour, in full or in part.
(b)
For Equity Shares being offered on rights basis under this issue, if the Equity shareholding of any of
the Equity Shareholders is less than two or not in multiple of two, then the fractional entitlement of
233
such holders shall be ignored and would be given preferential allotment of ONE additional Equity
Share each if they apply for additional share. Allotment under this head shall be considered if there are
any un-subscribed Equity Shares under (a). If number of Equity Shares available for allotment after
allotment under this head are less than number of shares available after allotment under (a), the
allotment would be made on a fair and equitable basis in consultation with the Designated Stock
Exchange.
SHAREHOLDERS HOLDING LESS THAN 2 EQUITY SHARES AND THEREFORE ENTITLED
FOR ZERO EQUITY SHARES UNDER THIS ISSUE WILL NOT HAVE A RIGHT TO
RENOUNCE. SUCH EQUITY SHAREHOLDERS ARE ENTITLED TO APPLY FOR ONE
ADDITIONAL EQUITY SHARE. HOWEVER THEY CAN NOT RENOUNCE THE SAME TO
THIRD PARTIES. CAF WITH ZERO ENTITLEMENT SHALL BE NON-NEGOTIABLE / NONTRANSFERABLE.
(c)
Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as
part of the Issue and have also applied for additional Equity Shares. The allotment of such additional
Equity Shares will be made as far as possible on an equitable basis having due regard to the number of
Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after
making full allotment in (a) and (b) above. The allotment of such Equity Shares will be at the discretion
of the Right Issue Committee in consultation with the Designated Stock Exchange, as a part of the
Issue and not as preferential allotment.
(d)
Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have
also applied for additional Equity Shares, provided there is an under-subscribed portion after making
full allotment in (a), (b) and (c) above. The allotment of such additional Equity Shares will be made on
a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation
with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.
(e)
Allotment to any other person as the Board may in its absolute discretion deem fit provided there is
surplus available after making full allotment under (a), (b), (c) and (d) above.
After taking into account allotment to be made under (a) and (b) above, if there is any undersubscribed portion,
the same would be available for allocation under (c), (d) and (e) above. In the event of undersubscription, our
Promoters and either by themselves or through one or more Promoter Group Entities intend to apply for
additional Equity Shares in accordance with the undertaing and disclosures as mentioned in the chapter titled
“Capital Structure” beginning on page 12 of the Draft Letter of Offer.
Our Promoters have confirmed that each of them intend to subscribe to the full extent of their entitlement in the
Issue. Our Promoters reserve their right to subscribe to their entitlement in the Rights Issue either by themselves,
their relatives or through one or more Promoter Group Entities, including by subscribing for renunciation, if
any, made by any of the Promoters to any other Promoter and/ or an affiliate thereof. Our Promoters may apply
for additional Equity Shares in the Issue. As a result of this subscription and consequent allotment as stated
above, the Promoters (and others as mentioned above) may acquire shares over and above their entitlement in
the Issue, which may result in an increase of the shareholding being above the current shareholding with the
entitlement of Equity Shares under the Issue.
This subscription and acquisition of additional Equity Shares by the Promoter(s) (and others as mentioned
above), if any, will not result in change of control of the management of our Company and shall be exempt in
terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code.
After such allotments as above and to the Promoters, including the application for rights/renunciation and
additional Equity Shares, any additional Equity Shares shall be disposed off by the Board of our Company, in
such manner as they think most beneficial to our Company and the decision of the Board of our Company in this
regard shall be final and binding. In the event of oversubscription, allotment will be made within the overall size
of the Issue
Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be done in
compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time.
Our Company expects to complete the allotment of Equity Shares within a period of 42 days from the date of
closure of the Issue in accordance with the listing agreement with BSE. Our Company shall retain no
oversubscription.
234
Listing and Trading of the Equity Shares proposed to be Issued
Our Company’s existing Equity Shares are currently traded on the BSE under the ISIN IN 564A01017. The
fully paid up Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the
BSE under the existing ISIN IN 564A01017 for fully paid Equity Shares of our Company. The fully paid up
Equity Shares allotted pursuant to this Issue will be listed as soon as practicable but in no case later than 7
working days from the date of allotment.
Printing of Bank Particulars on Refund Orders
As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement,
the particulars of the applicant’s bank account are mandatorily required to be given for printing on the refund
orders. Bank account particulars will be printed on the refund orders which can then be deposited only in the
account specified. Our Company will in no way be responsible if any loss occurs through these instruments
falling into improper hands either through forgery or fraud.
Mode of Allotment and Refund
Applicants residing at 68 centres where clearing houses are managed by the Reserve Bank of India (RBI), will
get refunds through ECS only except where applicant is otherwise disclosed as eligible to get refunds through
Direct Credit, RTGS & NEFT. In case of other applicants, Company shall ensure despatch of refund orders, if
any, of value up to Rs.1,500 by “Under Certificate of Posting”, and shall dispatch refund orders above Rs.1,500,
if any, by registered post or speed post. Applicants to whom refunds are made through Electronic transfer of
funds will be send a letter through ordinary post intimating them about the mode of credit of refund within 42
days of closure of this Issue.
In accordance with the requirements of the Stock Exchange and SEBI Guidelines, our Company undertakes that:
1
2
Allotment, despatch of refund orders/refund instructions shall be done within 42 days of closure of this
Issue;
If such money is not repaid within 8 days from the day specified above, our Company shall pay interest
at 15% per annum.
The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post/Speed post or
any other mode disclosed in the Draft Letter of Offer shall be made available by our Company to the Registrar
to the Issue.
Refunds orders will be made by cheques, pay orders or demand drafts drawn on the Refund Bank (s) and
payable at par at places where the applications were received and will be marked account payee and will be
drawn in the name of Sole /First applicant. The bank charges, if any, for encashing such cheques, pay orders or
demand drafts at other centres will be payable by the Applicants.
Payment of Refund
Applicants should note that on the basis of name of the applicants, Depository Participant’s name, Depository
Participant-Identification number and Beneficiary Account Number provided by them in the Composite
Application Form, the Registrar to the Issue will obtain from the Depositories, the applicant’s bank account
details including nine digit MICR code. Hence, applicants are advised to immediately update their bank
account details as appearing on the records of the depository participant. Please note that failure to do so
could result in delays in credit of refunds to applicants at the applicants sole risk and neither the Lead Manager
nor our Company shall have any responsibility and undertake any liability for the same.
The payment of refund, if any, would be done through various modes in the following order of preference:
I.
ECS
Payment of refund would be done through ECS for applicants having an account at one of the following centres:
1.
5.
9.
Ahmedabad
Bangalore
Bhubaneshwar
2. Nashik
6. Panaji
10. Surat
Centres
3. Sholapur
7. Ranchi
11. Tirupati (non-
4. Gorakhpur
8. Jammu
12. Indore
235
13. Kolkata
14. Trichy
17. Chandigarh
18. Trichur
21. Chennai
22. Jodhpur
25.
29.
33.
37.
41.
Guwahati
Hyderabad
Jaipur
Kanpur
Mumbai
26.
30.
34.
38.
42.
45. Nagpur
49. New Delhi
53. Patna
46.
50.
54.
57. Thiruvananthapuram
58.
61. Baroda
62. Burdwan
(nonMICR)
66. Durgapur
(nonMICR)
65. Dehradun
Gwalior
Jabalpur
Raipur
Calicut
Siliguri
(nonMICR)
Pondicherry
Hubli
Shimla
(nonMICR)
Tirupur
MICR)
15. Dhanbad(nonMICR)
19. Nellore (nonMICR)
23. Kakinada
(non- MICR)
27. Agra
31. Allahabad
35. Jalandhar
39. Lucknow
43. Ludhiana
28.
32.
36.
40.
44.
47. Varanasi
51. Kolhapur
55. Aurangabad
48. Bhopal
52. Madurai
56. Amritsar
59. Mysore
63. Erode
60. Haldia
(nonMICR)
64. Vijaywada
67. Udaipur
68. Bhilwara
16. Pune
20. Salem
24. Jamshedpur
Visakhapatnam
Mangalore
Coimbatore
Rajkot
Kochi/Ernakulam
This would be subject to availability of complete Bank Account Details including MICR code wherever
applicable from the depository. The payment of refund through ECS is mandatory for applicants having a bank
account at any of the 68 centres as mentioned in SEBI circular no. SEBI/ CFD/DILDIP / 29 / 2008 /01/02 dated
February 1, 2008 named herein above, except where applicant is otherwise disclosed as eligible to get refunds
through NEFT or Direct Credit or RTGS.
II.
NEFT
Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned
the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character
Recognition (MICR) , if any, available to that particular bank branch. IFSC Code will be obtained
from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped
with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their
bank account number while opening and operating the demat account, the same will be duly mapped
with the IFSC Code of that particular bank branch and the payment of refund will be made to the
applicants through this method.
236
III.
Direct Credit
Applicants applying through the web/internet whose service providers opt to have the refund amounts
for such applicants being by way of direct disbursement by the service provider through their internal
networks, the refund amounts payable to such applicants will be directly handled by the service
providers and credited to bank account particulars as registered by the applicant in the demat account
being maintained with the service provider. The service provider, based on the information provided by
the Registrar, shall carry out the disbursement of the refund amounts to the applicants.
IV.
RTGS
Applicants having a bank account at any of the 68 centres where such facility has been made available
and whose refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS.
Such eligible applicants who indicate their preference to receive refund through RTGS are required to
provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through
ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by such applicant
opting for RTGS as a mode of refund. Charges, if any, levied by the applicant’s bank receiving the
credit would be borne by the applicant.
Only or all the other applicants except for whom payment of refund is possible through I, II, III and IV, the
refund orders would be despatched “Under Certificate of Posting” for refund orders less than Rs.1,500/- and
through Speed Post/Registered Post for refund orders exceeding Rs.1,500/-. Such refunds will be made by
cheques, pay orders or demand drafts drawn in favour of the sole/first applicant and payable at par.
For shareholders opting for allotment in physical mode, bank account details as mentioned in the CAF
shall be considered for electronic credit or printing of refund orders, as the case may be. Refund orders
will be made by cheques, pay orders or demand drafts drawn on the Refund Bank(s) and payable at par
at places where the applications were received and will be marked account payee and will be drawn in the
name of Sole/First Applicant. The bank charges, if any, for encashing such cheques, pay orders or
demand drafts at other centres will be payable by the Applicants.
Refund payment to Non-Resident
Where applications are accompanied by Indian rupee drafts purchased abroad and payable at Mumbai(as
otherwise specified in this section titled “Terms of the Issue”), refunds will be made in convertible foreign
exchange equivalent to Indian rupees to be refunded. Indian rupees will be converted into foreign exchange at
the rate of exchange, which is prevailing on the date of refund. The exchange rate risk on such refunds shall be
borne by the concerned applicant and our Company shall not bear any part of the risk.
Where the applications made are accompanied by NRE/FCNR/NRO cheques, refunds will be credited to
NRE/FCNR/NRO accounts respectively, on which such cheques were drawn and details of which were provided
in the CAF. Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will
be subject to the approval of RBI.
Shareholder’s Depository Account and Bank details
Shareholder’s applying for shares in demat mode should note that on the basis of the name of the shareholder(s),
Depository Participant’s Name, Depository Participant’s Identification Number and Beneficiary Account
Number provided by them in the CAF, the Registrars to the Issue will obtain from the Depository the
demographic details including the address, Shareholders bank account details, MICR code and occupation
(hereinafter referred to as ‘Demographic Details’). These bank account details would be used for giving refunds
to the shareholder(s). Hence, the shareholder(s) are requested to immediately updated their bank account details
as appearing in the records of the Depository Participant. Please note that failure to do so could result in delays
in dispatch / credit of refunds to the shareholder(s) at the shareholder(s) sole risk and neither the Lead
Manager’s or the Registrars or the Refund Bankers nor our Company shall have any responsibility and
undertake any liability for the same. Hence, applicants should carefully fill their Depository Account details in
the Composite Application Form.
These demographic details would be used for all correspondences with the shareholder(s) including mailing of
Allotment advice and printing of bank particulars on the refund order or for refunds through electronic transfer
of funds, as applicable. By signing the Composite Application Form the shareholder(s) would be deemed to
have authorized the depositories to provide, upon request, to the Registrar to the Issue, the required
Demographic Details as available in its records.
237
In case of shareholder(s) receiving refunds through electronic transfer of funds, delivery of refund
orders/allocation advice gets delayed if the same once sent to the address obtained from the depositories are
returned undelivered.
Option to receive Equity Shares in Dematerialized Form
Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in
dematerialised (electronic) form at the option of the applicant. Our Company has signed agreements dated
March 24, 2005 and March 03, 2005 with NSDL and CDSL respectively, which enables the Investors to hold
and trade in securities in a dematerialised form, instead of holding the securities in the form of physical
certificates.
In this Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their Equity
Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF
shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will
have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do
not accurately contain this information, will be given the securities in physical form. Separate applications for
securities in physical and/or dematerialized form should be made. Separate applications are made, the
application for physical securities will be treated as multiple applications and is liable to be rejected. In case of
partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will
be allotted in physical shares.
The Equity Shares of our Company will be listed on the BSE
Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under:
1
Open a beneficiary account with any depository participant (care should be taken that the beneficiary
account should carry the name of the holder in the same manner as is exhibited in the records of our
Company. In the case of joint holding, the beneficiary account should be opened carrying the names of
the holders in the same order as with our Company). In case of Investors having various folios in our
Company with different joint holders, the Investors will have to open separate accounts for such
holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not
adhere to this step.
2
For Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on
the Record Date, the beneficial account number shall be printed on the CAF. For those who open
accounts later or those who change their accounts and wish to receive their Equity Shares by way of
credit to such account, the necessary details of their beneficiary account should be filled in the space
provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may
be made in dematerialized form even if the original Equity Shares of our Company are not
dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the
Equity Shareholders and the names are in the same order as in the records of our Company.
Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF visà-vis such information with the applicant’s depository participant, would rest with the applicant. Applicants
should ensure that the names of the applicants and the order in which they appear in CAF should be the same as
registered with the applicant’s depository participant.
If incomplete / incorrect beneficiary account details are given in the CAF or where the investor does not opt to
receive the Rights Equity shares in dematerialized form, the applicant will get Equity Shares in physical form.
Applicants must necessarily fill in the details (including the beneficiary account number or client ID number)
appearing in the CAF under the heading ‘Request for shares in Electronic Form’.
Applicants should ensure that the names of the Applicants and the order in which they appear in the CAF should
be the same as registered with the Applicant’s depository participant.
The Rights Equity Shares pursuant to this Issue allotted to investors opting for dematerialized form, would be
directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund
order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository
participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository
account.
238
Renouncees will also have to provide the necessary details about their beneficiary account for allotment of
securities in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.
Renouncees can also exercise the option to receive Equity Shares in the demat form by indicating in the relevant
column in the CAF and providing the necessary details about their beneficiary account. It may be noted that
Equity Share arising out of this Issue can be received in demat form even if the existing Equity Shares are held
in physical form. Nonetheless, it should be ensured that the depository participant account is in the name of the
Applicant(s) in the same order as per specimen signatures appearing in the records of the depository
participant/Company. It may be noted that shares in electronic form can be traded only on the Stock Exchange
having electronic connectivity with NSDL or CDSL.
Dividend or other benefits with respect to the Equity Shares held in dematerialised form would be paid to those
Equity Shareholders whose names appear in the list of beneficial owners given by the depository participant to
our Company as on the Record Date.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE
TRADED ON THE STOCK EXCHANGE ONLY IN DEMATERIALIZED FORM.
.
III. General Instruction
Payment by Stockinvest
In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest
Scheme has been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted
in this Issue
Underwriting
The present Issue is not underwritten.
Issue Period
Issue Opens on
[●], 2008
Last date for receiving request for Split Application Forms
[●], 2008
Issue Closes on
[●], 2008
Minimum Subscription
If our Company does not receive the minimum subscription of 90% of this Issue on the date of closure of the
Issue, the entire subscription shall be refunded to the applicants within 42 days from the date of closure of this
Issue. If there is a delay in the refund of subscription by more than 8 days after our Company becomes liable to
pay the subscription amount (i.e. 42 days after closure of this Issue), our Company shall pay interest for the
delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act 1956.
Under-subscription in the Issue will be determined after considering the number of shares applied as per the
entitlement plus additional shares applied by existing shareholders and the renouncees. The undersubscribed
portion can be applied for only after the close of the Issue. Our Promoters, either by themselves or through their
relatives or through one or more Promoter Group Entities, have undertaken to subscribe upto the extent of
minimum subscription, i.e. 90% of the Issue size, if the Issue is undersubscribed to ensure that the Issue is
successful. This acquisition of additional Equity Shares, if allotted as aforesaid shall be in terms of proviso to
Regulation 3(1) (b) (ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and
12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1) (b) (ii) of the
Takeover Code. Further, this acquisition will not result in change of control of management of our Company.
In case the permission to deal in and for an official quotation of the Equity Shares is not granted by the Stock
Exchange, the Issuer shall forthwith repay without interest, all monies received from the applicants in pursuance
of the Draft Letter of Offer and if such money is not repaid within eight days after the day from which the Issuer
239
is liable to repay it, the Issuer shall pay interest as prescribed under Section 73(2) / 73(2A) of the Companies
Act, 1956.
Allotment Schedule
1
Our Company agrees that as far as possible allotment of securities offered to the shareholders shall be made
within 42 days from the date of the closure of the Issue.
2
Our Company further agrees that it shall pay interest @ 15% per annum for the delayed period if the
allotment has not been made and/or allotment letters / the refund orders have not been despatched to the
applicants/ refund instruction beyond 8 days from the date specified above.
Disposal of applications and application money
No separate receipt will be issued for application money received. However, the collection centres as listed in
the CAF, will acknowledge its receipt by stamping and returning the acknowledgement slip at the bottom of
each CAF. In the event of shares not being allotted in full, the excess amount paid on application will be
refunded to the applicant or the refund instructions will be given within 2 working days from the date of
finalisation of basis of allotment.
The Board reserves its full, unqualified and absolute right to accept or reject any application in whole or in part
and in either case without assigning any reason therefore. In case an application is rejected in full the whole of
the application money received will be refunded to the applicant. Where an application is rejected in part, the
excess application money, if any will be refunded to the applicant.
For further instruction, please read the Composite Application Form (CAF) carefully.
Unsubscribed Equity Shares
The unsubscribed portion, if any of the Equity Shares offered to the shareholders, after considering the
application for Rights/Renunciation and additional Equity Shares, as above, shall be disposed by the Board of
our Company or Committee of Directors authorised in this behalf by the Board of our Company at their full
discretion and absolute authority, in such manner as they think most beneficial to our Company and the decision
of the Board of our Company or Committee of Directors in this regard shall be final and binding. In case the
Company issues Letter(s) of Allotment, the relative Share Certificate(s) will be kept ready within 3 months from
the date of allotment thereof or such extended time as may be approved by the Company Law Board or other
applicable provisions, if any. Allottees are requested to preserve such Letters of Allotment, which would be
exchanged later for Share Certificate(s).
General instructions for applicants
(a)
Please read the instructions printed on the enclosed CAF carefully.
(b)
Application should be made on the printed CAF, provided by our Company except as mentioned under
the head Application on Plain Paper and should be completed in all respects. The CAF found
incomplete with regard to any of the particulars required to be given therein, and/ or which are not
completed in conformity with the terms of the Draft Letter of Offer are liable to be rejected and the
money paid, if any, in respect thereof will be refunded without interest and after deduction of bank
commission and other charges, if any. The CAF must be filled in English and the names of all the
applicants, details of occupation, address, father’s / husband’s name must be filled in block letters.
