i Draft Letter of Offer - Kilburn (Private and Confidential) For equity ...
i Draft Letter of Offer - Kilburn (Private and Confidential) For equity ...
i Draft Letter of Offer - Kilburn (Private and Confidential) For equity ...
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<strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> - <strong>Kilburn</strong><br />
(<strong>Private</strong> <strong>and</strong> <strong>Confidential</strong>)<br />
<strong>For</strong> <strong>equity</strong> shareholders <strong>of</strong> the Company only<br />
KILBURN ENGINEERING LIMITED<br />
(Incorporated as a public company, limited by shares, under the Companies Act, 1956 on 7 th September 1987 <strong>and</strong><br />
obtained the Certificate for Commencement <strong>of</strong> Business under section 149(3) <strong>of</strong> Companies Act , 1956 from Registrar<br />
<strong>of</strong> Companies, West Bengal, Kolkata on 16 th September, 1987.)<br />
Registered Office : Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001.<br />
Tel: (033) 22435391, 22489434/35.<br />
Fax: (033) 22488114, 22481919<br />
Email-: administrator@wmg.co.in<br />
Head Office <strong>and</strong> Works : Subhash Nagar, Bh<strong>and</strong>up (West), Mumbai - 400 078<br />
Tel.: (022) 2566 3101/ 0210<br />
Fax: (022) 2566 8436<br />
Email: kilburn@bom3.vsnl.net.in<br />
Issue <strong>of</strong> 67,47,900 Equity Shares <strong>of</strong> Rs.10 each for cash at a premium <strong>of</strong> Rs. 15/- per Equity Share<br />
aggregating to Rs. 1686.98 lacs on rights basis to the existing Equity Shareholders <strong>of</strong> <strong>Kilburn</strong> Engineering<br />
Ltd. (the “Company”/KEL”) in the ratio <strong>of</strong> One Equity Share for Every Equity Share (i.e. 1:1) held as on the<br />
record date i.e. [·], 2005.<br />
The face value <strong>of</strong> the Equity Shares is Rs. 10/- per share <strong>and</strong> the Issue Price is 2.5 times the face value<br />
GENERAL RISKS<br />
Investment in <strong>equity</strong> <strong>and</strong> <strong>equity</strong> related securities involve a degree <strong>of</strong> risk <strong>and</strong> investors should not invest any funds<br />
in this issue unless they can afford to take the risk <strong>of</strong> losing their investment. Investors are advised to read the risk<br />
factors carefully before taking an investment decision in this Issue. <strong>For</strong> taking an investment decision, investors<br />
must rely on their own examination <strong>of</strong> the Issuer <strong>and</strong> the Issue including the risks involved. The securities have not<br />
been recommended or approved by the Securities <strong>and</strong> Exchange Board <strong>of</strong> India (SEBI) nor does SEBI guarantee the<br />
accuracy or the adequacy <strong>of</strong> this document.<br />
The attention <strong>of</strong> investors is drawn to the statement <strong>of</strong> Risk Factors appearing on page nos. (___) to (___) <strong>of</strong><br />
this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
ISSUER’S ABSOLUTE RESPONSIBILITY<br />
The Issuer, having made all reasonable inquiries, accepts responsibility for, <strong>and</strong> confirms that this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong><br />
contains all information with regard to the Issuer <strong>and</strong> the Issue, which is material in context <strong>of</strong> the Issue, that the<br />
information contained in this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> is true <strong>and</strong> correct in all material respects <strong>and</strong> is not misleading in any<br />
material respect, that the opinions <strong>and</strong> intentions, expressed herein are honestly held <strong>and</strong> that there are no other<br />
facts, the omission <strong>of</strong> which makes this document as a whole or any <strong>of</strong> such information or the expression <strong>of</strong> any<br />
such opinions or intentions misleading in any material respect.<br />
LISTING<br />
The existing <strong>equity</strong> shares <strong>of</strong> the Company are listed on The Bombay Stock Exchange Ltd. (BSE) (Designated<br />
Stock Exchange) <strong>and</strong> The Calcutta Stock Exchange Association Ltd. (CSE). Applications will be made to the BSE<br />
<strong>and</strong> the CSE for permission to deal in <strong>and</strong> for an <strong>of</strong>ficial quotation in respect <strong>of</strong> the <strong>equity</strong> shares <strong>of</strong> the Company<br />
being <strong>of</strong>fered in terms <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. The Company has received ‘in-principle’ approval from BSE <strong>and</strong><br />
CSE for listing <strong>of</strong> the <strong>equity</strong> shares being <strong>of</strong>fered through this Rights Issue vide their letters dated _____ <strong>and</strong> ____<br />
respectively.<br />
LEAD MANAGER TO THE ISSUE<br />
REGISTRAR TO THE ISSUE<br />
IDBI CAPITAL MARKET SERVICES LIMITED<br />
8 th Floor, Bakhtawar,<br />
Nariman Point,<br />
Mumbai-400021.<br />
Tel: (022)56371212/15 Fax (022) 22885850<br />
e-mail:kilburn@idbicapital.com<br />
SEBI Registration No: INM000010866<br />
AMBI Registration No: AMBI/ 088<br />
ISSUE OPENS ON: (•) 2005<br />
LAST DATE FOR RECEIVING REQUESTS FOR SPLIT FORMS (•) 2005<br />
ISSUE CLOSES ON: (•) 2005<br />
i<br />
INTIME SPECTURM REGISTRY LIMITED<br />
C-13, Pannalal Silk Mills Compound,<br />
LBS Road, Bh<strong>and</strong>up West,<br />
Mumbai – 400 078<br />
Tel.: (022) 2592 3837 Fax: (022) 2567 2693<br />
e-mail: isrl@vsnl.com<br />
SEBI Regn. No.: INR 00003761
TABLE OF CONTENTS<br />
Section Description Page nos.<br />
I DEFINITION & ABBREVIATIONS<br />
II<br />
III<br />
IV<br />
V<br />
VI<br />
VII<br />
VIII<br />
IX<br />
X<br />
XI<br />
XII<br />
Conventioanl /General Terms<br />
<strong>Offer</strong> Related Terms<br />
Company/ industry Related Terms<br />
Abbreviations<br />
<strong>For</strong>ward Look Statements<br />
RISK FACTORS<br />
INTRODUCTION<br />
Industry<br />
Company Overview<br />
Competition<br />
Selected Financial Information<br />
General Information<br />
Company<br />
Board <strong>of</strong> Directors<br />
Issue Management Team<br />
Capital Structure<br />
Particulars to the Issue<br />
Objects <strong>of</strong> the Issue<br />
Schedule <strong>of</strong> Implementation<br />
Interim use <strong>of</strong> Funds<br />
Basic Terms <strong>of</strong> Issue<br />
Basis <strong>of</strong> Issue Price<br />
Statement <strong>of</strong> Tax Benefits<br />
ABOUT THE ISSUER COMPANY<br />
Industry Overview<br />
Business Overview<br />
Details <strong>of</strong> Business <strong>of</strong> the Company<br />
Key Industry Regulations<br />
HISTORY & CORPORATE STRUCTURE OF THE COMPANY<br />
MANAGEMENT<br />
Board <strong>of</strong> Directors & related details<br />
Compliance with Corporate Governance<br />
Management Organisation Structure<br />
Key Management Personnel<br />
PROMOTERS / PRINCIPAL SHAREHOLDERS<br />
FINANCIAL STATEMENT<br />
Financial information<br />
Financial information <strong>of</strong> Group Companies<br />
Management Discussion & Analysis <strong>of</strong> Financial condition <strong>and</strong> Results <strong>of</strong><br />
Operations as Reflected in Financial Statement<br />
LEGAL & OTHER INFORMATION<br />
Outst<strong>and</strong>ing litigations & Material Developments<br />
Government Approvals/ Licensing Arrangements<br />
ii
XIII<br />
XIV<br />
XV<br />
XVI<br />
OTHER REGULATORY & STATUTORY DISCLOSURES<br />
OFFERING INFORMATION<br />
Terms <strong>of</strong> Issue<br />
Issue Procedure<br />
General Instructions<br />
DESCRIPTION OF EQUITY SHARES & TERMS OF THE<br />
ARTICLES OF ASSOCIATION<br />
OTHER INFORMATION<br />
Material Contracts<br />
Declaration<br />
iii
CONVENTIONAL/ GENERAL TERMS<br />
I. DEFINITIONS & ABBREVIATIONS<br />
Act : The Companies Act, 1956 as Amended<br />
The Issued, Subscribed <strong>and</strong> Paid Up Equity Share Capital <strong>of</strong><br />
Equity Shares<br />
: the Company <strong>and</strong> the additional <strong>equity</strong> share <strong>of</strong> the Company<br />
<strong>of</strong>fered pursuant to The Rights Issue<br />
Means a holder/beneficial owner <strong>of</strong> <strong>equity</strong> shares <strong>of</strong> the<br />
Equity Shareholders<br />
: <strong>Kilburn</strong> Engineering Limited as on the record date<br />
i.e.___________.<br />
A depository registered with SEBI under the SEBI<br />
Depository<br />
: (Depository <strong>and</strong> Participant) Regulations, 1996, as amended<br />
from time to time.<br />
Guidelines / SEBI<br />
Guidelines :<br />
SEBI (Disclosure <strong>and</strong> Investor Protection) Guidelines, 2000<br />
<strong>and</strong> subsequent amendments thereto<br />
ISIN<br />
International securities identification number allotted by the<br />
:<br />
depository<br />
Sole Lead Manager/IDBI Capital : IDBI Capital Market Services Limited<br />
Registrars / Registrars To The<br />
Issue/ Registrar And Share Transfer :<br />
Intime Spectrum Registry Ltd.<br />
Agent / R&T Agents<br />
Rights Issue : Present issue <strong>of</strong> <strong>equity</strong> shares <strong>of</strong> Rs. 10 each<br />
UIN<br />
Unique identification number<br />
OFFER RELATED TERMS<br />
CAF : Composite Application <strong>For</strong>m<br />
Bankers To The Issue : To be Appointed<br />
LOF / <strong>Letter</strong> Of <strong>Offer</strong><br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>of</strong> the Company for the rights issue <strong>of</strong><br />
:<br />
67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs. 10 each<br />
Record Date : __________, 2005<br />
COMPANY/INDUSTRY RELATED TERMS<br />
Articles or AOA : Articles <strong>of</strong> Association <strong>of</strong> the Company<br />
AIA : Authorized Inspeciton Agency<br />
ASME : The American Society <strong>of</strong> Mechanical Engineers<br />
Board :<br />
The Board <strong>of</strong> Directors <strong>of</strong> the Company or The Committee<br />
uthorized to act on its behalf<br />
BPVC : Boiler <strong>and</strong> Pressure Vessel Code<br />
EOT Crane : Electric Overhead Travelling Crane<br />
ERP : Enterprise Resource Planning<br />
Company/Issuer/KEL : <strong>Kilburn</strong> Engineering Limited<br />
MRP<br />
Material Resource Planning<br />
Memor<strong>and</strong>um Or MOA : Memor<strong>and</strong>um Of Association<br />
MSME : Master <strong>of</strong> Science in Mechanical Engineering<br />
RVA : Raad Voor Accreditatie, a Dutch Council for Accreditation<br />
VFBD : Vibro Fluid Bed Dryer<br />
ABBREVIATIONS<br />
Act : The Companies Act, 1956 And Amendments Thereto<br />
ACA : Associates <strong>of</strong> Chatered Accountant<br />
AMIE : Associate member <strong>of</strong> the Institute <strong>of</strong> Engineering<br />
AY : Assessment Year<br />
AGM : Annual General Meeting<br />
AS :<br />
Accounting St<strong>and</strong>ard As Issued By The Institute Of Chartered<br />
Accountants Of India<br />
BCCI : Bengal Chamber <strong>of</strong> Commerce & Industry<br />
BIFR : Board for Industrial <strong>and</strong> Financial Reconstruction<br />
iv
BSE/Designated Stock Exchange : The Bombay Stock Exchange Ltd.<br />
CAF : Comosite Application <strong>For</strong>m<br />
CDSL<br />
Central Depository Services (India) Limited<br />
CII : Confederation <strong>of</strong> Indian Industry<br />
CSE : The Calcutta Stock Exchange Association Limited<br />
DEMAT : Dematerialized (Electronic/Depository as the context may be)<br />
DBM : Diploma in Business Management<br />
DGFT : Directorate General <strong>of</strong> <strong>For</strong>eign Trade<br />
DP : Depository Participant<br />
DME : Diploma in Mechanical Engineering<br />
EBIDTA : Earnings Before Interest Depreciation <strong>and</strong> Tax<br />
EGM : Extra-Ordinary General Meeting<br />
ERO : Eastern Regional Office<br />
EPS : Earnings Per Share<br />
FCNR : <strong>For</strong>eign Currency Non Resident<br />
FDI : <strong>For</strong>eign Direct Investment<br />
FEMA :<br />
<strong>For</strong>eign Exchange Management Act 1999 <strong>and</strong> the subsequent<br />
amendments thereto<br />
FERA : <strong>For</strong>eign Exchange Regulation Act, 1973<br />
FICCI : Federation <strong>of</strong> Indian Chambers <strong>of</strong> Commerce & Induatry<br />
FII :<br />
<strong>For</strong>eign Institutional Investor As Defined Under Sebi<br />
(<strong>For</strong>eign Institutional Investors) Regulations, 1995 Registered<br />
With Sebi And As Defined Under Fem (Transfer Or Issue Of<br />
Security By A Person Resident Outside India) Regulations,<br />
2000 And Under Other Applicable Laws In India<br />
FIPB : <strong>For</strong>eign Investment Promotion Board<br />
FY : Financial Year<br />
GBIFR : Gujarat Board Of Industrial And Financial Reconstruction<br />
GOI / Government : Government Of India<br />
GIC : General Insurance Company Ltd.<br />
GoG : Government <strong>of</strong> Gujarat<br />
HUF : Hindu Undivided Family<br />
ICC : Indian Chamber <strong>of</strong> Commerce Calcutta<br />
IT : Income-Tax Act 1961<br />
Lead Manager To The Issue<br />
IDBI Capital Market Services Ltd.<br />
LoF : <strong>Letter</strong> Of <strong>Offer</strong><br />
MIS<br />
Management Information System<br />
MPCB : Maharashtra Pollution Control Board<br />
NIC : National Insurance Company Limited<br />
NR : Non Resident<br />
NRE ACCOUNT : Non Resident External Account<br />
NRI : Non Resident Indian<br />
NRO ACCOUNT : Non Resident Ordinary Account<br />
NSDL : National Securities Depository Limited<br />
NSE : The National Stock Exchange Of India Limited<br />
OIC : Oriental Insurance Company Ltd.<br />
OCB : Overseas Corporate Bodies<br />
PAN/GIR No. :<br />
Income Tax Permanent Account Number/General Index<br />
Reference Number<br />
PDIDT : Pr<strong>of</strong>it before Depreciation on Income<br />
QAC : Quality Assurance & Control<br />
RBI : Reserve Bank Of India<br />
SBI : State Bank Of India<br />
SEBI : Securities And Exchange Board Of India<br />
SEBI (SAST) Regulations, 1997<br />
:<br />
SEBI (Substantial Acquisition <strong>of</strong> Shares <strong>and</strong> Takeovers)<br />
Regulations, 1997 And subsequent amendments thereto<br />
Stock Exchanges : BSE And CSE Referred To Collectively<br />
UTI : Unit Trust Of India<br />
In this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, all references to “Rs.” or “INR” refer to Rupees, the lawful currency <strong>of</strong> India.<br />
References to the singular also refer to the plural <strong>and</strong> one gender also refers to any other gender wherever<br />
applicable.<br />
v
FORWARD-LOOKING STATEMENTS<br />
Statements included in this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> which contain words or phrases such as “will”, “aim”, “will<br />
likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”,<br />
“contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” <strong>and</strong> similar<br />
expressions or variations <strong>of</strong> such expressions, that are “forward-looking statements”. Actual results may<br />
differ materially from those suggested by the forward looking statements due to risks or uncertainties<br />
associated with the Company’s expectations with respect to, but not limited to, the Company’s ability to<br />
successfully implement its strategy, its growth <strong>and</strong> expansion, technological changes, its exposure to<br />
market risks, general economic <strong>and</strong> political conditions in India which have an impact on its business<br />
activities or investments, the monetary <strong>and</strong> interest policies <strong>of</strong> India, inflation, deflation, unanticipated<br />
turbulence in interest rates, foreign exchange rates, <strong>equity</strong> prices or other rates or prices, the<br />
performance <strong>of</strong> the financial markets in India <strong>and</strong> globally, changes in domestic <strong>and</strong> foreign laws,<br />
regulations <strong>and</strong> taxes <strong>and</strong> changes in competition in the industry.<br />
<strong>For</strong> further discussion <strong>of</strong> factors that could cause the Company’s actual results to differ, see the section<br />
entitled “Risk Factors” beginning on page no. ( ) <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. By their nature, certain market<br />
risk disclosures are only estimates <strong>and</strong> could be materially different from what actually occurs in the<br />
future. As a result, actual future gains or losses could materially differ from those that have been<br />
estimated. In accordance with SEBI requirements, the Company will ensure that investors are informed<br />
<strong>of</strong> material developments until such time as the grant <strong>of</strong> listing <strong>and</strong> trading permission by the Stock<br />
Exchanges for the <strong>equity</strong> shares being issued.<br />
Use <strong>of</strong> Market Data<br />
Unless stated otherwise, macroeconomic <strong>and</strong> industry data used throughout this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> has been<br />
obtained from publications prepared by Government sources, industry sources <strong>and</strong> data generally<br />
available in the public domain. Such publications generally state that the information contained therein<br />
has been obtained from sources believed to be reliable but that their accuracy <strong>and</strong> completeness are not<br />
guaranteed <strong>and</strong> their reliability cannot be assured. Although we believe that industry data used in this<br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> is reliable, it has not been independently verified.<br />
vi
II. RISK FACTORS<br />
(The <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> also includes statistical data regarding the engineering industry. This data has been<br />
obtained from industry publications, reports <strong>and</strong> other sources that the Company <strong>and</strong> the Lead Manager<br />
believe to be reliable. Neither the Company nor the Lead Manager has independently verified such data.)<br />
A. INTERNAL RISK FACTORS<br />
Risks Related To The Company<br />
1. Pr<strong>of</strong>itability <strong>of</strong> the Company has been negative in the past.<br />
The Company undertook an expansion project in the year 1995 for setting up additional facilities in<br />
Baroda. Thereafter, in the year 1999 the Company witnessed a slide in sales coupled with an increase in<br />
input cost due to the following reasons:<br />
‣ Overall recessionary trend in the economy (more particularly the Capital Goods Industry) the<br />
Company witnessed a decline in sales.<br />
‣ An increase in the cost <strong>of</strong> salaries <strong>and</strong> wages, other manufacturing expenses <strong>and</strong> administrative<br />
<strong>and</strong> selling expenses (consequent to setting up <strong>of</strong> the new plant at Baroda) the Company had to<br />
bear an increase in input costs.<br />
With the increase in input costs on one h<strong>and</strong> <strong>and</strong> decrease in sales on the other, the margins, both at gross<br />
<strong>and</strong> operating levels, eroded. As a result <strong>of</strong> this, the Company has reported a loss from the FY 1998<br />
onwards upto the FY2004 ( as per the restated financials disclosed on page no. _____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>). Losses incurred by the Company during the past five years are as given below:<br />
(Rs. in Lacs)<br />
<strong>For</strong> the Financial<br />
Year ending 30 th<br />
September,<br />
2001 2002 2003 2004 2005<br />
(twelve months<br />
period)<br />
Loss( as restated) 645.75 67.35 379.39 53.33 -<br />
2. KEL was declared sick u/s 3(1)(o) <strong>of</strong> the Sick Industrial Companies (Special Provisions) Act,<br />
1985 in November 2000. The Company has reported a pr<strong>of</strong>it during the FY 2004 <strong>and</strong> as per the<br />
audited financials for the twelve months period ended on September 30, 2005. However, the<br />
networth <strong>of</strong> the Company as on 30 th September, 2005, as per the audited figures, is negative.<br />
KEL was declared as a sick industrial undertaking by the Board for Industrial <strong>and</strong> Financial<br />
Reconstruction vide its order dated November 10, 2000 <strong>and</strong> Industrial Development Bank <strong>of</strong> India<br />
has been appointed as the Operating Agency. The rehabilitation scheme, prepared by the Operating<br />
Agency <strong>and</strong> approved by BIFR, is presently being implemented. The Company has witnessed a<br />
turnaround in turnover <strong>and</strong> pr<strong>of</strong>its during the twelve months period ending, 30 th September, 2005,<br />
owing to the Rehabilitation Scheme <strong>and</strong> on the back <strong>of</strong> the overall growth in the economy,<br />
specifically in the engineering segment. However, the networth as at 30 th September, 2005 is Rs.<br />
(2197.28) Lacs.<br />
3. The company has delayed the redemption <strong>of</strong> its debentures during the year 1998 upto 2004.<br />
KEL has issued the following debentures:<br />
• 1,15,000, 14% non-convertible debentures <strong>of</strong> Rs. 100/- each aggregating to Rs. 115 Lacs. The same<br />
were redeemable in five equal annual instalments commencing on 28 th November, 1995.<br />
• 2,00,000, 20.50% non-convertible debentures <strong>of</strong> Rs. 100- each aggregating to Rs. 200 Lacs. The<br />
same were redeemable (after being rolled over) at par on 8 th August, 1999.<br />
• 5,00,000, 18.50% non-convertible debentures <strong>of</strong> Rs. 100/- each aggregating to Rs. 500 Lacs. The<br />
same were redeemable at par in three equal annual installments commencing on 21 st November,<br />
1999.<br />
The Company has failed to redeem the above debentures as scheduled from the year 1998 onwards. The<br />
redemption <strong>of</strong> the said debentures has been rescheduled as a part <strong>of</strong> the Rehabilitation Scheme approved<br />
vii
y BIFR <strong>and</strong> the Company is in the process <strong>of</strong> redeeming the same. The Company, as per the<br />
Rehabilitation Scheme approved by BIFR, shall redeem the rolled over debentures by September 2007.<br />
4. The Company had not redeemed its debentures as scheduled from the year 1998 upto the year<br />
2004. In view <strong>of</strong> this, directors <strong>of</strong> KEL were disqualified from being appointed as directors in<br />
terms <strong>of</strong> Section 274(1)(g) <strong>of</strong> the Companies Act, 1956 during the period from the year 1999<br />
upto the year 2004. Further as per Section 274(1)(g) <strong>of</strong> the Companies Rules, 2003 directors <strong>of</strong><br />
KEL were disqualified from reappointment in the year 2004. During this year one <strong>of</strong> the<br />
directors has been reappointed in the Company. The said director had subsequently resigned<br />
w.e.f 16 th July, 2004. However, considering the rescheduled redemption <strong>of</strong> debentures as per<br />
the Rehabilitation Scheme approved by BIFR, none <strong>of</strong> the directors is disqualified as on date.<br />
5. The company has not been regular in payment <strong>of</strong> statutory dues in the past.<br />
The Company has not been regular in depositing certain statutory dues pertaining to Provident Fund,<br />
Employee State Insurance, Income Tax, Sales Tax <strong>and</strong> Service Tax dues in the past till the sanction <strong>of</strong> the<br />
BIFR Rehabilitation Scheme.<br />
6. The company has defaulted in payment <strong>of</strong> interest <strong>and</strong> principal on the term loans <strong>and</strong> other<br />
secured loans availed from banks <strong>and</strong> financial institutions in the past.<br />
KEL had availed <strong>of</strong> Term Loans <strong>and</strong> other secured loans from Banks <strong>and</strong> Financial Institutions from time<br />
to time aggregating to Rs. 804.78 Lacs as on 30 th September, 2005. The Company had defaulted in<br />
repayment <strong>of</strong> principal <strong>and</strong> interest thereon on the said loans from the year 1999 upto year 2004. The<br />
Company approached the Board for Industrial <strong>and</strong> Financial Reconstruction in the year 2000 <strong>and</strong> the<br />
Rehabilitation Scheme was approved in May, 2004. The Scheme is presently under implementation. The<br />
dues pending as on date are provided under the head “Status <strong>of</strong> Sanction” on page no. _____ o f this<br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
7. Legal/Regulatory Risk<br />
Litigations, Disputes/ Defaults pending against the Company<br />
There are 36 litigations/ disputes pending against the Company as detailed below:<br />
Particulars <strong>of</strong> the cases No. <strong>of</strong> cases Amount involved<br />
where quantifiable<br />
(Rs. Lacs)<br />
Civil Proceedings 8 23.98<br />
(with interest thereon)<br />
Labour Related Cases 4 Not ascertained<br />
Labour matters pertaining to Baroda 11 Not ascertained<br />
Criminal 8 58.37<br />
Income /SalesTax 4 260.62<br />
Central Excise Act/Customs 1 13.12<br />
<strong>For</strong> further information please refer para under “ Outst<strong>and</strong>ing Litigations <strong>and</strong> Material Developments” on<br />
page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
Legal Notices received by the Company<br />
The Company has received 34 Legal Notices amounting to Rs. 139.60 Lacs from various suppliers.<br />
However, the legal notices have been suitably replied by the Company <strong>and</strong> there are no further<br />
developments. The said amount has not been included as Contingent Liability in the annual accounts <strong>of</strong><br />
the Company.<br />
8. License under Shops <strong>and</strong> Establishment Act for Kolkata <strong>of</strong>fice<br />
The Company has not obtained a license under the Shops <strong>and</strong> Establishment Act in respect <strong>of</strong> the<br />
registered <strong>of</strong>fice <strong>of</strong> the Company located at Kolkata.<br />
viii
9. Non-Renewal <strong>of</strong> Pollution Control Clearance<br />
The Company is engaged in the business <strong>of</strong> manufacturing capital goods. As per the management, the<br />
operations do not result in release <strong>of</strong> effluents either into water or air. The Company had received<br />
Consent No. BO/Mum-30/PC-104, dated 24 th February, 1997, from Maharashtra Pollution Control Board<br />
(MPCB) for carrying on its business activities <strong>and</strong> the same was valid up 31/07/1998. Owing to the<br />
losses incurred, the Company had closed down its business operations at the Bh<strong>and</strong>up factory from<br />
15/10/1999 till 31/12/2001. During this period <strong>and</strong> subsequently upto the year 2004, the Company had<br />
failed to renew the consent received from the MPCB. However, the Company has made an application to<br />
MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28th July, 2005, for renewal <strong>of</strong> the consent w.e.f.<br />
01/08/1998 upto 31/07/2007. Approval <strong>of</strong> the same is still awaited.<br />
10. There are certain contingent liabilities that the Company has not provided for.<br />
As on 30 th September, 2005 the Company has some contingent liabilities detailed below, determination<br />
<strong>of</strong> which against the Company may adversely affect the financial position:<br />
( Rs. In Lacs)<br />
Particulars<br />
As on 30 th September,<br />
2005<br />
a) Dem<strong>and</strong> raised by ESIC 0.80<br />
b) Liability in respect <strong>of</strong> non submission <strong>of</strong> C <strong>For</strong>m pertaining to<br />
138.80<br />
Baroda Works<br />
c) Guarantees issued by Banks 681.07<br />
d) Claims raised by contractors/others 86.38<br />
e) Dem<strong>and</strong> notice from DGFT for non-fulfilling <strong>of</strong> export obligations 137.00<br />
f) Liquidated damages for delay in execution <strong>of</strong> contracts 18.50<br />
11. Shortfall in Promise versus Performance<br />
Significant shortfall in the performance vis-a-vis the promise made in the <strong>of</strong>fer document issued by the<br />
company in respect <strong>of</strong> the Rights Issue <strong>of</strong> <strong>equity</strong> shares in the year 1993 is as detailed below:<br />
Particulars <strong>of</strong> the Issue<br />
% Shortfall<br />
1993 1994 1995 1996<br />
Income from Operations 10 16.95 42.43 46.35<br />
Pr<strong>of</strong>it Before Tax 9.80 -- -- 69.59<br />
Pr<strong>of</strong>it After Tax 27.27 -- -- 54.12<br />
Networth 0.63 0.17 -- 10.73<br />
NAV 0.64 -- -- 9.71<br />
EPS 27.36 -- -- 53.68<br />
(<strong>For</strong> further details please refer to page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.)<br />
12. The <strong>equity</strong> shares <strong>of</strong> the Company are included in the ‘Z’ category by BSE.<br />
The <strong>equity</strong> shares <strong>of</strong> the company are categorized under the ‘Z’ group w.e.f. 31 st December, 2001 based<br />
on the Securities <strong>and</strong> Exchange Board <strong>of</strong> India’s directive to place all companies that had not signed up<br />
with both depositories as on 30 th September, 2001 in the trade-to-trade segment. The Company has<br />
entered into an agreement for dematerialization <strong>of</strong> its <strong>equity</strong> shares with both the depositories has taken<br />
steps for recategorisation <strong>of</strong> the <strong>equity</strong> shares by removal from the ‘Z’ Group.<br />
13. Compensation <strong>of</strong> workers at Baroda Unit<br />
KEL’s unit at Baroda was ceased operations <strong>and</strong> was closed w.e.f. November, 2001. The erstwhile<br />
workers <strong>of</strong> the Baroda Unit <strong>of</strong> the Company have claimed for wages for the period <strong>of</strong> closure <strong>of</strong> the<br />
factory (viz. from November 2001 to January 2003) through the Industrial Tribunal, Baroda. Though, the<br />
Company has made a provision <strong>of</strong> Rs. 41.24 Lacs, the balance Rs. 109.04 Lacs has not been provided for<br />
in the books, since the same is not been recognized as a contingent liability.<br />
ix
14. The Company has not entered into a legal agreement in respect <strong>of</strong> the premises where the<br />
registered <strong>of</strong>fice <strong>of</strong> the Company is situated.<br />
The registered <strong>of</strong>fice <strong>of</strong> the Company is located at Kolkata. The premises are owned by Williamson<br />
Magor & Co. Ltd., promoter <strong>of</strong> KEL. The Company has not entered into any agreement in respect <strong>of</strong> the<br />
said premises. The Company has not been paying any rent for the said premises.<br />
15. Any increase in labour costs <strong>and</strong> work stoppages may adversely impact the performance <strong>of</strong> the<br />
Company.<br />
The Company operates in the engineering segment which is highly labour intensive. Though the workers<br />
<strong>of</strong> the Company are not affiliated to any external labour union, any labour unrest may adversely impact<br />
the performance <strong>of</strong> the Company.<br />
Employee Cost forms <strong>and</strong> labour charges form 15.81 % <strong>of</strong> the total direct expenses <strong>of</strong> the Company for<br />
the twelve months period ended 30 th September, 2005. Thus any increase in the cost <strong>of</strong> labour will<br />
significantly increase the cost <strong>of</strong> production <strong>and</strong> adversely impact the pr<strong>of</strong>it margins <strong>of</strong> the Company.<br />
Risks Related To The Business<br />
16. The engineering industry is cyclical..<br />
Heavy engineering industry is an intermediate industry <strong>and</strong> its dem<strong>and</strong> depends on a variety <strong>of</strong> end-user<br />
industries such as power, mining, oil <strong>and</strong> gas, consumer goods, automotive <strong>and</strong> the general<br />
manufacturing sector. The beginning <strong>of</strong> a widespread economic slowdown leads to cancellation <strong>of</strong><br />
investments on capital goods across the industries. Thus, a slowdown adversely impacts the heavy<br />
engineering industry much before it affects other sectors. On the other h<strong>and</strong>, the heavy engineering<br />
industry is among the last to benefit from an upturn since capacity creation occurs after end-user<br />
industries fully utilize their own capacities <strong>and</strong> feel positive about the long-term dem<strong>and</strong> scenario.<br />
17. High Cost <strong>of</strong> Raw Material<br />
The basic raw material required by the Company is carbon steel <strong>and</strong> stainless steel. The revenues <strong>of</strong> the<br />
Company are subject to the fluctuation in the prices <strong>of</strong> metals such as steel <strong>and</strong> stainless steel. With the firming<br />
up <strong>of</strong> the steel prices witnessed since the last two years, the cost <strong>of</strong> production has also increased. During the<br />
twelve months period ended on 30 th September, 2005 cost <strong>of</strong> raw material was 63.95 % <strong>of</strong> the total expenditure<br />
incurred by the Company.<br />
Further, the Company produces capital goods that cater to the specific requirements <strong>of</strong> client. The raw material<br />
required for manufacturing such products have to match the specifications <strong>and</strong> may not be readily available in<br />
the market. Any delay in procurement <strong>of</strong> raw material impacts the cost <strong>of</strong> production <strong>and</strong> the pr<strong>of</strong>itability <strong>of</strong> the<br />
Company.<br />
Risks Related To The Proposed Capital Expenditure<br />
18. The Company has allocated an amount <strong>of</strong> Rs. 145 Lacs out <strong>of</strong> the funds raised through this rights<br />
issue towards installation <strong>of</strong> a temporary shed <strong>and</strong> erection <strong>of</strong> EOT Crane. The Company has<br />
received an approval from the Bombay Municipal Corporation (‘BMC’) vide their letter no.<br />
CE/998/9PES/AS dated July 07, 2005 for construction <strong>of</strong> the shed <strong>and</strong> the same is for a period upto<br />
six months from the date <strong>of</strong> the approval i.e. upto January 07, 2005. Subsequent to the expiry <strong>of</strong> the<br />
approval, the shed, if already erected, could be re quired to be demolished if so instructed by BMC.<br />
However, as per the Management, the said approval can be further extended to a maximum <strong>of</strong> two<br />
years.<br />
19. The Company has allocated an amount <strong>of</strong> Rs. 50 Lacs out <strong>of</strong> the funds raised through this rights<br />
issue towards implementation <strong>of</strong> ERP package. The management has estimated this amount on the<br />
basis <strong>of</strong> a quotation dated 6 th July, 2004 received from Godrej Infotech Limited <strong>and</strong> proposes to get<br />
it revised in due course.<br />
20. The Company has allocated an amount <strong>of</strong> Rs. 116 Lacs out <strong>of</strong> the funds raised through this rights<br />
issue towards procurement <strong>of</strong> certain capital goods. The Company has not received any quotations<br />
for the same <strong>and</strong> has not placed any orders for the capital goods mentioned on page no. ____ <strong>of</strong> this<br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
x
Risks Related To Other Ventures Of The Promoters<br />
21. Losses incurred by other ventures <strong>of</strong> the promoters are as follows:<br />
(Rs. In Lacs)<br />
Particulars 2003 2004 2005<br />
Metals Center Limited 376.15 470.36 873.38<br />
Eveready Industries Limited -- 38.27 --<br />
McLeod Russel India Limited 0.06 198.07 1974.78<br />
Williamson Financial Services 2208.63 186.64 145.78<br />
Limited<br />
The St<strong>and</strong>ard Batteries Limited 20.09 - -<br />
Dufflaghur Investments Limited 528.63 338.68 14.61<br />
22. Litigations <strong>and</strong> Disputes against Group Companies<br />
The details <strong>of</strong> litigations <strong>and</strong> disputes pending against the companies belonging to the group are<br />
detailed under the head “ Litigations <strong>and</strong> Disputes” on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
23. Some <strong>of</strong> the listed Group Companies have not been regular in complying with the provisions <strong>of</strong><br />
the listing agreement entered into by them with the stock exchanges.<br />
Equity shares <strong>of</strong> shree Durga Agencies Limited <strong>and</strong> Nirvan Commercial Co. Ltd., tow <strong>of</strong> the<br />
companies belonging to the group, are listed on the CSE. The companies have applied for voluntary<br />
delisting <strong>of</strong> their <strong>equity</strong> shares from the CSE in the year 2004 pursuant to a special resolution passed<br />
by the shareholders to this effect. These companies have not been delisted from the CSE as on date.<br />
However, both the companies have not been complying with the requirement <strong>of</strong> disclosures to be<br />
made by listed companies in terms <strong>of</strong> the listing agreement <strong>and</strong> have not been paying the listing fee.<br />
24. Metals Center Limited, McLeod Russell Limited <strong>and</strong> The St<strong>and</strong>ard Batteries Limited, companies<br />
belonging to the group, have accumulated losses exceeding their <strong>equity</strong> capital.<br />
25. Infrequently traded scrips in the group.<br />
St<strong>and</strong>ard Batteries Ltd., one <strong>of</strong> the companies belonging to the group, had reduced its <strong>equity</strong> share capital<br />
from Rs 10,34,22,500/- divided into 1,03,42,250 <strong>equity</strong> shares <strong>of</strong> Rs 10/- each to Rs 51,71,125/- divided<br />
into 1,03,42,250 <strong>equity</strong> shares <strong>of</strong> Rs 0.50 each by the canceling Rs 9.50 <strong>of</strong> every share <strong>of</strong> Rs 10/- each<br />
w.e.f. March 14, 2002 (Record Date). The Company is yet to receive approval for listing <strong>of</strong> the <strong>equity</strong><br />
shares <strong>of</strong> Rs. 0.50 from the stock exchanges where they were listed. As a result <strong>of</strong> this <strong>equity</strong> shares <strong>of</strong><br />
the company have been suspended from trading on the BSE since 11 th February, 2002.<br />
B. EXTERNAL RISK FACTOTRS<br />
1. Risk <strong>of</strong> Competition<br />
The Company faces competition from smaller players in the business who <strong>of</strong>fers competitive prices.<br />
However, none <strong>of</strong> the competitors have the range <strong>of</strong> products that KEL manufactures. In the overseas<br />
market, the Company faces competition from Eastern Europe <strong>and</strong> China. These countries are improving<br />
their technology <strong>and</strong> manufacturing capabilities <strong>and</strong> are likely to pose a threat to equipment<br />
manufacturers in India.<br />
2. Sensitivity to the Economy <strong>and</strong> Extraneous Factors<br />
The industrial production has been on an upswing since the year 2004 with the capital goods segment<br />
recording a growth <strong>of</strong> 18.9% in April-May 2005-06 against 11.6% in the corresponding period <strong>of</strong><br />
previous year. The growth in the revenues <strong>of</strong> KEL has reflected this upward trend. However, this<br />
buoyant phase in the industry depends on the performance <strong>of</strong> the other segments <strong>of</strong> the industry, more<br />
particularly the petrochemical industry <strong>and</strong> the FMCG segment where the product range <strong>of</strong> the company<br />
is in dem<strong>and</strong>. These on the other h<strong>and</strong> depend on the overall performance <strong>of</strong> the economy <strong>and</strong> the growth<br />
figures achieved by India <strong>and</strong> the other important markets in the world.<br />
xi
3. KEL’s performance is linked to the stability <strong>of</strong> policies <strong>and</strong> the political situation in India<br />
Policies pursued by the Government <strong>of</strong> India, including relaxing restrictions on the private sector, have<br />
been conducive to liberalization <strong>of</strong> the economy <strong>and</strong> overall growth in all sectors. Any slowdown in the<br />
liberalization process or political instability may slowdown the growth in the economy, which may have<br />
an adverse effect on the capital market <strong>and</strong> investor confidence.<br />
4. The Company is subject to the risk <strong>of</strong> foreign exchange fluctuation<br />
During the twelve months period ended on 30 th September, 2005 the Company has earned 38.97 % <strong>of</strong> its<br />
revenues in foreign currency. Thus any fluctuation in the foreign exchange rates is likely to impact the<br />
pr<strong>of</strong>itability <strong>of</strong> the Company.<br />
5. The performance <strong>of</strong> the Company is linked to the economic growth <strong>of</strong> the client economies in the<br />
world like USA, China, France, Africa, etc.<br />
The Company supplies capital goods to other countries in the world like USA, China, France, Africa, etc. A<br />
robust growth in these economies ensures a healthy market for the Company’s products. Thus the pr<strong>of</strong>itability<br />
<strong>of</strong> the Company depends on the political stability <strong>and</strong> economic growth <strong>of</strong> these countries.<br />
NOTES TO RISK FACTORS<br />
1.<br />
Adjusted Pre-issue Networth (as on 30/09/2005)<br />
Adjusted Pre-issue Net Asset Value (as on<br />
30/09/2005)<br />
Issue Size<br />
Negative<br />
Negative<br />
Cost per share to the promoter Rs. 24.19<br />
Rights Issue <strong>of</strong> 67,47,900 Equity Shares <strong>of</strong> Rs.<br />
10/- each for cash at a premium <strong>of</strong> Rs. 15/- per<br />
Equity Share aggregating Rs. 1686.98 lacs.<br />
2. There is no interest <strong>of</strong> promoters/directors/key management personnel other than reimbursement <strong>of</strong><br />
expenses incurred or normal remuneration or benefits.<br />
3. The transaction since past 6 months on the stock exchange in the shares <strong>of</strong> the Company by the<br />
Promoters/Directors <strong>of</strong> the Company are as follows:<br />
S.No. Name <strong>of</strong> the<br />
shareholder<br />
1. Shree Durga<br />
Agencies<br />
2. United Machine<br />
Co. Ltd.<br />
No.<br />
shares<br />
bought<br />
<strong>of</strong><br />
No. <strong>of</strong><br />
shares sold<br />
Date <strong>of</strong><br />
transaction<br />
--- 3,43,300 20-27<br />
Sep.’05<br />
3,43,300 --- 20-27<br />
Sep.’05<br />
Price<br />
(in Rs.)<br />
74.2356<br />
---<br />
Nature <strong>of</strong><br />
transaction<br />
Inter-Se<br />
transfer in<br />
promoter<br />
group<br />
4. <strong>For</strong> Related party disclosures under Accounting St<strong>and</strong>ard 18 issued by the Institute <strong>of</strong> Chartered<br />
Accountants <strong>of</strong> India please refer to para under ‘ Related Party Transactions’ on page no. ___ <strong>of</strong> this<br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
5. The lead manager <strong>and</strong> the Company shall update this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong> keep the shareholders/public<br />
informed <strong>of</strong> any material changes till the listing <strong>and</strong> trading commencement.<br />
xii
III. INTRODUCTION<br />
INDUSTRY<br />
The Heavy Engineering Industry comprises capital goods/machinery <strong>and</strong> equipment <strong>and</strong> can be broadly<br />
classified into electrical machinery <strong>and</strong> equipment <strong>and</strong> non-electrical machinery <strong>and</strong> equipment<br />
segments. The electrical machinery comprises power generation, transmission <strong>and</strong> distribution<br />
equipment like motors <strong>and</strong> generators, switchgears <strong>and</strong> transformers. The non-electrical machinery<br />
segment comprises machines <strong>and</strong> equipment used in various industries like material h<strong>and</strong>ling equipment,<br />
boilers, etc. Transport equipment has not been considered as a segment <strong>of</strong> heavy engineering industry in<br />
this report.<br />
STRUCTURE OF THE INDUSTRY<br />
Heavy engineering industry is integrated with various core sectors for its dem<strong>and</strong>. The dem<strong>and</strong> is derived<br />
primarily from capacity creations in sectors like infrastructure <strong>and</strong> general manufacturing including<br />
process industries. The Indian engineering industry, including the transport equipment segment, is<br />
estimated at around Rs. 1.2 trillion. The share <strong>of</strong> heavy engineering is about 80% <strong>of</strong> the value while rest<br />
was contributed by light engineering sector. The enterprise mix <strong>of</strong> the Indian engineering industry<br />
comprises primarily large Indian companies without foreign collaborations, subsidiaries <strong>of</strong> multinational<br />
companies, joint ventures <strong>of</strong> domestic <strong>and</strong> foreign companies <strong>and</strong> medium sized companies maintaining<br />
regional dominance.<br />
Key Issues Facing The Players<br />
Increase in Raw Material Prices<br />
A sharp increase in raw material prices has resulted in a small increase in the pr<strong>of</strong>it margins for the heavy<br />
engineering industry even though revenue has registered much higher growth during the last two years.<br />
Raw materials contribute to almost 50% <strong>of</strong> the operating costs <strong>of</strong> heavy engineering companies <strong>and</strong> a<br />
sharp increase in the input prices like those <strong>of</strong> steel including special steel, aluminium <strong>and</strong> copper have<br />
resulted in lower than expected growth in pr<strong>of</strong>itability.<br />
Deman Supply Position<br />
Heavy engineering sector has witnessed a steady rise in dem<strong>and</strong> from FY2003 onwards. The following<br />
figure illustrates the increase in capital goods production index for the period 2002 to 2004.<br />
Heavy engineering sector has continued with its good performance in 2004-05 also. The growth in the<br />
capital goods production index for the period April 04 to Jan 05 was 12.9% which was significantly<br />
higher than 10.7% registered for the corresponding period <strong>of</strong> the previous year. The index posted a<br />
double-digit growth in each month <strong>of</strong> 2004-05, except for November 2004. Overall growth in the index<br />
was led by the machinery <strong>and</strong> equipment segment, which grew by 20.89% during the period April 04 to<br />
Jan 05 while the growth was 11.83% for the corresponding period <strong>of</strong> the previous year.<br />
OUTLOOK<br />
Heavy engineering industry has been performing well after the recession that it faced in FY2002. The<br />
ROCE has increased up to the level <strong>of</strong> 20% for FY2004. The index <strong>of</strong> production <strong>of</strong> capital goods has<br />
increased by 12.9% during the period April 2004 to January 2005 as compared to 10.66% during the<br />
same months the previous year. The index <strong>of</strong> production <strong>of</strong> machinery <strong>and</strong> equipment has posted a<br />
1
growth <strong>of</strong> 20.89% during April 2004 to January 2005 as compared to 11.83% during the same months<br />
the previous year.<br />
The dem<strong>and</strong> in the engineering sector is expected to be maintained primarily on account <strong>of</strong> the<br />
government’s focus on infrastructure development in the country, which is expected to continue in the<br />
medium term. Stable sales growth has been observed in the heavy engineering industry in light <strong>of</strong> the<br />
existing dem<strong>and</strong>. Net pr<strong>of</strong>it margin <strong>of</strong> heavy engineering industries has improved <strong>and</strong> adverse changes in<br />
the same are not expected in the medium term in light <strong>of</strong> the stable dem<strong>and</strong>. However, operating pr<strong>of</strong>it<br />
have stagnated due to rise in raw material costs <strong>and</strong> reduction in import duties. Any further reduction in<br />
peak import duties in the short to medium term will lead to increased imports <strong>and</strong> higher competition in<br />
the industry. The heavy engineering industry is expected to further improve upon the performance <strong>of</strong><br />
FY2004 in the near to medium term.<br />
India is emerging as a preferred outsourcing destination for design <strong>and</strong> manufacture <strong>of</strong> machinery <strong>and</strong><br />
equipment. India has a large pool <strong>of</strong> skilled labour force <strong>and</strong> the labour costs are amongst the lowest in<br />
the world. Recession in FY2002 forced the heavy engineering companies to restructure their operations<br />
<strong>and</strong> downsize the number <strong>of</strong> employees that increased their efficiency. Development <strong>of</strong> Special<br />
Economic Zones <strong>and</strong> incentives for exports are expected to increase the flow <strong>of</strong> FDI in the sector.<br />
COMPANY OVERVIEW<br />
<strong>Kilburn</strong> Engineering Ltd.(KEL) was incorporated in Kolkatta in the State <strong>of</strong> West Bengal on September<br />
07, 1987. During the year 1989, KEL acquired the erstwhile Industrial Machinery Division <strong>of</strong> Macneill<br />
& Magor group (presently known as Williamson Magor & Co. Ltd.) through a Scheme <strong>of</strong> Arrangement<br />
sanctioned by the Honourable Calcutta High Court.<br />
Manufacturing Activities:<br />
KEL specialises in all types <strong>of</strong> drying systems for Chemical, Petrochemicals, Food, Oil & Gas <strong>and</strong><br />
several other industries. KEL has vast experience in providing solutions for drying <strong>and</strong> processing<br />
several products - be it breakfast cereals, rubber, s<strong>and</strong>, carbon black, tea, salt, sodium cyanide, heavy <strong>and</strong><br />
fine chemicals or ceramic tiles.<br />
The Company’s Its major activities are in the areas <strong>of</strong> design, engineering, manufacturing <strong>and</strong> installation<br />
<strong>of</strong> Solid Drying Systems, Fluid Bed Drying Systems, Heat Transfer <strong>and</strong> Combustion Systems,<br />
Absorption Systems, Oil Field Systems, Material H<strong>and</strong>ling Systems, Air H<strong>and</strong>ling Systems, Fabrication<br />
<strong>of</strong> Equipment, etc.<br />
Competition<br />
KEL manufactures equipment for diverse industries being chemical/ petrochemical <strong>and</strong> food processing.<br />
<strong>Kilburn</strong>’s range <strong>of</strong> products is diverse <strong>and</strong> authentic published data for existing <strong>and</strong> projected growth is<br />
not available. As per the management, the Company is among the leading manufacturers <strong>of</strong> Tea Dryers<br />
worldwide <strong>and</strong> is a significant player for Rotary Dryers in the Carbon Black industry. Domestically the<br />
company is one <strong>of</strong> the major suppliers <strong>of</strong> dryers <strong>of</strong> various kinds. KEL faces competition from smaller<br />
players in the business <strong>and</strong> few <strong>of</strong> the competitors have the wide range <strong>of</strong> products that KEL<br />
manufactures. However these competitors are able to <strong>of</strong>fer better prices. In the overseas market KEL<br />
faces competition from Eastern Europe <strong>and</strong> China.<br />
SELECTED FINANCIAL INFORMATION<br />
Following selected financial data have been prepared in accordance with Indian Accounting St<strong>and</strong>ards, in<br />
conjunction with our financial statements <strong>and</strong> related notes <strong>and</strong> "Management's Discussions <strong>and</strong><br />
Analysis". The audited financial statements have been prepared in Indian rupees <strong>and</strong> have been prepared<br />
in accordance with Indian Accounting St<strong>and</strong>ards for the fiscal years ended 2001,2002, 2003, 2004 <strong>and</strong><br />
twelve months period ending on 30 th September, 2005. The Company has vide its lette dated 12 th<br />
September, 2005 applied to the Registrar<strong>of</strong> Companies, West Bengal seeking permission to :<br />
(a) extend the Financial Year to a period <strong>of</strong> 18 months(from October 01, ’04 to March 31, ’06)<br />
ending on March 31, 2006 <strong>and</strong><br />
2
(b) extend the time for holding the next Annual general Meeting <strong>of</strong> the Company until 23 rd<br />
September, 2006.<br />
3
STATEMENT OF PROFITS & LOSSES AS RESTATED<br />
(Rs.in lacs)<br />
Financial Year ended 30th September Year ended 30 th<br />
September<br />
Particulars 2001 2002 2003 2004 2005<br />
Income<br />
Sales :<br />
Of products manufactured by the<br />
Company 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82<br />
Of products traded in by the Company - - - - -<br />
Total 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82<br />
Other Income 514.06 369.37 118.58 84.52 66.45<br />
Increase / (Decrease) in inventories (95.29) 219.06 (104.22) 193.16 (81.50)<br />
1,638.44 2,175.16 2,063.16 2,751.38 4,425.77<br />
Expenditure<br />
Raw Materials Consumed 606.20 879.83 873.35 1,422.42 2,402.36<br />
Staff Costs 432.76 335.38 210.23 188.82 272.35<br />
Other manufacturing Expenses 143.38 143.71 225.16 359.04 489.81<br />
Administration Expenses 408.43 360.14 312.45 318.35 397.28<br />
Selling & Distribution Expenses 83.67 45.33 44.51 106.07 183.98<br />
Other Expenses 76.25 46.50 - 15.60 10.74<br />
Interest 995.90 1,159.26 1,494.38 241.49 198.76<br />
Depreciation 199.34 161.31 141.93 41.48 26.42<br />
Provision/(Write back) 0f Diminution in<br />
value <strong>of</strong> Investment 24.00 (34.20) (25.50) 142.13 (87.43)<br />
Net Pr<strong>of</strong>it Before Tax <strong>and</strong><br />
extraordinary Items (1,331.49) (956.30) (1,213.35) (84.02) 531.50<br />
Extraordinary/Exceptional/Prior Period<br />
Income/(Expenses) (31.68) (58.59) (103.68) 4,178.05 -<br />
Less: Tax Provision/( Refund) - - (25.77) - 8.79<br />
Pr<strong>of</strong>it/ (Loss) after tax as per audited<br />
statements <strong>of</strong> accounts (1,363.17) (1,014.89) (1,291.26) 4,094.03 522.71<br />
Impact <strong>of</strong> Adjustments on account <strong>of</strong><br />
changes in Accounting Policies <strong>and</strong><br />
Prior Period Items (Refer Note 2 <strong>of</strong><br />
Annexure III)<br />
717.42 947.54 911.87 (4,147.36) -<br />
Restated Pr<strong>of</strong>it & Loss (645.75) (67.35) (379.39) (53.33) 522.71<br />
Balance brought forward (4,095.07) (4,740.82) (4,808.17) (5,187.56) (5,219.22)<br />
Adjustment prior to 1999-2000 - - - - -<br />
Restated Pr<strong>of</strong>it /(Loss) for the year (645.75) (67.35) (379.39) (53.33) 522.71<br />
Less: Transfer from General Reserve/<br />
DRR - - - 21.67 99.21<br />
Balance carried forward (4,740.82) (4,808.17) (5,187.56) (5,219.22) (4,597.30)<br />
4
STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED<br />
As at September' 30<br />
(Rs.in lacs)<br />
2001 2002 2003 2004 2005<br />
A Fixed Assets<br />
Gross Block 3198.76 3185.89 3188.89 677.16 718.05<br />
Less: Depreciation 1273.58 1422.80 1564.73 468.91 495.32<br />
Net Block 1925.18 1763.09 1624.16 208.25 222.73<br />
Capital Work in progress - - - - 0.73<br />
Less: Revaluation Adjustment [Refer<br />
Note 2 (A)(v) <strong>of</strong> Annexure III] - - - - -<br />
Net Block after adjustment <strong>of</strong><br />
Revaluation Reserve<br />
1925.18 1763.09 1246.76 208.25<br />
223.46<br />
B Investments 43.38 77.2 109.6 37.37 124.80<br />
C<br />
Current Assets, Loans &<br />
Advances:<br />
Inventories 256.73 489.79 424.33 509.27 455.26<br />
Sundry Debtors 203.47 197.71 369.08 508.97 607.64<br />
Cash & Bank Balances 175.02 219.6 248.95 192.54 138.09<br />
Loans & Advances 221.85 143.60 157.88 157.24 199.42<br />
Other Current Assets - - - - -<br />
D Liabilities <strong>and</strong> Provisions:<br />
Secured Loans 2706.58 2662.78 2719.24 1159.95 804.78<br />
Unsecured Loans 1060.82 1009.22 1052.39 1283.60 1328.63<br />
Current Liabilities <strong>and</strong> Provisions 1795.11 1797.04 1588.48 1890.07 1812.54<br />
E Networth<br />
F Represented by<br />
1. a. Share Capital 674.79 674.79 674.79 674.79 674.79<br />
b. Advance against Share Capital 825.00 825.00 825.00 825.00 825.00<br />
2. Reserves 1021.11 1021.11 1021.11 999.44 900.23<br />
3. Pr<strong>of</strong>it & Loss Account (4740.82) (4808.17) (5187.56) (5219.22) (4597.30)<br />
Less: Revaluation Reserves - - - - -<br />
Reserves (Net <strong>of</strong> Revaluation<br />
Reserves) (3719.71) (3787.06) (4166.45) (4219.78) (3697.07)<br />
Less: Misc. Expenditure 516.96 290.78 136.87 - -<br />
Networth (2736.88) (2578.05) (2803.53) (2719.99) (2197.28)<br />
The above details should be read in conjunction with the ‘Accounting Policies’ <strong>and</strong> the ‘Notes to the<br />
Accounts’. <strong>For</strong> detailed financial statements, prepared in accordance with Indian Accounting St<strong>and</strong>ards,<br />
as required by Guidelines, please refer, 'Auditor's Report" <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
5
IV. GENERAL INFORMATION<br />
KILBURN ENGINEERING LIMITED<br />
(Incorporated as a public company, limited by shares, under the Companies Act, 1956 on 7 th September 1987 <strong>and</strong><br />
obtained the Certificate for Commencement <strong>of</strong> Business under section 149(3) <strong>of</strong> Companies Act , 1956 from Registrar<br />
<strong>of</strong> Companies, West Bengal, Kolkata on 16 th September, 1987.)<br />
Registered Office : Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata-700001.<br />
Tel: (033) 22435391, 22489434/35.<br />
Fax: (033) 22488114, 22481919<br />
Email-: administrator@wmg.co.in<br />
Head Office <strong>and</strong> Works : Subhash Nagar, Bh<strong>and</strong>up (West), Mumbai - 400 078<br />
Tel.: (022) 2566 3101/ 0210<br />
Fax: (022) 2566 8436<br />
Email: kilburn@bom3.vsnl.net.in<br />
Address <strong>of</strong> the Registrar <strong>of</strong><br />
Companies<br />
Dear Shareholder(s),<br />
: Nizam Palace, 11 M Buildings, 2nd Floor, 234/4, A.J.C.B. Road,<br />
Kolkata - 700020<br />
Pursuant to the resolutions passed by the Board <strong>of</strong> Directors <strong>of</strong> the Company at its meetings held on May<br />
27, 2005 <strong>and</strong> resolution passed by the shareholders in the Extraordinary General Meeting held on<br />
September 12, 2005, it has been decided to make the following <strong>of</strong>fer to the Equity Shareholders <strong>of</strong> the<br />
Company:<br />
Issue <strong>of</strong> 67,47,900 Equity Shares <strong>of</strong> Rs.10 each for cash at a premium <strong>of</strong> Rs. 15/- per Equity<br />
Share aggregating to Rs. 1686.98 lacs on rights basis to the Equity Shareholders <strong>of</strong> <strong>Kilburn</strong><br />
Engineering Limited (the “Company”/ “KEL”) in the ratio <strong>of</strong> One Equity Share for every One<br />
Equity Share held on the record date i.e. [_____], 2005.<br />
Statutory Declaration<br />
In the reasonable opinion <strong>of</strong> the Board, there are no circumstances that have arisen since the date <strong>of</strong> the<br />
last financial statement disclosed in the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, that materially or adversely affect or are likely to<br />
affect the performance or pr<strong>of</strong>itability <strong>of</strong> the Company or value <strong>of</strong> its assets or its ability to pay its<br />
liabilities within the next twelve months.<br />
Important<br />
1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the<br />
list to be furnished by depositories in respect <strong>of</strong> the Equity Shares held in the electronic form <strong>and</strong> on<br />
the register <strong>of</strong> members <strong>of</strong> the Company in respect <strong>of</strong> the Equity Shares held in physical form at close<br />
<strong>of</strong> business hours on _____, 2005, i.e. the Record Date.<br />
2. Shareholders' attention is drawn to RISK FACTORS appearing on Page ____ to ____<strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
3. Please ensure that the CAF is received with this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
4. Please read this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong> the instructions contained therein <strong>and</strong> in the CAF carefully, before<br />
filling in the CAF. The instructions contained in the CAF are an integral part <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong><br />
must be carefully followed. Application is liable to be rejected if it is not in conformity with the terms<br />
<strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong>/or the Composite Application <strong>For</strong>m viz. CAF.<br />
5. All enquiries in connection with this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> or CAF should be addressed to the Registrars to<br />
the Issue viz. Intime Spectrum Registry Limited, quoting the registered folio number / DP ID/client ID<br />
number <strong>and</strong> the serial number <strong>of</strong> the CAF <strong>and</strong> his/her full name <strong>and</strong> address.<br />
6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrars/Company<br />
will issue a duplicate CAF on the request <strong>of</strong> the shareholder who should furnish the registered folio<br />
number/DP ID/client ID number <strong>and</strong> his/her full name <strong>and</strong> address to the Registrars/Company. Please<br />
note that those applicants who are making the application in the duplicate CAF should not utilize the<br />
original CAF for any purpose including renunciation, even if it is received/found subsequently. In case<br />
6
the original <strong>and</strong> the duplicate CAFs are lodged for subscription, allotment will be made on the basis <strong>of</strong><br />
the duplicate CAF <strong>and</strong> the original CAF will be ignored.<br />
7. The Rights Issue will be kept open for a minimum period <strong>of</strong> 30 days. If extended, it will be kept open<br />
for a maximum period <strong>of</strong> 60 days.<br />
8. The Lead Managers <strong>and</strong> the Company shall make all information available to the Equity Shareholders<br />
<strong>and</strong> no selective or additional information would be available for a section <strong>of</strong> the Equity shareholders<br />
in any manner whatsoever including at presentations, in research or sales reports etc. after filing <strong>of</strong> the<br />
draft <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with SEBI/Stock Exchange<br />
9. The Lead Managers <strong>and</strong> the Company shall update the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong> keep the public informed <strong>of</strong><br />
any material changes till the listing <strong>and</strong> trading commences.<br />
10. All the legal requirements as applicable till the filing <strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with the Designated Stock<br />
Exchange have been complied with.<br />
Board <strong>of</strong> Directors <strong>of</strong> company<br />
Name<br />
Mr. Deepak Khaitan<br />
Mr. V. R. Sinha<br />
Mr. S. Mukherjee<br />
Mr. P. K. Mogal<br />
Mr. A. U. Katra<br />
Mr. P. K. Khaitan<br />
Mr. S. R. Dasgupta<br />
Mr. Amritanshu Khaitan<br />
Designation<br />
Chairman<br />
Managing Director<br />
Director<br />
Director<br />
Director- Nominee Director (IDBI)<br />
Director<br />
Director<br />
Additional Director<br />
ISSUE MANAGEMENT TEAM<br />
Company Secretary <strong>and</strong> Compliance Officer<br />
Mr. B. N. Shah<br />
Company Secretary<br />
<strong>Kilburn</strong> Engineering Limited<br />
Subhash Nagar, Bh<strong>and</strong>up ( W),<br />
Mumbai – 400 078.<br />
Tel.: (022) 2566 3101<br />
Fax: (022) 2566 8436<br />
E-mail: kilburn@bom3.vsnl.net.in<br />
Bankers to the Company<br />
United Bank <strong>of</strong> India<br />
25, Sir P. M. road,<br />
<strong>For</strong>t, Mumbai – 400 001<br />
Tel.: ( 022) 2287 1261<br />
Fax.: ( 022) 2288 6909<br />
Union Bank <strong>of</strong> India<br />
Sai Arcade,<br />
