himalaya granites limited - bse india
TRANSCRIPT
LETTER OF OFFER
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTIONThis letter of Offer is sent to you as a registered equity shareholder of Himalaya Granites Limited (the “Company”) as on the Record Date in accordance with Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, as amended. If you require any clarifications about the action to be taken, you should consult your Stock Broker or Investment Consultant or the Manager to the Buyback Offer (VC Corporate Advisors Pvt. Ltd.) or to the Registrar to the Buyback Offer (S. K. Infosolutions Private Limited). Please refer to the section on “Definitions” for the definition of capitalized terms used therein.
HIMALAYA GRANITES LIMITEDCIN: L13206TN1987PLC015161
Registered Office: Panchalam Village, Melpettai Post, Tindivanam,Tamilnadu-604 307Telefax: 044-26693378, Website: www.hgl.co.in, Email: [email protected]
Contact person: Mr. Ramesh Kumar Haritwal, Tel: (011) 42791324, Fax: (011) 42791330, Email: [email protected]
Cash offer to buyback not exceeding 7,00,000 (Seven Lakhs Only) fully paid up equity shares of face value of Rs. 10/- each representing 23.29% of the total number of equity shares in the issued, subscribed, paid up equity share capital of the Company from all the existing public shareholders/beneficial owners of the Company as on the record date i.e. December 04, 2015 on a proportionate basis through the tender offer route at a price of Rs. 30/- (Rupees Thirty Only) per equity share for an aggregate amount of Rs. 2,10,00,000/- (Rupees Two Crores Ten Lakhs Only).
1) The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company, Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the “Companies Act”), the Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the “Share Capital Rules”) and in compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the “Buyback Regulations”) including any amendments, statutory modifications of re- enactments thereof, and such other approvals, permissions and exemptions as may be required, from time to time, from the BSE Limited (the “BSE”) where the equity shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which may be agreed to by the Board and/ or any other committee thereof. The Buyback would be undertaken in accordance with Circular No. CIR/CFD/POLICYCELL/1/2015 dated April 13, 2015 issued by the Securities and Exchange Board of India, which prescribes mechanism for acquisition of shares through Stock Exchange. In this regard, the Company will request BSE to provide the Acquisition Window. For the purpose of this Buyback, BSE would be the designated Stock Exchange.
2) The Buyback Offer Size is 23.34% of the fully paid-up equity share capital and free reserve as per audited accounts of the Company for the financial year ended March 31, 2015 and is within the statutory limits of 25% of the fully paid-up equity share capital and free reserves as per the last audited accounts of the Company.
3) This letter of Offer will be sent to the Equity Shareholder(s)/Beneficial Owner(s) of Equity shares of the Company as on the Record Date i.e., December 04, 2015.
4) The procedure for Tender and Settlement is set out in paragraph 20 of this Letter of Offer. The Form of Acceptance-cum-Acknowledgement (“Tender Form”) is enclosed together with this Letter of Offer.
5) For mode of payment of consideration to the Equity Shareholders refer Paragraph 20.10 of Letter of Offer. A copy of the Public Announcement and this Letter of Offer (including Tender Form) will be available on the website of Securities and
Exchange Board of India- www.sebi.gov.in7. Equity Shareholders are advised to refer to paragraph 17 (Details of Statutory Approvals) and paragraph 21 (Note on Taxation) before
tendering their Equity Shares in the Buyback.
BUYBACK OPENS ON: THURSDAY, JANUARY 14, 2016 BUYBACK CLOSES ON: THURSDAY, JANUARY 28, 2016
LAST DATE OF RECEIPT OF COMPLETED TENDER FORM AND OTHER SPECIFIED DOCUMENTS INCLUDING PHYSICAL SHARE CERTIFICATES BY THE REGISTRAR AND TRANSFER AGENT: SATURDAY, JANUARY 30, 2016
All future correspondence in relation to Buyback, if any should be addressed to the Manager to the Buyback Offer or the Registrar to the Buyback Offer at the respective addresses mentioned below:
MANAGER TO THE OFFER: REGISTRAR TO THE OFFER:
VC CORPORATE ADVISORS PRIVATE LIMITEDSEBIREGN NO: INM000011096(Contact Person: Mr. Anup Kumar Sharma)31 Ganesh Chandra Avenue, 2nd Floor, Suite No –2C,Kolkata-700 013.Phone No : (033) 2225-3940 / 3941Fax : (033) 2225-3941Email: [email protected]
S. K. INFOSOLUTIONS PRIVATE LIMITEDSEBIREGN. NO: INR000003886(Contact Person: Mr. Dilip Bhattacharya)34/1A, Sudhir Chatterjee Street,Kolkata- 700 006Tel No.: (033) 2219-4815/6797Fax: (033) 2219-4815E-mail: [email protected]
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TABLE OF CONTENTS:
Sr. No. Subject Page No
1 Schedule of Activities 2
2 Definition of Key Terms 3
3 Disclaimer Clause 4
4 Text of the Resolution passed at the Board Meeting 4
5 Details of Public Announcement 7
6 Details of the Buyback 7
7 Authority for the Buyback 8
8 Necessity of the Buyback 9
9 Management Discussions and Analysis of the Likely Impact of Buyback on the Company 9
10 Basis of Calculating Buyback Price 10
11 Sources of funds for the Buyback 11
12 Details of the Escrow account and the Amount to be deposited therein 11
13 Capital Structure and Shareholding Pattern 11
14 Brief Information of the Company 12
15 Financial Information about the Company 14
16 Stock Market data 17
17 Details of the statutory approvals 17
18 Details of the Registrar to the Buyback 18
19 Process and methodology for Buyback 18
20 Procedure for Tender/offer and Settlement 20
21 Note on Taxation 23
22 Declaration by the Board of Directors 24
23 Auditors Certificate 25
24 Documents for Inspection 27
25 Details of the Compliance Officer 27
26 Details of the Remedies available to the Shareholders/ Beneficial Owners 27
27 Details of the Investor Service Centres 27
28 Details of the Manager to the Buyback 27
29 Declaration by the directors regarding the authenticity of the information in the offer
document
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1. SCHEDULE OF ACTIVITIES OF THE OFFER
ACTIVITY DATE DAY
Date of Board Meeting Approving the Proposal of The Buyback October 10, 2015 Saturday
Date of declaration of results of the Postal ballot for special resolution by the
equity shareholders of the Company, approving the Buyback Offer.
November 19, 2015 Thursday
Date of Public Announcement for the buyback November 23, 2015 Monday
Record date for determining the Buyback entitlement and the names of the
eligible shareholders
December 04, 2015 Friday
Date of Opening of the buyback Offer January 14, 2016 Thursday
Date of Closing of the Buyback Offer January 28, 2016 Thursday
Last date of receipt of completed Tender Form and other specified documents
including physical share certificates by the Registrar and Transfer Agent
January 30, 2016 Saturday
Last Date of verification by the Registrar February 04, 2016 Thursday
Last date of providing acceptance to the Stock Exchange by the Registrar February 04, 2016 Thursday
Last date of Settlement of Bids on the Stock Exchange February 08, 2016 Monday
Last date of dispatch of Share certificate(s)/return of unaccepted demat shares
by Stock Exchange to Selling Member
February 08, 2016 Monday
Last date of Extinguishment of equity shares February 18, 2016 Thursday
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2. DEFINITION OF KEY TERMS
Acceptance Acceptance of Equity Shares, tendered by Eligible Persons in the Buyback Offer
Act The Companies Act, 2013
Additional Shares /
Additional
Equity Shares
Eligible Equity Shares tendered by an Eligible Person over and above the Buyback Entitlement of
such shareholder.
Company /
the Company Himalaya Granites Limited
Board of Directors/
Board
Board of Directors of the Company, or the Committee of Directors or Buyback Committee for the
purpose of the Buyback.
BSE BSE Limited
Buyback Entitlement
The number of Equity Shares that a Shareholder is entitled to tender in the Buyback Offer, based
on the number of Equity Shares held by that Shareholder, on the Record date and the Ratio of
Buyback applicable in the category, to which such Shareholder belongs to.
Buyback Offer /
Buyback /
Offer
Offer by Himalaya Granites Limited to buy back up to maximum of 7,00,000 fully paid-up Equity
Shares of face value of Rs. 10/- each at a price of Rs. 30/- per Equity Share from all the Equity
Shareholders of the Company through Tender Offer process, on a proportionate basis.
CDSL Central Depository Services (India) Limited
DP Depository Participant
Eligible Person(s)
Person(s) eligible to participate in the Buyback Offer and would mean all Equity Shareholders /
Beneficial Owner(s) of Equity Shares of the Company as on the Record Date i.e., December 04,
2015.
