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Public Announcement

For the attention of the shareholders of Gujarat JHM Hotels Limited

Registered Office: Near Bharti Park, Ambika Niketan, Surat - 395 007.

This Public Announcement is being issued by Fortune Financial Services (India) Limited, the Manager to the Offer, on behalf of M/s JHM Hotels Inc. (hereinafter referred to as 'The Acquirer’) pursuant to Regulation 11 (1) in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereto [SEBI (SAST) Regulations].


1. The Offer

1.1 M/s JHM Hotels Inc., a Company incorporated and registered under the laws of USA ('The Acquirer’)along with Mr. Hasmukh P. Rama (‘Persons acting in Concert’ or “PAC”) are voluntarily making this offer pursuant to Regulation 11 (1) of the SEBI (SAST) Regulations, The Acquirer is making an offer to the public shareholders of Gujarat JHM Hotels Limited to acquire 21,90,999 fully paid-up equity shares ('Shares') of Rs. 10/- each representing 32.35% of the paid- up equity share capital of Gujarat JHM Hotels at a price of Rs. 10/- (Rupees Ten only ) per share (“ Offer Price” ) payable in cash ( “The Offer”) subject to terms and conditions mentioned hereinafter.

1.2 The Offer is not conditional on any minimum level of acceptances.

1.3 The shares of Gujarat JHM Hotels Limited are listed on the Mumbai and Ahmedabad Stock Exchange. Based on available information, the shares of Gujarat JHM Hotels Limited are infrequently traded at all the said stock exchanges in terms of SEBI (SAST) Regulations. In view of the above, price of Rs.10/- per share, being face value, is kept as an Offer price.

1.4 M/s JHM Hotels Inc., The Acquirer, holds 42,52,251 equity shares representing 62.78% of paid up capital in Gujarat JHM Hotels Limited as on the date of this Public Announcement. The relatives of Mr. Hasmukh P. Rama, PAC, i.e. Mrs. Ila Rama, Mrs. Geeta Rama and Mrs. Daksha Rama hold 110,000 shares each (representing 4.87% of the paid-up capital) as of the date of this public announcement. The Acquirer or PAC have not acquired either directly or through any other person, any shares of Gujarat JHM Hotels Limited during the 12 months preceding the date of Public Announcement.

2. Information on M/s JHM Hotels Inc. (‘The Acquirer’) & Mr. Hasmukh P. Rama (‘PAC’)

2.1 M/s JHM Hotels Inc. (‘The Acquirer’)

a M/s JHM Hotels Inc., The Acquirer, is a company incorporated and registered under the laws of USA having its Registered office at Riverside Office Park, 880 South Pleasantburg Drive, Suite 3-G, Greenville, South Carolina 29607, USA.

b M/s JHM Hotels Inc. is engaged in the business of Investments in the Hotel Industry.

c Brief Financials of M/s JHM Hotels Inc. for the year ended December’2002 are Total income was US$ Nil , Loss after tax was US$ 3772 (equivalent to Rs.1.81 lacs), the equity share capital was US $ 26.53 lacs (equivalent to Rs. 1273.44 lacs) and Reserves were negative US $ 28554.71 (equivalent to negative Rs. 13.71 lacs). For the year ended 31st December, 2002 the Return on Networth was Nil %, Book value per share was US $ 0.98 (Equivalent to Rs.47.04), Earning per share was Rs. Nil.

2.2 Mr. Hasmukh P. Rama (‘PAC’)

a Mr. Hasmukh P. Rama, person acting in concert, is residing at 306, Huntington Road; Greenville, SC 29615 USA. He is Chairman and Chief Exeuctive Officer of JHM Hotels Inc.

b He is engaged in various businesses, principally related to lodging Industry.

C The networth of Mr. Hasmukh P. Rama is US$22,719,002 (equivalent to Rs. 109.05 crore) (Rupees One hundred and nine crore and five lacs only) as at 30.09.2002. The same is certified by M/s. Rajendra & Co., Chartered Accountants (Membership .No. 103316) , 1311, Dalamal Tower; 211, Nariman Point; Mumbai 400 021. Tel No. 22855770 vide their certificate dated 27th January 2003.

(Conversion Rate is assumed as 1 US $ = Rs.48)

3. Information on Gujarat JHM Hotels Limited (GUJARAT JHM HOTELS) (The Target Company)

3.1 Gujarat JHM Hotels is an existing public limited company incorporated on 4th September, 1985 under the Companies Act, 1956 having its registered office Near Bharti Park, Ambika Niketan, Surat 395 007.

3.2 The total issued, subscribed and paid-up capital of Gujarat JHM Hotels comprises of 67,73,250 fully paid-up equity shares of Rs.10/- each aggregating to Rs. 677.32 lacs. There are no partly paid-up shares.

3.3 Gujarat JHM Hotels is primarily engaged in running and operating a hotel in Surat.

3.4 Shares of Gujarat JHM Hotels are listed on Mumbai and Ahmedabad Stock Exchanges. However the shares are infrequently traded in terms of SEBI (SAST) Regulations.

