Read DRAFT LETTER OF OFFER text version

LETTER OF OFFER This document is important and requires your immediate attention This Letter of offer is sent to you as equity shareholders of India Forge and Drop Stampings Ltd. on the Specified date i.e. 31.10.2004 in accordance with SEBI (Buy Back of Securities) Regulations, 1998, as amended. If you require any clarifications about the action to be taken, you may consult your stockbroker or investment consultant or Merchant Banker. In case you have recently sold your shares in the Company, please hand over this Letter of Offer and the accompanying Form of Acceptance cum acknowledgement to the Member of the Stock Exchange through whom the said sale was effected. India Forge And Drop Stampings Limited 54, Facit Avenue, Kanthanchavadi, Chennai ­ 600 096. Tel : 044 24961156, 24964980 Fax : 044 2496 0380 Email : [email protected] Contact Person : Mr. R. Subramainam Compliance Officer Offer for Buyback of 5,08,687 fully paid equity shares of Rs. 10/- each representing 15% of the paid up capital of the company at a price of Rs. 12 per share aggregating to Rs. 61.04 lacs equivalent to 6.01 % of the total paid up capital and free reserves of the company through Tender Offer in accordance with the provisions of the Companies Act, 1956 as amended and the Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 as amended. The mode of payment would be by cash and the consideration would be paid by way of cheque / demand draft. The Copy of Public Announcement and Letter of Offer (including Form of Acceptance cum acknowledgement) are also available on the SEBI website (www.sebi.gov.in). The procedure for Tender / Offer is set out on page no. ------ of this Letter of Offer. A Tender /Offer form is enclosed with this Letter of Offer. The form along with relevant enclosures should be dispatched / delivered so as to reach before the close of business hours on or before 14.05.2005 Manager To The Buy Back Offer Aryaman Financial Services Limited SEBI Regn No : MB/INM000006807 Valid upto : 28.02.2007 208, Maker Chamber V, 2nd floor Nariman Point, Mumbai ­ 400 021. Tel.: (022) 22845716 Fax : (022) 22883134 Email: [email protected] Contact Person: Ms. Radha Kirthivasan Offer Opens on: 14.05.2005 Offer Closes on: 28.05.2005 Name & registered office address of the company

1

TABLE OF CONTENTS Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Subject Schedule of activities Definition of key terms Disclaimer clause Text of the Resolution passed at the Board meeting Details of Public Announcement Details of the Buy Back Authority for the Buy Back Necessity of the Buy Back Management Discussion and analysis of the likely impact of Buy Back on the Company Basis of calculating the Buy Back Price Sources of fund for the Buy back Details of the Escrow account and the amount to be deposited therein Capital Structure and Shareholding pattern Brief Information about the Company Financial Information about the Company Stock Market Data Details of the Statutory approvals Details of the collection centers Process and methodology for the Buy Back Procedure for tender / offer and settlement Note on taxation Declaration by the Board of Directors Auditors Certificate Documents for inspection Details of the Compliance Officer Details of the remedies available to the Shareholders Details of Investor Service Centres Declaration by the Directors regarding authencity of the information in the offer document Offer form Page No. 4 4 4 5 5 6 6 6 7 8 8 8 9 10 11 12 13 13 13 14 16 16 17 18 18 19 19 19 21

2

1. SCHEDULE OF ACTIVITIES Particulars Date of Board meeting approving Buy Back Date of Board meeting for ratification of earlier resolution passed on 04.10.2004 Date of Public Announcement for Buy Back Specified Date Buy Back Opening Date Buy Back Closing Date Last date of verification Last date of intimation regarding acceptance / non acceptance Last date of dispatch of consideration / share certificate Last date of extinguishment of shares 2. DEFINITION MSE Buy back offer / offer / Buy back Madras Stock Exchange Offer for Buyback of 5,08,687 fully paid equity shares of Rs. 10/- each amounting to 15% of the paid up capital of the company at a price of Rs. 12 per share through Tender Offer. Foreign Institutional Investors Aryaman Financial Services Ltd Securities and Exchange Board of India 31.10.2004, the date for the purpose of determining the names of equity share holders to whom the letter of offer will be sent The Companies Act, 1956 as amended The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, as ammended Rs. 12 per fully paid equity share payable in cash India Forge and Drop Stamping Limited Date 04.10.2004 27.01.2005 18.10.2004 31.10.2004 14.05.2005 28.05.2005 11.06.2005 11.06.2005 17.06.2005 23.06.2005

FIIs Manager to the Buy back offer SEBI Specified date The Act The Regulations Offer Price / Buy-back Price IFDSL 3. DISCLAIMER CLAUSE

As required, a copy of this Letter of Offer has been submitted to the Securities and Exchange Board of India (SEBI). It is to be distinctly understood that submission of the Letter of Offer to SEBI, should not, in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any resonsibility either for the financial soundness of the Company to meet the Buy-back commitments or for the correctness of the statements made or opinions expressed in the Letter of Offer. The Manager to the Offer, M/s. Aryaman Financial Services Limited has certified that the disclosures made in the Offer Document are generally adequate and are in conformity with the provisions of the Companies Act, 1956 and the Securities & Exchange Board of India ( Buy- back of Securities)