N. S. Road,<br />
Mulund(W), Mumbai – 400 080<br />
Tel (022) 2560 4723<br />
Fax: (022) 2561 0247<br />
The Federal Bank Ltd.<br />
32, Mumbai Samachar Marg,<br />
<strong>For</strong>t, Mumbai – 400 001<br />
Tel: 2268 0000<br />
Fax: 2566 4464<br />
Issue Management Team<br />
Lead Manager to the Issue<br />
7
IDBI Capital Market Services Limited<br />
8 th floor, Bhaktawar,<br />
Nariman Point,<br />
Mumbai – 400 021<br />
Tel: +91 – 22 – 56371212<br />
Fax: +91 – 22 – 22885848<br />
Email: kilburn@idbicapital.com<br />
Website: www.idbicapital.com<br />
Contact Person: Ms. Sangya Mishr<br />
Registrar to the Issue:<br />
Intime Spectrum Registry Ltd.<br />
C-13, Pannalal Silk Mills Compound,<br />
LBS Road, Bh<strong>and</strong>up West,<br />
Mumbai – 400 078<br />
Tel.: (022) 2592 3837<br />
Fax: (022) 2567 2693<br />
e-mail: isrl@vsnl.com<br />
Contact Person: Mr. Kishore Thakkar<br />
Bankers to the Issue<br />
To be appointed<br />
Auditors <strong>of</strong> the Company:<br />
Deloitte Haskins & Sells<br />
Chartered Accountants<br />
31, Nutan Bhanat Society, Alkapuri,<br />
Baroda- 390 007<br />
Tel.: (265) 2333776<br />
Fax: (265) 2339 729<br />
CREDIT RATING<br />
The present issue being a rights <strong>equity</strong> issue, credit rating is not required.<br />
TRUSTEES<br />
This being an issue <strong>of</strong> Equity Shares, appointment <strong>of</strong> Trustees is not required.<br />
MONITORING AGENCY<br />
Not Applicable<br />
APPRAISING ENTITY<br />
Not Applicable<br />
MINIMUM SUBSCRIPTION<br />
i) If the Company does not receive the minimum subscription <strong>of</strong> 90% <strong>of</strong> the issued amount on the date <strong>of</strong><br />
closure <strong>of</strong> the issue, or if the subscription level falls below 90% after the closure <strong>of</strong> issue on account <strong>of</strong><br />
cheques having been returned unpaid or withdrawal <strong>of</strong> applications, the Company shall forthwith<br />
refund the entire subscription amount received within 42 days from the date <strong>of</strong> closure <strong>of</strong> the issue .<br />
ii) If there is a delay beyond 8 days after the Company becomes liable to pay the subscription amount<br />
(i.e. 42 days after closure <strong>of</strong> the issue), the Company shall pay interest for the delayed period at rates<br />
prescribed under sub-sections (2) <strong>and</strong> (2A) <strong>of</strong> Section 73 <strong>of</strong> the Companies Act, 1956.<br />
In case this Rights Issue is undersubscribed after considering the number <strong>of</strong> Equity Shares applied as per<br />
entitlement/ renouncement <strong>and</strong> additional Equity Shares, the undersubscribed portion shall be applied for<br />
8
y the persons in the promoter group (as disclosed on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>) only after the<br />
close <strong>of</strong> the Issue.<br />
UNDERWRITING ARRANGEMENTS<br />
The Rights Issue <strong>of</strong> <strong>equity</strong> shares is not underwritten.<br />
ISSUE SCHEDULE<br />
ISSUE OPENS ON<br />
LAST DATE FOR<br />
ISSUE CLOSES ON<br />
RECEIVING<br />
REQUESTS FOR SPLIT<br />
FORM<br />
(●) 2005 (●) 2005 (●) 2005<br />
9
V. CAPITAL STRUCTURE OF THE COMPANY<br />
(Rs. in Lacs)<br />
NO. OF SHARES<br />
NOMINAL<br />
VALUE<br />
ISSUE<br />
AMOUNT<br />
A. Authorised Capital*<br />
-2,17,47,900 Equity Shares <strong>of</strong> Rs.10/- each<br />
- 82,52,100 Preference Shares <strong>of</strong> Rs. 10/- each<br />
2174.79<br />
825.21<br />
B. Issued Capital<br />
- 67,47,900 Equity Shares <strong>of</strong> Rs.10/- each 674.79 --<br />
C. Subscribed <strong>and</strong> Paid-up Capital<br />
- 67,47,900 Equity Shares <strong>of</strong> Rs.10/- each 674.79 --<br />
D. Present Rights Issue in the ratio <strong>of</strong> one <strong>equity</strong> shares for<br />
every <strong>equity</strong> shares held as on _______ ( Record Date)<br />
- 67,47,900 Equity Shares <strong>of</strong> Rs.10/- each at a premium <strong>of</strong><br />
Rs. 15/- per share<br />
--<br />
--<br />
674.79 1686.98<br />
E. Post Issue Capital<br />
1,34,95,800 Equity Shares <strong>of</strong> Rs.10/- each 1349.58 --<br />
F. Share Premium Account<br />
Before the <strong>Offer</strong><br />
After the <strong>Offer</strong><br />
838.53<br />
1850.72<br />
* At the Extraordinary General Meeting held on September 12, 2005, the Authorised Share Capital was<br />
rectified <strong>and</strong> re-classified from 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs.10/- each <strong>and</strong> 82,52,100 Preference Shares<br />
<strong>of</strong> Rs. 10/- each to 2,17,47,900 Equity Shares <strong>of</strong> Rs.10/- each <strong>and</strong> 82,52,100 Preference Shares <strong>of</strong> Rs.<br />
10/- each aggregating to Rs. 3000 Lacs.<br />
Changes in the authorized capital <strong>of</strong> the company since incorporation are given below:<br />
Date <strong>of</strong> change AGM/ EGM Authorised capital pursuant to<br />
change<br />
Incorporation - 39,90,000 <strong>equity</strong> shares <strong>of</strong> Rs.<br />
10/- each <strong>and</strong> 1000 redeemable<br />
preference shares <strong>of</strong> Rs. 100/-<br />
each aggregating to Rs. 400 lacs.<br />
02/11/1992 EGM 99,90,000 <strong>equity</strong> shares <strong>of</strong> Rs.<br />
10/- each <strong>and</strong> 1000 redeemable<br />
preference shares <strong>of</strong> Rs. 100/-<br />
each aggregating to Rs. 1000<br />
lacs.<br />
28/08/1996 AGM 1,49,90,000 <strong>equity</strong> shares <strong>of</strong> Rs.<br />
10/- each <strong>and</strong> 1000 redeemable<br />
preference shares <strong>of</strong> Rs. 100/-<br />
each aggregating to Rs. 1500<br />
lacs.<br />
27/10/2003 EGM 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs.<br />
10/- each <strong>and</strong> 82,52,100<br />
redeemable preference shares <strong>of</strong><br />
Rs. 10/- each aggregating to Rs.<br />
1500 lacs. ( Please refer to note<br />
(a) below this table)<br />
12/09/2005 EGM 2,17,47,900 <strong>equity</strong> shares <strong>of</strong> Rs.<br />
10/- each <strong>and</strong> 82,52,100<br />
redeemable preference shares <strong>of</strong><br />
Rs. 10/- each aggregating to Rs.<br />
3000 Lacs.<br />
Note (a): The Authorised share capital <strong>of</strong> the company was increased from Rs. 15 Crores to Rs. 30<br />
Crores by resolution <strong>of</strong> the shareholders passed at the Extra Ordinary general Meeting held on<br />
10
October 6, 1999. However, the Company did not complete the required formalities including<br />
filing <strong>of</strong> <strong>For</strong>m 5 with requisite RoC fee. At EGM held on October 27, 2003 the company<br />
reclassified the authorized share capital into 67,47,900 (Sixty Seven Lac <strong>For</strong>ty Seven<br />
Thous<strong>and</strong> Nine Hundred) <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each <strong>and</strong> 82,52,100 (Eighty Two Lac Fifty<br />
Two Thous<strong>and</strong> One Hundred) Redeemable Preference Shares <strong>of</strong> Rs. 10/- each without<br />
considering the increase from Rs. 15 Crores to Rs. 30 Crores in the Extra Ordinary General<br />
Meeting held on October 6, 1999. The Company has since filed the requisite form with<br />
Registrar <strong>of</strong> Companies for implementing the said increase <strong>and</strong> paid the requisite ROC filing<br />
fees/ additional fees to the Registrar <strong>of</strong> Companies, West Bengal as per the resolution passed<br />
at the EGM held on October 6, 1999 for the increased authorized share capital from Rs. 15<br />
Crores to Rs. 30 Crores. Subsequently, at the extraordinary general meeting held on<br />
September 12, 2005, the authorised share capital was rectified <strong>and</strong> re-classified from<br />
67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs.10/- each <strong>and</strong> 82,52,100 preference shares <strong>of</strong> Rs. 10/- each to<br />
2,17,47,900 <strong>equity</strong> shares <strong>of</strong> Rs.10/- each <strong>and</strong> 82,52,100 preference shares <strong>of</strong> Rs. 10/- each<br />
aggregating to Rs. 3000 lacs<br />
NOTES TO CAPITAL STRUCTURE:<br />
1) Details <strong>of</strong> present Equity Share Capital are as follows:<br />
Sr.<br />
No<br />
Date <strong>of</strong><br />
allotment<br />
1 Subscribers to<br />
the<br />
Memor<strong>and</strong>um<br />
Face<br />
Value<br />
(Rs)<br />
Issue<br />
Price<br />
(Rs)<br />
No. <strong>of</strong><br />
shares<br />
Reasons for allotment<br />
(Bonus, swap etc.)<br />
10 10 7 Initial Subscription to the<br />
Memor<strong>and</strong>um<br />
2 4 th June, 1990 10 10 5,28,000 Equity shares allotted to<br />
Williamson Magor & Co. Ltd.<br />
for acquisition <strong>of</strong> <strong>Kilburn</strong><br />
Division under Scheme <strong>of</strong><br />
arrangement approved by the<br />
Calcutta High Court.<br />
3 4 th June, 1990 10 10 28,42,793 Equity shares allotted to<br />
directors <strong>and</strong> relatives <strong>of</strong> the<br />
Company <strong>and</strong> Williamson<br />
Magor & Co. Ltd.( earlier<br />
Macneill & Magor Ltd.)<br />
Consideration<br />
Cash<br />
% to<br />
Present<br />
Capital<br />
Negligible<br />
Non Cash 7.82<br />
Cash 42.13<br />
4 21 st May, 1993 10 35 33,77,100 Rights Issue in the ratio <strong>of</strong> 1:1 Cash 50.05<br />
TOTAL 67,47,900 100.00<br />
Promoters’ Contribution <strong>and</strong> Lock-in<br />
The present issue being a rights issue, provisions <strong>of</strong> promoters’ contribution <strong>and</strong> lock-in are not<br />
applicable. However, Promoters <strong>and</strong> persons in the promoter group have agreed to put the <strong>equity</strong> shares<br />
allotted to them pursuant to this rights issue under a voluntary lock-in for a period <strong>of</strong> one year from the<br />
date <strong>of</strong> allotment in this issue.<br />
2. Present Rights Issue :<br />
Type <strong>of</strong> Instrument Ratio Face Value<br />
(Rs.)<br />
No. <strong>of</strong><br />
shares<br />
Issue Price<br />
(Rs.)<br />
Consideration<br />
Equity Shares 1:1 10/- 67,47,900 25/- Cash<br />
3. Existing shareholding pattern <strong>of</strong> the Company is given below:-<br />
A. Promoter's Holding<br />
Category<br />
No <strong>of</strong><br />
Share held<br />
Percentage <strong>of</strong><br />
Present Capital<br />
(%)<br />
11
Indian Promoters<br />
Williamson Magor & Co.Ltd<br />
McLeod Russel Inia Ltd.<br />
Metals Centre Limited<br />
Shree Durga Agencies Ltd<br />
Nirvan Commercial Co. Ltd<br />
United Machine Co. Ltd.<br />
<strong>For</strong>eign Promoters<br />
Persons Acting in Concert<br />
1201700<br />
908068<br />
727100<br />
279493<br />
352000<br />
361800<br />
--<br />
--<br />
17.81<br />
13.46<br />
10.78<br />
4.14<br />
5.22<br />
5.36<br />
--<br />
--<br />
Sub Total 3844343 56.97<br />
B. Non-Promoters Holding - -<br />
1 Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 500 0.01<br />
b. Banking, Financial Institution / Insurance Companies<br />
(Central/StateGovernment Institutions/ Non-Govt.<br />
Instituttions)<br />
17300 0.22<br />
c. FIIs -- 0<br />
Sub Total 17800 0.26<br />
2 Others<br />
a. <strong>Private</strong> Corporate Bodies 384805 5.70<br />
b. Indian Public 2450352 36.31<br />
c. NRIs / OCBs 8000 0.12<br />
d. Directors <strong>and</strong> Relatives 4000 0.06<br />
e. Clearing Members <strong>and</strong> Office Bearers 38600 0.57<br />
Sub Total 2885757 42.77<br />
Gr<strong>and</strong> Total 6747900 100.00<br />
Directors/Relatives mentioned in 2 (d) above are not in control <strong>of</strong> the Company.<br />
4. The shareholding pattern <strong>of</strong> the promoter group <strong>and</strong> directors pre <strong>and</strong> post issue is as detailed below:<br />
Particulars<br />
No. <strong>of</strong> Equity<br />
Shares <strong>of</strong><br />
Rs.10/- each<br />
Present<br />
% <strong>of</strong><br />
Present<br />
Capital<br />
a) Promoters<br />
Williamson Magor & Co.Ltd 1201700 17.81<br />
Post Rights ( refer to<br />
notes below this table)<br />
No. <strong>of</strong><br />
Equity<br />
Shares <strong>of</strong><br />
Rs.10/- each<br />
7688686<br />
% <strong>of</strong><br />
post<br />
issue<br />
capital<br />
56.98<br />
b) Immediate relative <strong>of</strong> promoters (Spouse,<br />
parent, child, brother, sister)<br />
c) Company in which 10% or more <strong>of</strong> the<br />
share capital is held by the promoter his<br />
immediate relative firm or HUF in which the<br />
promoter or his immediate relative is a<br />
member<br />
McLeod Russel Inia Ltd.<br />
Metals Centre Limited<br />
Shree Durga Agencies Ltd<br />
Nirvan Commercial Co. Ltd<br />
United Machine Co. Ltd.<br />
d) Company in which the Company<br />
mentioned in (c) above holds 10% or more<br />
<strong>of</strong> the share capital<br />
908068<br />
727100<br />
279493<br />
352000<br />
361800<br />
-- --<br />
13.46<br />
10.78<br />
4.14<br />
5.22<br />
5.36<br />
-- --<br />
12
e) HUF in which aggregate share <strong>of</strong> the<br />
promoter <strong>and</strong> his immediate relatives is equal<br />
or more than 10% <strong>of</strong> the total<br />
-- --<br />
Total 3844343 56.97 76,88,686 56.97<br />
Notes:<br />
The Company witnessed a decline in sales <strong>and</strong> increase in input cost from the year 1998 onwards <strong>and</strong><br />
reported 100% erosion in networth during the FY 1999. Subsequently, the Company made a reference to<br />
the Board for Industrial <strong>and</strong> Financial Reconstruction (BIFR) vide its application dated 14 th April, 2000.<br />
In the FY 2000, the Company, received share application money towards Cumulative Preference Shares<br />
<strong>of</strong> Rs. 100/- each to the extent <strong>of</strong> Rs. 8.25 crores from group companies viz. Dufflaghur Investments<br />
Limited <strong>and</strong> the erstwhile Natex Investment & Marketing Ltd. (later merged with Metals Centre Limited)<br />
in order to fund its operations. However the preference shares were not allotted to these companies. In<br />
the meantime the funds received were used in the year 2000 to repay the unsecured loan availed from<br />
HDFC (<strong>For</strong> details please refer to page no. ___ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>). The said application money<br />
remains pending for allotment.<br />
At the BIFR hearing held on 31/12/2002, the bench had ordered the conversion <strong>of</strong> the application money<br />
brought in by the promoter group into <strong>equity</strong>/preference capital. The bench on 14/05/2004 sanctioned the<br />
Rehabilitation Scheme. However, due to non-availability <strong>of</strong> appropriate authorized share capital, the<br />
preference shares could not be allotted. KEL now proposes to allot <strong>equity</strong> shares to the aforementioned<br />
companies in respect <strong>of</strong> their rights entitlement/ renunciation received against the funds brought in.<br />
Metals Centre Limited has vide its letter dated July 01, 2005 withdrawn its share application money<br />
towards Cummulative Preference shares <strong>and</strong> agreed for conversion <strong>of</strong> the said amount into an interest<br />
free loan. Further, the company has, in compliance with BIFR order dated 14/05/2004, agreed to the<br />
allotment <strong>of</strong> <strong>equity</strong> shares in lieu <strong>of</strong> the said loan amount. Dufflaghur Investments Limited has also vide<br />
its letter dated July 01, 2005 withdrawn its share application money towards Cumulative Preference<br />
shares <strong>and</strong> agreed for conversion <strong>of</strong> the said amount into an interest free loan. The Promoter, Williamson<br />
Magor & Co. Ltd., has agreed to the transfer <strong>of</strong> the loan amount <strong>of</strong> Rs. 4.25 Crores due by KEL to<br />
Dufflaghur Investments Limited in its name. The promoter has, in compliance with BIFR order dated<br />
14/05/2004, further granted its consent vide its letter dated July 1,2005 for the conversion <strong>of</strong> the said loan<br />
amount into <strong>equity</strong> shares.<br />
As on date, the interest free unsecured loan lying in the accounts <strong>of</strong> KEL to be utilized as application<br />
money towards allotment <strong>of</strong> shares in this rights issue are as follows:<br />
Name <strong>of</strong> the entity<br />
Amount<br />
( Rs. in Lacs)<br />
Metals Centre Limited 400<br />
Williamson Magor & Co. Ltd. 425<br />
The constituents <strong>of</strong> the promoter group shall collectively subscribe to the promoter group’s entire rights<br />
entitlement in the Issue. The Company has received confirmation from the following companies<br />
belonging to the promoter group to renounce their rights in favour <strong>of</strong> Metals Centre Limited <strong>and</strong>/or<br />
Williamson Magor & Co. Ltd. :<br />
Date <strong>of</strong> the <strong>Letter</strong> Name <strong>of</strong> entity renouncing its entitlement<br />
01/07/2005 Mcleod Russel India Limited<br />
01/07/2005 Ichamati Investments Pvt. Ltd.<br />
01/07/2005 United Machine Co. Ltd.<br />
26/07/2005 Shree Durga Agencies Limited<br />
26/07/2005 Nirvan Commercial Co. Ltd.<br />
13
Williamson Magor & Company Ltd. has undertaken to subscribe to the additional shares in the event<br />
<strong>of</strong> shortfall in the Rights Issue, if any, so that the issue is subscribed atleast to the extent <strong>of</strong> 90%. In<br />
case shareholders other than the promoters/directors do not subscribe to the issue the shareholding<br />
pattern <strong>of</strong> the company will be as follows:<br />
Category<br />
No. <strong>of</strong> <strong>equity</strong><br />
shares<br />
Pre Issue<br />
% No. <strong>of</strong> <strong>equity</strong><br />
shares*<br />
Post Issue<br />
Promoter 3845044 56.98 9918154 77.36<br />
Non Promoter 2883056 42.73 2883056 22.64<br />
Total 6747900 100.00 12821010 100.00<br />
* Considering subscription to the extent <strong>of</strong> 90% <strong>of</strong> the issue size by the promoter group.<br />
%<br />
The acquisition <strong>of</strong> additional securities <strong>and</strong> subscription to the shortfall shall be exempt in terms <strong>of</strong><br />
proviso to Regulation 3(1)(b)(ii) <strong>of</strong> the SEBI (Substantial Acquisition <strong>of</strong> Shares <strong>and</strong> Takeovers)<br />
Regulations, 1997. Further this acquisition will not result in change in control <strong>of</strong> management <strong>of</strong> the<br />
Company. Also refer to the paragraph “Basis <strong>of</strong> allotment” on [page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>]. As such other than meeting the Object <strong>of</strong> the issue as mentioned on page no. ___ <strong>of</strong> this<br />
<strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, there is no other intention/purpose <strong>of</strong> this issue, including any intention to delist the<br />
Company. The promoter currently holds 56.98% <strong>of</strong> the present <strong>equity</strong> share capital <strong>of</strong> the Company.<br />
In case the promoters <strong>and</strong> persons in the promoter group subscribe to the unsubscribed portion in the<br />
issue to the extent stated above, the public shareholding after the Rights Issue may fall below the<br />
“permissible minimum level” as specified in the listing condition or listing agreement <strong>and</strong> thus sub<br />
clause 17.1 <strong>and</strong> 17.2 <strong>of</strong> the SEBI (Delisting <strong>of</strong> Securities) Guidelines, 2003 will be applicable in this<br />
issue. Accordingly, the promoters have undertaken to make an <strong>of</strong>fer for sale <strong>of</strong> their holdings to<br />
bring the public shareholding at the level specified in the listing agreement within a period <strong>of</strong> three<br />
months.<br />
Further, Promoters <strong>and</strong> persons in the promoter group have agreed to put the <strong>equity</strong> shares allotted to<br />
them pursuant to this rights issue under a voluntary lock-in for a period <strong>of</strong> one year from the date <strong>of</strong><br />
allotment in this issue.<br />
5. The Company has not issued any warrant, option, convertible loan, debenture or any other securities<br />
convertible at a later date into <strong>equity</strong>, which would entitle the holders to acquire further <strong>equity</strong><br />
shares <strong>of</strong> the Company.<br />
6. The <strong>equity</strong> shares <strong>of</strong> the Company have been included in the ‘Z’ group by BSE. The <strong>equity</strong> shares <strong>of</strong><br />
the Company are being traded in compulsory dematerialised mode. The market lot <strong>of</strong> the <strong>equity</strong><br />
shares is 1 (one).<br />
7. Details <strong>of</strong> transactions by the promoters / their associate concerns during last 6 months are as<br />
follows:<br />
S.No. Name <strong>of</strong> the<br />
shareholder<br />
1. Shree Durga<br />
Agencies<br />
2. United Machine<br />
Co. Ltd.<br />
No.<br />
shares<br />
bought<br />
<strong>of</strong><br />
No. <strong>of</strong><br />
shares sold<br />
Date <strong>of</strong><br />
transaction<br />
--- 3,43,300 20-27<br />
Sep.’05<br />
3,43,300 --- 20-27<br />
Sep.’05<br />
Price<br />
(in Rs.)<br />
74.24<br />
74.24<br />
Nature <strong>of</strong><br />
transaction<br />
Inter-Se<br />
transfer<br />
amongst<br />
promoter<br />
group<br />
Other than the above there are no transactions in the securities <strong>of</strong> the Company during preceding 6 months<br />
which were financed/undertaken directly or indirectly by the promoters, their relatives, their group companies<br />
or associates or by the above entities directly or indirectly through other persons.<br />
14
8. The ten largest shareholders two years prior to the date <strong>of</strong> filing <strong>of</strong> this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with Stock<br />
Exchanges are as follows :<br />
Sr.<br />
No.<br />
Name <strong>of</strong> the Shareholders<br />
Number <strong>of</strong><br />
Equity Shares<br />
Percentage <strong>of</strong><br />
shareholding<br />
(%)<br />
1. Williamson Magor & Co. Ltd. 1201700 17.8<br />
2. Salsar Industrial Services Ltd. 663300 9.9<br />
3. Metals Centre Ltd. 659800 9.8<br />
4. Shree Durga Agencies Ltd. 620793 9.2<br />
5. Eveready Indstries India Ltd. 577468 8.56<br />
6. Nirvan Commercial co. Ltd. 352000 5.21<br />
7. The Bishnauth Tea Co. Ltd. 326700 4.84<br />
8. Bhagirath Pasari 145000 2.14<br />
9. Administrator <strong>of</strong> the Specified Undertaking 122100 1.8<br />
10. United Machine Co. Ltd. 20500 0.3<br />
Total 4689361 69.48<br />
9. The ten largest shareholders as on 10 days prior to the date <strong>of</strong> filing <strong>of</strong> the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with<br />
Stock Exchanges are as follows:<br />
Sr.<br />
No.<br />
Name <strong>of</strong> the Shareholders<br />
Number <strong>of</strong><br />
Equity Shares<br />
Percentage <strong>of</strong><br />
shareholding<br />
(%)<br />
1. Williamson Magor & Co. Ltd. 1201700 17.8<br />
2. Salsar Industrial Services Ltd. 663300 9.9<br />
3. Metals Centre Ltd. 659800 9.8<br />
4. Shree Durga Agencies Ltd. 620793 9.2<br />
5. Eveready Indstries India Ltd. 577468 8.56<br />
6. Nirvan Commercial co. Ltd. 352000 5.21<br />
7. The Bishnauth Tea Co. Ltd. 326700 4.84<br />
8. Bhagirath Pasari 145000 2.14<br />
9. Administrator <strong>of</strong> the Specified Undertaking 122100 1.8<br />
10. United Machine Co. Ltd. 20500 0.3<br />
Total 4689361 69.48<br />
10. The ten largest shareholders as on the date <strong>of</strong> filing <strong>of</strong> the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with Stock Exchanges are as<br />
follows:<br />
Sr.<br />
No.<br />
Name <strong>of</strong> the Shareholders<br />
Number <strong>of</strong><br />
Equity Shares<br />
Percentage <strong>of</strong><br />
shareholding<br />
(%)<br />
1. Williamson Magor & Co. Ltd. 1201700 17.8<br />
2. McLeod Russel India Ltd. 908068 13.46<br />
3. Metal Centre Ltd. 727100 10.78<br />
4. United Machine Co. Ltd. 435000 6.45<br />
5. Nirvan Commercial Co. Ltd. 352000 5.22<br />
6. Shree Durga Agencies Ltd. 206293 3.06<br />
7. Bhagirath Pasari 145100 2.15<br />
8. Hawa Faisal Zubair & Hawa Bilkis Zubair 83100 2.1<br />
9. V Nagesh 56900 0.84<br />
10. Kalyan Ugam Pvt. Ltd. 39600 0.59<br />
Total 4154861 61.56<br />
11. The Company/Promoters/Directors/Lead Merchant Bankers have not entered into buyback or similar<br />
arrangements for purchase <strong>of</strong> securities issued by the Company.<br />
12. The entire price <strong>of</strong> Rs. 25/- per share is payable on application. Since the shares allotted will be fully paid –up at<br />
the time <strong>of</strong> allotment, the forfeiture clause will not be applicable to the <strong>equity</strong> shares being allotted in terms <strong>of</strong><br />
this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
15
13. The present rights issue is being made in the ratio <strong>of</strong> one <strong>equity</strong> share for every one <strong>equity</strong> share held as on<br />
record date <strong>and</strong> will not lead to any fractional entitlements.<br />
14. The total number <strong>of</strong> shareholders as on the date <strong>of</strong> filing the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with the stock exchange is<br />
8852.<br />
15. At any given time there shall be only one denomination for the shares <strong>of</strong> the Company <strong>and</strong> the disclosures <strong>and</strong><br />
accounting norms specified by SEBI from time to time will be complied with.<br />
16. The Company shall not make any further issue <strong>of</strong> capital whether by way <strong>of</strong> issue <strong>of</strong> bonus shares, preferential<br />
allotment, rights issue or public issue or in any other manner during the period commencing from the submission<br />
<strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> to SEBI for the Rights Issue till the securities referred in the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> have been<br />
listed or application money refunded on account <strong>of</strong> failure <strong>of</strong> the issue.<br />
17. The Company does not propose to alter the capital structure by way <strong>of</strong> split or consolidation <strong>of</strong> the denomination<br />
<strong>of</strong> the shares or the issue <strong>of</strong> shares on a preferential basis or issue <strong>of</strong> bonus or rights or further public issue <strong>of</strong><br />
shares or any other securities within a period <strong>of</strong> six months from the date <strong>of</strong> opening <strong>of</strong> the present issue.<br />
16
OBJECTS OF THE ISSUE<br />
VI. PARTICULARS OF THE ISSUE<br />
The present rights issue <strong>of</strong> 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each at a premium <strong>of</strong> Rs. 15/- per share<br />
aggregating to Rs. 1686.98 lacs is being made to meet the following objectives:<br />
1) Compliance with BIFR order dated May 14, 2004, which requires that the Company issues<br />
shares to the promoter/promoter group company who had brought in Rs. 825 lacs for repayment<br />
<strong>of</strong> HDFC loan.<br />
2) Implementation <strong>of</strong> ERP computerization programme.<br />
3) Part repayment <strong>of</strong> secured loans, sales tax loans <strong>and</strong> sales tax dues.<br />
4) Capital expenditure.<br />
5) Issue expenses.<br />
1) Compliance with BIFR order:<br />
During the year 2000, the Company received share application money to the extent <strong>of</strong> Rs. 825 Lacs from<br />
two companies belonging to the promoter group [being Metals Centre Limited (earlier known as Natex<br />
Investment <strong>and</strong> Marketing Ltd.) <strong>and</strong> Dufflaghur Investments Limited] towards cumulative redeemable<br />
preference shares <strong>of</strong> Rs. 10/- each. The said amount <strong>of</strong> Rs. 825 lacs brought in by the Promoters was<br />
utilized for repayment <strong>of</strong> an unsecured loan from HDFC as detailed below:<br />
( Rs. In Lacs)<br />
Towards repayment <strong>of</strong> Principal 800.00<br />
Towards Interest thereon 25.00<br />
As on date the Company has not allotted any shares in respect <strong>of</strong> the said share application money. The<br />
Company was declared sick by the BIFR on November 10, 2000 <strong>and</strong> one <strong>of</strong> the directions issued by the<br />
bench, in its order dated 31/12/2002, was that advance against share capital amounting to Rs. 825 lacs<br />
brought in by the Promoter Group be converted either into preference share or into <strong>equity</strong> share capital.<br />
The Rehabilitation Scheme was approved by the BIFR <strong>and</strong> a sanctioned vide its Order dated May 14,<br />
2004.<br />
After the sanction <strong>of</strong> the Rehabilitation Scheme <strong>and</strong> as per the direction <strong>of</strong> the BIFR, the company is<br />
required to allot Equity/Preference shares to the aforementioned companies against the funds brought in.<br />
Pursuant to this both Metals Center Limited <strong>and</strong> Dufflaghur Investments Limited have withdrawn their<br />
application for redeemable preference shares <strong>and</strong> the money is lying in the account <strong>of</strong> the company as<br />
unsecured interest free loan. Williamson Magor & Co. Ltd., the promoter, has agreed to the transfer <strong>of</strong><br />
the loan amount <strong>of</strong> Rs. 4.25 Crores due by KEL to Dufflaghur Investments Limited in its name. Both<br />
Metals Center Limited <strong>and</strong> Williamson Magor & Co. Ltd. have in compliance with BIFR order dated<br />
14/05/2004, further granted their consent for the conversion <strong>of</strong> the said loan amount into <strong>equity</strong> shares.<br />
Considering that the funds brought in by the companies in the promoter group has been utilized for the<br />
repayment <strong>of</strong> the HDFC loan, <strong>and</strong> further to BIFR directive to allot either preference /<strong>equity</strong> shares to<br />
these companies against the share application money brought in, it has become essential to allot <strong>equity</strong><br />
shares to them to the extent <strong>of</strong> the unsecured interest free loan. Hence the management proposes to allot<br />
<strong>equity</strong> shares to the aforementioned companies.<br />
The Company has received confirmation from the following companies in the promoter group to<br />
renounce their rights in favour <strong>of</strong> Metals Center Limited <strong>and</strong>/or Williamson Magor & Co. Ltd. :<br />
Date <strong>of</strong> the <strong>Letter</strong> Name <strong>of</strong> entity renouncing its entitlement<br />
01/07/2005 Ichamati Investments Pvt. Ltd.<br />
01/07/2005 United Machine Co. Ltd.<br />
01/07/2005 Mcleod Russel India Limited<br />
26/07/2005 Shree Durga Agencies Limited<br />
17
26/07/2005 Nirvan Commercial Co. Ltd.<br />
2) Implementation <strong>of</strong> the ERP package:<br />
<strong>Kilburn</strong> Engineering specializes in process design, manufacture, supply <strong>and</strong> field installation <strong>of</strong> various<br />
process plant equipment. Apart from the major raw material required the company has to source some <strong>of</strong><br />
the parts/components /accessories required for manufacturing the various equipment in a timely manner<br />
to enable smooth manufacture <strong>and</strong> supply <strong>of</strong> the finished equipment to customers. The Company has<br />
Material Resource Planning s<strong>of</strong>tware to aid in this process. However, in face <strong>of</strong> the growing dem<strong>and</strong> for<br />
its products the company needs to implement an ERP package in order to efficiently manage the<br />
inventory <strong>and</strong> to enable timely execution <strong>of</strong> the orders received.<br />
The ERP will also enable integration <strong>of</strong> the manufacturing process with financial accounting enabling<br />
MIS/monitoring <strong>of</strong> costs in a more efficient manner. As per the quotation received by the Company from<br />
Godrej Infotech Limited dated July 06, 2004, the total estimated expenditure towards implementation <strong>of</strong><br />
the ERP package is Rs. 50.00 Lakhs consisting <strong>of</strong> s<strong>of</strong>tware <strong>and</strong> hardware.<br />
3) Part repayment <strong>of</strong> secured loans, sales tax loans <strong>and</strong> sales tax dues:<br />
The rehabilitation scheme sanctioned by the BIFR vide their order dated May 14, 2004 stipulates a<br />
repayment schedule for secured loans. Apart from the secured loans the Company is yet to repay certain<br />
outst<strong>and</strong>ing sales tax loan as well as some sales tax arrears. The Company has already approached the IC<br />
Cell, The Industries Commissioner, <strong>and</strong> G<strong>and</strong>hinagar for one time settlement <strong>of</strong> the Sales Tax dues under<br />
Option -3 <strong>of</strong> the Scheme for Relief to the Sick Industrial Company registered under BIFR/GoG. The<br />
same has been revised to Optiuon –1 vide letter dated August 25, 2005. The said option will enable the<br />
Company in seeking a waiver on the Interest amount <strong>and</strong> the penal interest.<br />
The total principal amount <strong>of</strong> the outst<strong>and</strong>ing loans as on September 30, ’05 <strong>and</strong> sales tax loan is Rs.<br />
1117.37 Lacs. Details <strong>of</strong> such principal amounts outst<strong>and</strong>ing are as follows:<br />
Particulars<br />
Rs. In Lacs<br />
IDBI Term Loan 107.99<br />
Debentures 61.62<br />
Banks 385.62<br />
Sales Tax Loans & Sales Tax Dues 562.14<br />
Total 1117.37<br />
Out <strong>of</strong> the Issue proceeds, the Company proposes to utilize an amount <strong>of</strong> Rs. 525 Lacs towards<br />
repayment <strong>of</strong> the above dues. Balance requirement <strong>of</strong> funds would be met through internal accruals. The<br />
Company proposes to make part/ full payments against these loans, at the appropriate time, based on<br />
overall assessment <strong>of</strong> the need <strong>of</strong> funds for additional capital expenditure which is likely to be required<br />
over the next 24 months <strong>and</strong> which is outlined under object no. (4) below.<br />
4) Capital Expenditure<br />
During the past two years, the Company has received orders from some reputed customers in the United<br />
States <strong>and</strong> in Europe. To enable execution <strong>of</strong> orders from these <strong>and</strong> other customers, the company needs<br />
to augment its manufacturing facilities. The company proposes to achieve this by erecting a covered shed<br />
admeasuring approximately 9056 sq. ft, equipped with over head crane, in the existing premises at<br />
Bh<strong>and</strong>up, Mumbai. The Company has obtained permission from the Bombay Municipal Corporation<br />
vide their letter No. CE/998/9PES/AS dated July 07, 2005, for construction <strong>of</strong> such a shed temporarily,<br />
within the Company’s premises in Bh<strong>and</strong>up, Mumbai. The said shed as per the permission can be erected<br />
for a period <strong>of</strong> six months starting from the date <strong>of</strong> the permission i.e. July 07, 2005. As per the<br />
management, the said permission can be extended for a further period <strong>of</strong> six months <strong>and</strong> upto a<br />
maximum period <strong>of</strong> two years. In the long run the Company proposes to acquire additional premises to<br />
accommodate the larger scale <strong>of</strong> operations. A capital expenditure <strong>of</strong> Rs. 145 Lacs is envisaged towards<br />
installation <strong>of</strong> the shed <strong>and</strong> overhead crane. The Company has received quotation <strong>of</strong> Rs. 68.01 Lacs from<br />
Muk<strong>and</strong> Limited for supplying the 20Tx20M span EOT Crane. The Company proposes to complete the<br />
installation by December, 2005.<br />
18
Additional Capital Expenditure<br />
The Company has recorded a turnover <strong>of</strong> Rs. 4440 Lacs during the twelve months period ended on 30 th<br />
September, 2005 as against the total turnover <strong>of</strong> Rs. 2473 lacs during the entire FY 2004. The Company<br />
expects a continuing appreciable growth in its sales turnover <strong>and</strong> therefore it may be necessary to acquire<br />
certain machinery as detailed below to augment its capacity:<br />
Description Nos. Cost<br />
(Rs. in Lacs)*<br />
MIG Welding Machines 5 24<br />
Welding Rotator <strong>of</strong> 100 ton 1<br />
Extra Idlers 5 40<br />
Welding Column & Boom 1<br />
18<br />
Submerged Arc Welding 1<br />
Multi Header Drilling M/C 1 34<br />
Total 116<br />
*The above costs are inclusive <strong>of</strong> Excise duty, sales tax/ VAT<br />
The Company proposes to incur additional capital expenditure, at the appropriate time, based on overall<br />
assessment <strong>of</strong> the need <strong>of</strong> funds for repayment <strong>of</strong> loans disclosed under (3) above. Presently, the<br />
Company proposes to utilize an amount <strong>of</strong> Rs. 116 Lacs towards the above additional capital<br />
expenditure.<br />
The abovementioned capital expenditure would help in optimum utilization <strong>of</strong> existing capacity.<br />
5) Issue Expenses:<br />
The expenses <strong>of</strong> rights issue to be incurred by the Company are estimated to be around Rs. 25.98 lacs as<br />
detailed below:<br />
Particulars<br />
Rs. In Lacs<br />
Fee to Intermediaries 12.00<br />
Statutory Fee 4.00<br />
Advertising 3.00<br />
Printing, Stationery <strong>and</strong> Despatch 6.98<br />
Total 25.98<br />
APPRAISAL<br />
The project is not being appraised by any Bank or Financial Institution.<br />
SCHEDULE OF IMPLEMENTATION<br />
The Company proposes to use the funds raised for the above mentioned objectives over a period <strong>of</strong> 24<br />
months as given below:<br />
Object Commencement Completion<br />
Implementation <strong>of</strong> ERP package January 2006 June 2006<br />
Part repayment <strong>of</strong> secured loans, March 2006 September 2006<br />
sales tax loans <strong>and</strong> sales tax dues<br />
Erection <strong>of</strong> Factory Shed <strong>and</strong><br />
Installation <strong>of</strong> EOT Crane<br />
November 2005 December, 2005<br />
19
BASIC TERMS OF ISSUE<br />
The Equity Shares now being <strong>of</strong>fered are subject to the terms <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, the CAF, the<br />
Memor<strong>and</strong>um <strong>and</strong> Articles <strong>of</strong> the Company, approvals under the <strong>For</strong>eign Direct Investment Scheme <strong>of</strong><br />
Government <strong>of</strong> India, FEMA, if applicable, Guidelines issued by SEBI, the Act, the guidelines,<br />
notifications <strong>and</strong> regulations for the issue <strong>of</strong> capital <strong>and</strong> for the listing <strong>of</strong> securities issued by the<br />
Government <strong>and</strong>/or other statutory authorities <strong>and</strong> bodies from time to time <strong>and</strong> such terms <strong>and</strong><br />
conditions as may be incorporated in the <strong>Letter</strong> <strong>of</strong> Allotment/Share Certificate or any deed or document<br />
executed by the Company regarding the Rights Issue. The principal terms <strong>and</strong> conditions <strong>of</strong> the <strong>Offer</strong> are<br />
as follows:<br />
i. Present Issue: Rights issue <strong>of</strong> 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each in a ratio <strong>of</strong> 1:1<br />
ii. Face Value: Each Equity Share shall have a face value <strong>of</strong> Rs.10/-.<br />
iii. <strong>Offer</strong> Price: Rs.25/- per Share<br />
20
BASIS OF THE ISSUE PRICE<br />
Quantitative Factors<br />
1. Earning per Share (EPS)<br />
Financial Year EPS (Rs.) Weight used<br />
2002-03 (5.62) 1<br />
2003-04 (0.79) 2<br />
2004-05 (twelve months period ended as on 7.75 3<br />
30 th September, 2005)<br />
Weighted Average 2.68<br />
2. Price Earnings Ratio (P/E Ratio)<br />
Based on EPS for the twelve months ended on 30 th September, 2005 <strong>of</strong> Rs.<br />
7.75<br />
3.23<br />
3. Industry P/E<br />
Highest 109.4<br />
Average 17.3<br />
Lowest 6.6*<br />
(Lowest P/E ratio for the industry segment is 2.6 being that <strong>of</strong> KEL. Hence the same has been ignored for<br />
the above comparison)<br />
(Source: Capital Market Vol. XX/18 Nov. 07 to Nov.20, 2005 Segment: Engineering)<br />
4. Return on networth<br />
The Company has been incurring losses from the FY1998 upto the FY 2004. During this period the<br />
networth <strong>of</strong> the Company was eroded. The Company has reported a pr<strong>of</strong>it for the twelve months period<br />
ended on 30 th September, 2005. However the networth <strong>of</strong> the Company continues to be negative. Hence<br />
the Return on Networth has not been calculated.<br />
5. Net Asset Value (NAV) per share<br />
As on 30/09/2005 (Rs.) ( 32.56)<br />
After the issue based on 30 th September, 2005 results (3.79)<br />
6. Minimum Return on Networth required to maintain Pre-Issue EPS<br />
The post issue networth <strong>of</strong> the Company continues to be negative. Hence the minimum Return on<br />
Networth required to maintain the pre-issue EPS has not been calculated.<br />
7. Peerset Analysis<br />
There are few companies in the same line <strong>of</strong> business as KEL. Hence a conclusive comparison <strong>of</strong> KEL<br />
with any listed company cannot be made. However a comparison with some <strong>of</strong> the companies in the<br />
Engineering Segment is as follows:<br />
Name <strong>of</strong> the<br />
Company<br />
Sales<br />
( Rs. In<br />
Lacs)<br />
PAT<br />
( Rs. In<br />
Lacs)<br />
Equity<br />
( Rs. In<br />
Lacs)<br />
EPS<br />
( Rs.)<br />
Disa India Ltd. 3380 450 151 29.5 13.9 711<br />
Eimco Elecon Ind. 9710 880 577 14.7 18.5 283<br />
Ltd.<br />
GMM Pflauder 8050 760 293 24.6 15.1 512<br />
Guj. Apollo E 6360 540 700 7.4 9.9 111<br />
Kabra Extrusion 7020 490 686 6.6 10.6 72<br />
GEI Hammon 6080 220 1202 1.7 16.8 40<br />
<strong>Kilburn</strong> Engg. Ltd. 2460 50 675 0.8 2.6 45<br />
P/E<br />
(x)<br />
Price as on<br />
28/10/2005<br />
21
The Company approached BIFR for a rehabilitation package in the year 1999. IDBI was appointed as the<br />
Operating Agency <strong>and</strong> the Rehabilitation Scheme was sanctioned in the year 2004. The Scheme is<br />
presently under implementation. The prospects <strong>of</strong> the Engineering industry have improved substantially<br />
during the past two years. <strong>Kilburn</strong> has witnessed a turnaround in its operations <strong>and</strong> has reported a pr<strong>of</strong>it<br />
for the twelve monthe period ended on 30 th September, 2005. As such the Company is on the path <strong>of</strong><br />
recovery <strong>and</strong> the present issue is being made to part finance certain capital expenditure necessary for its<br />
revival. The <strong>equity</strong> shares are being issued at a price <strong>of</strong> Rs. 25/- per share i.e at a P/E <strong>of</strong> 3.23 times on the<br />
basis <strong>of</strong> the EPS <strong>of</strong> Rs.7.75 for the twelve months period ended on 30 th September, 2005 which is lower<br />
than the lowest P/E multiple for the industry segment in which the Company operates. The issue price is<br />
at a discount <strong>of</strong> 47.20 % to the Market Price <strong>of</strong> the shares on the BSE (Rs. 47.35 per share as on<br />
10/11/2005). The price <strong>of</strong> the <strong>equity</strong> shares as on 27 th May, 2005, the date <strong>of</strong> the Board Meeting held for<br />
considering the issue <strong>of</strong> <strong>equity</strong> shares on a Rights Basis was Rs. 62.50 <strong>and</strong> was Rs. _____ as on ______<br />
being the record date set for the Rights Issue. In view <strong>of</strong> the above the price <strong>of</strong> Rs. 25/- per share is<br />
justified.<br />
22
TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS<br />
The Company has received letter no. 631/ 2005- 06 dated November 01, 2005 from Deloitte Haskins &<br />
Sells specifying the tax benefits available to the Company <strong>and</strong> its shareholders under the Direct Tax<br />
Laws. The contents <strong>of</strong> the same are given below. Unless otherwise specified, sections referred to are<br />
sections <strong>of</strong> the Income Tax Act, 1961 ( the Act).<br />
To the Company<br />
A1. Under the Income Tax Act, 1961<br />
• Benefit under Section 115 JB <strong>of</strong> the Act<br />
Company being a sick industrial company, while computing the book pr<strong>of</strong>it, tax at 7.5%<br />
payable under Section 115JB <strong>of</strong> the Act, the book pr<strong>of</strong>its shall be reduced by the amount <strong>of</strong><br />
pr<strong>of</strong>its earned by the Company on <strong>and</strong> from the assessment year in which the said company has<br />
become a sick industrial company <strong>and</strong> ending with the assessment year during which the entire<br />
net worth <strong>of</strong> such company becomes equal to or exceeds the accumulated losses.<br />
• Benefits <strong>of</strong> unabsorbed business/ long term capital losses <strong>and</strong> allowances<br />
Company has unabsorbed losses/ allowances under the Act which can be carried forward for set<br />
<strong>of</strong>f against the income under the Act <strong>of</strong> future years as unders :<br />
Unabsorbed business losses <strong>of</strong> Rs. 159,420,357.00<br />
In view <strong>of</strong> the provisions <strong>of</strong> Section 72 <strong>of</strong> the Act, Company can carry forward the unabsorbed<br />
business losses for a period <strong>of</strong> eight assessment years immediately succeeding the assessment<br />
year in which the loss was first computed.<br />
Unabsorbed depreciation <strong>of</strong> Rs. 51,515,237.00<br />
In view <strong>of</strong> the provisions <strong>of</strong> Seciton 32 <strong>of</strong> the Act, Company can carry forward the unabsorbed<br />
depreciation allowance <strong>of</strong> earlier years for an indefinite period to be set <strong>of</strong>f against business<br />
income under the Act <strong>of</strong> future years.<br />
Unabsorbed long term capital losses <strong>of</strong> Rs. 46,091,098.00<br />
In view <strong>of</strong> the provisions <strong>of</strong> Section 74 <strong>of</strong> the Act, Company can carry forward the unabsorbed<br />
long term capital losses for a period <strong>of</strong> eight assessment years immediately succeeding the<br />
assessment year in which the loss was first computed to be set <strong>of</strong>f against long term capital<br />
gains under the Act <strong>of</strong> future years.<br />
• Deduction under Section 35 <strong>of</strong> the Act<br />
In accordance with <strong>and</strong> subject to the provisions <strong>of</strong> Section 35 <strong>of</strong> the Act, the Company would be<br />
entitled to deduction in respect <strong>of</strong> expenditure laid out or expended on scientific research related to<br />
the business.<br />
• Dividend exempt under Section 10(34) <strong>of</strong> the Act<br />
Under Section 10(34) <strong>of</strong> the Act, dividend income earned by the company referred to in Section 115-<br />
O <strong>of</strong> the Act, will be exempt from tax in the h<strong>and</strong>s <strong>of</strong> the Company.<br />
• Income from specified mutual fund exempt under Section 10(35) <strong>of</strong> the Act<br />
In accordance with <strong>and</strong> subject to the provisions <strong>of</strong> Section 10(35) <strong>of</strong> the Act, the following income<br />
shall be exempt in the h<strong>and</strong>s <strong>of</strong> the Company :<br />
(a) Income received in respect <strong>of</strong> the units <strong>of</strong> a Mutual Fund specified under Clause (23D) <strong>of</strong><br />
Section 10 <strong>of</strong> the Act; or<br />
(b) Income received in respect <strong>of</strong> units from the Administrator <strong>of</strong> the specified undertaking; or<br />
23
(c) Income received in respect <strong>of</strong> units from the specified company.<br />
• Exemption from Capital Gain under Section 10(38) <strong>of</strong> the Act<br />
In terms <strong>of</strong> Section 10(38) <strong>of</strong> the Act, any long term capital gains arising to a company from transfer<br />
<strong>of</strong> long term capital asset being <strong>equity</strong> shares in any other company or a unit <strong>of</strong> an <strong>equity</strong> oriented<br />
fund would not be liable to tax if the following conditions are satisfied :<br />
(a) The transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October, 2004.<br />
(b) The transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the Finance (No.<br />
2) Act, 2004.<br />
To the Members <strong>of</strong> the Company<br />
B1. Under the Income Tax Act, 1961<br />
1. Resident Members<br />
• In terms <strong>of</strong> Section 10(23D) <strong>of</strong> the Act, all mutual funds set up by public sector banks or public<br />
financial institutions or mutual funds registered under the Securities <strong>and</strong> Exchange Board <strong>of</strong><br />
India or authorized by the Reserve Bank <strong>of</strong> India subject to the conditions specified therein are<br />
eligible for exemption from income tax on their entire income, including income from<br />
investments in the shares <strong>of</strong> the company.<br />
• By virtue <strong>of</strong> Section 10(34) <strong>of</strong> the Act, income earned by way <strong>of</strong> dividend income from<br />
domestic company referred to in Section 115-O <strong>of</strong> the Act, are exempt from tax in the h<strong>and</strong>s <strong>of</strong><br />
the shareholders.<br />
• In terms <strong>of</strong> Section 10(38) <strong>of</strong> the Act, any long term capital gains arising to a shareholder from<br />
transfer <strong>of</strong> long term capital asset being <strong>equity</strong> shares in the company would not be liable to tax<br />
in the h<strong>and</strong>s <strong>of</strong> the shareholders if the following conditions are satisfied :<br />
(a) The transaction <strong>of</strong> sale os such <strong>equity</strong> share is entered into on or after 1 October, 2004.<br />
(b) The transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the<br />
Finance (No.2) Act, 2004.<br />
• Under Section 48 read with Section 2(29B) <strong>of</strong> the Act, if the company’s shares are sold after<br />
being held for more than twelve months, the gains [in case not covered under Section 10(38) <strong>of</strong><br />
the Act], if any, will be treated as long term capital gains <strong>and</strong> the gains shall be calculated by<br />
deducting from the gross consideration, the indexed cost <strong>of</strong> acquisition/ improvement <strong>and</strong><br />
expenditure incurred wholly <strong>and</strong> exclusively in connection with the transfer. However, in terms<br />
<strong>of</strong> the fifth proviso to Section 48 <strong>of</strong> the Act, no deduction <strong>of</strong> amount paid on account <strong>of</strong><br />
securities transaction tax will be allowed in computing the income chargeable to tax as capital<br />
gains.<br />
• Under Section 54EC <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specified therein,<br />
long term capital gains [in cases not covered under Section 10(38) <strong>of</strong> the Act] arising on the<br />
transfer <strong>of</strong> shares <strong>of</strong> the Company shall not be chargeable to capital gains tax if the capital gains<br />
are invested within a period <strong>of</strong> six months after the date <strong>of</strong> such transfer in long-term specified<br />
assets <strong>and</strong> held for a period <strong>of</strong> atleast three years.<br />
• Under Section 54ED <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specified therein,<br />
long term capital gains [in cases not covered under Section 10(38) <strong>of</strong> the Act] on the transfer <strong>of</strong><br />
shares <strong>of</strong> the Company, as <strong>and</strong> when it is listed shall not be chargeable to capital gains tax if the<br />
capital gains are invested in shares <strong>of</strong> an Indian Company forming part <strong>of</strong> an eligible issue <strong>of</strong><br />
capital, within a period <strong>of</strong> six months after the date <strong>of</strong> such transfer <strong>and</strong> are held for a period <strong>of</strong><br />
atleast one year. Eligible issue <strong>of</strong> capital means issue <strong>of</strong> <strong>equity</strong> shares which satisfies the<br />
following conditions, namely :-<br />
(a) the issue is made by a public company formed <strong>and</strong> registered in India;<br />
(b) the shares forming part <strong>of</strong> the issue are <strong>of</strong>fered for subscription to the public.<br />
Further, the public issue <strong>of</strong> shares <strong>of</strong> the Company would also qualify as an eligible issue <strong>of</strong><br />
capital <strong>and</strong> long term capital gains would qualify for the benefit <strong>of</strong> Section 54ED <strong>of</strong> the Act if<br />
the capital gains are invested in shares <strong>of</strong> the Company.<br />
• Under Section 54F <strong>of</strong> the Act, long term capital gains [in cases not covered under Section<br />
10(38) <strong>of</strong> the Act] arising to an individual or Hindu Undivided Family (HUF) on transfer <strong>of</strong><br />
shares <strong>of</strong> the Company shall not be chargeable to capital gains tax subject to other conditions, if<br />
24
the net consideration from such shares are utilized for purchase <strong>of</strong> residential house property<br />
within a period <strong>of</strong> one year before or two years after the date on which the transfer took place or<br />
for construction <strong>of</strong> residential house property within a period <strong>of</strong> three years after the date <strong>of</strong><br />
transfer. Such benefit will not be available if:<br />
(a) The individual or Hindu Undivided Family:<br />
(i) Owns more than one residential house, other than the new residential house,<br />
on the date <strong>of</strong> transfer <strong>of</strong> share; or<br />
(ii) purchases another residential house within a period <strong>of</strong> one year after the date<br />
(iii)<br />
<strong>of</strong> transfer <strong>of</strong> the shares; or<br />
constructs another residential house within a period <strong>of</strong> three years after the<br />
date <strong>of</strong> transfer <strong>of</strong> shares <strong>and</strong><br />
(b) The income from such residential house, other than the one residential house owned on the<br />
date<strong>of</strong> transfer <strong>of</strong> the shares, is chargeable under the head “Income from house property”.<br />
• In terms <strong>of</strong> Section 111A <strong>of</strong> the Act <strong>and</strong> other relevant provisions <strong>of</strong> the Act, any short term<br />
capital gains arising to a shareholder from transfer <strong>of</strong> short term capital asset being <strong>equity</strong> shares<br />
in the Company would be liable to tax at the rate <strong>of</strong> 10% (plus applicable surcharge <strong>and</strong><br />
education cess) if the following conditions are satisfied :<br />
(a) the transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October, 2004<br />
(b) the transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the Finance<br />
(No.2) Act, 2004.<br />
Further, the public issue <strong>of</strong> shares <strong>of</strong> the Company would also qualify as an eligible issue <strong>of</strong><br />
capital <strong>and</strong> long term capital gains would qualify for the benefit <strong>of</strong> Section 54ED <strong>of</strong> the Act if<br />
the capital gains are invested in shares <strong>of</strong> the Company.<br />
• Under Section 54F <strong>of</strong> the Act, long term capital gains [in cases not covered under Section<br />
10(38) <strong>of</strong> the Act] arising to an individual or Hindu Undivided Family (HUF) on transfer <strong>of</strong><br />
shares <strong>of</strong> a company shall not be chargeable to capital gain tax subject to other conditions, if the<br />
net consideration from such shares are utilized for purchase <strong>of</strong> residential house property within<br />
a period <strong>of</strong> one year before or two years after the date on which the transfer took place or for<br />
construction <strong>of</strong> residential house property within a period <strong>of</strong> three years after the date <strong>of</strong><br />
transfer. Such benefit will not be available if :<br />
(a) The individual or Hindu Undivided Family:<br />
(i)<br />
(ii)<br />
(iii)<br />
Owns more than one residential house, other than the new residential house,<br />
on the date <strong>of</strong> transfer <strong>of</strong> share; or<br />
purchases another residential house within a period <strong>of</strong> one year after the date<br />
<strong>of</strong> transfer <strong>of</strong> the shares; or<br />
constructs another residential house within a period <strong>of</strong> three years after the<br />
date <strong>of</strong> transfer <strong>of</strong> shares <strong>and</strong><br />
(b) The income from such residential house, other than the one residential house owned on the<br />
date<strong>of</strong> transfer <strong>of</strong> the shares, is chargeable under the head “Income from house property”.<br />
• In terms <strong>of</strong> Section 111A <strong>of</strong> the Act <strong>and</strong> other relevant provisions <strong>of</strong> the Act, any short term<br />
capital gains arising to a shareholder from transfer <strong>of</strong> short term capital asset being <strong>equity</strong> shares<br />
in the Company would be liable to tax at the rate <strong>of</strong> 10% (plus applicable surcharge <strong>and</strong><br />
education cess) if the following conditions are satisfied :<br />
(a) the transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October, 2004<br />
(b) the transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the Finance<br />
(No.2) Act, 2004<br />
• Under Section 112 <strong>of</strong> the Act <strong>and</strong> other relevant provisions <strong>of</strong> the Act, long term capital gains<br />
[in cases not covered under Section 10(38) <strong>of</strong> the Act], arising on transfer <strong>of</strong> shares in the<br />
Company held for more than twelve months, shall be taxed at a rate <strong>of</strong> 20% (plus applicable<br />
surcharge <strong>and</strong> education cess). The amount <strong>of</strong> such tax should however, be limited to 10% (plus<br />
applicable surcharge <strong>and</strong> education cess) without indexation, at the option <strong>of</strong> the shareholder, if<br />
the transfer is made after listing <strong>of</strong> shares.<br />
• Under Section 115-I <strong>of</strong> the Act, a non-resident India (i.e. an individual being a citizen <strong>of</strong> India<br />
or person <strong>of</strong> India origin who is not a “resident”) shareholder has an option to be governed by<br />
the provisions <strong>of</strong> Chapter XII-A <strong>of</strong> the Income Tax Act, 1961 viz. “Special Provisions Relating<br />
to Certain Incomes <strong>of</strong> Non-Residents” which are as follows :-<br />
(a) Under Section 115E <strong>of</strong> the Act, where shares in the company are acquired or subscribed for<br />
in convertible foreign exchange by a Non Resident Indian, capital gains arising to the nonresident<br />
Indian on transfer <strong>of</strong> shares held for a period exceeding 12 months, shall, in cases<br />
not covered under Section 10(38) <strong>of</strong> the Act, be concessionally taxed at the rate <strong>of</strong> 10%<br />
(plus applicable surcharge <strong>and</strong> education cess). (Reference may also be made tot eh<br />
provisions <strong>of</strong> Section 115D <strong>of</strong> the Act).<br />
25
(b) Under the provisions <strong>of</strong> Section 115F <strong>of</strong> the Act, long term capital gains [in cases not<br />
covered under Section 10(38) <strong>of</strong> the Act] arising to a non-resident Indian from the transfer<br />
<strong>of</strong> shares <strong>of</strong> the company subscribed to in convertible foreign exchange shall not be<br />
chargeable to Income Tax, if the net consideration is reinvested in specified assets within<br />
six months <strong>of</strong> the date <strong>of</strong> transfer. If only part <strong>of</strong> the net consideration is so reinvested, the<br />
exemption shall be proportionately reduced. The amount so exempted shall be chargeable<br />
to tax subsequently, if the specified assets are transferred or converted into money within<br />
three years from the date <strong>of</strong> their acquisition.<br />
• Under provisions <strong>of</strong> Section 115G <strong>of</strong> the Act, it shall not be necessary for a Non-Resident<br />
Indian to furnish his return <strong>of</strong> Income if his only source <strong>of</strong> income is investment income or long<br />
term capital gains or both arising out <strong>of</strong> assets acquired, purchased or subscribed in convertible<br />
foreign exchange <strong>and</strong> tax deductible at source has been deducted therefrom.<br />
2. Non Resident Indians/ Members other than FIIs <strong>and</strong> <strong>For</strong>eign Venture Capital Investors)<br />
• By virtue <strong>of</strong> Section 10(34) <strong>of</strong> the Act, income earned by way <strong>of</strong> dividend income from<br />
domestic company referred to in Section 115-O <strong>of</strong> the Act, are exempt from tax in the h<strong>and</strong>s <strong>of</strong><br />
the shareholders.<br />
• In terms <strong>of</strong> Section 10(38) <strong>of</strong> the Act, any long term capital gains arising to a shareholder from<br />
transfer <strong>of</strong> long term capital asset being <strong>equity</strong> shares in the Company would not be liable to tax<br />
in the h<strong>and</strong>s <strong>of</strong> the shareholder if the following conditions are satisfied :<br />
a) The transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October,<br />
2004.<br />
b) The transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the<br />
Finance (No.2) Act, 2004.<br />
• Under Section 54EC <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specified therein,<br />
long term capital gains [in cases not covered under Section 10(38) <strong>of</strong> the Act] arising on the<br />
transfer <strong>of</strong> shares <strong>of</strong> the Company shall not be chargeable to capital gains tax if the capital gains<br />
are invested within a period <strong>of</strong> six months from the date <strong>of</strong> such transfer in long term specified<br />
assets <strong>and</strong> held for a period <strong>of</strong> atleast three years.<br />
• Under Section 54ED <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specified therein,<br />
long term capital gains [in cases not covered under Section 10(38) <strong>of</strong> the Act] on the transfer <strong>of</strong><br />
shares <strong>of</strong> the company, as <strong>and</strong> when it is listed shall not be chargeable to capital gains tax if the<br />
capital gain are invested in shares <strong>of</strong> an Indian company forming part <strong>of</strong> an eligible issue <strong>of</strong><br />
capital, within a period <strong>of</strong> six months after the date<strong>of</strong> such transfer <strong>and</strong> are held for a period <strong>of</strong><br />
atleast one year. Eligible issue <strong>of</strong> capital means issue <strong>of</strong> <strong>equity</strong> shares which satisfies the<br />
following conditions, namely :-<br />
a) the issue is made by a public company formed <strong>and</strong> registered in India;<br />
b) the share forming part <strong>of</strong> the issue are <strong>of</strong>fered for subscription to the public.<br />
• Under Section 112 <strong>of</strong> the Act <strong>and</strong> other relevant provisions <strong>of</strong> the Act, long term capital gains,<br />