3.5 Financial information of Gujarat JHM Hotels for the year ended March 31, 2002- Total revenue was Rs. 1129.05 lacs, Loss after tax was Rs. 169.25 lacs, The paid-up equity capital was Rs. 677.32 lacs and Reserves were negative Rs. 522.91 lacs. For the year ended 31st March, 2002 Return on Networth was Nil %, Book value per share was Rs.2.28 and Earning per share was negative Re. 2.50.

3.6 The Company has not revalued its assets since incorporation.

4. Reasons for the Acquisition and Offer and Future Plans about the Target Company

4.1 The Acquirer proposes to do a consolidation of existing holdings of shares in Gujarat JHM Hotels and delist the same from the exchanges. This offer of 32.35% of the Equity capital i.e. 21,90,999 shares of Gujarat JHM Hotels is made in terms of Regulation 11 (1) of SEBI (SAST) Regulations.

4.2 The Acquirer wants to utilise its existing resources for managing the Target Company’s hotel in Surat. The Acquirer does not have any plan to dispose of or otherwise encumber any assets of Gujarat JHM Hotels in the two years from the date of closure of the Offer except in the ordinary course of business of Gujarat JHM Hotels. However re-organization and/or streamlining of various businesses may be considered for commercial reasons and operational efficiencies.

5. Statutory Approvals & Conditions of the Offer.

5.1 The Acquirer has permission from the Secretarial of Industrial Approvals (‘SIA’), Government of India for acquiring shares from the shareholders of the Target Company.

5.2 As on date there are no other statutory approvals required for this offer. The Offer shall be subject to all statutory approvals that may become applicable prior to completion of the Offer.

5.3 In case of delay in receipt of statutory approvals, SEBI has power to grant extension of time to Acquirer for payment of consideration to shareholders, subject to Acquirer agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations. Further, if the delay occurs on account of willful default by Acquirer in obtaining the requisite approvals, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.

5.4 There is no Permission required from any Banks/FIs for this offer.

6. Delisting Option to the Acquirer in terms of Regulation 21(3)

a. If pursuant to this Offer, the public shareholding falls to 10% or below of the outstanding equity share capital of Gujarat JHM Hotels, then in accordance with SEBI (SAST) Regulations, The Acquirer will make a second Offer to buy out the remaining outstanding equity shares held by the public shareholders within three months from closure of the Offer, at the same Offer Price, in terms of Regulations 21(3) of SEBI (SAST) Regulations and the second Offer would remain open for six months.

b. On completion of the second Offer, the Acquirer will request Gujarat JHM Hotels to approach the Stock Exchanges, where the shares are listed for delisting the shares.

7. Financial Arrangements

7.1 The total fund requirement for the acquisition of 21,90,999 equity shares, being 32.35 % of the paid up equity capital of Gujarat JHM Hotels at Rs..10/- per share is Rs. 2,19,09,990/- (Rupees Two Crore Nineteen Lakh Nine Thousand Nine Hundred and Ninety only).

7.2 In accordance with Regulation 28 of the SEBI (SAST) Regulations, the Acquirer has created an Escrow Account in the form of a Fixed Deposit of Rs. 54,77,500/- (Rupees Fifty Four Lakhs Seventy Seven Thousand Five Hundred only) being 25% of the total consideration payable with HDFC Bank Limited, Parle Point Branch, Surat and a lien has been marked thereon in favour of Fortune Financial Services (India) Limited. The Manager to the Offer has been authorised to realise the value of the Escrow in terms of the SEBI (SAST) Regulations.

7.3 In case of a revision in the Offer price, the Acquirer would raise the amount in the escrow account to ensure compliance with Regulation 28 of SEBI (SAST) Regulations.

7.4 The Acquirer has adequate resources to meet the financial requirements of the Offer. The same is certified by M/s. Rajendra & Co., Chartered Accountants, (Membership No. 103316) vide their certificate dated January 27th, 2003

7.5 The Manager to the Offer is satisfied about the ability of Acquirer to implement the Offer in accordance with the SEBI (SAST) Regulations. The Offer will be implemented by utilizing the available resources in the hands of the acquirer and the person acting in concert.

8. Other Terms of the Offer

8.1 The Letter of Offer together with Form of Acceptance cum Acknowledgement will be mailed to the shareholders of Gujarat JHM Hotels, except the Acquirer, PAC, promoter group and parties to the agreement, whose names appear on the Register of Members of Gujarat JHM Hotels at the close of business hours on January 29, 2003 (specified date).

8.2 All the shareholders, except the Acquirer, PAC, promoter group and parties to the agreement, who own the shares of Gujarat JHM Hotels anytime before the closure of the offer are eligible to participate in the Offer.

8.3 Shareholders who wish to tender their shares will be required to send the Form of Acceptance cum Acknowledgement, original Share Certificate(s) and transfer deed(s) duly signed to the Manager to the Offer: - Fortune Financial Services (India) Ltd., 2nd Floor, K. K. Chambers, Sir P. T. Marg, Fort, Mumbai - 400 001, Telephone Number (022) 2207 7931 Fax number (022) 2207 2948 e-mail - gfaspl@bom5.vsnl.net.in Contact Person - Mr. Jinesh N. Mehta either by Hand Delivery between (11.00 a.m. to 5.00 p.m.) or by Registered Post on or before the closure of the Offer, i.e. April 17, 2003, in accordance with the instructions specified in the Letter of Offer and in the Form of Acceptance cum Acknowledgement.

