LETTER OF OFFER
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
1. DISCLAIMER CLAUSE
IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF SAMPARK TRADING & FINANCE COMPANY LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER OR THE COMPANY WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT ACQUIRER DULY DISCHARGES HIS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER SYSTEMATIX CORPORATE SERVICES LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED APRIL 11, 2002 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS 1997 AND SUBSEQUENT AMENDEMENT(S) THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAYBE REQUIRED FOR THE PURPOSE OF THE OFFER.
2. DETAILS OF THE OFFER
2.1 Background of the offer
i. The Acquirer shall acquire the Shares free from all encumbrances.
ii. The negotiated price paid by the Acquirer for the acquisition of 1,15,730 equity shares is Rs. 10 per share.
iii. There are no partly paid shares.
iv. As per Regulation 22(16), it has been agreed under the agreement that in case of non compliance of any of the provisions of SEBI (SAST) Regulations 1997 the agreement shall not be acted upon by the sellers or Acquirers.
v. All disputes & differences concerning the meaning or interpretation of these covenants or the rights and obligation of the parties, the same shall be referred to arbitration in accordance with the provisions of the Arbitration & Conciliation Act, 1996, or any statutory modification or re- enactment thereof for the time being in force
vi. Pursuant to the agreement the above referred share holding of ST&FL would be transferred to the Acquirers thereby leading to a change in control. As a consequence provisions of Regulation (10) and Regulation (12) of the Regulations have been attracted.
vii. As on the date of the public announcement the Acquirers do not hold any other shares of ST&FL .
viii. The sellers- promoter shareholders of ST&FL who are selling their shares are as follows:
2.2 Details of the Proposed Offer
The Acquirer has announced their intention to make a public offer to the existing shareholders of ST&FL through a public announcement which was published in 30/03/2002 in compliance with Regulation 15 of the Regulations in all editions of ‘Free Press Journal' being on English National Daily, ‘Navasakthi’, being Hindi National Daily and also being regional language daily with wide circulation where registered office of ST&FL is located. The Public announcement is also available on the SEBI website at www.sebi.gov.in
1. The Acquirers hereby announces an offer under the Regulations, to acquire 49800 fully paid-up equity shares of Rs.10/- each of ST&FL representing 20% of its paid-up equity share capital from the remaining shareholders of ST&FL (other than "Sellers") on the terms and subject to the conditions set out below, at a price of Rs. 12/-(Rupees Twelve Only) per fully paid-up equity share (the "Offer Price") payable by way of Account Payee cheque/ demand draft..
2. The offer is unconditional and is not subjected to any minimum level of acceptance from the share holders
3. The Acquirers have not acquired any shares of the Target Company after the date of PA and up to the date of the Letter Of Offer.
3 BACKGROUND OF THE ACQUIRERS
The acquirers are individuals – Mr. Suresh Chand Agarwal and Mrs Anju Agarwal.
1) Mr. Suresh Chand Agarwal
Mr. Suresh Chand Agarwal, residing at Kunwar Palace, ring Road, Surat –395002, Ph-0261-8311777 is a post graduate in Arts. He has been in the business of Textiles and Consumer Goods for past 25 years.
2) Mrs. Anju Agarwal
Mrs. Anju Agarwal , residing at Kunwar Palace, ring Road, Surat –395002, Ph-0261-8311777 is a post graduate in Science. She has been in the business of Textiles and Consumer Goods for past 10 years.
a) Mrs Anju Agarwal is the wife of Mr. Suresh Chand Agarwal.