(c)
Payments should be made in cash/cheque/demand draft drawn on any bank which is situated at and is a
member of sub-member of the banker’s clearing house located at the centre where application is
accepted. Outstation cheques/ demand drafts will not be accepted and application(s) accompanied by
such cheques/demand drafts will be rejected. The Registrar will not accept cash along with CAF
(d)
The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting
Bank or to the Registrar to the Issue and not to our Company or Lead Manager to the Issue. Applicants
residing at places other than cities where the branches of the Bankers to the Issue have been authorised
by our Company for collecting applications, will have to make payment by Demand Draft payable at
Mumbai of amount net of bank and postal charges, and send their application forms to the Registrar to
the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such
application is liable to be rejected.
240
(e)
PAN Number: Whenever the application(s) is/are made, the applicant or in the case of an application in
joint names, each of the applicants, should mention his/her Permanent Account Number (PAN) allotted
under the IT Act. The copy of the PAN card or PAN allotment letter is not required to be submitted
with the CAF. Applications without this information and documents will be considered incomplete and
are liable to be rejected. It is to be specifically noted that Applicant should not submit the GIR number
instead
of
the
PAN as the application is liable to be rejected on this ground. In terms of SEBI Circular bearing no.
MRD/DoP/Cir-20/2008 dated June 30, 2008, certain categories of investors (namely the Central
Government, State Government, and the officials appointed by the courts e.g. Official liquidator, Court
receiver etc. (under the category of Government)) shall be exempted from submitting their PAN, only
if such organisations submit sufficient documentary evidence to support the veracity of their claim for
such exemption.
(f)
Bank Account Details: It is mandatory for applicants to provide information as to their savings/current
account number and the name of the bank with whom such account is held in the CAF to enable the
Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees.
Application not containing such details is liable to be rejected. Shareholders may please note that for
shares held in DEMAT mode, the bank account details shall be obtained from the depositories.
Shareholders may ensure that the bank account details are updated with the depositories.
(g)
Payment by cash: The payment against the application should not be effected in cash if the amount to
be paid is Rs. 20,000 or more. In case payment is effected in contravention of this, the application may
be deemed invalid and the application money will be refunded and no interest will be paid thereon.
Payment against the application if made in cash, subject to conditions as mentioned above, should be
made only to the Bankers to the Issue.
(h)
Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule
to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be
attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity
Shareholders must sign the CAF as per the specimen signature recorded with our Company or
depositories.
(i)
In case of an application under power of attorney or by a body corporate or by a society, a certified true
copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the
relevant investment under this Issue and to sign the application and a copy of the Memorandum and
Articles of Association and / or bye laws of such body corporate or society must be lodged with the
Registrar to the Issue giving reference of the serial number of the CAF. In case the above referred
documents are already registered with our Company, the same need not be a furnished again. In case
these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue
Closing Date, then the application is liable to be rejected. In no case should these papers be attached to
the application submitted to the Bankers to the Issue.
(j)
In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as
per the specimen signature(s) recorded with our Company. Further, in case of joint applicants who are
renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if
any, will be made in the first applicant’s name and all communication will be addressed to the first
applicant.
(k)
Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for
allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to
time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares,
subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a
Non-Resident or PIO/NRI Equity Shareholder has specific approval from the RBI, in connection with
his shareholding, he should enclose a copy of such approval with the CAF.
(l)
All communication in connection with application for the Equity Shares, including any change in
address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of
allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers
and CAF number. Please note that any intimation for change of address of Equity Shareholders, after
the date of allotment, should be sent to Registrar to our Company; Satellite Corporate Services Private
Limited, B-302, Sony Apt., Opposite St. Jude’s High School, Off. Andheri-Kurla Road, Jarimari,
Sakinaka, Mumbai- 400072, in the case of Equity Shares held in physical form and to the respective
depository participant, in case of Equity Shares held in dematerialized form.
241
(m)
Split Application Forms cannot be re-split.
(n)
Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be
entitled to obtain split forms.
(o)
Applicants must write their CAF number at the back of the cheque / demand draft.
(p)
Only one mode of payment per application should be used. The payment must be either in cash or by
cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at
and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the
reverse of the CAF where the application is to be submitted.
(q)
A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated
cheques and postal / money orders will not be accepted and applications accompanied by such cheques
/ demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment
against application if made in cash. (For payment against application in cash please refer point (f)
above)
(r)
No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/
Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at
the bottom of the CAF.
Grounds For Technical Rejections
Applicants are advised to note that applications are liable to be rejected on technical grounds, including the
following:
1
CAFs, which are not completed or are not accompanied with the application money payable, are liable to
be rejected;
2
Amount paid does not tally with the amount payable for;
3
In case of physical shareholders, bank account details (for refund) are not given;
4
Age of first applicant not given;
5
PAN allotted under the IT Act has not been mentioned by the applicant;
6
In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant
documents are not submitted;
7
If the signature of the existing shareholder does not match with the one given on the Application Form
and for renouncees if the signature does not match with the records available with their depositories;
8
If the Applicant desires to receive Equity Shares in electronic form, but the CAF does not have the
Applicant’s depository account details;
9
CAF are not submitted by the Applicants within the time prescribed as per the CAF and the Draft Letter
of Offer;
10
Applications not duly signed by the sole/joint Applicants;
11
Applications by OCBs unless approved by RBI;
12
Applications accompanied by Stockinvest;
13
In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Applicants (including the order of names of joint holders), the Depositary
Participant’s identity (DP ID) and the beneficiary’s identity;
14
Applications by ineligible Non-residents on account of restriction or prohibition under applicable local
laws.
242
3
Multiple applications
Disposal of application and application money
No acknowledgment will be issued for the application moneys received by our Company. However, the Bankers
to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning
the acknowledgment slip at the bottom of each CAF.
The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part,
and in either case without assigning any reason thereto.
In case an application is rejected in full, the whole of the application money received will be refunded.
Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money
due on Equity Shares allotted, will be refunded to the applicant within six weeks from the close of the Issue in
accordance with Section 73 of the Companies Act, 1956.
For further instruction, please read the paragraph titled “Options available to the Equity Shareholders”
beginning on page 225 of the Draft Letter of Offer carefully.
Utilisation of Issue Proceeds
The Board of Directors declares that:
(i)
The funds received against this Issue will be transferred to a separate bank account other than the bank
account referred to sub-section (3) of Section 73 of the Companies Act, 1956.
(ii)
Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in
the balance sheet of our Company indicating the purpose for which such moneys has been utilised.
(iii)
Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate
separate head in the balance sheet of our Company indicating the form in which such unutilised
moneys have been invested.
The funds received against this Issue will be kept in a separate bank account and our Company will not have any
access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that
the minimum subscription of 90% of this Issue has been received by our Company.
Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders
Our Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with
refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of six
weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the day our
Company becomes liable to pay it, our Company shall pay that money with interest at the rate of 15% per
annum as stipulated under Section 73 of the Act, 1956.
Our Company agrees that as far as possible the allotment of the Equity Shares shall be made within fourty two
(42) days of the closure of Issue.
Undertakings by our Company
1.
The complaints received in respect of the Issue shall be attended to by our Company expeditiously and
satisfactorily.
2.
All steps for completion of the necessary formalities for listing and commencement of trading at the
Stock Exchange where the securities are to be listed will be taken within seven working days of
finalization of basis of allotment.
3.
The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post or any
other mode disclosed in the Draft Letter of Offer shall be made available to the Registrar to the Issue.
4.
Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to
the investors within 42 days of closure of the Issue giving details of the bank where refunds shall be
credited along with the amount and expected date of electronic credit of refund.
243
5.
The certificates of the securities/ refund orders to the valid applicants shall be dispatched within the
specified time.
6.
Except as mentioned in the chapter titled “Capital Structure” beginning on page 12 of the draft Letter
of Offer, no further issue of securities affecting equity capital of our Company shall be made till the
securities issued/offered through the Issue are listed or till the application moneys are refunded on
account of non-listing, under-subscription etc.
7.
Our Company accepts full responsibility for the accuracy of information given in the Draft Letter of
Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of
which makes any statement made in the Draft Letter of Offer misleading and further confirms that it
has made all reasonable enquiries to ascertain such facts.
8.
All information shall be made available by the Lead Manager and the Issuer to the investors at large
and no selective or additional information would be available for a section of the investors in any
manner whatsoever including at road shows, presentations, in research or sales reports etc.
Important
4
Please read the Draft Letter of Offer carefully before taking any action. The instructions contained in the
accompanying Composite Application Form (CAF) are an integral part of the conditions of the Draft
Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.
5
All enquiries in connection with the Draft Letter of Offer or accompanying CAF and requests for Split
Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number,
the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed
‘[●]’ on the envelope) to the Registrar to the Issue at the following address:
B-302, Sony Apt., Opposite St. Jude’s High School,
1
It is to be specifically noted that this Issue of Equity Shares is subject to the chapter entitled “Risk
Factors” beginning on page viii of the Draft Letter of Offer
6
Our Company will not be liable for any postal delays and applications received through mail after the
closure of the Issue, are liable to be rejected and returned to the applicants.
The Issue will not be kept open for more than 30 days unless extended, in which case it will be kept open
for a maximum of 60 days.
244
SECTION VIII: ARTICLES OF ASSOCIATION OF THE COMPANY
ARTICLES OF ASSOCIATION OF FUTURA POLYESTERS LIMITED
Note : By a Special Resolution of the Company passed at an Annual General
Meeting of the company held on the 8th day of September, 1976 these Articles
were adopted as the Article of Association of the Company in substitution for, and
to the exclusion of, all the existing Articles thereof.
Table A not to apply but
Company to be governed
by these Articles
1.
No regulation contained in Table A, in the First Schedule to the
Companies Act, 1956 shall apply to this Company but the regulations for the
management of the Company and for the observance of the members thereof and
their representatives, shall subject to any exercise of the statutory powers of the
Company with reference to the repeal or alteration, as prescribed by the said
Companies Act, 1956, be such as are contained in these Articles.
INTERPRETATION
Interpretation clause.
2.
In the interpretation of these Articles, unless repugnant to the subject or
context :-
The Company of “this
Company”
“The Company” or “this Company” means FUTURA POLYESTERS LIMITED”
“The Act”.
“The Act” means `the Companies Act, 1956”, or any statutory modification or reenactment thereof for the time being in force.
“Auditors”
“Auditors” means and includes those persons appointed as such for the time being
by the Company.
“Board” or “Board of
Directors”.
“Board or Board of Directors” means a meeting of the Directors duly called and
constituted, or as the case may be, the Directors assembled at the Board of
Directors of the Company Collectively.
“Capital”.
“Capital” means the share capita for the time being raised or authorised to be
raised, for the purpose of the Company.
“Debenture”.
“Debenture” includes debenture-stock.
“Directors”.
“Directors” means the Dire4ctors for the time being of the Company or, as the
case may be, the Directors assembled at a Board.
“Dividend”
“Dividend” includes bonus.
“Gender”.
Words importing the masculine gender also include the feminine gender.
“In
writing”
“Written”
and
“Member” means the duly registered holder from time to time of the share of the
Company and includes the subscribers of the Memorandum of Association of the
Company.
“Member”.
“Meeting
Meeting”
“In Writing” and “Written” include printing, lithography and other modes or
representing or reproducing words in visible form.
or
“General
“Meeting” or “General Meeting” means a meeting of members.
General
“Annual General Meeting” means a general meeting of the Members held in
accordance with the provision of Section 166 of the Act.
“Extraordinary General
Meeting.
“Extraordinary General Meeting” means an extraordinary general meeting of the
members duly called and constituted and any adjourned holding thereof.
“Month”.
“Month” means a calendar month.
“Annual
Meeting”.
245
“Office”.
“Office” means the registered office for the time being of the Company.
“Paid-up”.
“Paid-up” includes credited as paid u.
“Persons”
“Persons” includes corporation and firms as well as individuals.
“Register of Members”.
“Register of Members” means the Register of Members to be Kept pursuant to the
Act.
“The Registrar”
“The Registrar” means the Registrar of Companies of the State in which the office
of the Company is for the time being situate.
“Secretary”
“Secretary” means any individual appointed by the Board to perform any of the
duties of a Secretary under the Act and any other ministerial or administrative
duties and includes a temporary, deputy or assistant Secretary.
“Seal”
“Seal” means the Common Seal for the time being of the Company.
“Share”
“Share” means share in the share capital of the Company and includes stock
except where a distinction between stock and shares is expressed or implied.
“Singular Number”
“Words” importing the singular number include, where the context admits or
requires, the plural number and vice versa.
“Ordinary Resolution”
and “Special Resolution”
“Ordinary Resolution” and “Special Resolution” shall have the meanings assigned
thereto by Section 189 of the Act.
“Year” and “Financial
Year”.
“Year” means the calendar year and “Financial Year” shall have the meaning
assigned thereto by Section 217) of the Act.
The marginal notes used in the Articles shall not affect the construction hereto.
Save as aforesaid, any words or expression defined in the Act shall, if not
inconsistent with the subject or context bear the same meaning in these Articles.
CAPITAL AND INCREASE AND REDUCTION OF CAPITAL
Amount of Authorised
Capital
3.
The Authorised Share Capital of the Company is Rs.80,00,00,000/(Rupees Eighty crores) divided into 7,90,00,000 (Seven Ninety lacs) Equity
Shares of Rs.10/- (Rupees ten) each and 1,00,000 (One lac) Cumulative
Redeemable Preference Shares of Rs.100/- (Rupees one hundred) each.
Increase of Capital by the
Company
and
how
carried into effect.
4.
The Company in General Meeting may, from time to time, by an
Ordinary Resolution increase the capital by the creation of new shares, such
increase to be of such aggregate amount and to be divided into shares of such
respective amounts as the resolution shall prescribe. Subject to the provisions of
the Act any shares of the original or increased capital shall be issued upon such
terms and conditions and with such rights and privileges annexed thereto, as the
General Meeting resolving upon the creation thereof, shall direct, and if no
direction be given as the Directors shall determine; and in particular, such shares
may be issued with a preferential or qualified right to dividends, and in the
distribution of assets of the Company, and with a right of voting at general
meetings of the Company in conformity with Sections 87 and 88 of the Act.
Whenever the capital of the Company has been increased under the provisions of
this Articles, the Directors shall comply with the provisions of Section 97 of the
Act.
New Capital same as
existing capital.
5.
Except so far as otherwise provided by the conditions of issue or by these
Articles, any capital raised by the creation of new Shares shall be considered as
part of the original capital, and shall be subject to the provisions herein contained,
with reference to the payment of calls and instalments, forfeiture, lien, surrender,
transmission, voting and otherwise.
Redeemable
6.
Preference
Subject to the provisions of Section 80 of the Act, the Company shall
246
Shares.
have the power to iss7ue Preference Shares which are, or at the option of the
Company are liable to be redeemed and the resolution authorizing such issue shall
prescribe the manner, terms and conditions of redemption.
9.3%
Cumulative
Redeemable Preference
Shares
7.
(a)
The Cumulative Redeemable Preference Shares shall confer
upon the holders thereof the right out of the Profits of the Company resolved to be
distributed to a fixed Cumulative preferential dividend at the rate of 9% per
annum (free of Company’s tax but subject to deduction of tax at source as
required under the provisions of the Indian Income Tax Act for the time being in
force) on the capital for the time being paid up there on and the right in a winding
up to payment of capital and arrears of dividends whether declared or undeclared
up to the commencement of the winding up in priority to the Equity Shares, but
shall not confer the right to any further participation in profits or assets, except
that the holders thereof shall have the right to attend and vote at any general
meeting of the Company as provided by the Act.
(b)
The Preference shares shall be definitely redeemed at the expiry
of 10 years from the date of allotment. Provided, however, that the Company shall
have the option to redeem the same earlier but not earlier than 5 years from the
date of allotment.
(c)
The Company shall not create and/or issue preference shares in
future ranking in priority to the 9.3% preference shares already issued and in the
event of its creating and/or issuing preference shares, in future ranking pari passu
with the said 9.3% preference shares, it would do so only with the consent in
writing of the holders of not less than 3/4ths of the preference shares then
outstanding or with the sanction of a special resolution passed at a separate
meeting of the holders of the preference shares.
Reduction of Capital
8.
The Company may (subject to the provisions of Sections 78, 80, 100 to
105 inclusive of the Act) from time to time by Special Resolution, reduce its
capital, any Capital Redemption Reserve Account and Share Premium Account in
any manner for the time being authorised by law, and in particular capital may be
paid off on the footing that it may be called upon again or otherwise. This Article
is not to derogate from any power the Company would have if it were omitted.
Sub-division
and
cancellation of shares.
9.
Subject to the provisions of Section 94 of the Act the Company in
general meeting may, from time to time, sub-divide or consolidate its shares, or
any of them, and the resolution whereby any share is sub-divided, may determine
that as between the holders of the shares resulting from such sub-division one or
more of such shares shall have some preference or special advantage as regards
dividend, capital or otherwise over or as compared with the others or other.
Subject as aforesaid the Company in general meeting may also cancel shares
which have not been taken or agreed to be taken by any person and diminish the
amount of its share capital by the amount of the shares so called.
Modification of rights.
10.
Whenever the capital, by reason of the issue of Preference Shares or
otherwise, is dividend into different classes of shares, all or any of the rights and
privileges attached to each class may subject to the provision of Sections 105 and
107 of the Act be modified, commuted, affected or abrogated, or dealt with by
Agreement between the Company and any person purporting to contract on behalf
of that class, provided such agreement is ratified in writing by holders of at least
three-fourths in nominal value of the issued shares of the class or is confirmed by
a Special Resolution passed at a separate general meeting of the holders of shares
of that class.
SHARES AND CERTIFICATES
Register and Index of
Members
11.
The Company shall cause to be kept a Register and Index of Members in
accordance with Sections 150 and 151 of the Act. The Company shall be entitled
to keep in any State or country outside India a branch Register of Members
resident in that State or country.
Declaration by person
not holding beneficial
12.
(a)
Notwithstanding anything herein contained a person whose
name is at any time entered into the Register of Members of the Company as the
247
Interests in any shares.
holder of a share in that Company, but who does not hold the beneficial interest in
such share, shall within such time and in such form as may be prescribed, make a
declaration to the Company specifying the name and other particulars of the
person or persons who hold the beneficial interest in such share in the manner
provided in section 187-C of the Act.
(b)
A person who holds a beneficial interest in a share or a class of
shares of the Company shall, within the time prescribed, after his becoming such
beneficial owners, make a declaration to the Company specifying the nature of his
interest, particulars of the person in whose name the shares stand in the Register
of Members of the Company and such other particulars as may be prescribed as
provided in Section 187-C of the Act.
(c)
Whenever there is a change in the beneficial interest in a share
referred to above, the beneficial owner shall, within the time prescribed from the
date of such change make a declaration to the Company in such form and
containing such particulars as may be prescribed as provided in Section 187-C of
the Act.
(d)
Notwithstanding anything herein contained in Section 153 of
the Act and Article 12 hereof, where any declaration referred to above is made to
the Company, the Company shall make a note of such declaration in the Register
of Members and file within the time prescribed from the date of receipt of the
declaration a return in the prescribed form within the Registrar with regard to such
declaration.
Shares to be numbered
progressively and no
share to be sub-divided.
13.
The shares in the capital shall be numbered progressively according to
their several denominations, and except in the manner hereinbefore mentioned no
share shall be sub-divided. Every forfeited or surrendered share shall continue to
bear the number by which the same was originally distinguished.