8.4 Persons who own the shares but have not registered the same will also be required to submit documents to prove their title to the shares in respect of which they are accepting the Offer such as original broker’s contract note and transfer deed(s) executed by the registered holder of the shares. No indemnity is required from the unregistered owners.

8.5 Unregistered owners can send their application in writing to the Manager to the offer on a plain paper stating the Name, Address, Number of shares held, Number of shares offered, Distinctive Numbers, Folio Number, together with the original share certificate(s), valid transfer deeds and the original contract note issued by the SEBI registered broker through whom they acquired their shares.

8.6 In case of non-receipt of the Letter of Offer, persons who have sent the shares for transfer may make an application on plain paper stating their name, address, number of shares held, distinctive numbers, folio number and the number of shares in respect of which they are accepting the Offer along with the original share certificate(s) and duly signed transfer deed(s) during the period the Offer is open for acceptance i.e. between March 18, 2003 and April 17, 2003.

8.7 The Manager to the Offer will hold in trust the Shares / Share certificates, Form of Acceptance cum Acknowledgement, if any, and the transfer form/s on behalf of the shareholders of Gujarat JHM Hotels who have accepted the Offer, till the cheques/drafts for the consideration and/or the unaccepted shares/share certificates are dispatched/returned.

8.8 Unaccepted Share Certificates, transfer forms and other documents, if any, will be returned by Registered Post at the shareholders’/unregistered owners’ sole risk to the sole/first shareholder as per the details furnished by the beneficial owner in the Form of Acceptance cum Acknowledgement.

8.9 The shares of the Company are not in demat form hence relevant instructions are not disclosed.

8.10 A schedule of some of the major activities in respect of the Offer is given below:

Activity Day & Date
Specified Date Wednesday January 29, 2003
Letter of Offer to be posted to shareholders Tuesday March 04, 2003
Date of Opening of the Offer Tuesday March 18, 2003
Last date for a competitive bid Tuesday February 18, 2003
Last date for Revising the Offer Price / Number of Shares Tuesday April 08, 2003
Date of Closing of the Offer Thursday April 17, 2003
Date of communicating rejection/acceptance and payment of consideration for applications accepted Thursday May 15, 2003

9. General

9.1 “Shareholders who have accepted the offer by tendering the requisite documents, in terms of the Public announcement / Letter of offer, can withdraw the same upto three working days prior to the date of the closure of the offer"

9.2 If there is any upward revision in the Offer price till the last date of revision in terms of Regulation 26 i.e April 08, 2003 or withdrawal of the Offer, the same would be informed by way of a Public Announcement in the same newspapers where the original Public Announcement appeared. Such revised offer price would be payable to all the shareholders who have tendered their shares any time during the Offer and have been accepted under the Offer.

9.3 " If there is competitive bid :

i. The public offer under all the subsisting bids shall close on the same date.

ii. As the offer price can not be revised during 7 working days prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final offer price of each bid and tender their acceptance accordingly"

9.4 Neither Acquirers nor Sellers or the Target Company have been prohibited by SEBI from dealing in securities, in terms of directions issued u/s 11B of SEBI Act.

9.5 None of the Acquirers have acquired shares of Gujarat JHM Hotels Limited in the last twelve months nor do they hold any shares in Gujarat JHM Hotels Limited as on the date of this Public Announcement except those mentioned hereinabove in para 1.4.

9.6 Pursuant to Regulation 13 of SEBI (SAST) Regulations, the Acquirer has appointed Fortune Financial Services (India) Limited, as Manager to the Offer.

9.7 The Acquirer accepts full responsibility for the information contained in this Public Announcement and also for the obligations of the Acquirer as laid down in the SEBI (SAST) Regulations.

This Public Announcement will also be available on SEBI’s website at www.sebi.gov.in . Eligible persons to the Offer may also download a copy of Form of Acceptance-cum-Acknowledgement which will be available on SEBI’s website at www.sebi.gov.in from the Offer opening date March 18, 2003 and apply in the same.


fortune.JPG

ISSUED BY : MANAGER TO THE OFFER

FORTUNE FINACIAL SERVICES (INDIA) LIMITED

2nd Floor, K.K. Chambers, Sir Purshottamdas Thakurdas Marg,Fort, Mumbai 400 001.

Tel: (022) 2207 7931, Fax No. (022) 2207 2948 e-mail : gfaspl@bom5.vsnl.net.in

Contact Person - Mr. Jinesh N. Mehta

On behalf of the Acquirer

M/s JHM Hotels Inc.,

Riverside Office Park, 880 South Pleasantburg Drive,

Suite 3-G, Greenville, South Carolina 29607, USA.

Place : Mumbai

Date : January 28, 2003