LETTER OF OFFER

 

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

 

This Letter of Offer is sent to you as shareholder(s) of JRC Industries Limited. If you require any clarification about the action to be taken, you may please consult your stockbroker or investment consultant or the Manager to the Offer or the Registrar to the Offer. In case you have recently sold your equity shares in JRC Industries Limited please hand over this Letter of Offer and the accompanying Form of Acceptance cum Acknowledgement, Form of Withdrawal cum Acknowledgement and Transfer Deed(s) to the Member of Stock Exchange through whom the said sale was effected 

OPEN OFFER BY

1.

Name & Address of the Acquirer

 

 

 

 

 

RUSHABH SHAH

7/8 Lalkripa, 251, Hingwala Lane

Ghatkopar (East)

Mumbai-400 077

Phone no: 022-2511 9768

Email: srushabh@vsnl.com

2.

Name And Address of the Registered Office of the Target Company

JRC INDUSTRIES LIMITED

F/21, Vikram Chambers

Near Sales India, Ashram Road 

Ahmedabad 380 009

Tel No: 079-27545995 Fax No. 022-23462448

3.

Number and  Percentage of Equity Shares of the Target Company proposed to be acquired by the Acquirer through the Open Offer

15,01,980 Equity Shares being 30.00% of the total voting share capital of the total share capital from existing shareholders

4.

Offer Price and Mode of Payment

Rs. 4.25/- (Rupees Four and Paise Twenty Five only) per share by cash for each fully paid up Equity Share

5.

This Letter of Offer is made pursuant to Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof.

6.

The Offer is not a conditional Offer.

7.

The Offer is not Competitive Bid.

8.

As on the date of Public Announcement, to the best of knowledge of Acquirer, no Statutory Approvals are required to be obtained for the purpose of this Offer. However, the Offer would be subject to all Statutory Approvals that may become applicable at a later date before the completion of Offer.

9.

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 closure of the Offer i.e. 27th October 2007. The Withdrawal Form is also available on SEBI website (www.sebi.gov.in)

10.

If there is any upward revision/Withdrawal, if any, of the Offer Price by the Acquirer upto seven working days prior to the date of closure i.e. upto 27th October 2007, the same would be informed by way of a Public Announcement in the same newspapers where the original Public Announcement had appeared. Such revision in the Offer Price would be payable for all the equity shares tendered anytime during the Offer Period.

11.

A.

If there is a Competitive Bid:

 

1.

The Public Offer under all the subsisting bids shall close on the same date.

 

2.

As the Offer Price can not be revised during 7 (Seven) working days prior to the closing date of the Offers, 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.

12.

The copy of the Public Announcement and Letter of Offer (including Form of Acceptance cum Acknowledgement) are also available on the SEBI website (www.sebi.gov.in)

13.

All future correspondence, if any, should be addressed to the Registrar to the Offer at the following addresses:
       

2

 


MANAGER TO THE OFFER

PUNEET ADVISORY SERVICES PRIVATE LIMITED

1101, DALAMAL TOWERS, NARIMAN POINT, MUMBAI- 400 021

Contact Person : Mr. Kirit Damania

Contact Number (022) 22855351/ 52

Fax No. 22825417

E Mail: research@puneetindia.com  

 

REGISTRAR TO THE OFFER

Sharex Dynamics (India) Private Limited

17-B, DENA BANK BUILDING, 2ND FLOOR

HORNIMAN CIRCLE, FORT

MUMBAI 400 001

Contact Person : Mr. Henry Fernandes

Contact Number (022) 22702485/ 2264 1376, Fax No. 2264 1376.

E Mail: sharexindia@vsnl.com

 

SCHEDULE OF THE MAJOR ACTIVITIES OF THE OFFER

 

Sr. no

Activity

Original Date

Revised Date

1.

Date of Public Announcement (PA)

Thursday, 30-Nov-2006

Thursday, 30th November 2006

2.

Specified Date

Friday, 29-Dec-2006

Friday, 29th December 2006

3.

Last Date for a Competitive Bid(s)

Thursday, 21-Dec-2006

--

4.

Date by which Letter of Offer will be dispatched to the Shareholders

Friday, 12-Jan-2007

Friday 12th October 2007

5.

Offer Opening Date

Wednesday 24-Jan-2007

Wednesday, 17th October 2007

6.

Last Date for the Revision of the Offer Price / Number of Equity Shares.

Monday, 12-Feb -2007

Saturday, 27th October 2007

7.

Last date to withdraw acceptance tendered by shareholders

Friday, 16-Feb-2007

Saturday, 1st November  2007

8.

Offer Closing Date

Wednesday, 21-Feb-2007

Monday, 5th November 2007

9.

Date by which the acceptance / rejection would be intimated and the corresponding payment for the acquired equity shares and / or the unaccepted equity shares / share certificates will be dispatched.

Thursday, 8th March 2007

Wednesday 20th November 2007

 

RISK FACTORS

 

i.                     In the event that either(a) the regulatory approvals are not received in a timely manner, (b) there is any litigation to stay the Offer, or (c) SEBI instructs the Acquirer not to proceed with the Offer, then the Offer proceeds may be delayed beyond the schedule of activities indicated in this Letter of Offer. Consequently, the payment of consideration to the public shareholders of JRC, whose shares have been accepted in the Offer as well as the return of shares not accepted by the Acquirer, may be delayed.

 

ii.                   The Shares tendered in the Offer will be held in trust by the Registrar, till the completion of the Offer formalities. The Acquirer make no assurance with respect to the market price of the Shares both during the Offer period and upon the completion of the Offer, and disclaim any responsibility with respect to any decision by the shareholders on whether or not to participate in the Offer.

 

iii.                  The Acquirer does not warrant any assurance with respect to the future financial performance of the Company.

 

iv.                 In the event of over-subscription to the Offer, the acceptance will be on a proportionate basis.

            TABLE OF CONTENTS

 

Sr. no

Particulars

Page No.

1.

Definitions

4

 

 

 

2.

Disclaimer Clause

5

 

 

 

3.

Details of the Offer

5

 

 

 

4.

Background of the Acquirer

8

 

 

 

5.

Disclosure in terms of Regulation 21(2)

9

 

 

 

6.

Background of the Target Company – JRC Industries Limited

9

 

 

 

7.

Offer Price and Financial Arrangements

14

 

 

 

8.

Terms and Conditions of the Offer

19

 

 

 

9.

Procedure for Acceptance and Settlement of Offer

19

 

 

 

10.

Documents for Inspection

26

 

 

 

11.

Declaration by the Acquirer

26

 

 

 

 

Enclosures

28

 

 

1.         DEFINITIONS

 

Sr. no

Particulars

 

1.

Acquirer

Mr. Rushabh Shah

2.

BSE

The Bombay Stock Exchange Limited

3.

VSE

The Vadodara Stock Exchange Limited

4.

EPS/ Earning Per Share

Profit After Tax / No. of Equity Shares issued

5.

Form of Acceptance

Form of Acceptance cum Acknowledgement

6.

Form of Withdrawal

Form of Withdrawal cum Acknowledgement

7.

LOO or Letter of Offer

Offer Document

8.

Manager to the Offer or Merchant Banker

Puneet Advisory Services Private Limited

9.

JRC

JRC Industries Limited

10.

Negotiated Price

Rs. 1.75/- (Rupees One Paise Seventy Five Only) per fully paid up equity share/ voting share capital of face value of Rs.10/- each

11.

Net Asset Value/ Book Value Per Share

Net worth/ No. of Equity Shares issued

12.

Offer or The Offer

Open Offer for acquisition of 15,01,980 Fully Paid up equity shares, representing 30.00% of the total paid up share capital / voting share capital of Target Company at a price of Rs. 4.25/- (Rupees Four and Paise Twenty Five Only) per equity share payable in cash.

13.

Offer Price

Rs. 4.25/- (Rupees Four and Paise Twenty Five Only) per equity share/ voting share capital of Rs.10/- each payable in cash

14.

Persons eligible to participate in the Offer

Registered shareholders of JRC Industries Limited, and unregistered shareholders, including Promoters but other than the sellers who own the equity shares of JRC Industries Limited any time prior to the closure of Offer other than the Acquirer and Sellers

15.

Public Announcement or "PA"

Announcement of the Open Offer by The Acquirer, which appeared in the newspapers on 30th November 2006

16.

Registrar or Registrar to the Offer

Sharex Dynamic (India) Private Limited

17.

Return on Net worth

(Profit After Tax/ Net worth)*100

18.

SEBI

Securities and Exchange Board of India

19.

SEBI (SAST) Regulations, 1997 or Regulations

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto

20.

SEBI Act

Securities and Exchange Board of India Act, 1992

21.

Sellers

Mr. Gautam R. Shah and others

22.

SPA

Share Purchase Agreement

23.

Specified Date

29th December 2006

24.