b) The networth of Mr. Suresh Chand Agarwal as on 31st March 2001 duly certified by R.K.Sethia Partner Sethia & Bohra Associates , Chartered Accountants having their office at #501, Hira Panna Market , Behind Vankar Sangh, Ring Road, Surat-395 002 is Rs 91,40,072/- ( rupees Ninety one lakhs forty thousand and seventy two only)
c) The networth of Mrs Anju Agarwal as on 31st March 2001 duly certified by R.K .Sethia Partner Sethia & Bohra Associates , Chartered Accountants having their office at #501, Hira Panna Market , Behing Vankar Sangh, Ring Road, Surat-395 002 is Rs 76,99,682/- ( Rupees Seventy Six lakhs Ninety nine thousand six hundred and eighty two only)
d) Acquirers are not Directors in any listed company
e) The acquirers are promoters of
1.Poonam Industries Limited
2.Kunvar Ajay Designer Sarees Limited
3. Tarika Silks Mills Private Limited
4.Poem Sarees Private Limited
5. Poonam Sarees Private Limited
6 Kunvar Ajay Foods Private Limited.
7. Dandi Salt Private Limited
8. True Detergent Private Limited
9. Prachin Silk Mills Private Limited
10. Suresh Chand suiting Shirting Private Limited
11. Kunvar Sarees Private Limited
12. Amrit Namak Private Limited.
13. Anu Suresh Designer Saree Private Limited
14. Neelam Silk Mills Limited
15. Sher-A- Punjab Atta Limited
f) `The financial information of the aforementioned companies are as follows
3.2 Rationale for the acquisition
The Acquirers having good experience in trading and financial activities have decided to acquire a company listed on the Stock Exchange of Mumbai . After substantial acquisition of shares as per this offer and change in the management of the ST&FL , they plan to promote the business of fast moving consumer goods in the company subject to the necessary approval.
3.3 Delisting Option
Pursuant to this offer the public shareholding will not be reduced to 10% or less of the voting capital of ST&FL, and therefore the provisions of regulation 21(3) of the regulations do not apply.
4. BACKGROUND OF THE TARGET COMPANY
1) M/s Sampark Trading and Finance Limited. was incorporated on 29th March 1985 and received the Certificate of Commencement of Business from the Registrar of Companies Maharashtra on 15th April 1985. The registered office of Sampark Trading and Finance Limited is located at #193, Abdul Rehman Street, Mumbai-400 003. ST&FL is carrying on the business of finances and trading..
The company came out with a Public issue of 2,48,000 Equity Shares of Rs10/- each for cash at par aggregating to Rs.24.8 lacs with the object to augment the long term resources of the company to start its activities and to meet the expenses of the issue. The equity shares are listed on The Stock Exchange, Mumbai
The Company is presently also engaged in finance and trading activities.
2) The authorized share capital of ST&FL is Rs. 25.00 lacs comprising of 2,50,000 equity shares of Rs. 10/- each. The issued, subscribed and paid-up share capital of the company of the company is Rs. 24.90 lacs comprised of 2,49,000 equity shares of Rs. 10/- each.
3) There are no convertible instruments (warrants/FCDs/PCDs) etc issued by the company.
4) The equity shares of the company are listed on the Stock Exchange of Mumbai and the company is complying with all listing requirements and there are no penal actions against the company.
5) The Board of Directors of ST&FL as on 30th march 2002 are as follows :
There are no directors representing the Acquirers on the Board of ST&FL..
6) Status Of Compliance With The Provisions Of Chapter II Of The Takeover Regulations (As Applicable)
The Acquirers have complied with the relevant Regulations of Chapter II of SEBI Take Regulations on 26th March 2002. The intimation has been sent to the Stock Exchange of Mumbai and to the Target Company .( Sampark Trading and Finance Company Limited)
a) By the promoters/Sellers/major shareholders.
b) By ST&FL (the target company)
6) There has been no merger / demerger or spin off during the last three years involving ST&FL. There has been no change of name of the company.