[in cases not covered under Section 10(38) <strong>of</strong> the Act], arising on transfer <strong>of</strong> shares int eh<br />
Company held for more than twelve months, shall be taxed at a rate <strong>of</strong> 20% (plus applicable<br />
surcharge <strong>and</strong> education cess) after indexation as provided in the second proviso to Section 48<br />
<strong>of</strong> the Act. The amount <strong>of</strong> such tax could, however, be limited to 10% (plus applicable<br />
surcharge <strong>and</strong> education cess) without indexation, at the option <strong>of</strong> the shareholder, if the transfer<br />
is made after listing <strong>of</strong> shares.<br />
3. <strong>For</strong>eign Institutional Investors (FIIs)<br />
• In terms <strong>of</strong> Section 10(34) <strong>of</strong> the Act, any income by way <strong>of</strong> dividends referred to in Section<br />
115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the<br />
shares <strong>of</strong> the company is exempt from tax.<br />
• In terms <strong>of</strong> Section 10(38) <strong>of</strong> the Act, any long term capital gains arising to an investor from<br />
transfer <strong>of</strong> long term capital asset being <strong>equity</strong> shares in the Company would not be liable to tax<br />
in the h<strong>and</strong>s <strong>of</strong> the investor if the following conditions are satisfied :<br />
a) The transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October,<br />
2004.<br />
b) The transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the<br />
Finance (No.2) Act, 2004.<br />
26
• In terms <strong>of</strong> Section 111A <strong>of</strong> the Act <strong>and</strong> other relevant provisions <strong>of</strong> the Act, any short term<br />
capital gains arising to a shareholder from transfer <strong>of</strong> short term capital asset beign <strong>equity</strong> shares<br />
in the Company would be liable to tax at the rate <strong>of</strong> 10% (plus applicable surcharge <strong>and</strong><br />
education cess) if the following conditions are satisfied :<br />
a) The transaction <strong>of</strong> sale <strong>of</strong> such <strong>equity</strong> share is entered into on or after 1 October<br />
2004.<br />
b) The transaction is chargeable to securities transaction tax under Chapter VII <strong>of</strong> the<br />
Finance (No.2) Act, 2004.<br />
• The income by way <strong>of</strong> short term capital gains or long term capital gains [in cases not covered<br />
under Section 10(38) <strong>of</strong> the Act] realized by the FIIs is taxable @30% <strong>and</strong> 10% respectively<br />
(plus applicable surcharge <strong>and</strong> education cess) as per section 115AD <strong>of</strong> the Act. However in<br />
case <strong>of</strong> such long term capital gains, the tax is levied on the capital gains computed without<br />
considering the cost indexation <strong>and</strong> computation <strong>of</strong> gains in foreign exchange. Further, in terms<br />
<strong>of</strong> the fifth proviso to Section 48 <strong>of</strong> the Act, no deduction <strong>of</strong> amount paid on account <strong>of</strong><br />
securities transaction tax will be allowed in computing the income chargeable to tax as capital<br />
gains.<br />
• Under Section 54EC <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specifed therein,<br />
long term capital gains [in case not covered under Section 10(38) <strong>of</strong> the Act] arising on the<br />
transfer <strong>of</strong> shares <strong>of</strong> the Company shall not be chargeable to capital gains tax if the capital gains<br />
are invested within a period <strong>of</strong> six months after the date <strong>of</strong> such transfer in long –term specified<br />
assets <strong>and</strong> held for a period <strong>of</strong> at least three years.<br />
• Under Section 54ED <strong>of</strong> the Act <strong>and</strong> subject to the conditions <strong>and</strong> to the extent specified therein,<br />
long term capital gains [in cases not covered under Section 10(38) <strong>of</strong> the Act] on the transfer <strong>of</strong><br />
shares <strong>of</strong> the company, as <strong>and</strong> when it is listed, shall not be chargeable to capital gains tax if the<br />
capital gains tax if the capital gain are invested in shares <strong>of</strong> an Indian Company forming part <strong>of</strong><br />
an eligible issue <strong>of</strong> capital, within a period <strong>of</strong> six months after the date <strong>of</strong> such transfer <strong>and</strong> are<br />
held for a period <strong>of</strong> atleast one year. Eligible issue <strong>of</strong> capital means issue <strong>of</strong> <strong>equity</strong> shares<br />
which satisfies the following conditions namely :-<br />
a) the issue is made by a public company formed <strong>and</strong> registered in India;<br />
b) the shares forming part <strong>of</strong> the issue are <strong>of</strong>fered for subscription to the<br />
public.<br />
Further, the public issue <strong>of</strong> shares <strong>of</strong> the company would also qualify as an eligible issue <strong>of</strong><br />
capital <strong>and</strong> long term capital gains would qualify for the benefit <strong>of</strong> Section 54ED <strong>of</strong> the Act if<br />
the capital gains are invested in shares <strong>of</strong> the Company.<br />
4. Venture Capital Companies /Funds<br />
• In terms <strong>of</strong> Section 10(23FB) <strong>of</strong> the Act, all Venture Capital Companies /Funds registered with<br />
Securities <strong>and</strong> Exchange Board <strong>of</strong> India, subject to the conditions specified, are eligible for<br />
exemption from income tax on their entire income, including income from investment in the<br />
shares <strong>of</strong> the Company.<br />
B2. Under the Wealth Tax Act, 1957<br />
Notes :<br />
• Shares <strong>of</strong> the Company held by the shareholder are not treated as an asset within the meaning <strong>of</strong><br />
Section 2(ea) <strong>of</strong> the Wealth Tax Act, 1957, hence the shares are not liable to Wealth Tax.<br />
i. All the above benefits are as per the current tax laws as amended by the Finance Act, 2005.<br />
ii. In respect <strong>of</strong> non-residnets, the liability to tax <strong>and</strong> the tax rates mentioned above are further subject<br />
to any benefits available under the Double Taxation Avoidance Agreements, if any, between India<br />
<strong>and</strong> the country in which the non-resident is a tax resident.<br />
iii. The current positions <strong>of</strong> tax benefits available to the company <strong>and</strong> to its shareholders is provided for<br />
general information purposes only. In view <strong>of</strong> the individual nature <strong>of</strong> tax consequences, each<br />
investor is advised to consult his/ her own tax advisor with respect to specific tax consequences <strong>of</strong><br />
his /her participation in the issue.<br />
iv. The tax benefits listed above are not exhaustive <strong>and</strong> are based on information explanations <strong>and</strong><br />
representations obtained from the Company <strong>and</strong> on the basis <strong>of</strong> our underst<strong>and</strong>ing <strong>of</strong> the business<br />
activities <strong>and</strong> operations <strong>of</strong> the company. While all reasonable care has been taken in the<br />
preparation <strong>of</strong> this opinion, Deloitte Haskins <strong>and</strong> Sells accepts no responsibility for any errors or<br />
omissions therein or for any loss sustained by any person who relies on it.<br />
27
VII. ABOUT THE ISSUER COMPANY<br />
INDUSTRY OVERVIEW<br />
(Source :Report on Heavy Engineering Segment May 2005 by ICRA Information Grading <strong>and</strong> Research<br />
Services)<br />
INTRODUCTION<br />
The development <strong>of</strong> a strong <strong>and</strong> vibrant engineering <strong>and</strong> capital goods sector in India had been at the<br />
core <strong>of</strong> the industrial strategy ever since the planning process initiated in 1951. The philosophy during<br />
those years was import substitution, which was pursued with vigour <strong>and</strong> priority was given to develop<br />
the basic <strong>and</strong> capital goods sector.<br />
Today India is among a h<strong>and</strong>ful <strong>of</strong> nations among the developing countries to have a strong engineering<br />
<strong>and</strong> capital goods base. It is more-or-less fully self-sufficient <strong>and</strong> supplies the most sophisticated <strong>and</strong><br />
state-<strong>of</strong>-the-art machinery <strong>and</strong> equipment to the various sectors <strong>of</strong> the economy.<br />
The sector currently serves a wide cross section <strong>of</strong> industry segments ranging from consumer durables,<br />
chemicals <strong>and</strong> petrochemicals, fertilisers to defence equipment, power, oil & gas, refinery, mining,<br />
nuclear, automobiles, textiles. Today, India has very well developed <strong>and</strong> diversified industrial machinery<br />
/ capital base capable <strong>of</strong> manufacturing the entire range <strong>of</strong> industrial machinery. The industry has also<br />
successfully been able to absorb manufacturing technology over the years, <strong>and</strong> has achieved world class<br />
quality control - ASME Code stamps, ISO 9000 certifications.<br />
The industry's annual production stood at Rs 950 billion in 2000, with an investment <strong>of</strong> Rs 350 billion.<br />
Its contribution to the exchequer in terms <strong>of</strong> customs, excise <strong>and</strong> sales tax is estimated to be in excess <strong>of</strong><br />
Rs 220 billion <strong>and</strong> exports were in the region <strong>of</strong> Rs 30.54 billion. The sector employs more than 20 lakh<br />
persons <strong>and</strong> the average employment per crore <strong>of</strong> investment is over 50 times than that <strong>of</strong> a commodity<br />
production industry.<br />
Heavy engineering industry is integrated with various core sectors for its dem<strong>and</strong>. The dem<strong>and</strong> is derived<br />
primarily from capacity creations in sectors like infrastructure <strong>and</strong> general manufacturing including<br />
process industries. The Indian engineering industry, including the transport equipment segment, is<br />
estimated at around Rs. 1.2 trillion. The share <strong>of</strong> heavy engineering is about 80% <strong>of</strong> the value while rest<br />
was contributed by light engineering sector. The enterprise mix <strong>of</strong> the Indian engineering industry<br />
comprises primarily large Indian companies without foreign collaborations, subsidiaries <strong>of</strong> multinational<br />
companies, joint ventures <strong>of</strong> domestic <strong>and</strong> foreign companies <strong>and</strong> medium sized companies maintaining<br />
regional dominance.<br />
Government Policies<br />
The tremendous strides that the sector has made over the past four decades has primarily been possible<br />
because <strong>of</strong> the government’s support in providing a conducive policy environment. The first attempt was<br />
to de-license 24 industries as far back as 1975. Among the industries de-licensed were industrial<br />
machinery, machine tools <strong>and</strong> other equipment.<br />
Broad b<strong>and</strong>ing <strong>of</strong> the machine tool industry in 1983 followed this. The year 1985 saw a further<br />
delicensing <strong>of</strong> 25 broad groups <strong>of</strong> industries including several items <strong>of</strong> industrial machinery for non -<br />
MRTP, non - FERA companies. Industrial machinery sector was also broad -b<strong>and</strong>ed covering chemical,<br />
pharmaceutical, petrochemical <strong>and</strong> fertiliser machinery subsequently. In August 1987, a Technology Up<br />
gradation Fund was launched for five groups <strong>of</strong> capital goods industries.<br />
The decade <strong>of</strong> the nineties was marked primarily for the dismantling <strong>of</strong> the high tariff walls. After having<br />
to adjust in the initial years, this sector in fact responded very positively <strong>and</strong> successfully retooled,<br />
restructured <strong>and</strong> reengineered <strong>and</strong> clocked very healthy growth rates in the years 1995-96 <strong>and</strong> 1996-97.<br />
1991-92 to 1995-96: The period from 1991-92 to 1995-96 actually saw the tariffs on capital goods falling<br />
sharply by a significant 70 per cent <strong>and</strong> on an average the reduction each year was above 30 per cent.<br />
28
Analytical Pr<strong>of</strong>ile <strong>of</strong> Heavy Engineering Industry<br />
Threat <strong>of</strong> Substitutes: Heavy<br />
Engineering, as an industry, is <strong>of</strong> vital<br />
importance to the Indian Economy.<br />
The threat from substitutes is low,<br />
since substitution for majority <strong>of</strong> the<br />
heavy engineering products is not<br />
possible.<br />
Bargaining Power <strong>of</strong> Suppliers :<br />
companies in the light<br />
engineering sector act as major<br />
suppliers to heavy engineering<br />
industries. The large number <strong>of</strong><br />
players in light engineering sector<br />
<strong>and</strong> fragmented market result in<br />
weak supplier power.<br />
Inter-Firm Rivalry: Heavy<br />
engineering is considerably<br />
technology itensive with few players<br />
having required capabilities. While<br />
this limits the competition to an<br />
extent, growth in Indian infrastructure<br />
sector has led to foreign engineering<br />
majors forming joint ventures with<br />
Indian Partners<br />
Bargaining Power <strong>of</strong> Buyers :<br />
Limited number <strong>of</strong> players/ specific<br />
technology requirements <strong>of</strong> different<br />
buyers maintain a moderate<br />
bargaining power for heavy<br />
engineering. The bargaining power <strong>of</strong><br />
buyers increase as one moves towards<br />
medium to light engineering on<br />
account <strong>of</strong> increase in number <strong>of</strong><br />
players.<br />
Barriers to entry: remain high in<br />
heavy engineering on account <strong>of</strong><br />
relatively higher investment <strong>and</strong><br />
technology requirements.<br />
The Heavy Engineering Industry can be broadly classified into two groups as given below :-<br />
Heavy Engineering<br />
Electrical Machinery <strong>and</strong><br />
Equipment<br />
Non-electrical Machinery<br />
<strong>and</strong> Equipment<br />
Key Issues Facing the Players<br />
Cyclicality<br />
Heavy engineering industry is an intermediate industry <strong>and</strong> its dem<strong>and</strong> depends on a variety <strong>of</strong> end-user<br />
industries such as power, mining, oil <strong>and</strong> gas, consumer goods, automotive <strong>and</strong> the general<br />
manufacturing sector. A diverse mix <strong>of</strong> industries in the end-user segment results in now volatility in<br />
revenues in a normal business cycle. But, beginning <strong>of</strong> a widespread economic slowdown leads to<br />
cancellation <strong>of</strong> investments on capital goods across the industries. Thus, a slowdown adversely impacts<br />
the heavy engineering industry much before it affects other sectors. On the other h<strong>and</strong>, the heavy<br />
engineering industry is among the last to benefit from an upturn since capacity creation occurs after enduser<br />
industries fully utilize their own capacities <strong>and</strong> feel positive about the long-term dem<strong>and</strong> scenario.<br />
The figure below compares overall industrial performance <strong>and</strong> the performance <strong>of</strong> the capital goods<br />
sector <strong>and</strong> illustrates the cyclical trend in the performance <strong>of</strong> the heavy engineering sector.<br />
29
Lowering <strong>of</strong> Import Duties<br />
Reduction in import duties has led to increased imports <strong>of</strong> capital goods. The cut in peak customs duty<br />
from 20% to 15% <strong>and</strong> in customs duty on textile machinery from 20% to 10% in the budget 2005-06 is<br />
expected to result in higher competition for domestic players in the heavy engineering industry. Customs<br />
duty exemption is already provided for National Highway projects, which has resulted in considerable<br />
imports in this segment. A further reduction in the peak customs duty in the short to medium term can<br />
not be ruled out.<br />
Basic customs duty is zero or 5% on capital goods required for various purposes such as projects<br />
financed by international organisations, mega power projects, drinking water supply projects, fertiliser /<br />
coal mining / power generation projects <strong>and</strong> setting up crude petroleum refinery. Manufacturing sector is<br />
allowed to import capital goods at 5% basic customs duty under Export Promotion Capital Goods<br />
(EPCG) scheme. Moreover, import duties on some <strong>of</strong> the raw materials like alloy steel that are used as<br />
input by the heavy engineering industry are higher than the import duties on the machines <strong>and</strong><br />
equipment. This inverted duty structure results in a cost disadvantage for heavy engineering companies.<br />
The reduction in customs duties on copper, aluminium <strong>and</strong> alloy steel from 15% to 10% in budget 2005-<br />
06 is a step to correct the inverted duty structure.<br />
The following table provides the overview <strong>of</strong> customs duty for the heavy engineering sector. Customs<br />
duty for most <strong>of</strong> the categories <strong>of</strong> project imports has been reduced to 5%.<br />
Increase in Raw Material Prices<br />
A sharp increase in raw material prices has resulted in a small increase in the pr<strong>of</strong>it margins for the heavy<br />
engineering industry even though revenue has registered much higher growth during the last two years.<br />
Raw materials contribute to almost 50% <strong>of</strong> the operating costs <strong>of</strong> heavy engineering companies <strong>and</strong> a<br />
sharp increase in the input prices like those <strong>of</strong> steel including special steel, aluminium <strong>and</strong> copper have<br />
resulted in lower than expected growth in pr<strong>of</strong>itability.<br />
Dem<strong>and</strong> Supply Position<br />
Heavy engineering sector has witnessed a steady rise in dem<strong>and</strong> from FY2003 onwards. The following<br />
figure illustrates the increase in capital goods production index for the period 2002 to 2004.<br />
30
Heavy engineering sector has continued with its good performance in 2004-05 also. The growth in the<br />
capital goods production index for the period April 04 to Jan 05 was 12.9% which was significantly<br />
higher than 10.7% registered for the corresponding period <strong>of</strong> the previous year. The index posted a<br />
double-digit growth in each month <strong>of</strong> 2004-05, except for November 2004. Overall growth in the index<br />
was led by the machinery <strong>and</strong> equipment segment, which grew by 20.89% during the period April 04 to<br />
Jan 05 while the growth was 11.83% for the corresponding period <strong>of</strong> the previous year.<br />
Dem<strong>and</strong> for almost all the segments has recorded a double-digit growth in 2004.<br />
Imports<br />
Indian Government has been continually reducing the import duty on capital goods, which has led to<br />
increase in imports in the sector. Imports in the heavy engineering sector are mostly for the equipment<br />
that require very high technological inputs or items that are required in small numbers <strong>and</strong> hence are not<br />
produced in the country. Second-h<strong>and</strong> equipment contributes to a significant proportion <strong>of</strong> imports as<br />
they <strong>of</strong>fer a cost-effective option for Indian companies. The imports in the capital goods sector during<br />
April to January period from 2002-03 to 2004-05 increased at a compounded rate <strong>of</strong> 27.8%.<br />
The following table provides a segment-wise break-up <strong>of</strong> the imports in the capital goods sector.<br />
Table 2: Segment-wise Break-up <strong>of</strong> Capital Goods Imports - April to January<br />
31
Exports<br />
India is increasingly gaining acceptance as a preferred manufacturing base for heavy machinery <strong>and</strong><br />
equipment. Exports <strong>of</strong> engineering goods have increased at a compounded rate <strong>of</strong> 33.4% during the April<br />
to January period from 2002-03 to 2004-05. During April 2004 to January 2005, engineering goods as a<br />
sector contributed to 20.4% <strong>of</strong> total exports from the country up from 19.4% during the same moths the<br />
previous year. The following figures give an overview <strong>of</strong> export performance for the months <strong>of</strong> April to<br />
January from 2002-03 to 2004-05.<br />
The following table provides a segment-wise break-up <strong>of</strong> the exports <strong>of</strong> the engineering goods.<br />
However, if we exclude ferrous <strong>and</strong> non-ferrous metals <strong>and</strong> alloys from the engineering goods<br />
exports for a fair assessment <strong>of</strong> heavy engineering industry exports, total exports will be in the<br />
range <strong>of</strong> US$ 9.0-9.5 billion for the period April 2004 to January 2005.<br />
KEY GROWTH FACTORS<br />
Heavy engineering industry is witnessing growth in domestic dem<strong>and</strong> as well as exports. The<br />
major factors contributing to impressive domestic dem<strong>and</strong> are buoyant Indian economy <strong>and</strong><br />
increased infrastructure expenditure.<br />
OUTLOOK<br />
Heavy engineering industry has been performing well after the recession that it faced in FY2002. The<br />
ROCE has increased up to the level <strong>of</strong> 20% for FY2004. The index <strong>of</strong> production <strong>of</strong> capital goods has<br />
increased by 12.9% during the period April 2004 to January 2005 as compared to 10.66% during the<br />
same months the previous year. The index <strong>of</strong> production <strong>of</strong> machinery <strong>and</strong> equipment has posted a<br />
growth <strong>of</strong> 20.89% during April 2004 to January 2005 as compared to 11.83% during the same months<br />
the previous year.<br />
32
The dem<strong>and</strong> in the engineering sector is expected to be maintained primarily on account <strong>of</strong> the<br />
government’s focus on infrastructure development in the country, which is expected to continue in the<br />
medium term. Stable sales growth has been observed in the heavy engineering industry in light <strong>of</strong> the<br />
existing dem<strong>and</strong>. Net pr<strong>of</strong>it margin <strong>of</strong> heavy engineering industries has improved <strong>and</strong> adverse changes in<br />
the same are not expected in the medium term in light <strong>of</strong> the stable dem<strong>and</strong>. However, operating pr<strong>of</strong>it<br />
have stagnated due to rise in raw material costs <strong>and</strong> reduction in import duties. Any further reduction in<br />
peak import duties in the short to medium term will lead to increased imports <strong>and</strong> higher competition in<br />
the industry. The heavy engineering industry is expected to further improve upon the performance <strong>of</strong><br />
FY2004 in the near to medium term.<br />
India is emerging as a preferred outsourcing destination for design <strong>and</strong> manufacture <strong>of</strong> machinery <strong>and</strong><br />
equipment. India has a large pool <strong>of</strong> skilled labour force <strong>and</strong> the labour costs are amongst the lowest in<br />
the world. Recession in FY2002 forced the heavy engineering companies to restructure their operations<br />
<strong>and</strong> downsize the number <strong>of</strong> employees that increased their efficiency. Development <strong>of</strong> Special<br />
Economic Zones <strong>and</strong> incentives for exports are expected to increase the flow <strong>of</strong> FDI in the sector.<br />
33
BUSINESS OVERVIEW<br />
<strong>Kilburn</strong> Engineering Ltd. (“KEL”) specialises in design, engineering, manufacturing, supply <strong>and</strong><br />
commissioning <strong>of</strong> all types <strong>of</strong> drying systems for Chemical, Petrochemicals, Food, Oil & Gas <strong>and</strong> several<br />
other industries. KEL has vast experience in providing solutions for drying <strong>and</strong> processing several<br />
products - be it breakfast cereals, rubber, s<strong>and</strong>, carbon black, tea, salt, sodium cyanide, heavy <strong>and</strong> fine<br />
chemicals or ceramic tiles.<br />
INFRASTRUCTURE FACILITIES & UTILITIES<br />
Office And Factory<br />
<strong>Kilburn</strong>’s Corporate Office <strong>and</strong> Works are located at Bh<strong>and</strong>up, Mumbai. The premises are spread over<br />
three adjacent plots <strong>of</strong> l<strong>and</strong> admeasuring 10 acres. The l<strong>and</strong> is owned by the Company.<br />
Factory Building<br />
KEL’s factory building consists <strong>of</strong>:<br />
• A Machine Shop measuring 32 Mtrs Long <strong>and</strong> 8 Mtrs. wide wherein various machines such as<br />
Lathe Machine, Milling Machine, Shaping Machine, Drilling Machine, Dynamic Balancing<br />
Machine etc. are installed for machining <strong>of</strong> components <strong>and</strong> sub-assemblies is carried on;<br />
• A Light Bay measuring 64 Mtrs Long <strong>and</strong> 8 Mtrs. wide mainly consisting <strong>of</strong> components, subassembly<br />
<strong>and</strong> products weighing upto 2 MT for h<strong>and</strong>ling the fabricated components;<br />
• A Heavy Bay measuring 64 Mtrs Long <strong>and</strong> 8 Mtrs. wide wherein fabrication <strong>of</strong> heavy<br />
equipments is done. Sub-assembling <strong>and</strong> assembling <strong>of</strong> products transferred from the light bay<br />
are also carried out here. This bay consists <strong>of</strong> 2 nos. overhead cranes fo 5 Tons <strong>and</strong> 10 Tons<br />
respectively; <strong>and</strong><br />
• A Steel Yard measuring 40 Mtrs Long <strong>and</strong> 8 Mtrs. wide wherein raw materials are stored <strong>and</strong><br />
the same is h<strong>and</strong>led with the help <strong>of</strong> a 2MT overhead crane.<br />
<strong>Kilburn</strong> has a full-fledged workshop complete with all necessary machines, equipment <strong>and</strong> facilities for<br />
fabrication, assembly & testing <strong>of</strong> products <strong>and</strong> systems. The workshop has its full set <strong>of</strong> instruction<br />
procedures for all process - be it electrode, welding to precision assembly.<br />
Office Building<br />
The factory building admeasuring about 1500 Sq. Mtrs. enables to carry out various day to day activities<br />
<strong>of</strong> the Company pertaining to designing, engineering, research <strong>and</strong> development, manufacturing,<br />
marketing, Project & Engineering, Accounting <strong>and</strong> Administration/ HRD in a smooth, uninterrupted <strong>and</strong><br />
efficient manner.<br />
PLANT AND MACHINERY<br />
The general <strong>and</strong> critical fabrication equipments for making components <strong>and</strong> sub-assemblies (apart from<br />
those mentioned under the sub heading ‘ Machine Shop’ under para ‘Factory Building’ above) includes<br />
the following:<br />
1. Press Brake Godrej Make 160T capacity;<br />
2. Hydraulic press 300 MT capacity x 4 metric span;<br />
3. Shearing Machine Simtool Make (3M x 13mm thk.);<br />
4. Plate Blending Machine 25mm x 2.5 mtrs.;<br />
5. Plate Bending Machine 16 mm x 1.5 mtrs.;<br />
6. Cutting Machines –various capacities;<br />
7. Welding Machines –various processes <strong>and</strong> capacities;<br />
8. Pneumatic Compressor for Pneumatic Grinding <strong>and</strong> chipping;<br />
9. Diesel Generator Ashok Leyl<strong>and</strong> with Kirloskar Alternator 150 KVA.<br />
34
Industrial blower testing facility<br />
<strong>Kilburn</strong> has a well equipped Industrial Blower Testing Facility equipped with electrical <strong>and</strong> control panel<br />
instruments to test the performance <strong>of</strong> the blowers.<br />
Pilot Plant & Test Center<br />
The Company has its own Pilot Plant & Test Centre for Research <strong>and</strong> Development wherein trial <strong>of</strong><br />
products before designing the system/ equipment for various fabricated equipments/ systems is installed.<br />
Integrated computer system for MRP <strong>and</strong> CAD/CAM Activities<br />
QUALITY ASSURANCE<br />
Quality Assurance (QA) is the most active function at <strong>Kilburn</strong>. All equipments are subjected to rigorous<br />
inspection <strong>and</strong> quality control right from the receipt <strong>of</strong> raw material to despatch to customers' project site.<br />
<strong>Kilburn</strong> has been on the approved list <strong>of</strong> consultants <strong>and</strong> inspection agencies <strong>and</strong> is known for its<br />
stringent sense <strong>of</strong> quality.<br />
<strong>Kilburn</strong> has been working with Consultants <strong>and</strong> Inspection Agencies like Lloyds (LRIS), Det Norske<br />
Veritas (DNV), TUV , Engineers India Ltd. (EIL), KPG, H & G, UHDE, Toyo Engineering <strong>and</strong> several<br />
large business houses & organizations e.g. Oil <strong>and</strong> Natural Gas Corpoartion, IPCL, GACL, GAIL,<br />
CABOT (USA), etc. The QA department has arrangements for all types <strong>of</strong> non - destructive testing,<br />
including radiography (RT), Ultra Sonic Testing (UT), Magnetic Particle Test <strong>and</strong> Vibrations & Noise<br />
Measurement. <strong>Kilburn</strong> Engineering has implemented <strong>and</strong> maintained a Quality Management System for<br />
its entire operations as per the International Quality Management System. KEL had received its ISO-<br />
9001 Certification in 1998 <strong>and</strong> has thereafter upgraded its Quality Management System to the<br />
latest 2000 version. The ISO-9001 certification has been awarded by M/s. DET Norske Veritas (DNV)<br />
<strong>of</strong> Netherl<strong>and</strong>s <strong>and</strong> accredited by the RVA. <strong>Kilburn</strong> manufactures High Pressure Vessels <strong>and</strong> has<br />
acquired "U-Stamp" for manufacture <strong>of</strong> coded pressure vessels.<br />
DESIGN AND ENGINEERING<br />
KEL employs engineers from various disciplines <strong>of</strong> engineering to design, develop <strong>and</strong> engineer<br />
equipment <strong>and</strong> systems to customer's specifications alongwith national <strong>and</strong> international st<strong>and</strong>ards. The<br />
designs <strong>and</strong> engineering confirm to local legal, industrial <strong>and</strong> allied regulators <strong>of</strong> the industries. <strong>Kilburn</strong><br />
has a well equipped CAD center well connected on LAN for quick processing <strong>and</strong> access to its vast data<br />
bank <strong>of</strong> product tests, specifications, equipment design <strong>and</strong> field data. This enables to harness experience<br />
from past designs <strong>and</strong> installations <strong>and</strong> thereby provide continual improvement <strong>and</strong> optimum solutions.<br />
The Engineering & Production group is in close <strong>and</strong> constant touch with the Marketing group for quick<br />
updating <strong>of</strong> changes in customer specifications.<br />
MANUFCTURING PROCESS<br />
KEL manufactures various type <strong>of</strong> fabricated equipment which involves :<br />
(1) Material Testing<br />
Raw materials are purchased subject to Material Test Certificate or tested by KEL Quality Control<br />
Department before processing from the vendors.<br />
(2) Material Marking<br />
This activity is being carried out by fitter/ fabricators in shop under the supervision <strong>of</strong> Engineers<br />
wherein the raw materials viz. plates, rods <strong>and</strong> sheets are being marked as per fabrication drawing.<br />
(3) Material Cutting<br />
35
Materials have to be cut to the required shapes <strong>and</strong> sizes so as to make them fit for welding.<br />
Generally, oxy-acetylene gas is used for cutting carbon steel materials while the stainless steel<br />
materials are cut by plasma process. KEL has refurbished CNC plasma cutting machine which can<br />
cut both stainless steel <strong>and</strong> carbon steel. Rods, bars etc. <strong>of</strong> greater thickness are cut by mechanical<br />
hacksaw machine whereas those with lower thickness are cut by shearing machine.<br />
(4) Fit up<br />
Once the required materials are cut into the desired shapes the components are required to be fit up<br />
for welding. These activities are carried out by the fabricator /fitter under supervision <strong>of</strong> shop floor<br />
engineer. Quality Control Department checks the fit up before further processing the same.<br />
(5) Welding<br />
The welding engineers lay down the required procedure for welding.<br />
(6) Machining<br />
Machining <strong>of</strong> various components is carried out as per the drawings. However, machining <strong>of</strong> bigger<br />
components is not done by the company.<br />
(7) Assembly, Pressure Testing & Mechanical run trial<br />
Once the various components are duly welded <strong>and</strong> machined, assembly <strong>of</strong> the equipmwents are<br />
carried out as per the drawings. Pressure testing is carried out wherever required. Mechanical<br />
running trial for rotating equipment is as per the test requirements.<br />
RAW MATERIAL<br />
The major raw material used by the Company are Carbon Steel (plates <strong>and</strong> sheets), Stainless Steel (plates<br />
<strong>and</strong> sheets) <strong>and</strong> Special Alloying material (Hastalloy, Inconel plates <strong>and</strong> sheets). Major suppliers <strong>of</strong> these<br />
raw materials to the company are:<br />
Carbon Steel<br />
Stainless Steel<br />
Special alloy material<br />
Steel Authority <strong>of</strong> India<br />
Jindal Ltd.<br />
VDM Thyssen Krupp, Germany<br />
The Company produces specially designed machinery to suit the specific requirements <strong>of</strong> the client. This<br />
involves use <strong>of</strong> raw material meeting certain specifications <strong>and</strong> are not always available readily from the<br />
suppliers. This at times leads to a delay in procurement <strong>of</strong> raw material. This being a crucial element in<br />
the manufacturing process, the Company has installed a MRP s<strong>of</strong>tware package to minimise such gaps in<br />
the supply chain.<br />
The steel industry, in general, is on the upswing, due to strong growth in dem<strong>and</strong> propelled particularly<br />
by the dem<strong>and</strong> for steel in China. The increased production <strong>of</strong> steel has in turn led to rise in prices <strong>of</strong> raw<br />
materials like scrap, coking coal <strong>and</strong> metallurgical coke.<br />
UTILITIES<br />
Power<br />
The unit has a connected load <strong>of</strong> 450 KVA (250 KVA on a non continuous basis). The Company has a<br />
present requirement <strong>of</strong> 350KVA. The estimated requirement after the capital expenditure will be<br />
450KVA, which has already been approved.<br />
Water<br />
Water is needed only for human consumption. The Company has adequate water supply <strong>and</strong> does not<br />
envisage any problem in the supply.<br />
36
Pollution Control<br />
The Company is engaged in the business <strong>of</strong> manufacturing capital goods. As per the management, the<br />
operations do not result in release <strong>of</strong> effluents either into water or air. The Company had received<br />
consent from Maharashtra Pollution Control Board (MPCB) for carrying on its business activities <strong>and</strong> the<br />
same was valid up 31/07/1998. Owing to the losses incurred, the Company had closed down its business<br />
operations at the Bh<strong>and</strong>up factory from 15/10/1999 till 31/12/2001. During this period <strong>and</strong> subsequently<br />
upto the year 2004, the Company had failed to renew the consent received from the MPCB. However,<br />
the Company has made an application to MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28th<br />
July, 2005, for renewal <strong>of</strong> the consent w.e.f. 01/08/1998 upto 31/07/2007<br />
MANPOWER<br />
The Company has a total strength <strong>of</strong> 95 personnel working at its Mumbai Office <strong>and</strong> 17 other personnel<br />
engaged in marketing primarily at Kolkatta <strong>and</strong> Delhi. The company also has a strength <strong>of</strong> 15<br />
contractual employees. The proposed construction <strong>of</strong> the factory shed may entail recruitment <strong>of</strong><br />
additional labour, which the company proposes to recruit on a contract basis. In view <strong>of</strong> the increase in<br />
the number <strong>of</strong> orders to be implemented the company proposes to increase its managerial staff by<br />
recruiting atleast seven more persons. The Company has already taken steps for increasing its managerial<br />
staff.<br />
COLLABORATIONS<br />
The Company presently has the following collaborations:<br />
Name <strong>of</strong> the Collaborator Duration Type <strong>of</strong> Collaboration Consideration<br />
Nara Machinery Company 5 years w.e.f.<br />
Limited<br />
01/06/2005<br />
Carrier<br />
Equipment Inc.<br />
PRODUCTS<br />
Vibrating<br />
5 years w.e.f.<br />
3/10/2003<br />
Grant <strong>of</strong> Rights for:<br />
(i) Manufacture, use <strong>and</strong><br />
sell the licensed products<br />
in the exclusive licensed<br />
territory <strong>and</strong>,<br />
( ii )Manufacture, use <strong>and</strong><br />
sell in the non-exclusive<br />
licensed territory with<br />
prior permission from<br />
Nara<br />
Exclusive right to<br />
manufacture <strong>and</strong> sell the<br />
products under the<br />
Agreement within the<br />
licensed territories.<br />
Royalty:<br />
Internal Sales: 5%<br />
Exports: 8%<br />
Engineering Fee: 3% <strong>of</strong><br />
all product lines.<br />
Royalty as agreed upon<br />
depending on the Net<br />
Selling Price.<br />
KEL manufactures a range <strong>of</strong> dryers used in various industry segments like petrochemicals,chemicals,<br />
tea, coconut, sugar <strong>and</strong> other FMCG manufacturers. Some <strong>of</strong> the products are detailed below:<br />
Solid Dryers<br />
• Rotary Dryers, Calciners, Klins & Coolers<br />
• Fluid Bed Dryers And Coolers.<br />
• Flash Dryers.<br />
• Paddle Dryers And Coolers.<br />
• Spray Dryers.<br />
• Conveyorised / B<strong>and</strong> / Tunnel Dryers.<br />
• Vibrating Fluid Bed Dryers And Coolers.<br />
Fabricated Equipments<br />
37
• Pressure Vessels.<br />
• Heat Exchangers.<br />
• Columns.<br />
• Reactors.<br />
• Silos.<br />
Heat Transfer Systems<br />
• Direct <strong>and</strong> Indirect Fired Heaters, Furnaces.<br />
• Finned Tube Heaters <strong>and</strong> Coolers.<br />
• Waste Incineration Systems.<br />
Material H<strong>and</strong>ling Systems<br />
• Pneumatic Conveyors & Silos.<br />
• Vibratory Conveyors, Feeders & Spiral Elevators.<br />
Absorption Systems<br />
• Air / Gas / Liquid Drying Systems.<br />
• Solvent / Vapour Recovery Systems.<br />
• Catalytic Purifications Systems.<br />
Air & Dust H<strong>and</strong>ling Systems<br />
• Industrial Centrifugal Fans.<br />
• Cyclones.<br />
• Bag Filters.<br />
Oil Field Systems<br />
• Utility Gas Drying Systems.<br />
• Gas Conditioning Systems.<br />
• Inlet Manifolds.<br />
• Test Separators.<br />
• Water Injection Manifolds.<br />
CLIENTELE<br />
Some <strong>of</strong> the clients serviced by KEL during the past three years are given below.<br />
NAME OF THE CLIENT<br />
Apar Industries Limited<br />
KRBL Ltd.<br />
Thai Carbon Black Public Co. Ltd. Thail<strong>and</strong><br />
Finolex Industries Ltd.<br />
Tata Chemicals Ltd.<br />
Oriental Carbon Black Co. Ltd.<br />
SRF Ltd.<br />
Larsen & Toubro Ltd.<br />
Cabot India Ltd.<br />
India Petrochemicals Corporation Ltd.<br />
Saudi Basic Industries Ltd., Saudi Arabia<br />
Cabot Corporation, Ville Platte<br />
EQUIPMENT/ ITEM<br />
B<strong>and</strong> Dryer<br />
10. VFBD –Model 1 PD 15T<br />
a) Paddle Dryer 15T<br />
a) Pelletizers<br />
b) Rotary Dryer<br />
Fresh Air Heater<br />
Hydrator<br />
B<strong>and</strong> Dryer<br />
HF Rotary Kiln<br />
a) Instrument Utility Gas System<br />
b) Rotary Dryer<br />
c) Natural Gas Drying System<br />
d) IUG System for ONGC Offshore<br />
Main Unit Filter<br />
Upgradation <strong>of</strong> Existing Rotary<br />
Tube Banks for FBD<br />
Rotary Dryer<br />
38
Bertrams Chemical Plant Ltd.<br />
Cabot France<br />
Galaxy Surfactants Ltd.<br />
Navin Fluorine<br />
IPCL<br />
FEDO<br />
ONGC<br />
GNFC<br />
GSFC<br />
Samsung, Korea<br />
KHIC, Korea<br />
<strong>For</strong>mosa Plastics, Taiwan<br />
Gas Turbine Research Establishment<br />
(Defence Ministry, Govt. <strong>of</strong> India)<br />
Reliance Industries LTd.<br />
Futura Polymers/ PEPSI<br />
Visakhapatnam Steel Plant<br />
Nuclear Power Corpn.<br />
Purechem, Thail<strong>and</strong><br />
Chemplast<br />
Brooke Bond<br />
Nara Machinery, Japan<br />
Baroda Rayon<br />
Hindustan Lever Ltd.<br />
Sanmar Groups<br />
SPIC<br />
Khamam Refinery<br />
Mistubishi Heavy Inds. Ltd.<br />
Nirma Ltd.<br />
Cochin Refinery Ltd./ UOP<br />
Hindustan Petroleum Corp. /UOP<br />
Jindal Praxair Oxygen Co. Ltd.<br />
Petr<strong>of</strong>ace International Ltd.<br />
Pushpa Polymers Pvt. :td.<br />
Continental Carbon India Ltd.<br />
J Ray McDermott Middle East Inc.<br />
Caustic Soda Prilling<br />
Rotary Dryer<br />
Conveyorised Dryer<br />
Rotary Kiln<br />
a) Rotary Dryers<br />
b) Gas /Liquid Dryers<br />
c) Pressure Vessels<br />
a) A) Ammonia Synthesis Dryer<br />
b) Rotary Dryers<br />
c) Heat Exchangers<br />
d) Pressure Vessels<br />
a) Oil Field Packages<br />
b) Pressure Vessels<br />
c) Heat Exchangers<br />
d) Tanks<br />
a) Rotary Dryer<br />
b) Flash Dryer<br />
Fluid Bed Dryers<br />
Oil Field Packages & Heat Exchangers<br />
Oil Field Packages & Heat Exchangers<br />
Rotary Drums<br />
Supersonic Test Tunnel with high<br />
pressure, high temperature, fast response<br />
Fired Heater along with control <strong>and</strong><br />
measurement system<br />
Blowers<br />
Crystallizer<br />
a) Air Drying System<br />
b) Rotary Dryer<br />
a) Heavy Water Recovery System<br />
b) Cupro Nickel /SS Heat Exchangers<br />
Flash & Fluid Bed Dryer<br />
Fluid Bed Dryer & Silos<br />
Instant C<strong>of</strong>fee Plant consisting <strong>of</strong><br />
Evaporators, Extractors, Spray Dryer<br />
etc.<br />
Crystallisers, Dryers, Pollution Control<br />
Systems<br />
Crystalliser & Dryer<br />
Spray Dryers, Flash Dryers<br />
Fluid Bed Dryers<br />
Drying Systems<br />
Pressure Vessels <strong>and</strong> Tanks<br />
Incinerator<br />
Rotary Calciners, Hydrators & Coolers<br />
Adsorbers & Surge Drum for PSA<br />
polybed unit (DHDS Proj.)<br />
Adsorbers & Surge Drum for PSA<br />
polybed unit (DHDS Proj.)<br />
High Pressure Oxygen & Nitrogen<br />
Receivers (cap. 200 x 100 m 3 )<br />
Pressure Vessel (CS & SS Clad)<br />
Jacketed SS Clad Devolatizers<br />
Rotary Dryer<br />
IUG System for ONGC Offshore<br />
INNOVATIONS<br />
39
<strong>Kilburn</strong>’s R&D Test Centre is involved in an ongoing research <strong>and</strong> development activity <strong>and</strong> analyses<br />
the feedback from full-scale field models <strong>and</strong> from the customers. As a result <strong>of</strong> the efforts made by the<br />
R&D team the Company has developed the following new products:<br />
TEA DRYER<br />
The vibratory fluid bed dryer tea popularly known as VFBD <strong>and</strong> Vibro in the tea industry in the world is<br />
now available in its Phase-V version for all sizes. VFBD is now available for drying Orthodox Tea as<br />
well. This VFBD has very low consumption <strong>of</strong> power <strong>and</strong> fuel. <strong>Kilburn</strong>s improved design <strong>of</strong> mixing<br />
chamber with the special feature <strong>of</strong> independent control flow <strong>of</strong> temperature zones contributes to uniform<br />
drying <strong>and</strong> maintaining <strong>of</strong> uniform temperature. The Stainless Steel Deflector Plate facilitates falling <strong>of</strong><br />
fine dust back into drying chamber leaving no fly <strong>of</strong>f resulting in clean <strong>and</strong> hygienic consumption.<br />
While the stainless steel construction involves a wet section for the dust extractor. The improved<br />
aerodynamic plenum chamber involves a uniform distribution <strong>of</strong> airflow across width resulting in<br />
uniform drying. The VFBD performance is enhanced due to the alarm guiding operator resulting in<br />
better instrumentation.<br />
ROTARY DRYER FOR CARBON BLACK<br />
<strong>Kilburn</strong> has supplied several rotary dryers for Carbon Black. These dryers have proved their superiority<br />
quality <strong>and</strong> operational performance.<br />
PADDY DRYER<br />
The procedure <strong>of</strong> milling rice involves cooking soaked paddy for gelatinisation <strong>of</strong> Starch. The available<br />
equipment does not have the thermal efficiency required for the process. The existing process leads to an<br />
increase in the moisture content <strong>of</strong> the soaked paddy, which has to be further processed by drying. This<br />
increases the additional heat load.<br />
Rice processing mills generally use a batch processing for soaking, steaming <strong>and</strong> drying to attain the<br />
required moisture level. The paddle cookers developed by KEL use the conductive type cooking system<br />
wherein the soaked paddy is indirectly uniformly heated for gelatinization <strong>of</strong> soaked paddy. The new<br />
process innovated helps in avoiding this increase in moisture content thereby increasing fuel efficiency <strong>of</strong><br />
the process <strong>and</strong> also converts the process into a continuous process. As the paddle cookers work on a<br />
continuous basis, the batch system <strong>of</strong> steaming is avoided <strong>and</strong> the batch time reduces to 4 hours from the<br />
usual 9 to 10 hours.<br />
Vibrating system for drying <strong>of</strong> soaked steamed paddy works on the principle <strong>of</strong> fluidization; drying rate<br />
is high resulting in compact <strong>and</strong> highly efficient system. Vibrating type fluid bed can work very<br />
efficiently during constant rate drying for removal <strong>of</strong> surface moisture. Fluidized bed drying provides<br />
uniform moisture in partial dried paddy. Residence time in such dryers is very short (3 to 5 minutes) <strong>and</strong><br />
can be well controlled. As the moisture h<strong>and</strong>led is low evaporation load reduces in the dryers.<br />
The energy consumption per kilogram (expected utility consumption is in the range <strong>of</strong> 0.2 Kg. <strong>of</strong> steam/<br />
kg <strong>of</strong> paddy) <strong>of</strong> water evaporated decreases with increasing moisture level <strong>of</strong> paddy <strong>and</strong> drying air<br />
temperature resulting in recycling <strong>of</strong> exhaust air. Corrosion problem due to high humidity can be<br />
avoided which occur usually at the initial stage <strong>of</strong> drying.<br />
SUGAR DRYER<br />
VIBRO-FLUDISED SYSTEM FOR DRYING AND COOLING OF SUGAR<br />
Based on the extensive research <strong>and</strong> development <strong>of</strong> the field data, KEL has developed a vibratory bed<br />
dryer, which undertakes uniform drying, <strong>and</strong> cooling <strong>of</strong> sugar crystals. The dryer mainly works on the<br />
principle <strong>of</strong> vibration wherein the wet sugar crystals are dried. Measured quantity <strong>of</strong> sugar crystals from<br />
centrifuge is fed into the drying chamber <strong>and</strong> hot air is passed underneath a perforated tray carrying sugar<br />
crystals. Wet sugar is effectively fluidized by a combination <strong>of</strong> hot air <strong>and</strong> vibrations. The drying/<br />
cooling <strong>of</strong> sugar crystals is uniform because <strong>of</strong> excellent mixing <strong>of</strong> sugar crystals with fluidizing media.<br />
40
Generally, in a vibrating hopper dryer there is a horizontal sliding movement leading to fine generation<br />
<strong>and</strong> non-uniform drying <strong>of</strong> surgar crystals because <strong>of</strong> large bed heights <strong>and</strong> also results in slight brownish<br />
colour <strong>of</strong> the sugar crystals. Whereas in fludisation intense heat <strong>and</strong> mass transfer due to vibration<br />
movement provides for an extremely efficient removal <strong>of</strong> surface moisture <strong>and</strong> product heat. The gentle<br />
treatment to sugar results in maintaining the crystal structure <strong>and</strong> retains the crystals brightness.<br />
Moreover, the vibrating springs supported the plenum/ drying chamber are made <strong>of</strong> special steel which<br />
provides infinite life. As the vibratory fluid bed dryer/ cooler contact parts are in stainless steel<br />
construction results in hygienic construction.<br />
MARKET<br />
KEL primarily manufactures a large range <strong>of</strong> industrial dryers. There is no statistical data available on<br />
the dem<strong>and</strong> for these products in India or abroad. However, being a part <strong>of</strong> the capital goods segment,<br />
one can expect the growth in dem<strong>and</strong> to follow the overall industrial growth pattern. Led by a strong<br />
performance from the manufacturing sector, the overall industrial production (measured in terms <strong>of</strong> the<br />
Index <strong>of</strong> Industrial Production [IIP with base year 1993-94=100]) recorded a growth <strong>of</strong> 9.6 % during<br />
April-May 2005-06 compared to 7.9% recorded in April-May 2004-05.<br />
MARKETING<br />
<strong>Kilburn</strong> designs, manufactures <strong>and</strong> installs critical equipment for client industries in the chemical, petrochemical<br />
<strong>and</strong> food processing sectors. Equipment supplied by <strong>Kilburn</strong> includes various kinds <strong>of</strong> dryers<br />
including rotary dryers <strong>and</strong> calciners, heaters, coolers, fans <strong>and</strong> skid mounted packages. <strong>Kilburn</strong> also<br />
specializes in manufacture <strong>of</strong> equipment systems for the soda ash, caustic soda <strong>and</strong> PVC industries.<br />
<strong>Kilburn</strong> supplies on a routine basis dryers to the tea industry where it is a market leader in the domestic<br />
market <strong>and</strong> significant supplier for other tea producing countries. In the last two years, <strong>Kilburn</strong> has<br />
developed dryers for rice paddy processing <strong>and</strong> for drying <strong>of</strong> sugar, a diversification for the company.<br />
<strong>Kilburn</strong> has developed business relationships with some prominent international customers over the last<br />
three years in the carbon black industry <strong>and</strong> in particular as a supplier to Cabot Corporation <strong>of</strong> USA <strong>and</strong><br />
the Aditya Birla Group. <strong>Kilburn</strong> is also in the process <strong>of</strong> developing supplier relationships with other<br />
international customers, which include Komline S<strong>and</strong>erson, USA <strong>and</strong> GMF Gouda <strong>of</strong> Holl<strong>and</strong>. Bertrams<br />
Chemical Plants <strong>and</strong> Equipment <strong>of</strong> Switzerl<strong>and</strong> is also a customer for past many years. Domestically,<br />
<strong>Kilburn</strong> has been a supplier to prominent companies including Nirma Limited, Reliance Industries,<br />
Larsen & Toubro, SRF Limited, Apar Limited <strong>and</strong> others.<br />
<strong>Kilburn</strong> will continue to focus on these <strong>and</strong> other customers both in the overseas <strong>and</strong> domestic markets to<br />
consolidate long-term stable relationships. <strong>Kilburn</strong> is focusing on improvement <strong>of</strong> products to the Tea<br />
industry as well as in the diversification into rice paddy <strong>and</strong> sugar dryers. Overall, the Company’s<br />
objective is to obtain a balance between exports <strong>and</strong> domestic sales to ensure improving efficiencies <strong>and</strong><br />
products concurrently enabling a reasonable growth pattern in the coming years.<br />
COMPETITION<br />
KEL manufactures equipment for diverse industries in chemical/ petrochemical <strong>and</strong> food processing.<br />
KEL’s range <strong>of</strong> products is diverse <strong>and</strong> authentic published data for existing <strong>and</strong> projected growth is not<br />
available. Company’s assessment is that worldwide it is a market leader in Tea Dryers <strong>and</strong> a significant<br />
player for Rotary Dryers in the Carbon Black industry. Domestically the company is a major supplier <strong>of</strong><br />
dryers <strong>of</strong> various kinds. Competition is from smaller players in the business <strong>and</strong> none <strong>of</strong> the competitors<br />
have the range <strong>of</strong> products <strong>Kilburn</strong> manufactures, however these competitors are able to <strong>of</strong>fer better<br />
prices. Some <strong>of</strong> the players in the capital goods segment who manufacture some <strong>of</strong> the products<br />
manufactured by <strong>Kilburn</strong> are listed below:<br />
Name <strong>of</strong> the Company<br />
L & T – Niro Ltd.<br />
Sulzer India Ltd.<br />
FFE Minerals India Pvt. Ltd<br />
Indcone Ltd.<br />
GEI Hamon<br />
Mojj Engineering System Ltd.<br />
Vikram <strong>For</strong>ging<br />
Products manufactured<br />
Rotary <strong>and</strong> Fluid Bed Drier<br />
Fluid Bed Drier<br />
Rotary Drier<br />
Air Drier<br />
Air H<strong>and</strong>ling system (Fin fan cooler)<br />
Flash Drier, Spray Drier <strong>and</strong> paddle drier<br />
Tea Drier<br />
41
In the overseas market, competition for the company’s products is from Eastern Europe <strong>and</strong> China.<br />
KEY INDUSTRY REGULATIONS<br />
ASME Boiler & Pressure Vessel Code :<br />
The Code establishes rules <strong>of</strong> safety governing the design, fabrication <strong>and</strong> inspection <strong>of</strong> boilers <strong>and</strong><br />
pressure vessels, <strong>and</strong> nuclear power plant components. The objective <strong>of</strong> the rules is to assure reasonably<br />
certain protection <strong>of</strong> life <strong>and</strong> property <strong>and</strong> to provide a margin for deterioration in service. ASME Code<br />
Symbol Stamps are used by Certificate Holders to indicate that stamped items conform to the latest<br />
edition <strong>of</strong> the ASME Boiler <strong>and</strong> Pressure Vessel Code. Utilization <strong>of</strong> the ASME Code Symbol Stamp is<br />
a means <strong>of</strong> complying with the laws <strong>and</strong> regulation in most <strong>of</strong> the US <strong>and</strong> Canada as well as other<br />
countries throughout the world.<br />
There are 17 Symbol Stamps associated with the non-nuclear sections <strong>of</strong> the Code for which Certificates<br />
<strong>of</strong> Authorisation are issued by ASME. The rules <strong>of</strong> the Code are revised annually in addenda <strong>and</strong><br />
become m<strong>and</strong>atory six months after publication. Applicants are required to have a contract or agreement<br />
with a accredited Authorized Inspeciton Agency (AIA) under which the inspection services are to be<br />
furnished <strong>and</strong> which states the mutual responsibilities <strong>of</strong> both parties.<br />
Applicants are required to have <strong>and</strong> demonstrate a quality control system to establish that all code<br />
requirements including design, fabrication, examination (by the manufacturere, inspection by the AIA),<br />
pressure testing <strong>and</strong> certification will be met. The quality control system must be documented in a<br />
manual which supports understaning <strong>of</strong> the system. The “U-Stamp” granted to Pressure Vessels is valid<br />
for a period <strong>of</strong> 3 years from the date <strong>of</strong> the certificate. The renewal notices will be sent to the Certificate<br />
Holders six to eight months prior to the expiration date <strong>of</strong> the Certificate.<br />
RvA Accreditation Marks<br />
An accreditation mark is the symbol used by the accredited body to communicate its accredited status.<br />
An RvA accreditation mark is the combination af the RvA logo in association with an identification <strong>of</strong><br />
the accredited area <strong>and</strong> the registration number <strong>of</strong> the accredited body concerned. The Regulation for<br />
Accreditation (RAC) is the basic document for all organizations that are accredited or wish to be<br />
accredited. It contains the rules <strong>and</strong> regulations applied by the RvA (Dutch Accreditation Council RvA)<br />
in addition to the accreditation criteria.<br />
Organisation that perform testing, calibration, inspection, certification, verification, attestation or<br />
organize pr<strong>of</strong>iciency testing may be accredited by RvA. After the accrediation has been granted, it shall<br />
be periodically reviewed with regard to it validity. To this end, the RvA normally carries out an annual<br />
survelliance assessment <strong>and</strong> re-assessment within four years. During the accreditation period, the scope<br />
<strong>of</strong> the accreditation may be changed.<br />
Various other General Laws & Regulations applicable to the industry :<br />
(1) The Industrial Disputes Act, 1947<br />
This Act makes provisions for investigation <strong>and</strong> settlement <strong>of</strong> industrial disputes <strong>and</strong> for providing<br />
certain safeguards to the workers. This Act applies to all establishments <strong>and</strong> undertakings carrying on<br />
any systematic activity by co-operation between an employer <strong>and</strong> his workmen for the production,<br />
supply or distribution <strong>of</strong> goods or services.<br />
(2) The Minimum Wages Act, 1948<br />
The wages <strong>of</strong> the workers in the un-organised sector <strong>of</strong> employment are primarily fixed under the<br />
Minimum Wages Act, 1948. Under the Act both Central <strong>and</strong> State governments are appropriate<br />
governments for fixation/ revision <strong>of</strong> minimum rates <strong>of</strong> wages in respect <strong>of</strong> the scheduled employments<br />
falling under their respective jurisdiction. The minimum Wages Act provides for periodic revision <strong>of</strong><br />
minimum rates <strong>of</strong> wages. As per Section 22 <strong>of</strong> the Act, any person violating the provisions shall be<br />
42
punished with imprisonment which may extend to 6 months or fine which may extend upto Rs.500/- or<br />
both.<br />
(3) The Payment <strong>of</strong> Wages Act, 1936<br />
The Payment <strong>of</strong> Wages Act, 1936 was enacted to regulate the payment <strong>of</strong> wages to certain classes <strong>of</strong><br />
persons employed in industry with the object to provide for a speedy <strong>and</strong> effective remedy to the<br />
employees arising out <strong>of</strong> illegal deductions or unjustified delay made in paying the wages to them. At<br />
present the Act applies only to those who are in receipt <strong>of</strong> wages whose average is below Rs 1,600 per<br />
month. The Central government is responsible for the administration <strong>of</strong> the Act in railways, mines,<br />
oilfields <strong>and</strong> air transport services, while State governments are responsible in factories <strong>and</strong> other<br />
industrial establishments.<br />
(4) The Contract Labour (Regulation <strong>and</strong> Abolition) Act, 1970<br />
The Contract Labour (Regulation <strong>and</strong> Abolition) Act, 1970 has been enacted to regulate the employment<br />
<strong>of</strong> contract labour in certain establishments <strong>and</strong> for matters connected therewith. The Act applies to every<br />
establishment in which 20 or more workmen are employed or were employed on any day on the<br />
preceding 12 months as contract labour <strong>and</strong> to every contractor who employs or who employed on any<br />
day <strong>of</strong> the preceding 12 months 20 or more workmen. Every such establishment is required to get itself<br />
registered under the Act. Principal Employer should maintain register <strong>of</strong> contractors in prescribed form.<br />
Control over contract labour will be exercised by ‘Appropriate Government’. Appropriate Government<br />
means Central Government in case <strong>of</strong> railways, docks, IFCI, ESIC, LIC, ONGC, UTI, Airport Authority,<br />
industry carried on by or under authority <strong>of</strong> Central Government. State Government in case <strong>of</strong> other<br />
industrial disputes<br />
(5) The Factories Act, 1948<br />
The Factories Act, 1948 is the principal legislation for regulating various aspects relating to safety, health<br />
<strong>and</strong> welfare <strong>of</strong> workers employed in factories. This Act is a Central enactment which aims at protecting<br />
workers employed in factories from industrial <strong>and</strong> occupational hazards. State governments <strong>and</strong> union<br />
territory administrations frame rules under the Act <strong>and</strong> enforce provisions <strong>of</strong> the Act <strong>and</strong> rules through<br />
their factory inspectorates. If the employment is less than these numbers, the unit gets covered under<br />
Shop & Establishment Act. Factory should be licensed / registered with Chief Inspector <strong>of</strong> Factories <strong>and</strong><br />
the license / registration has to be renewed every year.<br />
(6) Workmen’s Compensation Act, 1923<br />
The Act provides for payment <strong>of</strong> compensation to workmen <strong>and</strong> their dependents in case <strong>of</strong> injury <strong>and</strong><br />
accident (including certain occupational disease) arising out <strong>of</strong> <strong>and</strong> in the course <strong>of</strong> employment <strong>and</strong><br />
resulting in disablement or death. The Act applies to railway servants <strong>and</strong> persons employed in any such<br />
capacity as is specified in Schedule II <strong>of</strong> the Act. Schedule II includes persons employed in factories,<br />
mines, plantations, mechanically propelled vehicles, construction works <strong>and</strong> certain other hazardous<br />
occupations.<br />
(7) The Payment <strong>of</strong> Gratuity Act, 1972<br />
The Payment <strong>of</strong> Gratuity Act, 1972 is applicable to factories, mines, oil fields, plantations, ports,<br />
railways, motor transport undertakings, companies, shops <strong>and</strong> other establishments. The Act provides for<br />
payment <strong>of</strong> gratuity at the rate <strong>of</strong> 15 days’ wages for each completed year <strong>of</strong> service subject to a<br />
maximum <strong>of</strong> Rs 3,50,000. In the case <strong>of</strong> seasonal establishment, gratuity is payable at the rate <strong>of</strong> seven<br />
days’ wages for each season. The Act does not affect the right <strong>of</strong> an employee to receive better terms <strong>of</strong><br />
gratuity under any award or agreement or contract with the employer.<br />
(8) Employees’ State Insurance Act, 1948<br />
The Employees’ State Insurance Act is applicable in the first instance, to non-seasonal factories using<br />
power <strong>and</strong> employing 10 or more persons <strong>and</strong> non-power using factories employing 20 or more persons.<br />
Under the enabling provisions contained in the Act, the Act is being extended by the State governments<br />