Target Company

JRC Industries Limited

25.

Transfer Deed

Transfer Deed includes Demat Transfer Requisition Slip

 

2.         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 JRC INDUSTRIES LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER, PERSONS ACTING IN CONCERT OR THE COMPANY WHOSE SHARES OR 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 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 DISCHARGE THEIR RESPONSIBILITY ADEQUATELY. IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER, PUNEET ADVISORY SERVICES PRIVATE LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 3RD NOVEMBER 2006 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997 AND SUBSEQUENT AMENDMENTS THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.

 

3.         DETAILS OF THE OFFER

 

3.1       Background of the Offer

3.1.1        The Offer is being made pursuant to the Regulation 10 and 12 and other provisions of Chapter III of and in Compliance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 1997 and pursuant amendments thereof for substantial acquisition of shares or voting rights accompanied with complete change in control and management of "JRC Industries Limited".

 

3.1.2        The Acquirer entered into an SPA dated 27th November 2006 to acquire 19,99,038 (Nineteen Lacs Ninety Nine Thousand Thirty Eight) fully paid up equity shares of Rs.10/- each representing 39.93% of the total paid up equity share capital of "JRC Industries Limited" from the promoters of JRC and Persons Acting in Concert with them namely,

 

Sr. No.

Name of the Persons

Address

No. of Shares

1.

Mr. Gautam R Shah

Flat no 1, Goola Mansion,

603, Jame Jamshed Road, Matunga

Mumbai 400 019

 

641238

2.

Mrs. Priti G Shah

Flat no 1, Goola Mansion,

603, Jame Jamshed Road, Matunga

Mumbai 400 019

 

575100

3.

Mr. Kshitij Shah

Flat no 1, Goola Mansion,

603, Jame Jamshed Road, Matunga

Mumbai 400 019

 

275000

4.

Mr. Sahil Shah

Flat no 1, Goola Mansion,

603, Jame Jamshed Road, Matunga

Mumbai 400 019

 

 

275000

5.

Mr. Viresh T Kamdar

139, Sewree Wadala Road

Mumbai 400 31

9300

6.

Mr. Rajesh Vrajlal Mehta

C-1, River Side Palace

Irani Road, Dahanu Thane 401 602

110000

7.

Mr. Neeta R Mehta

Ashirwad, Dahanu Road

Kati Road, Dahanu Dist Thane 401 602

78300

8.

Mr. Vrajlal Mehta

Ashirwad, Dahanu Road

Kati Road, Dahanu Dist Thane 401 602

35000

9.

Mr. Hiren Shah

4, Brahma Jyoti, Ground Floor,

361/C, Chandavarkar Road, Matunga

Mumbai 400 019

100

 

 

 

1999038

 

at a price of Rs. 1.75/- each (Rupees One and paise Seventy Five Only) per fully paid up equity share payable in cash (Negotiated Price). The total consideration for the shares acquired under the SPA is Rs. 34,98,317/- (Rupees Thirty Four Lacs Ninety Eight Thousand Three Hundred and Seventeen Only) to be discharged to the sellers by the Acquirer as per the terms agreed upon and contained in the SPA. The Sellers are Promoter and Persons acting in Concert with the Promoter.

 

3.1.3          The important features of the SPA are laid down as under:

 

a.       The Agreement was entered into between the Acquirer and the Seller Mr. Gautam Shah residing at Flat no 1, Goola Mansion, 603, Jame Jamshed Road, Matunga 400 019 Phone no: 022-24146440 acting on behalf of himself and other shareholders through Power of Attorney, on 27th November 2006 for sell of 1999038 Fully paid up Equity Shares of Rs. 10/- at Cash Price of Rs. 1.75/- (Negotiated Price) each representing 39.93% of the issued, subscribed and paid up Capital of JRC.

 

b.       On completion, by the Acquirer, of the obligations relating to the Public Offer under the Takeover Code, the Acquirer will take over the management and control of JRC.

 

c.       In consideration of the purchase of the shares, the Acquirer shall pay total cash consideration of Rs. 34,98,317/- (Rupees Thirty Four Lacs Ninety Eight Thousand Three Hundred and Seventeen Only).

 

d.      Against payment of the sale consideration, the Sellers as the legal and beneficial owners of the shares, shall sell, transfer, convey and deliver to the Acquirer and the Acquirer shall purchase and acquire from the sellers, shares free from all encumbrances, all rights, title and interests of the Sellers in the shares together with all accrued benefits, rights and obligations attaching thereto.

 

e.       The Acquirer undertakes and covenants to take all steps and actions as may be necessary for compliance with the provisions of the Takeover Code. The sellers agree to provide the Acquirer with all necessary support, for complying with the provisions of the Takeover Code relating to Public Offer as are applicable to the transaction envisaged herein.

 

f.        On completion, by the Acquirer, of the obligations relating to the Public Offer under the Takeover Code, as certified by Puneet Advisory Services Private Limited, the Manager to the Offer appointed for such Public Offer in accordance with the Takeover Code, the parties shall ensure that the Board of Directors of the Target Company shall pass effective resolutions for recording the transfer of shares of the Target Company to the Acquirer and appointment of the persons nominated by the Acquirer on the Board of Directors of the Target Company.

 

g.       In the event the Acquirer fail to comply with the applicable provisions of the Takeover Code relating to the Public Offer, the SPA shall stand terminated and shall be null and void.

 

3.1.4    The proposed change in control is not through any arrangement.

 

3.1.5    Neither the Acquirer, Sellers nor the Target Company, have been prohibited by SEBI from dealing in securities, in terms of direction under Section 11B of the SEBI Act or under any of the Regulations made under the SEBI Act.

 

3.1.6    The Composition of Board of Directors in JRC post acquisition and offer shall be determine on completion of all formalities relating to the offer.

 

3.2       Details of the Proposed Offer

 

3.2.1    The Acquirer has made a Public Announcement, which was published on 30th November 2006 and corrigendum will also be published simultaneously along with the dispatch of Letter of Offer in the following newspapers in accordance with the Regulation 15 and pursuant to Regulations 10 and 12 of SEBI (SAST) Regulations, 1997. The said Public Announcement and Corrigendum is also available on the website of SEBI (www.sebi.gov.in)

 

            Publication                                Editions

            Indian Express (English)            In the State of Gujarat

            Rajasthan Patrika (Hindi)          In the State of Gujarat  

            Aaj Kaal          (Gujarati)         In the State of Gujarat

 

            Free Press Journal (English)      In the State of Maharashtra

            Navbharat Times (Hindi)           In the State of Maharashtra

            Mumbai Navshakti (Marathi)    In the State of Maharashtra                  

 

3.2.2.   The Acquirer is making an Offer under the SEBI (SAST) Regulations, 1997 to acquire 15,01,980 equity shares of Rs. 10/- each fully paid up representing 30% of the voting capital of "JRC" at a price of Rs.4.25/- (Rupees Four and Paise Twenty Five Only) per fully paid up equity share ("Offer Price") payable in cash and will be paid by cheque or demand draft subject to the terms and conditions mentioned hereinafter.

 

3.2.3.   All Shares of the "JRC Industries Limited" is fully paid up.

 

3.2.4.   The Offer is not subject to any minimum level of acceptances from the shareholders.     

 

3.2.5.   Acquirer has not acquired any shares of the Target Company after the date of Public Announcement till the date of Letter of Offer.

 

3.2.6    It is not a competitive bid.

 

3.3       Object of the Acquisition / Offer

 

3.3.1    The Acquirer is interested in taking over the management and control of JRC. Thus substantial acquisition of shares and voting rights accompanied with change in control and management is the reason and rationale for the acquisition.

 

3.3.2    The Offer to the shareholders of JRC is for the purpose of acquiring 30% of the total voting capital / rights of JRC. After the proposed Offer, the Acquirer will achieve substantial acquisition of shares and voting rights, accompanied with effective management control over the Target Company.

 

 

3.3.3    The object of the takeover is to carrying the existing business of the Target Company and wish to amend the Object clause of the Company to enable them to carry on the business of manufacturing of Pet Bottles, Plastic Bags and other allied products. The Acquirer is in the field of trading and indenting of plastics granules for more than 9 Years and proposes to utilize their experience to ensure sustained growth and improve the performance of the Target Company and take advantage of listing status of the Target Company. The Acquirer is yet to finalize on how he would implement the future plans.

