Download - THE OUDH SUGAR MILLS LIMITED
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THE OUDH SUGAR MILLS LIMITED (Incorporated on July 26, 1932 under the Indian Companies Act VII of 1913)
Registered Office: P.O. Hargaon, Dist. Sitapur (U.P.) 261 121, India (shifted from Industry House, 159,
Churchgate Reclamation, Mumbai 400 020, India w.e.f. March 8, 2000)
Tel: (+91 5862) 256220 Fax: (+91 5862) 256225
Corporate Office: Industry House, 159, Churchgate Reclamation, Mumbai 400 020, India,
Tel: (+91 22) 2287 5987 Fax: (+91 22) 2284 5485,
Head Office: 9/1 R.N.Mukherjee Road, Kolkata 700 001, India Tel: (+91 33) 2243 0497/8
Fax: (+91 33) 2248 6369 E-mail: [email protected]; Website: www.birla-sugar.com,
Company Secetary and Compliance Officer: Mr. Sanjay Mukherjee
DRAFT LETTER OF OFFER
Issue of [●] Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●] per Equity Share on rights
basis to the existing Equity Shareholders of The Oudh Sugar Mills Limited in the ratio of [●] Equity Shares for every
[●] Equity Shares held on the Record Date i.e. [●].The issue price for the Equity Shares will be payable in [●●●●]
installments; [●] of the issue price will be payable on Application; [●] of the Issue Price will become payable at the option of Our Company, on or before 12 months from the Date of Allotment. For every [●] Equity Shares allotted on
rights basis the allottees will receive [●] detachable Warrants. Total Issue including conversion of Warrants into
Equity Shares at Rs [●] per share would aggregate to Rs 5000 lacs. The Issue Price is [●] times the face value of the
Equity Shares.For detrails please refer to Offering Information on page 306 of this Draft Letter of Offer.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this
Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors
carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their
own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or
approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this
document. Investors are advised to refer to “Risk Factors” on page 7 before making an investment in this Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information
with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of
Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed
herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such
information or the expression of any such opinions or intentions misleading in any material respect.
LISTING The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India
Limited (NSE). The Company has received “in-principle” approvals from BSE and NSE for listing the Equity Shares arising from this
Issue vide letters dated [●] and [●] respectively. For purpose of this Issue, the Designated Stock Exchange is [●].
LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE
Enam Securities Private Limited SEBI Reg. No:INM000006856
801/802, Dalamal Towers,
Nariman Point, Mumbai 400021
Tel: +91 22 5638 1800
Fax: +91 22 2284 6824
Email: [email protected]
Website: www.enam.com
Contact Person : Mr Sachin K Chandiwal
Intime Spectrum Registry Limited
C - 13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (West), Mumbai 400 078.
Tel: +91 22 2596 0320-28
Fax: +91 22 2596 0329
Email : [email protected]
Website: www.intimespectrum.com
Contact Person: Ms Awani Thakkar
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR REQUEST
FOR SPLIT APPLICATION
FORMS
ISSUE CLOSES ON
[●] [●] [●]
Draft Letter of Offer
1
CONTENTS
ITEM PAGE NO.
SECTION I: DEFINITIONS & ABBREVIATIONS 2
SECTION II: CERTAIN CONVENTION AND USE OF MARKET DATA 5
SECTION III: FORWARD LOOKING STATEMENTS 6
SECTIONS IV: RISK FACTORS 7
SECTION V: INTRODUCTION 24
SUMMARY OF INDUSTRY AND BUSINESS...................................................................................... 24
THE ISSUE SUMMARY.............................................................................................................. 25
SUMMARY OF FINANCIAL DATA................................................................. 26
GENERAL INFORMATION................................................................................................................ 29
CAPITAL STRUCTURE OF THE COMPANY……………………………………………………….......... 33
OBJECTS OF THE ISSUE............................................................................................................... 39
BASIS FOR ISSUE PRICE............................................................................................................... 41
TAX BENEFITS STATEMENT......................................................................................................... 43
SECTION VI: DETAILS OF ISSUER COMPANY 51
INDUSTRY OVERVIEW.................................................................................................................................. 51
OUR BUSINESS................................................................................................................................................. 58
OUR PROPERTIES ………………………………………………………………………………………….. 64
REGULATIONS AND POLICY.................................................................................................. 66
HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS................................... 70
OUR SUBSIDIARIES................................................................................................................................. 72
OUR MANAGEMENT.................................................................................................................................. 76
OUR PROMOTERS...................................................................................................... 86
DIVIDEND POLICY.......................................................................................................................... 101
RELATED PARTY TRANSACTION……………………………………………………………….. 102
SECTION VII : FINANCIAL STATEMENTS 115
FINANCIAL INFORMATION OF THE ISSUER COMPANY......................................................... 115
PROMOTER GROUP COMPANIES…………………………………………………………………….. 208
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION AS REFLECTED
218
SECTION VIII: LEGAL AND OTHER INFORMATION 225
OUTSTANDING LITIGATIONS AND DEFAULTS....................................................................................... 225
GOVERNMENT APPROVALS AND LICENSES................................................. 285
OTHER REGULATORY AND STATUTORY DISCLOSURE..................................................... 294
SECTION IX: OFFERING INFORMATION 306
TERMS OF THE ISSUE.................................................................................................................... 306
ISSUE PROCEDURE...................................................................................................................... 309
SECTION X: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY 327
SECTION XI: OTHER INFORMATION 350
LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION............................... 350
DECLARATION...................................................................................................................................... 351
Draft Letter of Offer
2
SECTION I: DEFINITIONS & ABBREVIATIONS
GENERAL TERMS AND ABBREVIATIONS
Act The Companies Act, 1956 and amendments thereto
Articles Articles of Association of the Company
Auditors S.R.Batliboi & Company, Chartered Accountants, 22, Camac Street, Block ‘C’, 3rd Floor,
Kolkata 700 016
AGM Annual General Meeting
Board or Board of
Directors
Board of Directors of The Oudh Sugar Mills Limited or a Committee thereof
BSE Bombay Stock Exchange Limited
Capital or Share
Capital
Share Capital of the Company
CDSL Central Depository Services (India) Limited
CESTAT Customs, Excise & Service Tax Appellate Tribunal
CIT Commissioner of Income Tax
DP Depository Participant
ECS Electronic Clearance System
EGM Extra-Ordinary General Meeting
Equity Share(s) or
Share(s)
means the Equity Share of the Company having a face value of
Rs. 10/-
Shareholder means an Equity Shareholder of The Oudh Sugar Mills Limited
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999
FI Financial Institutions
FII(s) Foreign Institutional Investors registered with SEBI under applicable laws and rules
FY / Fiscal Financial Year ending March 31 or June 30, as the case maybe
GoI Government of India
HUF Hindu Undivided Family
INR or Rs. Indian Rupee
IT Act The Income-Tax Act, 1961 and amendments thereto
ITAT Income Tax Appellate Tribunal
MD Managing Director
Memorandum Memorandum of Association of the Company
MoU Memorandum of Understanding
NR Non Resident
NRI(s) Non Resident Indian(s)
NSE The National Stock Exchange of India Limited
NSDL National Securities Depository Limited
Oudh or OSML or
Issuer or the
Company
or we or our / us
The Oudh Sugar Mills Limited
RBI Reserve Bank of India
ROC Registrar of Companies
SEBI Securities and Exchange Board of India
SEBI Act, 1992 Securities and Exchange Board of India Act,1992 and amendments thereto
SEBI DIP
Guidelines
SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued on January 19, 2000
read with amendments issued subsequent to that date
SICA Sick Industrial Companies (Special Provisions) Act 1985
Takeover
Regulations
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and
amendments thereto
WTO World Trade Organisation
Draft Letter of Offer
3
ISSUE RELATED TERMS AND ABBREVIATIONS
Allotment Unless the context otherwise requires, issue of equity shares pursuant to this Issue
Allottee The successful applicant to whom the Equity Shares along with the warrants are being/or
have been issued.
Applicant Any prospective investor who makes an application pursuant to the terms of this Draft
Letter of Offer
CAF Composite Application Form
Call Money Notice Notice issued by the Company to the list of shareholders for making payment towards
the [●]% of issue price of the Equity Shares
Conversion Price [●]
Consolidated
Certificate
In case of physical certificates, the Company would issue one certificate for the Equity
Shares allotted to one folio
Designated Stock
Exchange
The Bombay Stock Exchange Limited & the National Stock Exchange of India Limited
Draft Letter of Offer Draft Letter of Offer filed with SEBI on December 24, 2007 for its Comments
Enam or Lead
Manager
Enam Securities Private Limited
Face Value Face Value of equity shares of the Company being Rs 10/- each
First applicant The applicant whose name appears first in the Application Form
Issue/ Rights Issue Issue of [●] Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●]
per Equity Share on rights basis to the existing Equity Shareholders of The Oudh Sugar
Mills Limited in the ratio of [●] Equity Shares for every [●] Equity Shares held on the
Record Date i.e. [●] for every [●] Equity Shares to being allotted on rights basis. The
issue price for the Equity Shares will be payable in [●] installments. In terms of Clause
8.6.1 (vi) at leaset 25% of the issue price will be payable on Application; balance Rs. [●]
of the Issue Price will become payable at the option of Our Company, on or before 12
months from the Date of Allotment.
Under the Issue, the allottees will also receive [●] detachable Warrants. Total Issue
including conversion of Warrants into Equity Shares during Warrant Conversion Period
at Rs [●] per share would aggregate to Rs 5000 lacs. The Issue Price is [●] times the face
value of the Equity Shares. For detrails please refer to “Terms of the Issue” on page
306 of this Draft Letter of Offer.
Issue Closing Date [●], 2008
Issue Opening Date [●], 2008
Issue Price Rs. [●] per Equity Share
Investor(s) Shall mean the holder(s) of Equity Shares of the Company as on the Record Date, i.e.
[●], 2008
Letter of Offer Letter of Offer dated [●],as filed with the Stock Exchanges after incorporating SEBI
comments on the Draft Letter of Offer
Memorandum of
Association/MoA
The Memorandum of Association of The Oudh Sugar Mills Limited
Offer The Issue of Equity Shares along with detachable warrants pursuant to this Draft Letter
of Offer
PAN Permanent Account Number
Promoters Dr. K.K.Birla,
Shri C.S.Nopany,
Uttar Pradesh Trading Company Limited,
SCM Investment & Trading Company Limited,
RTM Investment & Trading Company Limited,
Darbhanga Marketing Company Limited,
Sonali Commercial Limited,
Deepsikha Trading Company Pvt. Limited,
Modern Household & Accessories Trading Pvt. Limited,
New India Retailing & Investment Ltd. (formerly New India Sugar Mills Ltd.),
HTL Investment & Trading Company Pvt. Limited,
Yashovardhan Investment & Trading Company Limited,
Shradhanjali Investment & Trading Company Limited,
Draft Letter of Offer
4
Rajpur Farms Limited,
Narkatiajang Farms Limited
Promoter Group
(Top 5 listed
Companies)
Zuari Industries Limited
Texmaco Limited
Sutlej Textiles & Industries Limited
Upper Ganges Sugar & Industries Limited
Chambal Fetilizers & Chemicals Limited
Record Date [●], 2008
Registrar to the
Issue or Registrar
Intime Spectrum Registry Limited
Rights entitlement The number of Equity Shares with detachable warrants that a Shareholder is entitled to
in proportion to his/her shareholding in the Company as on the Record Date
Stock Exchange(s) Shall refer to the BSE and NSE where the Shares of the Company are presently listed
Renouncees Shall mean the persons who have aquired Rights entitlements from the Equity
Shareholders.
Warrant Exercise
Period
The period commencing after [●] months form the date of allotment upto [●] months
from the date of allotment. The warrant will get converted on or before the fixed date
(“Notice Date, the outermost date for conversion”) and would be made uniformly in
respect of all the warrants outstanding.
Warrant Exercise
Price
Lower of (a) 20% discount to the average six month weekly closing prices before the
date of the public notice on the Designated Stock Exchange; or (b) 20% discount to
average two weekly closing prices before the date of the public notice on Designated
Stock Exchange; or (c) the cap price, being Rs [●] per Equity Share
COMPANY/INDUSTRY RELATED TERMS AND ABBREVIATIONS
ISMA Indian Sugar Mills Association
TCD Tonnes crushing per day
SAP State Advised Price of Sugar Cane
SMP Statutory Minimum Price of Sugar Cane
ISO International Sugar Organisation
Draft Letter of Offer
5
SECTION II: CERTAIN CONVENTIONS; USE OF MARKET DATA AND
CURRENCY OF PRESENTATION
In this Draft Letter of Offer, the terms “we”, “us”, “our” or “the Company”, unless the context otherwise
implies, refer to The Oudh Sugar Mills Limited.
All references to India contained in this Draft Letter of Offer are to the Republic of India.All references to
“Rupees”or”Rs.”or”Re” are to Indian Rupees, the official currency of India.
For additional definitions used in this Draft Letter of Offer, see the section “Definitions & Abbreviations” on
page 2 of this Draft Letter of Offer.
Market data used throughout this Draft Letter of Offer were obtained from industry publications and internal
Company reports. Industry publications generally state that the information contained in those publications has
been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and
their reliability cannot be assured. Although we believe market data used in this Draft Letter of Offer are
reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be
reliable, have not been verified by any independent sources.
Draft Letter of Offer
6
SECTION III: FORWARD-LOOKING STATEMENTS
This Draft Letter of Offer contains certain “forward-looking statements”. These forward looking statements
generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”,
“intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases
of similar import. Similarly, statements that describe our objectives, plans or goals are also forward-looking
statements.
All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause
actual results to differ materially from those contemplated by the relevant forward-looking statements.
Important factors that could cause actual results to differ materially from our expectations include, among
others:
1. Our ability to successfully implement our strategy, our growth and expansion plans and technological
changes;
2. Increasing competition in and the conditions of the Global and Indian sugar industry;
3. Increasing employee costs;
4. Manufacturer’s defects or mechanical problems in our plant and machineries;
5. Cyclical or seasonal fluctuations in our operating results;
6. General economic and business conditions in India;
7. Changes in the value of the Rupee and other currencies; and
8. Changes in laws and regulations that apply to the Indian and Global sugar industry.
For further discussion of factors that could cause our actual results to differ, see “Risk Factors” beginning on
page 7 of this Draft Letter of Offer. By their nature, certain market risk disclosures are only estimates and could
be materially different from what actually occurs in the future. As a result, actual future gains or losses could
materially differ from those that have been estimated. Neither our Company, the Lead Manager nor any of their
respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances
arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions
do not come to fruition. In accordance with SEBI requirements, our Company and the Lead Manager will
ensure that investors in India are informed of material developments until such time as the grant of listing and
trading permission by the Stock Exchanges.
Draft Letter of Offer
7
SECTION IV: RISK FACTORS
Investors should consider the following risk factors together with all other information included in this Draft
Letter of Offer carefully, in evaluating us and our business before making any investment decision. This Draft
Letter of Offer contains forward-looking statements that involve risks and uncertainties. Such statements can be
identified by the use of forward-looking terminology such as “may”, “believes”, “will”, “expect”,
“anticipate”, “estimate”, continue”, “plan”, “likely” or other similar words. Our actual results could differ
from those anticipated in these forward-looking statements as a result of various factors, including those set
forth in the following risk factors and elsewhere in this Draft Letter of Offer.
An investment in equity shares involves a high degree of risk. You should carefully consider all the information
in this Draft Letter of Offer, including the risks and uncertainties described below, before making an investment
in our Equity Shares. If any of the following risks actually occur, our business, results of operations and
financial condition could suffer, the price of our Equity Shares could decline, and you may loose all or part of
your investment. The financial and other implications of material impact of risks concerned, wherever
quantifiable have been disclosed in the risk factors mentioned below. However there are a few risk factors
where the impact is not quantifiable and hence the same has not been disclosed in such risk factors.
This Draft Letter of Offer also includes statistical and other data regarding the Indian Sugar Industry. This data
was obtained from industry publications, reports and other sources that we and the Lead Manager believe to be
reliable. Neither we nor the Lead Manager have independently verified such data.
INTERNAL RISK FACTORS
1. Cases were filed against our promoter Shri C. S. Nopany by the Income Tax Department. The cases
were pending for final orders.
Pursuant to an Amnesty Scheme introduced by the Government under the Income tax (I.T.) and Wealth
tax (W.T.) Acts for the assesment year 1986-87, a self assessment was made by our promoter Shri
C.S.Nopany whereby two cheques were deposited and a token receipt against such deposit was
attached to the applications which were duly submitted to the Income Tax / Wealth Tax Officer.
However, the cheques were dishonoured by the bank. The Income Tax Officer & Wealth Tax Officer
thus filed criminal cases (under Section 420 of the Indian Penal Code,1860 read with Section 35D of
the Wealth Act and Section 277 of the Income Tax Act, 1961) at the Court of Metropolitan Magistrate
at Kolkata in 1989 in this regard. Subsequently, both the amounts claimed (Rs. 53,500/- under the I.T.
and Rs. 1,11,400/- under the W.T.), have been paid to the concerned Authorities. Moreover, interest /
penalties for both the claims have also been waived by the concerned Authorities. The cases are now
pending for final orders.
2. Criminal case pending against our Directors Shri C S Nopany, Shri S V Muzumdar, Shri Ashvin C
Dalal & Shri C B Patodia
The Food Inspector, Jallandhar has filed a Criminal Complaint before the Addl. Chief Judicial
Magistrate Jallandhar, under section 7/16 of the Prevention of Food Adultration Act 1954 and Rules 32
r.w. 50 thereof. In the event of any unfavourable order in the said compaliant, our Directors Shri C S
Nopany, Shri S V Muzumdar, Shri Ashvin C Dalal & Shri C B Patodia may be liable for consequences
under the Prevention of Food Adultration Act 1954.
3. We have a high Debt-Equity ratio
Our debt-equity ratio, as per our restated financial statement, is considerably high. Details of our debt-
equity ratio for last five financial years are as follows: (please check these figures are as per restated
accounts)
Financial
Year/Period
2002 - 2003 2003 - 2004 2004 - 2005 2005 – 2006 2006 - 2007
Debt-Equity
Ratio 55.87 19.94 3.23 1.80 4.24
Draft Letter of Offer
8
Our high gearing ratio, coupled with financial performance in past had caused us to pay higher interest
rates. If the trend continues, it may cause substantial interest outgo which may affect profit margin
adversely.
4. Our success is substantially dependent on our management team
The success of our business is substantially dependent on our management team and key personnel and
their loss could adversely affect our business. Further, our ability to maintain our position in the sugar
industry substantially depends on our ability to attract, motivate and retain such personnel.
5. We are involved in certain legal proceedings, incidental to our business and operations, which if
determined against us, could have an adverse impact on our results of operations and financial
condition.
Our Company is involved in the certain litigation incidental to our business and operations. In the event
of any unfavourable orders, our company may incur additional liability of Rs 740.06 Lacs. (Net of
amount already provided by the Company).
For more information on ‘Litigations initiated by us’, ‘Litigation initiated against us’ and ‘Litigation
initiated against our Group Companies’, please refer to Section Litigations & other Information on
page no 225 of this Draft Letter of Offer.
6. There was shortfall in performances vis-à-vis projections made in relation to our earlier rights issue
and one of our promoter’s previous rights issue.
We made a rights issue in 1996 and made certain projections in that issue. We could not achieve the
same. For further details, please refer to section titled “Promise vs. Performance” on page 299 of this
Draft Letter of Offer.
One of our promoter namely Upper Ganges Sugar & Industries Limited, had made a rights issue in
1994. They had made certain projections on operating and financial performances in relation to that
Rights Issue, based on then prevailing situation. However, due to various reasons, the projections could
not be achieved. For further details, please refer to section titled “Promise vs. Performance” on page
299 of this Draft Letter of Offer.
7. As of June 30, 2007; we had some contingent liabilities, determination of which against us may
adversely impact our financial position
As on June 30, 2007; we have the following contingent liabilities:
Rs. In lacs
Nature of Liability Amount
Involved Demand/Claims against the Company not acknowledged as debts 658.14
Guarantees given to a bank against loans to cane growers
Against the above, the loan facilities actually availed as on the balance sheet
date aggregated to
1500.00
1074.37
Unredeemed Bank Guarantees 0.96
Bills discounted from Bank under LC (Since realized) 66.65
If any of these liabilites actually occur, our financial performance may be affected adversely.
8. Conflict of Interest
Some of the ventures promoted by our promoters viz. Gobind Sugar Mills Limited and Upper Ganges
Sugar & Industries Limited are also engaged in sugar business. Presence of these companies in the
same line of business may lead to the conflict of interest between our Company and our promoters as
our promoters may pursue such policies which may be favourable for Gobind Sugar Mills Limited and
Upper Ganges Sugar & Industries Limited but may be unfavourable for us.
9. We are subject to restrictive covenants in certain short-term and long term debt facilities provided to
us by our lenders
Draft Letter of Offer
9
We have taken long term and short term loans from FIs/Banks. As per the signed loan agreements with
them, there are certain standard restrictions imposed on us regarding change in capital structure,
payment of dividend out of reserves and other such matters. We are required to obtain their prior
approval before initiating such changes.
10. We are operating in a higly regulated market. Policy decision by the government may not be
favourable and that may have an impact over our revenues and profitability.
Sugar, being an essential commodity, is subject to various restrictions and regulations imposed by the
State/Central Government like Government controls over fixation of cane price, distribution and sale of
sugar, both levy and free, because of the release mechanism. As such the performance of our company
at par with the industry depends upon government policies and regulations.
11. In the past in accordance with the government regulations we were being forced to run our plants
despite lower recovery ratio and lower realisations
Under the government policies governing sugar factories, we are bound to procure the entire
contractual quantity of sugarcane from the reserved area, irrespective of recovery and realisation. In
1992 and 1996 we had to operate our plants for abnormally longer period resulting in lower recovery.
12. Our unsecured loans are repayable on demand basis
As on June 30, 2007, we have outstanding unsecured loans aggregating Rs. 13880.16 lacs from our
group companies and other entities, which are repayable on demand basis. Unscheduled demand of
these loans and payments thereof, may impact our liquidity positions.
13. There are certain qualifications in the Auditors’ Report dated December 11, 2007 regarding non-
provision/non-adjustment of some potential liabilities. Crystallisation of those liabilities/adjustments
may affect our financials adversely.
Our Statutory Auditors, in their report dated December 11, 2007 have made the following
qualifications:
“Attention is drawn to the following notes in Annexures 6 to this report:
1. Note Nos. 1(a) and 1(b) regarding non adjustment of certain realizations in earlier years
aggregating to Rs. 165.51 lacs and non provision of interest payable thereon, if any, in case of
refund of such realizations. As the matters are under adjudication / not yet settled, the impact
of the above non adjustment on the Company’s profit is not presently ascertainable.
The above-mentioned non-provisioning/non-adjustments, if crystallized in future, will impact our
financials adversely.
14. Some of the companies, through which our promoters Dr. K.K.Birla and C.S.Nopany control our
company through their direct and indirect shareholding, have incurred losses in previous years.
Further, some of the top five companies promoted by our promoters have also incurred losses in
previous years.
Some of the companies, through which our promoters Dr. K.K.Birla and Mr C.S.Nopany control our
company through their direct and indirect shareholding, have incurred losses in previous years. Further,
some of the top five listed companies promoted by our promoters have also incurred losses in previous
years. Details of the profit/(loss) incurred by those companies in last three years are detailed below:
Draft Letter of Offer
10
Rs. In Lacs
Name of the entity 2004-05 2005-06 2006-07
Upper Ganges Sugar & Industries
Limited
1369.44 2862.29 (2826.13)
New India Retailing & Investment
Limited
(124.44) 209.58 (27.68)
15. Our success depends on our ability to efficiently handle the critical factors affecting profitability
of sugar mill units.
Production of sugar is a complicated activity with the profitability primarily dependent on four critical
factors being Cane Acreage, Yield per Hectare, Drawal and Recovery factor. The sugar cycle (as
described on page no. 51 of Industry Section of this Offer Document) affects the Cane Acreage. As per
the extant laws, the distance between the chimneys of two sugar mills should be a minimum of 15
kilometers. The Cane Commissioner of the respective region allocates the reserved area for each sugar
mill. We are required under law to purchase sugarcane grown within our reserved area.
However, the farmers are not under any obligation to grow sugar cane and may shift to
alternative/more remunerative crops in case of non-receipt of sugar cane dues. Yield per Hectare
affects the quantum of sugar cane availability. As discussed earlier, adverse weather conditions, crop
disease, pest attacks may adversely affect sugarcane crop yields. Recovery rate depends on various
factors including quality of cane, duration between harvesting and crushing, sucrose content in cane
etc. Any reduction in the yield per hectare or the recovery rate may have a material adverse effect on
our profitability.
16. Sugarcane grown within our Reserved Cane Area may be sold to manufactures of Gur &
Khandsari and others instead of us.
India’s substantial sugarcane production was utilized for ‘Gur and Khandsari’ for ‘Seed, Feed and
Chewing, etc’. Hence, the total sugarcane grown may not be available to sugar manufacturers. To
ensure that the farmers stay interested in selling sugarcane to us, we may need to provide financial and
other incentives to the farmers. This may adversely affect our financial condition and results of our
operations.
17. High cost of raw material and inability to pass it to the consumer may put a pressure on the
profit margins.
Sugarcane costs constitute a major portion of our direct expenditure. As per the extant norms, we have
to purchase sugarcane at the State Advised Price (SAP). At the same time, the amount of sugar that can
be sold in the market is regulated. Sugar is sold in the open market at market-determined prices. Thus,
we have little control over the quantity or the price at which we can sell the sugar produced. This can
put a pressure on our profit margins.
The Uttar Pradesh Sugar Mills Association has challenged the SAP by the Uttar Pradesh Governement
fixing the price for the 2007-08 season. For further detail on the same please refer to Section
Litigations & other Information on page no 225 of this Draft Letter of Offer
18. Adverse weather conditions, crop disease, pest attacks may adversely affect sugarcane crop
yields and sugar recovery rates for any given harvest.
Our sugar production depends on the volume and sucrose content of the sugarcane that is supplied to
us. Crop yields and sucrose content depends primarily on the variety of sugarcane grown, the presence
of any crop disease and weather conditions such as adequate rainfall and temperature, which vary.
Adverse weather conditions have caused crop failures and reduced harvests and resulted in volatility in
the sugar and Ethanol industries and consequently in our operating results. Flood, drought or frost can
adversely affect the supply and pricing of the agricultural commodities that we sell and use in our
business. There can be no assurance that future weather patterns, potential crop disease or the
cultivation of certain sugarcane crop varieties will not reduce the amount of sugarcane or sugar that we
Draft Letter of Offer
11
can recover in any given harvest. Any reduction in the amount of sugar recovered could have a material
adverse effect on our results of operations.
19. Selling Price of sugar depends largely on prevailing market prices.
The wholesale price of sugar has a significant impact on our profits. Sugar is subject to price
fluctuations resulting from weather, natural disasters, domestic and foreign trade policies, shifts in
supply and demand and other factors beyond our control. Further the sugar industry in India is highly
fragmented and the pricing power of individual companies is limited. As a result, any prolonged
decrease in sugar prices could have a material adverse effect on our Company and our results of
operations.
20. Our profitability depends significantly on the cost of our primary raw material sugarcane and
the selling price of sugar that we are able to obtain for sugar. We are not able to set the cost of
sugarcane or the selling price for our sugar. Some of the main reasons that contribute to
fluctuations in the margin between our raw material cost and the selling price of our sugar are set forth below.
Sugar is an essential commodity, and is included within the purview of the Essential Commodities Act,
1955 and consequently, its production, supply and distribution are regulated by the state and central
government.
The Cane Commissioner of each state reserves and assigns areas for the supply of sugarcane to
factories on an equitable distribution basis. The purchase price of sugarcane is regulated by the State &
Central government who fixes the minimum price of sugarcane, termed as SAP & SMP repectively,
which must mandatorily be paid by sugar producers to sugarcane growers, within a specified time. The
SMP is fixed for a given base level of recovery. This is the minimum price that we have to pay the
farmers from whom we purchase cane. We typically pay a price for sugarcane, which is at a premium
to the SMP and is a function of overall availability of sugarcane and prices being paid by other mills in
the region. We may be adversely affected if the GoI raises the SMP, which in turn would affect the
actual price paid. The situation may worsen in the event of a decrease in the price of sugar.
Mills must sell a specified percentage termed as “Free Sale Sugar”, which is currently at 90% of their
production in the open market and are thereby subject to the forces of demand and supply. However,
the quantity to be sold is based on a Monthly Release Mechanism governed by the Sugar Directorate.
The remaining portion of a sugar factories production, commercially termed as “Levy Sugar”, must be
sold as per government directions through fair price shops and the public distribution system at
government notified prices, which could be below the cost of production. The Free Sale Sugar prices
are also modulated to some extent by the Monthly Release Mechanism (MRM). We may be adversely
affected if the Free Sale Sugar prices decline.
Various taxes and levies are also imposed on the purchase, use and consumption of sugarcane. For
further details, please see the section titled “Key Industry Regulations” in page 66 of this Offer
Document. Any change in governmental or legal policies or the applicability of the present regulations
and policies to our detriment, can adversely affect our business, operations and profitability.
21. We may face competition from other established companies and future entrants into the
industry. Since the sugar industry is going through a lean period, increasingly additional capacities are being
added by existing sugar companies and by new entrants in this field. The supply of sugar in the market
will increase once these additional capacities start production. This additional supply of sugar in the
market will affect the sugar price if it is not supported by proportionate increase in demand. Our profit
margin may reduce incase of fall in future sugar prices and the same will have a direct impact on our
share price. Competition is inevitable in any line of business.
22. We operate in an industry where the market price for our products is cyclical and affected by
general economic conditions.
Domestic sugar industry typically follows a 5 to 7 years cycle. Higher sugarcane and sugar production
results in a fall in sugar prices and non-payment of dues to farmers. This compels the farmers to switch
to other crops thereby causing a shortage of sugarcane, consequently an increase in sugarcane prices
Draft Letter of Offer
12
and extraordinary profits. Taking into account the prevalent higher prices for sugarcane, farmers then
switch back to sugarcane. Profitability of sugar manufacturing units like ours depends largely on the
stage of the cycle witnessed by the industry. Presently, the industry has witnessed high production of
28.50 million tonnes of sugar in the Sugar Season 2006- 07. As per ISMA, the production is expected
to increase in the current Sugar Season 2007-08. However, the higher production is also coupled with
lower inventory levels and thus prices are expected to remain stable if not rise.
The sugar industry has historically been subject to commodity cycles and is sensitive to changes in
domestic market prices, supply and demand. The market in India has experienced periods of limited
supply, causing sugar prices and industry profit margins to increase. Sugar imports are governed by
GoI’s policy, which currently applies a 100% customs duty and other import tariffs on imported white
crystal sugar. In the event of any changes in these policies, import of white sugar may be an attractive
option and which, in turn, would drop domestic prices and thereby impact our financial condition.
Conversely, years of low production and declining sugar stocks may be followed by years of excess
production that result in over-supply of sugar to the domestic markets, causing a decline in sugar prices
and industry profit margins. For further details see the section titled “Industry Overview” on page 51 of
this Offer Document.
Risks in relation to Co-generation business
23. Bagasse, which is derived from sugarcane, and other biomass based fuels are the basic raw
materials for our co-generation business. Any constraint in the availability or fluctuations in the
price of sugarcane may affect the current or future capacity utilisation of the co-generation plant.
Bagasse and other biomass based products such as rice husk, cane trash, mustard stalk/husk woodchips,
are raw materials for the co-generation business. Availability of the primary fuel, Bagasse is dependent
on the supply of sugarcane. Further, these raw materials are also used in some industries such as paper
and paperboard. The availability of Bagasse and other biomass based raw materials for co-generation is
subject to changes in the consumption patterns and other market forces in such other industries.
Additionally, other industries may offer higher prices which may divert the supply of externally
sourced raw material, which may in turn adversely affect the availability or pricing of these raw
materials could impact our co-generation business and our profitability. Any constraint in the
availability of sugarcane may affect the availability of Bagasse and consequently, the business of our
co-generation plant.
Risks in relation to our Distillery Business
24. Our Distillery business is molasses based, which is derived from sugarcane. Any constraint in the
availability of sugarcane may affect the current or future capacity utilisation of the distillery
business.
One of the by-products of sugar production is molasses. Our distillery uses molasses as raw material
for production of ethanol. Though in the past we have resorted to purchase of molasses from other
sugar mills, currently our dependence on external supply of raw materials is minimal. Any constraint in
the availability of molasses, will affect the results of our distillery business.
EXTERNAL RISK FACTORS
1. A slowdown in economic growth in India could cause our business to suffer
The economy has experienced rapid growth in recent years with the GDP growth being 8.5 %, 7.5%,
8.4 % and 9.4% in fiscal 2004, 2005, 2006 and for the second quter of fiscal 2007 respectively.
Any slowdown in the growth of Indian economy or future volatility in global commodity prices, could
adversely affect our business, including our future financial performance, our shareholders’ funds and
our ability to implement our strategy and the price of our Equity Shares.
2. A significant change in the Government’s economic liberalization and deregulation policies could
disrupt our business and adversely affect our financial performance
Draft Letter of Offer
13
The Government of India has traditionally exercised and continues to exercise a dominant influence
over many aspects of the economy. Its economic policies have had and could continue to have a
significant effect on public and private sector entities, including us, and on market conditions and
prices of Indian securities, including in the future our Equity Shares. The present Government, which
was formed after the Indian parliamentary elections in April-May 2004, is headed by the Indira
Congress and is a coalition of several political parties. Any significant change in the Government’s
policies or any political instability in India could adversely affect business and economic conditions in
India and could also adversely affect our business, our future financial performance and the price of our
Equity Shares.
3. Terrorist attacks and other acts of violence or war involving India, the United States and other
countries could adversely affect the financial markets, result in a loss of business confidence and
adversely affect our business, results of operations and financial condition.
Terrorist attacks, such as the ones that occurred in Hyederabad in September 2007, Mumbai on July 11,
2006, New York and Washington, D.C. on September 11, 2001, New Delhi on December 13, 2001,
Gandhinagar in Gujarat on September 24, 2002, Bali on October 12, 2002 and Mumbai on August 25,
2003, and other acts of violence or war may negatively affect the Indian stock markets and also
adversely affect the global financial markets. These acts may also result in a loss of business
confidence and have other consequences that could adversely affect our business, results of operations
and financial condition.
After the December 13, 2001 attack in New Delhi, July 11, 2006 in Mumbai and a terrorist attack on
May 14, 2002 in Jammu, India, diplomatic relations between India and Pakistan became strained and
there was a risk of intensified tensions between the two countries. The governments of India and
Pakistan have recently been engaged in conciliatory efforts. However, any deterioration in relations
between India and Pakistan might result in investor concern about stability in the region, which could
adversely affect the price of our Equity Shares. India has also witnessed civil disturbances in recent
years and it is possible that future civil unrest as well as other adverse social, economic and political
events in India could have an adverse impact on us.
Military activities or terrorist attacks in the future could influence the Indian economy by disrupting
communications and making travel and transportation more difficult. Such political tensions could
create a greater perception that investments in Indian companies involve a higher degree of risk. This,
in turn, could have a material adverse effect on the market for securities of Indian companies, including
our Equity Shares and on the market for our services.
4. Our performance is linked to the stability of policies and the political situation in India
The role of the Indian central and state governments in the Indian economy on producers, consumers
and regulators has remained significant over the years. Since 1991, the Government of India has
pursued policies of economic liberalization, including significantly relaxing restrictions on the private
sector. Certain members of the current coalition government have been protesting against the
privatization measures being undertaken by the Government of India. We cannot assure you that these
liberalization policies will continue in the future. Protests against privatization could slowdown the
pace of liberalization and deregulation. The rate of economic liberalization could change, and specific
laws and policies affecting technology companies, foreign investment, currency exchange rates and
other matters affecting investment in our securities could change as well. The withdrawal of one or
more of these parties from a coalition government can result in political instability. Any political
instability could delay the reform of the Indian economy and could have a material adverse effect on
the market for our Equity Shares and on the market for our services.
5. Any downgrading of India’s debt rating by an international rating agency could have a negative
impact on our business
Any adverse revisions to India’s credit ratings for domestic and international debt by international
rating agencies may adversely impact our ability to raise additional financing from overseas markets,
and the interest rates and other commercial terms at which such additional financing is available. This
could have a material adverse effect on our business and financial performance and adversely affect our
ability to obtain financing from overseas markets.
6. Sensitivity to the economy and extraneous factors
Draft Letter of Offer
14
The Company’s performance is highly correlated to the performance of the economy and the financial
markets. The health of the economy and the financial markets in turn depends on the domestic
economic growth, state of the global economy and business and consumer confidence, among other
factors. Any event disturbing the dynamic balance of these diverse factors would directly or indirectly
affect the performance of the Company.
7. Changes in Indian Government policies could adversely affect economic conditions in India, and
thereby adversely impact the Company’s results of operations and financial condition A significant proportion of the Company’s production facilities are located in India, and a significant
portion of its revenue is derived from sales of its products in the Indian market. Consequently, the
Company itself, and the market price and liquidity of the equity shares, may be affected by Indian
Government policy changes in India. For example, the imposition of foreign exchange controls, rising
interest rates, increases in taxation or the creation of new regulations could have a detrimental effect on
the Indian economy generally and the Company in particular.
The Indian Government has in recent years sought to implement economic reforms, and the current
Indian Government has implemented policies and undertaken initiatives that continue the economic
liberalization policies pursued by previous Indian Governments. For example, the Indian Government
has announced its general intention to continue India’s current economic and financial sector
deregulation policies and encourage infrastructure projects. However, the roles of the Indian
Government and the State Governments in the Indian economy as producers, consumers and regulators
have remained significant and there can be no assurance that liberalization policies will continue in the
future. Any significant change in such liberalization and deregulation policies could adversely affect
business and economic conditions in India generally and the Company’s results of operations and
financial condition in particular.
8. If inflation worsens, the Company’s results of operations and financial condition may be adversely
affected In 2006, India’s wholesale price inflation index suggested an increasing inflation trend compared to
recent years. An increase in inflation in India could cause a rise in the price of transportation, wages,
raw materials or any other of the Company’s expenses. If this trend continues and the Company is
unable to reduce its costs or pass its increased costs along to its customers, the Company’s results of
operations and financial condition may be materially and adversely affected.
NOTES TO RISK FACTORS:
1. Net worth of our company as on June 30 2007, was Rs. 9699.96 lacs. The size of the Rights Issue is Rs.
5,000.00 lacs. The book value per share as on June 30, 2007 for Rs. 10/- face value was Rs. 53.37.
2. Issue of [●] Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●] per Equity Share
on rights basis to the existing Equity Shareholders of The Oudh Sugar Mills Limited in the ratio of [●]
Equity Shares for every [●] Equity Shares held on the Record Date i.e. [●] for every [●] Equity Shares to
being allotted on rights basis. The issue price for the Equity Shares will be payable in [●] installments. In
terms of Clause 8.6.1 (vi) at leaset 25% of the issue price will be payable on Application; balance Rs. [●] of
the Issue Price will become payable at the option of Our Company, on or before 12 months from the Date
of Allotment.
Under the Issue, the allottees will also receive [●] detachable Warrants. Total Issue including conversion of
Warrants into Equity Shares during Warrant Conversion Period at Rs [●] per share would aggregate to Rs
5000 lacs. The Issue Price is [●] times the face value of the Equity Shares. For detrails please refer to
“Terms of the Issue” on page 306 of this Draft Letter of Offer.
3. Details of Related Party Transactions are as follows:
Statement of Aggregated Related Party Transactions as per Accounting Standard-18 for the reporting period
Draft Letter of Offer
15
Enterprises owned by Key Relatives of
Key Management Management Key Management
Particulars Personnel or their relatives Personnel Personnel Total
Year Transactions Balance Transactions Balance Transactions Balance Transactions Balance
Value Outstanding Value Outstanding Value Outstanding
Value Outstanding
as on as on as on as on
30th June 30th June 30th June 30th June
Sale of Goods/
Fixed Assets
Upper Ganges
Sugar &
Industries Ltd.
2006-07 224.14 - - - - -
224.14 -
2005-06 245.76 - - - - - 245.76 -
2004-05 271.18 - - - - - 271.18 -
2003-04 39.39 - - - - - 39.39 -
2002-03 48.64 - - - - - 48.64 -
Purchase of
Goods /Fixed
Assets
Upper Ganges
Sugar &
Industries Ltd.
2006-07
970.95
- - - - -
970.95 -
2005-06 75.31 - - - - - 75.31 -
2004-05 73.51 - - - - - 73.51 -
2003-04 10.42 - - - - - 10.42 -
2002-03 13.80 - - - - - 13.80 -
Mrs Vedanti
Sharma
2003-04 - - - -
10.79
-
10.79 -
Right Issue of
Draft Letter of Offer
16
Shares
Mr.
C.S.Nopany
2004-05 - - 9.56 - - -
9.56 -
SCM
Investment &
Trading
Company
Ltd.,
2004-05 339.98 - - - - -
339.98 -
RTM
Investment &
Trading
Company
Ltd.,
2004-05 349.13 - - - - -
349.13 -
Others 2004-05 - - 0.01 - 0.01 - 0.02 -
Dividend Paid
Mr.
C.S.Nopany
2006-07 - - 2.01 - - -
2.01 -
2005-06 - - 1.12 - - - 1.12
2004-05 - - 0.64 - - - 0.64 -
SCM
Investment &
Trading
Company
Ltd.,
2006-07 87.42 - - - - -
87.42 -
2005-06 39.66 - - - - - 39.66 -
2004-05 25.79 - - - - - 25.79 -
RTM
Investment &
Trading
Company
Ltd.,
2006-07 73.32 - - - - -
73.32 -
2005-06 40.73 - - - - - 40.73 -
Draft Letter of Offer
17
2004-05 25.90 - - - - - 25.90
Uttar Pradesh
Trading
Co.Ltd.,
2006-07 88.34 - - - - -
88.34 -
2005-06 49.08 - - - - - 49.08 -
Others 2004-05 - - 0.02 - 0.11 0.13 -
Interest Paid
Sutlej Textiles
& Industries
Limited
2006-07 62.43 - - - - -
62.43 -
SIL
Investments
Ltd.,(Formerly
Sutlej
Industries
Limited)
2004-05 140.71 - - - - -
140.71 -
2003-04 47.15 - - - - - 47.15 -
2002-03 68.00 - - - - - 68.00 -
SCM
Investment &
Trading Co.
Ltd.
2004-05
102.63
- - - - -
102.63 -
2003-04 150.26 - - - - - 150.26 -
2002-03 26.43 - - - - - 26.43 -
RTM
Investment &
Trading Co.
Ltd.
2004-05
53.25
- - - - -
53.25 -
2003-04 103.96 - - - - - 103.96 -
2002-03 17.47 - - - - - 17.47 -
Others 2005-06 - - 0.10 3.59 3.69 -
2004-05 5.90 0.42 0.10 3.88 4.09
10.20
4.19
2003-04
13.75
- 0.28 -
4.65
3.58
18.68
3.58
Draft Letter of Offer
18
2002-03 13.26 - 0.28 - 3.60 - 17.14 -
Loans Repaid /
Given
Upper Ganges
Sugar &
Industries Ltd.
2005-06
455.00
455.00 - - - -
455.00
455.00
Sutlej Textiles
& Industries
Limited
2006-07 1,500.0 - - - - -
1,500.00 -
SIL
Investments
Ltd.,(Formerly
Sutlej
Industries
Limited)
2004-05 2,100.0 - - - - -
2,100.00 -
2003-04 300.00 - - - - - 300.00 -
2002-03 1,405.00 - - - - - 1,405.00 -
SCM
Investment &
Trading Co.
Ltd.
2004-05
2,150.00
- - - - -
2,150.00 -
2003-04 2,300.00 - - - - - 2,300.00 -
2002-03 550.00 - - - - - 550.00 -
RTM Investment &
Trading Co. Ltd. 2004-05 2,225.00
- - - - -
2,225.00 -
2003-04 2,800.00 - - - - - 2,800.00 -
2002-03 300.00 - - - - - 300.00 -
Others 2005-06 - - 4.00 - 11.57 - 15.57 -
2004-05 340.00 - 2.00 - 9.50 - 351.50 -
2003-04 385.00 - - - 13.01 - 398.01 -
2002-03 340.00 - - - 1.40 - 341.40 -
Loans/Intercorporate
Loans Taken
Upper Ganges Sugar &
Industries Ltd. 2006-07 455.00
- - - - -
455.00
Draft Letter of Offer
19
Sutlej Textiles &
Industries Limited 2006-07
3,500.00 2,000.00 - - - -
3,500.00
2,000.00
SIL Investments
Ltd.,(Formerly Sutlej
Industries Limited) 2004-05
900.00 - - - - -
900.00 -
2003-04 1,200.00 1,200.00
- - - -
1,200.00
1,200.00
2002-03 1,705.00 300.00
- - - -
1,705.00
300.00
SCM Investment &
Trading Co. Ltd. 2004-05 1,150.00
- - - - -
1,150.00 -
2003-04 2,900.00 1,000.00
- - - -
2,900.00
1,000.00
2002-03 950.00 400.00
- - - -
950.00
400.00
RTM Investment &
Trading Co. Ltd. 2004-05 2,025.00
- - - - -
2,025.00 -
2003-04 2,500.00 200.00
- - - -
2,500.00
200.00
2002-03 800.00 500.00
- - - -
800.00
500.00
Others 2005-06 - - - - 2.31 - 2.31 -
2004-05
250.00 - 4.00 4.00
13.16 33.47 267.16
37.47
2003-04 400.00 90.00
- 2.00 9.60 33.81
409.60
125.81
2002-03 415.00 75.00
- 2.00
18.22
35.96
433.22
112.96
Balance Outstanding on
Current Accounts (net)
Credit :
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
58.02
- - - -
-
58.02
2005-06
-
16.72
- - - -
-
16.72
2004-05
-
14.07
- - - -
-
14.07
Draft Letter of Offer
20
2003-04
-
7.58
- - - -
-
7.58
2002-03
-
7.42
- - - -
-
7.42
Debit :
Mr. C.S.Nopany 2006-07
- - 6.09 6.09 - -
6.09
6.09
Interest Received
Upper Ganges Sugar &
Industries Ltd. 2006-07 2.15
- - - - -
2.15 -
2005-06 32.17 - - - - - 32.17 -
Dividend Received
Sutlej Textiles &
Industries Limited 2006-07 70.93
- - - - -
70.93 -
SIL Investments
Ltd.,(Formerly Sutlej
Industries Limited) 2005-06 65.93
- - - - -
65.93 -
2004-05 65.93 - - - - - 65.93 -
2003-04 65.93 65.93
2002-03 61.53 61.53
Upper Ganges Sugar &
Industries Ltd. 2006-07 58.61
- - - - -
58.61 -
2005-06 27.02 - - - - - 27.02 -
2004-05 25.67 - - - - - 25.67 -
- - - - - - -
Remuneration
Mr. C.S.Nopany 2006-07 - - 100.31 - - - 100.31 -
2005-06 - - 79.10 - - - 79.10
2004-05 - - 16.80 - - - 16.80
2003-04 - - 10.75 - - - 10.75 -
2002-03 - - 10.75 - - - 10.75 -
Mr. P.K.Lakhotia 2005-06
- -
15.91
5.29 - -
15.91
5.29
2004-05 - - 14.59 2.90 - - 14.59
Draft Letter of Offer
21
2.90
2003-04
- - 12.35 1.29 - -
12.35
1.29
2002-03 - - 7.90 - - - 7.90 -
Mr. Chandra Mohan 2006-07
- -
1.47
1.47 - -
1.47
1.47
Mr.M.S.Sharma 2006-07 - - 10.51 - - - 10.51 -
2005-06
- -
10.23
0.74 - -
10.23
0.74
2004-05
- -
9.00
0.67 - -
9.00
0.67
2003-04
- - 7.56 0.60 - -
7.56
0.60
2002-03 - - 7.05 - - - 7.05 -
Mr.M.N.Agarwal 2003-04 - - 6.53 - - - 6.53 -
2002-03 - - 6.32 - - - 6.32 -
Mr.V.P.Singh 2006-07
- - 18.97 4.00 - -
18.97
4.00
2005-06
- - 8.99 1.83 - -
8.99
1.83
2004-05
- - 6.92 0.56 - -
6.92
0.56
2003-04
- -
0.56
0.56 - -
0.56
0.56
Mr.P.K.Saini 2006-07 - - 8.95 - - - 8.95 -
2005-06
- -
0.39
0.20 - -
0.39
0.20
Mr.S.K.Premi 2006-07 - - 10.36 - - - 10.36 -
2005-06 - - 8.55 - - - 8.55 -
2004-05
- -
9.15
0.07 - -
9.15
0.07
2003-04
- -
6.88
0.49 - -
6.88
0.49
2002-03 - - 7.32 - - - 7.32 -
Mr.S.D.Shukla 2006-07 - - 4.74 1.42 - - 4.74
Draft Letter of Offer
22
1.42
Mr.D.J.Darji 2006-07
- -
4.62
0.10 - -
4.62
0.10
Note: The period referred to above is from 1st July to 30th June each year.
“For Private circulation to the equity shareholders of the Company”
Private and confidential
4 Before making an investment decision in respect of this Offer, you are advised to refer to the section titled
‘Basis for Issue Price’ on page 41 of this Draft Letter of Offer.
5 Please refer to the sub section titled ‘Basis of Allotment’ on page 321 of this Draft Letter of Offer for details
on basis of allotment.
6 Average cost of acquisition of shares of our Company currently held by our Promoters is as follows:
Name Average cost
of acquisition
of a share (in
Rs.)
Shri C.S.Nopany 42.22
Dr. K.K.Birla 33.50
Shri K.K.Birla, HUF 34.73
Uttar Pradesh Trading Company Limited 45.91
SCM Investment & Trading Company Limited 76.96
RTM Investment & Trading Company Limited 50.00
Darbhanga Marketing Company Limited 54.77
Sonali Commercial Limited 38.72
Deepsikha Trading Company Pvt. Limited 34.39
Modern Household & Accessories Trading Pvt.
Limited
51.44
New India Retailing & Investment Ltd.
(formerly New India Sugar Mills Ltd.)
51.51
HTL Investment & Trading Company Pvt.
Limited
43.65
Yashovardhan Investment & Trading Company
Limited
32.86
Shradhanjali Investment & Trading Company
Limited
45.04
Rajpur Farms Limited 199.48
Narkatiajang Farms Limited 190.73
7 You may contact the Lead Manager for any complaints pertaining to the Issue including any clarification or
information relating to the Issue. The Lead Manager is obliged to provide the same to you.
8 All information shall be made available by the Lead Manager and by us to the public and investors at large
and no selective or additional information would be available for a section of the investors in any manner
whatsoever.
9 Please refer page no. 153 of this Draft Letter of Offer for ‘Details of Loans & Advances’.
10 There is no interest of promoters/directors/key management personnel other than their shareholding,
unsecured loan and reimbursement of expenses incurred or normal remuneration or benefits.
Draft Letter of Offer
24
SECTION V: INTRODUCTION
SUMMARY OF INDUSTRY AND BUSINESS
INDUSTRY SUMMARY
Sugar industry is the second largest agro-based industry located in the rural India. About 50 million
sugarcane farmers, their dependents and a large mass of agricultural labourers are involved in sugarcane
cultivation, harvesting and ancillary activities, and constituting 7.5% of the rural population. Besides, about
0.5 million skilled and semi-skilled workers, mostly from the rural areas are engaged in the sugar industry.
Some of the sugar factories have also diversified into byproduct based industries and have invested and put
up distilleries, organic chemical plants, paper and board factories and cogeneration plants. The industry
generates its own replenishable biomass and uses it as fuel without depending on fossil fuel. At the
prevailing sugar prices, the total sugar produced in the country value at about Rs.37,000 crore per year.
There are approximately 607 sugar mills located in the 18 states of the country. About 50 % of these mills
are in the cooperative sector, 40% in the private sector and rest in the public sector. However, only 500
sugar mills were in operation during the season 06-07. (Source: ISMA)
BUSINESS SUMMARY
Our Company was promoted by Late Shri R.D.Birla in 1932 with the main object of carrying on business of
production and sales of sugar and sugar related products. The first sugar mill of our Company was set up at
Hargaon (District: Sitapur, Uttarpradesh) with a crushing capacity of 400 tcd. We further established a
distillery at Hargaon in 1945. Subsequently, our company purchased a sugar factory namely Rosa Sugar
Works at Rosa (Dist. Shahanjapur, Uttar Pradesh) in 1976 with a crushing capacity of 1000 tcd. In 1984,
The New Swadeshi Sugar Mills Limited having a sugar mill, distillery at Narkatiaganj (Bihar), a fruit and
vegetable canning factory at Allahabad and a paint factory under lease at Calcutta was merged with our
Company. The lease of the paint factory was terminated in April, 1997. Over the period we have expanded
our capacities of sugar production, industrial alcohol/ethanol and canning products.Presently we have three
sugar factories at Hargaon, Rosa in Uttarpradesh and at Narkatiaganj in Bihar with a combined crushing
capacity of 21,700 tcd alongwith 25 M.W. Co-generation. Our Company is also having two distilleries at
Hargaon and at Narkatiaganj with a total installed capacity 22.50 million litres per annum. Our fruits and
vegetable canning factory is situated at Bamrauli near Allahabad. The Company is in process of setting up a
Greenfield Sugar unit at Hatta, Gorakhpur, U.P with a capacity 7,000 tcd and co-generation power plant of
35 M.W.
We manufacture the following four main cateagories of products:
• Sugar
• Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
• Co-generation
• Canning Products.
In addition, we also have arrangement for manufacturing of Bio-compost at Hargaon by using Press-Mud
from sugar factory and spent wash from distillery. Bio-compositing culture purchased from Vasant Dada
Sugar Institute, Pune are added and by Aerobic Bio-composting process in 45-60 days Bio-compost is
ready. This is a fertilizer having Nitrogen, Phosphorus and Potash etc. and widely used in cane, wheat,
vegetables & flowers cultivation. Bio-compost produced by us is marketed under the brand name “Oudh
Jaivik Khad”.
Draft Letter of Offer
25
THE ISSUE SUMMARY
Pursuant to the resolution passed by Board of Directors of the Company at its Meeting held on 20th
August,
2007 and Shareholders approval in the EGM held on 22nd
September 2007, the Finance & Corporate Affairs
Committee of Directors of the Company at its meetings held on 17th
October 2007 has decided to make the
following offer to the Equity Shareholders of the Company:
Issue of [●] Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●] per Equity Share on
rights basis to the existing Equity Shareholders of The Oudh Sugar Mills Limited in the ratio of [●] Equity
Shares for every [●] Equity Shares held on the Record Date i.e. [●] for every [●] Equity Shares to being allotted
on rights basis. The issue price for the Equity Shares will be payable in [●] installments. In terms of Clause
8.6.1 (vi) at leaset 25% of the issue price will be payable on Application; balance Rs. [●] of the Issue Price will
become payable at the option of Our Company, on or before 12 months from the Date of Allotment.
Under the Issue, the allottees will also receive [●] detachable Warrants. Total Issue including conversion of
Warrants into Equity Shares during Warrant Conversion Period at Rs [●] per share would aggregate to Rs 5000
lacs. The Issue Price is [●] times the face value of the Equity Shares. For detrails please refer to “Terms of the
Issue” on page 306 of this Draft Letter of Offer.
Terms of Payment
In terms of Clause 8.6.1 (vi) at leaset 25% of the issue price will be payable on Application; i.e. Rs [●], which
constitutes [●] % of the full amount of the Issue Price Rs. [●] shall be payable (“Application Money”). The
remaining [●] % of the full amount of the Issue Price shall become payable, at the option of our Company, on or
before 12 months after the Allotment Date.
Towards Share Capital Towards Share Premium
Account
On Application Rs [●]
(In terms of Clause 8.6.1 (vi)
at leaset 25% of the issue price
will be payable on
Application)
Rs [●] per Equity Shares Rs [●]
On first and final Call Rs [●] Rs [●] per Equity Share Rs [●]
Draft Letter of Offer
26
SUMMARY OF FINANCIAL DATA
Please read the following data in conjunction with the detailed Auditors’ report on page 115 under the heading
“FINANCIAL INFORMATION OF THE ISSUER COMPANY”.
STATEMENT OF ADJUSTED PROFITS AND LOSSES
(Rs. In lacs)
For the year ended 30th June
Particulars 2003 2004 2005 2006 2007
Income
Sales of Products (Net of excise
duty) 31,331.65
35,435.52
35,604.57
50,116.73
44,244.45
Increase / (Decrease) in
Inventories (352.38)
(6,353.86)
1,077.83
(2,099.02)
3,708.61
Other Income 306.65
344.90
287.25
117.35
161.16
Total 31,285.92
29,426.56 36,969.65
48,135.06
48,114.22
Expenditure
Purchase of Semi-Finished
Goods 47.76
173.05
998.83
62.59
34.73
Raw Materials Consumed 23,557.64
17,247.94
21,528.91
29,727.34
38,765.85
Staff Cost 1,933.45
1,918.45
2,028.78
2,401.92
2,748.37
Other Manufacturing Expenses 2,858.63
3,001.23
3,152.68
3,973.93
4,752.87
Administrative and Other
Expenses 752.81
763.00
1,041.66
993.04
1,087.74
Selling and Distribution
Expenses 507.91
581.96
476.37
558.13
543.90
Interest & Finance Charges (Net) 3,084.35
3,536.87
2,701.54
1,684.79
2,092.87
Depreciation 1,072.72
1,097.79
1,251.28
1,558.68
2,028.67
Total 33,815.27
28,320.29 33,180.05
40,960.42
52,055.00
Net Profit / (Loss) Before Tax (2,529.35)
1,106.27 3,789.60
7,174.64
(3,940.78)
Taxation:
Current Tax (Net of Refunds) 1.03
32.17
197.09
680.38
29.65
Fringe Benefit Tax -
-
4.50
24.90
27.50
Deferred Tax Liability / (Asset) -
- -
1,103.64
(1,103.64)
Net Profit / (Loss) after Tax (2,530.38)
1,074.10 3,588.01
5,365.72
(2,894.29)
Notes:
Draft Letter of Offer
27
STATEMENT OF ADJUSTED ASSETS AND LIABILITIES
(Rs. In Lacs)
As at 30th June
Particulars 2003 2004 2005 2006 2007
Application of Funds
A Fixed Assets
Gross Block
21,866.61
22,580.79
26,919.44
30,321.92
41,687.98
Less : Depreciation
8,383.88
9,371.99
10,446.97
11,780.40
13,254.85
Net Block
13,482.73
13,208.80
16,472.47
18,541.52
28,433.13
Capital Work In Progress
306.92
174.66
190.09
202.11
256.09
Capital Expenditure on Expansion / New
Projects
-
1,415.50
1,443.10
4,421.31
13,224.76
13,789.65
14,798.96
18,105.66
23,164.94
41,913.98
B Investments
1,106.77
1,103.53
1,078.53
1,078.53
1,079.52
C Current assets, loans and advances
Inventories
22,790.91
16,032.43
17,326.19
15,143.37
19,473.86
Sundry Debtors
947.03
603.02
111.61
411.66
591.95
Cash & Bank Balances
310.94
191.06
203.83
338.70
512.27
Loans and advances
1,188.22
1,505.04
1,785.11
1,490.59
2,645.50
Other Current Assets
3.64
3.55
4.08
2.52
3.54
Total
25,240.74
18,335.10
19,430.82
17,386.84
23,227.12
TOTAL ASSETS
40,137.16
34,237.59
38,615.01
41,630.31
66,220.62
D Deferred Tax Liability (net)
- -
-
1,103.64
-
E Liabilities & Provisions
Secured Loans
26,761.85
21,894.76
24,282.17
20,555.15
27,252.99
Unsecured Loans
3,550.36
4,692.68
2,300.76
2,236.48
13,880.16
Current Liabilities
9,282.44 6023.29 3272.35 3997.12
15,311.65
Provisions
-
293.59
530.47
1,106.64
75.86
TOTAL LIABILITIES
39,594.65
32,904.32
30,385.75
27,895.39
56,520.66
F Net Worth (A+B+C-D-E)
542.51
1,333.27
8,229.26
12,631.28
9,699.96
G Represented by :
Shareholder's Funds
a. Equity Share Capital
1,038.62
1,038.62
1,817.49
1,817.49
1,817.49
Draft Letter of Offer
28
As at 30th June
Particulars 2003 2004 2005 2006 2007
b. Reserves and Surplus
3,566.33
3,576.58
6,623.74
10,813.79
7,882.47
4,604.95
4,615.20
8,441.23
12,631.28
9,699.96
Less: Profit and Loss Account Debit
Balance
4,062.44
3,281.93
211.97 -
-
Total
542.51
1,333.27
8,229.26
12,631.28
9,699.96
Draft Letter of Offer
29
GENERAL INFORMATION
ISSUER DETAILS
Name : The Oudh Sugar Mills Limited
Address of the Registered Office : P.O. Hargaon, Dist. Sitapur (U.P.) 261 121, India
Tel: (+91 5862) 256220 Fax: (+91 5862) 256225
Registration number of the Issuer : 20 – 25186
Corporate Identity Number : L15432UP1932PLC025186
Address of the Registrar of
Companies
: Registrar of Companies, Uttar Pradesh
West-Cott Building
The Mall, M. G. Road
Kanpur – 208 001.
The Equity shares of the Company are listed on the BSE & NSE
BOARD OF DIRECTORS OF THE ISSUER
Sr. No.
Name of the Director Designation DIN
1. Shri C.S.Nopany Chairman Cum Managing Director 00014587
2. Shri S. V. Muzumdar Non-Executive Independent Director 00006935
3. Shri Ashvin C. Dalal Non-Executive Independent Director 00016985
4. Shri Rohit Kumar Dhoot Non-Executive Independent Director 00016856
5. Smt. Madhu Vadera
Jayakumar
Non-Executive Independent Director 00016921
6. Shri C. B. Patodia Non-Executive Independent Director 01389238
7. Shri Haigreve Khaitan Non-Executive Independent Director 00005290
8. Shri J. N. Godbole Non-Executive Independent Director 00056830
BRIEF DETAILS OF THE CHAIRMAN CUM MANAGING DIRECTOR
Shri C. S. Nopany, is the Chairman cum Managing Director of our Company. He is a Chartered Accountant and
Master of Science in Industrial Administration from USA. He is an eminent industrialist having vast industrial
experience in diverse fields like sugar, tea, shipping, textiles, fertilizers and chemicals etc. He is the past
President of Indian Chamber of Commerce. He was appointed as Managing Director on 1st July, 1995. On 2
nd
September, 2002 he was designated as Chairman-cum-Managing Director. He is the overall in-charge of the
affairs of the Company. He is also a member of Finance & Corporate Affairs Committee of the Company.
There is no other Executive Director on our Board other than Shri C.S.Nopany.
COMPANY SECRETARY & COMPLIANCE OFFICER
Shri Sanjay Mukherjee,
9/1, R N Mukherjee Road, 5th Floor
Kolkata 700 001
Tel: +91- 33- 2242 9956
Fax: +91-33- 2248 6369
Email: [email protected]
Investors can contact the Registrar to the Issue/Compliance Officer in case of any pre-Issue or post-Issue related
problems such as non-receipt of Draft Letter of Offer/Composite Application Form/ Letter of Allotment/Share
Certificate/credit of allotted shares in respective beneficiary account/refund order etc.
ADVISOR TO THE ISSUE
M/s ANS Law Associates
Draft Letter of Offer
30
Advocates & Solicitors
41-A Film Center,
68, Tardeo Road,
Mumbai 400 034
Maharashtra, India
Tel: (+91 22) 6660 4761
Fax: (+91 22) 6660 4763
Contact Person: Mr Sharad Abhyankar
e-mail: [email protected]
BANKER TO THE COMPANY
State Bank of India Commercial Branch,
24 Park Street,
Kolkata – 700 016.
Tel: (+91 33) 2217 6022
Fax: (+91 33) 2229 3555
Email: [email protected]
LEAD MANAGER TO THE ISSUE
Enam Securities Private Limited 801/802, Dalamal Towers
Nariman Point
Mumbai 400 021
Tel: +91-22-6638 1800
Fax: +91 22 2284 6824
Contact Person: Shri Sachin K.Chandiwal
Email: [email protected]
REGISTRAR TO THE ISSUE
Intime Spectrum Registry Limited C – 13, Pannalal Silk Mills Compound
L.B.S. Marg, Bhandup (West)
Mumbai 400 078
Tel: (+91 22) 2596 3838
Fax: (+91 22) 2594 6969
Contact Person: Ms. Awani Thakkar
Email: [email protected]
BANKER TO THE ISSUE
HDFC Bank Limited
26-A, Narayan Properties,
Chandivalli Farm Road,
Saki Naka, Andheri (East)
Mumbai – 400 072
Tel: (91 22) 022 28569202
Fax: (91 22) 022 285 69256
E-mail: [email protected]
Contact Person: Mr. Viral Kothari
AUDITORS OF THE COMPANY
S.R.Batliboi & Company Chartered Accountants
22, Camac Street
Block ‘C’, 3rd
Floor
Kolkata 700 016
Tel: (+91 33) 2281 1224
Fax: (+91 33) 2281 7750
Draft Letter of Offer
31
INTER-SE ALLOCATION OF RESPONSIBILITIES The statement of inter se allocation of responsibilities for this Issue is as follows:
Sn.No
Activities Responsibility Coordinator
1. Capital structuring with relative components and formalities such
as type of instruments, etc.
ENAM ENAM
2. Drafting and Design of the Letter of Offer document and of
advertisement/publicity material including newspaper
advertisements and brochure / memorandum containing salient
features of the Letter of Offer document. The designated Lead
Merchant Banker shall ensure compliance with the Guidelines for
Disclosure and Investor Protection and other stipulated
requirements and completion of prescribed formalities with Stock
Exchange, Registrar of Companies and SEBI.
ENAM ENAM
3. Marketing of the Issue, which will cover, inter alia, formulating
marketing strategies, preparation of publicity budget, arrangements
for selection of (i) ad-media, (ii) centres of holding conferences of
brokers, investors etc. (iii) bankers to the issue, (iv) collection
centres (v) brokers to the issue, distribution of publicity and issue
material including application form, prospectus and brochure, and
deciding on the quantum of issue material.
ENAM ENAM
4. Selection of various agencies connected with the issue, namely
Registrars to the Issue, printers, bankers and advertisement
agencies.
ENAM ENAM
5. Follow-up with bankers to the issue to get estimates of collection
and advising the issuer about closure of the issue, based on the
correct figures.
ENAM ENAM
6. The post-issue activities will involve essential follow-up steps,
which must include finalisation of basis of allotment / weeding out
of multiple applications, listing of instruments and dispatch of
certificates and refunds, with the various agencies connected with
the work such as registrars to the issue, bankers to the issue, and
bank handling refund business. Even if many of these post-issue
activities would be handled by other intermediaries, the designated
Lead Merchant Banker shall be responsible for ensuring that these
agencies fulfil their functions and enable him to discharge this
responsibility through suitable agreements with the issuer
Company.
ENAM ENAM
CREDIT RATING Not applicable, since the current issue is a Rights Issue of Equity Shares.
DEBENTURE TRUSTEE As the issue consists of the Equity Shares, the appointment of trustees is not required.
MONITORING AGENCY In terms of clause 8.17.1 of the SEBI Guidelines, the size of the issue being less than Rs. 5000 million, we are
not required to appoint a monitoring agency.
APPRAISING ENTITY Not applicable.
BOOK BUILDING PROCESS DETAILS Not applicable.
UNDERWRITING DETAILS
Draft Letter of Offer
32
The Company has not currently entered into any standby underwriting arrangement. However, it may enter into
such an arrangement for the purpose of Rights Issue at an appropriate time and on such terms and conditions as
it may deem fit. In the event, if the Company does enter into such an arrangement prior to filing of the Letter of
Offer with the designated stock exchange, the Letter of Offer will be updated to reflect the same.
Draft Letter of Offer
33
CAPITAL STRUCTURE OF THE COMPANY
Nominal
Amount (Rs
in Lacs.)
Aggregate
Value (Rs.
in Lacs)
Authorised Share Capital
4,00,00,000 Equity Shares of Rs. 10/- each 4,000.00 4,000.00
Issued Share Capital
1,81,73,820 Equity Shares of Rs. 10/- each 1,817.38
1883.5 Equity Shares of Rs. 100/- each 1.89 1,819.27 1,819.27
Subscribed and Paid-up Share Capital
1,81,73,820 Equity Shares of Rs. 10/- each 1,817.38
44 Quarter Equity Shares of Rs. 25 each fully paid 0.01
Bearer Equity Share Coupons of Rs. 25 and Rs.
12.50 each fully paid 0.06
Add: Forfeited Shares (amount originally paid-up) 0.04
1,817.49
1,817.49
Present Issue being offered to the Equity Shareholders through this Draft Letter of Offer
[●] Equity Shares of Rs. 10/- each at a premium of Rs. each
[●] [●]
Paid-up Capital after the Issue
[●] Equity shares of Rs. 10/- each [●]
44 Quarter Equity Shares of Rs. 25 each fully paid 0.01
Bearer Equity Share Coupons of Rs. 25 and Rs.
12.50 each fully paid 0.06
Add: Forfeited Shares (amount originally paid-up) 0.04
[●]
Paid Up capital on conversion of Warrants [●]
Share Premium Account
Existing Share Premium Account 6,247.67 [●]
Share Premium Account after the Issue assuming allotment of all Equity Shares
offered [●] [●]
Share Premium Account after the conversion of warrants assuming allotment of all
warrants offered have been converted [●] [●]
(1) The Equity Share split was approved at the Annual General Meeting of the Shareholders of our Company
held on September 26, 1996, resulting each equity share of Rs.100/- being subdivided into ten Equity
Shares of Rs.10/- each.
(2) The Authorised Share Capital of our Company was increased from Rs.20,00,00,000/- divided into
2,00,00,000 Equity Shares of Rs. 10/- each to Rs. 40,00,00,000/- divided into 4,00,00,000 Equity Shares of
Rs.10/- each by an ordinary resolution passed at the Annual General Meeting of the Shareholders of our
Company held on October 15, 2004.
(3) Out of the above Issued and Subscribed Capital, 6,11,550 Equity Shares have been issued for consideration
other than cash and 11,55,575 Equity Shares have been allotted as Bonus Shares by capitalisation of Share
Premium and General Reserve.
(4) (a) Quarter Equity Shares of Rs. 25 each fully paid-up were issued by us as Bonus Shares in the
year 1943. Holders of those Quarter Equity Shares were not having any voting right.
Subsequently in the year 1949 those Quarter Equity Shares were called back for cancellation
by us and then we issued 1 Equity Share of Rs. 100/- as fully paid-up against each 4 Quarter
Equity Shares of Rs. 25/- each. However, 44 Quarter Equity Shares, as shown in the Capital
Structure above, were not tendered to us for cancellation and conversion. Subsequently, in the
year 1997, we sent a circular to all the shareholders requesting them to surrender their share
certificates in respect of Quarter Equity Shares for cancellation and issuance of Equity Shares
Draft Letter of Offer
34
of Rs. 10/- face value each. Even then, those 44 Quarter Equity Shares were not tendered to
us.
(b) On 18th
October, 1948; we passed a Shareholders’ Resolution which authorised us to issue
Bearer Equity Share Coupons and accordingly such Bearer Equity Share Coupons were issued
to the then existing equity shareholders. We, at our Annual General Meeting dated September
26, 1996; passed a resolution authorising sub-division of the then existing 20,00,000 Equity
Shares of Rs. 100/- each into 2,00,00,000 Equity Shares of Rs. 10/- each and to give effect to
the same, the Board was authorised to issue Equity Shares of Rs. 10/- each to the holders of
Bearer Equity Share Coupons provided the same are consolidated. Subsequently, in the year
1997, we sent a circular to all the shareholders requesting them to surrender their Bearer
Equity Share Coupons for consolidation and issuance of Equity Shares of Rs. 10/- face value
each in exchange of the same. Even then, those Bearer Equity Share Coupons were not
tendered to us.
(c) Since the holders of the Quarter Equity Shares and Bearer Equity Share Coupons have not
tendered their respective instruments to us despite repeated efforts as stated above, our
Finance and Corporate Affiars Committee of the Board of Directors, vide its resolution passed
on 14th
September 2007, has not made any entitlement in the last Rights Issue for the holders
of the said Quarter Equity Shares as well as the Bearer Equity Share Coupons who have not
consolidated and converted their Quarter Equity Shares and Bearer Equity Share Coupons to
Equity Shares of Rs. 10/- each fully paid, on the Record Date. We have adopted a similar
practice in the past at the time of our Rights Issue in 1992 , 1996 and 2005 and the Bonus
Issue in the year 1975.
NOTES TO THE CAPITAL STRUCTURE
1. Share Capital History
Date of Allotment
Number of Equity
Shares
Nominal value
(Rs.)
Issue Price
(Rs.)
Considertion
Reason for Allotment
Cumulative number of
shares
July 26,
1932
603 100 100 Cash Subscribers to the
Memorandum
603
Issued Capital (from May 9, 1975 onwards)
May 9, 1975 77,487 100 NA NA Bonus Issue 1,54,895
November
10, 1986
61,155 100 NA NA Issued on account of
the amalgamation of
The New Swadeshi
Sugar Mills Limited
with our Company
w.e.f. July 1, 1984.
2,16,050
February 8,
1993
1,30,068 100 450 Cash 1,29,838 Equity
Shares on Rights
Basis (Ratio 3:5) and
230 Equity Shares to
permanent/regular
employees through
reservation
3,46,118
March 22,
1996
6,92,386 100 500 Cash Rights Basis (Ratio
2:1)
10,38,504*
June 30,
2005
77,88,780 10 50 Cash Rights Basis (Ratio
3:4)
1,81,73,820
Total number of Shares 1,81,73,820
*10,38,504 Equity Shares of Rs.100 each were sub-divided into 1,03,85,040 Equity Shares of Rs.10 each
pursuant to the resolution passed by the Shareholders at the Annual General Meeting held on 26th
September,
1996 and the Board resolution dated 29th
January, 1997
2. Neither the Promoters of our Company and their relatives and associates nor the directors of our Company
have entered into any buyback/standby arrangement for purchase of Equity Shares of the Company from
any person.
Draft Letter of Offer
35
3 The Promoters of our Company have confirmed full subscription to their entitlement in the present Rights
Issue vide their letter dated [●]. The Promoters reserve the right to subscribe to their entitlement in the Issue
either by themselves or combination of entities controlled by the Promoters including by subscribing for
renunciation if any made within the promoter group to another person forming part of the promoter group.
In the event of undersubscription, our Promoters intend to apply for additional Equity Shares, to ensure
atleast minimum ninety percent subscription to make the Rights Issue subscribed. Allotment of shares to the
Promoters for additional Equity Shares in excess of their respective rights entitlement will not result in
change in control of management and will be governed by the regulation 3(1)(b) of SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 and amendments thereof. The promoters undertake
to comply with Clause 17 of SEBI (Delisting of Securities) Guidelines 2003 in case of non-promoter
holding in the Company falls below the level required for continuous listing requirement.
4 Details regarding top 10 Shareholders
(a) On the date of filing the Draft Letter of Offer with Stock Exchanges i.e. December 20, 2007
Sl.
No.
Name of the Shareholder No. of Shares
held
Percentage
Shareholding
1 Uttar Pradesh Trading Company Limited 19,63,127 10.80
2 SCM Investment & Trading Company Limited 19,42,568 10.69
3 RTM Investment & Trading Company Limited 16,29,285 8.97
4 Darbhanga Marketing Company Limited 12,77,434 7.03
5 Life Insurance Corporation Of India 8,30,918 4.57
6 National Insurance Company Limited 5,99,100 3.30
7 Sonali Commercial Limited 5,12,500 2.82
8 Deepsikha Trading Company Private Limited 3,86,055 2.12
9 SIL Investment Limited 3,64,000 2.00
10 Gama Holding Private Limited 3,25,000 1.79
(b) 10 days prior to the date of filing the Draft Letter of Offer with Stock Exchanges i.e. December 9, 2007
Sl. No.
Name of the Shareholder No. of Shares held
Percentage Shareholding
1 Uttar Pradesh Trading Company Limited 19,63,127 10.80
2 SCM Investment & Trading Company Limited 19,42,568 10.69
3 RTM Investment & Trading Company Limited 16,29,285 8.97
4 Darbhanga Marketing Company Limited 12,77,434 7.03
5 Life Insurance Corporation Of India 8,30,918 4.57
6 National Insurance Company Limited 5,99,100 3.30
7 Sonali Commercial Limited 5,12,500 2.82
8 Deepsikha Trading Company Private Limited 3,86,055 2.12
9 SIL Investment Ltd 3,64,000 2.00
10 Gama Holding Private Limited 3,25,000 1.79
(c) 2 years prior to the date of filing the Draft Letter of Offer with Stock Exchanges i.e. December 20, 2005
Sl.
No.
Name of the Shareholder No. of Shares
held
Percentage
Shareholding
1 Uttar Pradesh Trading CompanyLimited 19,63,127 10.80
2 RTM Investment & Trading Company Limited 16,29,285 8.97
3 SCM Investment & Trading Company Limited 15,86,568 8.73
4 Darbhanga Marketing Company Limited 12,04,734 6.74
5 Life Insurance Corporation Of India 9,30,918 5.12
6 National Insurance Company Limited 6,84,668 4.04
7 Sonali Commercial Limited 5,12,500 2.82
8 Gobind Sugar Mills Limited 4,28,700 2.36
9 Deepshikha Trading Co. Private Limited 3,86,055 2.12
10 Modern household & Accessories Trading Private Limited 2,93,189 2.14
Draft Letter of Offer
36
5. Aggregate Shareholding of Promoters and Directors of the Corporate Promoters (assuming full subscription
to the entitlement):
Pre-Issue Post-Issue Name
No. of
Shares
% of
shareholding
No. of
Shares
% of
shareho
lding
No. of equity
shares post
exercise of
warrants
% of post
issue capital,
post
exercising warrants
Promoters
Dr.K.K. Birla 22,506 0.12% [●] [●] [●] [●]
Shri C. S. Nopany 51,254 0.28% [●] [●] [●] [●]
Uttar Pradesh Trading Company Limited 19,63,127 10.80% [●] [●] [●] [●]
SCM Investment & Trading Company
Limited
19,42,568 10.69% [●] [●] [●] [●]
RTM Investment & Trading Company
Limited
16,29,285 8.97% [●] [●] [●] [●]
Darbhanga Marketing Company Limited 12,77,434 7.03% [●] [●] [●] [●]
Sonali Commercial Limited 5,12,500 2.82% [●] [●] [●] [●]
Deepshikha Trading Company Private
Limited
3,86,055 2.12% [●] [●] [●] [●]
Modern Household and Accessories
Trading Private Limited
2,93,189 1.61% [●] [●] [●] [●]
New India Retailing and Investment
Limited
2,70,410 1.49% [●] [●] [●] [●]
HTL Investment & Trading Company
Limited
1,59,460 0.88% [●] [●] [●] [●]
Yashovardhan Investment & Trading
Company Limited
1,27,733 0.70% [●] [●] [●] [●]
Shradhanjali Investment & Trading
Company Limited
13,350 0.07% [●] [●] [●] [●]
Rajpur Farms Limited 27,573 0.15% [●] [●] [●] [●]
Narkatiaganj Farms Limited 17,413 0.10% [●] [●] [●] [●]
Relatives of Individual Promoters - - [●] [●] [●] [●]
Total 86,93,857 47.84 [●] [●] [●] [●]
6. Shareholding pattern before and after the Issue is as under (assuming full subscription to the entitlement):
Category
Code
Category of
shareholder
Total
number of
shares held
pre-issue
% of pre-
issue
capital
No. of equity
shares post-
rights issue
% of post
rights issue
capital
No. of equity
shares post
exercise of
warrants
% of post issue
capital, post
exercising
warrants
(A) Shareholding of
Promoter and
Promoter Group
[●] [●] [●] [●]
(I) Indians 86,93,857 47.84 [●] [●] [●] [●]
Sub-Total (A)(1) [●] [●] [●] [●]
(II) Foreign Promoters - - [●] [●] [●] [●]
Sub-Total (A)(2) - - [●] [●] [●] [●]
Total Shareholding
of Promoter and
Promoter Group
(A) =
(A)(1)+(A)(2)
86,93,857 47.84 [●] [●] [●] [●]
(B) Public
Shareholding
[●] [●] [●] [●]
(I) Institutions [●] [●] [●] [●]
(a) Mutual Funds/UTI 3,950 0.02 [●] [●] [●] [●]
(b) Financial
Institutions/Banks
19,16,885
10.02 [●] [●] [●] [●]
Draft Letter of Offer
37
Category
Code
Category of
shareholder
Total
number of
shares held
pre-issue
% of pre-
issue
capital
No. of equity
shares post-
rights issue
% of post
rights issue
capital
No. of equity
shares post
exercise of
warrants
% of post issue
capital, post
exercising
warrants
(c) Foreign
Institutional
Investors
55,000 0.30 [●] [●] [●] [●]
Sub-Total (B)(1) 19,75,835 10.87 [●] [●] [●] [●]
II Non-institutions [●] [●] [●] [●]
(a) Private Corporate
Bodies
26,85,504 14.78 [●] [●] [●] [●]
(b) Indian Public 48,18,624 26.51 [●] [●] [●] [●]
Sub-Total (B)(2) 75,04,128 41.29 [●] [●] [●] [●]
Total Shareholding
(B)=(B)(1)+(B)(2)
9,479,963 52.16 [●] [●] [●] [●]
Total (A)+(B) 18,173,820 100 [●] [●] [●] [●]
7 Promoters of the Company, their relatives and associates, Promoter’s Group and the directors of the
Corporate Promoters have not purchased or sold, directly or indirectly, any equity shares during a period of
six months preceeding the date on which this Draft Letter of Offer is filed with Stock Exchanges.
8. We have 16107 Equity Shareholders as on December 14, 2007.
9. We have not issued any Equity Shares out of revaluation reserve in the past.
10. No further issue of equity capital whether by way of issue of bonus shares, preferential allotment, rights
issue or in any other manner will be made by our Company during the period commencing from submission
of the Draft Letter of Offer with SEBI until the securities referred to in this Draft Letter of Offer have been
listed or application money is refunded in case of failure of the Issue.
11. We presently do not have any intention or proposal to alter our capital structure for a period of 6 (six)
months from the Issue Opening Date, by way of split/consolidation of the denomination of Equity Shares or
further issue of Equity Shares (including issue of securities convertible / exchangeable, directly or indirectly
for Equity Shares) whether on preferential basis or otherwise. However, if we go in for acquisitions and
joint ventures, our Company might consider raising additional capital to fund such activity or use shares as
currency for acquisition and/or participation in such joint venture.
12 There are no warrants, options or any other convertible instruments except that of 44 Quarter Equity Shares
of Rs. 25/- each fully paid & Bearer Equity Share Coupons of Rs.25 and Rs.12.50 each fully paid up. These
securities are pending for conversion into fully paid Equity Share of Rs.10/- each on exchange of old
certificates.
13. Save and except 44 Quarter Equity Shares of Rs.25/- each fully paid, there shall be only one denomination
for the Equity Shares of the Company at any given point of time and the Company shall comply with such
disclosure and accounting norms as may be prescribed by SEBI.
14. We have not raised any bridge loan against the proceeds of this Issue.
15. Non-Resident Investors and FIIs will not need permission of the FIPB/RBI for investment in the Issue to
the extent of their Rights Entitlement. However, in case of applications from such entities in excess of their
entitlement, allotment will be subject to restrictions under applicable laws.
16. The Issue will remain open for 30 days. However, the Board will have the right to extend the issue period as
it may determine from time to time but not exceeding 60 days from the issue opening date
17. The Equity Shares offered through this Issue shall be made fully paid-up or may be forfeited within [●]
months from the date of the Call Option Notice.
18. In terms of loan agreements signed with Industrial Development Bank of India, State Bank of India and Axis
Bank Limited; we are required to obtain prior consent from them for issuing fresh Equity Shares. We have
obtained prior sanctions from the aforesaid lenders as stated below:
Draft Letter of Offer
38
19. Neither we nor our directors or Lead Manager have entered into any buy-back and/or standby
arrangements for purchase of Equity Shares of the Company.
Name of the Lender Letter reference no. Letter date
Industrial Development
Bank of India
IDBIL.KMB.No.6712/CFD 29.10.2007
State Bank of India CB/RM-III/598 07.11.2007
Axis Bank Limited AXISB/CB-MC/07-08/SS/228 10.10.2007
State Bank of Hyderabad F/BRC/Oudh/547 15.10.2007
Draft Letter of Offer
39
OBJECTS OF THE ISSUE The objects of the present issue of equity shares are:
1. To reduce overall indebtedness of the Company by repaying borrowings.
2. To meet the expenses of the issue
Fund Requirement Amount (Rs. in lacs)
Repayment of borrowing [�]
Meeting issue expenses [�]
Total 5000.00
Repayment of Borrowings
The Company has entered into various financing arrangements with banks and financial institutions.
Arrangements entered into by the Company, other than with related parties, includes borrowings in the form of
term loans, working capital facilities and unsecured loans including corporate loans from banks. As on
November 30, 2007 the amount outstanding from the Company under these facilities was Rs. 42137.29 lacs.
Details of the amounts outstanding have been provided in the table below:
(Rupees in lacs)
Sr. No Banks/ Financial Institutions/Lenders Amount Outstanding as
on November 30, 2007
A Term Loan Account
1 Industrial Development Bank of India (IDBI) 6300.00
2 Axis Bank Ltd 2911.56
3 Government of India ( Sugar Development Fund) 2299.86
4 Rabo India Finance 3000.00
5 State Bank Of India 10873.35
6 State Bank Of Hyderabad 2482.73
7 Union Bank of India 2000.00
TOTAL ( A ) 29867.50
B Working Capital Borrowings (from Banks) (B)
6734.79
C Unsecured Borrowings ( other than related parties)
1 State Bank of Hyderabad 1000.00
2 The Bank of Rajasthan Ltd. 1000.00
3 Intercorporate Deposits 3535.00
Total ( C ) 5535.00
Total (A+B+C) 42137.29
* Including Rs. 859.86 lacs towards interest which, as per stipulated terms, is payable on a long term basis.
The Company intends to utilize the net proceeds of the Issue upto Rs [●] lacs toward repayment of a portion of
debt as given above. Some of the Company’s financing arrangements contain provisions relating to pre-
payement penalty. The Company will take these provisions into considerations in pre-paying its debt from the
proceeds of the Issue.
BREAK-UP OF ISSUE EXPENSES
The expenses for this Rights Issue are estimated at Rs. [�] lacs, the break-up whereof is as follows:
Particulars Rs. in Lacs
Fees to Lead Manager [�]
Fees to Registrar [�]
Fees to Auditors [�]
Fees to Banker to the Issue [�]
Fees to Legal Advisor to the Issue [�]
Printing & Stationery and Postage expenses [�]
Advertisement, Travel and other Miscellaneous Expenses [�]
Total [�]
Draft Letter of Offer
40
No part of the issue proceeds will be paid as consideration to promoters, directors, key managerial personnel,
associates or group companies.
DEPLOYMENT OF FUNDS PENDING UTILIZATION Pending utilization of the proceeds for the purpose described above, we intend to temporarily invest the Issue
proceeds in interest bearing instruements including money market mutual funds and deposits with banks, for the
necessary duration.
Draft Letter of Offer
41
BASIS FOR ISSUE PRICE
Our issue price is based on the following ‘Qualitative Factors’ and ‘Quantitative Factors’:
Qualitative Factors: 1. More than 75 years experience in sugar industry.
2. Sugar plants are located in rich sugarcane producing areas of Northern India.
3. Loyal and experienced workforce.
Quantitative Factors :
Information presented in this section is derived from our Restated Financial Statements prepared in accordance
with Indian GAAP and SEBI (DIP) Guidelines.
1. Adjusted Earning Per Share (EPS)
Particulars Weight EPS (Rs.)
Year ended June 30, 2005 1 22.66
Year ended June 30, 2006 2 29.52
Year ended June 30, 2007 3 (15.93)
Weighted Average 12.08
(1) The earning per share has been computed on the basis of Restated Profits & Losses after Tax for the
respective years.
(2) The denominator considered for the purpose of calculating Earning Per Share is the weighted average
number of Equity Shares outstanding during the year.
2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. [����] per Equity Share
a. Based on earnings of financial year ended June 30, 2007; EPS was Rs. (15.93)
b. Industry P/E
i) Highest : 30.70
ii) Lowest : 01.40
iii) Industry Composite : 21.40
(Source: “Capital Market”, Vol.XXII/20, Dec-03-16, 2007)
3. Average Return on Net Worth
Weight RONW (%)
Year ended June 30, 2005 1 43.60
Year ended June 30, 2006 2 42.48
Year ended June 30, 2007 3 (29.84)
Weighted Average 18.75
(1) The average return on net worth has been computed on the basis of Restated Profits & Losses after Tax
for the respective year.
4. Minimum Return on Total Networth after Issue needed to maintain EPS - Not Applicable.
5. Net Asset Value Net Asset Value per Equity Share represents Shareholders’ Equity less Miscellaneous Expenses as
divided by weighted average number of Equity Shares.
Net Asset Value per Equity Share as at June 30, 2007 is Rs. 53.37
The Net Asset Value per Equity Share after the Issue is Rs. [�]
Draft Letter of Offer
42
Issue Price per Equity Share: Rs. [�]
6. Comparison of Accounting Ratios (1)
EPS (Rs.)
P/E* RONW (%)
Book Value/
Share (Rs.)
The Oudh Sugar Mills Ltd. (Based on June 30,
2007, Restated financial statements)
(15.93) [�] (29.84) 53.37
Industry Data
Category: Private Sector Companies
Peer Group
Bajaj Hindustan (for year ended September 30,
2006)
13.60 - 19.30 96.80
Balrampur Chini (for year ended September 30,
2007)
- - 27.80 34.80
Dhampur Sugar(for year ended September 30,
2006)
10.40 - 18.70 91.90
Ponni Sugars (E) (for year ended March 31,
2007)
5.8 - 13.80 45.70
Dwarikesh Sugar(for year ended September 30,
2007)
- - 17.20 90.0
Venus Sugars (for year ended June 30, 2007) - - - (0.20)
Industry Composite - 21.40 - -
* P/E based on trailing twelve month data
(Source: “Capital Market”, Vol.XXII/20, Dec-03-16, 2007)
7. Issue Price
In view of the reasons mentioned above, the Company and the Lead Manager to the Issue, in consultation with
whom the share premium has been decided, are of the opinion that the share premium is reasonable and
justified.
The Lead Managers believe that the Issue Price of Rs. [-] is justified in view of the above qualitative and
quantitative parameters. See the section titled “Risk Factors” on page 7 of this Draft Letter of Offer and the
financials of the Company including important profitability and return ratios, as set out in the Auditors Report
on page 115 of this Draft Letter of Offer to have a more informed view.
Draft Letter of Offer
43
TAX BENEFIT STATEMENT We, the auditors of The Oudh Sugar Mills Limited hereby confirm that the attached Annexure states the
possible tax benefits available to the Company and its shareholders under the Income Tax Act, 1961, subject to
the fact that several of these benefits are dependent on the Company or its shareholders fulfilling the conditions
prescribed under the relevant tax laws. Hence the ability of the Company or its shareholders to derive the tax
benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the Company
may or may not choose to fulfill. The benefits discussed in the Annexure are not exhaustive.
This statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for the professional tax advice. In view of the individual nature of the tax
consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with
respect to the specific tax implications arising out of their participation in the issue.
We do not express any opinion or provide any assurance as to whether:
• The Company or its shareholders will continue to obtain these benefits in future; or
• The conditions prescribed for availing of these benefits have been / would be met with.
The contents of this Annexure are based on the information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company and
interpretations of the current tax laws.
22 Camac Street
Block ‘C’, 3rd
Floor
Kolkata 700 016
Dated : 11th
December,2007
S. R. BATLIBOI & CO.
Chartered Accountants
Per R K AGRAWAL
Partner
Membership No. 16667
Draft Letter of Offer
44
ANNEXURE TO THE STATEMENT OF TAX BENEFITS
STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961.
The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of
these benefits are dependent on the company or its shareholders fulfilling the conditions prescribed under the tax
laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon
fulfilling such conditions as may be prescribed under the relevant sections of the Income Tax Act, 1961 (‘the
Act’) .
I. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY:
The Company is mainly engaged in production of Sugar, Spirits and Power. Based on its business activities,
there are no specific tax incentives available to the Company, except for Power as mentioned below.
Deduction under Section 80 IA of the Act for the profits derived from the Captive Power Plant will be available
to the Company subject to fulfilment of the conditions specified in the said section.
II. OTHER BENEFITS AVAILABLE TO THE COMPANY: 1. Subject to compliance of certain conditions laid down in Section 32 of the Income Tax Act 1961,
(hereinafter referred to as ACT) the Company will be entitled to a deduction for depreciation:-
a) In respect of building, machinery, plant or furniture being tangible assets
b) In respect of intangible assets being in the nature of know how, patents, copyrights, trademarks,
licenses, franchises or any other business or commercial rights of similar nature acquired after
31st day of March, 1998 at the rates prescribed under Income Tax Rules, 1962;
c) In respect of new plant or machinery which has been acquired and installed after 31st March,
2005 by a tax payer engaged in the business of manufacture or production of any article or thing,
additional depreciation of 20% of the actual cost of such new plant or machinery will be allowed
as deduction.
2. Subject to compliance of certain conditions laid down in Section 35 (1) (iv) of the Act, the Company is
entitled to claim as deduction the whole of capital expenditure, other than the expenditure incurred on
the acquisition of any land, incurred on scientific research related to the business of the Company.
3. The Company is eligible for amortization of preliminary expenses including the expenditure on public
issue of shares under Section 35D of the Act, subject to the conditions and limits specified in the
section.
4. Under Section 36 (1) (xiii) of the Act, the Company is entitled to claim deduction of Banking Cash
Transaction Tax paid on taxable Banking Transactions entered into by it.
5. MAT credit allowable is the difference between MAT paid and the tax computed as per the normal
provisions of the Act and can be utilized in those years in which tax becomes payable under the normal
provisions of the Act. MAT credit can be utilised to the extent of difference between tax payable under
the normal provisions and MAT payable for the relevant year. MAT credit cannot be carried forward
and set off beyond 7 years immediately succeeding the assessment year in which it becomes allowable
under section 115JAA(1A) of the Act [section 115 JAA(1A) of the Act].
III. BENEFITS AVAILABLE TO THE COMPANY AND PROSPECTIVE RESIDENT
SHAREHOLDERS OTHER THAN DOMESTIC COMPANIES 1. DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT
Draft Letter of Offer
45
1.1 Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic
company are exempt in the hands of the Company/shareholders, if the same is subject to dividend
distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the Act.
However, Section 94(7) of the Act provides that the losses arising on account of sale/transfer of shares
purchased up to three months prior to the record date and sold within three months after such date will be
disallowed to the extent of dividend on such shares are claimed as tax exempt by the shareholder.
2. INCOME FROM CAPITAL GAINS
2.1 Section 48 of the Act, categorises capital assets into two major categories viz. Long term Capital Assets
and Short Term Capital Assets. If the shares are held for a period more than 12 months it is termed as a
long term asset and otherwise as a short term asset. Any profit or loss arising on account of sale/transfer
of such Long Term Assets are termed as long term capital gains and short term assets as short term
capital gains.
2.2 Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction
of cost of acquisition / improvement and expenses incurred wholly and exclusively in connection with the
transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However,
as per second proviso to Section 48 of the Act, in respect of long term capital gains arising from transfer
of shares of Indian Company, it offers a benefit by permitting substitution of cost of acquisition /
improvement with the indexed cost of acquisition / improvement, which adjusts the cost of acquisition /
improvement by a cost inflation index, as prescribed annually.
2.3 Provisions of Section 112 of the Act, permit taxing long term capital gains (which are not exempt under
Section 10(38) of the Act) arising on transfer of shares in the Company at a rate of 20 percent (plus
applicable surcharge and education cess) after factoring the indexation benefit. However, the share
holder may opt for the tax on long term gains computed at the rate of 10 percent (plus applicable
surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of listed
securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the rate of
10 percent without indexation benefit.