Further Issue of Capital
14.
(a)
Where at any time after the expiry of two years from the
formation of the Company or at any time after the expiry of one year from the
allotment of shares in the Company made for the first time after its formation
whichever is earlier it is proposed to increase the subscribed capital of the
Company by allotment of further shares, whether out of unissued share capital or
out of increased share capital, then such further shares shall be offered to the
persons who at the date of the offer, are holders of the equity shares of the
Company, in proportion, as nearly as circumstances admit, to the capital paid up
on these shares at that date. Such offer shall be made by a notice specifying the
number of shares offered and limiting a time not being less than fifteen days from
the date of the offer within which the offer, if not accepted, will be deemed to
have been declined. After the expiry of the time specified in the notice aforesaid
or on receipt of earlier intimation from the person to whom such notice is given
that he declines to accept the shares offered, the Board may dispose of them in
such manner as they think most beneficial to the Company.
(b)
Notwithstanding anything contained in the preceding subclause, the Company may :(i)
by a special resolution; or
(ii)
where no such special resolution is passed, if the
votes cast (whether on a show of hands or on a poll, as the case may be) in favour
of the proposal contained in the resolution moved in that general meeting
(including the casting vote, if any, of the Chairman) by Members who, being
entitled so to do, vote in person, or where proxies are allowed, by proxy exceed
the votes, if any, cast against the proposal by Members so entitled and voting and
the Central Government is satisfied, on an application made by the Board of
Directors in this behalf, that the proposal is most beneficial to the Company offer
further shares to any person or persons and such person or persons may or may
not include the persons who at the date of the offer, are the holders of the equity
shares of the Company.
(c)
Notwithstanding anything contained in sub-clause (a) above, but
248
subject, however, to Section 81 (3) of the Act, the Company may increase its
subscribed capital on exercise of an option attached to debentures issued or loans
raised by the Company to convert such debentures or loans into shares, or to
subscribe for shares in the Company.
Shares under control of
Directors.
15.
Subject to the provisions of these Articles and of the Act, the shares,
forming part of any increased capital Company shall be under the control of the
Directors, who may allot or otherwise dispose of the same to such persons in such
proportion on such terms and conditions and at such times as the Directors think
fit and subject to the sanction of the Company in General Meeting with full
power, to give any person the option to call for or be allotted shares of any class
of the Company either (subject to the provisions of Sections 78 and 79 of the Act)
at a premium or at par or at a discount and such option being exercisable for such
time and for such consideration as the Directors think fit. The Board shall cause to
be filed the returns as to allotment provided for in Section 75 of the Act.
Power also to Company
in General Meeting to
issue shares.
16.
In addition to and without derogating from the powers for the purpose
conferred on the Board under Articles 14 and 15 the Company in general meeting
may, subject to the provisions of Section 81 of the Act, determine that any shares
(whether forming part of the original capital or of any increased capital of the
Company) shall be offered to such person (whether a Member or not), in such
proportion and on such terms and conditions and either (subject to compliance
with the provisions of Section 78 and 79 of the Act) at a premium or at par or at a
discount, as such general meeting shall determine and with full power to give any
person (whether a member or not) the option to call for or be allotted shares of
any class of the Company either (subject to compliance with the provisions of
Section 78 and 79 of the Act) at a premium or at par or at a discount, such option
being exercisable at such times and for such consideration as may be directed by
such General Meeting or the Company in general meeting may make any other
provision whatsoever for the issue, allotment or disposal of any shares.
Acceptance of shares.
17.
Any application signed by or on behalf of an applicant for shares in the
Company, followed by an allotment of any share therein, shall be an acceptance
of shares within the meaning of these Articles, and every person who thus or
otherwise accepts any shares and whose name is on the Register shall for the
purpose of these Articles, be a Member.
Deposit and call etc. to be
debt
payable
Immediately.
18.
The money (if any) which the Board shall, on the allotment of any shares
being made by them, require or direct to be paid by way of deposit, call or
otherwise, in respect of any shares allotted by them, shall immediately on the
insertion of the name of the allottee in the Register of Members as the name of the
holder of such shares, become a debt due to and recoverable by the Company
from the allottee thereof, and shall be paid by him accordingly.
Liability of Members
19.
Every Member, or his heirs, executors, or administrators, shall pay to the
Company the portion of the capital represented by his share or shares which may,
for the time being, remain unpaid thereon, in such amounts, at such time or times,
and in such manner as the Board shall, from time to time in accordance with the
Company’s regulations, require or fix for the payment thereof.
Share Certificates
20.
(a)
Every member or allottee of shares shall be entitled, without
payment, to receive one certificate specifying the name of the person in whose
favour it is issued, the shares to which it relates and the amount paid-up thereon.
Such certificate shall be issued only in pursuance of a resolution passed by the
Board and on surrender to the Company of its letter of allotment or its fractional
coupons of requisite value, save in case of issues against letters of acceptance or
of renunciation, or in cases of issues of bonus shares. Every such certificate shall
be issued under the seal of the Company, which shall be affixed in the presence of
two Directors or persons acting on behalf of the Directors under a duly registered
power of attorney and the Secretary or some other person appointed by the Board
for the purpose, and the two Directors or their attorney and the Secretary or other
person shall sign the share certificate provided that if the composition of the
Board permits of it, at least one of the aforesaid two Directors shall be a person
other than a Managing or a whole-time Director. Particulars of every share
certificate issued shall be entered in the Register of Members against the name of
249
the person to whom it has been issued, indicating the date of issue. For any further
certificate the Board shall be entitled, but shall not be bound to prescribe a charge
not exceeding Rupee One. The Company shall comply with the provisions of
Section 113 of the Act.
(b)
Any two or more joint allottees of a share shall, for the purpose
of this Article, be treated as a single Member, and the certificate of any share,
which may be subject of joint ownership may be delivered to any one of such
joint holders on behalf of all of them.
(c)
A Director may sign a share certificate by affixing his signature
thereon by means of any machine, equipment or other mechanical means, such as,
engraving in metal or lithography, but not by means of a rubber stamp, provided
that the Director shall be responsible for the safe custody of such machine,
equipment or other material used for the purpose.
Renewal
of
certificates.
share
21.
(a)
No certificate of any shares shall be issued either in exchange
for those which are sub-divided or consolidated or in replacement of those which
are defaced, torn or old, decrepit, worn out, or where the cases on the reverse for
recording transfer have been duly utilized, unless the certificate in lieu of which it
is issued is surrendered to the Company.
(b)
When a new share certificate has been issued in pursuance of
clause (a) of this Article, it shall state on the face of it and against the stub or
counterfoil to the effect that it is “Issued in lieu of shares certificate No. Subdivided/replaced/on consolidation of shares”.
(c)
If a share certificate is lost or destroyed, a new certificate in lieu
thereof shall be issued only with the prior consent of the Board and on such terms,
if any, as to evidence and indemnity and as to the payment of out-of-pocket
expenses incurred by the Company in investigating evidence, as the Board thinks
fit.
(d)
When a new share certificate has been issued in pursuance of
clause (c) of this Articles, it shall state on the face of it and against the stub or
counterfoil to the effect that it is “duplicate issued in lieu of which the new share
certificate No…”. the word “Duplicate” shall be stamped or punched in bold
letters across the face of the share certificate.
(e)
Where a new share certificate has been issued in pursuance of
clause (a) or clause c) of this Article, particulars of every such share certificate
shall be entered in a Register of Renewed and Duplicate Certificates indicating
against the names of the persons to whom the certificate is issued, the number and
date of issue of share certificate in lieu of which the new certificate is issued, and
the necessary changes indicated in the Register of Members by suitable cross
references in the “Remarks” column.
(f)
All blank forms to be used for issue of share certificates shall be
printed and the printing shall be done only on the authority of a resolution of the
Board. The blank forms shall be consecutively machine-numbered and the forms
and the blocks, engravings, facsimiles and hues relating to the printing of such
forms shall be kept in the custody of the Secretary or such other person as the
Board may appoint for the purpose; and the Secretary or the other person
aforesaid shall be responsible for rendering an account of these forms to the
Board.
(g)
The Managing Director of the Company for the time being or, if
the Company has no Managing Director, every Director of the Company shall be
responsible for the maintenance, preservation and safe custody of all books and
documents relating to the issue of share certificate except the blank forms of share
certificates referred to in sub-Article (f).
(h)
All books referred to in sub-Article (g) shall be preserved in
good order permanently.
250
The first name of jointholders deemed sole
holder.
22.
If any share stands in the name of two or more persons, the person first
named in the Register shall as regards receipt of dividends or bonus or service of
notice and all any other matter connected with the company, except voting at
meetings, and the transfer of the shares, be deemed the sole holder thereof but the
joint-holders of a share shall be severally as well as jointly liable for the payment
of all instalments and calls due in respect of such share and for all incidents
thereof according to the Company’s regulations.
Company not bound to
recognize any interest in
shares other than that of
registered holder.
23.
Except as ordered by a Court of competent jurisdiction or as by law
required, the Company shall not be bound to recognize any equitable, contingent,
future or partial interest in any share, or (except only as is by these Articles
otherwise expressly provided) any right in respect of share other than an absolute
right thereto, in accordance with these Articles, in the person from time to time
registered as the holder thereof; but the Board shall be at liberty at their sole
discretion to register any share in the joint names of any two or more persons or
the survivors of them.
Discretion
to
subdivision
consolidation
Certificate(s)
refuse
of
of
23.A. Notwithstanding anything contained in these Articles, the Board may in
its absolute discretion, refuse applications for sub-division or consolidation of
share Certificate(s), Debenture or Bond Certificate(s) into denominations of less
than the marketable lot except when such sub-division or consolidation is required
to be made to comply with a statutory provision or an order of a competent Court
of Law, Provided that notwithstanding anything contained in these Articles, the
Board of Directors shall, at its discretion, be entitled to charge and recover the
stamp duty payable on Share Certificate(s) and Debenture Certificate(s) issued
rising from splitting or consolidation or renewal or issue of duplicate
Certificate(s), or transfer or transmission of shares or Debentures; and such stamp
duty shall be paid by the Shareholder/Debentureholder prior to issue of the
Certificate(s).
Funds of the Company
may not be applied in
purchase of shares of the
Company.
24.
None of the funds of the Company shall be applied in the purchase of
any shares of the Company, and it shall not give any financial assistance for or in
connection with the purchase or subscription of any shares in the Company or in
its holding Company save as provided by Section 77 of the Act.
24.A#3. DEMATERIALISATION OF SECURITIES
1)
Definitions
For the purpose of this Article :
`Beneficial Owner’ means a person or persons whose name/s is/are
recorded as such with a depository;
`SEBI’ means the Securities & Exchange Board of India.
`Depository’ means a Company formed and registered under the
Companies Act, 1956 and which has been granted a certificate of
registration to act as a depository under the Securities & Exchange Board
of India Act, 1992;
`Security’ means such security as may be specified by SEBI from time to
time.
`Depositories Act, 1996’ shall include any statutory modification or reenactment thereof.
`Registered owner’ means a Depository whose name is entered as such in
the records of the Company.
Dematerialzation
Securities
Options for investors
of
2)
Notwithstanding anything contained in these Articles, the Company shall
be entitled to dematerialize/rematerialized its securities and to offer
securities in a dematerialized form pursuant to the Depositories Act,
1996.
3)
Every person subscribing to securities offered by the Company shall have
251
the option to receive security certificates or to hold the securities with a
Depository. Such a person who is the beneficial owner of the securities
can at any time opt out of a Depository, if permitted by the law, in respect
of any security in a manner provided by the Depositories Act, and the
Company shall, in the manner and within the time prescribed, issue to the
beneficial owner the required Certificates of Securities.
If a person opts to hold his security with a Depository, the Company shall
intimate such Depository the details of allotment of the security and on
receipt of the information, the Depository shall enter in its record the
name of the allottee as the beneficial owner of the security.
Securities in Depositories
to be in fungible form
4)
All securities held by a Depository shall be dematerialized and be in
fungible form. Nothing contained in Sections 153, 153A, 153B, 187B,
187C and 372A of the Act shall apply to a Depository in respect of the
securities held by it on behalf of the beneficial owners.
Rights of Depositories
and Beneficial owners
5)
(a)
Notwithstanding anything to the contrary contained in the Act or
these Articles, a Depository shall be deemed to be the registered
owner for the purposes of effecting transfer of ownership of
security on behalf of the beneficial owner.
(b)
Save as otherwise provided in (a) above, the Depository as the
registered owner of the securities shall not have any voting rights
or any other rights in respect of the securities held by it.
(c)
Every person holding securities of the Company and whose name
is entered as the beneficial owner in the records of the Depository
shall be deemed to be a member of the Company. The beneficial
owner of securities shall be entitled to all the rights and benefits
and be subject to all the liabilities in respect of his securities
which are held by a Depository.
Service of Documents
6)
Notwithstanding anything contained in the Act or these Articles to the
contrary, where securities are held in a Depository, the records of the
beneficial ownership may be served by such Depository on the company
by means of electronic mode or by delivery of floppies or discs.
Transfer of Securities
7)
(a)
Nothing contained in Section 108 of the Act or these Articles
shall apply to a transfer of securities effect by transferor and
transferee both of whom are entered as beneficial owners in the
records of a Depository.
(b)
In the case of transfer or transmission of shares or other
marketable securities where the Company has not issued any
certificates and where such shares or securities are being held in
any electronic or fungible form in a Depository, the provisions of
the Depositors Act, 1996 shall apply.
Allotment of Securities
dealt with in a Depositor)
8)
Notwithstanding anything in the Act or these Articles, where securities
are dealt with by a Depository, the Company shall intimate the details of
allotment of relevant securities thereof to the Depository immediately on
allotment of such securities.
Certificate number and
Distinctive numbers of
Securities held in a
Depository
9)
Nothing contained in the Act or these Articles regarding the necessity of
having certificate number/distinctive numbers for securities issued by the
Company shall apply to securities held with a Depository.
Beneficial Owners
10)
The Register and Index of beneficial owners maintained by a Depository
under the Depositories Act, 1996 shall be deemed to be the Register and
Index of Members and Security holders for the purposes of these
Articles.
UNDERWRITING AND BROKERAGE
252
Commission may be paid.
25.
Subject to the provisions of Section 76 of the Act the Company may at
any time pay a commission to any person in consideration of his subscribing or
agreeing to subscribe (whether absolutely or conditionally) for any shares or
debentures in the Company, or procuring, or agreeing to procure subscriptions
(whether absolute or conditional) for any shares or debentures in the Company,
but so that the commission shall not exceed in the case of shares five per cent of
the price at which the shares are issued and in the case of debentures two and a
half cent of the price at which the debentures are issued. Such commission may be
satisfied by payment of cash or by allotment of fully or partly paid shares or partly
in one way and partly in the other.
Brokerage
26.
The Company may also, on any issue of share or debentures, pay such
brokerage as may be lawful.
INTEREST OUT OF CAPITAL
Interest may be paid out
of Capital
27.
Where any shares are issued for the purpose of raising money to defray
the expenses of the construction of any work or building, or the provision of any
plant, which cannot be made profitable for a lengthy period, the Company may
pay interest on so much of that share capital as is for the time being paid up, for
the period, at the rate and subject to the conditions and restrictions provided by
Section 208 of the Act and may charge the same to capital as part of the cost of
construction of the work or building, or the provision of plant.
CALLS
Directors may make calls
28.
The Board may, from time to time, subject to the terms on which any
shares may have been issued and subject to the conditions of allotment, by a
resolution passed at a meeting of the Board (and not by circular resolution) make
such call as it thinks fit upon the Members in respect of all moneys unpaid on the
shares held by them respectively and each Member shall pay the amount of every
call so made on him to the person or persons and at the times and places
appointed by the Board. A call may be made payable by instalments.
Notice of call
29.
Fourteen day’s notice in writing of any call shall be given by the
Company specifying the time and place of payment, and the person or persons to
whom such call shall be paid.
Call to
resolution
date
from
30.
A call shall be deemed to have been made at the time when the resolution
authorizing such call was passed at a meeting of the Board.
Call may be revoked or
postponed
31.
Liability of Joint-holders
32.
The joint-holder of a share shall be jointly and se4verally liable to pay
calls in respect thereof.
Directors
time
33.
The Board may, from time to time, at its discretion, extend the time fixed
for the payment of any call, and may extend such time as to all or any of the
Members who, from residence at a distance or other cause, the Board may deem
fairly entitled to such extention but no Member shall be entitled to such
extensions save as a matter of grace and favour.
may
extend
A call may be revoked or postponed at the discretion of the Board.
Calls to carry interest
34.
If any Member fails to pay any call due from him on the day appointed
for payment thereof, or any such extention thereof as aforesaid he shall be liable
to pay interest on the same from the day appointed for the payment thereof to the
time of actual payment at such rate as shall from time to time be fixed by the
Board not exceeding 9 per cent per annum but nothing in this Article shall render
it obligatory for the Board to demand or recover any interest from any such
member.
Sums deemed to be calls.
35.
Any sum, which by the terms of issue of a share becomes payable on
allotment or at any fixed date, whether on account of the nominal value of the
share or by way of premium, shall for the purpose of these Article be deemed to
253
be a call duly made and payable on the date on which by the terms of issue the
same becomes payable, and in case of non-payment all the relevant provisions of
th3ese Articles as to payment of interest and expense, forfeiture or otherwise shall
apply as if such sum had become payable by virtue of a call duly made and
notified.
Proof on trial of suit for
money due on shares.
36.
On the trial or hearing of any action or suit brought by the Company
against any Member or his representative for the recovery of any money claimed
to be due to the Company in respect of his shares, it shall be sufficient to prove
that the name of the Member in respect of whose shares the is sought to be
recovered, appears entered on the Register of Members as the holder at or
subsequent to the date which the money sought to be recovered is alleged to have
become due on the shares in respect of which such money is sought to be
recovered; that the resolution making the call is duly recorded in the Minute
Book; and that notice of such call was duly given to the member or his
representatives, so sued in pursuance of these Article; and it shall not be necessary
to prove the appointment of the Directors who made such call, nor that a quorum
of Directors was present at the Board at which any call was made, nor that the
meeting at which any call was made was duly convened or constituted nor any
other matters whatsoever, but the proof of the matters aforesaid shall be
conclusive evidence of the debt.
Partial payment not to
preclude forfeiture
37.
Neither the receipt by the Company of a portion of any money which
shall from time to time be due from any Member to the Company in respect of his
shares, either by way of principal of interest, nor any indulgence granted by the
Company in respect of the payment of any such money, shall preclude the
Company from thereafter proceeding to enforce a forfeiture of such shares as
hereinafter provided.
Payment in anticipation
of calls may carry
interest.
38.
(a)
The Board may, if it thinks fit, agree to and receive from any
Member willing to advance the same, all or any part of the amounts of his
respective shares beyond the sums, actually called up and upon the moneys so
paid in advance, or upon so much thereof, from time to time, and at any time
thereafter as exceeds the amount of the calls then made upon and due in respect of
the shares on account of which such advances are made the Board may pay or
allow interest, at such rate as the Member paying sum in advance and the Board
agree upon. The Board may agree to repay at any time any amount so advanced or
may at any time repay the same upon giving to the member three month’s notice
in writing. Provided that mone4ys paid in advance of calls on any shares may
carry interest but shall not confer a right to dividend or to participate in profits.
(b)
No Member paying any such sum in advance shall be entitled to
voting rights in respect of the moneys so paid by him until the same would but for
such payment become presently payable.
lien
39.