 

4.         BACKGROUND OF THE ACQUIRER

 

4.1              The Acquirer is not a company.

 

4.2              INFORMATION OF ACQUIRER

4.2.1        Mr. Rushabh Shah, son of Mr. Jitendra Shah, aged 28 years, an Indian national residing at, 7/8, Lalkripa, 251, Hingwala Lane, Ghatkopar (East) Mumbai - 400 077 Phone no. 02225119768 Fax Nos. 02225119706

 

4.2.2        There is no person acting in concert with the Acquirer.

 

4.2.3        Mr. Rushabh Shah is Commerce Graduate from Mumbai University and having 9 years of experience in fields such as chemicals, plastics, diamonds etc. Since 1997 he has been concentrating on Plastic Industry and has gained knowledge in trading of Tarpaulins. Mr. Rushabh Shah is in the field of trading and indenting of plastics granules for more than 5 Years. His place of business is at Mumbai and Daman.

 

4.2.4        Mr. Rushabh Shah has sufficient means to fulfill the obligations under this Offer. Mr. Chandresh Gandhi Proprietor of M/s. C. T. Gandhi & Co., Chartered Accountants, having Office at 318/2, Siddhivinayak CHS Ltd., Ghatkopar (East) Mumbai 400 077 Tele Fax No. 25094029 (Membership No. 38185) has certified vide his certificate dated 10th November 2006 that the Net Worth of Mr. Rushabh Shah as on 31st October 2006 is Rs. 57,94,986/- (Rupees Fifty Seven Lacs Ninety Four Thousand Nine Hundred Eighty Six only) and that he has sufficient means to fulfill the obligations under this Offer.

 

4.2.5        There were considerable delays of times in compliance of provisions of Chapter II of the regulations and of the requirements of listing agreement by the target company, sellers, promoters and other major shareholders of JRC. Also, the company did not avail the SEBI (Regularization) Scheme, 2002 and appropriate action may be taken by SEBI for the non compliances.

 

4.2.6        Mr. Rushabh Shah do not hold directorship any public limited company. However he is director of following companies.

 

Sr. No

Name of the Company

Designation

Listed at

1.

Deluxe Kaaran Imports Private Limited

Director

Nil

2.

Deluxe Petro Chem Private Limited

Director

Nil

3.

Amex Finance and Leasing Private Limited

Director

Nil

4.

Eskay Bee International Private Limited

Director

Nil

 

4.2.7        The Acquirer is Whole time Director of following companies:

 

Sr. No

Name of the Company Designation

1.

Deluxe Kaaran Imports Private Limited

2.

Deluxe Petro Chem Private Limited

 

 

4.2.8        The Acquirer has not acquired any shares in the target company or any other listed company till date, the Compliance with the required provisions of Chapter II of SEBI (Substantial Acquisition and Takeovers) Regulations 1997 is not applicable.

 

4.2.9        The Acquirer has not been prohibited by SEBI from dealing in securities in terms of direction issued u/s 11(B) of SEBI Act or under any of the Regulation made under the SEBI Act.

 

4.3       The object of the takeover is to carrying the existing business of the Target Company and wish to amend the Object clause of the Company to enable them to carry on the business of manufacturing of Pet Bottles and Plastic Bags and other allied products and to ensure sustained growth, to improve the performance and take advantage of listing status of the Target Company. The Acquirer at present has no intention to sell, dispose of or otherwise encumber any significant assets of JRC in the succeeding two years, except in the ordinary course of business of JRC`s future policy for disposal of its assets, if any, will be decided by its Board of Directors, subject to the applicable provisions of the law and subject to the approval of the shareholders at a General Body Meeting of JRC.

 

4.4              The Acquirer is yet to finalize on how he would implement the future plans.

 

5                    DISCLOSURE IN TERMS OF REGULATION 21(2)

 

Assuming full acceptance of Offer, the post Offer voting capital with the public in Target  Company would not be less than 10% of the voting capital of the Company.

 

The future plans and strategies of the Acquirer is to carry on the existing business of the Target Company and to venture into the business of manufacturing of Pet Bottles and Plastic Bags and other allied products and to ensure sustained growth, to improve the performance and take advantage of listing status of the Target Company.

 

6                    BACKGROUND OF THE TARGET COMPANY – JRC INDUSTRIES LIMITED

 

6.1              JRC Industries Limited is having its Registered Office at F/21, Vikram Chambers Near Sales India, Ashram Road, Ahmedabad 380 009. Phone no : 079-27545995, Fax No. 022-23462448

 

6.2              The Target Company was incorporated with the name JRC Finvest Limited vide Registration No. 21862 as a Public Company under the Companies Act 1956 and the Certificate of Commencement of Business was issued by the Registrar of Companies, Gujarat on 3rd May 1994. Subsequently, the name of the Company was changed from JRC Finvest Limited to JRC Industries Limited consequent to change of the activities of the Company. The Main Promoters of the Company were Mr. Gautam R. Shah and Mr. Hiren R. Shah. The Company commenced its commercial operations in the year 1994 in the field of leasing hire purchasing, bills discounting, short term lending and also to act as an investment Banking and advisory and consultancy services. The members of the Company had approved the adoption of activities related to Manufacturing and Marketing of Various kinds of Electric instruments, Components, ferrite rods, hard and soft ferrites capacitors, rectifiers, integrated circuits, printed circuit boards and Computer, Mini computers and compounds vide special resolution passed on 26th September 1997. The Name of the Target Company was changed consequent to change in activities of the Company. The certificate to the effect of Change of Name was issued by the Registrar of Companies, Gujarat on 25th November 1997. Presently the main activities of the Company is trading Company in all types of magnetizers, magnetizing fixtures, coils, hydraulic presses, mechanical presses, rotary furnaces, tunnel furnace, heating elements, dies and tools, ball mills.

 

6.3              The Target Company operates from its Registered Office at F/21, Vikram Chambers, Near Sales India, Ashram Road, Ahmedabad 380 009. The Target Company does not have any manufacturing facilities.

 

 

6.4              The authorised share capital of JRC as on the date of Public Announcement is Rs. 5.50 Crores, comprising of 55,00,000 equity shares of Rs 10/- (Rupees Ten Only) each. The issued, subscribed and paid-up equity share capital as on date of Public Announcement stood at Rs. 5,00,66,000/- comprising of 50,06,600 equity shares of Rs 10/- (Rupees ten each).

 

Paid up Equity Shares of JRC

No. of Equity Shares / Voting rights

% of Shares / voting rights

Fully paid-up equity shares

50,06,600

100

Partly paid up equity shares

0

0

Total paid-up equity shares

50,06,600

100

Total voting rights in the Target Company

 

50,06,600

 

100

 

6.5              The current capital structure of the company has been build up since inception as under:

 

Date of Allotment

No of Shares

% of Shares issued

Cumulative Paid up Capital

Mode of Allotment

Identity of Allottees

(Promoters Ex-promoters / Others

Status of Compliance

Subscribers to

Memorandum & Articles of Association

700

0.01

7000

Cash

Promoters

Complied

31.10.1994

1749300

35.00

17500000

       Cash

Promoters

Complied

31.10.1994

1250000

25.00

30000000

Cash

Promoters

Complied

22.04.1995

2006600

40.08

50066000

Cash

Public Issue

Complied

 

6.6              The shares of "JRC" are listed on The Vadodara Stock Exchange and The Bombay Stock Exchange Limited. At present the shares of the Company are not suspended by any on the stock exchanges in which the shares are listed.

 

6.7              The shares of "JRC" are not de-listed in any of the stock exchanges in which the shares are listed. At the request of The Ahmedabad Stock Exchange the listing of shares were transferred from the Ahmedabad Stock Exchange to The Vadodara Stock Exchange since the Registered Office of the Company was situated in Vadodara.

 

6.8              There are no outstanding convertible instruments / warrants.

 

6.9               There were considerable delays at times in compliance of provisions of Chapter II of the regulations and of the requirements of listing agreement by the target company, sellers, promoters and other major shareholders of JRC. Also, the company did not avail the SEBI (Regularization) Scheme, 2002 and action may be taken by SEBI for non compliances.

 

6.10            SEBI may initiate action against the promoters and the Target Company for any non compliance with the provisions of Chapter II of the SEBI (SAST) Regulations, 1997 during the period 1997-2003. JRC has not fully complied with requirements of the Listing Agreement entered with The Vadodara Stock Exchange Limited, where its equity shares are listed. Further, no punitive action has been taken by the Stock Exchange against the target company.

 

 

 

 

 

 

6.11            The composition of the Board of Directors of JRC as on the date of Public Announcement are as follows:

 

Sr. No

Name of the Director

 

Designation

Qualification Experience in No. of years

Residential Address

Date of Appointment

 

1.

Mr. Gautam R. Shah

Director

MBA (General Management)

20 yrs in the field Electronic Industry

Flat no 1, Goola Mansion

603, Jamshed Road

Matunga

Mumbai 400 019

21st April 1994

2.

Mr. Ramakant Tawde

Managing Director

B. Com

10 yrs in the field Accounts

Avdhoot Nagar A-4/B-1

C. S. Road, Dahisar (East)

Mumbai 400 068

15th February 2003

3.