2.4 Provisions of Section 111A of the Act, prescribes for taxing the short-term capital gains arising from sale
of equity shares in the Company at a rate of 10 percent (plus applicable surcharge and education cess)
where such transaction of sale is entered on a recognized stock exchange in India and is liable to
securities transaction tax.
2.5 Provisions of section 10(38) of the Act, exempts from tax the long term capital gains arising on sale of
equity shares in the Company where the sale transaction has been entered on a recognized stock exchange
of India and is liable to securities transaction tax.
2.6 Provisions of Section 54EC of the Act exempts long-term capital gains (which are not exempt under
section 10(38) of the Act) from being taxed to the extent such capital gains are invested in long term
specified assets within a period of 6 months after the date of such transfer in notified bonds (Presently,
bonds issued by the National Highways Authority of India or the Rural Electrification Corporation
Limited have been specified) Where only a part of the capital gains is so invested, the exemption is
proportionately available. The minimum holding period prescribed to remain eligible for the exemption is
3 years.
However, in terms of Union Budget 2007-08 investments in the specified assets by an assessee during
any Financial Year should not exceed 50 lakhs rupees.
2.7 Subject to the conditions specified under the Provisions of Section 54F of the Act, long-term capital gains
(which are not exempt from tax under Section 10(38) of the Act) arising to an individual or a Hindu
Undivided Family (‘HUF’) on transfer of shares of the Company will be exempt from capital gains tax if
the sale proceeds from transfer of such shares are used for purchase of residential house property within a
period of 1 year before or 2 years after the date on which the transfer took place or for construction of
residential house property, within a period of 3 years after the date of such transfer.
2.8 In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase
and sale of equity share in a company through the recognized stock exchange is liable to securities
Draft Letter of Offer
46
transaction tax @ 0.125 percent of the value payable by both buyer and seller. (The non-delivery based
sale transactions are liable to tax @ 0.025 percent of the value payable by the seller).
2.9 Provisions of Section 88E provides that where the total income of a person includes income chargeable
under the head “Profits and Gains of business or profession” arising from purchase or sale of equity
shares in a company entered into on a recognized stock exchange, i.e. from taxable securities
transactions, he shall get a rebate equal to the securities transaction tax paid by him in the course of his
business. Such rebate is to be allowed from the amount of income tax in respect of such transactions
calculated by applying average rate of income tax on such income.
IV. BENEFITS AVAILABLE TO CORPORATE RESIDENT SHAREHOLDERS (DOMESTIC
COMPANIES).
DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT
1 Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a
domestic company are exempt in the hands of the Company/shareholders, if the same is subject to
dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the
Act. However, Section 94(7) of the Act provides that the losses arising on account of sale/transfer of
shares purchased up to three months prior to the record date and sold within three months after such
date will be disallowed to the extent dividend on such shares are claimed as tax exempt by the
shareholder.
INCOME FROM CAPITAL GAINS
2.1 Section 48 of the Act, categorises capital assets into two major categories viz. long term capital assets
and short term capital assets. If the shares are held for a period more than 12 months it is termed as a
long term asset and otherwise short term asset. Any profit or loss arising on account of sale/transfer of
such long term assets are termed as long term capital gains and short term assets as short term capital
gains.
2.2 Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for
deduction of cost of acquisition / improvement and expenses incurred wholly and exclusively in
connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of
capital gains. Further, in respect of long term capital gains from transfer of shares of Indian Company,
it offers a benefit by permitting substitution of cost of acquisition / improvement with the indexed cost
of acquisition / improvement, which adjusts the cost of acquisition / improvement by a cost inflation
index, as prescribed annually.
2.3 Provisions of Section 112 of the Act, permit taxing long term capital gains (which are not exempt
under Section 10(38) of the Act) arising on transfer of shares in the Company at a rate of 20 percent
(plus applicable surcharge and education cess) after factoring the indexation benefit. However, the
share holder may opt for the tax on long term gains computed at the rate of 10 percent (plus applicable
surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of
listed securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the
rate of 10 percent without indexation benefit.
2.4 Provisions of Section 111A of the Act, prescribes for taxing the short-term capital gains arising from
sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education
cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to
securities transaction tax.
2.5 Provisions of section 10(38) of the Act, exempts from tax the long term capital gains arising on sale of
equity shares in the Company where the sale transaction has been entered into on a recognized stock
exchange of India and is liable to securities transaction tax, subject to the condition that the income by
way of long-term capital gain of the company shall be taken into account in computing the book profit
and income tax payable under Section 115JB of the Act.
2.6 Provisions of Section 54EC of the Act exempts long-term capital gains (which are not exempt under
section 10(38) of the Act) from being taxed to the extent such capital gains are invested in long term
specified assets within a period of 6 months after the date of such transfer in notified bonds (Presently,
Draft Letter of Offer
47
bonds issued by the National Highways Authority of India or the Rural Electrification Corporation
Limited have been specified) Where only a part of the capital gains is so invested, the exemption is
proportionately available. The minimum holding period prescribed to remain eligible for the exemption
is 3 years.
However, in terms of Union Budget 2007-08 investments in the specified assets by an assessee during
any Financial Year should not exceed 50 lacs rupees.
2.7 In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase
and sale of equity share in a company through the recognized stock exchange is liable to securities
transaction tax @ 0.125 percent of the value payable by both buyer and seller. (The non-delivery based
sale transactions are liable to tax @ 0.025 percent of the value payable by the seller).
2.8 Provisions of Section 88E provides that where the total income of a person includes income chargeable
under the head “Profits and Gains of business or profession” arising from purchase or sale of an equity
share in a company entered on a recognized stock exchange, i.e. from taxable securities transactions,
the company shall get a rebate equal to the securities transaction tax paid by it in the course of its
business. Such rebate is to be allowed from the amount of income tax in respect of such transactions
calculated by applying average rate of income tax on such income.
V. BENEFITS AVAILABLE TO MUTUAL FUNDS
Provisions of Section 10(23D) of the Act exempts the Mutual Funds registered under the Securities and
Exchange Board of India or Mutual Funds set up by Public Sector Banks or Public Financial Institutions or
authorized by the Reserve Bank of India and subject to the conditions specified therein, from income tax on
their income.
VI. BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIS’)
DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT
Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic
company are exempt in the hands of the Company/shareholders, if the same is subject to dividend
distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the Act.
However, Section 94(7) of the Act provides that the losses arising on account of sale/transfer of shares
purchased up to three months prior to the record date and sold within three months after such date will be
disallowed to the extent dividend on such shares are claimed as tax exempt by the shareholder.
INCOME FROM CAPITAL GAINS
2.1 Provisions of Section 115AD of the Act, provides for taxing income of FIIS arising from securities
(other than income by way of dividends referred to in section 115(O) of the Act) at concessional rates,
as follows:
Nature of income Rate of tax (%)
Income in respect of securities 20
(other than units referred to in Section 115AB)
Long Term capital gains 10
Short term capital gains
(other than short term capital gain referred
to in section 111A) 30
The above tax rates would be increased by the applicable surcharge and education cess. The benefits of
indexation and foreign currency fluctuation protection as provided under Section 48 of the Act are not
available to a FII.
Draft Letter of Offer
48
2.2 Provisions of Section 111A of the Act, prescribes for taxing the short-term capital gains arising from
sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education
cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to
securities transaction tax.
2.3 Provisions of the Double Taxation Avoidance Agreement between India and the country of residence
of the FII would prevail over the provisions of the Act, as per section 90(2) of the Act, to the extent
they are more beneficial to the FII.
2.4 Provisions of section 10(38) of the Act, exempts from tax the long term capital gains arising on sale of
equity shares in the Company where the sale transaction has been entered into on a recognized stock
exchange of India and is liable to securities transaction tax, subject to the condition that the income by
way of long-term capital gain of the company shall be taken into account in computing the book profit
and income tax payable under Section 115JB.
2.5 Provisions of Section 54EC of the Act exempts long-term capital gains (which are not exempt under
section 10(38) of the Act) from being taxed to the extent such capital gains are invested in long term
specified assets within a period of 6 months after the date of such transfer in notified bonds (Presently,
bonds issued by the National Highways Authority of India or the Rural Electrification Corporation
Limited have been specified) Where only a part of the capital gains is so invested, the exemption is
proportionately available. The minimum holding period prescribed to remain eligible for the exemption
is 3 years.
However, in terms of Union Budget 2007-08 investments in the specified assets by an assessee during
any Financial Year should not exceed 50 lacs rupees.
2.6 In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase
and sale of equity share in a company through the recognized stock exchange is liable to securities
transaction tax @ 0.125 percent of the value payable by both buyer and seller. (The non-delivery based
sale transactions are liable to tax @ 0.025 percent of the value payable by the seller).
2.7 Provisions of Section 88E provides that where the total income of a person includes income chargeable
under the head “Profits and Gains of business or profession” arising from purchase or sale of an equity
share in a company entered on a recognized stock exchange, ie. from taxable securities transactions, he
shall get a rebate equal to the securities transaction tax paid by him in the course of his business. Such
rebate is to be allowed from the amount of income tax in respect of such transactions calculated by
applying average rate of income tax on such income.
VII. BENEFITS AVAILABLE TO NON-RESIDENTS / NON-RESIDENT INDIAN
SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE
CAPITAL INVESTORS)
DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT
1. Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a
domestic company are exempt in the hands of the Company/shareholders, if the same is subject to
dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the
Act. However, Section 94(7) of the Act provides that the losses arising on account of sale/transfer of
shares purchased upto three months prior to the record date and sold within three months after such
date will be disallowed to the extent dividend on such shares are claimed as tax exempt by the
shareholder.
INCOME FROM CAPITAL GAINS
2.1 In terms of first proviso to Section 48 of the Act, in case of a non-resident, while computing the capital
gains arising from transfer of shares in or debentures of the Company acquired in convertible foreign
exchange (as per exchange control regulations) protection is provided from fluctuations in the value of
rupee in terms of foreign currency in which the original investment was made. Cost indexation
benefits will not be available in such a case. The capital gains/ loss in such a case is computed by
Draft Letter of Offer
49
converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively
in connection with such transfer into the same foreign currency which was utilized in the purchase of
shares.
2.2 Provisions of Section 112 of the Act, permit taxing long term capital gains (which are not exempt
under Section 10(38) of the Act) arising on transfer of shares in the Company at a rate of 20 percent
(plus applicable surcharge and education cess) after factoring the indexation benefit. However, the
share holder may opt for the tax on long term gains computed at the rate of 10 percent (plus applicable
surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of
listed securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the
rate of 10 percent without indexation benefit.
2.3 Provisions of Section 111A of the Act, prescribes for taxing the short-term capital gains arising from
sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education
cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to
securities transaction tax. Short term capital gains arising from transfer of shares in a company other
than those covered by Section 111A of the Act would be subject to tax as calculated under the normal
provisions of the Act.
2.4 Provisions of the Double Taxation Avoidance Agreement between India and the country of residence
of the non resident would prevail over the provisions of the Act, as per section 90(2) of the Act, to the
extent they are more beneficial to the non-resident.
2.5 Provisions of section 10(38) of the Act, exempts from tax the long term capital gains arising on sale of
equity shares in the Company where the sale transaction has been entered into on a recognized stock
exchange of India and is liable to securities transaction tax.
2.6 Provisions of Section 54EC of the Act exempts long-term capital gains (which are not exempt under
section 10(38) of the Act) from being taxed to the extent such capital gains are invested in long term
specified assets within a period of 6 months after the date of such transfer in notified bonds (Presently,
bonds issued by the National Highways Authority of India or the Rural Electrification Corporation
Limited have been specified) Where only a part of the capital gains is so invested, the exemption is
proportionately available. The minimum holding period prescribed to remain eligible for the exemption
is 3 years.
However, in terms of Union Budget 2007-08 investments in the specified assets by an assessee during
any Financial Year should not exceed 50 lacs rupees.
2.7 Subject to the conditions specified under the Provisions of Section 54F of the Act, long-term capital
gains (which are not exempt from tax under Section 10(38) of the Act) arising to an individual or a
Hindu Undivided Family (‘HUF’) on transfer of shares of the Company will be exempt from capital
gains tax if the sale proceeds from transfer of such shares are used for purchase of residential house
property within a period of 1 year before or 2 years after the date on which the transfer took place or
for construction of residential house property within a period of 3 years after the date of such transfer.
2.8 Where shares of the Company have been subscribed in convertible foreign exchange, Non-Resident
Indians (ie. An individual being a citizen of India or person of Indian origin who is not a resident) have
the option of being governed by the provisions of Chapter XII-A of the Act, which inter alia entitles
them to the following benefits:
• Under Section 115E, where the total income of a non-resident Indian includes any income
from investment in convertible foreign exchange, such income shall be taxed at a concessional
rate of 20 per cent (plus applicable surcharge and education cess). Income arising to a non –
resident Indian in form of long term capital gain shall be taxed at a concessional rate of 10
percent (plus applicable surcharge and education cess).
• Under Section 115F of the Act, long-term capital gains (in cases not covered by section 10(38)
of the Act) arising to a non-resident Indian from transfer of shares of the company, subscribed
in convertible foreign exchange (in case not covered under Section 115E of the Act), shall be
exempt from income tax, if the entire net consideration is reinvested in specified assets/saving
certificates referred to in Section 10(4B) within 6 months of the date of transfer. Where only a
part of the net consideration is so reinvested, the exemption shall be proportionately reduced.
The amount so exempted shall be chargeable to tax subsequently, if the specified assets/saving
Draft Letter of Offer
50
certificates are transferred or converted into money within 3 years from the date of their
acquisition.
• Under Section 115G of the Act, it shall not be necessary for a non-resident Indian to furnish
his return of income under Section 139(1) if his income chargeable under the Act consists of
only investment income or long term capital gains or both, arising out of assets acquired,
purchased or subscribed in convertible foreign exchange and tax has been deducted at source
from such income as per the provisions of Chapter XVII-B of the Act.
• Under Section 115I of the Act, a Non-Resident Indian may elect not to be governed by the
foregoing provisions for any assessment year by furnishing his return of income for that
assessment year under Section 139 of the Act, declaring therein that the provisions of Chapter
XII-A shall not apply to him for that assessment year and accordingly his total income for that
assessment year will be computed in accordance with the other provisions of the Act.
2.9 In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase
and sale of equity share in a company through the recognized stock exchange is liable to securities
transaction tax @ 0.125 percent of the value payable by both buyer and seller. (The non-delivery based
sale transactions are liable to tax @ 0.025 percent of the value payable by the seller).
2.10 Section 88E provides that where the total income of a person includes income chargeable under the
head “Profits and gains of business or profession” arising from purchase or sale of an equity share in a
company entered into on a recognized stock exchange, i.e. from taxable securities transactions, he shall
get rebate equal to the securities transaction tax paid by him in the course of his business. Such rebate
is to be allowed from the amount of income tax in respect of such transactions calculated by applying
average rate of income tax.
BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957
1. Investment in shares of companies are excluded from the definition of the term “asset” as given under
section 2(ea) of the Wealth Tax act, 1957, and hence the shares held by the shareholders would not be
liable to Wealth tax.
BENEFITS AVAILABLE UNDER THE GIFT TAX ACT
1. Gift tax is not leviable in respect of any gifts made on or after 1st October, 1998. Therefore, any gift
of shares of the Company will not attract Gift tax.
Notes:
• The above Statement of Possible Direct Tax benefits sets out the provisions of law in a summary
manner only and is not a complete analysis or listing of all potential tax consequences of the purchase,
ownership and disposal of equity shares.
• The above Statement of Possible Direct Tax benefits sets out the possible tax benefits available to the
Company and its shareholders under the current tax laws presently in force in India. Several of these
benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the
relevant tax laws.
• This statement is only intended to provide general information to the investors and is neither designed
nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax
consequences, the changing tax laws, each investor is advised to consult his or her own tax consultant
with respect of the specific tax implications arising out of their participation in the issue.
• In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further
subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between
India and the country in which the non-resident has fiscal domicile.
Draft Letter of Offer
51
SECTION VI: DETAILS OF ISSUER COMPANY
INDUSTRY OVERVIEW The information presented in this section has been extracted from publicly available documents from various
sources, including officially prepared materials from the Government and its various ministries and has not
been prepared or independently verified by the Issuer or the Lead Manager.
INTERNATIONAL SCENARIO
Sugar
The world sugar market has entered a distinctive surplus phase, characterised by a significant excess in global
production over consumption and export availability considerably higher than projected import demand. World
sugar production is expected to be 11.139 million tonnes higher than world consumption in the year 2007-08.
The global sugar industry has undergone a complete transformation characterised by a significant excess in
global production over consumption. Brazil and India are two of the largest sugar producing countries in the
world with India as the largest consumer in the world. Brazil maintained its position of largest manufacturer and
exporter of sugar in the world but is likely to be overtaken by India during the current year.
Production
The world sugar production is expected to increase by 2.58 % and reach 170.308 million tonnes in the sugar
season 2007-08.
The major sugar producing countries comprising Brazil, India, China and U.S.A account for 45% of total sugar
production. EU collectively produces around 14 percent of the total sugar production. Brazil is the largest
producer of sugar. Going forward, the country plans to boost sugarcane output to 627 million tonnes in the next
seven years. India is the second largest producer and its sugar production has increased consistently except in
years which were drought affected.
Consumption
The total world consumption of sugar is estimated at 159.169 million tonnes in 2007-2008. India is the largest
consumer of sugar followed by China, Brazil, USA and Russia. Consumption in China, India and Brazil is
growing at a higher rate than the world average of 2.2 percent. Consequently, these geographies are expected to
play a larger role in the global sugar trade in the coming years.
World Sugar Balance
(mln tonne, raw value) 2007/08 2006/07 Change
in mln t in %
Production 170.308 166.030 4.278 2.58
Consumption 159.169 154.985 4.184 2.70
Surplus / Deficit 11.139 11.045
Import demand 45.496 46.070 -0.574 -1.25
Export availability 49.768 46.077 3.691 8.01
End Stocks 74.716 67.849 6.867 10.12
Stocks/Consumption ratio in% 46.94 43.78
Source: ISO quarterly market outlook, November, 2007
Ethanol
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Ethanol a real-world petroleum substitute is likely to emerge as a complete energy solution in the coming years,
especially with the spiraling cost of crude.
Being an oxygenate, ethanol contains 35% oxygen, helping combust fuel more completely and reducing
vehicular tailpipe emissions. This progressive use of ethanol will reduce vehicular pollution load and migrate
vehicles to Euro IV norms. The accelerated phase-out of MTBE (Methyl tertiary-butyl ether) will accelerate
ethanol demand
Global perspective: The world trade of ethanol reached a record high of 7.8 billion litres in 2006 compared to
5.9 billion litres in 2005. Brazil is the dominant supplier at 3.43 billion litres and US is the major importer at
2.74 billion litres.
Indian perspective: In India, the blending of petrol with 5% ethanol has been permitted, in all states excepting
the North-East states. India requires an estimated 550 million liters of Ethanol. The government is considering a
proposal to make 5% doping compulsory with immediate effect across the country, which is expected to
increase to 10% from October 2008. This will boost production of ethanol remarkably in India.
Global outlook: The world fuel ethanol production and consumption is forecast to grow by 28% and 27%
respectively in 2007. The world production is expected to rise to 50.7 billion litres in 2007 from 39.5 billion
litres in 2006. The world consumption closely approximates world production and is forecasted to reach 49.20
billion litres in 2007 from 38 billion litres in 2006.
INDIAN SCENARIO
Overview & Key Trends
• Sugar industry is the largest agro-based industry located in the rural India. About 50 million sugarcane
farmers, their dependents and a large mass of agricultural labourer are involved in sugarcane
cultivation, harvesting and ancillary activities, constituting 7.5% of the rural population. Besides, about
0.5 million skilled and semi-skilled workers, mostly from the rural areas are engaged in the sugar
industry. Some of the sugar factories have also diversified into byproduct based industries and have
invested and put up distilleries, organic chemical plants, paper and board factories and cogeneration
plants. The industry generates its own replenishable biomass and uses it as fuel without depending on
fossil fuel. At the prevailing sugar price, the total sugar cane produced in the country value at about
Rs. 37,000 crore per year.
• There are approximately 607 sugar mills located in the 18 states of the country. About 50 % of these
mills are in the cooperative sector, 40% in the private sector and rest in the public sector. However only
500 sugar mills were in operation during the season 06-07. (Source: ISMA)
• The minimum price of raw material, namely sugarcane, is statutorily fixed by the Central Government
on the basis of the recommendation made by Commission for Agricultural Costs & Prices (CACP).
Sale of sugar produced by the mills is regulated by the Central Government through monthly release of
quota. Currently, 90% of the sugar produced is allowed to be sold by mills as free sale quota (free in
regard to price and movement) and 10% is allowed to be sold as levy to State Governments or their
nominees at predetermined prices (levy Price). The sale of sugar produced in 4-5 months of the sugar
season is staggered over a period of a year or more.
• Sugar cycle: The domestic sugar industry typically follows a 4 to 5 year cycle. Higher sugarcane and
sugar production results in a fall in sugar prices and non-payment of dues to farmers. This compels the
farmers to switch to other crops thereby causing a shortage of sugarcane, consequently an increase in
sugarcane prices and extraordinary profits. Taking into account the prevalent higher prices for cane,
farmers then switch back to sugarcane. For example, the bumper crop in sugar season (Oct - Sep) 2002-
03 resulted in higher production, but lower prices for sugar. It also resulted in large cane arrears leading
to harsh times for cane growers. Taking into account the bad experience of 2002-03, many farmers
shifted to other crops leading to drop in sugarcane and sugar production in the country. The limited
availability of sugarcane in 2004-05 season forced the sugar manufacturers to make higher and prompt
payment to farmers. Consequently, this resulted in a bumper crop in 2006-07 season. An illustration of
the said sugar cycle is given below:
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53
• Agriculture in the country being largely rain fed, monsoon plays an important role in the production of
sugarcane, the basic raw material for the sugar industry. The sugar production in the last 15 years is
given below:
Year Sugar Production (Million Tonnes)
1988-89 8.75
1989-90 10.99
1990-91 12.04
1991-92 13.40
1992-93 10.60
1993-94 9.83
1994-95 14.64
1995-96 16.45
1996-97 12.90
1997-98 12.85
1998-99 15.53
1999-00 18.20
2000-01 18.51
2001-02 18.52
2002-03 20.14
2003-04 14.00
2004-05 12.69
2005-06 19.27
2006-07
(estimated)
28.50
(Source: ISMA October, 2007 issue)
The Indian sugar industry is the country’s second-largest agro-processing industry with a production of over
28.50 million tonnes during 2006-07.
The Indian sugar market is one of the largest markets in the world, in volume terms. India is also the second
largest sugar producing geography globally. It remains a key growth driver for world sugar, growing above the
Asian and world consumption growth average.
Production
Sugar production has been increasing steadily but there have been periods of low production, due to a variety of
reasons including pests and drought. Production has been cyclical, with the typical cycle duration ranging
between 4 to 5 years.
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54
Sugar production in India is driven by factors such as sugar and sugarcane prices, cane acreage, yield per
hectare and recovery percentage.
Yield per hectare: The average yield per hectare of cane production in India is estimated at 68 tonnes per hectare
compared to 73 tonnes per hectare in Brazil. Besides, the yield per hectare varies depending on the location of
the growing area. South India being significantly higher than the north. In Tamilnadu, the yield per hectare is
about 105 tonnes as opposed to Uttar Pradesh's 59 tonnes.
Consumption The Indian sugar consumption has steadily increased at 3.5 percent since 1996. The total sugar consumption is
estimated at 20 million tonnes. Of the total sugar sold in the free market, an estimated 61 percent is accounted
for by the industrial and small business segment, also referred to as indirect consumption of sugar. Dairy,
confectionary, bakery and beverages account for 75 percent of industrial consumption. The household segment,
which consumes sugar directly, accounts for an estimated 39 percent of the total free sale (non-levy) sugar
consumption.
The per capita sugar consumption increases with rise in income. At the lowest income levels, the average
household sugar consumption is at 2.2 kg per month, while at the highest income levels the average household
sugar consumption is at 5.11 kg per month.
Sugar Equation
(million/tonne)
2002-03 2003-04 2004-05 2005-06 2006-07 *
Opening stock 11.32 11.62 7.67 4.00 3.90
Production 20.14 14.00 12.69 19.27 28.50
Imports 0.04 0.40 2.14
Total supply 31.50 26.02 23.34 23.27 32.40
Consumption 18.38 18.13 18.50 18.24 19.00
Exports 1.50 0.22 0 1.13 1.80
Total demand 19.88 17.51 18.50 19.37 20.80
Closing stock 11.62 7.67 4.00 3.90 11.60
(* Estimated - Source ISMA –October, 2007)
Exports To support the ailing sugar industry, impacted by a bumper sugarcane production and sliding realization, the
Government has provided permission to export sugar in January 2007.
The Government made a u-turn to its earlier policy and is now actively encouraging Indian exporters to move
abroad as much sugar as possible. India's exports are expected to reach 2 million tonnes for the sugar season
2006-07.
Draft Letter of Offer
55
In addition to providing an additional revenue stream, exports have been boosted by favourable Government
incentives against transportation costs. The Central Government announced reimbursement of internal
Transport and freight charges subject to a ceiling of Rs.1350/- per ton for mills located in coastal area and
Rs.1450/- per ton for those in interior areas.
Government initiatives for stock building
The Food Ministry has created a 5 million tonnes sugar buffer to bail out the ailing industry. The buffer would
basically transfer the cost of interest, storage and insurance payable on the total allocated quantity from the
sugar mills to the Union Government's account. The money for buffer stock will come from the Sugar
Development Fund.
Sugarcane Pricing
Sugarcane is the main raw material for sugar industry and accounts for about 70% of the cost of production of
sugar. It is also the major source of income for millions of farmers. The determination of price for sugarcane is,
therefore, a matter of critical importance both for the sugar industry and the cane growers. The Central
Government fixes a Statutory Minimum Price factory wise, in terms of Clause 3 of the Sugarcane (Control)
order, 1966 in respect of each sugar season having regard to the following:
• Cost of production of sugarcane
• Return to the growers from alternative crops and the general trend of prices of agricultural commodities
• Availability of sugar to consumers at a fair price
• Price at which sugar produced from sugarcane is sold by sugar producers
• Recovery of sugar from sugarcane
Further, under the Clause 5A of the Sugarcane (Control) Order 1966, the farmer is entitled to an additional
payment out of the price realization by the factories.
The Central Government before the onset of crushing season declares the SMP. For season 2006-07, SMP of
sugarcane was fixed at Rs. 80.25 per quintal linked to a base recovery rate of 9.00% with a premium for higher
recovery.
Furthermore, factories are required to pay an additional price under Clause 5A of Sugarcane (Control) Order,
1966, which is calculated by the Government based on any additional sugar price realized by the factories.
This pricing mechanism has been adopted to ensure that the farmers get a fair price for the cane. Besides, it
reduces the impact of cane prices variation on the cost structure of different mills depending on their location.
Sugar season SMP (Rs. per quintal) Link to recovery (%)
2000-01 59.50 8.5
2001-02 62.05 8.5
2002-03 69.50 8.5
2003-04 73.00 8.5
2004-05 74.50 8.5
2005-06 79.50 9.0
2006-07 80.25 9.0
2007-08 81.18 9.0
Basic Statutory Minimum Price (Rs. per quintal) for Company’s units
Units 2006-07 2005-06
Hargaon 94.65 91.82
Rosa 82.05 82.14
Narkatiaganj 82.95 83.90
However, some of the State Governments fix their own State Advised Price (SAP) that are substantially higher
that the SMP.
Draft Letter of Offer
56
In a Landmark judgment, the Hon’ble Supreme Court in its 3:2 majority judgment, dated 5th May 2004 has
upheld the right of U.P State Government to fix the State Advised Price (SAP) of sugarcane at levels higher than
the SMP prescribed by the Central Government under the Sugar Cane (Control) Order, 1966, thereby setting
aside the order of the Allahabad High Court which had held SAP to be untenable. As regards other States, like
Bihar, Punjab, Haryana, the orders of the respective High Courts have been set aside and the writ petitions have
been remitted back to the respective High Courts for fresh consideration in accordance with the applicable laws
of those states. The U.P. Industry, subsequently filed the review petition, but the same was also dismissed.
After the judgement of the Supreme Court, the UP State Government has announced SAP for the sugar season
2003-04, with retrospective effect. The same was challenged by the U P Sugar Mills Association, before
Allahabad High Court and the Court has upheld the prices announced by the UP Government. As a result, we,
like the rest of the UP sugar mills have made a payment towards the arrears on account of differential prices of
cane for the seasons 1996-97, 2002-03 and 2003-04.
The U.P sugar factories have paid Rs. 107 per quintal for sugar season 2004-05, Rs. 115 per quintal for sugar
season 2005-06 and currently paying Rs. 125 per quintal for the sugar season 2006-07, based on the prices
announced by the U.P Government, which is also referred to as State Advised Price (SAP). Further the Bihar
sugar factories paid SMP for the sugar season 2003-04. However most of the Bihar sugar factories have paid a
contractual price of Rs. 108/- per quintal for sugar season 2005-06 and Rs. 115 per quintal for sugar season
2006-07, higher than the SMP.
The Uttar Pradesh Government has announced SAP of Rs 125 per quintal for Sugar season 07-08, which is
challenged by the Uttar Pradesh Sugar Mills Association, including the Company for its factories situated at
Hargaon and Rosa, before the Allahabad High Court, Lucknow Bench. For further details please refer to the
section Litigations & other Information on page no 225 of this Draft Letter of Offer
Release Mechanism of Sugar
Under the partial control of sugar industry followed by the Central Government, 90% of the sugar produced by
sugar mills may be disposed off by them, without any restriction on price and movement. The balance 10% is to
be supplied by them at prices fixed by the Central Government. However, both free sale sugar and levy sugar
are subject to monthly quotas decided by the Central Government. The sugar produced in 4 to 5 months in a
sugar seasons is controlled and regulated to be sold throughout the year. This release mechanism has been in
place since 1942, when the Sugar and Sugar Products Control Order was first promulgated and has since been
followed except for a break during 1978-79, when monthly release was given up. The reason for monthly
release of sugar has been to ensure that sugar is available throughout the year at reasonable prices to consumers.
10% of the sugar produced by the factory is procured by the Government as levy sugar at a pre-determined price
for supply to consumers through the Public Distribution System. This proportion of levy sugar was 60% in
1967-68 and has been gradually brought down to 10% from 2001-02.
Byproducts and Ethanol
Bagasse and molasses are the two most important by-products of the sugar industry. Whereas bagasse is
primarily used to meet the captive requirement of fuel, a substantial quantity of it can be saved to produce
products like paper, particle boards etc. In addition, the bagasse can also be used for cogeneration of power by
the sugar industry. It is estimated that the sugar industry has a potential to co-generate upto 5000 MW of power.
Similarly, molasses, an important by-product of the sugar industry, is used extensively for the manufacture of
ethyl alcohol and alcohol based down stream chemicals in addition to manufacture of potable alcohol.
Dehydrated alcohol (ethanol) is a good oxygenate and when used as a blend with motor spirit, substantially
reduce the vehicular emissions. Its blending therefore can help reduce pollution in large cities. Ethanol has a
high anti knock quality and its addition up to 10% raises the octane rating of regular petrol by 3 units and
blending up to 25% raises the octane no. by 8 units thus, eliminating the need for using environmentally harmful
lead additives for raising the octane number of petrol.
The Government announced Ethanol blended petrol scheme in 2002 to encourage alternative fuel, ethanol in the
larger interest of cane farmers and also its beneficial impact on environmental protection. the blending of petrol
with 5% ethanol has been permitted, in all states excepting the North-East states. India requires an estimated 550
million litters of Ethanol. The government is considering a proposal to make 5% doping compulsory with
immediate effect across the country, which is expected to increase to 10% from October 2008.
Co-generation
Draft Letter of Offer
57
The bagasse, by product of sugar, is used for cogeneration of power by the sugar industry. It is estimated that the
sugar industry has a potential to co-generate upto 7000 MW of power. About 100 sugar units across the country
have Co-generation facilites out of which 95 % are in the private sector with installed capacity of about 1800
MW, exporting about 1100/1200 power to grid. To promote this activity, the Minstry of Consumer Affairs,
Food and Public Distribution has also amended the Sugar Development Fund Act, to provide loans to co-
generation projects at concessional rate of interest.
Draft Letter of Offer
58
OUR BUSINESS
Our Company was promoted by Late R.D.Birla in 1932 with the main object of carrying on business of
production and sales of sugar and sugar related products. The first sugar mill of our Company was set up at
Hargaon (District: Sitapur, Uttarpradesh) with a crushing capacity of 400 tcd. We further established a distillery
at Hargaon in 1945. Subsequently, our company purchased a sugar factory namely Rosa Sugar Works at Rosa
(Dist. Shahanjapur, Uttar Pradesh) in 1976 with a crushing capacity of 1000 tcd. In 1984, The New Swadeshi
Sugar Mills Limited having a sugar mill, distillery at Narkatiaganj (Bihar), a fruit and vegetable canning factory
at Allahabad and a paint factory under lease at Calcutta was merged with our Company. The lease of the paint
factory was terminated in April, 1997. Over the period we have expanded our capacities of sugar production,
industrial alcohol/ethanol and canning products.Presently we have three sugar factories at Hargaon, Rosa in
Uttarpradesh and at Narkatiaganj in Bihar with a combined crushing capacity of 21,700 tcd alongwith 25 M.W.
Co-generation. Our Company is also having two distilleries at Hargaon and at Narkatiaganj with a total installed
capacity 22.50 million litres per annum. Our fruits and vegetable canning factory is situated at Bamrauli near
Allahabad. The Company is in process of setting up a Greenfield Sugar unit at Hatta, Gorakhpur, U.P with a
capacity 7,000 tcd and co-generation power plant of 35 M.W.
DETAILS OF OUR PRODUCTS
As stated above, we manufacture the following four main categories of products:
• Sugar
• Co-generation
• Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
• Canning Products.
In addition, we also have arrangement for manufacturing of bio-compost at Hargaon and Narkatiagang by using
press-mud from sugar factory and spent wash from distillery. Bio-Compositing culture purchased from Vasant
Dada Sugar Institute, Pune are added and by Aerobic Bio-composting process in 45-60 days Bio-Compost is
being made. This fertilizer having Nitrogen, Phosphorus and Potash and other chemicals is being widely used in
cane, wheat, vegetables & Flowers cultivation. Bio-Compost produced by us is marketed under the brand name
“Oudh Jaivik Khad” at Hargaon.
Share of different segments in our total sales for the last three years is as follows:
(Rs. in Lacs)
2004-05 2005-06 2006-07
Amount % to total
sales
Amount % to total
sales
Amount % to total
sales
Sugar 32078.00 90.10 44890.74 89.57 37817.54 85.47
Co-generation - 0 0 0 766.43 1.73
Industrial Spirits
(including
Denaturants), Fusel
Oil & Bio-Compost
2335.20 6.56 3792.89 7.57 3919.33 8.86
Canning Products 1191.37 3.34 1433.10 2.86 1741.15 3.94
Total 35604.57 100.00 50116.73 100 44244.45 100
Draft Letter of Offer
59
PRODUCTION PROCESS
Production process for sugar and industial alcohol/ethanol
Harvested cane is received at the mill gate. Cane is then weighed on the platform type weighbridges having the
weight recording arrangement with linkage to the computers for recording the gross and net weights as also the
price payable to the farmers. Unloading of Cane is done as follows:
• Cane received in Cart is unloaded directly into the cane carrier; and
• Canes received in tractor trolleys and truck is unloaded with the help of overhead traveling cranes and truck
trippler.
The sugarcane is uniformly fed to the shredder to prepare the same for efficient milling. The prepared cane will
then pass through the milling tandems for the initial grinding. The juice extracted is strained and kush-kush
separated from the juice is returned to the mill tandem. Bagasse from the last mill is conveyed, by means of a
carrier system, as fuel to the boilers.
Crushed juice from the milling plant is mechanically screened. Double sulphitation process is followed for the
manufacture of sugar in the factory. The juice is then sent for heating upto 70°C in rapid flow vertical juice
heater. The heated juice is limed and sulphited in a continuous juice sulphiter. The treated juice is then heated to
approximately 105 degree centigrade and made to enter a flash tank for the removal of gas and air before letting
it into a continuous clarifier, where the settling of the mud flock takes place. Accumulated mud is separately
withdrawn by gravity flow. Clear juice is withdrawn from the upper regions through the overflow box for
further treatment.
Clarified juice from the clarifier is further heated to around 115°C in a tubular heater, before being pumped for
thickening. Vapours from the 1st & 2nd effect are used to heat the pans. A quadruple effect evaporator is used to
effect final thickening of the juice into syrup. The syrup of approximately 60/62 brix is further bleached by
passing it through a continuous syrup sulphitation vessel and pumped to pan supply tanks at the pan floor.
A three and half boiling system with the use of true seeding method is used in the pans for complete exhaustion.
The process of crystallization is initiated in the pans, and is completed in the crystallizers. Air-cooled
crystallizers are used to handle proper crystallization. After the mother liquor in the massecuite is exhausted to
the optimum limit i.e. the maximum sugar from the mother liquor has been transferred to sugar crystals, the two
constituents are separated in the centrifugals. The sugar is washed thoroughly with super heated wash in stages
within the centrifugal baskets.
The sugar discharged from centrifugals is conveyed, dried and cooled by fluidized bed hoppers. Sugar is
screened in a grader so as to separate fine and lumps. Sugar is thereafter filled in sacks, weighted, stitched and
transferred to the sugar warehouse.
Molasses and Bagasse are by products of the sugar plant. Besides, the unit also produces steam, which is used to
generate power for captive consumption. The recovery of sugar from sugarcane ranges between 9% to 11%
during the last four years and the total reducing sugar in molasses has been around 40%.
Molasses is diluted and fermented with yeast. The Fermented diluted molasses called wash is distilled in the
distillation column to produce Rectified Spirit (Indstrial Alcohol). Rectified spirit is fed to the abosolute alcohol
plant whereby water present in rectified spirit is removed to get 99.5% -99.8% pure alcohol called absolute
alcohol (Ethanol).
Production process for Co-generation
In the process of generation of sugar, baggase is generated as a by-product, which in turn is used as the raw
material for production of steam, which is required to run turbine and alternative for production of electricity.
The Elctricity produced is of 440 volts and the voltage is stepped up through trasformers to match with the
frequency of 132 KVA of with State Grid.
Production process for Canning
The processing of our products upto receiving, sorting, weighing, washing, peeling & cutting is the common
irrespective of product category.
Draft Letter of Offer
60
For Canned Fruits & Vegetables, the cut / prepared fruits and / or vegetables are blanched then weighed quantity
of same is filled in containers which are also filled with the covering media which is sugar syrup in case of fruits
and brine / gravy in case of vegetables. Then these cans are exhausted under steam, hermetically sealed, and
processed/sterilized, cooled, wiped and stacked.
For Jams & Jellies, washed and cut fruits are passed through pulper in order to get a homogeneous pulp. The
pulp is then mixed with sugar syrup, pectin and other required ingredients, boiled to a suitable consistency, hot
filled in containers cooled, wiped and stacked.
For Squashes, the pulp is mixed with required ingredients like sugar syrup, citric acid, colour, flavour etc. and
homogenised, filled in containers at ambient temperature, wiped and stacked.
For Juices, the pulp is mixed with required ingredients like sugar syrup, citric acid etc., homogenised, boiled,
hot filled in containers, sealed, processed, cooled, wiped and stacked.
For Tomato Ketchup & Vegetable Sauces, the tomatoes or vegetables are properly washed and cut / trimmed if
required boiled, passed through pulper in order to get homogeneous juice / pulp. The juice / pulp thus obtained
is mixed with required ingredients like sugar syrup, salt, spices etc., boiled to a suitable consistency, hot filled in
containers, cooled, wiped and stacked.
PROCUREMENT OF RAW MATERIALS
Sugar
Sugarcane is the sole raw material required for production of sugar.
In the present regulatory system, each sugar mill has a command area which is assigned by the cane
commissioner of the state. Each sugar mill is required to procure sugarcane from its command area.
Our Hargaon Sugar Unit is located in Village Hargaon on Sitapur-Lakhimpur Highway in Sitapur District of
Uttar Pradesh .The command area of Hargaon factory is 68,650 Hectares falling in Sitapur & Lakhimpur
Districts.
Narkatiaganj Sugar Unit is located in the sub-divisional town of Narkatiaganj in the District of West
Champaran, Bihar. The command area of this unit consists of 78,243 hectares of cultivable land.
The Rosa Sugar Unit is located in village Rosa on National Highway, Shahjahanpur District of Uttar Pradesh.
The cultivable area in command area of Rosa consists of 42,152 Hectres.
Our sugar mills have to pay the SAP fixed by the State Government for Uttar Pradesh and SMP/contractual
prices for the sugarcane supplied in Bihar by the cane growers.
Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
In the process of production of sugar from cane juice, molasses is generated as a by-product which in turn is
used as the raw material for production of Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
at our distilleries and balance, if any, is sold in the open market in accordance with Molasses Policy of the state
governments.
Co-generation
In the process of production of sugar from cane, baggase is generated as a by-product which in turn is used as
the raw material for production of Electiricty.
Canning
We procure fruits and vegetables for canning from open market on as and when required basis.
Draft Letter of Offer
61
OUR PRODUCTION FACILITIES
We have three sugar units at Hargaon, Rosa in U.P and Narkatiaganj in Bihar. Our two distilleries are situated at
Hargaon in U.P and at Narkatiaganj in Bihar. Our canning unit is located at Bamrauli near Allahabad. The
Company is in process of setting up a Greenfield Sugar unit at Hatta, Gorakhpur, U.P with a capacity 7,000 tcd
and co-generation power plant of 35 M.W. Installed capacities, capacity utilisations and actual production of the
sugar units, distilleries and canning unit for the years 2004-05, 2005-06 and 2006-07 are as follows:
Hargaon Sugar Unit
Description 2004-05 2005- 06 2006-07
Installed capacity (TCD) 6500 7500 10000
Sugarcane crushed (lac quintals) 96.20 105.45 145.77
Capacity utilisation (%) 90.24 86.26 82.36
No. of working days 164 163 177
Sugar production (lac quintals) 10.02 11.14 15.15
Narkatiaganj Sugar Unit
Description 2004-05 2005- 06 2006-07
Installed capacity (TCD) 5000 5000 7500
Sugarcane crushed (lac quintals) 40.40 70.89 74.74
Capacity utilisation (%) 95.06 109.91 67.79
No. of working days 85 129 147
Sugar production (lac quintals) 3.85 6.59 6.02
Rosa Sugar Unit
Description 2004-05 2005- 06 2006-07
Installed capacity(TCD) 3500 4200 4200
Sugarcane crushed (lac quintals) 45.40 57.25 69.53
Capacity utilisation (%) 98.27 85.19 95.69
No. of working days 132 160 173
Sugar production (lac quintals) 4.23 5.28 6.64
Hargaon Distillery Unit
Description 2004-05 2005- 06 2006-07
Installed capacity(lac litres per annum) 135.00 135.00 135.00
Industrial Alcohol/Ethanol produced (lac litres) 64.13 93.29 130.36
Capacity utilisation (%) 47.50 68.10 96.56
Narkatiaganj Distillery Unit
Description 2004-05 2005- 06 2006-07
Installed capacity(lac litres per annum) 90 90 90
Industrial Alcohol/Ethanol produced (lac litres) 71.57 84.26 74.18
Capacity utilisation (%) 79.52 93.62 82.42
Allahabad Canning Company
Description 2004-05 2005- 06 2006-07
Installed capacity(in M.T. per shift of 8 hours) 10 10 10
Production (in M.T) 2930 4314 3427
Total Working Days 300 303 311
Capacity Utilisation 97.66 142.38 110.19
Draft Letter of Offer
62
Co-generation
Description 2006-07
Capacity (in M.W.) 25
Production (in Lac Units) 577.36
Total Units sold (in lac units) 262.53
OUR MARKETING Sugar
At present, 10% of the sugar produced is released by the Central Government for its nominees as levy sugar and
the remaining 90% is sold in the open market. However, the Government through the release mechanism system
controls the actual quantity that can be sold in the open market. The price of sugar sold in the open market
depends on market forces.
The free sugar is sold through a network of agents, who in turn sell to wholesalers. As per the Company’s
practice, the delivery of free sale sugar is generally made against advance payment through demand draft on ex-
factory basis. Besides U.P., our Company sells sugar in Haryana, Madhya Pradesh, Bihar, Jharkhand, West
Bengal & Assam.
Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
The Industrial Spirits , generally being used by the Chemical Industry is being sold by our Company through our
own network. Absolute Alcohol finds application in a variety of industries including pharmaceuticals, paints,
etc. Due to hike in international prices of crude oil which have impacted the prices of petrol and diesel, the
Government of India has encouraged the use of bio fuels like Ethanol to be blended with petroleum based fuels.
Ethanol, being an oxygenate it contains high percentage of oxygen which helps combust fuel more completely
and reduces vehicular injurious emission. The Government has permitted for blending of fuel petrol with 5%
ethanol except in the states of Jammu & Kashmir, Himachal Pradesh and North Eastern States of the country.
However the Government is considering a proposal to make 5% doping compulsory with immidieate effect
across the country which is expected to increase to 10% from October 2008.
Logistical advantage would accrue to both oil companies and Distilleries in sale of Ethanol to the nearest oil
company’s depots.
Co-generation
Electricity is generated and sold to the State Grid under Power Purchase Agreement on the term and conditions
mentioned therein.
Canning
We can broadly divide our Sales in two sectors: (1) Sales to consumer through market penetration (2)
Institutional Sales
1) Regarding consumer sales, we have separately developed a marketing department, which looks after
entire sales. This department identifies the new area for selling our products, appoint new consignee
agents, distributors/dealers, look after our inventories lying at different locations, identifies new
products so that our production department may work on R&D work to introduce new products as well
make improvement in existing products and formulate different schemes as per market norms, which
can be offered to distributors as well as to consumers.
2) Regarding, institutional sales we have defined different segment, e.g. Star Hotels, Hostels, Technical
Institutes, Departmental Houses, Cooperatives Societies and Govt Canteens. In this sector we have
appointed liaison agents and distributors who look after these sales. The Company procures contracts
for the same by participating in the open market tenders floated by the Government (obtain copies of
some tenders and the bids they won as back up).
Draft Letter of Offer
63
Business Strategy
Our Company is exploring various avenues for expanding and consolidating manufacturing capacities in sugar,
distillery and Co-generation. During the season 2006-07, we have completed the expansion of Sugar Mills at
Hargaon by increasing its capacity to 10,000 tcd, with a Co-generation Plant of 15 MW. Our Company has also
increased the capacity of the sugar factory at Narkatiaganj to 7500 tcd with a co-generation plant of 10 MW.
In order to meet the increasing demand of ethanol, we are in process of implementing capacity expansion of our
distilleries at Hargaon and Narkatiaganj to 100 KLPD and 60 KLPD respectively.
The Company is in process of setting up a Greenfield Sugar unit at Hata, Gorakhpur, U.P with a capacity 7,000
tcd and co-generation power plant of 35 M.W.
For further details, please refer to “Government Approvals” on page no. 285 of this Draft Letter of Offer
Export Obligation Currently there is no export obligation to be fulfilled by us.
Draft Letter of Offer
64
OUR PROPERTIES
Except stated herein below there is no property which is owned by the Company or propose to purchase or
acquire which is to be paid for whole, or in part, from the net proceeds of the Issue or the purchase or
acquisition of which has not been completed on the date of this Draft Letter of Offer.
UNIT Area (Acre) Location
Sugar Unit-
Hargaon
5.298 At Village-Muradnagar,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
23.368 At Village-Muradnagar,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
0.230 At Village-Jahangirabad,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
5.552 At Village-Jahangirabad,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
7.349 At Village-Deeppur,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
3.800 At Village-Deeppur,P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
3.01 At Village-Pipra Maroda Tehsil-Lakhim Pur
Distt.Lakhimpur-Kheri,Uttar Pradesh
0.71 At Village-Dudwa Midania Tehsil-Lakhim Pur
Distt.Lakhimpur-Kheri,Uttar Pradesh
52.99 At Village-Saidipur Khurd Tehsil-Lakhim Pur
Distt.Lakhimpur-Kheri,Uttar Pradesh
51.26 At Village-Haiderpur P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
Hargaon Distillery
Unit
25.155 At Village-Surjipara P.O.Hargaon
Distt.Sitapur,Uttar Pradesh
Narkatiaganj Sugar 42.82 At village narkatiaganj, district-betia
Bihar.
Narkatiaganj Farms 1045.97 At village narkatiaganj, district-betia
Bihar.
Narkatiaganj
Distillery
46.10 At village narkatiaganj, district-betia
Bihar.
Rosa Sugar Unit 29.51 Village Chaundhera, Rosa ( Shahjahanpur)
1.57 Village Rausar, Rosa ( Shahjahanpur)
Allahabad Canning
Unit
5.318 Village Bamrauli, Allahabad.
Hata Sugar Unit 81.3931 Village Dhadha Bujurj, Pargana-Silhut, Tehsil-Hata
District-Kushinagar ( Uttar Pradesh)
Draft Letter of Offer
65
INSURANCE
All our plants are insured and we have taken Insurance Policies for our plants (which covers fire risk for all
plant and machinery, loss caused due to earthquake and spontaneous combustion). All insurance polices are
tariff policies and the rates, terms, conditions and scope of coverage are determined by the Tariff Advisory
Committee, a Government body.)
COMPETITION
Sugar Industry in India is very fragmented and competitive because of presence of a number of players. Some of
the major players in Northen and Eastern India are Bajaj Hindusthan, Balrampur Chini Mills, Dhampur Sugar
etc.
Draft Letter of Offer
66
REGULATIONS AND POLICY The sugar industry is one of the industries enumerated in entry 33 of List III of the Seventh Schedule to the
Constitution of India and sugarcane is an article relatable to the sugar industry. Accordingly, both the Centre and
the State are empowered to legislate on this subject, and such legislations would be applicable to the business of
the Company.
Set out below is a summary of the significant legislations passed by the Central Government relating to the
production, sale and purchase of sugar and sugarcane-
1. The Essential Commodities Act, 1955
The Essential Commodities Act, 1955 (“EC Act”) provides for the control of the production, supply,
sales, storage, distribution etc. in certain commodities. The terms ‘food stuff’ and ‘food crop’ have been
identified as essential commodities under the Act. ‘Sugarcane’ being a ‘food crop’ and ‘sugar’ being
‘food stuff’ are covered under the class of essential commodities under the Act ;
Section 2(e) of the EC Act defines ‘sugar’ as under :-
i) any form of sugar containing more than ninety per cent of sucrose, including , sugar candy;
ii) khandsari sugar or bura sugar or crushed sugar or any sugar in crystalline or powdered form;
or
iii) sugar in process in vacuum-pan sugar factory or raw sugar produced therein;
Section 3 of the EC Act empowers the Central Government for issuing directions to control production,
supply, distribution etc. of the ‘essential commodity’ produced by the manufacturer or stock holders,
and also makes specific provision with regard to the amount payable for the levy sugar sold by the
producer.
The levy sugar price is to be fixed by the Central Government as per the provisions of Section 3 (3C) of
the EC Act, having regard to :
(a) the minimum price, if any, fixed for sugarcane by the Central Government;
(b) the manufacturing cost of sugar;
(c) the duty or tax payable thereon;
(d) securing a reasonable return of the capital employed in the business of manufacturing sugar.
Further, Section 3 (3-c) of the EC Act provides for fixing different prices from time to time for different
areas or factories or for different kinds of sugar.
The Central Government has also been empowered to direct that no producer, importer or exporter shall
sell or otherwise dispose of or deliver any kind of sugar or remove from the bonded godown of the
factory in which it is produced, except under and in accordance with the directions issued by the
Government.
Further, all kinds of sugar including plantation white sugar, raw sugar and refined sugar, whether
indigenously produced or imported, fall within the scope of powers of the Central Government for
directions in regard to, inter alia, stock, disposal or delivery.
2. The Levy Sugar Supply (Control) Order, 1979
The objective of this legislation is to empower the Central Government to issue directions to any
producer or importer or recognized dealer to supply levy sugar in such quantities and from such place
of manufacture or storage to such persons or organisations, in such areas or markets or to the State
Government/Union Territory / Administration as specified by the Government.
The term ‘Levy Sugar’ has been defined to mean the sugar requisitioned by the Central Government
under the EC Act.
Further, the Order prescribes that the producer shall supply levy sugar at a price not exceeding the price
as determined by Central Government under the EC Act.
Draft Letter of Offer
67
3. Sugar (Control) Order, 1966
The Sugar (Control) Order authorizes the Central Government to regulate sales etc. of sugar produced
or imported.
According to Clause 4 of the Sugar (Control) Order, no producer shall sell or agree to sell or otherwise
dispose of or deliver or agree to deliver any kind of sugar or remove any kind of sugar from the bonded
godowns of the factory in which it is produced except in accordance with the directions issued in
writing by the Central Government.
Clause 5 of the Sugar (Control) Order empowers the Central Government to issue directions to
producers or importers or recognized dealers regarding production, maintenance of stocks, storage,
sale, grading, packing, marking, weighment, disposal, delivery and distribution of any kind of sugar.
Further, the Sugar (Control) Order provides for powers for attachment, seizure and sale of attached
sugar, regulation of quality of sugar and other administrative powers.
4. Sugar (Packing and Marking) Order, 1970
The objective of Sugar (Packing and Marking) Order is to regulate the packing of sugar manufactured
by a producer and marking on bags. The Sugar (Packing and Marking) Order prescribes that each
producer shall, at the time of such packing, mark the quality of sugar in terms of the Indian Sugar
Standards.
5. Sugarcane (Control) Order, 1966
Under the Sugarcane (Control) Order, the Central Government is empowered to fix the minimum price
of sugarcane to be paid by producers of the sugar for sugarcane purchased by them having regard to
certain factors as mentioned in Clause 3 of the said Sugarcane (Control) Order.
Further, a different price may be fixed for different areas or different qualities or varieties of sugarcane.
Further, the Central Government, may, subject to such conditions as specified in the Sugarcane
(Control) Order, allow a suitable rebate in the price so fixed.
The Sugarcane (Control) Order also contains various provisions for regulating the supply and
distribution of sugarcane.
The Central Government is empowered to direct the producers of the sugarcane to pay additional price
for sugarcane in addition to the minimum sugar prices fixed in accordance with the provisions of the
second schedule to the Sugarcane (Control) Order.
The Central Government is empowered to delegate certain powers conferred upon it by Sugarcane
(Control) Order subject to such restrictions, exceptions and conditions, if any, as the Central
Government may think fit.
The following State legislations are also applicable to the business of the Company.
1. The Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953 (‘UP Sugarcane
Act’)
The aforesaid Act is applicable to the State of Uttar Pradesh and it seeks to regulate the supply and
purchase of sugarcane for use in sugar factories located in the State.
Section 2 of the UP Sugarcane Act defines the following terms as under-
(i) ‘Cane Commissioner’ means the Officer appointed to be Cane Commissioner under section 9
and includes an Additional Cane Commissioner under section 10 of UP Sugarcane Act.
(ii) ‘Crushing season’ means the period beginning on the 1st October in any year and ending on
the 15th of July in the next following year.
Draft Letter of Offer
68
The UP Sugarcane Act prescribes that the Cane Commissioner shall, on application by the occupier of
the factory, reserve or assign any area for the purposes of supply of sugarcane to the factory in
accordance with the provisions of Section 16 of the UP Sugarcane Act.
Further, in case of a ‘reserved area’, the occupier of the factory may be directed to purchase all the cane
grown in that area. In the case of an assigned area, the Cane Commissioner may determine the quantity
of cane to be offered for sale to the occupier of the factory.
Section 16 of the UP Sugarcane Act contains provisions to regulate the purchases and supply of cane in
the reserved and assigned areas.
The Hon’ble Supreme Court, vide a land mark judgment passed on 5th May, 2004 in its 3:2 bench
upheld the rights of Uttar Pradesh State Government to fix the State Advise Price (‘SAP’) of
Sugarcane, under section 16 of the Act at levels higher than Statutory Minimum Price (SMP)
prescribed by the Central Government under the Sugarcane (Control) Order 1966.
2. The Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Rules,1954 (‘UP Sugarcane
Rules’)
The UP Sugarcane Rules have been framed in exercise of the powers conferred by Section 23 of Uttar
Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953 which prescribes the rules with
particular regard to the reservation and assignment of sugarcane area, payment of the sugarcane price
by sugar factory to the cane growers, commission on the purchase of cane payable by the factory to the
Cane Growers Co-operative Society and Council to regulate the supply and purchase of sugarcane.
3. The Uttar Pradesh Sugarcane Supply & Purchase Order, 1954 (‘UP Sugarcane Order’)
The UP Sugarcane Order has been passed in exercise of powers conferred by Section 16 of the Uttar
Pradesh Sugarcane (Regulation of Supply & Purchase) Act, 1953. The UP Sugarcane Order deals with
the purchase of sugarcane by sugar factories as per the reservation order issued by the Cane
Commissioner. Sugar factories will have to enter into an agreement with the Cane Growers’ Co-
operative Society in Form ‘C’ by way of which the Co-operative Society agrees to sell the specified
quantity of sugarcane to the sugar factory through its members under the reservation order.
4. The Uttar Pradesh Sheera Niyantran Adhiniyam, 1964 (‘UPSNA’)
The UPSNA is applicable to the State of Uttar Pradesh which empowers the State Government to
control the storage, gradation and price of molasses produced by the sugar factories and the regulations
of supply and distribution thereof.
The term “molasses” has been defined under Section 2(d) of UPSNA as under-
“the heavy dark coloured viscose liquid produced in the final stage of manufacturing of sugar by
vacuum pan from sugarcane or gur, when the liquid as such or in any form or admixture contains
sugar”.
The UPSNA prescribes various provisions to regulate the supply and distribution of molasses from the
sugar factory to the distillery. The Act also contains provisions relating to storage of molasses.
5. Bihar Sugarcane (Regulation Of Supply and Purchase) Act, 1981 (‘Bihar Sugarcane Act’)
The Bihar Sugarcane Act regulates the production, supply and distribution of sugarcane intended for
use in sugar factories and khandsari sugar manufacturing units and taxation of sugarcane and matters
incidental thereto within the State of Bihar. The following key terms have been as under -
a. ‘Cane’ means sugarcane intended for use in a factory or unit.
b. ‘Cane Commissioner’ - means the officer appointed to be the Cane Commissioner under
section 12 of Bihar Sugarcane Act.
c. ‘Crushing year’ means the year commencing on the 1st day of July in any year and ending on
the 30th June in the year next following.
Draft Letter of Offer
69
d. ‘Factory’ - means any premises including the precincts thereof in any part of which sugar is
manufactured by means of vacuum pan process.
e. ‘Unit’ - means a manufacturing unit engaged or ordinarily engaged in the manufacture or
production of khandsari sugar, gur, shakkar, gul, jagari or rab from cane juice by power
crusher.
As per the provisions of the Bihar Sugarcane Act, the Cane Commissioner may, on application by the
occupier of the factory, reserve or assign any area for the purposes of supply of sugarcane to the
factory, having regard to the crushing capacity of the factory and availability of sugarcane in such area.
Section 42 of Bihar Sugarcane Act also empowers the State Government to determine by notification in
the Official Gazette the minimum price of sugarcane payable by the owners of the units to the cane
growers or Co-operative Societies for cane supplied to them.
Section 48 and Section 49 of Bihar Sugarcane Act empowers the Government to fix the Commission
and Tax payable by the occupier of the factory on the purchase of cane.
6. Sugar Development Fund Act, 1982 and Rules, 1983 (‘Sugar Development Fund Act’ and ‘Sugar
Development Fund Rules’)
The Sugar Development Fund Act and Rules were enacted by the Central Government to set up a fund
for financing the activities and development of the sugar industry. The Central Government provides
loans to the sugar industry out of the funds available in the Sugar Development Fund, for the purpose of
rehabilitation and modernisation of the sugar plant and machinery based on the scheme approved by the
financial institutions as also for sugarcane development, co-generation and manufacturing of Ethenol.
Under Rule 19 of Sugar Development Fund Rules, the Central Government has been empowered to
decide about maintenance of Buffer Stock and payment of subsidy thereon. The Central Government
under Sugar Development Fund Act and Rules made thereunder may also provide financial assistance
as it may consider fit and proper.
A list of other legislations relating to sugar, sugar cane and alcohol are set out below:
(i) Prevention of Food & Adulteration Act
(ii) Petroleum Act 1934
(iii) The Arms Rules 1962
(iv) Water (Prevention and Control of Pollution) Act 1974 and Rules
(v) Air (Prevention and Control of Pollution) Act & Rules 1981
(vi) Hazardous Waste Rules
(vii) India Explosives Act & Rules 1884
(viii) Standard Weight & Measure (Packaged Commodities) Rules 1977
(ix) Industrial (Development& Regulation) Act 1951
(x) Import/Export Trade Control Policy of Govt. of India
(xi) Central Excise Act, 1944
(xii) Factories Act, 1948
(xiii) Oil and Alcohol Taxation Rules, 1977
(xiv) Income Tax 1961 and Income Tax Rules 1962
(xv) Bihar Sugarcane (Regulation and Supply & Purchase) Act, 1982
(xvi) Bihar Molasses (Control) Act 1947
(xvii) Bihar Execise Act, 1915
(xviii) Fruit Products Order, 1955
(xix) Trade Marks Act, 1999
(xx) Land Ceiling Act, 1950
Draft Letter of Offer
70
HISTORY OF THE COMPANY AND OTHER CORPORATE MATTERS Our Company is a part of the K.K. Birla Group of Companies, which is a major player in key industries like
fertilizers, chemicals, heavy engineering, textiles, shipping. besides sugar.
Our Company was incorporated as a Public Limited Company in the year 1932 by the Birla Group under the
name of The Oudh Sugar Mills Limited. The first sugar mill was set up by the Company at Hargaon. The
Company started a distillery in the year 1945 and purchased Rosa Sugar Works at Rosa Dist. Shahjahanpur
(U.P.) in 1976 with a crushing capacity of 1000 tcd. Further, with effect from 1st July, 1984, The New Swadeshi
Sugar Mills Limited, having a sugar mill and distillery at Narkatiaganj, Dist. West Champaran (Bihar), a fruit &
vegetable canning factory at Allahabad & a paint factory under lease at Kolkata was merged with the Company.
The lease of the paint factory was terminated in April,1997. In 2006, the Company by a registered Deed of
Conveyance purchased from The Upper Ganges Sugar & Industries Limited on an ‘as is where is basis’ and ‘as
a going concern’ the sugar unit project at Hata, Dist, Khushinagar (U.P) which was under implementation. The
Company is now implementing the said Project with a crushing capacity of 7000 TCD and with co-generation of
35 MW.
Through organic and inorganic modes of growth, our company has cautiously but consistently grown from a
single unit sugar manufacturing company to a company having three sugar manufacturing units with an
aggregate crushing capacity of about 21,700 tonnes of sugarcane per day, two distilleries with a total installed
capacity of 22.5 million liters per annum of industrial alcohol/ethanol, bio-compost plant producing organic
fertilizer and a fruit and vegetable canning factory. After the proposed expansion & commissioning of the Hata
project the company shall have four sugar manufacturing units with an aggregate crushing capacity of about
28,700 tonnes of sugarcane per day, two distilleries with installed capacity of 45 million liters per annum of
industrial alcohol/ethanol.
The Equity Shares of our Company initially got listed on BSE on 1956. Thereafter, the Equity Shares were
listed on the Uttar Pradesh Stock Exchange Association Limited, Kanpur and the NSE. We voluntarily delisted
our Equity Shares from the Uttar Pradesh Stock Exchange Association Limited, Kanpur w.e.f. November 28,
2003.
OUR CORPORATE STRUCTURE
Management of the Company vests with the Board of Directors comprising of industrialists, professionals and
persons having industrial experience and business acumen. Majority of the directors on the Board are
independent. The Chairman -cum- Managing Director of the Company is overall incharge of the Company. He
is assisted by a team of Executive Presidents of various units of our Company and the Vice-Presidents to
manage the day to day affairs of the Company.
MAIN OBJECTS OF THE COMPANY
The main objects as set out in the Memorandum of Association of The Oudh Sugar Mills Limited are as under:
To purchase, manufacture, produce, refine, prepare, import, export, sell and generally to deal in sugar, sugar-
beets, sugarcane, molasses, syrups and melada and alcohol and all products or by-products thereof and food
products generally and in connection therewith to acquire, construct and operate sugar or other refineries,
buildings, mills, factories, distilleries and other works. To plant, cultivate, produce and raise or purchase
sugarcane, maize, sugar beets and other crops and to transact such other work or business as may be proper or
necessary in connection with the above objects or any of them.
The Objects Clause of the Memorandum of Association of our Company enables us to undertake our existing
activities.
Draft Letter of Offer
71
CHANGES IN MEMORANDUM OF ASSOCIATION
Since incorporation, the following changes have been made to our Memorandum of Association:
Date of Shareholders approval Changes
January 28, 1943 Increase in Authorised Share Capital of the Company from Rs.15 Lacs to
Rs.30 Lacs.
July 19, 1944 Increase in Authorised Share Capital of the Company from Rs.30 Lacs to
Rs.50 Lacs.
September 7, 1946 Increase in Authorised Share Capital of the Company from Rs.50 Lacs to
Rs.60 Lacs.
October 5, 1948 Amendment to the objects clause of the Company by way of addition of
clauses 1A, 1B, 1C, 1D, 1E, 1F and 1G.
October 18, 1948 Increase in Authorised Share Capital of the Company from Rs.60 Lacs to
Rs.1 Crore.
December 31, 1948 Increase in Authorised Share Capital of the Company from Rs.1 Crore to Rs.
1.30 Crores.
December 30, 1964 Alteration of Capital Clause by reclassification of Share Capital as 90,000
Equity Shares of Rs.100/- each and 40,000 Preference Shares of Rs.100/-
each.
December 30, 1965 Amendment to the objects clause of the Company by way of addition of
Clause 1AA and sub-clause (xiv) to the Clause 6.
May 6, 1969 Increase in Authorised Share Capital of the Company from Rs.1.30 Crores to
Rs. 5 Crores divided into 2,60,000 Equity Shares of Rs.100/- each and
2,40,000 Preference Shares of Rs.100/- each.
January 31, 1972 Reclassification of Authorised Share Capital of the Company of Rs. 5 Crores
divided into 3,50,000 equity shares of Rs.100/- each, 1,25,000 Preference
Shares of Rs.100/- each and 25,000 9.5% Cumulative redeemable Preference
Shares of Rs.100/- each .
June 7, 1974 Amendment to the objects clause of the Company by way of addition of
clauses 1H, 1I, 1J, 1K and 1L.
July 13, 1992 Reclassification of Authorised Share Capital as 5,00,000 Equity Shares of
Rs.100/- each
May 9, 1995 Increase in the Authorised Share Capital of the Company from Rs.5 Crores to
Rs. 20 Crores divided into 20,00,000 Equity Shares of Rs. 100/- each .
September 26, 1996 Subdivision of equity shares into the denomination of Rs.10/- each.
April 26, 1999 Registered Office of the Company was shifted from State of Maharastra to
State of Uttar Pradesh.
October 15, 2004 Increase in the Authorised Share Capital of the Company from Rs. 20 Crores
divided into 2,00,00,000 equity shares of Rs.10/- each to Rs.40 Crores
divided into 4,00,00,000 equity shares of Rs. 10/- each.
The details of the capital raised by our Company are given in the section titled “Capital Structure” on page no.
33 of this Draft Letter of Offer.
Draft Letter of Offer
72
OUR SUBSIDIARIES
Our Company currently has following four subsidiaries:
CHAMPARAN MARKETING COMPANY LIMITED. (“CMCL”)
CMCL was incorporated on 23rd
February, 1951 under the Indian Companies Act, 1913. CMCL became wholly
owned subsidiary of the Company with effect from 1st July, 1984.
As per its Memorandum of Association, its main object is to carry on business of buyers, sellers, importers,
exporters, manufacturers, producers, dealers, commission agents and otherwise in sugar, gur, molasses etc., and
other merchandise, commodities and articles of consumption of all kinds in India or elsewhere. Further the
objects also provides for carrying of an investment company and to invest in and acquire hold and deal in
shares, stocks, debentures and other securities.
CMCL’s main business activity consists of investment in shares and securities and is registered with RBI as a
NBFC under Section 45IA of RBI Act, 1934 vide Registration No. 05.00192 dated February 20, 1998.
Shareholding
CMCL is a wholly owned subsidiary of our Company.
Shareholding Pattern as on 30th
November 2007
Name of Shareholder Number of Shares % of shareholding
The Oudh Sugar Mills Ltd 43,48,994 100
Shri S.K. Poddar 1 -
Shri R.N.Jhunjhunwala 1 -
Shri R.N.Bagaria 1 -
Shri A.L.Tulsian 1 -
Shri S.K.Jhunjhunwala 1 -
Shri Sunil Lohia 1
Total 43,49,000 100
Board of Directors
• Shri R. N. Jhunjhunwala
• Shri Sanjay Mukherjee
• Shri T. R. Chachan
• Shri Sunil Lohia
Financial Performance (all figures are in Rs. lacs except per share data)
Year / Period March
2005 2006 2007 Three Months Period ended 30th June , 2007
Total Income 12.94 37.50 35.42 0.00
Profit After Tax/(Loss) 12.29 36.08 34.37 (0.04)
Equity Share Capital
(of Rs 2.50 each)
108.72 108.72 108.72 108.72
Reserves & Surplus 304.30 338.10 371.16 371.12
Earning per Share 0.23 0.78 0.76 0.0
Net Asset Value per
Share
9.50 10.27 10.57 10.57
The equity shares of CMCL are not listed on any stock exchanges in India. The company has not made any
public or rights issue in the last three years. The company has not become a sick industrial company under the
meaning of SICA and is not under winding up.
Draft Letter of Offer
73
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
The equity shares of CMCL are not listed on any stock exchange.
HARGAON INVESTMENT & TRADING COMPANY LIMITED (“HITCL”)
HITCL was incorporated on 26th
December, 1986 under the Companies Act, 1956. HITCL became subsidiary of
our Company with effect from 2nd
March, 1987.
As per its Memorandum of Association, its main object is to carry on business of investment company and to
invest in and acquire hold and deal in shares, stocks, debentures and other securities.
HITCL’s main business activity consists of investment in Shares and Securities and is registered with RBI as a
NBFC under Section 45IA of RBI Act vide Registration No. 05.00201 dated February 20, 1998.
Shareholding
HITCL is a wholly owned subsidiary of our Company.
Shareholding Pattern as on 30th
November 2007
Name of Shareholder Number of Shares % of shareholding
The Oudh Sugar Mills Ltd 30,45,721 100
Shri S.K. Poddar 1 -
Shri R.N.Bagaria 1 -
Shri U.S. Beria 1 -
Shri K.C. Gupta 1 -
Shri S.K.Jhunjhunwala 1 -
Shri Sunil Lohia 1
Total 30,45,727 100
Board of Directors
• Shri C. S. Nopany - Chairman
• Shri Sanjay Mukherjee
• Shri S. K. Jhunjhunwala
• Shri K. C. Gupta
Financial Performance
(all figures are in Rs. Lacs except per share data)
Year / Period
31st March
2005 2006 2007 Three Months Period
ended 30th June, 2007
Total Income 57.61 311.02 100.06 0.00
Profit After
Tax/(Loss)
56.97 305.05 97.01 (0.04)
Equity Share Capital
(of Rs 10 each)
304.57 304.57 304.57 304.57
Reserves & Surplus 603.49 908.54 1005.55 1005.51
Earning per Share 1.87 10.02 3.19 0.00
Net Asset Value per
Share
29.81 39.83 43.01 43.01
The equity shares of HITCL are not listed on any stock exchange. The company has not made any public
or rights issue in the last three years. The company has not become a sick industrial company under the meaning
of SICA and is not under winding up.
Draft Letter of Offer
74
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
OSM INVESTMENT & TRADING COMPANY LIMITED (“OITCL”)
OITCL was incorporated on 26th
December, 1986 under the Companies Act, 1956. OITCL became subsidiary of
the Company with effect from 2nd
March, 1987.
As per its Memorandum of Association, its main object is to carry on business of investment company and to
invest in and acquire hold and deal in shares, stocks, debentures and other securities.
The main business activity of OITCL consists of investment in Shares and Securities and it is registered with
RBI as a NBFC under Section 45 IA of RBI Act vide Registration No. 05.00288 dated February 21, 1998 .
Shareholding
OITCL is a wholly owned subsidiary of our Company.
Shareholding Pattern as on 30th
November 2007
Name of Shareholder Number of Shares % of shareholding
The Oudh Sugar Mills Ltd 17,40,412 100
Shri S.K. Poddar 1 -
Shri T.R.Chachan 1 -
Shri U.S. Beria 1 -
Shri K.C. Gupta 1 -
Shri S.K.Jhunjhunwala 1 -
Shri Sunil Lohia 1
Total 17,40,418 100
Board of Directors
Shri C. S. Nopany - Chairman
Shri T. R. Chachan
Shri A. L. Tulsian
Shri C.K. Vyas
Financial Performance
(all figures are in Rs. Lacs except per share data)
Year / Period 31st March
2005 2006 2007 Three Months Period ended 30th June, 2007
Total Income 21.23 98.39 39.86 0.0
Profit After
Tax/(Loss)
20.50 95.70 38.26 (0.05)
Equity Share Capital
(of Rs 10 each)
174.04 174.04 174.04 174.04
Reserves & Surplus 179.31 272.15 308.78 308.73
Earning per Share 1.01 5.33 2.10 2.10
Net Asset Value per
Share
20.30 25.64 27.74 27.74
The equity shares of OITCL are not listed on any stock exchange. The company has not made any public or
rights issue in the last three years. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Draft Letter of Offer
75
HARGAON PROPERTIES LIMITED (“HPL”)
HPL was incorporated on 18th November, 2003 under the Companies Act, 1956. HPL is a subsidiary of HITCL,
a subsidiary of the Company since its incorporation.
As per its Memorandum of Association, its main object is to purchase or otherwise acquire and to sell,
exchange, surrender, lease, mortgage, charge, convert, develop, hold, turn to account, dispose of and deal in real
and personal property and rights of all kinds and in particular lands, buildings, hereditaments business concerns
and undertakings.
HPL is currently engaged in real estate business.
Shareholding Pattern
The shareholding pattern of HPL as on 30th
November 2007 this date was as follows:
(all figures are in Rs. Lacs except per share data)
Name of Shareholder Number of Shares % of shareholding
Hargaon Investment & Trading
Company Limited
249,950 55.56
Champaran Marketing
Company Limited
200,000 44.44
Shri S.K. Poddar 10 -
Shri R.N. Bagaria 10 -
Shri U.S. Beria 10 -
Shri K.C. Gupta 10 -
Shri S.K.Jhunjhunwala 10 -
Total 450,000 100
Board of Directors
Shri Sanjay Mukherjee
Shri U. S. Beria
Shri K. C. Gupta
Financial Performance (all figures are in Rs. lacs except per share data)
Year/Period
31st March
2005 2006 2007 Three Months
Period ended 30th
June, 2007
Total Income 0.48 3.27 1.05 0.00
Profit After Tax/(Loss) 0.13 2.70 0.56 (0.05)
Equity Share Capital (of Rs 10
each)
45.00 45.00 45.00 45.00
Reserves & Surplus (0.52) 2.27 2.83 2.78
Earning per Share 0.03 0.60 0.12 0.00
Net Asset Value per Share
(excluding miscellaneous
expenditure)
9.79 10.42 10.57 10.57
The equity shares of HPL are not listed on any stock exchange. The company has not made any public or rights
issue in the last three years. The company has not become a sick industrial company under the meaning of SICA
and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Draft Letter of Offer
76
OUR MANAGEMENT
BOARD OF DIRECTORS
The following table sets forth details regarding our Board of Directors as on the date on this Draft Letter of
Offer:
Name, Designation, Father's Name,
Address, Occupation
Nationality Age
(years)
Other Directorships in Indian companies
Shri C. S. Nopany Indian 42 RTM Investment & Trading Company Limited
Designation - Chairman–cum–
Managing Director
OSM Investment & Trading Company Limited
Father’s Name - S/o. Shri Bimal
Kumar Nopany
Hargaon Investment & Trading CompanyLimited
Address - 44 Park Street,
Kolkata 700 016.
SCM Investment & Trading CompanyLimited
New India Retailing and Investment Limited
Occupation – Industrialist SIL Investment Limited
DIN No-00014587 Chambal Fertilizers & Chemicals Limited
Uttar Pradesh Trading Company Limited
Upper Ganges Sugar & Industries Limited
Gobind Sugar Mills Limited
Sutlej Textiles and Industries Ltd.
Yashovardhan Investment & Trading Company
Limited
La Monde Exports Pvt.Limited
Chambal Infrastructure Ventures Ltd.
Modern DiaGen Services Ltd.
CFCL Techonologies Limited, Cayman Islands
CFCL Ventures Limited, Cayman Islands
India Steamship Pte Limited, Singapore
Indo Maroc Phosphore S A, Morocco
Shri S. V. Muzumdar Indian 79 Tilaknagar Industries Limited
Indian Link Chain Mfrs. Limited
Designation – Director Industry House Limited
Phil Corporation Limited
Father’s Name - S/o. Late Vinayak D.
Muzumdar
Zuari Industries Limited
Simon India Ltd.
Address - “Roxana”,
109, Maharshi Karve Road,
Mumbai 400 020.
- Company Executive
DIN No- 00006935
Shri Ashvin C. Dalal Indian 71 Ashvin Chinubhai Broking Private Limited
Designation – Director
Father’s Name - S/o. Late Chinubhai
Dalal
Address - “AL SABHA COURT’,
2nd
Floor, Block No.6,
73, Marine Drive,
Mumbai 400 020.
Draft Letter of Offer
77
Name, Designation, Father's Name,
Address, Occupation
Nationality Age
(years)
Other Directorships in Indian companies
Occupation- Share, Stock & Finance
Broker
DIN No-00016985
SEBI Registration No. INS
232332234 dated 18.11.2005
Category : Sub-broker
Shri Rohit Kumar Dhoot Indian 39 Dhoot Industrial Finance Limited
Dhoot Instruments Private. Limited
Designation – Director Dhoot Meters Private Limited
Kanishta Finance & Investments Private Limited
Father’s Name – S/o. Shri Rajgopal
Dhoot
Benhur Investments Company Private Limited
Address- 4B – IL PALAZZO Naman Finance & Investments Private.Limited
Little Gibbs Road Ghewar Investments & Trading Private Limited
Mumbai 400 006. Rutgers Investments & Trading Private Limited
Pick-me-Quick Holding Private Limited
Occupation – Industrialist Anukool Traders & Finance Private Limited
DIN No- 00016856 Avilok Trade & Finance Limited
Aakarshak Synthetics Limited
Young Buzz India Limited
Ashish Trading And Agency Limited
Pine Fresh Minerals Private Limited
IRIS Resources Private Limted
Smt. Madhu Vadera Jayakumar Indian 44 Judith Investment Pvt. Ltd.
Designation – Director
Father’s Name - D/o. Late
Madhusudan Azad
Address- 51, Zenia Abad
Little Gibbs Road,
Malbar Hill
Mumbai – 400 006.
Occupation- Ex-banker & Investor
DIN No- 00016921
Shri C. B. Patodia 59 JKM Engineering Pvt. Ltd.
Indian Sugar Exim Corporation Ltd
Designation – Director
Father’s Name – S/o. Late Shyam
Sunder Patodia
Address - D – 395,
Defence Colony,
New Delhi – 110 024.
Occupation – Service
DIN No- 01389238
Shri Haigreve Khaitan Indian 37 Ceat Limited
Dhunseri Tea & Industries Limited
Draft Letter of Offer
78
Name, Designation, Father's Name,
Address, Occupation
Nationality Age
(years)
Other Directorships in Indian companies
Designation – Director Great Eastern Energy Corporation Ltd.
Gujarat Borosil Limited
Father’s Name -S/o. Shri Pradip
Kumar Khaitan
Harrisons Malayalam Limited
Hindustan Composites Limited
Address- 1104 Sterling Sea Face I.G.E. (India) limited
Dr. Annie Besant Road International ConveyorsLimited
Worli, National Engineering Industries Limited
Mumbai 400 018. Rama Newsprint & Papers Limited
Sterlite Optical Technologies Limited
Occupation – Advocate The Madras Aluminium Company Limited
DIN No- 00005290 Xpro India Limited
AVTEC Limited
Bonanza Trading Company Limited
BTS Investment Advisor Pvt. Limited
Khaitan Consultants Limited
Vinar Systems Private Limited
Twenty – First Century Printers Pvt. Ltd
Shri J. N. Godbole Indian 62 Emmellen Biotech Pharmaceuticals Ltd.
Designation – Director Technocraft Industries (India) Ltd.
J. K. Cements Ltd.
Father’s Name – S/o. Late Narayan
Wasudeo Godbole.
Gillander Arbhuthnot & Co. Ltd.
Address- 604A, Cottage Lane, Plot
No.16A,
IMP Powers Ltd.
Sector 19A, Nerul (East), Emami Paper Mills Limited
Navi Mumbai – 400 706. Invent Assets Securitisation & Reconstruction
Pvt.Ltd.
Occupation- Retd Banker Invent Arc Pvt. Ltd.
DIN No- 00056830 Unitex Designs Ltd.
Brief Biography of Our Directors
Shri C. S. Nopany, aged 42 years, is the Chairman cum Managing Director of our Company. He is a Chartered
Accountant and Master of Science in Industrial Administration from Carnegie Mellon University, Pittsburgh,
USA. He is an eminent industrialist having vast industrial experience in diverse fields like sugar, tea, shipping,
textiles, fertilizers and chemicals etc. He is the past President of Indian Chamber of Commerce. He was
appointed as Managing Director on 1st July, 1995. On 2
nd September, 2002 he was designated as Chairman-
cum-Managing Director. He is the overall in-charge of the affairs of the Company. He is also a member of
Finance & Corporate Affairs Committee of the Company.
Shri S.V. Muzumdar aged 79 years, is a Bachelor of Arts & Law and has got wide and varied experience in
the legal field, taxation and general management areas. He joined the Board of the Company in November
1969. The He is the Chairman of Investors’ Grievance Committee and a member of Finance & Corporate
Affairs Committee, Audit Committee and Remuneration Committee of the Company.
Shri Ashvin C. Dalal aged 71 years, is Commerce graduate and a partner in the firm M/s. Chimanlal J. Dalal &
Company, leading Share and Stock broker. He joined the Board of the Company in September, 1987. He is
Chairman of Audit Committee and a member of Investors’ Grievance Committee, Finance & Corporate Affairs
Committee and Remuneration Committee of the Company.
Shri C. B. Patodia, aged 59 years and possesses rich experience of over 37 years especially in Cane Marketing,
Sugar Manufacturing Process, Administration and Finance and audit matters. He joined the Board of the
Company in July, 1995 He is a member of Audit Committee of the Company.
Shri Rohit Kumar Dhoot aged 39 years, is a Chartered Accountant and a businessman of wide experience
accounts, audit, taxation and finance matters.. He joined the Board of the Company in February, 2003. He is a
member of Investors’ Grievance Committee, Audit Committee and Remuneration Committee of the Company.
Draft Letter of Offer
79
Smt. Madhu Vadera Jayakumar aged 44 years, is a holder of Post Graduate Diploma in Management from
Indian Institute of Management, Ahmedabad and Mathematics Honours Degree from University of Delhi. She
was associated with Mineral Metals Trading Corporation during 1985-1988 and later with Citi Bank N. A.
during 1988-2000. She joined the Board of the Company in May, 2003. She has wide experience in corporate
affairs, banking and finance matters. She is a member of Finance & Corporate Affairs Committee of the
Company.
Shri Haigreve Khaitan aged 37 years, a Bachelor of Law. Shri Khaitan is Practicing as an Advocate since,
1995. His Areas of expertise are commercial & corporate laws, tax laws, mergers and acquisitions,
restructuring, foreign collaboration, licensing etc. Mr. Khaitan has joined the Board of the Company in January
2006.
Shri J. N. Godbole aged 62 years, a Bachelor of Technology (Honours), Certificate in Financial Management
an ex-Chairman & Managing Director of Industrial Development Bank of India Ltd. His area of expertise
includes banking, financial Management, corporate restructuring mechanism, etc. Shri. Godbole joined the
Board in April, 2007.
Details of the Borrowing Powers
Pursuant to the provisions of Section 293(1)(d) of the Act, the shareholders at the annual general meeting held
on 6th
November, 2006 have authorised the Board of Directors of the Company to borrow a sum not exceeding
Rs.750 crores over and above the aggregate of the paid-up capital and free reserves of the Company.
Remuneration paid to Our Directors
Details of remuneration paid to Directors for the year 2006-07 are as follows:
Executive Director
Shri C S Nopany has been re-appointed as our Managing Director for a period of three years with effect from
July 1, 2005 on the following terms and conditions.
Salary Rs.3,25,000 (Rupees three lacs twenty five thousand only) per month
House The Company shall provide free furnished accommodation and also
pay all rents, rates, taxes, electricity, fuel charges, water charges and
all other expenses for the upkeep and maintenance thereof
Provident Fund Contribution to provident Fund shall be as per the Rules of the
Company
Gratuity Fund Contribution to Gratuity Fund shall be as per the Rules of the
Company
Medical
Reimbursement
Reimbursement of expenses incurred by the Managing Director for self
and his family, subject to a ceiling of one month’s salary in a year or
three months’ salary over a period of three years
Leave Leave with full pay including encashment of unavailed earned leave at
the end of the tenure of the Managing Director as per the Rules of the
Company
Leave Travel
Concession
For the Managing Director and his family once in a year in accordance
with the Rules of the Company
Entertainment,
traveling and other expenses
Reimbursement of entertainment, traveling and all other expenses
incurred for the business of the Company.
Club Fees Subject to a maximum of two clubs
Other perquisites Car with driver and telephone at the residence of the Managing
Director. Provision of car for use on Company’s business and
telephone will not be considered as perquisites. Personal long distance
calls and use of car for private purposes shall, however, be paid for by
the Managing Director.
Details of his remuneration for the year ended June 30, 2007 are as follows:
Draft Letter of Offer
80
Managing Director Salary (Rs) Perquisite value of Rent
& Maintenance (Rs)
Retirement
benefits (Rs)
Shri C S Nopany 39,00,000 53,06,333 8,24,961
Non-Executive Directors
The Company pays remuneration to its Non- Executive Directors by way of commission upto 1% of the net
profits for all directors put together with the maximum ceiling of Rs.1,00,000 per director. Since last eight years
no commission has been paid to directors except in the year 2005-06, in view of losses under Section 349 of the
Companies Act, 1956.
The Company paid sitting fees to non-executive Directors for attending the meetings of the Board/Committee of
Directors Rs.5000/- and Rs. 2500/- per meeting for attending meetings of the Board and Committee thereof,
respectively. The details of sitting fees paid during the year 2006-07 are as follows :
Sl. No. Name of the Director Amount (Rs.)
1. Shri C. S. Nopany N.A.
2. Shri S. V. Muzumdar 62,500
3. Shri Ashvin C. Dalal 65,000
4. Shri C. B. Patodia 7,500
5. Shri Rohit Kumar Dhoot 40,000
6. Smt. Madhu Vadera Jayakumar 37,500
7. Shri Haigreve Khaitan 15,000
8. Shri J. N. Godbole 5,000
9. Shri Rajaram Muchhal (Expired on 20-04-07) 20,000
10. Shri Viney Kumar (Withdrawn Nomination by IDBI on 26-04-07) 25,000
Draft Letter of Offer
81
Shareholding of our Directors in our Company
Name As on date of this Draft
Letter of Offer
Shri C S Nopany 51,254
Shri Suresh Vinayak Muzumdar 1,050
Interest of our Directors
Except as stated in “Related Party Transactions” on page 102 of this Draft Letter of Offer, and to the extent of
shareholding, remuneration, sitting fees for attending board or committee meetings, in our Company, the
Directors do not have any other interest in our business.
Changes in Our Board of Directors during the last three years
Corporate Governance
Composition of our Board of Directors is in compliance with the Corporate Governance norms as stipulated in
Clause 49 of the Listing Agreement. We have also formed Audit Committee and Investors’ Grievance
Committee in line with the Corporate Governance norms. The details of Audit Committee, Investors’ Grievance
Committee and Remuneration Committee are as follows :
1. Audit Committee
The Audit Committee of the Company is constituted in line with the provisions of Clause 49 of the
Listing Agreement with the Stock Exchange read with Section 292A of the Companies Act, 1956.
a) Terms of Reference
The terms of reference of the Audit Committee are broadly as under :
• Overview of the Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statements reflect a true and fair position and that
sufficient and credible information is disclosed.
• Recommending the appointment and removal of external auditors, fixation of audit fee and
also approval for payment for any other services.
• Discussion with external auditors before the audit commences, of the nature and scope of
audit as well as post-audit discussion to ascertain any area of concern.
• Reviewing the financial statements and draft audit report, including quarterly/half yearly
financial information.
• Reviewing with management the annual financial statements before submission to the Board,
focussing primarily on :
i. any changes in accounting policies and practices;
ii. major accounting entries based on exercise of judgment by management;
iii. qualifications in draft audit report;
iv. significant adjustments arising out of audit;
v. the going concern assumption;
Name of the Director Particulars of change Reason
Shri S . M. Agarwal Resigned wef 20.10.2005 Due to advancing age, health
grounds.
Shri M. Ghosh ( Nominee
Director of IDBI)
Resigned wef 19.05.2005 IDBI withdrew nomination
Shri Vinay Kumar ( Nominee
Director of IDBI)
Appointed wef 19.05.2005 Appointed in place of Shri M.
Ghosh
Shri Haigreve Khaitan Appointed wef 17.01.2006 Appointment
Late Rajaram Muchhal Expired on 20.04.2007 Death
Shri J. N. Godbole Appointed wef 23.04.2007 Appointment
Shri Vinay Kumar ( Nominee
Director of IDBI)
Resigned wef 26.04.2007 IDBI withdrew nomination
Draft Letter of Offer
82
vi. compliance with accounting standards;
vii. compliance with stock exchange and legal requirements concerning financial
statements;
viii. any related party transactions as per Accounting Standard 18.
• Reviewing the Company’s financial and risk management policies.
• Reviewing with the management, external and internal auditors, the adequacy of internal
control systems.
• Reviewing the adequacy of internal audit function, including structure of the internal audit
department, approval of the audit plan and its execution, staffing and seniority of the official
heading the department, reporting structure, coverage and frequency of internal audit.
• Discussion with internal auditors of any significant findings and follow-up thereon.
• Reviewing the findings of any internal investigations by the internal auditors into matters
where there is suspected fraud or irregularity or a failure of internal control systems of a
material nature and reporting the matter to the Board.
• Looking into the reasons for substantial defaults in payments to the depositors, debenture
holders, shareholders (in case of non-payment of declared dividends) and creditors.
b) Composition
The Audit Committee comprises of four Independent non-executive Directors viz. Shri Ashvin
C. Dalal being the Chairman Shri C. B. Patodia, Shri S. V. Muzumdar and Shri Rohit Kumar
Dhoot.. The Secretary of the Company who is also acting as Secretary of the Audit Committee
attended the meetings.
The Aduit Committee has met four times during the Fiscal 06-07. In the current fiscal of 07-
08 the Committee has met three times.
2. Remuneration Committee
i) The broad terms of reference of the Remuneration Committee are as under:
a. To approve the remuneration and commission payable to the Directors.
b. Such other matters as the Board may from time to time request the Remuneration
Committee to examine and recommend/approve.
ii) The Committee, presently, comprises of three Independent Non-executive Directors, viz. Shri
S.V. Muzumdar being the Chairman, Shri Ashvin C. Dalal and Shri Rohit Kumar Dhoot.
The Remuneration Committee has met twice times during the Fiscal 06-07. No such meeting
has taken place in the current fiscal of 07-08.
3. Investors’ Grievance Committee
i) Terms of Reference
The Board of Directors have authorised the Secretary to approve transfers/transmissions of
upto 1000 shares. The transfers/transmissions approved by the Secretary are periodically
placed before the committee. The Committee deals with the applications for transfer/
transmission of shares, subdivision and consolidation of share certificates and issue of
duplicate share certificates, etc. The Committee also keeps a close watch on all
complaints/grievances of shareholders. During the year under review the Company received
94 complaints/grievances from the shareholders which were duly attended.
ii) Composition
The Committee, presently, comprises of three non-executive Directors viz. Shri S. V.
Muzumdar, as Chairman and Shri Rohit Kumar Dhoot and Smt. Madhu Vadera Jayakumar as
members. Shri Sanjay Mukherjee, Company Secretary, is the Compliance Officer of the
Company for complying with the requirements of the Listing Agreement with the Stock
Exchanges.
The Investor Grievance Committee has met once during the Fiscal 06-07. No such
meeting has held in the current fiscal of 07-08.
Draft Letter of Offer
83
OUR ORGANISATION STRUCTURE
Key Managerial Personnel
The details of our key managerial personnel are as follows:
Name Age Designation Qualifications Previous
Employment
Total
Experience
Month of
Joining
Gross Salary Paid
during 2006-07
( Rs. In Lacs)
Shri C.S.Nopany 42 Chairman cum
Managing Director
ACA , Master
of Science in
Industrial
Administration
- 17 years August,
1992
100.31
Shri V. P. Singh
58 Executive President
(Hargaon)
Diploma in
Mechanical
Engineering
Dhampur
Sugar Mills
Limited
38 years June, 2004 20.00
Shri S. K. Premi
64 Executive President
(Allahabad Canning
Company)
Diploma in
Food
Technology
Kejriwal
Enterprises
45 years April, 1979 10.36
Board of Directors
Chairman – cum –
Managing Director
Executive
President
Hargaon
Middle Management
Workmen
Executive
President
Narkatiaga
nj
Executive
President
Rosa
Executive
President
Allahabad
Company
Secretary Chief
Financial
Officer
Senior
Executive
Vice
Presidents
(Finance,
Stores, Cane,
Technical,
Production)
Executive
Vice
Presidents
(Finance,
Technical,
Cane)
Executive
Vice
Presidents
(Finance,
Production,
Cane,
Materials)
Works
Manager,
Manager
(Accounts &
Finance),
Production
Manager
Secretarial,
Legal &
Taxation
Executive
Vice
Presidents
(Finance &
Accounts)
Executive
President
Hata
Draft Letter of Offer
84
Name Age Designation Qualifications Previous
Employment
Total
Experience
Month of
Joining
Gross Salary Paid
during 2006-07
( Rs. In Lacs)
Shri Mahesh Jain 51 Senior Executive
Vice-President &
Chief Financial
Officer
B.Com, Post
Graduate
Diploma in
Costs and
Works
Accountant
Triveni
Engineering
and
Industries
Limited
29 years September,
1998
11.86
Shri Sanjay
Mukherjee
52 Company Secretary B. Com., LL.B,
ACS,
Shree
Services &
Trading Co
Limited
27 years November
2007
-
Shri Chandra
Mohan
47 Executive President
(Narkatiaganj)
B.E. (Mech.) Bajaj
Hindustan
Ltd. (UP)
26 years May, 2007 01.47
Shri Mohan
Sharma
57 Executive President
(Hata)
B.Com, ICWA
(Inter)
Triveni
Enginering
Industries
Limited
36 years August,
2007
-
Shri P K Saini 54 Executive President
(Rosa)
Graduate Govind
Sugar Mills
Limited
34 years June 2006 08.95
All the abovementioned key managerial personnel are permanent employees of our Company. The remuneration
of each of our key managerial personnel is as per the provisions of Section 217(2A) of the Companies Act, 1956
and the Companies (Particulars of Employees) Rules, 1975.
Shareholding of our Key Managerial Personnel in our Company
Name of Key Managerial Personnel No. of Equity Shares held (Pre-Issue)
Shri C.S.Nopany 51,254
Shri Mahesh Jain 19
Interest of Key Managerial Personnel
The key managerial personnel of our Company do not have any interest in our Company other than to the extent
of the remuneration or benefits to which they are entitled to as per their terms of appointment and
reimbursement of expenses incurred by them during the ordinary course of business and to the extent of the
Equity Shares held by them in the Company as stated above.
Details of loans taken by Key Managerial Personnel in our Company
We have not granted any options to our Directors and key managerial personnel. Except as stated otherwise in
this Draft Letter of Offer, we have not entered into any contract, agreement or arrangement during the preceding
2 years from the date of this Draft Letter of Offer in which the Directors are interested directly or indirectly and
no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed
to be made to them.