The Company shall have a first and paramount lien upon all the shares
(other than fully paid up shares) registered in the name of each Member (whether
solely or jointly with others) and upon the proceeds of sale thereof, for all moneys
(whether presently payable or not) called or payable at a fixed time in respect of
such shares, and no equitable interest in any share shall be created except upon the
footing and upon the condition that Article 23 hereof is to have full effect. And
such lien shall extend to all dividends from time to time declared in respect of
such shares. Unless otherwise agreed the registration of a transfer of shares shall
operate as a waiver of the Company’s lien, if any, on such shares.
As to enforcing lien by
sale.
40.
For the purpose of enforcing such lien, the Board may sell the shares
subject thereto in such manner as they shall think fit, and for that purpose may
cause to be issued duplicate certificate in respect of such shares and may authorise
one of their number to execute a transfer thereof on behalf of and in the name of
such Member. No sale shall be made until such period as aforesaid shall have
arrived, and until notice in writing of the intention to sell shall have been served
on such member or his representatives and default shall have been made by him
or them in the payment, fulfillment, or discharge of such debts, liabilities or
engagements for fourteen days after such notice.
Company
shares
have
254
Application of proceeds
of sale
41.
The net proceeds of any such sale shall be received by the Company and
applied in or towards the payment of such part of the amount in respect of which
the lien exists as is presently payable and the residue, if any, shall (subject to a
like lien for sums not presently payable as existed upon the shares before the sale)
be paid to the persons entitled to the shares at the date of the sale.
FORFEITURE OF SHRES
If money payable on
shares not paid notice to
be given to Member
42.
If any Member falls to pay any call or instalment of a call on or before
the day appointed for the payment of the same or any such extension thereof as
aforesaid, the Board may at any time thereafter, during such time as the call or
instalment remains unpaid give notice to him requiring him to pay the same
together with any interest that may have accrued and all expenses that may have
been incurred by the Company by reason of such non-payment.
Forms of notice
43.
The notice shall name a day (not being less than fourte4en days from the
date of the notice) and the place or places on and at which such call or instalment
and such interest thereon at such rate not exceeding 9 per cent per annum as the
Directors shall determine from the day on which such call or instalment ought to
have been paid and expenses as aforesaid are to be paid. The notice shall also
state that, in the event of non-payment at or before the time and at the place
appointed, the shares in respect of which the call was made or instalment is
payable, will be liable to be forfeited.
In default of payment,
shares to be forfeited.
44.
If the requirements of any such notice as aforesaid shall not be complied
with every or any shares in respect of which such notice has been given, may at
any time thereafter before payment of all calls or instalmetns, interest and
expenses due in respect thereof, be forfeited by a resolution of the Board to the
effect. Such forfeiture shall include all dividends declared or any other moneys
payable in respect of the forfeited shares and not actually paid before the
forfeiture.
Notice of forfeiture to a
Member
45.
When any shares shall have been so forfeited notice of the forfeiture shall
be given to the Member in whose name it stood immediately prior to the
forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be
made in the Register of Members, but no forfeiture shall be in any manner
invalidated by any omission or neglected to give such notice or to make any such
entry as aforesaid.
Forfeited share to be
property of the Company
and may be sold, etc.
46.
Any share so forfeited shall be deemed to be the property of the
Company, and may be sold, re-allotted, or otherwise disposed of, either to the
original holder thereof or to any other person, upon such terms and in such
manner as the Board shall think fit.
Member still liable to pay
money owing at time of
forfeiture and interest.
47.
Any Member whose shares have been forfeited shall notwithstanding the
forfeiture, be liable to pay and shall forthwith pay to the Company, on demand all
calls, instalments, interest, and expenses owing upon or in respect of such shares
at the time of the forfeiture, together with interest thereon from time to time of the
forfeiture until payment, at such rate not exceeding 9 per cent per annum as the
Board may determine and the Board may enforce the payment thereof, if it thinks
fit.
Effect of Forfeiture
48.
the forfeiture of a share shall involve extinction, at the time of the
forfeiture, of all interest in and all claims and demands against the Company, in
respect of the share and all other rights incidental to the share, except only such
those rights as by these Articles are expressly saved.
Evidence of Forfeiture
49.
A declaration in writing that the declarant is a Director or Secretary of the
Company and that a share in the Company has been duly forfeited in accordance
with these Articles on a date stated in the declaration, shall be conclusive
evidence of the facts therein stated as against all persons claiming to be entitled to
the shares. Such declaration and the receipt of the Company for the consideration,
if any, given for the share on the sale or disposal thereof shall constitute a good
title to such shares and the person to whom the shares are sold shall be registered
as the holder of such shares and shall not be bound to see to the application of the
255
purchase money, nor shall his title to such shares be affected by any irregularity or
invalidity in the proceedings in reference to such forfeiture, sale or disposition.
Validity of sale under
Article 40 and 46.
50.
Upon any sale after forfeiture or for enforcing a lien in purported exercise
of the powers hereinbefore given, the Board may appoint some person to execute
an instrument of transfer of the shares sold and cause the purchaser’s name to be
entered in the Register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings, or to the application of the
purchase money, and after his name has been entered in the Register in respect of
such shares, the validity of the sale shall not be impeached by any person and the
remedy of any person aggrieved by the sale shall be in damages only and against
the Company exclusively.
Cancellation of share
certificates in respect of
forfeited shares
51.
Upon any sale, re-allotment or other disposal under the provisions of the
preceding Articles, the certificate or certificates originally issued in respect of the
relative shares shall (unless the same shall on demand by the Company have been
previously surrendered to it by the defaulting member) stand cancelled and
become null and void and of no effect, and the Directors shall be entitled to issue
a duplicate certificate or certificates in respect of the said shares to the person or
persons entitled thereof.
Power
to
forfeiture
52.
The Board may at any time before any share so forfeited shall have been
sold, re-allotted or otherwise disposed of, annual the forfeiture thereof upon such
conditions as it thinks fit.
annual
TRANSFER AND TRANSMISSION OF SHARES
Register of transfers
53.
The Company shall keep a “Register of Transfers” and therein shall be
fairly and distinctly entered particulars of every transfer or transmission of any
share.
Form of transfer
54.
Every instrument of transfer of shares shall be in writing in such form as
shall from time to time be permissible to used under the relevant provisions of the
Act in that behalf. The Directors may from time to time alter or vary the form of
such transfer but so as to comply with the provisions of the Act in that behalf.
Transfer form to be
completed and presented
to the Company
55.
The instrument of Transfer duly stamped and executed by the Transferor
and the Transferee shall be delivere4d to the Company in accordance with the
provisions of the Act. The Instrument of Transfer shall be accompanied by such
evidence as the Board may require to prove the title of Transferor and his right to
transfer the shares and every registered Instrument of Transfer shall remain in
custody of the Company until destroyed by order of the Board. The Transferor
shall be deemed to be the holder of such shares until the name of the Transfere4e
shall have been entered in the Register of members in respect thereof. Before the
registration of a transfer the certificate or certificates of the shares must be
delivered to the Company.
Transfer
closed.
when
56.
The Board shall have power on giving not less than seven days previous
notice by advertisement in a newspaper circulating in the city, town or village in
which the Registered Office of the Company is situated to close the transfer
books, the Register of Members and/or Register of Debentureholders at such time
or times and for such periods, not exceeding thirty days at a time and not
exceeding the aggregate forty-five days in each year as to it may seem expedient.
Directors may refuse to
register transfer(s)
57.
Subject to the provisions of Section 111 of the Act and Section 22A of
Securities Contracts (Regulation) Act, 1956, the Board may refuse to register any
transfer of, or the transmission by operation of law of the right to, any shares or
interest of a Member in the Company Provided however that the registration of a
share shall not be refused on the ground of the transferor being either alone or
jointly with any other person or persons indebted to the Company on any account
whatsoever. Provided further that in the event of refusal to register any such
transfer of, or the transmission of the right to, any shares or interest of the member
in the Company, the Company shall, within two months from the date on which
the instrument of transfer, or the intimation of such transmission, as the case may
be, was delivered to the Company, send notice of such refusal to the transferee
books
256
and transferor or the person giving intimation of such transmission, as the case
may be, giving reasons for such refusal.
Notice of application
when to be given
58.
When, in the case of partly paid shares, an application for registration is
made by the transferor, the Company shall give notice of the application to the
transferee in accordance with the provisions of Section 110 of the Act.
Death of one or more
joint holder of shares
59.
In the case of the death of any one of more of the persons named in the
Register of Members as the joint holders of any share, the survivor, or the
survivors shall be the only persons recognized by the Company as having any title
to or interest in such share, but nothing herein contained shall be taken to release
the estate of a deceased joint holder from any liability on shares held by him
jointly with any other person.
Title to Shares
deceased Member
of
60.
The executors or administrators or holder of a Succession Certificate or
the legal representative of a deceased Member (not being one of two or more
joint-holders) shall be the only persons recognized by the Company as having any
title to the shares registered in the name of such Member, and the Company shall
not be bound to recognize such executors or administrators or holders of a
Succession Certificate or the legal representatives unless such executors or
administrators or legal representatives shall have first obtained Probate or Letters
of Administration or Succession Certificate, as the case may be, from a duly
constituted Court in the Union of India; provided that in any case where the Board
in its absolute discretion thinks fit, the Board may dispense with the production of
Probate or Letters of Administration or Succession Certificate, upon such terms as
to indemnity or otherwise as the Board in its absolute discretion may think
necessary and under Article 63 register the name of any person who claims to be
absolutely entitled to the shares standing in the name of a deceased member, as a
Member.
No transfer to infant, etc.
61.
No share shall in any circumstances be transferred to any infant,
insolvent or person of unsold mind.
Compliance with the
Estate Duty Act, 1953.
62.
If any Member of the Company dies, and the Company through any of its
principal offices within the meaning of the Estate Duty Act, 1953, has knowledge
of the death, it shall not be lawful of the Company to register the transfer of any
shares standing in the name of the deceased Member unless the Company is
satisfied that the transferee has acquired such shares for valuable consideration or
there is produced to it a certificate from the Controller, Deputy Controller or
Assistant Controller or Estate Duty that either the Estate Duty in respect thereof
has been paid or will be paid or none is due as the case may be. Where the
Company has come to know through any of its principal officers of the death of
any Member, the Company shall, within three months of the receipt of such
knowledge, furnish to the Assistant Controller or the Deputy Controller of Estate
Duty who is exercising the functions of the Income-Tax Officer under the
Income-Tax Act in relation to the Company, such particulars as may be prescribed
by Estate Duty Rules, 1953.
Registration of persons
entitled
to
share
otherwise
than
by
transfer.
63.
Subject to the provisions of the Act Articles 59 and 60 any person
becoming entitled to shares in consequence of the death, lunacy, bankruptcy or
insolvency or any Member, or by any lawful means other than by a transfer in
accordance with these Articles, may, with the consent of the Board (which it shall
not be under any obligation to give), upon producing such evidence that he
sustains the character in respect of which he proposes to ct under this Article or of
such title as the Board thinks sufficient, either be registered himself as the holder
of the shares or elect to have some person nominated by him and approved by the
Board registered s such holder; provided nevertheless, that if such person shall
elect to have his nominee registered, he shall testify the election by executing in
favour of his nominee an instrument of transfer in accordance with the provisions
herein contained and until the does so, he shall not be freed from any liability in
respect of the shares.
Persons entitled may
receive dividend without
being
registered
as
64.
A person entitled to a share by transmission shall, subject to the right of
the Directors to retain such dividends or money s hereinafter provided, be entitled
to receive and may give a discharge, for, any dividends or other moneys payable
257
in respect of the shares.
Members.
or
65.
No fee shall be payable to the company, in respect of the transfer or
transmission of shares.
Company not liable for
disregard of a notice
prohibiting registration
of a transfer.
66.
The Company shall incur no liability or responsibility whatsoever in
consequence of its registering or giving effect to any transfer of shares made or
purported to be made by any apparent legal owner thereof (as shown or appearing
in the Register of Members) to the prejudice of persons having or claiming any
equitable right, title or interest to or in the said shares, notwithstanding that the
Company may have had notice of such equitable right, title or interest or notice
prohibiting registration of such transfer and may have entered such notice or
referred thereto, in any book of the Company, and the Company shall not be
bound or required to regard or attend or give effect to any notice which may be
given to it of any equitable right, title or interest, or be under any liability
whatsoever for refusing or neglecting so to do, though it may have been entered or
referred to in some book of the Company; but the Company shall nevertheless be
at liberty to regard and attend to any such notice and give effect thereto if the
Board shall so think fit.
Transfer of Debentures
67.
The provisions of these Articles shall mutatis mutandis apply to the
transfer or transmission by operation of law of debentures of the Company.
Nomination
67(A)
Fees on transfer
transmission
Transmission in case of
nomination
67(B)
(1)
Every holder of share(s) in and/or debenture(s) of the Company, so
entitled under the Act and Rules framed thereunder, may, at
anytime, nominate, in the manner prescribed under the ct, a person
to whom his share(s) in and/or debenture(s) of the Company shall
vest in the event of his death.
(2)
Where the share(s) in and/or debenture(s) of the Company are held
by more than one person jointly, the jointholders, so entitled under
the Act and the Rules framed thereunder, may, together nominate,
in the manner prescribed under the Act, a person to whom all the
rights in the share(s) and/or debenture(s) of the Company, as the
case may be, shall vest in the event of death of all the joint holders.
(3)
Notwithstanding anything contained in any other law for the time
being in force or in these Articles or in any disposition, whether
testamentary or otherwise, in respect of the share(s) in and/or
debenture(s) of the Company, where a nomination is made in the
manner prescribed under the Act, purports to confer on any person
the right to vest the share(s) in and/or debenture(s) of the Company,
the nominee shall, on the death of the shareholder and/or
debentureholder concerned or on the death of the jointholders as the
case may be, become entitled to all the rights in relation to such
share(s) and/or debenture(s), to the exclusion of all other persons,
unless the nomination is varied or cancelled in the manner
prescribed under the Act.
(4)
Where a nominee is a minor, the holder of the share(s) in and/or
debenture(s) of the Company can make a nomination in the manner
prescribed under the Act, to appoint any person to become entitled
to the share(s) in and/or debenture(s) of the Company, in the event
of his death, during the minority.
(1)
Notwithstanding anything contained in these Articles, any person
who becomes a nominee by virtue of the provisions of Article
67(A), upon the production of such evidence as may be required by
the Board and subject as hereinafter provided, elect, either (a)
to be registered himself as holder of the share(s) and/or
debenture(s), as the case may be; or
(b)
to make such transfer of the share(s and/or debenture(s), as
the case may be, as the deceased shareholder and/or
258
debentureholder concerned or deceased jointholder, as the
case may be, could have made.
(2)
If the person being a nominee, so becoming entitled, elects himself
to be registered s holder of the share(s) and/or debenture(s), as the
case may be, he shall deliver or send to the Company, a notice in
writing duly signed by him stating the nominee concerned so elects
and such notice shall be accompanied with the death certificate(s)
of the deceased shareholder/debentureholder/jointholders, as the
case may be.
(3)
All the limitations, restrictions and provisions of these Articles,
relating to the right to transfer and the registration of transfers of
share(s) and/or debenture(s) shall be applicable to any such notice
or transfer as aforesaid as if the death of the shareholder/debentureholder had not occurred and the notice or transfer were signed by
that shareholder and/or debentureholder or jointholders, as the case
may be.
(4)
A person, being a nominee, becoming entitled to the share(s) and/or
debenture(s) by reason of the death of the holder shall be entitled to
the same dividends and other advantages to which he would be
entitled if he were the registered holder of the share(s) and/or
debenture(s), except that he shall not, before being registered a
member in respect of his share(s) or debenture(s), be entitled in
respect of it to exercise any right conferred by membership in
relation to meetings of the Company.
Provided that the Board may, at any time, give notice requiring any
such person to elect either to be registered himself or to transfer the
share(s) and/or debenture(s); and if the notice is not compiled with,
within ninety days, the Board may thereafter withhold payments of
all dividends, bonuses or other moneys payable or rights accruing in
respect of the share(s) and/or debenture(s) until the requirements of
the notice have been complied with.
COPIES OF MEMORANDUM AND ARTICLES
TO BE SENT TO MEMBERS
Copies of Memorandum
& Articles of Association
to be sent by the
Company.
68.
Copies of the Memorandum and Articles of Association of the Company
and other documents referred to in Section 39 of the Act, shall be sent by the
Company to every Member at his request within seven days of the request on
payment of the sum of Rupee one for each copy.
BORROWING POWER
Power to borrow.
69.
Subject to the provisions of Section 292 and 293 of the Act and the4se
Articles, the Board may, from time to time at its discretion, accept deposits from
Members (either in advance of calls or otherwise), and from other persons and
generally borrow or raise or secure the payment of any sum or sums of money for
the purposes of the Company. Provided, however that where the moneys to be
borrowed together with the moneys already borrowed (apart from temporary loans
obtained from the Company’s, Bankers in the ordinary course of business),
exceed the aggregate of the paid-up capital of the Company and its free reserves,
(not being reserves set apart for any specific purpose) the Board shall not borrow
such moneys without the consent of the Company in General Meeting.
Payment or repayment of
moneys borrowed.
70.
The payment or repayment of moneys borrowed as aforesaid may be
secured in such manner and upon such terms and conditions in all respects as the
Board may think fit, and, in particular, by a resolution passed at a meeting of the
Board (and not by circular resolution), by the issue of debentures or debenture
stock of the Company, charged upon all or any part of the property of the
Company (both present and future) including its uncalled capital for the time
being; and debentures, debenture-stock and other securities may be made
assignable free from any equities between the Company and the person to whom
259
the same may be issued.
of
71.
Any debentures, debenture-stock or other securities may be issued at a
discount, premium or otherwise and may be issued on condition that they shall be
convertible into shares of any denomination, and with any privileges and
conditions as to redemption, surrender, drawing, allotment of shares and attending
(but not voting) at general meeting, appointment of Directors and otherwise.
Debenture with the right to conversion into or allotment of shares shall be issued
only with the consent of the Company in General Meeting.
Register of Mortgages
etc. of be kept.
72.
The Board shall cause a proper Register to be kept in accordance with the
provisions of Section 143 of the Act of all mortgages, debentures and charges
specifically affecting the property of the Company; and shall cause the
requirements of Section 118, 125 and 127 to 144 (both inclusive), of the Act in
that behalf to be duly complied with by the Board.
Debenture-holders
73.
The Company, shall, it at any time it issued debentures, keep a Register
and Index of Debenture-holders in accordance with Section 152 of the Act. The
Company shall have the power to keep in any State or Country outside India a
Branch Register of Debenture-holders resident in that State or Country.
Terms
of
Debentures
issue
CONVERSION OF SHRES INTO STOCK
AND RECONVERSION
Shares may be converted
into stock
74.
The Company in General Meeting may convert and any paid up shares
into stock and when any shares shall have been converted into stock, the several
holders of such stock may thenceforth transfer their respective interest therein or
any part of such interests, in the same manner and subject to which shares from
which the stock arise might have been transferred, if no such conversion had
taken place or as near thereto as circumstances will admit. The Company may at
any time reconvert any stock into paid-up shares of any denomination.
Rights of Stock-holder.
75.
The holders of stock shall according to the amount of stock held by them,
have the same rights, privileges and advantages as regards dividends, voting at
meetings of the Company, and other matters, as if they held the shares from which
the stock arose; but no such privileges or advantages, (except participation in the
dividends and profits of the Company and in the winding-up), shall be conferred
by an amount of stock which would not, if existing in shares, have conferred that
privilege or advantage.