to new classes <strong>of</strong> establishments, namely, shops, hotels, restaurants, cinemas, including preview theatres,<br />
road motor transport undertakings <strong>and</strong> newspaper establishments employing 20 or more persons.<br />
43
Employees working though contractor are also covered. It covers employees drawing wages not<br />
exceeding Rs 6,500 with effect from 1 January 1997. Employer’s contribution is 4.75% <strong>of</strong> total wage bill<br />
<strong>of</strong> all employees in respect <strong>of</strong> every wage period while the employee’s contribution is 1.75% <strong>of</strong> wages.<br />
The contribution has to be paid within 21 days from close <strong>of</strong> the month. It is payable by a challan in<br />
authorised bank. If the contribution is not paid in time, interest @ 12% is payable. ESIC authorities can<br />
impose ‘damages’ varying between 5% to 25% <strong>of</strong> arrears <strong>of</strong> contribution<br />
(9) Employees' Provident Fund <strong>and</strong> Miscellaneous Provisions Act 1952<br />
The Employees’ Provident Funds <strong>and</strong> Miscellaneous Provisions Act covers three schemes i.e. PF<br />
(Provident Fund scheme), FPF (Family Pension Fund scheme) <strong>and</strong> EDLI (Employees Deposit Linked<br />
Insurance scheme). The Act is applicable to Factories amongst various other establishments. Coverage<br />
under the Act is presently restricted to establishments employing 20 or more persons. It is further<br />
restricted to those drawing wages up to Rs 6,500 per month. Lower contribution in certain cases such as<br />
any establishment registered with Board for Industrial <strong>and</strong> Financial Reconstruction (BIFR) as a sick<br />
company <strong>and</strong> the same at the lower rate <strong>of</strong> contribution continues till its net worth is positive. Lower<br />
contribution for any other establishment which has accumulated loss equal to or more than its assets <strong>and</strong><br />
has also suffered cash loss in last two years is also permissible.<br />
(10) Payment <strong>of</strong> Bonus Act, 1965<br />
The Act is applicable to (a) any factory employing 10 or more persons where any processing is carried<br />
out with aid <strong>of</strong> power (b) Other establishments (established for purpose <strong>of</strong> pr<strong>of</strong>it) employing 20 or more<br />
persons. Minimum bonus payable is 8.33% <strong>and</strong> maximum is 20%. Bonus is payable annually within 8<br />
months from close <strong>of</strong> accounting year. Bonus is payable to all employees whose salary or wages do not<br />
exceed Rs 3,500 per month provided they have worked for at least 30 days in the accounting year.<br />
However, for calculation <strong>of</strong> bonus, maximum salary <strong>of</strong> Rs 2,500 is considered. The Act does not apply<br />
to any institution established not for purposes <strong>of</strong> pr<strong>of</strong>it.<br />
44
VIII. HISTORY AND CORPORATE STRUCTURE OF THE COMPANY<br />
HISTORY AND MAJOR EVENTS<br />
<strong>Kilburn</strong> Engineering Ltd. (KEL), incorporated in Kolkata in the State <strong>of</strong> West Bengal on September 07,<br />
1987, acquired the erstwhile Industrial Machinery Division <strong>of</strong> Macneill & Magor Group (presently<br />
known as Williamson Magor & Co. Ltd.) as a going concern (with facilities at Bh<strong>and</strong>up, Mumbai),<br />
through a Scheme <strong>of</strong> Arrangement sanctioned by the Honourable Calcutta High Court. The acquisition<br />
was effective from April 01, 1989.<br />
KEL specializes in design, engineering, manufacture, project management <strong>and</strong> commissioning <strong>of</strong> turnkey<br />
packages <strong>of</strong> a variety <strong>of</strong> process plants, equipment <strong>and</strong> systems in the area <strong>of</strong> heat <strong>and</strong> mass transfer<br />
employed in core sector industries like Petrochemcials, Fertilisers, Chemicals, Refineries, Oil <strong>and</strong> Gas,<br />
Food Processing etc.<br />
KEL has entered into technical collaboration <strong>and</strong> alliance with Carrier Vibrating Equipment Inc. <strong>and</strong><br />
Nara Machinery Company Limited. In addition to the above, the Company has already assimilated<br />
technology through various collaborations it had entered in the past. The company has over the years<br />
gained expertise in the design, engineering, manufacture <strong>and</strong> installation <strong>of</strong> various types <strong>of</strong> equipment<br />
<strong>and</strong> systems derived out <strong>of</strong> in-house R&D as well as through association with overseas collaborators.<br />
SLIDE IN PERFORMANCE<br />
The Company’s dealing with institutions /banks was satisfactory till the end <strong>of</strong> 1997/ early 1998.<br />
Subsequently, the Company witnessed a slide in sales coupled with an increase in input cost due to the<br />
following reasons:<br />
‣ Due to the overall recessionery trend in the economy (more particularly the Engineering<br />
Industry) the Company witnessed a decline in sales.<br />
‣ Due to an increase in the cost <strong>of</strong> salaries <strong>and</strong> wages, other manufacturing expenses <strong>and</strong><br />
administrative <strong>and</strong> selling expenses (consequent to setting up <strong>of</strong> the new plant at Baroda) the<br />
Company had to bear an increase in input costs.<br />
With the increase in input costs on one h<strong>and</strong> <strong>and</strong> decrease in sales on the other the margins, both at gross<br />
<strong>and</strong> operating levels, eroded. The Company started defaulting in its payments to institutions <strong>and</strong> banks<br />
from the financial year 1998 –99 onwards.<br />
RESTRUCTING & REHABILITATION<br />
The Company approached the Board for Industrial <strong>and</strong> Financial Reconstruction (BIFR) in the year<br />
2000 <strong>and</strong> was declared sick by BIFR vide its Order dated November 10, 2000. IDBI was appointed as<br />
the Operating Agency under Section 17(3) <strong>of</strong> the Sick Industrial Companies (Special Provisions) Act,<br />
1985 (SICA) to formulate a rehabilitation proposal for the company. In its Order passed at the BIFR<br />
hearing held on December 31, 2002, the Bench also directed the company that the sum <strong>of</strong> Rs. 825 Lacs<br />
brought in by the promoters <strong>and</strong> shown as advance against share capital should be converted into <strong>equity</strong>/<br />
preference shares. The rehabilitation scheme envisaged various fiscal reliefs <strong>and</strong> concessions from the<br />
lenders/ bankers <strong>and</strong> the implementation date was October 1, 2003. BIFR sanctioned said scheme in<br />
May 2004 leading to a delay <strong>of</strong> eight months in the implementation <strong>of</strong> the scheme. The rehabilitation<br />
scheme is presently under implementation.<br />
THE REHABILITATION SCHEME<br />
M/s. <strong>Kilburn</strong> Engineering Ltd. (KEL) filed a reference with BIFR on 14 th April, 2000 <strong>and</strong> was declared<br />
as a sick industrial company in terms <strong>of</strong> Section 3(1)(o) <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1985 (hereinafter referred to as the ‘Act’) vide its Order dated: 10 th November, 2000.<br />
BIFR in the hearing held on December 31, 2002 passed its order which included the following :<br />
(a) the sum <strong>of</strong> Rs. 825 Lacs brought in by the promoters <strong>and</strong> shown as advance against share capital<br />
to be converted into <strong>equity</strong>/ preference capital;<br />
45
(b) In case the company proposed to sell its Baroda unit, it shall settle VRS with both the Officers<br />
Associations as well as Workers’ Union;<br />
Restructuring proposed under the Rehabilitation Scheme is outlined below:<br />
The total amount due to banks <strong>and</strong> financial institutions at the time <strong>of</strong> the sanction <strong>of</strong> the Scheme were as<br />
follows:<br />
Particulars<br />
IDBI<br />
Term<br />
Loan<br />
<strong>For</strong>eign<br />
Currency<br />
Loan<br />
Debenture<br />
Holders<br />
Working Capital<br />
Banks<br />
Principal 595.10 274.39 746 940 867<br />
Sundry<br />
Creditors<br />
As per the Scheme part <strong>of</strong> the above dues were to be paid as One Time Settlement (OTS) <strong>and</strong> the balance<br />
in installments upto the year 2007/2008.<br />
COST OF REHABILITATION SCHEME :<br />
The cost <strong>of</strong> proposed Rehabilitation Scheme aggregates Rs. 1838 Lacs as per details given below :<br />
(Rs. in Lacs)<br />
Particulars<br />
Amount<br />
Payment <strong>of</strong> allotment price to GIDC 23<br />
Payment <strong>of</strong> Notified area taxes etc. 50<br />
OTS <strong>of</strong> Institutional <strong>and</strong> Bank Dues 1615<br />
Upfront VRS payment to Mumbai (Bh<strong>and</strong>up) workers 100<br />
VRS payment to Vadodara (Baroda) workers 50<br />
Total 1838<br />
MEANS OF FINANCE :<br />
The proposed Rehabilitation Scheme which is estimated at Rs. 1838 Lacs as given above is proposed to<br />
be financed as under :<br />
(Rs. in Lacs)<br />
Particulars<br />
Amount<br />
Promoters contribution 100<br />
Sale proceeds from Baroda Unit 1100<br />
Sale <strong>of</strong> investments 78<br />
Release <strong>of</strong> margin money from Federal Bank 150<br />
Internal Accruals 415<br />
Total 1838<br />
PROGRESS OF IMPLEMENTATION OF THE SCHEME :<br />
(As on 30 th June, 2005)<br />
The time frame for completion <strong>of</strong> the scheme /incurring expenditure as per the sanctioned scheme is from<br />
October 2003 to September 2009.The progress in implementation <strong>of</strong>`the sanctioned scheme as on 30 th<br />
June, 2005 as per the report submitted by the Company to the OA is detailed below:<br />
Cost <strong>of</strong> the Project:<br />
Particulars<br />
Payment <strong>of</strong><br />
allotment price<br />
to GIDC<br />
As per<br />
Scheme<br />
approved by<br />
BIFR<br />
Expenditure incurred<br />
During the<br />
half year<br />
ended June<br />
‘05<br />
Cumulative<br />
upto period<br />
ended June<br />
‘05<br />
Balance<br />
expenditure<br />
to be incurred<br />
(Rs. Lacs)<br />
Revised cost<br />
23 --- 24 --- 24<br />
46
Payment <strong>of</strong><br />
50 --- 34 --- 34<br />
Notified area<br />
taxes etc.<br />
OTS <strong>of</strong><br />
1615 --- 1615 --- 1615<br />
Institutional &<br />
Bank Dues<br />
Upfront VRS<br />
100 42 100 --- 100<br />
payment to<br />
Mumbai<br />
(Bh<strong>and</strong>up)<br />
Workers<br />
VRS payment<br />
50 -- 46 --- 46<br />
to Vadodara<br />
(Baroda)<br />
Workers<br />
Total 1838 42 1820 -- 1819<br />
Notes:<br />
a) Payment <strong>of</strong> Notified Area Taxes <strong>and</strong> other related payments amounted to Rs. 34 Lacs <strong>and</strong> no further<br />
amount is due.<br />
b) Company was to pay Rs. 1615 Lacs to institutions <strong>and</strong> Banks by 31 st March, 2004 under OTS. An<br />
amount <strong>of</strong> Rs. 1100 Lacs was paid out <strong>of</strong> the sales proceeds <strong>of</strong> the Baroda Factory prior to<br />
31.03.2004. Balance amount was progressively paid. As on 31.12.2004 the entire amount has been<br />
repaid along with interest thereon. Subsequent installments have since been paid regularly.<br />
c) Mumbai workers were to be paid Rs. 100 Lacs. As per revised agreement Rs. 100 Lacs has been<br />
paid.<br />
d) The compensation payable to Baroda Workmen worked out to Rs. 46 Lacs instead <strong>of</strong> Rs. 50 Lacs.<br />
e) Revised cost <strong>of</strong> the scheme is Rs. 1819 Lacs instead <strong>of</strong> Rs. 1838 Lacs in view <strong>of</strong> the saving <strong>of</strong> Rs. 19<br />
Lacs in payment <strong>of</strong> Notified Area Taxes <strong>and</strong> VRS <strong>of</strong> Baroda workers.<br />
TURN AROUND<br />
During FY 1999-2000 despite total income reducing by about 42% when compared to the previous year<br />
on a year-to-year basis the Company earned a gross pr<strong>of</strong>it <strong>of</strong> Rs. 101 Lacs as against gross loss in the<br />
previous year. However, it incurred operating loss <strong>of</strong> Rs. 1079 Lacs.<br />
During the year 2000-01 the Company’s operations were severely constrained due to lack <strong>of</strong> working<br />
capital facilities. However, during the year 2001-02 the Company’s operations improved with sales<br />
registering around 30% increase over the previous year. This was due to the fact that Tea auction prices<br />
which had fallen in the previous year improved resulting in improved domestic dem<strong>and</strong>.<br />
During the year 2002-03 the Company registered a growth <strong>of</strong> nearly 29% in net sales over the previous<br />
year <strong>and</strong> reported a PDIDT <strong>of</strong> Rs. 391.59 Lacs compared to Rs. 309.89 Lacs in the previous year.<br />
During the year the Company successfully executed orders from reputed customers including Nuclear<br />
Power Corporation <strong>of</strong> India Ltd., J. Ray McDermott Middle East Inc., Abu Dhabi, Continental Carbon<br />
Ltd. <strong>and</strong> Nirma Ltd..<br />
The year 2003-04 witnessed a growth <strong>of</strong> 21% in sales <strong>and</strong> services over the previous year. The company<br />
registered exports <strong>of</strong> 25.50% <strong>of</strong> the total sales <strong>and</strong> services.<br />
Over the period <strong>of</strong> three years ending on 30 th September, 2005 the Company witnessed a steady recovery<br />
<strong>and</strong> has reported an increase in turnover <strong>and</strong> operating pr<strong>of</strong>its. The EBIDTA has grown at a Compounded<br />
Annual Growth Rate <strong>of</strong> 41.01% over this period following the upcycle in the industry.<br />
The Company has witnessed a turnaround during the twelve months period ending on 30 th September,<br />
2005 <strong>and</strong> has reported a turnover <strong>of</strong> Rs. Rs. 4440 Lacs which is 79.52% higher than that reported for the<br />
FY 2004. The Company has also reported a Net Pr<strong>of</strong>it <strong>of</strong> Rs. 522.71 Lacs.<br />
Major events in the history <strong>of</strong> the Company are listed below:<br />
Year<br />
Event<br />
1987 Incorporated on 7 th September, in the State <strong>of</strong> W. Bengal, promoted by Macneil <strong>and</strong><br />
47
Magor group (M&M).<br />
1989 With a view to manufacture drying system, pneumatic h<strong>and</strong>ling system, heat<br />
exchangers etc., the Company acquired the <strong>Kilburn</strong> division <strong>of</strong> M & M (viz., the<br />
entire industrial machinery factory <strong>of</strong> M & M situated at revenue villages <strong>of</strong><br />
Bh<strong>and</strong>up <strong>and</strong> Nahur in Taluka Kurla) as a going concern by a Scheme <strong>of</strong><br />
Arrangement sanctioned by the High Court <strong>of</strong> Calcutta with effect from 1 st April,<br />
1989.<br />
1990 The Company made its Initial Public <strong>Offer</strong> <strong>of</strong> 33,70,793 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- per<br />
share at par.<br />
1990 With a view to substantial expansion <strong>of</strong> manufacturing operations from 1,200 TPA<br />
to 5,200 TPA, the Company acquired a plot at GIDC Industrial Estate at Por-<br />
Ramangamdi, on the outskirts <strong>of</strong> Baroda.<br />
1993 33,70,800 <strong>equity</strong> shares at a Premium <strong>of</strong> Rs. 25 per share were allotted on a rights<br />
basis to the existing shareholders in the ratio <strong>of</strong> 1:1. Another 88,200 shares were<br />
<strong>of</strong>fered at the same premium to employees <strong>of</strong> the Company <strong>and</strong> employees <strong>and</strong><br />
shareholders <strong>of</strong> promoter company namely, Williamson Magor & Co. Ltd. out <strong>of</strong><br />
which only 6300 <strong>equity</strong> shares were subscribed to. The unsubscribe part was allowed<br />
to lapse.<br />
1995 The Company issued 14% Non-Convertible debentures aggregating Rs. 115 lakhs on<br />
private placement basis with UTI.<br />
The Company issued secured redeemable non-convertible debentures to UTI, LIC,<br />
GIC, NIC, <strong>and</strong> OIC aggregating to Rs. 500 Lacs.<br />
The Company issued secured redeemable debentures to IDBI Mutual Fund<br />
aggregating to Rs. 200 Lacs.<br />
2000 The Company was declared sick by BIFR.<br />
2001 The Companys ceased operations at Baroda <strong>and</strong> the factory was closed.<br />
2004 At the AGM <strong>of</strong> the company held on March 31, 2004, the members <strong>of</strong> the company<br />
have approved the Delisting <strong>of</strong> <strong>equity</strong> shares <strong>of</strong> the company from Vadodara Stock<br />
Exchange. Vadodara Stock Exchange Ltd. letter no. VSE/ED-AK/DELIST/2005,<br />
dated: 24 th March, 2005 has confirmed the delisting<br />
Rehabilitation scheme was sanctioned by BIFR in May.<br />
Disposed <strong>of</strong>f the Baroda Unit pursuant to consent <strong>of</strong> shareholders in accordance with<br />
the Rehabilitation scheme approved.<br />
2005 The Company has reported a turnaround. As per the audited financials for the 12<br />
months period ended on 30 th September, 2005 the Compnay reported a Net Pr<strong>of</strong>it <strong>of</strong><br />
Rs. 522.71 Lacs.<br />
MAIN OBJECTS OF THE COMPANY<br />
The Main Object <strong>of</strong> the Company is:<br />
• To carry on any business <strong>of</strong> designers, researchers, developers, manufactures, producers,<br />
assemblers, installers repairers, maintainers, re-conditioners, dealers, buyers, sellers,<br />
stockist, distributors, packers, importers, exporters, contractors, <strong>and</strong> sub-contractors <strong>of</strong> all<br />
kinds <strong>of</strong> Engineering items <strong>and</strong> in particular the following-:<br />
Equipment pertaining to Dryers, Mining Equipment, Rotodynamic pumps, Boiler<br />
Mountings, Mechanical Power transmission equipment, Turnkey plants for Core sector<br />
Industries, Spare Parts, Consumables <strong>and</strong> Accessories <strong>of</strong> any <strong>of</strong> the above raw materials.<br />
• To develop, process, design, invent, discover, manufacture, buy, assimilate, import, protect<br />
<strong>and</strong> renew, register, apply for grants <strong>and</strong> licences, or in any way acquire <strong>and</strong> sell, export,<br />
deal, trade, grant license for technical, industrial, scientific, commercial, procedural<br />
information, know how, process, system, patent, trade-mark, invention, model, design<br />
secret formula, license, technology or similar other property concerning, relating to <strong>and</strong>/or<br />
having a bearing upon Engineering products <strong>and</strong> its related fields <strong>and</strong> other products<br />
mentioned in clause 1 above <strong>and</strong> factories, mills ,workshops, plants, machinery,<br />
installations vehicles, <strong>and</strong> equipment <strong>of</strong> any kind specially used by or in the Engineering<br />
48
Subsidiary Companies<br />
Industry <strong>and</strong> general, administrative secretarial, financial, commercial, accounting,<br />
management, resource management, taxation, legal, technical , technical, Industrial,<br />
structural, quality <strong>and</strong> cost control, energy conservation, effluent <strong>and</strong> pollution, control <strong>and</strong><br />
other knowledge , expertise, know-how, information <strong>and</strong> experience specially relating to<br />
the engineering Industry <strong>and</strong> to turn to accounts to rights <strong>and</strong> Information so acquired <strong>and</strong><br />
take up jobs on turnkey contract basis or otherwise <strong>and</strong> to carry on the business <strong>of</strong><br />
consultancy <strong>and</strong> service company to supply, provide, maintain <strong>and</strong> operate services to<br />
persons, firms, trusts, associations, government <strong>and</strong> local bodies, companies, corporate<br />
bodies <strong>and</strong> other organization specially in the field <strong>of</strong> engineering technology <strong>and</strong> Industry.<br />
The Company has no subsidiaries within the meaning <strong>of</strong> Section 4 <strong>of</strong> the Act.<br />
Shareholders Agreement<br />
The Company has not entered into any shareholder agreement till date.<br />
49
Subscription Agreement<br />
The Company has entered into the following subscription agreements in terms <strong>of</strong> the debentures issued:<br />
Type <strong>of</strong><br />
Instrument<br />
<strong>and</strong> date <strong>of</strong><br />
issue<br />
<strong>Private</strong>ly<br />
Placed<br />
Secured<br />
Redeemable<br />
Debentures<br />
<strong>Private</strong>ly<br />
Placed<br />
Secured<br />
Redeemable<br />
Non<br />
Convertible<br />
Debentures<br />
Date <strong>of</strong><br />
Agreement<br />
/Allotment<br />
Date <strong>of</strong><br />
Agreement:<br />
25/08/1995<br />
Date <strong>of</strong><br />
allotment<br />
25/08/1995<br />
Date <strong>of</strong><br />
Agreement:<br />
17/11/1995<br />
Date <strong>of</strong><br />
allotment<br />
21/11/1995<br />
Subscribers Amount Purpose <strong>of</strong><br />
issue<br />
IDBI<br />
Mutual<br />
Fund<br />
LIC, UTI,<br />
GIC, NIC,<br />
OIC<br />
Rs. 200<br />
Lacs<br />
Face value<br />
<strong>of</strong><br />
debentures:<br />
Rs. 100/-<br />
Rs. 500<br />
Lacs<br />
Face value<br />
<strong>of</strong><br />
debentures:<br />
Rs. 100/-<br />
To finance<br />
Long Term<br />
Working<br />
Capital<br />
requirements<br />
To finance<br />
Long Term<br />
Working<br />
Capital<br />
requirements<br />
Interest <strong>and</strong><br />
Redemption<br />
20%<br />
18 months<br />
from the date<br />
<strong>of</strong> allotment<br />
18.5%<br />
Three equal<br />
annual<br />
instalments<br />
commencing<br />
on expiry <strong>of</strong><br />
4 th year from<br />
date <strong>of</strong><br />
allotment<br />
ending on the<br />
sixth year<br />
from the date<br />
<strong>of</strong> allotment<br />
Conversion<br />
In case <strong>of</strong><br />
default the<br />
entire<br />
outst<strong>and</strong>ing<br />
debentures<br />
or 20% <strong>of</strong><br />
the<br />
debentures<br />
whichever is<br />
less may be<br />
converted<br />
into <strong>equity</strong><br />
shares <strong>of</strong> the<br />
Company at<br />
par.<br />
None<br />
The Company had defaulted in the redemption <strong>of</strong> the above debentures. As per the Rehabilitation<br />
Scheme sanctioned by the BIFR in May, 2004, the payment <strong>of</strong> the principal component <strong>of</strong> the said<br />
debentures was rescheduled <strong>and</strong> the interest waived. The Company is yet to pay an amount <strong>of</strong> Rs. 61.62<br />
Lacs as on 30 th September, 2005 towards redemption <strong>of</strong> the above debentures as per the Rehabilitation<br />
Scheme.<br />
STRATEGIC PARTNERS<br />
The Company does not have any strategic or financial partners.<br />
COLLABORATION<br />
Please refer to information given on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
50
IX. MANAGEMENT<br />
BOARD OF DIRECTORS<br />
Name, Age, Address,<br />
Qualification<br />
Mr. Deepak Khaitan<br />
51 years<br />
10, Queens Park,<br />
Kolkata – 700 019<br />
B.Com ( Hons), MBA<br />
(Geneva, Switzerl<strong>and</strong>)<br />
Mr. V. R Sinha<br />
66 years<br />
Designation Other Directorships No. <strong>of</strong> <strong>equity</strong> shares<br />
held in the <strong>Kilburn</strong><br />
Engineering Limited<br />
Chairman<br />
• Williamson Magor & 600<br />
Co. Ltd.<br />
• Eveready Industries<br />
India limited<br />
• B&A Limited<br />
• Babcock Borsing Ltd.<br />
• Flender Ltd.<br />
• <strong>Kilburn</strong> Chemicals<br />
Ltd.<br />
• McNally Bharat<br />
Engineering Co. Ltd.<br />
• Williamson Financial<br />
Services Ltd.<br />
• WPIL Ltd.<br />
• The Moran Tea Co.<br />
(India) Ltd.<br />
• McLeod Russel India<br />
Ltd.<br />
• Majuli Tea Holding<br />
Ltd., UK<br />
• Willianson Maknam<br />
Ltd., UK<br />
• Williamson Tea<br />
Assam Ltd.<br />
Managing Director Masi Consultancy ( P) -<br />
Ltd.<br />
N3 Pemino, Altamount<br />
Road, Mumbai –400<br />
026<br />
MSME ( USA), B. Sc.<br />
(Eng.) – BIT, India<br />
Mr. S. Mukherjee<br />
51 years<br />
Flat 2/2, 4 RA, Phase II,<br />
Sctor III, Purbachal,<br />
Salt Lake, Kolkata -700<br />
Director<br />
• WPIL Ltd.<br />
• <strong>Kilburn</strong> Chemicals<br />
Ltd.<br />
• One Two Three<br />
India.com Ltd.<br />
-<br />
B.Com ( Hons), C.A.<br />
Mr. P. K. Khaitan<br />
53 years<br />
3, Queens Parl, Kolkata<br />
–700 019<br />
Attorney at Law<br />
Director<br />
• Cheviot Agro<br />
Industries Limited<br />
• Rungamattee Tea &<br />
Industries Ltd.<br />
• Shauma Vanijya<br />
Parishtha Ltd.<br />
• Williamson Magor &<br />
Co. Ltd.<br />
• Woodside Parks Ltd.<br />
-<br />
51
Mr. S. R Dasgupta<br />
60 years<br />
1, Peck Hay Road,<br />
# 12-03<br />
Singapore –228-305<br />
BA. (Economics)<br />
Mr. P. K . Mogal<br />
65 years<br />
C.M. Banaji Bldg., Flat<br />
1, <strong>For</strong>jett St. X Lane,<br />
Gowalia Tank, Mumbai<br />
–400 036<br />
Director<br />
Director<br />
• Manjushree<br />
Plantations Ltd.<br />
• Khaitan & Co.<br />
Consulting Ltd.<br />
• Mysore Cements Ltd.<br />
• <strong>Kilburn</strong> Chemicals<br />
Ltd.<br />
• Hamilton Research&<br />
Technology Pvt. Ltd.<br />
• Time Leverage<br />
Instruments P Ltd.<br />
• Khaitan & Co.<br />
Consulting Ltd.<br />
• Khaitan & Co.<br />
• R.V. investment &<br />
Dealers Ltd.<br />
• Williamson Tea<br />
Assam Ltd.<br />
• WPIL Limited<br />
• Overseas :<br />
• Waterbright Pte. Ltd.,<br />
Singapore<br />
• JSP Nexus Pte. Ltd.,<br />
Singapore<br />
• California Credit<br />
Ltd., Singapore<br />
• Trasnglobal Group,<br />
U.K.<br />
• Moran Plc. UK<br />
• Cosepa Fiscal<br />
Industries Pvt.<br />
Limited<br />
-<br />
400<br />
B. Sc. DBM<br />
Mr. A. U. Katra<br />
50 yrs.<br />
H-32, Maker Kundan<br />
Gardens, Juhu Road,<br />
Santacruz (West),<br />
Mumbai –400 049<br />
Nominee Director<br />
(IDBI Ltd.)<br />
• Suryavanshi Spinning<br />
mills Ltd.<br />
• SWIL Ltd.<br />
-<br />
Mr. Amritanshu<br />
Khaitan<br />
23 yrs.<br />
10 Queens Park,<br />
Kolkatta –700 019<br />
B.Com (Hons.)<br />
Director<br />
• Ichamati Investments<br />
Pvt. Ltd.<br />
• United Machines<br />
Co.Ltd.<br />
• Nitya Holdings &<br />
Properties Pvt. Ltd.<br />
• Queens Park Property<br />
Co. Ltd.<br />
-<br />
Mr. Deepak Khaitan, aged 51 years, is a Commerce Graduate <strong>and</strong> an MBA from Geneva (Switzerl<strong>and</strong>).<br />
He has had in-depth exposure to <strong>and</strong> involvement in steering diverse business <strong>and</strong> gained considerable<br />
experience <strong>and</strong> expertise in management <strong>of</strong> Tea, Batteries <strong>and</strong> Enngineering Industries. Mr. Khaitan was<br />
52
a president <strong>of</strong> the Indian Chamber <strong>of</strong> Commerce Calcutta (ICC) in the year 1991 <strong>and</strong> he continues to be a<br />
committed member <strong>of</strong> ICC. He was also committee member <strong>of</strong> the Bengal Chamber <strong>of</strong> Commerce &<br />
Industry (BCCI), Confederation <strong>of</strong> Indian Industry (CII) <strong>and</strong> Federation <strong>of</strong> Indian Chambers <strong>of</strong><br />
Commerce & Induatry (FICCI).<br />
Mr. V. R. Sinha, aged 66 years, has completed his MSME ( USA), <strong>and</strong> B. Sc. ( Eng.) – BIT, India. He<br />
has an experience <strong>of</strong> 38 years in Automotive <strong>and</strong> Engineering Industries in USA <strong>and</strong> in India. He has a<br />
wide ranging <strong>and</strong> top management experience in Finance, Manufacturing, Marketing <strong>and</strong> negotiating<br />
investments <strong>and</strong> licensing agreements involving US, European <strong>and</strong> Japanese corporations. He has been<br />
the CEO <strong>and</strong> Managing Director <strong>of</strong> st<strong>and</strong>ard Batteries Limited (1988-1997), Executive Vice President <strong>of</strong><br />
Hindustan Motors Limited (1987-1988), Vice Chairman <strong>and</strong> Managing Director <strong>of</strong> Gabriel India Limited<br />
(1978-1987). <strong>For</strong>d Motor Company in the United States earlier employed Mr. Sinha.<br />
He has a successful track record <strong>of</strong> managing manufacturing/marketing companies involving joint<br />
ventures with foreign collaborators. Mr. Sinha has knowledge <strong>and</strong> experience in all functional areas <strong>and</strong><br />
also has a substantial experience in turnarounds in earlier assignments.<br />
Mr. S. Mukherjee, aged 51 years, is a Commerce Graduate <strong>and</strong> a Fellow <strong>of</strong> Chartered Accountants <strong>of</strong><br />
India. He has an experience <strong>of</strong> 30 years in Accounts, Finance <strong>and</strong> General Management. He is presently<br />
the President, Corporate Affairs in the Williamsom Magor Group. Prior to this he was the President <strong>of</strong><br />
M/s India Foils Ltd. <strong>and</strong> earlier managed its subsidiary M/s Light Metals Industries.<br />
Mr. P. K. Khaitan, 53 years, is an Attorney-at Law. He has an experience in h<strong>and</strong>ling corporate <strong>and</strong><br />
commercial affairs <strong>and</strong> has dealt with joint ventures, foreign collaboration, <strong>For</strong>eign Investment etc. He<br />
has h<strong>and</strong>led various matters pertaining to litigations, arbitration, real estate, labour <strong>and</strong> Trusts.<br />
Mr. A. U. Katra, 50 years, is a B.Sc., BGL, CAIIB -I, MBA (Finance). He has experience <strong>of</strong> 27 years<br />
in IDBI LTd.in the fields <strong>of</strong> Project Finance, Indirect Finance <strong>and</strong> Rehabilitation.<br />
Mr. P. K. Mogal , aged 65 years, is a B. Sc. And has completed his DBM. He has more than 40 years <strong>of</strong><br />
business experience in various positions in Marketing.<br />
Mr. S. R. Dasgupta, aged 60 years, has completed his B. A (Economics) . He has a vast experience in<br />
managing the business <strong>and</strong> affairs <strong>of</strong> large companies. He has held positions as Area Chairman <strong>of</strong><br />
Eveready Battery Company for all Asia <strong>and</strong> Africa Operations (1999-99), the Vice President/ Managing<br />
Director <strong>of</strong> Eveready Singapore Pte. Ltd. (1996-98) <strong>and</strong> President Director- PT Eveready Company<br />
Indonesia, Jakarta (1986-95)<br />
Mr. Amritanshu Khaitan, aged 23 years, is a B.Com (Hons.) from St. Xaviers College, Calcutta. He<br />
has an experience <strong>of</strong> one year in General Administration.<br />
COMPENSATION TO MANAGING DIRECTOR<br />
The compensation paid to the Managing Director, Mr, V. R. Sinha as approved by the Central<br />
Government u/s 269,198(4)/309(3) <strong>and</strong> 637AA <strong>of</strong> the Companies Act, 1956 vide their letter dated 4 th<br />
July, 2005 is as detailed below:<br />
(a)<br />
(b)<br />
Total remuneration <strong>of</strong> Rs. 4,52,743/- (Rupees Four Lacs Fifty-two Thous<strong>and</strong> Seven Hundred<br />
<strong>and</strong> <strong>For</strong>ty-three Only) per month plus use <strong>of</strong> telephone <strong>and</strong> car for <strong>of</strong>ficial use plus one time<br />
payment <strong>of</strong> reward <strong>of</strong> Rs. 10 Lacs for the year 2004-05.<br />
The appointee shall also be entitled to reimbursement <strong>of</strong> entertainment expenses actually <strong>and</strong><br />
properly incurred in the course <strong>of</strong> legitimate business <strong>of</strong> the Company. A reasonable ceiling in<br />
such expenses, may, however, be fixed in this regards by the company.<br />
The above is based on the remuneration approved by the shareholders at the General Body Meeting held<br />
on 24 th March, 2005 <strong>and</strong> is as detailed below:<br />
Remuneration<br />
Salary Rs. 1,25,000 per month subject to increase <strong>of</strong> 10%<br />
per annum at the Boards Discretion<br />
53
Fixed Bonus<br />
Equivalent to 4 months basic salary in a year<br />
Additional Remuneration<br />
<strong>For</strong> achieving turnaround <strong>of</strong> the company a one time payment <strong>of</strong> Rs. 10 lacs payable during the year<br />
2004-05.<br />
Performance linked additional remuneration as given in the table below based on pr<strong>of</strong>its before tax <strong>of</strong> the<br />
financial year <strong>of</strong> the company commencing October 01, 2004 without deducting accumulated losses <strong>of</strong><br />
the past years:<br />
Pr<strong>of</strong>it Before Tax for the year as per<br />
audited P&L Account without<br />
deducting past losses<br />
a) between Rs. 6 crores <strong>and</strong> Rs. 7<br />
crores<br />
b) between Rs. 7 crores <strong>and</strong> Rs.15<br />
crores<br />
Additional Remuneration<br />
payable pro rata to pr<strong>of</strong>it<br />
Rs. 6 Lacs to Rs. 7 Lacs<br />
Rs. 7 Lacs to Rs. 22 Lacs<br />
Perquisites<br />
Category A<br />
a) The Company shall provide free furnished accommodation <strong>and</strong> pay rent, electricity, gas <strong>and</strong> water<br />
charges subject to a sum not exceeding he annual basic salary.<br />
b) Medical Reimbursement for self <strong>and</strong> spouse at actual medical/hospitalization expenses <strong>and</strong> cost <strong>of</strong><br />
medical insurance in India <strong>and</strong>/or abroad.<br />
c) Leave Travel concession for self <strong>and</strong> spouse by air or first class air conditioned fare by rail once on a<br />
year to <strong>and</strong> from any place in India, subject to a ceiling <strong>of</strong> one months basic salary.<br />
d) Fees <strong>of</strong> clubs subject to a maximum <strong>of</strong> two clubs. This will not include admission <strong>and</strong> life<br />
membership fee.<br />
e) Personal accident insurance premium not to exceed Rs. 6000 per annum.<br />
Category B<br />
a) Contribution to provident fund, superannuation fund or annuity fund to the extent these either singly<br />
or put together are not taxable under the Income Tax Act.<br />
i. Gratuity payable shall not exceed half months salary for each completed year <strong>of</strong> service.<br />
ii. Encashment <strong>of</strong> leave at the end <strong>of</strong> tenure as per the company’s rule.<br />
Category C<br />
Provision <strong>of</strong> car for use for the company’s business <strong>and</strong> telephone at residence will not be considered<br />
perquisites. Personal long distance calls on telephone <strong>and</strong> use <strong>of</strong> car for private purpose shall be billed by<br />
the company.<br />
The Managing Director shall also be entitled to reimbursement <strong>of</strong> entertainment expenses actually <strong>and</strong><br />
properly incurred for the business <strong>of</strong> the company.<br />
The Managing Director shall be entitled to first class air or train fare whichever is convenient <strong>and</strong><br />
expeditious to the company <strong>and</strong> he shall be entitled all expenses incurred by him during such travel<br />
within India for the business if the Company.<br />
In the event <strong>of</strong> his having travelled outside the Indian Union on behalf if the Company or on Company’s<br />
business he shall be entitled to all expenses incurred by him during such travels including first class<br />
return air passage.<br />
Minimum Remuneration<br />
In the event <strong>of</strong> loss or inadequacy <strong>of</strong> pr<strong>of</strong>its in any financial year, Managing Director will be paid the<br />
remuneration as above as minimum remuneration.<br />
54
CORPORATE GOVERNANCE<br />
The provisions <strong>of</strong> “Corporate Governance” as introduced vide Clause 49 (as amended till date) <strong>of</strong> the<br />
Listing Agreement entered into are applicable to the Company. The Company has complied with all the<br />
requirements <strong>of</strong> the said Corporate Governance clause.<br />
Details <strong>of</strong> committees formed under the provisions <strong>of</strong> corporate governance are as given under:<br />
Corporate Governance Committees<br />
Audit Committee<br />
The Company has been reviewing <strong>and</strong> making appropriate changes in the composition <strong>and</strong> working <strong>of</strong><br />
the committee from time to time with a view to bring greater effectiveness in the committee <strong>and</strong> to<br />
comply with various requirements under the Companies Act, 1956 <strong>and</strong> clause 49 <strong>of</strong> the Listing<br />
Agreement.<br />
The current audit committee consists <strong>of</strong> :<br />
1. Mr. P.K. Mogal –Chairman<br />
2. Mr. S. Mukherjee<br />
3. Mr. A.U. Katra –IDBI Nominee<br />
All the members <strong>of</strong> the audit committee are non-executive directors with majority <strong>of</strong> them being<br />
independent.<br />
The terms <strong>of</strong> reference <strong>of</strong> the Audit Committee cover the matter specifed for Audit Committee under the<br />
Listing Agreement <strong>and</strong> the Companies (Amendment) Act, 2000 <strong>and</strong> is vested with the following powers:<br />
• To investigate any activity within its terms <strong>of</strong> reference.<br />
• To seek information from any employee.<br />
• To obtain outside legal or other pr<strong>of</strong>essional advice.<br />
• To seek attendance <strong>of</strong> outsiders with relevant expertise, if considered necessary.<br />
• Review <strong>of</strong> Company’s financial reporting process.<br />
• Review <strong>of</strong> half yearly <strong>and</strong> annual financial statements, before submission to the Board.<br />
• Review with External Auditors, on areas <strong>of</strong> concern.<br />
• Review the adequacy <strong>of</strong> internal control systems.<br />
• To appoint internal auditors <strong>and</strong> fix their remuneration.<br />
• To review whistle blower policy & code <strong>of</strong> ethics <strong>and</strong> conduct.<br />
The Managing Director, General Manager (Finance), Statutory Auditors <strong>and</strong> the Internal Auditors are<br />
invitees to the Audit Committee Meetings.<br />
Remuneration Committee<br />
The Board <strong>of</strong> Directors has constituted a Remuneration Committee on April 26, 2004. The present<br />
committee comprising <strong>of</strong> Mr. P.K. Khaitan –Chairman, Mr. P.K. Mogal, <strong>and</strong> Mr. A.U. Katra, all<br />
independent Directors as members with the following terms <strong>of</strong> reference :<br />
(i) to determine <strong>and</strong> recommend to the Board <strong>of</strong> Directors the remuneration package <strong>of</strong> the<br />
Managing Director including periodical revisions therein,<br />
(ii) to approve, in the event <strong>of</strong> loss or inadequate pr<strong>of</strong>its in any year, the minimum<br />
remuneration package payable to the Managing Director <strong>and</strong> Whole Time Directors within<br />
the limits <strong>and</strong> subject to the parameters prescribed in Schedule XIII to the Companies Act,<br />
1956,<br />
(iii) to recommend sitting fees/remuneration payable to the Non-Executive Directors.<br />
Remuneration Policy : The remuneration <strong>of</strong> the Managing Director is determined by the board on the<br />
basis <strong>of</strong> recommendation <strong>of</strong> the Remuneration Committee, subject to the Shareholders’ approval, Central<br />
Government approvals <strong>and</strong> such other approvals as may be necessary.<br />
Shareholders /Investors Grievance Committee<br />
55
The Board <strong>of</strong> Director <strong>of</strong> <strong>Kilburn</strong> Engineering Limited constituted the shareholders’ <strong>and</strong> investors’<br />
grievance committee on 30/12/2004 as under :<br />
Mr. P.K. Khaitan –Chairman<br />
Mr. P.K. Mogal, Non-Executive Independent Director<br />
Mr. V.R. Sinha, Managing Direcotr & Mr. A.U. Katra, IDBI Nominee<br />
Mr. B. N. Shah, Company Secretary was appointed as Compliance Officer w.e.f. 12/09/2005 to look into<br />
shareholders’ grievances on a day-to-day basis.<br />
The Committee looks into redressal <strong>of</strong> investors’ grievances, various matters relating to the transfer <strong>and</strong><br />
transmission <strong>of</strong> shares, issue <strong>of</strong> duplicate share certificates, approving <strong>of</strong> split <strong>and</strong> consolidation requests,<br />
non-receit <strong>of</strong> annual report, matters relating to transfer <strong>and</strong> registration <strong>of</strong> shares, complaints <strong>of</strong> investors<br />
routed by SEBI/ Stock Exchanges, amounts transferable to Investor Education <strong>and</strong> Protection Fund,<br />
Secretarial Audit, as well as matters such as transfer, transmission, dematerialization <strong>and</strong><br />
rematerialisation <strong>of</strong> shares. In addition, the committee also looks into matters which can facilitate better<br />
investor services <strong>and</strong> relations.<br />
All physical transfers as well as the requests for dematerialization/ rematerialisation are processed in<br />
fortnightly cycles.<br />
INTEREST OF DIRECTORS<br />
All the Directors may be deemed to be interested to the extent <strong>of</strong> the sitting fees <strong>and</strong> other remuneration<br />
for the services rendered <strong>and</strong> the reimbursement <strong>of</strong> expenses, if any, payable to them under the articles.<br />
The Directors may also be deemed to be interested to the extent <strong>of</strong>:<br />
• The shares, if any, held by them or by the relatives or by firms or companies <strong>of</strong> which any <strong>of</strong><br />
them is a partner <strong>and</strong> a Director/ Member as the case may be.<br />
• The shares if any, out <strong>of</strong> the present Issue that may be subscribed for <strong>and</strong> allotted to them or<br />
their relatives or any Company in which they are Directors / members <strong>of</strong> firms in which they are<br />
partners.<br />
Other than the above, the directors do not have any other interest in the Company.<br />
CHANGE IN BOARD OF DIRECTORS<br />
The changes in the Board <strong>of</strong> Directors in the past three years are as follows:<br />
Name <strong>of</strong> the Director Date <strong>of</strong> Appointment Date <strong>of</strong> Resignation Reason<br />
Mr. A.U. Katra 19.02.2004 -- Nominee Director<br />
Mrs. B.K. M<strong>and</strong>al 31.01.2000 19.2.2004 Nominee Director<br />
Mr.Y.Nara 30.07.1990 16.07.2004 Due to preoccupation<br />
Mr. Amritanshu<br />
Khaitan<br />
27.05.2005 -- To broad base<br />
Mr. S. R. Dasgupta 01.11.2004 -- To broad base<br />
Mr. P. K. Mogal 30.04.2002 -- To broad base<br />
Mr. Deepak Khaitan 16.07.2004 -- To broad base<br />
Mr. S. Mukherjee 16.07.2004 -- To broad base<br />
Mr. P. K. Khaitan 01.11.2004 -- To broad base<br />
56
KEY MANAGERIAL PERSONNEL<br />
The total strength <strong>of</strong> the organization is 82.<br />
Name Designation Educational<br />
Qualification<br />
MARKETING & HRD DEPARTMENT<br />
Mr. A. D. Korgaonkar Vice President<br />
- Marketing<br />
Mr. S. H. Palkar<br />
General BE (Mech.<br />
Manager – Engg.)<br />
Marketing <strong>and</strong><br />
Proposals<br />
Experience<br />
(in years)<br />
Present Responsibilities<br />
B. Sc. 40 Heading HR Department,<br />
Overall<br />
Administration, Commercial<br />
aspects <strong>of</strong> Transportation <strong>of</strong><br />
Finished Goods.<br />
24 Heading Proposals Department<br />
for Projects, Coordinating<br />
Purchase functions related with<br />
Procurement <strong>of</strong> Project items.<br />
Criterion <strong>of</strong><br />
Qualification<br />
Graduate <strong>and</strong><br />
experience<br />
in Marketing & General<br />
Management.<br />
Experience<br />
in HRD functions.<br />
Graduate in Engineering<br />
& Experience in Design<br />
&<br />
Estimation.<br />
Mr. D. Banerjee<br />
General<br />
Manager –<br />
Marketing<br />
(VFBD) &<br />
Head ( ERO )<br />
B. Ch. E.,<br />
AMIE<br />
20 Overall marketing & VFBD<br />
marketing in India <strong>and</strong><br />
abroad. Supervision <strong>of</strong><br />
activities <strong>of</strong> Service<br />
Engineers.<br />
Experience in<br />
Marketing<br />
& Service Management<br />
PROJECTS & ENGINEERING DEPARTMENT<br />
Mr. M. L. Munvar Sr. General B.Chem.(Engg. 26 Process Design <strong>of</strong> various<br />
Manager<br />
(Project &<br />
Engineering)<br />
)<br />
DBM<br />
Drying Systems<br />
& Offshore Plants. Head <strong>of</strong> the<br />
Department<br />
Experience in<br />
Designing <strong>of</strong> various<br />
Process<br />
Systems &<br />
Commissioning <strong>of</strong><br />
Plants<br />
QAC DEPARTMENT<br />
Mr. V. K. Srivastava Dy. Gen.<br />
Manager –<br />
QAC<br />
B. Tech.<br />
(Mech.<br />
Engg.)<br />
25 Heading QAC Department Experience in QA / QC<br />
PRODUCTION DEPARTMENT<br />
Mr. D. P.<br />
Sarbadhikari<br />
Mr. R. K. Damle<br />
Vice<br />
President<br />
-<br />
Manufacturing<br />
General<br />
Manager<br />
-Production<br />
B. Sc. Dip.<br />
(E&M)<br />
33 Head <strong>of</strong> Department Experience in QAC /<br />
Production / Planning &<br />
Sub-contracting<br />
activities. Coordination<br />
with<br />
all Departments.<br />
DBM 31 Supervision <strong>of</strong> overall<br />
Production activities<br />
Experience in<br />
Production<br />
/ Planning & Subcontracting<br />
activities.<br />
Coordination with<br />
all Departments.<br />
R&D DEPARTMENT<br />
Mr. P. K. Arora Sr. General<br />
Manager<br />
(R&D)<br />
M.Tech 26 Head <strong>of</strong> Department Experience in<br />
Designing <strong>of</strong> various<br />
Drying,<br />
Pneumatic Systems,<br />
57
Fans, etc.<br />
ACCOUNTS DEPARTMENT<br />
Mr. A. Suresh General<br />
Manager –<br />
Finance<br />
ACA, ICWA 26 Head <strong>of</strong> Finance &<br />
Accounts Department<br />
Experience in Finance<br />
& Account activities<br />
SECRETARIAL DEPARTMENT<br />
Mr. B.N. Shah Company<br />
Secretary<br />
A.C.S.,<br />
I.C.W.A.<br />
30 Heading the Secretarial Dept., &<br />
responsible for all compliances.<br />
Experience in Costing,<br />
Banking <strong>and</strong> Secretarial<br />
activities.<br />
There has been no major change in the Key Managerial Personnel during the past three years.<br />
Changes in Key Managerial Personnel :<br />
Name Designation Date <strong>of</strong> Joining Date <strong>of</strong> Leaving Reason<br />
Mr. Rajesh S. Company 16.8.2004 12.09.2005 Resignation<br />
Mittal<br />
Secretary<br />
Mr. Bhupendra<br />
Shah<br />
Company<br />
Secretary<br />
12.09.2005 ---- Appointment<br />
Employees :<br />
Summary <strong>of</strong> manpower strength as on date is as under :<br />
Division Managerial Executives Suprs. &<br />
Clerical<br />
Skilled Un-skilled Total<br />
Total 78 17 None None None None<br />
The Company has not issued any Employee Stock Option Scheme to its employees till date.<br />
58
X. PROMOTERS<br />
<strong>Kilburn</strong> Engineering Limited belongs to the Williamson Magor Group <strong>and</strong> has been promoted by<br />
Williamson Magor & Co. Ltd.<br />
WILLIAMSON MAGOR & CO. LTD.<br />
Date <strong>of</strong> Incorporation: 10 th March, 1949<br />
Registered Office: Four Mangoe Lane, Surendra Mohan Ghosh Sarani, Kolkata – 700 001<br />
Board <strong>of</strong> Directors:<br />
Shri B.M. Khaitan<br />
Shri D. Khaitan<br />
Shri A. Khaitan<br />
Shri R.S. Jhawar<br />
Shri T.R. Swaminathan<br />
Shri Padam Kr. Khaitan<br />
Shri D.K. Pal<br />
Dr. R. Srinivasan<br />
Shri G. Momen<br />
Chairman<br />
Vice-Chairman<br />
Managing Director<br />
Whole Time Director<br />
Director<br />
Director<br />
Director ( nominee-ICICI Bank Ltd.)<br />
Director<br />
Director<br />
Permanent Account Number<br />
AAACW2369P<br />
Registration Number 21-17715<br />
Registrar <strong>of</strong> Company<br />
West Bengal, Kolkata<br />
(The above details have been submitted to the stock exchanges where the <strong>equity</strong> shares <strong>of</strong> <strong>Kilburn</strong> are<br />
listed)<br />
Williamson Magor & Co. Ltd. was incorporated as Macneill & Barry Limited on 10 th March, 1949 under<br />
the Companies Act, 1913. The name <strong>of</strong> the company was changed to Macneill & Magor Ltd. on 19 th<br />
April, 1975 <strong>and</strong> further changed to its present name w.e.f. 7 th May, 1992. The Company has been<br />
promoted by Mr. B. M. Khaitan.<br />
The Company is registered as a Non Banking Finance Company <strong>and</strong> received registration no. N-<br />
05.05534, dated 31.03.2003 from the RBI. The Company is engaged in financial services likeinvestment<br />
& lending.<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the BSE, The National Stock Exchange (NSE), The<br />
Calcutta Stock Exchange Association Limited <strong>and</strong> the Gauhati Stock Exchange Limited. The <strong>equity</strong><br />
shares are frequently traded on the BSE <strong>and</strong> the NSE. The Highest <strong>and</strong> lowest market price <strong>of</strong> the <strong>equity</strong><br />
shares on the BSE <strong>and</strong> NSE during the past six months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 38.65 26.00<br />
June, 2005 47.75 32.15<br />
July, 2005 56.80 38.00<br />
August, 2005 59.00 47.40<br />
September, 2005 66.80 48.50<br />
October, 2005 53.55 35.00<br />
On NSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 38.35 26.55<br />
June, 2005 47.80 31.95<br />
July, 2005 56.95 38.40<br />
August, 2005 59.00 46.75<br />
September, 2005 66.55 48.65<br />
October, 2005 53.40 35.35<br />
59
The Shareholding Pattern <strong>of</strong> the Company is as detailed below:<br />
S.<br />
No.<br />
Category<br />
No. <strong>of</strong> Shares<br />
Held<br />
%<br />
Shareholding<br />
A. Promoters Holding<br />
Indian Promoters 8067629 73.63<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI - -<br />
b. Banks, Financial<br />
938380 8.57<br />
Institutions, Insurance<br />
Companies<br />
c. FIIs - -<br />
Sub Total 938380 8.57<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 614562 5.61<br />
b. Indian Public 1236894 11.29<br />
c. NRIs/OCBs 66775 0.61<br />
d. <strong>For</strong>eign Nationals 32120 0.29<br />
Sub Total 1950351 17.80<br />
Total 10956360 100.00<br />
Brief audited financials <strong>of</strong> the Company for the past three years are as follows:<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Total Income 953.75 1792.03 9334.04<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) (8469.77) (2018.90) 4861.53<br />
Equity Capital 1095.64 1095.64 1095.64<br />
Reserves excluding Revaluation Reserve 2510.45 491.55 5353.08<br />
Book value per Share (Rs.) 32.91 13.77 58.86<br />
Earning per Share (Rs.) (47.64) (18.43) 44.37<br />
Dividend ( %) - - -<br />
The company is not a sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>and</strong> the Company has not made an issue <strong>of</strong> <strong>equity</strong><br />
shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
COMMON PURSUITS<br />
There are no common pursuits between the promoter <strong>and</strong> <strong>Kilburn</strong>.<br />
INTEREST OF PROMOTER<br />
Please refer to para under “ Interest <strong>of</strong> Promoters/ Directors” on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
RELATED PARTY TRANSACTIONS<br />
Please refer to para under “ Related Party Transactions” on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
CURRENCY OF PRESENTATION<br />
All financial figures have been disclosed in Rupees in Lacs.<br />
DIVIDEND POLICY<br />
The Company has not declared dividend during the past five years.<br />
60
FINANCIAL INFORMATION<br />
AUDITOR’S REPORT<br />
Ref: 633 / 2005-06<br />
To<br />
The Board <strong>of</strong> Directors<br />
<strong>Kilburn</strong> Engineering Limited<br />
Subhash Nagar, Bh<strong>and</strong>up,<br />
MUMBAI – 400 078<br />
Dear Sirs<br />
We have examined the attached “Statement <strong>of</strong> Assets <strong>and</strong> Liabilities, as restated” as at September 30,<br />
2001, 2002, 2003, 2004 <strong>and</strong> 2005, <strong>and</strong> the “Statement <strong>of</strong> Pr<strong>of</strong>its <strong>and</strong> Losses, as restated” for each <strong>of</strong> the<br />
years ended on those dates (collectively “the Summary Statements”) <strong>of</strong> <strong>Kilburn</strong> Engineering Limited<br />
(“the Company”) for the purpose <strong>of</strong> proposed rights issue <strong>of</strong> its <strong>equity</strong> shares as approved at the Extra<br />
Ordinary General Meeting held on 12 th September, 2005.<br />
The Summary Statements are prepared by the Company <strong>and</strong> are based on the financial statements for the<br />
respective years audited by us.<br />
In accordance with the requirements <strong>of</strong> Paragraph B (1) <strong>of</strong> Part II <strong>of</strong> Schedule II to the Companies Act,<br />
1956 (“the Act”), the Securities <strong>and</strong> Exchange Board <strong>of</strong> India (Disclosure <strong>and</strong> Investor Protection)<br />
Guidelines, 2000 <strong>and</strong> amendments thereto (“SEBI Guidelines”) <strong>and</strong> based on our examination <strong>of</strong> the<br />
Summary Statements, we report that:<br />
a. The restated pr<strong>of</strong>its/(losses) <strong>of</strong> the Company for the respective years are as set out in Annexure I to<br />
this report. This pr<strong>of</strong>its/(losses) have been arrived at after charging all expenses including<br />
depreciation <strong>and</strong> after making such adjustments <strong>and</strong> regroupings as in our opinion are appropriate<br />
<strong>and</strong> more fully described in the notes appearing in Annexure III to this report.<br />
b. The restated assets <strong>and</strong> liabilities <strong>of</strong> the Company as at the end <strong>of</strong> respective years are as set out in<br />
Annexure II to this report after making such adjustments <strong>and</strong> regroupings as in our opinion are<br />
appropriate <strong>and</strong> more fully described in the notes appearing in Annexure III to this report.<br />
c. The aforesaid Summary Statements read with the significant accounting policies <strong>and</strong> notes thereto<br />
(Annexure III), have been prepared in conformity with the accounting principles generally accepted<br />
in India <strong>and</strong> in accordance with Part II <strong>of</strong> Schedule II <strong>of</strong> the Act <strong>and</strong> the SEBI Guidelines.<br />
Other financial information<br />
d. We have examined the following financial information relating to the Company as approved by the<br />
Board <strong>of</strong> Directors for the purpose <strong>of</strong> inclusion in the <strong>of</strong>fer document for the Rights Issue <strong>of</strong> <strong>equity</strong><br />
shares:<br />
i. Accounting Ratios as appearing in Annexure A to this report.<br />
ii.<br />
iii.<br />
iv.<br />
Capitalisation Statement as appearing in Annexure B to this report.<br />
Details <strong>of</strong> Other Income as appearing in Annexure C to this report.<br />
Statement <strong>of</strong> Sundry Debtors as appearing in Annexure D to this report.<br />
v. Statement <strong>of</strong> Loans & Advances as appearing in Annexure E to this report.<br />
vi.<br />
vii.<br />
Market value <strong>of</strong> Quoted Investments as appearing in Annexure F to this report.<br />
Recasted Cash Flow Statement as appearing in Annexure G to this report.<br />
61
In our opinion, the other financial information mentioned above has been prepared in accordance with<br />
Part II <strong>of</strong> Schedule II <strong>of</strong> the Act <strong>and</strong> SEBI Guidelines.<br />
This report is intended solely for your information <strong>and</strong> for inclusion in the <strong>of</strong>fer document for the<br />
proposed public <strong>of</strong>fer for <strong>equity</strong> shares <strong>of</strong> the Company <strong>and</strong> is not to be used, referred to or distributed<br />
for any other purpose without our written consent.<br />
Yours faithfully<br />
<strong>For</strong> Deloitte Haskins & Sells.<br />
Chartered Accountants<br />
Sd/-<br />
R. D. Kamat<br />
Partner<br />
Membership No. 36822<br />
Place: Baroda<br />
Dated: 01/11/2005<br />
62
ANNEXURE 1<br />
STATEMENT OF PROFITS & LOSSES AS RESTATED<br />
Financial Year ended 30th September<br />
(Rs.in lacs)<br />
Year ended on<br />
30 th September<br />
Particulars 2001 2002 2003 2004 2005<br />
Income<br />
Sales :<br />
Of products manufactured by the<br />
Company 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82<br />
Of products traded in by the Company - - - - -<br />
Total 1,219.67 1,586.73 2,048.80 2,473.70 4,440.82<br />
Other Income 514.06 369.37 118.58 84.52 66.45<br />
Increase / (Decrease) in inventories (95.29) 219.06 (104.22) 193.16 (81.50)<br />
1,638.44 2,175.16 2,063.16 2,751.38 4,425.77<br />
Expenditure<br />
Raw Materials Consumed 606.20 879.83 873.35 1,422.42 2,402.36<br />
Staff Costs 432.76 335.38 210.23 188.82 272.35<br />
Other manufacturing Expenses 143.38 143.71 225.16 359.04 489.81<br />
Administration Expenses 408.43 360.14 312.45 318.35 397.28<br />
Selling & Distribution Expenses 83.67 45.33 44.51 106.07 183.98<br />
Other Expenses 76.25 46.50 - 15.60 10.74<br />
Interest 995.90 1,159.26 1,494.38 241.49 198.76<br />
Depreciation 199.34 161.31 141.93 41.48 26.42<br />
Provision/(Write back) 0f Diminution in<br />
value <strong>of</strong> Investment 24.00 (34.20) (25.50) 142.13 (87.43)<br />
Net Pr<strong>of</strong>it Before Tax <strong>and</strong><br />
extraordinary Items (1,331.49) (956.30) (1,213.35) (84.02) 531.50<br />
Extraordinary/Exceptional/Prior Period<br />
Income/(Expenses) (31.68) (58.59) (103.68) 4,178.05 -<br />
Less: Tax Provision/( Refund) - - (25.77) - 8.79<br />
Pr<strong>of</strong>it/ (Loss) after tax as per audited<br />
statements <strong>of</strong> accounts (1,363.17) (1,014.89) (1,291.26) 4,094.03 522.71<br />
Impact <strong>of</strong> Adjustments on account <strong>of</strong><br />
changes in Accounting Policies <strong>and</strong><br />
Prior Period Items (Refer Note 2 <strong>of</strong><br />
Annexure III)<br />
717.42 947.54 911.87 (4,147.36) -<br />
Restated Pr<strong>of</strong>it & Loss (645.75) (67.35) (379.39) (53.33) 522.71<br />
Balance brought forward (4,095.07) (4,740.82) (4,808.17) (5,187.56) (5,219.22)<br />
Adjustment prior to 1999-2000 - - - - -<br />
Restated Pr<strong>of</strong>it /(Loss) for the year (645.75) (67.35) (379.39) (53.33) 522.71<br />
Less: Transfer from General Reserve/<br />
DRR - - - 21.67 99.21<br />
Balance carried forward (4,740.82) (4,808.17) (5,187.56) (5,219.22) (4,597.30)<br />
63
Particulars<br />
STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED<br />
As at September' 30<br />
(Rs.in lacs)<br />
2001 2002 2003 2004 2005<br />
A Fixed Assets<br />
Gross Block 3198.76 3185.89 3188.89 677.16 718.05<br />
Less: Depreciation 1273.58 1422.80 1564.73 468.91 495.32<br />
Net Block 1925.18 1763.09 1624.16 208.25 222.73<br />
Capital Work in progress - - - - 0.73<br />
Less: Revaluation Adjustment [Refer<br />
Note 2 (A)(v) <strong>of</strong> Annexure III] - - - - -<br />
Net Block after adjustment <strong>of</strong><br />
Revaluation Reserve<br />
1925.18 1763.09 1246.76 208.25<br />
223.46<br />
B Investments 43.38 77.2 109.6 37.37 124.80<br />
C<br />
Current Assets, Loans &<br />
Advances:<br />
Inventories 256.73 489.79 424.33 509.27 455.26<br />
Sundry Debtors 203.47 197.71 369.08 508.97 607.64<br />
Cash & Bank Balances 175.02 219.6 248.95 192.54 138.09<br />
Loans & Advances 221.85 143.60 157.88 157.24 199.42<br />
Other Current Assets - - - - -<br />
D Liabilities <strong>and</strong> Provisions:<br />
Secured Loans 2706.58 2662.78 2719.24 1159.95 804.78<br />
Unsecured Loans 1060.82 1009.22 1052.39 1283.60 1328.63<br />
Current Liabilities <strong>and</strong> Provisions 1795.11 1797.04 1588.48 1890.07 1812.54<br />
E Networth<br />
F Represented by<br />
1. a. Share Capital 674.79 674.79 674.79 674.79 674.79<br />
b. Advance against Share Capital 825.00 825.00 825.00 825.00 825.00<br />
2. Reserves 1021.11 1021.11 1021.11 999.44 900.23<br />
3. Pr<strong>of</strong>it & Loss Account (4740.82) (4808.17) (5187.56) (5219.22) (4597.30)<br />
Less: Revaluation Reserves - - - - -<br />
Reserves (Net <strong>of</strong> Revaluation<br />
Reserves) (3719.71) (3787.06) (4166.45) (4219.78) (3697.07)<br />
Less: Misc. Expenditure 516.96 290.78 136.87 - -<br />
Networth (2736.88) (2578.05) (2803.53) (2719.99) (2197.28)<br />
64
ANNEXURE III<br />
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON SUMMARY STATEMENTS<br />
1. SIGNIFICANT ACCOUNTING POLICIES<br />
A) Fixed Assets<br />
Fixed Assets are recorded at cost as increased or reduced due to exchange fluctuations arising<br />
from foreign currency liabilities relating to their acquisition. The cost <strong>of</strong> fixed assets include all<br />
costs incidental to acquisition, commissioning <strong>and</strong> related internal costs <strong>and</strong> interest paid on<br />
funds borrowed to finance the fixed assets until the assets are ready for commercial use.<br />
B) Depreciation<br />
Depreciation is calculated on the assets on straight-line method at the rates in the manner<br />
specified in schedule XIV <strong>of</strong> Companies Act, 1956. Assets costing Rs.5, 000/- or less are fully<br />
depreciated in the year <strong>of</strong> acquisition. The cost <strong>of</strong> leasehold l<strong>and</strong> is amortised over lease period.<br />
Depreciation on addition to the assets on account <strong>of</strong> exchange fluctuations is provided on<br />
balance life <strong>of</strong> assets.<br />
C) Inventories<br />
Raw Materials/ Components are valued at cost on weighted average cost basis. Stores <strong>and</strong> spare<br />
parts are valued at cost on FIFO basis. Finished goods <strong>and</strong> semi-finished goods are valued at<br />
lower <strong>of</strong> cost or net realizable value. Finished goods value includes excise duty. Provision is<br />
made for obsolete, slow moving <strong>and</strong> defective stocks, wherever necessary.<br />
D) Investments<br />
Long-term investments are stated at cost less diminution in value other than temporary. Current<br />
investments are stated at lower <strong>of</strong> cost or fair market value.<br />
E) <strong>For</strong>eign Currency transactions<br />
Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on<br />
the date <strong>of</strong> transaction. Assets <strong>and</strong> liabilities denominated in foreign currency as at balance sheet<br />
date are converted at the exchange rates prevailing on that date. Exchange differences other than<br />
those relating to acquisition <strong>of</strong> fixed assets are recognized in the pr<strong>of</strong>it <strong>and</strong> loss account.<br />
Exchange differences relating to acquisition <strong>of</strong> fixed assets are adjusted to the carrying value <strong>of</strong><br />
such fixed assets.<br />
F) Revenue Recognition<br />
i) Sales are net <strong>of</strong> returns, discount <strong>and</strong> sales tax/ service tax.<br />
ii) In the case <strong>of</strong> major site execution contracts undertaken by the Company, the revenue is<br />
accounted on percentage <strong>of</strong> completion basis.<br />
G) Retirement Benefits<br />
i) Contribution towards gratuity <strong>and</strong> superannuation liability (defined contribution plans) are<br />
funded with Life Insurance Corporation <strong>of</strong> India. Premium paid/ payable towards the same<br />
determined on actuarial basis is charged to the pr<strong>of</strong>it <strong>and</strong> loss account.<br />
ii) Provision for Leave Encashment on retirement is determined <strong>and</strong> accrued on the basis <strong>of</strong><br />
actuarial valuation.<br />
H) Provision, Contingent Liabilities <strong>and</strong> Contingent Assets:<br />
Provisions involving substantial degree <strong>of</strong> estimation in measurement are recognized when there<br />
is a present obligation as a result <strong>of</strong> past events <strong>and</strong> it is probable that there will be an outflow <strong>of</strong><br />
resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent<br />
assets are neither recognised nor disclosed in the financial statements.<br />