3

Regulations, 1998 and amendments made form time to time. This requirement is to facilitate investors to take an informed decision to tender their shares in the Buy-Back. It should be clearly understood that while the Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the Offer document, the Manager to the Issue is expected to exercise Due Deligence to ensure that the Company discharges its duty adquately in this behalf and towards this purpose, the Manager to the Offer Aryaman Finacial Services Limited has furnished to SEBI a Due Diligence certificate dated 24.03.2005 in accordance with the SEBI (Buy-back of securities) Regulation, 1998 which reads as follows: "We have examined various documents and materials contained in the annexure to this letter, as a part of the due- diligence carried out by us in connection with the finalisation of the public announcement and the Letter of Offer. On the basis of such examination and the discussions with the company, we here by state that: The Public Annoncement and the Letter of Offer are in conformity with the documents, materials and papers relevant to the buy back Offer. All the legal requirements connected with the said offer including SEBI (Buy back of Securities Regulations, 1998, have been duly complied with. The disclosures in the Public Announcement and the Letter of Offer are, to the best of our knowledge, true fair and adequate in all material respects for the shareholder of the company to make a well informed decision in respect of the captioned buy back Offer. Funds used for buy back shall be as per the provisions of the Companies Act. The Filing of Offer Document with the SEBI does not, however,absolve the Company from any liabilities under the provisions of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed buyback . Promoters / Directors declare and confirm that no information/material likely to have a bearing on the decisions of investors has been suppressed / withheld and / or incorporated in the manner that would amount to mis-statement/ misrepresentation and in the event of it transparing at any point of time that any information / material has been suppressed/ withheld and / or amounts to a mis-statement / misrepresentation,the Promoters / Directors and the Company shall be liable for penaltly in terms of the provisions of the Companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998. Promoters / Directors also declare and confirm that funds borrowed from banks and Financial Institutions will not be used for the buy back. 4. EXTRACTS FROM THE RESOLUTION PASSED AT THE BOARD MEETING HELD ON OCTOBER 04, 2004 Resolved that, pursuant to the provisions of the Articles of Association of the company and in accordance with the provisions of sections 77A and 77B and other applicable provisions of the companies Act, 1956, and in terms of Securities and Exchange Board of India (Buy back of Securities) Regulations, 1998 the company do buy back from the existing shareholders through the tender offer route on a proportionate basis, 5,08,687 fully paid up equity share of Rs 10 each amounting to 15% of the paid up equity shares of the company at a price of Rs. 12 per share aggregating Rs. 61.04 lacs equivalent to 6.01% of the total paid up equity capital and free reserves of the company.

4

5. DETAILS OF PUBLIC ANNOUNCEMENT As per Regulation 8(1) of the Regulations, the Company has made a Public Announcement in the News Today (English Daily), Rajasthan Patrika (Hindi Daily) and Malai Sudar (Regional language Daily) on 18.10.2004. 6. DETAILS OF THE BUY BACK OFFER a. India Forge and Drop Stampings Limited ("the Company") has announced the offer to Buy back 5,08,687 fully paid equity shares of Rs. 10/- each representing 15% of the paid up share capital of the company at a price of Rs. 12 per share aggregating to Rs. 61.04 lacs equivalent to 6.01% of the total paid ­up capital and free reserves of the company as on 31.03.04 from the existing share holders (including the promoters of the company) through tender offer method. The Buy back is pursuant to the provisions of the Articles of the Articles of Association of the Company and in accordance with the in accordance with the provisions of the Companies Act, 1956 as amended and the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998 as amended. b. The Promoters, and persons acting in concert with the promoters hold 21,55,174 equity shares representing 63.55% of the paid up equity share capital of the company and they also intend to tender their shares to the company under the Buy back. c. Assuming full acceptance to the offer, the promoters shareholding post buy back would not go beyond 63.55 % of the paid up equity share capital of the company. d. Post buy back the non-promoter share holding of the company shall not fall below the minimum level required as per the listing conditions / agreement. 7. AUTHORITY FOR THE BUY BACK The Buyback is made pursuant to the provisions of clause 7 of the Articles of Association of the Company and pursuant to Sections 77A, 77AA, 77B and other applicable provisions of the Companies Act, 1956 as ammended by the Companies (Ammendment) Act, 1999 and the Regulations. The present Offer for Buy-Back of Equity Shares of the Company from existing shareholders (inlcuding promoters of the company) on proportionate basis through the Tender offer has been duly authorised by:a. A resolution of the Board of Directors (the Board) passed at their meeting held on 04.10.2004 under the provisions of "Proviso to Section 77(A) (2) (b) of the Companies Act, 1956 b. A special resolution also passed by the shareholders of the company at the General Meeting (EGM) held on 24.03.04. Extra Ordinary

c. A resolution passed at the Board meeting held on 27.01.05 ratifying the earlier resolution.