MEETINGS OF MEMBERS
Annual General Meeting.
Annual Summary
76.
The Company shall in each year hold a General Meeting as its Annual
General Meeting in addition to any other meetings in that year. All General
Meetings other than Annual General Meetings shall be called Extraordinary
General Meetings. The Annual General Meeting shall be held within six months
after expiry of each financial year, provided that not more than fifteen months
shall elapse between the date of one Annual General Meeting and that of the next.
Nothing contained in the foregoing provisions shall be taken as affecting the right
conferred upon the Register under the provisions of Section 166(1) of the Act to
extend the time within which any Annual General Meeting may be held. Every
Annual General Meeting shall be called for at a time, during business hours, on a
day that is not a public holiday, and shall be held at the Registered Office of the
Company or at some other place within the city in which the Registered Office of
the Company is situate, as the Board may determine and the notices calling the
Meeting shall specify it as the Annual General Meeting. The Company may in
any one Annual General Meeting fix the time for its subsequent Annual General
Meetings. Every member of the Company shall be entitled to attend the Annual
General Meeting either in person or by proxy and the Auditor of the Company
shall have the right to attend and to be heard at any General Meeting which he
attends on any part of the business which concerns him as Auditor. At every
Annual General Meeting of the Company there shall be laid on the table, the
Director’s Report and Audited Statement of Accounts, Auditor’s Report (if not
already incorporated in the Audited Statement of Accounts) the Proxy Register
with proxies and the Register of Director’s Shareholdings which latter Register
260
shall remain open and accessible during the continuance of the Meeting. The
Board shall cause to be prepared the Annual List of Members, Summary of the
Share Capital, Balance Sheet and Profit and Loss Account and forward the same
to the Registrar, in accordance with Sections 159, 161 and 220 of the Act.
General
77.
The Board may, whenever it think fit, call an Exraordinary General
Meetings and it shall do so upon a requisition in writing by any Member or
Members holding aggregate not less than one-tenth of such of the paid-up capital
as at that date carries he right of voting in regard to the matter in respect of which
the requisition has been made.
Requisition of Members
to state object of meeting
78.
Any valid requisition so made by Members must state the object or
objects of the Meeting proposed to be called, and must be signed by the
requisitionists and be deposited at the Office provided that such requisition may
consist of several documents in like from each signed by one or more requisitions.
Upon the receipt of any such requisition, the Board shall forthwith call an
extraordinary general meeting, and if they do not proceed within 21 days from the
date of requisition being deposited at the office to cause a meeting to be called on
a day not later than forty-five days from the date of deposit of the requisition, the
requisitionists, or such of their number as represent either a majority in value of
the paid-up share capital held by all of them or not less than one-tenth of such of
the paid-up share capital of the Company as is referred to in Section 169(4) of the
Act, whichever is less, may themselves call the Meeting, but in either case any
Meeting so called be held within three months from he date of the delivery of the
requisition as aforesaid.
Meeting
called
requisitionists.
by
79.
Any Meeting called under the foregoing Articles by the requisitionists,
shall be called in the same manner, as nearly as possible, as that in which a
Meeting is to be called by the Board.
Twenty-one day’s notice
of meeting to be given.
80.
Twenty-one day’s notice at the least of every General meeting, Annual or
Extraordinary, and by whomsoever called specifying the day, place and hour of
Meeting, and the general nature of the business to be transacted thereat, shall be
given in the manner hereinafter provided, to such persons as are under these
Articles entitled to receive notice from the Company. Provided that in the case of
an Annual General Meeting with the consent in writing of all the Members
entitled to vote threat and in case of any other Meeting, with the consent of
Members holding not less than 95 per cent of such part of the paid-up share
capital of the Company as gives a right to vote at the meeting, a Meeting may be
convened by a shorter notice. In the case of an Annual General Meeting, if any
business other than (i) the consideration of the accounts, Balance Sheet and
Report of the Board of Directors and Auditors, (ii) the declaration of dividend,
(iii) the appointment of Directors in place of those retiring, (iv) the appointment
of, and fixing of the remuneration of the Auditors, is to be transacted, and in the
case of any other Meeting in any event, there shall be annexed to the notice of the
Meeting a statement setting out all material facts concerning each such item of
business, including in particular the nature of the concern or interest if any therein
of every Director and the Manager (if any). Where any such item of business
relates to or affects any other company, the extent of shareholding interest in that
other company of every Director, and the Manager, (if any), of the Company shall
also be set out in the statement if the extent of such shareholding interest is not
less than 20 per cent of the paid-up share capital of that other company. Where
any item of business consists of the according of approval to any document by the
Meeting, the time and place where the document can be inspected shall be
specified in the statement aforesaid.
Omission to give notice
not to invalidate a
resolution passed.
81.
The accidental omission to give any such notice as aforesaid to any of the
Members, or the non-receipt thereof, shall not invalidate any resolution passed at
any such meeting.
Notice of business to be
given.
82.
No General Meeting Annual or Extraordinary, shall be competent to enter
into, discuss or transact any business which has not been mentioned in the notice
or notices by which it was convened.
Quorum
83.
Extraordinary
Meeting
at
General
Five Members present in person shall be a quorum for a General
261
Meeting.
Meeting. A body corporate being a member shall be deemed to be personally
present if it is represented in accordance with Section 187 of the Act.
If quorum not present,
Meeting to be dissolved
or adjourned
84.
If, at the expiration of half an hour from the time appointed for holding a
Meeting of the Company, a quorum shall not be present, the Meeting, convened
by or upon the requisition of Members, shall stand dissolved, but in any other
case, the Meeting shall stand adjourned to the same day in the next week or, if
that is a public holiday until the next succeeding day which is not a public holiday
at the same time and place or to such other day and at such other time and place
within the city, town or village in which the Registered Office of the Company is
situate, as the Board may determine, and if at such adjourned Meeting a quorum is
not present at the expiration of half an hour from the time appointed for holding
the Meeting, the members present shall be a quorum, and may transact the
business for which the Meeting was called. It shall not be necessary to give any
notice of an adjournment or of the business to be transacted at an adjourned
meeting.
Chairman
Meeting
General
85.
The Chairman (if any), of the Board shall be entitled to take the chair at
every General Meeting, whether Annual or Extra-ordinary. If there be no such
Chairman of the Board, or if at any Meeting he shall not be present within fifteen
minutes of the time appointed for holding such meeting or if he shall be unable or
unwilling to take the chair then the Vice-Chairman (if any) of the Board shall be
entitled to take the chair at such General Meeting. If there be no such ViceChairman of the Board or if at any Meeting he shall not be present within fifteen
minutes of the time appointed for holding such meeting or if he shall be unable or
unwilling to take the chair, then the Members present shall elect another director
as Chairman, and if no Director be present shall elect another Director as
Chairman, and if no Director be present or if all the Directors present decline to
take the Chair, then the Members present shall elect one of their number to be the
Chairman.
Business confined to
election of Chairman
whilst chair is vacant
86.
No business shall be discussed at any General meeting except the
election of Chairman, while the Chair is vacant.
Chairman with consent
may adjourn Meeting.
87.
The Chairman with the consent of the meeting may adjourn any meeting
from time to time and from place to place within the City, Town or Village in
which the Registered Office of the Company is situate, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at the
Meeting which was adjourned.
Questions of General
Meetings how decided.
88.
At any General Meeting a resolution put to the vote of the Meeting shall
be decided on a show of hands, unless a poll is (before or on the declaration of the
result of the show of hands) demanded as provided in Article 88-A hereof. A
declaration by the Chairman that a resolution has on a show of hands, been carried
unanimously, or by particular majority or lost, and an entry to that effect in the
Minute Book of the Company shall be conclusive evidence of the fact, without
proof of proportion of the votes recorded in favour or against that resolution.
Demand for Poll
88-A. Before or on the declaration of the result of the voting on any resolution
on a show of hands, a poll may be ordered to be taken by the Chairman of the
Meeting of his own motion and shall be ordered to be taken by him on a demand
in that behalf by any Member or Members present in person or by proxy and
holding shares in Company which confer a power to vote on the resolution not
being less than one-tenth of the total voting power in respect of the resolution or
on which an aggregate sum of not less than fifty thousand rupees has been paidup. The demand for a poll may be withdrawn at any time by the person or persons
who made the demand.
Chairman’s casting vote.
89.
I case of an equality of votes, the Chairman shall both on a show hands
and at a poll, (if any), have a casting vote in addition to the vote or votes to which
he may be entitled as a Member.
of
262
Poll to be
demanded.
taken
if
90.
If a poll is demanded as aforesaid, the same shall subject to Article 96
and 103 be taken at such time, (not alter than forty-eight hours from the time
when the demanded was made), and place with City, Town or Village in which
the Registered Office of the Company is situate and either by open voting or by
ballot, as the Chairman shall direct, and either at once or after an interval or
adjournment, or otherwise, and the result of the poll shall be deemed to be the
decision of the Meeting at which the poll was demanded. The demand for a poll
may be withdrawn at any time by the person or persons who made the demand.
Scrutineers at poll.
91.
Where a poll is to be taken, the Chairman of Meeting shall appoint two
scrutineers to scrutinise the votes given on the poll and to report thereon to him.
One of the scrutineers so appointed shall always Member (not being an officer or
employee of the Company) present at the Meeting, provided such a Member is
available and willing to appointed. The Chairman shall have the power at any
time before the result of the poll is declared, to remove a scrutineer from office
and fill vacancies in the office of scrutineer arising from such removal or from
any other cause.
In what case poll taken
without adjournment.
92.
Any poll duly demanded on the election of a Chairman of a meeting or
on any question of adjournment shall be taken at the Meeting forthwith.
Demand for poll not to
prevent transaction of
other business.
93.
The demand for a poll except on the question of the election of the
Chairman and of an adjournment shall not prevent the continuance of a Meeting
for the transaction of any business other than the question on which the poll has
been demanded.
VOTE OF MEMBERS
Members in arrears not
to vote.
94.
No member shall be entitled to vote either personally or by proxy at any
General Meeting or Meeting of a class of shareholders either upon a show of
hands or upon a poll in respect of any shares registered in his name on which any
calls or other sums presently payable by him have not been paid or in regard to
which the Company has, and has exercised, any right of lien.
Number of votes to which
Member entitled.
95.
Subject to the provisions of these Articles, and without prejudice to any
special privileges or restrictions as to voting for the time being attached to any
class of shares for the time being forming part of the capital of the Company,
every Member, not disqualified by the last preceding Article, shall be entitled to
be present, and to speak and vote at such Meeting, and on a show of hands every
Member present in person shall have one vote and upon a poll, the voting right of
every Member present in person or by proxy shall be in proportion to his share of
the paid-up Equity Share capital of the Company.
Provided however, if any preference shareholder be present at any
Meeting of the Company, save as provided in Clause (b) of Sub-Section (2) of
Section 87 of the Act, he shall have right to vote only on resolution placed before
the Meeting which directly affect the rights attached to his preference shares.
Casting of votes by a
Member entitled to more
than one vote.
96.
On a poll taken at a Meeting of the Company, a Member entitled to more
than one vote, or his proxy, or other person entitled to vote for him as the case
may be, need not, if he votes, use all his votes or cast in the same way all the
votes he uses.
How
Members
Noncomponment is and
Minor may vote
97.
A Member of unsound mind, or in respect of whom an order has been
made by any Court having jurisdiction in lunacy, may vote, whether on a show of
hands or on a poll, by his committee or other legal guardian, and any such
committee guardian may, on a poll, vote by proxy; if any member be a minor, the
vote in respect of his share shall be by his guardian, or any one of his guardians, if
more than one, to be elected in case of dispute by the Chairman of the meeting.
Votes in respect of shares
of deceased and insolvent
98.
Any person entitled under Article 63 to transfer any share may vote at
any General Meeting in respect thereof in the same manner as if he were the
263
Member.
registered holder of such shares, provided that forty-eight hours at least before the
time of holding the meeting or adjourned meeting, as the case may be, at which he
proposes to vote he shall satisfy the Directors of his right to transfer such shares
and give such indemnity (if any)y require or the Directors shall have previously
admitted his right to vote at such meeting in respect thereof.
Votes of joint Members.
99.
If there be any joint registered holders of any shares, any one of such
persons may vote at any meeting or may appoint another person, (whether a
Member or not), his proxy in respect of such shares, as if he were solely entitled
thereto; but the proxy so appointed shall not have any right to speak at the
Meeting and if more than one of such joint-holders be present at any Meeting, that
one of said persons so present whose name stands higher on the Register of
Members shall alone be entitled to speak and to vote in respect of such shares but
the other or others of the joint-holders shall be entitled to be present at the
Meeting, Several, executors or administrators of a deceased Member in whose
name shares stand shall for the purpose of these Articles be deemed joint-holders
thereof.
Voting in person or by
proxy.
100.
Subject to the provisions of these Articles, vote may be given personally
or by an attorney or by proxy. A Body corporate being a Member may vote either
by a proxy or a representative duly authorised in accordance with Section 187 of
the Act, and such representative shall be entitled to exercise the same rights and
powers, (including the right to vote by proxy). On behalf of the body corporate
which he represents as that body could exercise if it were an individual Member.
Appointment of Proxy
101.
Every Proxy, (whether a Member or not), shall be appointed in writing
under the hand of the appointer or his attorney, or if such appointer corporation
under the Common Seal of such corporation or be signed by a officer or an
attorney duly authorised by it. In case of a Member who is of unsound mind or
who is a minor, his committee or guardian may appoint such proxy. The proxy so
appointed shall not have any right to speak at the meeting.
Proxy either for specified
Meeting or for a period.
102.
An instrument of proxy may appoint a proxy either for the purpose of a
particular Meeting specified in the instrument and any adjournment thereof or it
may appoint a proxy for the purpose every Meeting of the Company, or of every
Meeting to be held before a date specified in the instrument and every
adjournment of any such meeting.
Proxy to vote only on a
poll.
103.
Deposit of Instrument of
appointment.
104.
The instrument appointing a proxy and the power of attorney or other
authority, (if any), under which it is signed or a notarially certified copy of that
power or authority, shall be deposited at the Office not later than forty-eight hours
before the time for holding the Meeting at which the person named in the
instrument proposes to vote, and in default the instrument of proxy shall not be
treated as valid. An attorney shall not be entitled to vote unless the power of
attorney or other instrument appointing him or a notarially certified copy thereof
has either been registered in the records of the Company at any time not less than
forty-eight hours before the time for holding the Meeting at which the attorney
proposes to vote, or is deposited at the Office of the Company not less than fortyeight hours before the time fixed for such Meeting as aforesaid. Notwithstanding
that a power of attorney or other authority has been registered in the records of the
Company. The Company may, be notice in writing addressed to the Member of
the Attorney, given at least fourteen days before the meeting, require him to
produce the original power of attorney or authority and unless the same is thereon
deposited with the Company not less than forty-eight hours before the time fixed
for the meeting, the attorney shall not be entitled to vote at such Meeting unless
the Board in their absolute discretion excuse such non-production and deposit.
Form of proxy.
105.
Every instrument of proxy whether for a specified Meeting or otherwise
should, as far as circumstances admit, be in any of the forms set out in Schedule
IX of the Act.
Validity of votes given by
106.
A Member present by proxy shall be entitled to vote only on a poll.
A vote given in accordance with the terms of an instrument of proxy
264
proxy
notwithstanding
death of Member.
shall be valid notwithstanding the previous death of the principal or revocation of
the proxy or of any power of attorney under which such proxy was signed, or the
transfer of the share in respect of which the vote is given, provided that no
intimation in writing of the death, revocation or transfer shall have4 been received
at the Office of the Company before the Meeting.
Time for objections to
vote.
107.
No objection shall be made to the validity of any vote, except at the
Meeting or poll at which such vote is tendered, and every vote whether given
personally or by proxy, not disallowed at such Meeting or poll shall be deemed
valid for all purposes of such Meeting or poll whatsoever.
Chairman
of
any
Meeting to be the Judge
of validity of any vote.
108.
The Chairman of any Meeting shall be the sole judge of the validity of
every vote tendered at such Meeting. The Chairman present at the taking of poll
shall be the sole judge of the validity of every vote tendered at such poll.
MINUTES OF MEETINGS
Minutes
of
General
Meeting and inspection
thereof by Members.
109. (1)
The Company shall cause minutes of all proceedings of every
General Meeting to be kept by making within thirty days of the
conclusion of every such Meting concerned, entries thereof in books
kept for the purpose with their pages consecutively numbered.
(2)
Each page of every such book shall be initialled or signed and the
last page of the record of proceedings of each Meeting in such book
shall be dated and signed by the Chairman of the same Meeting
within the aforesaid period of thirty days or in the event of the death
or inability of that Chairman within that period, by a Director duly
authorised by the Board for that purpose.
(3)
In no case the minutes of proceedings of a Meeting shall be attached
to any such book as aforesaid by pasting or otherwise.
(4)
The Minutes of each Meeting shall contain a fair and correct
summary of the proceedings thereat.
(5)
All appointments of Officers made at any Meeting aforesaid shall be
included in the minutes of the Meeting
(6)
Nothing herein contained shall require or be deemed to require the
inclusion in any such Minutes of any matter which in the opinion of
the Chairman of the Meeting is, or could reasonably be regarded as,
defamatory of any person; is irrelevant or immaterial to the
proceedings; or is detrimental to the interests of the Company. The
Chairman of the Meeting shall exercise an absolute discretion in
regard to the inclusion or non-inclusion of any matter in the Minutes
on the aforesaid grounds.
(7)
Any such Minutes shall be evidence of the proceedings recorded
therein.
(8)
The book containing the Minutes of proceedings of General Meeting
shall be kept at the Registered Office of the Company and shall be
open, during business hours, for such periods not being less in the
aggregate than two hours in each day as the Board determines, to the
inspection of any Member without charge.
DIRECTORS
Number of Directors
110.
Until otherwise determined by General Meeting and subject to Section
252 of the Act, the number of Directors (excluding Debenture and Alternate
265
Directors) shall not be less than five or more than fifteen.
Power to appoint exofficio Directors.
111.
Whenever the Company enters into a contract with any Government,
Central, State or Local any Bank or financial institution or any person or persons
(hereinafter referred to as “the appointor”) for borrowing any money or for
providing any guarantee or security or for technical collaboration or assistance or
for underwriting or enter into any other arrangement whatsoever, the Directors of
the Company shall have, subject to the provisions of section 255 of the Act, the
power to agree that such appointor shall have the right to appoint or nominate by
notice in writing addressed to the Company one or more Directors on the Board
for such period and upon such conditions as may be mentioned in the notice and
that such Director or Directors may not be liable to retire by rotation not be
required to hold any qualification shares. The Directors of the Company may also
agree that any such Director or Directors may be removed from time to time by
the appointor entitled to appoint or nominate them and the appointor may appoint
another or others in his or their place and also fill in any vacancy, which may
occur as a result of any such Director or Directors ceasing to hold that office for
any reason whatever. The Directors appointed or nominated under this Article
shall be entitled to exercise and enjoy all or any of the rights and privileges
exercised and enjoyed by the Directors of the Company including payment of
remuneration and travelling expenses to such Director or Directors s may be
agreed by the Company with the appointor.
The persons/nominees appointed as Directors shall be entitled to receive
all notices of the Board of Directors of the Company and of the meetings of the
Committee/s to which such person/Director is a member and also the Minutes of
all such meetings.
112.