Equity Shares / Shares Fully paid up Equity Shares of face value of Rs. 10/- each of Himalaya Granites Limited
Escrow Account The Escrow Account opened with HDFC Bank
Form/ Tender Form Form of Acceptance–cum–Acknowledgement
LOF/ Offer Document Letter of Offer
Non-Resident
Shareholders
Includes Non-Resident Indians (NRI), Foreign Institutional Investors (FII) and Overseas Corporate
Bodies (OCB)
NSDL National Securities Depository Limited
Offer Price / Buyback
Price
Price at which Equity Shares will be bought back from the Shareholders i.e. Rs. 30/- per fully paid
up Equity Share, payable in cash
Offer Size / Buyback
Size
Number of Equity Shares proposed to be bought back (i.e. 7,00,000 Equity Shares) multiplied by
the Offer Price (i.e. Rs. 30/- per Equity Share) aggregating to Rs. 2,10,00,000/- (Rupees Two
Crores and Ten Lakhs Only).
PA / Public
Announcement
Public Announcement regarding the Buyback dated November 23, 2015, issued in Financial
Express (English), Jansatta (Hindi) and MalaaiSudar (Tamil) on November 23, 2015.
RBI Reserve Bank of India
Record Date
The date for the purpose of determining the entitlement and the names of the Shareholders, to
whom the Letter of Offer and Tender Offer Form will be sent and who are eligible to participate
in the proposed Buyback offer in accordance with the Regulations. The Record Date in this Buy
Back offer is December 04, 2015.
Registrar to the Offer /
Registrar to the
Buyback
S. K. Infosolutions Private Limited
Regulations / SEBI
Regulations /
SEBI Buyback
Regulations /
Buyback Regulations
Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 including any
statutory modifications or re-enactments thereof
SEBI The Securities and Exchange Board of India
Small Shareholder A Shareholder, who holds Equity Shares whose market value, on the basis of closing price on the
BSE as on Record Date i.e. December 04, 2015 is not more than two lakh rupees.
Stock Exchanges/Stock
Exchange BSE, being the Stock Exchange where the shares of the Company are listed.
VCAPL/ Manager to the
Buyback VC Corporate Advisors Private Limited
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3. DISCLAIMER CLAUSE
As required, a copy of this Letter of Offer has been submitted to Securities and Exchange Board of India (SEBI). It is to be
distinctly understood that submission of the Letter of Offer to SEBI should not, in any way be deemed or construed that the
same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of the
Company to meet the Buyback commitments of for the correctness of the statements or opinions expressed in the Offer
document. The Manager to the Buyback Offer, M/s VC Corporate Advisors Pvt Ltd has certified that the disclosures made in
the Offer document are generally adequate and are in conformity with the provisions of Companies Act and Buyback
Regulations. This requirement is to facilitate investors to take an informed decision for tendering their Equity Shares in the
Buyback.
It should be clearly understood that while the company is primarily responsible for the correctness, adequacy and
disclosures of all relevant information in the Offer Document, the Manager to the Buyback Offer is expected to exercise due
diligence to ensure that the Company discharges its duty adequately in this behalf and towards this purpose, the Manager
to the Buyback Offer, M/s. VC Corporate Advisors Pvt Ltd has furnished to SEBI a Due Diligence Certificate dated December
01, 2015 in accordance with Buyback Regulations which read as follows:
“We have examined various documents and materials contained in the annexure to this letter, as part of the due-diligence
carried out by us in connection with the finalization of the Public Announcement and the Letter of Offer. On the basis of
such examination and the discussions with the Company, we hereby state that:
• The Public Announcement and the Letter of Offer are in conformity with the documents, materials and papers
relevant to the Buyback offer;
• All the legal requirements connected with the said offer including SEBI (Buy Back of Securities) Regulations, 1998,
as amended, have been duly complied with;
• The disclosures in the Public Announcement and the Letter of Offer are, to the best of our knowledge, true, fair
and adequate in all material respects for the shareholders of the Company to make a well informed decision in
respect of the captioned Buyback offer.
• Funds used for buy back shall be as per the provisions of the Companies Act, 2013.
The filing of Offer Document with SEBI, does not, however, absolve the Company from any liabilities under the provisions
of the Companies Act, 2013, as amended or from the requirement of obtaining such statutory or other clearances as may be
required for the purpose of the proposed Buyback.
Promoters / Directors declare and confirm that no information / material likely to have a bearing on the decision of
investors has been suppressed / withheld and / or incorporated in the manner that would amount to mis-statement /
misrepresentation and in the event of it transpiring at any point of time that any information / material has been
suppressed / withheld and / or amounts to a mis-statement/ misrepresentation, the Promoters / Directors and the
Company shall be liable for penalty in terms of the provisions of the Companies Act, 1956 as amended and the SEBI (Buy
Back of Securities) Regulations, 1998, as amended.
Promoters / Directors also declare and confirm that funds borrowed from Banks and Financial Institutions will not be used
for the Buyback.
4. TEXT OF THE RESOLUTION PASSED AT THE BOARD MEETING
“RESOLVED THAT pursuant to the provisions of Article 33 of the Articles of Association of the Company, as amended, and
the provisions of Section 68, 69,70 and all other applicable provisions, if any, of the Companies Act, 2013 and in compliance
with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, including any statutory
modifications or re-enactments thereof (“SEBI Buyback Regulations”), and such other approvals, permissions and sanctions
as may be necessary and subject to such conditions and modifications as may be prescribed or imposed while granting such
approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (the "Board" which
expression shall include any committee constituted by the Board to exercise its powers, including the powers conferred by
this resolution), the Board hereby approves the buy back by the Company of its fully paid-up equity shares of Rs. 10/- each
not exceeding 7,00,000 (Seven Lakhs) equity shares (representing 23.29% of the total paid-up equity capital of the
Company) at a price of Rs. 30/- (Rupees Thirty only) per equity share (the “Buy Back Offer Price”) payable in cash for an
aggregate amount of Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only) (the “Buyback Offer Size”) which is within
25% of the fully paid-up equity share capital and free reserves of the Company as per the audited accounts of the Company
for the year ended March 31, 2015 from the shareholders of the Company on a proportionate basis, through the Tender
Offer route as prescribed under the SEBI Buyback Regulations (hereinafter referred to as the "Buyback").
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RESOLVED FURTHER THAT the buyback is being proposed in keeping with the Company’s desire to enhance overall
shareholders value and the buyback would lead to reduction in total number of equity shares.
RESOLVED FURTHER THAT the Company may implement the Buyback which is within 25% of its fully paid-up equity share
capital and free reserves of the Company as per the approval granted by way of this resolution and in compliance with
proviso to Section 68 (2)(c) of the Companies Act, 2013, and in accordance with the SEBI Buyback Regulations.
RESOLVED FURTHER THAT as required by Regulation 6 of the SEBI Buyback Regulations, the Company may buy back equity
Shares from the existing shareholders on a proportionate basis through tender offer mechanism, provided 15% of the
number of equity shares which the Company proposes to buyback or number of equity shares entitled as per the
shareholding of small shareholders, whichever is higher, shall be reserved for the small shareholders, as defined in the SEBI
Buyback Regulations.
RESOLVED FURTHER THAT a draft copy of the postal ballot notice along with the postal ballot form to be send to the
shareholders for approval of the Buyback as placed before the board be and is hereby approved and Mr. Ramesh Kumar
Haritwal, Managing Director & CEO of the Company be and is hereby authorised to issue the aforesaid notice under his
signature to the shareholders and all other persons entitled to receive the same and to do all such acts, matters, deeds and
things as may be required in connection with postal ballot.
RESOLVED FURTHER THAT Mr. Dilip Kumar Sarawagi, Practicing Company Secretary, Proprietor of M/s. DKS & Co., of 173,
M. G. Road, 1st Floor, Kolkata - 700 007 be and is hereby appointed as the Scrutinizer for conducting the postal ballot and e-
voting process in a fair and transparent manner at a remuneration of Rs. 20,000/- excluding applicable taxes and out-of-
pocket expenses, if any.
RESOLVED FURTHER THAT the Company do utilize the services of Central Depository Services (India) Limited for providing
e-voting platform in compliance with the provisions of Section 108 of the Act, 2013 read with applicable provisions of the
Companies (Management and Administration)Rules, 2014 and Clause 35B of the Listing Agreement with the Stock
Exchanges as may be in force from time to time.
RESOLVED FURTHER THAT the draft calendar of events as placed before the members of the Board, be and is approved.
RESOLVED FURTHER THAT the Board of Directors hereby confirms that:
a) all equity shares of the Company are fully paid up;
b) the Company has noted that it shall not issue and allot any equity shares including by way of bonus, till the date of
closure of this Buyback;
c) the Company shall not buy back its shares from any person through negotiated deal whether on or off the stock
exchanges or through spot transactions or through any private arrangement in the implementation of the Buyback;
d) that the aggregate amount of the Buyback i.e. Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only) does not exceed
25% of the total paid-up capital and free reserves as per the audited balance sheet as on March 31, 2015;
e) that the maximum number of equity shares proposed to be purchased under the Buyback i.e. 7,00,000 (Seven Lakhs)
equity shares, does not exceed 25% of the total number of shares in the paid-up equity capital as per the audited balance
sheet as on March 31, 2015;
f) no default, has been made by the Company in the repayment of deposits accepted either before or after the
commencement of the Companies Act, 2013, interest payment thereof, redemption of debentures or preference shares
or payment of dividend to any shareholder, or repayment of any term loan or interest payable to thereon to any financial
institution or banking company;
g) the debt equity ratio of the Company after the Buyback will be well within the limit of 2:1 as prescribed under the
Companies Act, 2013 (to the extent applicable), as the case may be.