Mr. Rajendra Thanvi

Director

B. Com, LL B

15 yrs in the field Accounts and Legal

A-1/703, Gangotri Sadan

Bangur Nagar

Goregaon (West)

Mumbai 400 090

31st May 2003

4.

Mr. Pravin Joshi

Director

 S.S.C.

30 yrs in the field of Sanitary Industries.

64, C. P. Tank Road

Dinesh Bhawan

3rd Floor

Mumbai 400 004

15th February 2003

5.

Mr. Deepak T Bhagat

Director

B. Com

20 yrs in the field of Marketing

Flat no 107, C Building

Ramayan Nagar

Near C.H.M. College

Ulhasnagar – 3.

3rd December 2005

6.

Mr. T. S. Ramchandran

Director

S.S.L.C & Dip. In Export-Import

20 yrs in the field of Import & Export

Flat No 104

Amrut Dham – 10

Near Yogi Dham

Murbad Road

Kalyan (West) 421 304

3rd December 2005

 

6.12            The Directors of the Target Company do not represent the Acquirer.

 

6.13            There has been no merger / de-merger, spin-off during the past three years in JRC.

 

6.14            Audited financial information of JRC for the financial year ended on March 31, 2007, 2006 and 2005 is given below:

(Rs. In Lacs)

Profit and Loss Statement

Year ended

31st March 2007

Year ended

31st March 2006

Year ended

31st March 2005

 

(Audited)

(Audited)

(Audited)

Income from Operations

0

1.38

0.72

Other Income

0

0

0

Total Income

0

1.38

0.72

Total Expenditure

4.00

2.93

4.11

Profit / (Loss) Before Depreciation Interest and Tax

 

(4.00)

 

(1.55)

 

(3.39)

Depreciation

0

0

0

Interest

0

0

0

Profit/ (Loss) Before Tax

(4.00)

(1.55)

(3.39)

Provision for Tax

0

0

0

Income Tax (Earlier Year)

0

0

0

Deferred Tax (Saving)/ Expenses

0

(0.60)

0

Deferred Tax (Saving) / Expenses (Earlier Year)

 

0

 

0

 

0

Profit/ (Loss) After Tax

(4.00)

(0.95)

(3.39)

                                                                  

(Rs. Lacs)

Balance Sheet Statement

Year ended

31st March 2007

Year ended

31st March 2006

Year ended

31st March 2005

 

(Audited)

(Audited)

(Audited)

Sources of funds

 

 

 

Paid-up Share Capital

500.66

500.66

500.66

Reserves and Surplus (excluding revaluation reserve)

 

-5.66

 

-2.39

 

-1.46

Net worth

495.00

498.27

499.20

Secured Loan

0

0

0

Unsecured Loan

0

0

0

Current Liabilities

0.27

1.08

(3.92)

Total

495.27

499.35

495.28

Uses of Funds

 

 

 

Net Fixed Assets

0

0

0

Investments

0

0

0

Current Assets

492.30

497.13

493.66

Misc. Expenses not written off

0

0

0.00

Deferred Tax Assets

2.97

2.22

1.62

Total

495.27

499.35

495.28

 

Other Financial Data

Year ended

31st March 2007

Year ended

31st March 2006

Year ended

31st March 2005

 

(Audited)

(Audited)

(Audited)

Dividend (%)

0

0

0

Earning per Share

-0.08

-0.05

-0.07

Return on Net worth (%)

-0.8%

-0.19%

-0.7%

Book Value per Share (in Rs.)

9.88

9.95

9.97

 

*          As certified by Statutory Auditors, Mr. Alpesh Savla (Membership No. - 14907), Partner of M/s. Sunderji Gosar & Co., Chartered Accountants, 301, Hind Rajasthan Building, 95, Dadasaheb Phalke Road, Dadar (C. R.) Ph: 022-24113441, 24150146, Fax No. 022-24168974

 

The Company could not carry out its activities due to tough market conditions and hence there were no operations in the year 2005, 2006 and 2007.

 

6.15            Pre and Post-Offer shareholding pattern of the Target Company is as per the following table:

 

As on the date of letter of offer

 

Sr. No

Shareholder Category

Shareholding & Shares / Voting rights prior to acquisition and offer

Shares / Voting rights acquired which triggered off the regulations 

Shares / Voting rights to be acquired in the open offer (assuming full acceptance)

Shareholding & Shares / Voting rights after acquisition and offer

 

 

A

B

C

(A+B+C)

 

 

Number

%

Number

%

Number

%

Number

%

1.

Promoter Group

 

 

 

 

 

 

 

 

 

a. Sellers

1955038

39.05

(1955038)

-39.05

0

0

0

0

 

b. Promoters / PACs other than (a)

53450

1.07

0

0

0

 

 

 

 

Total 1 (a+b)

2008488

40.12

(1955038)

-39.05

0

0

0

0

2.

Acquirer

0

0

1999038

39.93

1501980

30

3501018

69.93

3.

Parties to agreement other than 1(a) & 2

44000

0.88

(44000)

-0.88

0

0

0

0

4.

Public (other than 1 to 3)

 

 

 

 

 

 

 

 

 

Fls/MFs/Flls /Banks,SFIs

22000

0.44

0

0

0

0

22000

0.44

 

Private Corporate Bodies

66460

1.33

0

0

0

0

66460

1.33

 

Indian Public

2803382

55.99

0

0

0

0

2856832

58.92

 

NRI/OCB

62260

1.24

0

0

0

0

62260

1.24

 

Any Other

10

0

0

0

0

0

10

0

 

Assuming 30% recd by the Acquirer

 

 

 

 

 

 

-1501980

-30.00

 

Total

2954112

59.00

0

0

0

0

1505582

30.07

 

Grand Total (1 to 4)

5006600

100.00

0

0

1501980

30.00

5006600

100.00

 

There are 1441 total shareholders as on 6th October 2007

 

Note : The data within bracket indicate sale of equity shares.

 

The Promoter of the Target Company has confirmed that he has not made any transaction in the securities of the Target Company except those mentioned in Para 6.16

 

6.16            The changes in the shareholding of the promoters of the company are as per the details mentioned below:

 

Year

No. of shares held by Promoters and PAC’s

Paid up Equity Capital of the Company

% of total Capital

% of changes in shareholding of Promoters

Type of Transactions

 

Remarks

1995

3000000

5006600

59.92

None

 

1996

2649400

5006600

52.93

7.00%

Market Trade

1997

2149400

5006600

42.93

10.00%

Market Trade

1998

2149400

5006600

42.93

None

 

1999

2149400

5006600

42.93

None

 

2000

2149400

5006600

42.93

None

 

2001

2149400

5006600

42.93

None

 

2002

2149400

5006600

42.93

None

 

2003

2149400

5006600

42.93

None

 

2004

2174000

5006600

43.42

0.49%

Market Trade

2005

2003740

5006600

40.02

3.40%

Market Trade

2006

1999038

5006600

39.92

0.10%

Market Trade

 

As informed by Target Company as regards the status of compliance with the listing requirement, the Target Company, and its Promoters have presently complied with all the requirements to the extent applicable with Stock Exchange, Vadodara and Mumbai. There are no litigations pending against the Company.

                       

6.17            The Target Company has complied with provisions of the Corporate Governance as per clause 49 of the Listing agreement.

 

 

6.18            The name and contact details of the compliance officer are as under:-

 

Name of the Compliance Officer            : Mr. Ramakant Tawde

Contact Address                                   : F/21, Vikram Chambers Near Sales India, Ashram Road,

Ahmedabad 380 009.

Contact Number                                    : 079-27545995

Fax No.                                                : 022-23462448

 

7.         OFFER PRICE AND FINANCIAL ARRANGEMENTS

 

7.1        Justification of Offer Price

7.1.1     The equity shares of JRC are listed on The Vadodara Stock Exchange and The Bombay Stock Exchange Limited.

 

7.1.2     The shares of JRC Industries Limited are not frequently traded since the annualized trading turnover of during the preceding six calendar months i.e. April 2006 to September 2006 prior to the month in which public announcement i.e. October 2006 is made is 3.37% on annualized basis. (based on the data available from the official site of the Stock Exchange, Mumbai)

 

Month

No of shares traded

April 2006

1775

May 2006

18295

June 2006

16402

July 2006

14935

August 2006

8271

September 2006

24725

Total share traded

84403

Annualized trading turnover

168806

Total listed capital

5006600

% of total listed capital

3.37%

 

Hence the shares are not frequently traded as per the data available with BSE within meaning of explanation (i) to Regulation 20(5) of the SEBI (SAST) Regulations, 1997. The shares were last traded on Stock Exchange at Mumbai on 10th October 2006 at Rs. 2.75/- and the number of shares traded was 15.