7) Brief Audited Financial results of ST&FL for the last three years and the unaudited results for the half year ended 30/12/2001 are as follows :
Profit & Loss Account (Audited)
(Rs. in 000)
8) Pre and Post-Offer share holding pattern of ST&FL before & after the offer assuming 20.00% acceptance, would be as follows :
5. OFFER PRICE AND FINANCIAL ARRANGEMENTS
5.1 Justification of Offer price
The equity shares of ST&FL are listed on The Stock Exchange, Mumbai (BSE) The equity shares of ST&FL have not been traded on the BSE, for last three years prior to the month in which the Public Announcement in terms of the Regulations has been made. Hence the equity shares are termed as infrequently traded in terms of Explanation (i) of Regulation 20(3) of the Regulations.
The offer price of Rs. 12/- per share of ST&FL has been determined in terms of Regulation 20 (3) of The Regulations taking into account following factors :
i. There has been no trading in equity shares of ST&FL on any of the Stock Exchange during the period of last three years. As a result Price/Earning ratio has not been computed and may not be relevant.
ii. Taking the above factors into consideration the offer price of Rs. 12/- per share is justified.
iii. The offer price shall not be less than the highest price paid by the Acquirer for any acquisition of the shares of ST&FL from the date of PA upto seven working days prior to the closure of the offer.
5.2 Financial arrangements:
1) The open offer by the acquirers is for the acquisition of upto 49800 Equity Shares of ST&FL . The offer is being made at a price of Rs 12/- (Two rupee twelve only) per equity share. Assuming the full acceptance by the shareholders, the total amount required to fulfill the offer obligation comes to Rs. 5,97,600/-(Rupees Five Lacs Ninety seven Thousand six hundred Only) being the maximum amount payable.
2) In accordance with regulation 28(4)(a) , the Acquirer has opened an Escrow Account with Canara Bank of India, Nanapura Branch, Mumbai for Rs.1,50,000/- (Rupees One Lacs Fifty Thousand Only) which is more than 25% of total consideration payable under the Offer. The acquirers have opened an Escrow Account with The acquirers has empowered the manager to the offer to operate the escrow account in accordance with the Regulations.
3) Acquirers have adequate resources to meet the financial obligations under the said offer. These liquid funds are lying in the form of investment in shares, cash and bank balance. The purchase of further shares through the proposed offer would be financed through internal resources and not through Banks, FIs or foreign sources i.e. from NRIs or otherwise.
4) R.K.Sethia Partner Sethia & Bohra Associates , Chartered Accountants having their office at #501, Hira Panna Market , Behing Vankar Sangh, Ring Road, Surat-395 002 has certified vide their certificate dated 26th March 2002 that Acquirer have sufficient means to fulfill all their obligations under the said offer and haves immediate access to the liquid assets as on date, for fulfilling all the obligations under the proposed acquisition of equity shares of ST&FL from the shareholders.
5) The Manager to the Offer is satisfied about the ability of Mr. Suresh Chand Agarwal and Mrs Anju Agarwal the acquirers to implement the offer and fulfill the obligations under the SEBI (SAST) Regulations, 1997. Firm arrangements for funds and money for payment through verifiable means are in place to fulfill the offer obligations.
6. TERMS AND CONDITIONS OF THE OFFER
a. This Offer will remain open on all working days (excluding Public Holidays) between May 10, 2002 , Friday and June 8, 2002, Saturday (both days inclusive). The equity shareholders of ST&FL who wish to avail of and accept this offer shall be required to send their acceptance in the manner stated above so as to reach on or before June 8, 2002.
b. Subject to the conditions governing this Offer as mentioned in the Letter of Offer, the acceptance of this Offer by Shareholders of ST&FL must be absolute and unqualified. Any acceptance to this Offer which is conditional and incomplete in any respect will be rejected without assigning any reason whatsoever
c. The form of acceptance along with the Share Certificate(s) and other documents delivered shall become acceptance on the part of the shareholder, but will become a fully valid and binding contract between shareholder and Acquirer only upon the fulfillment of all conditions mentioned herein.
d. On fulfillment of the conditions herein mentioned, the Acquirer will pay the Offer price by Account Payee Cheque / Demand Drafts which will be sent by Registered Post to the shareholders of ST&FL , whose acceptance to the offer are accepted by the Acquirer. The cheque /Demand Drafts will be drawn in the name of first named person in case of joint shareholders. In case of unregistered owners of the shares, payment will be made as per mandate given by such owner in the Form of Acceptance. for incorporating in the Cheque / Demand Draft..The last of date of communication of the acceptance , rejection and payment of consideration for application accepted is July 1, 2002.