RESOLVED FURTHER THAT as required by Clause (x) of Part A of Schedule II of the SEBI Buyback Regulations, the Board
hereby confirms that they have made a full enquiry into the affairs and prospects of the Company and that they have
formed the opinion:
(a) That immediately following the date of the Board Meeting held on 10.10.2015 and the date on which the results of the
postal ballot will be declared, there will be no grounds, on which the Company can be found unable to pay its debts;
(b) That as regards the Company’s prospects for the year immediately following the date of the Board Meeting as well as
the year immediately following date on which the results of the postal ballot will be declared approving the Buy Back
and having regards to the Board’s intentions with respect to the management of the Company’s business during that
year and to the amount and character of the financial resources which will, in Board’s view, be available to the
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Company during that year, the Company will be able to meet its liabilities as and when they fall due and will not be
rendered insolvent within a period of one year from date of the Board meeting approving the Buy Back or within a
period of one year from the date on which the results of the postal ballot will be declared as the case may be;
(c) In forming its opinion aforesaid, the Board has taken into account the liabilities as if the Company were being wound up
under the provisions of the Companies Act, 2013 (including prospective and contingent liabilities).
RESOLVED FURTHER THAT the proposed Buyback be implemented from the existing shareholders other than those who are
Promoters, Promoters Group and Persons Acting in concert (such shareholders herein after collectively known as “Persons
in Control”) that persons in control will be such persons as have been disclosed under the filings made by the Company
from time to time under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover)
Regulations 2011 (“SEBI Takeover Regulations”) as the Board may consider appropriate, from out of its free reserves
and/or Share Premium Account and/or cash balances and/ or internal accruals and/or such other sources or by such
mechanisms as may be permitted by Law, and on such terms and conditions as the Board may decide from time to time,
and in the absolute discretion of the Board, as it may deem fit.
RESOLVED FURTHER THAT the Company shall not use borrowed funds, directly or indirectly, whether secured or unsecured,
of any form and nature, from banks and financial institutions for paying the consideration to the equity shareholders who
have tendered their equity shares in the Buyback.
RESOLVED FURTHER THAT the Company shall not Buyback the locked-in equity shares or other specified securities, if any
and non-transferable equity shares or other specified securities, if any, till the pendency of the lock-in or till the equity
shares or other specified securities become transferable;
RESOLVED FURTHER THAT as per the provisions of Section 68(8) of the Companies Act, 2013, the Company will not issue
same kind of shares or other specified securities shares within a period of 6 months after the completion of the Buyback
except by way of bonus shares or equity shares issued in the discharge of subsisting obligations such as conversion of
warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity shares.
RESOLVED FURTHER THAT as per the provisions of Regulation 19(f) of SEBI Buyback Regulations, the Company shall not
raise any further capital for a period of one year from the date of closure of the buyback offer, except in discharge of its
subsisting obligations.
RESOLVED FURTHER THAT the powers of the Board of Directors in respect of the buy-back be delegated to a committee
(“Buy Back Committee”) consisting of the following directors of the company namely Mr. Ramesh Kumar Haritwal,
Managing Director & CEO, Mr. Beni Gopal Saraf, Independent Director and Mr. Mahesh Kumar Malpani, Independent
Director of the Company and the quorum for the meeting of the Buy Back Committee shall be presence of two members at
the meeting.
RESOLVED FURTHER THAT that the Buy Back Committee is hereby authorized to do all such acts, deeds, matters and things
as it may in its absolute discretion deem necessary, expedient, usual or proper as the Buy Back Committee may consider to
be in the best interests of the shareholders, including but not limited to finalizing the terms of the Buy Back, record date,
entitlement ratio, the specific price for the Buy Back, the actual number of Equity Shares to be bought back, mechanism for
the Buy Back, opening of Escrow Bank Account and Special Bank Account or Special Demat Account, authorizing the persons
to operate the said accounts, appointment of intermediaries or agencies for the implementation of the Buy Back and sign
and execute the incidental documentation as also to prefer applications to the appropriate authorities for their requisite
approvals and to initiate all necessary actions for preparation and issue of various documents including but not limited to
Public Announcement, Declaration of Solvency, Draft Letter of Offer, Letter of Offer, Corporate Actions with Depositories,
extinguishment of Share Certificates and filing with appropriate authorities in connection with the Buy Back on behalf of
Board of Directors.
RESOLVED FURTHER THAT the Buy Back Committee be and is hereby authorized to decide the related issues as may be
required to regulate its working, to delegate all or any of the authorities conferred upon it to any Director(s) or Officer(s) or
authorized representative(s) of the Company.
RESOLVED FURTHER THAT a register of securities bought back shall be maintained wherein the details of equity shares
bought back, consideration paid for the equity shares bought back, date of cancellation of equity shares and date of
extinguishing and physically destroying of equity shares and such other particulars as may be prescribed, shall be entered
and that any Director of the Company be and is hereby authorized to authenticate the entries made in the said register.
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5. DETAILS OF PUBLIC ANNOUNCEMENT
The Public Announcement dated November 23, 2015 was made in the following newspapers, in accordance with Regulation
8(1) of the Buyback Regulations, within Two working days from the date of passing of the Special Resolution by the Equity
Shareholders of the Company approving the Buyback through Postal ballot, results of which were declared on November
19, 2015.
Publication Language Edition
The Financial Express English All editions
Jansatta Hindi All editions
Malaai Sudar Tamil Chennai Edition
For compliances with the requirements of the Buyback Regulations, The Company will publish further notices or corrigenda
in the above 3 newspapers in the editions as mentioned above i.e., The Financial Express (English- All Editions), Jansatta
(Hindi- All Editions) and Malaai Sudar (Tamil- Chennai Edition)
The Public Announcement is available on the SEBI website- www.sebi.gov.in
6. DETAILS OF THE BUYBACK
Himalaya Granites Limited has announced the Buyback of not exceeding 7,00,000 Equity shares from all the existing public
shareholders/ beneficial owners of equity shares, on a proportionate basis, through the Tender Offer route at a price of Rs.
30/- (Rupees Thirty Only) per equity share payable in cash for an aggregate amount of Rs. 2,10,00,000 (Rupees Two Crores
and Ten Lakhs Only). The maximum number of equity shares proposed to be bought back represents 23.29% of the total
number of equity shares in the Issued, Subscribed and Paid-Up Equity share capital of the Company.
The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company,
Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the “Companies Act”), the
Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the “Share Capital Rules”) and in
compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the “Buyback
Regulations”) including any amendments, statutory modifications of re- enactments thereof, and such other approvals,
permissions and exemptions as may be required, from time to time, from the BSE Limited (the “BSE”) where the equity
shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which
may be agreed to by the Board and/ or any other committee thereof.
The Buyback would be undertaken in accordance with Circular No. CIR/CFD/POLICYCELL/1/2015 dated April 13, 2015 issued
by the Securities and Exchange Board of India, which prescribes mechanism for acquisition of shares through Stock
Exchange. In this regard, the Company will request BSE to provide the Acquisition Window. For the purpose of this Buyback,
BSE would be the designated Stock Exchange.
The Buyback Offer Size is 23.34% of the fully paid-up equity share capital and free reserve as per audited accounts of the
Company for the financial year ended March 31, 2015 and is within the statutory limits of 25% of the fully paid-up equity
share capital and free reserves as per the last audited accounts of the Company. The Buyback Offer Size does not include
any expenses incurred or to be incurred for the buyback like SEBI filling fees, advisors fees, brokerage, Securities
Transaction Tax, Public Announcement Publication expenses, printing and Dispatch expenses, and other incidental and
related expenses.
The aggregate shareholding of the Promoters, Promoter Group, directors of the Promoter Group companies holding shares
in the Company and of Persons who are in control of the Company as on the date of the Public Announcement (i.e.,
November 23, 2015) is as follows:
a) Shareholding of the companies/entities forming part of the Promoter Group
Sl.No. Name No. of Equity shares % of Shareholding
1 Shiv Prakash Mittal 12,500 0.42
2 Shiv Prakash Mittal on behalf of Shiv Prakash Mittal HUF 1,09,250 3.64
3 Rajesh Mittal 3,21,250 10.69
4 Karuna Mittal 1,250 0.04
5 Saurabh Mittal 3,10,000 10.31
6 Parul Mittal 600 0.02
7 Shobhan Mittal 27,500 0.92
8 Surbhi Mittal 27,500 0.92
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Sl.No. Name No. of Equity shares % of Shareholding
9 Saurabh Mittal on behalf of Trade Combines, Partnership Firm 1,83,700 6.11
10 Shobhan Mittal on behalf of Trade Combines, Partnership Firm 1,28,700 4.28
11 Greenply Industries Ltd. 3,80,583 12.66
12 S M Management Pvt. Ltd. 2,14,117 7.13
13 Greenply Leasing & Finance Pvt. Ltd. 100 0.00
Total 17,17,050 57.14
b) Shareholding of Directors of the Promoter Group Companies [mentioned in point (a) above]:
Name Directorships held in companies mentioned under point no. (a) above No. of
Equity
Shares
% of
Shareholding
Mr. Shiv Prakash Mittal Greenply Industries Limited 12,500 0.42
Mr. Rajesh Mittal Greenply Industries Limited and S M Management Private Limited 3,21,250 10.69
Ms. Karuna Mittal S M Management Private Limited 1,250 0.04
Mr. Saurabh Mittal Greenply Leasing and Finance Private Limited 3,10,000 10.31
Ms. Parul Mittal Greenply Leasing and Finance Private Limited 600 0.02
Mr. Shobhan Mittal Greenply Industries Limited 27,500 0.92
c) Shareholding of Directors or Key Managerial Personnel of the Company:
Name No. of Equity Shares % of Shareholding
Mr. Ramesh Kumar Haritwal 200 0.00
Mr. Pradip ManharlalDomadia 700 0.02
Mr. Saurabh Mittal 3,10,000 10.31
Mr. Saurabh Mittal on Behalf of Trade Combines, Partnership Firm 1,83,700 6.11
d) Details of the Shares purchased or sold by persons including the Promoters or Directors for a period of Six months
preceding the date of Board Meeting at which the Buyback was approved till the date of notice convening the
General Meeting.