65
Notes to Summary Statements<br />
2. Impact on account <strong>of</strong> changes in accounting policies <strong>and</strong> prior period Adjustments<br />
Particulars<br />
Financial<br />
Year ended<br />
30th<br />
September<br />
2001<br />
Financial<br />
Year ended<br />
30th<br />
September<br />
2002<br />
Financial<br />
Year ended<br />
30th<br />
September<br />
2003<br />
Financial<br />
Year ended<br />
30th<br />
September<br />
2004<br />
Rs. in lacs<br />
Financial<br />
Year ended<br />
30th<br />
September<br />
2005<br />
Pr<strong>of</strong>it/ ( Loss) after tax (1363.17) (1014.89) (1291.26) 4094.03 522.71<br />
Adjustments on account <strong>of</strong><br />
changes in Accounting<br />
Policies <strong>and</strong> Prior Period<br />
Items<br />
Diminution in value <strong>of</strong><br />
Investments (10.15) (0.38) 6.90 174.90<br />
(Refer Note A i)<br />
Refund <strong>of</strong> Sales<br />
Tax/Income Tax - (27.28) (25.77) (12.63) -<br />
(Refer Note A ii)<br />
Prior Period Items 38.58 41.84 (40.08) 25.20 -<br />
(Refer Note A(iii)(a))<br />
Other Prior Period items (258.73) (190.26) 220.00<br />
(Refer Note A(iii)(b))<br />
Waiver <strong>of</strong> Interest 947.72 1,123.62 1,348.22 (4,932.23) -<br />
(Refer Note A iv)<br />
Reduction in reserves-<br />
Assets at Net<br />
Realisable Value (377.40) 377.40<br />
(Refer Note A v)<br />
Total <strong>of</strong> Adjustments 717.42 947.54 911.87 (4,147.36) -<br />
Adjusted Pr<strong>of</strong>it & Loss (645.75) (67.35) (379.39) (53.33) 522.71<br />
A. Notes on Adjustments:<br />
i. Provision for diminution in the value <strong>of</strong> investments in <strong>equity</strong> shares, which in the opinion <strong>of</strong><br />
the management was, in the relevant years considered as temporary <strong>and</strong> had been a matter <strong>of</strong><br />
audit qualification then, has been restated in respective years.<br />
ii. Income Tax /Sales Tax Refunds <strong>and</strong> interest thereon have been reallocated to respective years,<br />
to which it pertains to.<br />
iii. Prior Period Adjustments as per SEBI guidelines:<br />
a. Income <strong>and</strong> Expenses reported as Prior Period items/adjustments in each year have been<br />
reallocated to respective years (except for non-adjustments as referred at Note No. B (iii))<br />
66
. Significant write backs/provisions have been reallocated to respective years to which they<br />
pertain.<br />
iv. In the year 2003-2004, the company obtained a waiver <strong>of</strong> interest on various loans, amounting<br />
to Rs. 4971.11 Lacs, under the BIFR scheme. While the reversal <strong>of</strong> interest provided in the<br />
books was accounted as extra-ordinary income in that year, the waiver <strong>of</strong> interest, pertaining to<br />
years prior to 2003-04 has now been given effect in the respective years for the purpose <strong>of</strong><br />
restated accounts.<br />
v. Accounts for the year 2002-2003 carried an audit qualification for non-compliance <strong>of</strong> AS-10, in<br />
respect <strong>of</strong> assets retired (Baroda unit) from active use <strong>and</strong> held for disposal not being shown as<br />
such, at Net Realizable value. These assets are now restated at Net Realizable value considering<br />
the actual sales proceeds realized in the year 2003-04.<br />
vi. The Company has brought forward losses <strong>and</strong> unabsorbed depreciation under Income Tax Law<br />
estimated at Rs. 3319 lacs as at 30th September 2005. No Deferred Tax Asset has been<br />
recognised in the accounts in view <strong>of</strong> the requirement <strong>of</strong> virtual certainty supported by<br />
convincing evidence as stipulated by the Accounting St<strong>and</strong>ard AS 22 on Accounting for Taxes<br />
on Income. As no tax was payable in any <strong>of</strong> these years no Tax Shelter Statement has been<br />
given as a part <strong>of</strong> these accounts.<br />
vii. The company did not declare dividend in any <strong>of</strong> the reported years <strong>and</strong> therefore no separate<br />
statement/Annexure has been given as a part <strong>of</strong> these Accounts.<br />
B. Notes on Non Adjustments/Others:<br />
i. Audit report for the years 1999-2000 <strong>and</strong> 2000-2001 included qualifications for<br />
advances/sundry creditors being subject to confirmation <strong>and</strong> reconciliation. Necessary<br />
adjustments had been made in the accounts between the years 2000-01 <strong>and</strong> 2002-03 based on<br />
the management’s reviews. Of these, only significant adjustments have been considered for<br />
restatement [Refer note A (3) (b)]. No adjustments have been made for other amounts in the<br />
absence <strong>of</strong> definite <strong>and</strong> verifiable trail.<br />
ii. Over due/unconfirmed/unreconciled debts was a matter <strong>of</strong> audit qualification in the years 2000-<br />
2001 to 2002-2003. The recoverability <strong>of</strong> these debts had been reviewed by the management<br />
from time to time <strong>and</strong> adequate provision for debts considered doubtful has been made in the<br />
books by the year 2003-04. Therefore, no restatement is considered necessary in respect <strong>of</strong> these<br />
qualifications.<br />
iii. During the year ended 30th September 2004, arrears <strong>of</strong> Rs. 33.56 lacs towards Notified Area<br />
Tax was accounted as Prior Period Expenses. However, due to non availability <strong>of</strong> definite <strong>and</strong><br />
verifiable trail, as to the year(s) to which such expenses pertains, no adjustment for the said<br />
amount is made in the restated accounts.<br />
iv. The Company was declared a Sick Company under the meaning <strong>of</strong> Section 3(1)(o) <strong>of</strong> the Sick<br />
Industrial Companies (Special Provisions) Act, 1985 by the Board <strong>of</strong> Industrial <strong>and</strong> Financial<br />
Reconstruction(BIFR) vide order dated 10th November 2000. The audit reports upto 2002-03<br />
carried a qualification on account <strong>of</strong> financial statements being presented on “going concern”<br />
basis despite the erosion in the net worth.<br />
The rehabilitation scheme sanctioned by BIFR on 14th May 2004 involved inter-alia:<br />
• Appointment <strong>of</strong> IDBI as the Monitoring Agency<br />
• Release <strong>of</strong> Funds from Sale <strong>of</strong> Baroda Plant <strong>and</strong> disposal <strong>of</strong> Investments to repay secured<br />
lenders.<br />
• Induction <strong>of</strong> Funds by Promoters.<br />
• Reschedulement <strong>of</strong> Dues to Banks/Institutions<br />
• Waiver <strong>of</strong> Interest Payable to Lenders in arrears up to 31st March 2003/2004.<br />
Pursuant to the consent <strong>of</strong> BIFR <strong>and</strong> the shareholders (Under section 293 (1) (a) <strong>of</strong> the<br />
Companies Act 1956 at the Extraordinary General Meeting held on 27th October, 2003), the<br />
67
Company sold <strong>of</strong>f its Baroda Plant vide sale deed dated 23rd February, 2004. A Sale proceeds<br />
<strong>of</strong> Rs.1100 Lacs is being utilized for repayment <strong>of</strong> the Secured Lenders.<br />
In view <strong>of</strong> the substantial reliefs/concessions in the sanctioned scheme <strong>and</strong> buoyancy in the<br />
dem<strong>and</strong> for the company’s products, the management is positive about the company’s<br />
continuance as a “Going Concern” in the foreseeable future <strong>and</strong> hence, despite accumulated<br />
losses <strong>and</strong> the disposal <strong>of</strong> Baroda Plant, the Financial Statements continue to be prepared on a<br />
going concern basis.<br />
3. CONTINGENT LIABILITIES<br />
Particulars<br />
As at Sept. 30<br />
2001 2002 2003 2004 2005<br />
Contingent Liabilities not provided<br />
for :<br />
a) Dem<strong>and</strong> raised by ESIC 0.80 0.80 0.80 0.80 0.80<br />
b) Dem<strong>and</strong> raised by<br />
14.74 16.74 23.74 23.74 0.00<br />
Sales Tax Authorities<br />
c) Liability in respect <strong>of</strong> Sales Tax 191.09 190.06 125.78 121.14 138.80<br />
loans/C <strong>For</strong>m<br />
d) Guarantees issued by<br />
- 220.17 42.80 111.52 681.07<br />
Banks to Customers<br />
e) Other claims against the 80.00 68.49 86.38 86.38 86.38<br />
company not accepted as debts<br />
f) Claims towards Excise Duty/<br />
- 82.52 82.52 130.66 -<br />
Service Tax for the period<br />
1996-97 to 2000-2001<br />
g) Dem<strong>and</strong> notice from DGFT<br />
- - - 137.00 137.00<br />
for non-fulfilling <strong>of</strong> export<br />
obligations<br />
h) Back wages to Baroda<br />
- - - 109.04 -<br />
Workers<br />
i) Liquidated damages for delay<br />
in execution <strong>of</strong> contracts<br />
18.50<br />
Additional Provision towards Superannuation Fund assets, if any, is unascertainable.<br />
4. RELATED PARTY TRANSACTIONS<br />
Name <strong>of</strong> Party: Mr. V. R. Sinha<br />
Nature <strong>of</strong> Relationship: Managing Director<br />
Nature <strong>of</strong> Transaction: Managerial Remuneration<br />
2001-02 2002-03 2003-04 2004-05<br />
Volume <strong>of</strong><br />
Transaction<br />
Amount<br />
Payable/<br />
(Receivable)<br />
as on 30-09-<br />
2002<br />
Volume <strong>of</strong><br />
Transaction<br />
Amount<br />
Payable/<br />
(Receivable)<br />
as on 30-09-<br />
2003<br />
Volume <strong>of</strong><br />
Transaction<br />
Amount<br />
Payable/<br />
(Receivable)<br />
as on 30-09-<br />
2004<br />
Volume <strong>of</strong><br />
Transaction<br />
12.16 1.80 12.65 - 25.08 - 52.92<br />
Notes:<br />
1. Remuneration for the year 2004-05 includes one time reward <strong>of</strong> Rs. 10 lacs for achieving turnaround<br />
<strong>of</strong> the company.<br />
2. While certain transactions with group companies were disclosed in the Annual Financial<br />
Statements under the Related Party Transactions, on a review <strong>of</strong> the direct/indirect interests <strong>of</strong><br />
these companies, it is established that they are not under common control <strong>and</strong> do not have<br />
significant influence on the Company, <strong>and</strong> vice-versa, as stipulated under AS 18.<br />
Amount<br />
Payable/<br />
(Receivable)<br />
as on 30-09-<br />
2005<br />
68
5. BREAK UP OF SECURED LOANS<br />
(Rs. lacs)<br />
Particulars 2000-01 2001-02 2002-03 2003-04 2004-05<br />
Debentures 784.88 797.84 810.80 174.29 65.39<br />
Term Loans 869.83 874.37 869.49 298.41 110.95<br />
Bank Facilities 1051.87 990.57 1038.95 687.25 628.44<br />
Total 2706.58 2662.78 2719.24 1159.95 804.78<br />
Notes:<br />
A) Debentures<br />
i) 200,000, 18.50% non-convertible debentures <strong>of</strong> Rs.100/- each, aggregating Rs.200.00 lacs<br />
(<strong>Private</strong>ly placed with IDBI Mutual Fund), rolled over with effect from 25th February’1997,<br />
were fully redeemable at par on 8th August, 1998. As per the BIFR Scheme <strong>and</strong> OTS arrived at<br />
with the debenture holder an amount <strong>of</strong> Rs.175.34 lacs was repayable by 30-09-2005 leaving a<br />
balance <strong>of</strong> Rs.24.66 lacs repayable by September 2007 in half yearly instalment along with<br />
interest @ 12.50% (Previous Year Rs. 64.33 Lacs).<br />
ii)<br />
iii)<br />
500,000, 18.50% non-convertible debentures <strong>of</strong> Rs.100/- each, aggregating Rs.500.00 lacs<br />
(<strong>Private</strong>ly placed with certain Financial Institutions) were redeemable at par in three equal<br />
annual instalments commencing on 21st November’ 1999. As per the BIFR Scheme <strong>and</strong> OTS<br />
arrived at with the debenture holder an amount <strong>of</strong> Rs.463.04. lacs was repayable by 30-09-2005<br />
leaving a balance <strong>of</strong> Rs. 36.96 lacs repayable by September 2007 in half yearly instalment along<br />
with interest @ 12.50% (Previous Year Rs.96.50 Lacs)<br />
The debentures together with all interests <strong>and</strong> remuneration payable to the trustees to the<br />
debenture holders have been secured in favour <strong>of</strong> trustees by: -<br />
a. English mortgage <strong>of</strong> all the company’s immovable properties both present <strong>and</strong> future<br />
situated at Bh<strong>and</strong>up on pari passu first charge basis.<br />
b. Hypothecations <strong>of</strong> company’s movable assets (save <strong>and</strong> except book debts) including<br />
movable machinery, machinery spares, tools <strong>and</strong> accessories, present <strong>and</strong> future on a<br />
paripassu basis, subject to prior charges created <strong>and</strong> / or to be created in favour <strong>of</strong> the<br />
company’s bankers on the company’s stock <strong>of</strong> raw materials, semi-finished goods, finished<br />
goods <strong>and</strong> exclusive charge on certain specific items <strong>of</strong> machinery as agreed upon.<br />
B) Banks<br />
The credit facilities are secured by:<br />
i) English mortgage <strong>of</strong> all the company’s immovable properties both present <strong>and</strong> future situated at<br />
Bh<strong>and</strong>up on pari passu second charge basis.<br />
ii) Hypothecation <strong>of</strong> present <strong>and</strong> future stocks <strong>of</strong> raw materials, semi finished goods, finished<br />
goods <strong>and</strong> book debts by way <strong>of</strong> first charge <strong>and</strong> also by hypothecation <strong>of</strong> movable plant <strong>and</strong><br />
machinery by way <strong>of</strong> second charge.<br />
C) Term Loans from Industrial Development Bank <strong>of</strong> India Limited<br />
The term loan <strong>of</strong> Rs.107.99 lacs (Previous Year Rs.289.48 lacs) from IDBI are secured by:<br />
i) English mortgage <strong>of</strong> all the company’s immovable properties both present <strong>and</strong> future situated at<br />
Bh<strong>and</strong>up on pari-passu first charge basis.<br />
ii) Hypothecation <strong>of</strong> company’s movable assets (save <strong>and</strong> except book debts) including movable<br />
machinery, machinery spares, tools <strong>and</strong> accessories, present <strong>and</strong> future on a pari-passu basis,<br />
subject to prior charges created <strong>and</strong>/or to be created in favour <strong>of</strong> the company’s bankers on the<br />
company’s stock <strong>of</strong> raw materials, semi-finished goods, finished goods <strong>and</strong> exclusive charge on<br />
certain specific items <strong>of</strong> machinery as agreed upon.<br />
69
D) Out <strong>of</strong> total secured loan <strong>of</strong> Rs.804.78 lacs confirmation <strong>of</strong> balances have been received in respect <strong>of</strong><br />
secured loans <strong>of</strong> Rs.739.38 lacs.<br />
6. BREAK UP OF UNSECURED LOANS<br />
2000-01 2001-02 2002-03 2003-04 2004-05<br />
Sales Tax Loan (Short<br />
term loan) 542.57 560.83 596.04 644.45 700.03<br />
Deferred Liability 232.32 162.46 170.42 158.22 147.67<br />
ICDs & Loans from<br />
Group Company 285.93 285.93 285.93 480.93 480.93<br />
Total 1060.82 1009.22 1052.39 1283.6 1328.63<br />
NOTES :<br />
a. Interest payable on Sales Tax loan carry an interest <strong>of</strong> 12 % p.a.<br />
b. All short term loans outst<strong>and</strong>ing on each balance sheet date are repayable within one year from<br />
the respective balance sheet date<br />
c. In respect <strong>of</strong> the sales tax loan, the company has sought relief./concessions available to a sick<br />
industrial company under the government <strong>of</strong> Gujarat Scheme. Accordingly interest has been<br />
reworked <strong>and</strong> accounted as per the aforesaid scheme.<br />
d. Deferred Liability represents liability on account <strong>of</strong> purchase <strong>of</strong> machinery from NBFC’s on<br />
Lease / Hire Purchase basis. The amount is payable over a period <strong>of</strong> six years in accordance<br />
with the BIFR Scheme, without interest.<br />
7. The Company, in the year 2000, received application money to the extent <strong>of</strong> Rs.825 lacs from<br />
promoter group companies towards the cumulative redeemable preference shares <strong>of</strong> Rs.100/- each.<br />
The shares were not allotted to them. Further the company utilized the said application money in the<br />
year 2000 for repayment <strong>of</strong> borrowing from HDFC amounting to Rs.800 lacs along with accrued<br />
interest on it amounting to Rs.26 lacs. The said application money remains pending for allotment.<br />
Pursuant to an inter se arrangement involving Willaimson Magor & Co. Ltd., Metal Centre Limited<br />
(earlier Natex Investment & Marketing Ltd) <strong>and</strong> Dufflagur Investments Ltd the money is held by the<br />
company as unsecured interest free loan to be utilized as application money towards allotment <strong>of</strong><br />
shares as pe BIFR Order.<br />
8. <strong>For</strong> the purpose <strong>of</strong> Summary Pr<strong>of</strong>it <strong>and</strong> Loss Account, as restated <strong>and</strong> Summary <strong>of</strong> Assets <strong>and</strong><br />
Liabilities, items <strong>of</strong> Pr<strong>of</strong>it <strong>and</strong> Loss <strong>and</strong> Balance Sheet have been regrouped wherever necessary<br />
considering the requirement <strong>of</strong> SEBI guidelines.<br />
ANNEXURE A<br />
SUMMARY OF ACCOUNTING RATIOS<br />
KEY RATIOS<br />
Financial<br />
Year<br />
Financial<br />
Year<br />
Financial<br />
Year<br />
Financial<br />
Year Year<br />
Ended Ended Ended Ended Ended<br />
Sept 2001 Sept 2002 Sept 2003 Sept 2004 Sept 2005<br />
Adjusted Pr<strong>of</strong>it/(Loss) A (645.75) (67.35) (379.39) (53.33) 522.71<br />
Rs. in Lacs<br />
Weighted average Number <strong>of</strong> <strong>equity</strong><br />
shares outst<strong>and</strong>ing at the end <strong>of</strong> the<br />
year<br />
B<br />
6747900 6747900 6747900 6747900 6747900<br />
70
Net Worth (Rs. in lacs) C (2,736.88) (2,578.05) (2,803.53) (2,719.99) (2,197.28)<br />
Earning Per Share (Rs.) A/B (9.57) (1.00) (5.62) (0.79) 7.75<br />
Net Asset Value Per Share (Rs.) C/B (40.56) (38.21) (41.55) (40.31) (32.56)<br />
Return On Net Worth<br />
Refer Note 2 below<br />
Note:<br />
1. Ratios have been computed on the basis <strong>of</strong> adjusted pr<strong>of</strong>it/(loss) after tax for the respective years.<br />
2. Return on Net worth ratio has not been computed since the Earnings/Net worth are negative.<br />
<strong>For</strong>mulae :<br />
Earning Per Share (Rs.)<br />
Net Asset Value Per Share (Rs.)<br />
Return on Net Worth (%)<br />
Net Pr<strong>of</strong>it After Tax<br />
Average No. <strong>of</strong> Equity Shares outst<strong>and</strong>ing during the year<br />
Net worth excluding revaluation reserve<br />
No. <strong>of</strong> Equity Shares outst<strong>and</strong>ing at the end <strong>of</strong> the year<br />
Net Pr<strong>of</strong>it After Tax<br />
Net worth excluding revaluation Reserve<br />
ANNEXURE B<br />
CAPITALISATION STATEMENT<br />
Pre - issue Post Issue#<br />
as at 30.09.05<br />
(Rs. in lacs)<br />
Short Term Debt 942.84 942.84<br />
Long Term Debt 1190.57 1190.57<br />
Shareholders Funds<br />
Share Capital 674.79 1349.58<br />
Advance against Share Capital 825.00 0.00<br />
Reserves (3,697.06) (2,684.88)<br />
Total Shareholders Funds (2,197.27) (1,335.30)<br />
Long Term Debt/Equity (0.54) (0.89)<br />
# Post Issue figures are based on the presumption that the proposed right issue will be fully subscribed,<br />
but without considering repayment <strong>of</strong> loans.<br />
ANNEXURE C<br />
DETAILS OF OTHER INCOME<br />
Particulars 2000-01 2001-02 2002-03 2003-04 2004-05 Nature<br />
As per Original Audited Pr<strong>of</strong>it &<br />
Loss Account<br />
(Recurring/Non<br />
Recurring)<br />
Dividend from Trade Investments - 8.54 7.88 - - Recurring<br />
Interest 29.13 17.38 8.93 20.18 3.83 Recurring<br />
71
Refund <strong>of</strong> Sales Tax - 39.91 - 12.63 - Non recurring<br />
Sundry Balances & Excess Provision<br />
Written Back 424.37 252.95 59.74 17.88 - Non recurring<br />
Pr<strong>of</strong>it on sale <strong>of</strong> Investments - - - 4.41 - Non recurring<br />
Pr<strong>of</strong>it on Sale <strong>of</strong> Flats - - - - - Non recurring<br />
Miscellaneous Income(Including<br />
Selling Expenses recovered) 60.56 16.39 42.03 29.42 62.62 Non recurring<br />
Total 514.06 335.17 118.58 84.52 66.45<br />
Restatement on account <strong>of</strong><br />
Adjustments<br />
Period Adjustments for write backs (258.73) (190.26)<br />
Refund <strong>of</strong> Sales Tax (27.28) (12.63)<br />
Total Adjustments (258.73) (217.54) - (12.63) -<br />
Restated Other Income 255.33 117.63 118.58 71.89 66.45<br />
72
ANNEXURE D<br />
BREAK UP OF SUNDRY DEBTORS<br />
SUNDRY DEBTORS - Unsecured<br />
As at<br />
September, 30<br />
2005<br />
Debts Outst<strong>and</strong>ing <strong>For</strong> a Period Exceeding Six Months 938.70<br />
Other Debts 486.55<br />
1,425.25<br />
Less : Provision for Doubtful Debts 817.61<br />
607.64<br />
Considered Good 607.64<br />
Considered Doubtful 817.61<br />
1,425.25<br />
No amount was outst<strong>and</strong>ing as on September 30, 2005 from Promoters, Promoter Group <strong>of</strong> Group<br />
Companies.<br />
ANNEXURE E<br />
BREAK OF LOAN & ADVANCES<br />
LOANS AND ADVANCES<br />
As at<br />
September, 30<br />
2005<br />
Advances Recoverable in Cash or in Kind or for Value to be Received<br />
Considered Good 168.45<br />
Considered Doubtful 11.07<br />
179.52<br />
Less : Provision for Doubtful Advances to Suppliers / Employees 11.07<br />
168.45<br />
Balances with Government Authorities 5.49<br />
Other Deposits 17.00<br />
Tax Deducted at Source 8.48<br />
199.42<br />
No amount was outst<strong>and</strong>ing as on September 30, 2005 from Promoters, Promoter Group or Group<br />
Companies<br />
ANNEXURE F - MARKET VALUE OF QUOTED INVESTMENTS AS AT 30 TH SEPTEMBER<br />
2005<br />
Shares (Quoted) No. <strong>of</strong> Shares Face Value per Rs. in lacs<br />
share (Rs.)<br />
Equity Shares <strong>of</strong> Rs.5 each <strong>of</strong> Eveready 66666 5 116.85<br />
Industries (India) Limited<br />
Equity Shares <strong>of</strong> Rs.5 each <strong>of</strong> Mcleod<br />
Russel India Limited<br />
66666 5 70.35<br />
Notes:<br />
1. Consequent to a demerger scheme, the original shareholding in Eveready Industries (I) Ltd<br />
(Rs.190 lacs) has been split into Eveready Industries (I) Ltd <strong>and</strong> Mcleod Russel (I) Ltd. The cost<br />
has been apportioned between the two scrips based on the respective market values.<br />
73
2. Under simplified exit scheme introduced by the Department <strong>of</strong> Company Affairs, Ministry <strong>of</strong><br />
Finance <strong>and</strong> Company Affairs, Government <strong>of</strong> India, the Company’s subsidiary M/s Pristine<br />
investments Ltd filed an application for striking <strong>of</strong>f the name <strong>of</strong> the Company under Section 560<br />
<strong>of</strong> the Companies Act, 1956 with the Registrar <strong>of</strong> Companies, Maharashtra <strong>and</strong> provision for<br />
diminution for full value <strong>of</strong> this investment is already made in the books <strong>of</strong> the Company<br />
Annexure –G : Recasted Cash Flow Statement<br />
Financial Year ended 30th September<br />
Rs. in lacs<br />
Year<br />
ended<br />
30th<br />
Septembe<br />
r<br />
CASH FLOW FROM OPERATING<br />
ACTIVITIES<br />
2001 2002 2003 2004 2005<br />
Pr<strong>of</strong>it/( Loss) before taxation, as restated (645.75) (67.35) (405.16) (53.33) 531.50<br />
Adjustment for :<br />
Depreciation 199.34 161.31 141.93 41.48 26.42<br />
Know how fees written <strong>of</strong>f 107.73 107.73 53.86 - -<br />
Extraordinary/Exceptioonal items<br />
Loss on Sale <strong>of</strong> Vadodara Plant - - 377.40 - -<br />
Unrealised <strong>For</strong>eign Exchange - - - - -<br />
Pr<strong>of</strong>it on sale <strong>of</strong> Fixed Assets -<br />
Compensation under Voluntary Retirement<br />
Scheme 118.45 118.45 123.06 136.87 -<br />
Provision for Dimunition in value <strong>of</strong><br />
investments 34.15 (33.82) (32.40) (32.77) (87.43)<br />
Waiver <strong>of</strong> Interest (947.72) (1,123.62) (1,348.22) (38.88) -<br />
- -<br />
Interest Expense 1,005.07 1,148.91 1,503.56 241.49 198.76<br />
Closure Compensation to Baroda Workmen (23.02) - -<br />
Dividend Income (8.54) (7.88) - -<br />
Interest Income (39.26) (17.38) (8.93) (20.18) (3.83)<br />
Assets Written <strong>of</strong>f 5.32 - - -<br />
Capital Work in Progress Written <strong>of</strong>f<br />
Payment towards voluntary retirement<br />
scheme<br />
Pr<strong>of</strong>it on Sale <strong>of</strong> Investment. - - (4.41) -<br />
Operating pr<strong>of</strong>it/(loss) before working<br />
capital changes (167.99) 291.01 374.20 270.27 665.42<br />
Adjustments for :<br />
Trade <strong>and</strong> Other Receivables 318.67 87.42 (180.66) (139.25) (140.87)<br />
74
Inventories 173.38 (233.06) 65.45 (84.94) 54.01<br />
Trade <strong>and</strong> Other Payables (162.65) 49.86 (208.49) 174.45 (81.96)<br />
Cash Generated from Operations 161.41 195.23 50.50 220.53 496.60<br />
Direct Taxes(paid)/Refund 16.91 - 20.76 - (3.09)<br />
Net Cash from Operating Activities 178.32 195.23 71.26 220.53 493.51<br />
CASH FLOW FROM INVESTING<br />
ACTIVITIES<br />
Purchase <strong>of</strong> Fixed Assets (0.39) - (7.88) (25.82) (41.62)<br />
Sale <strong>of</strong> Vadodara Plant ( Net) - - - 1,019.22 -<br />
Sale <strong>of</strong> Fixed Assets<br />
Sale <strong>of</strong> Investment 6.87 - - 109.41 -<br />
Interest received 12.22 13.97 8.93 20.18 3.83<br />
Dividend Received - 8.54 7.88 - -<br />
Net Cash from Investing Activities 18.70 22.51 8.93 1,122.99 (37.79)<br />
CASH FLOW FROM FINANCING<br />
ACTIVITIES<br />
Proceeds from : Short Term Borrowings - - - 95.00 -<br />
Long Term Borrowings - - - 100.00 -<br />
Repayment <strong>of</strong> Borrowings (211.86) (107.97) (8.67) (1,507.87) (270.27)<br />
VRS Interest paid (33.32) (32.69) (31.08) (25.21) (20.06)<br />
Interest paid to Banks/Debentures (19.92) (32.46) - (60.67) (218.57)<br />
Other Interest paid - - (11.05) (1.18) -<br />
Advance against share capital received<br />
Dividend Paid ( Unclaimed) - (0.03) (0.04) - (1.27)<br />
Net Cash used in Financing Activities (265.10) (173.15) (50.84) (1,399.93) (510.17)<br />
Net Increase/(decrease) in cash & cash<br />
equivalents (68.08) 44.59 29.35 (56.41) (54.45)<br />
Cash & Cash Equivalents - Opening<br />
Balance 243.09 175.01 219.60 248.95 192.54<br />
Cash & Cash Equivalents - Closing Balance 175.01 219.60 248.95 192.54 138.09<br />
75
SUBSIDIARY COMPANY<br />
Pristine Investments Limited<br />
The Company has made an application dated 29 th December, 2003, to the Registrar <strong>of</strong> Companies,<br />
Maharashtra, Mumbai, for striking <strong>of</strong>f the name <strong>of</strong> the Company u/s 560 <strong>of</strong> the Companies Act, 1956<br />
under the simplified exit scheme.<br />
FINANCIAL INFORMATION OF GROUP COMPANIES<br />
Metals Center Limited<br />
Date <strong>of</strong> Incorporation: 20 th December, 1983<br />
Board <strong>of</strong> Director : Mr R.S. Jhawar,, Mr.K.K Baheti, Mr. A. Guha sarkar <strong>and</strong> Mr. B.K. Newar<br />
Nature <strong>of</strong> Business: Investment in Shares <strong>and</strong> Securities. The Company has made an application to RBI<br />
for grant <strong>of</strong> license to operate as an Non Banking Financial Company. The approval is awaited.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
United Machine Co. Ltd. 1,00,000 50.00<br />
Ichamati Investments Pvt. Ltd. 99994 50.00<br />
Others 6 Negligible<br />
The <strong>equity</strong> shares <strong>of</strong> the company are not listed on any stock exchange.<br />
Brief audited financials <strong>of</strong> Metals Centre Limited for the past three years are as follows:<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 194.18 176.36 251.67<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) (376.15) (470.36) (873.38)<br />
Equity Capital 200.00 200.00 200.00<br />
Reserves excluding Revaluation Reserve (3444.72) (3915.08) (4788.46)<br />
Book value per Share (Rs.) (1712.36) (1947.54) (2318.05)<br />
Earning per Share (Rs.) (188.07) (238.18) (436.69)<br />
The accumulated losses as at 31 st march, 2004 have exceeded the paid up capital <strong>of</strong> the Company. The<br />
accumulated losses <strong>of</strong> the Company are more than 50% <strong>of</strong> its networth <strong>and</strong> the Company has incurred<br />
cash losses in the past three years.<br />
The company was amalgamated with five <strong>of</strong> its subsidiary companies namely, Natex Investment <strong>and</strong><br />
Marketing Ltd., Salasar Industrial Services Limited, McNama Consultants Limited, Macneill Housing<br />
Finance Limited <strong>and</strong> <strong>Kilburn</strong> Company Limited w.e.f. 01/04/2001 vide an order <strong>of</strong> the Hon’ble High<br />
Court at Calcutta dated 10/03/2003. Other than this there has been no change in the capital structure <strong>and</strong><br />
the Company has not made an issue <strong>of</strong> <strong>equity</strong> shares during the past three years.<br />
The Company has made an application to the RBI for grant <strong>of</strong> registration for operating as a Non<br />
Banking Financial Company. The application is pending.<br />
There is no pending litigation/ disputes/ defaults by the company /promoters /directors <strong>of</strong> the Company<br />
as on the date <strong>of</strong> filing this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
EVEREADY INDUSTRIES INDIA LIMITED<br />
Date <strong>of</strong> Incorporation: 20 th June 1934<br />
Board <strong>of</strong> Directors: Mr. B. M. Khaitan, Mr. Deepak Khaitan, Mr. P. K. Paul, Mr. Bhasker Mitter, Mr.<br />
Aditya Khaitan, Mr. P. H. Ravikumar (Nominee <strong>of</strong> ICICI Bank Ltd.), Mr. D. A. N<strong>and</strong>a, Mr. Sanjiv<br />
Goenka, Mr. S. Saha, Mr. A. Roy, Mr. A. Chakravarti<br />
76
Nature <strong>of</strong> Business: The Company is engaged in the manufacture <strong>and</strong> sale <strong>of</strong> dry cell batteries <strong>and</strong> allied<br />
products, flashlight cases <strong>and</strong> parts, Zinc alloys, strips <strong>and</strong> plates, stellite super alloys <strong>and</strong> electrolyte<br />
manganese dioxide.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 2,40,29,119 43.08<br />
<strong>For</strong>eign Promoters 53,98,316 9.68<br />
Persons acting in Concert 22,89,336 4.10<br />
Sub Total 3,17,16,771 56.86<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 5,21,887 0.93<br />
b. Banks, Financial Institutions, Insurance<br />
47,34,315 8.49<br />
Companies<br />
c. FIIs 17,26,951 3.10<br />
Sub Total 69,83,153 12.52<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 41,89,373 7.51<br />
b. Indian Public 1,20,60,571 21.62<br />
c. NRIs/OCBs 2,68,320 0.48<br />
d. Other <strong>For</strong>eign Companies 5,60,824 1.01<br />
Sub Total 1,70,79,078 30.62<br />
Gr<strong>and</strong> Total 5,57,79,002 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the BSE, NSE <strong>and</strong> the Calcutta Stock Exchange<br />
Association Limited. The Highest <strong>and</strong> lowest market price <strong>of</strong> the <strong>equity</strong> shares on the BSE <strong>and</strong> NSE<br />
during the past six months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 105.75 83.00<br />
June, 2005 107.45 93.65<br />
July, 2005 111.00 90.65<br />
August, 2005 112.00 85.00<br />
September, 2005 143.40 99.60<br />
October, 2005 126.00 95.00<br />
On NSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 105.90 83.00<br />
June, 2005 107.75 95.10<br />
July, 2005 102.75 91.10<br />
August, 2005 110.00 84.80<br />
September, 2005 130.00 99.50<br />
October, 2005 124.85 94.90<br />
Note:In accordance with the Scheme <strong>of</strong> arrangement approved by the Hon’ble High Court at Calcutta<br />
vide its order dated 17/01/2005 <strong>and</strong> consequent to the demerger <strong>of</strong> Bulk Tea Division from the Company<br />
the paid-up value per share has been reduced from Rs. 10/- per share to Rs. 5/- per share. Trading in the<br />
shares <strong>of</strong> the Company having a nominal value <strong>of</strong> Rs. 5/- per share commenced on the exchange w.e.f.<br />
27/04/2005.<br />
Brief audited financials <strong>of</strong> Eveready Industries India Limited for the past three years are as follows:<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
77
Sales <strong>and</strong> Other Income 87896.03 89315.00 68,083.07<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 1113.1 (38.27) 4631.09<br />
Equity Capital 5577.91 5577.91 2788.95*<br />
Reserves excluding Revaluation Reserve 18588.82 19627.55 27047.59<br />
Book value per Share (Rs.) 43.33 41.48 53.49<br />
Earning per Share (Rs.) 2 (0.07) 8.30<br />
* Pursuant to the scheme <strong>of</strong> arrangement between the company <strong>and</strong> Eveready Company India Limited<br />
(now known as McLeod Russel India Limited (‘MRIL’)) <strong>and</strong> the respective shareholders, which was<br />
sanctioned by the High Court at Calcutta by its order dated 17/01/2005, the assets <strong>and</strong> liabilities <strong>of</strong> the<br />
Bulk Tea Division <strong>of</strong> the company were transferred to <strong>and</strong> vested in MRIL w.e.f 01/04/2004. Pursuant to<br />
the Scheme the paid up share capital <strong>of</strong> the company st<strong>and</strong> reduced from Rs. 55,77,90,020 divided into<br />
5,57,79,002 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each to Rs. 27,88,95,010 divided into 55779002 <strong>equity</strong> shares <strong>of</strong><br />
Rs. 5/- each.<br />
The company is not a sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>and</strong> the Company has not made an issue <strong>of</strong> <strong>equity</strong><br />
shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
McLEOD RUSSEL INDIA LIMITED (<strong>For</strong>merly Known As Eveready Company India Limited)<br />
Date <strong>of</strong> Incorporation: 5 th May, 1998<br />
Board <strong>of</strong> Directors : Shri B.M. Khaitan, Shri D. Khaitan, Shri A. Khaitan, Dr. R. Srinivasan, Shri B.<br />
Bajoria, Shri R. Sen, Shri R.S. Jhawar, Shri R. Takru, Shri A. Momen, Shri K.K. Baheti & Shri U.<br />
Parekh.<br />
Nature <strong>of</strong> Business: The Company is engaged in the business <strong>of</strong> growing, manufacturing & selling tea<br />
<strong>and</strong> has operations primarily in the states <strong>of</strong> Karnataka, Andhra Pradesh, Tamil Nadu <strong>and</strong> Maharashtra.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 2,41,91,052 43.27<br />
<strong>For</strong>eign Promoters 53,98,316 9.66<br />
Persons acting in Concert 22,89,336 4.10<br />
Sub Total 3,18,78,704 57.03<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 5,21,887 0.93<br />
b. Banks, Financial Institutions, Insurance<br />
47,34,315 8.47<br />
Companies<br />
c. FIIs 17,26,951 3.09<br />
Sub Total 69,83,153 12.49<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 41,89,373 7.49<br />
b. Indian Public 1,20,25,038 21.51<br />
c. NRIs/OCBs 2,68,320 0.48<br />
d. Other <strong>For</strong>eign Companies 5,60,814 1.00<br />
Sub Total 1,70,43,545 30.48<br />
Gr<strong>and</strong> Total 5,59,05,402 100.00<br />
Pursuant to the demerger <strong>of</strong> the Bulk Tea Division <strong>of</strong> Eveready Industries Limited into Eveready<br />
Company India Limited (name changed to McLeod Russel India Limited) an application was made to the<br />
78
stock exchanges i.e. BSE, NSE <strong>and</strong> CSE for listing <strong>of</strong> the <strong>equity</strong> shares <strong>of</strong> MRIL under clause 8.3.5 <strong>of</strong><br />
the SEBI (DIP) Guidelines, 2000. The <strong>equity</strong> shares are listed on these aforesaid Exchanges.<br />
The <strong>equity</strong> shares are listed on the BSE, NSE & Calcutta Stock Exchange. The Highest <strong>and</strong> lowest<br />
market price <strong>of</strong> the <strong>equity</strong> shares on the BSE during the past six months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 --- ---<br />
June, 2005 --- ---<br />
July, 2005 75.00 45.50<br />
August, 2005 68.30 47.70<br />
September, 2005 92.50 62.80<br />
October, 2005 82.80 51.30<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005*<br />
Sales <strong>and</strong> Other Income 0 0 34105.92<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) (0.06) (198.07) (1974.78)<br />
Equity Capital 200 200 2795.27<br />
Reserves excluding Revaluation Reserve 4.39 (193.68) 34897.54<br />
Book value per Share (Rs.) 10.22 0.32 63.89<br />
Earning per Share (Rs.) (0.00) (9.90) (3.53)<br />
Dividend ( %) - - -<br />
* The Company’s accumulated losses at the end <strong>of</strong> the FY 2004 were more than 50% <strong>of</strong> its networth.<br />
The company is a potentially sick company within the meaning <strong>of</strong> the Sick Industrial Companies<br />
(Special Provisions) Act, 1985. Pursuant ot the Scheme <strong>of</strong> Arrangement approved by the shareholders<br />
<strong>and</strong> sanctioned by the Hon’ble High Court at Calcutta vide its order <strong>of</strong> 17 th January, 2005, the assets<br />
(including investments, loans <strong>and</strong> Advances <strong>and</strong> other current assets) <strong>and</strong> liabilities <strong>of</strong> the bulk tea<br />
division <strong>of</strong> Eveready Industries Limited (EIL) were transferred to <strong>and</strong> vested in the Company w.e.f. 1 st<br />
April, 2004 (appointed date). In accordance with the Scheme, the paid-up share capital <strong>of</strong> the Company<br />
st<strong>and</strong> reduced effective from 1 st April, 2004 to Rs. 6.32 Lakhs comprising <strong>of</strong> 63,200 <strong>equity</strong> shares <strong>of</strong><br />
Rs. 10/- each. Also, the face value <strong>of</strong> the shares has been subdivided <strong>and</strong> one share <strong>of</strong> Rs. 10/- each has<br />
been subdivided into two shares <strong>of</strong> Rs. 5/- each. Further, the Company has issued to the shareholders <strong>of</strong><br />
EIL 1 (one) <strong>equity</strong> shares <strong>of</strong> Rs. 5/- each <strong>of</strong> the company credited as fully paid up for every 1 (one)<br />
<strong>equity</strong> shares <strong>of</strong> Rs. 10/- each held by them in EIL.<br />
Other than those stated above the Company has not issued any <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
SHREE DURGA AGENCIES LIMITED<br />
Date <strong>of</strong> Incorporation: 26 th November, 1973<br />
Board <strong>of</strong> Directors: Smt. Alaka Jalan, Shri S.K. Jalan, Shri R.D. Dujari, Shri R.S. Nethwewala & Shri<br />
R.K. Bagla.<br />
Nature <strong>of</strong> Business: The Company is engaged in real estate, investments, financing & leasing. The<br />
Company has made an application to the RBI for grant <strong>of</strong> registration for operating as a Non Banking<br />
Financial Company. The application is pending.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Promoter Holding 235350 94.18<br />
Non Promoter Holding 14550 5.82<br />
79
Total 249900 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the Calcutta Stock Exchange Association Ltd. The<br />
company has made an application to the exchange for voluntary delisting <strong>of</strong> the <strong>equity</strong> shares pursuant to<br />
a special resolution passed by the shareholders on 15/09/2004. However the company has not followed<br />
the provisions <strong>of</strong> the SEBI (Delisting <strong>of</strong> Securities) Guidelines, 2003 for delisting. The application is still<br />
pending with the exchange. The Company has not been complying with the provisions <strong>of</strong> the listing<br />
agreement entered into with the CSE.<br />
The <strong>equity</strong> shares <strong>of</strong> the company have not been traded <strong>of</strong> the CSE during the past three years.<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. In Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 97.53 90.23 97.66<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 9.49* 39.66 51.38<br />
Equity Capital 24.99 24.99 24.99<br />
Reserves excluding Revaluation Reserve 616.40 655.60 705.55<br />
Book value per Share (Rs.) 256.66 272.34 292.33<br />
Earning per Share (Rs.) 3.80 15.87 20.56<br />
* Pr<strong>of</strong>itability low due to payment <strong>of</strong> corporation tax amounting to Rs. 48 Lacs.<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
The Company has not issued any <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
NIRVAN COMMERCIAL COMPANY LIMITED<br />
Date <strong>of</strong> Incorporation: 13 th July, 1981<br />
Board <strong>of</strong> Directors : Smt Divya Jalan, Shri V. Vanchi, Shri V.K. Dujari, Shri N.F. Tankariwala & Shri<br />
B.P. Jalan.<br />
Nature <strong>of</strong> Business: The Company is engaged in the business <strong>of</strong> general trading, leasing, financing,<br />
investments & leasing <strong>and</strong> has operations primarily in the states <strong>of</strong> Karnataka, Andhra Pradesh, Tamil<br />
Nadu <strong>and</strong> Maharashtra.The Company has made an application to the RBI for grant <strong>of</strong> registration for<br />
operating as a Non Banking Financial Company. The application is pending.<br />
Nirvan Commercial Co. Ltd. is mainly into the business <strong>of</strong> general trading, leasing, financing,<br />
investments & leasing.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Promoter Holding 304270 92.20<br />
Non Promoter Holding 25730 7.80<br />
Total 330000 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the Calcutta Stock Exchange Association Ltd. The<br />
company has made an application to the exchange for voluntary delisting <strong>of</strong> the <strong>equity</strong> shares pursuant to<br />
a special resolution passed by the shareholders on 15/09/2004. However the company has not followed<br />
the provisions <strong>of</strong> the SEBI (Delisting <strong>of</strong> Securities) Guidelines, 2003. The application is still pending<br />
with the exchange. The Company has not been complying with the provisions <strong>of</strong> the listing agreement<br />
entered into with the CSE.<br />
The <strong>equity</strong> shares <strong>of</strong> the company have not been traded <strong>of</strong> the CSE during the past three years.<br />
80
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 15.62 48.31 20.86<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 11.16 30.62 13.83<br />
Equity Capital 33.00 33.00 33.00<br />
Reserves excluding Revaluation Reserve 148.72 175.94 182.06<br />
Book value per Share (Rs.) 55.07 63.32 65.17<br />
Earning per Share (Rs.) 3.38 9.28 4.19<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
The Company has not issued any <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
ICHAMATI INVESTMENTS PRIVATE LIMITED<br />
Date <strong>of</strong> Incorporation: 14 th April, 1977.<br />
Board <strong>of</strong> Directors : Mr. Amritanshu Khaitan, Mr. Survamoy Saha, Mr. Kamal Kishore Baheti, Mr.<br />
Kavita Khaitan & Mrs. Shanti Khaitan.<br />
Nature <strong>of</strong> Business: The Company is engaged in investment in shares <strong>and</strong> securities. The Company is<br />
registered as a Non Banking Financial Company.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Shri Deepak Khaitan 10000 3.33<br />
Shri Ganesh Ch<strong>and</strong>ra Jha 100 0.03<br />
Smt. Yashodhara Khaitan 23400 7.80<br />
Shri Vishwanath Agarwal 1200 0.40<br />
Metal Centre Ltd. 5200 1.73<br />
Smt. Shanti Khaitan 15000 5.00<br />
Shri Aditya Khaitan 42100 14.03<br />
Smt. Premlata Agarwal 3000 1.00<br />
Shri B M Khaitan 90000 30.00<br />
M/s. Deepak Khaitan (HUF) 110000 36.77<br />
Total 300000 100.00<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. In Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 82.51 64.35 339.47<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 75.82 8.91 6.79<br />
Equity Capital 30.00 30.00 30.00<br />
Reserves excluding Revaluation Reserve 213.01 221.92 198.71<br />
Book value per Share (Rs.) 81 83.97 76.24<br />
Earning per Share (Rs.) 25.27 2.97 2.26<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. The<br />
Company has not issued any <strong>equity</strong> shares during the past three years.<br />
81
There is no pending litigation/ disputes/ defaults by the company /promoters /directors <strong>of</strong> the Company<br />
as on the date <strong>of</strong> filing this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
UNITED MACHINE COMPANY LIMITED<br />
Date <strong>of</strong> Incorporation: 28 th March, 1949.<br />
Board <strong>of</strong> Directors : Mr. Amritanshu Khaitan, Mr. Anirudhya Sarkar, Mr. Kamal Kishore Baheti, Mr.<br />
Kavita Khaitan & Mrs. Yashodhara Khaitan.<br />
Nature <strong>of</strong> Business: The Company is engaged in general trading, leasing, financing, investments &<br />
leasing .The Company is registered as a Non Banking Financial Company <strong>and</strong> the registration number<br />
allotted is 05.01348.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Shri Brij Mohan Khaitan 43015 57.74<br />
Ganesh Ch. Jha 50 0.07<br />
Maganiram Pasari 50 0.07<br />
Smt. Shanti Khaitan 1575 2.11<br />
T.R. Swaminathan 1 Negligible<br />
Deepak Khaitan 12510 16.79<br />
Yashodhara Khaitan 3500 4.70<br />
Soom Stud Farm Pvt. Ltd. 300 Negligible<br />
Ichamati Investmnts (P) Ltd. 758 1.02<br />
M/s. Metal Centre Ltd. 5300 7.11<br />
Amritanshu Khaitan 735 0.99<br />
Smt. Divya Jalan 630 0.85<br />
Shri Deepak Khaitan & Smt. Yashodhara<br />
1826 2.45<br />
Khaitan<br />
Shri Aditya Khaitan 4250 3.17<br />
Total 74500 100.00<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. In Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 86.77 30.58 18.52<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 74.74 17.43 21.85<br />
Equity Capital 24.50 74.50 74.50<br />
Reserves excluding Revaluation Reserve 125.29 142.71 164.56<br />
Book value per Share (Rs.)( Face Value: Rs. 100/-) 611.39 291.557 320.88<br />
Earning per Share (Rs.) .)( Face Value: Rs. 100/-) 305.04 23.40 29.33<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. The<br />
Company issued 50,000 <strong>equity</strong> shares <strong>of</strong> Rs. 100/- each at par on a rights basis during the FY 2004.<br />
Other than this the company has not issued <strong>equity</strong> shares during the past three years.<br />
There is no pending litigation/ disputes/ defaults by the company /promoters /directors <strong>of</strong> the Company<br />
as on the date <strong>of</strong> filing this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
WILLIAMSON FINANCIAL SERVICES LIMITED<br />
Date <strong>of</strong> Incorporation: 17 th December 1971<br />
Board <strong>of</strong> Directors: Mr. A. Khaitan, Mr. D. Khaitan, Mr. T. R. Swaminathan, Mr. R. S. Jhawar, Mr. K.<br />
K. Baheti.<br />
82
Nature <strong>of</strong> Business: The Company is engaged in Lease Financing, Financial Advisory <strong>and</strong> Consultancy<br />
services <strong>and</strong> Capital Market operations .The Company is registered as a Non Banking Financial<br />
Company <strong>and</strong> the registration number allotted is 08.00053.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 32,85,701 39.31<br />
<strong>For</strong>eign Promoters 23,46,500 28.07<br />
Sub Total 56,32,201 67.38<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 3150 0.04<br />
b. Banks, Financial Institutions, Insurance<br />
3,23,099 3.87<br />
Companies<br />
c. FIIs - -<br />
Sub Total 3,26,249 3.90<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 3,64,878 4.37<br />
b. Indian Public 19,74,775 23.62<br />
c. NRIs/OCBs 61,033 0.73<br />
Sub Total 24,00,686 28.72<br />
Gr<strong>and</strong> Total 83,59,136 100.00<br />
The <strong>equity</strong> shares are listed on the BSE, CSE <strong>and</strong> the Gauhati Stock Exchange.The Highest <strong>and</strong> lowest<br />
market price <strong>of</strong> the <strong>equity</strong> shares on the BSE during the past six months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 16.99 9.17<br />
June, 2005 24.27 13.90<br />
July, 2005 22.35 17.75<br />
August, 2005 55.15 18.10<br />
September, 2005 50.00 30.65<br />
October, 2005 34.55 20.80<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows:<br />
(Rs. In Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 298.62 152.90 195.47<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) (2208.63)* (186.64) (145.78)<br />
Equity Capital 835.91 835.91 835.91<br />
Reserves excluding Revaluation Reserve 6534.50 6347.86 6269.93<br />
Book value per Share (Rs.)( Face Value: Rs. 100/-) 88.17 85.94 85.01<br />
Earning per Share (Rs.) .)( Face Value: Rs. 100/-) (26.42) (2.23) (1.74)<br />
* diminution in value <strong>of</strong> long term investments to the extent <strong>of</strong> Rs. 2069.18 Lacs provided for during the<br />
year.<br />
** Loss on sale <strong>of</strong> long term investments to the extent <strong>of</strong> Rs. 3309.48 Lacs<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. Other than<br />
this the company has not issued <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
83
WPIL LIMITED ( <strong>For</strong>merly Worthington Pump Limited)<br />
Date <strong>of</strong> Incorporation: 26 th February , 1952<br />
Board <strong>of</strong> Directors : Mr. Deepak Khaitan, Mr. Prakash Agarwal, Mr. V.N. Agarwal, Mr. Supriya<br />
Mukherjee, Mr. K.K. Ganeriwala, Mr. Subir Dasgupta, Mr. C.K. Pasari, Mr. S.N. Roy<br />
Nature <strong>of</strong> Business: The Company is engaged in the manufacture <strong>of</strong>, dealing in, export <strong>and</strong> import <strong>of</strong><br />
vertical, submersible turbine pumps <strong>and</strong> all other kind <strong>of</strong> pumps, related products <strong>and</strong> iron castings.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 69,80,707 87.59<br />
<strong>For</strong>eign Promoters - -<br />
Persons acting in Concert - -<br />
Sub Total 3,17,16,771 56.86<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 500 0.00<br />
b. Banks, Financial Institutions, Insurance<br />
566 0.00<br />
Companies<br />
c. FIIs 0.00 0.00<br />
Sub Total 1066 0.00<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 1,80,013 2.26<br />
b. Indian Public 8,01,594 10.06<br />
c. NRIs/OCBs 3,700 0.05<br />
d. Other <strong>For</strong>eign Companies 0.00 0.00<br />
Sub Total 9,85,307 12.37<br />
Gr<strong>and</strong> Total 79,67,080 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the BSE, <strong>and</strong> the Calcutta Stock Exchange Association<br />
Limited. The Highest <strong>and</strong> lowest market price <strong>of</strong> the <strong>equity</strong> shares on the BSE during the past six<br />
months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 48.10 29.05<br />
June, 2005 58.65 42.50<br />
July, 2005 58.00 40.25<br />
August, 2005 57.30 45.00<br />
September, 2005 75.50 51.15<br />
October, 2005 60.00 30.05<br />
Brief audited financials <strong>of</strong> WPIL Limited for the past three years are as follows:<br />
(Rs. In Lacs)<br />
Particulars as on 31 st March 2003(18mts.) 2004 2005<br />
Sales <strong>and</strong> Other Income 4753.07 3546.21 4967.07<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 35.25 40.65 64.44<br />
Equity Capital 796.71 796.71 796.71<br />
Reserves excluding Revaluation Reserve 14.03 14.03 128.18<br />
Accumulated Losses 61.58 20.92 ----<br />
Book value per Share (Face Value Rs.10.00) 8.28 9.17 11.61<br />
Earning per Share (Rs.) 0.44 0.51 0.81<br />
84
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. Other than<br />
this the company has not issued <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
KILBURN OFFICE AUTOMATION LTD.<br />
Date <strong>of</strong> Incorporation: 25/11/1980<br />
Board <strong>of</strong> Directors: Mr. S<strong>and</strong>eep Kumar Jalan, Mr. Varadarajan Vanchi, Mr. A. Khaitan, Mr. A.D.<br />
Nanaiya, Mr. C.R. Paul, Mr. M.Singh, Mr. M.Sen, Mr. A.Guha Sarkar<br />
Nature <strong>of</strong> Business: Manufacturing <strong>and</strong> trading <strong>of</strong> Office Equipment.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 38,57,853 57.15<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 7400 0.1096<br />
b. Banks, Financial Institutions, Insurance<br />
7,94,300 11.76<br />
Companies<br />
c. FIIs - -<br />
Sub Total 8,01,700 11.8768<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 9,48,562 14.0526<br />
b. Indian Public 11,38,185 16.8618<br />
c. NRIs/OCBs 3800 0.0563<br />
d. Other <strong>For</strong>eign Companies - -<br />
Sub Total 20,90,547 30.9709<br />
Gr<strong>and</strong> Total 67,50,100 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the BSE, <strong>and</strong> the Calcutta Stock Exchange Association<br />
Limited. The Highest <strong>and</strong> lowest market price <strong>of</strong> the <strong>equity</strong> shares on the BSE during the past six<br />
months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 12.65 7.26<br />
June, 2005 18.10 10.10<br />
July, 2005 17.00 10.30<br />
August, 2005 21.20 14.85<br />
September, 2005 18.25 11.55<br />
October, 2005 12.48 7.25<br />
Brief audited financials <strong>of</strong> <strong>Kilburn</strong> Office Automation Limited for the past three years are as follows:<br />
(Rs. in lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Equity Capital 720.01 720.01 795.01<br />
Reserves excluding Revaluation Reserve 168.5 171.53 154.03<br />
Sales <strong>and</strong> Other Income 3275.77 3464.34 2673.03<br />
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 6.23* 35.41 57.98<br />
Book value per Share (Face Value Rs.10.00) 6.48 8.14 9.99<br />
Earning per Share (Rs.) 0.09 0.49 0.73<br />
85
* Deferred tax debit <strong>of</strong> Rs. 19.14 Lacs. The Company has shown a deferred tax credit in other years.<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. Other than<br />
this the company has not issued <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
KILBURN CHEMICALS LTD.<br />
Date <strong>of</strong> Incorporation: 31 August 1990<br />
Board <strong>of</strong> Directors : Mr. Deepak Khaitan , Mr. S<strong>and</strong>eep Kumar Jalan, Mr. Varadarajan Vanchi, Mr.<br />
Supriyo Mukherjee ,Mr.A.D. Nanaiya, Mr. Padam Kumar Khaitan,Mr. Ranjit Chaudhri.<br />
Nature <strong>of</strong> Business: Manufacturing <strong>and</strong> trading <strong>of</strong> Office Equipment.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 44,41,738 59.8214<br />
B. Non Promoter Holding<br />
Institutional Investors<br />
a. Mutual Funds <strong>and</strong> UTI 17,850 0.2404<br />
b. Banks, Financial Institutions, Insurance<br />
8450 0.1138<br />
Companies<br />
c. FIIs - -<br />
Sub Total 26,300 0.3542<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 2,67,382 3.6011<br />
b. Indian Public 26,85,667 36.1706<br />
c. NRIs/OCBs 3913 0.0527<br />
d. Other <strong>For</strong>eign Companies - -<br />
Sub Total 29,56,962 39.8244<br />
Gr<strong>and</strong> Total 74,25,000 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the BSE, <strong>and</strong> the Calcutta Stock Exchange Association<br />
Limited, Madras Stock Exchange .The Highest <strong>and</strong> lowest market price <strong>of</strong> the <strong>equity</strong> shares on the BSE<br />
during the past six months is given below:<br />
On BSE<br />
Month Highest ( Rs.) Lowest ( Rs.)<br />
May, 2005 60.00 38.00<br />
June, 2005 51.80 42.70<br />
July, 2005 57.10 43.60<br />
August, 2005 60.90 45.00<br />
September, 2005 73.65 51.00<br />
October, 2005 59.00 45.00<br />
Brief audited financials <strong>of</strong> <strong>Kilburn</strong> Chemicals Limited for the past three years are as follows:<br />
(Rs. in lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Equity Capital 1133.72 1133.72 1133.72<br />
Reserves excluding Revaluation Reserve 1165.83 1215.52 1364.31<br />
Sales <strong>and</strong> Other Income 3854.33 4580.99 5446.53<br />
86
Pr<strong>of</strong>it/(Loss) after Tax (PAT) 423.50 223.88 348.56<br />
Book value per Share 20.19 20.72 22.03<br />
Earning per Share (Rs.) 3.74 1.97 3.07<br />
The company is not sick company within the meaning <strong>of</strong> the Sick Industrial Companies (Special<br />
Provisions) Act, 1995.<br />
There has been no change in the capital structure <strong>of</strong> the company during the past three years. Other than<br />
this the company has not issued <strong>equity</strong> shares during the past three years.<br />
<strong>For</strong> details on litigations <strong>and</strong> disputes pending against the Company <strong>and</strong> defaults made by the Company<br />
please refer to the paragraph under “ Litigations <strong>and</strong> Disputes” on page no. ______ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>.<br />
STANDARD BATTERIES LIMITED<br />
Date <strong>of</strong> incorporation : 20 th June, 1945<br />
Board <strong>of</strong> Directors : Mr. T.R. Swaminathan, Mr. R.S. Jhawar, Mr. B.C. Das & Mr. F.J. Guzdar<br />
Nature <strong>of</strong> Business ; Lead acid battery <strong>and</strong> battery accessories. Since 1999 involved in trading in<br />
engineering goods/ bulk tea.<br />
Shareholding Pattern <strong>of</strong> the company is as given below :<br />
Shareholder Category<br />
No. <strong>of</strong> <strong>equity</strong> shares<br />
A. Promoter Holding<br />
Indian Promoters 4651045<br />
<strong>For</strong>eign Promoters -<br />
Persons acting in concert 1600<br />
B. Non Promoter Holding<br />
Institutional investors<br />
a. Mutual Funds <strong>and</strong> UTI 18900<br />
b. Banks, Financial Institutions, Insurance<br />
2984040<br />
Companies<br />
c. FIIs<br />
Others 1982155<br />
a. <strong>Private</strong> Corporate Bodies 539300<br />
b. Indian Public<br />
c. NRIs/ OCBs 165210<br />
d. Other <strong>For</strong>eign Companies<br />
Gr<strong>and</strong> Total 10342250<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the Bombay Stock Exchange (BSE), Calcutta Stock<br />
Exchange Association Limited <strong>and</strong> Chennai Stock Exchange.<br />
The <strong>equity</strong> shares <strong>of</strong> the company have been suspended from trading on the BSE since February 2002.<br />
The Company shares have not been traded during the past six months. The Company has made an<br />
application for voluntary delisting <strong>of</strong> its <strong>equity</strong> share from the Stock Exchanges at Kolkata <strong>and</strong> Chennai<br />
pursuant to a special resolution passed by the shareholders on date: 29.09.2003.<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows :<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 155.36 132.18 87.06<br />
Pr<strong>of</strong>it /(Loss) after Tax (PAT) (20.09) 31.26 13.29<br />
Equity Capital 51.71 51.71 51.70<br />
Reserves excluding Revaluation 1237.93 1237.93 1237.93<br />
87
Reserve<br />
Book Value per Share (Rs.) 79.07 85.77 87.78<br />
Earning per Share (Rs.) (3.89) 6.05 2.57<br />
The accumulated losses <strong>of</strong> the company at the end <strong>of</strong> the financial year are exceeding fifty per cent <strong>of</strong> its<br />
net worth.<br />
According to the Auditors Report the Company is regular in depositing undisputed statutory dues<br />
including Provident Fund, Income Tax, Sales Tax, Excise Duty, cess <strong>and</strong> any other statutory dues<br />
applicable to it with appropriate authorities.<br />
NITYA HOLDINGS & PROPERTIES (P) LIMITED<br />
Date <strong>of</strong> incorporation : 5 th November, 1992<br />
Board <strong>of</strong> Directors : Mr. Amritanshu Khaitan, Mr. Suvamoy Saha, Mr. Yashodhara Khaitan & Ms.<br />
Shanti Khaitan<br />
Nature <strong>of</strong> Business ; The Company is engaged in trading investment, properties lease & Rental.<br />
Shareholding Pattern <strong>of</strong> the company is as given below :<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Mr. Ganesh Ch<strong>and</strong>ra Jha 100 0.04<br />
Mr. Surendra Kumar Khaitan 100 0.04<br />
Mr. B.M. Khaitan 1,60,000 57.10<br />
Mr. Deepak Khaitan 40,000 14.27<br />
Metal Centre Ltd. 22,000 7.85<br />
Ichamati Investments Pvt. Ltd. 18,000 6.42<br />
Nitya Bangur 20,000 7.14<br />
United Machine co. Ltd. 20,000 7.14<br />
Gr<strong>and</strong> Total 2,80,200 100.00<br />
This being a private limited company the shares are not quoted on any <strong>of</strong> the stock exchanges.<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows :<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 0.36 0.36 19.68<br />
Pr<strong>of</strong>it /(Loss) after Tax (PAT) (0.35) (0.76) 5.82<br />
Equity Capital 28.02 28.02 28.02<br />
Reserves excluding Revaluation<br />
0.05 0.05 0.05<br />
Reserve<br />
Book Value per Share (Rs.) 2.04 1.80 3.90<br />
Earning per Share (Rs.) (0.12) (0.27) 2.08<br />
There is no litigation/ disputes/ defaults by the company /promoters /directors <strong>of</strong> the Company as on the<br />
date <strong>of</strong> filing this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
DUFFLAGHUR INVESTMENTS LTD.<br />
Date <strong>of</strong> incorporation : 04/08/1992<br />
Board <strong>of</strong> Directors : Mr. Deepak Khaitan, Mr. S.P. Singhi, Mr. V.K. Verma, Mr. A. Sankara Narayanan,<br />
Mr. U.Parekh, Mr. C.K. Pasari, Mr. U.S. Chaturvedi <strong>and</strong> Mr. Srinivash Singh<br />
Nature <strong>of</strong> Business ; The Company is engaged in.<br />
88
Shareholding Pattern <strong>of</strong> the company is as given below :<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
Metal Centre Ltd. 1,24,994 50.00<br />
Calcutta Teachest & Fibre Ltd. 1,25,000 50.00<br />
Others 6 negligible<br />
Gr<strong>and</strong> Total 2,50,000 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the Calcutta Stock Exchange Association Limited,<br />
Bangalore Stock Exchange <strong>and</strong> Magadh Stock Exchange. The Highest <strong>and</strong> Lowest market price <strong>of</strong> the<br />
<strong>equity</strong> shares on the BSE during the past six months is given below :<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows :<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 379.17 214.92 287.71<br />
Pr<strong>of</strong>it /(Loss) after Tax (PAT) -528.63 -338.68 -14.61<br />
Equity Capital 25 25 25<br />
Reserves excluding Revaluation<br />
-1514.12<br />
Reserve -1163.89 -1499.51<br />
Book Value per Share (Rs.) -455.56 -589.80 -595.65<br />
Earning per Share (Rs.) -211.452 -135.472 -5.844<br />
The accumulated losses <strong>of</strong> the company as at the end <strong>of</strong> the financial year are more than fifty per cent <strong>of</strong><br />
its net worth <strong>and</strong> the Company has incurred cash losses during the financial year <strong>and</strong> in the immediately<br />
preceding financial year.<br />
According to the Auditors Report the Company is regular in depositing undisputed statutory dues<br />
including Provident Fund, Investor education <strong>and</strong> Protection Fund, Empoyees State Insurance, Income<br />
Tax, Sales Tax, Wealth Tax, Servcie Tax, Custome-duty, Excise Duty, cess <strong>and</strong> other statutory dues<br />
applicable to it with appropriate authorities.<br />
There is no litigation/ disputes/ defaults by the company /promoters /directors <strong>of</strong> the Company as on the<br />
date <strong>of</strong> filing this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
McNALLY BHARAT ENGINEERING COMPANY LIMITED<br />
Date <strong>of</strong> incorporation : 10 th July, 1961<br />
Board <strong>of</strong> Directors : Mr. Deepak Khaitan, Mr. S.P. Singhi, Mr. V.K. Verma, Mr. A. Sankara Narayanan,<br />
Mr. U.Parekh, Mr. C.K. Pasari, Mr. U.S. Chaturvedi <strong>and</strong> Mr. Srinivash Singh<br />
Nature <strong>of</strong> Business ; The Company is engaged in execution <strong>of</strong> turnkey engineering projects in various<br />
sectors <strong>of</strong> infrastructure development <strong>and</strong> manufacture <strong>of</strong> equipment <strong>and</strong> spares related to such activity.<br />
Major Events : Entire business takenover by Exide Industries Ltd. w.e.f February 1998 (scheme <strong>of</strong><br />
amalgation ) pursuant to the Hon’ble High Court <strong>of</strong> Mumbai order dated 21 st December, 2001 there was<br />
a reduction <strong>of</strong> paid up <strong>equity</strong> share capital <strong>of</strong> Rs. 9.50 per share was effected by setting <strong>of</strong>f <strong>and</strong> adjusted<br />
against carried forward losses <strong>of</strong> the Company. Thus, the authorized <strong>equity</strong> share capital was sub-divided<br />