      

7.1.3.        As the shares of "JRC" have been traded infrequently at the Stock Exchanges where they are listed during the preceding six calendar months prior to the month of this Public Announcement, the Offer Price in terms of Regulation 20(5) of the SEBI (SAST) Regulations, 1997 has been determined taking into account the following parameters:

Sr. no

 

 

a.

The Negotiated Price

Rs. 1.75/-

b.

Highest price paid by Acquirer for acquisition, if any, including by way of allotment in a public or rights issue or preferential issue during the 26 weeks prior to the date of PA

Rs. 1.75/-

c.

Other Financial Parameters

 

 

 

Based on the certified audited financial data for the year ended

31st March 2007

Based on the certified audited financial data for the year ended

31st March 2006

1.

Return on Net worth

 

 

2.

Book Value per share (Rs.)

Rs. 9.95

Rs. 9.97

3.

Earning per share (Rs.)

-0.08

-0.05

4.

Price Earning Multiple (with reference to the Offer price of Rs. 4.25 (per share)

Not ascertainable

Not ascertainable

5.

The average industry P/E for the sector in which JRC operates

Not ascertainable

Not ascertainable

 

The fair value of the Equity Shares of JRC has been arrived by C. T. Gandhi & Co., Chartered Accountants situated at 318/2, Siddhivinayak Society, New Mhada Colony, Hingwala Lane Ext., Ghatkopar (East) Mumbai 400 077 (Membership no. 38185) vide their valuation certificate dated 7th May 2007, considering the financial parameters of JRC with reference date to the respective trigger dates mentioned in table under para 7.1.3. above and by placing  reliance on Supreme Court Judgment in the case of Hindustan Lever Limited and others (1995) 83 Com case 30. Considering the judgment, weighted average has been taken by applying higher weight of 2 to the value per equity share under earnings capitalization method and market value method (using market price of the shares quoted on the stock exchanges) and lower weight of 1 to the value per equity share under net assets method to arrive at Fair value per equity share of JRC.  

 

Method

Value per share Rs. (X)

Weightage (Y)

Weightage  Amount Rs.

Value of shares as per Net Assets Method

9.95

1

9.95

Value of shares as per profit earning value capacity (PEVC)

0

2

0

Value of shares as per Earning Per Share  method

0

2

0

Total

9.95

 

9.95

Fair Value per Equity Share

 

 

1.99

Rounded off to

 

 

2.00

 

In view of the information above, in terms of Regulation 20(5) (as applicable on the trigger dates) the offer price was worked out at Rs. 2.25 per equity share.

 

The Acquirer of the proposed Open Offer of JRC Industries Limited then revised offer price to Rs. 4.25 per share. The Offer Price is based on provisions of regulation 20 (4) (c) considering that the take over code could have been triggered off on the date when the inter-se transaction was made between the Promoters which was made on 21st February 2006 along with Interest @ 10% p.a. till 21st December 2007 (probable date of completion of offer)

 

The calculation of offer price is based on the Rule 20 (5) since the shares were frequently traded preceding 26 weeks commencing from prior to the month in which the inter se transfer of shares took place which could have triggered off the Take over code. The detailed information about the volume of shares being traded on the Bombay Stock Exchange is as under:

 

No of Week

Week Commencement Date

Week Completion Date

No of Shares traded

26

23rd January 2006

27th January 2006

0

25

16th January 2006

20th January 2006

5

24

9th January 2006

13th January 2006

50

23

2nd January 2006

6th January 2006

7680

22

26th December 2005

30th December 2005

2120

21

19th December 2005

23rd December 2005

4100

20

12th December 2005

16th December 2005

6205

19

5th December 2005

9th December 2005

20

18

28th November 2005

2nd December 2005

3625

17

21st November 2005

25th November 2005

4698

16

14th November 2005

18th November 2005

1925

15

7th November 2005

11th November 2005

4225

14

31st October 2005

4th November 2005

300

13

24th October 2005

28th October 2005

14075

12

17th October 2005

21st October 2005

1186

11

10th October 2005

14th October 2005

6450

10

3rd October 2005

7th October 2005

16321

9

26th September 2005

30th September 2005

13455

8

19th September 2005

23rd September 2005

27685

7

12th September 2005

16th September 2005

65725

6

5th September 2005

9th September 2005

90100

5

29th August 2005

2nd September 2006

87083

4

22nd August 2005

26th August 2005

65721

3

15th August 2005

19th August 2005

41352

2

8th August 2005

12th August 2005

27302

1

1st August 2005

5th August 2005

3100

 

 

 

 

 

 

 Total no of Shares Traded

494508

 

 

 

 

 

Annual Average Turnover

 

989016

 

 

 

 

 

Total listed Shares

 

5006600

 

 

 

 

 

Average % of shares traded in 26 weeks

 

19.75%

 

Considering the frequency of shares traded as per the Regulations, Weekly high and low of the closing prices of JRC during 26 weeks period ending 20th February 2006 (being the last trading day before the date of Take over code could have been triggered off) as recorded on the BSE is as under:

 

WEEK NO

WEEK ENDING

Weekly High

 Weekly Low

Average

Weekly Volume

1

23/08/2005 to 29/08/2005

5.19

3.85

4.52

49790

2

30/08/2005 to 05/09/2005

5.20

4.06

4.63

69983

3

06/09/2005 to 12/09/2005

5.48

4.43

4.96

96925

4

13/09/2005 to 19/09/2005

5.05

4.50

4.78

63860

5

20/09/2005 to 26/09/2005

4.40

3.81

4.11

19935

6

27/09/2005 to 03/10/2005

3.45

3.28

3.37

8245

7

04/10/2005 to 10/10/2005

3.45

3.28

3.37

16321

8

11/10/2005 to 17/10/2005

3.45

3.41

3.43

6460

9

16/10/2005 to 24/10/2005

3.28

3.00

3.14

3051

10

25/10/2005 to 31/10/2005

3.00

2.86

2.93

12450

11

01/11/2005 to 07/11/2005

3.19

3.00

3.10

75

12

08/11/2005 to 14/11/2005

3.40

3.13

3.27

4325

13

15/11/2005 to 21/11/2005

3.40

3.24

3.32

3850

14

22/11/2005 to 28/11/2005

3.27

3.11

3.19

2648

15

29/11/2005 to 05/12/2005

3.01

2.86

2.94

3635

16

06/12/2005 to 12/12/2005

3.09

2.94

3.02

6010

17

13/12/2005 to 19/12/2005

3.00

2.86

2.93

1205

18

20/12/2005 to 26/12/2005

2.86

2.86

2.86

3100

19

27/12/2005 to 02/01/2006

3.00

2.95

2.98

7145

20

03/01/2007 to 09/01/2006

3.18

2.92

3.05

2655

21

08/01/2007 to 16/01/2006

3.48

3.33

3.41

50

22

17/01/2007 to 23/01/2006

3.64

3.64

3.64

5

23

24/01/2007 to 30/01/2006

 

 

 

0

24

31/01/2006 to 06/02/2006

3.64

3.64

3.64

5

25

07/02/2006 to 13/02/2006

3.59

3.46

3.53

10

26

14/02/2006 to 20/02/2006

3.75

3.75

3.75

5

 

 

 

 

87.81

 

 

 

 

 

 

 

 

Average of Weekly High & Low of 26 weeks

 

 

3.38

 

 

The Daily high and low of the closing prices of JRC during last 2 weeks period ending 20th February 2006 (being the last trading day before the date of Take over code could have been triggered off) as recorded on the BSE is as under:

 

 

High

Low

Average

20th February 2006

3.75

3.75

3.75

17th February 2006 *

 

 

 

16th February 2006 *

 

 

 

15th February 2006 *

 

 

 

14th February 2006 *

 

 

 

13th February 2006

3.59

3.59

3.59

10th February 2006 *

 

 

 

9th February 2006 *

 

 

 

8th February 2006 *

 

 

 

7th February 2006

3.46

3.46

3.46

 Total

 

 

10.8

 

 

 

 

Average of daily High & Low of last 2 week

 

 

3.60

 

* No trading of shares was recorded at BSE.

 

Sr. no.

Particulars

Price

a.

Negotiated Price

Rs. 1.75

b.

Highest price paid by the Acquirer during the 26 weeks prior to the date of Public Announcement.

 

Rs. 1.75

c.

The Average of the weekly high and low of the Closing prices of the Shares of JRC Industries Limited during the last 26 weeks

 

Rs. 3.38

.

Average of daily high and low of the closing prices during the two weeks preceding the date

 

Rs. 3.60

 

Highest of two

Rs. 3.60

 

Highest of (a), (b) and (c)

Rs. 3.60

 

Interest @ 10% p.a. from 21st Feb 2006 till 21st December 2007 (probable date of completion of Offer)

 

Rs. 0.66

 

Offer Price

Rs. 4.26

 

Rounded off to

Rs. 4.25

 

The shares of the Target Company in infrequently traded on the Baroda Stock Exchange and hence based on the Audited Accounts as at 31st March 2005, the calculation of offer price is as under taking into account following parameters as per the Regulation 20 (5) of SAST for infrequently traded shares:

 

Sr. no

 

 

a.