Sr.
No.
Name of the
Acquirer/Seller
Designation No. of equity
shares
Acquired/(Sold)
Price per Shares
(Rs.)
Date of
Acquisition/Sale
Mode of Acquisition
1 Mr. Saurabh Mittal
(Acquirer)
Non-
Executive
Chairman
3,00,000 Without
Consideration
i.e., Gift
8th
October
2015
Interse Transfer of
Shares amongst
Promoters’ Group
2 Mr. Rajesh Mittal
(Seller)
Part of
Promoter’s
Group
(3,00,000) Without
Consideration
i.e., Gift
8th
October
2015
Interse Transfer of
Shares amongst
Promoters’ Group
e) In terms of the Buyback Regulations under the Tender Offer Route, the Promoter and Promoter Group of the
Company have expressed their intention not to participate in the proposed Buyback and have irrevocably waived
their rights as shareholders in respect of this Buyback offer.
f) Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the Equity Shareholders upto
their entitlement, the aggregate shareholding of the Persons in Control, post Buyback will increase to 74.49% of
the Post Buyback Equity Share Capital of the Company. Post Buyback the Non- Promoter Shareholding of the
Company will not fall below the Minimum Statutory Limit as per the Listing Norms.
7. AUTHORITY FOR THE BUYBACK
The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company,
Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the “Companies Act”), the
Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the “Share Capital Rules”) and in
compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the “Buyback
9
Regulations”) including any amendments, statutory modifications of re- enactments thereof, and such other approvals,
permissions and exemptions as may be required, from time to time , from the BSE Limited (the “BSE”) where the equity
shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which
may be agreed to by the Board and/ or any other committee thereof.
On October 10, 2015, the Board of Directors passed a resolution to Buyback Equity shares of the company and sought
approval of its shareholders, as a special Resolution through the Postal Ballot notice dated October 10, 2015, the results of
which were declared on November 19, 2015, which is the date when the Special Resolution is deemed to have been passed
by the Shareholders.
8. NECESSITY OF THE BUYBACK
Share buyback is the acquisition by a Company of its own shares. The objective is to return surplus cash to the public
shareholders holding equity shares of the Company. The Board at its meeting held on October 10, 2015, considered the
amount in accumulated free reserves as well as the cash liquidity reflected in the audited accounts for the financial year
ending March 31, 2015 and considering these, the Board decided to allocate a sum of Rs.2,10,00,000 (Rupees Two Crores
and Ten Lakhs only) for distributing to the public shareholders holding equity shares of the Company through the Buyback.
After considering several factors and benefits to the public shareholders holding equity shares of the Company, the Board
decided to recommend Buyback of not exceeding 7,00,000 (Seven Lakhs only) equity shares (representing 23.29% of the
total number of equity shares in the paid-up equity share capital of the Company) at a price of Rs. 30/- (Rupees Thirty only)
per equity share for an aggregate consideration of Rs.2,10,00,000 (Rupees Two Crores and Ten Lakhs only). Buyback is a
more efficient form of distributing surplus cash to the public shareholders holding equity shares of the Company, inter-alia,
for the following reasons:
a. The Buyback will help the Company to distribute surplus cash to its public shareholders holding equity shares
broadly in proportion to their shareholding, thereby, enhancing the overall return to them;
b. The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback
Regulations, would involve allocation of 15% of the outlay to small shareholders. The Company believes that this
reservation of 15% for small shareholders would benefit a large number of public shareholders, who would get
classified as “small shareholder”;
c. The Buyback would help in improving return on equity, by reduction in the equity base, thereby leading to long term
increase in shareholders’ value;
d. The Buyback gives an option to the public shareholders holding equity shares of the Company, who can choose to
participate and get cash in lieu of Equity Shares to be accepted under the Buyback Offer or they may choose to not
participate and enjoy a resultant increase in their percentage shareholding, post the Buyback Offer, without
additional investment;
The Buy Back offer price of Rs. 30/- (Rupees Thirty Only) represents a premium of 267.37% over the volume weighted
average market price of the equity shares on BSE for 3 months preceding the date of intimation to the BSE for the Board
Meeting to consider the proposal of the Buyback.
9. MANAGEMENT DISCUSSION AND ANALYSIS OF THE LIKELY IMPACT OF THE BUYBACK ON THE COMPANY
9.1 The Buyback is not likely to cause any material impact on the profitability/earnings of the Company except a
reduction in the investment income, which the Company could have otherwise earned on the amount distributed
towards Buyback. Assuming there is full response to the buyback, the funds deployed by the Buyback would be Rs.
2,10,00,000 (Rupees Two Crores and Ten Lakhs Only). This shall impact the investment Income earned by the
Company, on account of the reduced amount of funds available for investments.
9.2 The buyback will not in any manner impair the ability of the Company in meeting to pursue growth opportunities or
meet its cash requirements for business operations.
9.3 The Promoter and Promoter Group of the Company have expressed their intention not to participate in the
proposed Buyback, in writing and have irrevocably waived their rights as shareholders in respect of this Buyback
offer.
10
9.4 The Buyback of Equity shares of the Company will not result in a change in control or otherwise effect the existing
management structure of the Company.
9.5 Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the public Equity Shareholders
upto their entitlement, the aggregate shareholding of the Promoter Group/Persons in Control, post Buyback will
increase to 74.49% from 57.14% (Pre- Buyback shareholding) and the aggregate shareholding of the Public in the
Company shall decrease to 25.51% (Post Buyback shareholding) from 42.86% (Pre Buyback shareholding).
9.6 Consequent to the Buyback and based on the number of Equity shares bought back from the Non- resident
Shareholders, Indian Financial Institutions, Mutual Funds and the Public including other bodies corporate, their
shareholding would undergo a change.
9.7 The debt-equity ratio post buyback will be compliant with the permissible limit of 2:1 prescribed by the Companies
Act, even if the response to the buyback is to the extent of 100% (full acceptance).
9.8 The Company shall not issue any equity shares or other securities (including by way of Bonus) till the date of closure
of buyback.
9.9 The Company shall not raise further capital for a period of one year from the closure of Buyback except in discharge
of subsisting obligations.
9.10 Salient Financial Parameters consequent to the Buyback based on the latest audited results as on March 31, 2015
are as under:
Parameters Pre- Buyback Post- Buyback**
Networth^ (Rs in lacs) 899.70 689.70
Return on Networth^ (2.57%) (3.40%)
Earnings Per Equity Share (net of tax) (basic &
Diluted) Rs.
(0.78) (1.02)
Book value per share (Rs)^ 29.94 29.92
P/E based as on latest audited financial results * Not meaningful Not meaningful
Total Debt/Equity Ratio - - Notes:
^Pre and Post Buyback Calculations are based on financial numbers as on March 31, 2015.
*Since there is negative EPS for the year ended 31.03.2015, the P/E ratio cannot be computed.
** The Post buyback numbers are calculated by reducing the net worth by the proposed buyback amount
(assuming full acceptance).
10. BASIS OF CALCULATING THE BUYBACK PRICE
10.1 The Buyback Offer Price has been arrived at after considering various factors such as the volume weighted average
market prices of the equity shares of the Company on BSE where the equity shares of the Company are listed for a
period of 3 months preceding the date of intimation to the BSE for the Board Meeting to consider the proposal for
the Buyback, the net worth of the Company and the impact of the Buyback on the key financial ratios of the
Company. The volume weighted average market price of equity Shares for a period of 3 months preceding the
date of intimation to the BSE for the Board Meeting to consider the proposal for the Buyback is Rs. 8.17/-.The Buy
Back offer price of Rs. 30/- (Rupees Thirty Only) represents a premium of 267.37% over the volume weighted
average market price of the equity shares on BSE for 3 months preceding the date of intimation to the BSE for the
Board Meeting to consider the proposal of the Buyback.