Any trust deed securing and covering the issue of debentures of the
Company may provide for the appointment of a Director (in these presents
referred to as “the Debenture Director”) for and on behalf of the Debentureholders
for such period as is therein provided not exceeding the period for which the
debenture or any of them shall remain outstanding and for the removal from office
of such Debenture Director and on a vacancy being caused whether by
resignation, death, removal or otherwise, for appointment of a Debenture Director
in the vacant place. The Debenture Director shall not be liable to retire by rotation
or be removed from office except as provided as aforesaid. The Debenture
Director shall not be bound to hold any qualification shares.
Debenture Director.
of
113.
The Board may appoint an Alternate Director to act for a Director
(hereinafter called the “Original Director”) during his absence for a period of not
less than three months from the State of Bombay. An Alternate Director appointed
under this Article shall not hold office for a period longer than that permissible to
the Original Director in whose place he has been appointed and shall vacate office
if and when the Original Director returns to the State of Bombay. If the terms of
office of the original Director is determined before he so returns to the state of
Bombay, any provision in the Act or in these Article for the automatic
reappointment of retiring Directors in default of another appointment shall apply
to the Original Director and not to the Alternate Director.
Directors’ power to add
to the Board.
114.
Subject to the provisions of Section 260 and 264 of the Act the Board
shall have power at any time and from time to time to appoint any other qualified
person to be an additional Director, but so that the total number of Directors shall
not any time exceed the maximum fixed under Article 110. Any such additional
Director shall hold office only upto the date of the next Annual General Meeting.
Directors’ power to fill
casual vacancies
115.
Subject to the provisions of Section 264 and 284(6) of the Act, the Board
shall have power at any time and from time to time to appoint any other qualified
person to be Director to fill a casual vacancy. Any person so appointed shall hold
office only upto the date upto which the Director in whos3e4 place he is
appointed would have held office if it had not been vacated by him.
Qualification of Directors
116.
A Director of the Company shall not be required or bound to hold any
qualification shares.
Appointment
Alternate Director
266
Special Remuneration for
Director
performing
extra service.
117.
If any Director be called upon to perform extra services or make any
special exertions or efforts (which expression shall include work done by a
Director as a member of any Committee formed by the Directors) the Board may
arrange with such Director for such special remuneration for such extra services
or special exertions or efforts, either by fixed sum or a percentage of profits or
otherwise as may be determined by the Board, and such remuneration may be
either in addition to or in substitution for his remuneration above provided.
Travelling
expenses
incurred by Director not
a bonafide resident or by
Director going out on
Company business
118.
The Board may allow and pay to any Director, who is not a bonafide
resident of the place where the meetings of the Board are ordinarily held and who
shall come to such place for the purpose of attending any meeting such sum as the
Board may consider fair compensation or for travelling, boarding, lodging and
other expenses in addition to his fee for attending such meeting as above
specified; and if any Director be called upon to go or reside out of the Ordinary
place of his residence on the Company’s business, he shall be entitled to be repaid
and reimbursed any travelling or other expenses incurred in connection with the
business of the Company.
Remuneration
Directors
119.
(1)
Subject to the provisions of the Act, a Managing Director or
Director, who is in the whole-time employment of the Company may be paid
remuneration either by way of a monthly payment or at a specified percentage of
the net profits of the Company or partly by one way and partly by the other.
of
(2)
Subject to the provisions of the Act, a Director, who is neither
in the whole-time employment nor a Managing Director may be paid
remuneration either :(i)
by way of monthly, quarterly or annual payment with the approval
of the Central Government; or
(ii)
by way of commission if the Company by special resolution
authorises such payment.
(3)
The fee payable to a Director (including a Managing or Wholetime Director, if any) for attending a meeting of the Board or Committee thereof
shall be such sum as the Board may determine from time to time but not
exceeding such sum as may be prescribed by the Central Government under the
Act from time to time.
Continuing
Directors
may act notwithstanding
any vacancy
120.
The continuing Directors may act notwithstanding any vacancy in their
body but if and so long as their number is reduced below the minimum fixed by
Article 110 hereof, the continuing Directors not being less than two may act for
the purpose of increasing the number of Directors to that number, or summoning a
General Meeting, but for no other purpose.
When office of Directors
to be vacated.
121.
Subject to Section 283(2) of the Act, the office of a Director shall be
vacated if :
(a)
jurisdiction; or
he is found to be of unsound mind by a Court of Competent
(b)
he applies to be adjudicated an insolvent; or
(c)
he is adjudged an insolvent; or
(d)
he is convicted by a Court of any offence involving moral
turpitude and is sentenced in respect thereof to imprisonment for not less than six
months; or
(e)
he fails to pay any call made on him in respect of shares of the
Company held by him whether alone or jointly with others, within six months
from the date fixed for the payment of such call, unless the Central Government
has by notification in the Official Gazette removed the disqualification incurred
by such failure; or
267
(f)
he absents himself from three consecutive Meetings of the
Board or from all Meetings of the Board for a continuous period of three months,
whichever is longer, without leave of absence from the Board; or
(g)
he, (whether by himself or by any person for his benefit or on
his account), or any firm in which he is a partner, or any private company of
which he is director, accepts a loan, or any guarantee or security for a loan, from
the Company, in contravention of Section 295 of the Act; or
(h)
he acts in contravention of Section 299 of the Act; or
(i)
he is removed in pursuance of Section 284 of the Act; or
(j)
he is removed in pursuance of Section 284 of the Act; or
(k)
he or any of his relatives or partners or any firm of which he or
any of his relative is a partner or any private company of which he is a Director or
member holds any office or place of profit under the Company in contravention of
Section 314 of the Act; or
(l)
he resins his office by a notice in writing addressed to the
Board.
Director may contract
with Company.
122.
(1)
A Directors or his relative, a firm in which such Director or
relative is a partner, or any other partner in such a firm, or a private company of
which the Director is a member or Director, may enter into any contract with the
Company for the sale, purchase or supply of any goods materials or services or for
underwriting the subscription of any shares in, or debentures of, the Company;
Provided that the sanction of the Board is obtained before or within three months
of the date on which the contract is entered into in accordance with Section 2987
of the Act. Provided further that if the paid-up share capital of the Company is
Rupees one crore or more, no such contract shall be entered into except with the
previous approval of the Central Government as may be required under the
provisions of Section 297 of the said Act.
(2)
No sanction however shall be necessary for:
(a)
any purchase of goods and materials from the Company, or the
sale of goods or materials to the Company by any such Director, relative, firm,
partner or private Company as aforesaid for cash at prevailing market prices; or
(b)
any contract or contracts between the Company on one side and
such Director, relative, firm, partner or private company on the other, for sale,
purchase or supply of any goods, materials and services, in which either the
Company or the Director, relative, firm, partner or private company, as the case
may be regularly trades or does business, where the value of the goods and
materials or the cost of such services does not exceed Rs.5,000/- in the aggregate
in any year comprised in the period of the contract or contracts.
Provided that in circumstances of urgent necessity, a Director, relative,
firm, partner or private company as aforesaid may without obtaining the consent
of the Board enter into any such contract or contracts with the Company for the
sale, purchase or supply of any goods, materials or services even if the value of
such goods or materials or the cost of such services exceeds Rs.5,000/- in the
aggregate in any year comprised in the period of the agreement, if the consent of
the Board shall be obtained to such contract or contracts at a meeting within three
months of the date on which the contract was entered into.
(3)
The Directors, so contracting or being so interested shall not be
liable to the Company for any profit realised by any such contract or the fiduciary
relation thereby established.
Disclosure of Interest.
123.
A Director of the Company who is in any way, whether directly or
indirectly, concerned or interested in a contract or arrangement, or proposed
contract or agreement entered into or to be entered into by or on behalf of the
268
Company shall disclose the nature of his concern or interest at a Meeting of the
Board in the manner provided in Section 299 (2) of the Act; Provided that it shall
not be necessary for a Director to disclose his concern or interest in any such
contract or arrangement entered into or to be entered into between two companies
where any of the Directors of the one company or two or more of them together
holds or hold not more than 2 per cent of the paid-up share capital in any such
other Company.
of
124.
A general notice given to the Board by the Director, to the effect that he
is a director or member of a specified body corporate or is a member of a
specified firm and is to be regarded as concerned or interested in any contract or
arrangement which may, after the date of the notice, be entered into which that
body corporate or firm, shall be deemed to be a sufficient disclosure of concern or
interest in relation to any contract or arrangement so made. Any such general
notice shall expire at the end of the financial year in which it is given but may be
renewed for a further period of one financial year at a time by a fresh notice given
in the last month of the financial year in which it would have otherwise expired.
No such general notice, and no renewal thereof shall be of effect unless, either it
is given at a meeting of the Board or the Directors concerned takes reasonable
steps to secure that it is brought up and read at the first Meeting of the Board after
it is given.
Interested Director not to
participate or vote in
Board’s proceeding.
125.
No director shall as a Director, take any part in the discussion of, or vote
on any contract or arrangement entered into or to be entered into by or on behalf
of the Company, if he is in any way, whether directly or indirectly, concerned or
interested in such contract or arrangement; nor shall his presence count for the
purpose of forming a quorum at the time of any such discussion or vote; and if
does vote, his vote shall be void; Provided however that nothing herein contained
shall apply to :
General
interest.
notice
(a)
any contract or indemnity against any loss which the Directors, or
any one or more of them, may suffer by reason of becoming or being
sureties or a surely for the Company;
(b)
any contract or arrangement entered into or to be entered into with a
public company or a private company which is subsidiary of a
public company in which the interest of the Director consists solely
:(i)
(ii)
Register of contracts in
which
Directors
are
interested.
in his being (a)
a Director of such company, and
(b)
the holder of not more than shares of such
number or value therein as is requisite to
qualify him for appointment as a Director
thereof, he having been nominated as such
Director by this Company, or
in his being a member holding not more than 2 per cent
of its paid-up share capital.
126.
The Company shall keep a Register in accordance with Section 301(1) of
the Act and shall within the time specified in Section 301(2) of the Act enter
therein such of the particulars as may be relevant having regard to the application
thereto of Section 297 or Section 299 of the Act, as the case may be. The Register
aforesaid shall also specify, in relation to each Director of the Company, the
names of the bodies corporate and firms of which notice has been given by him
under Article 124. The Register shall be kept at the Registered Office of the
Company and shall be open to inspection at such Office, and extracts may be
taken therefrom and copies thereof may be required by any Member of the
Company to the same extent, in the same manner, and on payment of the same fee
as in the case of the Register of Members of the Company and the provisions of
Section 163 of the Act shall apply accordingly.
269
Directors
may
be
Directors of Companies
promoted
by
the
Company.
127.
A Director may be or becomes a Director of any Company promoted by
the Company, or in which it may be interested as a vendor, shareholder, or
otherwise, and any such Director shall be accountable for any benefits received
and Director or shareholder of such Company except in so far as Section 309 (6)
or Section 314 of the Act may be applicable.
RETIREMENT AND ROTATION OF DIRECTOR
Retirement and rotation
of Directors.
128.
At every Annual General Meeting of the Company, one-third of such of
the Directors for the time being as are liable to retire by rotation or if their number
is not three or a multiple of three, the number nearest to one-third shall retire from
office. The non-retiring Directors and Debenture Directors, if any, shall not be
subject to retirement under this Article and shall not be taken into account in
determining the rotation of retirement or the number of Directors to retire.
Ascertainment
of
Directors retiring by
rotation and filling of
vacancies.
129.
Subject to the provisions of Section 256 (2) of the Act, the Directors to
retire by rotation under the forgoing Article 128 at every Annual General Meeting
shall be those who have been longest in office since their last appointment, but as
between persons who become Directors on the same day, those who are to retire
shall, in default of the subject to any Agreement among themselves, be
determined by lot.
Eligibility for re-election
130.
Company to
successors.
appoint
131.
Subject to Section 258 and 262 of the Act, the Company at the General
Meeting at which a Director retires in the manner aforesaid, may fill up the
vacated office by electing such retiring Director or some other person thereto.
Provision in default of
appointment.
132.
(a)
If the place of the retiring Director is not so filled up and the
Meeting has not expressly resolved not to fill the vacancy, the Meeting shall stand
adjourned till the same day in the next week, t the same time and place, or if that
day is a public holiday, till the next succeeding day which is not a public holiday,
at the same time and place
A retiring Director shall be eligible for re-election.
(b)
If at the adjourned Meeting also, the place of the retiring
Director is not filled up and that Meeting also has not expressly resolved not to fill
the vacancy, the retiring Director shall be deemed to have been re-appointed at the
adjourned meeting unless :
Company may increase
or reduce the number of
Directors.
(i)
at the Meeting or at the previous Meeting, a resolution for the
re-appointment of such Director has been put to the Meeting and
lost;
(ii)
the retiring Director has, by a notice in writing addressed to the
Company or its Board, expressed his unwillingness to be so reappointed;
(iii)
he is not qualified or is disqualified for re-appointment;
(iv)
a resolution, whether special or ordinary is required for the
appointment or re-appointment by virtue of any provisions of
the Act; or
(v)
the provision so sub-section (2) of Section 263 of the Act is
applicable to the case.
133.
Subject to Section 259 of the Act, the Company may, by ordinary
resolution, from time to time increase or reduce the number of Directors and may
alter their qualifications and the Company may, (subject to the provisions of
Section 284 of the Act), remove any Director before the expiration of his period
of office and appoint another qualified person in his stead. The person so
appointed shall hold office during such time as the Director in whose place he is
appointed would have held the same if he had not been removed.
270
Notice of candidate for
office of Director except
in certain cases.
134
(1)
No person not being a retiring Director, shall be eligible for
appointment to the office of Director at any General Meeting unless he or some
members intending to propose him has, not less than fourteen days before the
meeting, left at the Office of the Company a notice in writing under his hand
signifying his candidature for the office of Director or the intention of such
member to propose him as a candidate for that office, along with a deposit of five
hundred rupees which shall be refunded to such person or, as the case may be,
such member, if the person succeeds in getting elected as a Director.
(2)
Every person (other than a Director retiring by rotation or
otherwise or a person who has left at the office of the Company a notice under
Section 257 of the Act signifying his candidature for the office of a Director)
proposed as a candidate for the office of a Director shall sign and file with the
Company, the consent in writing to act as a Director, if appointed;
(3)
A person other than a Director re-appointed after retirement by
rotation or immediately on the expiry of his term of office; or an Additional or
Alternate Director, or a person filling a casual vacancy in the office of a Director
under Section 262 of the Act, appointed as a Director or re-appointed as a
Additional or Alternate Director, immediately on the expiry of his term of office
shall not act as a Director of the Company, unless he has within thirty days of his
appointment signed and filed with the Registrar his consent in writing to act as
such Director.
(a) Register of Directors
and
notification
of
change of Registrar.
135.
(a)
The Company shall keep at its Registered Office, a Register
containing the particulars of its Directors, Manager, Secretary and other persons
mentioned in Section 303 of the Act, and shall otherwise comply with the
provisions of the said Section in all respects.
Register of
debentures
Director.
shares of
held
by
(b)
The Company shall in respect of each of his Directors also keep
at its Registered Office a Register as required by Section 307 of the Act, and shall
otherwise duly comply with the provisions of the said section in all respects.
(a) Disclosure by Director
of appointment to any
other body corporate.
136.
(a)
Every Director, (including a person deemed to be a Director by
virtue of the Explanation to sub-section (1) of Section 303 of the Act), Managing
Director, Manager, and Secretary of the Company shall, within twenty days of his
appointment to any of the above offices in any other body corporate disclose to
the Company, the particulars relating to his office in the other body corporate
which are required to be specified under sub-section (1) of Section 303 of the Act.
(b)
Every Director and every person deemed to be Director of the
Company by virtue of sub-section (10) of Section 307 of the Act, shall give notice
to the Company of such matters relating to himself as may be necessary for the
purpose of enabling the Company to comply with the provisions of that section.
Appointment
of
Managing Director or
Whole-time Director.
137.
(a)
Subject to the provisions of Section 197A, 267, 268, 269, 309,
310, 311, 316 and 317 and other applicable provisions of the Act, the Company in
General Meeting or the Directors may from time to time appoint or re-appoint any
one or more of their Body to be a Managing Director or Managing Directors (in
which expression shall be included a Joint Managing Director or a Deputy
Managing Director) or Whole-time Director or Whole-time Directors of the
Company for such term not exceeding five years at a time as may be thought fit to
manage the business and affairs of the Company and may from time to time
(subject to the provisions of any contract between him or them and the Company)
remove or dismiss him or them from office and appoint another or others in his or
their place or places.
Managing and Wholetime Director not to
retire by rotation.
(b)
The Managing Director or Whole-time Director, while he
continues to hold that office, shall not be subject to retirement by rotation, but he
shall subject to the provisions of any contract between him and the Company, be
subject to the same provision as to resignation or removal of the other Directors of
the Company and he shall ipso facto immediately cease to be a Managing Director
or Whole time Director if he ceases to hold the office of a Director, for any cause,
provided that if at any time the number of Directors (including the Managing
271
Director or Whole-time Director) as are not subject to retirement by rotation shall
exceed one-third of the total number of the Directors for the time being, then such
Managing Director or Managing Directors or Whole-time Director or Whole-time
Directors as the Directors shall from time to time select shall be liable to
retirement by rotation to the intent that the Directors not liable to retirement by
rotation shall not exceed one-third of the total number of Directors for the time
being.
A Managing Director or a Whole-time Director, who is re-appointed as a
Director immediately on retirement by rotation, shall continue to hold his office of
Managing Director or Whole-time Director and such re-appointment as Director
shall not be deemed to constitute a break in his appointment as Managing Director
or Whole-time Director.
Remuneration
of
Managing or Whole-time
Director.
(c)
The remuneration of a Managing Director or a Whole-time
Director shall subject to the provisions of any contract between the Company and
him be from time to time fixed by the Board of Directors and subject to the
provisions of the Act, may be by way of fixed salary or commission on profit of
the company, or by any or all these modes and may be in addition to the
remuneration for attendance at the Board Meetings and any other remuneration
which may be provided under any other Articles.
Powers and duties of
Managing or Whole-time
Director.
(d)
The Directors may from time to time subject to the provisions
of the Act entrust to or confer upon the Managing Director or Whole-time
Director for the time being such of the powers exercisable b the Directors under
these presents or by Law, as they may think fit, and may confer such powers for
such time and to be exercised for such objects and purposes and upon such terms
and conditions and with such restrictions as they think expedient and they may
confer such powers either collaterally with or to the exclusion of or in substitution
for all or any of the powers of the Directors in that behalf and may from time to
time revoke, withdraw, alter or vary all or any of such powers.
(e)
Restriction
Management.
on
(i)
Mr. B.M.Ghia, during the period he continues to hold office
of Managing Director shall not be liable to retire by rotation
as a Director of the Company; and
(ii)
Mr. D. S. Dalal, during the period he continues to hold
office of Joint Managing Director shall not be liable to
retire by rotation as a Director of the Company.
138.
The Managing Director or Managing Directors shall not exercise the
powers to :
(a)
Make calls on shareholders in respect of money unpaid on the
shares in the Company;
(b)
issue debentures :
and except to the extent mentioned in the resolution passed at
the Board meeting under Section 292 of the Act, shall also not
exercise the power to
(c)
borrow moneys, otherwise than on debentures;
(d)
invest the funds of the Company; and
(e)
make loans.
PROCEEDINGS OF THE BOARD OF DIRECTORS
Meeting of Directors.
139.
The Directors may meet together as a Board for the despatch of business
from time to time and shall so meet at least once in every three months and at
least four such meetings shall be held in every year. The Directors may adjourn
272
and otherwise regulate their meetings as they think fit.
Notice of Meetings of the
Board.
140.