The Negotiated Price

Nil

b.

Highest price paid by Acquirer for acquisition, if any, including by way of allotment in a public or rights issue or preferential issue during the 26 weeks prior to the date of PA

Nil

c.

Other Financial Parameters

 

 

 

Based on the certified audited financial data for the year ended 31st March 2005

1.

Return on Net worth

 

2.

Book Value per share (Rs.)

Rs. 9.97

3.

Earning per share (Rs.)

Rs. -0.07

4.

Price Earning Multiple (with reference to the Offer price of Rs. 4.25 (per share)

Not ascertainable

5.

The average industry P/E for the sector in which JRC operates

Not ascertainable

 

The fair value of the Equity Shares of JRC considering the financial parameters of JRC with reference date to the respective trigger dates mentioned as mentioned above and by placing  reliance on Supreme Court Judgment in the case of Hindustan Lever Limited and others (1995) 83 Com case 30. Considering the judgment, weighted average has been taken by applying higher weight of 2 to the value per equity share under earnings capitalization method and market value method (using market price of the shares quoted on the stock exchanges) and lower weight of 1 to the value per equity share under net assets method to arrive at Fair value per equity share of JRC.  

 

Method

Value per share Rs. (X)

Weightage (Y)

Weightage  Amount Rs.

Value of shares as per Net Assets Method

9.97

1

9.97

Value of shares as per profit earning value capacity (PEVC)

0

2

0

Value of shares as per Earning Per Share  method

0

2

0

Total

9.97

 

9.97

Fair Value per Equity Share

 

 

1.99

Rounded off to

 

 

2.00

Interest @ 10% p.a. from 21st Feb 2006 till 21st December 2007 (probable date of completion of Offer)

 

 

 

0.36

Total

 

 

2.36

 

In view of the information above, in terms of Regulation 20(5) (as applicable on the trigger dates) the offer price of Rs.4.25 per equity share is the highest amongst considering all the parameters.

 

Hence the Acquirer has offered Revised Price at Rs. 4.25 per share for the proposed Open Offer.

 

7.1.4          There is no non-compete agreement.

 

7.2        FINANCIAL ARRANGEMENTS

 

7.2.1    Assuming full acceptance, the total requirement of funds for the Offer would be Rs. 6383415/- (Rupees Sixty three lacs Eighty Three Thousand Four Hundred Fifteen Only).

 

7.2.2        The Acquirer has adequate resources to meet the financial requirements of the Offer as per certificate dated 10th November 2006 of Net Worth of Mr. Rushabh Shah issued by Mr. Chandresh Gandhi Proprietor of M/s. C. T. Gandhi & Co., Chartered Accountants, having Office at 318/2, Siddhivinayak CHS Ltd., Ghatkopar (East) Mumbai 400 077 Telfax No. 25094029 (Membership No. 38185).

 

7.2.3.      An Escrow Account in the name of “Puneet Advisory Services P. Ltd Escrow A/c JRC Industries Ltd. Open Offer” with Indusind Bank Ltd., Fort Branch is opened and the Acquirer has deposited Rs. 16,00,000/- (Rupees Sixteen lacs only) being more than 25% of the amount required for the offer.

 

7.2.4.      The Acquirer has adequate resources to meet the financial requirements of the Offer. The Acquirer has made firm arrangement for the financial resources required to complete the obligation in terms of Regulation 16(xiv) of SEBI (SAST) Regulations, 1997. The Acquirer has received the confirmation from a family member to give loan to meet with the financial requirements of the Offer. The acquisition will be financed through internal / personal resources and no borrowings from banks / FIs etc., is being made.

 

7.2.5.      Mr. Chandresh Gandhi Proprietor of M/s. C. T. Gandhi & Co., Chartered Accountants, having Office at 318/2, Siddhivinayak CHS Ltd., Ghatkopar (East) Mumbai 400 077 Telfax No. 25094029 (Membership No. 38185) has certified vide his certificate dated 10th November 2006 that the Net Worth of Mr. Rushabh Shah as on 31st October 2006 is Rs. 57,94,986/- (Rupees Fifty Seven Lacs Ninety Four Thousand Nine Hundred Eighty Six only) and that he has sufficient means to fulfill the obligations under this Offer.

 

7.2.6.      The Manager to the Offer, M/s. Puneet Advisory Services Private Limited, hereby confirm that firm arrangements for funds and money for payment through verifiable means are in place to fulfill the Offer obligation under the SEBI (SAST) Regulations, 1997.

 

7.2.7.      The Acquirer is not a foreign body.

 

8.         TERMS AND CONDITIONS OF THE OFFER

 

8.1       This offer is made to all the Equity Shareholders [except Acquirer (including PACs) and the Parties to the Agreement] whose names appear in the Register of Shareholders as on 29th December 2006 (Specified Date) and also to those persons who own the equity shares of JRC any time prior to the date of Closure of the Offer but are not the Register Shareholder(s) and to the beneficial owners of the shares, whose names appear on the beneficial records of the respective depositories at the close of the business on 29th December 2006 (Specified Date).

 

8.2       None of the shares of JRC is under lock in period.

 

 

8.3       STATUTORY APPROVALS

 

8.3.1    The Offer is subject to the Acquirer obtaining the approval (s) from the Reserve Bank of India (RBI), if any, under the Foreign Exchange Management Act, 1999.

 

8.3.2        As on the date of Public Announcement, to the best of the Acquirer knowledge, no other statutory approvals are required to be obtained for the purpose of this Offer.

 

8.3.3        The Offer would be subject to all other statutory approvals that may become applicable at a later date before the completion of Offer.

 

8.3.4.      In case of delay in receipt of any statutory approval, Regulation 22(12) of SEBI (SAST) Regulations, 1997, will be adhered to, i.e. SEBI has power to grant extension of time to the Acquirer for payment of consideration to the shareholders subject to Acquirer agreeing to pay interest as directed by SEBI. Further in case the delay occurs on account of willful default by the Acquirer in obtaining the approvals, Regulation 22 (13) of SEBI (SAST) Regulations, 1997, will also become applicable.

 

9.         PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

 

1)      The Registrar to the Offer, M/s, Sarex Dynamic (India) Private Limited, have opened a special depository account at NSDL and CDSL as detailed below :

 

For NSDL

DP Name                                UTI Bank Limited

Special DP Account               “SHAREX DYNAMIC ( INDIA)  PVT LTD ESCROW JRCIL OPEN OFFER”

DP ID                                                 IN300484

Client ID                                 12696976

 

For CDSL

DP Name                                UTI Bank Limited

Special DP Account               “SHAREX DYNAMIC ( INDIA)  PVT LTD ESCROW JRCIL OPEN OFFER”

DP ID                                     13027500

Client ID                                 00008994                               

 

2)      Shareholders of JRC, who wish to avail of this Offer are free to offer their shareholding in whole or in part and should forward the under mentioned documents to

 

REGISTRAR TO THE OFFER

Sharex Dynamics (India) Private Limited

17-B, Dena Bank Building, Horniman Circle, Mumbai 400 001

Mondays to Fridays between 10.30 AM and 5.00 PM and on Saturdays between 10.30 AM and 1.30 PM,

By Hand Delivery or by Registered Post

 

on or before the date of Closure of the Offer, i.e. 5th November 2007., in accordance with the instructions specified in this Letter of Offer and in the Form of Acceptance cum Acknowledgement. Shareholders are advised to ensure that the Form of Acceptance cum Acknowledgement and other documents are complete in all respects, otherwise the same is liable to be rejected. In the case of demat shares, the shareholders are advised to ensure that their shares are credited in favour of the special depository account before the closure of the Offer. The Form of Acceptance cum Acknowledgement of such demat shares, not credited in favour of the special depository account before the closure of the Offer, will be rejected.

 

i.    For Equity shares held in physical form Registered Shareholders should enclose:

·        Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, by all shareholders whose names appear on the share certificates.

·        Original Share Certificate(s).

·        Valid Share Transfer form(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with “JRC” and duly witnessed at the appropriate place. A blank Share Transfer form is enclosed along with this Letter of Offer.

 

            Unregistered owners should enclose:

·        Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein.

·        Original Share Certificate(s).

·        Original broker contract note.

·        Valid Share Transfer form(s) as received from the market.

The details of buyer should be left blank failing which the same will be invalid under the Offer. The details of buyer will be filled upon verification of the Form of Acceptance and the same being found valid. All other requirements for valid transfer will be preconditions for valid acceptance.