from 1,47,50,000 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each to 29,50,00,000 <strong>equity</strong> shares <strong>of</strong> Rs. 0.50 each.<br />
Shareholding Pattern <strong>of</strong> the company is as given below:<br />
Shareholder Category No. <strong>of</strong> <strong>equity</strong> shares % shareholding<br />
A. Promoter Holding<br />
Indian Promoters 9115352 46.0813<br />
<strong>For</strong>eign Promoters -- ---<br />
Persons acting in concert 1000 ---<br />
Sub-total 9116352 46.0813<br />
89
B. Non Promoter Holding<br />
Institutional investors<br />
a. Mutual Funds <strong>and</strong> UTI 2810258 14.2053<br />
b. Banks, Financial Institutions, Insurance<br />
3199519 16.1729<br />
Companies<br />
c. FIIs 14000 0.0708<br />
Sub-total 6023777 30.449<br />
Others<br />
a. <strong>Private</strong> Corporate Bodies 1210370 6.1182<br />
b. Indian Public 3424407 17.3096<br />
c. NRIs/ OCBs 8290 0.0419<br />
d. Other <strong>For</strong>eign Companies --- ---<br />
Sub-total 4643067 23.4697<br />
Gr<strong>and</strong> Total 19783196 100.00<br />
The <strong>equity</strong> shares <strong>of</strong> the company are listed on the Bombay Stock Exchange (BSE), Calcutta Stock<br />
Exchange Association Limited, Bangalore Stock Exchange <strong>and</strong> Magadh Stock Exchange. The Highest<br />
<strong>and</strong> Lowest market price <strong>of</strong> the <strong>equity</strong> shares on the BSE during the past six months is given below :<br />
On BSE<br />
Month Highest (Rs.) Lowest (Rs.)<br />
May, 2005 81.90 64.00<br />
June, 2005 71.00 55.50<br />
July, 2005 84.00 57.75<br />
August, 2005 97.00 71.00<br />
September, 2005 104.70 80.00<br />
October, 2005 85.70 63.00<br />
Brief audited financials <strong>of</strong> the company for the past three years are as follows :<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 12.02 20.60 30.16<br />
Pr<strong>of</strong>it /(Loss) after Tax (PAT) 0.10 0.15 0.33<br />
Equity Capital 1.98 1.98 1.98<br />
Reserves excluding Revaluation 1.71 1.65 1.70<br />
Reserve<br />
Book Value per Share (Rs.) 18.4 18.33 18.59<br />
Earning per Share (Rs.) 0.51 0.76 1.67<br />
The Company has no accumulated losses as at 31 st March, 2005 <strong>and</strong> it has not incurred any cash losses in<br />
the financial year ended on that date or in the immediately preceding financial year.<br />
KHAITAN INVESTMENT COMPANY<br />
Date <strong>of</strong> <strong>For</strong>mation: 29/06/1984<br />
Partners: Mr. Deepak Khiatan, Mrs Shanti Khaitan<br />
Nature <strong>of</strong> Business : Investment in shares <strong>and</strong> securities.<br />
Brief audited financials <strong>of</strong> the partnership firm for the past three years are as follows :<br />
(Rs. in Lacs)<br />
Particulars as on 31 st March 2003 2004 2005<br />
Sales <strong>and</strong> Other Income 1.92 0.44 0.48<br />
Pr<strong>of</strong>it /(Loss) after Tax (PAT) 0.02 0.07 0.08<br />
Partners Capital 0.60 0.60 0.60<br />
90
RECENT CHANGES IN THE GROUP<br />
McLeod Russel India Ltd. has entered into a Share Purchase Agreemennt on June 16, 2005 with<br />
Williamson Tea Holdings plc (‘Promoter Group <strong>of</strong> Williamson Tea’) to acquire 100% <strong>of</strong> the fully paidup<br />
<strong>equity</strong> share capital <strong>of</strong> Borelli Tea Holdings Limited, a company incorporated in U.K. in March 19,<br />
1976 along with its control, subject to fulfillment <strong>of</strong> certain terms <strong>and</strong> conditions as per the Share<br />
Purchase Agreement. Borelli Tea Holdings Limited in turn holds 70% <strong>of</strong> the fully paid up <strong>equity</strong> share<br />
capital <strong>of</strong> Williamson Tea Assam Ltd., a company incorporated under the Indian Companies Act, 1956<br />
<strong>and</strong> listed on the BSE. Thus, McLeod Russel India Ltd. has indirectly acquired control <strong>of</strong> Williamson<br />
Tea Assam Ltd.<br />
As a result <strong>of</strong> this McLeod Russel India Ltd. alongwith Williamson Magor & Co. Ltd., United Machine<br />
Co. Ltd., Ichamati Investments Pvt. Ltd., Nitya Holdings & Properties Pvt. Ltd. (collectively referred to<br />
as ‘the Acquirers’) made an open <strong>of</strong>fer to acquire 20% <strong>of</strong> the <strong>equity</strong> share capital <strong>of</strong> Williamson Tea<br />
Assam Ltd. from its shareholders as per the provisions <strong>of</strong> the SEBI (SAST) Regulations, 1997. The said<br />
<strong>of</strong>fer has closed on 10 th October, 2005. Mcleod Russel further proposes to amalgamate Williamson Tea<br />
Assam Ltd. with itself.<br />
DISASSOCIATION WITH CERTAIN COMPANIES<br />
Companies listed below have been shown as Enterprises under common control as a part <strong>of</strong> the Related<br />
Party Disclosure made in the Annual Report <strong>of</strong> KEL upto the FY 2004. However, on a review <strong>of</strong> the<br />
direct/indirect interests <strong>of</strong> these companies, it has been established that they are not under common<br />
control <strong>and</strong> do not have significant influence on the Company, <strong>and</strong> vice-versa, as stipulated under AS 18.<br />
The same has been disclosed by Deloitte Haskins & Sells, statutory auditors <strong>of</strong> the Company as a part <strong>of</strong><br />
the audited financials for the 12 months period ended on 30 th September, 2005 under Note No. 4 in<br />
respect <strong>of</strong> Related Party Transaction disclosure. The promoter, Williamson Magor & Co. Ltd., does not<br />
hold any <strong>equity</strong> shares <strong>of</strong> these companies <strong>and</strong> does not have control over their operations. A list <strong>of</strong> these<br />
companies is given below:<br />
• Salsar Industrial Services Ltd.<br />
• The Moran Tea Co. ( India) Ltd.<br />
• Lathika Financers Pvt. Ltd.<br />
91
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND<br />
RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS<br />
(Rs.in lacs)<br />
Financial Year ended 30th September Year ended 30 th<br />
Particulars 2002 2003 2004 September 2005<br />
Income<br />
Sales:<br />
Of products manufactured by the<br />
Company 1,586.73 2,048.80 2,473.70 4,440.82<br />
Of products traded in by the Company - - - -<br />
Total 1,586.73 2,048.80 2,473.70 4,440.82<br />
Other Income 369.37 118.58 84.52 66.45<br />
Increase / (Decrease) in inventories 219.06 (104.22) 193.16 (81.50)<br />
2,175.16 2,063.16 2,751.38 4,425.77<br />
Expenditure<br />
Raw Materials Consumed 879.83 873.35 1,422.42 2,402.36<br />
Staff Costs 335.38 210.23 188.82 272.35<br />
Other manufacturing Expenses 143.71 225.16 359.04 489.81<br />
Administration Expenses 360.14 312.45 318.35 397.28<br />
Selling & Distribution Expenses 45.33 44.51 106.07 183.98<br />
Other Expenses 46.50 - 15.60 10.74<br />
Interest 1,159.26 1,494.38 241.49 198.76<br />
Depreciation 161.31 141.93 41.48 26.42<br />
Provision/(Write back) 0f Diminution in<br />
value <strong>of</strong> Investment (34.20) (25.50) 142.13 (87.43)<br />
Net Pr<strong>of</strong>it Before Tax <strong>and</strong><br />
extraordinary Items (956.30) (1,213.35) (84.02) 531.50<br />
Extraordinary/Exceptional/Prior Period<br />
Income/(Expenses) (58.59) (103.68) 4,178.05 -<br />
Less: Tax Provision/( Refund) - (25.77) - 8.79<br />
Pr<strong>of</strong>it/ (Loss) after tax as per audited<br />
statements <strong>of</strong> accounts (1,014.89) (1,291.26) 4,094.03 522.71<br />
Impact <strong>of</strong> Adjustments on account <strong>of</strong><br />
changes in Accounting Policies <strong>and</strong><br />
Prior Period Items (Refer Note 2 <strong>of</strong><br />
Annexure III)<br />
947.54 911.87 (4,147.36) -<br />
Restated Pr<strong>of</strong>it & Loss (67.35) (379.39) (53.33) 522.71<br />
Balance brought forward (4,740.82) (4,808.17) (5,187.56) (5,219.22)<br />
Adjustment prior to 1999-2000 - - - -<br />
Restated Pr<strong>of</strong>it /(Loss) for the year (67.35) (379.39) (53.33) 522.71<br />
2002<br />
92
Operating performance <strong>of</strong> the Company improved with sales registering a growth <strong>of</strong> nearly 30% as<br />
compared to the previous year. Pr<strong>of</strong>it Before Interest Depreciation , Extraordinary Items <strong>and</strong> Taxation<br />
(PBIDT) amounted to Rs. 364 Lacs as compared to a loss in the previous year amounting to Rs. 234<br />
Lacs. As manufacturing operations were suspended at the Vadodara Plant, the Bh<strong>and</strong>up Plant<br />
successfully implemented the pending orders.<br />
2003<br />
Operating performance <strong>of</strong> the Company improved with sales registering a growth <strong>of</strong> 29 % as compared<br />
to the previous year. PBIDT amounted to Rs. 397 Lacs as compared to Rs. 364 Lacs for the previous<br />
year. The Company witnesses an increase in the raw material costs owing to the increase in the cost <strong>of</strong><br />
steel, the main raw material. The Company successfully executed orders from reputed customers<br />
including Nuclear Power Corporation <strong>of</strong> India Ltd., J. Ray McDermott Middle East Inc., Abu Dhabi,<br />
Continental Carbon Ltd. <strong>and</strong> Nirma Ltd.<br />
2004<br />
Sales <strong>and</strong> Services registered a growth <strong>of</strong> 21% as compared to the previous year. The BIFR<br />
Rehabilitation Scheme has been implemented from the FY 2004. Various equipment were designed <strong>and</strong><br />
manufactured for important domestic customers including Larsen & Tubro, GNFC, Navin Flourine <strong>and</strong><br />
IPCL.<br />
During the twelve Months ended on 30 th September, 2005<br />
The Company has witnessed a turnaround. KEL has reported a turnover <strong>of</strong> Rs. 4440 Lacs <strong>and</strong> a Pr<strong>of</strong>it<br />
Aftre Tax <strong>of</strong> Rs. 523 Lacs.<br />
The Company has vide its lette dated 12 th September, 2005 applied to the Registrar <strong>of</strong> Companies, West<br />
Bengal seeking permission to :<br />
(a) extend the Financial Year to a period <strong>of</strong> 18 months(from October 01, ’04 to March 31, ’06) ending<br />
on March 31, 2006 <strong>and</strong><br />
(b) extend the time for holding the next Annual general Meeting <strong>of</strong> the Company until 23 rd September,<br />
2006<br />
1. Unusual or infrequent events or transactions<br />
The Company sold <strong>of</strong>f the Baroda Unit pursuant to the consent <strong>of</strong> BIFR <strong>and</strong> the shareholders vide sale<br />
deed dated 23 rd February, 2004.<br />
2. Significant economic/regulatory changes<br />
There have been no significant economic/ regulatory changes.<br />
3. Known trends or uncertainties<br />
There are no known trends or uncertainties likely to have a material adverse impact on revenue or<br />
income <strong>of</strong> our Company from continuing operations.<br />
4. Future relationship between costs <strong>and</strong> income<br />
To our knowledge, there are no known factors, which will affect the future relationship between the costs<br />
<strong>and</strong> income, or which will have a material impact on the operations <strong>and</strong> finances <strong>of</strong> our Company.<br />
5. Total turnover <strong>of</strong> each major industry segment<br />
We operate in only one industrial segment being Industrial Capital Goods. No data is available on the<br />
turnover <strong>of</strong> companies operating in this specific sector.<br />
6. New Products or business segments.<br />
93
New products developed by the Company are described under the head ‘Innovations’ on page no. ____<br />
<strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
7. Seasonality <strong>of</strong> business<br />
Companys business is not seasonal. However, the engineering industry is cyclical <strong>and</strong> its performance<br />
depends on the performance <strong>of</strong> sectors like power, cement, chemicals, metals, oil <strong>and</strong> gas, fertilizers <strong>and</strong><br />
other industrial plants<br />
8. Dependence on single or few suppliers or customers<br />
The Company does not depend on few suppliers or customers.<br />
9. Competitive Conditions<br />
KEL manufactures equipment for diverse industries being chemical/ petrochemical <strong>and</strong> food processing.<br />
<strong>Kilburn</strong>’s range <strong>of</strong> products is diverse <strong>and</strong> authentic published data for existing <strong>and</strong> projected growth is<br />
not available. As per the management, the Company is among the leading manufacturers <strong>of</strong> Tea Dryers<br />
worldwide <strong>and</strong> is a significant player for Rotary Dryers in the Carbon Black industry. Domestically the<br />
company is one <strong>of</strong> the major suppliers <strong>of</strong> dryers <strong>of</strong> various kinds. KEL faces competition from smaller<br />
players in the business <strong>and</strong> few <strong>of</strong> the competitors have the wide range <strong>of</strong> products that KEL<br />
manufactures. However these competitors are able to <strong>of</strong>fer better prices. In the overseas market KEL<br />
faces competition from Eastern Europe <strong>and</strong> China.<br />
Significant developments after fiscal 2004 that may affect our future operations<br />
Save as stated elsewhere in this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, to our knowledge, no circumstances have arisen<br />
since the date <strong>of</strong> the last financial statement as disclosed in the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> which materially <strong>and</strong><br />
adversely affect or is likely to affect the trading or our pr<strong>of</strong>itability or the value <strong>of</strong> our assets or our<br />
ability to pay our liability within the next twelve months. Save as stated elsewhere in this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>, there is no subsequent development after the date <strong>of</strong> the auditors’ report, which will have a<br />
material impact on reserves, pr<strong>of</strong>its, earnings per share <strong>and</strong> book value <strong>of</strong> our company.<br />
WORKING RESULTS<br />
Information relating to the Company sales, gross pr<strong>of</strong>it etc. as required by the Ministry <strong>of</strong> Finance<br />
Circular No. F2/5/SE/76 dated February 5, 1977 read with the amendments <strong>of</strong> No. dated March 8, 1977<br />
as under:<br />
The unaudited working results <strong>of</strong> the Company for the period from 1 st October, 2004 upto 31 st October,<br />
2005 are as given as under:<br />
Particulars<br />
Rs. in<br />
Lacs<br />
Sales 4441<br />
Other Income 67<br />
Total Expenditure 4091<br />
Gross Pr<strong>of</strong>it 776<br />
Interest 110<br />
Depreciation 29<br />
Pr<strong>of</strong>it Before Tax <strong>and</strong> Extraordinary Items 637<br />
Extraordinary/Exceptional/Prior Period Item -<br />
Tax Provision 9<br />
Pr<strong>of</strong>it After Tax 628<br />
Paid-up Equity Capital 675<br />
EPS 9.3<br />
94
LEGAL AND OTHER INFORMATION<br />
Except as described below, there are no outst<strong>and</strong>ing litigations, suits or criminal or civil prosecutions,<br />
proceedings or tax liabilities against us, our directors, our promoters or companies/firms promoted by<br />
our promoters that would have a material adverse effect on our business <strong>and</strong> there are no defaults, non<br />
payment or over dues <strong>of</strong> statutory dues, Institutional/bank dues <strong>and</strong> dues payable to holders <strong>of</strong> any<br />
debentures, bonds <strong>and</strong> fixed deposits that would have a material adverse effect on our business.<br />
OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS<br />
Litigation against the issuer Company :<br />
S.No<br />
.<br />
Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. M/s. Fine Folds, Summary Suit No. Non-payment Rs. 76,000<br />
Mumbai<br />
1688/ 2000 <strong>of</strong> outst<strong>and</strong>ing <strong>and</strong> interest<br />
Bombay High amount<br />
Court<br />
pertaining to<br />
2. M/s. Keld Ellent<strong>of</strong>t<br />
India Pvt. Ltd.<br />
Calcutta<br />
3. M/s. Gocool<br />
Insulations Pvt. Ltd.<br />
Mumbai<br />
4. M/s. Tefseal<br />
Industries<br />
Mumbai<br />
5. M/s. Tefseal<br />
Industries<br />
Mumbai<br />
6. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
7. M/s. Keld Ellent<strong>of</strong>t<br />
India Pvt. Ltd.<br />
8. Bank <strong>of</strong> madura<br />
Mumbai<br />
Labour Matters :<br />
W.P. No.<br />
C.P. No. 357/2000<br />
Calcutta High<br />
Court<br />
Winding up<br />
petition<br />
Summary Suit No.<br />
4540 <strong>of</strong> 2000<br />
Bombay City Civil<br />
Court<br />
Summary Suit No.<br />
4657 <strong>of</strong> 2000<br />
Bombay City Civil<br />
Court<br />
Summary Suit No.<br />
2390 <strong>of</strong> 2001<br />
Bombay High<br />
Court<br />
Winding up<br />
petition<br />
C.P. No. 357/00<br />
High Court<br />
Calcutta<br />
Legal notice to<br />
M/s. IIT capital<br />
services (KEL<br />
party)<br />
supplies made<br />
Non-payment<br />
against<br />
supplies made<br />
non-payment<br />
<strong>of</strong> disputed<br />
outst<strong>and</strong>ing<br />
amount<br />
pertaining to<br />
site work<br />
carried out at<br />
IPCL<br />
non-payment<br />
<strong>of</strong> outst<strong>and</strong>ing<br />
amount<br />
pertaining to<br />
supplies made<br />
non-payment<br />
<strong>of</strong> outst<strong>and</strong>ing<br />
amount<br />
pertaining to<br />
supplies made.<br />
recovery <strong>of</strong><br />
dues against<br />
lease/ hire<br />
purchase<br />
agreements<br />
Rs. 2.66 Lacs<br />
+ interest Rs.<br />
0.68 Lacs<br />
Rs. 16.10<br />
Lacs +<br />
interest<br />
@21%.<br />
Rs. 0.47 Lacs<br />
+ interest @<br />
20%.<br />
Rs. 0.49 Lacs<br />
+ interest @<br />
20%.<br />
Rs.<br />
1,25,85,000<br />
+ interest @<br />
26% p.a.<br />
Since June<br />
2001<br />
Recovery suit 3.34 Lacs +<br />
interest<br />
Lease/ hire<br />
purchase<br />
Present Status<br />
No further<br />
developments<br />
No further<br />
developments<br />
No further<br />
developments<br />
No further<br />
developments<br />
No further<br />
developments<br />
Awating date for<br />
hearing.<br />
Pending –filed<br />
supplementary<br />
affidavit in April,<br />
2002<br />
0.16 No further<br />
developments.<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
Present Status<br />
95
1. Mr. Dinkar N Complaint No.<br />
Bhosale<br />
(ULP) No. 36/95<br />
Thane Labour<br />
Mr. Ramesh<br />
Court &<br />
Complaint No.<br />
Gaikwad<br />
(ULP) No. 37/95<br />
Thane Labour<br />
Court<br />
2. Mr. S.A. Thakur ULP 339 <strong>of</strong> 1996<br />
I Labour Court<br />
Thane, Mumbai<br />
3. N.B. Jadhav Complaint No.<br />
(ULP) No. 591/94<br />
Thane Labour<br />
Court<br />
4. S.R. Keni Writ Petition in<br />
Bombay High<br />
Court, Mumbai<br />
Reinstatement<br />
Criminal case<br />
for assault <strong>of</strong><br />
<strong>of</strong>ficer in duty<br />
(Mr. Natu)<br />
Misbehaviour<br />
on premises<br />
Appeal against<br />
order <strong>of</strong> XI<br />
Labour Court<br />
<strong>of</strong> B<strong>and</strong>ra<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Written statement to<br />
be filed.<br />
Evidence <strong>of</strong> the<br />
workman.<br />
<strong>For</strong> further evidence<br />
by the Company.<br />
Writ Petition filed<br />
against the order <strong>of</strong><br />
the Labour Court <strong>of</strong><br />
B<strong>and</strong>ra wherein<br />
termination held<br />
illegal.<br />
Pending Labour matters at Baroda :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Mr. M.R. Satwara Labour Tribunal Dismissal <strong>of</strong> Not<br />
Baroda<br />
services ascertained<br />
2. Members <strong>of</strong> Industrial Tribunal Claim for Not<br />
Mahagujarat Baroda<br />
wages during ascertained<br />
Workers Union<br />
closed period<br />
22.11.2001 to<br />
3. Mr. Omprakash<br />
Saxsena<br />
4. Mr. Govindbhai J.<br />
Vasava<br />
Ref. 629/99<br />
Labour Court<br />
Baroda<br />
Ref. 942/96<br />
Labour Court<br />
Baroda<br />
5. Mr. I.S. Khokhar Ref. 1015/2000<br />
Labour Court<br />
Baroda<br />
6. Mr. Mohanlal S.<br />
Vasava<br />
Ref. 1578/98<br />
Labour Court<br />
Baroda<br />
7. Mr. Bharat Rohit Ref. 1112/99<br />
Labour Court<br />
Baroda<br />
8. Mr. Abhay S Chavan Ref. 1388/99<br />
Labour Court<br />
Baroda<br />
9. Mr. Balkrishna<br />
Sumbhe<br />
Ref. 1205/99<br />
Labour Court<br />
Baroda<br />
15.07.2003<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
Dismissal<br />
services<br />
<strong>of</strong><br />
<strong>of</strong><br />
<strong>of</strong><br />
<strong>of</strong><br />
<strong>of</strong><br />
<strong>of</strong><br />
<strong>of</strong><br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Present Status<br />
Next date <strong>of</strong> hearing<br />
not fixed.<br />
Next date <strong>of</strong> hearing<br />
10.11.2005 for reply<br />
by the company.<br />
Next date <strong>of</strong> hearing<br />
26.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
26.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
22.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
22.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
26.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
27.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
26.12.2005 for<br />
evidence by the<br />
96
10 Mr. Mahesh K Rohit Ref. 1390/99<br />
Labour Court<br />
Baroda<br />
11 Workers V/s<br />
Insurance Co. &<br />
<strong>Kilburn</strong> Engineering<br />
Ltd.<br />
Baroda<br />
W.C. No. 63/97<br />
Industrial Tribunal<br />
Dismissal<br />
services<br />
Dismissal<br />
service<br />
<strong>of</strong><br />
pf<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
27.12.2005 for<br />
evidence by the<br />
workers.<br />
Next date <strong>of</strong> hearing<br />
27.12.2005 for<br />
insurance reply.<br />
Pending Sales Tax (Gujarat) Appeals matters :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Asst. Commissioner Appeal with the Against the<br />
<strong>of</strong> Sales Tax, Baroda Deputy<br />
central sales<br />
Commissioner <strong>of</strong> tax assessment<br />
Sales Tax, Baroda for the period<br />
1.4.2000 to<br />
31.3.2001<br />
2. Asst. Commissioner<br />
<strong>of</strong> Sales Tax, Baroda<br />
3. Asst. Commissioner<br />
<strong>of</strong> Sales Tax, Baroda<br />
4. Asst. Commissioner<br />
<strong>of</strong> Sales Tax, Baroda<br />
Appeal with the<br />
Deputy<br />
Commissioner <strong>of</strong><br />
Sales Tax, Baroda<br />
Appeal with the<br />
Deputy<br />
Commissioner <strong>of</strong><br />
Sales Tax, Baroda<br />
Appeal with the<br />
Deputy<br />
Commissioner <strong>of</strong><br />
Sales Tax, Baroda<br />
Against the<br />
central sales<br />
tax assessment<br />
for the period<br />
1.4.2000 to<br />
31.3.2001<br />
Against the<br />
central sales<br />
tax assessment<br />
for the period<br />
1.4.2003 to<br />
31.3.2004<br />
Against the<br />
central sales<br />
tax assessment<br />
for the period<br />
1.4.2003 to<br />
31.3.2004<br />
Rs.<br />
1,79,61,746.00<br />
Rs.<br />
63,35,428.00<br />
Rs.<br />
14,71,699.00<br />
Rs.<br />
2,93,919.00<br />
Present Status<br />
Appeal filed in June<br />
2003 against the<br />
Order <strong>of</strong> 31.3.2003.<br />
Yet to come for<br />
hearing.<br />
Appeal filed in June<br />
2003 against the<br />
Order<br />
<strong>of</strong><br />
25.03.2003. Yet to<br />
come for hearing<br />
Appeal filed against<br />
the Order <strong>of</strong><br />
31.1.2005. Yet to<br />
come for hearing<br />
Appeal filed against<br />
the Order <strong>of</strong><br />
31.1.2005. Yet to<br />
come for hearing<br />
Pending Customs, Excise & Service Tax matters :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Commissioner <strong>of</strong> Appeal No. Waiver <strong>of</strong> predeposti<br />
Rs. 13,12,190<br />
Central Excise ST/71/05 &<br />
<strong>of</strong> & penalty Rs.<br />
Vadodara –II ST/75/05, Service Tax & 500<br />
ST/S/821/05 & penalty<br />
ST/S/891/05<br />
Customs, Excise &<br />
Service Tax<br />
Appellate Tribunal,<br />
Mumbai<br />
Present Status<br />
Waived by order dt.<br />
16.06.2005<br />
Litigation against the Directors (violation <strong>of</strong> statutory regulations or alleging criminal <strong>of</strong>fence) :<br />
S.No Party Details Suit Details Nature <strong>of</strong> suit Amount Present Status<br />
.<br />
/Claims<br />
1. M/s. IIT Capital<br />
Services Ltd.<br />
Case No.<br />
3220/SS/2005<br />
Cheque<br />
dishonour<br />
417663 Next date <strong>of</strong> hearing<br />
28.11.2005<br />
97
Mumbai<br />
2. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
3. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
4. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
5. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
6. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
7. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
8. M/s. IIT Capital<br />
Services Ltd.<br />
Mumbai<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
974/S/2000<br />
Small Causes<br />
Magistrate’s Court<br />
Mumbai<br />
Case No.<br />
975/S/2000<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
1010/S/2000<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
1008/S/2001<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
2464/SS/2005<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
481/S/2002<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
Case No.<br />
635/S/2002<br />
Small Causes<br />
Magistrate's Court<br />
Mumbai<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
Cheque<br />
dishonour<br />
cases U/S 482<br />
against the<br />
Directors D.<br />
Khaitan, V.R.<br />
Sinha, P.K.<br />
Khaitan<br />
773450 Next date <strong>of</strong> hearing<br />
28.11.2005<br />
946674 Not known as papers<br />
are not traceable.<br />
773450 Next date <strong>of</strong> hearing<br />
28.11.2005<br />
946674 Next date <strong>of</strong> hearing<br />
28.11.2005<br />
773450 Not known as papers<br />
are not traceable.<br />
773450 Next date <strong>of</strong> hearing<br />
10.11.2005.<br />
432356 Next date <strong>of</strong> hearing<br />
28.11.2005.<br />
98
3. There are no economic <strong>of</strong>fences against the issuer company or its directors.<br />
4. Litigations in the past wherein penalty has been imposed against the company <strong>and</strong> its directors :<br />
5. There are no Small Scale Undertakings to whom the Company owes a sum exceeding Rs. 1 Lac<br />
which is outst<strong>and</strong>ing.<br />
Litigation against /by Metal Centre Ltd.<br />
There are no pending litigations <strong>and</strong> dem<strong>and</strong>s/ show cause notices against the company.<br />
Litigations against/ by Eveready Industries India Limited (EIIL)<br />
S.No<br />
.<br />
Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1 Food<br />
Suit no. 2321 <strong>of</strong> Claim <strong>of</strong> damages for alleged failure <strong>of</strong> 20.41<br />
Corporation <strong>of</strong><br />
India<br />
1987 before the<br />
Delhi High Court<br />
the company to supply contracted<br />
quantity <strong>of</strong> block polythene film.<br />
2 West Bengal<br />
Stare Fisheries<br />
Development<br />
Corpn Act<br />
Arbitration before<br />
sole Arbitrator<br />
Dispute relating to operation <strong>of</strong> 4 trawlers<br />
for harvesting shrimps during 1980-84.<br />
WFSFDCL claimed Rs. 11.17 lakhs. The<br />
company has a counter claim <strong>of</strong> Rs. 4.70<br />
11.17<br />
3 Kolkata Port<br />
Trust (KPT)<br />
4 Kolkata Port<br />
Trust (KPT)<br />
5 Navana Printing<br />
Works<br />
6 Sarawgi Brothers<br />
Gorakhpur<br />
WP no. 2425 <strong>of</strong><br />
2003 before the<br />
Calcutta High<br />
Court.<br />
WP no. 2137 <strong>of</strong><br />
2004 before the<br />
Calcutta High<br />
Court.<br />
MS 215 <strong>of</strong> 2000<br />
before City Civil<br />
Court, Kolkata<br />
2 nd Appeal no. 929<br />
<strong>of</strong> 1973 before the<br />
Allahabad High<br />
Court<br />
7 Gopeswar Pal MS 8 <strong>of</strong> 1999 8 th<br />
Court Civil Judge,<br />
Alipore<br />
8 J.P. P<strong>and</strong>ey Case No. 259/1997<br />
Senior Civil Judge,<br />
Azamgarh, U.P.<br />
9 Saxena Traders Case No. 315/2002<br />
Civil Court,<br />
Badaun, U.P.<br />
10 Jindal Mareting<br />
Co.<br />
Case No. 18/2001<br />
District consumer<br />
<strong>For</strong>um, J.P. Nagar,<br />
lakhs<br />
Claim <strong>of</strong> damage for alleged unauthorized<br />
use <strong>and</strong> occupation <strong>of</strong> 11046.65 sq.m. <strong>of</strong><br />
l<strong>and</strong> at beyond expiry <strong>of</strong> lease. Claim<br />
stayed by interim order <strong>of</strong> court.<br />
Dem<strong>and</strong> for compactor for alleged<br />
unauthorized use <strong>and</strong> occupation <strong>of</strong><br />
18,381.60 sq.m. l<strong>and</strong> at Taratala Road on<br />
which one if the Company’s factory is<br />
situated petition admitted.<br />
Claim <strong>of</strong> alleged receivable against<br />
supply <strong>of</strong> polythene laminated bags to<br />
Chuapara Tea Estate. Company’s<br />
Affidavit-in-opposition field.<br />
The party’s distributorship was<br />
terminated in 1965. claiming to be sold<br />
distributor, it filed a suit for<br />
reinstatement. Suit dismissed in 1972,<br />
dismissal reversed by District Court in<br />
1973. The company filed the present<br />
appeal which is yet to be disposed <strong>of</strong>.<br />
District Court order remains stayed.<br />
Party claims compensation for<br />
termination <strong>of</strong> car hire contract. Case to<br />
come up for hearing.<br />
Party being a terminated employee <strong>of</strong> the<br />
Company’s Distributor, claims<br />
compensation from the Company on the<br />
plan that he was an employee <strong>of</strong> the<br />
Company. Yet to be heard.<br />
Claims back amount paid on the<br />
allegation <strong>of</strong> non-receipt <strong>of</strong> goods. Case is<br />
at argument stage.<br />
Claims compensation for termination <strong>of</strong><br />
distributorship. No progress in case as the<br />
Bench is vacant.<br />
79.53<br />
94.08<br />
1.85<br />
Not<br />
ascertainab<br />
le<br />
2.00<br />
0.81<br />
0.82<br />
1.65<br />
99
U.P.<br />
11 Anoop Agncies Case No. 125/98<br />
Civil Court,<br />
Azamgarh, U.P.<br />
12 Ratan General<br />
Stores<br />
13 Laxminarayan<br />
Tewari<br />
14 J.K. Trade &<br />
Marketing<br />
15 Navneet Singh<br />
Malhotra<br />
Proprietor <strong>of</strong><br />
Satkar Agencies<br />
16 Goulabch<strong>and</strong><br />
Jain<br />
Case No. 286/03<br />
Civil Court,<br />
Sultanpur, U.P.<br />
Case No. 1733<br />
/2003 Civil Court,<br />
Unnao, U.P.<br />
MS 5/2003 Civil<br />
Court, Naogan,<br />
Assam<br />
Case 43/2002<br />
Gadarwara Dist.<br />
Court M.P.<br />
Suit No. 10/B/03<br />
Civil Court Class<br />
1, Sagar, M.P.<br />
17 Ram Udyog Case No. 7/2004<br />
Civil Judge, Sr.<br />
Division,<br />
Amravati,<br />
Maharashtra<br />
18 Yaswante<br />
Nalwade<br />
19 Federal Bank<br />
Ltd.<br />
20 Vidur Impex &<br />
Traders Pvt. Ltd.<br />
& 5 Others<br />
Case No. 380/2002<br />
District Consumer<br />
Redressal <strong>For</strong>um,<br />
Nagpur,<br />
Maharashtra.<br />
OS No. 7 <strong>of</strong> 2004<br />
Debt Recovery<br />
Tribunal – III<br />
CS No. 106/2002<br />
Senior Civil Court,<br />
Delhi.<br />
21 M.C. Das TS 168 <strong>of</strong> 1989. 2 nd<br />
Munsiff, Alipore,<br />
W.B.<br />
22 Gita Mookerjee TS 189 <strong>of</strong> 2004<br />
before 2 nd Civil<br />
Judge (Jr. Divn.)<br />
<strong>and</strong> Misc. Appeal<br />
No. 217 <strong>of</strong> 2004<br />
before district<br />
Judge Alipore.<br />
23 C.S. Chowdhury TS No. 152 <strong>of</strong><br />
2004 before 2 nd<br />
Civil Judge (Jr.<br />
Divn.) <strong>and</strong> C.O.<br />
No. 3389 <strong>of</strong> 2004<br />
before the High<br />
Court at Kolkata<br />
24 Madhusudan<br />
Dutta<br />
TS No. 170 <strong>of</strong><br />
2003 2 nd Civil<br />
Judge (Junior<br />
Claims compensation per termination <strong>of</strong><br />
distributorship. Hearing to commence.<br />
Claim <strong>of</strong> various amounts by a<br />
distributor. Written statement <strong>of</strong><br />
opposition by Company to be filed.<br />
Claims compensation for termination <strong>of</strong><br />
distributorship <strong>and</strong> value <strong>of</strong> dem<strong>and</strong> draft<br />
although same returned by Company<br />
Matter to be heard.<br />
Claim <strong>of</strong> refund <strong>of</strong> interest recovered for<br />
delayed payment. Matter to be heard.<br />
Claims <strong>of</strong> various amounts by a stockist.<br />
Written statement filled.<br />
Claim <strong>of</strong> various amounts by a<br />
Distributor. Yet to be heard.<br />
Claim on account <strong>of</strong> returned stocks <strong>of</strong><br />
Tea. Yet to be heard.<br />
Compensation claimed for alleged nonperformance<br />
<strong>of</strong> rechargeable torch.<br />
Written statement filed.<br />
Claim against corporate guarantee given<br />
for loan granted to Macneill Engineering<br />
Ltd. <strong>For</strong> its alleged default. The company<br />
has petitioned for dismissal <strong>of</strong> suit. Matter<br />
to be heard.<br />
Prayer for permanent injunction on<br />
Company for alleged encroachment upon<br />
1 acre <strong>of</strong> the Company’s own property at<br />
23 Aurangzeb Road, New Delhi. Written<br />
statement filed.<br />
Suit for eviction <strong>of</strong> Company from rented<br />
flat. Matter yet to be heard.<br />
Claims possession <strong>of</strong> flat rented to the<br />
company, which has filed a suit for<br />
delivery <strong>of</strong> possession status quo by<br />
interim order.<br />
Transferee l<strong>and</strong>lord claims possession <strong>of</strong><br />
flat rented to the company. Status quo<br />
directed by interim order <strong>of</strong> High Court.<br />
Yet to be finally heard.<br />
One <strong>of</strong> the joint l<strong>and</strong>lord <strong>of</strong> a flat rented<br />
to the company seeks restraint on the<br />
Company from surrendering the tenancy<br />
0.72<br />
5.54<br />
0.40<br />
0.20<br />
0.93<br />
0.39<br />
0.10<br />
0.03<br />
457.74<br />
No money<br />
claim<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
100
25 Vishwanath<br />
Podder<br />
26 Central<br />
Government<br />
27 State <strong>of</strong> M.P.<br />
through the<br />
Central Bureau<br />
<strong>of</strong> Investigation<br />
28 Inspector <strong>of</strong><br />
Factories, Govt.<br />
<strong>of</strong> M.P.<br />
29 Inspector <strong>of</strong><br />
Factories, Govt.<br />
<strong>of</strong> U.P.<br />
Division) Sealdah,<br />
Kolkata<br />
C.P. No. 03/2001<br />
Company Law<br />
Board, Eastern<br />
Region Bench<br />
C.P. No. 57 <strong>of</strong><br />
2002 company<br />
Law Board<br />
Principal Bench<br />
Case No. 8460/96<br />
Chief Jidicial<br />
Magistrate, Bhopal.<br />
Case No. 1/85 FA,<br />
Laour Court,<br />
Bhopal<br />
Case No. 4850/98,<br />
chief Judicial<br />
Magistrate,<br />
Lucknow<br />
30 Chottey Lal Case No. 52/92<br />
Chief Judicial<br />
Magistrate,<br />
Lucknow<br />
31 State <strong>of</strong> Bihar Case No. 2244/04<br />
Session Judge,<br />
Patna<br />
32 Registrar <strong>of</strong><br />
Companies,<br />
West Bengal<br />
33 Registrar <strong>of</strong><br />
Companies,<br />
West Bengal<br />
34 Employee’s<br />
State Insurance<br />
Corpn (ESIC)<br />
Case Nos.<br />
C/3908/01,<br />
3909/01, 3910/01<br />
3963/01, 3964/01<br />
4064/01, 4065/01<br />
& 4060/01 before<br />
10 th Metropolitan<br />
Magistrate,<br />
Kolkata.<br />
Case No.<br />
C/1707/01 before<br />
the Chief Judicial<br />
magistrate Alipore<br />
SLP Nos. 19447-<br />
19451 <strong>of</strong> 2004<br />
before the Supreme<br />
Court <strong>of</strong> India<br />
to the other l<strong>and</strong>lord. Written statement<br />
filed. Yet to be heard.<br />
Petition u/s 397 & 398 <strong>of</strong> the Companies<br />
Act, 1956 for alleged oppression <strong>and</strong><br />
mismanagement. Pleadings completed<br />
<strong>and</strong> arguments done. The bench by its<br />
order <strong>of</strong> 15/01/04 consigned the petition<br />
to records as the petitioner did not want<br />
any order.<br />
Reference application u/s 408 <strong>of</strong> the<br />
Companies Act, 1956 for the appointment<br />
<strong>of</strong> 12 Govt. directors on the Board <strong>of</strong> the<br />
Company. By order dated 20/12/04, the<br />
CLB allowed appointment <strong>of</strong> 3 Directors.<br />
The company has challendged this order<br />
before the Calcutta High Court, which has<br />
granted an interim stay.<br />
Offences relating to the escape <strong>of</strong> MIC<br />
Gas at the Company’s erstwhile factory at<br />
Bhopal on December 2/3, 1984, u/s 304-<br />
A, 336, 337 & 338 <strong>of</strong> IPC. Leading <strong>of</strong><br />
evidence by prosecution is continuing.<br />
Complaint u/s 105 <strong>of</strong> the Factories Act<br />
for causing escape <strong>of</strong> MIC Gas from<br />
Bhopal Factory. Prosecution leading<br />
evidence.<br />
Complaint for alleged violation <strong>of</strong><br />
Sections 63 & 79 <strong>of</strong> the Factories Act.<br />
Prosecution yet to start evidence.<br />
Complaint u/s 232, 504, 506, 352 <strong>and</strong><br />
120B <strong>of</strong> IPC. Prosecuytion yet to start<br />
evidence.<br />
Case filed by State Bank <strong>of</strong> India relating<br />
to a forged dem<strong>and</strong> draft lodged by a<br />
distributor. Prosecution case yet to start.<br />
Complaint cases filed for alleged<br />
violation <strong>of</strong> Sections 211(2), 370,<br />
217(2A), 269, 205(2)(b) & 295 <strong>of</strong> the<br />
Companies Act 1956. Prosecution yet to<br />
lead evidence.<br />
Complaint case filed for alleged violation<br />
<strong>of</strong> Sections 58A <strong>of</strong> the Companies Act<br />
1956 for non-publication <strong>of</strong><br />
advertisement for deposits accepted on<br />
private placement basis. Prosecution yet<br />
to lead evidence.<br />
ESIC has challenged the order <strong>of</strong><br />
Division Bench <strong>of</strong> Calcutta High Court<br />
by which ESIC was restrained from<br />
recovery <strong>of</strong> contribution for back periods<br />
from companies which suffered<br />
injunction order <strong>of</strong> the single-Judge<br />
Bench relating to raising <strong>of</strong> ceiling limit.<br />
The company has filed its Affidavit – in –<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
0.20 (value<br />
<strong>of</strong> the<br />
Dem<strong>and</strong><br />
draft)<br />
Not<br />
ascertainab<br />
le<br />
Not<br />
ascertainab<br />
le<br />
22.00<br />
101
35 Basheerullah 187/83 MPIR,<br />
Labour Court,<br />
Bhopal<br />
36 Shankar Lal 186/83 MPIR,<br />
Labour Court,<br />
Bhopal<br />
37 Achey Khan 2/95 MPIR, Labour<br />
Court, Bhopal<br />
38 S.K. Pareekh 68A/97 before<br />
ADJ, Bhopal<br />
39 J.P. Gupta &<br />
Ors.<br />
40 UCIL Staff<br />
Association<br />
41 Sumit<br />
Bhattacharjee<br />
WP No. 262/2003,<br />
before High Court<br />
at Jabalpore<br />
Case No. 255/87<br />
MPIR, Labour<br />
Court, Bhopal<br />
O.S. No. 365 <strong>of</strong><br />
1986 Calcutta High<br />
Court<br />
42 Durga Banerjee TS 1852/1992 City<br />
Civil Court,<br />
Calcutta<br />
43 Sk. Tasuddin TS 1107/98 City<br />
Civil Court,<br />
Calcutta<br />
44 P.Dalvi & Ors. Reference case<br />
IDA No. 891 <strong>of</strong><br />
1986. 6 th Labour<br />
court B<strong>and</strong>ra,<br />
Maharashtra.<br />
45 Sm. K<br />
Vasudevan<br />
WCA No. 742/B-<br />
147/2000. 6 th<br />
Labour court,<br />
Mumbai.<br />
46 B.P. Panigrahi Case No. 6033(3)<br />
<strong>of</strong> 2004. district<br />
Labour Office,<br />
Bhubaneswar.<br />
47 Eveready<br />
Mazdoor Sangh<br />
Conciliation before<br />
Deputy Labour<br />
Commissioner,<br />
Noida, U.P.<br />
48 Devram Thorat C (ULP) No. 55 <strong>of</strong><br />
2003, IInd Labour<br />
Court, Thane.<br />
49 Dyes &<br />
Chemicals<br />
Worker’s Union<br />
C (ULP) No. 199<br />
<strong>of</strong> 2003, Industrial<br />
Court, Thane.<br />
opposition.<br />
Dismissed employee <strong>of</strong> Bhopal factory<br />
claims reinstatement. Hearing yet to be<br />
concluded.<br />
Dismissed employee <strong>of</strong> Bhopal factory<br />
claims reinstatement. Hearing yet to be<br />
concluded.<br />
Dismissed employee <strong>of</strong> Bhopal factory<br />
claims reinstatement. Hearing yet to be<br />
concluded.<br />
The employee has been discharged from<br />
service. He earlier refused to accept<br />
transfer, <strong>and</strong> filled this suit for posting at<br />
Bhopal <strong>and</strong> also claiming compensation.<br />
Case dismissed for non-appearance but<br />
restoration petition is pending.<br />
Ex-employees challenged the closing <strong>of</strong><br />
the Bhopal facotory <strong>and</strong> claimed<br />
reinstatement with back wages. The<br />
industrial Court upheld the closure,<br />
against which order the ex-employees<br />
have moved the High Court. The matter is<br />
yet to be heard.<br />
The association has challenged the<br />
closure <strong>of</strong> Bhopal factory. The case is at<br />
evidence stage.<br />
The ex-employee has challenged certain<br />
amendments <strong>of</strong> the Rules <strong>of</strong> the<br />
Company’s Pension Fund. The matter is<br />
yet to be taken up for hearing.<br />
Dismissed employee claims<br />
reinstatement. Yet to be taken up for<br />
hearing.<br />
Retired employee disputing date <strong>of</strong> birth<br />
recorded with company suit for<br />
declaration <strong>and</strong> injunction. Yet to be<br />
taken up for hearing.<br />
11 Temporary workers <strong>of</strong> erstwhile<br />
Chembur factory claims permanency <strong>of</strong><br />
job. Arguments concluded. Award<br />
awaited.<br />
Widow <strong>of</strong> deceased employee <strong>of</strong><br />
contractor claims compensation under<br />
Workmens’ Compensation Act. Order<br />
awaited.<br />
Petitioner used to work with the<br />
Company from time to time on casual<br />
basis. He claims permanent job. Matter<br />
yet to be taken up for hering.<br />
Dispute raised by contractor’s employees<br />
for ESI, PF <strong>and</strong> minimum wages benefits<br />
from contractor. Conciliation in progress.<br />
Dismissed employee (now deceased)<br />
claimed reinstatement. Company’s<br />
application for dismissal <strong>of</strong> complaint is<br />
pending.<br />
Dem<strong>and</strong> for taking canteen contractor’s<br />
employees directly on the Company’s<br />
rolls. Hearing yet to start.<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
0.33<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
Not<br />
crystalised<br />
102
50 Eveready<br />
Industries<br />
Employees’<br />
Union<br />
C (ULP) No. 43 <strong>of</strong><br />
2004, Industrial<br />
Court, Thane.<br />
51 I. John Bosco WP 13291/93<br />
Madras High Court<br />
52 D. Venkatadri ID 91/2000.<br />
Labour Court,<br />
Hyderabad<br />
53 B. Shankar ID 91/2002,<br />
Labour Court<br />
Hyderabad<br />
54 Ravi Kumar ID 268/1997,<br />
Labour Court<br />
Hyderabad<br />
55 Shaik Babu OS 362/2003, Civil<br />
Court RR District,<br />
A.P.<br />
56 Canteen<br />
Contractors’<br />
Workers’ Union,<br />
Hyderabad.<br />
57 NCC KS<br />
Sangam<br />
(Workmens’<br />
Union at<br />
Hyderabad<br />
ID 28/2004,<br />
Labour Court<br />
Hyderabad<br />
Conciliation before<br />
Dy. Labour<br />
Commissioner<br />
factory)<br />
58 Saeduddin C.R.No. 31 <strong>of</strong><br />
1994, High Court<br />
Lucknow<br />
59 Ramraj WP 275/99, High<br />
Court, Lucknow<br />
60 Hafeez Ahmed WP 1864/96, High<br />
Court, Lucknow<br />
61 Hausala Prasad WP 4939/81, High<br />
Court, Lucknow<br />
62 Malkhan Singh WP 5901/82, High<br />
Court, Lucknow<br />
63 J.P. Sharma WP 100/90, High<br />
Court, Lucknow<br />
Dem<strong>and</strong> <strong>of</strong> wages for the temporary<br />
stoppage <strong>of</strong> Thane factory in January /<br />
February 2004. Hearing yet to start.<br />
Dismissed employee filed case before the<br />
Labour Court which passed reinstatement<br />
order. The company has challenged the<br />
order <strong>and</strong> Labour Court;s Order stayed.<br />
Hearing yet to start.<br />
Dismissed employee claims reinstatement<br />
at evidence stage. Meanwhile petitioner’s<br />
writ petition to High Court dismissed. He<br />
has filed an appeal which is pending.<br />
Dismissed employee <strong>of</strong> Canteen<br />
contractor<br />
Dismissed employee <strong>of</strong> canteen<br />
contractor claims reinstatement. The<br />
labour court has dismissed the petition as<br />
against the Company. Petitioner has filed<br />
a writ petition against the Labour Courts<br />
Order to High Court,which is pending.<br />
Ex-employee filed suit for perpetual<br />
injunction <strong>and</strong> continuation <strong>of</strong> service. No<br />
interim order granted. Companys Written<br />
Statement filed<br />
Claim <strong>of</strong> absorption <strong>of</strong> Contractors’ 30<br />
employees in companys roll. Evidence<br />
stage.<br />
Claim is for incentive payment for 39<br />
non-working days during 2003-04.<br />
Conciliation in progress.<br />
Retired employee disputes date <strong>of</strong> birth as<br />
recorded with Company. The company<br />
has provided bank guarantee for claimed<br />
amount. Hearing awaited.<br />
Retired employee disputes date <strong>of</strong> birth<br />
recorded with Company. As per Courts<br />
Order 60% <strong>of</strong> dem<strong>and</strong>ed amount<br />
deposited.<br />
Employee claimed higher grade which<br />
was allowed Labour Court. The<br />
Company challenged the Labour Courts<br />
Order by Writ Petition. Final hearing<br />
awaited.<br />
Dismissed employee has filed this writ<br />
petition challenging the Labour Courts<br />
order upholding his dismissal. Final<br />
hearing awaited.<br />
Dismissed employee has filed this writ<br />
petition challenging Industrial Tribunals<br />
order upholding the dismissal. Final<br />
hearing awaited.<br />
Ex-employee disputed his grade. Claim<br />
turned down by Tribunal. He then filed<br />
this writ. Final hearing awaited.<br />
64 Kalyan Singh Case No. 03/01 Disputes his transfer outside the location. Not<br />
Not<br />
crystalised<br />
16.00<br />
Not<br />
crystalised<br />
Not<br />
crystallised<br />
Not<br />
crystallized<br />
Not<br />
crystallized<br />
5.00<br />
2.06<br />
2.50<br />
0.69<br />
1.62<br />
1.62<br />
0.09<br />
103
65. A.K. Srivastava Case No. 45/02<br />
Labour Court<br />
Lucknow<br />
66. A.K. Srivastava Case No. 249/02<br />
Consumer <strong>For</strong>um<br />
67. Eveready<br />
Flashlight<br />
Karmachari<br />
Sangha & State<br />
<strong>of</strong> U.P.<br />
68. Eveready<br />
Flashlight<br />
Karmachari<br />
Sangha<br />
69. Eveready<br />
Flashlight<br />
Karmachari<br />
Sangha<br />
70. Eveready<br />
Flashlight<br />
Karmachari<br />
Sangha & State<br />
<strong>of</strong> U.P.<br />
71. Employees State<br />
Insurance<br />
corporation<br />
72. Employees State<br />
Insurance<br />
corporation<br />
73. Employees State<br />
Insurance<br />
corporation<br />
74. Employees State<br />
Insurance<br />
corporation<br />
75. Tiruvittyur<br />
Municipality<br />
Labour Court. Final order awaited. crystallized<br />
Contractors ex-employee claims bonus Not<br />
from company. At evidence stage crystallised<br />
Lucknow<br />
WP No. 3280/91<br />
High Court<br />
Lucknow<br />
WP No. 5120/81<br />
High Court<br />
Lucknow<br />
WP No. 6176/83<br />
High Court<br />
Lucknow<br />
WP No. 6173/83<br />
WP No. 3202/87<br />
High Court<br />
Lucknow<br />
Case No. 49/1980<br />
ESI Court<br />
Lucknow<br />
ESI Court<br />
Lucknow Recovery<br />
proceeding<br />
Show cause notice<br />
ESI Court<br />
Chennai<br />
CMA No. 13/2002<br />
Chingleput dist.<br />
Litigations pertaining to McLeod Russel India Limited<br />
Contractors ex-employee claims<br />
Provident Fund from company. At<br />
evidence stage<br />
Industrial Tribunals Award in Adj. Case<br />
No. 89/95 holding that the lock out from<br />
7.5.85 to 15.7.85 illegal, challenged by<br />
Company by this Writ. Final hearing<br />
awaited.<br />
Union dem<strong>and</strong> that canteen contractors<br />
employees should get the same rate <strong>of</strong><br />
bonus as paid to permanent employees for<br />
1974, 1975 & 1976 rejected by Industrial<br />
Tribunal. The union challenged the<br />
Tribunals award by this writ. Final<br />
hearing awaited.<br />
Industrial Tribunal Award holding that<br />
canteen contractors employees should get<br />
20% bonus i.e., the same as Companys<br />
employees for 1977-78 employees,<br />
challenged by the company in this writ.<br />
Final hearing awaited.<br />
Proceeding in Industrial tribunal for<br />
bonus claims <strong>of</strong> Canteen contractors<br />
employees for 1979, 1980,1981 <strong>and</strong> 1983<br />
have been stayed by order in these writ<br />
petitions filed by the company.<br />
Damage claim by ESIC. Final disposal<br />
awaited. Bank Guarantee for the claimed<br />
amount provided.<br />
Recovery <strong>of</strong> ESI contribution on account<br />
<strong>of</strong> a vendor <strong>of</strong> the Lucknow Factory.<br />
Final disposal awaited.<br />
Deman for ESI contribution on total<br />
payment made to various job work<br />
vendors during 2001-02 & 2002-03 in the<br />
Lucknow factory. Explanation <strong>and</strong><br />
particulars provided by the Company are<br />
under examination by ESIC<br />
The company has appealed against a<br />
adem<strong>and</strong> for contribution for contract<br />
jobs done by vendors at Tiruvittiyur<br />
factory. Final order awaited<br />
The company has challenged the increase<br />
in property tax from Rs. 1,40,350 to Rs<br />
3,50,875 per half year from 1998-99 for<br />
the Tiruvittiyur factory l<strong>and</strong>. Final<br />
hearing is awaited<br />
Not<br />
crystallised<br />
0.24<br />
0.30<br />
0.30<br />
Not<br />
crystallized<br />
0.86<br />
0.34<br />
53.88<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Shwar & Others 8/2001 in the<br />
Labour Court,<br />
Mangaldai<br />
Dismissed employee <strong>of</strong><br />
Bhooteachang Tea Estate,<br />
Reinstatement claim<br />
Not<br />
ascertained<br />
2. Preshab Saikia (Exemployee)<br />
Guwahati High<br />
court<br />
Dismissed employee (June 1999) <strong>of</strong><br />
Dekorai Tea Estate, claims<br />
0.17<br />
4.21<br />
Not<br />
ascertained<br />
104
3. Pabon Sona (Exemployee)<br />
4. Pabon Sona (Exemployee)<br />
5. Sri D Kalita (Exemployee)<br />
6. Budhu Baraik (Exworker)<br />
W/C/ No.9/95<br />
pending at Assam<br />
Labour Court,<br />
Tezpur<br />
Labour Tribunal<br />
Guwahati<br />
GLR 170/1993/23<br />
in the Labour<br />
Court, Guwahati<br />
16 <strong>of</strong> 1998 Labour<br />
Court<br />
Guwahati<br />
7. 5 Ex-workers 15/2002 Labour<br />
Court<br />
8. Budhu Baraik (Exworker)<br />
Misc. Case No.<br />
224/87<br />
Local Court,<br />
9. Smt. Maya Rani<br />
Routh (w/o. Exemployee)<br />
10. Assam Cha Karmi<br />
Sangha<br />
11. Assam Cha Mazdur<br />
Sangha<br />
Tezpur<br />
Case No. 19/98 in<br />
the Guwahati High<br />
Court<br />
WP© No.<br />
413/2003 in the<br />
Guwahati High<br />
Court<br />
WP© No.<br />
6901/2001<br />
Guwahati High<br />
Court<br />
12. S N Barua WP© No. 5385/<br />
2002<br />
Industrial Court<br />
13. Assan Cha Mazdur Labour Court<br />
Sangha<br />
Dibrugarh<br />
14. S.K. Daguprta 2729/95 in the<br />
Guwahati High<br />
Court<br />
15. Smt. S Chaklraborty Guwahati High<br />
Court<br />
16. Jasoda Bharati MACT No.<br />
330/2000<br />
Motor accident<br />
claim Tribunal<br />
Tezpur<br />
17. Factory inspector<br />
Govt. <strong>of</strong> Assam<br />
Chief Judicial<br />
Magistrate,<br />
Tinsukia<br />
18. Govt. <strong>of</strong> Assam Eviction case No. 6<br />
<strong>of</strong> 96/97<br />
19. Dy. Commissioner 9/95 & 10/95<br />
Sonitpur<br />
before Board <strong>of</strong><br />
20. Circle <strong>of</strong>fice<br />
Charduar<br />
Revenue<br />
CDC-4/95-<br />
2002/1560 <strong>of</strong><br />
23.9.02, 4/95-<br />
2002/1559 <strong>of</strong><br />
reinstatement<br />
Claim for compensation for accident.<br />
Case related to Taraulie Tea Estate<br />
Dismissed employee <strong>of</strong> Rarajulie Tea<br />
Estate claims reinstatement<br />
Dismissed employee <strong>of</strong> Mijicajan<br />
Tea Estate claims reinstatement<br />
Termination case related to Tezpur &<br />
Gogra Tea estates. Order infavour <strong>of</strong><br />
the company employee appealed for<br />
review<br />
Dismissed employee <strong>of</strong> Halem Tea<br />
Estate claims reinstatement<br />
Alleged encroachment <strong>of</strong> l<strong>and</strong><br />
Claim for compensation in respect <strong>of</strong><br />
termination <strong>of</strong> service <strong>of</strong> deceased<br />
husb<strong>and</strong>. Case relates to Monabarie<br />
T.E.<br />
Dismissed employee <strong>of</strong> Bukhial Tea<br />
Estate, claim reinstatement<br />
Dispute on date <strong>of</strong> retirement by exworker<br />
<strong>of</strong> Bukhial Tea Estate,<br />
company appeal against labour court<br />
order pending in High Court<br />
Ex-employee <strong>of</strong> Hunwal T.E.<br />
claiming reinstatement<br />
Termination <strong>of</strong> 4 workers <strong>of</strong><br />
Bogapani T.E. on disciplinary ground<br />
Ex-employee <strong>of</strong> Bogapani T.E.<br />
claiming compensation for loss <strong>of</strong><br />
service<br />
Dismissed employee <strong>of</strong> Namdang<br />
T.E. claims reinstatement. Rejected<br />
by Labour Court Ex-employee<br />
moved the High Court<br />
Claim for motor accident injury by<br />
employee <strong>of</strong> Dejoai T.E.<br />
Charge in connection with an<br />
accident <strong>of</strong> an employee <strong>of</strong> Namdang<br />
T.E.<br />
Alleged l<strong>and</strong> encroachement in<br />
Addabarie T.E. eviction order stayed<br />
Alleged l<strong>and</strong> encroachemntin<br />
Tarajulie T.E. matter referred to D.C.<br />
Sonitpur<br />
Settlement petition <strong>of</strong> alleged<br />
encroachement <strong>of</strong> l<strong>and</strong> at Tarajulie<br />
T.E.<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Rs.<br />
1,31,265/-<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
105
21. Sub-divisional <strong>of</strong>ficer<br />
(Civil) Bishnauth<br />
Charali<br />
22. Sub-divisional Office<br />
(Civil) Bishnauth<br />
Charali<br />
23. Govt. <strong>of</strong> Assam<br />
23.9.02 & CDR-<br />
61/2004/760 Dt.<br />
21.5.04<br />
42/71 <strong>of</strong><br />
05.01.1993<br />
EC/12/2003<br />
<strong>of</strong>20.04.2003<br />
Tezpur Court<br />
Circle Officer<br />
24. Govt. <strong>of</strong> assam EB/95 <strong>of</strong> 26.10.95<br />
& 7/96/97 <strong>of</strong><br />
13.11.96<br />
25. Govt. <strong>of</strong> Assam Dy. Commissioner<br />
Sonitpur, Tezpur<br />
26. Revenue Dept. Govt.<br />
<strong>of</strong> Assam<br />
EC 14/95 before<br />
Addl. Dist.<br />
Commissioner<br />
Tezpur<br />
27. Govt. <strong>of</strong> Asssam Deputy<br />
Commissioner<br />
Tinsukia<br />
28. Govt. <strong>of</strong> Assam<br />
Revenue Reforms<br />
Dept.<br />
29. Director L<strong>and</strong><br />
Acquisition (Govt. <strong>of</strong><br />
Assam)<br />
30. Assam State<br />
Electricity Board<br />
31. Area Manager<br />
I.R.C.A. Tezpur<br />
32. Assam State<br />
Electricity board<br />
33. Assam State<br />
Electricity board<br />
34. Superintendent <strong>of</strong><br />
Sales Taxx, Gauhati<br />
35. Assam Agriculture<br />
I.T.O. Guwahati<br />
36. Duars Engg. Corp.<br />
Jalpaiguri<br />
37. Nikhil Ch<strong>and</strong>ra<br />
Ghosh<br />
38. Hasim Ali Ansari<br />
Alupurduar<br />
RRT/47/2001/89 <strong>of</strong><br />
4/5/2001<br />
Gauhati High<br />
Court<br />
922/28 in the<br />
Gauhati High<br />
Court<br />
ASEB Bill No.<br />
AM/IRCA/ASEB/<br />
TEZPUR/04/T-IR-<br />
TE<br />
29/2001 in<br />
Dibrugarh Court<br />
Chief engineer<br />
commercial assam<br />
state electricity<br />
Commissioner <strong>of</strong><br />
Sales Tax, Gauhati<br />
Assam agriculture<br />
income tax <strong>of</strong>ficer,<br />
Gauhati<br />
Money Suite No.<br />
17/98, MEX-4/04,<br />
pending MA 1/03<br />
Jalpaiguir Court<br />
Money Suit No.<br />
1/2001 (1/98)<br />
Jalpaiguri Court<br />
Money Suit No.<br />
16/99<br />
Alleged l<strong>and</strong> encroachement at<br />
Pertabghur T.E.<br />
Alleged l<strong>and</strong> encroachement at<br />
Mijicajan T.E.<br />
Alleged l<strong>and</strong> encroachment at Halem<br />
T.E.<br />
Alleged occupation <strong>of</strong> Govt. l<strong>and</strong> at<br />
Tezpore <strong>and</strong> Gogra T.E.<br />
Alleged l<strong>and</strong> encroachment <strong>of</strong><br />
Monabari T.E.<br />
Alleged l<strong>and</strong> encroachement <strong>of</strong><br />
Behali T.E.<br />
Alleged l<strong>and</strong> encroachment at Dirok<br />
T.E.<br />
Alleged l<strong>and</strong> encroachmentat<br />
Hunwal T.E.<br />
Alleged l<strong>and</strong> encroachment at<br />
Namdang T.E.<br />
Alleged unauthorized electricityt<br />
connection at Tarajulie T.E.<br />
Disputed electicity bill at Mijicajan<br />
T.E. pending resolution by<br />
ombudsman<br />
Claim <strong>of</strong> additional amount on<br />
amount <strong>of</strong> energy consumption at<br />
Dirai T.E.<br />
Additional dem<strong>and</strong> <strong>of</strong> electricity bill<br />
at Dirai T.E. appeal pending with<br />
C.E.<br />
Sales tax dem<strong>and</strong> for 99-00 at Halem<br />
T.E.<br />
Claim <strong>of</strong> arrears agriculture tax for<br />
the year 91-92 A/c. Dirok T.E.<br />
Judgement given by the lower court<br />
for non payment <strong>of</strong> bills by the pre<br />
vious owner <strong>of</strong> Mathura T.E. under<br />
appeal before the District court<br />
Judgement given by the lower court<br />
for non-payment o hbills by the<br />
previous owner <strong>of</strong> Mathura T.E.<br />
under appeal before the District<br />
Court<br />
Judgement given by the lower court<br />
for non-payment o hbills by the<br />
previous owner <strong>of</strong> Mathura T.E.<br />
under appeal before the District<br />
Court<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Rs.<br />
5,91,525/-<br />
R.<br />
82,11,581/-<br />
Rs.<br />
29,27,124<br />
Rs.<br />
13,11,005<br />
Rs. 5,72,476<br />
Rs.<br />
70,17,108<br />
Rs. 1,66,127<br />
R. 36,590<br />
Rs. 1,51,824<br />
106
39. Income Tax<br />
authorities<br />
40. Income tax<br />
authorities<br />
41. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
42. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
43. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
44. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
45. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
46. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
47. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
48. Director General <strong>of</strong><br />
<strong>For</strong>eign Trade<br />
Kolkata<br />
Income tax<br />
appellate tribunal<br />
High Court <strong>of</strong><br />
Kolkata<br />
ALS/F2/80/040/10<br />
15/AM96<br />
ALS-G-<br />
007379/Ralc/am93<br />
18/338/03-<br />
04/ECA/CAL/ALS<br />
-H<br />
ALS-<br />
H/02/81/40/0002/A<br />
M’92<br />
ALS-<br />
H/02/77/40/01845/<br />
AM95<br />
ALS-<br />
H/02/81/040/00009<br />
/AM93<br />
18/467/03-<br />
04/ECA/CAL/ALS<br />
-H 9092<br />
18/382/03-<br />
04/ECA/CAL/ALS<br />
-H<br />
49. Federal Bank Ltd. Case No.<br />
RP/04/2005 at<br />
DRT –Kolkata<br />
Litigation against /by Shree Durga Agencies Ltd.<br />
Dispute on various disallowancs<br />
relating to Tea Division for the Ay<br />
1989-90 to 99-00 pending for<br />
disposal<br />
Dispute on various disallowances<br />
relating to the Tea division for the<br />
Ay 1989-90 to 1995-96<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/2143726/C dt. 25.03.96<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3257672 dt.20.04.90<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3264551/c dt. 11.06.91<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3264527 dt. 29.09.91<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/2283506/C dt. 19.1.95<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3321991/C dt. 22.05.92<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3321992/C dt. 22.5.92<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submission <strong>of</strong> documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/3321994/C dt. 22.05.92<br />
Against Macneill Engineering Ltd.<br />
for recovery <strong>of</strong> outst<strong>and</strong>ing loan.<br />
McLeod Russel India Ltd. <strong>and</strong><br />
Eveready Industries India Ltd.<br />
Named as respondents as guarantors<br />
Rs. 404 Lacs<br />
Rs. 313 Lacs<br />
Rs. 48 Lacs<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Rs. 20 Lacs<br />
Rs. 20 Lacs<br />
Rs. 4.19<br />
Lacs<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit<br />
1. C IT Appeal Commissioner <strong>of</strong><br />
Income Tax<br />
Calcutta<br />
2. Calcutta Municipal<br />
Corporation<br />
Writ Petition in the<br />
Calucutta High<br />
Appeal against the Assessment Years 1996-97 <strong>and</strong><br />
2002-03<br />
<strong>For</strong> grant <strong>of</strong> mutation in facvour <strong>of</strong> the company for<br />
the area owned by the Company from erstwhile<br />
107
Court<br />
Vasundhara Properties as also for correction <strong>of</strong><br />
annual valuation<br />
Litigation against /by Nirvan Commercial Co. Ltd.<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. C IT Appeal Assesment year Appeal against the Assessment Years 3,33,100<br />
1997-98 with 1997-98<br />
Income Tax<br />
Appellate Tribunal<br />
Litigation against /by Ichamati Investments Pvt. Ltd.<br />
There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters.<br />
Litigation against /by United Machine Co. Ltd.<br />
There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters.<br />
Litigation against /by Williamson Financial Services Ltd.<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Dept. <strong>of</strong> Company<br />
Affairs<br />
Litigations against/ by WPIL Limited :<br />
Sub-Divisional<br />
Judicial Magistrat<br />
Guwhati Assam<br />
Against a director <strong>and</strong> former<br />
Company Secretary <strong>of</strong> the Co. u/s.<br />
209, 147, 629A <strong>of</strong> the Companies<br />
Act, 1956<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit<br />
1. A.K. Palit C.S. 69 <strong>of</strong> 2005 Dispute over alleged S.A.F. dues<br />
2. P. Dutta W.P. 613 <strong>of</strong> 2005 Dispute over alleged S.A.F. dues<br />
3. N.C. Banerjee W.P. <strong>of</strong> 2005 Dispute over alleged S.A.F. dues<br />
Litigations against <strong>Kilburn</strong> Office Automation :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1 Export Credit GuaranteeDistrict Consumer Excise duty<br />
Not ascertainable<br />
Corporation <strong>of</strong> India<br />
Ltd.<br />
<strong>For</strong>um<br />
Jaipur<br />
Jaipur<br />
Litigations against/ by <strong>Kilburn</strong> Chemicals Limited :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit<br />
1. P.Alagiri W.P. No.<br />
20849/2003<br />
High Court (???)<br />
2. P. Ganesan W.C. 358 <strong>of</strong> 2001<br />
Chennai High<br />
Court<br />
3. D. Magesh Domestic Enquiry<br />
Asst. Labour<br />
Commissioner<br />
4. G. Subramanian Domestic Enquiry<br />
Asst. Labour<br />
Commissioner<br />
Misuse & misrepresenting <strong>and</strong> attempting to forge<br />
signature <strong>of</strong> manager<br />
Fatal Accident by slipping from ceiling in ETP filter<br />
press area<br />
Negligence in duty<br />
False statement against management staff<br />
108
5.<br />
Income Tax :<br />
CIT (A) Appeal Funded interest<br />
CIT (A) Appeal ICD interest –KOAL<br />
Litigations against/ by St<strong>and</strong>ard Batteries Limited :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Provident fund<br />
penalty under<br />
Section 14B<br />
Regional Provident Fund<br />
Commissioner<br />
Chennai<br />
Penalty u/s. 14B 14.57<br />
2. Sales Tax matters<br />
under dispute -<br />
Cuttack<br />
(1996/97)<br />
3. Excise matters<br />
under dispute<br />
4. Income Tax<br />
matters under<br />
appeal<br />
(a) By Income<br />
Tax authorities<br />