10.2 For trends in the Market price of the equity shares please refer to paragraph 16.
10.3 The closing Market Price of equity Shares as on the date of intimation to BSE for the Board Meeting for
considering the Buyback, was Rs. 8.49/-
10.4 The Buyback offer price represents a premium of 0.20% over the, Pre- Buyback, Company’s Book value per share
of Rs. 29.94/- as at March 31, 2015.
10.5 The Loss per share of the Company Pre- Buyback as on March 31, 2015 was Rs. (0.78) which will increase to
Rs. (1.02) Post buyback assuming full acceptance of the Buyback.
11
10.6 The Return of net worth of the Company Pre- Buyback as on March 31, 2015 was negative 2.57% which will
increase to negative 3.40% Post Buyback, assuming full acceptance.
11. SOURCES OF FUNDS FOR THE BUYBACK
11.1 Assuming full acceptances, the funds that will be employed by the Company for the purpose of Buyback of
7,00,000 equity shares at a price of Rs. 30/-per equity share would be Rs. 2,10,00,000/- (Rupees Two Crores and
Ten Lakhs Only).
11.2 The funds for the Buyback will be sourced from cash balances available with the Company and/or liquidation of
financial instruments held by the Company. These funds have been generated through internal accruals. The
Company does not intend to raise additional debt for the explicit purposes of the Buyback. Accordingly, borrowed
funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary
course of its business.
12. DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT DEPOSITED THEREIN
12.1 In accordance with the Regulation 10 of the Buyback Regulations, an Escrow agreement has been entered into
between the Company, VC corporate Advisors Private Limited and HDFC Bank Limited(“Escrow agent”) having its
branch at Central Plaza, 2/6 Sarat Bose Road, Kolkata- 700 020.
12.2 In accordance with the Escrow agreement, the Company has opened an Escrow account in the name and style
“Himalaya Granites Limited-Buyback Offer Escrow Account” bearing Account No: 00140350010095 with the
Escrow agent. The Company has Deposited cash of Rs. 52,50,000 (Rupees Fifty Two Lakhs Fifty Thousand Only)
This amount of cash deposited is equal to the amount required to be deposited in accordance with the Buyback
Regulations. The Merchant Banker has been empowered to operate the Escrow account in terms of the Buyback
Regulations.
12.3 M/s. A. Mallik & Associates, Chartered Accountants (Firm Registration number 318085E), located at 6/47,
Bijoygarh, Kolkata – 700 032, signing through their Partner Mr. Arunava Mallik (Membership Number: 053709)
have certified, vide their certificate dated November 23, 2015, that the Company has adequate funds for the
purposes of buyback of 7,00,000 Equity Shares at Rs.30 each.
12.4 The Manager to the Buyback Offer has satisfied itself in regard to the ability of the Company to Implement the
Buyback Offer in accordance with the Buyback Regulations.
13. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN
13.1 The capital Structure of the Company as on the date of the Public announcement is as follows:
Particulars No. of Shares Amount (Rs. Lacs)
Authorized Equity Share Capital 40,00,000 4,00,00,000
Issued, Subscribed and Paid-up Equity
Shares
30,05,000 3,00,50,000
13.2 The Company has not bought back any equity shares under any buyback programme, during the 3 years preceding
the date of the Public Announcement.
13.3 As on the date of the Public Announcement there are no outstanding preference shares, partly paid-up equity
shares or outstanding convertible instruments or calls in arrears.
13.4 The shareholding pattern of the Company pre- buyback, taken on December 04, 2015, as well as Post Buyback
shareholding pattern, is as shown below:
Pre- Buyback Post Buyback
Particulars No. of equity
shares
% of existing
equity share
capital
No. of equity
shares
% of Post-
Buyback
equity share
capital
Promoters and persons acting in
Concert (Collectively “the
1717050 57.14 1717050 74.49
12
Pre- Buyback Post Buyback
Particulars No. of equity
shares
% of existing
equity share
capital
No. of equity
shares
% of Post-
Buyback
equity share
capital
Promoters”)
Foreign Investors
(Including Non Resident Indians,
FIIs and Foreign Mutual Funds)
1386 0.05 587950 25.51
Financial Institutions/Banks &
Mutual Funds promoted by
Banks/Institutions
100 0.00
Others (Public, Public Bodies
Corporate etc.)
1286464 42.81
13.5 Assuming 100% response to the Buyback Offer, the Issued, Subscribed and Paid-up Equity Share Capital of the
Company after the completion of the Buyback Offer is as follows:
Particulars No. of shares Amount(Rs.)
Issued, Subscribed and paid up
equity share
23,05,000 2,30,50,000
13.6 Assuming response to the Buyback is 100% (full acceptance) from all the equity shareholders upto their
entitlement, the aggregate shareholding of the Promoter Group/ Persons in control Post Buyback, will increase to
74.49% of the Post Buyback equity share capital of the Company.
14. BRIEF INFORMATION ABOUT THE COMPANY
14.1 The Himalaya Granites Limited was incorporated on December 11, 1987 under the Companies Act 1956 as a
Private Limited company under the name of Himalaya Granites Private Limited. The name of the Company was
changed to Himalaya Granites Limited through resolution passed by the shareholders on February 28, 1994 and
fresh Certificate of Incorporation to this effect was issued on March 21, 1994. The registered office of the
Company is situated at Panchalam Village, Melpettai Post, Tindivanam, Tamil Nadu- 604307.
14.2 The Company currently has closed down manufacturing /production activities and the substantial part of the
income is earned by let out of part of its factory shades and office space.
14.4 Details of the changes in share capital of the company since incorporation:
Date of the Board
resolution authorizing
allotment
No. of equity
shares issued
% of total outstanding
equity share capital
Cumulative equity share capital
No. of equity
shares
Total
Amt.(Rs)
Class A
with
face
value of
Rs.
100/-)
Class B
with
face
value of
Rs. 10/-
Class A
with face
value of Rs.
100/-)
Class B
with face
value of
Rs. 10/-
Class A
with
face
value of
Rs.
100/-)
Class B
with face
value of
Rs. 10/-
11.12.1987 (date of
Incorporation)
5 0 0.0002 0 5 0 500
03.03.1989 1000 10000 0.03 0.33 1005 10000 200500
23.05.1989 0 212500 0.03 7.40 1005 222500 2325500
13
Date of the Board
resolution authorizing
allotment
No. of equity
shares issued
% of total outstanding
equity share capital
Cumulative equity share capital
No. of equity
shares
Total
Amt.(Rs)
25.09.1989 0 67450 0.03 9.65 1005 289950 3000000
21.03.1990 6495 129850 0.25 13.97 7500 419800 4948000
11.04.1990 0 5200 0.25 14.14 7500 425000 5000000
11.03.1993 0 302000 0.25 24.19 7500 727000 8020000
Vide resolution passed at EGM held on
28.02.1994, each 10 shares of class B of Rs. 10/
each were consolidated to one share of Rs. 100/-
each. Thereafter Class A & B shares were
merged into one class. Then all the shares of Rs.
100 each were subdivided into Ten shares of Rs.
10/- each the details of which are given below.
26.69 802000 8020000
19.07.1994 1203000 40.03 2005000 20050000
17.12.1994 100000 3.33 2105000 21050000
11.02.1995 900000 29.95 3005000 30050000
14.5 Details of the Board of Directors as on the date of PA:
Sl.
No.
Name, Qualification, occupation
and Age
Date of
Appointment/ re-
appointment
Designation Other Directorships
1 Name: Saurabh Mittal,
Qualification: B. Com,
Occupation: Business,
Age: 40 years
02.01.1996 Non-Executive
Chairman
1.Greenlam
Industries Limited
2.Prime Properties
Pvt Ltd.
3. Greenply Leasing
& Finance Pvt. Ltd
4. S. M.
SafeinvestPvt. Ltd.
5. Greenlam VT
Industries Pvt Ltd.
6. Greenlam Asia
Pacific Pte. Ltd.,
incorporated in
Singapore.
7. Greenlam
America Inc.,
Incorporated in USA
8. Greenlam Europe
(UK) Ltd.,
Incorporated in UK.
9. Greenlam Holding
Co. Ltd.,
Incorporated in
Thailand.
10. Greenlam Asia
14
Sl.
No.
Name, Qualification, occupation
and Age
Date of
Appointment/ re-
appointment
Designation Other Directorships
Pacific (Thailand) Co.
Ltd., Incorporated in
Thailand.
2 Name: Ramesh Kumar Haritwal,
Qualification:B.Com,
Occupation: Service, Age:52
years
31.05.2007 Managing Director
& CEO
NIL
3 Name: Mr. Beni Gopal Saraf,
Qualification:B.Com,
Occupation: Service, Age:68
31.01.2005 Independent
Director
Shriswasti Clothings
Pvt Ltd
4 Name: Mr. Mahesh Kumar
Malpani, Qualification:B.Com,
Occupation: Service, Age:62
26.03.2009 Independent
Director
Mitsan Agencies Pvt
Ltd, Showan
Agencies Pvt Ltd
5 Name: Mr. Pradip Manharlal
Domadia, Qualification:B.Com,
LLB, FCA & FCS, Occupation:
Service, Age:63
30.05.2012 Independent
Director
NIL
6 Name: Ms. Mathangi
Ramanujam, Qualification: MBA,
Occupation: Service, Age: 49
13.02.2015 Non- Executive
Director
NIL
14.6 The details of changes in the Board of Directors during the 3 years preceding the date of Public Announcement is
as under:
14.7 Person in Control of the Company are not concerned or interested either directly or indirectly for participating in
the Buyback. The Persons in Control have consented not to participate in the Buyback. Consequent to the Buyback
and depending upon the response to the Buyback offer, the holding of promoters would increase from the pre-
Buyback Shareholding of 57.14% to a maximum post-Buyback Shareholding of 74.49% (assuming that all the
7,00,000 Equity Shares are bought back in the proposed Buyback offer). The Buyback will not result in change in
control or otherwise affect the existing management structure of the Company.