·        In case of non-receipt of the Letter of Offer, the eligible persons may send their consent to the Registrar to the Offer, on a plain paper stating acceptance of the Offer with Name; Address; Number of Shares held; Distinctive Number; Folio Number, Number of shares offered; along with documents as mentioned above, so as to reach the Registrar to the Offer on or before the close of the Offer, i.e., no later than 5th November, 2007 or in case of beneficial owners they may send their application in writing to the Registrar to the Offer, on a plain paper stating acceptance of the Offer with Name; Address; Number of Shares held; Number of shares offered or the eligible persons can write to the Registrar to the Offer requesting for the Letter of Offer and Form of Acceptance cum Acknowledgement and fill up the same in accordance with the instructions given therein, so as to reach the Registrar to the Offer, on or before the close of the Offer, i.e., no later than 5th November, 2007. Unregistered owners should not sign the transfer deed and the transfer deed should be valid for transfer. Alternatively, the Letter of Offer and Form of Acceptance cum Acknowledgement will be available on SEBI’s website (www.sebi.gov.in), from the date of Opening of the Offer. The eligible persons can download the Form of Acceptance cum Acknowledgement from the SEBI’s website and apply using the same.

 

ii    For Equity shares held in demat form:

                  Beneficial owners should enclose:

·        Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, as per the records of the Depository Participant (DP).

·        Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP in favour of Depository Escrow Account. For each Delivery Instruction, the beneficial owner should submit separate Form of Acceptance in favour Depository Escrow Account.

·        In case of non-receipt of the Letter of Offer, the eligible persons may send their consent to the Registrar to the Offer, on a plain paper stating acceptance of the Offer with Name; Address; Number of Shares held; Number of shares offered; along with documents as mentioned above, so as to reach the Registrar to the Offer on or before the close of the Offer, i.e., no later than 5th November, 2007 or in case of beneficial owners they may send their application in writing to the Registrar to the Offer, on a plain paper stating acceptance of the Offer with Name; Address; Number of Shares held; Number of shares offered; DP name; DP ID; Beneficiary Account Number and a photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market”

mode, duly acknowledged by the DP, in favour of the Special Depository Escrow Account, or the eligible persons can write to the Registrar to the Offer requesting for the Letter of Offer and Form of Acceptance cum Acknowledgement and fill up the same in accordance with the instructions given therein, so as to reach the Registrar to the Offer, on or before the close of the Offer, i.e., no later than 5th November, 2007. Alternatively, the Letter of Offer and Form of Acceptance cum Acknowledgement will be available on SEBI’s website (www.sebi.gov.in), from the date of Opening of the Offer. The eligible persons can download the Form of Acceptance cum Acknowledgement from the SEBI’s website and apply using the same.

 

3)      In terms of Regulation 22 (5A) of the SEBI (SAST) Regulations, shareholders desirous of withdrawing their acceptance tendered by them in the Offer, may do so up to three working days prior to the date of closure of the Offer. The withdrawal option can be exercised by submitting the documents only to the Registrar to the Offer as per the instructions below, so as to reach the Registrar to the Offer at any of the collection centers mentioned above as per the mode of delivery indicated therein on or before 1st November 2007:

 

            i.    For Equity Shares held in demat form:

                  Beneficial owners should enclose

·        Duly signed and completed Form of Withdrawal (enclosed with the Letter of Offer).

·        Acknowledgement slip in original / Copy of the submitted Form of Acceptance cum Acknowledgement in case delivered by Registered A.D.

·        Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP.

 

            ii.   For Equity Shares held in physical form:

                 Registered Shareholders should enclose:

·        Duly signed and completed Form of Withdrawal (enclosed with the Letter of Offer).

·        Acknowledgement slip in original/ Copy of the submitted Form of Acceptance cum Acknowledgement in case delivered by Registered A.D.

·        In case of partial withdrawal, valid Share Transfer form(s) duly signed as transferors by all registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with JRC and duly witnessed at the appropriate place.

 

            Unregistered owners should enclose:

·        Duly signed and completed Form of Withdrawal (enclosed with the Letter of Offer).

·        Acknowledgement slip in original/ Copy of the submitted Form of Acceptance cum Acknowledgement in case delivered by Registered A.D.

·        In case of non-receipt of Form of withdrawal, the withdrawal option can be exercised by making a plain paper application along with the following details

·        In case of physical shares: Name; Address; Distinctive Numbers; Folio Number and Number of Shares tendered.

·        In case of dematerialised shares: Name; Address; Number of Shares offered; DP name; DP ID; Beneficiary Account Number and a photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction in “Off-market” mode, duly acknowledged by the DP, in favour of the special depository account.

 

1)      The withdrawal of Shares will be available only for the Share certificates/ Shares that have been received by the Registrar to the Offer/ Special Depository Escrow Account.

2)      The intimation of returned shares to the Shareholders will be at the address through Registered post as per the records of JRC/Depository as the case may be.

 

In case of partial withdrawal of Shares tendered in physical form, if the original share certificates are required to be split, the same will be returned on receipt of share certificates from JRC.

3)      Partial withdrawal of tendered shares can be done only by the Registered shareholders / Beneficial owners. In case of partial withdrawal, the earlier Form of Acceptance will stand revised to that effect. Shareholders holding Shares in dematerialised form are requested to issue the necessary standing instruction for receipt of the credit in their DP account.

 

4)      If the aggregate of the valid responses to the Offer exceeds the Offer size of 1501980 fully paid-up equity shares of JRC (representing 30% of the paid-up equity share capital of JRC), then the Acquirer shall accept the valid applications received on a proportionate basis in accordance with Regulation 21(6) of the SEBI (SAST) Regulations. The shares of JRC are compulsorily traded in dematerialised form hence minimum acceptance will be one share.

 

5)      The share certificate(s), share transfer form(s) and the Form of Acceptance should be sent only to the Registrar to the Offer and not to the Manager to the Offer, the Acquirer or JRC.

 

6)      While tendering shares under the Offer, NRIs / OCBs / Foreign Shareholders will be required to submit the previous RBI Approvals (specific or general) that they may have obtained for acquiring shares of JRC. In case of previous RBI Approvals not being submitted, the Acquirers reserve the right to reject such shares tendered

 

7)      While tendering shares under the Offer, NRI / OCBs / Foreign Shareholders will be required to submit a Tax Clearance Certificate from the Income Tax authorities, indicating the amount of tax to be deducted by the Acquirers under the Income Tax Act, 1961 before remitting the consideration. In case the aforesaid Tax Clearance Certificate is not submitted, the Acquirers will arrange to deduct tax at the rate as may be applicable to the category of the shareholder under the Income Tax Act, 1961, on the entire consideration amount payable to such shareholder.

 

8)      In addition to the above mentioned address, the equity shareholders of JRC, who wish to avail of and accept the Offer can also hand deliver the Acceptance Form along with all the relevant documents at any of the collection centre below.

SHAREX DYNAMICS (INDIA) PRIVATE LIMITED

17-B, DENA BANK BUILDING, 2ND FLOOR

HORNIMAN CIRCLE, FORT

MUMBAI 400 001

      (Monday to Friday: 10.00 a.m. to 5.00 p.m.; Saturday : 10 a.m. to 1.30 p.m.)

 

9)      Shareholders who cannot hand deliver their documents at the Collection Centers referred above, may send the same by Registered Post, at their own risk and cost, to the Registrar to the Offer at their address given below:

 

Sharex Dynamics (India) Private Limited,

            17-B, Dena Bank Building

Horniman Circle

            Mumbai 400 001

 

10)  In case of delay in receipt of statutory approvals beyond 20th November 2007 interest will be payable for the delayed period in terms of Regulation 22(12) of SEBI (SAST) Regulations. Further, if the delay occurs on account of willful default by Acquirers in obtaining the requisite approvals, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.

11)  Payment of consideration will be made by crossed account payee cheque / demand draft and sent by registered post, to those shareholders/unregistered owners and at their own risk, whose shares/ share certificates and other documents are found in order and accepted by the Acquirers. In case of joint registered holders, cheques /demand drafts will be drawn in the name of the sole/first named holder/unregistered owner and will be sent to him. It is desirable that shareholders provide bank details in the Form of Acceptance cum Acknowledgment, so that same can be incorporated in the cheque / demand draft

 

12)  Unaccepted or withdrawn Share Certificate(s), transfer form(s) and other documents, if any, will be returned by Registered Post at the shareholders’/unregistered owners’ sole risk to the sole/first named shareholder/unregistered owner. Unaccepted or withdrawn shares held in demat form will be credited back to the beneficial owners’ depositary account with the respective depositary participant as per the details furnished by the beneficial owner in the Form of Acceptance cum Acknowledgement.

 

13)  The Registrar to the Offer will hold in trust the Share(s)/Share certificate(s), Shares lying in credit of the special depository account, Form of Acceptance cum Acknowledgement, if any, and the transfer form(s) on behalf of the shareholders/unregistered owner(s) of JRC, who have accepted the Offer, till the cheques / drafts for the consideration and/or the unaccepted shares/ share certificates are dispatched / returned.

