WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM ...

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WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM of cash flows for dividends, capital expenditure or other reinvestment in their respective businesses. 9. The public shareholders of SCL from the Effective Date, apart from continuing to be the equity shareholders of SCL are also now the Equity Shareholders. Brief financial details of the Demerged Company: (Rs.in crores except for per share data) Particulars *2007 2006 2005 2004 Audited Total Income 864.81 674.60 568.83 445.78 Profits Before Tax and Exceptional Items 128.08 106.31 76.33 66.36 Net Profits After Tax and Exceptional Items 91.16 74.47 53.26 46.87 Equity Share Capital 18.97 18.97 18.97 18.97 EPS 48.06 39.26 28.08 24.25 Return on Capital Employed 27.80% 28.10% 25.70% 29.20% * Includes Pre Demerger data of the Demerged Undertaking VI. SALIENT FEATURES OF THE SCHEME : 1. The Demerged Undertaking was transferred to and vested in the Company with effect from the Appointed Date in terms of the Scheme. 2. The particulars of assets and liabilities of the Brakes Business transferred to the Company, in terms of the Scheme, as on the Appointed Date are furnished below: (Rs.in Lakhs) Particulars Amount Assets Fixed Assets 10126.79 Leasehold Land 351.59 Capital Work in Progress 332.61 Investments 820.02 Current Assets, Loans and Advances 9,842.59 Total Assets (A) 21,473.60 Liabilities Loan Funds – Unsecured loans 1,204.99 Current Liabilities and Provisions 8,273.53 Total Liabilities (B) 9,478.52 Surplus (A) – (B) 11,995.08 3. The surplus amount representing the excess of the Total Assets (A) over the Total Liabilities (B) of the Brakes Business of SCL was also transferred to the Company as detailed below: (Rs. in Lakhs) Share Capital 948.38 General Reserve 7832.12 Profit and Loss (Surplus) 3214.58 Total 11995.08 4. The Scheme inter alia also provided for the reduction in the face value of equity shares of SCL from Rs. 10/- to Rs. 5 each. In lieu thereof, the equity shareholders of SCL whose names stood in the Register of Members as on the Record Date were allotted one Equity Share of Rs.5/- each in the Company credited as fully paid for every one equity share of Rs.10/- each held by them in SCL as on that date. Page 18 of 95
WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM 5. The Equity Shares so allotted by the Company in pursuance of the Scheme would also be listed on the Stock Exchanges where the equity shares of SCL were listed. 6. 1,00,000 Equity Shares held by SCL and its nominees in the Company were cancelled and extinguished on the Effective Date. 7. During the period of two (2) years from the date of listing of the Equity Shares on a recognised Indian stock exchange (a) CDH shall, subject to prior mutual written agreement between CDH and TVS, transfer, and the TVS Group shall obtain, in one or more transactions the entire equity shareholding held by CDH in the Demerged Company at the Transfer Amount, and (b) the TVS Group shall, subject to prior mutual written agreement between CDH and TVS, transfer, and CDH shall obtain, in one or more transactions the entire equity shareholding of the TVS Group in the Company at the Transfer Amount. 8. Upon acquisition of more than 54.17% of the issued and paid up equity share capital of the Company by CDH and consequent management control of the Company by CDH, the Board shall be reconstituted by CDH. 9. SCL will enter into an agreement with the Company for use of the brand name “Sundaram” and “TVS” by it for such period and on such terms and conditions, as may be mutually agreed between SCL and the Company. VII. STATEMENT OF POSSIBLE TAX BENEFITS: Based on the understanding of current laws applicable, the following tax benefits shall be available to the Company and the Equity Shareholders / prospective Equity Shareholders under the current direct tax laws. A. Under the I.T Act, 1961: I. Benefits available to the Company: 1. As per section 10(33) of the IT Act, any income arising from a transfer of a capital asset, being a unit of the Unit Scheme, 1964 referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 (58 of 2002) is not liable to tax where transfer of such asset takes place on or after the 1st Day of April, 2002. 2. As per section 10(34) of the IT Act, any income by way of dividends referred to in section 115-O (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the shares of any Company is exempt from tax. 3. As per section 10(35) of the IT Act, the following income will be exempt in the hands of the Company: a. Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10; or b. Income received in respect of units from the Administrator of the specified undertaking; or c. Income received in respect of units from the specified Company: However, this exemption does not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case may be. For this purpose (i) Page 19 of 95
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