Draft Letter of Offer
85
Changes in our Key Managerial Personnel during the last three years
Name Designation Date of
Joining
Date of Cessation(if
applicable)
Reason for Resignation (if
applicable)
Shri V. P. Singh Executive President,
Hargaon
04.06.2004 - -
Shri C. C. Chhaya Company Secretary 11.02.2003 31.08.2006 Personal
Shri D. J. Darji Company Secretary 11.09.2006 31.10.2007 Personal
Shri P K Lakhotia Executive President,
Hargaon
01.05.1997 15.06.2006 Personal
Shri P K Saini Executive President, Rosa 16.6.2006 - -
Shri M S Sharma Executive President,
Narkatiaganj
01.10.1983 18.06.2007 Retired
Shri Chandramohan Executive President,
Narkatiaganj
19.06.2007 - -
Shri Mohan Sharma Executive President, Hatta 06.08.2007 - -
Shri Sanjay
Mukherjee
Company Secretary 1.11.2007 - -
Draft Letter of Offer
86
OUR PROMOTERS
Our Company was incorporated in 1932 by the well known house of Birlas with Late R.D. Birla as the
Chairman. M/s Birla Brothers Limited were the Managing Agents of the Company. During 1942, consequent to
a change in the Managing Agents, the Cotton Agents Ltd. (name subsequently changed to Birla Bombay Pvt.
Ltd), came in and continued to be Managing Agents till 1969, whereafter the Managing Agency System was
abolished by the Government. The Company currently is part of the well known K. K Birla group. Our present
promoters are Dr. K K Birla & Shri C S Nopany, who control the Company through their direct holdings and
through shares held through the following companies:
• Uttar Pradesh Trading Company Limited.
• RTM Investment & Trading Company Limited.
• SCM Investment & Trading Company Limited
• Darbhanga Marketing Company Limited
• Sonali Commercial Limited
• Deepsikha Trading Company Private Limited.
• HTL Investment & Trading Company Limited.
• Yashovardhan Investment & Trading Company Limited.
• Modern Household & Accessories Trading Company Private Limited.
• Shradhanjali Investment & Trading Company Limited
• Rajpur Farms Limited
• Narkatiaganj Farms Limited.
• New India Retailing and Investment Limited
At present, our Company is being managed by the Board of Directors. Shri C.S. Nopany is the Chairman Cum
Managing Director of the Company. Dr. K.K. Birla is the Chairman Emeritus of the Company.
Brief Profiles of our promoters and the above-mentioned companies are given below:
Dr. K.K. Birla
Voter ID No. DKD-1457803, Permanent Account No. ADMPB 6470C.
Dr. Krishna Kumar Birla, son of Late Ghanshyam Das Birla, was born in
Pilani, Rajasthan, on 12th October, 1918. He joined the Sugar Industry in
the year 1940 and is amongst the founder member of Indian Sugar Industry.
Over the years, Dr. Birla has established one of India's well known business
conglomerate through brilliance of entrepreneurial genius and sheer hard
work. His industrial empire spans across a wide spectrum of key industries
like sugar, fertilizers, chemicals, heavy engineering, textiles, shipping,
newspaper etc. One of his greatest achievements has been to earn the trust
of his millions of shareholders, employees and customers which has played
a crucial role in his phenomenal growth. He has the distinction of being a
respected parliamentarian, socialite, philanthropist and scholar apart from
being a renowned industrialist.
For 18 consecutive years Dr. Birla was a Member of Rajya Sabha. In the
year 1961, he was elected Sheriff of Calcutta and in the year 1997, he was
conferred Doctor of Letters (Honoris Causa) by Pondichery University. He
has headed a number of Chambers of Commerce such as Indian Sugar
Mills Association, Federation of Indian Chamber of Commerce and
Industry, Indian Chamber of Commerce and many such prominent
organisations. His numerous responsibilities include the Trusteeship of the
Birla Education Trust, which runs a number of schools and institutions in
the country offering subsidised education, and Chairmanship of the
prestigious Birla Institute of Technology and Science (BITS) at Pilani and
Dubai. Dr. Birla has established K.K. Birla Foundation which has instituted
annual awards for excellence in Indian literature, scientific research, Indian
philosophy etc. and K.K. Birla Academy to undertake research on
scientific, cultural and historical subjects. The beautiful Radhakrishna
Draft Letter of Offer
87
Temple dedicated to Lord Krishna in Kolkata and the G.D. Birla Sabhagar
in Kolkata are amongst his many social contributions.
Details of the Permanent Account Number, Bank Account Number and
Passport Number have been submitted to the Stock Exchanges where the
Equity Shares are proposed to be listed at the time of filing this Draft Letter
of Offer.
Shri C.S. Nopany
Voter ID No. DWK 4990941, Driving License No. WB-01-035925,
Permanent Account No. ABJPN 5385K
Shri C. S. Nopany, aged 42 years, is the Chairman cum Managing
Director of our Company. He is a Chartered Accountant and Master of
Science in Industrial Administration from Carnegie Mellon University,
Pittsburgh, USA. He is an eminent industrialist having vast industrial
experience in diverse fields like sugar, tea, shipping, textiles, fertilizers
and chemicals etc. He is the past President of Indian Chamber of
Commerce & Indian Sugar Mills Association.
Details of the Permanent Account Number, Bank Account Number and
Passport Number have been submitted to the Stock Exchanges where the
Equity Shares are proposed to be listed at the time of filing this Draft
Letter of Offer.
Uttar Pradesh Trading Company Limited (“UPTCL”)
UPTCL was incorporated on February 23, 1951 under the Indian Companies Act, 1913. The registered office of
UPTCL is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of buyers,
sellers, agents , dealers, exporters and importers of any goods or merchandise whatsoever and to transit all
manufacturing or treating and preparing process and mercantile business and to purchase and vend raw material
and manufactured articles. Further the objects provides for undertaking investment activities and dealing in
shares and securities.
Currently, it is engaged in the business of dealing and investment in shares and securities. UPTCL is registered
with RBI as a NBFC vide certificate of registration number 05.00220 dated February 20, 1998 under section
45IA of RBI Act, 1934.
Shareholding Pattern
UPTCL is a wholly owned subsidiary of Upper Ganges Sugar & Industries Limited.
Holding of Dr, K.K. Birla and Shri C.S. Nopany in Upper Ganges Sugar & Industries Limited are given below:
Name No. of equity shares held % of total shareholding
Dr. K.K. Birla 1,77,729 1.54
Shri C.S. Nopany 39,600 0.34
Shri C.S. Nopany (C/o. Urvi Nopany Charity Trust) 5,610 0.05
Board of Directors
The Board of Directors of UPTCL as on date is comprised of Smt. Nandini Nopany (Chairperson), Shri C. S.
Nopany (Managing Director), Shri I.P. Singh Roy (Nominee of Upper Ganges Sugar & Industries Limited), Shri
R. N. Jhunjhunwala and Shri A. L. Tulsian.
Financial Performance
Draft Letter of Offer
88
Brief financials of UPTCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 447.41 156.65 223.74
Profit After Tax 441.27 152.82 211.50
Equity Share Capital
(of Re1each)
1636.25 1636.25 1636.25
Reserves & Surplus 1007.03 1156.42 1365.86
Earning per Share 0.27 0.09 0.13
Net Asset Value per
Share
1.61 1.71 1.83
There has been no change in management of UPTCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where UPTCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of UPTCL are not listed on any stock exchange. The company has not made any public or
rights issue in the last three years. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
RTM Investment & Trading Company Limited. (“RITCL”)
RITCL was incorporated on February 6, 1987 under the Companies Act, 1956. The registered office of RITCL
is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of Investment
Company and to invest in and acquire hold, deal in shares, stocks, debentures, debentures stocks and other
securities.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.00345 dated February 26, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
RITCL is a wholly owned subsidiary of SIL Investment Limited.
Dr. K.K. Birla and Shri C.S. Nopany do not hold any shares in SIL Investment Limited.
Board of Directors
The Board of Directors of RITCL as on date is comprised of Shri C.S. Nopany(Chairman), Shri T.R. Chachan
(Managing Director), Shri R.N. Laddha, Shri Sanjay Goenka (Nominee of SIL Investment Ltd.), Shri N.M.
Gupta, Shri S.K. Poddar and Shri Sunil Lohia.
Financial Performance
Brief financials of RITCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 185.06 646.11 123.89
Profit After Tax 118.10 626.78 110.04
Draft Letter of Offer
89
Particulars 2004-05 2005-06 2006-07
Equity Share Capital
(of Rs 10 each)
1445.69 1445.69 1445.69
Reserves & Surplus 470.98 1097.77 1207.80
Earning per Share 0.82 4.34 0.76
Net Asset Value per
Share
13.26 17.59 18.35
There has been no change in management of RITCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where RITCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of RITCL are not listed on any stock exchange. The company has not made any public or
rights issue in the last three years. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
SCM Investment & Trading Company Limited. (“SITCL”)
SITCL was incorporated on December 26, 1986 under the Companies Act, 1956. The registered office of SITCL
is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of investment
company and to invest in and acquire hold, deal in shares, stocks, debentures, debentures stocks and other
securities.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.02417 dated May 16, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
SITCL is a wholly owned subsidiary of SIL Investments Limited.
Board of Directors
The Board of Directors of SITCL as on date is comprised of Shri C.S. Nopany (Chairman), Shri U.S. Beria
(Managing Director), Shri Padam Khaitan (Nominee of SIL Investment Ltd.), Shri R.N. Jhunjhunwala Shri
Sanjay Mukherjee and Shri R.N. Laddha .
Financial Performance
Brief financials of SITCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 253.21 769.81 139.20
Profit After Tax 134.59 749.24 130.62
Equity Share Capital (of
Rs.10 each)
1550.92 1550.92 1550.92
Reserves & Surplus 581.14 1330.38 1461.00
Earning per Share 0.86 4.83 0.84
Net Asset Value per
Share
13.75 18.58 19.42
There has been no change in management of SITCL in last ten years.
Draft Letter of Offer
90
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where SITCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of SITCL are not listed on any stock exchange.The company has not made any public or
rights issue in the last three years. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
*Darbhanga Marketing Company Limited. (“DMCL”)
DMCL was incorporated on February 23, 1951 under the Indian Companies Act, 1913. The registered office of
DMCL is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of buyers,
sellers, agents , dealers, exporters and importers of any goods or merchandise whatsoever and to transit all
manufacturing or treating and preparing process and mercantile business and to purchase and vend raw material
and manufactured articles. Further the objects provides for undertaking investment activities and dealing in
shares and securities.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.00275 dated February 19, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
DMCL is a wholly owned subsidiary of New India Retailing and Investment Limited.
Dr. K.K. Birla holds 750 equity shares constituting 0.06% of the paid-up share capital of New India Retailing
and Investment Limited
Board of Directors
The Board of Directors of DMCL as on date is comprised of Shri U.S. Beria (Managing Director), Shri Sanjay
Mukherjee and Shri C.K. Vyas.
Financial Performance
Brief financials of DMCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 244.19 961.55 483.62
Profit After Tax 241.39 949.89 445.36
Equity Share Capital (of Re. 1 each) 694.40 694.40 694.40
Reserves & Surplus 936.95 1883.99 2327.71
Earning per Share 0.34 1.36 0.64
Net Asset Value per Share 2.35 3.71 4.35
There has been no change in management of DMCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where DMCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of DMCL are not listed on any stock exchange. The company has not made any public or
rights issue in the last three years. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
Draft Letter of Offer
91
There are no defaults in meeting any statutory /bank /institution dues. No proceedings have been initiated for
economic offences against the company.
*Note: Pursuant to the Scheme of Amalgamation under section 391 & 394 of the Companies Act, 1956 of
Darbhanga Marketing Company Limited with New India Retailing & Investment Limited ( formerly known as
New India Sugar Mills Limited), DMCL shall stand amalgamated in to New India Retailing & Investment
Limited with effect from the date of filing of the sacnitoned Scheme of Amalgamation with the Registrar of
Companies. The certified copy of the sanctioned Scheme of Amalgamation is awaited from the Calcutta High
Court.
Sonali Commercial Limited. (“SCL”)
SCL was incorporated on June 3, 1985 under the Companies Act, 1956. The registered office of SCL is at 9/1,
R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, its main object is to carry on the business of manufacturing, trading and
dealing in several goods and articles. Further the other objects of the company provide for undertaking
investment activities and dealing in shares and securities.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.00305 dated February 21, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
Shareholding Pattern of SCL as on date is as follows:
Category of Shareholder Number of Shares held % Shareholding
Promoters 2,33,730 95.40
Mutual Funds, Banks, FIs, Insurance Companies - -
Private Corporate Bodies - -
Others(Public) 11,270 4.60
Total 2,45,000 100.00
Dr. K.K. Birla and Shri C.S. Nopany do not hold any share in SCL.
Board of Directors
The Board of Directors of SCL as on date comprises of Shri K. C. Gupta, Shri. Sunil Lohia and Shri P.C.
Kejriwal.
Financial Performance
Brief financials of SCL for the financial year 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 61.23 22.78 39.08
Profit After Tax 59.17 20.90 37.11
Equity Share Capital (of
Rs.10each)
24.50 24.50 24.50
Reserves & Surplus 255.50 266.62 303.73
Earning per Share 24.15 8.53 15.15
Net Asset Value per
Share
114.29 118.82 133.97
Draft Letter of Offer
92
The equity shares of SCL are listed on The Calcutta Stock Exchange Association Limited and Uttar Pradesh
Stock Exchange Association Limited. There has been no trading in the equity shares of SCL during last six
months preceding the month in which this Draft Letter of Offer is filed.
There has been no change in management of the company in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where SCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
Promise vs Performance
No Public Issue or Rights Issue has been made in last ten years.
The equity shares of SCL are not listed on any stock exchange. The company has not made any public or rights
issue in the last three. The company has not become a sick industrial company under the meaning of SICA and
is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Deepsikha Trading Company Private Limited. (“DTCPL”)
DTCPL was incorporated on December 24, 1983 under the Companies Act, 1956. The registered office of
DTCPL is at 9/1, R.N .Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, its main object is to carry on the business of traders, importers,
exporters, buyers, sellers, dealers, stockists, hire purchasers, agents, distributors and concessionaries of all
substance merchandise, goods, chemicals machinery, tools, implements, hardware, and to undertake, transact
and execute agency business in connection therewith. Further in addition to other objects, the objects of the
company also provide for carrying on business of an investment company.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.02860 dated August 27, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
Shareholding Pattern of DTCPL as on date is as follows:
Name of Shareholder Number of Shares held % Shareholding
FIACO S.A. 380,000 76.00
Ronson Traders Limited 70,000 14.00
Pavapuri Trading & Investment
Company Limited
50,000 10.00
Total 500,000 100.00
Dr. K.K. Birla and Dr. K.K. Birla (HUF) hold 77,500 (13.52%) and 2,27,495 (39.70%) equity shares in Ronson
Traders Limited.. Shri C.S. Nopany does not hold any equity share in Ronson Traders Limited.
Dr. K.K. Birla and Shri C.S. Nopany do not hold any shares in FIACO S.A. and Pavapuri Trading & Investment
Company Limited.
Board of Directors
The Board of Directors of DTCPL as on date comprises of Shri T.R. Chachan, Shri K.C. Gupta and Shri Sunil
Lohia.
Financial Performance
Brief financials of DTCPL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
Draft Letter of Offer
93
(all figures are in Rs. lac except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 65.89 23.06 34.02
Profit After Tax 62.64 21.56 32.53
Equity Share Capital (of
Rs. 10 each)
50.00 50.00 50.00
Reserves & Surplus 112.58 124.16 143.53
Earning per Share 12.53 4.31 6.51
Net Asset Value per
Share
32.51 34.83 38.71
There has been no change in management of DTCPL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where DTCPL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of DTCPL are not listed on any stock exchange. The company has not made any public
or rights issue in the last three. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Yashovardhan Investment & Trading Company Limited (“YITCL”)
YITCLwas incorporated on October 30, 1987 as a private limited company under the name “Yashovardhan
Investment & Trading Company Private Limited” under the Companies Act, 1956. Subsequently, it was
converted to a public limited company and the word ‘private’ was deleted from its name with effect from April
28, 1993.The registered office of YITCL is at 9/1 R.N. Mukherjee Road, Kolkata 700 001.
As per its Memorandum of Association, its main object is to invest in and acquire, hold and deal in shares,
stocks, debentures, debenture stocks, bonds, obligations and securities, issued or guaranteed by any
Government, State dominion sovereign, ruler, commissioners, public body or authority, supreme, municipal,
local or otherwise, whether in India or elsewhere.
Currently, it is engaged in the business of dealing and investment in shares, securities and debentures. The
company is registered with RBI as NBFC vide certificate of registration number 05.00216 dated February 20,
1998 under section 45IA of the RBI Act, 1934.
Shareholding Pattern
The shareholding pattern of YITCL as on date is as follows:
Name of the shareholder No. of shares held Percentage
Smt. Nandini Nopany 10 -
Smt. Jyotsna Poddar 10 -
Usha Flowell Limited 52,000 1.50
Duke Commerce Limited 52,000 1.50
Deepsikha Trading Company
Private Limited
102,500 2.96
Ricon Commerce Limited 1,500 0.04
Pavapuri Trading & Investment
Company Limited
52,000 1.50
Nilgiri Plantations Limited 1,000,000 28.90
Sidh Enterprises Limited 50,000 1.45
Udit(India)Limited 50,000 1.45
Shital Commercial Limited 50,000 1.45
Draft Letter of Offer
94
Name of the shareholder No. of shares held Percentage
Ronson Traders Limited 1,050,000 30.35
Sonali Commercial Limited 850,000 24.56
Britex (India) Limited 50,000 1.45
Swasthya Sewa Sansthan 100,000 2.89
Total 3,460,020 100.00
Board of Directors
The Board of Directors of YITCL as on date is comprised of Dr. K.K. Birla (Chairman), Smt. Jyotsna Poddar,
Smt. Shobhana Bhartia, Shri C.S. Nopany, Shri Sanjay Mukherjee, Shri U.S. Beria and Shri. T.R. Chachan
Financial Performance
Brief financials of YITCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(All figures are in Rs. Lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 142.63 292.07 196.85
Profit After Tax 135.15 283.83 188.64
Equity Share Capital (Rs.
10 each)
346.00 346.00 346.00
Reserves & Surplus 1159.50 1442.33 1630.97
Earning per Share 3.91 8.17 5.45
Net Asset Value per
Share
43.51 51.69 57.13
There has been no change in management of YITCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where YITCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of YITCL are not listed on any Stock Exchange. The company has not made any public or
rights issue in the last three. The company has not become a sick industrial company under the meaning of
SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Modern Household & Accessories Trading Company Private Limited. (“MHATCPL”)
MHATCPL was incorporated on 1st March, 2004 under the Companies Act, 1956. The registered office of
MHATCPL is at 9/1 R.N. Mukherjee Road, Kolkata 700 001.
As per its Memorandum of Association, its main object is to carry on the business of trading in household
appliances , furnitures and other items.
Shareholding Pattern
Shareholding Pattern of MHATCPL as on date is as follows:
Name of the shareholder No. of shares
held
Percentage(%)
Darbhanga Marketing Company Limited 20,000 9.53
Jhalak Marketing Private Limited 20,000 9.53
RTM Investment & Trading Company Limited 15,000 7.14
SCM Investment & Trading Limited 15,000 7.14
La – Monde Exports Private Limited 40,000 19.05
Draft Letter of Offer
95
Name of the shareholder No. of shares
held
Percentage(%)
La – Monde Trading & Investments Private Limited 20,000 9.52
Wasmen Technologies Private Limited 15,000 7.14
Moneyline Finvest Private Limited 15,000 7.14
Shri C.S. Nopany 25,000 11.91
Shri C.S. Nopany (HUF) 25,000 11.91
Total 210,000 100.00
Board of Directors
The Board of Directors of MHATCPL as on date is comprised of Shri M. G. Kamath, Shri K. C. Agarwal, Shri
S. K. Poddar, Shri U. S. Beria and Shri T. R. Chachan.
Financial Performance
Brief financials of MHATCPL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(All figures are in Rs. Lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 77.12 111.77 16.56
Profit After Tax 67.49 99.39 15.39
Equity Share Capital (Rs.
10 each)
21.00 21.00 21.00
Reserves & Surplus 67.49 166.89 182.28
Earning per Share 64.95 47.33 7.33
Net Asset Value per
Share
41.83 89.47 96.80
There has been no change in management of MHATCPL since inception.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where MHATCPL is registered have been submitted to the Stock Exchanges where the Equity Shares
are proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of MHATCPL are not listed on any Stock Exchange.
The company has not made any public or rights issue in the last three years. The company has not become a sick
industrial company under the meaning of SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
HTL Investment & Trading Company Limited. (“HITCL”)
HITCL was incorporated on April 2, 1986 under the Companies Act, 1956. The registered office of HITCL is at
Hindustan Times House, 7th
Floor, 18-20, Kasturba Gandhi Marg, New Delhi – 110 001.
As per its Memorandum of Association, its main object is to carry on the business of an investment company.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.02487 dated May 25, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
HITCL is a wholly owned subsidiary of The Hindustan Times Limited.
Draft Letter of Offer
96
Dr. K.K.Birla and Shri C.S.Nopany do not hold any share in The Hindustan Times Limited.
Board of Directors
The Board of Directors of HITCL as on date is comprised of Smt. Shobhana Bhartia, Shri S.M. Agarwal, Shri.
T.R.Chachan, Shri R.K. Agarwal and Shri Raian Karanjawala.
Financial Performance
Brief financials of HITCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 63.68 152.83 143.41
Profit After Tax 46.21 122.85 80.06
Equity Share Capital (of
Rs. 10each)
109.22 109.22 109.22
Reserves & Surplus 213.36 336.20 416.26
Earning per Share 4.23 11.25 7.33
Net Asset Value per Shares 29.53 40.78 48.11
There has been no change in management of HITCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where HITCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the draft Letter of Offer.
The equity shares of HITCL are not listed on any stock exchange.
The company has not made any public or rights issue in the last three years. The company has not become a sick
industrial company under the meaning of SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Shradhanjali Investment & Trading Company Limited (“SHITCL”)
SHITCL was incorporated on April 2, 1986 under the Companies Act, 1956. Its registered office is at Hindustan
Times House, 7th
Floor, 18-20, Kasturba Gandhi Marg, New Delhi 110 001.
As per its Memorandum of Association, its main object is to carry on the business of an investment company.
Currently, the company is engaged in the business of investment in shares and securities. The company is
registered with RBI as a NBFC vide certificate of registration number 05.00777 dated Mrch 9, 1998 under
section 45IA of RBI Act, 1934.
Shareholding Pattern
SHITCL is a wholly owned subsidiary of The Hindustan Times Limited.
Board of Directors
The Board of Directors of SHITCL as on date is comprised of Smt. Shobhana Bhartia, Shri S.K.Poddar, Shri
V.K.Charoria and Shri R.K.Agrawal.
Financial Performace
Brief financials of SHITCL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
Draft Letter of Offer
97
(All figures in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 70.18 123.41 169.43
Profit After Tax 47.98 95.33 53.06
Equity Share Capital (Rs.
10 each)
76.05 76.05 76.05
Reserves & Surplus 232.96 328.30 381.35
Earning per Share 6.31 12.54 6.98
Net Asset Value per Share 40.63 53.05 60.14
There has been no change in management of SHITCL in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where SHITCL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of SHITCL are not listed on any stock exchange
The company has not made any public or rights issue in the last three years. The company has not become a sick
industrial company under the meaning of SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Rajpur Farms Limited (“RFL”)
RFL was incorporated on December 19, 1949 under the Indian Companies Act, 1913. The registered office of
RFL is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of plantation,
cultivation and purchase/sell of sugarcane, maize, sugar-beets and other crops and to transact such other work or
business as may be proper or necessary in connection with the above object or any of them. Further the objects
provides for undertaking investment activities and dealing in shares and securities.
Shareholding Pattern
Shareholding Pattern of RFL as on date is as follows:
Name of the shareholder No. of shares
held
Percentage(%)
The Oudh Sugar Mills Limited 50,000 19.22
SCM Investment & Trading Limited 20,000 7.69
RTM Investment & Trading Company Limited 20,000 7.69
Modern Household & Accessories Trading Private Limited. 25,000 9.62
La – Monde Exports Private Limited 45,000 17.31
La – Monde Trading & Investments Private Limited 20,000 7.69
Wasmen Technologies Private Limited 10,000 3.85
Moneyline Finvest Private Limited 20,000 7.69
Narkatiaganj Farms Limited 10,000 3.85
Darbhanga Marketing Company Limited 30,000 11.54
Jhalak Marketing Private Limited 10,000 3.85
Total 260,000 100.00
Draft Letter of Offer
98
Board of Directors
The Board of Directors of RFL as on date is comprised of Shri B L Himmatsinghka, Shri A K Dasmal, Shri T R
Chachan, Shri K C Gupta and Shri Sunil Lohia.
Financial Performance
Brief financials of RFL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 79.01 122.16 8.56
Profit After Tax 57.78 92.75 7.77
Equity Share Capital
(of Re1each)
26.00 26.00 26.00
Reserves & Surplus 79.14 171.89 179.66
Earning per Share 22.22 35.67 2.99
Net Asset Value per
Share
40.44 76.11 79.10
RFL was a 100 % subsidiary of the Company till 19.10.2004. Except the same there is no change in
Management.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where RFL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of RFL are not listed on any stock exchange.
The company has not made any public or rights issue in the last three years. The company has not become a sick
industrial company under the meaning of SICA and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
Narkatiaganj Farms Limited (“NFL”)
NFL was incorporated on March 31, 1951 under the Indian Companies Act, 1913. The registered office of NFL
is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the company is to carry on business of plantation,
cultivation and purchase/sell of sugarcane, maize, sugar-beets and other crops and to transact such other work or
business as may be proper or necessary in connection with the above object or any of them. Further the objects
provides for undertaking investment activities and dealing in shares and securities.
Shareholding Pattern
Shareholding Pattern of NFL as on date is as follows:
Name of the shareholder No. of shares
held
Percentage(%)
The Oudh Sugar Mills Limited 50,000 19.22
SCM Investment & Trading Limited 20,000 7.69
RTM Investment & Trading Company Limited 20,000 7.69
Modern Household & Accessories Trading Private Limited. 25,000 9.62
La-Monde Exports Private Limited 45,000 17.31
La-Monde Trading & Investments Private Limited 20,000 7.69
Wasmen Technologies Private Limited 20,000 7.69
Moneyline Finvest Private Limited 10,000 3.85
Rajpur Farms Limited 10,000 3.85
Draft Letter of Offer
99
Name of the shareholder No. of shares
held
Percentage(%)
Darbhanga Marketing Company Limited 30,000 11.54
Jhalak Marketing Private Limited 10,000 3.85
Total 260,000 100.00
Board of Directors
The Board of Directors of NFL as on date is comprised of Shri Sushil Poddar, Shri R N Jhunjhunwala, Shri S K
Jhunjhunwala and Shri C K Vyas.
Financial Performance
Brief financials of NFL for the financial years 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 80.64 121.16 9.47
Profit After Tax 62.84 99.53 8.29
Equity Share Capital
(of Re1each)
26.00 26.00 26.00
Reserves & Surplus 86.26 185.78 194.08
Earning per Share 24.17 38.28 3.19
Net Asset Value per
Share
43.12 81.45 84.64
NFL was a 100 % subsidiary of our Company till 19.10.2004. Except this there is no change in the management.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where NFL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
The equity shares of NFL are not listed on any stock exchange. The company has not made any public or rights
issue in the last three years. The company has not become a sick industrial company under the meaning of SICA
and is not under winding up.
There are no defaults in meeting any statutory/bank/institution dues. No proceeding have been initiated for
economic offences against the company
New India Retailing & Investment Limited (“NIRIL”)
NIRIL, formerly known as New India Sugar Mills Limited, was incorporated on May 4, 1933 under the
Companies Act, 1913. The registered office of NIRIL is at 9/1, R.N. Mukherjee Road, Kolkata – 700 001.
As per its Memorandum of Association, the main object of the Company is to carry on the business of sugar
manufacture and refinery and manufacture of any other material that may be decided upon by or on behalf of the
Company and the business of buyers, sellers and dealers of any goods or merchandise whatsoever and to
transact all manufacturing or treating and preparing processes and mercantile business that may be necessary or
expedient and to purchase and vend the raw material and manufactured articles.
Currently, the Company is engaged in the business of trading in various goods and products including dress
materials, etc. besides investments in shares and securities.
Shareholding Pattern
Shareholding Pattern of NIRIL as on date is as follows:
Category of Shareholder Number of Shares held % Shareholding
Promoters 9,42,765 64.88
Mutual Funds, Banks, FIs, Insurance Companies 1,30,606 8.99
Private Corporate Bodies 1,41,512 9.74
Draft Letter of Offer
100
Category of Shareholder Number of Shares held % Shareholding
Others(Public) 2,38,112 16.39
Total 14,52,995 100.00
Dr. K.K .Birla holds 750 shares in the Company. However, Shri C.S. Nopany do not hold any share in NIRIL.
Board of Directors
The Board of Directors of NIRIL as on date comprises of Shri C S Nopany (Chairman), Shri R. Tapuriah, Shri
P.K. Singhi, Smt. Shalini Nopany, Shri Suresh Somani, Shri K.K .Palit and Shri V.P. Singh.
Financial Performance
Brief financials of NIRIL for the financial year 2004-05, 2005-06 and 2006-07 are given below:
(all figures are in Rs. lacs except per share data)
Particulars 2004-05 2005-06 2006-07
Total Income 412.60 243.23 1098.84
Profit After Tax (124.44) 209.58 (27.68)
Equity Share Capital (of
Rs.10each)
125.22 145.47 145.47
Reserves & Surplus 794.46 975.35 939.18
Earning per Share (8.56) 14.42 (1.91)
Net Asset Value per
Share
75.19 77.05 74.65
The equity shares of NIRIL are listed on The Calcutta Stock Exchange Association Limited. There has been no
trading in the equity shares of NIRIL during last six months preceeding the month in which this Draft Letter of
Offer is filed.
There has been no change in management of the company in last ten years.
The Company Registration Number, Permanent Account Number, Bank Account Number and the address of
Registrar where NIRIL is registered have been submitted to the Stock Exchanges where the Equity Shares are
proposed to be listed at the time of filing the Draft Letter of Offer.
Promise vs Performance
No Public Issue or Rights Issue has been made in last ten years.
INTEREST OF PROMOTERS
Except as stated in “Related Party Transactions” on page 102 of this Draft Letter of Offer, and to the extent of
shareholdings, remuneration, sitting fees for attending board or committee meetings, in our Company, the
Promoters do not have any other interest in our company.
PAYMENT OR BENEFITS TO THE PROMOTERS
Except as stated in “Related Party Transactions” on page 102 of this Draft Letter of Offer, and to the extent of
dividend paid on account of their respective shareholding, remuneration, sitting fees for attending board or
committee meetings, our Promoters have not received any payment or benefit.
RELATED PARTY TRANSACTIONS
For details, please refer point 3 of Notes to Risk Factors.
Draft Letter of Offer
101
DIVIDEND POLICY
The declaration and payment of dividend is recommended by our Board of Directors depending upon number of
factors, including but not limited to our profits, capital requirements and overall financial conditions, and shall
be subject to the provisions of our Articles, Companies Act, 1956 and approval of our lenders.
Please refer to Annexure 12 of Financial Statements on page 149 of this Draft Letter of Offer.
The amounts paid as dividend in the past are not necessarily indicative of our dividend policy or dividend
amounts, if any, to be paid in future. Future dividends will depend upon our revenues, profits, cash flows,
financial condition, capital requirements and other factors (statutorily or otherwise).
Draft Letter of Offer
102
ANNEXURE - 10
RELATED PARTY DISCLOSURES
Names of the related parties: Subsidiary Companies
Champaran Marketing Company Ltd.
OSM Investment & Trading Company Ltd.
Hargaon Investment & Trading Company Ltd.
Hargaon Properties Ltd.
Rajpur Farms Ltd. *
Narkatiaganj Farms Ltd.*
Key Management Personnel
Shri C. S. Nopany – Chairman cum Mg. Director
Shri P.K. Lakhotia – Executive President, Hargaon Unit (upto 15th June 2006)
Shri V.P.Singh –Executive President, Rosa Unit (From 4th
June,2004)
Executive President, Hargaon (From 16th June 2006)
Shri M. S. Sharma – Executive President,Narkatiaganj Unit (upto 18th June, 2007)
Shri Chandra Mohan–Executive President,Narkatiaganj Unit (from 19th June, 2007)
Shri P.K. Saini – Executive President, Rosa Unit (From16th June 2006)
Shri M.N. Agarwal – Executive President, Rosa Unit (Upto 2ndJune,2004)
Shri S.D. Shukla – Sr.Executive Vice President, Hata Unit
Shri S.K. Premi – Executive President, Allahabad Unit
Shri D.J. Darji – Secretary
Relatives of Key Management Personnel
Smt. Nandini Nopany - Mother of Shri C.S. Nopany
Shri Ansul Sharma- Son of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Vedanti Sharma- Wife of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Ritu Sharma- Duaghter of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Urmila Lakhotia- Wife of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Garima Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Abha Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Astha Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Mr. Mohit Lakhotia- Son of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Anamika- Daughter of Shri M N Agarwal ** (upto 2nd June,2004)
Miss. Annapurna- Daughter of Shri M N Agarwal ** (upto 2nd June,2004)
Enterprises owned or significantly influenced by Key Management Personnel and their relatives
Upper Ganges Sugar & Industries Ltd.
SIL Investments Ltd. ( Formerly Sutlej Industries Ltd.)
Sutlej Textiles & Industries Ltd.
SCM Investment & Trading Co. Ltd.
RTM Investment & Trading Co. Ltd.
RTM Properties Ltd. (Formerly ISS Shipping Services Ltd.)
SIL Properites Ltd. (Formerly ISS Shipping and Trading Co. Ltd.)
Uttar Pradesh Trading Co. Ltd.
* Ceased to be subsidiaries of the Company w.e.f. 19-10-2004. All the transactions relating to these companies are
Draft Letter of Offer
103
considered only upto the aforesaid date.
** Ceased to be related parties in term of Accounting Standard- 18 from the respective dates. Accordingly all the
transactions are considerred only upto the said dates and also their outstanding balances, if any, as on Balance Sheet date
has not been disclosed.
“For Private circulation to the equity shareholders of the Company”
Private and confidential
ANNEXURE-10
(Contd.) Restated Related Party
Disclosure
Statement of Aggregated Related Party Transactions as per Accounting Standard-18 for the reporting period
(Rs. In lacs.)
Enterprises
owned by Key Relatives of
Key
Management Management Key Management
Particulars Subsidiaries
Personnel or
their relatives Personnel Personnel Total
Time
Transac
tions Balance
Transa
ctions Balance
Transac
tions Balance
Transactio
ns Balance Transactions Balance
Period Value
Outstan
ding Value
Outstan
ding Value
Outstandi
ng Value
Outstandin
g Value
Outstand
ing
as on as on as on as on as on
Sale of Goods/ Fixed
Assets
Rajpur Farms Ltd. 2004-05 1.47
-
-
-
-
- - -
1.47
-
2003-04
4.56
-
-
-
-
- - -
4.56
-
2002-03
2.22
-
-
-
-
- - -
2.22
-
Narkatiaganj Farms
Ltd. 2004-05
1.23
-
-
-
-
- - -
1.23
-
2003-04
3.62
-
-
-
-
- - -
3.62
-
2002-03
1.03
-
-
-
-
- - -
1.03
-
Upper Ganges Sugar & 2006-07 - - - 224.14
Draft Letter of Offer
105
Industries Ltd. - - 224.14 - - -
2005-06
-
-
245.76
-
-
- - -
245.76
-
2004-05
-
-
271.18
-
-
- - -
271.18
-
2003-04
-
-
39.39
-
-
- - -
39.39
-
2002-03
-
-
48.64
-
-
- - -
48.64
-
Purchase of Goods /Fixed
Assets
Rajpur Farms Ltd. 2003-04
5.30
-
-
-
-
- - -
5.30
-
2002-03
3.34
-
-
-
-
- - -
3.34
-
Narkatiaganj Farms
Ltd. 2003-04
3.44
-
-
-
-
- - -
3.44
-
2002-03
3.25
-
-
-
-
- - -
3.25
-
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
970.95
-
-
- - -
970.95
-
2005-06
-
-
75.31
-
-
- - -
75.31
-
2004-05
-
-
73.51
-
-
- - -
73.51
-
2003-04
-
-
10.42
-
-
- - -
10.42
-
2002-03
-
-
13.80
-
-
- - -
13.80
-
Mrs Vedanti Sharma 2003-04
-
-
-
-
-
-
10.79
-
10.79
-
Right Issue of Shares
Mr. C.S.Nopany 2004-05
-
-
-
-
9.56
- - -
9.56
-
SCM Investment & 2004-05 - - - 339.98
Draft Letter of Offer
106
Trading Company Ltd., - - 339.98 - - -
RTM Investment &
Trading Company Ltd., 2004-05
-
-
349.13
-
-
- - -
349.13
-
Others 2004-05
-
-
-
-
0.01
-
0.01
-
0.02
-
Dividend Paid
Mr. C.S.Nopany 2006-07
-
-
-
-
2.01
- - -
2.01
-
2005-06
-
-
-
-
1.12
- - -
1.12
2004-05
-
-
-
-
0.64
- - -
0.64
-
SCM Investment &
Trading Company Ltd., 2006-07
-
-
87.42
-
-
- - -
87.42
-
2005-06
-
-
39.66
-
-
- - -
39.66
-
2004-05
-
-
25.79
-
-
- - -
25.79
-
RTM Investment &
Trading Company Ltd., 2006-07
-
-
73.32
-
-
- - -
73.32
-
2005-06
-
-
40.73
-
-
- - -
40.73
-
2004-05
-
-
25.90
-
-
- - -
25.90
Uttar Pradesh Trading
Co.Ltd., 2006-07
-
-
88.34
-
-
- - -
88.34
-
2005-06
-
-
49.08
-
-
- - -
49.08
-
Others 2004-05
-
-
-
-
0.02
-
0.11
-
0.13
-
Interest Paid
Rajpur Farms Ltd. 2004-05
0.34
-
-
-
-
- - -
0.34
-
2003-04
1.13
-
-
-
-
- - -
1.13
-
Narkatiaganj Farms
Ltd. 2004-05
0.42
-
-
-
-
- - -
0.42
-
Draft Letter of Offer
107
2003-04
0.91
-
-
-
-
- - -
0.91
-
2002-03
0.27
-
-
-
-
- - -
0.27
-
Sutlej Textiles &
Industries Limited 2006-07
-
-
62.43
-
-
- - -
62.43
-
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
140.71
-
-
- - -
140.71
-
2003-04
-
-
47.15
-
-
- - -
47.15
-
2002-03
-
-
68.00
-
-
- - -
68.00
-
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
102.63
-
-
- - -
102.63
-
2003-04
-
-
150.26
-
-
- - -
150.26
-
2002-03
-
-
26.43
-
-
- - -
26.43
-
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
53.25
-
-
- - -
53.25
-
2003-04
-
-
103.96
-
-
- - -
103.96
-
2002-03
-
-
17.47
-
-
- - -
17.47
-
Others 2005-06
-
-
-
-
0.10
-
3.59
-
3.69
-
2004-05
-
-
5.90
-
0.42
0.10
3.88
4.09
10.20
4.19
2003-04
-
-
13.75
-
0.28
-
4.65
3.58
18.68
3.58
2002-03
-
-
13.26
-
0.28
-
3.60
-
17.14
-
Loans Repaid / Given
Champaran Marketing
Company Ltd. 2006-07
168.00
39.50
-
-
-
- - -
168.00
39.50
Draft Letter of Offer
108
2005-06
5.00
-
-
-
-
- - -
5.00
-
2004-05
5.00
-
-
-
-
- - -
5.00
-
2003-04
22.50
-
-
-
-
- - -
22.50
-
2002-03
7.75
-
-
-
-
- - -
7.75
-
Rajpur Farms Ltd. 2004-05
16.00
-
-
-
-
- - -
16.00
-
2003-04
6.19
-
-
-
-
- - -
6.19
-
2002-03
2.08
-
-
-
-
- - -
2.08
-
Narkatiaganj Farms
Ltd. 2004-05
17.50
-
-
-
-
- - -
17.50
-
2003-04
5.65
-
-
-
-
- - -
5.65
-
2002-03
2.17
-
-
-
-
- - -
2.17
-
OSM Investment &
Trading Company Ltd. 2006-07
55.50
-
-
-
-
- - -
55.50
-
2005-06
7.50
-
-
-
-
- - -
7.50
-
2004-05
3.50
-
-
-
-
- - -
3.50
-
2003-04
2.50
6.00
-
-
-
- - -
2.50
6.00
2002-03
14.50
26.50
-
-
-
- - -
14.50
26.50
Hargaon Investment &
Trading Company Ltd. 2006-07
122.50
-
-
-
-
- - -
122.50
-
2005-06
5.75
-
-
-
-
- - -
5.75
-
2004-05
0.25
-
-
-
-
- - -
0.25
-
Draft Letter of Offer
109
2003-04
24.75
3.25
-
-
-
- - -
24.75
3.25
2002-03
80.46
22.50
-
-
-
- - -
80.46
22.50
Hargaon Properties Ltd. 2005-06
39.75
7.36
-
-
-
- - -
39.75
7.36
2004-05
0.04
0.04
-
-
-
- - -
0.04
0.04
Sutlej Textiles &
Industries Limited 2006-07
-
-
1,500.0
-
-
- - -
1,500.00
-
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
2,100.0
-
-
- - -
2,100.00
-
2003-04
-
-
300.00
-
-
- - -
300.00
-
2002-03
-
-
1,405.00
-
-
- - -
1,405.00
-
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
2,150.00
-
-
- - -
2,150.00
-
2003-04
-
-
2,300.00
-
-
- - -
2,300.00
-
2002-03
-
-
550.00
-
-
- - -
550.00
-
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
2,225.00
-
-
- - -
2,225.00
-
2003-04
-
-
2,800.00
-
-
- - -
2,800.00
-
2002-03
-
-
300.00
-
-
- - -
300.00
-
Others 2005-06
-
-
-
4.00
-
11.57
-
15.57
-
2004-05
-
-
340.00
-
2.00
-
9.50
-
351.50
-
Draft Letter of Offer
110
2003-04
-
-
385.00
-
-
-
13.01
-
398.01
-
2002-03
-
-
340.00
-
-
-
1.40
-
341.40
-
Loans/Intercorporate
Loans Taken
Rajpur Farms Ltd. 2003-04
8.50
16.00
-
-
-
- - -
8.50
16.00
2002-03
19.77
13.69
-
-
-
- - -
19.77
13.69
Narkatiaganj Farms
Ltd. 2003-04
12.50
17.50
-
-
-
- - -
12.50
17.50
2002-03
13.82
10.65
-
-
-
- - -
13.82
10.65
Champaran Marketing
Company Ltd. 2006-07
30.00
-
-
-
-
- - -
30.00
-
2005-06
19.75
98.50
-
-
-
- - -
19.75
98.50
2004-05
13.25
83.75
-
-
-
- - -
13.25
83.75
2003-04
22.00
75.50
-
-
-
- - -
22.00
75.50
2002-03
6.00
76.00
-
-
-
- - -
6.00
76.00
OSM Investment &
Trading Company Ltd. 2006-07
37.50
10.50
-
-
-
- - -
37.50
10.50
2005-06
24.50
28.50
-
-
-
- - -
24.50
28.50
2004-05
21.00
11.50
-
-
-
- - -
21.00
11.50
2003-04
23.00
-
-
-
-
- - -
23.00
-
2002-03
12.25
-
-
-
-
- - -
12.25
-
Hargaon Investment &
Trading Company Ltd. 2006-07
94.00
89.00
-
-
-
- - -
94.00
89.00
Draft Letter of Offer
111
2005-06
69.50
117.50
-
-
-
- - -
69.50
117.50
2004-05
57.25
53.75
-
-
-
- - -
57.25
53.75
2003-04
44.00
-
-
-
-
- - -
44.00
-
2002-03
57.96
-
-
-
-
- - -
57.96
-
Hargaon Properties Ltd. 2006-07
7.36
-
-
-
-
- - -
7.36
-
2005-06
32.43
-
-
-
-
- - -
32.43
-
Sutlej Textiles &
Industries Limited 2006-07
-
-
3,500.00
2,000.00
-
- - -
3,500.00
2,000.00
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
900.00
-
-
- - -
900.00
-
2003-04
-
-
1,200.00
1,200.00
-
- - -
1,200.00
1,200.00
2002-03
-
-
1,705.00
300.00
-
- - -
1,705.00
300.00
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
1,150.00
-
-
- - -
1,150.00
-
2003-04
-
-
2,900.00
1,000.00
-
- - -
2,900.00
1,000.00
2002-03
-
-
950.00
400.00
-
- - -
950.00
400.00
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
2,025.00
-
-
- - -
2,025.00
-
2003-04
-
-
2,500.00
200.00
-
- - -
2,500.00
200.00
2002-03
-
-
800.00
500.00
-
- - -
800.00
500.00
Others 2005-06
-
-
-
-
-
2.31
-
2.31
-
2004-05 33.47 267.16
Draft Letter of Offer
112
- - 250.00 - 4.00 4.00 13.16 37.47
2003-04
-
-
400.00
90.00
-
2.00
9.60
33.81
409.60
125.81
2002-03
-
-
415.00
75.00
-
2.00
18.22
37.22
433.22
114.22
Balance Outstanding on
Current Accounts (net)
Credit :
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
-
58.02
-
- - -
-
58.02
2005-06
-
-
-
16.72
-
- - -
-
16.72
2004-05
-
-
-
14.07
-
- - -
-
14.07
2003-04
-
-
-
7.58
-
- - -
-
7.58
2002-03
-
-
-
7.42
-
- - -
-
7.42
Debit :
Mr. C.S.Nopany 2006-07
-
-
-
-
6.09
6.09
- -
6.09
6.09
Dividend Received
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
0.93
-
-
- - -
0.93
-
2005-06
-
-
0.45
-
-
- - -
0.45
-
2004-05
-
-
0.34
-
-
- - -
0.34
-
Champaran Marketing
Company Ltd. 2002-03
5.22
-
-
-
-
- - -
5.22
-
OSM Investment &
Trading Company Ltd. 2002-03
12.18
-
-
-
-
- - -
12.18
-
Hargaon Investment &
Trading Company Ltd. 2002-03
41.24
-
-
-
-
- - -
41.24
-
Remuneration
Mr. C.S.Nopany 2006-07
-
-
-
-
100.31
- - -
100.31
-
Draft Letter of Offer
113
2005-06
-
-
-
-
79.10
- - -
79.10
-
2004-05
-
-
-
-
16.80
- - -
16.80
-
2003-04
-
-
-
-
10.75
- - -
10.75
-
2002-03
-
-
-
-
10.75
- - -
10.75
-
Mr. P.K.Lakhotia 2005-06
-
-
-
-
15.91
5.29
- -
15.91
5.29
2004-05
-
-
-
-
14.59
2.90
- -
14.59
2.90
2003-04
-
-
-
-
12.35
1.29
- -
12.35
1.29
2002-03
-
-
-
-
7.90
- - -
7.90
-
Mr. Chandra Mohan 2006-07
1.47
1.47
1.47
1.47
Mr.M.S.Sharma 2006-07
-
-
-
-
10.51
- - -
10.51
-
2005-06
-
-
-
-
10.23
0.74
- -
10.23
0.74
2004-05
-
-
-
-
9.00
0.67
- -
9.00
0.67
2003-04
-
-
-
-
7.56
0.60
- -
7.56
0.60
2002-03
-
-
-
-
7.05
- - -
7.05
-
Mr.M.N.Agarwal 2003-04
-
-
-
-
6.53
- - -
6.53
-
2002-03
-
-
-
-
6.32
- - -
6.32
-
Mr.V.P.Singh 2006-07
-
-
-
-
18.97
4.00
- -
18.97
4.00
2005-06
-
-
-
-
8.99
1.83
- -
8.99
1.83
2004-05
-
-
-
-
6.92
0.56
- -
6.92
0.56
Draft Letter of Offer
114
2003-04
-
-
-
-
0.56
0.56
- -
0.56
0.56
Mr.P.K.Saini 2006-07
-
-
-
-
8.95
- - -
8.95
-
2005-06
-
-
-
-
0.39
0.20
- -
0.39
0.20
Mr.S.K.Premi 2006-07
-
-
-
-
10.36
- - -
10.36
-
2005-06
-
-
-
-
8.55
- - -
8.55
-
2004-05
-
-
-
-
9.15
0.07
- -
9.15
0.07
2003-04
-
-
-
-
6.88
0.49
- -
6.88
0.49
2002-03
-
-
-
-
7.32
- - -
7.32
-
Mr.S.D.Shukla 2006-07
-
-
-
-
4.74
1.42
- -
4.74
1.42
Mr.D.J.Darji 2006-07
-
-
-
-
4.62
0.10
- -
4.62
0.10
Note: The period referred to above is from 1st July to 30th June each year.
“For Private circulation to the equity shareholders of the Company”
Private and confidential
SECTION VII : FINANCIAL STATEMENTS
FINANCIAL INFORMATION OF THE ISSUER COMPANY
AUDITORS’ REPORT
To,
The Board of Directors
The Oudh Sugar Mills Limited
9/1 R N Mukherjee Road
Kolkata 700 001
Dear Sirs,
1. We have examined the attached financial information of The Oudh Sugar Mills Limited (hereinafter referred
to as the Company), as approved by the Committee of Directors of the Company, prepared in terms of the
requirements of Paragraph B, Part II of Schedule II of the Companies Act, 1956 (“the Act”) and the
Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 as amended to
date (SEBI Guidelines) and in terms of our engagement agreed upon with you in accordance with our
engagement letter dated 22nd October, 2007 in connection with the proposed Rights Issue of Equity shares
alongwith detachable warrants of the Company.
2. These information have been extracted by the Management from the financial statements for the years ended
on 30th
June 2003, 2004, 2005, 2006 and 2007.
3. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines
and in terms of our engagement agreed with you, we further report that:
a) The ‘Restated Summary of Assets and Liabilities’ of the Company as at 30th
June 2003, 2004, 2005,
2006 and 2007 examined by us, as set out in Annexure-1 to this report are after making such adjustments
and regroupings as in our opinion were appropriate and as are more fully described in Significant
Accounting Policies and Notes and Statement of Adjustments (Refer Annexures 4A, 4B, 5 & 6).
b) The ‘Restated Summary Statement of Profits and Losses’ of the Company for each of the years ended on
30th
June 2003, 2004, 2005, 2006 and 2007 examined by us, as set out in Annexure-2 to this report are
after making such adjustments and regroupings as in our opinion were appropriate and as are more fully
described in Significant Accounting Policies & Notes and Statement of Adjustments (Refer Annexures
4A , 4B, 5 & 6).
c) The ‘Restated Statement of Cash Flows’ of the Company in respect of each of the years ended on 30th
June 2003, 2004, 2005, 2006 and 2007 examined by us, as set out in Annexure-3 to this report, in our
opinion, have been prepared by the Company in accordance with the requirement of Accounting
Standard 3 (Cash Flow Statements) issued by the Institute of Chartered Accountants of India.
d) Without qualifying our opinion, we draw attention to the fact that for the purpose of these summary
statements, due to practical difficulties in retrospective application of Accounting Standard 29 on
“Provisions, Contingent Liabilities and Contingent Assets” as detailed vide Note No. 5 on Annexure-6,
such standard has been applied from the date it became applicable to the Company and not for all the
periods restated.
e) Based on the above, we are of the opinion that
i. the restated financial information have been made after incorporating:
a. Adjustments for the changes in accounting policies retrospectively in the respective financial
years to reflect the same accounting treatment as per changed accounting policies for the
reporting periods.
b. Adjustments for the material amounts in the respective financial years to which they relate
except to the extent mentioned in clause iii below;
ii. There are no extra-ordinary items that need to be disclosed separately in the Summary
Statements; and
Draft Letter of Offer
116
iii. The adjustments for qualifications and material adjustments relating to the relevant previous
year have been made in the summary statements except for Note Nos. 1 (a) and 1(b) on
Annexure-6 regarding non-adjustment of certain realisations in earlier years aggregating to
Rs. 165.51 lacs and non-provision of interest payable thereon, if any, in case of refund of such
realisations. As the matters are under adjudication / not yet settled, the impact of above non-
adjustment on the Company’s profit / (loss) is not presently ascertainable.
f) At your request, we have also examined the following other financial information prepared by the
management and approved by the Committee of Directors relating to the Company for the year ended on
30th
June 2003, 2004, 2005, 2006 and 2007:
i. Statement of Changes in Accounting Policies enclosed as Annexure-7
ii. Statement of Qualifications in Auditors Report enclosed as Annexure-8
iii. Statement of Accounting Ratios based on the adjusted profits / (losses) relating to earning per
share, net assets value & return on net worth, enclosed as Annexure-9.
iv. Statement of Related Party Transactions enclosed as Annexure-10.
v. Statement of Segment Reporting enclosed as Annexure-11.
vi. Statement of Dividend Paid enclosed as Annexure-12.
vii. Statement of Tax Shelter enclosed as Annexure-13.
viii. Capitalisation Statement as at 30th
June, 2007 enclosed as Annexure-14.
ix. Statement of Earning Per Share enclosed as Annexure-15A.
x. Statement of Balance of Debtors enclosed as Annexure-15B.
xi. Statement of Loans & Advances enclosed as Annexure-15C.
xii. Statement of Other Income enclosed as Annexure-15D
xiii. Statement of Secured and Unsecured Loans enclosed as Annexure- 15E & 15F.
xiv. Statement of Investments enclosed as Annexure -15G.
In our opinion, the financial information contained in Annexures 7 to 15G of this report read along with
the Significant Accounting Policies and Notes (Refer Annexures- 5&6) prepared after making such
adjustments and regroupings as were considered appropriate, have been prepared in accordance with Part
IIB of Schedule II of the Act and the SEBI Guidelines.
We report that subject to our observation in para 3(e) (iii) above, the information mentioned in clauses 1
to 3 have been correctly computed / compiled with reference to the various statements enclosed vide
Annexures 1 to 15G of this report.
4. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports
issued by us, nor should this report be construed as a new opinion on any of the financial statements referred
to herein.
Our report is intended solely for use of the management and for inclusion in the Letter of Offer in connection
with the proposed Rights Issue of the Company. Our report should not be used for any other purpose without
our prior written consent.
For S. R. BATLIBOI & CO.
CHARTERED ACCOUNTANTS
Place: Kolkata
Dated: December 11, 2007 Per R K AGRAWAL Partner
Membership No.
16667
Draft Letter of Offer
117
STATEMENT OF RESTATED ASSETS AND LIABILITIES
ANNEXURE - 1
Rs. In lacs
As at 30th June
Particulars 2003 2004 2005 2006 2007
Application of Funds
A Fixed Assets
Gross Block
21,866.61 22,580.79 26,919.44 30,321.92
41,687.98
Less : Depreciation
8,383.88 9,371.99 10,446.97 11,780.40
13,254.85
Net Block
13,482.73 13,208.80 16,472.47 18,541.52
28,433.13
Capital Work In Progress
306.92 174.66 190.09 202.11
256.09
Capital Expenditure on
Expansion / New Projects
- 1,415.50 1,443.10 4,421.31
13,224.76
13,789.65 14,798.96 18,105.66 23,164.94
41,913.98
B Investments
1,106.77 1,103.53 1,078.53 1,078.53
1,079.52
C
Current assets, loans and
advances
Inventories
22,790.91 16,032.43 17,326.19 15,143.37
19,473.86
Sundry Debtors
947.03 603.02 111.61 411.66
591.95
Cash & Bank Balances
310.94 191.06 203.83 338.70
512.27
Loans and advances
1,188.22 1,505.04 1,785.11 1,490.59
2,645.50
Other Current Assets
3.64 3.55 4.08 2.52
3.54
Total
25,240.74 18,335.10 19,430.82 17,386.84
23,227.12
TOTAL ASSETS
40,137.16 34,237.59 38,615.01 41,630.31
66,220.62
D Deferred Tax Liability (net)
- - - 1,103.64 -
E Liabilities & Provisions
Secured Loans
26,761.85 21,894.76 24,282.17 20,555.15
27,252.99
Unsecured Loans
3,550.36 4,692.68 2,300.76 2,236.48
13,880.16
Current Liabilities
9,282.44 6023.29 3272.35 3997.12
15,311.65
Provisions
- 293.59 530.47 1,106.64
75.86
TOTAL LIABILITIES
39,594.65 32,904.32 30,385.75 27,895.39
56,520.66
F Net Worth (A+B+C-D-E)
542.51 1,333.27 8,229.26 12,631.28
9,699.96
G Represented by :
Shareholder's Funds
Draft Letter of Offer
118
STATEMENT OF RESTATED ASSETS AND LIABILITIES
ANNEXURE - 1
Rs. In lacs
As at 30th June
Particulars 2003 2004 2005 2006 2007
a. Equity Share Capital
1,038.62 1,038.62 1,817.49 1,817.49
1,817.49
b. Reserves and Surplus
3,566.33 3,576.58 6,623.74 10,813.79
7,882.47
4,604.95 4,615.20 8,441.23 12,631.28
9,699.96
Less: Profit and Loss
Account Debit Balance
4,062.44 3,281.93 211.97 - -
Total
542.51 1,333.27 8,229.26 12,631.28
9,699.96
Notes:
(1) The above figures should be read with the Statement of Significant Accounting Policies and Statement of Notes on Restated
Profits & Losses and Restated Assets & Liabilities, as appearing in Annexures 5 and 6 respectively.
(2) Necessary adjustments have been made to the audited financial statements in accordance with the requirements of
paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.
Draft Letter of Offer
119
STATEMENT OF RESTATED PROFITS AND LOSSES
ANNEXURE - 2
(Rs. in lacs.)
For the year ended 30th June
Particulars 2003 2004 2005 2006 2007
Income
Sales of Products (Net of
excise duty)
31,331.65
35,435.52
35,604.57
50,116.73
44,244.45
Increase / (Decrease) in
Inventories
(352.38)
(6,353.86)
1,077.83
(2,099.02)
3,708.61
Other Income
306.65
344.90
287.25
117.35
161.16
Total
31,285.92
29,426.56
36,969.65
48,135.06
48,114.22
Expenditure
Purchase of Semi-Finished
Goods
47.76
173.05
998.83
62.59
34.73
Raw Materials Consumed
23,557.64
17,247.94
21,528.91
29,727.34
38,765.85
Staff Cost
1,933.45
1,918.45
2,028.78
2,401.92
2,748.37
Other Manufacturing
Expenses
2,858.63
3,001.23
3,152.68
3,973.93
4,752.87
Administrative and Other
Expenses
752.81
763.00
1,041.66
993.04
1,087.74
Selling and Distribution
Expenses
507.91
581.96
476.37
558.13
543.90
Interest & Finance Charges
(Net)
3,084.35
3,536.87
2,701.54
1,684.79
2,092.87
Depreciation
1,072.72
1,097.79
1,251.28
1,558.68
2,028.67
Total
33,815.27
28,320.29
33,180.05
40,960.42
52,055.00
Net Profit / (Loss) Before Tax
(2,529.35)
1,106.27
3,789.60
7,174.64
(3,940.78)
Taxation:
Current Tax (Net of Refunds)
1.03
32.17
197.09
680.38
29.65
Fringe Benefit Tax - -
4.50
24.90
27.50
Deferred Tax Liability /
(Asset) - - -
1,103.64
(1,103.64)
Net Profit / (Loss) after Tax
(2,530.38)
1,074.10
3,588.01
5,365.72
(2,894.29)
Notes:
(1) The above figures should be read alongwith the Statement of Significant Accounting Policies and Statement
of Notes on Restated Profits & Losses and Restated Assets & Liabilities, as appearing in Annexures5 and 6
respectively.
(2) Necessary adjustments have been made to the audited financial statements in accordance with the
requirements of paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000.
Draft Letter of Offer
120
STATEMENT OF RESTATED CASH FLOWS
ANNEXURE – 3
(Rs. in lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
A.
CASH FLOW FROM
OPERATING ACTIVITIES :
Restated Profit /(Loss) before Tax (2,529.35) 1,106.27 3,789.60 7,174.64 (3,940.78)
Adjustments for :
Depreciation as per Restated Profit
& Loss 1,072.72 1,097.79 1,251.28 1,558.68 2,028.67
Depreciation on Agriculture
Equipments 0.20 0.16 0.13 1.00 1.42
Interest & Finance Charges (net of
capitalization) 3,162.80 3,590.38 2,729.46 1,725.16 2,177.60
Provision for diminution in the
value of investments - - 25.00 - -
Molasses Storage and Maintenance
Reserve 8.84 10.25 9.27 13.86 7.97
Loss on Fixed Assets sold /
discarded 9.93 18.19 (5.41) 34.24 41.40
Interest & Dividend Income (113.80) (53.98) (28.46) (41.02) (85.94)
Profit on Share Transactions - (23.36) - - -
Operating Profit before Working
Capital Changes : 1,611.34 5,745.70 7,770.87 10,466.56 230.34
Adjustments for :
Trade Payables 1,439.91 (3,218.41) (2,749.73) 757.91 9,399.11
Trade & Other Receivables (658.95) 19.43 219.53 (92.60) (1,158.64)
Inventories 249.93 6,758.48 (1,293.76) 2,182.82 (4,330.49)
1,030.89 3,559.50 (3,823.96) 2,848.13 3,909.98
Cash Generated from Operations : 2,642.23 9,305.20 3,946.91 13,314.69 4,140.32
Direct Taxes( Paid) / Refunds (9.95) (67.23) (208.22) (534.38) (321.45)
Net Cash from Operating Activities 2,632.28 9,237.97 3,738.69 12,780.31 3,818.87
B.
CASH FLOW FROM INVESTING
ACTIVITIES :
Sale of Fixed Assets 0.86 10.21 55.26 64.89 116.27
Loans (Given)/Refunds (5.93) 19.31 2.94 (13.52) (22.80)
Interest & Dividend Received 113.37 54.07 27.93 42.58 84.92
Capital Subsidy received - - 15.00 - -
Purchase of Fixed Assets (623.45) (2,105.19) (4,506.42) (6,530.13) (18,517.49)
Sale/(Purchase) of Investments (6.87) 3.24 - - (0.99)
Profit on Share Transactions - 23.36 - - -
Net Cash from Investing Activities (522.02) (1,995.00) (4,405.29) (6,436.18) (18,340.09)
C.
CASH FLOW FROM FINANCING
ACTIVITIES :
Proceeds from Borrowings 2,575.43 1,142.32 12,614.07 2,935.00 40,729.74
Repayment of Loans (1,639.97) (4,867.09) (12,618.58) (6,726.30) (22,244.26)
Draft Letter of Offer
121
STATEMENT OF RESTATED CASH FLOWS
ANNEXURE – 3
(Rs. in lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
Right Issue of Shares - - 778.87 - -
Premium on Right Issue of Shares - - 3,115.51 - -
Expenses on Right Issue of Shares - - (92.62) - -
Interest Paid (2,962.42) (3,637.47) (2,827.20) (1,900.61) (2,863.27)
Dividend Paid (0.64) (0.61) (290.68) (517.35) (927.42)
Net Cash from Financing Activities (2,027.60) (7,362.85) 679.37 (6,209.26) 14,694.79
NET CHANGES IN CASH & CASH EQUIVALENTS (A+B+C) 82.66 (119.88) 12.77 134.87 173.57
Cash & Cash equivalents -
Opening Balance 228.28 310.94 191.06 203.83 338.70
Cash & Cash equivalents - Closing
Balance 310.94 191.06 203.83 338.70 512.27
STATEMENT OF THE ADJUSTMENTS MADE TO THE AUDITED FINANCIAL STATEMENTS
ANNEXURE - 4 A
Rs. In Lacs
Statement of adjustments on profit and loss account carried out in accordance with Part II of Schedule II of the Companies Act,
1956 and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000
For the year ended 30th June
Particulars 2003 2004 2005 2006 2007
Net Profit / (Loss) as per Audited Profit and
Loss Account (1,176.53) 1,412.47 1,116.04 4,536.51 (2,689.55)
Add: Exceptional Items Considered Below
Separately - - 2,237.45 - -
Adjustments on account of :
Differential cane price *
(1,602.23) (480.21) - - -
Increase / (Decrease) in valuation of process and
finished stock ** 945.90 (648.27) (297.63) - -
Provision for doubtful debts 81.67 10.25 7.13 22.19 -
Provision for doubtful Loans & Advances (45.46) 31.04 18.43 91.91 -
Swap Transactions (3.93) 3.93 - - -
Items pertaining to previous years (5.03) (28.50) 2.79 (0.22) 2.32
Interest from Items pertaining to previous years 23.51 - - - -
Provision for Leave liability & Gratuity (0.50) (0.41) (0.27) 6.57 -
Total adjustments before tax (606.07) (1,112.17) 1,967.90 120.45 2.32
Adjustments for Taxation
Provision for current income tax - (3.01) (26.88) 29.89
MAT Credit entitlement - - - (696.00) (25.50)
Deferred tax (747.78) 776.81 530.95 1,374.87 (181.56)
Total adjustments for taxation (747.78) 773.80 504.07 708.76 (207.06)
Draft Letter of Offer
122
Net adjustments (1,353.85) (338.37) 2,471.97 829.21 (204.74)
Profit / (Loss) after adjustments (2,530.38) 1,074.10 3,588.01 5,365.72 (2,894.29)
* Differential Cane Price of Rs. 155.01 Lacs for the season 1996-97 has been restated against the opening Reserve in the year 2003
** Arisen due to Consideration of differential cane price as a part of cost.
STATEMENT OF THE ADJUSTMENTS MADE TO THE AUDITED FINANCIAL STATEMENTS
ANNEXURE - 4B
Rs. In Lacs
Statement of adjustments on assets and liabilities carried out in accordance with Part II of Schedule II of
the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000.
As at 30th June
Particulars 2003 2004 2005 2006 2007
Net Adjustments ( as per Annexure 4A) (1,353.85) (338.37) 2,471.97 829.21 (204.74)
Adjusted from opening Reserves *
Opening Deferred Tax Liability
(1,934.85)
Doubtful Debts
(121.24)
Doubtful loans &advances
(95.92)
Exceptional Item ( differential cane price for
sugar season 1996-97)
(155.01)
Item pertaining to previous years
5.13
Provision for Leave liability& Gratuity
(5.39)
Increase / (Decrease) in Reserves (3,661.13) (338.37) 2,471.97 829.21 (204.74)
Cummulative Increase / (Decrease) in Reserves (3,661.13) (3,999.50) (1,527.53) (698.32) (903.06)
* Adjustments related to prior of reporting period
Draft Letter of Offer
123
ANNEXURE- 5
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES ON RESTATED PROFIT & LOSS
ACCOUNT AND RESTATED ASSETS & LIABILITIES
1. ACCOUNTING POLICIES:
(i) Basis of Accounting:
The Company follows mercantile system of accounting and recognizes income and expenditure on
accrual basis, as per normally accepted accounting principles, except for the following which due to
uncertainty in realisation, are maintained on cash/ acceptance basis: –
(a) Insurance and other claims.
(b) Interest on doubtful loans and advances to cane growers.
(c) Compensation receivable in respect of land surrendered to / acquired by the Government.
(ii) Revenue Recognition:
Revenue from the sale of goods is recognized upon passage of title to the customers which
generally coincides with delivery thereof.
(iii) Fixed Assets:
Fixed assets are stated at cost of acquisition inclusive of duties (net of cenvat credit), taxes,
incidental expenses and erection/commissioning expenses etc. upto the date the asset is ready for its
intended use. Expenses incurred on major modernization programs including Projects under
implementation are capitalized.
Machinery spares which can be used only in connection with an item of fixed assets and whose
use as per technical assessment is expected to be irregular, are capitalised and depreciated over the
residual life of the respective assets.
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment based on external/internal factors. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price and ‘Value in use’ of the assets. The estimated future
cash flows considered for determining the value in use, are discounted to their present value at the
weighted average cost of capital.
Assets awaiting disposal are valued at the lower of written down value and net realisable value
and disclosed separately.
(iv) Depreciation :
(a) The classification of plant and machinery into continuous and non-continuous process is
done as per technical certification and depreciation thereon is provided accordingly.
Draft Letter of Offer
124
(b) Depreciation on fixed assets is provided as under:
A) On assets valuing Rs. 4.62 lacs, at the rate applicable under the Bihar Agricultural
Income Tax Act, 1949.
B) On assets valuing Rs. 43.11 lacs, on written-down value method, at the rates
prescribed in schedule XIV of the Companies Act, 1956.
C) On other assets, as per straight line method, at the rates prescribed in schedule XIV
of the Companies Act, 1956.
(c) Depreciation on fixed assets added / disposed off during the year is provided on pro-rata
basis, with reference to the date of addition / disposal.
(d) In case of impairment, if any, depreciation is provided on the revised carrying amount of the
assets over its remaining useful life.
(v) Borrowing Costs :
Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time
all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A
qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to revenue.
(vi) Investments :
Current Quoted Investments are stated at lower of cost and market rate on individual investment
basis. Unquoted / long term investments are considered “at cost” on individual investment basis,
unless there is a decline other than temporary in the value, in which case adequate provision is made
against such diminution in the value of investments.
(vii) Inventories :
(a) Inventories (including Power - Banked) are valued at lower of cost (computed on annual
weighted average basis for raw materials, stores and spares etc.) and net realisable value.
However, Country Crop, by products and saleable scrap, whose cost is not identifiable, are
valued at estimated net realisable value.
(b) In case of inter-transferred materials, the transfer price is considered as cost for the purpose
of valuation of closing stock.
(viii) Foreign Currency Transactions :
(a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the
foreign currency amount the exchange rate between the reporting currency and the foreign
currency at the date of the transaction.
Draft Letter of Offer
125
(b) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items
which are carried in terms of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction, and non-monetary items which are
carried at fair value or other similar valuation denominated in a foreign currency are
reported using the exchange rates that existed when the values were determined.
(c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items are
recognized as income or expenses in the year in which they arise except those relating to
acquisition of fixed assets outside India, in which case such exchange differences are
capitalized.
The premium or discount arising at the inception of forward exchange contracts is
amortized as expenses or income over the life of the respective contracts. Exchange
differences on such contracts are recognized in the statement of profit and loss in the year
in which the exchange rates change. Any profit or loss arising on cancellation or renewal
of forward exchange contract is recognized as income or as expense for the year.
(ix) Retirement Benefits :
(a) The Company has created an approved gratuity fund which has taken a group gratuity
insurance policy with Life Insurance Corporation of India (LIC), for future payment of
gratuity to the employees. The Company accounts for gratuity liability equivalent to the
premium amount payable to LIC every year based on actuarial valuation carried out by
them as on 31st March each year, which together with annual contribution in subsequent
years, would be sufficient to cover the gratuity liability as and when it accrues for payment.
(b) Leave liability is provided for on the basis of actuarial valuation carried on at the year end.
(c) Retirement benefits in the form of provident fund / pension schemes and superannuation funds
are charged to the Profit & Loss Account of the year when the contributions to the respective
funds are due.
(x) Taxation :
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe
benefit tax are measured at the amount expected to be paid to tax authorities in accordance with
Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences
between taxable income for the year and reversal of timing differences of earlier years.
The deferred tax for timing differences between the book and tax profit for the year is accounted
for using the tax rates and laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax asset are recognized only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax asset can be realized. If the
Draft Letter of Offer
126
company has carry forward unabsorbed depreciation and tax losses, deferred tax asset are
recognized only to the extent that there is virtual certainty supported by convincing evidence that
sufficient taxable income will be available against which such deferred tax asset can be realized.
Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent
there is convincing evidence that the company will pay normal income tax during the specified
period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be
recognized as an asset in accordance with the recommendations contained in guidance Note
issued by the Institute of Chartered Accountants of India, the said asset is created by way of a
credit to the profit and loss account and shown as MAT Credit Entitlement. The Company
reviews the same at each balance sheet date and writes down the carrying amount of MAT
Credit Entitlement to the extent there is no longer convincing evidence to the effect that
Company will pay normal Income Tax during the specified period.
(xi) Segment Reporting :
(a) Identification of Segments :
The Company has identified that its operating segments are the primary segments. The Company’s
operating businesses are organized and managed separately according to the nature of products, with
each segment representing a strategic business unit that offers different products and serves different
markets. The analysis of geographical segments is based on the areas in which the customers of the
Company are located.
(b) Inter Segment Transfers :
The Company accounts for inter segment transfers at mutually agreed transfer prices.
(c) Allocation of Common Costs :
Common allocable costs are allocated to each segment on case to case basis applying the
ratio, appropriate to each relevant case. Revenue and expenses which relate to the enterprise
as a whole and are not allocable to segments on a reasonable basis are included under the
head “Unallocated – Common”.
The accounting policies adopted for segment reporting are in line with those of the Company.
(xii) Share Issue Expenses:
Share issue expenses are adjusted against Securities Premium Account.
(xiii) Earning per Share :
Basic Earning per Share are calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted number of equity shares outstanding during the year.
Draft Letter of Offer
127
For the purpose of calculating diluted earning per share, net profit or loss for the period
attributable to equity share holders and the weighted average number of shares outstanding during
the period are adjusted for the effect of all dilutive potential equity shares.
(xiv) Excise Duty :
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered
for valuation of stocks as on the Balance Sheet date.
(xv) Hedging :
The Company uses derivative financial instruments including forward exchange contracts to hedge
its risk associated with foreign currency fluctuations.
The premium or discount arising at the inception of forward exchange contracts is amortized as
expense or income over the life of the contract except those relating to acquisition of fixed assets
outside India, in which case such exchange differences are capitalized.
(xvi) Research & Development :
Research and Development expenditure of revenue nature are charged to the Profit & Loss Account,
while capital expenditure are added to the cost of fixed assets in the year in which these are incurred.
(xvii) Premium on Redemption of Debentures:
Premium on redemption of debentures is accounted for in the year of payment.
(xviii)Provisions:
A provision is recognized when an enterprise has a present obligation as a result of past event and
it is probable that an outflow of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions made in terms of Accounting Standard 29 are
not discounted to its present value and are determined based on management estimate required to
settle the obligation, at the Balance Sheet date. These are reviewed at each Balance Sheet date
and adjusted to reflect the current management estimates.
(xix) Contingencies:
Liabilities which are material and whose future outcome cannot be ascertained with reasonable
certainty are treated as contingent and disclosed by way of notes to the accounts.
Draft Letter of Offer
128
Annexure 6
STATEMENT OF NOTES ON THE RESTATED PROFITS AND LOSSES AND RESTATED ASSETS
AND LIABILITIES
1. As required by paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and
Investor Protection) Guidelines, 2000, the Statement of Adjusted Profits and Losses for the year ended
30th
June, 2003, 2004, 2005, 2006 and 2007 as well as Statement of Adjusted Assets and Liabilities as
at 30th
June, 2003, 2004, 2005, 2006 and 2007 have been reinstated for the changes in accounting
policies as well as audit qualifications. However, certain audit qualifications the impact whereof could
not be ascertained presently, for the reasons mentioned in the respective notes, have not been adjusted
and are indicated herein below:
(a) Pending disposal of writs/appeals by the court with regard to levy sugar prices for some years,
Rs.113.46 lacs (net) received as excess levy sugar price, against which bank guarantees furnished by
the Company for Rs. 84.88 lacs, are in force in terms of the Court Orders, is included under the head
'Current Liabilities'. Necessary adjustment for the above amount together with interest, if any, in this
regard will be made in the accounts as and when the matter will be finally settled.
(b) Pending decisions of the various courts on writ petitions filed by/ against the Company, no credit
has been taken in the Profit and Loss Account in respect of certain realizations aggregating to
Rs.52.05 lacs in earlier years, which is shown under the head ‘Current Liabilities’. Against the
above, fixed deposits receipts / bank guarantees for similar amount have been furnished by the
Company.
2. Sundry creditors include Rs. 8.55 lacs due to Small Scale Industrial undertakings (SSI) to the extent such
parties have been identified from the available documents / information. The Company has normally made
payments to the SSI units in due time and also there being no claims from the parties, interest, if any, on
overdue payments, is not expected to be material and thus not provided for.
3. Based on the information / documents available with the company, no creditor is covered under Micro,
Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments have
been made by the company to such creditors, if any, and no disclosures thereof are made in these accounts.
4. (a) Pending execution of the conveyance deed, no adjustment has been made in respect of 0.75 acre of land
sold by the Company in earlier years.
(b) An application filed by the Company for exemption of 3,785.19 sq. mtrs. of land at Bamrauli under the
Urban Land (Ceiling and Regulation) Act, 1976, is pending with the concerned authority.
5. Accounts are not restated for the periods prior to the date when the Accounting Standard-29 on Provisions,
Contingent Liabilities and Contingent Assets, became effective from the period commencing on or after 01-
.04-2004.
6. The year wise break up of contingent liabilities is as under :
Rs. In lacs
As at the year ended on 30th
June Nature of Liability
2003 2004 2005 2006 2007
Demands/Claims against the Company not
acknowledged as debts
205.86 105.43 212.18 615.87
658.14
Guarantees given to a bank against loans to cane
growers
750.00 750.00 750.00 750.00 1500.00
Against the above, the loan facilities actually availed
as on the balance sheet date
749.98 749.84 749.50 750.00 1074.37
Draft Letter of Offer
129
As at the year ended on 30th
June Nature of Liability
2003 2004 2005 2006 2007
Customs duty in respect of pending export
obligations against duty free imports
493.13
Unredeemed Bank Guarantees
19.01 21.39 16.48 1.32 0.96
Bills discounted from bank under L/C 66.65
7. The year wise break up of estimated amount of contracts remaining to be executed on capital items and
not provided for is as under:
Rs. In lacs
As at the year ended on 30th
June
2003 2004
2005
2006 2007
34.65 2331.01 1216.49 4739.61 18672.67
Draft Letter of Offer
130
ANNEXURE - 7
STATEMENT OF SIGNIFICANT CHANGES IN ACCOUNTING POLCIES DURING THE
REPORTING PERIOD OF THE OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
There is no change in the accounting policies during reporting period.
Draft Letter of Offer
131
ANNEXURE - 8
STATEMENT OF QUALIFICATIONS IN AUDITORS’ REPORT DURING THE REPORTING PERIOD
(Rs. In lacs)
For the year ended 30th June
Sl
No.
Particulars of audit qualifications
2003 2004 2005 2006 2007
1 Non provision of doubtful debts,loans and advances the
impact whereof on the Company's profit/ (loss) is not
presently ascertainable.
180.95
139.66
114.10
-
-
2 Non provision of various government demands / dues, the
impact whereof is not presently ascertainable due to
pending appeals
495.44
392.16
312.47
-
-
3 Non adjustment of certain realizations in earlier years and
non provision of interest payable thereon, if any, in case of
refund of any such realization. As the matters are under
adjudication / not yet settled, the impact of the above
adjustment on the Company’s profit /(loss) is not presently
ascertainable
179.23
174.98
174.98
165.51
165.51
4 Recognition of Deferred tax Asset (net), based on the
future profitability projections made by the management.
However, we are unable to express any opinion on the
above projections and their consequent impact, if any, on
such recognition of deferred tax asset(net)
2,682.63
1,905.82
1,374.87
-
181.56
5 Non provision of gratuity and leave liability on differential
wages and salaries at the Company's Allahabad Unit.
Amount not ascertained
-
-
6 Non provision of Income Tax liability,if any, for the
period from 1st April to 30th June,2005
-
-
Amount
not
ascertained
-
-
7 Recognition of Minimum Alternate Tax (MAT) Credit
entitlement in terms of Section 115JB of the Income Tax
Act,1961 which being availabe as tax credit for set-off in
the future years, as per section 115 JAA of the Income Tax
Act,1961 has been carried forward as recoverable under "
MAT Credit Entitlement"
-
-
-
-
721.50
Draft Letter of Offer
132
STATEMENT OF RESTATED PROFITS AND LOSSES
ANNEXURE - 9 ( Rs. in Lacs.)
For the year ended 30th June
Accounting Ratios 2003 2004 2005 2006 2007
Earnings per Share ( Rs.)
(24.36) 10.34 22.66 29.52
(15.93)
(Nominal Value Rs. 10
Per Share)
Return on Net Worth(%)
(466.42) 80.56 43.60 42.48
(29.84)
Net Asset Value per
Share (Rs.)
5.22 12.84 51.97 69.50
53.37
NOTES:
Defination of ratios:
a) Earning per share
( EPS)
Restated Profit/(Loss) after tax as per statement of Restated
Profits/(Losses),divided by the weighted average number of outstanding equity
shares during the year.
b)Return on net worth
Profit/(Loss)after tax as per statement of Restated Profits and Losses, divided by
net worth.
c) Net Assests Value
Net worth as per statement of Restated Assets and Liabilities, divided by the
weighted average number of outstanding equity shares during the year.
ANNEXURE - 10
RELATED PARTY DISCLOSURES
Names of the related parties: Subsidiary Companies
Champaran Marketing Company Ltd.
OSM Investment & Trading Company Ltd.
Hargaon Investment & Trading Company Ltd.
Hargaon Properties Ltd.
Rajpur Farms Ltd. *
Narkatiaganj Farms Ltd.*
Key Management Personnel
Shri C. S. Nopany – Chairman cum Mg. Director
Shri P.K. Lakhotia – Executive President, Hargaon Unit (upto 15th June 2006)
Shri V.P.Singh –Executive President, Rosa Unit (From 4th
June,2004)
Executive President, Hargaon (From 16th June 2006)
Shri M. S. Sharma – Executive President,Narkatiaganj Unit (upto 18th June, 2007)
Shri Chandra Mohan–Executive President,Narkatiaganj Unit (from 19th June, 2007)
Shri P.K. Saini – Executive President, Rosa Unit (From16th June 2006)
Shri M.N. Agarwal – Executive President, Rosa Unit (Upto 2ndJune,2004)
Shri S.D. Shukla – Sr.Executive Vice President, Hata Unit
Shri S.K. Premi – Executive President, Allahabad Unit
Draft Letter of Offer
133
Shri D.J. Darji – Secretary
Relatives of Key Management Personnel
Smt. Nandini Nopany - Mother of Shri C.S. Nopany
Shri Ansul Sharma- Son of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Vedanti Sharma- Wife of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Ritu Sharma- Duaghter of Shri M. S. Sharma ** (upto 18th June,2007)
Smt. Urmila Lakhotia- Wife of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Garima Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Abha Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Astha Lakhotia- Daughter of Shri P K Lakhotia ** (upto 15th June,2006)
Mr. Mohit Lakhotia- Son of Shri P K Lakhotia ** (upto 15th June,2006)
Miss. Anamika- Daughter of Shri M N Agarwal ** (upto 2nd June,2004)
Miss. Annapurna- Daughter of Shri M N Agarwal ** (upto 2nd June,2004)
Enterprises owned or significantly influenced by Key Management Personnel and their relatives
Upper Ganges Sugar & Industries Ltd.
SIL Investments Ltd. ( Formerly Sutlej Industries Ltd.)
Sutlej Textiles & Industries Ltd.
SCM Investment & Trading Co. Ltd.
RTM Investment & Trading Co. Ltd.
RTM Properties Ltd. (Formerly ISS Shipping Services Ltd.)
SIL Properites Ltd. (Formerly ISS Shipping and Trading Co. Ltd.)
Uttar Pradesh Trading Co. Ltd.
* Ceased to be subsidiaries of the Company w.e.f. 19-10-2004. All the transactions relating to these companies are
considered only upto the aforesaid date.
** Ceased to be related parties in term of Accounting Standard- 18 from the respective dates. Accordingly all the
transactions are considerred only upto the said dates and also their outstanding balances, if any, as on Balance Sheet date
has not been disclosed.
Draft Letter of Offer
134
ANNEXURE-10
(Contd.)
Restated Related Party
Disclosure
Statement of Aggregated Related Party Transactions as per
Accounting Standard-18 for the reporting period
(Rs. In lacs.)
Enterprises
owned by Key Relatives of
Key
Management Management Key Management
Particulars Subsidiaries
Personnel or
their relatives Personnel Personnel Total
Time
Transac
tions Balance
Transa
ctions Balance
Transac
tions Balance
Transactio
ns Balance Transactions Balance
Period Value
Outstan
ding Value
Outstan
ding Value
Outstandi
ng Value
Outstandin
g Value
Outstand
ing
as on as on as on as on as on
Sale of Goods/ Fixed Assets
Rajpur Farms Ltd. 2004-05 1.47
-
-
-
-
- - -
1.47
-
2003-04
4.56
-
-
-
-
- - -
4.56
-
2002-03
2.22
-
-
-
-
- - -
2.22
-
Narkatiaganj Farms
Ltd. 2004-05
1.23
-
-
-
-
- - -
1.23
-
2003-04
3.62
-
-
-
-
- - -
3.62
-
2002-03
1.03
-
-
-
-
- - -
1.03
-
Upper Ganges Sugar & 2006-07 - - - 224.14
Draft Letter of Offer
135
Industries Ltd. - - 224.14 - - -
2005-06
-
-
245.76
-
-
- - -
245.76
-
2004-05
-
-
271.18
-
-
- - -
271.18
-
2003-04
-
-
39.39
-
-
- - -
39.39
-
2002-03
-
-
48.64
-
-
- - -
48.64
-
Purchase of Goods /Fixed
Assets
Rajpur Farms Ltd. 2003-04
5.30
-
-
-
-
- - -
5.30
-
2002-03
3.34
-
-
-
-
- - -
3.34
-
Narkatiaganj Farms
Ltd. 2003-04
3.44
-
-
-
-
- - -
3.44
-
2002-03
3.25
-
-
-
-
- - -
3.25
-
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
970.95
-
-
- - -
970.95
-
2005-06
-
-
75.31
-
-
- - -
75.31
-
2004-05
-
-
73.51
-
-
- - -
73.51
-
2003-04
-
-
10.42
-
-
- - -
10.42
-
2002-03
-
-
13.80
-
-
- - -
13.80
-
Mrs Vedanti Sharma 2003-04
-
-
-
-
-
-
10.79
-
10.79
-
Right Issue of Shares
Mr. C.S.Nopany 2004-05
-
-
-
-
9.56
- - -
9.56
-
SCM Investment & 2004-05 - - - 339.98
Draft Letter of Offer
136
Trading Company Ltd., - - 339.98 - - -
RTM Investment &
Trading Company Ltd., 2004-05
-
-
349.13
-
-
- - -
349.13
-
Others 2004-05
-
-
-
-
0.01
-
0.01
-
0.02
-
Dividend Paid
Mr. C.S.Nopany 2006-07
-
-
-
-
2.01
- - -
2.01
-
2005-06
-
-
-
-
1.12
- - -
1.12
2004-05
-
-
-
-
0.64
- - -
0.64
-
SCM Investment &
Trading Company Ltd., 2006-07
-
-
87.42
-
-
- - -
87.42
-
2005-06
-
-
39.66
-
-
- - -
39.66
-
2004-05
-
-
25.79
-
-
- - -
25.79
-
RTM Investment &
Trading Company Ltd., 2006-07
-
-
73.32
-
-
- - -
73.32
-
2005-06
-
-
40.73
-
-
- - -
40.73
-
2004-05
-
-
25.90
-
-
- - -
25.90
Uttar Pradesh Trading
Co.Ltd., 2006-07
-
-
88.34
-
-
- - -
88.34
-
2005-06
-
-
49.08
-
-
- - -
49.08
-
Others 2004-05
-
-
-
-
0.02
-
0.11
-
0.13
-
Interest Paid
Rajpur Farms Ltd. 2004-05
0.34
-
-
-
-
- - -
0.34
-
2003-04
1.13
-
-
-
-
- - -
1.13
-
Narkatiaganj Farms
Ltd. 2004-05
0.42
-
-
-
-
- - -
0.42
-
Draft Letter of Offer
137
2003-04
0.91
-
-
-
-
- - -
0.91
-
2002-03
0.27
-
-
-
-
- - -
0.27
-
Sutlej Textiles &
Industries Limited 2006-07
-
-
62.43
-
-
- - -
62.43
-
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
140.71
-
-
- - -
140.71
-
2003-04
-
-
47.15
-
-
- - -
47.15
-
2002-03
-
-
68.00
-
-
- - -
68.00
-
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
102.63
-
-
- - -
102.63
-
2003-04
-
-
150.26
-
-
- - -
150.26
-
2002-03
-
-
26.43
-
-
- - -
26.43
-
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
53.25
-
-
- - -
53.25
-
2003-04
-
-
103.96
-
-
- - -
103.96
-
2002-03
-
-
17.47
-
-
- - -
17.47
-
Others 2005-06
-
-
-
-
0.10
-
3.59
-
3.69
-
2004-05
-
-
5.90
-
0.42
0.10
3.88
4.09
10.20
4.19
2003-04
-
-
13.75
-
0.28
-
4.65
3.58
18.68
3.58
2002-03
-
-
13.26
-
0.28
-
3.60
-
17.14
-
Loans Repaid / Given
Champaran Marketing
Company Ltd. 2006-07
168.00
39.50
-
-
-
- - -
168.00
39.50
Draft Letter of Offer
138
2005-06
5.00
-
-
-
-
- - -
5.00
-
2004-05
5.00
-
-
-
-
- - -
5.00
-
2003-04
22.50
-
-
-
-
- - -
22.50
-
2002-03
7.75
-
-
-
-
- - -
7.75
-
Rajpur Farms Ltd. 2004-05
16.00
-
-
-
-
- - -
16.00
-
2003-04
6.19
-
-
-
-
- - -
6.19
-
2002-03
2.08
-
-
-
-
- - -
2.08
-
Narkatiaganj Farms
Ltd. 2004-05
17.50
-
-
-
-
- - -
17.50
-
2003-04
5.65
-
-
-
-
- - -
5.65
-
2002-03
2.17
-
-
-
-
- - -
2.17
-
OSM Investment &
Trading Company Ltd. 2006-07
55.50
-
-
-
-
- - -
55.50
-
2005-06
7.50
-
-
-
-
- - -
7.50
-
2004-05
3.50
-
-
-
-
- - -
3.50
-
2003-04
2.50
6.00
-
-
-
- - -
2.50
6.00
2002-03
14.50
26.50
-
-
-
- - -
14.50
26.50
Hargaon Investment &
Trading Company Ltd. 2006-07
122.50
-
-
-
-
- - -
122.50
-
2005-06
5.75
-
-
-
-
- - -
5.75
-
2004-05
0.25
-
-
-
-
- - -
0.25
-
Draft Letter of Offer
139
2003-04
24.75
3.25
-
-
-
- - -
24.75
3.25
2002-03
80.46
22.50
-
-
-
- - -
80.46
22.50
Hargaon Properties Ltd. 2005-06
39.75
7.36
-
-
-
- - -
39.75
7.36
2004-05
0.04
0.04
-
-
-
- - -
0.04
0.04
Sutlej Textiles &
Industries Limited 2006-07
-
-
1,500.0
-
-
- - -
1,500.00
-
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
2,100.0
-
-
- - -
2,100.00
-
2003-04
-
-
300.00
-
-
- - -
300.00
-
2002-03
-
-
1,405.00
-
-
- - -
1,405.00
-
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
2,150.00
-
-
- - -
2,150.00
-
2003-04
-
-
2,300.00
-
-
- - -
2,300.00
-
2002-03
-
-
550.00
-
-
- - -
550.00
-
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
2,225.00
-
-
- - -
2,225.00
-
2003-04
-
-
2,800.00
-
-
- - -
2,800.00
-
2002-03
-
-
300.00
-
-
- - -
300.00
-
Others 2005-06
-
-
-
4.00
-
11.57
-
15.57
-
2004-05
-
-
340.00
-
2.00
-
9.50
-
351.50
-
Draft Letter of Offer
140
2003-04
-
-
385.00
-
-
-
13.01
-
398.01
-
2002-03
-
-
340.00
-
-
-
1.40
-
341.40
-
Loans/Intercorporate
Loans Taken
Rajpur Farms Ltd. 2003-04
8.50
16.00
-
-
-
- - -
8.50
16.00
2002-03
19.77
13.69
-
-
-
- - -
19.77
13.69
Narkatiaganj Farms
Ltd. 2003-04
12.50
17.50
-
-
-
- - -
12.50
17.50
2002-03
13.82
10.65
-
-
-
- - -
13.82
10.65
Champaran Marketing
Company Ltd. 2006-07
30.00
-
-
-
-
- - -
30.00
-
2005-06
19.75
98.50
-
-
-
- - -
19.75
98.50
2004-05
13.25
83.75
-
-
-
- - -
13.25
83.75
2003-04
22.00
75.50
-
-
-
- - -
22.00
75.50
2002-03
6.00
76.00
-
-
-
- - -
6.00
76.00
OSM Investment &
Trading Company Ltd. 2006-07
37.50
10.50
-
-
-
- - -
37.50
10.50
2005-06
24.50
28.50
-
-
-
- - -
24.50
28.50
2004-05
21.00
11.50
-
-
-
- - -
21.00
11.50
2003-04
23.00
-
-
-
-
- - -
23.00
-
2002-03
12.25
-
-
-
-
- - -
12.25
-
Hargaon Investment &
Trading Company Ltd. 2006-07
94.00
89.00
-
-
-
- - -
94.00
89.00
Draft Letter of Offer
141
2005-06
69.50
117.50
-
-
-
- - -
69.50
117.50
2004-05
57.25
53.75
-
-
-
- - -
57.25
53.75
2003-04
44.00
-
-
-
-
- - -
44.00
-
2002-03
57.96
-
-
-
-
- - -
57.96
-
Hargaon Properties Ltd. 2006-07
7.36
-
-
-
-
- - -
7.36
-
2005-06
32.43
-
-
-
-
- - -
32.43
-
Sutlej Textiles &
Industries Limited 2006-07
-
-
3,500.00
2,000.00
-
- - -
3,500.00
2,000.00
SIL Investments Ltd.,(
Formerly Sutlej
Industries Limited) 2004-05
-
-
900.00
-
-
- - -
900.00
-
2003-04
-
-
1,200.00
1,200.00
-
- - -
1,200.00
1,200.00
2002-03
-
-
1,705.00
300.00
-
- - -
1,705.00
300.00
SCM Investment &
Trading Co. Ltd. 2004-05
-
-
1,150.00
-
-
- - -
1,150.00
-
2003-04
-
-
2,900.00
1,000.00
-
- - -
2,900.00
1,000.00
2002-03
-
-
950.00
400.00
-
- - -
950.00
400.00
RTM Investment &
Trading Co. Ltd. 2004-05
-
-
2,025.00
-
-
- - -
2,025.00
-
2003-04
-
-
2,500.00
200.00
-
- - -
2,500.00
200.00
2002-03
-
-
800.00
500.00
-
- - -
800.00
500.00
Others 2005-06
-
-
-
-
-
2.31
-
2.31
-
2004-05 33.47 267.16
Draft Letter of Offer
142
- - 250.00 - 4.00 4.00 13.16 37.47
2003-04
-
-
400.00
90.00
-
2.00
9.60
33.81
409.60
125.81
2002-03
-
-
415.00
75.00
-
2.00
18.22
37.22
433.22
114.22
Balance Outstanding on
Current Accounts (net)
Credit :
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
-
58.02
-
- - -
-
58.02
2005-06
-
-
-
16.72
-
- - -
-
16.72
2004-05
-
-
-
14.07
-
- - -
-
14.07
2003-04
-
-
-
7.58
-
- - -
-
7.58
2002-03
-
-
-
7.42
-
- - -
-
7.42
Debit :
Mr. C.S.Nopany 2006-07
-
-
-
-
6.09
6.09
- -
6.09
6.09
Dividend Received
Upper Ganges Sugar &
Industries Ltd. 2006-07
-
-
0.93
-
-
- - -
0.93
-
2005-06
-
-
0.45
-
-
- - -
0.45
-
2004-05
-
-
0.34
-
-
- - -
0.34
-
Champaran Marketing
Company Ltd. 2002-03
5.22
-
-
-
-
- - -
5.22
-
OSM Investment &
Trading Company Ltd. 2002-03
12.18
-
-
-
-
- - -
12.18
-
Hargaon Investment &
Trading Company Ltd. 2002-03
41.24
-
-
-
-
- - -
41.24
-
Remuneration
Mr. C.S.Nopany 2006-07
-
-
-
-
100.31
- - -
100.31
-
Draft Letter of Offer
143
2005-06
-
-
-
-
79.10
- - -
79.10
-
2004-05
-
-
-
-
16.80
- - -
16.80
-
2003-04
-
-
-
-
10.75
- - -
10.75
-
2002-03
-
-
-
-
10.75
- - -
10.75
-
Mr. P.K.Lakhotia 2005-06
-
-
-
-
15.91
5.29
- -
15.91
5.29
2004-05
-
-
-
-
14.59
2.90
- -
14.59
2.90
2003-04
-
-
-
-
12.35
1.29
- -
12.35
1.29
2002-03
-
-
-
-
7.90
- - -
7.90
-
Mr. Chandra Mohan 2006-07
1.47
1.47
1.47
1.47
Mr.M.S.Sharma 2006-07
-
-
-
-
10.51
- - -
10.51
-
2005-06
-
-
-
-
10.23
0.74
- -
10.23
0.74
2004-05
-
-
-
-
9.00
0.67
- -
9.00
0.67
2003-04
-
-
-
-
7.56
0.60
- -
7.56
0.60
2002-03
-
-
-
-
7.05
- - -
7.05
-
Mr.M.N.Agarwal 2003-04
-
-
-
-
6.53
- - -
6.53
-
2002-03
-
-
-
-
6.32
- - -
6.32
-
Mr.V.P.Singh 2006-07
-
-
-
-
18.97
4.00
- -
18.97
4.00
2005-06
-
-
-
-
8.99
1.83
- -
8.99
1.83
2004-05
-
-
-
-
6.92
0.56
- -
6.92
0.56
Draft Letter of Offer
144
2003-04
-
-
-
-
0.56
0.56
- -
0.56
0.56
Mr.P.K.Saini 2006-07
-
-
-
-
8.95
- - -
8.95
-
2005-06
-
-
-
-
0.39
0.20
- -
0.39
0.20
Mr.S.K.Premi 2006-07
-
-
-
-
10.36
- - -
10.36
-
2005-06
-
-
-
-
8.55
- - -
8.55
-
2004-05
-
-
-
-
9.15
0.07
- -
9.15
0.07
2003-04
-
-
-
-
6.88
0.49
- -
6.88
0.49
2002-03
-
-
-
-
7.32
- - -
7.32
-
Mr.S.D.Shukla 2006-07
-
-
-
-
4.74
1.42
- -
4.74
1.42
Mr.D.J.Darji 2006-07
-
-
-
-
4.62
0.10
- -
4.62
0.10
Note: The period referred to above is from 1st July to 30th June each year.