5

8. NECESSITY OF THE BUY BACK a. Buy-back is considered necessary for optimising returns to the shareholders and enhancing the overall shareholders value. b. The shares of the company are listed only on the Madras Stock Exchange (MSE). Since the shares of the company is presently not traded on the exchange, hence liquidity is presently not available to the shareholders of the company. Through this buyback offer , the Company intends to provide liquidity to the existing shareholders, as also provide an exit route. c. The Buy back programme is being proposed in pursuance of the Company`s desire to strive for improving the quality of serrvice to the members by reducing the number of members to a manageable level and simultaneously help small investors to get decent return for their investments, by returning cash to shareholders, in a tax efficient and investor friendly manner. The company also proposes to enhance the quality of servicing by the company and in the long term result in better performance and also contribute to an increase in the Company`s overall market development d. In the Board's view, for the purpose of effectively servicing the Shareholders of the Company, it was desirable to bring down the number of shareholders by Buy-back of shares held in odd lots and also buy back shares held by small shareholders in the interest of the company and in the interest of the said shareholders. Further the Board also felt that there will be effective and true representation of capital structure by this process. 9. MANAGEMENT DISCUSSIONS AND ANALYSIS OF THE LIKELY IMPACT OF BUY BACK ON THE COMPANY a. The Buy-back is not likely to cause any material impact on the profitablity of the Company except the opportunity loss of income, if any, on the amount of cash to be utilised for the Buy-back. b. The share Buy-back program is expected to contribute to the overall enhancement of shareholder value. c. The Promoters, and persons acting in concert with the promoters presently hold 21,55,174 equity shares representing 63.55% of the paid up equity share capital of the company. Assuming full acceptance to the offer, the percentage of promoters shareholding post buy back shall not increase beyond its present level of holding of the paid up equity share capital of the company. d. The Buy back of shares will not result in a change in control or otherwise affect the existing management structure of the company. e. Consequent to the Buy-back and based on the number of shares bought back from the promoters, Indian Financial institutions/Banks/Mutual Funds and public including bodies Corporate, the shareholding pattern of the company would undergo a change to the extent of shares bought back from each such category. f. As required under the Act, the ratio of the debt owed by the Company would not be more than twice the share capital and free reserves after the Buy-back. The Debt Equity Ratio as at 31st March, 2004 is 0.91:1.

6

g. The Company will not issue fresh equity shares for a period of 6 months after the completion of the Buy-back. However, this restriction will not apply to bonus shares or shares issued towards discharge of subsisting obligations such as arising from convertible preference shares, debentures, employees stock options, etc. Issued before the Buy-back. h. The salient Financial parameter consequent are as under : Parameter (based on the audited results for the year ended 31.03.04) Networth * (Rs. lacs) (Paid up capital + Reserves ­ Accumulated Losses) Return on networth * (Profit after tax / Networth) Earnings per shares (Rs.) (Profit after tax/No. of shares) Book Value per share (Rs.)* (Paid up capital + Free Reserves / No. of shares) P/E as of 31.03.04 (Based on buy back price of Rs. 12 per share) (EPS/Market Price *10) Total Debt / Equity Ratio (Total Debt / Total Equity) to the Buy back based on the latest audited results Pre Buy back 1100.02 5.98% 1.94 29.93 Rs. 1.62 Post Buy back 1038.97 6.33% 2.28 32.21 Rs. 1.90

0.91:1

1:1

* Excluding revaluation reserves and miscellaneous expenditure to the extent not written off. 10. BASIS OF CALCULATING THE BUY BACK PRICE The Board of Directors of the company have proposed a maximum price of Rs. 12/- per share for buy back which includes a premium of Rs. 2/- per share over the face value of Rs. 10/- per share. The price has been arrived at after taking into account the following : a. The last quoted price was only during 1997 wherein the highest was between Rs. 12-14 in Madras Stock Exchange. The Company`s shares have not been traded for the last seven years. b. The closing market price of the equity shares as on the date of the Board Meeting for considering the Buy back to the stock exchange is nil. c. The Book value of the shares based on the audited financials as on March 31, 2004 was Rs. 29.93, E.P.S was Rs. 1.94 and the Return on networth was 5.98 %. Though the Book Value of shares as on March 31, 2004 was Rs. 29.93, the offer price of Rs. 12 per share is justified based on the fact that the shares of the company has not been traded for the past seven years and the last traded price was in the range of Rs. 12-14 per share and also that the price for the earlier buyback made by the company was also at Rs. 12 per share.

7

11. SOURCES OF FUND FOR THE BUY BACK a. The total amount of funds required for the buy back is Rs. 61.04 lakhs, assuming 100% response to the buy-back offer. b. The amount required for the buy-back will be financed out of the Company`s free reserves and / or out of the Share premium account and / or the proceeds of earlier issue of shares other than equity shares made specifically for Buy-back purposes. 12. DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT TO BE DEPOSITED THEREIN a. The Company will provide security for performance of its obligations by opening an Escrow account or before 14.05.2005 i.e. the date of opening of the offer in terms of Regulation 10 of the SEBI (Buy Back of Securities) Regulation 1998. with the State bank of Mysore. Abiramapuram Branch, Chennai and the amount deposited shall be 25% of the maximum amount to be utilised for buy back. b. The manager to the offer M/s. Aryaman Financial Services Ltd shall be empowered by the Company to realise the value of the escrow account by sale or otherwise. c. M/s. Singhi & Co- Chartered Accountants, (membership no. of Mr. Sudesh Choraria ­ Partner is 204936), having their office at 1, Philips Street, 2nd Floor, Chennai ­ 600 001 Tel No. 044 25384722, Fax no : 044 26162758 have confirmed vide their certificate dated October 4, 2004 that sufficient resources are available with the company for fulfilling all the obligations under the offer. d. Based on the above, the Manager to the Offer is satisfied about the ability of the company to implement the offer in accordance with the Regulations. 13. CAPITAL STRUCTURE AND SHARE HOLDING PATTERN The Share Capital of the Company as on March 31, 2004 is as follows : Particulars No. of Shares Authorised Equity shares of Rs. 10/- each 47,50,000 Reedemable Cumulative preference 25,000 shares of Rs. 100/- each Issued and Subscribed Equity shares of Rs. 10/- each Amount (Rs.) 475,00,000 25,00,000