15. FINANCIAL INFORMATION ABOUT THE COMPANY
15.1) Financials of the company for the Last 3 yrs:
Key Financials 30.09.2015
(unaudited)
Year ended 31
March,2015
(Audited figures)
Year ended 31
March, 2014
(Audited figures)
Year ended 31
march, 2013
(Audited figures)
Revenue from
operations
0 199900 147400 251550
Other income 4756468 9055258 7780355 11915436
Total Revenue 4756468 9255158 7927755 12166986
Changes in
Inventories of
Finished Goods,
0 205804 435269 394710
Name of Director Appointment/Resignation Effective
date
Reasons
Ms. Mathangi
Ramanujam
Appointment 13.02.2015 As per section 149 of the Companies Act
2013 read with Rule 3(Appointment &
Qualification of Directors) Rules 2014.
15
Key Financials 30.09.2015
(unaudited)
Year ended 31
March,2015
(Audited figures)
Year ended 31
March, 2014
(Audited figures)
Year ended 31
march, 2013
(Audited figures)
Stock in progress
and Stock in
Trade
Employees
Benefits expense
1069641 2197972 2377427 2248041
Depreciation 756735 1860576 2035211 2433130
Other expenses 2089888 3920062 4196405 4749555
Total
Expenditure
3916264 8184414 9044312 9825436
P/L before
exceptional items
and tax
840204 1070744 (1116557) 2341550
Exceptional Items 0 (1454232) 0 0
P/L Before tax 840204 (383488) (1116557) 2341550
Current Tax 0 0 0 0
Income tax for
earlier years
0 (4008580) 0 0
Release of
Deferred Tax
0 2045791 1190090 1100417
P/L for the years 840204 (2346277) 73533 3441967
Paid up equity
share capital
30050000 30050000 30050000 30050000
Reserves &
surplus
(excluding Capital
Reserve)
60760000 59920169 66606867 66533334
Net worth
(excluding Capital
Reserve)
90810000 89970169 96656867 96583334
Total Debt - - - -
16
Key Ratios 30.09.2015
(unaudited)
Year ended 31
March, 2015
Year ended 31 March,
2014
Year ended 31 March,
2013
Earnings per
equity shares
before
exceptional
items (basic &
diluted)
0.28 0.36 0.02 1.15
Earnings per
equity shares
after
exceptional
items (net of
tax) (basic &
diluted)
0.28 (0.78) 0.02 1.15
Book value per
equity shares
30.21 29.94 32.17 32.14
Return on Net
worth
excluding
Revaluation
Reserve (%)
0.93% (2.61%) 0.08% 3.56%
Debt/ Equity
Ratio
- - - -
The basis of computing the Key Ratios: Earnings per equity shares before exceptional items Net profit before exceptional items to equity shareholders/
Weighted average number of equity shares outstanding
during the year
Earnings per equity shares after exceptional items Net profit after exceptional items net of tax attributable to
equity shareholders/ Weighted average number of equity
shares outstanding during the year
Book value per equity shares (Paid up equity share capital + Reserves and surplus)/ No. of
equity shares at the end of the year
Return on Net worth excluding Revaluation Reserve Net profit after tax attributable to equity shareholders / Net
worth excluding revaluation reserve
Debt/ Equity Ratio Total Debt(excluding Working capital loans)/ Net worth
excluding Revaluation reserve
15.2 The Company will comply with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, wherever
and if applicable. The Company hereby declares that it has complied with Section 68(2)(c), 68(2)(d), 70(1) and
70(2) of the Companies Act.
15.3 Pursuant to buyback if there is any increment in the Promoters’ shareholding beyond the limits prescribed in
Regulation 3(2) of the SEBI (SAST) Regulations, the Promoters shall be exempted from making an Open Offer
under Regulation 10(4)(c) of the SAST Regulations 2011, as the Promoters of the Company are in compliant with
the proviso clauses i.e., they have not voted in favour of the Board resolution and Special resolution authorizing
the buyback. Further the resolution for approval of the buyback has been obtained through postal ballot and the
proposed increase in shareholding of promoters shall not result in acquisition / change in control of the Company.
17
16. STOCK MARKET DATA 16.1 The Company’s equity shares are listed on BSE only. The high, low and average market prices in the preceding
three financial years (April to March period) and the monthly high, low and average market prices for the six
months preceding the date of Public Announcement from May01, 2015 to October 31, 2015 and till November 23,
2015 is as follows:
Period High Date of High No. of
shares
traded
on the
date of
high
Low Date of
Low
No. of
shares
traded
on the
date of
low
Average
price
No. of
shares
traded in
that
period
Preceding 3 years
Financial year
2012-13
36.75 11.11.2013 1400 32 04.02.2013 4500 34.375 11,084
Financial year
2013-14
37 22.04.2014 10 12.45 14.12.2014 361 24.725 18370
Financial year
2014-15
13.47 15.01.2015 1896 7.53 15.07.2015 2855 10.5 102801
Preceding 6 months May 01, 2015 –
May 31, 2015
8.40 28.05.2015 120 8.00 22.05.2015 100 8.20 681
June 01, 2015-
June 30, 2015
8.82 09.06.2015 289 7.96 22.06.2015 1 8.39 815
July 01, 2015-July
31, 2015
8.35 15.07.2015 100 7.53 31.07.2015 1040 7.94 2855
August 01, 2015-
August 31, 2015
8.92 07.08.2015 62684 8.08 07.08.2015 62684 8.5 64184
September 01,
2015-September
30, 2015
8.49 24.09.2015 500 8.49 02.09.2015 100 8.49 600
October 01, 2015-
October 31, 2015
11.03 26.10.2015 300 8.91 06.10.2015 1000 9.97 1751
November 01,
2015- November
23, 2015
12.15 18.11.2015 100 11.58 04.11.2015 200 23.73 3531
Source : www.bseindia.com
16.2 The Closing Market price of the equity share of the Company on October 06, 2015 i.e., the last trading day prior to
the date of board meeting approving the buyback is Rs. 8.91/-.
17. DETAILS OF THE STATUTORY APPROVALS
17.1 The Buyback offer is subject to approval, if any required, under the provisions of Companies Act, FEMA, Buyback
Regulations, and/or such other rules and regulations for the time being in force.
17.2 Non- Resident Shareholders (excluding OCBs) permitted under general permissions under the consolidated
Foreign Direct Investment Policy issued by the Government of India read with applicable FEMA Regulations, are
not required to obtain approvals from RBI.
17.3 As of date, there is no other statutory or regulatory approvals required to implement the Buyback offer other than
the mentioned above. If any statutory or Regulatory approval becomes applicable subsequently, the Buyback
offer will be subject to such statutory or regulatory approval(s). In the event of any delay in the receipt of
statutory or regulatory approval, the changes in the time table of the Buyback offer, if any, shall be intimated to
the BSE.
18
18. DETAILS OF THE REGISTRAR TO THE BUYBACK
M/s. S.K. Infosolutions Pvt. Ltd.
Contact Person : Mr. Dilip Bhattacharya
34/1A, Sudhir Chatterjee Street Kolkata - 700 006,
Tel : (033)2219-4815/6797, Fax : (033) 2219-4815
Email id: [email protected]
THE TENDER FORM AND OTHER RELEVANT DOCUMENTS SHOULD NOT BE SENT TO THE COMPANY OR TO THE MANAGER
TO THE BUY BACK OFFER.
19. PROCESS AND METHODOLOGY FOR THE BUYBACK
19.1 The Company proposes to Buyback not exceeding 7,00,000 Equity Shares of the Company from all the existing
public shareholders/beneficial owners of Equity shares of the Company, on a proportionate basis, through the
Tender Offer route, at a price of Rs. 30/- per equity share for an aggregate amount of Rs. 2,10,00,000/- (Rupees
Two Crores Ten Lakhs Only). The maximum number of Equity shares proposed to be bought back represents
23.29% of the total number of equity shares in the paid-up equity share capital of the Company. The Buyback is in
accordance with the provisions contained in the Article 33 of the Articles of Association of the Company, Section
68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the “Companies Act”), the
Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the “Share Capital Rules”) and
in compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the
Buyback Regulations”). The aggregate Buyback Offer Price represents 23.34% of the fully paid-up equity share
capital and free reserves as per the audited accounts of the Company for the financial year ended March 31, 2015.