Locked in shares:
Eligibility for accepting
.7. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT
7.1 Procedure for accepting the offer by eligible persons
a. The shareholders of ST&FL who qualify and who wish to avail of this Offer (hereinafter referred to as "Acceptors") will have to deliver the relevant documents mentioned below as applicable to the Registrar to the Offer at the following address:
No document should be sent to the Acquirer or to ST&FL (the Target Company)
· Registered Shareholders should enclose:
i. Form of Acceptance cum acknowledgment duly completed and signed in accordance with the instructions contained therein, by all shareholders (in case of joint holding) whose names appear on the share certificates.
ii. Original share certificate(s).
iii. Valid share transfer form(s) duly signed as transferors by all registered shareholders (in case of joint holding), in the same order and as per the specimen signatures registered with ST&FL and duly witnessed at the appropriate place,.
iv. In case the shares stand in the name of a sole shareholder, who is deceased, the notarised certified copy of the legal representation/succession obtained from a competent court.
The share certificate(s) and share transfer form(s) submitted by the acceptors of this offer will be held by the Registrar to the offer in trust for the acceptors of this offer, till the time the acquirers pay the price mentioned in above clause. Share transfer stamps shall be affixed by and the charges borne by the acquirers.
In case the shareholder has already sold his shares, he may kindly forward this offer document to the transferee or to the broker through whom the sale was effected.
· Unregistered owners should enclose :
i. Form of acceptance cum acknowledgment duly completed and signed in accordance with the instructions contained therein.
ii. Original share certificate(s)
iii. Original broker contract note of a registered broker of a recognized stock exchange.
iv. Valid share transfer form(s) as received from the market. The details of the buyer should be left blank. If the details of the buyer are filled in, the tender will not be valid under the offer. Acquirer's name will be subsequently filled in upon verifying the validity of the share transfer form.
v. No indemnity is needed from the unregistered shareholders.
b. In case of non-receipt of the offer document, the eligible shareholders who wish to accept the offer should communicate their acceptance in writing on a plain paper stating the name, address, no of shares held, distinctive numbers, folio number and number of shares offered to the Registrar to the Offer together with relevant share certificate(s), the transfer deed(s) and the original contract note issued by share broker of a recognized stock exchange through whom they acquired the equity shares before the close of the Offer, i.e.10th June 2002. Such shareholders may also download a copy of the form of acceptance cum acknowledgement from SEBI’s website at www.sebi.gov.in and use the same.
c. Where the number of shares offered for sale by the shareholders are more than the shares agreed to be acquired by Acquirer, Acquirer will accept the offers received from the share holders on a proportionate basis, in consultation with the Manager to the Offer taking care to ensure that the basis of acceptance is decided in a fair and equitable manner and does not result in non-marketable lots, provided that acquisition of shares from a shareholder shall not be less than the minimum marketable lot or the entire holding if it is less than the marketable lot. The marketable lot of ST&FL is 100 equity shares ..
d. On fulfillment of the conditions herein mentioned, the acquirers will complete all procedures relating to the offer within 30 days from the closure of the offer, including payment of consideration to the shareholders of ST&FL whose acceptance to the offer are accepted by the acquirers.
e. Shares not accepted under the offer will be sent to the shareholders / applicants at their sole risk by Registered post.
f. The Registrars to the Offer will hold in trust the Share certificates, Form of Acceptance cum Acknowledgement, if any, and the transfer form/s on behalf of the shareholders of ST&FL who have accepted the Offer, till the drafts / pay orders for the consideration and/ or the unaccepted share certificates are despatched/ returned.