33,94,447

339,12,000

Called and paid up Equity shares of Rs. 10/- each fully paid 33,91,247 up

339,12,470

8

During January 2003, the company had bought back 3,58,753 equity shares of Rs. 10/- each at a price of Rs. 12/- per share through the Tender Offer method. The offer opened on January 3, 2003 and closed on January 23, 2003. There are no partly paid up shares in the company and there are no shares on which call money is due. There are no outstanding convertible securities issued by the company. The share holding pattern of the Company before and after the Buy-back offer (assuming full subscription of the Buy back offer ) is as given herein below :Particulars Pre- Buy- Back No. of Equity Shares Post Buy-Back % to the No. of Equity % to the existing equity Shares existing equity share capital share capital 21,55,174 63.55 18,31,867 63.55 ---

Promoters (including persons acting in concert) Foreign Investors (including Non ­ Resident Indians, FIIs and Foreign Mutual Funds) Financial Institutions / Banks & Mutual Funds promoted by Banks / Institutions Other (Public , Pubic Bodies Corporate etc. Total

5,65,505

16.68

10,50,693 6,70,568 33,91,247 19.77 100.00 28,82,560

36.45

100.00

Note : the actual post buy back number of shares and percentage to the existing share capital may vary depending upon the offers received but in any case the percentage of promoters share holding post buy back shall not increase beyond its present level. 14. BRIEF INFORMATION ABOUT THE COMPANY ­ INDIA FORGE AND DROP STAMPINGS LIMITED (IFDSL) a. IFDSL is a public limited company incorporated on 27th June, 1960 engaged in the manufacture of Steel forgings for the last 44 years. It has its registered office at 54, Facit Avenue, Kanthanchavadi, Chennai 600 096. b. The Company was promoted by late Mr.K.C.Sood, a Metallurgical Engineer who had wide experience in the field of Steel Forgings.

9

c. The Company has manufacturing units at Marai Malai Nagar, Pune and Faridabad with a total installed capacity of 12,000 MT per annum and is supplying forgings to original equipment manufacturers of trucks, tractors, cars, two and three wheelers, earth moving equipment, defence and general engineering industries. d. The company`s business was doing very well for almost 3 decades but presently though the demand for the company`s products has picked up, due to the rapid rise in the cost of steel and impending increase in the fuel and power costs, and not corresponding increase in the prices of the products sold by the company, the margins of the company continue to be under pressure. e. The present capital structure of the company as on 31.03.04 is as under : Particulars No. of Shares Amount (Rs.) Authorised Equity shares of Rs. 10/- each 47,50,000 475,00,000 25,000 25,00,000 Reedemable Cumulative preference shares of Rs. 100/- each Issued and Subscribed Equity shares of Rs. 10/- each Called and paid up Equity shares of Rs. 10/- each fully paid up

33,94,447

339,12,000

33,91,247

339,12,470

There is no pending scheme of amalgamation or compromise or arrangement pursuant to the provisions of the Companies Act, 1956. The shares of the Company are listed in the Madras Stock Exchange. Trading in the shares of the Company had commenced from the year 1960. f. The details of the Board of Directors of the Company are as follows : Name , Qualification, Designation Date of appointment Occupation and age / reappointment Director 30.09.1980 Sri. V. Dwarkanath Reddy M.Sc. Business 77 years Sri. G. Krishnan B.E Business 66 years Sri. Dipak Raj Sood B.Com Business 62 years Director 27.12.1980 Other directorships Chairman : Nutriene Confectionaries Ltd. NIL

Vice Chairman & Managing Director

29.12.1967

Incowax Ltd. Sudtrac Linkages pvt. Ltd.

10

Sri. V.R. Ramakrishnana M.Sc 65 Years Ms. Rupa Sood B.A. 56 Years

Nominee of LIC Business

03-12-2001

23.05.1998

Sudtrac Linkages Pvt. Ltd.