19.2 The aggregate shareholding of the Promoter Group/ Persons in Control is 17,17,050 equity shares which represents
57.14% of the existing equity share capital of the Company. In terms of the buyback regulations, under the Tender
Offer Route the Promoters of the Company have the option to participate in the proposed buyback. In this regard
the Promoter and Promoter Group of the Company have expressed their intention not to participate in the
Buyback and have irrevocably waived their rights as shareholders in respect of this Buyback Offer.
19.3 Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the Equity Shareholders upto
their entitlement, the aggregate shareholding of the Promoter Group/Persons in Control, post Buyback will
increase to 74.49% from 57.14% (Pre- Buyback shareholding) and the aggregate shareholding of the Public in the
Company shall decrease to 25.51% (Post Buyback shareholding) from 42.86% (Pre Buyback shareholding).
19.4 Record Date, ratio of Buyback and entitlement of each shareholder.
a. The Buyback Committee has fixed December 04, 2015 as the Record Date for the purpose of determining the
entitlement and the names of the shareholders who are eligible to participate in the Buyback offer.
b. The equity shares proposed to be bought back shall be divided into two categories:
• Reserved category for small shareholders (“Reserved Category”).
• General category for all shareholders other than small shareholders (“General Category”).
c. As defined in the Buyback Regulations, a “small shareholder” is a shareholder who holds equity shares having
market value, on the basis of closing price on BSE as on Record Date, of not more than Rs.2,00,000 (Rupees Two
Lacs only).
d. Based on the above definition, there are 1221 Small shareholders with aggregate shareholding of 313838 shares
as on the Record Date, which constitutes 10.44% of outstanding paid up equity share capital of the company and
44.83% of the equity shares which the Company proposes to Buyback as a part of this Buyback Offer.
e. In compliance with Regulation 6 of the Buyback Regulations, the reservation for small shareholders will be higher
of:
• 15% of the number of equity shares which the company proposes to buyback i.e., 15% of 7,00,000
Equity shares which works out to 1,05,000 Equity shares;
• The number of Equity shares entitled as per their holding as on the Record Date [i.e., (313838/
1287950) *700000] which works out to 1,70,403 equity shares (after rounding off for entitlement).
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e.1 All the outstanding Equity Shares less Promoter’s shareholding have been used for computing the Buy Back
Entitlement of Small Shareholders since the Promoters and Promoter Group does not intent to offer Equity Shares
held by them in the Buy Back.
e.2 Based on the above and in accordance with Regulation 6 of the Buy Back Regulations, 1,70,403 (Rounded off)
Equity Shares have been reserved for Small Shareholders. Accordingly, General Category for all other Equity
Shareholders shall consist of 5,29,597 Equity Shares.
f. Based on the above the entitlement ratio of Buyback for both categories is decided as below:
Category Entitlement ratio of buyback
Reserved Category 25 equity shares out of every 46 fully paid up equity shares as on
record date i.e., December 04, 2015
General Category 25 equity shares out of every 46 fully paid up equity shares as on
record date i.e., December 04, 2015
19.5 Fractional Entitlement
If the entitlement under Buyback, after applying the abovementioned ratios to the Equity Shares held on Record
Date, is not a round number (i.e. not in the multiple of 1 Equity Share) then the fractional entitlement shall be
round off to the next higher round number for computation of entitlement to tender Equity Shares in the Buyback
Offer, for both categories of Shareholders.
19.6 Basis of acceptance of equity shares validly tendered in the Reserved Category
Subject to the provisions contained in this Letter of Offer, the Company will accept the Shares tendered in the
Buyback Offer by the Small Shareholders in the Reserved Category in the following order of priority:
a) Full acceptance of Shares from Small Shareholders in the Reserved Category who have validly tendered their
Shares, to the extent of their Buyback Entitlement, or the number of Shares tendered by them, whichever is less.
b) Post the acceptance as described in paragraph 19.6 (a) and (b), in case there are any validly tendered unaccepted
shares in the Reserved Category (“Reserved Category Additional Shares”) and shares left to be bought back in
the Reserved Category, the Reserved Category Additional Shares shall be accepted in a proportionate manner
and the acceptances shall be made in accordance with the Buyback Regulations, i.e. valid acceptances per
Shareholder shall be equal to the Reserved Category Additional Shares by the Shareholder divided by the total
Reserved Category Additional Shares and multiplied by the total number of Shares remaining to be bought back
in Reserved Category. For the purpose of this calculation, the Reserved Category Additional Shares taken into
account for such Small Shareholders, from whom one Equity Share has been accepted in accordance with
paragraph 19.6 (b), shall be reduced by one.
c) Adjustment for Fractional results in case of proportionate acceptance, as described in Paragraph 19.6 (c), will be
made as follows:
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the
fraction would be rounded off to the next higher integer.
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiples of 1 and the Fractional acceptance is less than 0.50, then the Fraction
shall be ignored.
19.7 Basis of acceptance of equity shares validly tendered in the General Category
Subject to the provisions contained in this Letter of Offer, the Company will accept the shares tendered in the
Buyback Offer by shareholders (other than the small shareholders) in the General category in the following
order of priority:
a. Full acceptance of shares from shareholders in the General Category who have validly tendered their shares, to
the extent of their Buyback entitlement, or the number of shares tendered by them, whichever is less.
b. Post the acceptance as described in paragraph 19.7(a), in case there are any validly tendered unaccepted shares
in the General Category (“General Category Additional Shares”) and shares left to be bought back in General
Category, the General Category shares will be accepted in a proportionate manner and the acceptances shall be
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made in accordance with Buyback Regulations, i.e., valid acceptances per shareholders shall be equal to General
Category additional shares by the shareholders divided by the total General Category Additional shares and
multiplied by the total number of additional shares remaining to be bought back in the General Category.
c. Adjustment for Fractional Results in case of proportionate acceptance as described in paragraph 19.7(b) will be
made as follows:
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the
fraction would be rounded off to next higher integer.
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiple of 1 and the fractional acceptance is less than equal to 0.50, then the
fraction shall be ignored.
19.8 Basis of acceptance of equity shares between the two Categories
a. After acceptance of tenders, as mentioned in paragraph 19.6 and 19.7, in case there are any shares left to be
bought back in one category (“Partially Filled Category”) and there are additional unaccepted validly tendered
shares (“Further Additional Shares”) in the second category (“Over Tendered Category”), then the further
additional shares in the over tendered category shall be accepted in a proportionate manner i.e., valid
acceptances per shareholder shall be equal to further additional shares validly tendered by the shareholder in
the over tendered category divided by the total further additional shares in the over tendered category and
multiplied by the total shares left to be bought back in the partially filled category.
b. Adjustment for Fractional Results in case of proportionate acceptance as described in paragraph 19.8(b) will be
made as follows:
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiple of 1 and the fractional acceptance is greater than or equal to 0.50, then the
fraction would be rounded off to next higher integer.
• For any shareholder, if the number of additional shares to be accepted, calculated on a proportionate
basis is not in the multiple of 1 and the fractional acceptance is less than equal to 0.50, then the
fraction shall be ignored.
20. PROCEDURE FOR TENDER/OFFER AND SETTLEMENT
20.1 The Buyback is open to all public equity shareholders/ beneficial owners of the Company holding Equity Shares
either in physical and/or electronic form on the Record Date.
20.2 The Buyback shall be implemented using the “Mechanism for Acquisition of Shares through Stock Exchange”
notified by SEBI vide circular CIR/CFD/POLICYCELL/1/2015 dated April 13, 2015 and following the procedure
prescribed in the Companies Act and the Buyback Regulations and as may be determined by the board (including
the committee authorized to complete the formalities of the buyback) and on such terms and conditions as may
be permitted by law from time to time.
20.3 For implementation of the Buyback, the Company has appointed JRK Stock Broking Pvt Ltd. as the registered
broker of the Company (the “Company’s Broker”) through whom the purchases and settlement on account of the
Buyback would be made by the Company. The contact details of the Stock Broker are as follows:
Name: JRK Stock Broking Pvt Ltd
Address: Tobacco House, 1 Old Court House Corner, 3rd Floor, Room No 301, Kolkata – 700 001.
Tel No. 033-40174777, Fax No. 033-40174700, Email Id :[email protected]
Name of Contact Person: Mr. Birendra Kumar Jain
20.4 The Company will request BSE to provide the separate Acquisition Window to facilitate placing of sell orders by
shareholders who wish to tender Equity Shares in the Buyback. BSE would be the Designated Stock exchange for
this Buyback.
20.5 During the tendering period, the order for selling the shares will be placed in the Acquisition Window by eligible
sellers through their respective stock brokers during normal trading hours of the secondary market. The stock
brokers (“Seller Member(s)”) can enter orders for demat shares as well as physical shares.