Draft Letter of Offer
145
STATEMENT OF RESTATED SEGMENTAL INFORMATION AS PER ACCOUNTING STANDARD-17 FOR
THE REPORTING PERIOD
ANNEXURE -11
(Rs. in lacs)
Year Sugar Spirits
Others Total
Co-generation
Canning Products
(a) Revenue ( net of excise duty and cess)
2006-07
37,817.54 3,919.33
766.43
1,741.15
-
44,244.45
2005-06
44,890.74 3,792.89 -
1,433.10
50,116.73
2004-05
32,078.00 2,335.20 -
1,191.37
35,604.57
2003-04 31,006.47 3,168.18 -
1,260.87 - 35,435.52
External Sales
2002-03 28,063.23 2,176.26 -
1,092.16 - 31,331.65
2006-07 2,777.18 4.00
1,425.95
- - 4,207.13
2005-06 1,197.96 13.68 -
- - 1,211.64
2004-05 826.63 - -
- - 826.63
2003-04 713.56 - -
- - 713.56
Inter-segment Sales
2002-03 736.73 - -
- - 736.73
2006-07 40,594.72 3,923.33
2,192.38
1,741.15 - 48,451.58
2005-06 46,088.70 3,806.57 -
1,433.10 - 51,328.37
2004-05 32,904.63 2,335.20 -
1,191.37 - 36,431.20
2003-04 31,720.03 3,168.18 -
1,260.87 - 36,149.08
Total Revenue
2002-03 28,799.96 2,176.26 -
1,092.16 - 32,068.38
(b) Results
2006-07 (3,643.62) 1,315.14
746.21
81.24
(0.25) (1,501.28)
2005-06 8,048.36 1,168.24 -
(2.64)
3.07 9,217.03
2004-05 6,364.12 498.67 -
(42.11)
1.60 6,822.28
2003-04 3,823.34 1,105.05 -
(87.29)
1.29 4,842.39
Segment Results
2002-03 218.66 474.53 -
(20.42)
(44.61) 628.16
Unallocated expenses net of 2006-07 346.63
Draft Letter of Offer
146
2005-06 357.60
2004-05 331.14
2003-04 199.25
unallocated Income
2002-03 73.16
2006-07 (1,847.91)
2005-06 8,859.43
2004-05 6,491.14
2003-04 4,643.14
Operating Profit
2002-03 555.00
2006-07 2,092.87
2005-06 1,684.79
2004-05 2,701.54
2003-04 3,536.87
Interest Expenses & Finance
Charges(net)
2002-03 3,084.35
2006-07 57.15
2005-06 705.28
2004-05 201.59
2003-04 32.17
Income & Wealth Tax (net)
2002-03 1.03
2006-07 (1,103.64)
Deferred Tax Liability/(Asset)
(net)
2005-06 1,103.64
2006-07 (2,894.29)
2005-06 5,365.72
2004-05 3,588.01
2003-04 1,074.10
Net Profit / (Loss)
2002-03 (2,530.38)
(c) Total Assets
2006-07 52,227.18 5,127.94
6,501.35
880.79
1.48 64,738.74
2005-06 36,933.57 2,532.14 -
874.92
1.47 40,342.10
2004-05 34,121.45 2,417.79
765.13
10.24 37,314.61
2003-04 29,805.30 2,283.34
855.43
17.45 32,961.52
Segment Assets
2002-03 36,001.85 2,008.08
654.47
19.53 38,683.93
2006-07 1,481.88
2005-06 1,288.21
2004-05 1,300.40
Unallocated Assets
2003-04 1,276.07
Draft Letter of Offer
147
2002-03 1,453.23
2006-07 66,220.62
2005-06 41,630.31
2004-05 38,615.01
2003-04 34,237.59
Total
2002-03 40,137.16
(d) Total Liabilities
2006-07 14,352.99 185.35
0.30
680.88
0.06 15,219.58
2005-06 3,251.37 133.53 -
600.48
0.06 3,985.44
2004-05 2,484.21 168.76 -
580.04
1.13 3,234.14
2003-04 5,176.96 202.73 -
600.81
1.12 5,981.62
Segment Liabilities
2002-03 8,559.24 149.49 -
507.46
9.91 9,226.10
2006-07 41,301.08
2005-06 25,013.59
2004-05 27,151.61
2003-04 26,922.70
Unallocated Liabilities
2002-03 30,368.55
2006-07 56,520.66
2005-06 28,999.03
2004-05 30,385.75
2003-04 32,904.32
Total
2002-03 39,594.65
(e) Other Information
(i) 2006-07 7.97 - -
- - 7.97
2005-06 13.86 - -
- -
13.86
2004-05 9.27 - -
- -
9.27
2003-04 10.25 -
-
-
- 10.25
Non cash expenses included in
Segment Expenses for arriving at
Segment Results
2002-03 8.84 -
-
-
- 8.84
(ii) 2006-07 12,520.28 2,374.08
6,035.84
6.60 - 20,936.80
2005-06 6,340.05 334.33 -
0.48 -
6,674.86
2004-05 4,187.03 419.48 -
1.45 -
4,607.96
2003-04 1,893.60 232.21 -
9.85 -
2,135.66
Capital Expenditure
2002-03 363.82 265.09 -
3.91
- 632.82
(iii) Depreciation for the period 2006-07 1,728.79 109.34 2,030.09
Draft Letter of Offer
148
187.41 4.52 0.03
2005-06 1,465.88 89.56 -
4.22
0.02 1,559.68
2004-05 1,180.92 65.98 -
4.48
0.03 1,251.41
2003-04 1,027.59 66.36 -
3.97
0.03
1,097.95
2002-03 1,015.70 53.42 - 3.78 0.02 1,072.92
Revenue
(f) Geographical Segments
2006-07
43,127.64
2005-06
48,556.40
2004-05
35,284.60
2003-04 34,902.89
Domestic
2002-03 31,112.30
2006-07 1,116.81
2005-06 1,560.33
2004-05 319.97
2003-04 532.63
Overseas (Including through
canalising agents)
2002-03 219.35
2006-07 44,244.45
2005-06 50,116.73
2004-05 35,604.57
2003-04 35,435.52
Total
2002-03 31,331.65
Notes :
(i) Business Segment: The business segments have been identified on the basis of the products
of the Company. Accordingly, the Company has identified “Sugar”, “Spirits”, "Co-
generation" and “Canning Products” as the operating segments:
Sugar - Consists of manufacture and sale of Sugar, Molasses & Bagasse
Spirits - Consists of manufacture and sale of Industrial Spirits (including Denaturants), Fusel
Oil & Bio-Compost
Co-generation - Consists of generation and transmission of Power
Canning Products - Consists of Canned Fruits & Vegetables, Jams, Jellies, Squashes &
Juices
Others – Consist of Miscellaneous business comprising of less than 10% revenues.
(ii)
Geographical Segment: The Company primarily operates in India and therefore the analysis
of geographical segment is demarcated into its Indian and Overseas Operations.
(iii) The Company has common fixed assets located in India for producing goods for domestic
and overseas markets. Hence, separate figures for fixed assets / additions to fixed assets
thereof cannot be furnished.
(iv) The period referred to above is from 1st July to 30th June each year.
Draft Letter of Offer
149
STATEMENT OF DIVIDENDS PAID
ANNEXURE-12
For the year ended 30th June
2003 2004 2005 2006 2007
No. of Equity Shares of
Rs. 10 each 10,385,790 10,385,790 18,174,570 18,174,570
18,174,570
Rate of Dividend (%) - 25% 25% 45%
-
Dividends Paid (Rs. in Lacs)
Amount of Dividend - 259.65 454.36 817.86
-
Corporate Tax on
Dividend - 33.94 63.72 114.70
-
Total - 293.59 518.08 932.56
-
STATEMENT OF TAX SHELTER BASED ON RESTATED PROFITS / (LOSSES) Annexure 13
(Rs. In
Lacs)
July 2002 to
June 2003
July 2003 to
June 2004
July 2004 to
June 2005
July 2005 to
June 2006
July 2006
to June
2007
Tax Rate Including Surcharge Refer Note no. 1 below
Net Profit / (Loss) as per Restated
Profit and Loss Account after
depreciation but before taxation
(2,529.35) 1,106.27 3,789.60
7,174.64
(3,940.78)
Permanent Difference
Dividend Received -
(0.47)
(0.54)
(0.65)
(1.21)
Others
(33.00) 26.69 5.18
24.37
30.80
Draft Letter of Offer
150
Timing Difference
Difference in Book Depreciation &
Depreciation under Income Tax
Act 1961
(334.68)
(91.74)
(339.48)
(610.08)
(4,421.29)
Net Disallowable sum under
section 43B of the Income Tax
Act,1961 346.38
(948.44) 97.00
103.86
(366.95)
Others
(53.87)
(62.62) 83.45
265.86
29.95
Adjustment of Carry forward
losses and unabsorbed depreciation -
(29.69)
(3,635.21)
(6,958.00)
-
Notional Income Tax at Specified
Rates (Refer Note 2 below) - 88.20 320.97
808.22
-
Tax As per Accounts
(a) Current Tax (including
Wealth Tax)* 1.03 32.17 197.09
680.38
29.65
(b) Deferred Tax Liability /
(Asset) - - -
1,103.64
(1,103.64)
(c) Fringe Benefit Tax - - 4.50
24.90
27.50
Tax Shelter in form of
(a) Brought Forward Business
Loss and Unabsorbed
Depreciation 13,255.88 12,149.96 11,138.73
4,117.11
12,680.92
(b) Expenses Allowable on
Payment Basis 2,416.18 1,467.74 1,564.74
1,668.60
1,301.65
(c) Others 11.61 11.61 36.61
36.61
36.61
(d) MAT Credit entitlement - - -
696.00
721.50
Notes:
(1) As the accounting year of the Company falls in two financial years as per Income Tax Act,1961, the applicable tax
rate including surcharge has not been specified.
(2) In view of accumulated business loss and unabsorbed depreciation under the Income Tax Act, 1961, "Minimum
Alternate Tax" was payable for the year ended 30th June, 2004, 2005 and 2006, under Section-115 JB of the Income
Tax Act, 1961.
(3) The figures for the year ended 30th June, 2003, 2004, 2005, 2006 & 2007 are as provided by the Management and
not from the return of income of the company
* Net of refunds
Draft Letter of Offer
151
ANNEXURE-14
RESTATED CAPITALISATION STATEMENT
(Rs. in Lacs)
As at 30th June, 2007
Pre-issue
As Restated for
Right issue #
Borrowings
Short-Term *
28,458.08
Long-Term
12,675.07
Total
41,133.15 -
Shareholders' Funds
Equity
1,817.49
Reserves & Surplus**
7,882.47
Total
9,699.96 -
Long-term Debt/Equity ratio 1.31 :1
* Represents loan repayable within one year and/or
on demand.
** Restated Reserves
# Ratio and price of share (including premium) etc., shall be decided at the time of preparation of final
letter of offer for submission to SEBI.
Draft Letter of Offer
152
ANNEXURE- 15 (A)
STATEMENT OF RESTATED EARNING PER SHARE
(Rs. in Lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
Restated Profit /
(Loss) after Tax (2,530.38) 1,074.10 3,588.01
5,365.72 (2,894.29)
Basic / Weighted
average number of
outstanding equity
Shares 10,385,790 10,385,790 15,834,696 *
18,174,570 18,174,570
Nominal Value of
Equity shares (Rs.) 10.00 10.00 10.00
10.00 10.00
Basic / diluted
Earning / (Loss) per
share (Rs.) (24.36) 10.34 22.66
29.52 (15.93)
* After considering the impact of Right Issue of Shares during the year.
ANNEXURE -15 (B)
STATEMENT OF RESTATED BALANCE OF DEBTORS
(Rs. in Lacs)
As at 30th June
2003 2004 2005 2006 2007
More than 6 Months
Considered Good
10.47
25.64 16.70 4.69 13.39
Considered Doubtful
131.61
119.51 112.38 107.44 113.76
142.08
145.15 129.08 112.13 127.15
Less than 6 Months
936.56
577.38 94.91 406.97 578.56
Total Debtors
1,078.64
722.53 223.99 519.10 705.71
Less: Provision
131.61
119.51 112.38 107.44 113.76
Net Debtors Balance
947.03
603.02 111.61 411.66 591.95
Draft Letter of Offer
153
ANNEXURE -15 (C)
STATEMENT OF RESTATED BALANCE OF LOANS AND ADVANCES
(Rs. in
Lacs)
As at 30th June
2003 2004 2005 2006 2007
LOANS (Considered Good)
To Subsidiary Companies
49.00 9.25
0.04 7.36
39.50
To Others
8.71 44.44
50.71 48.46
39.12
ADVANCES (Considered Good)
Advances recoverable in cash or in kind
or for value to be received or pending
adjustments
513.43 585.93
850.8
4 801.80
661.26
Sales tax, Purchase tax and Excise duty
payments under appeal and/or under
dispute
101.24 111.75
107.9
1 86.91
87.01
Balance with Registrar, Allahabad High
Court
14.18 -
- - -
Balance with Excise, Port Trust & other
Govt.Authorities
321.82 416.41
558.2
8 428.45
1,490.67
Claims and Refunds receivable
125.26 239.78
109.2
3 75.72
148.19
Advance payment of Tax,Refunds
receivable and Tax deducted at source
(after adjusting provisions)
11.17 46.23
57.36 -
148.01
Sundry Deposits
43.41 51.25
50.74 41.89
31.74
ADVANCES (Considered Doubtful)
227.45 179.02
149.8
9 205.21
235.70
Total Loans and Advances
1,415.67 1,684.06
1,935
.00 1,695.80
2,881.20
Less: Provisions
227.45 179.02
149.8
9 205.21
235.70
Net Loans and Advances
1,188.22 1,505.04
1,785
.11 1,490.59
2,645.50
Details of Loans to Subsidiary Companies
OSM Investment & Trading Company
Ltd.
26.50 6.00
- - -
Hargaon Investment & Trading
Company Ltd.
22.50 3.25
- - -
Hargaon Properties Ltd.,
- -
0.04 7.36 -
Champaran Marketing Company Ltd.,
- -
- -
39.50
49.00 9.25
0.04 7.36
39.50
Draft Letter of Offer
154
ANNEXURE -15 (D)
STATEMENT OF RESTATED OTHER INCOME
(Rs. in
Lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
Income from Long Term
Investments(Gross)
Dividend
58.80
0.47 0.54 0.65
1.21
Interest
0.06
- - - -
Insurance & Other Claims
29.80
14.08 42.98 7.64
11.85
Export Incentive
3.18
20.47 - 23.21
14.11
Holding Charges on Buffer stock
118.34
246.76 135.10 -
54.92
Rent & Hire charges
4.91
6.65 16.42 18.10
19.95
Miscellaneous Receipts
59.06
5.23 8.59 22.31
10.31
Unspent liabilities,excess provisions and
unclaimed balances Written back
(net)
32.50
27.88 55.82 44.45
48.80
Profit on sale of Fixed Assets
-
- 5.34 - -
Exchange Rate Fluctuations (Net)
-
- 22.46 0.99
0.01
Profit on sale of Investments
-
23.36 - - -
Total
306.65
344.90 287.25 117.35
161.16
Note: All the items of other Income as given except for profit on sale of investment are generally recurring
in nature and are related to business activities carried out by the Company.
Draft Letter of Offer
155
ANNEXURE -15
(E)
STATEMENT OF RESTATED SECURED LOANS
(Rs. in
Lacs)
As at 30th June
Particulars 2003 2004 2005 2006 2007
Term Loans
From Financial Institution(s) / Bank(s)
:
Under Corporate Loan
2,850.00 2,250.00
1,65
0.00 1,050.00
450.00
Under Project Finance Scheme
2,945.00 2,945.00
4,68
5.00 6,000.00
9,262.58
Short Term Loan from a Bank
250.00 250.00
- - -
From Others
6,00
0.00 4,800.00
3,600.00
From Government of India (Sugar
Development Fund)
4,022.61 3,824.91
3,60
0.42 3,373.42
2,861.23
Other Loans
From Scheduled Banks on Cash Credit
Account :
State Bank of India
15,924.85 11,840.95
8,34
6.75 * 5,331.73
11,079.18
Punjab National Bank
769.39 783.90
- - -
Total
26,761.85 21,894.76
24,2
82.1
7 20,555.15
27,252.99
* Including Working Capital Demand Loan of Rs.6500 lans.
Draft Letter of Offer
156
(Rs. in Lacs.)
Sl.no.
NAME OF
BANK/INSTIT
UTION/
OTHERS
SANCTI
ONED
AMOUN
T
RATE OF
INTEREST
(%) p.a.
Outstandin
g as on
30th
June,2007
NATURE OF
SECURITY
REPAYMEN
T
SCHEDULE
1.
TERM
LOANS
a)
3,000.00
10.00%
Payable
Quarterly
450.00
Secured by first
mortgage/charge on all
the immovable/movable
assets,(save and except
book debts), present and
future,of the Company's
Sugar units at
Narkatiaganj & Hargaon
and Distillery unit at
Hargaon, ranking pari-
pasu amongst the various
lenders, subject to prior
charges created on
movables for working
capital borrowings from
the Company's bankers.
Quarterly
installments of
Rs. 150.00 lacs
each
Industrial
Development
Bank of India
(IDBI)
b)
941.15
4.00%
Payable
Yearly
297.46
Secured by a second
charge on all the
immovable / movable
assets (save and except
book debts) present and
future of the Company's
Sugar units at Rosa
including Rs.109.23 lacs
towards interest which, as
per stipulated terms,is
payable on a long term
basis
Five yearly
instalments
commenced
from Ist
Oct.,2003
(Four
installments
already paid.)
Government of
India (Sugar
Development
Fund)
1,800.00
4.00%
Payable
Yearly
2,563.77
Secured by a second
charge on all the
immovable / movable
assets (save and except
book debts) present and
future of the Company's
Sugar units at
Narkatiaganj including
Rs.943.77 lacs towards
interest which, as per
stipulated terms,is
payable on a long term
basis
10 instalments
in five years
commencing
from 2nd
June,2007
(One
instalment
already paid.)
Draft Letter of Offer
157
Sl.no.
NAME OF
BANK/INSTIT
UTION/
OTHERS
SANCTI
ONED
AMOUN
T
RATE OF
INTEREST
(%) p.a.
Outstandin
g as on
30th
June,2007
NATURE OF
SECURITY
REPAYMEN
T
SCHEDULE
2,741.15
2,861.23
c) Rabo India
Finance
6,000.00
8.30%&8.43
5% Payable
Quarterly
3,600.00
Secured by first
mortgage/charge on all
the immovable/movable
assets,(save and except
book debts), present and
future,of the Company's
Sugar units at
Narkatiaganj, Hargaon &
Rosa and Distillery unit
at Hargaon, ranking pari-
pasu amongst the various
lenders, subject to prior
charges created on
movables for working
capital borrowings from
the Company's bankers.
Half yearly
installments of
Rs. 600.00 lacs
each
commencing
from Oct.,05
(Four
instalments
already paid.)
d) UTI Bank
4,235.00
11.00%
Payable
Monthly
3,479.82
Secured by first
mortgage/charge on all
the immovable/movable
assets,(save and except
book debts), present and
future,of the Company's
Sugar units at Hargaon
and Distillery unit at
Hargaon ranking pari-
pasu amongst the various
lenders, subject to prior
charges created on
movables for working
capital borrowings from
the Company's
bankers.(Including
Rs.38.88 lacs towards
interest.)
16th Quarterly
installments of
Rs. 264.6875
lacs each
commencing
from Oct.,06(
Three
installemnt
already paid)
e) State Bank Of
India
4,300.00
11.00%
Payable
Monthly
4,300.00
Secured by first
mortgage/charge on all
the immovable/movable
assets,(save and except
book debts), present and
future,of the Company's
Sugar units at Hargaon
and Distillery unit at
Hargaon ranking pari-
pasu amongst the various
lenders, subject to prior
charges created on
movables for working
capital borrowings from
the Company's bankers.
20th Quarterly
installments of
Rs. 215 lacs
each
commencing
from Dec.,07
Draft Letter of Offer
158
Sl.no.
NAME OF
BANK/INSTIT
UTION/
OTHERS
SANCTI
ONED
AMOUN
T
RATE OF
INTEREST
(%) p.a.
Outstandin
g as on
30th
June,2007
NATURE OF
SECURITY
REPAYMEN
T
SCHEDULE
f) State Bank Of
Hydrabad
1,650.00
9.00%
Payable
Monthly
1,482.76
To be Secured by first
mortgage/charge on all
the immovable/movable
assets,(save and except
book debts), present and
future,of the Company's
Narkatiaganj unit ,
ranking pari-pasu
amongst the various
lenders, subject to prior
charges created on
movables for working
capital borrowings from
the Company's bankers.
20th Quarterly
installments of
Rs. 82.50 lacs
each
commencing
from June,08
2 CASH CREDIT
ACCOUNT
a) State
Bank of
India,
(SBI)
19,785.00
11.75%
Payable
Monthly
11,079.18
Secured by
hypothecation of entire
current assets of the
Company and further
secured by a charge on
the immovable assets of
the company as follows :-
On Demand
a.Canning factory at
Allahabad - First Charge
b. Hargaon Sugar &
Distllery units - Second
Charge
c. Narkatiaganj & Rosa
Sugar units - Third
Charge
Total
27,252.99
Draft Letter of Offer
159
ANNEXURE -15 (F)
DETAILS OF UNSECURED LOANS (Rs. in Lacs)
As at 30th June
Particulars 2003 2004 2005 2006 2007
Intercorporate Deposits from
Promoters' Companies
985.00
765.00
-
Associate / Promoters' Group
Companies
1,300.00
1,300.00
190.00
55.00
4,045.00
Others
765.00
2,040.00
255.00
175.00
900.00
Sub Total
3,050.00
4,105.00
445.00
230.00
4,945.00
From Subsidiary Companies
100.34
109.00
149.00
244.50
99.50
25-10.35% Short Term non-
convertible debentures of Rs. 100
lacs each ( Reedemable at par on 6th
July,07)
-
-
-
-
2,500.00
From State Bank of India - Against
crop Loan to Growers
-
-
-
-
354.15
Short Term Loan from Scheduled
Banks
-
-
1,000.00
1,000.00
5,440.00
From Trade & deposits( partly not
bearing interest)
58.39
63.09
57.10
75.48
91.78
Fixed Deposits from :
Key management Personnel and
their relatives
39.22
35.81
37.47
-
-
Others
302.41
379.78
612.19
686.50
449.73
Total
3,550.36
4,692.68
2,300.76
2,236.48
13,880.16
BREAK-UP OF RESTATED INTERCORPORATE DEPOSITS AS ON 30TH JUNE,2007
S
l
N
o. Particulars
Interest
payment
schedule
Rate of
Interest
Amount
Re-
payment
Schedule
1
From Associate / Promoters'Group
Companies:
SIL Investments Limited Monthly 14.00% 525.00
On
demand
Sutlej Textiles & Industries Limited Monthly 13.00% 2,000.00
On
demand
Chambal Fertilizers & Chemicals
Ltd. Quarterly 13.00% 1,000.00
28-09-
2007
H.T.Media Ltd., Quarterly 10.00% 500.00
On
demand
Pollock Traders (P) Ltd. Quarterly 10.00% 20.00
4,045.00
19-04-
2008
2 From others Monthly
14% -
15%
900.00
On
various
dates
From
Oct.,07 to
March,08
Total
4,945.00
Draft Letter of Offer
160
BREAK-UP OF LOANS FROM SUBSIDIARY COMPANIES(NOT
BEARING INTEREST)
1 Hargaon Investment & Trading Company Limited 89.00
2 Osm Investment & Trading Company Limited 10.50
TOTAL 99.50
ANNEXURE -
15 (G)
DETAILS OF INVESTMENTS
(Rs. in
Lacs)
Particulars As at 30th June
2003 2004 2005 2006 2007
Quoted Investments
In Associate / Promoter's Group
Companies
4.96
2.26
2.26
2.26
13.23
Others
1.13
1.13
1.13
1.13
1.13
Total
6.09
3.39
3.39
3.39
14.36
Unquoted Investments
In Subsidiaries
1,073.16
1,073.16
1,063.16
1,063.16
1,063.16
Others
39.13
38.59
48.59
48.59
38.61
Total
1,112.29
1,111.75
1,111.75
1,111.75
1,101.77
Grand Total
1,118.38
1,115.14
1,115.14
1,115.14
1,116.13
Less: Provison for diminution in
value of Investments
11.61
11.61
36.61
36.61
36.61
Net Investments
1,106.77
1,103.53
1,078.53
1,078.53
1,079.52
Market Value of Quoted Investments
11.18
8.06
22.47
19.83
15.08
Draft Letter of Offer
161
AUDITORS’ REPORT
To,
The Board of Directors
The Oudh Sugar Mills Limited
9/1 R N Mukherjee Road
Kolkata 700 001
Dear Sirs,
1. We have examined the attached financial information of The Oudh Sugar Mills Limited (hereinafter referred
to as the Company) and its subsidiaries as approved by the Committee of Directors of the Company, prepared
in terms of the requirements of Paragraph B, Part II of Schedule II of the Companies Act, 1956 (“the Act”)
and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 as
amended to date (SEBI Guidelines) and in terms of our engagement agreed upon with you in accordance with
our engagement letter dated 22nd October,2007 in connection with the proposed Rights Issue of Equity
shares along with detachable warrants of the Company.
2. These information have been extracted by the Management from the Consolidated financial statements for the
years ended on 30th
June 2003, 2004, 2005, 2006 and 2007.
We have not audited the financial statements of the subsidiaries viz. Rajpur Farms Limited, Narkatiaganj
Farms Limited for the financial years ended March 31, 2003, 2004 & 2005 (ceased to be subsidiaries from
19.10.04), OSM Investment & Trading Company Limited, Hargaon Investment & Trading Company
Limited, Champaran Marketing Company Limited and Hargaon Properties Limited for the financial years
ended on March 31, 2003, 2004, 2005, 2006 and 2007 and three months period ended June 30, 2007 whose
financial statements reflect total assets of Rs. 48.87 lacs, Rs. 49.36 lacs, 487.36 lacs, Rs. 1317.69 lacs, 519.65
lacs & Rs. 48.26 lacs and total revenues of Rs. 0.75 lacs, Rs. 0.78 lacs, Rs. 39.86 lacs, Rs. 100.06 lacs, Rs.
35.42 lacs & Rs. 1.05 lacs respectively. The financial statements of the subsidiaries have been audited by
other auditors, whose reports have been furnished to us and our opinion, insofar as it relates to the amounts
included in these Consolidated Restated Summary Statement of Assets & Liabilities, Consolidated Restated
Summary Statement of Profit & Loss and Consolidated Restated Summary Statement of Cash Flows are
based solely on the reports of other auditors as well as management representation as enumerated vide note
no. 1(c) to the Annexure-5 enclosed with this report.
3. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines
and in terms of our engagement agreed with you, we further report that:
e) The ‘Consolidated Restated Summary of Assets and Liabilities’ of the Company and its subsidiaries as at
30th
June 2003, 2004, 2005, 2006 and 2007 examined by us, as set out in Annexure-1 to this report are
after making such adjustments and regroupings as in our opinion were appropriate and as are more fully
described in Significant Accounting Policies and Notes and Statement of Adjustments (Refer Annexures
4A, 4B, 5 & 6).
b) The ‘Consolidated Restated Summary Statement of Profits and Losses’ of the Company and its
subsidiaries for each of the years ended on 30th June 2003, 2004, 2005, 2006 and 2007 examined by us,
as set out in Annexure-2 to this report are after making such adjustments and regroupings as in our
opinion were appropriate and as are more fully described in Significant Accounting Policies & Notes and
Statement of Adjustments (Refer Annexures 4A, 4B, 5 & 6).
c) The ‘Consolidated Restated Statement of Cash Flows’ of the Company and its subsidiaries in respect of
each of the years ended on 30th
June 2003, 2004, 2005, 2006 and 2007 examined by us, as set out in
Annexure-3 to this report, in our opinion, have been prepared by the Company in accordance with the
requirements of Accounting Standard 3 (Cash Flow Statements) issued by the Institute of Chartered
Accountants of India.
d) Without qualifying our opinion, we draw attention to the fact that for the purpose of these summary
statements, due to practical difficulties in retrospective application of Accounting Standard 29 on
“Provisions, Contingent Liabilities and Contingent Assets” as detailed vide Note No. 5 on Annexure-6,
Draft Letter of Offer
162
such standard has been applied from the date it became applicable to the Company and not for all the
periods restated.
e) Based on the above and also as per the reliance placed on the audit/review reports submitted by other
auditors for the subsidiaries for the respective years, we confirm that-
i. the restated financial information have been made after incorporating:
a. Adjustments for the changes in accounting policies retrospectively in the respective financial
years to reflect the same accounting treatment as per changed accounting policies for all the
reporting periods.
b. Adjustments for the material amounts in the respective financial years to which they relate
except to the extent mentioned in clause iii below;
ii. There are no extra-ordinary items that need to be disclosed separately in the Summary
Statements; and
iii. All qualifications in the auditors’ reports, which require any adjustments to the summary
statements, have been adjusted except for the Note nos. 1(a) and 1(b) on Annexure-6
regarding non-adjustment of certain realisations in earlier years aggregating to Rs.
165.51 lacs and non-provision of interest payable thereon, if any, in case of refund of such
realisations. As the matters are under adjudication / not yet settled, the impact of above
non-adjustment on the Company’s profits / (losses) is not presently ascertainable;
f) At your request, we have also examined the following other Consolidated financial information prepared
by the management and approved by the Committee of Directors relating to the Company and its
subsidiaries for the year ended on 30th
June 2003, 2004, 2005, 2006 and 2007:
i. Statement of Changes in Accounting Policies enclosed as Annexure-7
ii. Statement of Qualifications in Auditors Report enclosed as Annexure-8
iii. Statement of Accounting Ratios based on the adjusted profits / (losses) relating to earning
per share, net assets value, return on net worth, enclosed as Annexure-9.
iv. Statement of Related Party Transactions enclosed as Annexure-10.
v. Statement of Segment Reporting enclosed as Annexure-11.
vi. Statement of Dividend Paid enclosed as Annexure-12.
vii. Statement of Tax Shelter enclosed as Annexure-13.
viii. Capitalisation Statement as at 30th
June, 2007 enclosed as Annexure-14.
ix. Statement of Earning Per Share enclosed as Annexure-15A.
x. Statement of Balance of Debtors enclosed as Annexure-15B.
xi. Statement of Loans & Advances enclosed as Annexure-15C.
xii. Statement of Other Income enclosed as Annexure-15D
xiii. Statement of Secured and Unsecured Loans enclosed as Annexure- 15E & 15F.
xiv. Statement of Investments enclosed as Annexure -15G.
In our opinion, the financial information contained in Annexures 7 to 15G of this report read along with the
Significant Accounting Policies and Notes (Refer Annexures- 5&6) prepared after making such adjustments
and regroupings as were considered appropriate, have been prepared in accordance with Part IIB of Schedule
II of the Act and the SEBI Guidelines.
We report that subject to our observation in Para 3 (e) (iii) above, the information mentioned in clauses 1 to
3 above have been correctly computed / compiled with reference to the various statements enclosed vide
Annexures 1 to 15G of this report.
4. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports
issued by us or by other firm of Chartered Accountants, nor should this report be construed as a new opinion
on any of the financial statements referred to herein.
Our report is intended solely for use of the management and for inclusion in the Letter of Offer in connection
with the proposed Rights Issue of the Company. Our report should not be used for any other purpose except
with our consent in writing.
Draft Letter of Offer
163
For S. R. BATLIBOI & CO.
CHARTERED ACCOUNTANTS
Place: Kolkata
Dated: December 11, 2007 Per R K AGRAWAL Partner
Membership No.
16667
Draft Letter of Offer
164
ANNEXURE -1
STATEMENT OF RESTATED CONSOLIDATED ASSETS AND LIABILITIES OF THE OUDH SUGAR
MILLS LIMITED AND ITS SUBSIDIARIES
(Rs. In Lacs)
Particulars As at 3oth June
2003 2004 2005 2006 2007
Application of Funds
Assets
A Fixed Assets
Gross Block 21,932.37 22,646.55 26,987.69 30,429.97 41,796.03
Less : Depreciation 8,386.99 9,375.18 10,446.97 11,780.40 13,254.85
Net Block 13,545.38 13,271.37 16,540.72 18,649.57 28,541.18
Capital Work in Progress 306.92 174.66 190.09 202.11 256.09
Capital Expenditure on Expansion /
New Projects - 1,415.50 1,443.10 4,421.31 13,224.76
13,852.30 14,861.53 18,173.91 23,272.99 42,022.03
B Investments 1,524.99 1,537.16 1,513.52 1,366.15 2,123.60
C Current assets, loans and advances
Inventories 22,798.05 16,046.02 17,326.19 15,143.37 19,473.86
Sundry Debtors 947.03 603.02 111.61 411.66 591.95
Cash & Bank Balances 329.30 199.38 206.35 347.06 513.27
Loans and advances 1,145.45 1,497.85 1,786.00 1,938.77 2,606.64
Other Current Assets 5.33 3.90 4.08 2.52 3.54
Total 25,225.16 18,350.17 19,434.23 17,843.38 23,189.26
TOTAL ASSETS 40,602.45 34,748.86 39,121.66 42,482.52 67,334.89
D Deferred Tax Liability (net) - - - 1,103.64 -
E Liabilities & Provisions
Secured Loans 26,761.85 21,894.76 24,282.17 20,555.15 27,252.99
Unsecured Loans 3,450.02 4,583.68 2,151.76 1,991.98 13,780.66
Current Liabilities 9,289.65 6,027.94 3,272.70 3,997.40 15,311.71
Provisions - 293.59 530.47 1,104.72 77.50
TOTAL LIABILITIES 39,501.52 32,799.97 30,237.10 27,649.25 56,422.86
F Liability to preference shareholders 45.00 45.00 45.00 45.00 -
G Net Worth (A+B+C-D-E) 1,055.93 1,903.89 8,839.56 13,684.63 10,912.03
H Represented by :
Shareholder's Funds
a. Share Capital 1,038.62 1,038.62 1,817.49 1,817.49 1,817.49
b. Reserves and Surplus 3,674.96 3,697.49 7,022.60 11,867.54 9,094.77
4,713.58 4,736.11 8,840.09 13,685.03 10,912.26
Less:
Profit and Loss Account Debit
Balance 3657.65 2831.57
Miscellaneous Expenditure (to the
extent not written off or Restated) - 0.65 0.53 0.40 0.23
Total 1,055.93 1,903.89 8,839.56 13,684.63 10,912.03
Notes:
(1) The above figures should be read with the Statement on Significant Accounting Policies and Statement of Notes
on the Restated Consolidated Profits and Losses and Restated Consolidated Assets and Liabilities as appearing in
Annexures 5 and 6 respectively.
Draft Letter of Offer
165
(2) Necessary adjustments have been made to the audited financial statements in accordance with the requirements
of paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000.
Draft Letter of Offer
166
ANNEXURE -2 STATEMENT OF RESTATED CONSOLIDATED PROFITS AND
LOSSES OF THE OUDH SUGAR MILLS LIMITED AND ITS
SUBSIDIARIES
(Rs. In Lacs)
For the year ended 30th June
Particulars 2003 2004 2005 2006 2007
Income
Sales of Products (Net of excise duty) 31,331.65 35,435.52 35,604.57 50,116.73 44,244.45
Increase / (Decrease) in Inventories (352.38) (6,353.86) 1,077.83 (2,099.02) 3,708.61
Other Income 310.24 407.25 379.26 543.88 326.89
Total 31,289.51 29,488.91 37,061.66 48,561.59 48,279.95
Expenditure
Purchase of Semi-finished Goods 47.76 173.05 998.83 62.59 34.73
Raw Materials Consumed 23,551.05 17,247.94 21,528.91 29,727.34 38,765.85
Staff Cost 1,933.45 1,918.45 2,028.78 2,401.92 2,748.37
Other Manufacturing Expenses 2,858.63 3,001.23 3,152.67 3,973.93 4,752.87
Administrative and Other Expenses 768.14 764.49 1,048.78 995.38 1,090.43
Selling and Distribution Expenses 507.91 581.96 476.37 558.13 543.90
Interest & Finance Charges (Net) 3,081.43 3,533.65 2,700.26 1,652.63 2,090.74
Depreciation 1,072.72 1,097.79 1,251.28 1,558.68 2,028.67
Total 33,821.09 28,318.56 33,185.88 40,930.60 52,055.56
Net Profit / (Loss) Before Tax (2,531.58) 1,170.35 3,875.78 7,630.99 (3,775.61)
Taxation :
Current Tax (net of refunds) 6.95 33.33 197.84 688.69 33.32
Fringe Benefit Tax - - 4.50 24.90 27.50
Deferred Tax Liability /(Asset) - - - 1,103.64 (1,103.64)
Net Profit / (Loss) after tax (2,538.53) 1,137.02 3,673.44 5,813.76 (2,732.79)
Notes:
1.The above figures should be read with the Statement on Significant Accounting Policies and Statement of Notes
on the Restated Consolidated Profit and Losses and Assets and Liabilities as appearing in Annexures 5 and 6
respectively
2. Necessary adjustments have been made to the audited financial statements in accordance with the requirements of
paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines,
2000.
Draft Letter of Offer
167
ANNEXURE – 3 STATEMENT OF RESTATED CONSOLIDATED CASH FLOWS THE
OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
(Rs. in lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
(A) CASH FLOW FROM OPERATING
ACTIVITIES :
Restated Profit /(Loss) before Tax (2,531.58) 1,170.35 3,875.78 7,630.99
(3,775.61)
Adjustments for :
Loss of Subsidiary companies ceased during the
period - - 3.94 -
-
Depreciation as per Restated Profit & Loss 1,072.72 1,097.79 1,251.28 1,558.68
2,028.67
Depreciation on Agriculture Equipments 0.25 0.24 0.12 1.00
1.42
Preliminary Expenses Written off - - 0.12 0.13
0.17
Interest Expenses (net of capitalisation) 3,162.53 3,588.34 2,728.69 1,725.16
2,177.62
Molasses Storage and Maintenance Reserve 8.84 10.25 9.27 13.86
7.97
Provision for deminution in value of Investments - - 25.00 -
-
Loss / (Profit) on Fixed Assets sold / discarded 9.93 18.19 (5.41) 34.24
41.40
Interest & Dividend Income (120.04) (128.16) (120.22) (171.12)
(250.28)
Profit on Share Transactions - (12.71) (0.46) (328.59)
(3.54)
Operating Profit before Working Capital
Changes : 1,602.65 5,744.29 7,768.11 10,464.35
227.82
Adjustments for :
Trade Payables 1,442.98 (3,220.66) (2,754.54) 757.84
9,404.64
Trade & Other Receivables (658.91) 30.45 197.97 (92.05)
(1,164.36)
Inventories 251.80 6,752.03 (1,274.33) 2,182.82
(4,330.49)
1,035.87 3,561.82 (3,830.90) 2,848.61
3,909.79
Cash Generated from Operations : 2,638.52 9,306.11 3,937.21 13,312.96
4,137.61
Direct Taxes( Paid) / Refunds (19.92) (63.73) (208.00) (544.78)
(323.33)
Net Cash from Operating Activities 2,618.60 9,242.38 3,729.21 12,768.18
3,814.28
(B) CASH FLOW FROM INVESTING
ACTIVITIES :
Sale of Fixed Assets 0.86 10.21 57.00 64.89
116.27
Loans (Given)/Refunds 13.82 (32.52) (6.27) (461.20)
464.34
Interest & Dividend Received 119.67 129.59 120.31 172.68
249.26
Capital Subsidy Received - - 15.00 -
-
Purchase of Fixed Assets (643.30) (2,105.19) (4,513.87) (6,569.92)
Draft Letter of Offer
168
(18,517.49)
Sale/(Purchase) of Investments 2.50 (12.17) 12.12 147.37
(753.91)
Profit on Share Transactions - 12.71 0.46 328.59
Net Cash from Investing Activities (506.45) (1,997.37) (4,315.25) (6,317.59)
(18,441.53)
(C)CASH FLOW FROM FINANCING
ACTIVITIES :
Proceeds from Borrowings 2,553.05 1,133.66 12,574.07 2,935.00
40,568.24
Repayment of Loans (1,639.97) (4,937.62) (12,618.58) (6,821.80)
(21,937.76)
Right Issue of Shares - - 778.87 -
-
Premium on Right Issue of Shares - - 3,115.51 -
-
Right Issue of Share Expenses - - (92.62) -
-
Redemption of Preference Share - - - -
(45.00)
Share Application money received by subsidiary
companies - - (42.00) -
-
Prliminary Expenses - (0.65) - -
-
Interest Paid (2,962.36) (3,564.90) (2,826.43) (1,900.61)
(2,863.29)
Dividend Paid (5.14) (5.42) (295.81) (522.47)
(928.73)
Net Cash from Financing Activities (2,054.42) (7,374.93) 593.01 (6,309.88)
14,793.46
NET CHANGES IN CASH & CASH
EQUIVALENTS (A+B+C) 57.73 (129.92) 6.97 140.71
166.21
Cash & Cash equivalents - Opening Balance 271.57 329.30 199.38 206.35
347.06
Cash & Cash equivalents - Closing Balance 329.30 199.38 206.35 347.06
513.27
Draft Letter of Offer
169
ANNEXURE - 4A
Statement of the adjustments made to the Consolidated Audited Financial Statements of The Oudh Sugar Mills
Limited and its Subsidiaries
Rs. In Lacs
Statement of Adjustments on Consolidated profit and loss account carried out in accordance with Part II of Schedule II of the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure and Investor Protection)
Guidelines, 2000.
For the year ended 30th June
Particulars 2003 2004 2005 2006 2007
Net Profit / (Loss) as per Audited Profit and Loss
Account
(1,184.68)
1,475.39
1,201.47 4,984.55
(2,527.87)
Add: Exceptional Item Considered Below Separately - -
2,237.45 - -
Adjustments on account of :
Profit / (Loss) with respect to Subsidiaries of the
Company on updation of their accounts upto 30th June as
against 31st March followed for the purpose of Audited
Accounts under the Companies Act,1956 - - - -
(0.18)
Differential cane price *
(1,602.23)
(480.21) - - -
Increase / (Decrease) in valuation of process and
finished stock **
945.90
(648.27)
(297.63) - -
Provision for doubtful debts
81.67
10.25
7.13 22.19 -
Provision for doubtful Loans & Advances
(45.46)
31.04
18.43 91.91 -
Swap Transactions
(3.93)
3.93 - - -
Items pertaining to previous years
(5.03)
(28.50)
2.79
(0.22) 2.32
Interest from Items pertaining to previous years
23.51 - - - -
Provision for Leave liability & Gratuity
(0.50)
(0.41)
(0.27) 6.57 -
Total adjustments before tax
(606.07)
(1,112.17)
1,967.90 120.45 2.14
Adjustments for Taxation
Provision for current income tax -
(3.01)
(26.88) 29.89 -
MAT Credit entitlement - - -
(696.00)
(25.50)
Deferred tax
(747.78)
776.81
530.95 1,374.87
(181.56)
Total adjustments for taxation
(747.78)
773.80
504.07 708.76
(207.06)
Total adjustments
(1,353.85)
(338.37)
2,471.97 829.21
(204.92)
Profit / (Loss) after adjustments
(2,538.53)
1,137.02
3,673.44 5,813.76
(2,732.79)
* Differential Cane Price of Rs. 155.01 Lacs for the season 1996-97 has been restated against the opening
Reserve in the year 2003.
** Arisen due to Consideration of differential cane price as a part of cost.
Draft Letter of Offer
170
ANNEXURE - 4B
Statement of adjustments on Consolidated Assets and Liabilities carried out in accordance with Part II of Schedule II of the Companies Act, 1956 and the Securities and Exchange Board of India (Disclosure
and Investor Protection) Guidelines, 2000.
Rs. In Lacs
As at 30th June
Particulars 2003 2004 2005 2006 2007
Net Adjustments ( as per Annexure 4A)
(1,353.85)
(338.37) 2,471.97 829.21
(204.92)
Adjusted from opening Reserves *
Opening Deferred Tax Liability
(1,934.85)
Doubtful Debts
(121.24)
Doubtful loans &advances
(95.92)
Exceptional Item ( differential cane price
for sugar season 1996-97)
(155.01)
Item pertaining to previous years 5.13
Provision for Leave liability& Gratuity
(5.39)
Increase / (Decrease) in Reserves
(3,661.13)
(338.37) 2,471.97 829.21
(204.92)
Cummulative Increase / (Decrease) in
Reserves
(3,661.13)
(3,999.50) (1,527.53) (698.32)
(903.24)
* Adjustments related to prior of reporting period
Draft Letter of Offer
171
ANNEXURE -5
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES ON RESTATED CONSOLIDATED
PROFITS & LOSSES ACCOUNT AND RESTATED CONSOLIDATED ASSETS & LIABILITIES OF
THE THE OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
1. PRINCIPLES OF CONSOLIDATED FINANCIAL STATEMENT :
The consolidated financial statements which relate to The Oudh Sugar Mills Ltd. and its subsidiary companies
have been prepared on the following basis:
a) The financial statements of the Company and its subsidiaries are combined on a line-by-line basis by
adding together the book values of like items of assets, liabilities, income and expenditure, after fully
eliminating intra group balances, intra group transactions and any unrealized profit/loss included therein.
b) The consolidated financial statements have been prepared using uniform accounting policies, except stated
otherwise, for like transactions and are prepared, to the extent possible, in the same manner as the
Company’s separate financial statements.
(c) As the financial year of the holding Company and subsidiaries closes on 30th June and 31
st March
respectively, the financial statements of the Subsidiaries are considered after making certain adjustments
in order to eliminate the intra group transactions during the intervening period from 1st April to 30
th June
each year, except for the year ended 30th June,2007, where the accounts of subsidiary companies were
considered for the fifteen months period ended 30th June,2007.
d) The difference between the cost of the Company’s investments in the subsidiaries and their respective
equity as on the date of investment is treated as Goodwill / Capital Reserve, as the case may be, in the
financial statements.
e) The Subsidiary Companies considered in the financial statements are as follows:
Name Country of Incorporation % of voting power as on
30th June, 2007
Hargaon Investment & Trading Company Ltd. India 100
OSM Investment & Trading Company Ltd. India 100
Champaran Marketing Company Ltd. India 100
Hargaon Properties Ltd India 100
(f) M/s M/s Rajpur Farms Limited and M/s Narkatiaganj Farms Limited ceased to be subsidiaries of the
Company w.e.f. 19.10.2004 and accordingly, the financial results of these companies are incorporated
upto the respective dates.
Draft Letter of Offer
172
2. ACCOUNTING POLICIES :
(i) Basis of Accounting :
The Company follows mercantile system of accounting and recognizes income and expenditure on
accrual basis, as per normally accepted accounting principles, except for the following which due to
uncertainty in realisation, are maintained on cash/ acceptance basis: –
(a) Insurance and other claims.
(d) Interest on doubtful loans and advances to cane growers.
(e) Compensation receivable in respect of land surrendered to / acquired by the Government.
(ii) Revenue Recognition :
Revenue from the sale of goods is recognized upon passage of title to the customers which
generally coincides with delivery thereof.
(iii) Fixed Assets :
Fixed assets are stated at cost of acquisition inclusive of duties (net of cenvat credit), taxes,
incidental expenses and erection/commissioning expenses etc. upto the date the asset is ready for its
intended use. Expenses incurred on major modernization programs including Projects under
implementation are capitalized.
Machinery spares which can be used only in connection with an item of fixed assets and whose
use as per technical assessment is expected to be irregular, are capitalised and depreciated over the
residual life of the respective assets.
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment based on external/internal factors. An impairment loss is
recognized wherever the carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price and ‘Value in use’ of the assets. The estimated future
cash flows considered for determining the value in use, are discounted to their present value at the
weighted average cost of capital.
Assets awaiting disposal are valued at the lower of written down value and net realisable value
and disclosed separately.
(iv) Depreciation :
(e) The classification of plant and machinery into continuous and non-continuous process is
done as per technical certification and depreciation thereon is provided accordingly.
(f) Depreciation on fixed assets is provided as under:
Draft Letter of Offer
173
A) On assets valuing Rs. 4.62 lacs, at the rate applicable under the Bihar Agricultural
Income Tax Act, 1949.
B) On assets valuing Rs. 43.11 lacs, on written-down value method, at the rates
prescribed in schedule XIV of the Companies Act, 1956.
C) On other assets, as per straight line method, at the rates prescribed in schedule XIV
of the Companies Act, 1956.
(g) Depreciation on fixed assets added / disposed off during the year is provided on pro-rata
basis, with reference to the date of addition / disposal.
(h) In case of impairment, if any, depreciation is provided on the revised carrying amount of the
assets over its remaining useful life.
(w) Borrowing Costs :
Borrowing costs relating to acquisition / construction of qualifying assets are capitalized until the time
all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A
qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to revenue.
(vi) Investments :
Current Quoted Investments are stated at lower of cost and market rate on individual investment
basis. Unquoted / long term investments are considered “at cost” on individual investment basis,
unless there is a decline other than temporary in the value, in which case adequate provision is made
against such diminution in the value of investments.
(vii) Inventories :
(a) Inventories (including Power - Banked) are valued at lower of cost (computed on annual
weighted average basis for raw materials, stores and spares etc.) and net realisable value.
However, Country Crop, by products and saleable scrap, whose cost is not identifiable, are
valued at estimated net realisable value.
(b) In case of inter-transferred materials, the transfer price is considered as cost for the purpose
of valuation of closing stock.
(viii) Foreign Currency Transactions :
(a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the
foreign currency amount the exchange rate between the reporting currency and the foreign
currency at the date of the transaction.
(b) Conversion
Draft Letter of Offer
174
Foreign currency monetary items are reported using the closing rate. Non-monetary items
which are carried in terms of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction, and non-monetary items which are
carried at fair value or other similar valuation denominated in a foreign currency are
reported using the exchange rates that existed when the values were determined.
(c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items are
recognized as income or expenses in the year in which they arise except those relating to
acquisition of fixed assets outside India, in which case such exchange differences are
capitalized.
The premium or discount arising at the inception of forward exchange contracts is
amortized as expenses or income over the life of the respective contracts. Exchange
differences on such contracts are recognized in the statement of profit and loss in the year
in which the exchange rates change. Any profit or loss arising on cancellation or renewal
of forward exchange contract is recognized as income or as expense for the year.
(x) Retirement Benefits :
(a) The Company has created an approved gratuity fund which has taken a group gratuity
insurance policy with Life Insurance Corporation of India (LIC), for future payment of
gratuity to the employees. The Company accounts for gratuity liability equivalent to the
premium amount payable to LIC every year based on actuarial valuation carried out by
them as on 31st March each year, which together with annual contribution in subsequent
years, would be sufficient to cover the gratuity liability as and when it accrues for payment.
(c) Leave liability is provided for on the basis of actuarial valuation carried on at the year end.
(c) Retirement benefits in the form of provident fund / pension schemes and superannuation funds
are charged to the Profit & Loss Account of the year when the contributions to the respective
funds are due.
(x) Taxation :
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe
benefit tax are measured at the amount expected to be paid to tax authorities in accordance with
Income Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences
between taxable income for the year and reversal of timing differences of earlier years.
The deferred tax for timing differences between the book and tax profit for the year is accounted
for using the tax rates and laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax asset are recognized only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax asset can be realized. If the
company has carry forward unabsorbed depreciation and tax losses, deferred tax asset are
Draft Letter of Offer
175
recognized only to the extent that there is virtual certainty supported by convincing evidence that
sufficient taxable income will be available against which such deferred tax asset can be realized.
Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent
there is convincing evidence that the company will pay normal income tax during the specified
period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be
recognized as an asset in accordance with the recommendations contained in guidance Note
issued by the Institute of Chartered Accountants of India, the said asset is created by way of a
credit to the profit and loss account and shown as MAT Credit Entitlement. The Company
reviews the same at each balance sheet date and writes down the carrying amount of MAT
Credit Entitlement to the extent there is no longer convincing evidence to the effect that
Company will pay normal Income Tax during the specified period.
(xi) Segment Reporting :
(c) Identification of Segments :
The Company has identified that its operating segments are the primary segments. The Company’s
operating businesses are organized and managed separately according to the nature of products, with
each segment representing a strategic business unit that offers different products and serves different
markets. The analysis of geographical segments is based on the areas in which the customers of the
Company are located.
(d) Inter Segment Transfers :
The Company accounts for inter segment transfers at mutually agreed transfer prices.
(c) Allocation of Common Costs :
Common allocable costs are allocated to each segment on case to case basis applying the
ratio, appropriate to each relevant case. Revenue and expenses which relate to the enterprise
as a whole and are not allocable to segments on a reasonable basis are included under the
head “Unallocated – Common”.
The accounting policies adopted for segment reporting are in line with those of the Company.
(xiv) Share Issue Expenses:
Share issue expenses are adjusted against Securities Premium Account.
(xv) Earning per Share :
Basic Earning per Share are calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted number of equity shares outstanding during the year.
For the purpose of calculating diluted earning per share, net profit or loss for the period
attributable to equity share holders and the weighted average number of shares outstanding during
the period are adjusted for the effect of all dilutive potential equity shares.
Draft Letter of Offer
176
(xiv) Excise Duty :
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered
for valuation of stocks as on the Balance Sheet date.
(xv) Hedging :
The Company uses derivative financial instruments including forward exchange contracts to hedge
its risk associated with foreign currency fluctuations.
The premium or discount arising at the inception of forward exchange contracts is amortized as
expense or income over the life of the contract except those relating to acquisition of fixed assets
outside India, in which case such exchange differences are capitalized.
(xvi) Research & Development :
Research and Development expenditure of revenue nature are charged to the Profit & Loss Account,
while capital expenditure are added to the cost of fixed assets in the year in which these are incurred.
(xvii) Premium on Redemption of Debentures :
Premium on redemption of debentures is accounted for in the year of payment.
(xviii)Provisions :
A provision is recognized when an enterprise has a present obligation as a result of past event and
it is probable that an outflow of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions made in terms of Accounting Standard 29 are
not discounted to its present value and are determined based on management estimate required to
settle the obligation, at the Balance Sheet date. These are reviewed at each Balance Sheet date
and adjusted to reflect the current management estimates.
(xix) Contingencies :
Liabilities which are material and whose future outcome cannot be ascertained with reasonable
certainty are treated as contingent and disclosed by way of notes to the accounts.
Draft Letter of Offer
177
Annexure -6
STATEMENT OF NOTES ON THE “RESTATED CONSOLIDATED PROFITS AND LOSSES” AND
RESTATED CONSOLIDATED ASSETS AND LIABILITIES” OF THE OUDH SUGAR MILLS
LIMITED AND ITS SUBSIDIARIES.
2. As required by paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and
Investor Protection) Guidelines, 2000, the Statement of Restated Consolidated Profits and Losses for
the year ended 30th
June, 2003, 2004, 2005, 2006 and 2007 as well as Statement of Restated
Consolidated Assets and Liabilities as at 30th
June, 2003, 2004, 2005, 2006 and 2007 have been
reinstated for the changes in accounting policies as well as audit qualifications. However, certain audit
qualifications the impact whereof could not be ascertained presently, for the reasons mentioned in the
respective notes, have not been Restated and are indicated herein below:
(a) Pending disposal of writs/appeals by the court with regard to levy sugar prices for some years,
Rs.113.46 lacs (net) received as excess levy sugar price, against which bank guarantees furnished by
the Company for Rs. 84.88 lacs, are in force in terms of the Court Orders, is included under the head
'Current Liabilities'. Necessary adjustment for the above amount together with interest, if any, in this
regard will be made in the accounts as and when the matter will be finally settled.
(b) Pending decisions of the various courts on writ petitions filed by/ against the Company, no credit
has been taken in the Profit and Loss Account in respect of certain realizations aggregating to
Rs.52.05 lacs in earlier years, which is shown under the head ‘Current Liabilities’. Against the
above, fixed deposits receipts / bank guarantees for similar amount have been furnished by the
Company.
(c) No provision has been made towards diminution in the value of certain long term investments
based on the year end quoted price. The said diminution in the opinion of the management is
temporary in nature and hence no provision has been considered necessary in this regard.
(Rs. In Lacs)
As at the year ended on 30th
June
2003
2004 2005
2006 2007
272.88 143.99 ---- 132.57 132.57
2.Sundry creditors include Rs. 8.55 lacs due to Small Scale Industrial undertakings (SSI) to the extent such
parties have been identified from the available documents / information. The Company has normally made
payments to the SSI units in due time and also there being no claims from the parties, interest, if any, on
overdue payments, is not expected to be material and thus not provided for.
3. Based on the information / documents available with the company, no creditor is covered under Micro,
Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments
have been made by the company to such creditors, if any, and no disclosures thereof are made in these
accounts.
4. (a) Pending execution of the conveyance deed, no adjustment has been made in respect of 0.75 acre of
land sold by the Company in earlier years.
(b) An application filed by the Company for exemption of 3,785.19 sq. mtrs. of land at Bamrauli under
the Urban Land (Ceiling and Regulation) Act, 1976, is pending with the concerned authority.
Draft Letter of Offer
178
5. Accounts are nor restated for the periods prior to the date when the Accounting Standard 29 on
Provisions, Contingent Liabilities and Contingent Assets, became effective from the period
commencing on or after 01-.04-2004 .
6. The year wise break up of contingent liabilities is as under :
Rs. In lacs
As at the year ended on 30th
June Nature of Liability
2003
2004 2005 2006 2007
Demands/Claims against the
Company not acknowledged
as debts
205.86 105.43 212.18 615.87
658.14
750.00 750.00 750.00 750.00 1500.00 Guarantees given to a bank
against loans to cane
growers
Against the above, the loan
facilities actually availed as
on the balance sheet date 749.98 749.84 749.50 750.00
1074.37
Customs duty in respect of
pending export obligations
against duty free imports
493.13
Unredeemed Bank
Guarantees
19.01 21.39 16.48 1.32 0.96
Bills discounted from bank
under L/C
66.65
7. The year wise break up of the estimated amount of contracts remaining to
be executed on capital items and not provided for is as under:
Rs. In lacs
As at the year ended on 30th
June
2003 2004
2005
2006 2007
34.65 2331.01 1216.49 4739.61 18672.67
Draft Letter of Offer
179
ANNEXURE - 7
STATEMENT OF SIGNIFICANT CHANGES IN ACCOUNTING POLCIES DURING THE
REPORTING PERIOD OF THE OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
There is no change in the accounting policies during reporting period.
Draft Letter of Offer
180
ANNEXURE - 8
CONSOLIDATED STATEMENT OF QUALIFICATIONS IN AUDITORS’ REPORT DURING THE REPORTING PERIOD OF THE OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
(Rs. In lacs)
For the year ended 30th June
Sl
No.
Particulars of audit qualifications
2003 2004 2005 2006 2007
1 Non provision of doubtful debts,loans and
advances the impact whereof on the Company's
profit/ (loss) is not presently ascertainable.
180.95 139.66 114.10 - -
2 Non provision of various government demands
/ dues, the impact whereof is not presently
ascertainable due to pending appeals
495.44 392.16 312.47 - -
3 Non adjustment of certain realizations in earlier
years and non provision of interest payable
thereon, if any, in case of refund of any such
realization. As the matters are under
adjudication / not yet settled, the impact of the
above adjustment on the Co
179.23 174.98 174.98 165.51 165.51
4 Recognition of Deferred tax Asset (net), based
on the future profitability projections made by
the management. However, we are unable to
express any opinion on the above projections
and their consequent impact, if any, on such
recognition of deferred tax asset(net)
2,682.63 1,905.82 1,374.87 - 181.56
5 Non provision of gratuity and leave liability on
differential wages and salaries at the
Company's Allahabad Unit.
Amount not ascertained - -
6 Non provision towards diminution in the value
of certain investments , as the same in the
opinion of management, is not of permanent
nature
272.88 143.99 - - -
7 Non provision of Income Tax liability,if any,
for the period from 1st April to 30th June,2005
- - Amount not
ascertained
- -
8 Recognition of Minimum Alternate Tax (MAT)
Credit entitlement in terms of Section 115JB of
the Income Tax Act,1961 which being availabe
as tax credit for set-off in the future years, as
per section 115 JAA of the Income Tax
Act,1961 has been carried forward as
recoverable under "MAT Credit Entitlement".
- - - - 721.50
Draft Letter of Offer
181
CONSOLIDATED STATEMENT OF RESTATED ACCOUNTING
RATIOS OF THE OUDH SUGAR MILLS LIMITED AND ITS SUBSIDIARIES
ANNEXURE – 9
For the year ended 30th June
Accounting
Ratios 2003 2004 2005 2006 2007
Earnings per
Share ( Rs.) (24.49) 10.90 23.17 31.96 (15.05)
(Nominal
Value Rs. 10
Per Share)
Return on Net
Worth(%) (240.00) 60.00 42.00 42.00 (25.00)
Net Asset
Value per
Share (Rs.) 10.17 18.33 55.82 75.30 60.04
NOTES:
Defination of ratios:
a) Earning per share ( EPS)
Restated Profit/(Loss) after tax as per statement of Restated Profits/(Losses), attributed to Equity
Shareholders,divided by the weighted average number of outstanding equity shares during the year.
b)Return on net worth
Profit/(Loss)after tax as per statement of Restated Profits and Losses, divided by net worth.
c) Net Assests Value
Net worth as per statement of Restated Assets and Liabilities, divided by the weighted average number of
outstanding equity shares during the year.
Draft Letter of Offer
182
CONSOLIDATED RELATED PARTY DISCLOSURES
ANNEXURE – 10
Names of the related
parties:
Key Management Personnel
Shri C. S. Nopany – Chairman cum Mg. Director
Shri P.K. Lakhotia – Executive President, Hargaon Unit (upto 15th June 2006)
Shri V.P.Singh –Executive President, Rosa Unit (From 4th June, 2004)
-- Executive President, Hargaon (From 16th June 2006)
Shri M. S. Sharma – Executive President,Narkatiaganj Unit (upto 18th June, 2007)
Shri Chandra Mohan–Executive President,Narkatiaganj Unit (from 19th June, 2007)
Shri P.K. Saini – Executive President, Rosa Unit (From16th June 2006)
Shri M.N.Agarwal – Executive President, Rosa Unit (Upto 2nd June, 2004)
Shri S.D. Shukla – Sr. Executive Vice President, Hata Unit
Shri S. K. Premi – Executive President, Allahabad Unit
Shri D.J. Darji – Secretary
Relatives of Key Management Personnel
Smt. Nandini Nopany - Mother of Shri C.S. Nopany
Shri Ansul Sharma- Son of Shri M. S. Sharma * (upto 18th June,2007)
Smt. Vedanti Sharma- Wife of Shri M. S. Sharma * (upto 18th June,2007)
Smt. Ritu Sharma- Duaghter of Shri M. S. Sharma * (upto 18th June,2007)
Smt. Urmila Lakhotia- Wife of Shri P K Lakhotia * (upto 15th June,2006)
Miss. Garima Lakhotia- Daughter of Shri P K Lakhotia * (upto 15th June,2006)
Miss. Abha Lakhotia- Daughter of Shri P K Lakhotia * (upto 15th June,2006)
Miss. Astha Lakhotia- Daughter of Shri P K Lakhotia * (upto 15th June,2006)
Mr. Mohit Lakhotia- Son of Shri P K Lakhotia * (upto 15th June,2006)
Miss. Anamika- Daughter of Shri M N Agarwal * (upto 2nd June,2004)
Miss. Annapurna- Daughter of Shri M N Agarwal * (upto 2nd June,2004)
Enterprises owned or significantly influenced by Key Management Personnel and their relatives
Upper Ganges Sugar & Industries Ltd.
SIL Investments Ltd. ( Formerly Sutlej Industries Ltd.)
Sutlej Textiles & Industries Ltd.
SCM Investment & Trading Co. Ltd.
RTM Investment & Trading Co. Ltd.
RTM Properties Ltd. (Formerly ISS Shipping Services Ltd.)
SIL Properites Ltd. (Formerly ISS Shipping and Trading Co. Ltd.)
Uttar Pradesh Trading Co. Ltd.
* Ceased to be related parties in term of Accounting Standard- 18 from the respective date. Accordingly all the transactions
are considerred only upto the said dates and also their outstanding balances, if any, as on Balance Sheet date has not been
disclosed.
Consolidated Statement of Aggregated Related Party Transactions as per Accounting Standard-18 for the reporting
Draft Letter of Offer
183
period
(Rs. In lacs.)
Enterprises
owned by Key Relatives of
Key
Management Management Key Management
Particulars
Personnel or
their relatives Personnel Personnel Total
Year
Transac
tions Balance
Transac
tions Balance
Transac
tions Balance
Transacti
ons Balance
Value
Outstan
ding Value
Outstandin
g Value
Outstand
ing Value Outstanding
as on as on as on as on
30th
June 30th June
30th
June 30th June
Sale of Goods/
Fixed Assets
Upper
Ganges
Sugar &
Industries
Ltd.
2006-
07
224.14
-
-
-
-
-
224.14 -
2005-
06
245.76
-
-
-
-
-
245.76 -
2004-
05
271.18
-
-
-
-
-
271.18 -
2003-
04
39.39
-
-
-
-
-
39.39 -
2002-
03
48.64
-
-
-
-
-
48.64 -
Purchase of Goods /Fixed
Assets
Upper
Ganges
Sugar &
Industries
Ltd.
2006-
07
970.95
-
-
-
-
-
970.95 -
2005-
06
75.31
-
-
-
-
-
75.31 -
2004-
05
73.51
-
-
-
-
-
73.51 -
2003-
04
10.42
-
-
-
-
-
10.42 -
2002-
03
13.80
-
-
-
-
-
13.80 -
Mrs
Vedanti
Sharma
2003-
04
-
-
-
-
10.79
-
10.79 -
Right Issue of
Shares
Mr.
C.S.Nopan
y
2004-
05
-
-
9.56
-
-
-
9.56 -
SCM
Investment
& Trading
Company
2004-
05
339.98
-
-
-
-
-
339.98 -
Draft Letter of Offer
184
Ltd.,
RTM
Investment
& Trading
Company
Ltd.,
2004-
05
349.13
-
-
-
-
-
349.13 -
Others
2004-
05
-
-
0.01
-
0.01
-
0.02 -
Dividend Paid
Mr.
C.S.Nopan
y
2006-
07
-
-
2.01
-
-
-
2.01 -
2005-
06
-
-
1.12
-
-
-
1.12
2004-
05
-
-
0.64
-
-
-
0.64 -
SCM
Investment
& Trading
Company
Ltd.,
2006-
07
87.42
-
-
-
-
-
87.42 -
2005-
06
39.66
-
-
-
-
-
39.66 -
2004-
05
25.79
-
-
-
-
-
25.79 -
RTM
Investment
& Trading
Company
Ltd.,
2006-
07
73.32
-
-
-
-
-
73.32 -
2005-
06
40.73
-
-
-
-
-
40.73 -
2004-
05
25.90
-
-
-
-
-
25.90
Uttar
Pradesh
Trading
Co.Ltd.,
2006-
07
88.34
-
-
-
-
-
88.34 -
2005-
06
49.08
-
-
-
-
-
49.08 -
Others
2004-
05
-
-
0.02
-
0.11
0.13 -
Interest Paid
Sutlej
Textiles &
Industries
Limited
2006-
07
62.43
-
-
-
-
-
62.43 -
SIL
Investment
s
Ltd.,(Form
erly Sutlej
Industries
Limited)
2004-
05
140.71
-
-
-
-
-
140.71 -
2003-
04
47.15
-
-
-
-
-
47.15 -
2002-
03
68.00
-
-
-
-
-
68.00 -
Draft Letter of Offer
185
SCM
Investment
& Trading
Co. Ltd.
2004-
05
102.63
-
-
-
-
-
102.63 -
2003-
04
150.26
-
-
-
-
-
150.26 -
2002-
03
26.43
-
-
-
-
-
26.43 -
RTM
Investment
& Trading
Co. Ltd.
2004-
05
53.25
-
-
-
-
-
53.25 -
2003-
04
103.96
-
-
-
-
-
103.96 -
2002-
03
17.47
-
-
-
-
-
17.47 -
Others
2005-
06
-
-
0.10
3.59
3.69 -
2004-
05
5.90
0.42
0.10
3.88
4.09
10.20
4.19
2003-
04
13.75
-
0.28
-
4.65
3.58
18.68
3.58
2002-
03
13.26
-
0.28
-
3.60
-
17.14 -
Loans Repaid /
Given
Upper
Ganges
Sugar &
Industries
Ltd.
2005-
06
455.00
455.00
-
-
-
-
455.00
455.00
Sutlej
Textiles &
Industries
Limited
2006-
07
1,500.0
-
-
-
-
-
1,500.00 -
SIL
Investment
s
Ltd.,(Form
erly Sutlej
Industries
Limited)
2004-
05
2,100.0
-
-
-
-
-
2,100.00 -
2003-
04
300.00
-
-
-
-
-
300.00 -
2002-
03
1,405.0
0
-
-
-
-
-
1,405.00 -
SCM
Investment
& Trading
Co. Ltd.
2004-
05
2,150.0
0
-
-
-
-
-
2,150.00 -
2003-
04
2,300.0
0
-
-
-
-
-
2,300.00 -
2002-
03
550.00
-
-
-
-
-
550.00 -
RTM
Investment
& Trading
Co. Ltd.
2004-
05
2,225.0
0
-
-
-
-
-
2,225.00 -
2003- - -
Draft Letter of Offer
186
04 2,800.0
0
- - - - 2,800.00
2002-
03
300.00
-
-
-
-
-
300.00 -
Others
2005-
06
-
-
4.00
-
11.57
-
15.57 -
2004-
05
340.00
-
2.00
-
9.50
-
351.50 -
2003-
04
385.00
-
-
-
13.01
-
398.01 -
2002-
03
340.00
-
-
-
1.40
-
341.40 -
Loans/Intercor
porate Loans
Taken
Upper
Ganges
Sugar &
Industries
Ltd.
2006-
07
455.00
-
-
-
-
-
455.00
Sutlej
Textiles &
Industries
Limited
2006-
07
3,500.0
0
2,000.0
0
-
-
-
-
3,500.00
2,000.00
SIL
Investment
s
Ltd.,(Form
erly Sutlej
Industries
Limited)
2004-
05
900.00
-
-
-
-
-
900.00 -
2003-
04
1,200.0
0
1,200.0
0
-
-
-
-
1,200.00
1,200.00
2002-
03
1,705.0
0
300.00
-
-
-
-
1,705.00
300.00
SCM
Investment
& Trading
Co. Ltd.
2004-
05
1,150.0
0
-
-
-
-
-
1,150.00 -
2003-
04
2,900.0
0
1,000.0
0
-
-
-
-
2,900.00
1,000.00
2002-
03
950.00
400.00
-
-
-
-
950.00
400.00
RTM
Investment
& Trading
Co. Ltd.
2004-
05
2,025.0
0
-
-
-
-
-
2,025.00 -
2003-
04
2,500.0
0
200.00
-
-
-
-
2,500.00
200.00
2002-03
800.00
500.00
-
-
-
-
800.00
500.00
Others 2005-06
-
-
-
-
2.31
-
2.31 -
2004-05
250.00
-
4.00
4.00
13.16
33.47
267.16
37.47
2003-04
400.00
90.00
-
2.00
9.60
33.81
409.60
125.81
Draft Letter of Offer
187
2002-03
415.00
75.00
-
2.00
18.22
35.96
433.22
112.96
Balance
Outstanding on
Current
Accounts (net)
Credit :
Upper
Ganges
Sugar &
Industries
Ltd. 2006-07
-
58.02
-
-
-
-
-
58.02
2005-06
-
16.72
-
-
-
-
-
16.72
2004-05
-
14.07
-
-
-
-
-
14.07
2003-04
-
7.58
-
-
-
-
-
7.58
2002-03
-
7.42
-
-
-
-
-
7.42
Debit :
Mr.
C.S.Nopan
y 2006-07
-
-
6.09
6.09
-
-
6.09
6.09
Interest
Received
Upper
Ganges
Sugar &
Industries
Ltd. 2006-07
2.15
-
-
-
-
-
2.15 -
2005-06
32.17
-
-
-
-
-
32.17 -
Dividend
Received
Sutlej
Textiles &
Industries
Limited 2006-07
70.93
-
-
-
-
-
70.93 -
SIL
Investment
s
Ltd.,(Form
erly Sutlej
Industries
Limited) 2005-06
65.93
-
-
-
-
-
65.93 -
2004-05
65.93
-
-
-
-
-
65.93 -
2003-04
65.93
65.93
2002-03
61.53
61.53
Upper
Ganges
Sugar &
Industries
Ltd. 2006-07
58.61
-
-
-
-
-
58.61 -
2005-06
27.02
-
-
-
-
-
27.02 -
2004-05
25.67
-
-
-
-
-
25.67 -
Draft Letter of Offer
188
-
-
-
-
-
- -
Remuneration
Mr.
C.S.Nopan
y 2006-07
-
-
100.31
-
-
-
100.31 -
2005-06
-
-
79.10
-
-
-
79.10
2004-05
-
-
16.80
-
-
-
16.80
2003-04
-
-
10.75
-
-
-
10.75 -
2002-03
-
-
10.75
-
-
-
10.75 -
Mr.
P.K.Lakhot
ia 2005-06
-
-
15.91
5.29
-
-
15.91
5.29
2004-05
-
-
14.59
2.90
-
-
14.59
2.90
2003-04
-
-
12.35
1.29
-
-
12.35
1.29
2002-03
-
-
7.90
-
-
-
7.90 -
Mr.
Chandra
Mohan 2006-07
-
-
1.47
1.47
-
-
1.47
1.47
Mr.M.S.Sh
arma 2006-07
-
-
10.51
-
-
-
10.51 -
2005-06
-
-
10.23
0.74
-
-
10.23
0.74
2004-05
-
-
9.00
0.67
-
-
9.00
0.67
2003-04
-
-
7.56
0.60
-
-
7.56
0.60
2002-03
-
-
7.05
-
-
-
7.05 -
Mr.M.N.Ag
arwal 2003-04
-
-
6.53
-
-
-
6.53 -
2002-03
-
-
6.32
-
-
-
6.32 -
Mr.V.P.Sin
gh 2006-07
-
-
18.97
4.00
-
-
18.97
4.00
2005-06
-
-
8.99
1.83
-
-
8.99
1.83
2004-05
-
-
6.92
0.56
-
-
6.92
0.56
2003-04
-
-
0.56
0.56
-
-
0.56
0.56
Mr.P.K.Sai
ni 2006-07
-
-
8.95
-
-
-
8.95 -
2005-06
-
-
0.39
0.20
-
-
0.39
0.20
Mr.S.K.Pre
mi 2006-07
-
-
10.36
-
-
-
10.36 -
2005-06
-
-
8.55
-
-
-
8.55 -
2004-05
-
-
9.15
0.07
-
-
9.15
0.07
2003-04
-
-
6.88
0.49
-
-
6.88
0.49
Draft Letter of Offer
189
2002-03
-
-
7.32
-
-
-
7.32 -
Mr.S.D.Shu
kla 2006-07
-
-
4.74
1.42
-
-
4.74
1.42
Mr.D.J.Dar
ji 2006-07
-
-
4.62
0.10
-
-
4.62
0.10
Note: The period referred to above is from 1st July to 30th June each year.
Draft Letter of Offer
190
CONSOLIDATED STATEMENT OF RESTATED SEGMENTAL INFORMATION AS PER ACCOUNTING
STANDARD-17 FOR THE REPORTING PERIOD
ANNEXURE -
11
(Rs. in lacs)
Year Sugar Spirits
Co-generation
Canning Products Others Total
Revenue ( net of excise duty and cess)
2006-07
37,817.54
3,919.33
766.43
1,741.15
-
44,244.45
2005-06
44,890.74
3,792.89
-
1,433.10
-
50,116.73
2004-05
32,078.00
2,335.20
-
1,191.37
-
35,604.57
2003-04
31,006.47
3,168.18
-
1,260.87
-
35,435.52
External Sales
2002-03
28,063.23
2,176.26
-
1,092.16
-
31,331.65
2006-07
2,777.18
4.00
1,425.95
-
-
4,207.13
2005-06
1,197.96
13.68
-
-
-
1,211.64
2004-05
826.63
-
-
-
-
826.63
2003-04
713.56
-
-
-
-
713.56
Inter-segment Sales
2002-03
736.73
-
-
-
-
736.73
2006-07
40,594.72
3,923.33
2,192.38
1,741.15
-
48,451.58
2005-06
46,088.70
3,806.57
-
1,433.10
-
51,328.37
2004-05
32,904.63
2,335.20 -
1,191.37
-
36,431.20
2003-04
31,720.03
3,168.18
-
1,260.87
-
36,149.08
Total Revenue
2002-03
28,799.96
2,176.26
-
1,092.16
-
32,068.38
Results
2006-07
(3,643.62)
1,315.14
746.21
81.24
(0.25)
(1,501.28)
2005-06
8,048.36
1,168.24
-
(2.64)
3.07
9,217.03
2004-05
6,364.12
498.67
-
(42.11)
86.95
6,907.63
2003-04
3,823.34
1,105.05
-
(87.29)
62.65
4,903.75
Segment Results
2002-03
218.66
474.53
-
(20.42)
(52.91
)
619.86
2006-07
183.59
Unallocated expenses net of
unallocated Income
2005-06
(66.59)
Draft Letter of Offer
191
2004-05
331.59
2003-04
199.75
2002-03
70.01
2006-07
(1,684.87)
2005-06
9,283.62
2004-05
6,576.04
2003-04
4,704.00
Operating Profit
2002-03
549.85
2006-07
2,090.74
2005-06
1,652.63
2004-05
2,700.26
2003-04
3,533.65
Interest Expenses & Finance
Charges(net)
2002-03
3,081.43
2006-07
60.82
2005-06
713.59
2004-05
202.34
2003-04
33.33
Income, Wealth Tax & Fringe
Benefit Tax (net)
2002-03
6.95
2006-07
(1,103.64)
Deferred Tax Liability/(Asset)
(net)
2005-06
1,103.64
2006-07
(2,732.79)
2005-06
5,813.76
2004-05
3,673.44
2003-04
1,137.02
Net Profit / (Loss)
2002-03
(2,538.53)
Total Assets
2006-07
52,227.18
5,127.94
6,501.35
880.79
2.48
64,739.74
Segment Assets
2005-06
Draft Letter of Offer
192
36,933.57 2,532.14 - 874.92 117.88 40,458.51
2004-05
34,121.45
2,417.79
-
765.13
81.90
37,386.27
2003-04
29,805.30
2,283.34
-
855.43
95.09
33,039.16
2002-03
36,001.85
2,008.08
-
654.47
107.68
38,772.08
2006-07
2,595.38
2005-06
2,024.41
2004-05
1,735.92
2003-04
1,710.35
Unallocated Assets
2002-03
1,830.37
2006-07
67,335.12
2005-06
42,482.92
2004-05
39,122.19
2003-04
34,749.51
Total
2002-03
40,602.45
Total Liabilities
2006-07
14,352.99
185.35
0.30
680.88
0.06
15,219.58
2005-06
3,251.37
133.53
-
600.48
0.06
3,985.44
2004-05
2,484.21
168.76
-
580.04
1.48
3,234.49
2003-04
5,176.96
202.73
-
600.81
5.77
5,986.27
Segment Liabilities
2002-03
8,559.24
149.49
-
507.46
19.72
9,235.91
2006-07
41,203.28
2005-06
24,767.45
2004-05
27,002.61
2003-04
26,813.70
Unallocated Liabilities
2002-03
30,265.61
2006-07
56,422.86
2005-06
28,752.89
2004-05
30,237.10
Total
2003-04
Draft Letter of Offer
193
32,799.97
2002-03
39,501.52
Other Information
2006-07
7.97
-
-
-
-
7.97
2005-06
13.86
-
-
-
-
13.86
2004-05
9.27
-
-
-
-
9.27
2003-04
10.25
-
-
-
-
10.25
Non cash expenses included in
Segment Expenses for arriving
at Segment Results
2002-03
8.84
-
-
-
-
8.84
2006-07
12,520.28
2,374.08
6,035.84
6.60
-
20,936.80
2005-06
6,340.05
334.33
-
0.48
39.79
6,714.65
2004-05
4,187.03
419.48
-
1.45
7.45
4,615.41
2003-04
1,893.60
232.21
-
9.85
-
2,135.66
Capital Expenditure
2002-03
363.82
265.09
-
3.91
19.85
652.67
2006-07
1,728.79
109.34
187.41
4.52
0.03
2,030.09
2005-06
1,465.88
89.56
-
4.22
0.02
1,559.68
2004-05
1,180.92
65.98
-
4.48
0.07
1,251.45
2003-04
1,027.59
66.36
-
3.97
0.11
1,098.03
Depreciation for the period
2002-03
1,015.70
53.42
-
3.78
0.07
1,072.97
Revenue
Geographical Segments
2006-07
43,127.64
2005-06
48,556.40
2004-05
35,284.60
2003-04
34,902.89
Domestic
2002-03
31,112.30
2006-07
1,116.81
2005-06
1,560.33
2004-05
319.97
2003-04
532.63
Overseas (Including through
canalising agents)
2002-03
219.35
Draft Letter of Offer
194
2006-07
44,244.45
2005-06
50,116.73
2004-05
35,604.57
2003-04
35,435.52
Total
2002-03
31,331.65
Notes: (i). Business Segment: The business segments have been identified on the basis of the products of the Company.
Accordingly, the Company has identified “Sugar”, “Spirits”, "Co-generation" and “Canning Products” as the
operating segments:
Sugar - Consists of manufacture and sale of Sugar, Molasses & Bagasse
Spirits - Consists of manufacture and sale of Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
Co-generation - Consists of generation and transmission of Power
Canning Products - Consists of Canned Fruits & Vegetables, Jams,
Jellies, Squashes & Juices
Others – Consist of Miscellaneous business comprising of less than 10%
revenues.
(ii) Geographical Segment: The Company primarily operates in India and therefore the analysis of geographical
segment is demarcated into its Indian and Overseas Operations.
(iii) The Company has common fixed assets located in India for producing goods for domestic and overseas
markets. Hence, separate figures for fixed assets / additions to fixed assets thereof cannot be furnished.
(iv) The period referred to above is from 1st July to 30th June each year.
Draft Letter of Offer
195
CONSOLIDATED STATEMENT OF DIVIDEND PAID
ANNEXURE -12
For the year ended 30th June
EQUITY SHARES 2003 2004 2005 2006 2007
No. of Equity Shares of Rs. 10
each 10,385,790 10,385,790 18,174,570 18,174,570 18,174,570
Rate of Dividend (%) - 25% 25% 45% -
Dividend Paid (Rs. in Lacs)
Amount of Dividend - 259.65 454.36 817.86 -
Corporate Tax on Dividend - 33.94 63.72 114.70 -
Total - 293.59 518.08 932.56 -
For the year ended 30th June
PREFERENCE SHARES 2003 2004 2005 2006 2007
No. of Preference Shares of Rs. 10
each 450,000 450,000 450,000 450,000
450,000*
Rate of Dividend (%) 10% 10% 10% 10% 10%
Dividend Paid (Rs. in Lacs)
Amount of Dividend 4.50 4.50 4.50 4.50 2.52
Corporate Tax on Dividend - 0.57 0.63 0.62 0.43
Total 4.50 5.07 5.13 5.12 2.95
* Redeemed on 21.10.2006
Draft Letter of Offer
196
ANNEXURE -13
STATEMENT OF CONSOLIDATED TAX SHELTER BASED ON RESTATED
PROFITS / (LOSSES)
(Rs. In Lacs)
July 2002
to June
2003
July 2003 to
June 2004
July 2004
to June
2005
July 2005 to
June 2006
July 2006 to June
2007
Tax Rate Including Surcharge Refer Note no. 1 below
Net Profit / (Loss) as per
Consolidated Restated Profit and
Loss Account after depreciation
but before taxation
(2,531.58)
1,170.35
3,875.78
7,630.99 (3,775.61)
Permanent Difference
Dividend Received
-
(73.24)
(91.79)
(98.59) (163.40)
Others
(17.27)
27.98
12.19
26.18 32.93
Timing Difference
Difference in Book Depreciation
& Depreciation under Income
Tax Act 1961
(334.68)
(91.74)
(339.48)
(610.08) (4,421.29)
Net Disallowable sum under
section 43B of the Income Tax
Act, 1961.
346.38
(948.44)
97.00
103.86 (366.95)
Others
(53.87)
(62.62)
83.45
265.86 29.95
Adjustment of Carry forward
losses and unabsorbed
depreciation
-
(29.69)
(3,635.21)
(6,958.00) -
Notional Income Tax at Specified
Rates (Refer Note 2 below)
5.92
89.36
321.72
816.53 3.67
Tax As per Accounts
(a) Current Tax (including
Wealth Tax)*
6.95
33.33
197.84
688.69 33.32
(b) Deferred Tax Liability /
(Asset)
-
-
-
1,103.64 (1,103.64)
(c) Fringe Benefit Tax
-
-
4.50
24.90 27.50
Tax Shelter in form of
(a) Brought Forward Business
Loss and Unabsorbed
Depreciation
13,255.88
12,149.96
11,138.73
4,117.11 12,680.92
(b) Expenses Allowable on
Payment Basis
2,416.18
1,467.74
1,564.74
1,668.60 1,301.65
(c) Others
16.61
16.61
36.61
36.61 36.61
(d) MAT Credit entitlement
-
-
-
696.00 721.50
Notes:
(1) As the accounting year of the holding Company falls in two financial years as per Income tax Act,1961, the
applicable tax rate including sur-charge has not been specified.
Draft Letter of Offer
197
(2) Includes "Minimum Alternate Tax" under Section 115 JB of the Income Tax Act, 1961 of Rs. 88.20 lacs for the
period from July 2003 to June 2004, Rs. 320.97 lacs for the period from July 2004 to June 2005 and Rs. 808.22 lacs
for the period July 2005 to June 2006 payable by the holding company in view of accumulated business loss and
unabsorbed depreciation under the Income tax Act, 1961.
(3) The figures for the year ended year ended 30th June, 2003, 2004, 2005,2006 & 2007 are as provided by the
management and not from the return of income of the Company.
* Net of refunds
Draft Letter of Offer
198
CONSOLIDATED RESTATED CAPITALISATION STATEMENT
(Annexure-14)
(Rs. in Lacs)
As at 30th June, 2007
Pre-issue
As Restated for Right
issue #
Borrowings
Short-Term* 28,358.58
Long-Term 12,675.07
Total 41,033.65
-
Shareholders' Funds
Equity 1,817.49
Reserves & Surplus** 9,094.77
Total 10,912.26
-
Long-term Debt/Equity ratio 1.16 :1
* Represents loan payable within one year and/or on demand.
** Restated Reserves
# Ratio and price of share (including premium) etc, shall be decided at the time of preparation of final letter of offer for
subussion to SEBI.
Draft Letter of Offer
199
ANNEXURE - 15 B
CONSOLIDATED STATEMENT OF RESTATED BALANCE OF DEBTORS (UNSECURED)
(Rs. in Lacs)
As at 30th June
2003 2004 2005 2006 2007
More than 6 Months
Considered Good
10.47
25.64
16.70
4.70 13.39
Considered Doubtful
131.61
119.51
112.38
107.44 113.76
142.08
145.15
129.08
112.14 127.15
Other
Debtors(Considered
good)
936.56
577.38
94.91
406.96 578.56
Total Debtors
1,078.64
722.53
223.99
519.10 705.71
Less: Provision
131.61
119.51
112.38
107.44 113.76
Net Debtors Balance
947.03
603.02
111.61
411.66 591.95
ANNEXURE - 15 C
CONSOLIDATED STATEMENT OF RESTATED BALANCE OF LOANS AND ADVANCES
(Rs. in Lacs)
As at 30th
June
2003 2004 2005 2006 2007
LOANS UNSECURED
(Considered Good)
To Promotor's Group
Company - - - 455.00
-
To Others 8.71 44.44
50.71 48.46
39.12
ANNEXURE - 15 A
CONSOLIDATED STATEMENT OF RESTATED EARNING PER SHARE
(Rs. in Lacs)
For the year ended 30th June
2003 2004 2005 2006 2007
Restated Profit / (Loss)
after Tax
(2,538.53)
1,137.02
3,673.44
5,813.76 (2,732.79)
Less : Dividend on
Preference Shares
4.50
4.50
4.50
4.50 2.52
Net Profit/(Loss)
(2,543.03)
1,132.52
3,668.94
5,809.26 (2,735.31)
Basic / Weighted average
number of outstanding
equity Shares
10,385,790
10,385,790
15,834,696 *
18,174,570 18,174,570
Nominal Value of Equity
shares (Rs.)
10.00
10.00
10.00
10.00 10.00
Basic / diluted Earning /
(Loss) per share (Rs.)
(24.49)
10.90
23.17
31.96 (15.05)
* After considering the impact of Right Issue of Shares during the year.
Draft Letter of Offer
200
ADVANCES
UNSECURED
(Considered Good)
Advances recoverable in
cash or in kind or for
value to be received or
pending adjustments 513.92 587.48
851.93 802.34
661.77
Sales tax, Purchase tax
and Excise duty payments
under appeal and/or under
dispute 101.24 111.75
107.91 86.91
87.01
Balance with Registrar,
Allahabad High Court 14.18 -
Balance with Excise, Port
Trust & other
Govt.Authorities 321.82 416.41
558.28 428.45
1,490.67
Claims and Refunds
receivable 125.26 239.78
109.23 75.72
148.19
Advance payment of
Tax,Refunds receivable
and Tax deducted at
source (after adjusting
provisions) 16.91 46.74
57.20 -
148.14
Sundry Deposits 43.41 51.25
50.74 41.89
31.74
Advances (Considered
Doubtful) 227.45 179.02
149.89 205.21
235.70
Total Loans and
Advances 1,372.90 1,676.87
1,935.89 2,143.98
2,842.34
Less: Provisions 227.45 179.02
149.89 205.21
235.70
Net Loans and Advances 1,145.45 1,497.85
1,786.00 1,938.77
2,606.64
ANNEXURE - 15 D
CONSOLIDATED STATEMENT OF RESTATED OTHER INCOME
(Rs. in Lacs)
Draft Letter of Offer
201
For the year ended 30th June
2003 2004 2005 2006 2007
Income from Long Term
Investments(Gross)
Dividend
61.70
73.24
91.79
98.59
163.40
Interest 0.75 0.23
Insurance & Other
Claims
29.80
14.08
42.98 7.64
11.85
Export Incentives 3.18
20.47 -
23.21
14.11
Holding charges on
Buffer stock
118.34
246.76
135.10 -
54.92
Rent & Hire charges 4.91 6.65
16.42
18.10
19.95
Miscellaneous Receipts
59.06 5.23
8.59
22.31
10.31
Unspent liabilities,excess
provisions and
unclaimed balances
Written back (net)
32.50
27.88
56.12
44.45
48.80
Profit on sale of Fixed
Assets - -
5.34 -
-
Exchange Rate
Fluctuations(Net) - -
22.46 0.99
0.01
Profit on sale of
Investments(Net) -
12.71
0.46
328.59
3.54
Total
310.24
407.25
379.26
543.88
326.89
Note: All the items of Other Income as given above except for Profit on sale of Investment are generally
recurring in nature and are related to business activities carried out by the Company.
ANNEXURE - 15 E
CONSOLIDATED STATEMENT OF RESTATED SECURED LOANS
(Rs. In Lacs)
As at 30th June
2003 2004 2005 2006 2007
Term Loans
From Financial Institution(s)/Bank(s)
:
Under Corporate Loan
2,850.00
2,250.00
1,650.00
1,050.00
450.00
Under Project Finance Scheme
2,945.00
2,945.00
4,685.00
6,000.00
9,262.58
Short Term Loan from a Bank
250.00
250.00
-
-
-
From Others
-
-
6,000.00
4,800.00
3,600.00
From Government of India (Sugar
Development Fund)
4,022.61
3,824.91
3,600.42
3,373.42
2,861.23
Other Loans
From Scheduled Banks on Cash
Credit Account :
State Bank of India
15,924.85
11,840.95
8,346.75 *
5,331.73
11,079.18
Punjab National Bank
769.39
783.90
-
-
-
Total
26,761.85
21,894.76
24,282.17
20,555.15
27,252.99
Draft Letter of Offer
202
BREAK-UP OF CONSOLIDATED SECURED LOANS AS AT 30TH JUNE,2007
(Rs. In Lacs)
Sl.no
.
NAME OF
BANK/INSTITUT
ION/ OTHERS
SANCTION
ED
AMOUNT
RATE OF
INTEREST
(%) p.a.
Outstandin
g as on
30th
June,2007
NATURE OF
SECURITY
REPAYMEN
T
SCHEDULE
1.
TER
M
LOAN
S
a) Industrial
Development Bank
of India (IDBI)
3,000.00
10.00%
Payable
Quarterly
450.00
Secured by first
mortgage/charge
on all the
immovable/movab
le assets,(save and
except book
debts), present and
future,of the
Company's Sugar
units at
Narkatiaganj &
Hargaon and
Distillery unit at
Hargaon, ranking
pari-pasu amongst
the various
lenders,
Quarterly
installments
of Rs. 150.00
lacs each
b)
941.15
4.00%
Payable
Yearly
297.46
Government of
India (Sugar
Development Fund)
1,800.00
4.00%
Payable
Yearly
2,563.77
2,741.15
2,861.23
Secured by a
second charge on
all the immovable
/ movable assets
(save and except
book debts)
present and future
of the Company's
Sugar units at
Rosa including
Rs.109.23 lacs
towards interest
which, as per
stipulated terms,is
payable on a long
te
Five yearly
instalments
commenced
from Ist
Oct.,2003
(Four
installments
already paid.)
c) Rabo India Finance 6,000.00
8.30%&8.435
% Payable
Quarterly
3,600.00
* Including working capital demand loan of Rs. 6500 lacs.