There has been no changes in the Board of Directors of the company during the last 3 years. 15. FINANCIAL INFORMATION ABOUT THE COMPANY The salient financial information of the company as extracted from the audited results for the last three years is as given below : Particulars Income from operations Other income Total Income Profit before interest, depreciation and tax Interest Depreciation Tax Profit after tax Paid up Equity Share Capital Reserves Net worth Total debt (Excluding Working capital loans) Year Ended 31.03.2004 6348.20 51.16 6399.36 275.35 24.15 154.09 31.35 65.76 339.13 760.89 1100.02 868.05 (Rs. in lacs) Year Ended 31.03.2003 4929.43 78.80 5008.23 245.85 40.86 142.00 32.30 30.69 339.23 695.03 1034.26 999.37 Year Ended 31.03.2002 5377.73 99.69 5477.42 422.96 81.54 151.76 47.52 142.14 375.10 671.52 1046.62 1489.44

The Financial Ratios for the last three years is as given herein under : Particulars EPS (Rs. Per share) Book value (Rs.) Return on networth (%) Formula Profit after tax/No. of shares Paid up capital + Free Reserves / No. of shares Profit after tax / Networth Year Ended 31.03.2004 1.94 29.93 5.98 Year Ended 31.03.2003 0.83 27.99 2.97 Year Ended 31.03.2002 3.79 25.45 13.58

11

Debt Equity Ratio

Total Debt / Total Equity

0.91:1

1.25:1

1.86:1

The unaudited certified financial information of the company for the nine months ended 31.12.04 is as given below: (Rs. in lacs) Particulars For 9 months ended on 31.12.2004 (certified) Income from operations Other income Total Income Profit before interest, depreciation and tax Interest Depreciation Tax Profit after tax Paid up Equity Share Capital Reserves Net worth EPS (Rs. Per share) Book value (Rs.) Return on networth (%) Debt Equity Ratio 6183 142 6325 272 22 140 50 60 339 841.89 1181 1.77 32.22 5.08 1.03:1

The Company hereby declares that it has complied with Section 77A (2) (c ), (d), 77B (1) 77B (2) of the Companies Act, 1956. The Company hereby declares that it shall comply with Clause 23 of the SEBI (SAST) Regulations as and when applicable. 16. STOCK MARKET DATA a. The Company's shares are listed on the Madras Stock Exchange. Trading in the shares of the Company commenced from 1960, on the stock exchanges. b. The shares of the company have not been traded since 1997. c. The Company at its Board of Directors meeting held on 04.10.2004 approved the proposal for the Buy-back upto 5,08,687 fully paid Equity shares representing upto 15% of the Paid up Equity share capital of the company, at a price not exceeding Rs. 12/- per share. There has been no trading on MSE subsequent to the date of the resolution of the Board of Directors approving the Buy-back.

12

17. STATUTORY APPROVALS The Offer is subject to apporvals. If any required, under the provisions of the Act, the Regulations and / or such other Acts in force for the time being. There is no necessity to obtain any statutory approvals from the Reserve Bank of India since the company does not have NRI/FII holdings. 18. DETAILS OF THE COLLECTION CENTRES The share holders accepting the buy back offer shall submit their shares under the offer at the registered office of the company at the following given address between 10.00 am to 3.00 p.m on any working day during the period the offer is open i.e. 14.05.2005 to 28.05.2005 (other than Sundays and holidays) : India Forge and Drop Stampings Ltd. # 54, Facit Avenue, Kanthanchavadi, Chennai ­ 600 096 Tel : 044 24691156 / 24964980 Fax : 044 24960380 Email : [email protected] Contact Person : Mr. R. Subramanian Company Secretary Mode of delivery : Hand delivery Share holders residing at places other than the place where the collection centre is situated may send the same by registered post., at their own risk and cost, to the above mentioned address. 19. PROCESS AND METHODOLOGY FOR THE BUY BACK a. The company is proposing a buy back of maximum of 5,08,687 fully paid-up equity shares of Rs. 10/- each representing 15% of the paid-up share Capital of the company as on 31.03.2004 through the tender offer method in accordance with the Securities And Exchange Board of India (Buy-Back of Securities) Regulations, 1998 (hereinafter referred to as "Buy-back") from the shareholders of the company. The buy back is to be made at a price of Rs. 12/- (Rupees twelve only) per equity share ("Offer Price") payable in cash aggregating to Rs. 61.04 lacs ("Offer size") which represents 6.01% of the paid up capital and eligible free reserves of the company as on 31st March, 2004. b. The aggregate shareholding of the promoters and the Directors, persons who are in control of the company as on the date of the Board meeting, i.e. 04.10.2004 is 21,55,174 equity shares constituting 63.55 % of the issued share capital of the company. Promoters and persons in control of the Company and their Associates and the Directors and their relatives, will also tender their shares to the company under the Buyback. c. Assuming 100% response to the Buy-Back offer, the issued , subscribed and paid up equity share capital of the Company after the completion of the Buy Back would consists of 28,82,560 equity shares of Rs. 10/ each and the share holding of the promoters is not expected to increase beyond their present level of holding.