Notice of every Meeting of the Board shall be given in writing to every
Director for the time being in India, and at his usual address in India to every
other Director.
Quorum
141.
Subject to the Section 287 of the Act, the quorum for a Meeting of the
Board shall be one-third of the total number of Directors for the time being
(excluding Directors if an whose places may be vacant at the time and any
fraction contained in that one-third being rounded off as one), or two Directors,
whichever is higher. Provided that where at any time the number of interested
Directors exceeds or is equal to two-thirds of the total strength, the number of
remaining Directors, that is to say, the number of Directors who are not interested
present at the Meeting being not less than two, shall be the quorum during such
time.
Adjournment
of
Meetings for want of
quorum.
142.
If a Meeting of the Board could not be held for want of a quorum, then
the Meeting shall automatically stand adjourned to such other day, time and place
as may be fixed by the Chairman not being later than seven days from the date
originally fixed for the Meeting.
When Meeting
convened.
be
143.
A Director may at any time, and the Secretary upon the request of a
Director shall, convene a Meeting of the Board by giving a notice in writing to
every other Director.
Vice-
144.
The Directors may from time to time elect from among their number a
Chairman of the Board and determine the period for which he is to hold office.
The Directors may also from time to time elect from their number a ViceChairman of the Board and determine the period for which he is to hold office. If
at any meeting of the Board, the Chairman is not present, within fifteen minutes
after the time appointed for the same, the Vice-Chairman shall be the Chairman of
that meeting. If at any meeting of the Board, the Chairman or the Vice-Chairman
are not present within fifteen minutes after the time appointed for holding the
meeting the Directors present may choose one of their member to be the
Chairman of the Meeting.
Questions
at
Board
Meetings how decided.
145.
Questions arising at any meeting of the Board shall be decided by a
majority of the votes and in case of an equality of votes, the Chairman shall have
a second or a casting vote.
Powers of Board Meeting
146.
A Meeting of the Board for the time being at which a quorum is present
shall be competent to exercise all or any of the authorities powers and discretions
which by or under the Act or the Articles of the Company are for the time being
vested in or exercisable by the Board generally. Without prejudice to the powers
conferred by the other Articles and so as not in any way to limit or restrict those
powers, the Board may, subject to the provisions of Section 292 of the Act,
delegate any of their powers to the Managing Director the Manager or any other
principal officer of the Branch Office and may at any time revoke such
delegation. The Managing Director, the Manager or other principal officer as
aforesaid shall, in the exercise of the powers so delegated, conform to any
regulations that may from time to time be imposed on them by the Board and all
acts done by them in exercise of the powers so delegated and in conformity with
such regulations shall have the like force and effects as if done by them in
exercise of the powers so delegated and in conformity with such regulations shall
have the like force and effect as if done by the Board.
Board
may
Committees.
147.
Subject to the restrictions contained in Section 292 of the Act, the Board
may delegate any of their powers to Committees of the Board consisting of such
Member or Members of its body as it thinks fit, and it may from time to time
revoke and discharge any such Committees of the Board either wholly or in part,
and either as to persons or purposes; but every Committee of the Board so formed
shall in the exercise of the powers so delegated conform to any regulations that
may from time to time be imposed on it by the Board. All acts done by any such
Committee of the Board in conformity with such regulations and in fulfillment of
the purposes of their appointment but not otherwise, shall have the like force and
Chairman
Chairman
and
to
appoint
273
effect as if done by the Board.
Meeting of Committee
how to be governed
148.
The meetings and proceedings of any such Committee of the Board
consisting of two or more Members shall be governed by the provisions herein
contained, for regulating the meetings and proceedings of the Directors, so far as
the same are applicable thereto and are not superseded by any regulations made
by the Directors under the last preceding Article.
Resolution by circular.
149.
No resolution shall be deemed to have been duly passed by the Board or
by a Committee thereof by circulation, unless the resolution has been circulated in
draft, together with the necessary papers, if any, to all the Directors, or to all the
members of the Committee, then in India (not being less in number than the
quorum fixed for a Meeting of the Board of Committee, as the case may be), and
to all other Directors or Members of the Committee, at their usual address in India
and has been approved by such of the Directors or Members of the Committee as
are then in India, or by a majority of such of them, as are entitled to vote on the
resolution.
Acts
of
Board
or
Committee valid not
withstanding
informal
appointment.
150.
All acts done by any Meeting of the Board or by a Committee of the
Board, or by any person acting as a Director shall notwithstanding that it shall
afterwards be discovered that there was some defect in the appointment of such
Director or persons acting as aforesaid, or that they or any of them were disqualified or had vacated office or that the appointment of any of them had been
terminated by virtue of any provisions contained in the Act or in these Articles, be
as valid as if every such person had been duly appointed, and was qualified to be a
Director and had not vacated his office or his appointment had not been
terminated. Provided that nothing in this Article shall be deemed to give validity
Minutes of proceedings
of Meetings of the Board
151.
(1)
The Company shall cause minutes of the proceedings of the
every Meeting of the Board to be kept by making within fourteen days of the
conclusion of every such Meeting, entries thereof in books kept for that purpose
with their pages consecutively numbered.
(2)
Each page of every such book shall be initialled or signed and
the last page of the record of proceedings of each Meeting in such book shall be
dated and signed by the Chairman of the said Meeting or the Chairman of the next
succeeding Meeting.
(3)
In no case the minutes of proceedings of a Meetings shall be
attached to any such books as aforesaid by pasting or otherwise.
(4)
The minutes of each Meeting shall contain a fair and correct
summary of the proceedings thereat.
(5)
All appointments of officers made at any of the Meetings
aforesaid shall be included in the minutes of the Meegting.
(6)
The minutes shall also contain -
(a)
the names of the Directors present at the Meeting and
(b)
in the case of each resolution passed at the Meeting, of the
names of the Directors, if any, dissenting from or not concurring in, the
resolution.
(7)
Nothing contained in sub-clauses (1) to (6) shall be deemed to
require the inclusion in any such minutes of any matter, which in the opinion of
the Chairman of the Meeting (a)
is or could reasonably be regarded as, defamatory of any
(b)
is irrelevant or immaterial to the proceedings; or
person;
274
(c)
is detrimental to the interest of the Company.
The Chairman shall exercise an absolute discretion in regard to
the inclusion or non-inclusion of any matter in the minutes on the grounds
specified in this sub-clause.
(8)
Minutes if Meetings kept in accordance with the aforesaid
provisions shall be evidence of the proceedings recorded therein.
General powers of the
Board
152.
The management and control of the business of the Company shall be
vested in Director who may exercise all such powers of the Company and do all
such acts and things, as are not, by the Act, or any other Act or by the
Memorandum or by Articles of the Company required to be exercised by the
Company in General Meeting, subject nevertheless to these Articles, to the
provisions of the Act, or any other Act and to such regulations being not
inconsistent with the aforesaid regulations or provisions, as may be prescribed by
the Company in General Meeting but no regulation made by the Company in
General Meeting, shall invalidate any prior act of the Board which would have
been valid if that regulation had not been made. Provided that the Board shall not,
except with the consent of the Company in the Company General Meeting:(a)
sell, lease or otherwise dispose of the whole, or substantially the
whole, of the undertaking of the Company, or where the Company
owns more than one undertaking, of the whole or substantially the
whole of any such undertaking;
(b)
remit or give time for the repayment of any debt due by a Director;
(c)
invest, otherwise than in trust securities, the amount of
compensation received by the Company in respect of the
compulsory acquisition of any such undertaking as is referred to in
sub-article (a) or of any premises or properties or properties used for
any such undertaking and without which it cannot be carried on or
can be carried on only with difficulty or only after a considerable
time;
(d)
borrow moneys where the moneys to be borrowed together with the
moneys already borrowed by the Company (apart from temporary
loans obtained from the Company’s bankers in the ordinary course
of business), will exceed the aggregate of the paid up capital of the
Company and its free reserves that is to say, reserves not set apart
for any specific purpose.
Provided further that the powers specified in Section 292 of the Act
shall, subject to these Articles, be exercised only at Meetings of the
Board, unless the same be delegated to the extent therein stated.
(e)
Certain powers of the
Board
contribute to charitable and other funds not directly relating to the
business of the Company or the welfare of its employees, any
amounts the aggregate of which will, in any financial year, exceed
twenty-five thousand rupees or five per cent of its average net
profits as determined in accordance with the provisions of Sections
349 and 350 of the Act during the three financial years immediately
preceding whichever is greater.
153.
Without prejudice to the general powers conferred by the last preceding
Article and so as not in any way to limit or restrict those powers, and without
prejudice to the other powers conferred by these Articles, but subject to the
restrictions contained in the last preceding Article, it is hereby declared that the
Board shall have the following powers that is to say, power:
(1)
To pay and change to the capital account of the Company any
commission or interest lawfully payable under the provisions of Sections 76 and
208 of the Act.
275
(2)
Subject to Sections 292 and 297 and other applicable provisions
of the Act, to purchase or otherwise acquire for the Company any property, rights
or privileges which the Company is authorised to acquire, at or for such price or
consideration and generally on such terms and conditions as they may think fit,
and in any such purchase or other acquisition to accept such title as the Board may
believe or may be advised to be reasonably satisfactory.
(3)
At their discretion and subject to the provisions of the Act, to
pay for any property, rights or privileges acquired by or services rendered to the
Company, either wholly or partially, in cash or in shares, bonds, debentures,
mortgages, or other securities of the Company, and any such shares may be issued
either as fully paid up or with such amount credited as paid up thereon as may be
agreed upon; and any such bonds, debentures, mortgages or other securities may
be either specifically charged upon all or any part of the property of the Company
or not so charged.
(4)
To secure the fulfilment of any contracts or engagements
entered into by the Company by mortgage or charge of all or any of the property
of the Company for the time being or in such manner as they may think fit.
(5)
To accept from any Member, as far as may be permissible by
law, a surrender of his shares or any part thereof, on such terms and conditions as
shall be agreed.
(6)
To appoint any person to accept and hold in trust for the
Company, any property belonging to the Company, or in which it is interested, or
for any other purposes; and to execute and do all such deeds and things as may be
required in relation to any such trust, and to provide for the remuneration of such
trustee.
(7)
To institute, conduct, defend, compound or abandon any legal
proceedings by or against the Company or its officers, or otherwise concerning
the affairs of the Company and also to compound and allow time for payment or
satisfaction of any debts due, and of any claims or demands by or against the
Company and to refer any claims demands by or against the Company to
arbitration and observe, the terms of any awards made thereon.
(8)
To act on behalf of the Company in all matters relating to
bankrupts and insolvents and winding up and liquidation of Companies.
(9)
To make and give receipts, release and other discharges for
moneys payable to the Company and for the claims and demands of the Company.
(10)
Subject to the provisions of Sections 77, 292, 293(1)(a), 295,
370 and 372 to invest and deal with any moneys of the Company not immediately
required for the purposes thereof, upon such security, (not being shares of this
Company), or without security and in such manner as they may think fit, and from
time to time vary or realise such investments. Save as provided in Section 49 of
the Act, all investments shall be made and held in in the Company’s own name.
(11)
To execute in the name and on behalf of the Company in favour
of any Director other person who may incur or be about to incur any personal
liability whether as principal or surety, for the benefit of the Company, such
mortgage of the Company’s property (present and future), as they think fit, and
any such mortgage may contain a power of sale and such other powers,
provisions, covenants, and agreements as shall be agreed upon.
(12)
To determine from time to time who shall be entitled to sign, on
the Company’s behalf, bills, notes, receipts, acceptances, endorsement, cheques,
dividend, warrants, releases, contracts and documents and to give the necessary
authority for such purposes.
(13)
To distribute by way of bonus amongst the staff of the
Company, a share or shares in the profits of the Company, and to give any
276
Director, officer or other person employed by the Company a commission on the
profits of any particular business or transaction; and to charge such bonus or
commission as part of the working expenses of the Company.
(14)
To provide for the welfare Directors or ex-Directors or
employees or ex-employees of the Company and the wives, widows and families
or the dependents or connections of such persons, by building or contributing to
the building of houses, dwellings or chawls, or by grants of money, pensions,
gratuities, allowances, bonus, or other payments; or by creating and from time to
time subscribing or contributing to provident and other associations, institutions,
funds, and trusts and by providing and subscribing or contributing towards places
of instruction and recreation, hospitals and dispensaries, medical and other
attendance and other assistance as the Board shall think fit; and to subscribe or
contribute or otherwise to assist or to guarantee money to charitable, benevolent,
religious, scientific, national, or other institutions or objects which shall have any
moral or other claim to support or aid by the Company, either by reasons of
locality of operation, or of public and general utility or otherwise; Provided that
when contributing (a) to any political party or (b) for any political purpose to any
individual or body, the provisions of Section 293A of the Act shall be complied
with.
(15)
Before recommending any dividend, to set aside, out of the
profits of the Company such sums as they may think proper for depreciation or to
Depreciation Fund, or to an Insurance Fund, or as a Reserve Fund, or Sinking
Fund, or any special fund to meet conntigencies, or to repay debentures or
debenture stock, or for special dividends or for equalising dividends, or for
repairing, improving, extending and maintaining any of the property of the
Company, and for such other purposes (including the purposes referred to in the
preceding clause), as the Board of Directors may, in their absolute discretion,
think conducive to the interests of the company, and subject to Section 292 of the
Act, to invest the several sums so sets aside or so much thereof as required to be
invested, upon such investments (other than shares of the Company) as they may
think fit, and from time to time to deal with and vary such investments and
dispose of and apply and expand all or any part thereof for the benefit of the
Company, in such manner and such purposes as the Board of Directors, in their
absolute discretion, think conducive to the interests of the company
notwithstanding that the matters to which the Board of Directors apply or upon
which they expend the same, or any part thereof, may be matters to or upon which
the capital moneys of the Company might rightly be applied or expended; and to
divide the Reserve Funds into such special funds as the Board of Directors may
think fit, with full power to transfer the whole or any portion of a Reserve Funds
or division of Reserve Fund and with full powers to employ the assets constituting
all or any of the above funds including, the Depreciation Fund, in the business of
the Company or in the purchase or repayment of debentures or debenture stock,
and without being bound to pay interest on the same with power however to the
Board of Directors at their discretion to pay or allow to the credit of such funds
interest at such rate as the Board of Directors may think proper, not exceeding
nine per cent per annum.
(16)
To appoint and at their discretion remove or suspend such
general managers, managers, secretaries, stenographers, assistants, supervisors,
clerks, agents and servants for permanent, temporary or special services as they
may from time to time think fit, and to determine their powers and duties, and fix
their salaries or emoluments or remunerations, and to require security in such
instances and for such amounts as they may think fit. And also from time to time
to provide for the management and transaction of the affairs of the Company in
any specified locality in India or elsewhere in such manner as they think fit; and
the provisions contained in the following sub-articles shall be without prejudice to
the general powers conferred by this sub-article.
(17)
To comply with the requirements of any local law which in its
opinion, it shall in the interest of the Company necessary or expedient to comply
with.
277
(18)
From time to time and, at any time to establish any Local
Boards for managing any of the affairs of the Company in any specified locality
in India or elsewhere and to appoint any persons tgo be members of such local
boards, and to fix their remuneration.
(19)
At any time And from time to time by power of attorney under
the Seal of the Company, to appoint any person or persons to be the Attorney or
Attorneys of the Company, for such purposes and with such powers, authorities
and discretion, (not exceeding those vested in or exercisable by the Board under
these presents and excluding the powers which may, under the Act or these
Articles, be exercised only by the Board) and for such period and subject to such
conditions as the Board may from time to time think fit, and any such
appointment may, (if the Board think fit), be made in favour of the Members or
any of the Members of any Local Board, established as aforesaid or in favour of
the Company, or the shareholders, directors, nominees, or managers of any
company or firm or otherwise in favour of any fluctuating body of persons
whether nominated directly or indirectly by the Board and any such Power of
Attorney may contain such powers for the protection or convenience of persons
dealing with such Attorneys, as the Board may think fit, and may contain powers
enabling any such delegates or attorneys as aforesaid to sub-delegate all or any of
the powers, authorities and discretions for the time being vested in them.
(20)
Subject to Sections 294, 297, 300 and other applicable
provisions of the Act and the Articles for or in relation to any of the matters
aforesaid or otherwise for the purpose of the Company, to enter into all such
negotiations and contracts and rescind and vary all such contracts, and
execute and do all such acts, deeds and things, in the name and on behalf of
the Company as they may consider expedient, or in relation to any of the
matters aforesaid or otherwise for the purposes of the Company.
(21)
From time to time to make, vary and repeal by-laws for the
regulation of the business of the Company, its officers and servants.
MANAGEMENT
Prohibition
of
almultaneous
appointment of different
categories of managerial
personnel.
154.
The Company shall not appoint or employ at the same time more than
one of the following categories of managerial personnel, namely :
(a)
Managing Director.
(b)
Manager.
THE SECRETARY
Secretary
155.
The Directors shall from time to time appoint a Secretary, and, at their
discretion remove any such Secretary, to perform any functions which by the Act
are to be performed by the Secretary and to execute any other ministerial or
administrative duties, which may from time to time be assigned to the Secretary
by the Directors. The Directors may also appoint at any time any person or
persons (who need not be the Secretary) to keep the Registers required to be kept
by the Company.
THE SEAL
The Seal, its custody and
use.
156.
(a) The Board shall provide a common seal for the purposes of the
Company, and shall have power from time to time to destroy the same and
substitute a new Seal in lieu thereof, and the Board shall provide for the safe
278
custody of the Seal for the time being, and the Seal shall never be used except by
the authority of the Board or a Committee of the Board previously given.
(b)
The Company shall also be at liberty to have an official Seal in
accordance with Section 50 of the Act for use in any territory, district or place
outside India.
Deeds how executed.
157.
Every Deed or other instrument to which the Seal of the Company is
required to be affixed, shall unless the same is executed by a duly constituted
attorney, be signed by one Director and the Secretary or some other person
appointed by the Board for the purpose. Provided that in respect of Shares
Certificate(s) the Seal be affixed in accordance with Article 20.
Division of profits.
158.
The profits of the Company, subject to the any special rights relating
thereto created or authorised to be created by the Memorandum or these Articles
and subject to the provisions of these Articles, shall be divisible among the
Members in proportion to the amount of capital paid-up or credited as paid-up on
the shares held by them respectively.
The Company in General
Meeting may declares a
dividend.
159.
The Company in General Meeting may declare dividends, to be paid to
the Members according to their respective rights but no dividends shall exceed the
amount recommended by the Board, but the Company in General Meeting may
declare a smaller dividend.
Dividend to be paid only
out of profits.
160.
(a) No dividend shall be declared or paid otherwise, by the Company for
any financial year out of profits for that year arrived at after providing for
depreciation in accordance with the provisions of Section 205 of the Act except
after the transfer to reserves of the Company of such percentage of its profits for
that year as may be prescribed, or out of the profits of the Company for any
previous financial year or years arrived at after providing for depreciation in
accordance with those provisions and remaining undistributed or out of both
Provided that :
(i)
If the Company has not provided for depreciation for any previous
financial year or years it shall, before declaring or paying a dividend
for any financial year or years it shall, provide for such depreciation
out of the profits of that financial year or out of the profits of any
other previous financial year or years.
(ii)
if the Company has incurred any loss in any previous financial year
or years, the amount of the loss or an amount which is equal to the
amount provided for depreciation for that year or those years,
whichever is less, shall be set off against the profits of the Company
for the year for which the dividend is proposed to be declared or paid
or against the profits of the Company for any previous financial year
or years arrived at in both cases after providing for depreciation in
accordance with the provisions of sub-section (2) of Section 205 of
the Act or against both.