Draft Letter of Offer
203
d) UTI Bank
4,235.00
11.00%
Payable
Monthly
3,479.82
Secured by a
second charge on
all the immovable
/ movable assets
(save and except
book debts)
present and future
of the Company's
Sugar units at
Narkatiaganj
including
Rs.943.77 lacs
towards interest
which, as per
stipulated terms,is
payable on a
10 instalments
in five years
commencing
from 2nd
June,2007
(One
instalment
already paid.)
e) State Bank Of India 4,300.00
11.00%
Payable
Monthly
4,300.00
f) State Bank Of
Hydrabad
1,650.00
9.00%
Payable
Monthly
1,482.76
Secured by first
mortgage/charge
on all the
immovable/movab
le assets,(save and
except book
debts), present and
future,of the
Company's Sugar
units at
Narkatiaganj,
Hargaon & Rosa
and Distillery unit
at Hargaon,
ranking pari-pasu
amongst the
various lend
Half yearly
installments
of Rs. 600.00
lacs each
commencing
from Oct.,05
(Four
instalments
already paid.)
2 CASH CREDIT ACCOUNT
a) State Bank of
India, (SBI)
19,785.00
11.75%
Payable
Monthly
11,079.18
Secured by
first
mortgage/c
harge on all
the
immovable
/movable
assets,(save
and except
book
debts),
present and
future,of
the
Company's
Sugar units
at Hargaon
and
Distillery
unit at
Hargaon
ranking
pari-pasu
16th
Quarterly
installments of Rs.
264.6875 lacs each
commencing from
Oct.,06( Three
installemnt already
paid)
Draft Letter of Offer
204
amongst
the various
lenders,
subject to
pr
Secured by
first
mortgage/c
harge on all
the
immovable
/movable
assets,(save
and except
book
debts),
present and
future,of
the
Company's
Sugar units
at Hargaon
and
Distillery
unit at
Hargaon
ranking
pari-pasu
amongst
the various
lenders,
subject to
pr
20th
Quarterly
installments of Rs.
215 lacs each
commencing from
Dec.,07
Total
27,252.99
To be
Secured by
first
mortgage/c
harge on all
the
immovable
/movable
assets,(save
and except
book
debts),
present and
future,of
the
Company's
Narkatiaga
nj unit ,
ranking
pari-pasu
amongst
the various
lenders,
subject to
prior
charges
created on
movabl
20th
Quarterly
installments of Rs.
82.50 lacs each
commencing from
June,08
Secured by On Demand
Draft Letter of Offer
205
hypothecati
on of
entire
current
assets of
the
Company
and further
secured by
a charge on
the
immovable
assets of
the
company as
follows :-
a.Canning
factory at
Allahabad -
First
Charge
b. Hargaon
Sugar &
Distllery
units -
Second
Charge
c.
Narkatiaga
nj & Rosa
Sugar units
- Third
Charge
Draft Letter of Offer
206
ANNEXURE - 15 F
CONSOLIDATED STATEMENT OF RESTATED UNSECURED LOANS
(Rs. in Lacs)
As at 30th June
Particulars 2003 2004 2005 2006 2007
Intercorporate Deposits
from
Promoters' Companies 985.00
765.00
- - -
Associate / Promoters'
Group Companies 1,300.00
1,300.00
190.00 55.00 4,045.00
Others 765.00
2,040.00
255.00 175.00 900.00
Sub Total 3,050.00
4,105.00
445.00 230.00 4,945.00
25-10.35% Short Term
non-convertible
debentures of Rs. 100 lacs
each ( Reedemable at par
on 6th July,2007) - -
- - 2,500.00
From State Bank of India
- Against crop Loan to
Growers - - 354.15
Short Term Loan from
Schedule Bank - -
1,000.00 1,000.00 5,440.00
From Trade & deposits(
partly not bearing
interest) 58.39
63.09
57.10 75.48 91.78
Fixed Deposits from :
Key management
Personnel and their
relatives 39.22
35.81
37.47 - -
Others 302.41
379.78
612.19 686.50 449.73
Total 3,450.02
4,583.68
2,151.76 1,991.98 13,780.66
BREAK-UP OF RESTATED INTERCORPORATE DEPOSITS AS ON 30TH JUNE,2007
Sl
No. Particulars
Interest
payment
schedule
Rate of
Interest
Amount
Re-payment
Schedule
1
From Associate /
Promoters'Group
Companies:
SIL Investments Limited Monthly 14.00%
525.00 On demand
Sutlej Textiles &
Industries Limited Monthly 13.00%
2,000.00 On demand
Chambal Fertilizers &
Chemicals Ltd. Quarterly 13.00%
1,000.00 28-09-2007
H.T.Media Ltd., Quarterly 10.00%
500.00 On demand
Pollock Traders (P) Ltd. Quarterly 10.00%
20.00 4,045.00 19-04-2007
2 From others Monthly 14% - 15% 900.00 On various dates
from Oct.,07 to
March,08
Total 4,945.00 ANNEXURE - 15 G
Draft Letter of Offer
207
CONSOLIDATED STATEMENT OF RESTATED INVESTMENTS
(Rs. in Lacs)
Particulars As at 30th June
2003 2004 2005 2006 2007
Quoted Investments
In Promoter's Company 250.19
212.63
212.63 212.63 212.63
In Associate/Promoter's
Group Companies 1,163.58
1,174.44
1,171.29 1,053.33 1,833.20
Others 11.60
50.03
42.73 13.32 6.73
Total 1,425.37
1,437.10
1,426.65 1,279.28 2,052.56
Unquoted Investments
In Promoter's Company -
0.49
12.00 12.00 -
Others 116.23
116.18
111.48 111.48 107.65
Total 116.23
116.67
123.48 123.48 107.65
Grand Total 1,541.60
1,553.77
1,550.13 1,402.76 2,160.21
Less: Provison for
diminution in value of
Investments 16.61
16.61
36.61 36.61 36.61
Net Investments 1,524.99
1,537.16
1,513.52 1,366.15 2,123.60
Market Value of Quoted
Investments 1,236.63
1,813.19
5,215.30 3,567.16 4,950.81
Draft Letter of Offer
208
PROMOTER GROUP COMPANIES
Since there are more than five listed companies promoted by promoters, financial information of top five listed
group companies are disclosed hereunder in terms of Clause 6.10.3.2 of SEBI (DIP) Guidelines read with
Clause 6.10.3.1 are as follows:
Upper Ganges Sugar & Industries Limited (“UGSIL”)
UGSIL was incorporated on August 10, 1932 under the name and style of Upper Ganges Sugar Mills Limited
under the Indian Companies Act, 1913. The name of the Company was subsequently changed to Upper Ganges
Sugar & Industries Limited on September 3, 1984.
As per its Memorandum of Association, the main object of the company is to carry on the business of sugar
manufacture and refinery and the manufacture of any other material that may be decided upon by or on behalf of
the company.
Currently, the company is engaged in manufacture of sugar and its by-products, industrial alcohol / ethanol, Bio-
compost and tea.
Shareholding Pattern
Shareholding Pattern of UGSIL as on September 30, 2007 was as follows:
Sl Name of the Share Holder No of Shares %
1 Promoters 56,83,206 49.17
2 Banks, FI, FIIs, Insurance Companies, Mutual fund 5,70,769 4.94
3 Private Bodies Corporate 12,76,716 11.04
4 Resident Individuals 39,55,105 34.22
5 NRIs/ OCBs 71,443 0.63
Total 11557239 100
Board of Directors
Board of Directors of UGSIL as on September 30, 2007 comprised of:
1. Smt. Nandini Nopany (Chairperson cum Managing Director)
2. Shri C. S. Nopany
3. Shri R. K. Choudhury
4. Shri G. K. Bhagat
5. Lt. Gen. K. Chiman Singh (Retd.)
6. Shri Gaurav Swarup
7. Shri Supriya Gupta
8. Shri Sunil Kanoria
9. Shri I P Singh Roy
10. Shri P.K.Lakhotia
Financial Performance
The operating results of UGSIL as at and for the years ended June 30, 2005, 2006 and 2007 are set forth below:
(all figures in Rs. lacs, except per share data)
Particulars 2005 2006 2007
Total Income 35830.37 41527.89 32565.01
Profit/(Loss) After Tax 1369.44 2862.29 (2826.13)
Equity Capital(of Rs.10 each) 697.94 700.44 1155.73
Reserves and Surplus 7250.41 9387.74 12767.89
Earning per Share 65.70 40.86 (25.15)
Book Value per Share (excluding
deferred tax liability and net of
miscellaneous expenditure)
113.92 144.03 120.47
Draft Letter of Offer
209
Share Quotation
The equity shares of UGSIL are listed on BSE, NSE and The Calcutta Stock Exchange Association Limited.The
highest and lowest market price of shares of UGSIL on the Stock Exchanges during the preceding six months
are as follows:
BSE NSE CSE
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
June, 2007 85.50 68.10 84.40 68.00 - -
July, 2007 84.00 67.00 83.35 68.70 - -
August, 2007 78.50 58.00 78.50 58.25 - -
September, 2007 87.00 66.80 89.80 66.00 - -
October 2007 83.70 66.20 83.00 61.00 - -
November 2007 102.00 65.10 102.40 67.45 - -
Previous Issues made in last three years
UGSIL had made a Rights Issue of 4552,852 Equity Shares of Rs.10/-each at a premium of Rs. 140/- per share
(i.e. at a price of Rs. 150/- per share) in the ratio of thirteen Equity Share for every one Equity Share held during
the financial year i.e. 2005-06.
Issue opened on June 28, 2006
Issue closed on July 27, 2006
Date of completion of dispatch of
delivery of security certificates
August 7, 2006
Object of the issue The issue of the Equity Shares was made to repay working
capital borrowings and to meet the expenses of the issue.
Rate of dividend paid prior to the
issue 40 %
Particulars of changes in the capital structure are given below:
Particulars
Equity Share Capital
(Rs. Lacs)
Share Premium
(Rs. Lacs)
Prior to the issue 700.44 387.69
After the Rights issue 1155.73 6761.68
After retention of 15% over-
subscription
N. A. N. A.
Common Pursuits
Upper is also in sugar production and and trading business. Presence of Upper in the same line of business may
lead to the conflict of interest between us and our promoters and our promoters may pursue such policies which
are favourable for Upper but not for us.
Mechanism for redressal of Investors’ Grievances
UGSIL has an Investor’s Grievance Committee which oversees the performance of the Registrar and Share
Transfer Agent of the Company and recommends measures to improve the level of investor related services. The
Committee deals with applications for transfer/ tramsmission of shares, sub division and consolidation of share
certificates and other related matters. There was no pending investors’ complaint as on September 30, 2007.
Texmaco Limited (“Texmaco”)
Texmaco was incorporated on August 4, 1939 under the Indian Companies Act, 1913 as “Textile Machinery
Corporation Limited”. The name of the company was subsequently changed to Texmaco Limited on September
18, 1973.
Draft Letter of Offer
210
As per the Memorandum of Association of Texmaco, the main object of the company is to carry on the business
of manufacturing machinery, engines, turbines, tanks, ships, bodies, tools, implements, accessories, equipments
and other materials and products in India or elsewhere.
Currently, Texmaco is engaged in manufacturing heavy and precision engineering products, including Railway
wagons, Hydro-mechanical equipment for Dams and Barrages, Structurals, Industrial Boilers and Pressure
Vessels, Sugar Mill Machinery, Textile Spinning Machinery, Switches & Crossings for Railway Tracks, Steel
Castings, Forgings, Agro Mechanical Equipments and other related equipments. Texmaco has 4 engineering
plants in the state of West Bengal engaged in manufacture of heavy engineering goods and steel foundry.
Shareholding Pattern
Shareholding Pattern of Texmaco as on September 30, 2007 was as follows:
Sl No Name of the Share Holder No of Shares %
1 Promoters 5424890 52.54
2 Banks, FI, FIIs, Insurance Companies, Mutual fund 1785198 17.29
3 Private Bodies Corporate 1377418 13.34
4 Resident Individuals 1578345 15.29
5 NRIs/ OCBs 79643 0.77
6 Others 3115672 30.17
Total 10325760 100.00
Board of Directors
Board of Directors of Texmaco as on September 30, 2007 comprised of following
1. Dr. K. K. Birla (Chairman)
2. Shri S. K. Poddar (Vice Chairman)
3. Shri B. P. Bajoria
4. Shri H. C. Gandhi
5. Shri A. C. Chakrabortti
6. Dr. H. Sadhak (Nominee of LIC)
7. Shri B. Rai
8. Shri Manish Gupta
9. Shri A. Dhasarathy
10. Shri A. K. Nanda – Wholetime Director
Financial Performance
The operating results of Texmaco for the years ended March 31, 2005, 2006 and 2007 are set forth below:
(All figures in Rs. lacs, except per share data)
Particulars 2005 2006 2007
Total Income 30,598.04 39,475.82 47,933.00
Profit/(Loss) After Tax 1,566.43 1,901.39 2,847.61
Equity Capital
( face value of Rs.10/- each)
1,032.58 1,032.58 1,032.58
Reserves & Surplus
(excluding revaluation reserves, if any) 9,897.43 11,445.60 13,809.99
Earnings per Share 17.01 18.41 27.58
Net Asset Value per Share (excluding deferred tax liabilities
and net of miscellaneous expenditure not written off)
103.88 118.78 142.03
Share Quotation
The equity shares of Texmaco are currently listed on BSE, The Calcutta Stock Exchange Association Limited
and NSE.
Draft Letter of Offer
211
The highest and lowest market price of shares of Texmaco as listed on the exchanges during the preceding six
months is as follows:
BSE NSE
Month High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
June, 2007 1115.00 875.20 1100.00 856.70
July, 2007 1300.00 1015.25 1305.00 1020.00
August, 2007 1205.00 1007.00 1200.00 994.10
September, 2007 1279.00 1080.00 1203.00 1060.25
October, 2007 1686.40 1010.00 1496.00 1001.00
November 2007 1900.00 1350.00 1922.00 1350.00
The equity shares of Texmaco were not traded on The Calcutta Stock Exchange in last six months.
Previous Issues made in last three years
Texmaco has not made any Public Issue or a Rights Issue in last three years
Mechanism for redressal of Investors’ Grievances
Texmaco has formed a committee to dealt with the investor’s grievances. There was no pending investors’
complaint as on September 30, 2007.
Sutlej Textiles and Industries Limited (“Sutlej”)
Sutlej was incorporated on 22nd June, 2005 and was created out of a corporate restructuring exercise in which
the Textiles Divisions of Sutlej Industries Limited (SIL) and Damanganga Processors Limited (DPL) were
demerged into Sutlej with effect from July 1, 2005. The restructuring is aimed at making Sutlej into a focused
and an integrated company in the Textiles Industry with its range of products varying from yarn to fabrics to
home furnishing and now garments.
As per the Memorandum of Association of Sutlej, the main object of the company is to carry on the business of
spineers, weavers, manufacturers, ginners, balers and pressers of cotton kapas, yarn, cotton waste, yarn waste,
hemp, jute and any other fibrous material and the cultivation thereof and the business of buyers, sellers and
dealers of cotton kapas, cotton waste, yarn waste, hemp, jute and any other fibrous material, oil seeds, and
any other seeds and produce and of any goods or merchandise whatsoever business that may be necessary or
expedient and to purchase and vend the raw material and manufactured articles and to carry on or be interested
in the business of ginning and pressing factory proprietors.
The company is currently engaged in business of manufacture of Cotton Yarn, Staple Yarn, Synthetic Yarn,
Fabrics. The plants of Sutlej are located in the states of Rajasthan, Jammu and Kashmir and Gujarat engaged in
manufacture of cotton yarn, manmade fibre yarns and fabrics respectively.
Sutlej is today an integrated player in the textiles industry with a value chain extending from yarn at one end and
extending to fabric, garments and home textiles at the other, enabling it to address opportunities in every
intervening segment.
Shareholding Pattern
Shareholding Pattern of Sutlej as on September 30, 2007 was as follows:
Sl No Name of the Share Holder No of Shares %
1 Promoters 65,51,134 61.83
2 Banks, FI, FIIs, Insurance Companies, Mutual
fund
2,78,576 2.63
3 Private Corporate Bodies 22,13,296 20.89
4 Resident Individuals 15,46,173 14.59
5 NRIs/ OCBs 6,681 0.06
Total 1,05,95,860 100.00
Board of Directors
Draft Letter of Offer
212
Board of Directors of Sutlej as on September 30, 2007 comprised of following
1. Dr. K. K. Birla (Chairman)
2. Shri C. S. Nopany (Vice Chairman)
3. Shri K. R. Podar
4. Shri U. K. Khaitan
5. Shri Amit Dalal
6. Shri J. S. Varshneya
7. Shri S. M. Agarwal
8. Shri Bodhishwar Rai
9. Shri R. N. Laddha – Wholetime Director
Financial Performance
The operating results of Sutlej for the years ended March 31, 2006 and 2007 are set forth below:
(all figures inRs.Lacs except per share data)
Particulars 2006 2007
Total Income 47041.22 72036.60
Profit/(Loss) After Tax 2067.38 3631.49
Equity Capital (of Rs.10 each) 1092.19 1092.19
Reserves & Surplus(excluding
revaluation reserve, if any) 11167.20 14223.68
Earnings per Share 18.93 33.26
Net Asset Value per Share (excluding
deferred tax liability and net of
miscellaneous expenditure not written
off)
112.25 140.23
Share Quotation
The equity shares of Sutlej are listed on BSE and NSE.
The highest and lowest market prices of shares of Sutlej as listed on the exchanges during the preceding six
months are as follows:
BSE NSE
Month High
(Rs.)
Low
(Rs.)
High
(Rs.)
Low
(Rs.)
June, 2007 167.40 139.60 167.70 135.00
July, 2007 174.00 140.05 173.00 129.00
August, 2007 158.00 122.55 167.95 112.00
September, 2007 170.00 134.00 164.80 127.00
October 2007 156.70 121.35 156.00 112.25
November 2007 148.95 120.00 143.95 104.30
Previous Issues made in last three years
No public or rights issue has been made by Sutlej in the preceding three years.
Mechanism for redressal of Investors’ Grievances
Sutlej has formed an Investors Grievance Committee to specifically look into the redressing of shareholders and
investors complaints relating to transfer of shares, non-receipt of dividend and other related matters. As on
September 30, 2007; there were no pending investors’ complaints.
Draft Letter of Offer
213
Zuari Industries Limited. (“Zuari”)
The company was incorporated on May 12, 1967 under the Companies Act, 1956 in the name and style of
“Zuari Agro Chemicals Limited”. Subsequently the name of the company was changed to “Zuari Industries
Limited” on February 12, 1998.
As per the Memorandum of Association of Zuari, the main object of the company is to manufacture agriculture
chemicals, fertilizers formulations used in fertilizers,manures, mixtures and their formulations and all clasees
and kinds of chemicals, source materials, ingredient, mixtures,derivatives and compounds thereof.
The company is currently engaged in business of manufacture and sale of urea and complex fertilisers. The
plants of the company are located in state of Goa and it produces ammonia, urea and fertilizers of various
grades.
Shareholding Pattern
Shareholding Pattern of Zuari as on September 30, 2007 was as follows:
Sl No Category No of Shares %
1 Promoters 10042838 34.11
2 Banks, FI, FIIs, Insurance Companies,
Mutual fund
5182524 17.60
3 Private Bodies Corporate 1627825 5.53
4 Resident Individuals 4602592 15.64
5 NRIs/ OCBs 7984825 27.12
6 Others - -
Total 2,94,40,604 100.00
Board of Directors Board of Directors of Zuari as on September 30, 2007 comprised of following
1. Dr. K.K. Birla (Chairman)
2. Shri Saroj Kumar Poddar (Co-Chairman)
3. Shri H.S. Bawa (Managing Director)
4. Shri Shyam Bhartia
5. Shri Arun Duggal
6. Shri D.B. Engineer
7. Shri M.D. Locke (Alternate – Shri K.H. Captain)
8. Shri S.V. Muzumdar
9. Shri Marco Wadia
10. Shri J.N. Godbole – Additional Director
Financial Performance
Brief audited financials of Zuari for the years ended March 31, 2005, 2006 and 2007 are as follows :
(All figures in Rs. Lacs, except per share data)
Particulars 2005 2006 2007
Total Income 179012.78 221123.21 241536.99
Profit/(Loss) After Tax 2681.90 2617.48 39354.51
Equity Share Capital (of Rs.10/- each) 2944.11 2944.11 2944.11
Reserves & Surplus 34753.65 36699.73 75193.13
Earning per Share 9.11 8.89 133.67
Net Asset Value per Share (excluding deferred tax liabilities
and net of miscellaneous expenditure not written off)
128.05
134.66 265.41
Share Quotation
The equity shares of Zuari are listed on BSE and NSE.
Draft Letter of Offer
214
The highest and lowest market price of shares of Zuari as listed on the exchanges during the preceding six
months is as follows:
BSE NSE
Month High(Rs.) Low
(Rs.)
High (Rs.) Low (Rs.)
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
174.50
250.75
254.90
303.80
290.00
369.40
156.65
162.30
190.05
229.00
201.00
211.00
175.00
249.75
254.35
305.00
288.00
N.A
153.00
161.00
189.25
226.00
204.05
N.A
Previous Issues made in last three years
No public or rights issue has been made by Zuari in the preceding three years.
Mechanism for redressal of Investors’ Grievances
Zuari has formed an Investors’ Grievance Committee to oversee the performance of share transfer work and to
recommend measures to improve the level of investor services. As on September 30, 2007 there were no
pending investors’ complaints.
Chambal Fertilisers & Chemicals Limited. (“Chambal”)
Chambal was incorporated on May 7, 1985 in the name and style of “Aravali Fertilizers Limited” under the
Companies Act, 1956. Subsequently the name of the company was changed to “Chambal Fertilizers and
Chemicals Limited” on January 12, 1989.
As per the Memorandum of Association of Chambal, the main object of the company is to manufacture,
produce, refine, process, formulate all classes and kinds of agricultural chemicals, fertilizers, manures, their
bye-products, intermediarires, derivatives and compounds and remedies of all kinds for agricultural, humans and
animals by any process whether chemical, mechanical, electrical or otherwise.
The company is currently engaged in business of manufacture of agricultural inputs. Chambal’s fertilizers plants
are located in Rajasthan, textile mills in Himachal Pradesh and food processing unit in Haryana.
Shareholding Pattern
Shareholding Pattern of Chambal as on Septemeber 30, 2007; was as follows:
Sl No Name of the Shareholder No of Shares %
1 Promoters 207890579 49.95
2 Banks, FI, FIIs, Insurance Companies, Mutual
fund 70288422 16.89
3 Private Bodies Corporate 20411613 4.90
4 Resident Individuals 104260429 25.05
5 NRIs/ OCBs 12251809 2.94
6 Others 1105000 0.27
Total 416207852 100.00
Board of Directors
Board of Directors of Chambal as on September 30, 2007 comprised of following:
1. Dr. K. K. Birla (Chairman)
2. Shri S. K. Poddar (Co-Chairman)
3. Shri H. S. Bawa (Vice Chairman)
4. Shri Anil Kapoor (Managing Director)
5. Shri A. J. A. Tauro
6. Shri Dipankar Basu
7. Shri Marco P.A. Wadia
8. Shri M. D. Locke (Alternate – Shri. C. S. Nopany)
Draft Letter of Offer
215
9. Shri R. N. Bansal
10. Shri Shyam S. Bhartia
Financial Performance
The operating results of Chambal for the years ended March 31, 2005, 2006 and 2007 are set forth below:
(All Figures in Rs. lacs except per share data)
Particulars 2005 2006 2007
Total Income 267946.99 274062.03 259130.60
Profit After Tax 22062.52 20312.05 15113.10
Equity Capital (of Rs. 10 each) 41620.79 41620.79 41620.79
Reserves & Surplus
(excluding revaluation reserves) 42729.82 54495.55 60590.71
Earning per Share 5.35 4.88 3.63
Net Assets Value per Equity Share (Rs.) 20.07 22.99 24.51
Share Quotation
The equity shares of Chambal are listed on BSE and NSE.
The highest and lowest market price of shares of Chambal as listed on the exchanges during the preceding six
months is as follows:
BSE NSE
Month High
(Rs.)
Low (Rs.) High
(Rs.)
Low (Rs.)
June, 2007 36.80 32.85 36.95 32.70
July, 2007 37.80 34.45 37.45 34.35
August, 2007 51.70 32..00 54.00 32.15
September, 2007 62.75 48.10 62.80 47.10
October, 2007 40.00 60.90 40.00 60.85
November, 2007 45.40 80.70 44.40 80.65
Previous Issues made in last three years
No public or rights issue has been made by Chambal Fertilisers & Chemicals Limited in the preceding three
years.
Mechanism for redressal of Investors’ Grievances
Chambal has formed an Investors’ Grievance Committee to approve the matters relating to allotment of
securities, issue of duplicate certificates, review and redressal of investor grievances and other related matters.
As on Septemebr 30, 2007 there 7 cases pending with respect to investors’ complaints.
Draft Letter of Offer
216
RECENT DEVELOPMENT
QUARTERLY LIMITED REVIEW REPORT (STANDALONE) FOR QUARTER ENDED
SEPTEMBER 30, 2007
Type UnAudited Audited UnAudited UnAudited UnAudited Audited
Period Ending 30 Sep 07 30 Jun 07 31 Mar 07 31 Dec 06 30 Sep 06 30 Jun 07
No Of Months 3 3 3 3 3 12
Description
Net Sales /
Interest Earned
/ Operating
Income
733.00 1,321.71 951.75 1,050.00 1,100.99 4,424.45
Other Income 14.90 9.94 2.74 1.54 1.90 16.12
Total Income 747.90 1,331.65 954.49 1,051.53 1,102.89 4,440.56
Expenditure -835.98 -1,600.36 -848.32 -950.30 -1,023.74 -4,422.72
Operating
Profit -88.08 -268.72 106.17 101.24 79.15 17.84
Interest -83.16 -86.97 -64.13 -26.12 -32.07 -209.29
Profit Before
Depreciation
and Tax
-171.24 -355.69 42.04 75.11 47.09 -191.44
Depreciation -53.64 -63.87 -47.06 -48.49 -43.45 -202.87
Profit before
Tax -224.88 -419.55 -5.02 26.63 3.64 -394.31
Tax 75.70 136.20 0.90 -9.83 -1.92 125.36
Net Profit -149.19 -283.35 -4.13 16.80 1.72 -268.96
Equity Capital 181.75 181.75 181.75 181.75 181.75 181.75
Basic And
Diluted EPS
after
Extraordinary
item
-8.21 -15.59 -0.23 0.92 0.09 -14.80
Nos. of Shares
- Public 9,479,963.00 9,479,963.00 9,479,963.00 9,479,963.00 - 9,479,963.00
Percent of
Shares-Public 52.16 52.16 52.16 52.16 - 52.16
Operating
Profit Margin -12.02 -20.33 11.16 9.64 7.19 0.40
Net Profit
Margin -20.35 -21.44 -0.43 1.60 0.16 -6.08
Cash EPS -5.26 - - - - -
1. Sugar is a seasonal industry where crushing takes place during the period between November and May while
sales are distributed throughout the year. As such the above quarterly results are not indicative of the likely
results for the year.
2. The Auditors in their report on the Accounts for the year ended June 30, 2007 had commented upon (i) non
adjustment of certain realizations in earlier years due to pending appeals and (ii) recognition of Deferred Tax
Asset (net) and MAT Credit entitlement based on future profitability projections, the impact whereof on the
aforesaid financial results is not presently ascertainable.
3. The construction of Company´s Greenfield integrated Sugar project of 7000 TCD along with Co-generation at
Hata Kushinagar (U.P.) and Distillery at Hargaon is in progress.
4. There was no exceptional / extraordinary items during the quarter ended September 30, 2007.
Draft Letter of Offer
217
5. The previous period figures have been re-grouped, wherever necessary, to conform to the current year figures.
6. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors
at its meeting held on October 27, 2007 and October 29, 2007 respectively.
Expenditure Includes
Decrease in stock (After adjusting
excise duty & cess on stock) Rs 822.093 million
Consumption of Raw Material Rs 577.164 million
Purchase of Semi-finished goods Rs 2.012 million
Staff Cost Rs 65.308 million
Stores, Spares & packing materials consumed Rs 58.387 million
Other expenditure Rs 75.397 million
Tax Includes Provision for
Provision for Tax Rs (0.431)million
MAT Credit Entitlement Rs 0.846 million
Fringe Benefit Tax Rs 0.400 million
Deferred Tax Liability Rs (137.017)million
EPS is Basic & Diluted
1. The Auditors in their report on the Accounts for the year ended June 30, 2007 had commented upon (i) non
adjustment of certain realizations in earlier years due to pending appeals, (ii) recognition of Deferred Tax Asset
(MAT Credit entitlement based on future profitability, projections and impact thereof on the aforesaid financial
results is not presently ascertainable.
2. The construction of Company´s Greenfield integrated Sugar project of 7000 TCD along with Co-generation at
Hata Kushi Nagar (U.P.) is in progress.
3. The previous period figures have been re-grouped, where necessary, to conform to the current year figures.
4. The above results have been reviewed by the Audit Committee as on September 27, 2007 and taken on record
by the Board of Directors at their meetings held on the September 28, 2007.
Draft Letter of Offer
218
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION AS REFLECTED IN THE FINANCIAL STATEMENT
You should read the following discussion on financial conditions and results of operations together with audited
unconsolidated financial statements (as restated) for the years ended June 30, 2003, 2004, 2005, 2006 and 2007
under Indian GAAP including schedules, annexures and notes thereto and reports thereon, which appear in the
Financial Statement of the Issuer Company section of this Draft Letter of Offer.
OVERVIEW OF OUR BUSINESS
Our Company was promoted by Late R.D.Birla in 1932 with the main object of carrying on business of
production and sales of sugar and sugar related products. The first sugar mill of our Company was set up at
Hargaon (District : Sitapur, Uttarpradesh) with a crushing capacity of 400 tcd. We further established a distillery
at Hargaon in 1945. Subsequently, our company purchased a sugar factory namely Rosa Sugar Works at Rosa
(Dist. Shahanjapur, Uttar Pradesh) in 1976 with a crushing capacity of 1000 tcd. In 1984, The New Swadeshi
Sugar Mills Limited having a sugar mill, distillery at Narkatiaganj (Bihar), a fruit and vegetable canning factory
at Allahabad and a paint factory under lease at Calcutta was merged with our Company. The lease of the paint
factory was terminated in April, 1997. Over the period we have expanded our capacities of sugar production,
industrial alcohol/ethanol and canning products.Presently we have three sugar factories at Hargaon, Rosa in
Uttarpradesh and at Narkatiaganj in Bihar with a combined crushing capacity of 21,700 tcd alongwith 25 M.W.
Co-generation. Our Company is also having two distilleries at Hargaon and at Narkatiaganj with a total installed
capacity 22.50 million litres per annum. Our fruits and vegetable canning factory is situated at Bamrauli near
Allahabad. The Company is in process of setting up a Greenfield Sugar unit at Hatta, Gorakhpur, U.P with a
capacity 7,000 tcd and co-generation power plant of 35 M.W.
DETAILS OF OUR PRODUCTS
As stated above, we manufacture the following four main categories of products:
• Sugar
• Co-generation
• Industrial Spirits (including Denaturants), Fusel Oil & Bio-Compost
• Canning Products.
In addition, we also have arrangement for manufacturing of bio-compost at Hargaon and Narkatiagang by using
press-mud from sugar factory and spent wash from distillery. Bio-Compositing culture purchased from Vasant
Dada Sugar Institute, Pune are added and by Aerobic Bio-composting process in 45-60 days Bio-Compost is
being made. This fertilizer having Nitrogen, Phosphorus and Potash and other chemicals is being widely used in
cane, wheat, vegetables & Flowers cultivation. Bio-Compost produced by us is marketed under the brand name
“Oudh Jaivik Khad” at Hargaon.
Share of different segments in our total sales for the last three years is as follows:
(Rs. in Lacs)
2004-05 2005-06 2006-07
Amount % to total
sales
Amount % to total
sales
Amount % to
total
sales
Sugar 32078.00 90.10 44890.74 89.57 37817.54 85.47
Co-generation - 0 0 0 766.43 1.73
Industrial Spirits
(including
Denaturants), Fusel
Oil & Bio-
Compost
2335.20 6.56 3792.89 7.57 3919.33 8.86
Canning Products 1191.37 3.34 1433.10 2.86 1741.15 3.94
Total 35604.57 100.00 50116.73 100 44244.45 100
Draft Letter of Offer
219
SIGNIFICANT DEVELOPMENTS SINCE THE DATE OF LAST FINANCIAL STATEMENT
The Company has declared its quaterly unadudited results for the 3 months period ended 30th
Septemeber 2007,
which has been limited reviewed by the Statutory Auditors of the Company in accordance with the requirement
of amended clause 41 of the Listing Agreement with the Stock Exchange.
For details please refer to section title recent developments beginning on page no. 216
There are no other material developments after the date of the latest balance sheet save and except as stated
above.
RESULTS OF OPERATIONS
Analysis of Income and Sales trend for the last five financial years ended June 30, 2007 as per restated
accounts are as follows:
(Rs. In lacs)
For the year ended 30th June Particulars
2003 2004 2005 2006 2007
Sale of Products (net of exice duty) 31331.65 35435.52 35604.57 50116.73 44244.45
Total Income 31,285.92 29,426.56
36,969.65
48,135.06
48,114.22
Profit before Interest, Depreciation,
Tax
1627.72 5740.93 7742.42 10418.11 180.76
Net Profit/(Loss) Before Tax
(2,529.35)
1,106.27
3,789.60
7,174.64
(3,940.78)
Net Profit/(Loss) after tax
(2,530.38)
1,074.10
3,588.01
5,365.72
(2,894.29)
The company has achieved sale of products of Rs. 44244.45 lacs during the financial year 2006-07 as compared
to Rs. 50116.73 lacs during the preceding year 2005-06. This was mainly on account of low realization of
sugar, reduction in sugar price,s overall decrease in turnover of sugar. In fiscal 2006 - 2007 we have commenced
generation and transmission of power which has realized Rs. 766.43 lacs. Further our sale of spirit has increased
from Rs. 3998.00 lacs in fiscal 2006 to Rs. 4214.81 lacs in fiscal 2007 mainly due to efficient marketing and
distribution skills and better utilization of capacity. Further we have also realized Rs. 1740.04 lacs in fiscal 2007
as compared to Rs 1432.11 lacs in fiscal 2006 from sale of Canned Fruits and Vegetables this is due to increase
in export sales.
Sugar Sales* 2002-03 2003-04 2004-05 2005-06 2006-07
Sugar (Qty in Quintals) 2281667 2340121 1911643 2515824 2419637
Sales Value (in Rs. Lacs) 29098.19 32327.95 32087.73 45372.22 38215.71
Average Realisation (Rs. Per
quintal)
1275.30 1381.46 1678.54 1803.47 1579.40
Spirit Sales* 2002-03 2003-04 2004-05 2005-06 2006-07
Spirit (in Litres) 18396818 20898490 12077789 18907809 19007939
Sales Value (in Rs. Lacs) 2350.08 3483.00 2449.27 3998.00 4214.81
Average Realisation(Rs./ Ltr) 12.77 16.67 20.28 21.14 22.17
(*The quantity sold includes inter-segment sale and sales value is gross of excise and cess as per audited
accounts)
The average price per liter of spirit is increasing over period of five years due to overall increase in molasses
(basic raw material) price and efficient marketing skill.
Draft Letter of Offer
220
COMPARISON OF RESULTS OF OPERATION
Fiscal Year ended June 30, 2007 compared to Fiscal Year ended June 30, 2006
Sale of products
The company has achieved sale of products of Rs. 44244.45 lacs during the financial year 2006-07 as compared
to Rs. 50116.73 lacs during the preceding year 2005-06. This was mainly on account of low realization of
sugar, reduction in sugar price,s overall decrease in turnover of sugar. In fiscal 2006 - 2007 we have commenced
generation and transmission of power which has realized Rs. 766.43 lacs. Further our sale of spirit has increased
from Rs. 3998.00 lacs in fiscal 2006 to Rs. 4214.81 lacs in fiscal 2007 mainly due to efficient marketing and
distribution skills and better utilization of capacity. Further we have also realized Rs. 1740.04 lacs in fiscal 2007
as compared to Rs 1432.11 lacs in fiscal 2006 from sale of Canned Fruits and Vegetables this is due to increase
in export sales.
Raw materials consumed
We have consumed raw material of the value of Rs. 38765.85 lacs in fiscal 2007 as compared to our
consumption of raw materials of Rs. 29727.34 lacs in fiscal 2006. This increase is primarily due to increase in
crushing from 233.60 lacs quintals of sugarcane in fiscal 2006 to 290.03 lacs quintals in fiscal 2007 and increase
in sugarcane prices. During fiscal 2007, our consumption of sugarcane has also increased due to increase in the
overall crushing capacity.
Other Expenses
The other expenses includes purchase of trading/semi finished goods, staff cost and other manufacturing,
administrative and selling expenses. In fiscal 2006, other expenses were Rs. 7989.61, which is increased to Rs.
9167.61 lacs in fiscal 2007. This increase is mainly duly to increase in manufacturing expenses and staff cost
because of higher crushing. Further in fiscal 2007 the there was overall revision in wages and salaries.
Profit before Interest, Depreciation and Tax (PBIDT)
PBIDT of Rs. 10418.11 lacs in fiscal 2006 was reduced to Rs. 180.76 lacs in fiscal 2007 due to higher prices of
sugar crane coupled with low price of sugar.
Interest
The net interest cost for the fiscal 2007 was Rs. 2092.87 lacs as compared to interest cost of Rs. 1684.79 lacs in
fiscal 2006. This increase is mainly due to increase in borrowing cost and overall increase in secured and
unsecured loan.
Tax (including Fringe Benefit Tax)
We have paid Rs. 705.28 lacs as net tax for fiscal 2006 whereas for fiscal 2007 we have paid Rs. 57.15 lacs as
net tax. The decrease is due to net loss before taxation in fiscal 2007 as compared to profit in fiscal 2006.
Net Profit /(Loss) after tax
The net profit after tax which was Rs. 5365.72 lacs for fiscal 2006 has reduced to net loss of Rs. 2894.29 lacs in
fiscal 2007.
Fixed Assets
Net fixed assets including capital work in progress and capital Expenditure on expansion/new projects increased
from Rs. 23164.94 lacs in fiscal 2006 to Rs. 41913.98 lacs in fiscal 2007. This increase is due to expansion of
our existing capacities at Hargaon and Narkatiaganj sugar unit, setting up new sugar plant with co-generation at
our unit at Hatta (UP) and expansion of distillery plant at Hargaon to capacity of 100 KLPD.
Draft Letter of Offer
221
Current Assets, Loans & Advances
The current assets, loans and advances was Rs. 23227.12 lacs as on June 30, 2007 as compared to Rs. 17386.84
lacs as on June 30, 2006. This increase was mainly on account of increase in inventory levels of sugar.
Liabilities & Provisions
The total liability has increase from Rs. 27895.39 lacs in fiscal 2006 to Rs. 56520.66 lacs in fiscal 2007. This
increase is mainly on account of increase in our overall borrowing such as secured and unsecured loan and
current liabilities.
Fiscal Year ended June 30, 2006 compared to Fiscal Year ended June 30, 2005
Major Development:
- Expansion of capacity at our Hargaon unit
Sale of products
Our sales of products during fiscal 2006 was increase to Rs. 50116.73 lacs from Rs. 35604.57 lacs in fiscal
2005, this increase was mainly due to better realization as well as increase in turnover of sugar. Further sale of
spirit was also increase from Rs. 2449.27 lacs in fiscal 2005 to Rs. 3998.00 lacs in fiscal 2006.
Raw materials consumed
We have consumed raw material of the value of Rs. 29727.34 lacs in fiscal 2006 as compared to our
consumption of raw materials of Rs. 21528.91 in fiscal 2005. This increase is primarily due to increase in
crushing from 182.00 lacs quintals of sugarcane in fiscal 2005 to 233.60 lacs quintals in fiscal 2006 and increase
in sugarcane prices.
Other Expenses
The other expenses includes purchase of trading/semi finished goods, staff cost and other manufacturing,
administrative and selling expenses. In fiscal 2005, other expenses were Rs. 7698.32, which is increased to Rs.
7989.61 lacs in fiscal 2006. This increase is mainly duly to increase in manufacturing expenses and staff cost
because of higher crushing. However there was reduction in purchase of raw sugars by Rs, 943.31 lacs in fiscal
2006 as compared to fiscal 2005.
Profit before Interest, Depreciation and Tax (PBIDT)
PBIDT of Rs. 7742.42 lacs in fiscal 2005 was increased to Rs. 10418.11 lacs in fiscal 2006 due to increase in
overall turnover and better realization.
Interest
The net interest cost for the fiscal 2005 was Rs. 2701.54 lacs as compared to interest cost of Rs. 1684.79 lacs in
fiscal 2006. This decrease is due to reduction in overall indebtedness of the Company.
Tax (including Fringe Benefit Tax)
We have paid Rs. 201.59 lacs as net tax for fiscal 2005 whereas for fiscal 2006 we have paid Rs. 705.28 lacs as
net tax. This increase is due to higher PBT.
Net Profit after tax
The net profit after tax was increased from Rs. 3588.01 lacs for fiscal 2005 to Rs. 5365.72 lacs for fiscal 2006.
This increase is due to increase in overall volume and better realization.
Draft Letter of Offer
222
Fixed Assets
Net fixed assets including capital work in progress and capital Expenditure on expansion/new projects increased
from Rs. 18105.66 in fiscal 2005 to Rs. 23164.94 lacs in fiscal 2006. This increase is due to expansion of our
existing capacities at Hargaon.
Current Assets, Loans & Advances
The current assets, loans and advances was reduced to Rs. 17386.84 lacs as on June 30, 2006 from Rs. 19430.82
lacs. This decrease was on account of decrease in inventory levels of sugar.
Liabilities & Provisions
The total liability has decreased from Rs. 30385.75 lacs in fiscal 2005 to Rs. 27895.39 lacs in fiscal 2006. This
decrease is mainly on account of repayment of overall debts.
Fiscal Year ended June 30, 2005 compared to Fiscal Year ended June 30, 2004
Major Development:
- Expansion of capacity at our Hargaon unit
- Issuance of Rights issue equity shares in the ratio of 3:4 of aggregating to Rs. 3894.39 lacs
Sale of products
Our sales of products during fiscal 2005 was marginally increased to Rs. 35604.57 lacs from Rs. 35435.54 lacs
in fiscal 2004.
Raw materials consumed
We have consumed raw material of the value of Rs. 21528.91 in fiscal 2005 as compared to Rs. 17247.94 lacs in
fiscal 2004. This is primarily due to increase in crushing from 168.96 lacs quintals in fiscal 2004 to 182.00 lacs
quintals in fiscal 2005 and increase in sugarcane prices.
Other Expenses
The other expenses includes purchase of trading/semi finished goods, staff cost and other manufacturing,
administrative and selling expenses. In fiscal 2005, other expenses increased to Rs. 7698.32, from Rs. 6437.69
lacs in fiscal 2004. This increase is mainly due to purchase of raw sugar amounting to Rs. 943.31 lacs in fiscal
2005.
Profit before Interest, Depreciation and Tax (PBIDT)
PBIDT of Rs. 5740.93 lacs in fiscal 2004 were increased to Rs. 7742.42 lacs in fiscal 2005 due to better
realization.
Interest
The net interest cost for the fiscal 2005 was Rs. 2701.54 lacs as compared to interest cost of Rs. 3536.87 lacs in
fiscal 2004. This decrease is due to reduction in overall reduction of interest rate and reduction in overall
borrowings.
Tax
We have paid Rs. 201.59 lacs as net tax (including fringe benefit tax) for fiscal 2005 whereas for fiscal 2004 we
have paid Rs. 32.17 lacs as net tax. This increase is due increase in profit eligible for taxation.
Net Profit after tax
The net profit after tax was increased to Rs. 3588.01 lacs for fiscal 2005 from Rs. 1074.10 lacs in fiscal 2004.
This increase is due to better realization and reduction in interest outgo.
Draft Letter of Offer
223
Fixed Assets
Net fixed assets including capital work in progress and capital Expenditure on expansion/new projects increased
to Rs. 18105.66 in fiscal 2005 from Rs.14798.96 lacs in fiscal 2004. This increase is due to expansion of our
existing capacities at Hargaon.
Current Assets, Loans & Advances
The current assets, loans and advances was marginally increased from Rs. 18335.10 lacs in fiscal 2004 to Rs.
19430.82 lacs as on June 30, 2005. This increase was mainly due increase in inventory levels of sugar.
Liabilities & Provisions
The total liability has decreased from Rs. 32904.32 lacs in fiscal 2004 to Rs. 30385.75 lacs in fiscal 2005. This
decrease is mainly due to reduction in unsecured loans and current liabilities which was partly offset by increase
in secured loans.
ECONOMIC ENVIRONMENT AND COMPANY PERFORMANCE
Sugarcane is the main raw material for sugar industry and accounts for 70% of the cost of production of sugar.
It is also the major source of income for millions of farmers. The determination of price for sugarcane is,
therefore, a matter of critical importance both for the sugar industry and the cane growers. The Central
Government fixes a Statutory Minimum Price factory wise, in terms of Clause 3 of the Sugarcane (Control)
Order, 1966 in respect of each sugar season
Further, under the Clause 5A of the Sugarcane (Control) Order 1966, the farmer is entitled to an additional
payment out of the price realization by the factories.
The Central Government before the onset of crushing season declares the SMP. For season 2005-06, 2006-07
and 2007-08, SMP of sugarcane was fixed at Rs. 79.50, 80.25, 81.18 per quintal respectively linked to a base
recovery rate of 9.0% with a premium for higher recovery.
The Uttar Pradesh sugar factories has paid / provided Rs. 125 per quintal for the sugar season 2006-07, based
on the prices announced by the U.P Government, which is also referred to as SAP. However the Company
alongwith other sugar factories has also challenged the said price, before the honble High Court of Allahabad.
The judgement is awaited. Further the Bihar sugar factories have paid / provided a contractual price of Rs. 115/-
per quintal, higher than the SMP, for the sugar season 2006-07.
For the sugar seasons 2007-08, the Uttar Pradesh State Government has announced SAP of Rs. 125/- per
quintals which has been challenged by the UP Sugar Mills Association before Hon’ble Allahabad High Court
(Lucknow Bench), Lucknow. The court in its interim order dated November 15, 2007 has provided that the
sugar factories, till the next date of listing of the case, shall pay the cost of sugar cane to the cane growers at the
rate of Rs. 110/- per quintal which shall be subject to further order of the Court and the sugar factories shall start
the crushing forthwith. The above interim order has been further challenged in the Honble Supreme Court of
India by the sugar factories.
The Indian Sugar scenario is right now passing through recession attributable to the glut in the sugarcane
production throughout the country. During sugar season 2006–07 Indian sugar industry has registered ever high
production of sugar by 285 lacs tons which lead to crash in the free sale sugar prices in the domestic market.
Surplus production coupled with carry forward stocks led to depressed sugar prices. Depressed sugar prices,
impacted the sugar mills performance which inturn led to accumulation of arrears of cane payment by the mills
to the farmers.
UNUSUAL OR INFREQUENT EVENTS OR TRANSACTIONS
The Food Ministry has created a 5 million tonnes sugar buffer to bail out the ailing industry. The buffer would
basically transfer the cost of interest, storage and insurance payable on the total allocated quantity from the
sugar mills to the Union Government's account. The money for buffer stock will come from the Sugar
Development Fund.
Draft Letter of Offer
224
The Central Government through Minsitry of Consumer Affiars, Food and Public Distribution (Department of
Food and Public Distribution) by its notification dated 7th
December 2007 has announced a Scheme for
extending financial assistance to the Sugar Undertaking to improve the liquidity position of Sugar factories to
enable them to clear the cane price arrears of sugar season 2006-07 and cane price of sugar season 2007-08
relating to SMP. The said loan will be equivalent to notional central excise duty (net of sugar cess) on the total
production of sugar during sugar season 2006-07 and sugar season 2007-08 for a period of four years including
morotium of 2 years. The Government will subsidise interest on the said loan to the extent of 12 % p.a.
KNOWN TRENDS OR UNCERTAINTIES
Sugar is cyclical industries and dependent to a large extent on the availability of sugarcane. Also, the output of
sugar being agro-based products is influenced by climatic conditions. The Company has diversified into
Alcohol, Ethanol Co-generation and Bio-compost to achieve value addition and reduce dependence on its core
product “sugar”.
FUTURE RELATIONSHIP BETWEEN COSTS AND REVENUES
In sugar industry, costs depend upon sugarcane prices, which account for about 70% of the costs. The revenue
depends on Government policies relating to sugarcane pricing as well as free sale quotas, international markets,
and availability of sugar. The Company’s future sale prices will be determined by the demand-supply situation,
government policies and sugarcane availability and prices.
TURNOVER FROM THE COMPANY’S MAJOR INDUSTRY SEGMENTS
The Company operates in the four segments namely Sugar, Industrial Alcohol/Ethanol, Co-generation and
Canning Product. The contribution of these divisions to the total turnover of the Company is as under :
Division Sales for the year 2006-07 (Rs. in lacs) *
Sugar 37817.54
Industrial Alcohol/Ethanol 3919.33
Co-generation 766.43
Canning Product 1741.15
Total 44244.45
*(net of Inter-segment sales, excise duty and cess – as per restated accounts)
STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCTS OR BUSINESS SEGMENTS
For further details on our expansion plans, please refer to the section titled “Business Strategy” on page no.63 of
this Draft Letter of Offer.
SEASONALITY OF THE BUSINESS
Sugar production is dependent on the availability and quality of cane. To some extent, sugarcane is a weather
resistant crop and is unaffected by moderately high or low rainfall. However, any drastic changes in climatic
conditions may impact sugarcane crop and hence sugar production.
COMPETITIVE CONDITIONS
While our Company, The Oudh Sugar Mills Limited is one of the operationally profitable producers of sugar in
India , we are consciously working towards reducing overall borrowing costs, in order to increase its
profitability. The Company also uses its by-products -molasses for Alcohol and Ethanol production and bagasse
for co-generation to obtain sustainable profits.
The Company is not dependent on a single or few suppliers or customers.
Draft Letter of Offer
225
SECTION VIII: LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS
Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions,
proceedings or tax liabilities against our Company, and there are no defaults, non payment of statutory dues,
over dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable
to holders to any debentures, bonds or fixed deposits issued by the Company (including past cases where
penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i)
of Part 1 of Schedule XIII of the Companies Act, 1956
(A) CASES FILED BY THE COMPANY (OSML)
I. CIVIL CASES
Brief Particulars and contentions Claim
amount
(Rs. in
Lakhs)
Court/Forum/
Case number
Current Status
The Oudh Sugar Mills Limited
V/s.
Shipping Corporation of India Ltd.
The matter is regarding outstanding
dues claimed by erstwhile unit of
OSML, Macfarlane Paints, which
is now a part of Texmaco Ltd.
51.28 Bombay High
Court O.O.C.J. Suit
No. 1208 of 1997
The matter has been transferred to the list
of long cause suit and is pending for
recording evidence.
OSM Vs Nagar Panchayat,
Hargaon
The Company has challenged the
alleged demand of House Tax by
Nagar Panchayat, Hargaon from the
Company
0.77 C.S.No.271/99 before
Addl. Civil Judge,
Sr.Div.Sitapur
Pending for arguments.
Mohd. Adil Vs The Oudh Sugar
Mills Ltd.
Compensation matter decided aginst
the Company by lower court at
Lkhimpur, Appeal filed before High
Court
0.40
Case no. W.C.No. High
Court,
Lucknow
Pending before High Court, Company has
deposited Rs. 20000/- as per direction of
court.
OSML vs State of UP & Ors
The Company has challenged the
Recovery certificate received by the
Company (Hargaon Unit Rs
2911.03 lacs & Rosa Unit 1426.72
lacss), issued by the Cane
Commissioner, U P, Lucknow
demanding cane dues pertaining to
season 2006-07 and cane
commission of the said season
along with interest.
4337.75 WP No. 8055 of 2007
before Allahabad High
Court, Lucknow Bench
The Hon’ble High Court, Lucknow bench
has vide its order dated 29.10.07 stayed
the demands in the recovery certificate on
the condition to pay 25% of the said
demand within 5 weeks. Accordingly
company has paid Rs 728.04 lacs for
Hargaon unit and Rs 356.94 lacs for their
Rosa Unit.
The East Sugar Mills Association &
Ors have challenged the fixation of
price of sugar cane for crushing
season 2007-08 at Rs 125 per
quintal by the UP State
Government.
Not
ascertanable
Civil Misc. W P no. 8548
(M/B) of 2007
Allahabad High Court
(Lucknow Bench)
The Allahabad High Court (Lucknow
Bench) by its interim order dated
15.11.2007 have directed sugar mills to
pay sugarcane growers at the rate of Rs
110 per quintal till further orders of the
Court.
Draft Letter of Offer
226
Brief Particulars and contentions Claim
amount
(Rs. in
Lakhs)
Court/Forum/
Case number
Current Status
The Company is part of the
Association.
Simbholi Sugar Mills Ltd & Ors Vs
State of UP and Ors
Simbholi Sugar Mills Ltd & Ors
have challenged the fixation of
price of sugar cane for crushing
season 2006-07 at Rs 125 per
quintal by the UP State
Government..
The Company is party to the
litigation.
Not
ascertainable
Civil Misc. W P no.
43536/07
Allahabad High Court
The Allahabad High Court have reserved
the Orders in the said matter
OSML (Narkatiaganj unit) has filed 40 recovery suits against various cane growers, all of which are pending
before the Munsif/ Sub-Judge of Civil Court at Bettiah. The cumulative amount claimed under all these suits,
aggregate to Rs.79.16 lacs.
II. EXCISE, CUSTOMS AND SERVICE TAX MATTERS
HARGAON SUGAR & DISTILLERY UNITS
Brief Particulars
( Name of Parties)
Claim
Amount (Rs. in
lacs)
Court/Forum
With Case No.
Current Status
The Oudh Sugar Mills Ltd. Vs. State of U.P. &
Ors.
OSML filed a Writ Petition against the State of
U.P., Secretary Excise & Others restraining the
State from incorrectly levying and claiming to
recover administrative charges on molasses
produced by the Sugar Unit of OSML and
transfer the same to its own Distillery Unit
solely for the purpose of captive consumption.
OSML was granted stay against the recovery of
said administrative charges, subject to
furnishing a bank guarantee for Rs. 1.00 lakh.
Accordingly OSML has furnished a bank
guarantee which is still in force. OSML had
paid administrative charges from the year 2001
under protest. Thereafter by an interim order
dated 10.03.2005, the High Court permitted
transfer of molasses to its Distillery without
any imposition of administrative charges.
OSML has filed an Appeal for refund of the
Administrative charges already paid.
233.21 Writ Petition
No.237(M/B)/1986 at
High Court, Allahabad,
Lucknow Bench.
Appeal pending for final hearing
Draft Letter of Offer
227
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
The Oudh Sugar Mills Ltd. Vs. Union of India
& Ors.
The Central Government has allowed excise
duty rebate during the sugar season 1981-82 &
1982-83 by way of various notifications which
was subsequently amended by the Government
and were challenged. Rs.26.91 Lacs was
allowed in terms of the interim order of the
Kolkata High Court subject to furnishing of
Bank Guarantee for equivalent amount. OSML
had filed Transfer Petition No.144 & 145/1985
before the Supreme Court of India. The said
Petition was allowed by order dated
04.04.1985.
26.91 C.R.No.8298
(W)/1983 &
9263(w)/1983 at Kolkata
High Court.
The matter is pending for hearing.
The Oudh Sugar Mills Ltd. & Anr. Vs. Union
of India & Ors.
OSML’s Hargaon Sugar Unit was earlier
placed in the Central U.P. Zone of State of U.P.
and was accordingly allowed the levy sugar
prices. OSML filed a writ petition praying that
its Sugar Factory be placed in the East U.P.
Zone for the production years 1984-85 and
1985-86 and be allowed to charge price of levy
sugar as admissible in East U.P. Zone. The
Court, vide its interim order passed in October,
1986 has permitted OSML to charge levy sugar
prices applicable to the East U.P. Zone on
furnishing a bank guarantee for the differential
amount between the levy sugar prices for
Central and East U.P. Zone. Hon’ble Allahabad
High Court (Lucknow Bench) by its order
dated 18.07.06 has dismissed the Petition
against which the company has filed SLP No.
20946 of 2006 before the Supreme Court. The
Company has also filed Review Petition No.
253 of 2006 before the Allahabad High Court
(Lucknow Bench) and the same was also
dismissed. The Company has also filed SLP
before the Supreme Court.
17.56 SLP (C) No. 20946 /06 &
Review SLP No 22878
/07
Before the Supreme Court
Pending hearing
Bihar Sugar Mills Association & Ors. Vs.
Union of India & Ors.
OSML filed writ petitions before Kolkata High
Court challenging the fixation of the levy sugar
price for the sugar season 1974-75. Interim
price was allowed by the Court by directing
OSML to furnish bank guarantee. The matter
was ultimately decided by the Supreme Court
and the Supreme Court had directed the Central
Government to re-fix the prices. Accordingly,
prices for the sugar season 1974-75 were re-
fixed by way of a notification dated
13.04.1999. However the said prices were
applicable only in respect of deliveries made
from 12.07.1975. Subsequently, a writ
29.57 L.P.A.No.609/2003 at
High Court Delhi in
which OSML is a
Petitioner.
Pending for final hearing.
Draft Letter of Offer
228
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
petition was filed before Delhi High Court
challenging the Government levy sugar price
notification dated 13.04.1999 for the sugar
season 1974-75 as the price notified for 1974-
75 (effective from 12.07.1975) was fixed
without taking into account the loss caused to
producers (including OSML) for sugar sold at
the low interim price fixed on 28.11.1974.
The Oudh Sugar Mills Ltd. Vs. U.P. State
Electricity Board
The U.P. State Electricity Board demanded
electricity duty on OSML’s own generation
which was challenged by OSML. The Court
has granted stay against the recovery of the
amount of duty and has directed OSML to
furnish a bank guarantee.
4.32 Writ Petition
No.3006(M/B)/1984 at
High Court Allahabad
Lucknow Bench.
The matter is pending for hearing.
The Oudh Sugar Mills Ltd. Vs. Assistant
Commissioner, Central Excise, Sitapur
OSML, vide its letter dated 12.06.1998 claimed
a refund on the following ground:
OSML had deposited excise duty of Rs. 22.12
lacs on transfer of molasses for captive
consumption in distillery and the same was not
claimed as MODVAT. Subsequently, the
company also paid Rs. 14.10 lacs by way of
reversal of 8% as duty on clearance of alcohol
manufactured by use of duty paid molasses.
The claim for refund of excise duty was
rejected by the Assistant Commissioner,
Sitapur. OSML had filed an appeal with the
Commissioner (Appeals) Lucknow. The
Commissioner (Appeals) decided against
OSML vide his order dated 24.06.2005. The
Company has filed an appeal before the
CESTAT.
22.12 Appeal no.3135/05-CEX
before CESTAT
Pending before CESTAT
The Oudh Sugar Mills Ltd. Vs Uttar Pradesh
Power Corporation
The Uttar Pradesh Power Corporation has
raised an electricity bill on OSML. OSML has
filed this present suit contesting the disputed
amount as stated in the bill due to a mistake in
the calculation of the amount.
0.91 C.S.No.124/1998 before
Jr. Civil Judge, Sitapur.
Pending for evidence.
The Oudh Sugar Mills Ltd., Vs State of U.P.
The matter relates to land owned by OSML on
which a Hospital has been constructed by the
Government. OSML has claimed equivalent
land in exchange of the subject land.
Not
ascertain
able
Exe.12/2000 before Civil
Judge, Sitapur.
Pending for arguments.
The Oudh Sugar Mills Ltd. Vs Umar Ahemed Not C.S.No.740/89 before Pending for recording evidence.
Draft Letter of Offer
229
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
The matter relates to declaration of title
asserted by OSML on the grounds of adverse
possession.
ascertain
able
Addl. Civil Judge, Sitapur
The Oudh Sugar Mills Ltd.Vs Hasina Begum
The matter relates to declaration of title
asserted by OSML on the grounds of adverse
possession.
Not
ascertain
able
C.S.No.465/2000 before
Addl. Civil Judge, Sitapur
Pending for recording evidence.
The Oudh Sugar Mills Ltd. Vs Sharda Devi
Kedia
The matter relates to an encroachment of land
owned by OSML by the defendant. The
defendant has filed a counter case claiming
ownership on the ground of adverse possession.
Not
ascertain
able
Case no. C.S.NO.29/95
before Addl. Civil Judge,
Lakhimpur.
Pending for recording evidence.
OSML has filed 5 recovery suits against various parties, all of which are pending before the Civil Court, Sitapur.
The cumulative amount claimed under these suits aggregate to Rs.11.40 lacs.
OSML has filed 6 cases before Additional District Judge, Lakhimpur and Civil Judge, Sitapur for vacation of
Company’s land/quarters ownded by OSML encroached by various parties. No amount claimed can be
quantifiable.
Narkatiaganj Sugar & Distillery Units
Brief Particulars
( Name of Parties)
Claim
Amount (Rs. in
lacs)
Court/Forum
With Case No.
Current Status
New Swadeshi Sugar Mills Vs. State of Bihar
The Government of Bihar vide notification
dated 10.01.2000 imposed administrative
charges on the sale and supply of molasses to
the distilleries within the State of Bihar as well
as on transfer of molasses from a sugar unit to
the distillery for captive consumption. OSML
filed writ petition challenging the aforesaid
notification. In the meantime, Government of
Bihar through Superintendent of Excise,
Narkatiaganj Distillery raised a demand for
administrative charges on the molasses
transferred by OSML’s sugar factory to the
distillery with retrospective effect from the year
1995 till the date of notification. The said
demand was challenged by OSML by filing
another writ petition. The Hon’ble Court
directed OSML to deposit 25% of the total
amount of the demand and the balance demand
has been stayed. Accordingly, OSML had
deposited Rs.38.76 Lacs. OSML is regularly
depositing the administrative charges from the
date of notification.
155.05 Writ Petition No.CWJC
No.3829/2000 &
1048/2003
High Court, Patna
The matter is pending for hearing.
New Swadeshi Sugar Mills Vs. Union of India
OSML has challenged the levy sugar price
fixed for sugar season 1973-74 and the High
32.28 Civil Writ Petition No.
5047(W)/1974 and CAN
No. 2254/2002 at
High Court, Kolkata.
The matter is pending hearing.
Draft Letter of Offer
230
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
Court, by way of interim order has allowed
additional levy prices provided OSML
furnishes a bank guarantee. Accordingly
OSML has furnished a bank guarantee of Rs.
26.90 lacs towards additional levy price and the
same is in force.
Bihar Sugar Mills Association and Others Vs.
State of Bihar and Other
The Association (The Company being one of
the party) filed a writ petition challenging the
demand of electricity duty chargeable @6% on
the value of energy as per notification no.
So137 dated 21.10.2002, for captive
consumption out of own generation. During the
pendency of the petition the Bihar Government
through Notification dated04.03.2005 has
amended the earlier Notification and imposed
electricity duty @ 6% of the value of energy
which shall be equivalent to the energy tariff as
fixed by Bihar State Electricity Board. The said
Notification was also challenged by the Bihar
Sugar Mills Associations, in which the
company is one of the party. There is no further
demand made by the authorities till date.
Amount
unascerta
inable
CWJC No. 4613 of 2003
& CWJC No. 13614 of
2006
Petition has been admitted. Pending
hearing.
The Department of Excise has directed OSML
to deposit a security amount against distillery
licence. OSML has challenged the said demand
by filing a writ petition. The petition has been
admitted and stay has been granted.
10.00 CWJC No. 12024 of
1996, High Court, Patna
Pending for hearing.
ROSA SUGAR WORKS
Brief Particulars
(Name of parties)
Claim
Amount
(Rs.)
Court/Forum
And Case No.
Current Status
OSML (Rosa Sugar Works)
Vs.
Mukesh Dixit & Ram Prakash Dixit
In the year 2001, OSML filed the present case
to restrain nuisance caused by the unauthorized
entry of the Defendants in area- Bunglow No.
5. The stay application has been allowed.
N.A. Case No. 26/2001 Civil
Judge Senior Division
Shahjahanpur
The case is fixed for statement.
Ram Prakash Dixit
Vs.
OSML (Rosa Sugar Works)
The plaintiff has prayed for a stay in the
construction carried out by OSML on plot no.
504 (area 0.174 hectare) and plot no. 506 (area
0.231 hectare)
N.A. Case No. 492/2004
Civil Judge Senior
Division Shahjahanpur
The case is fixed for statement.
Draft Letter of Offer
231
Brief Particulars
(Name of parties)
Claim
Amount
(Rs.)
Court/Forum
And Case No.
Current Status
Rashid Husain
Vs.
OSML (Rosa Sugar Works)
Matter relates to recovery of amount paid as
advance for cane transportation, as he has not
performed transportation work.
0.28 Case No. 483/2000
Addl.Civil Judge Senior
Division Shahjahanpur
Pending for statement.
ALLAHABAD CANNING COMPANY
Brief Particulars ( Name of Parties)
Claim Amount
(Rs. in
lacs)
Court/Forum With Case No.
Current Status
OSML (Allahabad Canning Company) Vs. Reil
Products Ltd., New Delhi
Pursuant to a dispute relating to non payment
of outstanding dues arising out of a supply
agreement entered into by OSML with Reil
Products Ltd. OSML served the defendant a
legal notice for winding up under Section
433/434 of the Companies Act, 1956.
35.40 CA1459/98 in CP No.
156/98
Hon’ble High Court New
Delhi,
Pending for hearing.
OSML (Allahabad Canning Company) Vs.
Regional Provident Fund Commissioner
The Company has challenged the show cause
notice issued by the Regional Provident Fund
Commissioner for levy of damages u/s. 14B of
the Provident Fund Act regarding contribution
to Provident Fund payable for the period April,
1972 to June, 1984.
0.60
Writ Petition No.
45/190/92 High Court
Allahabad,
Pending for hearing.
OSML (Allahabad Canning Company) Vs.
Regional Director, Employee State Insurance
Corporation (ESIC)
This is a suit filed by the Company challenging
the notice issued under Section 45© by
Regional Director, Employee State Insurance
Corporation for non-contribution on wages
paid for building repairs during February, 1989
to March, 1989.
0.09 Civil Judge Allahabad
Civil Case No. 4/93
Re-application to the additional plea to be
filed.
OSML (Allahabad Canning Company) Vs.
State of U. P. and Bamrauli Canning Co.
Mazdoor Union.
The Company has challenged Notifications
issued by the U. P. Government in 1984, 1990
& 1996 relating to connection with payment of
minimum wages to workers. Latest notification
for the year 1997 has been stayed by the Court
on 22.05.1997
Amount
unascerta
inable.
Writ Petition No.
17701/1997. High Court
Allahabad
Pending hearing
Draft Letter of Offer
232
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
OSML (Allahabad Canning Company) Vs The
Chief Director of Purchase, Army Purchase
Organisation, Ministry of Defence
The Company had filed this suit bearing
C.M.P.no. 88/2006 for recovery of dues
towards the supply made to the Defendants by
the Company. The said claim was rejected by
the Allahabad High Court on 12.10.2007. The
Company is proprosing to file SLP before the
Supreme Court
5.31 SLP to be filed.
OSML (Allahabad Canning Company) Vs The
Regional Director, ESIC, Kanpur
The Company has challenged the alleged
demand of ESIC contribution or Rs 4.46 lacs
issued by the ESIC Officer Kanpur before the
High Court Allahbad. The Single Judge bench
of High Court By its order dated 15.4.98 had
dismissed the Companies Plea. The Company
has now chanlleged the said Order of the Single
Judge vide Special Appeal No. 472 of 1998
before the Division Bench of the High Court
Allahabad.
In the mean time the department by its letter
dated 4.10.02 had demanded the said amount.
The Company has already deposited the said
amount pursuant to the said demand.
4.46
Amount
deposited
High Court Allahabad,
Special Appeal no 472 of
1998
Pending Hearing
B. CASES FILED AGAINST THE COMPANY (OSML)
I. Civil Cases
Brief Particulars and contentions Claim
amount
(Rs. In Lacs)
Court/Forum Current Status
Vineet Kumar Mathur
Vs.
Union of India
The Petitioner along with other social workers
had filed a Public Interest Litigation before the
Allahbad High Court, (Lucknow Bench), which
was subsequently transferred to the Supreme
Court of India. OSML is one of the several
Respondents in the petition. The petition has been
filed in connection with the provisions of the
Environment Protection Act, 1986 with regard to
alleged pollution of river Gomti near Lucknow.
The Court directed certain respondents to set up
Effluent Treatment Plants (ETP) in their factory
premises. OSML had already established an ETP
in its Hargaon factory. OSML has filed a Reply to
the said Writ Petition. Till date, no adverse
N.A. Writ Petition No.
327/1990
Supreme Court of India
Pending for hearing.
Draft Letter of Offer
233
Brief Particulars and contentions Claim
amount
(Rs. In
Lacs)
Court/Forum Current Status
direction or order has been passed against OSML.
Union of India vs The Oudh Sugar Mills Limited
OSML was served with a Demand Notice dated
26.07.2004 by North Eastern Railway, Lucknow
in connection with arrears of siding charges
allegedly payable to the Railway Authorities for
the years 1984 to 2004. OSML had responded to
the said notice and has filed the present suit
disputing the said demand. The Suit was decreed
in favour of the Company. The Union of India has
now preferred an appeal before the High Court.
30.00 C.S. No. 643/2004 Civil
Judge
Sr.Div.Sitapurdecided on
29.04.06 in favour of
company, opposite party
file Appeal before High
Court,
WP.no.151/06
Pending before High Court
M. C. Mehta Vs. Union of India
The petitioner has prayed for the prevention of
degradation of the quality of water of river
Ganga. OSML is one of the several respondents
to the petition. OSML has filed its Reply. Till
date, no adverse direction or order has been
passed against OSML.
N.A. Writ Petition No.
3727/1985
Supreme Court of India
Pending for hearing
Shri Pankaj Kumar Nevatia
V/s.
28 Others
OSML is only a formal party.
The case relates to a family dispute regarding the
ownership of shares of OSML. The number of
shares involved are 3300 bearing distinctive nos.
06022441-06025740.
As per the directions of the Court the OSML has
noted “Stop Transfer” against the subject shares.
Nil Madras High Court
(Civil Appellate
Jurisdiction)
C.M.P. Nos. 12298
and 2851 of 2002
in O.S.A. No. 239
of 2001
Pending hearing
Shri Devendra Bangur
V/s.
The Oudh Sugar Mills Limited and Subhash Jain
The matter is regarding non-receipt of 300 shares
sent by the Plaintiff to OSML on 9th
September,
1997 and the same were transferred in the name
of Shri Subhash Jain on 2nd
February, 1998.
OSML further received transfer deeds duly
executed by Shri. Subhash Jain as transferor in
favour of various transferees in respect of the
subject shares and the same were transferred in
favour of the said parties and are now in
dematerialised form. The suit was initiated by the
Plaintiff for declaration of permanent injunction
and to stop transfer or deal with the subject shares
bearing distinctive nos. 06105161-460 and
benefits arising therefrom.
Nil Calcutta City Civil
Court, Title Suit
No. 1934 of 1999.
Company has filed written statement.
Amit Kumar Vs The Oudh Sugar Mills Ltd.,
Mr Amit Kumar, the Plaintiff has filed a suti
claiming outstanding dues in connection with
transportation work carried out by him in the
Company. OSML has filled a counter claim
against the plaintiff for Rs. 0.33 lacs.
0.07 C.S.No.265/99
beforeAddl.Civil Judge,
Sitapur and counter case
no.273/99 Civil Judge
Sr.Div.Sitapur
Pending for arguments.
Gayatri Devi Vs The Oudh Sugar Mills Ltd.
N.A. C.S.No.699/04 Civil
Judge Sr.Div.Sitapur
Pending for framing issues.
Draft Letter of Offer
234
Brief Particulars and contentions Claim
amount
(Rs. In
Lacs)
Court/Forum Current Status
The suit has been filed by Gayatri Devi, the
Plaintiff, to restrain OSML from discharging
waste water from the factory outlets into the land
of the Plaintiff. OSML has contested the
plaintiff’s allegation and has filed written
statement in this regard. OSML is in the process
of out of settlement.
Wilayat Ahmed Vs The Oudh Sugar Mills Ltd.
The case relates to a dispute pertaining to the use
of a Chuck-Road. The parties are in the process of
reaching a mutual amicable settlement.
Not
ascertai
nable
C.S.No.592/2000 before
Civil Judge Jr.Div.,
Sitapur
M.C.S.No.28/2005 before
Civil Judge Jr.Div.,
Sitapur
Both the cases are pending for hearing
Bitti Devi W/O Late Barister Singh Vs The Oudh
Sugar Mills Ltd.
The case relates to compensation claimed for the
death of the petitioner’s husband during service
with the Company.
Not
ascertai
nable
Case no. W.C.No.28/2002
before D.L.C.Lucknow
Pending for evidence.
OSM Vs State
Case filed by the Company related to Land at
Distellary at Hargaon for injunction
Not
ascertai
nable
Case no. 489/06
C.J.(S.D.) Sitapur
Matter Pending before court
OSM Vs Gram Sabha, Saidipur Khurd
Case filed by the Company for declaration of land
for use in industrial purpose.
Not
ascertai
nable
Case no. 213
S.D.M. Lakhimpur
Pending for arguments.
Ram Kumar & Others Vs The Oudh Sugar Mills
Ltd.
Mr Ram Kumar, the plaintiff, has prayed for an
injunction order restraining the Company from
evicting him from the factory’s land occupied and
used by him. The Company has filed a counter
case against the plaintiff on the ground that the
land belongs to the Company.
Not
ascertai
nable
Case No.C.S.No.35/95
before Civil Judge,
Sitapur. Counter case
filled by Company -
C.A.No.34/2000 before
ADJ (VIII) Sitapur.
Both the cases are pending for arguments.
Draft Letter of Offer
235
Rosa Sugar Works
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in lacs)
Court/Forum
With Case No.
Current Status
Saf Yeast Co. Ltd.
Vs.
OSML (Rosa Sugar Works)
Saf Yeast Co. Ltd, the plaintiff, has
disputed the quality of molasses
delivered to him by the Defendant
Company. Thereafter, the Company
filed a counter claim against the
Plaintiff for claiming an additional
amount of Rs.2.53 lacs for the loss
incurred by the Company due to non
lifting of 6218.70 qtls of Molasses
which was sold at Rs. 95 per qtl. to
another party as against the contract
price Rs. 184 per qtl to M/s. Saf Yeast,
i.e. loss of Rs. 5.53 lacs against which
the Company had adjusted Rs. 3.01
lacs
3.01 Civil Judge Sr.
Division,
Hardoi
Civil Juged (Jr.
Division),
Shahjahanpur
Case No.
87/2002
Pending for filing of Written
Statement by the Company.
Government of Uttar Pradesh
Vs
OSML (Rosa Sugar Works)
This case is connected with land
situated in Chaudera village on which
we have constructed a sugar godown.
The land has been exchanged with the
Gram Samaj under an agreement and a
confirmation from the Court in this
regard, is awaited.
7.76 Tehsildar
Judicial,
Shahjahanpur
Case fixed for Statement
Gram Samaj
Vs.
OSML (Rosa Sugar Works)
This case is connected with land in
Rausar village located near bungalow
No. 5 and 6.
11.44 District
Magistrate
Court,
Shahjahanpur
against the order
dated 24.8.06
passed by Upper
Tehsildar
(Judicial)
against the
Company.
The case is fixed for hearing.
Smt. Som Lata W/o Ashok Kumar
Singh & others
Vs.
OSML (Rosa Sugar Works)
The case has been filed for claiming
compensation from OSML in relation
to the death of her husband, a
workman of OSML. The case was
decided in favour of OSML. The
opponent has preferred an appeal
before the High Court.
1.92 High Court of
Uttaranchal,
Nainital Appeal
(Appeal No.
46/2004)
Pending for hearing.
Draft Letter of Offer
236
Brief Particulars
( Name of Parties)
Claim
Amount
(Rs. in
lacs)
Court/Forum
With Case No.
Current Status
Union Of India Vs OSML( Rosa Sugar
works)
Union of India has challenged the
order dated 21.11.06 passed by
CESTAT, Delhi wherein the CESTAT
had allowed the appeals filed by the
Company in the matter of show cause
notice no.
V(30)Tech/Rem/154/2003/3855 dated
05.07.2004 from Commissioner,
Lucknow regarding duty on molasses
lost during storage.
2.08 WP.no.
F.A.F.O.666/20
07
Pending before High Court
Smt. Mahima Devi and others Vs.
OSML( Rosa Sugar works)
The Petitioners, being villagers of the
Daniyapur village, Shahjahanpur
challenged the land exchange order no.
8/97/1/97 dated 09.09.1997 of the
SDM Sadar, Shahjahanpur regarding
exchange of plot no. 51 of OSML with
plot no. 39 of Gram Samaj, Chaudera,
District Shahjahanpur
N.A. Case No.
8/97/1/98
Court of SDM
sadar
Shahjahanpur
The case is fixed for hearing
Smt. Mahima Devi and others Vs.
OSML( Rosa Sugar works)
The petitioners, being villagers of
village Daniyapur, Shahjahanpur filed
a case praying for restraining OSML
from growing plantations behind the
factory wall of the Company.
N.A. Case No.
293/2004
Civil Judge
(Junior
Division)
Shahjahanpur
The stay application is pending
hearing.
Gram Samaj Vs OSML( Rosa Sugar
works)
Matter relates to Cane Purchase centre
installed on Gram Sabha Land
0.80 Case no. 2/2006
dated
13.10.2006 in
the court of
Tehsildar Sadar,
Shahjahanpur
Notice u/s 122B of Jamidari (
Abolition & Regulation)Act
Sh.Raja Ram Vs OSML( Rosa Sugar
works)
Matter relates to alleged dues against
supply of cane.
0.30 Case no.
204/2005 dated
19.04.2005 in
the court of
Civil Judge,
Sr.Div.,
Shahjahanpur
Pending for argument
Mangoo Lal Vs OSML( Rosa Sugar
works)
Matter relates to alleged dues against
supply of cane.
0.15 Case no.
162/2005 in the
court of Civil
Judge, Jr.Div.,
Shahjahanpur
Pending for argument
Jamir Hasan Vs OSML( Rosa Sugar
works)
Matter relates to alleged dues against
supply of cane.
0.09 Case no.
13/2006 in the
court of Sub
Divisional
Magistrate,
Sadar,
Shahjahanpur
Pending for argument
Draft Letter of Offer
237
HATA UNIT
Brief Particulars
(Name of parties)
Claim
Amoun
t (Rs. in
lacs)
Court/Forum
And Case No.
Current Status
Anil Kumar S/O Mohan Prahlad Vs
OSML(Hata)
The Company by Registered deed dated
22.12.2006, registered with the Sub-Registrar of
Assurances, Hata Tehsil bearing no. 5028 &
5029 of 2006 purchase land admeasuring 1.841
Hectare from Smt. Dhaneshwari Devi , the
mother of Plantiff. It is case of the plantiff that
smt. Dhaneshwari Devi who though according
to the mutation entry in the Revenue records is
the sole owner of the said land, she does not
have the right to sell the said land. The company
has filed its reply challenging the same.
16.54 Cane no. 237/2007 &case
no. 80/2007 before Civil
Judge, Jr.Div.Kushinagar
.
Pending before court.
II. INCOME TAX CASES
Brief Particulars and contentions Claim
amount
(Rs. In
Lakhs)
Court/Forum/Cas
e number
Current Status
Income Tax related -
CIT, WBIV, Kolkata Vs. The Oudh Sugar Mills
Ltd.
For assessment years 1993-94, 1994-95 and 1995-
96 -
OSML was valuing closing stock of the sugar at
cost or market whichever is lower. In working out
the cost OSML was not adding depreciation as an
element of cost. The Income-tax Department took
a view that depreciation should also be taken as
part of the cost sheet. On appeal the Income-tax
Appellate Tribunal, Kolkata Bench has held that
depreciation should not be taken as part of the
cost as the assessee has been following a
consistent and regular method of valuation.
Not
ascertai
nable
Kolkata High Court
I.T.A No.
266/2002
The Income-tax Department has filed
several applications under Section 260A
of Income-tax Act. In all the applications
the High Court has yet to decide under
Section 260A of Income-tax Act.
The application filed by Central
Government for condonation of delay in
filing the Reference was granted by the
High Court. No further proceedings have
been served on OSML.
CIT, WB-I, Kolkata Vs. The Oudh Sugar Mills
Ltd. -
For assessment years 1993-94, 1994-95 and 1995-
96 –
OSML was valuing the closing stock of sugar at
cost or market whichever is lower. In the closing
stock which was not cleared from the factory, the
excise duty payable was neither debited to Profit
& Loss Account nor included in the valuation of
closing stock sugar. The Income-tax Department
took a view that the closing stock of sugar should
Not
ascertai
nable
Kolkata High Court
I.T.A. No. 267/2002
The Income-tax Department has filed
applications under Section 260A of
Income-tax Act and the same are pending
for admission in the High Court. The
High Court has yet to decide whether
there is a substantial question of law
involved in the applications filed by
Income-tax Department. The application
by Central Government for condonation
of delay in filing the Reference was
granted by the High Court. No further
proceedings have been served on OSML.
Draft Letter of Offer
238
Brief Particulars and contentions Claim
amount
(Rs. In
Lakhs)
Court/Forum/Cas
e number
Current Status
be valued taking the excise duty as part of the
stock valuation.
III. CASES FILED UNDER LABOUR LAWS
HARGAON SUGAR & DISTILLERY UNITS
Brief Particulars
( Name of Parties)
Claim
Amoun
t
(Rs. In
lacs)
Court/Forum
With Case No.
Current Status
State Trading Corporation of India Vs. The
Oudh Sugar Mills Ltd.
Pursuant to a dispute arising out of contract
entered into by OSML with State Trading
Corporation (STC), in connection with loss
incurred by OSML for non-lifting of sugar, an
arbitration award was passed in favour of
OSML. Thereafter, the STC filed an appeal with
the Delhi High Court. As directed by the High
Court Plaintiff deposited Rs. 25.14 lacs. OSML
has been permitted to withdraw the said amount
by furnishing a bank guarantee of an equivalent
amount. Accordingly, OSML has withdrawn the
said amount by furnishing the required bank
guarantee.
25.14 FAO (OS) 53/86 at the
High Court, Delhi
Pending for hearing.
NARKATIAGANJ SUGAR & DISTILLERY UNITS
Brief Particulars and contentions Claim
amount
(Rs. in
Lakhs)
Court/Forum/Cas
e number
Current Status
Deputy Labour Commissioner Vs. New Swadeshi
Sugar Mills, Narkatiaganj (OSML)
The Labour Union has raised certain demands
relating to workman status in the factory.
Amount
not
ascertai
nable
Case No. 2/99
Labour Court,
Motihari
Case pending for Final hearing.
Madan Kishor Srivastava Vs. New Swadeshi
Sugar Mills, ( Distillery Division)
Narkatiaganj (OSML)
Workman dismissal case.
Amount
not
ascertai
nable
Case No. 1/2006
Labour Court,
Motihari
Case pending for hearing.
There are 8 labour related cases pending against OSML with the following authorities - Labour Commissioner,
Lucknow, Industrial Tribunal, Lucknow, District Magistrate, Sitapur, filed during the period 2001 to 2004
where the amount is not ascertainable.
Draft Letter of Offer
239
IV CASES FILED UNDER CRIMINAL LAWS
Brief Particulars
( Name of Parties)
Claim
Amoun
t (Rs.)
Court/Forum
With Case No.
Current Status
State Vs P.K. Lakhotia & Others
Effluent discharge from the factory of OSML
entered the land of one Mr. Wilayat Ahmed who
filed a First Information Report against the
respondent, an employee of OSML. The
Department of Police carried out investigation in
this regard and thereafter submitted a final
Report to the Court.
Not
ascertai
nable
M.C.S.No.957/2004
before Chief Judicial
Magistrate Sitapur.
Final Report is pending acceptance by
Court.
State Vs P.N. Singh & Others
The case has been filed in connection with the
death of Shri Mahinder an employee of OSML
at the Bio Compost Plant situated at Hargaon.
The Police carried out investigation in this
regard and thereafter submitted a final Report to
the Court.
In the similar matter before Dy. Labour
Commissioner, Lucknow, another case no. WC
203/04 was filed for compensation, the same is
finalised by court Rs. 1.60 lacs, OSML has
deposited the same with appropriate authority on
23.07.07
Not
ascertai
nable
M.C.S.No.948/2004
before Chief Judicial
Magistrate Sitapur.
Pending for final hearing.
State Vs Manager OSM
The case has been filed against the company
under section 133 of Cr. P C. with regards to the
pollution imitated from the distillery unit of the
company at Hargaon.
Not
ascertai
nable
Case No.4/2006 before
Sub Divisional
Magistrate, Sitapur.
Pending for evidence.
Allahabad Canning Unit
State through Food Inspector, Jallandhar Vs The
Oudh Sugar Mills Limited (Allahabad Canning
Works) and the Directors of the Company
Matter relates to complaint u/s 7/16 of the
Prevention of Food Adultration Act, 1954 and
Rules 32 and 50 thereof( Against Directors also)
Not
ascertai
nable
Criminal case no.
304/7/2002 in court of
Addl.Chief Jud. Mag.,
Jallandhar
Pending for hearing
Draft Letter of Offer
240
V. CASES RELATING TO SALES TAX DEMANDS
Particulars
Amount
(Rs. in
lacs)
Deman
ded
Court/Forum With Case No.
Current Status
Under the U. P. Sales tax laws, for Assessment
year 2000-2001, the Assessing Officer imposed
tax on the purchases from unregistered parties.
OSML filed an appeal before the Deputy
Commissioner (Appeals) Sitapur, which was
decided in favour of OSML. Thereafter, Sales
tax department filed an appeal contesting the
aforesaid order before the Tribunal.
1.18 Appellate Tribunal,
Lucknow
OSML has deposited an amount of Rs.
110887.00. Appeal is pending for
hearing.
Interest & penalty imposed by the Assessing
Officer on late deposit of Entry Tax on sale of
sugar during the year 2000-2001.The Appellate
Authority and Tribunal upheld the order. OSML
has now filed an appeal before the High Court,
Lucknow Bench
6.73 Allahabad High Court ,
Lucknow Bench
OSML has deposited an amount of Rs.
323062.00 Appeal is pending for hearing.
Entry Tax imposed by Assessing officer on inter
State sale of sugar during the year 2000-2001 by
treating the same as sale within the State of U.P.
OSML filed an appeal with the Dy.
Com.(Appeal) Sitapur. The case has been
remanded back to Assessing Officer for re-
examination. The Assessing Officer and Jt.
Commissioner (Appeal),Sitapur maintained
their earlier order. Thereafter, OSML filed
Appeal before Tribunal, Lucknow.
0.63 Tribunal, Lucknow. OSML has deposited an amount of Rs.
43,762.00. Appeal is pending for hearing.
Entry Tax imposed by Assessing officer on inter
State sale of sugar during the year 2001-2002 by
treating the same as sale within the State of U.P.
OSML filed an appeal with the Dy.
Com.(Appeal) Sitapur. The case has been
remanded back to Assessing Officer for re-
examination. The Assessing Officer and Jt.
Commissioner (Appeal),Sitapur maintained
their earlier order. Thereafter, OSML filed
Appeal before Tribunal, Lucknow.
1.03 Tribunal, Lucknow. OSML has deposited an amount of Rs.
72,336.00. Appeal is pending for hearing.
Entry Tax imposed by Assessing officer on inter
State sale of sugar during the year 2005-2006 by
treating the same as sale within the State of U.P.
OSML filed an appeal with the Dy.
Com.(Appeal) Sitapur.
1.10 Dy.Comm.(A) Sitapur OSML has deposited an amount of Rs.
44,000.00. Appeal is pending for hearing.
Draft Letter of Offer
241
Particulars
Amoun
t
(Rs. in
lacs)
Demanded
Court/Forum With Case
No.
Current Status
The Central Sales tax authorities imposed tax on
sale of alcohol out of the State of U.P. OSML
has challenged the applicability of such
imposition.
Assessment Amount Amount
Year Demanded Deposited
(Rs.) (Rs.)
1977-78 31509.00 50400.00
1978-79 39920.29 27200.00
1979-80 125068.00 35100.00
1980-81 231376.00 13675.75
1981-82 29333.00 500.00
Total 457206.29 126875.75
4.57
Allahabad High Court,
Lucknow Bench
OSML has deposited an amount of Rs.
126875.75. Petition is still pending for
hearing.
• The above table reflects consolidated amounts pertaining to both, Hargaon unit as well as Rosa unit.
Narkatiaganj Sugar & Distillery units
Nature of Government demand and particulars in
brief
Amount under dispute
(Rs. in lacs)
Current status
(a) Bihar Sales Tax
Sales tax was imposed on the supply of spirit to
country spirit ware - houses. The Company has
contested such imposition on the grounds of the
applicability of the rate of sales tax.
For the year 1984-85 6.88 OSML has deposited an amount of Rs.
687813.59 with the authorities. Appeal
No. MZ/123/99 is pending with
Commercial Taxes Tribunal, Patna, Bihar.
For the year 1985-86 4.42 OSML has deposited an amount of Rs.
140000.00 with the authorities. Appeal.
CWJC No. 3476 of 1996 is pending at
Hon’ble High Court, Patna.
For the year 1986-87 0.91 OSML has deposited an amount of Rs.
70000.00 with the authorities. Appeal
CWJC No. 3479 of 1996 is pending at
Hon’ble High Court, Patna.
For the year 1987-88 5.48 OSML has deposited an amount of Rs.
145000 with the authorities. Appeal
CWJC No. 3530 of 1996 is pending at
Hon’ble High Court, Patna.
For the year 1988-89 10.92 OSML has deposited an amount of Rs.
100000 with the authorities. Appeal
CWJC No. 3529 of 1996 is pending at
Hon’ble High Court, Patna.
For the year 1989-90 6.38 OSML has deposited an amount of Rs.
443854.47 with the authorities. The Case
has been remanded back to the Assistant
Commissioner, Commercial Taxes,
Bettiah and the same is pending.
Draft Letter of Offer
242
Nature of Government demand and particulars in
brief
Amount under dispute
(Rs. in lacs)
Current status
Non-submission of declaration form to be submitted
by Indian Drugs and Pharmaceutical Ltd. (IDPL) for
spirit supply at a concessional rate to IDPL,
Muzaffarpur. Non submitance was due to the winding
up of IDPL.
For the year 1995-96 28.93 OSML has deposited an amount of Rs.
2473970.00 with the authorities. Appeal
No. MZ4666/2006 is pending with
Commercial Taxes Tribunal,Bihar,Patna.
Sales Tax on sale of denatured spirit against
declaration forms at concessional rate of 2%
disallowed.
For the year 1997-98 11.75 OSML has deposited an amount of Rs.
1174784.00 with the authorities. Appeal
CN MZ/38/2004 is pending with
Commercial Taxes Tribunal, Patna, Bihar.
For the year 1998-99 2.82 OSML has deposited an amount of Rs.
282238.00 with the authorities. Appeal
CN MZ/39/2004 is pending with
Commercial Taxes Tribunal, Patna, Bihar.
For the year 2000-01 2.35 OSML has deposited an amount of Rs.
117380.00 with the authorities. Appeal
No. ST/BT-10/05-06 is pending with Joint
Commissioner (A), Commercial Taxes,
Muzaffarpur.
[b] Central Sales Tax
Non-submission of declaration forms for spirit supply.
For the year 1984-85 0.28 OSML has deposited an amount of Rs.
28107.29 with the authorities. Appeal
Case No. CST54/1991 with Joint
Commissioner, Commercial Taxes,
Appeals, Muzaffarpur has been remanded.
It is pending for hearing in the Court of
Assistant Commissioner, Commercial
Taxes, Bettiah.
2.34 OSML has deposited an amount of Rs.
157585.00 with the authorities. Appeal
Case No. CST11/1995-96 with Joint
Commissioner, Commercial Taxes,
Appeals, Muzaffarpur has been remanded.
It is pending for hearing in the Court of
Assistant Commissioner, Commercial
Taxes, Bettiah.
Matter relates to taxability on account of non-receipt of
Sales Tax declaration form , liability arrises for
differential sales tax amount.
2.75 Case no. C.W.J.C.No. 1670/ 2006 pending
before High Court, Patna.
ALLAHABAD CANNING
There are 9 cases of Central Sales Tax amounting to Rs 12.54 lacs and 2 cases under the Uttar Pradesh Trade
Tax amounting to Rs 0.14 lacs against the demand of alleged Sales tax which pending before the Salex Tax
Authorites.
Draft Letter of Offer
243
HATTA UNIT
The Assistant Commissioner Trade Tax has imposed penalty of Rs 1.21. lacs on the material received by the
Company from Bihar. The Company has deposited the said amount for taking delivery of material and filed an
refund application
VI. CASES RELATING TO EXCISE, CUSTOMS AND SERVICES LAWS
Particulars
Amount (Rs. in lacs)
Demanded
Court/Forum With Case No.
Current Status
OSML received a Show Cause Notice No.
Nil dated 05.05.1989 vide letter No.
27/DEM/MOL/89/669 regarding the Central
Excise duty on 112054.00 quintals of
molasses stored in pits, which was
deteorated during storage and unfit for
distillation.
14.12 An Order in Original
No. 77/92 dated
18.09.1992 was
passed by A.C.Sitapur
upholding the
demand. Case
remanded back to
A.C.Sitapur in Appeal
No. 2-CE/93 under
Case No.
132/APPL/KNP/92/48
dated 20.01.1993
passed by
Commissioner(A).
Pending before Assistant Commissioner,
Sitapur: order is awaited.
OSML received a Show Cause Notice No.
Nil dated 15.12.1992 vide letter no.
VI(30)78/92/4150-52 regarding the central
excise duty on 100667.65 quintals of
molasses in pits which was detoriated
during storage and unfit for distillation. An
Order in Original No. 32/92 dated
02.07.1993 was passed by A.C.Sitapur
upholding the demand and the same was
remanded back to A.C.Sitapur in No.
899/94NR passed by Comm (A), Lucknow.
17.37 Assistant
Commissioner,
Sitapur
Pending for Orders
OSML received a Show Cause Notice No.
Nil dated 08.04.1980 vide letter No.
3b/gl/79/441 against rebate of Duty as per
incentive policy announced by Central
Govt.for the year 1977-78. An Order in
Original No. 67/92 dated 26.08.1992 was
passed by A.C.Sitapur upholding the
demand and the same was confirmed in
Appeal order no.E/953/93-D passed by
Commissioner(A),Lucknow. Further writ
petition filed before High Court, Lucknow
bench and stay was granted.
1.66 W.P.No. 1023/99 Matter pending before High Court,
Lucknow bench.
OSML received a Show Cause Notice No.
Nil dated 25.10.1980 vide letter No. 6-
GL/Misc/80/1412 regarding duty on
reprocessing loss of sugar during 77-78. An
Order in Original No. Jun-80 dated
27.08.1982 was passed by A.C.Sitapur
upholding the demand.
0.05 Commissioner
(Appeal)
Appeal dated 25/11/82 still pending.
Draft Letter of Offer
244
Particulars
Amount
(Rs. in lacs)
Demanded
Court/Forum With
Case No.
Current Status
OSML received a Show Cause Notice No.
10/LMP/2000 dated 12.06.2000 vide letter
No 1-HAR/2000/425 regarding excise duty
on loss of undenatured ethyl alcohol during
storage. The Company has challenged the
order passed by the Commissioner (A),
Lucknow before the CESTAT, New Delhi
0.23
The aforesaid
amount
includes a
penalty of 0.02
Appeal of OSML no.
E5343/06 dated
20.09.06. CESTAT
Appeal Pending
OSML received a Show Cause Notice No.
EP/5136 dated 05.04.1991 against our
application for remission of central excise
duty on 76355.25 quintals of molasses, not
fit for consumption. An Order in Original
No. 09/Lko/02 dated 03.10.2002 was passed
by A.C.Sitapur upholding the demand and
the same was confirmed in Appeal No.
05/Lko/04 dated 31.08.04 passed. F.No.
982/2003-B dated 19.11.2003 passed by
Commissioner(A),Lucknow.
15.27 Appeal (Appeal No.
E/5690/04) filed
before CESTAT
Appeal pending.
OSML received a Show Cause Notice No.
36/STP/04 dated 27.04.04 vide letter No.