13

20. PROCEDURE FOR TENDER / OFFER AND SETTLEMENT a. The Offer is open to all the shareholders of the company b. The shares of the company are only under physical form c. The Letter of offer and Tender / Offer Form will be mailed to all the shareholders of the company whose names appear on the Registrar of Members of the Company as on the Specified Date. d. The Company shall not accept any shares for Buy-Back, in case of court restraints on transfer / sale of shares. e. The Company will consider all the shares tendered for Buy-back by shareholders, for acceptances under the Buy-Back offer, irrespective of whether the shareholder is registered with the Company as on the Specified Date or has obtained delivery after the Specified Date or he holds the shares in street name. In case the tenderer is an unregistred share holder, he should submit the transfer deed complete in all respects, along with the Share Certificate. f. In case the number of shares offered by the shareholders is more than the total number of shares to be bought back by the Company, the acceptances per shareholder will be on proportionate basis, in accordance with the Regulations i.e. acceptances per shareholder will be equal to the acceptances tendered by the shareholders divided by the total acceptances received and multiplied by the total number of shares to be bought back. g. The Company shall comply with the Regulation 19(5) of the regulations. h. No single offeror can tender shares more than the shares proposed to be bought back and any Tender / Offer form wherein the number of shares offered by a share holder exceeds the total number of shares to be bought back will be rejected. i. The shareholder should tender only one form, irrespective of the number of folios he holds. Multiple applications tendered by any shareholder shall be liable to be rejected. Also multiple tenders from the same depository account or same registered folio shall also be liable to be rejected. j. The shareholders to whom the offer is made are free to tender / offer their shareholding to the company in whole or in part. k. Shareholders of the Company who wish to tender / offer their shares in response to this Buy-back Offer should deliver the following documents : i. The relevant Tender / Offer Form duly signed (by all shareholders in case the shares are in joint names) in the same order in which they hold the shares. Original Share Certificates.

ii. l.

Unregistered shareholders who wish to tender / offer their shares in response to the Buyback Offer should send the application in plain paper signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered for Buy-back, bank account details together with the original share certificates & duly executed transfer deed and other relevant documents

m. Shareholders should also provide all relevant documents in addition to the above documents. Such may include (but not limited to): i. Duly attested Power of Attotney if any person other than the shareholder has signed the relevant Tender / Offer Form.

14

ii. Duly attested death certificate / succession certificate in case any shareholder has expired. iii. Necessary corporate authorisations, such as Board Resolutions. etc., in case of companies. n. The documents should be submitted to the collection centre so as to reach before the close of the business hours of the respective collection centre on the closing date. o. The mode of payment to the shareholders whose offers have been accepted would be by cheque and the same would be dispatched by registered post. p. Despatch of payment in case of acceptance of shares and dispatch of share certificates in case of rejection will be intimated before 03.06.2005. q. The payment shall be made by default to the sole / first shareholder in the bank account, the details of which are recorded with the company. The cheques for shareholders residing at places where the facility of transfer of payment is not available would be made payable at par at Chennai. r. It will be mandatory for shareholders to indicate bank account number to which the offer proceeds should be made payable at the appropriate place in the Tender / Offer form. s. Non- receipt of this letter of offer by, or accidental omission to despatch the letter of offer to any person who is eligible to receive this offer shall not invalidate the offer in any way. t. In case of non-receipt of this Letter of Offer, shareholders may send their application in plain paper in writing signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive number of shares tendered for Buy-back, bank account details together with the original share certificates and other relevant documents to the Company. u. All documents / remittances sent by or to shareholders will be at their own risk. Shareholders of the company are advised to adequately safegaurd their interests in this regard.

21. NOTE ON TAXATION a. The extract of Income Tax Act, 1961 as amended by Finance Act, 1999 relating to treatment in case of buy-back of shares is given below in "Section 2(22) "Dividend" includes (a) ..........to .........(e) but "dividend" does not include, (any payment made by a company on purchase of its own shares from a shareholder in accordance with the provisions of section 77A of the Companies Act, 1956 (1 of 1956)". b. Capital gains on purchase by company of its own shares or other specified securities is contained in Section 46A of the Income tax Act,1956 which is reproduced below: `Where a shareholder or a holder of other specified receives any consideration from any company for purchase of its own shares or other specified securities held by such shareholder or holder of other specified securities, then, subject to the provisions of section 48, the difference between the cost of acquisition and the Value of consideration received by the shareholder or the holder of other specified securities, as the case may be, shall be deemed to be the capital gains arising to such

15

shareholder or the holder of other specified securities, as the case may be, in the year in which such shares or other specified securities were purchased by the company' Explanation-for the purpose of this section, "specified securities" shall have the meaning assigned to it in Explanation to section 77A of the Companies Act, 1956( 1 of 1956)" Investors are advised to consult their tax consultants for treatment that may be given by the respective assesing officer in their case. Company or lead manager does not accept any responsibility for the accuracy or otherwise of such advice. 22. DECLARATION BY THE BOARD OF DIRECTORS a. The Board of Directors confirms that there are no defaults subsisting, in repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks. b. The Board of Directors confirms that it has made a full enquiry into the affairs and prospects of the company and that they have formed the opinioni. That immediately following the date of the meeting of the Board of Directors. i.e. 04.10.04 convened that there will be no grounds on which the company could be found unable to pay its debts. As regards its prospects for the year following that date that, having regard to their intention with respect to the management of the company's business during that year and to the amount and character of the financial resources which will in their view be available to the company during that year, the company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent with in a period of one year from that date. In forming their opinion for the above purpose, the Directors have taken into account the liabilities as if the company is being wound up under the provisions of the Companies Act, 1956 (including prospective and contingent liabilities).

ii.

iii.