8. DOCUMENTS FOR INSPECTION
The following documents are regarded as material documents and are available for inspection at the office of the Acquirer from 11.00 a.m. to 5.00 p.m. on any working day until the Offer closes:
1. Published copy of Public announcement
2. Chartered Accountant’s certificate dated 26th March 2002 certifying the net worth of the Acquirers Mr. Suresh Chand Agarwal and Mrs. Anju Agarwal.
3. Chartered Accountnats certificate dated 26th March , 2002 certifying that sufficient resources are available with the acquirers to meet the obligations under the present takeover offer
4. Memorandum of understanding for acquisition of 115,730 equity shares Rs 10/- each of the ST&FL Company
5. Copy of Memorandum and Articles of Association of ST&FL .
6. Copies of Annual reports of ST&FL for the year 1998-99,1999-2000 and 2000-01.
7. Deposit receipt from Canara Bank, Nanpura Branch confirming deposit of Rs 1,50, 000 and a lein in favour of the merchant Banker- systematix Corporate Services Limited.
8. . MOU between the Manager to the Offer and the Acquirers dated 26th march 2002
9. Copy of the letter , received from SEBI, dated April 22, 2002
9. DECLARATION BY THE ACQUIRER
i. The acquirers accept full responsibility for the information given in this LOF
ii. Further each of the acquirers would be severally and jointly responsible for ensuring compliance with the Regulations. SEBI can proceed legally or otherwise for any default or non compliance by the acquirers.
For and on behalf of the acquirers
Mr. Suresh Chand Agarwal
Mrs Anju Agarwal
FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT
Reg : Open offer to acquire upto 49,800 equity shares representing 20% of the paid up shares of SAMPARK TRADING AND FINANCIAL LIMITED by Mr. Suresh Chand Agarwal and Mrs Anju Agarwal (Acquirers) at a price of Rs. 12/- per share pursuant to SEBI (Substantial Acquisition of Shares & Takeovers) Regulations 1997
I/We, refer to the letter of offer dated ________________ for acquiring the equity shares held by me/us in ST&FL Limited.
I/We, the undersigned have read the letter of offer and understood its contents including the terms and conditions as mentioned therein.
I/We, accept the offer and enclose the original share certificate(s), duly signed transfer deed(s) in respect of my/our shares as detailed below.
I/We confirm that the equity shares of ST&FL which are being tendered herewith by me/us under this offer, are free from liens, charges and encumbrances of any kind whatsoever.
I/We note and understand that the original share certificate(s) and valid share transfer deed will be held in trust for me/us by the Registrar to the offer until the time the Acquirer gives the purchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents and signatures.
I/We authorise the Acquirer to accept the shares so offered which he may decide to accept in consultation with the Manager to the offer and in terms of the Letter of Offer and I/We further authorise the Acquirer to return to me/us, equity share certificate(s) in respect of which the offer is not found valid/not accepted, specifying the reasons thereof.
I/We authorise the Acquirer or the Registrar to send by registered post the draft/pay-order, in settlement of the amount to the sole/first holder at the address mentioned below.
Note : In case of joint holdings all must sign. A Corporation must affix its common seal.
So as to avoid fraudulent encashment in transit, the shareholder(s) may provide details of bank account of the first/sole shareholder and the consideration demand daft / pay-order will be drawn accordingly. I/We are Un-registered Shareholders of the Company. The payment may please be made in the name of __________________________________
Name of the Bank Branch _____________ Account Number __________
Savings/Current/(Others; please specify).
------------------------------------------------------------------------TEAR HERE------------------------------- ACKNOWLEDGMENT SLIP
All further correspondence, if any should be addressed to :
Corporate Services Limited,