(b) By the<br />
company for the<br />
years 1998/99 to<br />
2002/03<br />
5. By the Labours<br />
against the<br />
company<br />
Asst. Commisioner <strong>of</strong> Sales<br />
Tax<br />
Cuttack 1 Range<br />
Commissioner Central<br />
Excise<br />
Mumbai<br />
Commisioner Income Tax<br />
Mumbai<br />
Income Tax Commissioner<br />
Mumbai<br />
Income Tax Commissioner<br />
Mumbai<br />
Sales tax dem<strong>and</strong> for the<br />
year 1996-97<br />
Penalty interest & excess<br />
availed Modvat credit<br />
Amount disputed by the<br />
Income Tax authority<br />
0.73<br />
58.10<br />
14.97<br />
Disputed by the Company 530.57<br />
Settlement has been reached Complaint for dismissal <strong>of</strong><br />
with the dismissed/ suspended workers<br />
workmen, the cases in courts /<br />
Tribunals filed earlier have not<br />
yet been withdrawn.<br />
Litigation against /by Nitya Holdings & Properties Pvt. Ltd.<br />
There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters.<br />
Litigation against /by Dufflaghur Investments Ltd.<br />
There are no pending litigations/ disputes by/ against the Company/ its Directors/ its promoters<br />
Litigations against/ by McNally Bharat Engineering Co. Ltd.<br />
Cases filed against the company :<br />
116.99<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Sales Tax Tribunal 14342/94-95 Assessment completed by 19.39<br />
Hyderabad<br />
CTO, N<strong>and</strong>igama &<br />
2. Sales Tax Tribunal<br />
Hyderabad<br />
3. Sales Tax Tribunal<br />
Hyderabad<br />
4. Labour court<br />
Dhanbad<br />
5. N. Muniraj<br />
Labour Court<br />
reopened by DC (CT)<br />
14349/96-97 Assessment completed byu<br />
CTO, N<strong>and</strong>igama & appeal<br />
for refund<br />
14359/97-98 Assessment completed byu<br />
CTO, N<strong>and</strong>igama &<br />
reopened by DC (CT)<br />
3/92 Contract labour –case for<br />
being absorbed permanently<br />
in company<br />
43/99 Termination <strong>of</strong> service ---<br />
8.86<br />
10.53<br />
Nil<br />
109
6. C.V.<br />
Venkataramanappa<br />
Labour Court<br />
7. Dominic Verghese<br />
Labour Court<br />
8. Chief Judicial<br />
Magistrate<br />
9. Session District<br />
Judicial Magistrate<br />
Asansol<br />
10 Jabalpur High<br />
Court<br />
11 CEGAT<br />
Kolkata<br />
12 Commissioner<br />
(Appeal) Patna<br />
13 Commissioner<br />
(Appeal) Patna<br />
14 Commissioner<br />
(Appeal) Patna<br />
15 Commissioner<br />
(Appeal) Patna<br />
16 Commissioner<br />
(Appeal) Patna<br />
17 Commissioner<br />
(Appeal) Patna<br />
18 Commissioner<br />
(Appeal) Patna<br />
19 Commissioner<br />
(Appeal) Patna<br />
20 Commissioner<br />
(Appeal) Patna<br />
21 Asst. Comm<br />
Dhanbad<br />
22 Asst. Comm<br />
Dhanbad<br />
23 Asst. Comm<br />
Dhanbad<br />
24 Asst. Comm<br />
Dhanbad<br />
186/01 Termination <strong>of</strong> probationery<br />
service<br />
23/2003 Dismissal from service<br />
GR/3668/1991 L<strong>and</strong> dispute with KMCEL Nil<br />
193/2001 Accident Nil<br />
Criminal Revision No. 785 <strong>of</strong><br />
1998<br />
V(84) (15) 33/91/<br />
3107 dt. 14/6/91<br />
MP/13/04/KDBII/MBE/95/62<br />
dt. 7/12/1995<br />
MP/13/09/KDBII/MBE/95/117<br />
dt.3/3/1995<br />
MP/13/23/KDBII/MBE/95/435<br />
dt. 24/5/1995<br />
MP/13/23/KDBII/MBE/95/435<br />
dt. 7/12/1995<br />
MP/13/29/KDBII/MBE/95/645<br />
dt. 30/8/1995<br />
MP/13/32/KDBII/MBE/95/809<br />
dt. 31/10/1995<br />
MP/13/35/KDBII/MBE/95/815<br />
dt. 31/10/1995<br />
MP/13/37/KDBII/MBE/95/955<br />
dt. 28/11/1995<br />
MP/13/02/KDBII/MBE/96/24<br />
dt. 11/1/1996<br />
MP/13/02/KDBII/MBE/96/111<br />
Dt. 11/1/1996<br />
MP/13/02/SCN/99/KDB/1398<br />
Dt. 13/8/99<br />
MP/13/02/SCN/99/KDB/479<br />
Dt. 30/3/2000<br />
MP/13/02/SCN/99/KDB/478A<br />
Dt. 3/4/2000<br />
---<br />
Crl. Case 2.54<br />
Appeal 6.70<br />
Appeal allowed 2.39<br />
Appeal allowed 4.84<br />
Appeal allowed 1.14<br />
Appeal allowed 1.67<br />
Appeal allowed 0.16<br />
Appeal allowed 0.58<br />
Appeal allowed 2.33<br />
Appeal allowed 7.80<br />
Appeal allowed 0.28<br />
CEGAT classification 28.32<br />
CEGAT classification 6.74<br />
CEGAT classification &<br />
notional interest<br />
CEGAT classification &<br />
notional interest<br />
18.80<br />
3.56<br />
Cases Filed by the Company :<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1 Asst. Comm. Dhanbad V(18)(94)29/<br />
REFU ND/87/5420<br />
dt. 19/06/87<br />
Refund claim for site fabrication 8.65<br />
2 --do-- V(18)(94)26/<br />
REFUND/87/6779<br />
dt. 18/08/87<br />
3 --do-- V(18)(94)29/<br />
REFUND/87/4476<br />
dt. 10/06/88<br />
Refund claim for site fabrication 1.05<br />
Refund claim for site fabrication 1.73<br />
110
4 CEGAT, KOLKATA FIN/346/RKC Refund claim for<br />
excess duty paid<br />
for BHEL<br />
2.48<br />
5 Asst. Comm. Dhanbad V(18)(94)29/<br />
REFUND/89/7045<br />
dt. 11/11/89<br />
Refund claim for duty<br />
paid on bought out<br />
castings FCI Talcher<br />
0.68<br />
6 --do-- V(84)(16)29/<br />
REFUND/95/2220<br />
dt. 27/04/95<br />
7 CEGAT, KOLKATA Nil.<br />
Dt. 02/02/2001<br />
Refund claim for<br />
classification dispute<br />
Refund for excess<br />
excise duty paid<br />
0.34<br />
0.08<br />
7a --do-- 5107-37/99/ARS Refund <strong>of</strong> Special Addl.<br />
Duty <strong>of</strong> B/E No. 1-1817<br />
dtd. 29/12/98<br />
0.51<br />
7b<br />
Custom House<br />
Drawback Dept<br />
834-M-255/2000<br />
Refund for excess duty paid – Refund<br />
<strong>of</strong> spares for Motor Grader<br />
0.8<br />
8 Commercial Tax<br />
Tribunal, Ranchi<br />
DN-16/2001<br />
SST- Tax charged on cement supplied<br />
by principal contractor <strong>and</strong> credit note<br />
not allowed.<br />
10.67<br />
9 Commercial Tax<br />
Tribunal Ranchi<br />
10 Commercial Tax<br />
Tribunal Ranchi<br />
11 DCCT, Chirkunda<br />
Circle<br />
DN-17/2001 --do-- 0.48<br />
DN-18/2001 --do-- 21.35<br />
CKCST-21/9899<br />
SST- Tax charged on cement supplied<br />
by principal contractor. CST-Refund for<br />
NTPC Import Sale Taxed<br />
0.62<br />
12 --do-- CKCST-59/9899 SST- Tax charged on cement supplied<br />
by principal contractor. Wrong tax<br />
charges on crane supplied by us.<br />
18.86<br />
13 --do-- CKCST-52/9899 CST -6% differential tax charged due to<br />
non production <strong>of</strong> C <strong>For</strong>m which is<br />
produced later.<br />
1.45<br />
111
14 --do-- CKST-17/0001 SST-wrong determination <strong>of</strong> TTO by<br />
AG Audit. One <strong>For</strong>m IX supplied by<br />
ECL rejected.<br />
46.37<br />
15 --do-- CKCST-12/0001 CST-NTPC import sale taxed wrongly 5.46<br />
16 --do-- CKST-29/9900 SST- Tax charged on cement supplied<br />
by principal contractor<br />
19.74<br />
17 --do-- CKCST-18/0001 CST –Tax charged under objection <strong>of</strong><br />
AG audit due to heavy difference in<br />
sale <strong>and</strong> purchase price sold U/S 6(2) <strong>of</strong><br />
CST Act.<br />
48.11<br />
18 --do-- Under Rule-34 <strong>of</strong><br />
BST Rules 1957<br />
TDS deducted <strong>and</strong> deposited by<br />
Principal Contractor refundable<br />
12.39<br />
19 --do-- --do-- --do-- 3.04<br />
20 --do-- --do-- Refund <strong>of</strong> CST 0.73<br />
21 JCCT Appeals Dhanbad CKST-5/0405 CST-disallowance <strong>of</strong> credit not issued<br />
by us for sale refund from BGML,<br />
Kolar.<br />
0.96<br />
22 --do-- CKCST-3/0405 TDS in <strong>For</strong>m A-1 disallowed. 3.43<br />
23 High Court, Calcutta C.S. No. 236 <strong>of</strong> 2004 Non-payment <strong>of</strong> dues arising our <strong>of</strong><br />
goods sold <strong>and</strong> delivered by the<br />
Company to one N.I. Energo<br />
Engineering Projects Ltd.<br />
11.13<br />
24 14 th Metropolitan<br />
Magistrate Court<br />
C.S. No. 4756 <strong>of</strong><br />
2004<br />
Dishonour <strong>of</strong> a cheque amounting to<br />
Rs. 10,42,701/- issued by one Energo<br />
Engineering Projects Pvt. Ltd. In<br />
respect <strong>of</strong> goods sold <strong>and</strong> delivered by<br />
the Company to it<br />
10.43<br />
Litigations pending against/ by Williamson Magor & Co. Ltd.:<br />
S.No. Party Details Suit Details Nature <strong>of</strong> suit Amount<br />
/Claims<br />
1. Ex-employees <strong>of</strong> Co.<br />
(Dishergarh branch)<br />
MAT No. 803<br />
/1998<br />
Calcutta High<br />
Dispute relating to payment <strong>of</strong><br />
gratuity<br />
Not<br />
ascertained<br />
2. Ex-employees <strong>of</strong> Co.<br />
(Dishergarh Branch)<br />
Court<br />
Pending before<br />
Calcutta High<br />
Court<br />
112<br />
Dispute relating to computation <strong>of</strong><br />
compensation<br />
3. Satish Ch<strong>and</strong>ra Roy F.A. Case No. 74 Eviction suit relating to tenanted Not<br />
Not<br />
ascertained
<strong>of</strong> 1985 City Civil<br />
Court<br />
4. PrasantaMitra Suit No. 169 <strong>of</strong><br />
1983 in City Civil<br />
Court<br />
5. Delta International Suit No. 90 <strong>of</strong><br />
1997 in City Civil<br />
Court<br />
6. Bhusan Das (EXemployee)<br />
tribunal Calcutta<br />
1 st industrial<br />
7. Chowdhury Estate Pending before<br />
Pvt. Ltd.<br />
Calcutta High<br />
8. Williamson Magor &<br />
Co. Ltd. &<br />
Associated concern<br />
<strong>of</strong>ficers association<br />
Court<br />
Case No. CA 448<br />
<strong>of</strong> 2002 in Calcutta<br />
High Court<br />
show room<br />
Eviction suit in relation to residential<br />
premises at Kolkata<br />
Eviction wuit & title <strong>of</strong> lease in<br />
relation to Warehouse at Kolkata<br />
Dismissed employee claims<br />
reinstatement<br />
Eviction suit relating to residential<br />
premises at Kolkatta<br />
Alleged shortfall in the pension fund<br />
<strong>of</strong> Macneill engineering Ltd.<br />
9. ESI Corp. Kolkata ESI Court Kolkata Suit filed by co. against ESI dem<strong>and</strong><br />
<strong>and</strong> its computation. As per co.s<br />
calculation, amount payable has been<br />
deposited<br />
10 Commissioner <strong>of</strong><br />
Central Excise<br />
Chennai<br />
11 Commissioner <strong>of</strong><br />
central excise<br />
chennai<br />
12 Dy. Commissioner<br />
commercial taxes <strong>of</strong><br />
chennai<br />
13 Dy. Commissioner<br />
Commercial Taxes <strong>of</strong><br />
Chennai<br />
14 Dy. Commissioner<br />
Commercial Taxes<br />
Chennai<br />
15 <strong>Kilburn</strong> Electricals<br />
Ltd.<br />
16 42, Individual<br />
workers <strong>of</strong> <strong>Kilburn</strong><br />
Electricals Ltd.<br />
Madras (WM<br />
Respondent No.2)<br />
17 Sanjay Muk<strong>and</strong>as<br />
Munat & Shriniwas<br />
B Bangad<br />
18 Golak Lal Seal Vs<br />
Banshi Binod<br />
Banbdhopadhayay<br />
W.P. No. 29368 <strong>of</strong><br />
2003<br />
Madras High Court<br />
EOCC No. 82 <strong>of</strong><br />
1994 in the Addl.<br />
Metropolitan<br />
Magistrate Chennai<br />
STA/499 <strong>of</strong> 2002<br />
sales Tax Appellate<br />
Tribunal Chennai<br />
STA/500 <strong>of</strong> 2002<br />
Sales Tax<br />
Appellate Tribunal<br />
Chennai<br />
STA/501 <strong>of</strong> 2002<br />
Sales Tax<br />
Appellate Tribunal<br />
Chennai<br />
CS/338/92 High<br />
Court at Chennai<br />
Labour Court<br />
Chennai<br />
RCS No. 555/03 in<br />
the Court <strong>of</strong> Civil<br />
Judge, Pune<br />
Title Suit No. 15 <strong>of</strong><br />
2002 in the Civil<br />
Judge Alipore<br />
(WM Respondent<br />
No.2)<br />
19 Miss Devki Kalwani Suit No. 61/73 <strong>of</strong><br />
1994 Vs. WM Mr.<br />
A K Sharma<br />
Mumbai<br />
Payment <strong>of</strong> interest on delyed<br />
payment <strong>of</strong> disputed duty<br />
Removal <strong>of</strong> goods allegedly without<br />
payment <strong>of</strong> excise duty<br />
Relating to classification dispute on<br />
sale <strong>of</strong> Tarpaulins in 98-99<br />
Relating to classification dispute on<br />
sale <strong>of</strong> Tarpaulins in 97-98<br />
Relating to classification dispute on<br />
sale <strong>of</strong> Tarpaulins in 97-98<br />
Claiming rights<strong>of</strong> <strong>Kilburn</strong> br<strong>and</strong><br />
name <strong>and</strong> prfit on sale <strong>of</strong> electrical<br />
goods sold with <strong>Kilburn</strong> name.<br />
Claiming injunction on company on<br />
the use <strong>of</strong> <strong>Kilburn</strong> name<br />
Alleged claim petition for<br />
reinstatement & back wages<br />
Dispute relating to registration <strong>of</strong><br />
1080 shares <strong>of</strong> WTA<br />
Terminationo f lease <strong>of</strong> 35 D H<br />
Road, Kolkata<br />
Eviction suit by l<strong>and</strong>lord for vacant<br />
possession <strong>of</strong> the flat<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Rs.<br />
7,11,104.25<br />
Not<br />
ascertained<br />
Rs. 7,450<br />
Rs. 62776<br />
Rs. 296269<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
113
20 Mr. A.K. Sharma<br />
(Ex-employee)<br />
RAD Suit No.<br />
1659 <strong>of</strong> 1986<br />
B<strong>and</strong>ra Court<br />
Mumbai<br />
21 Kolkata Port Trust In the Estate Office<br />
Kolkata Port Trust<br />
22 Miss Devki Kalwani Suit No. 61/73 <strong>of</strong><br />
1994 Vs. WM Mr.<br />
A.K. Sharma<br />
23 SP Vijay Prasad Vs<br />
RPFC Chennai<br />
Application No.<br />
933/2002 in the<br />
Madras Court<br />
24 Kolkata Port Trust In the Estate Office<br />
Kolkata Port Trust<br />
25 ITP Limited &<br />
Others<br />
Title Suit No. 1716<br />
<strong>of</strong> 2000<br />
(Chowdhury Estate<br />
& WM)<br />
26 Delta International APL No. 5 <strong>of</strong> 2004<br />
in the High Court<br />
Kolkata<br />
27 ITP Limited &<br />
Others<br />
28 Amar Nath Dutta &<br />
Others<br />
29 Aruna Chakraborty<br />
Vs Parul<br />
Chakraborty<br />
30 Director General <strong>of</strong><br />
<strong>For</strong>eign Trade,<br />
Kolkata<br />
31 Dy. Registrar <strong>of</strong><br />
Companies<br />
Department <strong>of</strong><br />
Company Affaris,<br />
Kolkata<br />
32 Dy. Registrar <strong>of</strong><br />
Companies<br />
Department <strong>of</strong><br />
Company Affaris,<br />
Kolkata<br />
Misc. Case No.<br />
367 <strong>of</strong> 2004 in The<br />
City Civil Court,<br />
Kolkata<br />
COMP. 51 <strong>of</strong> 2001<br />
in the Labour<br />
Court<br />
Pending before<br />
Court <strong>of</strong> Civil<br />
Judge (WM<br />
Respodent No.2)<br />
02/82/40/0022/AM<br />
94<br />
Show cause notices<br />
No.<br />
TS1/STA/17715/In<br />
spn<br />
(Suppl)/147(1)(a),<br />
TS-<br />
1/STA/17715/Insp<br />
n<br />
(suppl)/290(3)(b)/2<br />
11, TS-<br />
1/STA/17715/Insp<br />
n(suppl)/211(1),<br />
TS1/STA/17715/In<br />
spn/(suppl)/217(3)<br />
<strong>and</strong> Ts-<br />
1/STA/17715/Insp<br />
n(Suppl)/209(1) all<br />
dated 24/06/2004<br />
Show cause notices<br />
No.<br />
TS1/STA/17715/In<br />
spn (Suppl)/49(7),<br />
TS-<br />
A K Sharma claimed that he is a<br />
Contractual tenant <strong>and</strong> not a licensee<br />
Eviction suit in respect <strong>of</strong> P6<br />
Transport Depot Road, Kolkata<br />
<strong>For</strong> h<strong>and</strong>ling over vacant possession<br />
<strong>of</strong> the flat compensation<br />
Contempt application<br />
Eviction from Transport Depot Road,<br />
Kolkata on alleged unauthorized<br />
occupation<br />
Eviction suit relating to residential<br />
flat at Kolkata<br />
Eviction suit relating to warehouse at<br />
Kolkata<br />
Eviction suit related to residential flat<br />
at Kolkata<br />
Compensation case<br />
Payment <strong>of</strong> dues <strong>of</strong> Ex-employee<br />
since deceased leaving 2 claimanants<br />
Show cause notice for alleged nonfulfillment<br />
<strong>of</strong> export obligation <strong>and</strong><br />
/or non-submissiono f documents in<br />
respect <strong>of</strong> advance license No.<br />
P/W/1525501/C dt. 30.06.93<br />
Alleged violation <strong>of</strong> sections<br />
147(1)(a), 209(3)(b)/ 211, 211(1),<br />
217(3) <strong>and</strong> 209(1) <strong>of</strong> the companies<br />
Act, 1956<br />
Alleged violation <strong>of</strong> sections 49(7),<br />
286(1), 219(1), 264(2), 293(1)(e),<br />
301(1), 303(1) <strong>and</strong> 307(1) <strong>of</strong> the<br />
companies Act, 1956<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Rs. 2,65,000<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
114
33 Dy. Registrar <strong>of</strong><br />
Companies<br />
Department <strong>of</strong><br />
Company Affaris,<br />
Kolkata<br />
34 Asst. Registrar <strong>of</strong><br />
Companies<br />
Department <strong>of</strong><br />
Company Affaris,<br />
Kolkata<br />
1/STA/17715/Insp<br />
n (suppl)/209(1),<br />
TS-<br />
1/STA/17715/Insp<br />
n(suppl)/264(2),<br />
TS1/STA/17715/In<br />
spn/(suppl)/286(1)<br />
<strong>and</strong> TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/293(1)(e),<br />
TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/301(1),<br />
TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/303(1)<br />
<strong>and</strong> TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/307(1)all<br />
dated 25/06/2004<br />
Show cause notices<br />
No. TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/224(8)(b)<br />
<strong>and</strong> TS-<br />
1/STA/17715/Insp<br />
n (Suppl)/17/291<br />
both dated<br />
18.2.2005<br />
Show cause notices<br />
No. TS-<br />
1/STA/17715/Insp<br />
n(Suppl)/205A(3)<br />
<strong>and</strong> TS-<br />
1/STA/17715/Insp<br />
n<br />
(Suppl)/17/205(2A<br />
) both dated<br />
30.10.2003<br />
Alleged violation <strong>of</strong> sections<br />
224(8)(b) <strong>and</strong> 17/291 <strong>of</strong> the<br />
Companies Act, 1956<br />
Alleged violation <strong>of</strong> sections<br />
205A(3) <strong>and</strong> 205(2A) <strong>of</strong> the<br />
Companies Act, 1956<br />
Not<br />
ascertained<br />
Not<br />
ascertained<br />
115
GOVERNMENT APPROVALS AND LICENSING<br />
Various approvals <strong>and</strong> licenses obtained by the Company are listed below. It must, however, be<br />
distinctly understood that in granting the above consents/ licenses/ permissions/ approvals, the<br />
Government does not take any responsibility for the financial soundness <strong>of</strong> the company or for the<br />
correctness <strong>of</strong> any <strong>of</strong> the statements or any commitments made or opinions expressed.<br />
Investment Approvals (FIPB/ RBI, etc.)<br />
As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under<br />
automatic route <strong>of</strong> Reserve Bank, the Company is not required to make an application for Issue <strong>of</strong> Equity<br />
Shares to NRIs/FIIs with repatriation benefits. However, the allotment / transfer <strong>of</strong> the Equity Shares to<br />
NRIs/ FIIs shall be subject to prevailing RBI Guidelines. Sale proceeds <strong>of</strong> such investments in Equity<br />
Shares will be allowed to be repatriated along with the income thereon subject to the permission <strong>of</strong> the<br />
RBI <strong>and</strong> subject to the Indian tax laws <strong>and</strong> regulations <strong>and</strong> any other applicable laws.<br />
Approvals required for manufacturing<br />
Industry License<br />
KEL has obtained a Industrial Licence No. IL:55(79) dated : 31.10.1979, which was originally granted to<br />
M/s. Macneill & Magor Limited, Calcutta for the manufacture <strong>of</strong> Chemical <strong>and</strong> Pharmaceutical<br />
Machinery falling under Scheduled Industry No. 8-A. The Ministry <strong>of</strong> Industry, New Delhi has vide its<br />
letter dated: 15.05.1990 has re-endorsed the said license in favour <strong>of</strong> KEL. Further following are the<br />
various approvals obtained by KEL from the Ministry :<br />
Re-endorsement <strong>of</strong> license enhancing annual capacity <strong>of</strong> 781 tonnes <strong>of</strong> 16.03.1983<br />
drying systems <strong>and</strong> 500 numbers <strong>of</strong> water stills<br />
Regularisation <strong>of</strong> excess capacity under Ministry <strong>of</strong> Industries Note dt. 31.03.1983<br />
29.08.1980<br />
Amendment <strong>of</strong> Industrial Licence for manufacture <strong>of</strong> water still, drying 9.08.1985<br />
system, pressure vessels, heat exchangers, mixers <strong>and</strong> agitators.<br />
Proposal for manufacture <strong>of</strong> pressure vessles 7.01.1986<br />
Broad categorization for the manufacture <strong>of</strong> chemical, pharmaceutical petrochemical<br />
<strong>and</strong> fertilizer machinery<br />
8.8.1986<br />
Amendment to Broad categorization for the manufacture <strong>of</strong> chemical, 30.10.1986<br />
pharmaceutical machinery<br />
Endorsement <strong>of</strong> licence for manufacture <strong>of</strong> additional item – centrifugal fans 19.3.1987<br />
for industrial use<br />
Endorsement <strong>of</strong> licence for manufacture <strong>of</strong> chemical, pharmaceutical 20.4.1990<br />
machinery<br />
Endorsement <strong>of</strong> industrial licence in favour <strong>of</strong> KEL 15.5.1990<br />
Factory License<br />
KEL has obtained a license No. 50947 (Originally No. 62335), dated 13/02/2002 to run a factory under<br />
the Factories Act, 1948 from the Government <strong>of</strong> Maharashtra<br />
The Company is in possession <strong>of</strong> a Factory Permission No. Sub-39-s <strong>of</strong> 1981-82, dated : 15 th September,<br />
1992, from the Municipal Corporation <strong>of</strong> Greater Bombay to establish the industry. The said permission<br />
is renewed further for the period ending 31 st March, 2006 (vide permit stamp <strong>of</strong> Municipal Corporation<br />
<strong>of</strong> Greater Bombay No. AEBF/1808/B-1200 <strong>of</strong> 5 th May, 2004).<br />
Statutory approvals<br />
Registration under Export – Import<br />
The Company is registered as a manufacturer exporter vide IEC No. 0289015324, dated: 28 th February,<br />
1990 with the Engineering Export Promotion Council, Kolkatta <strong>and</strong> the registration is valid upto 31 st<br />
March, 2007.<br />
116
Registration under Central Excise<br />
The Company is in possession <strong>of</strong> Central Excise Registration Certificate bearing Registration number<br />
AABCK3123E XM 002.<br />
Registration under Labour Laws<br />
Registration Code No. 31-8246-90 granted by Employees’ State Insurance Corporation.<br />
While the other employees are covered under the Mediclaim Policy <strong>of</strong> National Insurance co. <strong>and</strong><br />
Personal Accident Policy <strong>of</strong> United Insurance India Co.<br />
Pr<strong>of</strong>essional Tax Registration No. PT/R/1/1/32/9246<br />
Registration No. MH-2485 granted by the Office <strong>of</strong> the Regional Provident Fund Commissioner.<br />
Approvals not received or renewed:<br />
License under Shops <strong>and</strong> Establishment Act for Kolkata <strong>of</strong>fice<br />
The Company has not obtained a license under the Shops <strong>and</strong> Establishment Act in respect <strong>of</strong> the<br />
registered <strong>of</strong>fice <strong>of</strong> the Company located at Kolkata.<br />
Pollution Control<br />
The Company had received consent from Maharashtra Pollution Control Board ( MPCB) for carrying on<br />
its business activities <strong>and</strong> the same was valid up 31/07/1998.The same has not been renewed by the<br />
Company upto the year 2004. However, the Company has made an application to MPCB, vide its letter<br />
no. KEL/HRD/07/2004-05 dated 28 th July, 2005, for renewal <strong>of</strong> the consent w.e.f. 01/08/1998 upto<br />
31/07/2007. An approval <strong>of</strong> the same is still awaited.<br />
OTHER INCIDENTAL LICENSES<br />
The Company is in possession <strong>of</strong> the necessary permission from the Municipal Corporation <strong>of</strong> Greater<br />
Mumbai vide its letter CE/998/BPES/AS, dated : 7 th July, 2005 granted for a period <strong>of</strong> six months from<br />
the aforementioned date.<br />
Other than those stated above no further major approval from any government authority/RBI is required<br />
to continue the business activities.<br />
117
IMPORTANT INFORMATION<br />
OTHER REGULATORY AND STATUTORY DISCLOSURES<br />
• Under no circumstances should any request be sent to the Lead Manager to the <strong>Offer</strong>.<br />
• The Company undertakes to provide adequate Funds to the Registrars to the <strong>Offer</strong> for posting <strong>of</strong><br />
the Refund Orders/ <strong>Letter</strong>s <strong>of</strong> Allotment/ Share Certificates by registered post wherever<br />
applicable.<br />
AUTHORITY FOR THE PRESENT ISSUE<br />
The Board <strong>of</strong> Directors <strong>of</strong> the Company (hereinafter referred to as “The Board”) in pursuance to a<br />
special resolution passed at the Extra-ordinary General Meeting held on September 12, 2005 have<br />
decided to <strong>of</strong>fer 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each at premium <strong>of</strong> Rs.15/- per share aggregating to<br />
Rs.16,86,97,500 to the existing <strong>equity</strong> shareholders <strong>of</strong> the Company on rights basis in the ratio <strong>of</strong> 1<br />
(one) <strong>equity</strong> share for every 1 (one) <strong>equity</strong> shares (i.e.1:1) held as on __________ (hereinafter referred<br />
to as “Record Date”).<br />
PROHIBITION BY SEBI<br />
The Company, its Promoters, Directors or any <strong>of</strong> the Company’s associates or group companies with<br />
which the Directors <strong>of</strong> the Company are associated as Directors or Promoters have not been prohibited<br />
from accessing the capital market under any order or direction passed by SEBI.<br />
The promoters, their relatives, KEL, group companies are not detained as willful defaulters by RBI/<br />
Government authorities <strong>and</strong> there are no violations <strong>of</strong> securities laws committed by them in the past or<br />
pending against them.<br />
ELIGIBILITY<br />
<strong>Kilburn</strong> Engineering Limited is an existing listed Company. It is eligible to <strong>of</strong>fer this Rights Issue in<br />
terms <strong>of</strong> Clause 2.4 (iv) <strong>of</strong> the SEBI (DIP) Guidelines, 2000.<br />
DISCLAIMER CLAUSE<br />
AS REQUIRED A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO<br />
SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS<br />
LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR<br />
CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI.<br />
SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL<br />
SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS<br />
PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS<br />
MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. LEAD MERCHANT<br />
BANKER, IDBI CAPITAL MARKET SERVICES LIMITED, HAS CERTIFIED THAT<br />
THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY<br />
ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR<br />
DISCLOSURES AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING.<br />
THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED<br />
DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.<br />
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER<br />
COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY<br />
AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF<br />
OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE<br />
TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY<br />
ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD<br />
MANAGER, IDBI CAPITAL MARKET SERVICES LIMITED HAS FURNISHED TO<br />
SEBI A DUE DILIGENCE CERTIFICATE DATED 11 TH NOVEMBER, 2005 IN<br />
ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATION 1992 WHICH<br />
READS AS FOLLOWS:<br />
118
(I) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING<br />
TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES<br />
WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION<br />
WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE<br />
SAID ISSUE.<br />
(II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE<br />
COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,<br />
INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE<br />
OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE<br />
JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN<br />
THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY.<br />
WE CONFIRM THAT:<br />
(A) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH<br />
THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;<br />
(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS<br />
ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE<br />
GOVERNMENT AND ANOTHER COMPETENT AUTHORITY IN THIS BEHALF<br />
HAVE BEEN DULY COMPLIED WITH; AND<br />
(C) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR<br />
AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL<br />
INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.<br />
(D) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES<br />
NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND<br />
THAT TILL DATE SUCH REGISTRATION IS VALID.<br />
THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER ABSOLVE THE<br />
COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OF THE COMPANIES ACT,<br />
1956, OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER<br />
CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE.<br />
SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH<br />
THE LEAD MANAGER FOR ANY IRREGULARITIES OR LAPSES IN THE LETTER OF<br />
OFFER.<br />
THE PROMOTERS / DIRECTORS OF KEL VIZ. MR. DEEPAK KHAITAN, MR. V. R. SINHA,<br />
MR. S. MUKHERJEE, MR. P. K. MOGAL, MR. A. U. KATRA, MR. P. K. KHAITAN, MR. S. R.<br />
DASGUPTA AND MR. AMRITANSHU KHAITAN DECLARE AND CONFIRM THAT NO<br />
INFORMATION/MATERIAL LIKELY TO HAVE A BEARING ON THE DECISION OF<br />
INVESTORS IN RESPECT OF THE SHARES OFFERED IN TERMS OF THIS LETTER OF<br />
OFFER HAS BEEN SUPPRESSED / WITHHELD AND / OR INCORPORATED IN THE<br />
MANNER THAT WOULD AMOUNT TO MIS-STATEMENT/ MISREPRESENTATION AND<br />
IN THE EVENT OF ITS TRANSPIRING AT ANY POINT IN TIME TILL<br />
ALLOTMENT/REFUND, AS THE CASE MAY BE, THAT ANY INFORMATION/MATERIAL<br />
HAS BEEN SUPPRESSED/WITHHELD AND/ OR AMOUNTS TO A MIS-STATEMENT/MIS-<br />
REPRESENTATION, THE PROMOTERS/DIRECTORS UNDERTAKE TO REFUND THE<br />
ENTIRE APPLICATION MONIES TO ALL SUBSCRIBERS WITHIN 7 DAYS THEREAFTER<br />
WITHOUT PREJUDICE TO THE PROVISIONS OF SECTION 63 OF THE COMPANIES ACT.<br />
CAUTION / DISCLAIMER CLAUSE OF THE ISSUER AND THE LEAD MANAGER<br />
The Company <strong>and</strong> the Lead Manager accept no responsibility for the statements made otherwise than in<br />
the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> or in the advertisement or any other material issued by or at the instance <strong>of</strong> the issuer<br />
<strong>and</strong> that anyone placing reliance on any other source <strong>of</strong> information would be doing so at their own risk.<br />
DISCLAIMER IN RESPECT OF JURISDICTION<br />
This <strong>Offer</strong> is being made in India to persons resident in India (including Indian nationals resident in India<br />
who are majors, Hindu Undivided Families, companies, corporate bodies <strong>and</strong> societies registered under<br />
the applicable laws in India <strong>and</strong> authorised to invest in shares, Indian mutual funds registered with SEBI,<br />
Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI<br />
119
permission), Trusts registered under the Societies Registration Act, 1860, or any other Trust law <strong>and</strong> who<br />
are authorised under their constitution to hold <strong>and</strong> invest in shares) <strong>and</strong> to NRIs, OCBs <strong>and</strong> FIIs as<br />
defined under the Indian laws. This <strong>Offer</strong> Document does not, however, constitute an <strong>of</strong>fer to sell or an<br />
invitation to subscribe to securities issued hereby in any other jurisdiction. Any person into whose<br />
possession this <strong>Offer</strong> Document comes is required to inform himself about <strong>and</strong> to observe any such<br />
restrictions. Any dispute arising out <strong>of</strong> this <strong>Offer</strong> will be subject to the jurisdiction <strong>of</strong> appropriate<br />
court(s) in India only.<br />
No action has been or will be taken to permit a public <strong>of</strong>fering in any jurisdiction where action would be<br />
required for that purpose, except that this <strong>Offer</strong> Document has been submitted to the SEBI. Accordingly,<br />
the <strong>equity</strong> shares represented thereby may not be <strong>of</strong>fered or sold, directly or indirectly, <strong>and</strong> this <strong>Offer</strong><br />
Document may not be distributed, in any jurisdiction, except in accordance with the legal requirements<br />
applicable in such jurisdiction. Neither the delivery <strong>of</strong> <strong>Offer</strong> Document nor any sale hereunder shall,<br />
under any circumstances, create any implication that there has been no change in the affairs <strong>of</strong> <strong>Kilburn</strong><br />
Engineering Limited since the date here<strong>of</strong> or that the information contained herein is correct as <strong>of</strong> any<br />
time subsequent to this date.<br />
LISTING<br />
The existing <strong>equity</strong> shares <strong>of</strong> the Company are listed on BSE (Designated Stock Exchange) <strong>and</strong> the CSE.<br />
Applications will be made to the BSE <strong>and</strong> the CSE for permission to deal in <strong>and</strong> for an <strong>of</strong>ficial quotation<br />
in respect <strong>of</strong> the <strong>equity</strong> shares <strong>of</strong> the Company being <strong>of</strong>fered in terms <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. The<br />
Company has received ‘in-principle’ approval from BSE <strong>and</strong> CSE for listing <strong>of</strong> the <strong>equity</strong> shares issued<br />
pursuant to the Rights Issue vide their letters dated _____ <strong>and</strong> ____ respectively.<br />
The <strong>equity</strong> shares <strong>of</strong> the company were earlier listed on the Vadodara Stock Exchange (‘VSE’). The<br />
<strong>equity</strong> shares have since been voluntarily delisted from the VSE w.e.f. 24 th March, 2005 pursuant to the<br />
Special Resolution passed by the shareholders at their meeting held on 31/03/2004.<br />
DISCLAIMER CLAUSE OF THE BOMBAY STOCK EXCHANGE LIMITED (BSE)<br />
As required a copy <strong>of</strong> this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> has been submitted to BSE. The BSE has given the<br />
permission to the Company vide its letter dated __________ to use their name in this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong> as one <strong>of</strong> the stock exchanges on which Equity Shares <strong>of</strong> the Company being issued in terms <strong>of</strong> this<br />
<strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> are proposed to be listed. The BSE has scrutinized this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> for<br />
their limited internal purpose <strong>of</strong> deciding on the matter <strong>of</strong> granting the aforesaid permission to the<br />
Company. It is to be distinctly understood that the aforesaid permission given by the BSE should not in<br />
any way be deemed or construed that the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> has been cleared or approved by BSE nor<br />
does it in any manner warrant, certify or endorse the correctness or completeness <strong>of</strong> any <strong>of</strong> the contents<br />
<strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>; nor does it warrant that the Company’s securities will be listed or will continue to<br />
be listed on the BSE nor does it take any responsibility for the financial or other soundness <strong>of</strong> the<br />
Company, its Promoters, its management or any scheme or project <strong>of</strong> this Company.<br />
Every person who desires to apply for or otherwise acquires any securities <strong>of</strong> this Company may do so<br />
pursuant to an independent inquiry or any investigation <strong>and</strong> analysis <strong>and</strong> shall not have any claim against<br />
the BSE whatsoever by reason <strong>of</strong> any loss which may be suffered by such person consequent to or in<br />
connection with such subscription/ acquisition whether by reason <strong>of</strong> anything stated or omitted to be<br />
stated herein or for any other reason whatsoever.<br />
DISCLAIMER CLAUSE OF THE CALCUTTA STOCK EXCHANGE ASSOCIATION<br />
LIMITED (CSE)<br />
As required a copy <strong>of</strong> this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> has been submitted to CSE. The CSE has given the<br />
permission to the Company vide its letter dated __________ to use their name in this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong> as one <strong>of</strong> the stock exchanges on which Equity Shares <strong>of</strong> the Company being issued in terms <strong>of</strong> this<br />
<strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> are proposed to be listed. The CSE has scrutinized this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> for<br />
their limited internal purpose <strong>of</strong> deciding on the matter <strong>of</strong> granting the aforesaid permission to the<br />
Company. It is to be distinctly understood that the aforesaid permission given by the CSE should not in<br />
any way be deemed or construed that the <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> has been cleared or approved by CSE nor<br />
does it in any manner warrant, certify or endorse the correctness or completeness <strong>of</strong> any <strong>of</strong> the contents<br />
<strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>; nor does it warrant that the Company’s securities will be listed or will continue to<br />
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e listed on the CSE nor does it take any responsibility for the financial or other soundness <strong>of</strong> the<br />
Company, its Promoters, its management or any scheme or project <strong>of</strong> this Company.<br />
Every person who desires to apply for or otherwise acquires any securities <strong>of</strong> this Company may do so<br />
pursuant to an independent inquiry or any investigation <strong>and</strong> analysis <strong>and</strong> shall not have any claim against<br />
the CSE whatsoever by reason <strong>of</strong> any loss which may be suffered by such person consequent to or in<br />
connection with such subscription/ acquisition whether by reason <strong>of</strong> anything stated or omitted to be<br />
stated herein or for any other reason whatsoever.<br />
FILING<br />
A copy <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> dated _________ has been filed with SEBI, Kolkata, The Bombay Stock<br />
Exchange Limited (BSE) (Designated Stock Exchange), <strong>and</strong> the Calcutta Stock Exchange Association<br />
Limited ( CSE).<br />
IMPERSONATION<br />
Attention <strong>of</strong> the applicants is specifically drawn to the provisions <strong>of</strong> Sub-Section (1) <strong>of</strong> section 68A<br />
<strong>of</strong> the Companies Act, 1956 which is reproduced below:<br />
“ Any person who –<br />
(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for,<br />
any shares therein, or<br />
(b) otherwise induces a Company to allot or register any transfer <strong>of</strong> shares therein to him, or<br />
any other person in a fictitious name,<br />
shall be punishable with imprisonment for a term which may extend to five years.”<br />
CONSENTS<br />
Consents in writing <strong>of</strong> : (a) the Directors, the Company Secretary <strong>and</strong> Compliance Officers, the Auditors,<br />
Lead Manager to the Issue <strong>and</strong> Registrar to the Issue, to act in their respective capacities, have been<br />
obtained <strong>and</strong> shall be filed along with a copy <strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> with SEBI <strong>and</strong> such consents have<br />
not been withdrawn up to the time <strong>of</strong> delivery <strong>of</strong> this draft <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> for registration with SEBI.<br />
Deloitte Haskins & Sells, Stautory Auditors, have given their written consent to the inclusion <strong>of</strong> their<br />
report in the form <strong>and</strong> context in which it appears in this draft <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong> such consent <strong>and</strong><br />
report has not been withdrawn up to the time <strong>of</strong> delivery <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> for filing with the SEBI.<br />
EXPERT OPINION<br />
No expert opinion has been obtained in respect <strong>of</strong> the present Rights Issue.<br />
EXPENSES OF THE ISSUE<br />
Please refer to para under ‘ Issue Expenses’ on page no. _____ <strong>of</strong> this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>.<br />
PREVIOUS PUBLIC ISSUES OR RIGHTS ISSUES<br />
The Company has not made a public or rights issue during the past five years.<br />
PREVIOUS ISSUE OF SHARES OTHERWISE THAN FOR CASH<br />
The Company has issued 5,28,000 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each to Williamson Magor & Co. Ltd.<br />
without payment being received in cash on 4 th June, 1990 for acquisition <strong>of</strong> its <strong>Kilburn</strong> Division<br />
pursuant to the scheme <strong>of</strong> arrangement approved by the Calcutta High Court.<br />
COMMISSION OR BROKERAGE ON PREVIOUS ISSUES<br />
The Company made one public issue since inception <strong>and</strong> no underwriting commission was paid, as the<br />
issue was not underwritten. The Company has paid the brokerage @ 1.5% to the members <strong>of</strong> any<br />
recognized stock exchange in India on the issue price <strong>of</strong> Equity Shares on the basis <strong>of</strong> allotment made<br />
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against applications bearing their respective stamps in the Broker’s column. Brokerage at the same rate<br />
was also paid to the Bankers to the Issue in respect <strong>of</strong> allotments made against applications procured by<br />
them provided the relative forms <strong>of</strong>f application bear their respective stamps in the Broker’s column.<br />
PARTICULARS IN REGARD TO CAPITAL ISSUE DURING THE LAST THREE YEARS<br />
By The Company<br />
The Company has not made any capital Issue during the last three years.<br />
Listed companies under the same management within the meaning section 370 (1)(B) <strong>of</strong> the<br />
Companies Act, 1956<br />
None <strong>of</strong> the listed group companies <strong>of</strong> KEL have made preferential allotment <strong>of</strong> shares or issued<br />
debentures or made any public or rights issue in the past three years.<br />
PROMISE VERSUS PERFORMANCE<br />
<strong>For</strong> KEL<br />
Public Issue<br />
The Company’s Public Issue <strong>of</strong> 18,00,000 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each for cash at par aggregating to<br />
Rs. 1.80 Crores through its Prospectus dated 16 th March, 1990 <strong>and</strong> which were allotted on 4 th June, 1990.<br />
There were no forecast made in the prospectus.<br />
Rights Issue<br />
The Company’s’ Rights Issue <strong>of</strong> 34,59,000 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each at a premium <strong>of</strong> Rs. 25/- for<br />
cash per share aggregating to Rs. 12.11 Crores in the ration <strong>of</strong> one <strong>equity</strong> share for every one <strong>equity</strong><br />
share held on 24 th February, 1993 (referred to as the record date) through the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> dated 10 th<br />
March, 1993 <strong>and</strong> which were allotted on 21 st May,1993. The performance <strong>of</strong> the company vis-à-vis the<br />
projection made in the prospectus is given below:<br />
(Rs. In lacs)<br />
Particulars for the year ending 31 st March<br />
1993<br />
Proj.<br />
1993<br />
Actual<br />
1994<br />
Proj.<br />
1994<br />
Actual<br />
1995<br />
Proj.<br />
1995<br />
Actual<br />
1996<br />
Proj.<br />
1996<br />
Actual<br />
Income from 2621 2364 3822 3174 5460 3140 8281 4443<br />
operations<br />
(net <strong>of</strong> excise)<br />
Pr<strong>of</strong>it before 204 184 191 270 236 254 845 257<br />
Tax<br />
Pr<strong>of</strong>it after Tax 143 104 161 195 198 231 473 217<br />
Equity Share 337 337 683 675 683 675 683 675<br />
Capital<br />
Networth 475 472 1716 1713 1783 1817 2125 1897<br />
NAV (Rs.) 14.09 14.00 25.12 25.37 26.10 26.91 31.11 28.09<br />
EPS (Rs.) 4.24 3.08 2.36 2.88 2.90 3.42 6.93 3.21<br />
Reasons for Variation in Promises V/s. Performance<br />
The performance has been significantly lower in the FY 1993 <strong>and</strong> FY 1996 owing to Lower Order<br />
Booking <strong>and</strong> high fixed expenses.<br />
<strong>For</strong> Listed Companies in the Group<br />
None <strong>of</strong> the listed companies in the group have issued <strong>equity</strong> shares pursuant to a public/ rights issue<br />
during the past five years.<br />
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STOCK MARKET DATA<br />
The <strong>equity</strong> shares <strong>of</strong> the Company are listed on the Stock Exchange, Mumbai. The stock market data for<br />
the <strong>equity</strong> shares on the BSE are as follows:<br />
High<br />
Date (Rs)<br />
Low<br />
Date (Rs)<br />
Average<br />
Price (Rs.)<br />
High<br />
Volume Low<br />
Volume on<br />
Particulars<br />
(Rs)<br />
on date (Rs)<br />
date <strong>of</strong><br />
<strong>of</strong> high<br />
Low<br />
(no. <strong>of</strong><br />
(no <strong>of</strong><br />
shares)<br />
shares)<br />
2002 4 9/7/2002 1800 0.90 23/8/2002 200 2.45<br />
2003 9 29/12/2003 3400 0.85 22/5/2003 100 4.93<br />
2004 28.52 31/12/2004 23700 1.97 21/4/2004 4100 15.25<br />
March, 2005 57 4/3/2005 39300 38.30 1/3/2005 22600 47.65<br />
April, 2005 61 26/4/2005 93700 41.80 5/4/2005 3400 51.40<br />
May, 2004 78.25 23/5/2005 43500 46 3/6/2005 9000 62.13<br />
June, 2005 68 1/6/2005 8000 53 23/6/2005 6200 60.50<br />
July, 2005 72 26/7/2005 54400 52.25 13/7/2005 32100 62.13<br />
Aug, 2005 95 17/8/2005 46300 60.10 1/8/2005 11100 77.55<br />
Sep.,2005 83.75 01/09/2005 8200 59.65 30/09/2005 48100 71.70<br />
Oct., 2005 64.45 06/10/2005 4100 44.05 31/10/2005 1200 54.25<br />
Week end price <strong>of</strong> <strong>equity</strong> Shares <strong>of</strong> KEL on the BSE<br />
Week ended<br />
Price (Rs)<br />
21 st October, 2005 47.25<br />
28 th October, 2005 45.10<br />
2 nd November, 2005 44.90<br />
11 th November, 2005 49.40<br />
The market price <strong>of</strong> KEL as on 30/05/2005 (next working day) immediately after the date on which<br />
the resolution <strong>of</strong> the Board <strong>of</strong> Directors approving the issue was passed 27/05/2005 is Rs. 63.05 /-.<br />
The market price <strong>of</strong> KEL as on 13/09/2005 immediately after the date <strong>of</strong> the EGM (12/09/2005)<br />
was Rs. 73.45 /-.<br />
• The Cum-Rights Closing price <strong>of</strong> the shares <strong>of</strong> the Company as on ____ was ______<br />
• The Ex-Rights closing price <strong>of</strong> the shares <strong>of</strong> the Company as on ___ was _____<br />
THE CALCUTTA STOCK EXCHANGE<br />
The <strong>equity</strong> shares <strong>of</strong> the company are not traded on the Calcutta Stock Exchange.<br />
Mechanism for redressal <strong>of</strong> investor grievances<br />
The company has a Registrar <strong>and</strong> Share Transfer Agent. The investor grievances are redressed within a<br />
period <strong>of</strong> one week from the date <strong>of</strong> receipt <strong>of</strong> the complaint.<br />
Disposal <strong>of</strong> Investor Grievance<br />
The Company has appointed Intime Spectrum Registry Limited, Registrar <strong>and</strong> Share Transfer Agents, as<br />
a common agency to expedite the process <strong>of</strong> share transfer. The share transfers lodged are being<br />
processed on a day-to day basis <strong>and</strong> memor<strong>and</strong>um <strong>of</strong> transfers is generated on a fortnightly basis.<br />
Investor Grievance received during the period from September, 2004 to August, 2005 have been resolved<br />
<strong>and</strong> there are no pending investor grievances as on date. Details <strong>of</strong> the investor complaints received are<br />
given below:<br />
Sr. Nature <strong>of</strong> the Complaint No. <strong>of</strong> Time Taken<br />
No<br />
Complaints<br />
1. Non Receipt <strong>of</strong> Share Certificates 39 Within 30 days<br />
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2. Non Receipt <strong>of</strong> Annual Report 13 Within 7 days<br />
3. Others 29 Within 10 days<br />
Total 81<br />
The Company has appointed Mr. B. N. Shah, Company Secretary, as Compliance Officer. The investors<br />
may contact the Compliance Officer in case <strong>of</strong> any pre issue/post issue related problems such as nonreceipt<br />
<strong>of</strong> allotment advise, refund orders, demat credits etc. The Compliance Officer will be available at<br />
the following address: Subhash Nagar, Bh<strong>and</strong>up, Mumbai - 400 078, Tel.: (022) 2566 3101/0210 Fax: (<br />
022) 2566 8436, Email : kilburn@bom3.vsnl.net.in<br />
Change in Auditors<br />
There has been no change in the auditors during last three years.<br />
Capitalization <strong>of</strong> reserves or pr<strong>of</strong>it<br />
We have not capitalized our reserves or pr<strong>of</strong>its during the last five years.<br />
Revaluation <strong>of</strong> Assets<br />
We have not revalued our assets in the past five years.<br />
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TERMS OF THE ISSUE<br />
The Equity Shares now being <strong>of</strong>fered are subject to the provisions <strong>of</strong> the Act <strong>and</strong> the terms <strong>and</strong><br />
conditions <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>, the CAF, the MoA <strong>and</strong> AoA <strong>of</strong> the Company, the approvals from the<br />
Government <strong>of</strong> India, FIPB <strong>and</strong> RBI, if applicable, FEMA, guidelines issued by SEBI, laws, guidelines,<br />
notifications <strong>and</strong> regulations for issue <strong>of</strong> capital <strong>and</strong> for listing <strong>of</strong> Equity shares issued by SEBI,<br />
Government <strong>of</strong> India, RBI <strong>and</strong>/or other statutory authorities <strong>and</strong> bodies from time to time, listing<br />
agreements entered into by the Company with Stock Exchanges, terms <strong>and</strong> conditions as stipulated in the<br />
allotment advise or letters <strong>of</strong> allotment, rules as may be applicable <strong>and</strong> introduced from time to time.<br />
RANKING OF EQUITY SHARES<br />
The Equity Shares allotted pursuant to this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> shall rank pari-passu in all respects with the<br />
existing Equity Shares <strong>of</strong> the Company including in respect <strong>of</strong> dividend, if any, declared by the<br />
Company, for the financial year, in which these Equity Shares are allotted.<br />
RIGHTS OF SHAREHOLDERS<br />
Subject to applicable laws, the <strong>equity</strong> shareholders shall have the following rights :<br />
• Right to receive dividend, if declared;<br />
• Right to attend general meetings <strong>and</strong> exercise voting powers, unless prohibited by law;<br />
• Right to vote on a poll either in person or by proxy;<br />
• Right to receive <strong>of</strong>fers for rights shares <strong>and</strong> be allotted bonus shares, if announced;<br />
• Right to receive surplus on liquidation;<br />
• Right to free transferability; <strong>and</strong><br />
• Such other rights, as may be available to a shareholder <strong>of</strong> a listed public company under the<br />
Companies Act <strong>and</strong> our Memor<strong>and</strong>um <strong>and</strong> Articles.<br />
MARKET LOT<br />
Since trading <strong>of</strong> our <strong>equity</strong> shares is in dematerialized form, the tradable lot is one <strong>equity</strong> share.<br />
In case <strong>of</strong> physical certificates the company would issue one certificate for the Equity shares allotted to<br />
one person (Consolidated Certificate). In respect <strong>of</strong> the consolidated certificate, the company will only<br />
upon receipt <strong>of</strong> a request from the Equity shareholders, split such consolidated certificate into smaller<br />
denomination with in week’s time from the date <strong>of</strong> the request from the Equity shareholders. No fee<br />
would be charged by the company for splitting the consolidated certificate.<br />
NOMINATION FACILITY TO THE INVESTOR<br />
In accordance with Section 109A <strong>of</strong> the Companies Act, the sole or first bidder, along with other joint<br />
bidder, may nominate any one person in whom, in the event <strong>of</strong> the death <strong>of</strong> sole bidder or in case <strong>of</strong> joint<br />
bidders, death <strong>of</strong> all the bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A<br />
person, being a nominee, entitled to the Equity Shares by reason <strong>of</strong> the death <strong>of</strong> the original holder(s),<br />
shall in accordance with Section 109A <strong>of</strong> the Companies Act, be entitled to the same advantages to<br />
which he or she would be entitled if he or she were the registered holder <strong>of</strong> the <strong>equity</strong> share(s). Where the<br />
nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any<br />
person to become entitled to <strong>equity</strong> share(s) in the event <strong>of</strong> his or her death during the minority. A<br />
nomination shall st<strong>and</strong> rescinded upon a sale/ transfer/ alienation <strong>of</strong> <strong>equity</strong> share(s) by the person<br />
nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh<br />
nomination can be made only on the prescribed form available on request at our Registered / Corporate<br />
Office or to our Registrar <strong>and</strong> Transfer Agents.<br />
MINIMUM SUBSCRIPTION<br />
The minimum subscription which must be raised by this issue <strong>of</strong> <strong>equity</strong> shares is 90% <strong>of</strong> the total issue<br />
<strong>of</strong> Rs 16,86,97,500/- being the aggregate issue size <strong>of</strong> 67,47,900 <strong>equity</strong> shares <strong>of</strong> Rs. 10/- each at a price<br />
<strong>of</strong> Rs.15/- per share <strong>of</strong>fered in terms <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. The Board <strong>of</strong> Directors will proceed to allot<br />
the shares on receipt <strong>of</strong> the application money payable on 90% <strong>of</strong> the 67,47,900 <strong>equity</strong> shares.<br />
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If the Company does not receive the minimum subscription <strong>of</strong> 90% <strong>of</strong> the issued amount upto the date <strong>of</strong><br />
closure <strong>of</strong> the issue, or if the subscription level falls below 90% after the closure <strong>of</strong> issue on account <strong>of</strong><br />
cheques having been returned unpaid or withdrawal <strong>of</strong> applications, the Company shall forthwith refund<br />
the entire subscription amount received within 42 days from the date <strong>of</strong> closure <strong>of</strong> the issue. If there is a<br />
delay beyond 8 days after the Company becomes liable to pay the amount, the Company shall pay<br />
interest for the delayed period as per Section 73 <strong>of</strong> the Companies Act, 1956.<br />
In case this Rights Issue is undersubscribed after considering the number <strong>of</strong> Equity Shares applied as per<br />
entitlement/ renouncement <strong>and</strong> additional Equity Shares, the undersubscribed portion shall be applied for<br />
by the persons in the promoter group (as disclosed on page no. ____ <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> )only after the<br />
close <strong>of</strong> the Issue.<br />
BASIS OF THE OFFER<br />
The Equity Shares are being <strong>of</strong>fered for subscription for cash to those existing Equity Shareholders<br />
whose names appear as beneficial owners as per the list furnished by the depositories in respect <strong>of</strong> the<br />
Equity Shares held in the electronic form <strong>and</strong> on the Register <strong>of</strong> Members <strong>of</strong> the Company in respect <strong>of</strong><br />
Equity Shares held in the physical form at the close <strong>of</strong> business hours on the Record Date. The Company<br />
has in consultation with the Designated Stock Exchange fixed the Record Date for determining the<br />
shareholders who are entitled to receive this <strong>of</strong>fer for Equity shares on a rights basis. The Equity Shares<br />
are being <strong>of</strong>fered for subscription in the ratio <strong>of</strong> Four Equity Share for every five Equity Shares held by<br />
the Equity Shareholders. The shareholders whose names appear as beneficial owners as per the list<br />
furnished by the depositories in respect <strong>of</strong> the Equity Shares held in electronic form <strong>and</strong> on the register <strong>of</strong><br />
members <strong>of</strong> the Company in respect <strong>of</strong> the shares held in physical form on 26/08/2005 at the close <strong>of</strong><br />
business hours shall be entitled to the <strong>equity</strong> shares on the Rights basis in the ratio <strong>of</strong> four <strong>equity</strong> share<br />
for every five <strong>equity</strong> shares held by them.<br />
DISPOSAL OF ODD LOTS<br />
The <strong>equity</strong> shares are being issued in the ratio <strong>of</strong> one <strong>equity</strong> shares for every <strong>equity</strong> share held as on<br />
record date. As such the rights issue will not lead to any odd lots.<br />
OPTION TO SUBSCRIBE<br />
Applicants to the Equity Shares <strong>of</strong> the Company issued through this Rights Issue shall be allotted the<br />
securities in dematerialized (electronic) form at the option <strong>of</strong> the applicant.<br />
RIGHTS ENTITLEMENT<br />
As your name appears as beneficial owner in respect <strong>of</strong> the shares held in the electronic form or appears<br />
in the register <strong>of</strong> members as an <strong>equity</strong> shareholder <strong>of</strong> the Company on the Record Date, you are entitled<br />
to this Rights <strong>Offer</strong>. The number <strong>of</strong> Equity Shares to which you are entitled is shown in Block I <strong>of</strong> Part A<br />
<strong>of</strong> the enclosed CAF <strong>and</strong> as shown in part A <strong>of</strong> the enclosed CAF.<br />
FRACTIONAL ENTITLEMENT<br />
The present rights issue being in the ratio <strong>of</strong> 1:1 will not lead to any fractional entitlement.<br />
JOINT-HOLDERS<br />
Where two or more persons are registered as the holders <strong>of</strong> any Equity Shares, they shall be deemed (so<br />
far as the company is concerned) to hold the same as joint-tenants with benefits <strong>of</strong> survivorship subject to<br />
provisions contained in the Articles.<br />
OFFER TO NON-RESIDENT EQUITY SHAREHOLDERS/ APPLICANTS<br />
Presently 8000 <strong>equity</strong> shares aggregating to 0.12 % <strong>of</strong> the present issued capital are held by<br />
NRIs/FIIs/OCBs on repatriation basis. Applications received from NRIs <strong>and</strong> other NR shareholders for<br />
allotment <strong>of</strong> Equity Shares shall be, inter alia, subject to the conditions imposed from time to time by the<br />
RBI under the FEMA in the matter <strong>of</strong> refund <strong>of</strong> application moneys, allotment <strong>of</strong> Equity Shares, issue <strong>of</strong><br />
<strong>Letter</strong> <strong>of</strong> Allotment / share certificates, payment <strong>of</strong> interest, dividends, etc. General permission has been<br />
granted to any person resident outside India to apply shares <strong>of</strong>fered on rights basis by an Indian<br />
126
Company in terms <strong>of</strong> FEMA <strong>and</strong> the rules <strong>and</strong> regulations thereunder. Vide notification dated June 18,<br />
2003, bearing number FEMA 94/2003, RBI has granted general permission to Indian companies to issue<br />
rights/bonus shares to existing non-resident shareholders. The existing non-resident shareholders may<br />
apply for issue <strong>of</strong> additional shares <strong>and</strong> the Company may allot the same subject to the condition that the<br />
overall issue <strong>of</strong> shares to non-residents in the total paid up capital does not exceed the sectoral cap. In<br />
other words, non-residents may subscribe for additional shares over <strong>and</strong> above shares <strong>of</strong>fered on rights<br />
basis by the company <strong>and</strong> renounce the shares <strong>of</strong>fered in full or part there<strong>of</strong> in favour <strong>of</strong> a person named<br />
by them. Residents may subscribe for additional shares over <strong>and</strong> above the shares <strong>of</strong>fered on rights basis<br />
by the Company <strong>and</strong> also renounce the shares <strong>of</strong>fered either in full or part there<strong>of</strong> in favour <strong>of</strong> a person<br />
named by them. The Equity Shares issued under the Rights Issue <strong>and</strong> purchased by NR shall be subject<br />
to the same conditions including restrictions in regard to the repatriability as are applicable to the<br />
previously held Equity Shares against which Equity Shares under the Rights Issue are issued.<br />
However, as per the provisions <strong>of</strong> AP (DIR) circular No. 14 dated September 16, 2003 (issued by the<br />
RBI), such shareholders who have been allotted the Equity Shares as OCBs would not be permitted to<br />
participate in the Rights Issue. Accordingly, shareholders/ applicants who are OCBs <strong>and</strong> wishing to<br />
participate in the Rights Issue would be required to submit approvals in relation thereto from the FIPB<br />
<strong>and</strong> the RBI. The Board <strong>of</strong> Directors may at its absolute discretion, agree to such terms <strong>and</strong> conditions as<br />
may be stipulated by RBI while approving the allotment <strong>of</strong> Equity Shares, payment <strong>of</strong> dividend etc. to<br />
the Equity Shareholders who are NR.<br />
NOTICES<br />
All notices to the Equity shareholder(s) required to be given by the Company in connection with the<br />
Issue shall be published in one English national daily with wide circulation, one Hindi national daily with<br />
wide circulation, one regional language daily in Kolkata being the place where the registered <strong>of</strong> the<br />
Company is situated <strong>and</strong>/or will be sent by ordinary post to the registered holders <strong>of</strong> the Equity Share(s)<br />
from time to time.<br />
ISSUE OF DUPLICATE EQUITY SHARE CERTIFICATE<br />
If any Equity Share certificate(s) is/are mutilated or defaced or the cages for recording transfers <strong>of</strong> Equity<br />
Shares are fully utilized, the Company against the surrender <strong>of</strong> such certificate(s) may replace the same,<br />
provided that the same will be replaced as aforesaid only if the certificate numbers <strong>and</strong> the distinctive<br />
numbers are legible.<br />
If any Equity Share certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production <strong>of</strong><br />
pro<strong>of</strong> there<strong>of</strong> to the satisfaction <strong>of</strong> the Company <strong>and</strong> upon furnishing such indemnity/surety <strong>and</strong>/or such<br />
other documents as the Company may deem adequate, duplicate Equity Share certificate(s) shall be<br />
issued.<br />
PRINTING OF BANK PARTICULARS ON REFUND ORDERS<br />
As a matter <strong>of</strong> precaution against possible fraudulent encashment <strong>of</strong> refund orders due to loss or<br />
misplacement,<br />
the particulars <strong>of</strong> the applicant’s bank account are m<strong>and</strong>atorily required to be given for printing on refund<br />
orders. Bank account particulars will be printed on the refund orders / refund warrants, which can then be<br />
deposited only in the account specified. The Company will in no way be responsible if any loss occurs<br />