V(30)/79/2004/1999 regarding MODVAT
credit taken by the Company on M.S.Plate,
Angles, bars & rods and electrodes etc.
Matter decided against the Company
confirming demand of Rs. 2.92 Lacs,
penalty set aside by Commissioner (A),
Appeal filed before CESTAT.
2.92
CESTAT Appeal No.
E/10/06
Pening before CESTAT.
OSML received a Show Cause Notice No.
75/STP/04 dated 13.07.2004 vide letter No.
V(30)/83/2004/3060 regarding MODVAT
credit taken by OSML on Welding
Electrodes decided aginst the company,
penalty set aside by CESTAT, appeal filed
before High Cort.
1.41
O-I-O no. 443-CE/05,
order no. 375/06-SM
dated 28.02.06 from
CESTAT. W.P.
No. 4867/06 (Misc.)
Pending before High Court.
OSML received Show Cause Notice No.
110/STP/04 dated 21.12.2004 vide letter
No. V(30)/117/2004/4844 regarding
CENVAT credit taken by the Company on
HREC & GP Sheet and Plates, decided
against the company by Commissioner(A),
penalty set aside.Appeal filed before
CESTAT.
1.39
Appeal no E/2006/06 Appeal pending before CESTAT, Stay
order no. 753 dated 20.07.06 passed by
CESTAT.
OSML received Show Cause Notice No.
111/STP/04 dated 21.12.2004 vide letter
No. V(30)/117/2004/4842 regarding
CENVAT credit taken by the Company on
Welding Electrodes disallowed by
AC(STP), upheld by Commissioner(A) and
CESTAT, Appeal filed before High Court.
1.76
WP no. 5300/06 Pending before High Court.
Draft Letter of Offer
245
Particulars
Amount
(Rs. in lacs)
Demanded
Court/Forum With
Case No.
Current Status
OSML received Show Cause Notice No.
76/STP/04 dated 23.07.04 vide letter No.
V(30)/81/04/3155 regarding CENVAT
credit taken by the Company on
M.S.Plates,Angles,Bars & Rods, Joist &
H.R.Sheet, decided against the company by
AC(STP) and Commissioner(A). Appeal
filed before CESTAT
4.36
CESTAT, Appeal no
E/2007/ 06
Appeal pending before CESTAT, Stay
order no. 754 dated 20.07.06 passed by
CESTAT.
OSML received Show Cause Notice No.
86/STP/04 dated 20.09.04 vide letter No.
V(30)/92/04/3893 regarding CENVAT
credit taken by the Company on
Aluminium coil, M.S.Plates,Tor steel,Bars,
shape & section decided against the
company by AC(STP) and
Commissioner(A). Appeal filed before
CESTAT
4.68
CESTAT, Appeal no
E/2437/06
Appeal pending before CESTAT, Stay
application dismissed, restoration filed.
OSML received a show cause notice No.
09/STP/05 dated 24.02.05 vide letter No.
V(30)/129/04/786 regarding CENVAT
credit taken by the Company on Shape&
section M.S.Angle etc. decided against the
company by AC(STP) and
Commissioner(A).Appeal filed before
CESTAT
4.77
CESTAT. appeal no
E/167/06
Appeal pending before CESTAT, Stay
order no. 264-265/07 dated 23.02.07
passed by CESTAT
OSML received Show Cause Notice No.
16/STP/05 dated 29.03.05 vide letter No.
V(30)/145/04/1421 regarding CENVAT
credit taken by the Company on
M.S.Angle, channel,welding electrodes etc.
decided against the company by AC(STP)
and Commissioner(A).Appeal filed before
CESTAT
4.39
CESTAT, Appeal no
E/166/06
Appeal pending before CESTAT, Stay
order no. 264-265 dated 23.02.07 passed
by CESTAT, Rs. 1.50 lacs deposited as per
stay order.
OSML received Show Cause Notice No.
04/Addl Comm/LKO/03 dated 7.08.03 vide
letter No. V(30)/Adj/210/2000/10568-71
dated 7.8.03 regarding loss of sugar during
reprocess of brown sugar pertaining to the
season 1994-95 and 1996-07 total 11230
quitalas.
9.55 and
penalty of
9.55
Denovo Order-in-
Original No. 26/Add
Comm./LKO/2007
dated 24.09.07 passed
by the Additional
Commissioner
Lucknow. Appeal
filed before
Commissioner (A),
Lucknow under appeal
no. 181/07 dated
29.11.07
Appeal pending before Commissioner (A),
Lucknow
OSML received Show Cause Notice No.
02/Jt. Comm/LKO/05 dated 25.01.05 vide
letter No. V(30)/Adj/9/2005/977-979 dated
25.01.05 regarding loss of sugar during
reprocess of brown sugar pertaining to the
season 1997-98 to 2001-02 total 11581
quitalas.
9.85 and
penalty of
9.85
Denovo Order-in-
Original No. 27/Add
Comm./LKO/2007
dated 24.09.07 passed
by the Additional
Commissioner
Lucknow. Appeal
filed before
Commissioner (A),
Lucknow under appeal
no. 180/07 dated
29.11.07
Appeal pending before Commissioner (A),
Lucknow
Draft Letter of Offer
246
Particulars
Amount
(Rs. in lacs)
Demanded
Court/Forum With
Case No.
Current Status
OSML received show cause notice No.
12/Dem//06 dated 31.08.06 vide letter No.
V(30)24-Dem/06/2546 regarding CENVAT
credit taken by the Company on Welding
electrodes decided against the company by
AC(STP) , appeal filed before
Commissioner(A).
3.28
The aforesaid
amount
includes a
penality of Rs.
1.64 lakhs.
Appeal no 139/2007
filed before
Commissioner(A)
Appeal pending (A).
Narkatiaganj Sugar & Distillery units
Central Excise duty on alleged wrong
availment of MODVAT credit on use of
Molasses for production of Rectified Sprit.
Commissioner, Central Excise, Patna vide
order no. O-I-O no. 47/MP/Com/2005 dated
22.12.2005 confirmed the demand against
the company, Appeal filed before CESTAT.
101.12
The aforesaid
amount
includes a
penalty of Rs.
50.56 lakhs
Appeal no.
EDM/126/05
CESTAT, Kolkata.
Pending before CESTAT, Kolkata Stay
granted against recovery vide order no. S-
961/Kol/06 dated 7.7.06.
Rosa Sugar Works Unit
RSW received a Show Cause Notice
No.VI(30) 35 –Dem/64/2000/1258 dated
31.05.2001 regarding Cenvat Credit taken
on welding electrodes & spare parts. An
Order in Original No.
222/DC(S)/Stp/Dem/2001 dated 27.11.2001
passed by A.C.Sitapur upholding the
demand and the same was upheld by
Appellate Commissioner, Lucknow vide O-
I-A no. 261-CE/2004 dated 31.08.2004.
Company filed Appeal before CESTAT and
the same was rejected vide order no. 551/06
dated 04.04.2006. Company had filed
Appeal before High Court.
0.39 Company file Appeal
before High Court,
WP no. 4866/06
Pending before High Court.
RSW received a Show Cause Notice
No.VI(30)Rem/117/2003/6465 dated
07.10.2004 regarding storage loss on
molasses. Order in Original No.
07/com./Lko/Rem/2005 dated 16.03.2005
passed by Commissioner, Central Excise,
Lucknow aginst the company, appeal filed
before CESTAT.
0.08 Appeal no. E/2018/05
CESTAT
Pending before CESTAT.
RSW received a Show Cause Notice
regarding storage loss on molasses. Order in
Original No. 37-39/CE/2006 dated 31.03.06
passed by Commissioner, Central Excise,
Lucknow aginst the company,and the
Com(A) confirmed the demand , Company
filed appeal before CESTAT.
2.50 Appeal no.E/3498-
3500 CESTAT
Pending before CESTAT.
Draft Letter of Offer
247
RSW received a Show Cause Notice no.
V(15) 25-Sez./Adj./2005/2634 dated
08.07.2005 regarding seizure of molasses.
Order in Original No. 61-AC/STP/Dem/05
dated 07.12.05 passed by Commissioner,
Central Excise, Lucknow against the
company imposing Redemption fine of Rs.
1 lacs ,and the Com(A) confirmed the
demand vide order no.133CE/Lko/06 dated
30.08.06, Company filed appeal before
CESTAT.
0.50 Appeal no.161/07
CESTAT
Pending before CESTAT.
RSW received a Show Cause Notice
No.VI(30) 60 –Dem/05/2005/2269 dated
01.06.2005 regarding Cenvat Credit taken
on welding electrodes & iron material. An
Order in Original No.
71/AC/STP/Dem/2005 dated 29.12.2005
passed by A.C.Sitapur upholding the
demand and the same was upheld by
Appellate Commissioner, Lucknow vide O-
I-A no. 192-CE/2006 dated 26.12.2006.
Company filed Appeal before CESTAT,
stay application rejected, company
deposited Rs. 0.81 lacs Appeal pending
before CESTAT.
0.81 Appeal no.
E/566/2007
Pending before CESTAT.
RSW received a Show Cause Notice
No.VI(30) 66 –Dem/05/2001/3302 dated
07.11.02 regarding storage loss on
molasses. Order in Original No.
16/Com./Tech/Rem/Lko/2006 dated 29.9.06
passed by Commissioner, Central Excise,
Lucknow aginst the company,and the
Com(A) confirmed the demand , Company
filed appeal before CESTAT.
0.25 Appeal no. E/210/07
CESTAT
Pending before CESTAT.
RSW received a Show Cause Notice
No.VI(30) Tech/Rem/119/2003/
2348 dated 14.03.05 regarding storage loss
on molasses. Order in Original No.
15/Comm./Tech/Rem/Lko/2006 dated
29.09.2006passed by Commissioner,
Central Excise, Lucknow aginst the
company,and the Com(A) confirmed the
demand , Company filed appeal before
CESTAT.
0.58 Stay application
rejected Appeal no.
E/211/07
Pending before CESTAT.
RSW received a SCN No. V(30)
107/Demand/Cenvet/2005/3122/dt 26.10.05
regarding cenvet credit availed by the
Company on the Wielding electrodes and
other spare parts. Asst Commissioner by
his Order in Original no. 09
AC/STP/Demand/2006 dated 29.09.06
confirmed the duty demanded in the SCN.
The Company filed Appeal before the
Commissioner Appeals Lucknow, wherein
the Commissioner Appeals by his Order in
Appeal No. 48 CE/LKO/07 dated
24.05.2007 confirmed the said order passed
by the Assistant Commissioner. The
Company has filed an appeal against the
Order in Appeal before the CESTAT Delhi
0.17 CESTAT Delhi,
Appeal no 2454/07.
Stay Application vide
order dated 15.10.07
decided by directing
Company to deposit
the said amount of Rs
0.17
Appeal Pending
Draft Letter of Offer
248
The Department has filed an Appeal bearing
No before the CESTAT, Delhi challenging
the Order in Appeal No 426/CE/2005 dated
31.08.2005 wherein the Commissioner
Appeals has allowed the Appeal filed by the
Company. The Company had taken modvat
credit of RS 97332 in place of Rs 22400 in
RG 23C Part II vide entry no. 620 dated
30.11.95 and reversed the excess amount of
Rs 74932 vide entry no. 98 dt 29.04.98
before the issuance of the Show cause
notice. The Department issued a Show
cause notice No. V(15)
0ff/no/Adj/Kc1116/99/10522 dt 04.11.2000.
The Company has filed its cross objection
to the said appeal.
0.99.
This includes
Rs 0.02
towards
Penalty
CESTAT New Delhi Appeal Pending
RSW had received a SCN NoV(30)/70
Demand /STP /2004 /70/dt 29.06.04
regarding loss of molasses stored by the
Company. Asst Commissioner by his Order
in Original no. 27 AC/STP/Demand/2006
dated 30.11.06 confirmed the duty
demanded in the SCN. The Company has
filed Appeal before the Commissioner
Appeals Lucknow
5.48
The aforesaid
amount
includes
penalty of Rs.
2.74 lacs.
Commissioner
Appeals Lucknow
Appeal Pending
MOTOR ACCIDENT CASES
There are 6 cases pending before the Motor Accidnet Cliams Tribunal, at Sitapur, U P, in which the Company is
one of the Respondents. The aggregate amount claimed is Rs 34 lacs.
SHOW CASUSE NOTICES RECEIVED BY THE COMPANY
The Company has received 38 show cause notices (20 to Rosa Sugar Works Unit & 18 to Hargaon Unit) from
the Central Excise Authories demanding a aggregate of Rs 175.32 lacs ( Rs 81.49 lacs + Rs 93.83 lacs)
disputing the Cenvat Credit availed by the Company and also raised demands. Company has duily responded to
the said show cause notices.
PENALTIES IMPOSED ON THE COMPANY
SEBI vide its letter dated 23.07.2004 made certain allegations against OSML under Regulations 6 & 8 of the
SEBI Takeover Code. On receipt of the aforesaid letter, we, vide letter dated 9.08.04 duly responded to SEBI,
clearly denying the said allegations and settling forth relevant facts and explanations in that regard. OSML
further requested SEBI to withdraw the allegations made. Though we believe that there is no violation of SEBI
(SAST) Regulations, there has been no formal communication received from SEBI in this regard. OSML has
however as a matter of abundant caution sent a reminder letter to SEBI on 09.03.2005. There is no further
correspondence exchanges between the Company and SEBI.
C. Cases against the Directors of the Company
Shri C. S. Nopany
Pursuant to an Amnesty Scheme introduced by the Government under the Income tax (I.T.) and Wealth tax
(W.T.) Acts for the assessment year 1986-87, a self assessment was made by our promoter Shri C.S.Nopnay
whereby two cheques were deposited and a token receipt against such deposit was attached to the applications
Draft Letter of Offer
249
which were duly submitted to the Income Tax / Wealth Tax Officer. However, the cheques were dishonoured by
the bank. The Income Tax Officer & Wealth Tax Officer thus filed criminal cases (under Section 420 of the
Indian Penal Code,1860 read with Section 35D of the Wealth Act and Section 277 of the Income Tax Act, 1961)
at the Court of Metropolitan Magistrate at Kolkata in 1989 in this regard. Subsequently, both the amounts
claimed (Rs. 53,500/- under the I.T. and Rs. 1,11,400/- under the W.T.), have been paid to the concerned
Authorities. Moreover, interest / penalties for both the claims have also been waived by the concerned
Authorities. The cases are now pending for final orders.
CASES PENDING UNDER THE CRIMINAL LAWS
Stae through Food Inspector, Jullandhar Vs
Allahabad Canning and the Directors of the
Company
Matter relates to complaint u/s 7/16 of the
Prevention of Food Adultration Act, 1954
and Rules 32 and 50 thereof
Not ascertainable Criminal case no.
304/7/02 in court of
Addl.Chief Jud.
Mag., Jallandhar
Pending for hearing
Shri S V Muzumdar
CASES PENDING UNDER THE CRIMINAL LAWS
State through Food Inspector, Jallandhar Vs
Allahabad Canning and the Directors of the
Company
Matter relates to complaint u/s 7/16 of the
Prevention of Food Adultration Act, 1954
and Rules 32 and 50 thereof
Not ascertainable Criminal case no.
304/7/2002 in court
of Addl.Chief Jud.
Mag., Jallandhar
Pending for hearing
SHRI ASHVIN C DALAL
CASES PENDING UNDER THE CRIMINAL LAWS
Stae through Food Inspector, Jallandhar Vs
Allahabad Canning and the Directors of the
Company
Matter relates to complaint u/s 7/16 of the
Prevention of Food Adultration Act, 1954
and Rules 32 and 50 thereof
Not ascertainable Criminal case no.
304/7/2002 in court
of Addl.Chief Jud.
Mag., Jallandhar
Pending for hearing
SHRI C B PATODIA
CASES PENDING UNDER THE CRIMINAL LAWS
Stae through Food Inspector, Jallandhar Vs
Allahabad Canning and the Directors of the
Company
Matter relates to complaint u/s 7/16 of the
Prevention of Food Adultration Act, 1954
and Rules 32 and 50 thereof
Not ascertainable Criminal case no.
304/7/2002 in court
of Addl.Chief Jud.
Mag., Jallandhar
Pending for hearing
Draft Letter of Offer
250
(F) LITIGATION BY / AGAINST THE TOP FIVE LISTED COMPANIES PROMOTED BY PROMOTERS
A. ZUARI INDUSTRIES LIMITED
Brief Particulars and contentions Claim amount
(Rs. in Lakhs) Court/Forum/
Case number
Current Status
ZIL Vs Land Acquisition Officer, Govt. of
Goa. There arose a dispute regarding
Compensation received by the Company
from the Government of Goa with respect to
Acquisition of the Company's land. The
Company had Preferred an appeal for
enhanced compensation for the total land
acquired 168424 sq.mts.
N.A. Hon’ble High Court of
Bombay at Goa
Appeal is pending before the
Hon’ble High Court of Bombay at
Goa for hearing
Zuari Vs. Hindustan Dorr- Oliver (HDO) The
Company has challenged the order and
decree passed by the Addl Civil Judge Sr
Division, Goa, entitling Zuari to recover
23.27 crore from HDO and 5% of 23.27
crore from HDO & GP jointly and severaly
with 18% interest from the date of
realization. Company has filed an appeal to
recover a sum of FF 501,247 with 18%
interest from GP from the date of passing the
decree till realization which was paid to GP.
Also for interest of 18% on 23.27 crore
awarded to Zuari.
Subsequently, the defendant has filed a
counter claim at the Bombay High Court
claiming Rs. 688 Lacs which Includes
interest at 18.50%. Both the suits are pending
in the Respective Courts.
15490.00 Hon’ble High Court of
Bombay at Goa
Pending hearing
Disputed tax liability relating to payment to foreign concerns for services, there are
certain decisions of the Appellate Tribunal/Commissioner (Appeals) favourable to the Company, which are contested by the Department.
57.32 Department of
Income Tax
Pending
Demand of Andhra Pradesh Sales Tax
authorities on second sale of pesticide (trade
mark sales under section 5AA) considered
sales as firm and not considered for tax
concession enjoyed by first manufacturer.
19.98 Sales Tax Authorities The Company has filed an appeal
in the High Court of Hyderabad
Demand of Rajastan Sales Tax under self
declared assessment scheme towards penalty
and interest.
0.03 Sales Tax authorities Pending
Demand of Sales Tax on refunds of tax on
subsidy.
35.58 Appeal pending before Appellate
Tribunal
Demand to levy Professional Tax on each
branch and godown.
22.80 Karnataka Sales Tax
Authorities.
Writ filed in Hon’ble High Court
of Karnataka
Demand from Commercial Tax Department
Bangalore.
24.62 Commercial Tax
Department
Bangalore
Appeal filed before the Appellate
Tribunal
Demand from South Central Railways 209.19 Pending in High court of Bombay
at Goa.
The Revenue Department of Goa Hon’ble High Court Pending hearing, Status quo is
Draft Letter of Offer
251
Brief Particulars and contentions Claim amount
(Rs. in Lakhs) Court/Forum/
Case number
Current Status
Government has issued a notification
proposing to acquire 159700 sq. mts. Of land.
The Company has filed an appeal in the
Hon’ble the High Court of Bombay at Goa.
of Bombay at Goa maintained.
The Company has received a demand of Rs.
1426.16 lacs for the assessment year 2001-02
pertaining to the penalty on capital gains on
transfer of the Cement undertaking.
1426.16 Income Tax
Authorities.
pending
Way leave charges payable to MPT towards
storage of Phosphoric acid.
22.84 Pending
During the year, pursuant to the order of the
High Court of Punjab & Haryana, the
Company has made a payment of Rs. 210.54
lacs for purchase /allotment of land at
gurgaon from Haryana Urban Development
Authority ( HUDA) HUDA has filed an
appeal with the division bench of the High
Court challenging the Order.
330.41 Appeal No. 88/07
Hon’ble High Court
of Punjab and
Haryana
Pending for hearing. Cout has
ordered to maintain status quo.
Consequent to the outbreak of fire in 1998-99
the company has raised an insurance claim of
Rs. 900.00 lacs with the insurers. The
Insurance Company disallowed the claim.
The Company went to the National
Consumer Dispute Redressal Forum, which
ruled in favour of the company. Against the
said Order, the Insurance Company has filed
an appeal with the Hon’ble Supreme Court.
The Supreme Court has allowed the
Company to withdraw the money deposited
by the Insurance Company on furnishing the
security bond.
1331.17 Hon’ble Supreme
Court
Pending for hearing.
Draft Letter of Offer
252
B. TEXMACO LIMITED
Brief Particulars and contentions Claim amount
(Rs. in Lakhs) Court/Forum/
Case number
Current Status
Daulat Shetkari Sahakari
Sakhar Karkhana Ltd. has instituted a suit at
Gadhinglaj Court for recovery of Rs. 785.27
lacs for delay in delivery and non-
performance of the mill & boilers.
785.27 16/1997
Court of the Civil
Judge
Senior Divn.
Gadhinglaj
The Bombay High Court has
granted the say order vide interim
order dated 31.01.2006.
Shri Sant Damaji S S K has filed their claim
for recovery of Rs.2992 lacs. The Company
has filed a counter claim of Rs.3151 lacs.
2992.00 18/7/1999. Before the
Arbitrators Justice
Mr. S. C. Pratap
(Retd.) Justice Mr. A.
N. Mody (Retd.)
Justice Mr. S. B.
Shete (retd.)
Arbitration proceedings are in
progress.
The Board of Trustees of the Port of Calcutta
filed a suit for specific performance of the
contract, recovery of money and damages.
148.20 38 of 1992
Court of 6th
Assistant
District Judge,
Alipore
The case is contested by the
Company at District Court level.
M/s. Prakash Cotton Mills Pvt. Ltd., filed a
suit for recovery of losses and non-supply of
materials valued at Rs. 92.26 lacs and amount
of interest. The suit was decreed ex-party on
24.10.2002.
In terms of the order, the High Court on
21.12.2002 approved following decreetal
amounts, which are recoverable from the
Company.
a) Rs. 92.26 lacs towards debts
b) Rs. 397.94 lacs towards interest on debts
@21% per annum
c) Rs. 0.30 lac towards cost of suit
d) Further interest on the sum of Rs. 490.50
lacs @21% p.a. from the date of decree.
First notice for the suit for execution of
decree was served on the Company on
12.05.2005
92.26 Execution
Application No. 159
of 2005.
Notice No. 649 of
2005 in Suit No.
1586 of 1982
Mumbai High Court.
On 18.08.2006 Bombay High
Court passed an interim order for
stay of ex-party decree dated
24.10.2002
Shri G.Veera Reddy vs Texmaco Limited
Against the arbitration award awarding a sum
of Rs.19.08 lacs as claim and Rs.51.81 lacs
as interest, an order against Appeal was
made.
The Company has filed an appeal before the
High Court of Andhra Pradesh. The appeal
was allowed and the matter was remanded
back to the Lower Court.
70.89 O.P. No. 1090 of
2000.
Court of Chief Judge
City Civil Court at
Hyderabad
Hearing in Dist. Court concluded
the judgement yet not delivered.
M/s Green Force Engineers (P) Ltd vs
Texmaco Limited
the plaintiff filed the suit for recovery of
Rs.1.25 lacs plus interest for alleged
deficiency of Wet Scrubber System.
1.25 Appeal No. of 2006
in the Court of Dist.
Judge, Chandigarh
M/s. Green Force file an appeal
against the order dated 24.10.2006
pass by Civil Judge (Jr. Divn.),
Chandigarh, we have taken up with
the Court as the case is not
maintainable.
Draft Letter of Offer
253
C. CHAMBAL FERTILISERS & CHEMICALS LIMITED
Brief Particulars Claim amount (Rs.
in Lacs)
Court/Forum/Case
number
Current Status
The company filed a winding up petition
against erstwhile Modiluft Ltd. now Spice
Jet Ltd.
400.00 and interest
there on
High Court of Delhi The matter is pending in the court.
Remarks:
M/s Spice Jet Ltd. has submitted a
Scheme of Arrangement with its
Creditors. The said scheme was
approved by Hon’ble Delhi High
Court. As per the scheme, Spice Jet
Limited will pay to CFCL 70% of
the principal amount towards full
and final settlement of the claim in
two instalments. The first
instalment of Rs. 1.20 crore
has already been received by
CFCL.
The company filed a writ petition against
State of Rajasthan and others pertaining to
bills of Rs. 1.99 crores towards water
charges raised by Executive Engineer,
Irrigation Dept., Govt. of Rajasthan.
N. A. High Court of
Rajasthan
Stay has been granted and the
matter is pending before the Court
for final disposal.
The company filed a writ petition against
Jaipur Vidyut Vitran Nigam Ltd. for refund
of advance deposited by the company with
Rajasthan State Electricity Board.
306.00 High Court of
Rajasthan
Pending
Erstwhile India Steamship Company
Limited (since amalgamated with CFCL)
had filed a winding up petition in Calcutta
High Court against Nihat Shipping
Company Ltd. (Nihat) due to non payment
of dues by Nihat.
230.33
Calcutta HIGH Court The matter is pending before the
court
Civil case filed before challenging the
demand of West Central Railway
53.54 Railways Rats
Tribunal, Chennai
Pending
Differential Purchases Tax, Interest &
Penalty Demands for the Asstt.year 1996-97
to 2001-02 (01.04.01 to 30.05.01) up to
30.6.2007
pertaining to the purchases of Natural Gas
for Generation of power.
Rs.16.01
Crore Rajasthan High
Court
The Company has obtained a stay
from Rajasthan High Court in
July,2001
Sub Registrar (Digod) issued assessment
order along with demand notice dated
29.12.2006 for deposit of Land Tax, u/s 42
of the Rajasthan Finance Act 2006
Rs.40.02 Lacs High Court,
Jaipur.
An appeal with 50% deposit has
been filed before High Court,
jaipur.
The Company has received the Show Cause
Notice dated 26.3.2007 from Central Excise
Additional Commissioner, Jaipur about the
recovery of excise duty on shortage of Urea
manufactured by the Company.
Rs.20.46 Lacs Central Excise
Commissioner,
Jaipur
Show cause notice has been replied
and hearings are yet to commence.
Commercial Taxes department vide its
order dated 8.12.06 asked to show cause as
to why input tax credit of Rs.22.18 lacs
claimed on opening stock of finished goods
as on 1.4.2006 should not be disallowed.
(VAT-Assessment Year 2006-07)
22.18 Deputy
Commissioner
(Appeals)
Appeal against the above order is
filed before the Deputy
Commissioner (Appeals) on
22.2.2007
Central Excise Commissioner,Jaipur has
issued the notice dated 22.5.2006 &
5.9.2006 as to why Service Tax amounting
to Rs.85.06 lacs should not be recovered
from the Company on Goods Transport
Agency Services received by the Company.
85.06 Central Excise
Commissioner,
Jaipur
The notice has been replied and
hearings are yet to commence.
Draft Letter of Offer
254
Brief Particulars Claim amount (Rs.
in Lacs)
Court/Forum/Case
number
Current Status
Central Excise Additional Commissioner,
Jaipur has issued show cause notice dated
15.3.2007 as to why Service Tax amounting
to Rs.22.73 Lacs should not be recovered
from the Company on consulting
Engineering Services and Maintenance &
Repair Services received by the Company
from Non-resident.
22.73 Central Excise
Commissioner,
Jaipur
The notice has been replied and
hearings are yet to commence.
Dy.Commissioner of Central Excise,
Udaipur has issued an show cause notice
dated 21.4.2006 for Rs.0.92 Lacs being the
tax on the abatement of 75% availed
pursuant to notifications.
0.92 Dy.Commissio
ner of Central
Excise,
Udaipur
Dy. Commissioner of Central
Excise, Udaipur
Chambal Fertilisers & Chemicals Limited
1. Under the Jute packaging Material (Compulsory use of Packing Commodities) Act, 1987, a specified percentage of fertilizers
dispatched were required to be supplied in jute bags up to 31.8.2001.The provisions of the said Act were challenged in the
Supreme Court, which upheld the constitutional validity of this Act in its judgment in 1996.Inspite of making conscious
efforts to step up use of jute packaging material, the Company had been unable to adhere to the specified percentage, due to
strong customer resistance to use of jute bags. The Company had received show cause notice from the Office of the Jute
Commissioner, Kolkatta, for levying a penalty of Rs.7380.36 lacs for non compliance of the provisions of the said Act. The
Company has obtained a stay order from Delhi High Court against the above show cause notice and has been advised that the
said levy is not tenable in law.
2. The Company has received a demand of Rs.352.34 lacs (previous year Rs.352.34 lacs) from Sales Tax Deptt., Kota towards
use of Natural Gas for Ammonia fuel, power and steam generation, for the period April, 1996 May, 2001.The Company has
obtained a stay from Hon’ble High Court, of Rajasthan , Jodhpur on July 11, 2001.However, in the event of the Company
having to pay the above, it is reimbursable by FICC/Govt of India under subsidy scheme.
3. There are 29 cases relating to the Essential Commodities Act, 1955.
4. There were 24 cases under Labour Laws, 61 civil cases,4 cases pending with the Consumer Forum and 12 under
Miscellaneous Acts where amounts are not ascertainable
5. There are 2 civil cases pending against the company involving a cumulative amount of Rs.4.14 lacs.
6. There are 12 consumer forum cases pending against the company involving a cumulative amount of Rs. 3.20 lacs.
7. One Criminal Case u/s 420 & 407 of Indian Penal Code 1861
8. One case of Arbitration CFCL vs NFL
9. 4 cases under section 138 of Negotiable Instruments Act, 1881
D. Sutlej Textiles and Industries Limited
Details of outstanding litigation under Income Tax Act, 1961
Brief Particulars (See note below)
Claim Amount
(Rs.) Lacs
Court/Case No.
Current Status
Assessment Year 1985-86
CIT, New Delhi Vs. Sutlej Industries Ltd.
Additions on account of Purchases allowed by ITAT.
55.17 Delhi High
Court
ITC No.
18/2000
Deptt. Appeal
admitted, pending
listing for final
hearing.
Draft Letter of Offer
255
Brief Particulars (See note below)
Claim Amount
(Rs.) Lacs
Court/Case No.
Current Status
Assessment Year 1986-87
CIT, New Delhi Vs. Sutlej Industries Ltd.
Additions on account of Purchases allowed by ITAT.
99.35
Delhi High
Court
ITC No.
17/2000
Deptt. Appeal
admitted, pending
listing for final
hearing.
Assessment Year 1989-90
CIT, New Delhi Vs. Sutlej Industries Ltd.
1) Provision for Incentive to Staff and Workers allowed
by ITAT in Computing book Profit u/s 115J of the
I.T. Act.
2) Deduction u/s 80I allowed without reducing
deduction u/s 80HH
3)1/7th Premium on redemption of debentures allowed
by ITAT
15.00
1.01
0.71
Delhi High
Court
ITA No.95/99
Deptt. Appeal admitted, pending
listing for final hearing.
Assessment Year 1990-91
CIT, New Delhi Vs. Sutlej Industries Ltd.
1)1/7th Premium on redemption of debentures allowed
by ITAT
2) Deduction u/s 80HH allowed without adjustment of
B/F business losses of earlier Years by ITAT.
3) Deduction u/s 80I allowed without reducing
deduction u/s 80HH by ITAT.
2.86
10.24
3.62
Delhi High
Court
ITA No.
127/2000
Deptt. Appeal
admitted, pending
listing for final
hearing.
Assessment Year 1991-92
CIT, New Delhi Vs. Sutlej Industries Ltd.
1) Deduction u/s 80I allowed without reducing u/s
80HH by ITAT.
2)1/7th Premium on redemption of debentures allowed
by ITAT.
1.41
2.86
Delhi High
Court
ITA No.
138/2001
Deptt. Appeal
admitted, pending
listing for final
hearing.
Assessment Year 1992-93
CIT, New Delhi Vs. Sutlej Industries Ltd.
Deduction u/s 80HH & 80I allowed on interest, rent &
misc. income, etc. received being disputed by deptt. in
Order u/s 147 which was quashed by ITAT, New Delhi.
18.28
Delhi High
Court
ITA No.
522/2004
Deptt. Appeal
admitted & pending listing for
final hearing.
Assessment Year 1993-94
CIT, New Delhi Vs. Sutlej Industries Ltd.
Deduction u/s 80HH & 80I allowed on interest, rent &
misc. income, etc. received being disputed by deptt. In
Order u/s 147 which was quashed by ITAT, New Delhi.
15.50
Delhi High
Court
ITA No.
523/2004
Deptt. Appeal admitted &
pending listing for final hearing.
Assessment Year 1995-96
CIT, New Delhi Vs. Sutlej Industries Ltd.
Deduction u/s 80IA allowed without adjusting brought
forward losses of earlier years from the total business
profit of the current year by ITAT.
19.10
Delhi High
Court
ITA No.
437/2004
Deptt. Appeal admitted and
pending listing for final hearing.
Assessment Year 1994-95
Deduction u/s 80I allowed without reducing deduction
allowed u/s 80HH
Delhi High
Court
ITA No.
81/2004
Deptt. Appeal
admitted & pending listing
for final hearing.
Draft Letter of Offer
256
Brief Particulars (See note below)
Claim Amount
(Rs.) Lacs
Court/Case No.
Current Status
Assessment Year 1994-95
Sutlej Industries Ltd. Vs. CIT, New Delhi
Interest u/s 244A not allowed on Rs.2588954/- for the
period from Dec.,1994 to June,97
on amount become refundable out of Self assessment
taxes paid, not allowed by ITAT.
-
Delhi High
Court
ITA No.
493/2003
Our Appeal admitted, pending
listing for final
hearing.
Assessment Year 1995-96
Sutlej Industries Ltd. Vs. CIT, New Delhi
Interest u/s 244A not allowed on Rs.423873/- from
December, 1995 to June, 1997 as amount become
refundable out of Self assessment taxes paid, not
allowed by ITAT.
-
Delhi High
Court
ITA No.
120/2004
Deptt. Appeal admitted, pending
listing for final
hearing.
Assessment Year 1998-99
CIT New Delhi Vs. Sutlej Industries Ltd.
Interest u/s 244A allowed on refund of self-assessment
tax Rs.6690474/- for the period 1.4.1998 to 30.4.2002.
-
Delhi High
Court
ITA No.
1204/2005
Hearing pending
Assessment Year 1999-2000
Sutlej Industries Ltd. Vs. ITO, New Delhi
Appeal filed to CIT(A) against order passed u/s 147 in
the re-assessment proceedings for not allowing
deduction u/s 80HHC on DEPB benefits.
143.46 CIT(A)XII,
New Delhi
Appeal to CIT(A).
Hearing pending.
Assessment Year 2001-02
Notice issued u/s 148 to initiate re-assessment
proceedings for not allowing
deduction u/s 80HHC on DEPB benefits.
335.62 I.T.O.
Ward No.9(4)
C.R.Building
New Delhi
Return filed u/s
148, pending
re-assessment proceedings.
Assessment Year 2002-03
Notice issued u/s 148 to initiate re-assessment
proceedings for not allowing
deduction u/s 80HHC on DEPB benefits.
357.72 I.T.O.
Ward No.9(4)
C.R.Building
New Delhi
Return filed u/s
148, pending
re-assessment proceedings.
Assessment Year 2003-04
Sutlej Industries Ltd. Vs. ITO, New Delhi
Appeal filed to CIT(A) for not allowing deduction u/s
80HHC on DEPB benefits. Besides appeal was filed on
other issues too having no tax impact
289.79 CIT(A)-XII
New Dehli
Appeal to CIT(A)
hearing completed.
Order yet to receive.
Assessment Year 2004-05
Sutlej Industries Ltd. Vs. ITO, New Delhi
Appeal filed to CIT(A) for not allowing deduction u/s
80HHC on DEPB benefits. Besides appeal was filed on
other issues too having no tax impact
169.36 CIT(A)-XII
New Dehli
Appeal to CIT(A)
hearing pending.
Note: The issues in the above appeals were related to textiles division of Sutlej Industries Ltd. which are now
vested with Sutlej Textiles and Industries Ltd. as per Scheme of Arrangement, from the appointed date
1.7.2005. All taxation liabilities pertaining to the Textiles division as on the appointed date transferred
and vested in the Company as per Scheme of Arrangement.
Draft Letter of Offer
257
Details of outstanding litigation under Central Excise Act
Brief Particulars
Claim
Amount (Rs.)
Court/Case No. Current Status
Sutlej Textiles and Industries Limited
Unit : Rajasthan Textile Mills
(Reversal of Cenvat credit on inputs
Furnace Oil and Coolants used in generation of
electricity which used in
exempted final products. Period
of dispute - May 1999 to Feb. 2002)
8.50/-
E-1253/05-06
(Deptt.Approval)
Deptt. Filed Appeal in CESTAT
New Delhi against
Commissioner (A)'s
order which is in our favour
Pending at CESTAT, New Delhi
Sutlej Textiles and Industries Limited
Unit : Rajasthan Textile Mills
-Penalty
(Service Tax on GTA payment through Cenvat Credit)
13.17/-
14.17
ST/113/2007
Pending at CESTAT, New Delhi
Sutlej Textiles and Industries Limited
Unit : Rajasthan Textile Mills
- Penalty
(Service Tax Credit on
CHA Services)
1.26
1.26
CESTAT, New
Delhi
Pending at CESTAT, New Delhi
Sutlej Textiles and Industries Limited
Unit : Rajasthan Textile Mills
(Refund of Input Services used in export of goods)
2.16 ST/251/2006
(Deptt. Appeal)
Pending at CESTAT, New Delhi
Sutlej Textiles and Industries Limited
Unit : Rajasthan Textile Mills
-Penalty
(Service Tax on overseas commission)
1.82
1.82
The
Commissioner
(Appeal) – 1
Jaipur
Pending at The Commissioner
(Appeal) – 1, Jaipur
Sutlej Textiles and Industries Ltd.
Unit: Rajasthan Textile Mills
(Irregular availment of exemption Notification 30/2004-
CE dated 9.7.2004
Period of dispute: May, 2005 to Feb. 2007)
105.21
782.49
The
Commissioner
Central Excise
Jaipur-I
Deptt. issued Show Cause
Notice
and reply submitted by us.
Sutlej Textiles and Industries Ltd.
Unit: Rajasthan Textile Mills
(Wrong availment of exemption Notification 32/2004
ST- dated 3.12.2004 in case of payment of service tax
on freight to GTA. Period of dispute: April, 2005 to
March, 2006).
50.22 The
Commissioner
Central Excise
Jaipur-I
Deptt. issued Show Cause
Notice
and reply submitted by us.
Sutlej Textiles and Industries Ltd.
Unit: Rajasthan Textile Mills
(Service Tax on GTA paid through Cenvat Credit)
8.42 The
Commissioner
Central excise
Jaipur-I
Deptt. Issued show cause notice
and reply submitted by us.
Sutlej Textiles an Industries Ltd.
Unit Rajasthan Textile Mills
(Service Tax on commission paid to Overseas Agent
period Dec.05 to Oct.06)
13.29 The
Commissioner
Central Excise
Jaipur
Reply to Show Cause Notice
submitted.
Sutlej Textiles and Industries Ltd.
Unit Rajasthan Textile Mills
(Cenvat credit of service tax on Banking services on
Improper documents)
0.50 The Assistant
Commissioner
C.Excise Division
Kota
Reply to Show Cause Notice
submitted
Draft Letter of Offer
258
Brief Particulars
Claim
Amount (Rs.)
Court/Case No. Current Status
Sutlej Textiles and Industries Ltd.
Unit Rajasthan Textile Mills
(Service Tax on GTA paid through Cenvat Balances)
4.32 The Assistant
Commissioner
C.Excise Division
Kota
Reply to Show Cause Notice
Submitted.
Appeal filed before Customs, Excise & Service Tax
Appealate Tribunal, A’Bad against order of
Commissioner (Appeals) Central Excise & Customs,
Vapi order no. KU/439to KU 442/VAPI/2005 dated
14.12.05
A’Bad Tribunal allowed appeals with consequential
relief through order no A/1734 to 1737/WZB/A HO107
dated 06.07.07
24.51 Commissioner
(Appeal) Vapi
Refund of T & T
Show cause notice dated 28.11.05 issued by Dy.
Commissioner for disallowing of rebate claim of T & T
refund under Rule 5
15.53 Deputy
Commissioner
Of Central
Excise &
Customs,Vapi
Reply of the show cause notice
given vide reply dated
4.01.2006,
Labour Court Case filed against company Rajendra N
Hazare vs. Sutlej Industries Ltd.
15.00 Illegal
Termination of
Worker
last date of hearing was on
4.03.2006 .Case no.10/2202
Case filed by the company Sutlej Industries ltd. v/s P.K.
Industries Bilimora
0.65 Supply of Beam
To Beam
rewinding
machine
Case is still pending .No hearing
date fixed so far case no.
1630/201
Criminal Case filed by the company Sutlej Industries
ltd. v/s Rajesh Nand Kishore Tripathi
69.19 Withdrawal of
money through
fraudlent
cheques
Case is still pending before court
Show cause notice no.V( Ch.54)3-104/DEM/2003 dated
4.04.2006 issued by Commissioner Central Excise &
Customs,Vapi for disallowing deemed modvat credit &
recovery of under Rule 12 of the Cenvat Credit
Rules,2001/2002 read with provision 11 A( 1 ) of
Central Excise Act,1944.
750.04 along
with interest &
penalty if any
Commissioner
Of Central
Excise &
Customs,Vapi
Reply of the show cause notice
given vide reply dated
10.04.2006. The matter pertains
to availment of deemed credit on
grey fabrics during the
periodfrom March 2001 to
March 2003.
Criminal Case Sutlej Industries Ltd. v/s Dae Hung
Precision Company Ltd.,Seth Enterprises Ltd.& Sonal
Industries
2.45 Supply of Faulty
machinery parts
/Stores material
Case is still pending before
court. Case was filed on
30.08.2004. Case is not opened
so far.
Draft Letter of Offer
259
RAJASTHAN TEXTILE MILLS, (BHAWANIMANDI UNIT)
Cases Pending under Labour Laws
There 32 cases filed against the Company seeking stay on termination and suspension of their jobs by the
Rajasthan Textile Mills, (Bhawanimandi Unit).
Cases Pending Before Payment of Gratuity Authority Jhalawar
There 3 cases pending before the Payment of Gratuity Authority Jhalawar against the Company aggregating to
amount of Rs 0.61 lacs.
Cases Pending Before Labour Department Government of Rajasthan Jaipur
There are 4 cases pending before the Payment the Labour Department, Jaipur, Government of Rajasthan seeking
permission for prosecution.
Cases pending under section 138 of the Negotiable Instruments Act 1881 before the ACJM, Court
Bhawani Mandi
There are 6 cases filed by the Company which are pending before the ACJM, Court Bhawani Mandi under
section 138 of the Negotiable Instrument Act 1881 aggregating to Rs 8.95Lacs
CTM Unit
Brief Particulars
Court/Case No. Current Status
C.T.M. V/s Ind. Tribunal & Others
Mr Abhimanyu was suspended pending enquiry, but was not paid
subsistence allowance. Ind. Tribunal passed order dated 21.5.02
against the Company. Company moved to H.C. where stay granted
after deposit award amount of Rs.17,332 in H.C.
555/2002
High Court
Jammu
Workman filed objection on
26.10.02. Rejoinder to be filed by
Company
Abhimanyu V/s C.T.M
Workman dismissed on 22.6.1997 after domestic enquiry.
Workman filed claim for reinstatement with full back wages &
other benefits. Evidence of workman completed.
623/ 2002
Labour Court
Jammu
Arguments heard of both
representatives.
Final order awaited.
Dharampal V/s C.T.M
Workman abandoned services from 6.2.1997. He filed claim for
reinstatement with full back wages & other benefits. Evidence of
workman completed. Partly evidence of co. completed.
625/ 2002
Labour Court
Jammu
Arguments heard of both
representatives.
Final order awaited.
Sushant V/s C.T.M.
Workman abandoned service from 11.3.1997. He filed claim for
reinstatement with full wages. Evidence or workman completed.
Partly evidence of Co. completed.
664/ 2002
Labour Court
Jammu
Workers and his representative were
absent, hence Case adjourned.
Final order awaited.
Draft Letter of Offer
260
Civil Litigation filed by the Company
Brief Particulars
Claim
Amount (Rs.
In lacs)
Court/Case No. Current Status
S.I.L. vs.Gupta Cotton
Traders Batala
Case against recovery of additional
Sales tax paid for non-receipt of C Form.
0.33.00
Sub Judge, Kathua The Court has passed the order
for recovery of the amount in
favour of CTM.
Execution of decree is still
pending.
CTM V/s Pilaniwala Synt.
Pilaniwala Textile Mills P. Ltd
The Mill has filed Civil Suit against the parties for
recovery of amount U/s XXXVII of CPC The District
Court of Kathua has given the direction to the Defendant
to submit the Surety of the entire amount. Defendant
appealed against the decision, in High Court and then in
Supreme Court, but Supreme court again ordered the
Defendant to submit the Surety.
24.05
District Judge
Kathua
Pending for decision against
the objection for admission of
bond and surety given by
defendant
Sutlej Industries Ltd V/s
Sirohiya Synthetics P Ltd.
We sold the yarn to Party. But the party
did not make the payment.
52.04
Additional District
Judge,
Kathua
Reply is submitted in the court
to the objection filed by
opposite party.
Sutlej Industries Ltd V/s
Mohit Garg
Defendant Mohit Garg appointed as a senior Asst. in
accounts department and gave an undertaking to serve
for 3 years and if he resigns from the Job, then he is
liable for Six month's salary as damages. He has left the
job in violation of the terms of the service bond.
0.40
Sub Judge
Kathua
Recovery Suit for breach of
contract.
Case is decided; final decree is
passed by the court. Execution
of decree is still pending.
STIL V/s Sanjay Bhan
He left the job within the bond period in violation of the
terms and conditions of the bond
0.60 District Judge
Kathua
Summons is sent
STIL V/s Anil Shiekhar
He Left the job within the bond period in violation of the
terms and conditions of the bond
0.60 District Judge
Kathua
Summons is Sent
STIL V/S Viney Janu
He left the job within the bond period in violation of the
terms and conditions of the bond.
0.40 District Judge
Kathua
Summons is sent
STIL V/s Pushkar Bharadwaj
He left the job within the bond period in violation of the
terms and conditions of the bond
0.37 District Judge
Kathua
Summons is sent
CTM V/s Ramesh Pandey
He left job in violation of the bond undertaken by him.
3.04 CJM
Kathua
Accused presented himself in
the court.
Draft Letter of Offer
261
Criminal Cases
Brief Particulars
Claim
Amount (Rs.)
Court. Current Status
CTM V/s Shri Uttam Fabrics Delhi
CTM has sold yarn to accused. The accused issued
cheques but cheque got
dishonoured. The Party has filed objection for which the
court has decided against the M/s Uttam Fabrics
1.26
Chief Judicial
Magistrate
Kathua
Accused filed the revision
petition in the High Court &
the said petition is rejected by
the High Court & now the
case transferred at Kathua for
Statement.
Summon is sent to call the
witness.
CTM V/s Samurai Synthetics
5 Case Bhilwara ( 3 Case Transffered at Munsif
Magistrate 1st Class
CTM has sold yarn to accused. The accused issued
cheques but cheque got dishonoured
3.03
District Mobile
Magistrate.
Summon is sent.
CTM V/s N.B.Sadiwala
Khambat ( South Gujarat )
CTM has sold yarn to accused. The accused issued
cheques but cheque got dishonoured
0.31
Distt. Mobile
Magistrate,
Kathua
Summons Sent By Court we
have deposit the Reg. AD
Envelope in the court.
CTM V/s Vijay Gupta
Jammu
U/s 500/501 R.P.C. accused who is editor of Jammu
Today. He published a news about Sexual Harassment of
lady worker in the mill. So we filed a Criminal
Complaint against him.
N.A District Mobile
Magistrate,
Kathua.
To execute the Warrant.
CTM V/s Chitra Synthetics
Bhilwara
CTM has sold yarn to accused. The accused issued
cheques but cheque got dishonored
1.65 Distt. Mobile
Magistrate
Kathua
To execute summons.
CTM V/s Samurai Synt.
2 Case Bhilwara
CTM has sold yarn to accused. The
accused issued cheques but cheque
got dishonored
3.03 Distt. Mobile
Magistrate
Kathua
Summons Sent Directly
at Surat.
STIL V/s Berger Paints. 28.50 Consumer court,
Jammu
Objections to be filed by
opposite party.
SIL V/s R.K.Textile NA District Judge Final decree awaited.
STIL V/s Tarun Export
Cheque dishonoured.
53.23 Chief Judicial
Magistrate,
Kathua
Summons is sent.
Draft Letter of Offer
262
UPPER GANGES SUGAR & INDUSTRIES LTD
LITIGATION AGAINST THE COMPANY
A. LABOUR LAW CASES (SEOHARA SUGAR UNIT)
1. There are 4 cases of reinstatement of employees field against the Company imposing a liability of around
Rs.9.75 Lacs. Further, there are 19 cases of reinstatement of employees/claiming regular (permanent)
employment (amount is not ascertainable in these cases)
2. Other than the above there is a case fled by Mr. Sukh Lal Singh & others, contract laborers, who
have claimed outstanding dues under the provision of Payment of Wages Act, 1936. The Assistant Labor
Commissioner, Bijnor has passed an award payment on wages to the tune of Rs. 1.27 Lakhs. The Company has
filed an appeal (Appeal No. 74/2002) in the District Court, Bijnor. The amount awarded by the Commissioner
has been deposited before in the District Court, Bijnor.
B CRIMINAL CASES
(SEOHARA SUGAR UNIT)
Sr.N
o.
Name of the complainant Court where
pending & suit
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases, particulars and current
status
1. Sunil Kumar Kaushik Chief Judicial
Magistrate Bijnor.
The said matter is
pending filing of
charge sheet.
Nil One Mr. Sunil Kumar Kaushik, was a seasonal
clerk. He was made permanent w.e.f.
01.11.1995. However, he filed a criminal
complaint against the Executive President of the
Company Mr. B.K. Malpani before CJ
Magistrate, Bijnor that he has deliberately
tampered with the attendance register with
regard to the attendance of the complainant. The
Magistrate has issued an ad-interim order dated
27.11.1997 and the Dept. of Police to carry out
investigation under section 156(3) of Criminal
Procedure Code against the Accused. The
operation of said order was stayed by the
Allahabad High Court in Writ Petition No.
176/1998 filed by the Company vide order dated
16.1.1998.
2.
State of Uttar Pradesh through
Assistant Cane Commission,
Bijnor
Chief Judicial
Magistrate Bijnor
317/1997
Nil The Assistant Cane Commissioner, Bijnor filed
a criminal complaint against the company
alleging that the company has tagged the cash
credit limits at lower percentage in Sugar season
1996-97. The Chief Judicial Magistrate issued
process against which the Company has filed a
petition in the Allahabad High Court. The said
order is stayed by Hon’ble Allahabad High
Court Order dated 17.11.1998 in Writ Petition
1350/1998.
3. Food Inspector Lucknow Addl Chief Judicial
Magistrate
Amount not
ascertainable
On 10th
December 1991, the food Inspector
lucknow had taken sample of sugar from the
shop of PCF Godown Barah Birbah, Lucknow.
The Sugar is alleged to have been manufactured
by Sugar Mill Seohara. As per instruction report
the sample were found having moisture and
foreign substances in excess of the limit. The
Company has been issued notice by ACJ Court.
Draft Letter of Offer
263
SEOHARA DISTILLERY UNIT
Sr.N
o.
Name of the complainant Court where
pending & suit
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases, particulars and current
status
1. State of Uttar Pradesh & Others
Ist Additional
Chief Judicial
Magistrate, Bijnor
1616 of 1990.
Nil The District Excise Officer, Bijnor has filed a
case under sections 64/88 of the U P Excise Act
in connection with non delivery of Rectified
Spirit against allotment order dated 26.6.1989 of
the Excise Commissioner Allahabad. The said
Complaint is stayed by the order of Hon’ble
Allahabad High Court by its order dated
7.2.1991 in C.M. A Mo. 1895/1991.
BHARAT SUGAR MILLS
Sr.N
o.
Name of the complainant Court where
pending & suit
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases, particulars and current
status
1.
State of Bihar SDJM Gopalganj
Case no. 124/05 &
126/05
Nil The Bihar State Pollution Control Board through
its Member Secetary filed Criminal Complaints
(24(M)/1987 and 33(M)/1988) under Water
(Prevention and Control of Pollution ) Act,1974
against Bharat Sugar Mills (a unit of the the
Company) before SDJM, Patna. The said cases
were transferred to SDJM Gopal Ganj for trial.
The Company has filed petitions (CWJC
21109/05 and 21998/05) before the Patna High
Court. The High Court has by its order dated
31.03.2006 stayed the proceeding pending
before SDJM Gopalganj.
2. State of Bihar Chief judicial
Magistrate
Gopalganj
CCNo.2065/05
Nil This is a Complaint pending against one Mr.
P.R. Gupta the Security person of Bharat Sugar
Mills for firing a gun in the air to disperse the
agitated cane growers. The case is pending for
hearing.
3. State of Bihar Chief judicial
Magistrate
Gopalganj
CCNo.23/05
Nil The Cane Officer, Gopalganj filed a criminal
complaint against Mr. B.K. Sureka of Bharat
Sugar Mills for purchasing excess quantity of
cane as against quantity allotted by the Cane
Commissioner in sugar season 1999-2000 under
the provisions of Bihar Sugarcane (Regulation
of Supply and Purchase) Act, 1981. The Court
had taken cognizance of the said complaint.
Against this order the Company filed petition
before the Patna High Court (W.P. No.
22561/2000). The Patna High Court stayed the
said proceeding before CJM, Gopalganj by its
order dated 14.03.2002.
Draft Letter of Offer
264
HASANPUR SUGAR MILLS
Sr.N
o.
Name of the complainant Court where
pending & suit
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases, particulars and current
status
1. Ram Pirey Prasad Singh
Vs Ram Nandan Pathak
JMFC, Rosera
TR No.147/1997
Nil The Complainant has filed a complaint
against then field officer of the Company for
manhandling in the factory premises. Case is
under trial before the Court.
2.
Bihar State Pollution Control
Board Vs Upper Ganges
Sugar & Industries Ltd. (New
India Sugar Mills)
SDJM, Samastipur
Case No.32 (M) of
1998/T R
No.984/2004
Nil The Bihar State Pollution Control Board
through its member secretary filed criminal
complaint u/s 41, 43 & 44 under the Water
(Prevention Control of Pollution) Act, 1974
against New India Sugar Mills( a unit of the
Company) before SDJM, Patna. The said case
was transferred to SDJM, Samastipur for trial.
The Company has filed a petition against the
Cognizance taken by the S.D.J.M Court,
Patna. The case stayed till the decision of the
Hon'ble Patna Court, Patna. This case is
pending for hearing in the High Court,
Patna.
C. CIVIL CASES
(SEOHARA SUGAR UNIT`)
Sr.N
o.
Parties Amount involved
(Rs. In Lacs)
Court where
pending & suit/ petition
no.
Nature of the cases and particulars
1. State Trading Corporation of
India Ltd. (STC) Vs. Upper
Ganges Sugar & Industries Ltd.
And others
Rs.18.33 Lakhs High Court,
Delhi
FAO(OS) 53
of 1986
Pursuant to a dispute arising out of a contract
entered into by the Company (for its units
namely Seohara Sugar Mills & New India Sugar
Mills) with STC, in connection with loss
incurred by the Company for non lifting of
sugar, an arbitration award was passes in favor
of the Company. Thereafter STC filed an appeal
before Delhi High Court. The Delhi High Court
by its order dated 09.02.87 directed STC to
deposit the decretal amount in court within a
period of 4 months. Further, the High Court
permitted the Company to withdraw the amount
subject to our Company furnishing Bank
Guarantee for the amount so availed. The bank
guarantee has been furnished by our Company.
2 The East Sugar Mills
Association & Ors have
challenged the fixation of price
of sugar cane for crushing
season 2007-08 at Rs 125 per
quintal by the UP State
Government.
The Company is part of the
Association.
Not ascertanable Civil Misc. W
P no. 8548
(M/B) of 2007
Allahabad
High Court
(Lucknow
Bench)
The Allahabad High Court (Lucknow Bench) by
its interim order dated 15.11.2007 have directed
sugar mills to pay sugarcane growers at the rate
of Rs 110 per quintal till further orders of this
Court.
3 Simbholi Sugar Mills Ltd & Ors
Vs State of UP and Ors
Not ascertainable Civil Misc. W
P no. 43536/07
Allahabad
The Allahabad High Court have reserved the
Orders in the said matter
Draft Letter of Offer
265
Sr.N
o.
Parties Amount involved
(Rs. In Lacs)
Court where
pending &
suit/ petition
no.
Nature of the cases and particulars
Simbholi Sugar Mills Ltd & Ors
have challenged the fixation of
price of sugar cane for crushing
season 2006-07 at Rs 125 per
quintal by the UP State
Government..
The Company is party to the
litigation.
High Court
4 USML vs State of UP & Ors
The Company has challenged
the Recovery certificate dated
18.10.2007 received by the
Company issued by the Cane
Commissioner, U P, Lucknow
demanding cane dues pertaining
to season 2006-07 and cane
commission of the said season
along with interest.
3770.17 WP No. 8148
/2007 before
Allahabad
High Court
The Hon’ble High Court, Lucknow bench has
vide its order dated 29.10.07 stayed the demands
in the recovery certificate on the condition to
pay 25% of the said demand within 5 weeks.
Accordingly company has paid Rs 955 lacs.
SEOHARA DISTILLERY UNIT
Sr.No.
Parties Court where pending & suit/
petition no.
Amount involved (Rs.
In Lacs)
Nature of the cases and particulars
1. State of Uttar Pradesh Vs.
Upper Ganges Sugar &
Industries Ltd.
Supreme Court of
India
Special Leave
Petition (SLP) No.
16780/2005
Rs. 3.11 Lakhs The Uttar Pradesh State Excise Authorities has
filed a Special Leave Petition before the
Supreme Court of India against an order dated
11.04.2005 passed by the Allahabad High Court
in Writ Petition No. 906 of 1995 (M/B). The
said Writ Petition was filed by the Company
challenging the notifications issued by the State
Government under the U P Excise Act, 1910.
The Hon’ble High Court by its order quashed
the demand by the State Excise Authority on
loss of rectified spirit in transit due to accident.
During the pendency of the said writ petition the
demand amount was deposited by the Company.
The Supreme Court by its interim order dated
22.08.2005 has issued notice to the Respondents
and stayed the operation of the judgment and
order passed by the Allahabad High Court.
Draft Letter of Offer
266
BHARAT SUGAR MILLS
Sr.N
o.
Parties Court where
pending & suit/
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
1. State of Bihar Vs Upper Ganges
Sugar and Industries Ltd.,
(Bharat Sugar Mills)
Certificate Officer,
Gopalganj
& CWJC
13242/06,
13744/06,
13451/06 and
13604/06
Case No. 2/02-03,
7/02-03, 11/02-03,
15/02-03,
Rs.4.33 Lacs The Cane Officer, Gopalganj filed recovery of
interest amount due on late depositing of cane
tax under section 49(1) of the Bihar Sugarcane
(Supply & Purchase) Act, 1981 for the season
1984-85 to 1989-90, 1990-91, 2000-2001 and
2001-02 before Certificate Officer under the
provision of Bihar & Orissa Public Demand
Recovery Act, 1914 order passed by Certificate,
Gopalganj to pay Rs. 432936.61. The factory
filed writ petition against above order of
Certificate Officer in the High Court. The High
Court had stayed the order of Certificate Officer.
The Certificate Officer, Gopalganj issued
demand notice for payment. Company has filed
its objection as the demand is time barred and
Cane Officer is not empowered in Section 49 of
the Cane Act, 1981 to raise this demand of
Rs.4.33 lacs as public demand
HASANPUR SUGAR MILLS
Sr.N
o.
Parties Court where
pending & suit/
petition no.
Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
1. The State of Bihar Vs Upper
Ganges Sugar & Industries Ltd.,
(New India Sugar Mills)
Certificate Officer,
Samastipur Case
No.1,4,5/202-03
Rs.1.89 Lakh Cane Officer, Samastipur filed recovery of
interest amount on late depositing of cane tax
under section 49(1) of the Bihar Sugarcane
(Supply & Purchase) Act, 1981 for the sugar
seasons 1980-81 to 1986-87, 1991-92 and 1994-
95 to 1998-99 before Certifate Officer, as public
demand. Certificate officer, Samastipur issued
demand notice for payment. The Company has
filed objection as the demand is time barred and
Cane Officer is not empowered under Section 49
of the Cane Act, 1981 to rise this demand as
public demand.
2. The State of Bihar Vs Upper
Ganges Sugar & Industries
Ltd., (Hasanpur Sugar Mills)
Certificate Officer,
Samastipur Case
No.1/2006-07
Rs.1.48 Lakh Cane Officer, Samastipur filed recovery of
interest amount on late of Cane Tax under 49(1)
of the Bihar Sugarcane (Supply & Purchase)
Act, 1981 for the sugar season 2003-04 & 2004-
05 before Certificate Officer, as Public demand.
The case is pending before the Court.
D. MOTOR ACCIDENT CLAIMS There are 4 cases pending before the Motor Accident Claim Tribunals at Meerut/ Bijnor in which the
Company is one of the respondents. The aggregate amount claimed under these cases is Rs.49.75 Lakhs.
E. CANE RESERVATION CENTRE There are two appeals pending before the Appellate Authority against the Company with respect to reservation
of cane centres in favour of the Company under the provision of UP Sugarcane (Regulation of Supply &
Purchase) Act 1953
Draft Letter of Offer
267
(LITIGATION BY THE COMPNY)
A. CRIMINAL CASES
(SEOHARA SUGAR UNIT)
Sr.No.
Name of the Respondent Court where pending suit/
petition no.
Amount involved (Rs.)
Nature of the cases & particulars
1. State of Uttar Pradesh Allahabad High
Court Writ Petition
No. 176/1998
Not
ascertainable
This is the Petition filed under section 482 of Cr.
P.C. challenging the order passed by the Chief
Judicial Magistrate issuing directions to conduct
investigation under Section 156(3) of Cr.P.C.
against Mr. B.K. Malpani, Executive President
of the Company. The Hon’ble High Court has
stayed the proceeding of the lower court its
order dated 16.1.1998
2 State of Uttar Pradesh Allahabad High
Court Writ Petition
No. 1350/1998
Not
ascertainable
This is the Petition filed by the Company against
the order dated 27.4.1998 passed by the Chief
Judicial Magistrate Bijnor, issuing process
against the Company in the complaint filed by
the Assistant Cane Commissioner, Bijnor before
the CJM, Bijnor. It was alleged by the Asst.
Commissioner that the Company has tagged the
Cash Credit Limit at lower percentage in sugar
season 1996-97. The Hon’ble High Court stayed
the said proceedings by its order dated 17.11.98
BHARAT SUGAR MILLS
Sr.N
o.
Name of the Respondent Court where
pending suit/
petition no.
Amount
involved (Rs.)
Nature of the cases & particulars
1. Guddu Singh & Others 246/01 CJM
Gopalganj
Not
ascertainable
The matter relates to assault (man handling) of
the Company's Sr. Officer by the Respondent.
First information Report was filed on
21.12.2001. The Deptt of Police carried out the
investigation and submitted the charge sheet in
Court. The Court has taken cognizance against
the Respondent.
2 The State of Bihar Patna High Court
Writ Petition No.
21109/2005 &
21998/05
Not
ascertainable
This is the Petition filed under section 482 of the
Criminal Procedure Code filed by Bharat Sugar
Mills against the Bihar State Pollution Control
Board for quashing of the Criminal complaints
filed against Bharat Sugar Mills, a unit of the
Company before the SDJM at Gopalganj. (Case
No.124/05 & 126/05)
3. The State of Bihar Patna High Court
Writ Petition No.
22561/2000
Not
ascertainable
This is the Petition filed under section 482 of the
Criminal Procedure Code filed by Bharat Sugar
Mills, a unit of the company against the Cane
Commissioner for quashing of the Criminal
complaint filed against B.K. Sureka of Bharat
Sugar Mills before the CJM Gopalganj (CC
No.23/05). The Hon’ble High Court had stayed
the proceeding before the lower court by its
order dated 14.3.2002
Draft Letter of Offer
268
B.SALES TAX CASES
(SEOHARA SUGAR UNIT)
Sr.N
o.
Authority / Court Amount involved
(Rs. in Lacs)
Nature of the cases and particulars
1. Allahabad High Court Nil The Company has challenged the validity of the imposition of the
CST on bagasse. During the A.Y. 2000-01 the Trade Tax
Authorities raised the demand on sale of bagasse to the parties
situated in the newly formed state of Uttaranchal w.e.f.
10.11.2000. The demand ultimately was confirmed by Trade Tax
Tribunal Moradabad and the same was deposited by the company
under protest and charged to expenses.
2. Trade Tax Tribunal
Moradabad
Appeal No. 295/05
Not ascertainable The Company has filed an appeal before the Trade Tax Tribunal,
Moradabad against the order of Jt. Commissioner (Appeals)
upholding the CST demand raised by the assessing officer for
A.Y.2001-02 on bagasse along with interest. The Jt.
Commissioner (Appeal) however, upheld the demand but
remanded the matter with regards to computation of interest to Dy.
Commissioner (assessment) who has since dropped the demand of
interest. The original demand has been paid under protest and
charged to expenses.
3. Trade Tax Tribunal,
Moradabad
Not Ascertainable The Company has challenged the order passed by the Jt.
Commissioner (Appeals) Bijnor wherein the Jt. Commissioner has
upheld the demand raised by the assessing officer for A.Y. 2002-
03 demanding CST on sale of bagasse along with interest.
However, the original demand has been paid by the company
under protest and charged to expenses.
4. Trade Tax Tribunal,
Moradabad
Nil The Company has challenged the order passed by the Jt.
Commissioner (Appeals) Bijnor upholding the demand raised by
the Trade Tax Authority for the AY 2002-2003 on sale of old
trucks along with interest. However, the original demand has been
paid by the Company under protest.
5. Allahabad High Court
Not ascertainable
The Company has challenged the order passed by the Trade Tax
Tribunal, Moradabad where in the demand of CST on sale of
bagasse was upheld by the tribunal. for A.Y.2003-04. However,
the original demand has been paid by the company under protest
and charged to expenses
6. .Jt.Commissioner (Appeals)
Trade Tax, Bijnor
Rs.5.68 Lacs The Company had challenged the order passed by the Jt.
Commissioner Appeals upholding the orders of Dy Commissioner
Assessment Trade Tax Dhampur where in
the Dy. Commissioner has raised demand for A.Y.2003-04
demanding Entry Tax on sale of Sugar, before Trade Tax
Tribunal, Moradabad. The Tribunal had remanded the case to the
Dy. Commissioner Assessment Trade Tax Dhampur for passing
fresh orders in view of the directions given by the Tribunal.
Now the Dy. Commissioner Assessment Trade Tax
Dhampur has passed fresh orders raising the same demand for
Rs.5.68 Lacs against which the Company had earlier deposited a
sum of Rs.1.89 Lacs under protest. Now the Company is going to
file a fresh appeal before the Jt. Commissioner Appeals, Bijnor
challenging the fresh order passed by the Dy. Commissioner
Assessment Trade Tax Dhampur.
7. Jt. Commissioner (Appeals)
Trade Tax, Bijnor
Not ascertainable The Company has challenged the order passed by the Dy
Commissioner Assessment Trade Tax Dhampur where in the Dy
Commissioner has raised demand for A.Y.2004-05 demanding
CST on sale of bagasse. However, the original demand has been
paid by the company under protest and realized from customers.
8. Jt. Commissioner (Appeals)
Trade Tax, Bijnor
Not ascertainable The Company has challenged the order passed by the Dy
Commissioner Assessment Trade Tax Dhampur where in the Dy.
Commissioner has raised demand for A.Y.2004-05 demanding
Sales Tax on purchase of sand from unregistered dealers with
interest. However, the original demand has been paid by the
Draft Letter of Offer
269
Sr.N
o.
Authority / Court Amount involved
(Rs. in Lacs)
Nature of the cases and particulars
company under protest and charged to expenses.
9. Jt. Commissioner (Appeals)
Trade Tax, Bijnor
Rs. 5.32 lacs The Company has challenged the order passed by the Dy
Commissioner Assessment Trade Tax Dhampur where in the Dy.
Commissioner has raised demand for A.Y.2004-05 demanding
Entry Tax and interest, amounting to Rs. 16.15 Lac including
Rs.5.32 lac on import of raw sugar during the year, Rs.10.56 lac
and Rs.0.27 lac respectively on purchase of diesel and coal from
outside local area during the year for which form ‘E’ were
required to be submitted. The assessing officer allowed time upto
30.06.07 to submit these Forms which the Company deposited in
time (except for certain purchases of Coal on which Entry Tax
Liability amounting to Rs.0.07 Lac has arisen.)
Now the Dy. Commissioner has passed another Order revising
the Demand of Entry Tax from Rs.16.15 Lac to Rs.5.39 Lac
including Rs.5.32 Lac on import of raw sugar and Rs.0.07 Lac on
purchase of Coal without Form E. The sum of Rs.0.07 Lac is
being deposited by the Company which will be charged to
expenses, leaving a net Demand of Rs.5.32 Lac to be contested
before the Jt. Commissioner (Appeals) Trade Tax, Bijnor.
(CINNATOLLIAH TEA GARDEN)
Sr.N
o.
Authority / Court Amount involved
(Rs. in Lacs)
Nature of the cases and particulars
1. Joint Commossioner of Taxes,
Assam
Rs. 8.46 Lakhs The Company has challenged the imposition of Central Sales Tax
of AY 1999-2000 on rejection of Form F by the Superintendent of
Taxes North Lakhimpur. The Company has deposited a sum of
Rs.0.37 Lakhs with the authorities.
C. CIVIL CASES
(SEOHARA SUGAR UNIT)
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
1. Bihar Sugar Millls
Association & others
Vs.Union of India &
Others
Delhi High Court
Letters Patent
Appeal No. 609 of
2003
Rs. 8.30 lacs Bihar Sugar Mills Association & others ( including the
company) filed before the Delhi High Court
Challenging the levy sugar price notification dated.
13.4.1999 for the sugar season 1974-75, since the price
notified for 1974-75 was fixed without taken into
account the loss caused to sugar producers due to
sugar sold at low interim price fixed on 28.11.1974.
The said writ petition was dismissed . The Bihar Sugar
Association & others have challenged the said order of
the single judge dismissing the writ petition.
2. Upper Ganges Sugar &
Industries Ltd. Vs. Union
of India & others
Kolkata High Court
C.R.no. 8384
(W)/1983 & 9265
(W)/1983
Supreme Court of
India
Transfer Petition
Nos. 143/1985 and
146/1985
Rs.26.14 lacs The Central Government has allowed excise duty rebate
during the sugar season 1981-82 & 1982-83 by way of
various notifications which were subsequently amended
by the Government and the same were challenged. The
Kolkata High Court by its interim order has allowed
excise duty rebate of Rs. 26.14 lacs subject to
furnishing of bank guarantee for equivalent amount.
The Company has filed Transfer Petitions No. 143 and
146/1985 before the Supreme Court of India and the
said petition were allowed by order dated 4.4.1985.
The matter is pending for hearing.
3. Upper Ganges Sugar & High Court of Claim in Our Company has filed a writ petition against the state
Draft Letter of Offer
270
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
Industries Ltd. Vs. State
of U.P.
Allahabad
Writ Petition No.
2308 (M/B)/1986
Petition Rs.
277.83 lacs
of U.P., Secretary Excise & others restraining the State
from incorrectly levying and claiming to recover
administrative Charges on molasses produced by the
sugar unit of the company and transferred to its own
distillery for its own consumption. Our Company was
granted stay against said recovery subject to furnishing
of bank guarantee of Rs. 1.00 lacs . The Company has
furnished the bank guarantee. Our Company has paid
Administrative charges from 1.11.97 to 26.03.2005
under protest. Thereafter by an interm order dated
10.3.2005 the High Court extended the stay and
permitted the Company to transfer the molasses from
sugar unit to the distillery without any imposition of
administrative charges. Our Company has filed an
appeal for refund these charges which is pending.
SEOHARA DISTILLERY UNIT
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
1. Upper Ganges Sugar &
Industries Ltd. Vs.
Andhra Pradesh
Government Power
Alcohol Factory
Andhra Pradesh High
Court.
Civil Misc. Petition
No. 3202 of 1991
Rs. 2.55
Lakhs
The Company has filed the said writ petition against
Andhra Pradesh Government Power Alcohol Factory.
The respondent had filed a recovery Suit No. 50/83
before Additional Chief Judge, City Civil Court,
Secundrabad, against the Company for recovery of
Export Duty of Rs. 1.68 lacs along with interest. The
respondent earlier paid the said amount to the Company
1973-74 while taking the delivery of Rectified Spirit and
the Company deposited the same with the State Excise
Authorities. On challenging the applicability of the
provisions related to export duty, the Hon’ble Allahabad
High Court in its order dated 31.01.1977 declared the
said duty as illegal and allowed the refund to the
Company, thereafter, the party demanded the refund of
the said duty. The Additional Chief Judge, Civil Court,
Secundrabad in its decree and judgment dated
18.11.1989 has directed the Company to refund the said
amount along with the interest @18% p.a. The Company
subsequently filed an appeal before High Court of
Andhra Pradesh Hyderabad challenging the said
judgment and decree. The Hon’ble Court in its interim
order dated 16.3.1991 has stayed half the decree amount.
2. Upper Ganges Sugar &
Industries Ltd. Vs.
Additional Excise
Commissioner
UP Allahabad
Supreme Court
SLP No. (c )
657/2007
Rs 2.94 Lakhs The Company has filed an appeal before the Hon’ble
High Court challenging the order 28.9.2005 passed by
the Principal Excise Secretary Govt. of U.P. wherein the
demand raised by U P State Excise Authorities on loss of
rectified spirit on its way to siliguri due to accident has
been confirmed. The Hon’ble High Court in its order
dated 05.01.2006 granted an interim stay to the Company
subject to furnishing of the Bank guarantee for the
equivalent amount of the demand raised by the
Authorities. However the department has recovered the
said amount from the Company. The Hon’ble High Court
of Allahabad vide its order dated 18.5.2006 quashed the
demand. The State Govt. has filed SLP no, (c ) 657/2007
before the Hon’ble Supreme Court. The matter is
pending for hearing.
3. U.P.Distillers Allahabad High Nil The Company through Uttar Pradesh Distillers
Draft Letter of Offer
271
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
Association & others
Vs. State of Uttar
Pradesh & Others
Court
Writ Petition No.
1084/(M/B) of 1996
Association has challenged the applicability of the
provisions with regards to export permit fees imposed on
the supply of Industrial alcohol out of U.P. which the
State Government has brought in by way of amendment
in the Uttar Pradesh Transport & Possession of
Denatured Spirit (Nineteenth Amendment) Rule 1996.
The amount of export permit fees are deposited by the
company with the state excise authorities.
4. Upper Ganges Sugar &
Industries Ltd. Vs.
U.P.State Sugar
Corporation; Ltd.
Doiwala, Dehradun
Civil Judge Senior
Division Dehradun
Suit No. 407/1997
Rs. 3.97 lacs The Company has filed a recovery suit for the recovery
of Rs. 3.97 lacs along with interest. The said amount was
paid by the company as advance to the respondent
against purchase of molasses in the year 1995 but a part
of the delivery could not be effected due to heavy rains.
The Respondent had forfeited the said amount .
Respondent has filed its written statement. The Company
has filed evidence.
5. Upper Ganges Sugar &
Industries Ltd. Vs.
U.P.Pollution Control
Board, Lucknow
Allahabad High
Court, Bench at
Lucknow
Writ Petition No.
9278 of 1989
Rs. 1.41 lacs The Company has challenged the order dated 7.8.1989
passed by the Appellate authority of U.P. Pollution
Control Board. The respondent had raised a demand of
Rs, 4.37 lacs ( including interest of Rs. 1.56 lacs )
towards water cess for the period from April 1978 to
December 1988. The Company challenged the said
demand. The Appellate Authority set aside the interest
demand and confirmed the cess demand. The Company
Subsequently challenged the said order before Allahabad
High Court. The Hon’ble High Court stayed half of the
demand subject to Company furnishing bank guarantee
as a security and directed the Company to pay the
balance amount which has been paid.
BHARAT SUGAR MILLS
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
1. Upper Ganges Sugar &
Industries Ltd. (Bharat
Sugar Mills) Vs.
Agriculture Produce
Market Committee
Patna High Court
First Appeal No.
414/1985
Rs.2.06 Lakhs The Market Committee Gopalganj issued demand
notice for the period from 15.11.76 to 31-05-77 on
sugarcane purchased by the Company. The Company
filed Suit No. 52 of 1978 in the court of Sub-Judge,
Gopalganj and the Court ultimately dismissed Suit.
The Company by this Appeal has challenged the
judgment and decree dated 31.05.1985 in the High
Court passed by the Sub-Judge, Gopalganj
dismissing the Suit filed by the Company.
2. Bihar Sugar Mills
Association and others Vs.
State of Bihar & others
High Court, Pana
Writ Petition (CWJC)
No.4613 of 2003 &
13614 of 2006
Not
ascertainable
The Association (The Co. being the party for
Sidhwalia & Hasanpur Unit) filed a writ petition
challenging the demand of electricity duty
chargeable @6% on the value of energy as per
Notification No.SO137 dated 21.10.2002, generated
for own consumption. During the pendency of the
Petition the Bihar Government through Notification
dated 04.03.2005 has amended the earlier
Notification and imposed electricity duty @6% of
the value of energy which shall be equivalent to the
energy tariff as fixed by BSEB. The said Notification
was also challenged by the Bihar Sugar Mills
Draft Letter of Offer
272
Sr.
No.
Name of the
Respondent/Defendant
Court where
pending Suit/
Petition No.
Amount
involved ( Rs.
In Lacs)
Nature of the Cases & particular
Associations, in which the company is one of the
party. There is no further demand made by the
Authorities till date.
Petition has been admitted.
3. Upper Ganges Sugar &
Ind. Ltd. (Bharat Sugar
Mills & New India Sugar
Mill) vs. Union of India
High Court of
Kolkata writ Petition
No. 5045 (W) & 5046
(W) / 1974
Rs. 45.81
Lakhs
The Company has for its Unit namely Bharat Sugar
Mills & Hasanpur Sugar Mills has challenged the
levy sugar price fixed for sugar season 1973-74 and
the High Court, Kolkata by way of interim order has
allowed additional levy price provided the Company
furnished a bank guarantee. According the Company
has furnishes a bank guarantee of Rs.41.53 lakhs
towards additional levy price.
4. Upper Ganges Sugar &
Ind. Ltd. (Bharat Sugar
Mills) vs. Union of India
High Court, Patna
CWJC/4452/1999
Rs. 46.51
Lakhs
The Company had realized additional levy sugar
price in terms of order dated 8.08.83 of the Delhi
High Court for the sugar season 1982-83. Though
the Company had refunded the said additional levy
sugar price in terms of order dated 19.08.1998 of the
Hon’ble Supreme Court, the Government of India
through Ministry of Food and Consumer Affairs
(Department of Sugar & Edible Oil) New Delhi
through its letter dated 15.02.1999 raised the demand
towards interest on the aforesaid additional amount.
The said demand has been challenged by the
Company in these proceedings. The said demand has
been stayed by the High Court, Patna by its order
dated 13.5.1999
HASANPUR SUGAR MILLS
Sr.
No.
Name of the
Party
Claim amount (Rs.
In Lakhs)
Court /
Fourm /Case
No.
Brief Particulars & Current Status
1. Upper Ganges
Sugar &
Industries Ltd.
(New India Sugar
Mills) Vs Asst.
Commissioner,
Leharia Sarai
1.44 Lakhs Patna High
Court
The Company challenged before the Patna High Court, the
order passed by the ACGM Court, Rosera wherein the lower
Court has confirmedthe demand raised by the Asst
Commissioner, Laheriasarai against the destruction of
molasses in August 1987 due to floods. The writ petitionis
pending for admission.
Draft Letter of Offer
273
C. EXCISE LAW CASES
(SEOHARA SUGAR UNIT)
Sr.N
o.
Authority / Court Amount
involved (Rs. In Lacs)
Nature of the cases and particulars
1. Assistant Commissioner,
Moradabad
Disallowed
modvat credit
of Rs. 1.53
lacs
Our Company received a Show Cause Notice No. (17) (15)
32/OFF/Adj/95/416 dated 22.01.95 stating that credit taken by our
Company on certain goods is inadmissible as such goods do not fall
within the definition of ‘admissible capital goods’. The Asstt.
Commissioner in its order disallowed modvat credit of Rs.1.53 lacs and
imposed penalty of Rs.10000. On an appeal by the Company, the
Commissioner (Appeals) has remanded the case to the Asstt.
Commissioner for re-examination and de novo adjudication.
2. Commissioner (Appeals),
Meerut (O.I.A. No. 10-
CE/MRT-II/2004)
Duty demand
Rs.0.26 lacs
penalty
Rs.0.45 lacs
Disallowed
Modvat Credit
Rs. 1.45 lacs
Our company received a show cause notice No. 20/UGS/97/580 dated
24.06.97 stating that credit taken by the Company on certain goods is
inadmissible as such goods do not fall within the definition of
‘admissible capital goods’ and also demand duty on storage loss of sugar.
The Asstt. Commissioner in its Order-in-original No. 69/MBD/Dem/01-
02 dated 16.04.02 confirmed duty of Rs.26350 and imposed penalty of
Rs.45000 and disallowed modvat credit of Rs.1.45 lacs. This appeal is
filed by our Company against the order of Asstt. Commissioner Dated
16.04.02. In the said appeal the Commissioner (Appeals) has admitted
the appeal subject to pre deposit of Rs.100000. Penalty and demand of
Rs. 26350 are stayed.
3. Commissioner (Appeals),
Meerut
Appeal No. 217-
CE/MRT/2000
Dated27.3.2000
Disallowed
Modvat credit
Rs.2.40 lacs
Our Company received a show cause notice No. 20/UGS/97/374 dated
04.06.98 stating that credit taken by our Company on certain goods is
inadmissible as such goods do not fall within the definition of admissible
‘inputs’. The Asstt. Commissioner In its order (O.I.O.No.75/MBD/99
dated 24.12.99) disallowed credit of Rs.2.40 lacs which was upheld by
the commissioner (Appeals), In the appeal (Appeal No. E/1016/03-
NB(SM) before the CESTAT, the matter has been remanded to the
commissioner (Appeals) for re-adjudication by the CESTAT’s order No.
A/1417/03 dated 17.11.03
4. High Court of Allahabad Rs. 0.31 lacs This appeal is filed by our Company against the order of CESTAT dated
11.01.2004.
Our Company received a show cause notice No. 20/Seohara/SCN/99/490
dated 21.12.99 stating that credit taken by our company on certain goods
is inadmissible ‘capital goods’. The Dy. Commissioner in its order
(O.I.O. No.37/MBD/2000 dated 5.10.2000) confirmed the show cause
notice demand of Rs.31215 which was upheld by the commissioner
(Appeals) by its order dated 13.10.2003. The CESTAT has confirmed the
demand by its order no. A/1399-1401/04/NB(SM) dated 11.10.2004. Our
company has filed an appeal in the Allahabad High Court against the
CESTAT order.
5. High Court of Allahabad Rs.1.83 lacs This appeal is filed by our Company against the order of CESTAT dated
11.10.2004.
Our Company received 3 show cause notice bearing Nos.
20/Seo/SCN/99/212 dated 14.03.02, No.20/Seo/SCN/DPR/99/632 dated
6/07/02 and no. V(30) 21/DEM/2001/1513 dated 25/05/01 stating that
credit taken by the Company on certain goods is inadmissible as such
goods do not fall within the definition of admissible ‘Capital Goods’. A
single order no. 39-42/MBD/DEM/01-02 dated 30.10.2001 was passed
by the Asstt. Commissioner Allowing the entire credit of Rs.217160. On
an appeal by the department, the Commissioner (Appeals) allowed
Modvat credit to Rs. 14000 and confirmed rest of duty demanded in the
show cause notice. The CESTAT, on an appeal (Appeal No. E/3680/04,
E/82/04 & E/83/04-NB(SM) by the Company, by its order dated
11.10.2004 has allowed credit of Rs. 20000 and confirmed the balance
demand of Rs.182624. Our Company has filed an appeal in the
Allahabad High Court against the CESTAT order.
6 High Court of Allahabad Disallowed The Company has filed an appeal before High Court against the
Draft Letter of Offer
274
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
credit of Rs.
1.44 lacs
CESTAT Final order No. 1009/07-SM/(BR) 1.06.2007.
Our Company received a show cause notice no.
V(30)231/DEM/2001/5066 dated 3.7.02 stating that credit taken by the
company on certain goods is inadmissible as such goods do not fall
within the definition of admissible ‘capital goods’. The Deputy
Commissioner by its order disallowed credit of Rs. 151198 and imposed
penalty of Rs. 147822 and interest. The commissioner (Appeals) by order
No. 62/CE/MRT-II/05 dated 3.05.2005 disallowed credit in respect of
welding electrodes for Rs. 1.44 lacs and set aside the penalty. Our
Company has filed an Appeal No. E/2548/05 in CESTAT, Delhi. In the
interim Order CESTAT has directed the Company to deposit the duty
under dispute which has been paid.
CESTAT has rejected the appeal vide their final order no.1009/07-
SM/(BR) 01.06.07 and upheld the demand passed by the Commissioner
Appeals, Meerut II.
7. CESTAT, New Delhi
E/S/355/06 in E/399/06
Disallowed
Credit Rs.1.19
lacs Penalty
Rs.1.19 Lacs
The company was granted stay from CESTAT vide their stay order no.
383/06-SM/(BR) after pre deposited Rs.0.35 lacs against the order passed
by the Commissioner (Appeals) wherein the Commissioner (Appeals)
has vide its order dated 19.10.2005 dismissed the Appeal filed by the
Company. The Commissioner (Appeals) has upheld the order dated
17.02.2005 passed by the adjudicating officer Dy. Commissioner.
Our Company received a show cause notice No. V(30)269/Dem/02/7779
dated 03.01.2003 stating the credit taken by our company on certain
goods is inadmissible as such goods do not fall within the definition of
admissible ‘capital goods’. The Deputy Commissioner by its order-in-
original no. 212(3/03) Dem/03/05 dated 17.02.2005 disallowed credit of
Rs. 1.19 lacs and imposed penalty for an equal amount along with
interest thereon.
8. CESTAT, New Delhi
E/S/153-154/06
Disallowed
Credit Rs.1.66
lacs Penalty
Rs.2.94 Lacs
The company was granted stay from CESTAT after pre deposited Rs.
0.50 lacs against the order passed by the Commissioner (Appeals)
Meerut wherein, the Commissioner (Appeals) has partly allowed the
Appeal filed by the Company allowing the credit of Rs.1.28 lacs which
was disallowed by the order dated 17.02.2005 passed by the adjudicating
officer, Deputy Commissioner.
Our Company received a show cause notice No. V(30)376/Dem/02/99
MBD-I/34/M-II/02 dated 08.03.2003 stating the credit taken by our
company on goods such as Iron material , V. Belt Welding electrode etc.
is inadmissible as such goods do not fall within the definition of
admissible ‘capital goods’ on which credit is admissible.
The Deputy Commissioner by its order-in-original no. 212(3/03)
Dem/03/05 dated 17.02.2005 confirmed the show cause notice duty
demand of Rs. 2.94 lacs and imposed penalty for an equal amount along
with interest thereon.
9. CESTAT, New Delhi
Appeal No.E/172/06/MBS
Disallowed
credit Rs. 2.23
lacs Penalty
Rs. 3.25 lacs
The Company was granted stay order no 403/404/06/SM dated 17.4.06
from CESTST after pre-deposit 0.50 lacs against draft O-I-A no.
243/244/EE/MRT-II/05 dated 19.10.05 passed by the Commissioner (A),
Meerut., the Commissioner (Appeals) has partly allowed the appeal filed
by the Company allowing the credit of Rs. 1.02 lacs which was
disallowed by the order dated 17.2.2005 passed by the adjudicating
officer, Deputy Commissioner.
Our Company received a Show Cause Notice No. V(30)64/Dem/03
dated 29.8.03 stating that Credit taken by our Company on certain goods
is inadmissible as such goods do not fall within the definition of
admissible ‘capital goods/input’. The Dy. Commissioner by order-in-
original No. 211(64/Dem/03/05) dated 17.2.2005 confirmed demand of
Rs. 3.25 lacs and imposed penalty of equal amount and interest.
10. CESTAT, Delhi (E/158/2005) Disallowed
Credit Rs. 7.87
This Appeal filed by our Company against the order of Commissioner (
Appeals) dated 23.11.2004.
Draft Letter of Offer
275
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
lacs
Penalty Rs.
8.66 lacs
Our Company received a Show Cause Notice V(30)374/Dem/02/306
dated 7.2.2003 stating that Credit taken by the Company on certain goods
is inadmissible as such goods do not fall within the definition of
admissible ‘inputs’/’capital goods’. By its order dated 31.12.2003, the
Additional Commissioner confirmed duty demand of Rs. 8,65,902 and
imposed penalty of equal amount along with interest thereon. In appeal
the commissioner (Appeals) by its order dated 23.11.04 confirmed duty
demand of Rs. 7,86,731 and penalty of Rs. 8,65,902. Against this order
the Company has filed an appeal No. E/158/2005 along with stay
application before the CESTAT New Delhi . The CESTAT vide its order
No. 114/05-13 dated 15.2.2005 stayed the demand and penalty subject to
pre-depositing Rs. 1 lac which has been duly complied with.
11 High Court of Allahabad
(Appeal No. 13/2004)
Rs. 2.69 lacs This Appeal filed by our Company against the order of CESTAT, New
Delhi dated 28.01.2004.
Our Company received a Show Cause Notice No. V(15)(17)
143/Off.96/255 dated 3.04..96 stating that Credit taken by the Company
on certain goods is inadmissible as such goods do not fall within the
definition of admissible’ capital goods’. By its order dated 17.7.02, the
Asst. Commissioner confirmed duty demand of Rs. 2.74 lacs and
imposed penalty of Rs.1,25,000. On appeal preferred by the Company,
the Commissioner (Appeals) confirmed duty of Rs. 2.74 lacs and
imposed a reduced penalty of Rs. 25,000. Our Company filed an appeal
before CESTAT New Delhi challenging the order of the Commissioner
(Appeals). The CESTAT vide its order No. A/187/04-NB(SM) dated
28.1.04 has allowed credit of Rs. 5000 and confirmed the balance. The
penalty was also set aside. The entire demand of Rs. 2.69 lacs was
reversed by the Company under protest. Our Company has filed an
appeal No. 13/2004 with High Court Allahabad.
12. Commissioner (Appeals),
Meerut
(Appeal No.
47/CE/Appeal/MRT/02
CESTAT New Delhi
Duty demand
Rs. 2.49 lacs
Penalty Rs.
0.50 lacs
0.33 lacs
This Appeal is filed by our Company against the order of Jt.
Commissioner confirming duty demand of Rs. 2.49 lacs and imposing
penalty of Rs. 50,000.
Our Company received Show Cause Notice No. V(15)
Off/Adj/Noida/67/02/5979 dated 22.03.02 as regards storage wastage of;
4983.90 Qtls. of molasses and demanding duty of Rs. 2.49 lacs along
with penalty and interest thereon. The Jt. Commissioner confirmed the
show cause notice duty demand and imposed penalty of Rs. 50,000. Our
Company has filed an Appeal dated 2.9.2002 to Commissioner
(Appeals), Meerut. The order is awaited.
Our Company has also filed applications for remission of duty on
molasses wastage. The Commissioner, Meerut vide order No. 01/
Comm/MRT-II/2003 dated 10.11.2003 has rejected the remission
application and confirmed the duty of Rs. 0.33 lacs on part of the
quantity covered under above application.
An appeal No. E/810/NB dated 15.10.2004 was filed before CESTAT
New Delhi challenging the order of the Commissioner Excise, Meerut.
The CESTAT New Delhi vide its order No. A/1404/04/NB dated
9.9.2004 has remanded the matter to Commissioner for fresh decision.
The Commissioner by its order dated 24.10.2005 has rejected the
remission application and confirmed the duty of Rs. 0.33 lacs. The
Company has filed an appeal before the CESTAT on 23.1.2006. The
same is pending for the hearing.
13. Commissioner (Appeals), Duty Demand This Appeal is filed by our Company against the order of Deputy
Draft Letter of Offer
276
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
Meerut
(Appeal No.11/04)
CESTAT, New Delhi
Rs.1.54 lacs
Rs.0.35 lacs
Commissioner confirming duty demand of Rs.1.54 lacs along with
interest.
Our Company received a Show Cause Notice No. 20/Seo/SCN/99/488
dated 17.12.99 as regards wastage of 3074.07 qtls of molasses and
demanding duty of Rs. 1.54 lacs. The Deputy Commissioner confirmed
the show cause notice duty demand and imposed interest thereon.
Against the order of the Deputy Commissioner of Company has filed an
Appeal ( No. 11/04) to Commissioner ( Appeals), Meerut dated
23.01.2004. The order is awaited.
Our Company has also filed applications for remission of duty on
molasses wastage. The Commissioner, Meerut vide its order No.
01/Comm/MRT-II/2003 dated 10.11.2003 has rejected the remission
application and confirmed the duty of Rs. 0.35 lacs on part of the
quantity covered under above application.
An appeal No.E/810/NB dated 15.10.2004 was filed before CESTAT
New Delhi, challenging the order dated 10.11.2003.
The CESTATE New Delhi vide its order No. A/1404/NB dated 9.9.2004
has remanded the matter to Commissioner for fresh decision. The
Commissioner by its order dated 24.10.2005 has rejected the remission
application and confirmed the duty of Rs. 0.35 lacs. The company has
filed an appeal before the CESTAT on 23.1.2006. The same is pending
for the hearing.
14. Additional Commissioner
(Meerut)
Duty Demand-
Rs. 17.06 lacs
The Company had filed an appeal before the Commissioner(Appeals)
Meerut against the order of Additional Commissioner confirming duty
demand of Rs. 17.06 lacs along with interest.
Our Company received Show Cause Notice No. 20/UGS/95/410 dated
6.06.95 as regards duty on 20,076 Qtls of sugar lost due to fire and
demanding duty of Rs. 17.06 lacs The Additional Commissioner by its
order in original dated 30.6.2005 received by the Company on 12.1.2006
confirmed the duty demand in the show cause notice. The Company has
filed an appeal against the said order before the Commissioner (
Appeals). Our Company has filed a remission application before the
Commissioner Meerut which is still pending for final disposal.
The Commissioner Appeals by its order dated 28.4.2006 remand the
matter to Additional Commissioner.
15. CESTAT New Delhi
Appeal No. 795/06
Demand for
redemption Rs.
30.00 lacs
Duty demand-
Rs. 4.74 lacs
Penalty- Rs.
5.00 lacs
The Company has filed an appeal before CESTAT along with stay
application. The Company was granted stay from CESTAT after pre-
deposited Rs. 4.00 lacs against the order dated 30.11.2005 passed by the
Commissioner ( Appeals) upholding the order passed by the Asst.
Commissioner. Our Company received a Show Cause Notice No. V(30)
Seiz/Off/28/2002/4990 dated 28.06.02 alleging discrepancy in season
wise sugar stocks. The Asst. Commissioner by order No. 135/MBD/AUG
dated 11.8.2005 has confiscated 5577 Qtls of sugar providing for
redemption opportunity to our Company by paying Rs.30 lacs and
demanding duty of Rs. 4.74 lacs. The Asst. Commissioner has further
imposed penalty of Rs. 5 lacs and interest thereon.
16. CESTAT New Delhi
E/1280-84, 1370/2006
1923/2006
Disallowed
credit of Rs.
16.10 lacs
The Company has filed the appeal before CESTAT New Delhi and was
granted stay vide order dated 17.05.06 in appeal Nos. E/1280-84 after
pre-deposit Rs.1.50 lacs against the order passed by Commissioner
(Appeals) Meerut dated 30.1.2006 . The Company has received 7 show
Draft Letter of Offer
277
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
Penalty Rs.
16.10 lacs
cause notice stating that the credit of Rs. 17.83 lacs availed by the
company on certain items are not admissible as such goods do not fit
within the definition of capital goods or inputs.
Asst. Commissioner Moradabad has allowed part of Appeal by Rs. 1.73
lacs and confirmed the balance show cause notice demand duty of Rs.