For and on behalf of the Board of Directors of India Forge and Drop Stampings Ltd. Sd/Dipak Raj Sood Vice Chairman and Managing Director Date : 27.01.2005 Place : Chennai Sd/G. Krishnan Director

16

23. AUDITORS CERTIFICATE The text of the report dated 04.10.04 received from Messrs. Singhi & Co., Chartered Accountants of the Company addressed to the Board of Directors of the Company is reproduced below: In continuation of India Forge and Drop Stampings Limited (the Company) proposal to buyback its shares and in pursuance of the provisions of Section 77A and 77B of the Companies Act, 1956 and the SEBI (Buy-back of Securities) Regulations 1998, we have examined the audited financial statements of the company for the year ended 31.03-2004 and the relevant records, ratios, analysis and reports and according to the information and explanations given to us and on the basis of such verification of records, as we considered appropriate, we report that: a. We have enquired into the company's state of affairs. b. In our opinion the amount of the maximum permissible capital payment of Rs. 253.72 lacs, as determined by the company on the basis of the total of the paid up capital and free reserves of the company, for the shares to be bought back is properly determined in accordance with Section 77A(2) of the Companies Act, 1956. (Rs. In lacs) Paid up share Capital as on 31.03.04 339.13 Free Reserves as on 31.03.04 675.77 Total 1014.90 Maximum amount permitted for Buy Back (i.e. 25% of the total paid up capital and free reserves) 253.72 Maximum permissible Buy back of shares Share capital as on date (3391247 shares of Rs. 10/- each) Maximum buy back permissible in a financial Year is 25% of the paid up capital 339.12 84.78

Maximum amount to be utilized for the present buyback 61.04 (Rs. 50.87 lakhs paid-up capital and Rs. 10.17 lakhs from the Reserves on the buy-back of 15% of the present paid-up equity shares) c. Based on the representations made by the Company and other information and explanations given to us, which to the best of our knowledge and belief were necessary for this purpose, we report that we are not aware of anything to indicate that the opinion expressed by the Directors in the declartion as to any of the matter mentioned in the declartion as apporved by the Board of Director in their meeting held on 04.10.2004 is unreasonable in all the circumstances in the the present context.

17

Yours faithfully For Singhi & Co., Chartered Accountants Mr. Sudesh Choraria Partner (Registration No. of Mr. Sudesh Choraria: 204936) Place: Chennai Date: 04.10.2004 24. DOCUMENTS FOR INSPECTION Copies of the following documents will be available for inspection at the registered office of the Company between 11 a.m. and 1 p.m. on all working days except Saturdays and Holidays. 1. 2. 3. 4. 5. 6. 7. 8. Certificate of Incorporation Memorandum and Articles of Association of the Company. Annual Reports for the years 2001-2002, 2002-2003, and 2003-2004. Resolution approving proposal for buy-back passed at the Extra Ordinary meeting of the Company held on 04.10.2004 Declaration of solvency by the Directors and an affidavit verifying the same as per Form 4A of the Companies (Central Government's) General Rules and Forms, 1956. Auditors Certificate as prescribed in Schedule I (xi) Auditors Certificate as prescribed in Schedule III (24) Copy of the Public Announcement dated 18.10.2004.

25. DETAILS OF THE COMPLIANCE OFFICER Mr. R. Subramanian, Company Secretary, Address: India Forge and Drop Stampings Limited 54, Facit Avenue, Kanthanchavadi, Chennai - 600 096. Tel : 044 24691156 / 24964980 Fax : 044 24960380 email address: [email protected] 26. DETAILS OF THE REMEDIES AVAILABLE TO THE SHARE HOLDERS a. In case of any queries the Shareholders may contact the aforesaid person at the above address on any working day (except Sunday and Public Holidays) between 10 a.m. and 3 p.m. b. If the Company makes a default in complying with the provisions of Section 77A of the act or any rules made there under, or any regulation made under clause (f) of sub-section (2) of Section 77A, the Company or any officer of the Company who is in default shall be punishable with imprisonment for a term and its limit or with a fine and its limit or both.

18

c. The address of the concerned officer of the Registrar of Companies is The Registrar of Companies, Sastri Bhavan, 26, Haddows Road, Nungambakkam, Chennai ­ 600 006. 27. DETAILS OF THE INVESTOR SERVICE CENTRE: India Forge and Drop Stampings Limited 54, Facit Avenue, Kanthanchavadi, Chennai - 600 096. Tel : 044 24691156 / 24964980 Fax : 044 24960380 email address: [email protected] Mr. R. Subramanian, Company Secretary 28. DECLARATION BY THE BOARD OF DIRECTORS THE INFORMATION IN THE OFFER DOCUMENT REGARDING THE AUTHENTICITY OF

As per Regulation 19(1)(a), of the Regulations, the directors of the company hereby accept full responsibilty for the information contained in this Letter of Offer. This letter has been issued under the authority of the Board and in terms of the resolution passed by the Board on 04.10.2004 For and on behalf of the Board of Directors of India Forge and Drop Stampings Ltd. Sd/Dipak Raj Sood Vice Chairman and Managing Director Date : 03.05.2005 Sd/G.Krishnan Director

19

INSTRUCTIONS 1. This offer will open on 14.05.2005 and close on 28.05.2005. 2. This Tender / Offer Form has to be read along with the Letter of Offer and is subject to the terms and conditions mentioned in the Letter of offer and this Tender / Offer Form.