 

11.       Method of Settlement

 

11.1          The Form of Acceptance, relevant Original Share Certificate(s), valid Share Transfer Deed(s) and other documents or/ and shares lying in the special depository account, tendered by the shareholders of JRC under this Offer, shall be accepted from such shareholders in terms of the Letter of Offer, but will become a fully valid and binding contract between such shareholder(s) and the Acquirer only upon the fulfillment of all the conditions mentioned herein the Letter of Offer and Form of Acceptance.

 

11.2          On fulfillment of all the conditions herein mentioned, the Letter of Offer and Form of Acceptance, the Acquirer will pay the Offer Price by a crossed and "Account Payee Only" cheque(s) or demand draft(s) or pay order(s) drawn in favour of the sole shareholder or first named shareholder in case of joint holding. The payment consideration will be sent by Registered Post to the sole / first named shareholder of JRC whose equity shares are accepted by the Acquirer at his address registered with JRC. It is desirable that shareholders provide bank details of the first/ sole shareholder in the Form of Acceptance cum Acknowledgement, so that the same can be incorporated in the cheque/demand draft.

 

11.3          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.

 

11.4          The Acquirer shall endeavor to complete all procedures relating to the Offer within Fifteen days from the date of Closure of the Offer {i.e. 20th November 2007 (Wednesday)} including payment of consideration to the shareholders of JRC whose equity shares are accepted for purchase by the Acquirer.

 

11.5          In case of non-receipt of any of statutory approvals required, as per regulation 22(12), SEBI may grant extension of time for the purpose of making payments to the shareholders who have successfully tendered their equity shares pursuant to this Offer and in such an event, the Acquirer will pay interest for the delayed payment beyond fifteen days of the closure of the Offer, at such rate as may be prescribed by SEBI.

 

12.       OTHERS

 

1)                  The Letter of Offer together with the Form of Acceptance cum Acknowledgement is being mailed to the shareholders of JRC (except the Acquirer and parties to the agreement), whose names appear on the Register of Members of JRC and to the beneficial owners of the shares of JRC, whose names appear as beneficiaries on the records of the respective Depositories, at the close of business on December 29, 2006 (“Specified Date”).

 

2)                  Accidental omission to dispatch this Letter of Offer to any person to whom this Offer is made or the non-receipt or delayed receipt of this Letter of Offer by any such person will not invalidate this Offer in any way.

 

3)                  Shareholders having their beneficiary account in CDSL/NSDL have to use delivery instruction slip for the purpose of crediting their Shares in favour of the special depository account with NSDL/CDSL.

 

4)                  All owners (registered or unregistered) of Shares of JRC, (except the Acquirer, parties to the agreement referred in para 2.1 above and the PAC) anytime before the closure of the Offer are eligible to participate in the Offer. Unregistered owners can send their application in writing to the Registrar to the Offer, on a plain paper stating acceptance of the Offer with Name; Address; Number of shares held; Number of shares offered; Distinctive Numbers; Folio Number; together with the original Share Certificate(s); Valid Transfer Deed(s) and the Original Contract Note issued by the broker through whom they acquired their shares. No indemnity is required from the unregistered owners.

 

5)                  The acceptance of the Offer is entirely at the discretion of the shareholders of JRC. The Acquirer will not be responsible in any manner for any loss of equity share certificate(s) and offer acceptance documents during transit and the shareholders of JRC are advised to adequately safeguard their interest in this regard.

 

6)                  Shares that are subject to any charge, lien or encumbrance are liable to be rejected.

 

13.       General

 

13.1          The Form of Acceptance and instructions contained therein are integral part of this Letter of Offer.

 

13.2          Neither the Acquirer nor the Manager nor the Registrar nor the Target Company will be responsible for any loss in transit or delay in receipt of the completed Form of JRC.

 

13.3          The Offer Price is denominated and payable in Indian Rupees only.

 

13.4          All the communication in connection with the Form of Acceptance should be addressed to the Registrar to the Offer as mentioned above, with full name of the sole / first applicant, folio number, number of equity shares tendered, date of lodgment of the Form of Acceptance and other relevant particulars.

 

13.5          If there is any upward revision in the Offer Price (Regulation 26) by the Acquirer till the last day of revision, viz., at any time upto seven working days prior to the date of closure of the Offer or withdrawal of the Offer i.e. Saturday, 27th October, 2007 would be informed by way of Public Announcement in the same newspapers where original Public Announcement had appeared. Such revised Offer would be payable for all the shares tendered anytime during the Offer.

 

13.6          "If there is competitive bid:

 

13.6.1 The Public Offers under all the subsisting bids shall close on the same date.

 

13.6.2 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"

 

13.7          Acquirer does not hold any shares in the Target Company except 1999038 fully paid equity shares agreed to be acquired through SPA.

 

13.8          Applications which are complete in all respect and which reach the Registrar to the Offer on or before the date of closure of Offer i.e. 5th November, 2007 be approved and the shares so offered would be accepted by the Acquirer free from all lien, charges, encumbrances along with all the rights attached to the shares like the right to all dividends, bonus and right shares and all other rights as are attached to such acquired shares.

 

14.       DOCUMENTS FOR INSPECTION

 

            The following documents are regarded as material documents and are available for inspection at the office of the Manager to the Offer at 1101, Dalamal Towers, Nariman Point, Mumbai 400 021 from 10.30 A.M. to 1.00 P.M. on any working day, except Saturdays, Sundays and Holidays until the closure of the Offer.

 

14.1          Net Worth certificates issued by Mr. Chandresh Gandhi, Proprietor of M/s. C. T. Gandhi & Co., Chartered Accountants, certifying the net worth of Mr. Rushabh Shah (acquirer) and adequacy of financial resources with the Acquirer to fulfill his part of open Offer obligations.

14.2          Audited Annual Reports of JRC for the years ended on March 31, 2005, 2006 and 2007.

14.3          Published copy of the Public Announcement, which appeared in the newspapers on November 30, 2006.

14.4          Copy of Share Purchase Agreement (SPA) dated November 27, 2006.

14.5          Copy of letter from SEBI in terms of proviso to Regulation 18(2) of the Regulations.

 

15.       DECLARATION BY THE ACQUIRER

The Acquirer Mr. Rushabh Shah, accept full responsibility for the information contained in this Letter of Offer (except for the information regarding the Target Company which has been compiled from the publicly available information) and for ensuring compliance with the Regulations. The Acquirer would be responsible for ensuring compliance with the Regulations All information contained in this document is as on the date of the Public Announcement, true unless stated otherwise.

 

For and on behalf of the Acquirer

 

 

 

(RUSHABH JITENDRA SHAH)

Place: Mumbai

 

Date: 10th October 2007

 

ENCLOSURES

1.      Form of Acceptance cum Acknowledgement

2.      Form of Withdrawal cum Acknowledgement

3.      Blank Share Transfer Deed(s).

ANNEXURE I

 

STATUS OF COMPLIANCE WITH THE PROVISIONS OF CHAPTER II OF THE TAKEOVER REGULATIONS (as applicable)

By the promoters/Sellers/major shareholders/Acquirers

 

Sr. no

Regulation / Sub Regulation

Due date for compliance as mentioned in the Regulation

Actual date of compliance

Delay, if any (in no. of days)

Col 4 – Col 3

1

6 (1)

20.04.1997

09.02.2007

More than 9 years

2

6 (3)

20.04.1997

09.02.2007

More than 9 years

3

8 (1)

21.04.1998

09.02.2007

More than 8 years

4

8 (2)

21.04.1998

09.02.2007

More than 8 years

5

8 (1)

21.04.1999

09.02.2007

More than 7 years

6

8 (2)

21.04.1999

09.02.2007

More than 7 years

7

8 (1)

21.04.2000

09.02.2007

More than 6 years

8

8 (2)

21.04.2000

09.02.2007

More than 6 years

9

8 (1)

21.04.2001

09.02.2007

More than 5 years

10

8 (2)

21.04.2001

09.02.2007

More than 5 years

11

8 (1)

21.04.2002

09.02.2007

More than 4 years

12

8 (2)

21.04.2002

09.02.2007

More than 4 years

13

8 (1)

21.04.2003

09.02.2007

More than 3 years

14

8 (2)

21.04.2003

09.02.2007

More than 3 years

15

8 (1)

21.04.2004

09.02.2007

More than 2 years

16

8 (2)

21.04.2004

09.02.2007

More than 2 years

17

8 (1)

21.04.2005

09.02.2007

More than 1 years

18

8 (2)

21.04.2005

09.02.2007

More than 1 years

19

8 (1)

21.04.2006

09.02.2007

More than six months

20

8 (2)

21.04.2006

09.02.2007

More than six months

21

7 (3)

None