16.10 lacs and also imposed penalty of equal amount along with interest
thereon, against which the Appeal before the Commissioner (Appeals)
Meerut was filed. The Commissioner (Appeals) Meerut –II upheld the
order passed by Dy. Commissioner Moradabad.
17 CESTAT New Delhi
Appeal No. E/2860-2861/06
of 2006
Disallowed
Credit of Rs.
0.87 lacs
Penalty Rs.
0.50 lacs
The Company has filed an appeal before CESTAT New Delhi and was
granted stay from CESTAT by their stay order No. 1164-65/06 dated
6.10.2006. The Company has received show cause notice stating that the
credit taken by the company of Rs..3.38 lacs on certain items are
inadmissible as such goods do not fall with the definition of capital goods
or inputs on which the Credit is admissible. Dy. Commissioner
Moradabad in its order dated 21.12.2005 has allowed part of the disputed
credit availed by the Company of Rs. 2.51 lacs and confirmed the
balance demand of Rs. 0.87 lacs and also imposed penalty of Rs. 0.50
lacs
The Commissioner (Appeals) has by its stay order dated 8.3.2006
directed the Company to pre-deposit 50% of the duty confirmed within
two weeks and has waived the pre-deposit of the payment of penalty
amount till the disposal of the appeal. Commissioner (Appeals) Meerut
has disposed off the appeal and upheld the demand by their O.I.A. No.
125-126CE/MRT-II/06 dated 30.6.06.
18. CESTAT New Delhi
Appeal No. E/2860-2861/06
of 2006
Disallowed
credit of Rs.
2.65 lacs and
Penalty of Rs.
0.50 lacs
The Company was granted stay from CESTAT by their stay order No.
1164-65 /06 dated 6.10.06. The Company has received show cause notice
stating that the credit taken by the Company of Rs. 3.36 lacs on certain
items are inadmissible as such goods do not fall with the definition of
capital goods or inputs on which the Credit is admissible. Asst.
Commissioner Moradabad in its order dated 23.12.2005 has partly
allowed the credit of Rs.0.71 lacs and confirmed the balance demand of
Rs.. 2.65 lacs and also imposed penalty of Rs. 0.50 lacs
The Commissioner( Appeals) has by its stay order dated 8.3.2006
directed the Company to pre-deposit 50% of the duty confirmed within
two weeks and has waived the pre-deposit of the payment of penalty till
the disposal of the appeal. Commissioner Appeals has disposed off the
appeal and upheld the demand passed by Dy. Commissioner Moradabad
vide their O.I.A. No. 125-126-CE/MER-II/06 dated 30.6.06.
19. CESTAT New Delhi Disallowed
Credit Rs. 7.90
lacs
Penalty Rs.
7.90 lacs
The Company is in process of filling an appeal before CESTAT
challenging the order dated 30.7.2007 passed by the Commissioner (
Appeals) upholding the order passed by the Addl. Commissioner Meerut-
II . Our Company received a show cause notice No. V(15)Adj/M-
II/UGS/ 3/06/4875 dated 2.5.06 stating that the credit taken by the
Company on certain items are inadmissible as such goods do not fall with
the definition of capital goods or inputs on which the Credit is
admissible.. The Addl. Commissioner Meerut II confirmed the demand
Rs. 8.17 lacs and imposed penalty for equal amount along with interest.
The Commissioner (Appeals ) Meerut allowed credit of Rs. 27020 and
the reduced penalty with the same amount vide their in order in appeal
No. 183-184 CE/MRT-II/07 dated 30.7.2007 after pre-deposited Rs.
4.09 lacs .
20. CESTAT New Delhi
Disallowed
credit Rs. 0.07
The Company has filed an appeal along with stay application before the
CESTAT and obtained stay order no 632/07 dated 27/07/07 against
Draft Letter of Offer
278
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
Appeal No. 1397 of 2007 –
SM(BR)
& Penalty Rs.
0.10
O.I.A. No. 78-CE/MRT-II/2007 dated 30.3.2007.
The Company received a show cause notice No. V(30)
Dem/MBD/553/06 9494 dated 17.8.06 for Rs. 94361.00 stating that the
credit taken by the Company on certain items are inadmissible as such
goods do not fall with the definition of capital goods or inputs on which
the Credit is admissible.Dy. Commissioner Moradabad allowed Rs.
87209.00 and disallow Rs. 7152.0 and imposed penalty Rs. 10000.00.
The Commissioner (Appeals) Meerut upheld the order (passed by Dy.
Commissioner Moradabad) vide their O.I.A. No. 78-CE/MRT-II/2007
dated 30.3.2007.
21. CESTAT New Delhi
Appeal No. 464-465 of 2007 -
SM
Disallowed
credit Rs. 4.25
lacs
Penalty Rs. 1
Lacs
The Company has filed appeal along with stay application before the
CESTAT New Delhi against the O.I.A. No. 216-217 –CE/MRT-II/2006
dated 30.11.06. The Company was granted stay order from CESTAT
after pre-deposited Rs..0.50 lacs of penalty amount vide their stay order
No.314-315/07-SM(BR)
The Company received show cause notice No. V(30)
Dem/UGSIL/454/MBD/05/8001 dated 14.12.2005 stating that the credit
taken by the Company on certain items are inadmissible as such goods do
not fall with the definition of capital goods or inputs on which the Credit
is admissible.. The Deputy Commissioner Moradabad vide its order No.
96-MBD/2006 dated 14.3.2006 had upheld the demand and also imposed
penalty Rs. 1 lacs. The Company filed an appeal before Commissioner
Appeal Meerut and obtained stay order after pre deposited Rs. 2.12 lacs.
Commissioner (Appeals) Meerut has disposed off the appeal and has
uplehd the order passed by Dy. Commissioner, Moradabad.
22 CESTAT New Delhi
Appeal No. 464-465 of 2007 –
SM
Disallowed
credit Rs. 3.58
lac
Penalty Rs.
1.00 lacs
The Company has filed an appeal along with stay application before the
CESTAT New Delhi against the O.I.A. No. 216-217 –CE/MRT-II/2006
dated 30.11.06. and was granted stay order from CESTAT after pre-
deposited Rs..0.50 lacs of vide their stay order No.314-315/07-SM(BR).
The Company received show cause notice No. V(30)
Dem/UGSIL/456/MBD/05/8003 dated 14.12.2005 stating that the credit
taken by the Company on certain items are inadmissible as such goods do
not fall with the definition of capital goods or inputs on which the Credit
is admissible.. The Deputy Commissioner Moradabad vide its order No.
90-MBD/2006 dated 14.3.2006 had upheld the demand and also imposed
penalty Rs. 1.00 lacs. The Company filed an appeal before
Commissioner Appeal Meerut and obtained stay after pre deposited Rs.
1.79 lacs up to final hearing. Commissioner (Appeals) Meerut has
disposed off the appeal and has upheld the order passed by Dy.
Commissioner, Moradabad.
23. CESTAT New Delhi
&
Revision Authority
Govt. of India
Disallowed
remission Rs.
0.32 lacs
Penalty
Rs.0.10
Lacs
The Company has filed an appeal before the CESTAT New Delhi against
the order no.17/Commissioner/MRT dated 14/03/2006 passed by
Commissioner Meerut rejecting the application on 366 qtls of sugar
burnt in fire in the Company’s Godown.
The company has also received show cause notice No. V(30)
01/Dem/U.G./2006/92 No.01/MBD/2006 dated 6/01/06, regarding
remission of duty on 366 qtls. Sugar burnt in godown Dy. Commissioner
MBD in its O.I.O no. 74/MBD/2007 dated 25/01/07 has confirmed duty
demand Rs.31,732 and imposed Penalty of Rs 10,000.
The company filed an appeal before Commissioner (Appeal) Meerut
regarding remission of duty on 366 qtls. sugar burnt in godown.
Commissioner (Appeal) upheld demand vide O.I.A. No. 117-CE/MRT-
II/2007 dated 16-05-2007. The company filed and applied before the
revision Authority Govt.of India. Both appeals are pending for hearing
Draft Letter of Offer
279
SEOHARA DISTILLERY UNIT
Sr.
No.
Authority/Court Amount
involved (Rs. In lacs)
Nature of the Case and particulars
1. Commissioner ( Appeals)
Ghaziabad
(Appeal No. 423-
CE/MRT/97)
Duty Demand
– Rs. 2.50
lacs (
including
penalty of Rs.
0.20 lacs)
Our Company received a Show Cause Notice No. V(30) 125/MOD/95/2107
dated 7.04.95 regarding credit taken on original invoices. The Asst.
Commissioner , Moradabad in its order-in-original No. 3901 dated June
18,1996 up-held the demand and also imposed the penalty of Rs. 20,000/-.
The same was confirmed in an appeal filed by the Company ( No. 423-
CE/MRT/97) dated 25.03.1997 before the Commissioner (Appeals)
Ghaziabad. CESTAT in its order dated August 31, 2001 in Appeal No.
E/1235/97-NB(SM) filed by the Company has remanded the matter to
Commissioner (Appeal) for consideration.
2. CESTAT New Delhi
E/724/2006
Duty demand
Rs. 3.13 lacs
Penalty Rs.
3.13 lacs
The Company filed an appeal before CESTAT against the order passed by the
Commissioner (Appeals), Meerut. The Commissioner (Appeals) has upheld
the order passed by the Asst. Commissioner.
Our Company received Show Cause Notice No.
V(30)/DEM/MBD/718/2004/5431 dated 2.12.2004 stating that Credit taken
by our Company on certain items is inadmissible as such goods do not fall
within the definition of ‘ capital goods’ on which credit is admissible. The
show cause notice demanded a duty of Rs. 3,13,186 along with penalty and
interest. The Asst. Commissioner by its order No. 131/DEM/MBD/05 dated
27.7.05 has confirmed the demand and imposed penalty of equal amount
along with interest thereon.
The CESTAT by its order dated 13.4.2006 has passed an unconditional stay
order waiving the pre-deposit of the duty demand and the penalty.
Draft Letter of Offer
280
Sr.
No.
Authority/Court Amount
involved (Rs.
In lacs)
Nature of the Case and particulars
3. CESTAT New Delhi
E/3764-65/2006
Disallowed
credit Rs.
4.27 lacs
Penalty
Rs.1.00 lacs
The Company has filed an appeal before CESTAT against the order passed by
the Commissioner (Appeal), Meerut and was granted stay after pre-deposited
Rs. 1.50 lacs Our Company received a Show Cause Notice No.
V(30)305/DEM/MBD/2005/5352 / 1/10/2005 of Rs. 4.27 Lacs stating that
credit taken by our company on certain items is inadmissible as such goods
do not fall definition of capital goods on which credit admissible .The Asst.
Commissioner by its O.I.O No. 38/MBD/2006 dated 31.1.2006 confirmed the
demand and imposed penalty of Rs. 1 lacs along with interest thereon.
The Company has filed an appeal before the Commissioner ( Appeal) Meerut
Challenging the order dated 31.1.2006 passed by Dy. Commissioner,
Moradabad. The Commissioner (Appeal) upheld the demand passed by Dy.
Commissioner Moradabad.
4. CESTAT New Delhi
E/3764-65/2006
Disallowed
credit Rs.
4.27
Penalty Rs.
1.00
The Company has filed an appeal before CESTAT against the order passed
by the Commissioner (Appeal), Meerut and was granted stay after pre-
deposited Rs. 1.50 lacs Our Company received a Show Cause Notice No.
V(30)307/DEM/MBD/2005/5356 dated 7/10/2005 of Rs. 4.27 lacs stating that
credit taken by our company on certain items is inadmissible as such goods
do not fall definition of capital goods on which credit admissible . The Asst.
Commissioner by its O.I.O No. 33/MBD/2006 dated 31.1.2006 confirmed the
demand imposed penalty of Rs. 1 lacs along with interest thereon.
The Company has filed an appeal before the Commissioner (Appeal) Meerut
Challenging the order dated 31.1.2006 passed by Dy. Commissioner,
Moradabad. The Commissioner (Appeal) upheld the demand passed by Dy.
Commissioner Moradabad.
5. CESTAT New Delhi
E/454-455/2007
Disallowed
credit Rs.0.58
Penalty Rs.
0.10
The Company has filed an appeal before CESTAT against the order passed
by the Commissioner (Appeal), Meerut and was granted unconditional stay .
Our Company received a Show Cause Notice No.
V(30)305/DEM/UGSIL/35/06/808 dated 31/1/2006 stating that credit taken
by our company on Iron Material is inadmissible. The Dy. Commissioner by
its O.I.O No. 105/MBD/2006 dated 18.4.2006 confirmed the demand and
imposed penalty Rs. 10000.00
The Company has filed an appeal before the Commissioner (Appeal) Meerut
Challenging the order dated 18.4.2006 passed by Dy. Commissioner,
Moradabad. The Commissioner Appeal upheld the demand passed by Dy.
Commissioner Moradabad vide O.I.A. No.213-214-CE/MRT-II/2006 dated
30.11.2006.
6. CESTAT New Delhi
E/454-455/2007
Disallowed
credit Rs.0.85
Penalty Rs.
0.10
The Company has filed and appeal before CESTAT against the order passed
by the Commissioner (Appeal), Meerut and was granted unconditional stay .
Our Company received a Show Cause Notice No.
V(30)/DEM/UGSIL/30/06/537 dated 20/1/2006 stating that credit taken by
our company on Iron Material is inadmissible. The Dy. Commissioner by its
O.I.O No. 106/MBD/2006 dated 18.4.2006 confirmed the demand imposed
penalty Rs. 10000.00
The Company has filed an appeal before the Commissioner ( Appeal) Meerut
Challenging the order dated 18.4.2006 passed by Dy. Commissioner,
Moradabad. The Commissioner Appeal upheld the demand passed by Dy.
Commissioner Moradabad vide O.I.A. No.213-214-CE/MRT-II/2006 dated
Draft Letter of Offer
281
Sr.
No.
Authority/Court Amount
involved (Rs.
In lacs)
Nature of the Case and particulars
30.11.2006.
7. CESTAT New Delhi Disallowed
credit Rs.
11.63
Penalty Rs.
11.63
The Company in process of filling as appeal before CESTAT challenging the
order dated 30.7.2007 passed by the Commissioner ( Appeals) upholding the
order passed by the Addl. Commissioner Meerut-II . Our Company received a
show cause notice No. V(15)Adj/M-II/UGS/38/06 dated 28.4.06 stating that
the credit taken by the Company on certain items are inadmissible as such
goods do not fall with the definition of capital goods or inputs on which the
Credit is admissible.. The Addl. Commissioner Meerut confirmed the demand
vide their O.I.O No. 35/ADC/M-II/2006 dated 30.11.2006. The Company
filed an appeal before Commissioner ( Appeals) Meerut-II against its order.
The Commissioner (Appeals) granted stay after pre-deposited 50% amount
of total demand. The Commissioner (Appeals) upheld the demand passed by
Addl. Commissioner , Meerut vide their in order appeal No. 183-184 –
CE/MRT-II/2007 dated 30.7.2007.
8. CESTAT New Delhi
E/2269/2007
Disallowed
credit Rs.
2.75
Penalty Rs.
0.25
The company has filed an appeal before CESTAT New Delhi challenging the
order passed by the Commissioner (Appeals) Meerut . The Company
received a show cause notice No.V(30)Dem/MBD/268/06/9373 dated
3.10.2006 stating that the credit availed by the Company on Iron are not
admissible. The Dy. Commissioner Moradabad upheld the demand.
The Commissioner (Appeals) upheld the demand (passed by Dy.
Commissioner Moradabad) by their in O.I.A No. 126-CE/MER-II/2007 dated
23.5.2007.
BHARAT SUGAR MILLS
Sr.N
o.
Authority / Court Amount
involved (Rs.
In Lacs)
Nature of the cases and particulars
1. CESTAT, Kolkata
Service Tax
demand
Rs.1.93
This Appeal is filed against the order of Commissioner (Appeals) dated
24.02.2005.
Our Company received a Show Cause Notice No. V-4 (30) 14-ST/
C&F/99/2364 dated 10.06.2002 from Asstt. Commissioner demanding
service tax amounting to Rs. 1.93 lakhs along with interest and penalty
thereon alleging that our Company has failed to collect and deposit
service tax on discounts to sugar selling agents. The Dy. Commissioner
has confirmed the show cause notice demand and imposed equal amount
of penalty and interest. In an appeal preferred by the Company, the
Commissioner (Appeals) by order No. 82/PAT/ CEX/appeal/2005 dated
24.02.2005 has confirmed the demand of Rs. 1.93 lakhs but set aside
penalty and interest. Our Company has filed an appeal to the CESTAT
against the Order in Appeal confirming the service tax demand.
2. High Court of Kolkata CR
No.3043(W)of 1981
Duty
demanded –
Rs.1.19
This Appeal is filed against the order of the Collector of Central Excise
dated 17.07.1980.
Our Company received a Notice of demand dated 04.03.1977 from
Inspector, CE, Sidhwalia (Gopalganj) Asstt. Commissioner demanding
inadmissible rebate on sugar production amounting to Rs. 1,19,365.50.
The show cause notice was confirmed by the Asstt. Collector. In an
appeal preferred by the Company, the Collector of Central Excise
(Appeals) by its order dated 17.07.1980 dismissed our Company's appeal
and upheld the demand. Our Company went in appeal before the Kolkata
High Court, which by its interim order order dated 30.04.1981 granted a
stay on the order of CCE (Appeals) and by its order dated 20.05.1981
directed our Company to furnish a bank guarantee of Rs. 75,000 which
our Company has furnished.
3. CESTAT, Kolkata
SP-518/06 Appeal EDM-
382/06
Rs.2.53 The Unit received a Show Cause Notice No. MOI/92-93/88 dated
24.02.1993 regarding the payment of duty on 14656.33 Qtls. Of molasses
destroyed as per order of State Excise Authority.
Draft Letter of Offer
282
E. Land/Property related Disputes /Cases
1. The Company by agreement dated 7.11.1992 purchased land admeasuring 4.05 bigha situated at
Gata No.2233 Survey No. 2671/2.2671/3 Gram Khalilpur ( Pergana Seohara ), Tehsil Dhampur
Dist. Bijnor from Ram Chandra Singh, Ghanshyam Singh, Bhudev Singh Devendra Kumar,
Yashpal Singh. The said agreement is pending registration.
The Khalilpur Gram Sabha has claimed ownership on the said property. The property is since then
pending for registration.
2. The Company was served notice under U.P. Imposition of Ceiling of Land Holding Act by the
State Government after the introduction of the U.P. Zamindari Abolition and Land Reforms Act,
1956, The Company had challenged the said notice before the Allahabad High Court vide Writ
Petition No. 8239/1980. The Court in its order dated 9.12.1996 has remanded the case before the
concerned Land Ceiling Authority, Bijnor.
3. The Company has been served with the notices under the provisions of the U.P. Zamindari
Abolition and Land Reforms Act,1956 by the Addl. Collector (City) Ghaziabad for acquiring of
additional land admeasuring 9.31 acres of land at village Sahapur Fagota, Pargana Dashana, Tehsil
Hapur Dist. Ghaziabad. The Company has filed its reply to the said notices. The Addl. Collector
(City) Ghaziabad has passed Ex-party orders dated 14.8.2006, acquiring the total land. The
company has filed appeal before the Divisional Commissioner Meerut against the order of Addl.
Collector (City) Ghaziabad.
4. Bharat Sugar Mills, was served a notice to declare 241.85 Acres of Land related to Company’s
farm as surplus land under the provisions of Bihar Land Reforms (Fixation of Ceiling Area &
Acquisition of Surplus Land) Act 1951. Against this declaration the Company filed a writ petition
before Patna High Court, and the Hon’ble High Court in its order dated 08.01.0998 remanded the
matter to S.D.O. Gopalganj for fresh hearing and the matter is pending.
5. Hasanpur Sugar Mills has filed 7 number of cases before the Civil Court, Rosera,
Distt.Samastipur, against encroachment of illegal possession of the land belonging to the
Company. Interim Injunction has been granted by the Court for maintaining status quo by the
parties. The details are:-
Suit No. Parties Current Status
T S No.54/1981 New India Sugar Mills V/s Ram
Dev Ray & Ors.
Status quo to be maintained and
case is under trial.
Civil Case Misc
Appln.
No.15/1991
New India Sugar Mills V/s Md.
Azam & Ors.
Case is under trial
T S No.54/2002 New India Sugar Mills V/s State
of Bihar & Ors.
Case is under trial
Civil Misc
No.2/2003
New India Sugar Mills V/s State
of Bihar & Ors.
Status quo to be maintained and
case is under trial.
Civil Misc
No.1/2004
New India Sugar Mills V/s State
of Bihar & Ors.
Status quo to be maintained and
case is under trial.
Civil T S
No.9/2003
New India Sugar Mills V/s State
of Bihar & Ors.
Status quo to be maintained and
case is under trial.
Civil T S
No.3/2003
New India Sugar Mills V/s Gyani
Devi
Status quo to be maintained and
case is under trial.
Draft Letter of Offer
283
F. Recovery Cases
The Company has filed 27 recovery cases against various parties relating to recovery of Dadni and
Transportation aggregating to a claim of Rs.9.05 Lakhs.
G. Litigation pertaining to transfer / transmission of Shares of the Company There are 3 civil suits filed by certain shareholders claiming right and title to certain shares of the Company.
The Company is made a formal party to these suits and no financial claim has been made against the
Company.
III. Claim/Show Cause Notice Pending against the Company
A. Labour Laws: One Mr. Syed Suleman Ahmad an ex-employee of the company had retired from the service of the
company and has claimed arrears of Rs.2.45 lacs as differential salary as per U.P. Government
Notification dated 30.6.2002. The Company had duly responded about the non applicability of the said
notification in the case.
B. Excise Law : The Company has been served with 4 Show Cause Notices by the Central Excise Authorities disputing
the Cenvat credit availed by the Company and also raising demands otherwise. The aggregate demand
amount to Rs. 64.44 lacs. The Company has dully responded to the said Notices. The Show Cause
Notices are pending adjudication by the department. (Seohara Sugar Unit)
In Distillery Unit 2 demand notices amounting to Rs.12.60 lacs are pending for hearing adjudication by
the department.
IV. Cases Filed by Morton Confectionery & Milk Products
A. Civil Cases The Company (in relation to its Morton Confectionery & Milk Products) Division has filed 5 recovery cases
aggregating to a claim of Rs. 11.51 Lakhs.
B. Excise Cases
Sr.No.
Authority / Court Amount / Claim
involved (Rs.
In Lacs)
Nature of the cases and particulars
1. CESTAT, Kolkata
(Appeal No.ST/SM/37 of
2005)
Duty demand
– Rs.0.72
Lakhs
The Company has filed an appeal against order of the Commissioner
(Appeals) confirming duty demand of Rs.72,000 along with penalty and
interest.
Our Company received a Show Cause Notice dated 26.06.05 from Asst.
Commissioner demanding service tax amounting to Rs.72,000 along with
interest and pelanty thereon alleging that our Company has failed to
collect and deposit service tax on commission. The Asst. Commissioner
confirmed the show cause notice demand along with penalty and interest.
In appeal preferred by the company, the Commissioner (Appeal) has
upheld the Asst. Commissioner order. Our Company has filed an appeal
in the CESTAT.
C. Sales Tax Cases
Sr.N
o.
Authority / Court Amount /
Claim involved (Rs.
In Lacs)
Nature of the cases and particulars
1. Joint Commissioner (Appeals)
ST/19/88-89
Rs.0.37 Lakhs The Company has challenged the order of the Asst. Commissioner
Commercial Tax, Saran, Chapra for not considering the transfer of goods
against Form 'F' during the assessment year 1983-84
2. Joint Commissioner (Appeals)
ST/20/88-89
Rs.0.34 Lakhs The Company has challenged the order of the Asst. Commissioner
Commercial Tax, Saran, Chapra for not considering the transfer of goods
against Form 'F' during the assessment year 1984-85
3. Joint Commissioner (Appeals) Rs.1.90 Lakhs The Company has challenged the order of the Asst. Commissioner
Draft Letter of Offer
284
Sr.N
o.
Authority / Court Amount /
Claim
involved (Rs.
In Lacs)
Nature of the cases and particulars
ST/11/2004 Commercial Tax, Saran, Chapra for not considering the transfer of goods
against Form 'F' during the assessment year 1996-97
4. The Commissioner of
Commercial Tax, Bihar
Revision Case No.
CC (S) 413/98-99
Rs.8.47 Lakhs The Company has challenged the passed by the Asst. Commissioner
Commercial Tax, Chapra wherein the Asst. Commissioner had levied
Sales Tax for the AY 1993-94 on the stock transfer to Delhi Branch
The Commissioner has remanded the matter back for Re-assessment and
reconsideration of Form ‘F’ submitted by the Company
5. Joint Commissioner (Appeal)
Muzaffarpur
ST/12-13/2001
Rs.17.16
Lakhs (amount
includes
penalty of
Rs.0.56 Lakhs)
The Company has challenged the order passed by the Asst.
Commissioner, Commercial Tax Saran, Chapra for not considering the
transfer of goods against From ‘F’ and arbitrarily increasing the gross
turnover and not giving credit for the taxes deposited in treasury during
AY 1997-98
(G) LITIGATION BY/ AGAINST THE SUBSIDIARIES OF THE COMPANY
There is no pending litigation by or against the subsidiaries of the Company
(H) DUES TO SMALL SCALE UNDERTAKINGS
For details, please refer to the note no 2 on Annexure 6 of the Auditor’s report in the section titled “Financial
Performace of the Issuer Company” on page no. 128 of this Draft Letter of Offer.
Draft Letter of Offer
285
GOVERNMENT APPROVALS AND LICENSES In view of the approvals listed below, we can undertake this Rights Issue and our current business activities and
no further material approval are required from any Government authority or the RBI to continue such activities.
We have received the following Government approvals that are material to our business:
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
HARGAON
Sugar &
Distillery
Industries
(Development
& Regulation)
Act, 1951
For enhancing
crushing
Capacity to
10000TCD
Secretariat for
Industrial Assistance
- Ministry of
Commerce &
Industry, New Delhi
3785/SIA/IMO/2005
dated 09.08.2005
One Time
Industries
(Development
& Regulation)
Act, 1951
Industrial
Licence for
distillery upto
30000 KL per
annum
Ministry of
Commerce &
Industry, Govt. of
India, New Delhi
2919/SIA/IMO/2006
dated 30.05.06
One Time
Factories Act,
1948
Factory Licence
Director of Factories,
Lucknow
STR – 11 -009363
Upto
December,
2007.
Uttar Pradesh
Govt.
Provincial
Excise Act,
1910
Mfg. Licence of
Distillery - PD 2
Excise
Commissioner, U.P.
PD – 2
Upto March,
2008.
Petroleum
Act, 1934
Diesel Storage
Licence
District Magistrate,
Sitapur
Form - J36 dated
12.10.1989
Upto
December,
2007.
The Arms
Rules, 1962
Sulphur Storage
Licence
District Megistrate,
Sitapur
Licence No. II
Upto
December,
2007.
Rule 9,Central
Excise Rules,
2002
Central Excise
Registration
Certificate-
Hargaon Sugar
& Distillery
Assistance
Commissioner of
Central Excise,
Sitapur
AABCT0813GXM018
Certificate dated
29.05.2007
One Time
Service Tax
Rules, 1994
Central Excise
Registration for
Service Tax
Hargaon Sugar
& Distillery
Assistance
Commissioner of
Central Excise,
Sitapur
AABCT0813GST004
Certificate dated
16.05.2007
One Time
Rule 9,Central
Excise Rules,
2002
Central Excise
Registration
Certificate-
Sitapur
Godowns
Assistant
Commissioner of
Central Excise,
Sitapur
AABCT0813GXM019
Certificate dated
16.01.2003
One Time
Uttar Pradesh
Govt.
Provincial
Excise Act,
1910
For denaturant
storage &
Mixing
District Excise
Officer, Sitapur
DS-1/G-3-1/187
1991 -92)
Upto March,
2008.
Draft Letter of Offer
286
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Prevention of
Food &
Adulteration
Rules, 1976
Under Food
Adulteration Act
- For Sugar &
Molasses
District Health
Officer, Sitapur
H.G.N-82/2007-08
dated 31.05.2007
Upto March,
2008.
Central Sales
Tax Act, 1956
Trade Tax
Registration
under CST
Assistant
Commissioner, Trade
Tax, Sitapur
5000319 dated
01.07.1957
One Time
The Uttar
Pradesh Trade
Tax Act, 1948
Trade Tax
Registration
under CST
Assistant
Commissioner, Trade
Tax, Sitapur
0000237 dated
20.10.1956
TIN no. 09853600001
One Time
Oil and
Alcohol
Taxation
Rules,1977
Sale of Alcohol
Licence
District Excise
Officer, Sitapur
RC No. G- 9-3/27/92-
93 dated 28.05.92
Upto March,
2008.
Water
(Prevention
and control of
Pollution)
Act, 1974 and
Rules made
thereunder
Water Pollution
Consent for
Sugar Unit.
Uttar Pradesh
Pollution Control
Board, Lucknow
F12970/C5/Jal47/07/14
4 dated 26.02.2007
Upto
December,
2007
.
Air
(Prevention
and control of
Pollution)
Act, 1981 and
Rules made
thereunder
Air Pollution
Consent for
Sugar Unit.
Uttar Pradesh
Pollution Control
Board, Lucknow
F12969/C5/Vayu
01/07/88 dated
26.02.2007
Upto
December,
2007
.
Water
(Prevention
and control of
Pollution)
Act, 1974 and
Rules made
thereunder
Water Pollution
Consent for
Distillery unit
Uttar Pradesh
Pollution Control
Board, Lucknow
F12968/C5/Jal45/07/10
9 dated 26.02.2007
Upto
December,
2007
.
Air
(Prevention
and control of
Pollution)
Act, 1981 and
Rules made
thereunder
Air Pollution
Consent for
Distillery unit
Uttar Pradesh
Pollution Control
Board, Lucknow
F12967/C5/Vayu
94/07/50 dated
26.02.2007
Upto
December,
2007
.
Income Tax
Act, 1961 &
Income Tax
Rules, 1962
Income Tax
Permanent
Account No.
(PAN)
Office of The CCIT,
Kolkata
No. AABCT0813G
dated 23.03.2000
One Time
Income Tax
Act, 1961 &
Income Tax
Rules, 1962
Income Tax Tax
Deduction
Account No.
(TAN) – Sugar
NSDL, Mumbai
No LKNT05182C
dated 11.11.2004
One Time
Draft Letter of Offer
287
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Unit
Income Tax
Act, 1961 &
Income Tax
Rules, 1962
Income Tax Tax
Deduction
Account No.
(TAN) –
Distillery Unit
NSDL, Mumbai
No. LKNT05183D
dated 11.11.2004
One Time
Import Trade
Control Policy
Registration for
the purpose of
import of spare
parts
Directorate of Sugar,
New Delhi
78 ST 1888 dated 4th
July 1988
One Time
NARKATI-
AGANJ
Sugar &
Distillery
Factories Act,
1948, and
rules
thereunder.
Factory Licence
The Chief Inspector
of Factories, Hinoo,
Ranchi and Inspector
of Factories,
Motihari
832/CHW
Upto
December,
2007.
Bihar
Sugarcane
(Regulation of
Supply &
Purchase)
Act, 1982
Cane Crushing
Licence
The Cane
Commissioner,
Bihar, Patna
Licence No. 9 dated.
21/02/89
Applied for
the year 2007-
2008
Bihar
Sugarcane
(Regulation of
Supply &
Purchase)
Act, 1982
Licence under
Cane Act-
Appointment of
Cane Manager
District Magistrate,
Bettiah
Form IX
Applied for
the year 2007-
2008
Bihar
Molasses
(Control) Act,
1947
Molasses
Storage Licence
– Sugar unit
The Superintendent
of Excise, Bettiah
12/78
Upto
December,
2007.
Bihar Shops
&
Establishment
Act, 1953
Certificate of
Registration
Assistant Labour
Commissioner,
Bettiah
WC 72/NKJ
Upto
December,
2007
.
Insecticides
Act, 1968 and
Rules
Insecticide
Licence – Sugar
unit
Joint Director, Plant
Protection, Govt. of
Bihar, Patna
8540/19-14/73 Dated
09.05.07
Upto
December
2007
.
Fertilizer
Control Order
1985
Fertilizer
Licence – Sugar
unit
District Agriculture
Officer, Bettiah
Form B (clause 9) Upto
December,
2007
.
Water
(Prevention &
Control of
Pollution)
Act, 1974 and
rules
thereunder.
Discharge
consent (Sugar
Mill)
Bihar State Pollution
Control Board,
Patna
P/S 4-1052/86-T-92
Dated 05.01.07
Upto
December,
2007
.
Air
(Prevention &
Emission
Consent Order
Bihar State Pollution
Control Board,
P/S 4-2045/87-T-93
Dated 05.01.07
Upto
December,
Draft Letter of Offer
288
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Control of
Pollution)
Act, 1981 and
rules
thereunder.
(Sugar Mill)
Patna 2007.
Import/Export
Trade Control
Policy of
Govt. of India
Certificate of
Importer/Expord
er
Department of
Foreign Trade, Govt.
of India, Kolkata
No.0288032730 Dated
20-12-2000
One Time
Import Trade
Control Policy
Registration for
the purpose of
import of spare
parts
Directorate of Sugar,
New Delhi
78 ST 1890 dated 4th
July 1988
One Time
Central Excise
Rules, 2002
Central Excise
Registration
Assistant
Commissioner of
Central Excise,
Laheriasarai.
AABCT0813GXM024
One Time
Standard
Weights &
Measures
(Packed
commodities)
Rules 1977
Registration
under Packed
Commodities –
Sugar
Directorate of
Weights & Measures,
New Delhi
WM 26(11)/79 dated
14/5/1980
One Time
Bihar Value
Added Tax
Ordinance,
2005
Certificate of
Registration
Assistant
Commissioner of
Commercial Taxes,
Bettiah
TIN 10260186059
Dated 19.09.2005
One Time
Bihar Value
Added Tax
Ordinance,
2002
Certificate of
Registration
Assistant
Commissioner of
Commercial Taxes,
Bettiah
CST TIN 10260186156
Dated 01.07.1957
One Time
Industrial
(Development
& Regulation)
Act 1951
Industrial
Licence for
enhancing
capacity upto
7500 TCD –
Sugar
Secretariat for
Industrial Assistance
– Ministry of
Commerce &
Industry, New Delhi
2346/SIA/IMO/2006
Dated 03.05.06
One Time
Bihar Excise
Act, 1915
Manufacturing
Licence Spirit
for Distillery
unit
State Excise
Authority through
the District
Magistrate, Bettiah
28 A dated 31.03.07
Upto March
2008.
Bihar Excise
Act, 1915
For
Denaturation of
sprit & issue of
the same for
Distillery unit
State Excise
Authority through
the District
Magistrate, Bettiah
Form no.25 dated
31.03.07
Upto March
2008.
Water
(Prevention &
Control of
Pollution)
Act, 1974 and
rules
thereunder
Water Discharge
Consent –
Distillery unit
Bihar State Pollution
Control Board, Patna
P/T 1-1668/88 (Part) T-
5262 dated 02.07.07
Upto
December,
2007.
Air Air Emission Bihar State Pollution A-656 T-5261 dated Upto
Draft Letter of Offer
289
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
(Prevention &
Control of
Pollution)
Act, 1981 and
rules
thereunder.
Consent –
Distillery
Control Board, Patna 02.07.07 December,
2007.
Factories Act
1948 and
Bihar
Factories
Rules, 1950
Factory Licence
– Distillery
The Chief Inspector
of Factories, Hinno,
Ranchi & The
Inspector of
Factories, Motihari
8961/CHW
Upto
December,
2007.
Bihar
Molasses
(Control) Act,
1947
Molasses
Storage licence
– Distillery
State Excise
Authority, Bihar
1/92 Upto
December,
2007.
Industries
(Development
& Regulation)
Act, 1951
Industrial
Licence for
enhancing the
capacity of
distillery upto
30000 KL per
annum
Ministry of
Commerce &
Industry, Govt. of
India, New Delhi
2748/SIA/IMO/2006
Dated 22.05.06
One Time
ROSA Sugar
Works
Factories Act,
1948
Factory Licence Deputy Director –
Factories, Bareilly
SJR – 01/010477 Upto
December,
2007
.
Industries
(Development
& Regulation)
Act, 1951
Enhanching
crushing
capacity to 5000
TCD
Secretariat for
Industrial Assistance,
New Delhi
IEM letter
No.2665/SIA/IMO/200
2 dated 11.11.2002
One Time
Air
(Prevention
and control of
Pollution)
Act, 1981 and
Rules made
thereunder
Air Pollution
Consent
Uttar Pradesh
Pollution Control
Board, Lucknow
Letter No. F12976/C-
5/Air/B-30/2007/53
dated 26.02.2007
Upto
December,
2007
.
Water
(Prevention
and control of
Pollution)
Act, 1974 and
Rules made
thereunder
Water Pollution
Consent
Uttar Pradesh
Pollution Control
Board, Lucknow
Letter No. F12975/C-
5/Water/B-30/2007/65
dated 26.02.2007
Upto
December,
2007
.
Weights and
Measures
(Packaged
Commodities)
Rules, 1977
Certificate of
Registration
Ministry of
Commerce and Civil
Supplies, New Delhi
Certificate No.
UP/76/79
Registration No. MN-
26(21)/79 dated
13.5.1980
One Time
Central Excise
Rules, 2002
Central Excise
Registration
Certificate
Assistant
Commissioner of
Central Excise,
No.AABCT0813GXM
020 dated 16.01.2003
One Time
Draft Letter of Offer
290
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Sitapur
Central Excise
Rules, 2002
Central Excise
Service Tax
Registration
Superintandent,
Central Excise,
Shahjahanpur.
275/ST2/STP/G.T.by
road/05 dated
24.01.2005
One Time
Sugar Control
Order, 1966
Cane Crushing
Licence
Secretary,
Government of Uttar
Pradesh, Sugar
Industry Section
No. 4 dated 17.10.1998 One Time
Prevention of
Food &
Adulteration
Rules, 1976
Sugar
Production
Licence
Local Authority cum
Chief Medical
Officer,
Shahjahanpur
MM04/V/2007-11
Dated 01.04.07
Upto March,
2008.
Arms Rules,
1962
Licence for
acquisition and
possession of
arms and
ammunitions –
Sulphur
District Magistrate,
Shahjahanpur
Form III Licence no.
5640 & 8
Valid Upto
16.05.2008 &
02.11.08
Petroleum
Act, 1934 and
Rules
thereunder
Licence to
import and store
Petroleum in
installation
Total capacity
(Petroleum) –
40KL
Chief Controller of
Explosive
P/HQ/UP/15/1702
(P9144) Dated
28.11.2000
Upto
December,
2008.
Hazardous
Wastes Rules,
1989
Authorisation
for collection,
reception,
treatment,
storage,
transport and
disposal of
Hazardous
Wastes
Member Secretary,
Uttar Pradesh,
Pollution Control
Board
8776C-5/HAZI-
21/2002/20 dated
10.10.2002
Upto October,
2007. Renewal
applied on
18.9.07.
Allahabad
Canning
Company
Factories Act,
1948
Factory Licence Deputy Director –
Factories, Allahabad
ALD/143 Upto
December,
2008.
Fruit Products
Order, 1955
Fruit Products
Order
(Manufacturing)
Director – Fruits &
Vegetable Products,
Ministry of Food
Processing, New
Delhi
ALD-1659 Upto
December,
2007
.
Fruit Products
Order, 1955
Fruit Products
Order
(Relabeller )
Director – Fruits &
Vegetables Products,
Ministry of Food
Processing, New
Delhi
3014-R Upto
December,
2007
Small Scale
Industries
Act, 1972
SSI Unit Director, SSI,
Allahabad
020-03-00568-PMT-
SSI/02 dated
13.12.1972
One Time
Ministry of Manufacturer Agricultural and Certificate of One Time
Draft Letter of Offer
291
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Commerce,
Govt. of India
Exporter
certificate
Processed Food
Products Export
Development
Authority, New
Delhi
Registration No.
APEDA/REGN/008772
/95-96
Trade Marks
Act, 1999
“ACCOS” Registrar of Trade
marks, Mumbai
226028 & 29 Upto
December,
2016
Trade Marks
Act, 1999
"MORTON"
Trade Marks
Registry, Kolkata
85869 & 70
Upto
September,
2017
Uttar Pradesh
Trade
Tax,1948
Uttar Pradesh
Trade Tax
Manufacture of
canned fruits
and vegetables
Commissioner of
Sales Tax, Allahabad
AD 0018762
TIN No. 09913300004
One Time
Central Sales
Tax Act, 1956
CST
Commissioner of
Sales Tax, Allahabad
AD 5012301
One Time
Central Excise
Act
Central Excise
Registration
Assistant
Commissioner
Central Excise,
Allahabad
AABCT0813 GXM017
One Time
Central Excise
& Service Tax
Rules
Service Tax
Registration
(Service:
Transport of
goods by road)
Dy. Commissioner
Central Excise,
Allahabad
AABCT0813 GST002
One Time
Municipal
Corporation
Under
Circumstances
& Property Tax
Zila Parishad,
Allahabad
49805 Upto March,
2008
Central Excise
Act
Central Excise
Registration
Superintandent
Central Excise,
Chitoor (A.P.)
AABCT0813 GXM023
One Time
Service Tax
Rules,1994
Service Tax
Registration
Assistant
Commissioner
Central Excise,
Chitoor (A.P.)
AABCT0813 GST001
One Time
Central Sales
Tax Act
Central Sales
Tax Registration
Assitant Commercial
Tax Officer-II,
Chitoor(A.P.)
CTR/04/1/3663/04-05
One Time
Andhra
Pradesh
General Sales
Tax Act
Registration of
Commercial Tax
Assitant Commercial
Tax Officer-II,
Chitoor(A.P.)
CTR/04/1/2707/04-05
One Time
Value Added
Tax
Registration
Registration of
VAT
Assitant Commercial
Tax Officer-II,
Chitoor(A.P.)
28090245763 dated
1.4.2005
One Time
Draft Letter of Offer
292
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Hata Unit Industries
(Development
& Regulation)
Act, 1951
For crushing
capacity of 7000
TCD
Secretariat for
Industrial Assistance,
New Delhi
IEM letter
No.830/SIA/IMO/2005
dated 25.02.2005 &
Amendment dated
03.07.2007
One Time
Uttar Pradesh
Pollution
Control Board
Pollution
Consent for
Sugar Unit.
Uttar Pradesh
Pollution Control
Board, Lucknow
F15124/C6/NOC/6/GK
P dated 10.04.2007
One Time
Land Ceiling
Act
Permission
under Land
Ceiling Act
Commissioner,
Gorakhpur
4705-11/Sat-38(2004-
05) Dated 22.03.07
One Time
Central Excise
Act
Central Excise
Registration
Assistant
Commissioner,
Central Excise,
Gorakhpur Division
AABCT0813 GXM025
Dated 13.12.2006
One Time
Service Tax
Rules,1994
Service Tax
Registration
(Service:
Transport of
goods by road)
Assistant
Commissioner
Central Excise,
Gorakhpur, Division
AABCT0813 GST003
Dated 14.12.2006
One Time
Income Tax
Act, 1961 &
Income Tax
Rules, 1962
Income Tax
Deduction
Account No.
(TAN)
Income Tax
Department
No ALDN 00598D
One Time
Central Sales
Tax Act, 1956
Trade Tax
Registration
under CST
Assistant
Commissioner, Trade
Tax,
Padrauna,Kushinagar
PD 5011905dated
04.01.2007
One Time
The Uttar
Pradesh Trade
Tax Act, 1948
Trade Tax
Registration
under UPST
Assistant
Commissioner, Trade
Tax,
Padrauna,Kushinagar
PD 0050736 dated
04.01.2007
TIN no. 09320602964
One Time
The Uttar
Pradesh Trade
Tax Act, 1948
Trade Tax
Registration for
3 B
Assistant
Commissioner, Trade
Tax,
Padrauna,Kushinagar
PD 0123 dated
05.12.2006
One Time
Contract
Labour
(Regulation &
Abolition)
Act,1970
Labour
Registration
Dy.Labour
Commissioner,
Gorakhpur
No. 112 dated
09.03.2007
One time
MUMBAI
Office
Maharashtra
State Tax on
Professions,
Trades,
Callings and
Employments
Act, 1975 and
Rules there
under.
Profession Tax
Registration
Assistant
Commissioner of
Profession Tax,
Bombay
PT/R/1/1/21/8012
dated 01.04.1976
One Time
Bombay Registration Inspector under the A-II-5048 Upto
Draft Letter of Offer
293
Name of the
Unit
Name of the
Act under
which licence
is granted
Name of the
licence
Licence issuing
Authority
Licence No./Date
Validity
Status
Shops and
Establishment
s Act, 1948
Certificate of
Establishment
Bombay Shops and
Establishments Act,
1948
December,
2007
KOLKATA
Office
West Bengal
State tax on
Professions,
Trades,
Callings and
Employments
Act, 1979
Profession Tax
Registration
Profession Tax
Officer, Calcutta,
North Range
RCN 2578748 One Time
West Bengal
Shops and
Establishment
s Act, 1963
Registration
Certificate of
Establishment
Draft Letter of Offer
294
OTHER REGULATORY AND STATUTORY DISCLOSURES
AUTHORITY FOR THE ISSUE
This Issue has been authorized by the Board of Directors at its held on 20th
August, 2007 and approved by the
members of the Company at the Extrageneral Meeting held on 22nd
September 2007 and Finance and Corporate
Affiars Committee at its meetings held on 17th
Otober 2007, wherein the Committee approved issue of Equity
Shares on rights basis along with detachable warrants to the existing equity shareholders on the Record Date, the
details of which are as follows:
Issue of [●]Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●] per Equity Share on
rights basis to the existing Equity Shareholders of The Oudh Sugar Mills Limited in the ratio of [●] Equity
Shares for every [●] Equity Shares held on the Record Date i.e. [●] for every [●] Equity Shares to being allotted
on rights basis. The issue price for the Equity Shares will be payble in two installments; [●] of the issue price
will be payable on Application; [●] of the Issue Price will become payable at the option of Our Company, on or
before 12 months from the Date of Allotment.
Under the Issue, the allottees will also receive [●] detachable Warrants. Total Issue including conversion of
Warrants into Equity Shares during Warrant Conversion Period at Rs [●] per share would aggregate to Rs 5000
lacs. The Issue Price is [●] times the face value of the Equity Shares.
CONSENT OF LENDERS
The agreements in respect of some of the debt taken by us contain certain covenants inter-alia for altering our
share capital and for expansion and diversification plans. We have obtained these consents from our lenders,
where required.
PROHIBITION BY SEBI
Our Company, our subsidiaries, our affiliates, our promoters, our promoter group entities, our directors and
other companies promoted by our promoters has not been prohibited from accessing the capital markets under
any order or direction passed by SEBI. None of our directors or the promoters has been prohibited from
accessing capital market under any order or direction passed by SEBI.
ELIGIBILITY
The Oudh Sugar Mills Limited is an existing Company, whose Equity Shares are listed on BSE and NSE. It is
eligible to offer this Rights Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines. The Company, its
Promoters, its Directors or any of the Company’s associates or group companies is currently not prohibited from
accessing the capital market under any order or direction passed by SEBI. Further the Promoters, their relatives
(as per the Companies Act, 1956), the Company, group companies, associate companies are not declared as
willful defaulters by RBI / Government authorities.
DISCLAIMER CLAUSE
AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO THE
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD
THAT THE SUBMISSION OF THE DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY
BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI
DOES NOT TAKE ANY RESPOSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY
SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE
CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER
OF OFFER. THE LEAD MANAGER ENAM FINANCIAL CONSULTANTS PRIVATE LIMITED HAS
CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY
ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND
INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO
FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE
PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER
COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND
DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD
MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY
Draft Letter of Offer
295
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS
PURPOSE THE LEAD MANAGER ENAM SECURITES PRIVATE LIMITED HAS FURNISHED TO SEBI
A DUE DILIGENCE CERTIFICATE DATED DECEMBER 24, 2007 WHICH READS AS FOLLOWS:
1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION
LIKE COMMERCIAL DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER
MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN
CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO
THE SAID ISSUE;
2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS
DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF
THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND
THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS
FURNISHED BY THE COMPANY;
WE CONFIRM THAT:
a) THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE
DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE
GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY
OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH;
c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND
ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO
INVESTMENT IN THE PROPOSED ISSUE, AND;
d. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE
DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE
SUCH REGISTRATION IS VALID.
e. IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE NET WORTH OF THE
UNDERWRITERS TO FULFILL THEIR UNDERWRITING COMMITMENTS.
f. WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED
FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS CONTRIBUTION
SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO BE FORM PART OF
PROMOTER CONTRIBUTION SUBJECT TO LOCK-IN, WILL NOT BE DISPOSED/ SOLD/
TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE
OF FILLING THE DRAFT RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE
OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING
PROSPECTUS. – NOT APPLICABLE
g. WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR
PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE FOR
COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH
AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN
MADE IN THE DRAFT PROSPECTUS/LETTER OF OFFER. . – NOT APPLICABLE
h. WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI (DISCLOSURE
AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE COMPLIED WITH. WE
CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’
CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD BE
RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE .WE UNDERTAKE
THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE
BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A
SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE COMPANY
ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE
Draft Letter of Offer
296
i. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT APPLICABLE TO
THE ISSUER, WE CERTIFY THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION
UNDER CLAUSE 4.10 {SUB-CLAUSE (A), (B) OR (C), AS MAY BE APPLICABLE} ARE NOT
APPLICABLE TO THE ISSUER. . – NOT APPLICABLE
j. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS
ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED
IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER
OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL
NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF
ASSOCIATION.
k. WE CONFIRM THAT NECESSARY ARRANGEMENTS WILL BE MADE TO ENSURE THAT
THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK
ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956
AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER
PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE
PROSPECTUS/LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT TO BE
ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER
SPECIFICALLY CONTAINS THIS CONDITION.
l. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION,
ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS,
DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF
FIRM ALLOTMENT IN THE ISSUE.
m. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE PROSPECTUS THAT THE
INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL
MODE.
The filing of the Draft Letter of Offer does not, however, absolve the Company from any liabilities under
Section 63 or Section 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or
other clearance as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take
up, at any point of time, with the Lead Manager any irregularities or lapses in the Draft Letter of Offer.
CAUTION
We and the Lead Managers accept no responsibility for statements made otherwise than in this Draft Letter of
Offer or in any advertisement or other material issued by us or by any other persons at our instance and anyone
placing reliance on any other source of information would be doing so at his own risk.
We and the Lead Managers shall make all information available to the Equity Shareholders and no selective or
additional information would be available for a section of the Equity Shareholders in any manner whatsoever
including at presentations, in research or sales report etc. after filing of this Draft Letter of Offer with SEBI.
Draft Letter of Offer
297
DISCLAIMER STATEMENT FROM THE ISSUER AND LEAD MANAGER
The Company and the Lead Manager accept no responsibility for statements made otherwise than in this Draft
Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the
instance of the Company and anyone placing reliance on any other source of information would be doing so at
his own risk.
The Lead Manager and the Company shall make all information available to the Equity Shareholders and no
selective or additional information would be available for a section of the Equity Shareholders in any manner
whatsoever including at presentations, in research or sales reports etc. after filing of the Draft Letter of Offer
with SEBI.
DISCLAIMER WITH RESPECT TO JURISDICTION
This Draft Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and
regulations there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the
appropriate court(s) in the District of Sitapur, Uttar Pradesh, India only.
The Draft Letter of Offer has been filed with SEBI, [●], for its observations. After SEBI gives its observations,
the final Letter of Offer will be filed with the Designated Stock Exchange as per the provisions of the Act.
DISCLAIMER CLAUSE OF THE BSE
Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter dated ●, 2007 permission to this
Company to use the Exchange’s name in this Draft Letter of Offer as one of the stock exchanges on which this
Company’s securities are proposed to be listed. The Exchange has scrutinized this Draft Letter of Offer for its
limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The
Exchange does not in any manner:
i. warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Letter of Offer;
or
ii. warrant that this company’s securities will be listed or will continue to be listed on the Exchange; or
iii. take any responsibility for the financial or other soundness of this company, its Promoters, its management
or any scheme or project of this company;
and it should not for any reason be deemed or construed that this Draft Letter of Offer has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this
company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim
against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or
in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated
herein or for any other reason whatsoever.
DISCLAIMER CLAUSE OF THE NSE
As required, a copy of this Draft Letter of Offer has been submitted to NSE. NSE has given vide its letter dated
●, 2007 permission to the Issuer to use the Exchange’s name in this Draft Letter of Offer as one of the Stock
Exchanges on which the Issuer’s securities are proposed to be listed. The Exchange has scrutinized this Draft
Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to
this Issuer. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be
deemed or construed that the Draft Letter of Offer has been cleared or approved by NSE; nor does it in any
manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Letter of
Offer; nor does it warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange;
nor does it take any responsibility for the financial or other soundness of this Issuer, its Promoters, its
management or any scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to
independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever
by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason
whatsoever.
Draft Letter of Offer
298
IMPERSONATION
As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection
(1) of Section 68A of the Companies Act, 1956 which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any
shares therein, or otherwise induces a Company to allot, or register any transfer of shares therein to him, or any
other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years”
GOVERNMENT APPROVALS
Our company was incorporated on July 26, 1932 under the Indian Companies Act VII of 1913. We have
obtained all necessary approvals to undertake our activities and we do not propose to enter into any new
activities through this Issue, for which further approvals may be required to be obtained, except as may be
required to be obtained in the normal course of business. For further details, please refer to Section
“Government Approvals/Licensing Arrangements”.
FILING
The Draft Letter of Offer was filed with SEBI, [●]. All the legal requirements applicable till the date of filing
the Draft Letter of Offer with the Stock Exchanges have been complied with.
The Draft Letter of Offer having attached thereto the material contracts and documents referred in this Draft
Letter of Offer, have been filed with BSE and NSE at the following address:
Bombay Stock Exchange Limited
1st Floor, Rotunda Bldg.,
B.S.Marg, Fort
Mumbai - 400 001
The National Stock Exchange of India Limited
Exchange Plaza,
Bandra-Kurla Complex, Bandra (East),
Mumbai - 400 051
LISTING
The existing Equity Shares are listed on the BSE and NSE. We have made applications to the BSE and NSE for
permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this
Letter of Offer, [●] is the Designated Stock Exchange for this Issue. We have received in-principle approvals
from BSE and NSE by letters dated [●] and [●] respectively. We will apply to the BSE and NSE for listing of
the Equity Shares to be issued pursuant to this Issue.
If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock
Exchanges mentioned above, within six weeks from the Issue Closing Date, the Company shall forthwith repay,
without interest, all monies received from applicants in pursuance of this Draft Letter of Offer. If such money is
not paid within 8 days after the Company becomes liable to repay it, then the Company and every Director of
the Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to
repay the money with interest as prescribed under the Section 73 of the Act.
CONSENTS
Consents in writing of the Directors, Auditors, Lead Manager, Legal Advisor, Bankers to the Company,
Registrar to the Issue, Banker to the Issue to act in their respective capacities have been obtained and filed with
Stock Exchanges at the time of filing this Draft Letter of Offer and such consents have not been withdrawn up to
the time of delivery of the Draft Letter of Offer for registration with the stock exchanges.
The Auditors of the Company have given their written consent for the inclusion of their Report in the form and
content as appearing in the Draft Letter of Offer and also the tax benefits accruing to the Company and its
Draft Letter of Offer
299
members and such consents and reports have not been withdrawn up to the time of delivery of the Draft Letter
of Offer for registration with the Stock Exchanges.
DEMATERIALISED DEALING
We have entered into agreements dated November 1, 1999 and October 29, 1999 with NSDL and CDSL
respectively for Equity Shares of our Company bearing ISIN Number INE594A01014.
EXPERT OPINION
We have not obtained any expert opinion in relation to this issue
EXPENSES OF THE ISSUE
The expenses for this Rights Issue are estimated at Rs [●] lacs, the break-up whereof is as follows:
Particulars
Rs. in Lacs
Fees to Lead Manager
Fees to Registrar
Fees to Auditors
Fees to Banker to the Issue
Fees to Legal Advisor to the Issue
Printing & Stationery and Postage expenses
Advertisement, Travel and other Miscellaneous Expenses
Total
UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION
No underwriting commission, brokerage and selling commission will be paid for this Issue.
PROMISE VS. PERFORMANCE
Issuer Company
We made a Rights Issue of Equity Shares to our equity shareholders in 1996. The issue of 6,92,386 Equity
Shares of Rs.100/- each for cash at a premium of Rs.400/- each aggregating to Rs.3461.93 lacs was made in the
ratio of two Equity Shares for every one Equity Share held.
Issue opened on 17th
January, 1996
Issue closed on 23rd
February, 1996
Date of completion of dispatch of delivery
of security certificates
2nd
April, 1996
Object of the issue Long Term Working Capital
The promises made in the above-mentioned rights issue and actual performance achieved is as follows:
Draft Letter of Offer
300
(Figures in Rs. lacs except per share data)
1995-96 1996-97 1997-98
Projected Actual Projected Actual Projected Actual
Business Parameters
Sales 17242.88 14744.16 21295.94 15597.38 21821.49 18699.96
PBIDT 2666.60 2583.05 3310.92 2379.75 3473.37 3022.71
Interest (net) 1521.29 1465.45 1396.28 1746.34 1176.62 2055.70
Depreciation 441.43 430.97 508.43 489.97 598.53 623.92
PBT 703.88 686.63 1406.21 143.44 1698.32 344.09
Taxation - 1.00 - 20.00 290.00 38.50
PAT 703.88 685.63 1406.21 123.44 1408.32 305.59
Dividend (%) 25 25 25 20 25 20
Equity Capital 1038.62 1038.62 1038.62 1038.62 1038.62 1038.62
Reserves & Surplus 6745.00 6757.76 7891.56 6689.87 9040.23 6846.36
Net Worth 7783.62 7796.38 8930.18 7728.49 10078.85 7884.98
EPS (Rs.) 67.77 66.02 135.39 1.19 * 135.60 2.94*
NAV (Rs.) 749.42 750.68 859.81 74.41* 970.41 75.92*
* Rs. 10/- per share on sub division
The reasons for variation between actual figures and projections for the aforesaid 3 year period are given below:
1995-96 The turnover was lower on account of lower releases of levy and free sugar. The reasons for lower profitability
were due to depressed selling price and increase in State Advisory Price by the State Government. Delayed
monsoon and poor recoveries also strained profitability.
1996-97 The turnover was lower on account of lower sugar releases of levy and free sugar. The profitability was
adversely affected due to lower production and lower recovery of sugar from sugar cane and lower sales
realisation.
1997-98: The perforamance of the Company was adeveresely affected during the year due to lower production of sugar
caused by diversion of sugar cane to gur and khandesari units and erratic climatic conditions. The lower
production during the year severly affected the turnover and profitability of the Coampny.
Details of the previous public or rights issue made in the last five years
The Company had come up with a rights issue in the year 2005. The issue was of 77,88,780 equity shares of Rs.
10/- each at a premium of Rs. 40 per share aggregating Rs. 38,94,39,000 to the equity shareholders on rights
basis in the ratio of 3 equity shares for every 4 equity shares held on the record date i.e. May 6, 2005. The issue
of the Equity Shares was made to reduce overall indebtedness of the Company and to meet the expenses of the
issue.
Details of the previous issues of shares otherwise than for cash
There was no Issue made by the Company otherwise than for cash except the following
Date of Allotment No. of Shares Face Value per Share (Rs. Particulars
February 18, 1943 19462 25 Issued as Bonus Shares
August 17, 1944 4865.5 100 Issued on cancellation of Qtr. equity
shares in the ratio 1 : 4
October 10, 1948 33207 100 Bonus Shares in the ratio of 3 : 4
May 9, 1975 77487 100 Issue of Bonus shares 1 : 1
January 27, 1987 61155 100 Issued on Amalgamation with The New
Swadeshi Sugar Mills Ltd.
Draft Letter of Offer
301
COMMISSION OR BROKERAGE ON PREVIOUS ISSUES No commission or brokerage was paid in respect of the previous issues.
DETAILS OF CAPITAL ISSUES MADE BY THE LISTED COMPANIES UNDER SAME
MANAGEMENT
LISTED COMPANIES PROMOTED BY THE PROMOTERS
Upper Ganges Sugar & Industries Limited (UGSIL)
UGSIL had made a Rights Issue of 45,52,852 Equity Shares of Rs.10/-each at a premium of Rs.140/- per share
(i.e. at a price of Rs.150/- per share) in the ratio of thirteen Equity Shares for every twenty Equity Shares held
during the financial year 2005-06 & 2006-07.
Issue opened on June 28, 2006
Issue closed on July 27, 2006
Date of completion of dispatch of delivery August 7, 2006
of security certificates
Object of the issue The issue of the Equity Shares was made to
partly reduce overall indebtedness of the
Company by repaying a part of the outstanding
working capital borrowings and to meet the
expenses of the issue.
No specific promise was made in relation to the said issue.
Texmaco Limited
Texmaco had made a Rights Issue of 51,63,378 Equity Shares of Rs.10/-each at a premium of Rs.20/- per share
(i.e. at a price of Rs.30/- per share) in the ratio of one Equity Share for every one Equity Share held during the
financial year 2004-05.
Issue opened on May 7, 2004
Issue closed on June 7, 2004
Date of completion of dispatch of
delivery of security certificates
June 18, 2004
Object of the issue The issue of the Equity Shares was made to partly meet the
Working Capital requirements and to partly repay short term
loans taken to meet Working Capital requirements of the
Company and to meet the expenses of the issue.
Zuari Industries Limited
Zuari made a rights issue of 1,31,26,400 equity shares in 1997 at price of Rs.10/-each for cash at par aggregating
Rs. 1,312.64 lacs to its equity shareholders to meet the working capital requirement of the company. No specific
promise was made in relation to the said issue.
Chambal Fertilizers and Chemicals Limited
Chambal had made a Public Issue of 2,12,00,000; 15% secured partly convertible debentures of Rs. 200 each for
cash at par aggregating to Rs. 424.00 crores to its equity shareholders.
Issue opened on April 15, 1993
Issue closed on April 26, 1993
Date of completion of dispatch of delivery -
of security certificates
Draft Letter of Offer
302
Object of the issue To raise part finance for meeting Project Cost
estimated at Rs.1267.00 crores and to meet
expenses of Issue.
DETAILS OF OUTSTANDING DEBENTURES/BONDS/REDEEMABLE PREFERENCE SHARES/ OTHER INSTRUMENTS
Except as stated under “Capital Structure” on page 33 of the Draft Letter of Offer, there are no outstanding
debentures, bonds, redeemable Preference Shares.
STOCK MARKET DATA FOR EQUITY SHARES OF THE ISSUER COMPANY
The Company's shares are listed on the BSE and NSE. As the shares are actively traded on the BSE and NSE,
the Company’s stock market data have been given separate for each of these Stock Exchanges.
The high and low closing prices recorded on the BSE and NSE for the preceding three years and the number of
shares traded on the days the high and low prices were recorded are stated below:
BSE
Year ending
June, 30
High
(Rs.)
Date of High Volume
on date of
high (no. of shares)
Low (Rs.) Date of
Low
Volume on
date of low
(no. of shares)
Average
price for
the year (Rs.)
2005 125.34 February 05 103589 27.96 09 June 04 475 70.83
2006 293.45 April 06 148258 82.7 28.10.2005 14239 148.09
2007 144.25 August 06 201660 53.15 22.6.07 14131 87.33
July , 2007 60.15 July 07 76478 52.5 25.7.07 7881 56.47
August 07 52.15 August 07 36807 44.55 23.8.07 7537 48.03
September,
2007
62.6 September 07 32363 49.35 11.9.07 50085 54.63
October, 2007 64.85 10th
October
07
92794 50.90 23.10.07 8425 57.88
November,
2007
57.25 21st
November 07
20430 48.00 8.11.07 7561 52.63
Draft Letter of Offer
303
NSE
Year ending
June, 30
High
(Rs.)
Date of
High
Volume on
date of high (no. of
shares)
Low (Rs.) Date of
Low
Volume on
date of low (no. of
shares)
Average
price for the year
(Rs.)
2005 125.18 February o5 327738 27.21 9.7.04 550 70.91
2006 293.45 April 06 324607 82.9 28.10.05 29493 148.11
2007 144.1 August
2006
288947 53.10 27.6.2007 9358 87.34
July, 2007 60.15 July 07 73966 52.85 25.7.2007 12515 56.55
August 2007 52.05 August 07 58097 44.85 21.8.07 6772 48.01
September
2007
62.65 September
07
436310 49.9 14.9.07 8564 54.71
October, 2007 69.00 1st October
07
124036 44.05 17.10.07 35538 56.53
November,2007 58.30 21st
November
07
64720 41.10 5.11.07 13211 49.70
The high and low prices and volume of shares traded on the respective dates during the last six months is as
follows:
BSE
Month High (Rs.) Date of
High
Volume on
date of
high (no. of
shares)
Low (Rs.) Date of
Low
Volume on
date of low
(no. of
shares)
Average
price for
the year
(Rs.)
April-07 70.65 30.4.07 141799 57.7 30.4.07 7451
May -07 63.2 22.5.07 35265 56.75 10.5.207 2627
June-07 59.95 1.6.2007 14743 53.15 22.6.07 14131
July , 2007 60.15 July 07 76478 52.5 25.7.07 7881 56.47
August 07 52.15 August 07 36807 44.55 23.8.07 7537 48.03
September,
2007
62.6 September
07
32363 49.35 11.9.07 50085 54.63
October,
2007
64.85 10th
October
07
92794 50.90 23.10.07 8425 57.88
November,
2007
57.25 21st
November
07
20430 48.00 8.11.07 7561 52.63
NSE
Month High (Rs.) Date of
High
Volume on
date of
high (no. of shares)
Low (Rs.) Date of
Low
Volume on
date of low
(no. of shares)
Average
price for
the year (Rs.)
April-07 71 2.4.07 234766 57.75 30.4.07 7155
May -07 63.15 22.5.07 79815 56.75 10.5.07 7662
June-07 59.95 1.6.07 33820 53.1 27.6.07 9358
July, 2007 60.15 July 07 73966 52.85 25.7.2007 12515 56.55
August 2007 52.05 August 07 58097 44.85 21.8.07 6772 48.01
September
2007
62.65 September
07
436310 49.9 14.9.07 8564 54.71
October, 2007 69.00 1st October
07
124036 44.05 17.10.07 35538 56.53
November,2007 58.30 21st
November
07
64720 41.10 5.11.07 13211 49.70
Draft Letter of Offer
304
The market price was Rs. [●] on BSE on [●], the trading day immediately following the day on which Board
meeting was held to finalize the offer price range for the right Issue.
The market price was Rs. [●] on NSE on [●] the trading day immediately following the day on which Board
meeting was held to finalize the offer price range for the right Issue.
REDRESSAL OF INVESTORS GRIEVANCES
Investor Grievances and Redressal System
The Company has adequate arrangements for redressal of Investor complaints. Well-arranged correspondence
system has been developed for letters of routine nature. Share transfer and dematerialization is being handled by
Intime Spectrum Registry Limited, Registrars and Share Transfer Agents. Letters are filed category wise after
having attended to. Redressal norm for response time for all correspondence including shareholders complaints
is 10 days. However, the Company endeavors to redress all the complaints within 7 days of the receipt of
complaint.
Status of Complaints
As on 30th
September 2007, the Company and its Registrars have received 4 Investor complaints during the
quarter ended on that date and all were redressed. No complaint was pending as on September 30, 2007.
Investor Grievances arising out of this Issue
Our Company’s Investor grievances arising out of the Issue will be handled by Intime Spectrum Registry
Limited, Registrar to the Issue. The Registrar will have a separate team of personnel handling only our post
Issue correspondence. Investor grievances will be settled expeditiously and satisfactorily by us. The agreement
between us and the Registrar will provide for retention of records with the Registrar for a period of at least one
year from the last date of dispatch of Letter of Allotment/ share certificate / warrant/ refund order to enable the
Registrar to redress grievances of Investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as
Folio No., Client ID / DP ID No., Name and Address of the First Applicant, number and type of shares applied
for, Composite Application Form serial number, amount paid on application and the Bank Branch where the
application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the
same details of the renounces should be furnished.
The average time taken by the Registrar for attending to routine grievances will be 30 days from the date of
receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the
endeavor of the Registrar to attend to them as expeditiously ass possible. We undertake to resolve the Investor
grievances in a time bound manner.
Investors may contact the Compliance Officer in case of any pre-issue/ post -issue related problems such as non-
receipt of letters of allotment/share certificates/demat credit/refund orders etc. The Company has appointed Shri
Sanjay Mukherjee as the Compliance Officer.
Compliance Officer
The Investors may note that a Compliance Officer has been appointed by the Company who may be contacted
for any pre-Issue / post-Issue related matter. The details relating to the Compliance Officer are as under:
Shri. Sanjay Mukherjee,
9/1, R N Mukherjee Road, 5th
Floor,
Kolkata 700 001
Tel: (+91 33) 2242 9956
Fax: (+91 33) 2248 6369
E-mail: [email protected];
Website: www.birla-sugar.com
CHANGE IN AUDITORS IN LAST THREE YEARS There is no change in auditor in last three years.
Draft Letter of Offer
305
CAPITALISATION OF RESERVE OR PROFIT DURING LAST FIVE YEARS There was no capitalisation of reserve or profit during last five years.
REVALUATION OF ASSETS DURING LAST FIVE YEARS There was no revaluation of Assets during last five years.
Draft Letter of Offer
306
SECTION IX: OFFERING INFORMATION
TERMS OF THE ISSUE
The Equity Shares now being offered are subject to the provisions of the Act and the terms and conditions of
this Draft Letter of Offer, the enclosed Composite Application Form (the CAF), the Memorandum and Articles
of Association of the Company, the approvals from the Government of India, FIPB and RBI, if applicable, the
provisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital
and for listing of securities issued by Government of India and/or other statutory authorities and bodies from
time to time, Listing Agreements entered into by the Company with Stock Exchanges, terms and conditions as
stipulated in the allotment advise or letter of allotment or share certificate and rules as may be applicable and
introduced from time to time.
AUTHORITY FOR THE ISSUE
This Issue has been authorized by the Board of Directors at its held on 20th
August, 2007 and approved by the
members of the Company at the Extrageneral Meeting held on 22nd
September 2007 and Finance and Corporate
Affiars Committee at its meetings held on 17th
Otober 2007, wherein the Committee approved issue of Equity
Shares on rights basis along with detachable warrants to the existing equity shareholders on the record date.
BASIS OF ISSUE
The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity
Shares held in the electronic form and on the Register of Members of the Company in respect of the Equity
Shares held in physical form at the close of business hours on [●] (the “Record Date”), fixed in consultation
with the Designated Stock Exchanges. The Equity Shares are being offered for subscription in the ratio of
[●](____) Equity Shares for every [●] (__) Equity Shares held on Record Date. In addition, for every [●] Equity
Share being allotted on rights basis, the Allottees will receive one detachable warrant(s) therefore aggregating
up to [●] warrants.
RIGHTS ENTITLEMENT As your name appears as beneficial owner in respect of the Equity Shares held in the electronic form or appears
in the Register of Members as an Equity Shareholder on the Record Date, you are entitled to the number of
Equity Shares shown in Block I of Part A of the enclosed Composite Application Form (“CAF”).
The eligible equity shareholders are entitled to [●] (___) Equity Shares for every [●] (____) Equity Shares held
on the Record Date. In addition, the eligible Equity Shareholders are entitled to receive ____ (___) detachable
warrants for every [●] (___) Equity Share being allotted on rights basis.
MARKET LOT
The securities of the Company are tradable only in a dematerialised form. The market lot for the Equity Shares
and detachable warrants in dematerialised mode is one. In case of physical certificates, the Company would
issue one certificate for the Equity Shares allotted to one folio and a detachable warrant with a split
performance. (the “Consolidated Certificate”). In respect of the Consolidated Certificate, the Company will,
upon receipt of a request from the equity shareholder/warrant holder, split such Consolidated Certificate into
smaller denomination within one week’s time from the request of the equity shareholder/warrant holder. The
Company shall not charge any fee for the splitting of the Consolidated Certificate.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE
TRADED ON THE STOCK EXCHANGES IN DEMATERIALIZED FORM ONLY.
NOMINATION FACILITY
In terms of section 109A of the Companies Act, 1956, nomination facility is available in case of Equity Shares.
The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this
purpose. A sole equity shareholder or first equity shareholder, along with other joint equity shareholders being
individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint
holders, as the case may be, shall become entitled to the Equity Shares. A person, being a nominee, becoming
Draft Letter of Offer
307
entitled to the Equity Shares by reason of the death of the original equity shareholder(s), shall be entitled to the
same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the
nominee is a minor, the equity shareholder(s) may also make a nomination to appoint, in the prescribed manner,
any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the
minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person
nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity
Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the
demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the
registered office of the Company or such other person at such addresses as may be notified by the Company.
The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination
would be applicable for one folio. Hence, in case the Shareholder(s) has already registered the nomination with
the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the
same folio. In case the allotment of Equity Shares/detachable warrants is in dematerialised form, there is no
need to make a separate nomination for the Equity Shares/detachable warrants to be allotted in this Issue.
Nominations registered with respective DP of the applicant would prevail. If the applicant requires change in the
nomination, they are requested to inform their respective DP.
JOINT HOLDERS
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the
same as joint-holders with benefits of survivorship subject to provisions contained in the Articles of Association
of the Company.
OFFER TO NON-RESIDENT EQUITY SHAREHOLDERS
Applications received from NRIs and non-residents for allotment of Equity Shares with detachable warrants
shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange
Management Act, 2000 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares,
issue of letter of allotment/share certificates, payment of interest, dividends, etc. General permission has been
granted to any person resident outside India to purchase shares offered on rights basis by an Indian Company in
terms of FEMA and regulation 6 of notification No. FEMA 20/200-RB dated May 03, 2000. The rights shares
purchased by non-residents and the shares acquired on conversion of warrants shall be subject to the same
conditions including restrictions in regard to the repatriability as are applicable to the original shares against
which rights shares are issued.
By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”)
have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign
Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations,
2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares and warrants. The RBI has
however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which
are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as
incorporated non-resident entities.
Applications received from the non-resident equity shareholders for the allotment of Equity Shares with
detachable warrants shall, among other things, be subject to conditions as may be imposed, from time to time,
by the RBI, in the matter of refund of application moneys, allotment of Equity Shares/ detachable warrants,
issue of letters of allotment/ certificates/ payment of dividends etc.
In case of change of status of holders i.e. from resident to non-resident, a new demat account shall be opened for
the purpose. DETAILS OF SEPARATE COLLECTING CENTRES FOR NON-RESIDENT APPLICATIONS
SHALL BE PRINTED ON THE CAF.
The Draft Letter of Offer and CAF shall only be dispatched to non-resident equity shareholders with registered
addresses in India.
FOR RESIDENT INDIAN SHAREHOLDERS
Applications will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at
any offices except in the case of postal applications as per instructions given in the Draft Letter of Offer. Only
applications for an amount of less than Rs.20,000 may be effected in cash and all the payments more than Rs.20,
000 shall be effected by cheque / bank draft / drawn on any bank (including a co-operative bank) which is
situated at and is a member or a sub-member of the bankers clearing house located at the center where the CAF
Draft Letter of Offer
308
is submitted and which is participating in the clearing at the time of submission of the application. Outstation
cheque / money orders / postal orders will not be accepted and CAFs accompanied by such cheque / money
orders / postal orders are liable to be rejected.
NO OFFER IN THE UNITED STATES
The rights and the Shares of our Company have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), or any U.S. state securities laws and may not be
offered, sold, resold or otherwise transferred within the United States or to, or for the account or benefit of,
"U.S. Persons" (as defined in Regulation S under the Securities Act), except in a transaction exempt from the
registration requirements of the Securities Act. The rights referred to in this Draft Letter of Offer are being
offered in India but not in the United States of America. The offering to which this Draft Letter of Offer relates
is not, and under no circumstances is to be construed as, an offering of any Shares or rights for sale in the United
States of America, or the territories or possessions thereof, or as a solicitation therein of an offer to buy any of
the said Shares or rights. Accordingly, this Draft Letter of Offer should not be forwarded to or transmitted in or
into the United States of America at any time except in a transaction exempt from the registration requirements
of the Securities Act. Neither we nor any person acting on our behalf will accept subscriptions from any person,
or the agent of any person, who appears to be, or who we or any person acting on our behalf has reason to
believe is, a resident of the United States of America and to whom an offer, if made, would result in requiring
registration of this Draft Letter of Offer with the United States Securities and Exchange Commission. Rights
may not be transferred or sold to any U.S. Person (as defined in Regulation S under the Securities Act).
Draft Letter of Offer
309
ISSUE PROCEDURE
The Equity Shares with warrants now being offered are subject to the provisions of the Act and the terms and
conditions of this Draft Letter of Offer, the CAF, the Memorandum and Articles of Association of the Company,
the approvals from the Government of India, FIPB and RBI, if applicable, the provisions of the Act, guidelines
issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued
by Government of India and/or other statutory authorities and bodies from time to time, Listing Agreements
entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the allotment advise
or letter of allotment or share certificate and rules as may be applicable and introduced from time to time.
Face value Each Equity Share shall have the face value of Rs 10/-
Issue price
The Equity Shares of the Rs 10/- each are being offered at an Issue Price of Rs. [●] per Equity Share for cash at
a premium of Rs. [●] per Equity Share in the present rights issue.
Issue of [●] Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. [●] per Equity Share on
rights basis to the existing Equity Shareholders of The Oudh Sugar Mills Limited in the ratio of [●] Equity
Shares for every [●] Equity Shares held on the Record Date i.e. [●] for every [●] Equity Shares to being allotted
on rights basis. The issue price for the Equity Shares will be payable in [●] installments. In terms of Clause
8.6.1 (vi) at leaset 25% of the issue price will be payable on Application; balance Rs. [●] of the Issue Price will
become payable at the option of Our Company, on or before 12 months from the Date of Allotment.
Under the Issue, the allottees will also receive [●] detachable Warrants. Total Issue including conversion of
Warrants into Equity Shares during Warrant Conversion Period at Rs [●] per share would aggregate to Rs 5000
lacs. The Issue Price is [●] times the face value of the Equity Shares. For detrails please refer to “Terms of the
Issue” on page 306 of this Draft Letter of Offer.
Minimum Subscription
In the event of undersubscription, our Promoters intend to apply for additional Equity Shares, to ensure atleast
minimum ninety percent subscription to make the Rights Issue subscribed. Allotment of shares to the Promoters
for additional Equity Shares in excess of their respective rights entitlement will not result in change in control of
management and will be governed by the regulation 3(1)(b) of SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 and amendments thereof. The promoters undertake to comply with Clause 17 of
SEBI (Delisting of Securities) Guidelines 2003 in case of non-promoter holding in the Company falls below the
level required for continuous listing requirement.
Draft Letter of Offer
310
Terms of Payment
In terms of Clause 8.6.1 (vi) at leaset 25% of the issue price will be payable on Application i.e.Rs [●], which
constitutes [●] % of the full amount of the Issue Price Rs. [●] shall be payable (“Application Money”). The
remaining [●] % of the full amount of the Issue Price shall become payable, at the option of our Company, on or
before 12 months after the Allotment Date.
Towards Share Capital Towards Share Premium
Account
On Application Rs. [●]
In terms of Clause 8.6.1 (vi) at
leaset 25% of the issue price
will be payable on
Application.
Rs [●] per Equity Shares Rs [●]
On first and final Call Rs [●] Rs [●] per Equity Share Rs [●]
If there is a failure to pay any call or installment of a call on or before the day appointed for the payment of the
same, the Board may, at any time during which any part of the call or installment remains unpaid, serve a notice
on such member of our Company requiring him to pay the same together with any interest that may have
accrued.
The notice shall fix a date and a place or places on and at which such call or installment are to be paid. The
notice shall also state that in the event of nonpayment at or before the time and at the place or places appointed,
the shares in respect of which such call was made or installment is payable and to which the notice relates will
be liable to be forfeited. If the requisites of such notice are not complied with, any shares in respect of which
such notice has been given may, at any time thereafter before payment of all calls or installments, interest and
expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall
include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture.
Neither the receipt by our Company of a portion of any money which shall from time to time be due from any
Member to our Company in respect of his shares, either by way of principle or interest, nor any indulgence
granted by our Company in respect of the payment of any such money, shall preclude our Company from
thereafter proceeding to enforce a forfeiture of such shares. Any share so forfeited shall be deemed to be the
property of our Company, and the Board may sell, re-issue or otherwise dispose of the same in such manner as
they think fit.
Payment should be made in cash (not more than Rs.20,000) or by cheque/bank demand draft/ drawn on any
bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers
clearing house located at the center where the CAF is accepted. Outstation cheques /money orders/postal orders
will not be accepted and CAFs accompanied by such cheque/money orders/postal orders are liable to be
rejected. Where an applicant has applied for additional shares and is allotted lesser number of shares than
applied for, the excess application money shall be refunded. The monies would be refunded within 42 days from
the closure of the Issue, and if there is a delay beyond 8 days from the stipulated period, the Company will pay
interest on the monies in terms of sub-sections (2) and (2A) of section 73of the Companies Act, 1956.
Mode of payment
(i) For resident applicants - Payment(s) must be made by cheque/demand draft and drawn on any bank
(including a co-operative bank) which is situated at and is a member or a sub-member of the Bankers’ Clearing
House located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF.
Only one mode of payment should be used. Money orders, postal orders and outstation cheques will not be
accepted and applications accompanied by any such instruments will be rejected. Shareholders/Applicants
residing at places other than those mentioned in the CA and applicants who wish to send their applications but
not having collection centres should send their application by Registered Post, ONLY to the Registrar to the
Issue enclosing a Cheque/ Demand draft drawn on a clearing Bank and payable at [●] ONLY net of bank
charges and postal charges, before the closure of the issue. Such cheque/drafts should be payable to “The Oudh
Sugar Mills Limited – RIGHTS ISSUE”. All cheque/ drafts must be crossed ‘A/c Payee only’. No receipt will
be issued for the application money received. However, the Collection Centre receiving the application will
acknowledge receipt of the application by stamping and returning the acknowledgement slip at the bottom of
each CAF. The Company is not responsible for any postal delay/ loss in transit on this account.
Draft Letter of Offer
311
(ii) For Non-resident applicants/ FIIs - Payments by Non-Resident shareholders will be accepted by Indian
Rupee Drafts purchased abroad or cheques/drafts drawn on Non-Resident External Account (NRE Account) or
Foreign Currency Non- Resident Account (FCNR Account) maintained anywhere in India but payable at [●] or
by Telegraphic Transfer in favour of the collecting Bankers by the concerned shareholders. However, in case
shares are held on a non-repatriable basis, payment may also be made by cheques / draft drawn on Non-Resident
Ordinary Account (NRO A/c.) maintained anywhere in India but payable at [●]. Such cheques/drafts should be
drawn in favour of “The Oudh Sugar Mills Limited- RIGHTS ISSUE – NRI/FII” payable at [●], India and
shall be crossed A/c. Payee Only, Banker’s Certificate regarding source of payment must be submitted with the
CAFs wherever necessary. The CAF along with cheques/drafts should be deposited with any of the branches of
the Bankers to the Issue nominated for this purpose. The certificate of inward remittance, if any, must be sent
only to the Registrar to the Issue, Intime Spectrum Registry Limited, quoting the details of folio no. and the
name and address of the branch of the Bankers to the Issue where CAF has been deposited before the closure of
the issue.
KINDLY NOTE THAT APPLICATIONS WILL NOT BE ACCEPTED BY THE LEAD MANAGER TO THE
ISSUE OR BY THE COMPANY
Mode of payment of dividend
We shall pay dividend, if declared, to our shareholders as per the provisions of the Companies Act, 1956.
Utilisation of Issue proceeds
The Board of Directors declares that:
(i) The funds received against this Issue will be transferred to a separate bank account other than the bank
account referred to sub-section (3) of Section 73 of the Act.
(ii) Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in the
balance sheet of the Company indicating the purpose for which such moneys has been utilised.
(iii) Details of all such unutilised monies out of the Issue, if any, shall be disclosed under an appropriate separate
head in the balance sheet of the Company indicating the form in which such unutilised moneys have been
invested. The funds received against this Issue, except to the extent utilized by the Company from the
promoters’ entitlement in the Issue brought in the form of advance share application money for subscription, if
any, till the Issue Opening Date as mentioned above shall be kept in a separate bank account and the Company
will not have any access to such funds unless it satisfies the Designated Stock Exchange with suitable
documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company.
Undertakings by the Company
The Company undertakes that –
(i) The complaints received in respect of the Issue shall be attended to by the Company expeditiously and
satisfactorily.
(ii) All steps for completion of the necessary formalities for listing and commencement of trading at all Stock
Exchanges where the securities are to be listed will be taken within seven working days of finalization of basis
of allotment.
(iii) The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be
made available to the Registrar to the Issue.
(iv) The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the
specified time.
(v) No further issue of securities affecting equity capital of the Company shall be made till the securities
issued/offered through the Issue are listed or till the application moneys are refunded on account of non listing,
under-subscription etc.
(vi) The Company accepts full responsibility for the accuracy of information given in this Draft Letter of Offer
and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any
statement made in this Draft Letter of Offer misleading and further confirms that it has made all reasonable
enquiries to ascertain such facts.
(vii) All information shall be made available by the Lead Manager and the Issuer to the Investors at large and no
selective or additional information would be available for a section of the Investors in any manner whatsoever
including at road shows, presentations, in research or sales reports etc.
Notices
Draft Letter of Offer
312
All notices to the equity shareholder(s) and warrant holders required to be given by the Company shall be
published in one English national daily with wide circulation, one Hindi national daily with wide circulation, a
regional language daily where the Registered Office of the Company is situated and/or, will be sent by ordinary
post to the registered holders of the Equity Share(s) and warrants from time to time.
Draft Letter of Offer
313
Principal terms and conditions of the issue of Equity Shares on Rights Basis
Entitlement
The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the
ratio of [●] Equity Share(s) for every [●] Equity Share(s) held on the Record Date. An eligible shareholder can
either renounce his entitlement (in whole or in part) or apply for additional Equity Shares over and above his
entitlement. Shareholder who has either renounced a part or whole of his entitlement cannot apply for additional
shares. If there is an over subscription on account of application for additional shares, then the additional shares
will be allotted to those applicants proportionately.
Options available to the equity shareholders:
The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is
entitled to. If the Equity Shareholder applies for an investment in Equity Shares, then he can –
(i) Apply for his entitlement in part
(ii) Apply for his entitlement in part and renounce the other part
(iii) Renounce his entire entitlement
(iv) Apply for his entitlement in full
(v) Apply for his entitlement in full and apply for additional Equity Shares
Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional
Equity Shares.
Rights of Equity Shareholders
Subject to the applicable laws, the Memorandum and the Articles of Association of the Company, the terms of
this Draft Letter of Offer, the shareholders are entitled to the following rights –
(i) To receive dividend, if declared;
(ii) To attend general meetings and exercise voting power, unless prohibited by law;
(iii) To vote on poll, either in person or proxy;
(iv) To receive offer for right shares and be allotted bonus shares if announced;
(v) To receive surplus on liquidation;
(vi) Free transferability of share; and
(vii) Such other rights as may be available to a shareholder of a listed public company under the Companies Act,
1956.
For more details regarding the rights available under the Articles of Association please refer to section titled
“Main Provisions of Our Articles of Association” beginning on page 327 of this Draft Letter of Offer.
Ranking of the Equity Shares
The Equity Shares issued and allotted on a rights basis as a part of this Issue shall be subject to the
Memorandum and Articles of Association of the Company and shall rank pari passu in all respects including
dividends with the existing Equity Shares of the Company.
Additional Shares
The Equity Shareholders are eligible to apply for additional equity shares provided the applicant has applied for
all the equity shares offered to him without renouncing them in full or in part. Where the number of additional
equity shares applied for exceeds the number available for allotment, the allotment would be made on a fair and
equitable basis in consultation with the Designated Stock Exchange. Renouncees can apply for additional
shares.
Fractional Entitlement
For Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the equity
shareholders is less than [●] or is not in multiples of [●] then the fractional entitlement of such Equity
Shareholders shall be rounded up to the nearest integer. The Equity Shares needed for such rounding off shall be
adjusted from the Promoter and Promoter Group’s entitlement at the time of allotment.
Draft Letter of Offer
314
Procedure for Calls
The schedule set out below for listing and trading of the partly paid and fully paid shares is based on the current
regulatory framework applicable thereto. Accordingly, any change in the regulatory regime would accordingly
affect the schedule.
Calls
Our Company would convene meetings of the Board from time to time to pass the required resolution(s) for
making the Calls and suitable intimation would be given by our Company to the Stock Exchanges. Further,
advertisements for the same will be issued in one English national daily with wide circulation, one Hindi
national daily with wide circulation.
Record date for Calls and suspension of trading
Our Company would fix a record date giving at least 15 days prior notice to the Stock Exchanges for the
purpose of determining the list of shareholders to whom the notice for call money (“Call Money Notice”)
would be sent. Once the record date has been fixed, trading in the partly paid Equity Shares for which calls have
been made would be suspended 5 days prior to each record date that has been fixed for the call concerned.
Separate ISINs on application and call
In addition to the present ISIN for the existing fully paid up Equity Shares, Our Company would obtain separate
ISIN Nos. for its [●] paid up Equity Shares. The [●] paid up Equity Shares offered under the Issue will be traded
under a separate ISIN No. for the period from the date of listing of these Equity Shares and up to five days prior
to the record date for the first and final call. The ISIN No. representing [●] paid up Equity Shares will be
terminated after the record date for the first and final call.
On payment of the first and final call in respect of the [●] paid up Equity Shares, such shares on which final call
has been duly paid would be converted into fully paid up Equity Shares and merged with the existing ISIN for
fully paid Equity Shares of Our Company.
Listing of partly paid shares
The [●] paid up shares would be listed on the Stock Exchanges. Once, the Call Money Notice for respective
calls has been sent, the listing of then existing partly paid up Equity Shares would be terminated. Our Company
will make necessary application to BSE and NSE for listing of partly paid up shares. The [●] paid up shares will
be issued in accordance with the Letter of Offer and would be listed for the period as per the following details.
The allotment of [●] paid up shares will be made within 30 days from the closure of Issue and the same will be
listed within 10 days thereafter.
The fully paid up shares will be listed within approximately 15 days from the last date fixed for payment of first
and final call money.
The process of corporate action for crediting [●] paid up and fully paid up shares to the Demat Account may
take about two weeks time from the last date of payment of the account under the call money notice.
During this period the partly paid up shares would not be tradeable.
Payment Period for each call
As per the Articles of Association of our Company, the shareholders would be given not less than fourteen days
time for the payment of the call money for each call.
Indicative Schedule of activities for making the partly paid up equity shares fully paid up
Activity Date
Allotment is finalized with Stock Exchange A
Listing of Equity Shares [●]% paid up A + 2
Board to make first and final call for balance [●]% A + (on or before
12 months from
date of allotment)
Record date for making first and final call B
Suspension of trading of [●]% paid up shares B – 5 trading days
Send the call notice to the shareholders holding shares on the record date B + 2
Last date of payment of call money B + 23
Draft Letter of Offer
315
Activity Date
Corporate action for credit of fully paid up shares to the demat account of shareholders
who have paid the call money
B + 35
Listing of shares fully paid up within B + 40
Principal terms and conditions of the issue of detachable warrants being issued
Face Value
Each detachable warrant is convertible into one (1) Equity Share of face value of Rs.10/- each.
Entitlement
In addition to entitlement to apply for [●] Equity Share(s) for every [●] Equity Share(s) held on the Record
Date, an eligible equity shareholder is entitled to receive [●] detachable warrants for every [●] Equity Shares
being allotted on rights basis. The warrants so issued can be freely and separately traded. The warrant holder
will be entitled to exercise his right to apply for [●] Equity Share of Rs. 10/- each for every warrant held at
Warrant Exercise Price for each warrant held, on the fixed date declared by the Company (Notice date, the
outermost date for conversion) during the Warrant Exercise Period. Warrant holders can exercise their right to
apply for the Equity Share at the Warrant Exercise Price. Warrant holder can not renounce his entitlement to
apply for the Equity Share or apply for additional Shares over and above his entitlement.
This share entitlement on each warrant shall be proportionately adjusted for any further bonus issue made by the
Company prior to the Warrant Exercise Period so as to ensure that the benefit to the warrant holder is not
prejudiced and remains the same as if the bonus would not have been declared. For example, should the
Company declare a bonus issue prior to the Warrant Exercise Period in the ratio of 1:1, then the number of
equity shares to be issued pursuant to exercise of warrant shall double.
In the event of any sub-division or consolidation of the face value, the share entitlement on each warrant shall be
proportionately increased / decreased such that the aggregate nominal value of the entitlement remains the same
as the nominal value of the Equity Shares immediately prior to such subdivision or consolidation e.g. in case the
Company decides to reduce the face value of Equity Shares to Rs.5 each, then upon exercise of each warrant by
making payment under the Warrant Exercise Price, the warrant holder would get 2 Equity Shares of Rs.5 each
instead of one Equity Share of Rs.10 each. However, in case the Company announces a rights issue during the
tenure of the warrants, neither would any adjustment be made to the share entitlement on each warrant nor
would there be any reservations for warrant holders.
Options available to warrant holder
A warrant holder has the following rights –
(i) Apply for his entitlement in part. However, the other part shall not be renounciable,
(ii) Apply for his entitlement in full,
(iii) Apply for his entitlement in full and also apply for additional shares.
Rights available to warrant holders
The warrants shall be transferable and transmittable in the same manner and to the same extent and be subject to
the same restrictions and limitations and other related matters as in the case of Equity Shares of the Company.
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies
(“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the
Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs))
Regulations, 2003. Accordingly, the warrants shall not be transferable (by sale or gift) in favour of OCB(s). The
warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of the
Shareholders of the Company or annual report of the Company and or to attend/vote at any of the general
meetings of the Shareholders of the Company held, if any. Save and except the right of subscription to the
Company’s Equity Shares as per the terms of the issue of warrants, the holders of the warrants in their capacity
as warrant holders shall have no other rights or privileges.
The equity shares arising from the conversion of warrants shall be subject to the Memorandum and Articles of
Association of the Company and shall rank pari passu in all respects with existing Equity Shares of the
Company including dividends. Except that the shares arising from conversion of warrants shall be eligible for
dividends only after payment of Exercise Conversion Price and allotment of the Equity Shares.
Draft Letter of Offer
316
Additional shares pursuant to exercise of warrants.
A warrant holder can apply for additional shares provided that the applicant has applied for all the shares offered
to him. The application for additional shares shall be considered for allotment at the sole discretion of the Board
and in consultation if necessary with the Designated Stock Exchange. This allotment of additional shares will be
made on proportionate basis with reference to number of warrants already held by the applicant at the time of
application for issue of additional shares.
Warrant Exercise Period
Warrant Exercise Period shall be the period commencing after [●] months from the date of allotment up to [●]
months from the date of allotment. The warrant will get converted on or before a fixed date (i.e. “Notice Date,
the outermost date for conversion”) and would be made uniformly in respect of all the warrants outstanding. The
Company will fix the Record Date as any time during the Warrant Exercise Period for the purpose of warrant
conversion. The conversion of warrants into Equity Shares of the Company will be as per the Warrant Exercise
Price as mentioned under the para “Warrant Exercise Price” provided below.
WARRANTS SHALL LAPSE ON THE NOTICE DATE OR THE END OF WARRANT EXERCISE
PERIOD, WHICH EVER IS EARLIER.
Warrant Exercise Price
Warrant Exercise Price shall be lower of (a) 20% discount to the average six weekly closing prices before the
date of the public notice on Designated Stock Exchange; or (b) 20% discount to average two weekly closing
prices before the date of the public notice on the Designated Stock Exchange; or (c) Rs. [●] per Equity Share,
being the Cap Price. The Warrant Exercise Period and the Warrant Exercise Price will be notified by giving
public notice in the newspaper. The investors may also note that the cap price of Rs. [●] per share for the
purpose of conversion into Equity Shares for every detachable warrant should not be taken to be indicative of
the market price of the Equity Shares, whether presently or after the Equity Shares issued upon the exercise of
warrants are listed. No assurance can be given regarding the active / sustained trading in the Equity Shares or
the price at which the Equity Shares offered under the present Issue will trade either after the listing or at the
time of exercise of warrants.