through these instruments falling into improper h<strong>and</strong>s either through forgery or fraud.<br />
OPTIONS AVAILABLE TO THE EQUITY SHAREHOLDER<br />
The CAF clearly indicates the number <strong>of</strong> Equity Shares, which the Equity shareholder is entitled to. If<br />
the Equity shareholder applies for an investment in Equity Shares, then he/she can:<br />
• Apply for his/her entitlement in full<br />
• Apply for his/her entitlement in full <strong>and</strong> apply for additional Equity Shares<br />
• Apply for his/her entitlement in part<br />
• Apply for his/her entitlement in part <strong>and</strong> renounce the other part<br />
• Renounce the entire entitlement (or part <strong>of</strong> entitlement).<br />
• Renouncee for the Equity Share can apply for the Equity Shares renounced to them <strong>and</strong> also<br />
apply for additional Equity Shares.<br />
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GROUNDS FOR TECHNICAL REJECTIONS<br />
Applicants are advised to note that applications are liable to be rejected on technical grounds, including<br />
the following:<br />
• Amount paid does not tally with the amount payable for;<br />
• Bank account details (for refund) are not given;<br />
• Age <strong>of</strong> First Applicant not given;<br />
• PAN photocopy/ PAN Communication/ <strong>For</strong>m 60 / <strong>For</strong>m 61 declaration not given if Application<br />
is for Rs.50,000 or more;<br />
• In case <strong>of</strong> Application under power <strong>of</strong> attorney or by limited companies, corporate, trust, etc.,<br />
relevant documents are not submitted;<br />
• If the signature <strong>of</strong> the existing shareholder does not match with the one given on the Application<br />
<strong>For</strong>m <strong>and</strong> for renouncees if the signature does not match with the records available with their<br />
depositories;<br />
• If the Applicant desires to have shares in electronic form, but the Application <strong>For</strong>m does not<br />
have the Applicant’s depository account details;<br />
• Application <strong>For</strong>ms are not submitted by the Applicants within the time prescribed as per the<br />
Application <strong>For</strong>m <strong>and</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>;<br />
• Applications not duly signed by the sole/joint Applicants;<br />
• Applications by OCBs unless accompanied by specific approval from the RBI permitting the<br />
OCBs to invest in the Issue;<br />
• Applications accompanied by Stockinvest;<br />
• In case no corresponding record is available with the Depositories that matches three<br />
parameters, namely, names <strong>of</strong> the Applicants (including the order <strong>of</strong> names <strong>of</strong> joint holders), the<br />
Depositary Participant’s identity (DP ID) <strong>and</strong> the beneficiary’s identity;<br />
• Applications by ineligible Non-residents (including on account <strong>of</strong> restriction or prohibition<br />
under applicable local laws) <strong>and</strong> where last available address in India has not been provided.<br />
HOW TO APPLY<br />
<strong>For</strong> Resident Indian Shareholders<br />
Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF<br />
should be completed in all respects, as explained in the instructions indicated in the CAF. Applications<br />
will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any<br />
<strong>of</strong>fices except in the case <strong>of</strong> postal applications as per instructions given in the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. Payment<br />
should be made in cash (not more than Rs.20,000) or by cheque/bank draft/ drawn on any bank<br />
(including a co-operative bank) which is situated at <strong>and</strong> is a member or a sub-member <strong>of</strong> the bankers<br />
clearing house located at the centre where the CAF is submitted <strong>and</strong> which is participating in the clearing<br />
at the time <strong>of</strong> submission <strong>of</strong> the application. Outstation cheques/money orders/postal orders will not be<br />
accepted <strong>and</strong> CAFs accompanied by such cheques/money orders/postal orders are liable to be rejected.<br />
<strong>For</strong> Non-Resident Shareholders on Non-Repatriation basis<br />
Applications received from the Non-Resident Equity Shareholders for the allotment <strong>of</strong> Equity Shares<br />
shall, inter alia, be subject to the conditions as may be imposed from time to time by the Reserve Bank <strong>of</strong><br />
India, in the matter <strong>of</strong> Refund <strong>of</strong> application moneys, allotment <strong>of</strong> Equity Shares, issue <strong>of</strong> <strong>Letter</strong>s <strong>of</strong><br />
Allotment/ certificates/ payment <strong>of</strong> dividends etc. <strong>For</strong> NRIs holding shares on non-repatriation basis,<br />
payment may also be made by way <strong>of</strong> cheque drawn on Non-Resident Ordinary (NRO) Account<br />
maintained in Mumbai or Rupee <strong>Draft</strong> purchased out <strong>of</strong> NRO Account maintained elsewhere in India but<br />
payable at Mumbai. In such cases, the allotment <strong>of</strong> shares will be on non-repatriation basis. If the<br />
payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank<br />
issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be<br />
enclosed with the CAF. In the absence <strong>of</strong> the above, the application shall be considered incomplete <strong>and</strong> is<br />
liable to be rejected. All cheques/bank drafts accompanying the CAFs should be crossed. A/c Payee<br />
Only. And made payable to “(Name <strong>of</strong> The Bank) A/c –<strong>Kilburn</strong> Engineering Ltd. - Rights Issue -<br />
NRI” The CAF duly completed together with the amount payable on application must be deposited with<br />
the collecting bank/collection centres indicated on the reverse <strong>of</strong> the CAF, on or before the close <strong>of</strong><br />
banking hours on or before the Issue closing date. A separate cheque or bank draft must accompany each<br />
128
CAF. Reference number <strong>of</strong> CAF should be mentioned on the reverse <strong>of</strong> the Cheque/<strong>Draft</strong>. New Demat<br />
account shall be opened for holders who have had a change <strong>of</strong> status from Resident Indian to NRI.<br />
The CAF consists <strong>of</strong> four parts:<br />
Part A : <strong>For</strong>m for accepting the Equity Shares <strong>of</strong>fered <strong>and</strong> for applying for additional Equity Shares<br />
Part B : <strong>For</strong>m for renunciation<br />
Part C : <strong>For</strong>m for application for renouncees<br />
Part D : <strong>For</strong>m for request for split application forms<br />
ACCEPTANCE OF OFFER<br />
The Equity shareholder may accept <strong>and</strong> apply for the Equity Share(s) <strong>of</strong>fered in whole or in part, by<br />
filling in Part "A" <strong>of</strong> the enclosed CAF <strong>and</strong> submitting the same along with payment <strong>of</strong> the application<br />
money to the Bankers to the Issue <strong>and</strong> its collection centers specified on the reverse <strong>of</strong> the CAF on or<br />
before the close <strong>of</strong> banking hours on____________, 2005. Applicants at centers not covered by the<br />
branches <strong>of</strong> collecting banks can send their CAF together with the dem<strong>and</strong> draft, net <strong>of</strong> dem<strong>and</strong> draft <strong>and</strong><br />
postal charges, payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent<br />
to anyone other than the Registrar to the Issue are liable to be rejected.<br />
You may apply for the <strong>equity</strong> shares <strong>of</strong>fered wholly or in part by filling in the enclosed CAF <strong>and</strong><br />
submitting the same along with the application money to the Bankers to the Issue or its designated<br />
branches on or before the closure <strong>of</strong> the subscription list. The CAF should be complete in all respects, as<br />
explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any<br />
circumstances, otherwise the application(s) will be rejected forthwith.<br />
ADDITIONAL EQUITY SHARES<br />
The Equity shareholder is eligible to apply for additional Equity Shares over <strong>and</strong> above the number <strong>of</strong><br />
Equity Shares entitled to, provided he/she applies for all the Equity Shares, to which he/she is entitled to,<br />
without renouncing them, in whole or in part, in favor <strong>of</strong> any other person(s).<br />
If you desire to apply for additional <strong>equity</strong> shares, you may fill in the number <strong>of</strong> additional <strong>equity</strong> shares<br />
in Part A <strong>of</strong> the CAF. The allotment <strong>of</strong> additional <strong>equity</strong> shares will be at the sole discretion <strong>of</strong> the board<br />
on an equitable designated stock exchange. In the case <strong>of</strong> request for additional <strong>equity</strong> shares by nonresidents,<br />
the allotment will be subject to approval <strong>of</strong> Reserve Bank <strong>of</strong> India. The board may reject any<br />
application for additional <strong>equity</strong> shares without assigning any reasons there<strong>of</strong>.<br />
RENUNCIATION<br />
A shareholder to whom the <strong>equity</strong> shares are <strong>of</strong>fered as rights entitlement may renounce the <strong>equity</strong> shares<br />
<strong>of</strong>fered to him, either in full or in part, in favour <strong>of</strong> any other person or persons. Such renounces can<br />
only be Indian Nationals, limited companies incorporated in India <strong>and</strong> governed by the Act, statutory<br />
corporations/ institutions, societies (registered under the Societies Registration Act, 1860 or any other<br />
applicable laws) provided that such corporation/ institutions/ society is authorized under its constitution/<br />
bye laws to hold <strong>equity</strong> shares in a company. The rights renunciation cannot be renounced jointly in<br />
favour <strong>of</strong> more than three persons, a minor, a partnership firm, trust (unless the same is registered under<br />
the applicable Trusts laws <strong>and</strong> is authorized under its constitution to hold <strong>equity</strong> shares <strong>of</strong> a company),<br />
HUF, foreign national or his nominee (unless approved by RBI or other relevant authorities) or to any<br />
person situated within the jurisdiction where the <strong>of</strong>fering in terms <strong>of</strong> this LoF could be illegal or require<br />
compliance with securities laws <strong>of</strong> such jurisdiction or to any other persons not approved by the Board.<br />
Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident<br />
Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to<br />
Resident Indian(s) is subject to the renouncer(s)/ renouncee(s) obtaining the approval <strong>of</strong> the FIPB/ SIA<br />
<strong>and</strong> /or necessary permission <strong>of</strong> the RBI under the <strong>For</strong>eign Exchange Management Act, 1999 (FEMA)<br />
<strong>and</strong> other applicable laws <strong>and</strong> such permissions should be attached to the CAF. Applications not<br />
accompanied by the aforesaid approval are liable to be rejected.<br />
The Board reserves the right to reject the request for allotment to renounces in its sole <strong>and</strong> absolute<br />
discretion without assigning any reason there<strong>of</strong>.<br />
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Any person(s) other than those in whose favor this <strong>of</strong>fer has been made must not use part A <strong>of</strong> the CAF.<br />
Submission <strong>of</strong> the enclosed CAF to the Banker to the Issue at its collecting centers specified on the<br />
reverse <strong>of</strong> the CAF with the <strong>For</strong>m <strong>of</strong> Renunciation (Part B <strong>of</strong> the CAF) duly filled in shall be conclusive<br />
evidence in favor <strong>of</strong> the Company <strong>of</strong> the person(s) applying for Equity Shares in Part C to receive<br />
allotment <strong>of</strong> such Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the<br />
application invalid.<br />
By virtue <strong>of</strong> the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate<br />
Bodies (“OCB”) have been derecognized as an eligible class <strong>of</strong> investors <strong>and</strong> the RBI has subsequently<br />
issued the <strong>For</strong>eign exchange Management (withdrawal <strong>of</strong> General Permission to Overseas Corporate<br />
Bodies (OCBs)) Regulations, 2003. Accordingly, the existing <strong>equity</strong> shareholders <strong>of</strong> the company who<br />
do not wish to subscribe to the <strong>equity</strong> shares being <strong>of</strong>fered but wish to renounce the same in favour <strong>of</strong><br />
renounces shall not renounce the same (whether for consideration or otherwise) in favour <strong>of</strong> OCB(s).<br />
Renouncee(s) will have no further right to renounce any Equity Shares in favor <strong>of</strong> any other person.<br />
Further Renouncee(s) cannot apply for additional <strong>equity</strong> shares.<br />
PROCEDURE FOR RENUNCIATION<br />
(a) To renounce the <strong>of</strong>fer in whole in favor <strong>of</strong> one renouncee :<br />
If the Equity shareholder wishes to renounce this <strong>of</strong>fer in whole, then he/she has to complete Part B <strong>of</strong><br />
the CAF. In case <strong>of</strong> joint holders, all joint holders must sign this part <strong>of</strong> the CAF. The person in whose<br />
favour renunciation has been made should complete <strong>and</strong> sign Part C <strong>of</strong> the CAF. In case <strong>of</strong> joint<br />
renouncees, all joint renouncees must sign this part <strong>of</strong> the CAF.<br />
(b) To renounce the <strong>of</strong>fer in part:<br />
If the Equity shareholder wishes to either accept this <strong>of</strong>fer in part <strong>and</strong> renounce the balance or renounce<br />
the entire <strong>of</strong>fer in favour <strong>of</strong> two or more renouncees, separately, the CAF must be first split by applying<br />
to the Registrars to the Issue. The Equity shareholder should indicate his/her requirement for split forms<br />
in the space provided for this purpose in Part D <strong>of</strong> the CAF <strong>and</strong> return the entire CAF to the Registrars to<br />
the Issue so as to reach them latest by the close <strong>of</strong> business hours on _________ 2005. On receipt <strong>of</strong> the<br />
required number <strong>of</strong> split forms from the Registrars, the procedure as mentioned in the above Para (a)<br />
shall have to be followed.<br />
(c) Change <strong>and</strong>/or introduction <strong>of</strong> additional holders:<br />
If the Equity shareholder wishes to apply for Equity Shares jointly with any other person, or persons, not<br />
more than three, who is/are not already joint holders, it shall amount to renunciation <strong>and</strong> the procedure as<br />
stated above shall have to be followed. Even a change in the sequence <strong>of</strong> the joint holders shall amount<br />
to renunciation <strong>and</strong> the procedure for renunciation, as stated above shall have to be followed.<br />
However, any right <strong>of</strong> renunciation is subject to the express condition that the Board <strong>of</strong> the Company<br />
shall be entitled in its absolute discretion to reject the request for allotment from the renouncees without<br />
assigning any reasons there for.<br />
SPLITTING OF COMPOSITE APPLICATION FORMS<br />
Requests for split CAF should be sent to the Registrars to the Issue, namely Intime Spectrum Registry<br />
Limited before the closure <strong>of</strong> business hours on or before _____________________ by filling in Part D<br />
<strong>of</strong> the CAF along with entire CAF. Split CAF cannot be re-split. The renouncee(s) shall be entitled to<br />
obtain split CAF.<br />
HOW TO APPLY FOR SHARES<br />
The Equity shareholder may exercise any <strong>of</strong> the following options with regard to the Equity Shares<br />
<strong>of</strong>fered to him/her, using the enclosed CAF:<br />
S. NO. OPTIONS AVAILABLE ACTION REQUIRED<br />
A. Accept your entitlement to all the <strong>equity</strong> Fill in <strong>and</strong> sign ‘Part A’ <strong>of</strong> the CAF.<br />
shares <strong>of</strong>fered to you<br />
B. Accept your entitlement to all the <strong>equity</strong> Fill in <strong>and</strong> sign ‘Part A’ <strong>of</strong> the CAF after<br />
130
shares <strong>of</strong>fered to you <strong>and</strong> apply fro<br />
additional shares<br />
C. Accept only a part <strong>of</strong> your entitlement <strong>of</strong> the<br />
<strong>equity</strong> shares <strong>of</strong>fered to you (without<br />
renouncing the balance)<br />
D. Renounce your full entitlement <strong>of</strong> the <strong>equity</strong><br />
shares <strong>of</strong>fered to you to one person<br />
(Renouncee)(Joint Renouncees not<br />
exceeding three are considered as one<br />
Renouncee)<br />
E. Accept a part <strong>of</strong> your entitlement <strong>of</strong> the<br />
<strong>equity</strong> shares <strong>of</strong>fered to you <strong>and</strong> then<br />
renounce the balance to one renouncee or<br />
more renounces<br />
F. Renounce your entitlement <strong>of</strong> the <strong>equity</strong><br />
shares <strong>of</strong>fered to you, to more than one<br />
Renouncee<br />
G. Introduce a joint holder or change the<br />
sequence <strong>of</strong> joint holders<br />
indicating in Block IV the number <strong>of</strong><br />
additional Equity Shares applied for.<br />
Fill <strong>and</strong> sign Part A <strong>of</strong> the CAF<br />
Fill <strong>and</strong> sign Part B <strong>of</strong> the CAF indicating the<br />
number <strong>of</strong> <strong>equity</strong> shares renounced <strong>and</strong> h<strong>and</strong><br />
over the entire CAF to the renouncee. The<br />
renouncee must fill <strong>and</strong> sign Part C <strong>of</strong> the CAF<br />
Fill <strong>and</strong> sign Part D <strong>of</strong> the CAF for Split <strong>For</strong>ms<br />
after indicating the required number <strong>of</strong> Spilt<br />
Application <strong>For</strong>ms <strong>and</strong> send the entire CAF to<br />
the registrars to the Issue so as to reach them<br />
on or before the last date for receiving request<br />
for Split <strong>For</strong>ms indicated in the CAF i.e.,<br />
_______. On receipt <strong>of</strong> the Split <strong>For</strong>ms take<br />
action as indicated below :<br />
(i) <strong>For</strong> the <strong>equity</strong> shares, if any, which you<br />
want to accept, fill in <strong>and</strong> sign Part A <strong>of</strong> one<br />
Split Composite Application <strong>For</strong>m.<br />
(ii) <strong>For</strong> the <strong>equity</strong> shares you want to renounce,<br />
fill in <strong>and</strong> sign Part B in the required number<br />
<strong>of</strong> Split Composite Application <strong>For</strong>ms<br />
indicating the number <strong>of</strong> Equity Shares<br />
renounced to each renounceee.<br />
(iii) each <strong>of</strong> the renouncee should then fill in<br />
<strong>and</strong> sign Part C <strong>of</strong> the respective split<br />
composite application form for the <strong>equity</strong><br />
shares accepted by the renouncee.<br />
Follow the procedures stated in (E) above for<br />
obtaining the required number <strong>of</strong> Split<br />
Composite Application <strong>For</strong>ms <strong>and</strong> on receipt<br />
<strong>of</strong> Split Composite Application <strong>For</strong>ms follow<br />
the procedure as stated in (E) (ii) <strong>and</strong> (iii)<br />
above.<br />
This will be treated as a renunciation. Fill in<br />
<strong>and</strong> sign Part B <strong>and</strong> the renouncees must fill in<br />
<strong>and</strong> sign Part C.<br />
Application for Equity Shares should be made only on the CAFs, which are provided by the Company.<br />
The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated<br />
on the reverse <strong>of</strong> the CAF before submission to the Bankers to the Issue at its collecting centres on the<br />
reverse <strong>of</strong> the CAF on or before the last day <strong>of</strong> the closure <strong>of</strong> the Issue. Non resident<br />
shareholders/renouncee(s) should forward their applications to the Bankers to the Issue at the specified<br />
collection centers indicated on the reverse <strong>of</strong> the CAF for non-resident applicants. No part <strong>of</strong> the CAF<br />
should be detached under any circumstances.<br />
Availability <strong>of</strong> duplicate CAF<br />
In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will<br />
issue a<br />
duplicate CAF on the request <strong>of</strong> the applicant who should furnish the registered folio number/ DP <strong>and</strong><br />
Client ID number <strong>and</strong> his/ her full name <strong>and</strong> address to the Registrar to the Issue. Please note that the<br />
request for duplicate CAF should reach the Registrar to the Issue within 15 days from the Issue Opening<br />
Date. Please note that those who are making the application in the duplicate form should not utilize the<br />
original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the<br />
applicant violates any <strong>of</strong> these requirements, he / she shall face the risk <strong>of</strong> rejection <strong>of</strong> both the<br />
applications as well as forfeiture <strong>of</strong> amounts remitted along with the applications.<br />
131
Application on Plain Paper<br />
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the<br />
duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with a<br />
Dem<strong>and</strong> <strong>Draft</strong> payable at Mumbai which should be drawn in favour <strong>of</strong> the Company <strong>and</strong> send the same<br />
by registered post directly to the Registrar to the Issue.<br />
The application on plain paper, duly signed by the applicants including joint holders, in the same order as<br />
per specimen recorded with the Company, must reach the <strong>of</strong>fice <strong>of</strong> the Registrar to the Issue before the<br />
Issue Closing Date (i.e _______) <strong>and</strong> should contain the following particulars:<br />
• Name <strong>of</strong> Issuer,<br />
• Name <strong>and</strong> address <strong>of</strong> the Equity Shareholder including joint holders<br />
• Registered Folio Number/ DP <strong>and</strong> Client ID no.<br />
• Number <strong>of</strong> shares held as on Record Date i.e (•).<br />
• Certificate numbers <strong>and</strong> distinctive numbers, if held in physical form<br />
• Number <strong>of</strong> Rights Equity Shares entitled<br />
• Number <strong>of</strong> Rights Equity Shares applied for out <strong>of</strong> entitlement<br />
• Number <strong>of</strong> additional Equity Shares applied for, if any<br />
• Total number <strong>of</strong> Equity Shares applied for<br />
• Total amount paid at the rate <strong>of</strong> Rs. 25/- per Equity Share<br />
• Particulars <strong>of</strong> cheque/draft<br />
• Savings/Current Account Number <strong>and</strong> name <strong>and</strong> address <strong>of</strong> the Bank where the Equity<br />
Shareholder will be depositing the refund order<br />
• Applications for a total value <strong>of</strong> Rs, 50,000 or more, i.e. where the total number <strong>of</strong> securities<br />
applied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case <strong>of</strong><br />
application in joint names, each <strong>of</strong> the applicants, should mention his/her PAN number allotted<br />
under the Income-Tax Act, 1961 <strong>and</strong> also submit a photocopy <strong>of</strong> the PAN card(s) or a<br />
communication from the Income Tax authority indicating allotment <strong>of</strong> PAN (“PAN<br />
Communication”) along with the application for the purpose <strong>of</strong> verification <strong>of</strong> the number.<br />
Applicants who do not have PAN are required to provide a declaration in <strong>For</strong>m 60/ <strong>For</strong>m 61<br />
prescribed under the I.T.Act along with the application. Applications without this photocopy/<br />
PAN Communication/declaration will be considered incomplete <strong>and</strong> are liable to be rejected.<br />
• In case <strong>of</strong> Non-Resident shareholders, NRE/FCNR/NRO Account No., name <strong>and</strong> address <strong>of</strong> the<br />
bank <strong>and</strong> branch.<br />
• Signature <strong>of</strong> Equity Shareholders to appear in the same sequence <strong>and</strong> order as they appear in the<br />
records <strong>of</strong> the Company<br />
• Payment in such cases, should be through a dem<strong>and</strong> draft, net <strong>of</strong> dem<strong>and</strong> draft <strong>and</strong> postal<br />
charges, payable at Mumbai be drawn in favour <strong>of</strong> “<strong>Kilburn</strong> Engineering Ltd. - Rights Issue”<br />
crossed “A/c Payee only”. Please note that those who are making the application on plain paper<br />
shall not be entitled to renounce their rights <strong>and</strong> should not utilize the original CAF for any<br />
purpose including renunciation even if it is received subsequently. If the applicant violates any<br />
<strong>of</strong> these requirements, he/she shall face the risk <strong>of</strong> rejection <strong>of</strong> both the applications as well as<br />
forfeiture <strong>of</strong> amounts remitted along with the applications. The Company shall refund such<br />
application amount to the applicant without any interest thereon.<br />
QUOTING OF UNIQUE IDENTIFICATION NUMBER (UIN) ISSUED UNDER SEBI<br />
(CENTRAL DATABASE OF MARKET PARTICIPANTS) REGULATION, 2003<br />
In terms <strong>of</strong> SEBI (Central Database <strong>of</strong> Market Participants) Regulation, 2003 as amended from time<br />
to time <strong>and</strong> SEBI Notification dated November 25, 2003 <strong>and</strong> July 30, 2004, circular dated August<br />
16, 2004 <strong>and</strong> press release dated December 31, 2004, no specified investor being a body corporate<br />
shall subscribe to securities which are proposed to be listed in any recognized stock exchange unless<br />
such specified investor, its promoters <strong>and</strong> directors have been allotted unique identification number<br />
(UIN). However SEBI vide its circular no. MAPIN/Cir- 13 /2005 dated July 01, 2005 has<br />
suspended all fresh registrations for obtaining UIN <strong>and</strong> the requirement to obtain/quote UIN under<br />
the MAPIN Regulations/Circulars with effect from July 01, 2005.<br />
QUOTING OF PAN/GIR NO. IN THE APPLICATION FORMS<br />
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Where an application is for allotment <strong>of</strong> securities in response to a rights issue, for a total value <strong>of</strong> Rs.<br />
50,000/- or more i.e. the total number <strong>of</strong> securities applied for multiplied by the issue price, is Rs.<br />
50,000/- or more the applicant or in the case <strong>of</strong> applications in joint names, each <strong>of</strong> the applicants, should<br />
mention his/her permanent account number (PAN) allotted under the Income-Tax Act, 1961 or where the<br />
same has not been allotted, the GIR number <strong>and</strong> the Income-Tax Circle/Ward/District. In case neither<br />
the permanent account number nor the GIR number has been allotted, the fact <strong>of</strong> non-allotment should be<br />
mentioned in the application forms. Application forms without this information will be considered<br />
incomplete <strong>and</strong> are liable to be rejected.<br />
NOTE ON CASH PAYMENT (SECTION 269 SS)<br />
Having regard to the provisions <strong>of</strong> Section 269 (SS) <strong>of</strong> the Income Tax Act, 1961, subscriptions against<br />
applications for securities should not be effected in cash <strong>and</strong> must be effected only by ‘Account Payee’<br />
cheques or ‘Account Payee’ bank drafts, if the amount payable is Rs. 20,000/- or more. In case payment<br />
is effected in contravention <strong>of</strong> this provision, the application is liable to be rejected.<br />
APPLICATION NUMBER ON THE CHEQUE/DEMAND DRAFT<br />
To avoid any misuse <strong>of</strong> instruments, the applicants are advised to write the application number <strong>and</strong> name<br />
<strong>of</strong> the first applicant on the reverse <strong>of</strong> the cheque / dem<strong>and</strong> draft.<br />
GENERAL<br />
(a) All applications should be made on the printed CAF provided by the Company <strong>and</strong> should be<br />
complete in all respects. Applications which are not complete in all respects or are made otherwise<br />
than as herein provided or not accompanied by proper application money in respect there<strong>of</strong> will be<br />
refunded without interest.<br />
(b) Please read the instructions in the enclosed CAF carefully.<br />
(c) ALL COMMUNICATIONS IN CONNECTION WITH YOUR APPLICATION FOR THE<br />
EQUITY SHARES INCLUDING ANY CHANGE IN YOUR REGISTERED ADDRESS SHOULD<br />
BE ADDRESSED TO THE REGISTRAR TO THE ISSUE.<br />
(d) Application <strong>For</strong>ms must be filled in ENGLISH in BLOCK LETTERS.<br />
(e) Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to<br />
the constitution <strong>of</strong> India. Signatures other than in the aforementioned languages or thumb<br />
impressions must be attested by a Notary Public or a Special Executive Magistrate under his/her<br />
<strong>of</strong>ficial seal.<br />
(f) In case <strong>of</strong> Joint Holders, all joint holders must sign the relevant parts <strong>of</strong> the Application <strong>For</strong>m in the<br />
same order <strong>and</strong> as per the specimen signatures recorded with the Company.<br />
(g) In case <strong>of</strong> joint applicants, refunds <strong>and</strong> all payments will be made to the person whose name<br />
appears first on the application form <strong>and</strong> all communications will be addressed to him/her. To<br />
prevent any fraudulent encashment <strong>of</strong> refund orders by third parties, the Sole/First Applicant must<br />
indicate Saving / Current Account number <strong>and</strong> the name <strong>of</strong> the bank <strong>and</strong> its branch with whom such<br />
account is held in the space provided in the CAF for the purpose so that Refund Orders are printed<br />
with these details after the name. Applications without this information are liable to be rejected.<br />
(h) The Application <strong>For</strong>m should be presented to the Bank in its entirety. If any <strong>of</strong> the Part(s) A, B, C<br />
<strong>and</strong> D <strong>of</strong> the Application <strong>For</strong>m(s) is /are detached or separated, such application will forthwith be<br />
rejected.<br />
(i) All shareholders must submit the CAF along with remittance only to the Bankers to the Issue<br />
mentioned elsewhere in this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> <strong>and</strong> not to the Company, the Registrar or the Lead<br />
Manager.<br />
(j) Any dispute or suit action or proceedings arising out <strong>of</strong> or in relation to this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> or in<br />
respect <strong>of</strong> any matter or thing herein contained <strong>and</strong> claimed by either party against the other shall be<br />
133
instituted or adjudicated upon or decided solely by the appropriate Court where Registered Office <strong>of</strong><br />
the Company is situated.<br />
(k) The last date for receipt <strong>of</strong> CAF along with the amount payable is ______________. However, the<br />
Board will have the right to extend the same for such period as it may determine from time to time,<br />
but not exceeding 60 days from the date <strong>of</strong> opening <strong>of</strong> the subscription list. If the CAF together with<br />
the amount payable there under is not received by the bankers to the issue on or before the closure <strong>of</strong><br />
the banking hours on the aforesaid date, or such date as may be extended by the Board, the <strong>of</strong>fer<br />
contained in this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> shall be deemed to have been declined <strong>and</strong> the Board shall be at<br />
liberty to dispose the Rights hereby <strong>of</strong>fered.<br />
<strong>For</strong> further instructions please read CAF carefully.<br />
DEMATERIALISATION<br />
As per the provisions <strong>of</strong> the Depositories Act, 1996, the shares <strong>of</strong> a body corporate may be held in<br />
dematerialized form i.e. not in the form <strong>of</strong> physical certificates but be fungible <strong>and</strong> be represented by the<br />
statement issued through electronic mode. The <strong>equity</strong> shares <strong>of</strong> <strong>Kilburn</strong> Engineering Limited are traded<br />
in the demat segment The Company has also entered into a tripartite agreement dated 8 th April , 2002<br />
with the National Securities Depository Limited(NSDL) <strong>and</strong> Intime Spectrum Registry Ltd for<br />
dematerialization <strong>of</strong> the <strong>equity</strong> shares <strong>of</strong> the Company. The ISIN No. granted to the <strong>equity</strong> shares <strong>of</strong> the<br />
Company is INE 338F01015. The Company has also entered into a tri partite agreement dated 18 th<br />
October, 2005 with Central Depository ( India) Limited <strong>and</strong> Intime Spectrum Registry Ltd. for<br />
dematerialisation <strong>of</strong> <strong>equity</strong> shares <strong>of</strong> the Company.<br />
An applicant has the option to seek allotment in physical or demat mode. An applicant who seeks<br />
allotment in demat mode must have atleast one Beneficiary Account with any <strong>of</strong> the Depository<br />
Participants (DP) <strong>of</strong> NSDL registered with SEBI, prior to the application. Such applicants must<br />
necessarily fill in the details (including the Beneficiary Account Number <strong>and</strong> Depository Participant’s ID<br />
Number) appearing under the head “Request for shares in electronic form” in the CAF.<br />
Applicant must indicate in the CAF, the number <strong>of</strong> shares they wish to receive in electronic form<br />
out <strong>of</strong> the total number <strong>of</strong> <strong>equity</strong> shares applied for. In case <strong>of</strong> partial allotment, shares will first be<br />
allotted in electronic form <strong>and</strong> the balance, if any, will be allotted in physical form.<br />
Names in the CAF should be identical to those appearing in the account details in the Depository. In<br />
case <strong>of</strong> joint holders, the name should necessarily be in the same sequence as they appear in the account<br />
details in the Depository.<br />
No separate application for demat <strong>and</strong> physical shares is to be made. If such applications are made the<br />
application for physical shares will be treated as multiple applications <strong>and</strong> rejected accordingly. It may<br />
be noted that electronic shares can be traded only on the stock exchanges having electronic connectivity<br />
with NSDL.<br />
Non transferable allotment letters/ refund orders will be directly sent to the applicant by the Registrar to<br />
the Issue<br />
The applicant is responsible for the correctness <strong>of</strong> the applicants demographic details given in the share<br />
application form vis-à-vis those with his/her DP. Equity shares allotted in demat mode will be credited<br />
directly to the respective Beneficiary Account.<br />
MODE OF PAYMENT<br />
<strong>For</strong> Resident Applicants<br />
Payment(s) must be made by cash or by cheque/dem<strong>and</strong> draft <strong>and</strong> drawn on any bank (including a cooperative<br />
bank) which is situated at <strong>and</strong> is a member or a sub-member <strong>of</strong> the Bankers' Clearing House<br />
located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF.<br />
Only one mode <strong>of</strong> payment should be used. Money orders, postal orders <strong>and</strong> outstation cheques will not<br />
be accepted <strong>and</strong> applications accompanied by any such instruments will be rejected.<br />
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Shareholders/Applicants residing at places other than those mentioned in the CAF <strong>and</strong> applicants who<br />
wish to send their applications but not having collection centres should send their application by<br />
Registered Post, ONLY to the Registrar to the Issue, Intime Spectrum Registry Limited, enclosing a<br />
dem<strong>and</strong> draft drawn on a clearing Bank <strong>and</strong> payable at Mumbai ONLY net <strong>of</strong> bank charges <strong>and</strong> postal<br />
charges, before the closure <strong>of</strong> the issue.<br />
Such cheque/drafts should be payable to "(Name <strong>of</strong> The Bank)-A/c – KILBURN ENGINEERING<br />
LTD. - RIGHTS ISSUE". All cheques/ drafts must be crossed 'A/c Payee only’. No receipt will be<br />
issued for the application money received. However, the Collection Centre receiving the application will<br />
acknowledge receipt <strong>of</strong> the application by stamping <strong>and</strong> returning the acknowledgement slip at the<br />
bottom <strong>of</strong> each CAF. The Company is not responsible for any postal delay/ loss in transit on this<br />
account.<br />
Application will not be accepted by the Lead Manager or by the Company<br />
<strong>For</strong> Non-Resident Applicants/ FIIs<br />
Payments by Non-Resident Shareholders will be accepted by Indian Rupee <strong>Draft</strong>s purchased abroad or<br />
cheques/drafts drawn on Non-Resident External Account (NRE Account) or <strong>For</strong>eign Currency Non-<br />
Resident Account (FCNR Account) maintained anywhere in India but payable at Mumbai or by<br />
Telegraphic Transfer in favour <strong>of</strong> the collecting Bankers by the concerned shareholders.<br />
However, in case shares are held on a non-repatriable basis, payment may also be made by cheque /draft<br />
drawn on Non-Resident Ordinary Account (NRO A/c.) maintained anywhere in India but payable at<br />
Mumbai. Such cheques/drafts should be drawn in favour <strong>of</strong> " KILBURN ENGINEERING LTD -<br />
RIGHTS ISSUE - NRI” payable at Mumbai, India <strong>and</strong> shall be crossed A/c. Payee Only, Banker’s<br />
Certificate regarding source <strong>of</strong> payment must be submitted with the CAFs wherever necessary.<br />
The CAF along with cheques/drafts should be deposited with any <strong>of</strong> the branches <strong>of</strong> the Bankers to the<br />
Issue nominated for this purpose. The certificate <strong>of</strong> inward remittance, if any, must be sent only to the<br />
Registrar to the Issue, Intime Spectrum Registry Limited, quoting the details <strong>of</strong> folio no. <strong>and</strong> the name<br />
<strong>and</strong> address <strong>of</strong> the branch <strong>of</strong> the Bankers to the Issue where CAF has been deposited before the closure<br />
<strong>of</strong> the issue.<br />
DISPOSAL OF APPLICATIONS AND APPLICATION MONIES<br />
The Board, reserves its full, unqualified <strong>and</strong> absolute right to accept or reject any application in whole or<br />
in part in consultation with the Designated Stock Exchange without assigning any reason there<strong>of</strong>, in case<br />
the application is not made in terms <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong>. In case an application is rejected in full, the<br />
application money received will be refunded to the first named applicant within six week from the date<br />
<strong>of</strong> closure <strong>of</strong> the Issue in accordance with Section 73 <strong>of</strong> the Act. If there is delay <strong>of</strong> refund <strong>of</strong> application<br />
money by more than 8 days after the Company becomes liable to pay (i.e. forty two days after the closure<br />
<strong>of</strong> Issue), the Company will pay interest for the delayed period at the rate prescribed under sub-section<br />
(2) <strong>and</strong> (2A) <strong>of</strong> Section 73 <strong>of</strong> the Act.<br />
ALLOTMENT / REFUND<br />
A) <strong>For</strong> applications made by Cheques/<strong>Draft</strong>s<br />
The Company will issue <strong>and</strong> dispatch letter <strong>of</strong> allotment/securities certificate <strong>and</strong>/or letter <strong>of</strong> regret along<br />
with the refund orders or credit the allotted securities to the respective beneficiaries account, if any,<br />
within a period <strong>of</strong> six weeks from the date <strong>of</strong> closure <strong>of</strong> issue. If such money is not repaid with 8 days<br />
from the day the company becomes liable to pay it, the company shall pay that money with interest as<br />
stipulated under Section 73 <strong>of</strong> the Companies Act, 1956. Refunds, if any, will be made along with<br />
Allotment <strong>Letter</strong>s <strong>and</strong> /or Regret <strong>Letter</strong>s by refund order / pay order drawn on the Bankers to the<br />
Company <strong>and</strong> will be dispatched within 6 weeks from the date <strong>of</strong> closure <strong>of</strong> Issue, by Registered Post if<br />
the amount <strong>of</strong> such refund exceeds Rs.1500/-. Such cheque refund order / pay order will be payable at<br />
par during their validity period at all centres where the applications are received. In case <strong>of</strong> joint<br />
applications, Refund Orders, if any, will be made out in the First applicant's name <strong>and</strong> all communication<br />
will be addressed to the person whose name appears on the CAF.<br />
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B) <strong>For</strong> application by Non-Resident Indians / <strong>For</strong>eign Institutional Investors (FIIs)<br />
In case <strong>of</strong> Non-Resident Indians/FIIs who remit their application money from funds held in<br />
NRE/FCNR/NRO<br />
Accounts, refund/payment <strong>of</strong> interest <strong>and</strong> other disbursements, if any, shall be credited to such account,<br />
details <strong>of</strong> which should be furnished in the column provided for that purpose in the CAF. In case <strong>of</strong> nonresidents<br />
who remit their application money through Indian Rupee drafts purchased from abroad,<br />
refunds/payments <strong>of</strong> interest <strong>and</strong> other disbursements, if any, will be made in US dollars at the exchange<br />
rate prevailing at such time, subject to the permission <strong>of</strong> the RBI. The Company will not be responsible<br />
for any loss on account <strong>of</strong> exchange fluctuations for converting the Indian Rupees amount into US<br />
Dollars.<br />
LETTERS OF ALLOTMENT / SHARE CERTIFICATES<br />
Share certificate, letter <strong>of</strong> allotment or letter <strong>of</strong> regret as the case may be will be despatched to the<br />
registered address <strong>of</strong> the first named applicant <strong>and</strong>/or the respective beneficiary accounts will be credited<br />
within six weeks, from the date <strong>of</strong> closure <strong>of</strong> the Issue. In case the allotment is made in physical form,<br />
<strong>and</strong> if letter <strong>of</strong> allotment is issued, the relevant share certificate will be dispatched within three months<br />
from the date <strong>of</strong> allotment in exchange for the letter <strong>of</strong> allotment. Allottees are requested to preserve such<br />
letter <strong>of</strong> allotment (if any) to be exchanged later for share certificates.<br />
DISPOSAL OF APPLICATIONS AND APPLICATION MONEY<br />
(a) The Board <strong>of</strong> the Company or Committee <strong>of</strong> Directors authorised in this behalf by the Board <strong>of</strong> the<br />
Company reserves its full, unqualified <strong>and</strong> absolute right to accept or reject any application in whole or<br />
in part in consultation with BSE without assigning any reason there<strong>of</strong>. If any application is rejected in<br />
full the entire application money will be refunded to the applicant in accordance with the provisions <strong>of</strong><br />
Section 73 <strong>of</strong> the Companies Act, 1956. Where the applicant is allotted in part, the balance <strong>of</strong> the<br />
application money will be refunded to the applicant in accordance with the provisions <strong>of</strong> Section 73 <strong>of</strong><br />
the Companies Act, 1956.<br />
(b)Refund will be made by cheques/ pay orders drawn on refund bankers <strong>and</strong> bank charges, if any, for<br />
encashing such cheques or pay orders will be payable by the applicant. Such cheques or pay orders will<br />
however, be payable at par at the branches <strong>of</strong> the refund bankers located at all places where applications<br />
are accepted or such places as may be approved by BSE.<br />
( c )Allotment <strong>of</strong> Equity Shares <strong>and</strong> export <strong>of</strong> <strong>Letter</strong>s <strong>of</strong> Allotment/share certificate(s) to NRI/OCB/Non-<br />
Residents would be subject to the approval <strong>of</strong> the Reserve Bank <strong>of</strong> India under the FEMA, if required.<br />
(d)The Company shall provide adequate funds to the Registrar to the Issue for complying with<br />
requirement <strong>of</strong> despatch <strong>of</strong> refund cheques/<strong>Letter</strong>(s) <strong>of</strong> Allotment / share certificate(s) by registered<br />
post/under postal certificate.<br />
BASIS OF ALLOTMENT<br />
The basis <strong>of</strong> allotment shall be finalised by the Board <strong>of</strong> the Company or Committee <strong>of</strong> Directors <strong>of</strong> the<br />
Company authorised in this behalf by the Board <strong>of</strong> the Company. The Board <strong>of</strong> the Company or the<br />
Committee <strong>of</strong> Directors as the case may be, will proceed to allot the Equity Share in consultation with<br />
BSE in the following order <strong>of</strong> priority.<br />
i. Full allotment to the <strong>equity</strong> shareholders who have applied for their Rights entitlement either in full or<br />
in part <strong>and</strong> also to the renouncees who have applied for Equity Shares renounced in their favour either in<br />
full or in part (subject to other provisions contained under the paragraph titled "Renunciation").<br />
ii. Allotment to the <strong>equity</strong> shareholders who having applied for their full Rights entitlement <strong>of</strong> Equity<br />
Share <strong>of</strong>fered to them <strong>and</strong> have applied for additional Equity Shares, provided there is surplus available<br />
after full allotment under (i) above <strong>and</strong> shall be at the absolute discretion <strong>of</strong> the Board <strong>of</strong> the Company or<br />
the Committee <strong>of</strong> the Directors authorised in this behalf by the Board <strong>of</strong> the Company <strong>and</strong> the decision<br />
<strong>of</strong> the Board <strong>of</strong> the Company or the Committee <strong>of</strong> the Directors shall be final <strong>and</strong> binding. The allotment<br />
<strong>of</strong> such additional Equity Shares will be made as far as possible on an equitable basis with reference to<br />
the number <strong>of</strong> Equity Shares held by them on the Record Date in consultation with BSE.<br />
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iii. Allotment to any other shareholder(s)/beneficial shareholder(s) as the Board <strong>of</strong> the Company or<br />
Committee <strong>of</strong> Directors <strong>of</strong> the Company authorised in this behalf by the Board <strong>of</strong> the Company may, in<br />
their absolute discretion, deem fit, provided there is surplus available after making full allotment under<br />
(i) <strong>and</strong> (ii) above.<br />
iv. The Equity Shares remaining unsubscribed after making full allotments under i, ii <strong>and</strong> iii above, shall<br />
be disposed <strong>of</strong>f by the Board in any manner as it in its sole discretion deems fit <strong>and</strong> the decision <strong>of</strong> the<br />
Board in this regard shall be final <strong>and</strong> binding<br />
The allotment to the renouncee(s) in whose favour the renunciation has been exercised shall be subject to<br />
the condition that the Board <strong>of</strong> the Company or Committee <strong>of</strong> Directors shall have the discretion to reject<br />
such request without assigning any reasons there<strong>of</strong>. In the event <strong>of</strong> over subscription, allotment will be<br />
made only within the overall size <strong>of</strong> the Rights Issue.<br />
DISPATCH OF SHARE CERTIFICATES/LETTERS OF ALLOTMENT/REFUND ORDER<br />
All the pay orders / refund orders <strong>and</strong> <strong>Letter</strong>(s) <strong>of</strong> Allotment / Share Certificates will be despatched to the<br />
first named / sole applicant at his / her own risk. The Refund Orders will be payable at par in India at all<br />
the centres where the applications were originally accepted. The instruments will be marked “Account<br />
Payee Only” <strong>and</strong> in<br />
the name <strong>of</strong> the sole/first applicant. Bank charges, if any, for encashing such refund orders / pay orders<br />
will be payable by the applicants.<br />
The Company has given an undertaking that the requisite funds will be made available to the Registrar<br />
for complying with the requirement <strong>of</strong> despatch <strong>of</strong> refund orders / allotment letters. The Company shall<br />
ensure despatch <strong>of</strong> refund orders <strong>of</strong> value over Rs.1,500/- by Registered Post only <strong>and</strong> adequate funds<br />
will be made available to the Registrar.<br />
INTEREST IN CASE OF DELAY ON ALLOTMENT/DESPATCH<br />
The Company agrees that as far as possible allotment <strong>of</strong> securities <strong>of</strong>fered to the existing shareholders on<br />
Rights basis shall be made within 30 days <strong>of</strong> the closure <strong>of</strong> the issue.<br />
The Company agrees that it shall pay interest at the rate <strong>of</strong> 15% per annum if the allotment has not been<br />
made <strong>and</strong>/or the <strong>equity</strong> share allotment letters/refund orders have not been despatched <strong>and</strong> relevant<br />
<strong>equity</strong> shares have not been credited to the beneficiary account <strong>of</strong> the investors within 30 days from the<br />
date <strong>of</strong> closure <strong>of</strong> the issue.<br />
LAST DATE FOR SUBMISSION OF CAF<br />
The last date for receipt <strong>of</strong> CAF by the Bankers to the Issue together with the amount payable on<br />
application is _____________. If the relevant CAF together with amount payable there under is not<br />
received by the Bankers/Registrar to the Issue on or before the close <strong>of</strong> banking hours on the aforesaid<br />
last date the <strong>of</strong>fer contained in this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> shall be deemed to have been declined <strong>and</strong> the Board<br />
shall be at liberty to dispose <strong>of</strong> the <strong>equity</strong> shares hereby <strong>of</strong>fered as provided under "Basis <strong>of</strong> Allotment".<br />
UNDERTAKING BY THE COMPANY<br />
The Company undertakes that:<br />
a) The complaints received in respect <strong>of</strong> the Issue shall be attended to by the Company expeditiously <strong>and</strong><br />
satisfactorily;<br />
b) All steps for completion <strong>of</strong> the necessary formalities for listing <strong>and</strong> commencement <strong>of</strong> trading at all<br />
stock exchanges where the securities are to be listed are taken within seven working days <strong>of</strong> finalisation<br />
<strong>of</strong> basis <strong>of</strong> allotment;<br />
c) Funds required for despatch <strong>of</strong> refund orders/allotment letters/certificates by registered post shall be<br />
made available to the Registrar to the Issue by the Company.<br />
d) Certificates <strong>of</strong> securities/refund orders <strong>of</strong> the Non-Resident/Non Resident Indians shall be dispatched<br />
within the specified time subject to receipt <strong>of</strong> approval from RBI/FIPB, if required.<br />
e) No further issue <strong>of</strong> shares shall be made till the shares <strong>of</strong>fered through this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> are listed or<br />
till the application moneys are refunded on account <strong>of</strong> non-listing, under-subscription, etc.<br />
137
UTILIZATION OF ISSUE PROCEEDS<br />
a) All monies received out <strong>of</strong> the issue <strong>of</strong> shares to the investors shall be transferred to a separate bank<br />
account other than the bank account referred to in sub-section (3) <strong>of</strong> Section 73 <strong>of</strong> the Act;<br />
b) Details <strong>of</strong> all monies utilised out <strong>of</strong> the Issue shall be disclosed under an appropriate separate head in<br />
the balance sheet <strong>of</strong> the Company indicating the purpose for which such monies has been utilised <strong>and</strong><br />
c) Details <strong>of</strong> all unutilized monies out <strong>of</strong> the Issue <strong>of</strong> shares, if any, shall be disclosed under an<br />
appropriate separate head in the Balance Sheet <strong>of</strong> the Company indicating the form in which such<br />
unutilized monies have been invested.<br />
The funds received against this rights issue to be kept in a separate bank account <strong>and</strong> the Company will<br />
not have any access to such funds unless it satisfies BSE (Designated Stock Exchange) with suitable<br />
documentary evidence that the minimum subscription <strong>of</strong> 90% <strong>of</strong> the issue has been received by the<br />
Company.<br />
138
OTHER INFORMATION<br />
The following contracts mentioned below (not being contracts entered into in the ordinary course <strong>of</strong><br />
business carried on by the Company) are or may be deemed to be material contracts. Copies <strong>of</strong> these<br />
contracts along with documents referred below may be inspected at the Registered Office <strong>of</strong> the<br />
Company between 10.00 a.m. <strong>and</strong> 1.00 p.m. on any working day until the closing <strong>of</strong> the subscription list.<br />
MATERIAL CONTRACTS AND DOCUMENTS<br />
The Contracts referred to in para (A) below (not being contracts entered into in the ordinary course <strong>of</strong> the<br />
business carried on by the Company or entered into more than two years before the date <strong>of</strong> this <strong>Letter</strong> <strong>of</strong><br />
<strong>Offer</strong>) which are or may be deemed material, have been entered into by the Company.<br />
The contracts together with the documents referred to in paragraph (B) below, copies <strong>of</strong> all <strong>of</strong> which<br />
have been attached to the copy <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> may be inspected at the Registered Office <strong>of</strong> the<br />
Company between _11.00 a.m. to 1.00 p.m. on any working day from the date <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong><br />
until the closing <strong>of</strong> the subscription list.<br />
A. MATERIAL CONTRACTS<br />
1. Copy <strong>of</strong> MOU dated 13 th October, 2005 between <strong>Kilburn</strong> Engineering Limited <strong>and</strong> IDBI<br />
Capital Market Services Limited, Lead Manager to the Issue.<br />
2. Copy <strong>of</strong> MOU dated 27 th October, 2005 between <strong>Kilburn</strong> Engineering Limited <strong>and</strong> Intime<br />
Spectrum Registry Ltd., Registrar to the Issue.<br />
3. Copy <strong>of</strong> Tri- Partite Agreement dated 8 th April, 2002 between <strong>Kilburn</strong> Engineering Limited,<br />
Intime Spectrum Registry Ltd. <strong>and</strong> National Securities Depository Limited.<br />
4. Copy <strong>of</strong> Tri-Partite Agreement dated 18 th October, 2005 between <strong>Kilburn</strong> Engineering Limited<br />
Intime Spectrum Registry Ltd. <strong>and</strong> Central Depository Services (India) Limited.<br />
5. Copy <strong>of</strong> the Collaboration Agreements with Nara Machinery Co. Ltd. & Carrier Vibrating<br />
Equipment Ltd.<br />
B. DOCUMENTS FOR INSPECTION<br />
6. Copy <strong>of</strong> Memor<strong>and</strong>um <strong>and</strong> Articles <strong>of</strong> Association <strong>of</strong> the Company.<br />
7. Copy <strong>of</strong> Certification <strong>of</strong> Incorporation <strong>of</strong> the Company<br />
8. Copies <strong>of</strong> Annual Report for the FY 2000, 2001, 2002 ,2003, 2004 & 2005.<br />
9. Copy <strong>of</strong> Notice for EGM dated 10/08/2005 <strong>and</strong> extract <strong>of</strong> minutes <strong>of</strong> EGM passing resolution under<br />
Sec. 81(1A) <strong>of</strong> Companies Act, 1956.<br />
10. Copy <strong>of</strong> resolution dated 27 th May, 2005 passed by the Board <strong>of</strong> Directors regarding present rights<br />
issue.<br />
11. Copies <strong>of</strong> Prospectus dated 16/03/1990 issued in respect <strong>of</strong> the Initial Public <strong>Offer</strong> by the Company.<br />
12. Copy <strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> dated 10/03/1993 issued in respect <strong>of</strong> the Rights Issue.<br />
13. Copy <strong>of</strong> Scheme <strong>of</strong> Rehabilitation dated 14/05/2004 approved by BIFR.<br />
14. Copy <strong>of</strong> Progress Report <strong>of</strong> the Sanction Scheme as on 30 th June, 2005.<br />
15. Copy <strong>of</strong> certificate 633/2005-06 dated 01/11/2005issued by Deloitte Haskins & Sells Chartered<br />
Accountants <strong>and</strong> Statutory Auditors <strong>of</strong> the Company in terms <strong>of</strong> Part II Schedule II <strong>of</strong> The<br />
Companies Act 1956 including capitalization statement, taxation statement <strong>and</strong> accounting ratios<br />
16. Copy <strong>of</strong> <strong>Letter</strong> 631/2005-06 dated 01/11/2005 received from Deloitte Haskins & Sells Chartered<br />
Accountants <strong>and</strong> Statutory Auditors <strong>of</strong> the Company advising the Company on the Tax Benefits<br />
available to the Company <strong>and</strong> its shareholders.<br />
17. Copy <strong>of</strong> certificate no. 530/200-06 dated 30 th September, 2005 received from Deloitte Haskins &<br />
Sells Chartered Accountants <strong>and</strong> Statutory Auditors <strong>of</strong> the Company regarding the deployment <strong>of</strong><br />
funds received from Dufflaghur Investments Limited <strong>and</strong> Metals Centre Limited.<br />
18. Copy <strong>of</strong> quotation received from Godrej Infotech Limited in respect <strong>of</strong> the ERP Package to be<br />
implemented<br />
19. Copy <strong>of</strong> quotation received from Muk<strong>and</strong> Ltd. in respect <strong>of</strong> the EOT Crane to be installed.<br />
20. Copy <strong>of</strong> the letter dated 12 th September, 2005 to the Registrar <strong>of</strong> Companies, Kolkata for extension<br />
<strong>of</strong> the financial year to a period <strong>of</strong> 18 months ending March 31, 2006.<br />
21. e-mail from ICRA being the source <strong>of</strong> the Heavy Engineering Sector Report for May 2005<br />
consenting to publish the report/ extracts <strong>of</strong> the reports.<br />
22. Copy <strong>of</strong> <strong>Letter</strong> dated 01/07/2005 received from Metals Centre Limited regarding withdrawal <strong>of</strong><br />
share application money <strong>and</strong> conversion <strong>of</strong> the same into interest free loan.<br />
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23. Copy <strong>of</strong> <strong>Letter</strong> dated 01/07/2005 received from Dufflaghur Investments Limited regarding<br />
withdrawal <strong>of</strong> share application money <strong>and</strong> conversion <strong>of</strong> the same into interest free loan.<br />
24. Copy <strong>of</strong> <strong>Letter</strong> dated 01/07/2005 received from Williamson Magor & Co. Ltd. regarding transfer <strong>of</strong><br />
the loan amount due to Dufflaghur Investments Limited from KEL in its name <strong>and</strong> agreeing to<br />
allotment <strong>of</strong> <strong>equity</strong> shares in lieu <strong>of</strong> the said amount in respect <strong>of</strong> its rights entitlement.<br />
25. Copies <strong>of</strong> following letters received in respect <strong>of</strong> renunciation <strong>of</strong> rights entitlement:<br />
Date <strong>of</strong> the <strong>Letter</strong> Name <strong>of</strong> entity renouncing its<br />
entitlement<br />
01/07/2005 Mcleod Russel India Limited<br />
26/07/2005 Shree Durga Agencies Limited<br />
26/07/2005 Nirvan Commercial Co. Ltd.<br />
01/07/2005 Ichamati Investments Pvt. Ltd.<br />
01/07/2005 United Machine Co. Ltd.<br />
26. Copies <strong>of</strong> audited financials for the FY 2003, 2004, 2005 <strong>of</strong> the following companies:<br />
Mcleod Russel India Limited, Shree Durga Agencies Limited, Nirvan Commercial Co. Ltd.,<br />
Ichamati Investments Pvt. Ltd., United Machine Co. Ltd., St<strong>and</strong>ard Batteries Ltd., Wlliamson Magor<br />
& co. Ltd., <strong>Kilburn</strong> Office Automation Ltd., <strong>Kilburn</strong> Chemicals Ltd., McNally Bharat Engineeing<br />
Co. Ltd., Eveready Industries India Ltd., WPIL, Metal Centre Ltd., Williamson Financial services<br />
Ltd., Dufflaghur Investments Ltd., Khaitan Investments Ltd.<br />
27. Copy <strong>of</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> issued under SEBI (SAST) Regulations, 1997 issued in respect <strong>of</strong> indirect<br />
acquisition <strong>of</strong> Williamson Tea Assam Ltd.<br />
28. Export Import License vide IEC No. 0289015324, dated: 28 th February, 1990<br />
29. Factory License license No. 50947 (Originally No. 62335), dated 13/02/2002<br />
30. Industry Licence No. IL:55(79) dated : 31.10.1979<br />
31. Endorsement <strong>of</strong> industrial licence in favour <strong>of</strong> KEL dated : 15.5.1990<br />
32. Copies <strong>of</strong> Acknowledgement received from Department <strong>of</strong> Industrial Development, Entrepreneur<br />
Assistance Unit.<br />
33. Central Excise Registration Certificate bearing Registration number AABCK3123E XM 002<br />
34. Application to MPCB, vide its letter no. KEL/HRD/07/2004-05 dated 28 th July, 2005, for renewal<br />
<strong>of</strong> the consent w.e.f. 01/08/1998 upto 31/07/2007.<br />
35. Copies <strong>of</strong> various Undertakings received from the Company.<br />
36. List <strong>of</strong> pending litigations/disputes against the Company, Group Companies <strong>and</strong> filed by the<br />
Company.<br />
37. Copy <strong>of</strong> in-principle approval received from BSE vide their letter no. ______________<br />
38. Copy <strong>of</strong> in-principle approval received from CSE vide their letter no. ______________<br />
39. Copy <strong>of</strong> SEBI observation letter No. _______________.<br />
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DECLARATION<br />
No statement made in this <strong>Draft</strong> <strong>Letter</strong> <strong>of</strong> <strong>Offer</strong> shall contravene any <strong>of</strong> the provisions <strong>of</strong> the Companies<br />
Act, 1956 <strong>and</strong> the rules made thereunder. All the legal requirements connected with the said issue as also<br />
the guidelines, instructions etc. issued by SEBI, Government <strong>and</strong> any other competent authority in this<br />
behalf have been duly complied with.<br />
Signed by the Directors <strong>of</strong> the Company<br />
Shri Deepak Khaitan<br />
Shri V.R. Sinha<br />
Shri S. Mukherjee<br />
Shri P.K. Khaitan<br />
Shri S.R. Dasgupta<br />
Shri. P.K. Mogal<br />
Shri A.U. Katra<br />
Shri Amritanshu Khaitan<br />
Sd/-<br />
Shri A. Suresh<br />
General Manager (Finance)<br />
Place: Kolkata<br />
Date: 11/11/2005<br />
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