3. Shareholders who wish to tender / offer their shares in response to this Buy-back offer should deliver the following documents so as to reach before the close of business hours of the respective Collection Centres (as mentioned in the Letter of Offer) on or before 14.05.2005- by 5.00 p.m. · · The relevant Tender / Offer Form duly signed ( by all shareholders in case shares are in joint names) in the same order in which they hold the shares; Original Share Certificates;

4. Shareholders should also provide all relevant documents in addition to the above documents. Such may include (but not limited to); · · · Duly attested Power of Attorney if any person other than the shareholder has signed the relevant Tender / Offer form. Duly attested death certificate / succession certificate in case any shareholder has expired. Necessary corporate authorisations, such as Board Resolutions, etc., in case of companies.

5. Shareholders to whom this offer is made are free to tender / offer their shareholding to the Company in whole or in part. 6. In case of non-receipt of this Letter of Offer, shareholders may send their application in plain paper in writing signed by all shareholders, stating folio number, name, address, number of shares held, share certificate number, distinctive numbers, number of shares tendered for Buy-back, bank account details together with the original share certificates and other relevant documents to the Compliance officer to the Buy Back offer. 7. It will be mandatory for shareholders to indicate bank account number to which the offer proceeds should be made payable at the appropriate place in the Tender / Offer form. 8. All docunents/ remittances sent by or to shareholders will be at their own risk. Shareholders of the company are advised to safegaurd adequately their interest in this regard. 9. Any shareholder should tender only one form, irrespective of the number of folios he holds. Multiple applications tendered by any shareholder shall be liable to be rejected. ALL FUTURE CORRESPONDENCE IN CONNECTION WITH THIS BUY-BACK OFFER SHOULD BE ADDRESSED TO THE COMPLIANCE OFFICER TO THE BUY-BACK OFFER QUOTING YOUR FOLIO NUMBER.

20

TENDER / OFFER FORM To The Board of Directors India Forge & Drop Stampings Limited Registered Office: 54, Facit Avenue, Kanthanchavadi, Chennai-600 096. Dear Sirs Ref : Letter of Offer dated 03.05.2005, to buy back shares of India Forge & Drop Stampings Ltd. 1. I/ We (having read and understood the Letter of Offer dated 03.05.2005) hereby tender / Offer my / our shares in response to the Buy-back Offer on the terms and conditions set out below and in the Letter of Offer. 2. I/ We authorise the Company to buy back the shares offered and as a consequence to extinguish the share certificates.

3. I/ We hereby warrant that the shares comprised in this tender / offer are offered for Buy-back by me / us free from liens, equitable interest, charges and encumbrance. 4. I/ We declare that there are no restraints / injunctions or other order of any nature which limits / restricts in any manner my / our right to tender shares for Buy-back and that I / we am / are legally entitled to tender the shares for Buy-back. 5. I/We agree that the Company is not obliged to accept any shares offered for Buy-back where loss of share certificates has been notified to the Company. 6. I /We agree that the Company will pay the Offer Price only after due verification of the validity of the documents and signatures and that the consideration may be paid to the first name shareholder. 7. I/We undertake to return to the Company any Buy-back consideration that may be wrongfully received by me / us. 8. I /We undertake to execute any further documents and give any further assurances that may be required or expedient to give effect to my / our tender / offer and agree to abide by any decision that may be taken by the Company to effect the Buy-back in accordance with the Act and the Regulations. 9. I / We authorise the company to split the share certificate and issue new consolidated certificate for the unaccepted shares in case the shares accepted by the company are less than the shares tendered in the buy back due to oversubscription.

21

10. Details of shares held and offered for Buy-back : In Figures Number of shares held Number of shares offered for Buy Back 11. Details of Share Certificates(s) enclosed : Sr. No Folio No. Share Certificate No. Total No. of Certificates submitted Distinctive No(s) No. of shares In Words

From To 1. 2. 3. 4. 5. Total In case the number of folios and share certificates enclosed exceed 5 nos., please attach a seperate sheet giving details in the same format as above. 12. Details of Other Documents (please tick appropriately), if any, enclosed : · Corporate Authorisations · Death Certificate · Succession Certificate · Power of Attorney · Any Other, Please specify 13. Details of Bank Account of the Sole/First Shareholder to be incorporated in the consideration warrant (to be mandatorily filled) Name of the bank Branch and City Account Number (Indicate type of account)

14. Shareholder(s) details (signature(s) as per specimen recorded with the Company) Sole / First Shareholder Name in full Signature Address of the sole / first shareholder Telephone No. / Email Second holder (if any) Third holder (if any)

22

India Forge & Drop Stampings Limited - BUY-BACK OFFER - ACKNOWLEDGEMENT (to be filled by the shareholder) Received from Mr /Ms. -----------------------------------------------------------Folio No. Number of shares In figures tendered Number of share certificates submitted Collection centre stamp and date Please quote folio no. for future correspondence

In words

23

24

Information

DRAFT LETTER OF OFFER

24 pages

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate

298887


You might also be interested in

BETA
Microsoft Word - Prospectus - Jan07 final.doc
DSP - Alfa Laval India Ltd - 23-10-2008.p65
Microsoft Word - LOF 22.10.2008 _Centrum_.doc