If there is an increase in the shareholding of the Promoters / Promoter Group beyond the limit prescribed in the
Listing Agreement pursuant to the warrant conversion, the Company undertakes to ensure compliance in such
manner as may be directed by the Stock Exchanges. Such increase in their shareholding, if any, will be pursuant
to the exercise of their entitlement and shall be covered under 3(1)(b)(i) of the SEBI (Substantial Acquisition of
Shares and Takeover) Regulations, 1997. Further such increase in their shareholding, if any, will not result in
change of control of the management of the Company. In the event of the minimum public shareholding falling
below the prescribed minimum, the Company will take the necessary steps in ensuring that the minimum public
shareholding is restored in compliance with SEBI regulations. As such, other than meeting the requirements
indicated in the section on “Objects of the Issue” on page 39 of this Draft Letter of Offer, there is no other
intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments
to the Promoters, in this Issue, the Promoters’ shareholding in the Company exceeds their current shareholding.
Allotment of warrants
Subject to the provisions contained in this Draft Letter of Offer, the Articles of Association of the Company and
the approval of the Designated Stock Exchange, the Board will proceed to allot one detachable warrant for every
[●] Equity shares allotted under the rights issue. If there is any shortfall or surplus in the warrants, required on
account of rounding off as mentioned above, then the said shortfall or surplus would be adjusted against warrant
entitlement of Promoter / Promoter Group.
How to apply
Procedure for application for Equity Shares and the detachable warrants
The enclosed CAF for equity shares should be completed in all respects in its entirety before submission to the
Bankers to the Issue or their designated branches as they appear in the CAF. The forms of the CAF should not
be detached under any circumstances otherwise the application is liable to be rejected. The CAF consists of four
parts –
Draft Letter of Offer
317
(i) Part A: Form for accepting the Equity Shares and the detachable warrants and for applying for additional
Equity Shares and / or warrants
(ii) Part B: Form for renunciation of Equity Shares
(iii) Part C: Form for application for renounces of Equity Shares
(iv) Part D: Form for request for split application forms
Application for conversion into Equity Shares will be sent separately to the warrant holders as on the Record
Date.
Options available Actions required
1 Accept whole or part of your entitlement without
renouncing the balance.
Fill in and sign Part A (All joint holders must sign)
2. Accept entitlement in full and apply for additional
number of additional Equity Shares
Fill in and sign ‘Part A’ including Block III relating to the acceptance
of entitlement and Block IV relating to additional Equity Shares (All
joint holders must sign)
4. Accept a part of your entitlement and renounce the
balance to one or more renouncee(s)
OR
Renounce your entitlement to all the Equity Shares
offered to you to more than one renouncee
Fill in and sign Part D (all joint holders must sign) requesting for Split
Application Forms. Send the CAF to the Registrar to the Issue so as to
reach them on or before the last date for receiving requests for
Split Forms. Splitting will be permitted only once.
On receipt of the Split Form take action as indicated below.
For the Equity Shares you wish to accept, if any, fill in and sign Part A.
For the Equity Shares you wish to renounce, fill in and sign Part B
indicating the number of Equity Shares renounced and hand it over to
the renouncees. Each of the renouncees should fill in and sign Part C
for the Equity Shares accepted by them.
5. Introduce a joint holder or change the sequence of joint
holders
This will be treated as a renunciation. Fill in and sign Part B and the
renouncees must fill in and sign Part C.
Please note that:
• Part A of the CAF must be used only by the existing Equity Shareholders of the Company to whom the shares
are offered and must not be used by any person(s) in whose favour this entitlement has been made. If used, this
will render the application invalid.
• While applying for or renouncing equity shares joint holders must sign in the same order and as per the
specimen signatures registered with the Company.
• Request for split form should be made for a minimum of 100 Equity Shares or in multiples thereof and one
Split Application Form for the balance Equity Shares, if any.
• Request by the applicant for the Split Application Form should reach the Company on or before [●] .
• Only the person to whom this Draft Letter of Offer has been addressed to and not the renouncee(s) shall be
entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.
• Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.
(i) Availability of duplicate CAF -In case the original CAF is not received, or is misplaced by the applicant, the
Registrar to the Issue will issue a duplicate CAF on request of the applicant who should furnish the registered
folio number, DP and Client ID no. and his/ her full name and address to the Registrar to the Issue. Please note
that those who are making the application on duplicate form should not utilize the original CAF for any purpose
including renunciation, even if it is received subsequently. If the applicant violates any of these requirements,
he/she shall face the risk of rejection of both the applications.
(ii) Applications by resident equity shareholders - Applications should be made only on the enclosed CAF
provided by the Company. The enclosed CAF should be completed in all respects, as explained in the
instructions indicated in the CAF. Applications will not be accepted by the Lead Manager or by the Registrar to
the Issue or by the Company at any offices except in the case of postal applications as per instructions given in
this Draft Letter of Offer.
iii) Applications by non-resident equity shareholders - Applications received from the non-resident equity
shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed
from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of
letters of allotment / certificates / payment of dividends etc. Non-resident equity shareholders will be required to
Draft Letter of Offer
318
represent, inter alia, that they are not excluded U.S. Persons as such term is defined in Regulation S under the
U.S. Securities Act of 1933, as amended.
(iv) For applicants residing at places other than designated bank collecting branches.- Applicants residing at
places other than the cities where the bank collection centers have been opened should send their completed
CAF by registered post/speed post to the Registrar to the Issue, along with demand drafts, net of demand draft
and postal charges, payable at [●] in favour of “The Oudh Sugar Mills Limited - Rights Issue” crossed “A/c
Payee only” so that the same are received on or before closure of the Issue i.e. [●]. The Company will not be
liable for any postal delays and applications received through mail after the closure of the Issue are liable to be
rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as
mentioned below. All application forms duly completed together with cash/ Cheque /demand draft for the
application money must be submitted before the close
of the subscription list to the Bankers to the Issue named herein or to any of its branches mentioned on the
reverse of the CAF. The CAF alongwith application money must not be sent to the Company or the Lead
Manager to the Issue or the Registrar to the Issue except as mentioned above. The applications are required to
strictly adhere to these instructions. Failure to do so could result in the application being liable to be rejected by
the Company, the Lead Manager and the Registrar not having any liabilities to such applicants.
(v) Application on plain paper - An Equity Shareholder who has neither received the original CAF nor is in a
position to obtain the duplicate CAF may make an application to subscribe to the Rights Issue on plain paper,
along with a Cheque/ Demand Draft payable at [●] which should be drawn in favour of “The Oudh Sugar
Mills Limited - Rights Issue” and send the same by registered post directly to the Registrar to the Issue- Intime Spectrum Registry Limited., Mumbai. The application on plain paper, duly signed by the applicants
including joint holders, in the same order as per specimen recorded with the Company, must reach the office of
the Registrar to the Issue before the Issue Closing Date and should contain the following particulars –
(a) Name of Issuer, being The Oudh Sugar Mills Limited.
(b) Name and address of the Equity Shareholder including joint holders
(c) Registered Folio Number/ DP and Client ID no.
(d) Number of shares held as on Record Date i.e. [●]
(e) Certificate numbers and distinctive numbers, if held in physical form
(f) Number of rights Equity Shares entitled
(g) Number of rights Equity Shares applied for out of entitlement
(h) Number of additional Equity Shares applied for, if any
(i) Total number of Equity Shares applied for
(j) Total amount paid at the rate of Rs. [●]per Equity Share
(k) Particulars of cheque/draft
(l) Savings/Current Account Number and name and address of the Bank where the Equity
Shareholder will be depositing the refund order
(m) In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the bank and
branch should be given.
(n) Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of
the Company
(o) Payment in such cases, should be through a Cheque/ demand draft, net of demand draft and postal charges,
payable at [●] be drawn in favour of “Oudh Sugar Mills Limited - Rights Issue” crossed “A/c Payee only”.
Please note that those who are making the application on plain paper shall not be entitled to renounce their rights
and should not utilize the original CAF for any purpose including renunciation even if it is received
subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both
the applications as well as forfeiture of amounts remitted along with the applications. The Company shall refund
such application amount to the applicant without any interest thereon.
Please note that:
(a) In case of applications or in case of an application in joint names, each of the applicants, should mention
his/her PAN allotted under the IT Act. The copy of the PAN card(s) or PAN allotment letter(s) is required to be
submitted with the Bid-cum-Application Form. Applications without this information and documents will be
considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should not submit
the GIR number instead of the PAN, as the Bid is liable to be rejected on this ground.
.
(vi) Acceptance of the Issue - You may accept the Issue and apply for the Equity Shares with detachable
warrants offered, either in full or in part by filling Block III of Part A of the enclosed CAF and submit the same
along with the application money payable to the Bankers to the Issue or any of the branches as mentioned on the
Draft Letter of Offer
319
reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended
time as may be specified by the Board thereof in this regard. Applicants at centers not covered by the branches
of collecting banks can send their CAF together with the cheque drawn on a local bank in [●] / demand draft,
net of bank and postal charges, payable at [●] to the Registrar to the Issue by registered post. Such applications
sent to anyone other than the Registrar to the Issue are liable to be rejected.
Procedure for exercise of warrants being issued with Equity Shares under the Issue
Activity Date
Activity Date
Relevant date for determination of the warrant conversion price X-1
Company to give public notice for, application of Record Date, Notice Date and Warrant
Conversion Price
X
Company to apply for Record Date with the Stock Exchanges X
Stock Exchanges will suspend the trading of warrants (subject to Stock Exchanges
approval)
X + 10
Company / Registrar to dispatch exercise application form to the warrant holders X+17`
Company to give notice for the dispatch confirmation X+17
Warrant Conversion Period for Public (29 Days) during which warrant holders will
exercise their entitlement towards warrant conversion
X+17 to
X+45
Consolidated allotment of Equity Shares from the converted warrants X+46
Company to apply for listing of New Equity Shares from the converted warrants to the
Stock Exchanges
X+47
Unsubscribed portion of warrants will lapse on X+45
Notice Date (outermost date for conversion) X+45
Listing of Equity Shares from the converted warrants X+50
(approx.)
Application for conversion into Equity Shares, should be made on the prescribed warrants exercise application
form.
The Company will apply for the Record Date with the Stock Exchanges and fix the Record Date. The Company
will determine the Warrant Conversion Price on relevant date, which is the date prior to date of the public
notice. Warrant exercise application form would be sent to all the warrant holders separately as per the details
appearing in Register of warrant holders on the Record Date. On receipt of the aforesaid intimation, the sole
warrant holder / all the joint holders should follow the procedure as described in this SECTION with respect to
physical/ demat form and send the relevant documents by registered post / speed post with acknowledgment due
or by hand delivery to Registrar to the Company; Intime. The Company will give the public notice for the
warrant conversion price and the confirmation for the dispatch in the newspaper.
(i) In case of warrant held in physical mode - The warrant holder should send his application for issue of Equity
Shares to the Registrar to the Company, Intime, by filling up the requisite particulars on the warrant exercise
application form and by discharging on the reverse of the warrants certificate. For resident shareholders /
applicants and non-resident equity shareholders / applicants applying on a nonrepatriation basis, the application
should be accompanied by a cheque/demand draft favoring “The Oudh Sugar Mills Limited-Warrants Issue”
payable at [●] for the requisite amount. For non-resident equity shareholders / applicants applying on a
repatriation basis, the application should be accompanied by a cheque / demand draft favoring “The Oudh
Sugar Mills Limited-Warrant Issue-NR” payable at [●]for the requisite amount. For making the payment,
non-resident equity shareholders / applicants are required to follow the similar procedures as specified in
‘Submission of Application & Mode of Payment for Rights Issue of Equity Shares’ in this Draft Letter of Offer.
(ii) In case of warrant held in DEMAT mode - The Registrar of the Company, Intime, will before the Warrant
Exercise Period open a special depository account with NSDL “The Oudh Sugar Mills Limited- Warrant
Conversion Escrow Account” with a DP (the “Special Depository Account”). The Company will open the
Special Depository Account through the Registrar with NSDL at least 2 days prior to the commencement of the
Warrant Exercise Period and the details of the account will be included by the Company in the newspaper
notice. Shareholders of The Oudh Sugar Mills Limited having the depository account with CDSL must use inter
depository delivery instruction slip for the purpose of crediting their warrants in favour of the Special
Depository Account with the NSDL. Beneficial owners (holders of warrants in dematerialized form) who wish
Draft Letter of Offer
320
to tender their warrants for conversion, will be required to send their application for issue of equity shares on the
prescribed application form sent separately, accompanied by a cheque / demand draft favouring “The Oudh
Sugar Mills Limited” payable at [●] along with a photocopy of the delivery instruction in “off market” mode
or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the depository participant
(“DP”) in favour of the special depository account, to the Registrar of the Company, before the close of
Warrant Exercise Period. For resident shareholders / applicants and non-resident equity shareholders / applicants applying on a non-
repatriation basis, the application should be accompanied by a cheque / demand draft favoring “The Oudh
Sugar Mills Limited-Warrants Issue” payable at [●] for the requisite amount. For non-resident equity
shareholders / applicants applying on a repatriation basis, the application should be accompanied by a cheque /
demand draft favoring “The Oudh Sugar Mills Limited-Warrants Issue-NR” payable at [●] for the requisite
amount. For making the payment, non-resident equity shareholders / applicants are required to follow the similar
procedures as specified in ‘Submission of Application & Mode of Payment for Rights Issue of Equity Shares’ in
this Draft Letter of Offer.
In case the warrants along with the cheques / drafts towards full payment of the Warrant Exercise Price do not reach the Registrar by the end of Warrant Exercise Period , then the same shall lapse. Warrants
with payments for lesser amounts shall be rejected & returned.
Shares allotted on exercise of valid warrants will be dispatched /credited to the applicant’s electronic account
within 10 days from the last day of the calendar month in which the application is received. On allotment,
Company shall apply for listing of these equity shares.
MODIFICATION TO THE TERMS OF THE WARRANTS ANY\ MODIFICATION TO THE TERMS
OF ISSUE AND EXERCISE OF THE WARRANTS WOULD BE CARRIED OUT ONLY WITH THE
PRIOR APPROVAL OF THE WARRANT HOLDERS. THIS WOULD BE DONE BY CONVENING
THEIR SPECIAL CLASS MEETING IN ACCORDANCE WITH THE PROVISIONS OF THE
COMPANIES ACT, 1956 AND TAKING THEIR APPROVAL BY A SIMPLE MAJORITY TO THE TERMS OF MODIFICATION SOUGHT, FROM THE WARRANT HOLDERS PRESENT AND
VOTING.
Caution:
Each warrant application form shall be accompanied by a single instrument of payment. Clubbing of
folios/securities for the purpose of making a consolidated payment is not permitted. Cheques/DD should be
payable at [●] for the full amount and upcountry instructions/payments for less amount will be rejected
Investors are advised not to close or transfer their DEMAT account between the period of application for
exercise of warrant(s) till the time of allotment/receipt of credit in their account so as to avoid rejection of credit
from the Depositories and resultant delay in receiving the intimation of allotment
Warrants may not be exercised from within United States by/or on behalf of US citizens. Each person
exercising the warrant must provide a written certification that he/she is not a US person or that the
warrant is not being exercised on behalf of US citizen. No exercise will be accepted from any person
whose address is within United States. If the Warrants are not exercised within the Warrant exercise period as described above then any unexercised
Warrant shall automatically be treated as cancelled.
Renunciations
This Issue includes a right exercisable by the eligible shareholder to renounce the Equity Shares offered to them
either in full or in part in favour of any other person or persons. The attention of the shareholder is drawn to the
fact that the Company shall not allot and / or register and Equity Shares and detachable warrnts in favour of
more than three persons (including joint holders), partnership firm(s) or their nominee(s), minors, HUF, any
trust or society (unless the same is registered under the Societies Registration Act, 1860 or the
Indian Trust Act or any other applicable law relating to societies or trusts and is authorized under its constitution
or bye-laws to hold equity shares. Any renunciation from resident indian shareholder(s) to Non-Resident
Indian(s) or from Non-Resident Indian shareholder(s) to resident Indian(s) or from Non-Resident Indian
shareholder(s) to other Non-Resident Indian(s) is subject to the renouncer(s) / renounce(s) obtaining the
approval of the FIPB and/or necessary permission of the RBI under the FEMA and such permissions should be
attached to the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected.
Draft Letter of Offer
321
Procedure for renunciation
(i) To renounce the whole offer in favour of one Renouncee – Shareholders who wish to renounce the offer
indicated in Part A, in whole, should complete Part B of the CAF. In case of joint holding, all joint holders must
sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part
C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF.
(ii) To renounce in part / or renounce the whole to more than one person(s) – In case if any shareholder wishes
to either accept this offer in part and renounce the balance or renounce the entire offer under this Issue in favour
of two or more renouncees, the CAF must be first split into requisite number of forms.
Shareholders should indicate his/her requirement of split forms in the space provided for this purpose in Part D
of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of
business hours on the last date of receiving requests for split forms. On receipt of the required number of split
forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.
PLEASE NOTE THAT IN CASE THE SIGNATURE OF THE EQUITY SHAREHOLDER(S), WHO
HAS RENOUNCED THE EQUITY SHARES, DOES NOT AGREE WITH THE SPECIMEN REGISTERED WITH THE COMPANY, THE APPLICATION IS LIABLE TO BE REJECTED.
(iii) Renouncee(s) – The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part
C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the
Issue Closing Date along with the application money.
Change and / or introduction of additional holders
If you wish to apply for Equity Shares with detachable warrants jointly with any other person(s), not more than
three, who is/are not already a joint holder with you, it shall amount to renunciation and the procedure as stated
above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders
shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of
renunciation is subject to the express condition that the Board of Directors of the Company shall be entitled in
its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason
thereof.
Disposal of Odd Lots
The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this Issue.
For Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the equity
shareholders is less than eight (●) or is not in multiples of eight (●), then the fractional entitlement of such
Equity Shareholders shall be rounded up to the nearest integer. The Equity Shares needed for such rounding off
shall be adjusted from the Promoter Group’s entitlement at the time of allotment.
Restriction on transfer and transmission of Shares.
Nothing contained in the Articles of Association of the Company shall prejudice any power of the Company to
refuse to register the transfer of any share. No fee shall be charged for sub-division and consolidation of share
certificates (physical form) and detachable warrants and for sub-division of letters of allotment and split,
consideration, renewal and pucca transfer receipts into denomination corresponding to the market units of
trading.
Basis of the Offer and allotment
The Equity Shares with detachable warrants are being offered for subscription for cash to those existing Equity
Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in
respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in
respect of Equity Shares held in the physical form at the close of business hours on the Record Date. The
Company has in consultation with the Designated Stock Exchange fixed the Record Date for determining the
shareholders who are entitled to receive this offer for Equity Shares with detachable warrants on a rights basis.
The Equity Shares with detachable warrants are being offered for subscription in the ratio of [●] Equity Share
for every [●] Equity Shares held by the Equity Shareholders on the Record Date, also, for every [●] Equity
Share being allotted on rights basis, the shareholder would receive [●] detachable warrants. Subject to the
provisions contained in this Draft Letter of Offer, the Articles of Association of the Company and the approval
of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of
priority –
Draft Letter of Offer
322
(i) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in
part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in
part.
(ii) For Equity Shares with detachable warrants being offered on rights’ basis under this Issue, if the equity
shareholding of any of the Equity Shareholders is less than [●] or is not in multiples of [●], then the fractional
entitlement of such holders shall be rounded up to the nearest integer. The Equity Shares needed for such
rounding off shall be adjusted from the the Promoter Group’s entitlement at the time of allotment, the allotment
would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
(iii) Allotment to the Equity Shareholders who having applied for all the Equity Shares with detachable warrants
offered to them as part of the Issue and have also applied for additional Equity Shares and / or detachable
warrants. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis
having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-
subscribed portion after making full allotment in (a) and (b) above. The allotment of such Equity Shares with
detachable warrants will be at the sole discretion of the Board/ duly authorised committee of Directors in
consultation with the Designated Stock Exchange, as a part of the Issue and not preferential allotment.
(iv) Allotment to the renouncees who having applied for all the Equity Shares renounced in their favour have
also applied for additional Equity Shares, provided there is an under-subscribed portion after making full
allotment in (i) (ii) and (iii) above. The allotment of such additional Equity Shares will be made on
proportionate basis at the sole discretion of the Board/ duly authorised committee of Directors but in
consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment. After
taking into account allotment to be made under (i) and (ii) above, if there is any unsubscribed portion, the same
shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would
be available for allocation under (iii) and (iv) above. In the event of under-subscription, Promoters intends to
apply for additional Equity Shares. Such acquisition of additional Equity Shares, if allotted to Promoters shall be
in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of
regulation 11 of Takeover Code. Further this acquisition will not result in change of control of management of
the Company. Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be
done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that
time. The Company expects to complete the allotment of Equity Shares within a period of 42 days from the date
of closure of the Issue in accordance with the listing agreement with the Stock Exchanges.
Standby Underwriting
The Company has not entered into any underwriting arrangement.
Option to Subscribe
Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities
in dematerialized (electronic) form at the option of the applicant. The Company has signed a tripartite agreement
with National Securities Depository Limited (NSDL) and Intime Spectrum Registry Limited on [●] and with
Central Depository Services (India) Limited (CDSL) and [●] on [●], which enables the Investors to hold and
trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates.
Issue of duplicate equity share certificate
If any Equity Share Certificate(s) is/are mutilated or defaced or the pages for recording transfers of Equity
Shares are fully utilized, the Company against the surrender of such Certificate(s) may replace the same,
provided that the same will be replaced as aforesaid only if the Certificate numbers and the Distinctive numbers
are legible. If any Equity Share Certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of
proof thereof to the satisfaction of the Company and upon furnishing such indemnity/ surety and/or such other
documents as the Company may deem adequate, duplicate Equity Share Certificate(s) shall be issued.
Printing of bank particulars on refund orders
As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement,
the particulars of the applicant’s bank account are mandatorily required to be given for printing on refund
orders. Bank account particulars will be printed on the refund orders / refund warrants, which can then be
deposited only in the account specified. The Company will in no way be responsible if any loss occurs through
these instruments falling into improper hands either through forgery or fraud.
Draft Letter of Offer
323
Note on cash payment (Section 269 SS)
Having regard to the provisions of Section 269 SS of the Income Tax Act, 1961, subscriptions against
applications for securities should not be effected in cash and must be effected only by ‘Account Payee’ cheques
or ‘Account Payee’ bank drafts, if the amount payable is Rs. 20,000/- or more. In case payment is effected in
contravention of this provision, the application is liable to be rejected.
Last date for submission of CAF
The last date for receipt of CAF by the Bankers to the Issue together with the amount payable on application is
[●]. If the relevant CAF together with amount payable thereunder is not received by the Bankers/Registrar to the
Issue on or before the close of banking hours on the aforesaid last date the offer contained in this Draft Letter of
Offer shall be deemed to have been declined and the Board shall be at liberty to dispose of the equity shares
hereby offered as provided under “Basis of Allotment”.
Incomplete application
CAFs, which are not complete or are not accompanied with the application money amount payable, are liable to
be rejected.
Forfeiture
The allotment shall be made only on receipt of full application money as mentioned in “Terms of Payment”.
Application under power of attorney
In case of applications under Power of Attorney or by Limited Companies or Bodies Corporates or Societies
registered under the applicable laws, a certified copy of the Power of Attorney or the relevant authority, as the
case may be, along with the certified copy of the Memorandum and Articles of Association or Bye-laws, as the
case may be, must be lodged separately by registered post at the office of the Registrar to the Issue
simultaneously with the submission of the CAF, indicating the serial number of the CAF and the name of the
bank and the branch office where the application is submitted within 10 days of closure of the offer, failing
which the application is liable to be rejected. In case the Power of Attorney is already registered with the
Company, then the same need not be furnished again. However, the serial number of the Registration under
which the Power of Attorney has been registered with the Company must be mentioned below the signature of
the Applicant.
Bank details of the applicant
The applicant must fill in the relevant column in the CAF giving particulars of Savings Bank/Current Account
Number and the name of the Bank with whom such accounts is held, to enable the Registrar to the Issue to print
the said details in the Refund Orders, if any, after the name of the payees. Please note that provision of Bank
Account details has now been made mandatory and applications not containing such details are liable to be
rejected.
Application number on the cheque/demand draft
To avoid any misuse of instruments, the applicants are advised to write the application number and name of the
first applicant on the reverse of the cheque / demand draft.
General
All applications should be made on the printed CAF provided by the Company and should be complete in all
respects. Applications, which are not complete in all respects or are made otherwise than as herein provided or
not accompanied by proper application money in respect thereof will be refunded without interest.
(i) Please read the instructions in the enclosed CAF carefully.
(ii) All communications in connection with your application for the equity shares including any change in your
registered address should be addressed to the registrar to the issue.
(iii) Application Forms must be filled in ENGLISH in BLOCK LETTERS.
(iv) Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to the
constitution of India. Signatures other than in the aforementioned languages or thumb impressions must be
attested by a Notary Public or a Special Executive Magistrate under his/her official seal.
Draft Letter of Offer
324
(v) In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in the same
order and as per the specimen signatures recorded with the Company.
(vi) In case of joint applicants, refunds and all payments will be made to the person whose name appears first on
the application form and all communications will be addressed to him/her. To prevent any fraudulent
encashment of refund orders by third parties, the Sole/First Applicant must indicate Saving / Current Account
number and the name of the bank and its branch with whom such account is held in the space provided in the
CAF for the purpose so that Refund Orders are printed with these details after the name. Applications without
this information are liable to be rejected.
(vii) The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C and D of
the Application Form(s) is /are detached or separated, such application will forthwith be rejected.
(viii) All shareholders must submit the CAF along with remittance only to the Bankers to the Issue mentioned
elsewhere in this Draft Letter of Offer and not to the Company, the Registrar or the Lead Manager.
(ix) Any dispute or suit action or proceedings arising out of or in relation to this Draft Letter of Offer or in
respect of any matter or thing herein contained and claimed by either party against the other shall be instituted or
adjudicated upon or decided solely by the appropriate Court where Registered Office of the Company is
situated.
(x) The last date for receipt of CAF alongwith the amount payable is [●]. However, the Board will have the right
to extend the same for such period as it may determine from time to time, but not exceeding 60 days from the
date of opening of the subscription list. If the CAF together with the amount payable thereunder is not received
by the bankers to the issue on or before the closure of the banking hours on the aforesaid date, or such date as
may be extended by the Board, the offer contained in this Draft Letter of Offer shall be deemed to have been
declined and the Board shall be at liberty to dispose the Rights hereby offered. For further instructions please
read CAF carefully.
Grounds for technical rejections
Applicants are advised to note that applications are liable to be rejected on technical grounds, including the
following –
(i) Amount paid does not tally with the amount payable for;
(ii) Bank account details (for refund) are not given / or incomplete / or incorrect;
(iii) Age of First Applicant not given;
(iv) PAN photocopy/ PAN Communication
(v) In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant
documents are not submitted;
(vi) If the signature of the existing shareholder does not match with the one given on the Application Form and
for renouncees if the signature does not match with the records available with their depositories;
(vii) If the Applicant desires to have shares in electronic form, but the Application Form does not have the
Applicant’s depository account details;
(viii) Application Forms are not submitted by the Applicants within the time prescribed as per the Application
Form and the Draft Letter of Offer;
(ix) Applications not duly signed by the sole/joint Applicants;
(x) Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest
in the Issue;
(xi) Applications accompanied by Stockinvest;
(xii) In case no corresponding record is available with the Depositories that matches three parameters, namely,
names of the Applicants (including the order of names of joint holders), the Depositary Participant’s identity
(DP ID) and the beneficiary’s identity;
(xiii) Applications by US persons; or
(xiv) Applications by non-eligible Non-residents (including on account of restriction or prohibition under
applicable local laws) and where last available address in India has not been provided.
Dematerialisation
As per the provisions of the Depositories Act, 1996, the shares of a body corporate may be held in
dematerialized form i.e. not in the form of physical certificates but be fungible and be represented by the
statement issued through electronic mode. The equity shares of The Oudh Sugar Mills Limited are traded in
the demat segment The Company has entered into a tripartite agreement dated [●]with the National Securities
Depository Ltd. (NSDL) and Intime Spectrum Registry Limited for dematerialization of the equity shares of the
Company. The Company has also entered into a tripartite agreement dated January 28, 2000 with the Central
Depository Services Limited (CDSL) and Intime Spectrum Registry Limited for dematerialization of the equity
shares of the Company. The ISIN No. granted to the equity shares of the Company is [●]. An applicant has the
option to seek allotment in physical or demat mode. An applicant who seeks allotment in demat mode must have
Draft Letter of Offer
325
atleast one Beneficiary Account with any of the Depository Participants (DP) of NSDL or CDSL registered with
SEBI, prior to the application. Such applicants must necessarily fill in the details (including the Beneficiary
Account Number and Depository Participant’s ID Number) appearing under the head “Request for shares in
electronic form” in the CAF.
Applicant must indicate in the CAF, the number of shares they wish to receive in electronic form out of the total
number of equity shares applied for. In case of partial allotment, shares will first be allotted in electronic form
and the balance, if any, will be allotted in physical form. Names in the CAF should be identical to those
appearing in the account details in the Depository. Incase of joint holders, the name should necessarily be in the
same sequence as they appear in the account details in the Depository. No separate applications for demat and
physical shares are to be made. If such applications are made the application for physical shares will be treated
as multiple applications and rejected accordingly. It may be noted that electronic shares can be traded only on
the stock exchanges having electronic connectivity with NSDL and CDSL. Non-transferable allotment letters/
refund orders will be directly sent to the applicant by the Registrar of the Issue The applicant is responsible for
the correctness of the applicants demographic details given in the share application form vis-à-vis those with
his/her DP. Equity shares allotted in demat mode will be credited directly to the respective Beneficiary Account.
Disposal of application and application money
No receipt will be issued for application money received. However, the Bankers to the Issue receiving the
CAF(s) will acknowledge its receipt by stamping and returning the acknowledgement slip at the bottom of each
CAF. In the event of shares not being allotted in full, the excess amount paid on application will be refunded to
the applicant within six weeks of the date of closure of the issue. The Board reserves its full, unqualified and
absolute right to accept or reject any application in whole or in part and in either case without assigning any
reason. In case an application is rejected in full, the whole of the application money received will be refunded
and where an application is accepted in part the excess money will be refunded after adjusting the money
payable for the shares allotted. All refunds will be made within six weeks of the date of closing of the
Subscription List.
Unsubscribed equity shares
The unsubscribed portion, if any of the equity shares offered to the shareholders, after considering the
application for Rights/Renunciation and additional equity shares, as above, shall be disposed by the Board of the
Company or Committee of Directors authorised in this behalf by the Board of the Company at their full
discretion and absolute authority, in such manner as they think most beneficial to the Company and the decision
of the Board of the Company or Committee of Directors in this regard shall be final and binding. Issue of Letter
of Allotment In case the Company issues Letter(s) of Allotment, the relative Share Certificate(s) will be kept
ready within 3 months from the date of allotment thereof or such extended time as may be approved by the
Company Law Board or other applicable provisions, if any. Allottees are requested to preserve such Letters of
Allotment, which would be exchanged later for Share Certificate(s).
Allotment and refund orders
All the pay orders / refund orders and Letter(s) of Allotment / Share Certificates will be dispatched within six
weeks of the date of closure of issue to the first named / sole applicant at his / her own risk. The Refund Orders
will be payable at par in India at all the centres where the applications were originally accepted. The instruments
will be marked “Account Payee Only” and in the name of the sole/ first applicant. Bank charges, if any, for
encashing such refund orders / pay orders will be payable by the applicants. The Company undertakes that the
requisite funds will be made available to the Registrar for complying with the requirement of dispatch of refund
orders / allotment letters. The Company shall ensure dispatch of refund orders of value over Rs.1,500/- by
Registered Post only and adequate funds will be made available to the Registrar. The Company undertakes to
dispatch share certificates/refund orders, complete demat credits and submit the allotment and listing documents
to the Stock Exchange within 2 working days of the finalisation of the basis of allotment. Further, the Company
undertakes to ensure that all steps for completion of the necessary formalities for listing and commencement of
trading at the Stock Exchange where the securities are to be listed are taken within 7 working days of
finalisation of basis of allotment.
Mode of making refunds
Applicants should note that on the basis of name of the Applicants, Depository Participant’s name, Depository
Participant-Identification number and Beneficiary Account Number provided by them in the CAF, the Registrar
to the Issue will obtain from the Depository the Applicant’s bank account details including nine digits MICR
Draft Letter of Offer
326
code. Hence, Applicants are advised to immediately update their bank account details as appearing on the
records of the depository participant. Please note that failure to do so could result in delays in credit of refunds
to Applicants at the Applicants sole risk and neither the Lead Manager nor the Bank shall have any
responsibility and undertake any liability for the same.
The payment of refund, if any, would be done through various modes in the following order of preference –
(i) Direct Credit - For investors having their Bank Account with the Banker to the Issue, the refund amount
would be credited directly to their Bank Account with the Banker to the Issue.
(ii) RTGS - Investors desirous of taking direct credit of refund through RTGS, will have to provide the IFSC
code in the CAF.
(iii) ECS - Payment of refund would be done through ECS for applicants residing at one of the [●] centres,
namely [●], where clearing houses for ECS are managed by RBI. This would be subject to availability of
complete Bank Account Details
including MICR code from the depository.
For all the other applicants except for whom payment of refund is possible through I, II and III, the refund
orders would be dispatched “Under Certificate of Posting” for refund orders less than Rs. 1500/- and through
Speed Post/ Registered Post for refund orders exceeding Rs. 1500/-.
Interest in case of delay on allotment/dispatch
The Company will issue and dispatch Letter(s) of Allotment/Share Certificate(s) and/or Letter(s) of Regret
along with the Refund Orders, if any, credit the allotted securities to the beneficiary account within a period of 6
weeks from the date of closure of the subscription list. Such refund orders, in the form of MICR
warrants/cheque/pay order, marked “Account payee” would be drawn in the name of a sole/first applicant and
will be payable at par at all the centers where the applications were originally accepted, risk, except for those
who have opted to receive refunds through the ECS facility or RTGS or Direct Credit. If such money is not
repaid within 8 days from the day the Company becomes liable to pay it, the Company shall, as stipulated under
sub-section 2 and 2A of Section 73 of the Companies Act, 1956, pay that money with interest at the rate of 15%
p.a. Letter(s) of Allotment/Refund Order(s) above the value of will be dispatched by Registered Post to the
sole/first applicant’s address. However, Refund Orders for values not exceeding Rs.1,500/- shall be sent to the
applicants under Certificate of Posting at the applicant’s sole risk at his address. The Company would make
adequate funds available to the Registrar to the Issue for this purpose.
Important
Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in the
accompanying CAF are an integral part of the conditions of this Draft Letter of Offer and must be carefully
followed; otherwise the application is liable to be rejected.
All inquiries in connection with this Draft Letter of Offer or accompanying CAF and requests for Split
Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID no., the CAF
number and the name of the first Equity Shareholder as mentioned on the CAF and super scribed “The Oudh
Sugar Mills Limited-Rights Issue” on the envelope) to the Registrar to the Issue at the following address:
Intime Spectrum Registry Limited C - 13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (West),
Mumbai 400 078.
Tel: +91 22 2596 0320-28
Fax: +91 22 2596 0329
Email : [email protected]
Website: www.intimespectrum.com
Contact person: Ms Awani Thakkar
1. It is to be specifically noted that this Issue of Equity Shares is subject to Risk Factors appearing on page 7 of
this Draft Letter of Offer.
2. The Rights Issue will be kept open for minimum 30 days unless extended, in which case it will be kept open
for a maximum 60 days.
Draft Letter of Offer
327
SECTION X : MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF THE COMPANY
The regulations contained in Table ‘A’ of Schedule I to the Companies Act shall apply only in so far as the same
are not provided for or are not inconsistent with these Articles and the regulations for the management of our
Company and for observance of the members thereof and their representatives shall, subject to any exercise of
the statutory powers of our Company with reference to repeal or alteration of or addition to, its regulations by
Special Resolution, as prescribed by the Companies Act, be such as are contained in these Articles.
Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, an abstract of the main provisions of the
Articles of Association of our Company is set out below:
(i) Preliminary
Title of Article Article Number and contents
Table ‘A’ not to
apply but company
to be governed by these Articles
The regulations contained in Table ‘A’ in the First Schedule to the Companies Act, 1956, shall not apply to
Company, but the regulations for the management of the Company and for the observance of the Members
thereof and their representatives, shall, subject to any exercise of the statutory powers of the Company with
reference to the repeal or alterations of, or addition to, its regulations by Special Resolution, as prescribed by
the said Companies Act, 1956 be such as are contained in these Articles.
Title of Article Article Number and contents
Preliminary “The Company” means The Oudh Sugar Mills Limited.
“The Act” means the Companies Act, 1956.
“The Directors” means the Directors of the Company or as the case may be, Directors assembled at a Board
Meeting.
“The Office” means the Registered Office for the time being of the Company.
“The Register” means the Register of Members to be kept pursuant to the Act and includes the Register of
Beneficial Owners maintained by a Depository.
“The Registrar” means the Registrar of Companies of the State in which the office is situated.
“Beneficial Owner” shall mean beneficial owner as defined under Section 2(l)(a) of the Depositories Act, 1996.
“Debenture holder” means the duly registered holders from time to time of the debentures of the Company.
“Depository” shall mean a Depository as defined under Section 2(1) (e) of the Depositories Act, 1996.
“Depositories Act” shall mean Depositories Act,1996 and any rules, Regulations and bye-laws made thereunder
and any statutory modification or re-enactment thereof for the time being in force.
“Dividend” includes bonus.
“Member” means the duly registered holder from time to time of the shares of the Company and includes the
subscribers to the Memorandum of Association of the Company. Every person holding ordinary shares of the
Company and whose name is entered as beneficial owner in the records of a Depository shall be deemed to be a
member of the Company.
“Month” means calendar month.
“Participant” means a person registered as such under Section 12(1A) of the Securities and Exchange Board of
India Act, 1992.
DEFINITIONS & INTERPRETATIONS
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Title of Article Article Number and contents
“Record” includes the records maintained in the form of books or stored in computer or in such other form as
may be determined by regulation
made by SEBI in relation to the Depositories Act.
“Seal” means the Common Seal of the Company.
“SEBI” means Securities and Exchange Board of India established under Section 3 of the Securities and
Exchange Board of India Act, 1992.
“Securities” means such securities as may be specified by the SEBI from time to time.
“Share” means share in the Share Capital of the Company and includes stock except when a distinction
between stock and share is express or implied.
“In Writing” and “Written” include printing, lithography and other modes of representing or reproducing words
in a visible form.
Words importing the singular number only include the plural number and vice versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons include corporations.
Words and expressions used and not defined in the Act but defined in the Depositories Act, 1996, shall have the
same meaning respectively assigned to them in that Act.
Unless the context otherwise requires words or expressions contained in these Articles shall bear the same
meaning as in the Act.
The marginal notes are inserted for convenience and shall not affect the construction of these Articles.
(ii) Articles relating to rights of members regarding voting, dividend, lien on shares, process for
modification of such rights and forfeiture of shares
Title of Article Article Number and contents
Votes of members 63. On a show of hands every holder of ordinary shares entitled to vote and present in person or by proxy
shall have one vote and upon a poll every holder of ordinary shares entitled to vote and present in person
or by proxy shall have one vote for every share held by him.
Votes in
respect of
deceased,
insolvant and
insane members.
64. Subject to the provisions of the articles, any person entitled under the Transmission Article to transfer any
shares may vote at any General Meeting in respect thereof in the same manner as if he were the registered
holder of such shares, provided that seventytwo hours at least before the time of holding the meeting or
adjourned meeting as the case may be at which he proposes to vote he shall satisfy the Directors of his
right to transfer such shares, or the Directors shall have previously admitted his right to vote at such
meeting in respect thereof. If any member be a lunatic, idiot or non compos mentis, he may vote whether
on a show of hands or at a poll by his committee, curator bonis or other person recognised by the
Company as entitled to represent such member and such last mentioned persons may give their votes by
proxy.
VOTE OF MEMBERS
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Title of Article Article Number and contents
Joint Holders 65. Where there are jointholders of any share any one of such persons may vote at any meeting either
personally or by proxy in respect of such share as if he were solely entitled thereto and if more than one of
such joint-holders be present at any meeting either personally or by proxy then that one of the said persons
so present whose name stands prior in order on the Register in respect of such share shall alone be entitled
to vote in respect thereof. Several executors or administrators of a deceased member in whose name any
share stands shall for the purpose of this Article be deemed joint-holders thereof.
Instrument
appointing
proxy to be in
writing
66. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his Attorney
duly authorised in writing or if such appointor is a corporation under its common seal or the hand of its
Attorney.
Instrument
appointing
proxy to be
deposited
at the Office.
67. The instrument appointing a proxy and the Power of Attorney or other authority (if any) under which it is
signed or a notarially certified copy of that power or authority shall be deposited at the Office not less
than forty eight hours before the time for holding the meeting at which the person named in the instrument
proposes to vote and in default the instrument of proxy shall not be treated as valid.
When vote by
proxy valid
though authority
revoked.
68. A vote given in accordance with the terms of an instrument appointing a proxy shall be valid
notwithstanding the previous death or insanity of the principal or revocation of the instrument or transfer
of the share in respect of which the vote is given: Provided no intimation in writing of the death, insanity,
revocation or transfer of the share shall have been received at the Office or by the Chairman of the
Meeting before the vote is given: Provided nevertheless that the Chairman of any meeting shall be entitled
to require such evidence as he may in his discretion think fit of the due execution of an instrument of
proxy and that the same has not been revoked.
Form of
Instrument
appointing
proxy.
69. Every instrument appointing a proxy shall, as nearly as
circumstances will admit, be in the form set out in Schedule IX to the Act.
Restrictions
on voting.
70. No member shall be entitled to vote on any question either personally or by proxy or as proxy for another
member at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum
shall be due and payable presently to the Company in respect of any of the shares of such member.
Validity of
votes.
71. No objection shall be taken to the validity of any vote except at the meeting or poll at which such vote
shall be tendered and every vote not disallowed at such meeting or poll and whether given personally or
by proxy or otherwise shall be deemed valid for all purposes.
DIVIDENDS AND RESERVES
Title of Article Article Number and contents
Division of
Profits.
101. The net profit of the Company (after making provision if any, for sinking, depreciation and reserve funds
and for carrying forward balances for the next year) shall subject to the right of holders of preference shares
and to any resolution of the Company attaching any special privileges to other shares and to the provisions
of these Articles, be divisible among the ordinary shareholders subject as provided in Article 19 in
proportion to the amounts paid up on the ordinary shares held by them respectively.
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Title of Article Article Number and contents
Capital paid
in advance
of calls.
102. When capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital
shall not whilst carrying interest, confer a right to participate in profit.
Declaration
and payment
of dividends.
103. The Company in General Meeting may declare a dividend to be paid to the members according to their
rights and interest in the profits and may fix the time for payment subject to the provision of Section 207 of
the Act.
Restrictions on
amount of
dividends.
104. No larger dividend shall be declared than is recommended by the Directors, but the Company in General
Meeting may declare a smaller dividend.
Dividend out
of profits only
and not to carry
interest What to
be deemed not
profits.
105. No dividend shall be payable except out of the profits of the Company of the year or any other undistributed
profits, and no dividend shall carry interest as against the Company.
106. The declaration of the Directors as to the amount of the net profits of the Company in any year shall be
conclusive.
Interim
dividends.
107.The Directors may from time to time pay to the members such interim dividends as in their judgments the
position of the Company justifies.
Debts may
be deducted.
108. The Directors may retain any dividends on which the Company has a lien and may apply the same in or
towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.
Company may
retain
dividends.
109. The Directors may retain the dividend payable upon shares in respect of which any person is under “The
Transmission Article” entitled to become a member or which any person under that Article is entitled to
transfer until such person shall become a member in respect thereof or shall duly transfer the same.
Dividend and
call together.
110. Any General Meeting declaring a dividend may make a call on the members of such amounts as the
meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that
the call be made payable at the same time as the dividnd and the dividend may, if so arranged between the
Company and the members, be set off against the call.
Capitalisation
of Reserves.
111. Any General Meeting may upon the recommendation of the Directors resolve that any moneys, investments
or other assets forming part of the undivided profits of the Company standing to the credit of any reserve
fund or special account or in the hands of the Company and available for dividend and including any profits
arising from the sale of the assets of the Company or any part thereof or by reason of any other accretion to
capital assets or representing premium received on the issue of shares and standing to the credit of the share
premium account, be capitalised and distributed (in the manner and to the extent permissible under the
provisions of the Act) amongst such of the shareholders as would be entitled to receive the same if
distributed by way of dividend and in the same proportions on the footing that they become entitled thereto
as capital and that all or any part of such capitalised fund be applied on behalf of such shareholders in
paying up in full either at par or at such premium as the resolution may provide any unissued shares,
debentures or debenture stock (in the manner and to the extent aforesaid) of the Company which shall be
distributed accordingly or in or towards payment of the uncalled liability on any issued shares, or debentures
or debenturestock, and that such distribution or payment shall be accepted by such shareholders in full
satisfaction of their interest in the said capitalised surn.
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Title of Article Article Number and contents
Fractional
certificates.
112. For the purpose of giving effect to any resolution under the preceding Article, the Directors may settle any
difficulty which may arise in regard to the distribution as they think expedient and in particular may issue
fractional certificates or ignore fractions or may vest the same in trust for the persons entitled as may seem
expedient to the Directors. Where requisite a proper contract shall be filed in accordance with the provisions
of the Act and the Directors may appoint any person to sign such contract on behalf of the persons entitled
to the dividend or capitallsed fund, and such appointment shall be effective.
Any one of
Joint-holders
can give
receipts.
113. Any one of several persons who are registered as joint holders of any share may give effectual receipts for
all dividends and payments on account of dividends in respect of such shares.
Payment by
post.
114. Unless otherwise directed, any dividend may be paid by cheque, warrant or postal money order sent through
the post to the registered address of the member or person entitled thereto, or in the case of joint-holders to
the registered address of that one whose name stands first on the Register in respect of the joint-holding or
to such person and such address as the member or person entitled or such joint-holders, as the case may be,
may direct
When payment
a good
discharge.
115. The payment of every, cheque or warrant sent under the provisions of the last preceding Article shall, if such
cheque or warrant purports to be duly endorsed, be a good discharge to the Company in respect thereof :
Provided nevertheless that the Company shall not be responsible for the loss of any cheque, dividend
warrant or postal money order which shall be sent by post to any member or by his order to any other person
in respect of any dividend. Dividends unclaimed for one year after having been declared may be invested or
otherwise used by the Directors for the benefit of the Company until claimed and all dividends unclaimed
till the claim thereto becomes barred by law may be forfeited by the Directors for the benefit of the
Company. The Directors may, however, at any time annul such forfeiture and pay any such dividend.
FORFEITURE AND LIEN
Title of Article Article Number and contents
If call or installment
not paid notice may
be given.
20. If any member falls to pay any call or installment on or before the day appointed for the payment of the
same, the Directors may, at any time thereafter during such time as the call or installment remains
unpaid, serve a notice on such member requiring him to pay the same, together with any interest that
may have accrued and all expenses that may have been incurred by the Company by reason of such
non-payment.
Form of notice.
21. The notice shall name a day (not being less than 21 days from the date of the notice) and a place or
places on and at which such call or installment and such interest and expenses as aforesaid are to be
paid. The notice shall also state that in the event of non-payment at or before the time, and at the place
or places appointed, the shares in respect of which such call was made or installment is payable will be
liable to be forfeited.
If notice not
complied with
shares may be
forfeited.
22. If the requisitions of any such notice as aforesaid be not complied with, any shares in respect of which
such notice has been given may, at any time thereafter before payment of all calls or installments,
interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that effect.
Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually
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Notice after
forfeiture
paid before the forfeiture. Neither the receipt by the Company of a portion of any money which shall
from time to time be due from any member of the Company in respect of his shares, either by way of
principal or interest, nor any indulgence granted by the Company in respect of the payment of any such
money shall preclude the Company from thereafter proceeding to enforce a forfeiture-of such shares as
herein provided.
23. When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in
whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture with the date
thereof, shall forthwith be made in the Register but no forfeiture shall be in any manner invalidated by
any omission or neglect to give such notice or to make such entry as aforesaid.
Forfeited share to
become property of
the Company.
24. Any share so forfeited shall be deemed to be the property of the Company, and the Directors may sell,
re-allot or otherwise dispose of the same in such manner as they think fit.
Power to annul
forfeiture.
25. The Directors may, at any time before any share so forfeited shall have been sold, re-allotted or
otherwise dispose of annul the forfeiture thereof upon such conditions as they think fit.
Arrears to be
paid not
withstanding
forfeiture.
26. Any member whose shares have been forfeited shall notwithstanding such forfeiture be liable to pay
and shall forthwith pay to the Company all calls, installments interest and expenses, owing upon or in
respect of such shares at the time of the forfeiture, together with interest thereupon, from the time of the
forfeiture until payment at 12 percent, per annum or such other rate as the Directors may determine and
th Directors may enforce the payment thereof without any deduction or allowance for the value of the
shares at the time of forfeiture but shall not be under any obligation to do so.
Effect of
forfeiture.
27. The forfeiture of a share shall involve the extinction of all interest in and also of all claims and
demands against the Company in respect of the share, and all other rights incidental to the share except
only such of those rights as by these Articles are expressly saved.
Evidence of
forfeiture.
28. A duly verified declaration in writing that the declarant is a director of the Company and that certain
shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive
evidence of the facts therein stated as against all persons claiming to be entitled to the shares and such
declaration and the receipt of the Company for the consideration, if any, given for the shares on the sale
or disposition thereof shall constitute a good title to such shares.
Company’s
lien on share.
29. The Company shall have a first and paramount lien upon all the shares (not fully paid up) registered in
the name of each member (whether solely or jointly with others), and upon the proceeds of sale thereof
for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such
shares, and no equitable interest in any share shall be created except upon the footing and condition that
Article 8 hereof is to have full effect and the said lien shall extend to all dividends from time to time
declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall
operate as a waiver of the Company’s lien, if any on such shares.
As to
enforcing lien
by sale.
Application
of proceeds of
sale
30. For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner
as they think fit, but no sale shall be made until such period as aforesaid shall have elapsed and until
notice in writing of the intention to sell shall have been served on such member, his executors or
administrators or his committee, curator bonis or other person recognised by the Company as entitled to
represent such member and default shall have been made by him or them in the payment of the sum
payable as aforesaid for seven days after such notice. The net proceeds of any such sale shall be applied
in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently
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MODIFICATION OF CLASS RIGHTS
Title of Article Article Number and contents
Power to
modify rights.
50. Whenever the capital (by reason of the issue of preference shares or otherwise) is divided into different
classes of shares, all or any of the rights and privileges attached to each class may be varied in the
manner provided in Section 106 of the Act and all the provisions hereinafter contained as to General
Meeting shall, mutatis mutandis, apply as regard class Meetings. Provided that the rights conferred upon
the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise
expressly provided by the terms of issue of the shares of that class, be deemed to be varied under this
Article by the creation or issue of further shares and such new shares may be issued with such
preferential rights as may be decided at the time of issue thereof.
UNDERTAKING AND BROKERAGE
Title of Article Article Number and contents
Power to pay
certain
Commission for
placing shares.
Brokerage
6. The Company may, subject to the compliance with the provisions of Section 76 of the Act exercise the
powers of paying commission on the issue of shares and debentures. The commission may be paid or
satisfied in cash or in Shares, debentures or debenture stock of the Company.
7. The Company may pay a reasonable sum for brokerage.
payable by such member and the residue (if any) paid to such member, his executors, administrators, or
other representatives or persons so recognised as aforesaid.
Validity of
sales.
31. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers by these
presents given, the Directors may appoint some person to execute an instrument of transfer of the
shares sold and cause the purchaser’s name to be entered in the Register in respect of the shares sold,
and the purchaser shall not be bound to see to the regularity of the proceedings, nor to the application
of the purchase money and after his name has been entered in the Register in respect of such shares his
title to such shares shall not be affected by any irregularity or invalidity in the proceedings in reference
to such forfeiture, sale or disposition, nor impeached by any person and the remedy of any person
aggrieved by the sale shall be in damages only and against the Company exclusive.
Power to
issue new
certificate.
32. Where any shares under the powers in that behalf herein contained are sold by the Directors and the
certificate thereof has not been delivered to the Company by the former holder of the said shares the
Directors may issue a new certificate for such shares distinguishing it in such manner as they may think
fit from the certificate not so delivered up.
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(iii) Other provisions of Articles of Association
CAPITAL AND ALTERATION OF CAPITAL
Title of Article Article Number and contents
Redeemable
Preference Shares
3. Subject to the provisions of these Articles and of Section 80 of the Act, the Company shall have power to
issue preference shares, which are, or at the option of the Company are to be liable to be redeemed on
such terms and in such manner as the Company may determine.
Allotment of
Shares
Further issue
Of Capital by
Director
4. Subject to the provisions of these Articles, the shares shall be under the control of the Directors who may
allot or otherwise dispose of the same to such persons on such terms and conditions, and at such times, as
the Directors think fit and with power to issue any shares as fully paid up in consideration of services
rendered to the Company in its formation or otherwise. Provided that where the Directors decide to
increase the issued capital of the Company by the issue of further shares, the provisions of Section 81 of
the Act will be complied with. The Directors with the sanction of the Company in General Meeting, shall
have full power to give to any person the right to call for the allotment of any shares either at par or at a
premium; and for such period, and for such consideration as the Directors think fit.
Power to issue
shares at a discount
5. Subject to the provisions of the Act it shall be lawful for the Company to issue at a discount shares of a
class already issued.
Company not
bound to recognise
any interest in
share other than
that of registered
holder of beneficial
owner
8. Except as ordered by a Court of competent jurisdiction or as required by law, the Company shall be
entitled to treat the person whose name appears on the Register of Members as the holder of any share or
where the name appears as the beneficial owner of shares in the records of the Depository, as the
absolute owner thereof and accordingly shall not be bound to recognise any benami trust or equitable,
contingent, future or partial interest in any share (except only as is by these Articles otherwise expressly
provided) or any right in respect of a share other than an absolute right thereto in accordance with these
Articles on the part of any other person whether or not it shall have express or implied notice thereof.
Power to
subdivide and
consolidate.
On what
conditions new
shares may
be issued.
47. The Company may by ordinary resolution from time to time after the conditions of the Memorandum of
Association as follows:
(a) Increase the Share Capital by such amount, to be divided into shares of such amount as may be
specified in the resolution;
(b) Consolidate and divide all or any of its share capital into shares of larger amount than its existing
shares;
(c) Subdivide its existing shares or any of them into shares of smaller amount than is fixed by the
Memorandum, so however, that in the subdivision the proportion between the amount paid and the
amount, if any, unpaid-on each reduced share shall be the same as it was in the case of the share
from which the reduced share is derived; and
(d) Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed
to be taken by any person and diminish the amount of its share capital by the amount of the shares
so cancelled.
48. The resolution whereby any share is subdivided or consolidated may determine that, as between the
members registered in respect of the shares resulting from such subdivision or consolidation, one or
more of such shares shall have some preference or
special advantage as regards dividend, capital, voting or otherwise or as compared with the others or
other subject nevertheless to the provisions of Sections 85, 87, 88, 93 and 106 of the Act.
Draft Letter of Offer
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Title of Article Article Number and contents
Surrender
49. Subject to the provisions of Sections 100 to 104 inclusive of the Act, the Board may accept from any
member the surrender of all or any of his shares on such terms and conditions as shall be agreed.
Reduction of
share capital.
47A. The Company may :
(1) by Special Resolution and subject to confirmation by the Court, reduce its share capital in any
way; and, in particular and without prejudice to the generality of the foregoing power
(a) extinguish or reduce the liability on any of its shares in respect of Share Capital not paid up;
(b) either with or without extinguishing or reducing the liability on any of its shares, cancel any
paid up share capital which is lost or is unrepresented by available assets; or
(c) either with or without extinguishing or reducing liability on any of its shares, pay off any
paid up share capital which is in excess of the wants of the Company;
And may, if and so far as is necessary, alter its Memorandum by reducing the amount of its share
capital and of its shares accordingly.
(2) by Special Resolution reduce in any manner and with, and subject to, any incident authorised and
consent required by law;
(a) any Capital Redemption Reserve Fund; or
(b) any Share, Premium Account.
CONVERSION OF SHARES INTO STOCK
Title of Article Article Number and contents
Conversion of
Shares into
Stock and
reconversion.
46. The Company may exercise the power of conversion of its shares into stock and in that case clauses 37
to 39 of Table “A” in Schedule I to the Act shall apply.
GENERAL MEETINGS
Title of Article Article Number and contents
Convening of
Meeting.
55. The Board may, whenever it thinks fit, call a general meeting provided however if at any time there are
not in India Directors capable of acting who are sufficient in number to form a quorum any Director
may call a general meeting in the same manner as nearly as possible as that in which such a meeting
may be called by the Board.
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PROCEEDINGS OF GENERAL MEETINGS
Title of Article Article Number and contents
Quorum 56. The quorum for a General Meeting shall be five members present in person.
Chairman 57. At every General Meeting the Chair shall be taken by the Chairman of the Board of Directors. If at any
meeting the Chairman of the Board of Directors be not present within fifteen minutes after the time
appointed for holding the meeting or, though present, be unwilling to act as Chairman the members
present shall choose one of the Directors present to be Chairman, or if no Director shall be present and
willing to take the Chair, then the members present shall choose one of their number, being a member
entitled to vote, to be Chairman.
Sufficiency of
Ordinary
Resolution
58. Any act or resolution which, under the provisions of this article or of the Act, is permitted or required
to be done or passed by the Company in general meeting shall be sufficiently so done or passed if
effected by an ordinary resolution unless either the Act or the Articles specifically require such act to
be done or resolution passed by a Special Resolution.
When,
if quorum
not present,
meeting to be
dissoved and
when to be
adjourned.
59. If within half an hour from the time appointed for the meeting a quorum be not present, the meeting, if
convened upon a requisition of shareholders shall be dissolved but in any other case it shall stand
adjourned to the same day in the next week at the same time and place, unless the same shall be a
public holiday when the meeting shall stand adjourned to the next day not being a public holiday at
the same time and place and if at such adjourned meeting a quorum be not present within half an hour
from the time appointed for the meeting, those members who are present and not being less than two
persons shall be a quorum and may transact the business for which the meeting was called.
How questions
or resolutions
to be decided
at meetings.
60. In the case of an equality of votes the Chairman shall, both on a show of hands and at a poll, have a
casting vote in addition to the vote or votes, to which he may be entitled as a member.
Power to
adjourn
General Meeting.
Business may
proceed notwith
standing
demand of poll.
61. The Chairman of a General Meeting may adjourn the same from time to time and from place to place,
but no business shall be transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place. It shall not be necessary to give notice to the
members of such adjournment or of the time, date and place appointed for the holding of the
adjourned meeting.
62. If a poll be demanded, the demand of a poll shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which a poll has been demanded.
SHARE WARRANTS
Title of Article Article Number and contents
Power to
issue share
warrants
45. Subject to the provisions of Section 114 and 115 of the Act and subject to any directions which may be
given by the Company in General Meeting, the Board may Issue share-warrants in such manner and on
such terms and conditions as the Board may deem fit. In case of such issue clauses 40 to 43 of Table “A”
in Schedule I to the Act, shall apply.
Draft Letter of Offer
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SHARES CERTIFICATE AND DEMATERIALISATION
Title of Article Article Number and contents
Certificates.
9. Except where shares of the Company are held in depository, Depository the
certificates of title to shares shall be issued under the Seal of the
Company.
Member’s right to
certificate.
10. Except where shares of the company are held in Depository, every member shall be entitled free of charge
to one or more certificates for all the shares of each class registered in his name in marketable lots, or if
the Board so approves to several certificates each for one or more of such shares, but in respect of each
additional certificate, the Company, if the Board so determines, shall be entitled to charge a fee of not
exceeding Re.1.
As to issue of new
certificate in place
of one defaced.
Lost or destroyed
etc.
11. If any certificate be old, decrepit or worn out or defaced, then, upon production thereof to the Company,
the Board may order the same to be cancelled, and may issue a new certificate in lieu thereof, and if any
certificate be lost or destroyed, then, upon proof thereof to the satisfaction of the Board and on such
indemnity as the Board deems adequate being given, a new certificate in lieu thereof may be given.
However production of old certificate will not be required in case of rematerialisation. For every such
new certificate and for every new certificate issued on the consolidation or subdivision of certificates,
there shall be paid to the Company; if the Board so determines, a sum not exceeding Re. 1. In case of
destruction or loss the member to whom such new certificate is given shall also bear and pay to the
Company all legal costs and other expenses of the Company incidental to the investigation by the
Company of the evidence of such destruction or loss and to the preparation of such indemnity.
Joint holders
Maximum
number.
Liability several
as well as joint.
Survivors of
joint-holders
only recognised.
Delivery of
certificate.
12. Where two or more persons are registered as the holders of any share they shall be deemed to hold the
same as joint-tenants with benefit of survivorship subject to the provisions following and to the other
provisions if these Articles relating to joint-holders :-
a) The Company shall not be bound to register more than four persons as the joint-holders of any
share.
b) The joint-holders of a share shall be liable severally as well as jointly in respect of all payments
which ought to be made in respect of such share.
c) On the death of any one of such joint-holders the survivor or survivors of shall be the only person
or persons recognised by the Company as having any title to or interest in such share but the Board
may require such evidence only recognised of death as it may deem fit.
d) Only the person whose name stands first in the Register as one of the joint holders of any share
shall be entitled to delivery of the certificate relating to such share.
Company’s
right to
Dematerialise
or
Rematerialise
its securities.
44A. (a) Notwithstanding anything to the contrary or inconsistency contained in these Articles, the
Company shall be entitled to dematerialise its shares, debentures and other securities (hereinafter
referred to as “securities”) pursuant to the Depositories Act and to offer its securities for
subscription in a dematerialised form and to rematerialise its securities.
(b) Either the Company may exercise the option to issue or the investor may exercise an option to deal
in or hold the securities with a Depository in electronic form and the certificates in respect thereof
Draft Letter of Offer
338
Title of Article Article Number and contents
Company
to recognise
interest in
dematerialised
securities under
Depositiories Act.
Option for
Investors.
Securities in
Depositories to be
in fungible form.
Rights of
Depositories
and Beneficial
Owners.
Service of
Documents
Transfer of
Securities.
shall be dematerialised, in which event the rights and obligations of the parties concerned and
matters connected therewith or incidental thereto, shall be governed by the provisions of the
Depositories Act, as amended from time to time or any statutory modification thereto or
re-enactment thereof.
(c) Every person subscribing to or holding securities of the Company shall have the option to
receive security certificates or to hold the securities with a Depository. Such a person who is the
beneficial owner of the securities can at any time opt out of a Depository, if permitted by law, in
respect of any security, in the manner provided by the Depositories Act, and the Company shall, in
the manner and within the time prescribed, arrange to issue to the Beneficial Owner the required
certificates of securities. If a person opts to hold his security with a Depository, the Company shall
intimate such Depository the details of allotment of the security, and on receipt of the information,
the Depository shall enter in its records the name of the allottee as the Beneficial Owner of the
security.
(d) All securities of the Company held by a Depository shall be dematerialised and shall be in fungible
form. Nothing contained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Act shall
apply to a Depository in respect of the securities held by it on behalf of the beneficial owners.
(e) (i) Notwithstanding anything to the contrary contained in the Act or these Articles, a
Depository shall be deemed to be the registered owner for the purposes of effecting transfer
of ownership of securities on behalf of the beneficial owner.
(ii) Save as otherwise provided in (i) above, the Depository as the registered owner of the
securities shall not have any voting rights or any other rights in respect of the securities held
by it.
(iii) Every person holding securities of the Company and whose name is entered as the beneficial
owner in the records of the Depository shall be deemed to be a member of the Company.
The beneficial owner of the securities shall be entitled to all the rights and benefits and be
subject to all the liabilities in respect of his securities which are held by the Depository.
(f) Notwithstanding anything contained to the contrary in the Act or these Articles, where securities
are held in a Depository, the records of the beneficial ownership may be served by such
Depository on the Company by means of electronic mode or by delivery of flopies or discs.
(g) Nothing contained in Section 108 of the Act shall apply to transfer of securities affected by the
transferor and the transferee both of whom are entered as beneficial owners in the records of a
Depository.
In the case of such transfer of securities where the Company has not issued any certificate or
certificates, or certificate or certificates issued have been dematerialised subsequently and where
such securities are being held in an electronic and fungible form, the provisions of the Depositories
Act, shall apply.
(h) Every Depository shall furnish to the Company information about the transfer of securities in the
name of the beneficial owner at such intervals and in such manner as may be specified by the
bye-laws and the Company in that behalf.
(i) Upon receipt of certificate of securities on surrender by a person who has entered into an
agreement with the Depository through a Participant, the Company shall cancel such certificate
and substitute in its records the name of Depository as the registered owner in respect of the said
securities and shall also inform the Depository accordingly.
(j) If a Beneficial Owner seeks to opt out of a Depository in respect of any security the beneficial
owner shall inform the Depository accordingly. The Depository shall, on receipt of information as
Draft Letter of Offer
339
Title of Article Article Number and contents
Depository to
furnish
information.
Cancellation of
certificates
upon surrender
by a person.
Option to opt
out in respect
of any security.
Allotment of
Securities dealt
with in a
Depository.
Distinctive
numbers of
securities held
in a Depository.
Register and
Index of
Beneficial
Owners.
Register of
Transfers.
Overriding
effect of this
Article.
Nomination
for Shares &
Debentures.
above, make appropriate entries in its records and shall inform the Company.
The Company shall, within thirty (30) days of the receipt of intimation from the Depository and on
fulfillment of such conditions and on payment of such fees as may be specified by the regulations,
issue the certificate of securities to the Beneficial Owner or the transferee as the case may be.
(k) Notwithstanding anything contained in the Act or these Articles, where securities are dealt with by
a Depository, the Company shall intimate the details thereof to the Depository immediately on
allotment of such securities.
(I) Nothing contained in the Act or these Articles regarding the necessity of having distinctive
numbers for securities issued by the Company, shall apply to securities held with a Depository.
(m) The Register and Index of beneficial owners maintained by a Depository under the Depositories
Act, shall be deemed to be the Register and Index of members and Register and Index of
Debenture-holders, as the case may be, for the purpose of the Act.
(n) The Company shall keep a Register of Transfers and shall have recorded therein, fairly and
distinctly, particulars of every transfer or transmission of any securities held in material form.
(o) Provisions of this Article will have full effect and force notwithstanding anything to the contrary
or inconsistent contained in any other Article of these presents.
44B. Notwithstanding anything to the contrary contained in any other Article every holder of shares in or
holder of debentures of the Company, holding either singly or jointly, may, at any time, nominate a
person in the prescribed manner to whom the shares and/or the interest of the members in the capital of
the Company or debentures of the Company shall vest in the event of his/her death and the death of the
joint bolder(s), if any, of shares/ debentures. Such holder may revoke or vary his/her nomination, at any
time, by notifying the same to the Company to that effect. Such nomination shall be governed by the
provisions of Section 109A and 109B of the Companies Act, 1956 or such other regulations governing
the matter from time to time.
Draft Letter of Offer
340
Title of Article Article Number and contents
Calls 13. The Directors may, from time to time, subject terms on which any shares may have been issued, make
such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them
respectively, and not by the conditions of allotment thereof made payable at fixed times, and each
member shall pay the amount of every call so made on him to the persons and at the times and places
appointed by the Directors. A call may be made payable by installments.
When call
deemed to have
been made.
14. A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed.
Notice for calls 15. Not less than 14 day’s notice of any call shall be given specifying the time and place of payment and to
whom such call shall be paid.
Amount payable
at fixed times or by
instalments
payable as calls.
16. If by the terms of issue of any share or otherwise, the whole or part of the amount or issue price thereof
is made payable at any fixed time or by installments at fixed times, every such amount or issue price or
installment thereof shall be payable as If it were a call duly made by the Directors and of which due
notice had been given, and all the provisions herein contained in respect of calls shall apply to such
amount, or issue price or installment accordingly.
When interest
on call or
instalment
payable.
17. If the sum payable in respect of any call or installment be not paid on or before the day appointed for the
payment thereof, the holder for the time being of the share in respect of which the call shall have been
made or the installment shall be due, shall pay interest for the same at the rate of 12 per cent per annum,
from the day appointed for the payment thereof to the time of the actual payment or at such other rate as
the Directors may determine but they shall have power to waive the payment thereof wholly or in part.
Evidence in
actions by
Company
against
shareholders.
18. On the trial or hearing of any action or suit brought by the Company against any member or his
representative to recover any debt or money claimed to be due to the Company in respect of his shares, it
shall be sufficient to prove that the name of the defendant is, or was, when the claim arose, on the
Register of the Company as a holder, or one of the holders of the number of shares in respect of which
such claim is made, that the resolution making the call is duly recorded in the minute book and that the
amount claimed is not entered as paid in the books of the Company, and it shall not be necessary to
prove the appointment of the Directors who made any call, nor that a quorum of Directors was present at
the meeting at which any call was made nor that such meeting was duly convened or constituted, nor any
other matter whatsoever; but the proof of the matters aforesaid shall be conclusive evidence of the debt.
Payment of
calls in
advance.
19. The Directors may, if they think fit, receive from any member willing to advance the same, all or any
part of the money due upon the shares held by him beyond the sums actually called for and upon the
money so paid in advance or so much thereof as from time to time exceeds the amount of the calls then
made upon the shares in respect of which such advance has been made, the Company may at the option
of the Directors pay interest at such rate as may be agreed, but the member shall not be entitled to
participate in profits or dividend or to any voting rights in respect of money so paid by him until the
same would but for such payment become presently payable.
Draft Letter of Offer
341
TRANSFER AND TRANSMISSION OF SHARES
Title of Article Article Number and contents
Execution of
transfer, etc.
33. Subject to the provisions of the Act, no transfer of shares shall be registered unless a proper instrument
of transfer duly stamped and executed by the transferor and transferee has been delivered to the
Company together with the certificate, or certificates of the shares, or if no such certificate is in
existence, alongwith the letter of allotment of shares. The instrument of transfer of any shares shall be in
writing in the usual common form and be signed both by the transferor and the transferee and shall
contain the name, and other particulars of the transferee and the transferor shall be deemed to remain the
holder of such share until the name of transferee is entered in the Register in respect thereof.
Application
for transfer.
34. Application for the registration of the transfer of a share may be made either by the transferor or the
transferee provided that, where such application is made by the transferor, no registration shall in the
case of partly paid shares be effected unless the Company gives notice of the application to the
transferee in the manner prescribed by the Act, and subject to the provisions of Articles 8 and 37 hereof,
the Company shall, unless objection is made by the transferee within two weeks from the date of receipt
of the notice, enter in the Register the name of the transferee in the same manner and subject to the same
conditions as if the application for registration was made by the transferee.
Notice of
transfer to
registered
holder.
35. Before registering any transfer tendered for registration the Company may, if it so thinks fit, give notice
by letter posted in the ordinary course to the registered holder that such transfer deed has been lodged
and that, unless objection is taken, the transfer will be registered and if such registered holder fails to
lodge an objection in writing at the Office of the Company within seven days from the posting of such
notice to him he shall be deemed to have admitted the validity of the said transfer. Where no notice is
received by the registered holder, the Company shall be deemed to have decided not to give notice and
In any event the non-receipt by the registered holder of any notice shall not entitle him to make any
claim of any kind against the Company in respect of such non-receipt.
Indemnity
against
wrongful
transfer.
36. Neither the Company nor its Directors shall incur any liabilities for registering or acting upon a transfer
of shares apparently made by sufficient parties, although the same may, by reason of any fraud or other
cause not known to the Company or its Directors be legally inoperative or insufficient to pass the
property in the shares proposed or professed to be transferred, to pass the property in the shares proposed
or professed to be transferred, and although the transfer may, as between the transferor and the
transferee, be liable to be set aside, and notwithstanding that the Company may have notice that such
instrument of transfer was signed or executed and delivered by the transferor in blank as to the name of
the transferee or the particulars of the shares transferred, or otherwise in defective manner. And in every
such case the person registered as transferee, his executors, administrators and assigns alone shall be
entitled to be recognised as the holder of such share and the previous holder shall so far as the Company
is concerned be deemed to have transferred his whole title thereto.
In what case to
decline to
register transfer
of shares.
37. Subject to the provisions of Section 111 of the Act, the Board, without assigning any reason for such
refusal, may, within two months from the date on which the instrument of transfer was delivered to the
Company, refuse to register any transfer of a share upon which the Company has a lien and, in the case
of a share not fully paid up, may refuse to register a transfer to a transferee of whom the Board does not
approve. Provided that registration of a transfer shall not be refused on the ground of the transferor being
either alone or jointly with any other person or persons indebted to the Company on any account
whatsoever except a lien on the shares.
No transfer to
minor or person
of unsound mind.
38. No transfer shall be made to a minor or person of unsound mind or firm without the consent of the
Board.
Draft Letter of Offer
342
Title of Article Article Number and contents
When instrument
of transfer to be
retained.
39. All instruments of transfer which shall be registered shall be retained by the Company.
Notice of refusal
to register
transfer.
40. If the Directors refuse to register the transfer of any shares, the Company shall, within two months from
the date on which the instrument of transfervas lodged with the Company, send to the transferee and the
transferor notice of the refusal.
Power to close
transfer books
and register.
41. On giving seven days’ notice by advertisement in a news paper circulating in the District in Which the
Office of the Company is situated, the Register of Members may be closed during such time as the
Directors think fit not exceeding in the whole forty five days in each year but not exceeding thirty days
at a time.
Transmission of
registered shares.
42. The executors or administrators or the holder of a succession certificate in respect of shares of a
deceased member (not being one of several joint holders) shall be the only person whom the Company
shall recognise as having any title to the shares registered in the name of such member and, in case of
the death of any one or more of the joint-holder of any registered shares, the survivors shall be the only
persons recognised by the Company as having any title to or interest in such shares but nothing herein
contained shall be taken to release the estate of a deceased joint-holder from any liability on shares held
by him jointly with any other person. Before recognising any legal representative or heir or a person
otherwise claiming title to the shares the Company may require him to obtain a grant of probate or
letters of administration or succession certificate or other legal representation, as the case may be, from
a competent Court: Provided nevertheless that in any case where the Board in its absolute discretion
thinks fit it shall be lawful for the Board to dispense with the production of probate or letters of
administration or a succession certificate or such other legal representation upon such terms as to
indemnity or otherwise as the Board may consider desirable.
As to transfer
of shares of
deceased or
insolvent
members.
Transmission
Article.
Notice of election
to be registered as
shareholders.
Provisions of
Articles relating to
transfer applicable.
43. Any person becoming entitled to or to transfer shares in consequence of the death or insolvency of any
member, upon producing such evidence that he sustains the character in respect of which he proposes to
act under this Article or of his title as the Directors think sufficient, may, with the consent of the
Directors (which they shall not be under any obligation to give), be registered as a member in respect of
such shares or may subject to the regulations as to transfer hereinbefore contained, transfer such shares.
This Article is hereinafter referred to as “The Transmission Article”. Subject to any other provisions of
these Articles, if the person so becoming entitled to shares under this or the last preceding Article shall
elect to be registered himself, he shall deliver or send to the Company a notice in writing signed by him
stating that he so elects. If he shall elect to transfer the shares to some other person he shall execute an
instrument of transfer in accordance with the provisions of these Articles relating to transfer of shares.
All the limitations, restrictions and provisions of these Articles relating to the right to transfer and the
registration of transfer of shares shall be applicable to any such notice or transfer as aforesaid.
Rights of
unregistered
executors and
trustees.
44. Subject to any other provisions of these Articles and if the Directors in their sole discretion are satisfied
in regard thereto, a person becoming entitled to a share in consequence of the death or insolvency of a
member may receive and give a discharge for any dividends or other moneys payable in respect of the
share.
Draft Letter of Offer
343
LOANS AND DEBENTURES
Title of Article Article Number and contents
Power to
borrow.
Conditions of
Borrowing
Issue of
Debenture.
51. The Board may from time to time at its discretion. subject to the provisions of the Act, raise or borrow
from the Directors or from elsewhere and secure payment of any sum or sums of money for the purposes
of the Company.
52. The Board may raise or secure the repayment of such sum or sums in such manner and upon such terms
and conditions in all respects as it thinks fit and in particular by the issue of bonds, notes, convertible
redeemable or otherwise perpetual or redeemable debentures or debenture-stock or any mortgage or
other security on the undertaking of the whole or any part of the property of the Company (both present
and future) including its uncalled capital for the time being.
53. Any debentures, debenture-stock bonds and other securities may be issued at a discount, premium or
otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, or
conversion, appointment of Directors and otherwise. Provided that debentures with the right to allotment
of or conversion into shares shall not be issued except with the sanction of the Company in General
Meeting. Debentures, debenture-stock, bonds and other securities may be made assignable free from any
equities between the Company and the person to whom the same may be issued.
DIRECTORS
Title of Article Article Number and contents
Number of
directors
Present
Directors.
72. Until otherwise determined by the Company in General Meeting, the number of Directors shall not be less
than 3 nor more than 15.
73. At the date of the adoption of these Articles, the Directors of the Company are :-
Shri K. K. Birla
Shri Maneklal Premchand
Shri S. G. Nevatia
Shri Kamalnayan Bajaj
Shri P. R. Jhunjhunwala
Shri Rasiklal Maneklal
Shri Gopikisan Piramal
Shri N. K. Karanjia
Qualification
of Directors.
74. A Director of the Company shall not be required to hold qualification shares.
Remuneration
of Directors.
75. Each Director will be entitled to be paid out of the funds of the Company by way of remuneration for
his services, such sum as may be fixed by the Directors but not exceeding such sum as may be
prescribed by the Act or the Central Government from time to time, for any meeting of the Board or
Committee attended by him. The Directors shall also be entitled to receive in each year a commission
@1% of the net profits of the Company such commission to be calculated on the net profit of the
Company to be computed in accordance with the provisions of the Companies Act, 1956, and such
commission shall be divided among the Directors in such proportions and manner as may be
determined by them. The Directors may allow and pay to any Director, who for the time being is
Draft Letter of Offer
344
Title of Article Article Number and contents
resident out of the place at which any Meeting of the Directors may be held and who shall come to
that place for the purpose of attending such meeting, such sum as the Directors may consider fair and
reasonable for his expenses in connection with his attending at the meeting in addition to his
remuneration as above specified. If any Director being willing shall be called upon to perform extra
service or to make any special exertions for any of the purposes of the Company the Directors shall
be entitled to remunerate such Director either by a fixed sum or percentage of profits or in any other
manner as may be determined by the Directors in addition to the remuneration above provided.
Continuing
Directors may
act.
76. The continuing Directors may act notwithstanding any vacancy in their body but so that if the number
falls below the minimum above fixed the Directors shall not except for the purpose of filling
vacancies or of summoning a General Meeting act so long as the number is below the minimum.
Directors may
contract with
Company.
77. Subject to the provisions of the Act, the Directors (including a Managing Director) shall not be
disqualified by reason of his or their office as such from holding office under the Company or from
contracting with the Company either as vendor, purchaser, lender, agent, broker, lessor or lessee or
otherwise, nor shall any such contract or any contract or agreement entered into by or on behalf of the
Company with any Director or with any company or partnership, of or in which any Director shall be
a member or otherwise interested be avoided nor shall any Director so contracting or being such
member or so interested be liable to account to the Company for any profit realised by such contract
or arrangement by reason only of such Director holding that office or of the fiduciary relation thereby
established.
Appointment
of Directors.
78. The Company in General Meeting, may, subject to the provisions of these Articles and the Act, at any
time elect any person to be a Director and may from time to time increase or reduce the number of
Directors and may also determine in what rotation such increased or reduced number is to go out of
office.
Appointment of
Additional
Director.
79. (a) The Directors shall have power at any time and from time to time to appoint any person other than
a person who has been removed from the office of a Director of the Company to be a Director of
the Company as an addition to the Board but so that the total number of Directors shall not at any
time exceed the maximum number fixed. Any Director so appointed shall hold office only until the
conclusion of the next following Annual General Meeting of the Company when he shall be
eligible for reappointment.
Casual vacancy
may be filled
by Board
(b) The Directors shall also have power to fill a vacancy in the Board. Any Director so appointed shall
hold office only so long as the vacating Director would have held the same it to no vacancy had
occurred.
Power to
nominate
Directors.
80. Subject to the provision of the Act, any State or Credit Institutions if so agreed between them and the
Company shall be at liberty to nominate Directors in terms of such agreement.
Alternate
Directors.
81. The Board may appoint any person to act as an alternate director for a director during the latter’s absence
for a period of not less than three months from the State in which meetings of the Board are ordinarily
held and such appointment shall have effect and such appointee, whilst he holds office as an alternate
director shall be entitled to notice of meetings of the Board and to attend and vote thereat accordingly; but
he shall ipso facto vacate office if and when the absent Director returns to the State in which meetings of
Draft Letter of Offer
345
Title of Article Article Number and contents
the Board are ordinarily held or the absent Director vacates office as a Director.
Rotation of
Directors.
82. At the Annual General Meeting of the Company in every year, one third of the Directors for the time
being liable to retire by rotation and if their number is not three or a multiple of three then the number
nearest thereto shall retire from office. The Directors to retire at such Annual General Meeting shall be the
Directors (other than ex-officio Director or Directors or a Managing Director or Directors who by virtue
of the provisions of any agreement with any Central or State Government or Credit Institution are not
liable to retire) who shall have been longest in office since their last election. As between Directors who
became Directors on the same day those to retire shall (in default of agreement between them) be
determined by lot. For the purpose of this Article a Director appointed to fill a vacancy under the
provisions of Article 79 (b) shall be deemed to have been in office since the date on which the Director, in
whose place he was appointed was last elected as a Director.
Retiring
Director eligible
For re-election.
83. A retiring Director shall be eligible for re-election and shall act as a Director throughout the meeting at
which he retires.
Adjournemnt
of meeting
for election
of Directors
84. Subject to any resolution for reducing the number of Directors, if at any meeting at which an election of
Directors ought to take place the places of the retiring Directors are not filled up, the meeting shall stand
adjourned till the same day in the next week or if that day is a public holiday till the next succeeding day
which is not a public holiday at the same time and place and if at the adjourned meeting the places of the
retiring Directors are not filled up the retiring Dirctors or such of them as have not had their places filled
up shall (if willing to continue in office) be deemed to have been re-elected at the adjourned meeting.
PROCEEDINGS OF THE BOARD OF DIRECTORS
Title of Article Article Number and contents
Meetings of
Directors.
85. The Directors may meet together for the despatch of meounss of business, adjourn and otherwise regulate
their meetings and proceedings as they think fit.
Summoning
meeting of
Directors.
86. The Secretary may at any time, and upon request of any two Directors shall summon a Meeting of the
Directors.
Voting at
meeting.
87. Subject to the provisions of the Act, questions arising at any meeting shall be decided by a majority of
votes, each Director having one vote and in case of an equality of votes the Chairman shall have a second
or casting vote.
Chairman of
meeting.
88. The Chairman of the Board of Directors shall be the Chairman of the meetings of Directors: Provided that
if the Chairman of the Board of Directors is not present, the Directors present shall choose one of their
member to be Chairman of such meeting.
Acts of
meeting.
89. A meeting of Directors in which a quorum is present shall be competent to exercise all or any of the
authorities, powers and discretions by or under the Articles of the Company and the Act for the time
being vested in or exercisable by the Directors.
Draft Letter of Offer
346
Title of Article Article Number and contents
Delegation to
committees.
90. The Directors may subject to compliance of the provisions of the Act from time to time delegate any of
their powers to Committees consisting of such member or members of their body as they think fit, and
may from time to time revoke such delegation. Any Committee so formed shall in the exercise of the
powers so delegated conform to any regulations that may from time to time be imposed on it by the
Directors. The meeting and proceedings of any such Committee, if consisting of two or more members,
shall be governed by the provisions for regulating the meetings and proceedings of the Directors so far
as the same are applicable thereto and are not superseded by any regulation made by the Directors under
this Article.
Validity of
acts.
91. All acts done at any meeting of Directors or of a, Committee of the Directors or by any person acting as
a Director shall notwithstanding that it be afterwards discovered that there was some defect in the
appointment of any such Directors, Committee or person acting aforesaid or that they or any of them
were disqlialified, be as valid as if every such person bad been duly apointed and was duly qualified.
Provided always that nothing in this Article shall be deemed to give validity to acts done by such
Directors, Committee or person acting as aforesaid after it has been shown that there was some defect in
any appointment or that they or any of them were disqualified.
Resolution by
circulation.
92. A resolution may be passed by the Board by circulation in accordance with the provisions of Section
289 of the Act.
Minutes to
be made.
93. The Directors shall cause minutes to be duly entered in the books provided for the purpose :-
(a) of all appointments of officers and Committees made by the Directors;
(b) of the names of the Directors present at each meeting of the Directors and of any Committee
of Directors;
(c) of all orders made by the Directors and Committees of Directors;
(d) of all resolutions and proceedings of General Meetings and of meetings of Directors and
Committees,
And any such minutes of any meeting of Directors or of any Committee or of the Company, if
purporting to be signed by the Chairman of such meeting or by the Chairman of the next succeeding
meeting, shall be receivable as prima facie evidence of the matters stated in such minutes.
POWERS OF DIRECTORS
Title of Article Article Number and contents
General powers
of Company
vested in
Directors.
94. The business of the Company shall be managed by the Directors who in addition to the powers and
authorities by these presents or otherwise expressly conferred upon them may exercise all such powers
and do all such acts and things as may be exercised or done by the Company and are not hereby or by
law expressly directed or required to be exercised or done by the Company in General Meeting but
subject nevertheless to the provisions of any law and of these presents and to any regulations not being
inconsistent with these presents from time to time made by the Company in General Meeting : Provided
that no regulation so made shall invalidate any prior act of the Directors which would have been valid if
such regulation had not been made.
Draft Letter of Offer
347
Title of Article Article Number and contents
Management
abroad
95. The Directors may make such arrangements as may be thought fit for the management of the Company’s
affairs abroad and may for this purpose (without prejudice to the generality of their powers) appoint
local boards, attorneys and agents and fix their remuneration, and delegate to them such powers as may
be deemed requisite or expedient. The Company may have for use abroad such official seal as is
provided for by Section 50 of the Act. Such seal shall be affixed by the authority and in the presence of,
and the instruments sealed theirewith shall be signed by such persons as the Directors shall from time to
time by writing under the Seal appoint. The Company may also exercise the powers of, keeping Foreign
Registers as provided by the Act.
MANAGEMENT
Title of Article Article Number and contents
Management
96. The company may appoint Managing or wholetime Director/Directors or Manager to manage its affairs
for such period and on such remuneration and upon such terms and conditions as may be sanctioned by
the Company in the manner required by the Act and approved by the Central Government.
COMMON SEAL
Title of Article Article Number and contents
Custody of
Seal etc.
97. The Directors shall provide a seal for the purpose of the Company and shall have power from time to
time to destroy the same and substitute a new seal in lieu thereof and shall provide for the safe custody
of the seal and the seal shall except as otherwise empowered under the Act or rules thereunder, never be
used except by the authority of Directors or of a Committee of the Directors and one Director shall sign
every instrument to which the seal is affixed. Provided nevertheless that any instrument bearing the Seal
of the Company and issued for valuable consideration shall be binding on the Company
notwithstanding any irregularity touching the authority of the Directors to issue the same.
Draft Letter of Offer
348
ACCOUNTS
Title of Article Article number and contents
Books of
account to
be kept.
Inspection by
members
When accounts
to be deemed
finally settled.
98. The books of account shall be kept at the Office of the Company or at such other place as the Directors
think fit.
99. The Board shall from time to time determine whether and to what extent and at what times and places
and under what conditions or regulations the accounts and books of the Company or any of them shall
be open to the inspection of the members not being Directors, and no member (not being a Director)
shall have any right of inspecting any account or books or document of the Company except as
conferred by law or authorised by the Directors or by the Company in General Meeting.
100. Every Balance Sheet and Profit and Loss Account when audited and approved by a General Meeting
shall be conclusive except as regards any error discovered therein within three months next after the
approval thereof. Whenever any such error is discovered within that period the account shall forthwith
be corrected and thenceforth shall be conclusive.
RECONSTRUCTION
Title of Article Article Number and contents
Reconstruction 116. On any sale of the undertaking of the Company, the Directors or the Liquidators on a winding up
may, if authorised by a Special Resolution, accept fully paid or partly paid-up shares, debentures or
securities of any other company, whether incorporated in India or not, either then existing or to be
formed for the purchase in whole or in part of the property of the Company. The Liquidators (in a
winding up), may distribute such shares, or securities, or any other property of the Company amongst
the contributories without realisation or vest the same in trustees for them and may if authorised by
Special Resolution provide for the distribution or appropriation of the cash, shares or other securities,
benefits or property otherwise than in accordance with the strict legal rights of the contributories of
the Company, and for the valuation of any such securities or property at such price and in such
manner as the meeting may approve, and the contributories shall be bound to accept and shall be
bound by any valuation or distribution so authorised and waive all rights in relation thereto, save such
statutory rights (if any) under the Act as are incapable of being varied or excluded by these presents.
WINDING UP
Title of Article Article Number and contents
Distribution of
Assets
117. Upon the winding up of the Company, the holders of Preference shares, it any, shall be entitled to be
paid all arrears of Preferential dividend to the commencement of winding up and also to be repaid the
amount of capital paid up or credited as paid up on such preference shares held by them respectively, in
priority to the Ordinary shares, but shall not be entitled to any other further rights to participate in
profits or assets; subject as aforesaid and to the rights of any other holders of shares entitled to receive
preferential payment over the Ordinary shares, in the event of the windIng up of the Company, the
holders of the Ordinary shares shall be entitled to be repaid the amount of capital paid up or credited as
paid up on such shares and all surplus assets thereafter shall belong to the holders of the Ordinary
shares in proportion to the amount paid up or credited as paid up on such Ordinary shares respectively,
at the commencement of the winding up. If the assets shall be insufficient to repay the whole of the paid
up Ordinary capital, such assets shall be distributed so that as nearly as may be the losses shall be borne
by the members holding Ordinary shares in proportion to the capital paid up or which ought to have
been paid up on the Ordinary shares held by them respectively at the commencement of the winding up,
Draft Letter of Offer
349
Title of Article Article Number and contents
Distribution of
assets in specie.
other than the amounts paid by them in advance of calls.
118. If the Company shall be wound up, whether voluntarily or otherwise, the Liquidators may, with the
sanction of a special Resolution of the Company and any other sanction required by the Act, divide
among the contributories in specie or kind, any part of the assets of the Company and may, with the like
sanction, vest any part of the assets of the Company in trustees upon such trusts for the benefit of the
contributories, or any of them, as the Liquidators, with the like sanction, shall think fit.
INDEMNITY
Title of Article Article Number and contents
Indemnity
Individual
responsibility of
Directors
119. Subject to the provisions of Section 201 of the Act, every Director, Manager, Secretary and other officer
or employee of the Company shall be indemnified against, and it shall be the duty of the Directors to pay
out of the funds of the Company all costs, losses and expenses (including travelling expenses) which any
such Directors, Manager or Secretary or other officer or employee may incur or become liable to by
reason of any contract entered into or any way in the discharge of his or their duties and in particular, so
as not to limit the generality of the foregoing provisions, against all liabilities incurred by him or them as
such Director, Manager, Secretary, Officer or employee in defending any proceedings whether civil or
criminal, in which judgement is given in his or their favour or he or they is or are acquitted or in
connection with any application under Section 633 of the Act in which relief is granted by the Court and
the amount for which such indemnity is provided shall immediately attach as a lien on the property of the
Company and have priority as between the Members over all other claims.
120. Subject to the provisions of the Act and so far as such provisions permit, no Director, Auditor or other
Officer of the Company shall be liable for acts, receipts, neglects or defaults of any other Director or
Officer, or for joining in any receipt or other act for conformity, or for any loss or expense happening to
the Company through the insufficiency or deficiency of title to any property required by order of the
Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or upon
which any of the moneys of the company shall be invested, or for any loss occasioned by any error of
judgment, omission, default, or oversight on his part, or for any loss, damage or misfortune whatever
which shall happen in the execution of the duties of his office or in relation thereto, unless the same
happens through his own dishonesty.
SECRECY CLAUSE
Title of Article Article Number and contents
Secrecy 121. Subject to the provisions of these Articles and the Act no member or other person (not being a Director)
shall be entitled to enter the property of the Company or to inspect or examine the Company’s premises
or properties of the Company without the permission of the Directors or to require discovery of or any
information respecting any detail of the Company’s trading or any matter which is or may be in the
nature of a trade secret, mystery of trade, or secret process or of any matter whatsoever which may
relate to the conduct of the business of the Company and which in the opinion of the Directors it will be
inexpedient in the interest of the Company to communicate.
Draft Letter of Offer
350
SECTION XI: OTHER INFORMATION
LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
MATERIAL CONTRACTS
1. Letters of appointment, dated October 9, 2007, to the Enam Securities Private Limited, from our
Company appointing them as the Book Running Lead Managers.
2. Letter of Appointment dated ___________, 2007 to ___________ appointing them as the Registrar to
the Issue.
3. Memorandum of Understanding between our Company and the Lead Manager.
4. Memorandum of Understanding between our Company and the Registrar to the Issue.
MATERIAL DOCUMENTS 1. Board Resolutions dated August 20, 2007 for the Rights Issue.
2. Annual Reports of the Company for the years ended June 30, 2003; 2004; 2005; 2006; 2007.
3. Report dated December 11, 2007, of the Statutory Auditors, M/s. S. R. Batliboi & Co., prepared as per
Indian GAAP, SEBI (DIP) Guidelines, 2000 and SEBI Act, 1992.
4. Tax Benefits Certificate dated 11th
December, 2007 from the Statutory Auditors, M/s. S. R. Batliboi &
Co.
5. Consent of the Directors, Compliance Officer, Lead Manager, Registrar to the Issue, Banker to the
Issue, Legal Advisor to the Issue and Statutory Auditors to include their names in the Draft Letter of
Offer.
6. Undertaking given by the promoters to subscribe more than their entilement, in case required to ensure
minimum subscription in the Rights Issue.
7. Listing applications dated�, 2007 made to BSE and NSE respectively.
8. In-principle listing approvals dated�, 2007 and�, 2007 from BSE and NSE respectively.
9. Triprtite agreement between NSDL, our Company and Registrar to the Issue dated November 1, 1999.
10. Triprtite agreement between CDSL, our Company and Registrar to the Issue dated October 29, 1999.
11. Due diligence certificate dated�, 2007 to SEBI from the Lead Manager, Enam Financial Consultants
Private Limited.
12. SEBI observation letter no.� Dated�, 2008 and our reply dated �, 2008.
AVAILABILITY OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The above-mentioned ‘Material Contracts’ and ‘Material Documents’ may be inspected at the Registered Office
of our Company from 11.00 a.m. to 2.00 p.m. on all the working days, from the date of this Draft Letter of Offer
until the closure of the subscription list. Copies of these documents, for inspection as mentioned above, will be
delivered to the Designated Stock Exchange.
Draft Letter of Offer
351
DECLARATION
All relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government or the
guidelines issued by the Securities and Exchange Board of India established under section 3 of the Securities
and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in
this Draft Letter of Offer is contrary to the provisions of the Companies Act, 1956 or the Securities and
Exchange Board of India Act, 1992 or Rules made there under or guidelines issued, as the case may be.
We, the Directors of the Company, hereby certify that, all statements in this Draft Letter of Offer are true correct
and fair.
Yours faithfully
On behalf of the Board of Directors of The Oudh Sugar Mills Limited
Mr. C.S.Nopany (Chairman cum Managing Director)
Mr. S.V.Muzumdar (Director)
Mr. Ashvin Dalal (Director)
Mr. Rohit Kumar Dhoot (Director)
Mrs. Madhu Vadera Jayakumar (Director)
Mr. C.B. Patodia (Director)
Mr Jayant Godbole (Director)
Mr Haigreve Khaitan (Director)
Managing Director
Mr. C.S.Nopany
Chief Financial Officer
Mr. Mahesh Jain
Company Secretary
Mr. Sanjay Mukherjee
Place: Mumbai
Date: December 24, 2007