PROVIDED FURTHER that, no dividend shall be declared or paid for
any financial year out of the profits of the Company for that year arrived at after
providing for depreciation as above, except after the transfer to the reserves of the
Company of such percentage of its profits for that year as may be prescribed in
accordance with Section 205 of the Act or such higher percentage of its profits as
may be allowed in accordance with that Section .
(b)
The declaration of the Board as to the amount of net profits
shall be conclusive.
Interim dividend.
161.
The Board may from time to time, pay to the Members such interim
dividends as in their judgement the position of the Company justifies.
Capital paid up in
advance at interest not to
162.
Where capital is paid in advance of calls, such capital may carry interest,
but shall not in respect thereof confer a right to dividend or to participate in
279
earn dividend.
profits.
Dividends in proportion
to amount paid up.
163.
All dividends shall be apportioned and paid proportionately to the
amounts paid or credited as paid on the shares during any portion or portions of
the period in respect of which the dividend is paid; but if any share is issued on
terms providing that it shall rank for dividend as from a particular date, such share
shall rank for dividend accordingly.
Retention
cases.
certain
164.
The Directors may retain the dividends payable upon shares in respect of
which any person is under the Transmission Article (Article 63) entitled to
become a member, or which any person under that Article is entitled to transfer
until such person become a member in respect thereof or shall duly transfer the
same.
Dividend etc. to jointholders.
165.
Any one of several persons who are registered as the joint-holders of any
share may give effectual receipts for all dividends or bonus and payments on
account of dividends or bonus or sale proceeds of fractional certificates or other
moneys payable in respect of such shares.
No Member to receive
dividend whilst indebted
to the Company’s right of
reimbursement thereof.
166.
Subject to provisions of the Act, no Member shall be entitled to receive
payment of any interest or dividends in respect of his share or shares, whilst any
money may be due or owing from him to the Company in respect of such share or
shares or otherwise howsoever, either alone or jointly with any other person or
persons; and the Board may deduct from the interest or dividend payable to any
Member all sums of money so due from him to the Company.
Transfer of shares must
be registered.
167.
A transfer of shares shall not pass the right to any dividend declared
thereon before the registration of the transfer.
Dividends how remitted
168.
Unless otherwise directed any dividend may be paid by cheques or
warrant or by a payslip or receipt having the force of a cheque or warrant sent
through post to the registered address of the Member or person entitled or in case
of joint-holders to that one of them first named in the Register of Members in
respect of the joint-holding. The Company shall not be liable or responsible for
any cheque or warrant or payslip or receipt lost in transmission or for any
dividend lost to the Member or person entitled thereto by the forged endorsement
of any cheque or warrant or the forged signature on any payslip or receipt or the
fraudulent recovery of the dividend by any other means. If two or more persons
are registered as joint-holders of any share or shares anyone of them can give
effectual receipts for any moneys payable in respect thereof. Several executors or
administrators of a deceased Member in whose sole name any share stands, shall
for the purpose of this clause be deemed to be joint-holders thereof.
Unclaimed Dividend.
169.
(a) If the Company has declared a dividend but which has not been paid
or a dividend warrant in respect thereof has not been paid within 42 days from the
date of declaration to any shareholder entitled to the payment of the dividend the
Company shall within 7 days from the date of the expiry of the said period of 42
days open a special account in that behalf in any scheduled bank called “the
unpaid dividend account of Indian Organic Chemicals Limited.”
in
(b)
Any money transferred to the unpaid dividend account of the
Company which remains unpaid or unclaimed for a period of three years from the
date of such transfer, shall be transferred by the Company to the general revenue
account of the Central Government. A claim to any money so transferred to the
general revenue account may be preferred to the Central Government by the
shareholders to whom the money is due.
No interest on dividends.
170.
Dividend
together.
171.
Any General Meeting declaring a dividend may on the recommendation
of the Board make a call on the members of such amount as the Meeting fixes, but
so that the call on each Member shall not exceed the dividend payable to him, and
so that the call be made payable at the same time as the dividend; and the
dividend may, if so arranged between the Company and the Members, be set off
against the calls.
and
call
No unpaid dividend shall bear interest as against the Company.
280
172.
(a) The Company in General Meeting may resolve that any moneys,
investments or other assets forming part of the undivided profits of the Company
or sanding to the credit of the General Reserve, Reserve or any Reserve Fund or
any other Fund of the Company, the Capital Redemption Reserve Account, or in
the hands of the Company and available for dividend, or representing premiums
received on the issue of shares and standing to the credit of the Share Premium
Account, be capitalized and distributed amongst such of the shareholders or any
class of shareholders as would be entitled to receive the same if distributed by
way of dividend in accordance with their respective rights and interests and in
proportion to the amount of capital paid up on shares held by them respectively,
on the footing that they become entitled thereto as capital and that all or any part
of such capitalized fund be applied on behalf of such shareholders in paying up in
full either at par or at such premium as the resolution may provide, any unissued
shares of the Company or debentures of the Company which shall be distributed
accordingly, or in or towards payment of the whole or part of the uncalled liability
on any issued shares and that such distribution or payment shall be accepted by
such shareholders in full satisfaction of their interest in the said capitalized sum.
Provided that a Share Premium Account and a Capital Redemption Reserve
Account may, for the purpose of this Article, only be applied in the paying up of
unissued shares to be issued to Members of the Company as fully paid bonus
shares.
Capitalisation
(b) Subject to the provision of Section 205 of the Act, a General
Meeting may resolve that any surplus moneys arising from the realization of any
capital assets of the Company, or any investments representing the same, or any
other undistributed profits of the Company not subject to charge for Income-tax,
be distributed among the Members on the footing that they receive the same as
capital.
(c) For the purpose of giving effect to any resolution under the
preceding paragraphs of this Article, the Board may settle any difficulty which
may arise in regard the distribution as it thinks expedient and in particular may
issue fractional certificates and may fix the value for distribution of any specific
assets and may determine that such cash payments shall be made to any Members
upon the footing of the value so fixed or that fractions of less value than Rupees
ten may be disregarded in order to adjust the rights of all parties and may vest any
such cash, share, debenture or other specific assets in trustees upon such trusts for
the persons entitled to the dividend or capitalized fund as may seem expedient to
the Board and generally may make such arrangement for the acceptance,
allotment and sale of such shares, debentures and fractional certificates or
otherwise as they may think fit. Where requisite, a proper contract shall be
delivered to the Registrar for registration in accordance with Section 75 of the Act
and the Board may appoint any person to sign such contract on behalf of the
person entitled to the dividend or capitalized fund and such appointment shall be
effective.
ACCOUNTS
Board to
accounts
keep
true
173.
(a) The Company shall keep at its office or at such other place in India
as the Board thinks fit proper books of Accounts in accordance with Section 209
of the Act with respect to (i)
all sums of money received and expended by the Company
and the matters in respect of which the receipt and
expenditure taken place;
(ii)
all sales and purchases of goods by the Company.
(iii)
the assets and liabilities of the Company.
(b) Where the Board decides to keep all or any of the books of account
at any place other than the Office of the company, the Company shall within
seven days of the decision file with the Registrar, a notice in writing giving the
full address of that other place.
281
(c) The Company shall preserve in good order the books of account
relating to a period of not less than eight years preceding the current year together
with the vouchers relevant to any entry in such books of account.
(d) Where the Company has a branch office, whether in or outside
India, the Company shall be deemed to have complied with this Article of proper
books of account relating to the transactions effected at the branch office are kept
at the branch office and proper summarized returns made upto dates at intervals of
not more than three months, are sent by the branch office to the Company at its
office or at the other place in India, at which the Company’s books of account are
kept as aforesaid.
(e) The books of accounts shall give a true and fair view of the state of
affairs of the Company or branch office, as the case may be, and explain its
transactions and shall be open to inspection by any Director during business
hours.
As to inspection of
accounts or books by
Members
174.
The Board shall from time to time determine whether and to what extent
and at what times and places and under what conditions or regulations the
accounts and books of the Company or any of them shall be open to the inspection
of Members, not being Directors, and no member, (not being a Director), shall
have any right of inspecting any account or books or documents of the Company
except as conferred by law or authorised by the Board.
Statement of accounts to
be furnished to General
Meeting.
175.
The Board shall from time to time, in accordance with Sections 210, 211,
212, 215, 216 and 217 of the Act, cause to be prepared to be laid before the
Company in General Meeting, the Balance Sheet, Profit and Loss Accounts and
Reports as are required by the said Sections shall comply with.
Copies/Statements to be
sent to each Member
176.
(a) A copy of every such Profit and Loss Account and Balance Sheet
(including Auditor’s Report and every other document required by law to be
annexed or attached to the Balance Sheet) shall, at least twenty-one days before
the meeting at which the same are to be laid before the members, be sent to the
members of the Company, to every trustee for the holders of any Debentures
issued by the Company (whether such member or trustee is or is not entitled to
have notice of general meetings of the Company sent to him), and to all persons
other than such Members or trustees, being persons so entitled. Provided that the
documents aforesaid shall not be required to be sent if copies thereof are made
available for inspection at the Company’s Registered office during working hours
for a period of twenty-one days before the date of the aforesaid meeting and a
Statement, containing the salient features of such documents in the prescribed
form or copies of the documents aforesaid, as the Company may deem fit, is sent
to every Member of the Company and to every trustee for the holders of any
debentures issued by the Company, not less than twenty-one days before the date
of the said meeting.
(b) Any member or holder of Debentures of the Company and any
person from whom the Company has accepted a sum of money by way of deposit,
shall, on demand, be entitled to be furnished free of cost, with a copy of the last
Balance Sheet of the Company and of every document required by law to be
annexed or attached thereto, including the Profit and Loss Account and the
Auditors Report.
AUDIT
Accounts to be audited
177.
Auditors shall be appointed and their rights and duties regulated in
accordance with Sections 224 to 233 of the Act.
DOCUMENTS AND NOTICE
Service of docu-ments or
notices on Members by
Company
178.
(1) A document or notice may be given or served by the Company to or
on any member whether having his registered address within or outside India
either personally or by sending it by post to him to his registered address.
(2)
Where a document or notice is sent y post, service of the documents
282
or notice shall be deemed to be effected by properly addressing, preparing and
posting a letter containing the document or notice, provided that where a Member
has intimated to the Company in advance that documents or notice should be sent
to him under a certificate of posting or by registered post with or without
acknowledgment due or by cable or telegram and has deposited with the
Company a sum sufficient to defray the expenses of doing so, service of the
document or notice shall not be deemed to be effected unless it is sent in the
manner intimated by the Member. Such service shall be deemed to have been
effected in the case of a notice of a meeting, at the expiration of forty-eight hours
after the letter containing the document or notice is posted or after telegram has
been dispatched and in any other case, at the time at which the letter would be
delivered in the ordinary course of the post or the cable or telegram would be
transmitted in the ordinary course.
By Advertisement
(3) A documents or notice advertised in a newspaper circulating in the
neighborhood of the Office shall be deemed to be duly served or sent on the day
on which the advertisement appears on or to every member who has no registered
address in India and has not supplied to the Company an address within India for
the serving of documents on or the sending of notice to him.
On Joint holders.
179.
A document or notice may be given or served by the Company to or on
the joint-holders of a share by giving or serving the document or notice to or on
the joint-holder named first in the Register of Members in respect of the share.
On
personal
representatives etc.
180.
A documents or notice may be given or served by the Company to or on
the persons entitled to a share in consequence of the death or insolvency of a
Member by sending it through the post in a prepaid letter addressed to them by
name or by the title of representatives of the deceased, or assignee of the insolvent
or by any like description, at the address (if any), in India supplied for the purpose
by the persons claiming to be so entitled, or, (until such an address has been so
supplied), by serving the document or notice in any manner in which the same
might have been given if the death or insolvency had not occurred.
To whom documents or
notices must be served or
given.
181.
documents or notices of every General Meeting shall be served or given
in some manner hereinbefore authorised on or to (a) every Member, (b) every
person entitled to a share in consequence of the death or insolvency of a Member,
and (c) the Auditor or Auditors for the time being of the Company.
Members
bound
by
documents or notices
served on or given to
previous holders.
182.
Every person, who by operation of law, transfer or other means
whatsoever, shall become entitled to any share, shall be bound by every document
or notice in respect of such share, which previous to his name and address being
entered on the Register of Members, shall have been duly served on or given to
the person from whom he derives his title to such share.
183.
Any document or notice to be given or served by the Company may be
signed by a Director or the Secretary or some person duly authorised by the Board
for such purpose and the signature thereto may be written, printed, Photostat or
lithographed.
WINDING-UP
Distribution of assets in
specie.
184.
(a)
If the Company shall be wound up, the liquidator may with the
sanction of a special resolution of the company and any other
sanction required by the Act, divide amongst the members in spcie
or kind the whole or any part of the assets of the Company, whether
they shall consist of property of the same kind or not.
(b)
For the purpose aforesaid, the liquidator may set such value as he
deems fair upon any property to be divided as aforesaid and may
determine how such division shall be carried out as between the
members or different classes of members.
(c)
The liquidator may, with the like sanction, vest the whole or any
part of such assets in trustees upon such rusts for the benefits of the
contributories as the liquidator, with the like sanction shall think fit,
283
but so that no member shall be compelled to accept any shares or
other securities whereon there is any liability.
Service of document or
notice by Member
185.
All documents or notices to be given or served by Members on or to the
Company or to any officer thereof, shall be served or given by sending the same
to the Company or Officer at the Office by post under a certificate of posting or
by registered post, or by leaving it at the office.
INDEMNITY
Indemnity
186.
Subject to the provisions of Section 201 of the Act, every Director,
manager and other officer or servant of the Company shall be indemnified by the
Company against, and it shall be the duty of Directors out of the funds of the
Company to pay, all costs, losses and expenses which any such officer or servant
may incur or become liable or by reason of any contract enter into or any act or
thing done by him as such officer or servant or in any way in the discharge of his
duties including expenses, and in particular, and so as not to limit the generality of
the foregoing provisions against all liabilities incurred by him as such Director,
manager, officer or servant in defending any proceedings, whether civil or
criminal, in which judgement is given in his favour or he is acquitted, or in
connection with any application under Section 633 of the Act, in which relief is
granted by the Court, and the amount for which such indemnity is provided shall
immediately attach as a lien on the property of the Company.
INDEMNITY AND RESPONSIBILITY
Not responsible for acts
of others
187.
Subject to the provisions of Section 201 of the Act, no Director,
Managing Director, or other Officer of the Company shall be liable for the acts,
receipts, neglects, or defaults of any other Director or Officer, or for joining in
any receipt or other act for conformity, or for any loss or expenses happening to
the Company through insufficiency or deficiency of the title to any property
acquired by order of the Board for or on behalf of the Company, or for the
insufficiency or deficiency of any security in or upon which any of the moneys of
the Company shall be invested, o for any loss or damages arising from the
bankruptcy, insolvency or tortuous act of any person, company or corporation
with whom any moneys, securities or effects shall entrusted or deposited, or for
any loss occasioned by any error of judgement or oversight on his part, or for any
other loss or damages or misfortune whatever which shall happen in the execution
of the duties of his office or in relation thereto, unless the same happens through
his own dishonesty.
SECRECY CLAUSE
Secrecy clause
188.
(a) Every Director, Manager, auditor, treasurer, trustee, member of a
committee, officer, servant, agent, accountant, or other person employed in the
business of the Company shall, if so required by the Board, before entering upon
his duties, sign a declaration pledging himself to observe a strict secrecy
respecting all secret processes or other secret technical information of any nature
whatsoever, transactions and affairs of the Company with the customers and the
state of the accounts with individuals and in matters relating thereto, and shall by
such declaration pledge himself not to reveal any of the matters which may come
to his knowledge in the discharge of his duties except when required so to do by
the Board or by law or by the person to whom such mattes relate and except so far
as may be necessary in order to comply with any of the provisions in these
presents contained.
(b) No Member shall be entitled to visit or inspect any works of the
Company without the permission of the Board or the Managing Director or to
require discovery of or any information respecting any detail of the Company’s
trading, or any matter which may relate to the conduct of the business of the
Company and which in the opinion of the Board, it would be inexpedient in the
interest of the Company to disclose.
************
284
SECTION IX – OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The following contracts (not being contracts entered in to in the ordinary course of business carried on by our
Company or entered into more than two years before the date of the Draft Letter of Offer) which are or may be
deemed material have been entered or are to be entered in to by our Company. These contracts and also the
documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company
situated at Paragon Condominium, 3rd Floor, Pandurang Budhkar Marg, Mumbai – 400 013from 10.00 a.m. to
1.00 p.m., from the date of the Draft Letter of Offer until the date of closure of the Subscription List on all
working days except Saturdays, Sundays and Public holidays.
A)
1.
MATERIAL CONTRACTS
Engagement Letter dated January 10, 2008 received from the Company IDBI Capital Market Services
Limited to act as Lead Manager to the Issue.
2.
Memorandum of Understanding dated June 30, 2008 entered into with IDBI Capital Market Services
Limited as Lead Manager to the Issue.
3.
Memorandum of Understanding dated June 17, 2008 entered into with Satellite Corporate Services
Private Limited entered into as the Registrar to the Issue
B) DOCUMENTS
4.
Memorandum and Articles of Association of our Company.
5.
Certificate of Incorporation of our Company dated bearing Registration no. 11579, dated February 10,
1960.
6.
Fresh Certificate of Incorporation of our Company bearing Registration no. 11-11579, dated November
05, 2002
7.
Copy of the resolution passed at the meeting of the Board of Directors held on May 30, 2008 approving
this Issue.
8.
Consents of the Directors, Company Secretary, Auditors, Lead Manager to the Issue, Bankers to the
Issue, Legal Advisors to the Issue and Registrar to the Issue, to include their names in the Draft Letter of
Offer to act in their respective capacities.
9.
The Report of the Auditors, N.M. Raiji & Co, dated June 10, 2008 for the financial years endied on
March 31, 2008, March 31, 2007, March 31, 2006, March 31, 2005 and March 31, 2004.
10.
Annual Reports of our Company for the Financial Years ended on March 31, 2008, March 31, 2007,
March 31, 2006, March 31, 2005and March 31, 2004.
11.
Copies of the initial listing application made to the Stock Exchange for listing of equity shares in this
Issue.
12.
In-principle approval from Bombay Stock Exchange Limited vide letter dated [●].
13.
Letter No. [●] dated [●] issued by the Securities and Exchange Board of India for the Issue.
14.
Due Diligence Certificate dated July 17, 2007 from IDBI Capital Market Services Limited
15.
Resolutions passed at Annual General Meeting held on September 28, 2004 for appointment of Mr.
Shyam Bhupatirai Ghia as Chairman and Managing Director and Mr. Mukund Dharamdas Dalal as the
Joint Managing Director of our Company, and agreement entered into by each of them with our Company
dated March 31, 2004 in the aforesaid context.
16.
Tripartite Agreement dated March 24, 2005 entered into with NSDL and the Registrar, to establish direct
connectivity with the Depository.
17.
Agreement dated March 03, 2005 entered into with CDSL and the Registrar to establish direct
connectivity with the Depository.
18.
Scheme of Arrangement, order of High Court at Bombay dated July 04, 2008 sanctioning the Scheme of
Arrangement and proof of filing of the same with the RoC on July 15, 2008.
19.
RBI letter No. FE.CO.FID/1494/11.01.020(XXX) 2008-09 dated July 16, 2008.
285
DECLARATION
286

futura polyesters limited

Transcription

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