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20.6 Procedure to be followed by Registered Equity Shareholders holding Equity shares in the dematerialized form:
a) Shareholders who desire to tender their Equity Shares in the electronic form under the Buyback would have to
do so through their respective Seller Member by indicating to their broker the details of Equity Shares they
intend to tender under the Buyback.
b) The Seller members would be required to transfer the number of Equity Shares by using the settlement number
and the procedure prescribed by the Clearing Corporation of India Ltd. (“Clearing Corporation”) for the transfer
of the Equity Shares to the Special Account of the Clearing Corporation before placing the bids/ orders and the
same shall be validated at the time of order entry.
c) The details of the Special Account of the Clearing Corporation shall be informed in the issue opening circular that
will be issued by BSE Limited/Clearing Corporation.
d) For Custodian Participant orders for demat Equity Shares early pay-in is mandatory prior to confirmation of order
by custodians. The custodian shall either confirm or reject the orders not later than the closing of the Trading
hours on the last day of the tendering period. Thereafter, all unconfirmed orders shall be deemed to be rejected.
For all confirmed Custodian Participant orders, order modification shall revoke the custodian confirmation and
the revised order shall be sent to the custodian again for confirmation.
e) Upon placing the bid, the Seller member shall provide a Transaction Registration Slip (“TRS”) generated by the
Exchange Bidding System to the Shareholder. TRS will contain the details of order submitted like Bid ID No.,
Application No., DP ID., Client ID, No. of equity Shares tendered etc.
20.7 Procedure to be followed by Registered Equity Shareholders holding Equity shares in the Physical Form:
a) Shareholders who are holding Physical Equity Shares and intend to participate in the Buyback will be required to
approach the Seller Member along with the complete set of Documents for verification procedures to be carried
out including the i) original share certificate(s), ii) valid share Transfer Form(s) duly filled and signed by the
transferors (i.e. by all registered shareholders in same order and as per the specimen signatures registered with
the Company) and duly witnessed at the appropriate place authorizing the transfer in favour of the Company, iii)
self-attested copy of the shareholder’s PAN Card, iv) any other relevant documents such as Power of Attorney,
corporate authorization (including board resolution/specimen signature), notarized Copy of Death Certificate
and succession certificate or probated will, if the original shareholder has deceased, etc., as applicable. In
addition, if the address of the Shareholder has undergone a change from the address registered in the register of
Members of the Company, the Shareholder would be required to submit a self-attested copy of address proof
consisting of any one of the following documents: valid Aadhar Card, Voter Identity card, bank statement not
older than two months or Passport.
b) Upon Placing the Bid, the Seller member shall provide a TRS generated by the Exchange Bidding System to the
shareholders. TRS will contain the details of order submitted like Folio No, Certificate No, Distinctive No., No. of
Equity Shares tendered etc.
c) After placement of bid, as mentioned in para 20.7.b above, the Seller Member must ensure delivery of tender
form, TRS, original Share Certificate(s), valid share transfer forms & other documents (as mentioned in paragraph
20.7.a above) either by Registered Post or Courier or Hand Delivery to the Registrar and Transfer Agent (“RTA”)
(at the address mentioned on the Cover Page) within 2 (two) days of closing date i.e., January 30, 2016 by 2 P.M.
The envelope should be super scribed as the “Himalaya Granites Limited Buyback Offer, 2015”. One copy of the
TRS will be retained by the RTA and it will provide acknowledgement of the same to the Seller Member.
d) Shareholders holding Physical Equity Shares should note that physical Equity shares shall not be accepted unless
the complete set of documents is submitted. Acceptance of the physical Equity Shares for Buyback by the
company shall be subject to verification as per the Buyback Regulations and any further directions issued in this
regard. RTA will verify the bids based on the documents submitted on a daily basis and till such time the BSE
Limited shall display such bids as “unconfirmed physical Bids”. Once, RTA confirms the Bids it will be treated as
“Confirmed Bids”.
20.7 Modification/ cancellation of the orders will be allowed during the Tendering period of the Buyback.
20.8 The cumulative quantity tendered shall be made available on BSE Limited’s website- www.bseindia.com
throughout the Trading session and will be updated at specific intervals during the tendering period.
20.10 METHOD OF SETTLEMENT
Upon Finalization of the basis of acceptance as per Buyback Regulations:
a. The settlement of Trades shall be carried out in the manner similar to the settlements of Trade in the secondary
markets.
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b. The Company will pay the consideration to the Company’s broker on or before the pay-in date for the
settlement. For Equity shares accepted under the Buyback, the Seller Members will receive the funds pay-out in
their settlement bank account.
c. The equity shares bought back in the demat form would be transferred directly to the escrow account of the
Company (the “Demat Escrow Account”) provided it is indicated by the Company’s Broker or it will be
transferred by the Company’s Broker to the Demat Escrow Account on receipt of the Equity Shares from the
Clearing and Settlement Mechanism of the Stock Exchange.
d. Excess Demat equity shares or unaccepted demat Equity Shares, if any, tendered by the Shareholders would be
returned to the Selling Member by Clearing Corporation in payout. Any excess physical Equity Shares pursuant to
Proportionate acceptance/rejection will be returned back to the shareholders directly by the RTA.
e. The Seller Member would issue Contract note & pay the consideration for the Equity Shares accepted under the
Buyback and return the balance unaccepted equity shares to their respective clients. Company Broker would also
issue a contract note to the Company for the equity shares accepted under the Buyback.
f. Shareholders who intend to participate in the Buyback should consult their respective Seller Member for
payment to them of any cost, charges and expenses (including brokerage) that may be levied by the Seller
Member upon the selling shareholders for Tendering Equity Shares in the Buyback (secondary market
transaction). The Buyback consideration received by the selling Shareholders from their respective Seller
Member, in respect of accepted equity shares, could be net of such costs, charges and expenses (including
brokerage) and the company accepts no responsibility to bear or pay such additional cost, charges and expenses
(including brokerage) incurred by the selling shareholders.
g. The Equity Shares lying to the credit of the Demat Escrow Account and the equity shares bought back and
accepted in physical form will be extinguished in the manner and following the procedure prescribed in the
Buyback Regulations.
20.11) In case of Non- Receipt of this letter of Offer
a. In case the equity shares are in Dematerialized form: An eligible person may participate in the offer by
downloading the Tender form from the website of the Company www.hgl.co.in or by providing their application
in writing on plain paper, signed by all joint shareholders, stating name and address of shareholder(s), number of
equity shares held as on the record date, Client ID Number, DP name/ID, beneficiary account number, and
number of equity shares tendered for the Buyback.
b. In case the Equity shares are in Physical Form: An eligible person may participate in the Offer by providing their
application in writing on plain paper signed by all joint shareholders stating name, address, folio number,
number of equity shares held, share certificate number, number of equity shares tendered for the Buyback offer
and the distinctive numbers thereof, enclosing the Original share certificate(s), copy of Equity shareholder(s)
PAN card(s) and executed share transfer form in favour of the Company. The transfer form SH-4 can be
downloaded from the Company’s website www.hgl.co.in. Equity shareholders must ensure that the traded form,
along with the TRS and requisite documents (as mentioned in paragraph 20.7.(a), reach the RTA before 2.00 PM
(IST) on January 30, 2016. If the signature(s) of the Equity Shareholders provided in the plain paper application
differs from the specimen signature(s) recorded with the Registrar of the Company or not in the same order
(although attested), such applications are liable to be rejected under this Buyback offer.
Please note that Eligible Person(s) who intend to participate in the Buyback will be required to approach their
respective Seller Member (along with the complete set of documents for verification procedures) and have to
ensure that their bid is entered by their respective Seller Member or broker in the electronic platform to be
made available by BSE before the Closing Date.
The Company shall accept Equity Shares validly tendered by the Shareholder(s) in the Buyback on the basis of
their shareholding as on the Record Date and the Buyback Entitlement. Eligible Person(s) who intend to
participate in the Buyback using the ‘plain paper’ option as mentioned in this paragraph are advised to confirm
their entitlement from the Registrar to the Buyback Offer, before participating in the Buyback.
20.12 Non receipt of this Letter of Offer by, or accidental omission to dispatch this Letter of Offer to, any Eligible
Person shall not invalidate the Buyback Offer in any way.
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20.13 The acceptance of the Buyback Offer made by the Company is entirely at the discretion of the Equity
shareholders of the Company. The Company does not accept any responsibility for the decision of any equity
shareholder to either participate or not to participate in the buyback offer. The Company will not be
responsible in any manner for any loss of share Certificate(s) and other documents during transit and the Equity
shareholders are advised to adequately safeguard their interest in this regard.
21. NOTES ON TAXATION
Disclosures in this paragraph are based on expert opinion sought by the Company.
SHAREHOLDERS ARE ADVISED TO CONSULT THEIR TAX ADVISORS FOR THE APPLICABLE TAX PROVISIONS
INCLUDING THE TREATMENT THAT MAY BE GIVEN BY THEIR RESPECTIVE ASSESSING OFFICERS IN THEIR CASE,
AND THE APPROPRIATE COURSE OF ACTION THAT THEY SHOULD TAKE. THE COMPANY DOES NOT ACCEPT
ANY RESPONSIBILITY FOR THE ACCURACY OR OTHERWISE OF SUCH ADVICE.
Given below is a broad summarization of the applicable sections of the Income-tax Act, 1961 relating to
treatment of income-tax in case of buyback of listed equity shares on the stock exchange, which is provided only
as a guidance
21.1 CLASSIFICATION OF SHARES AND SHAREHOLDERS
a) Based on the provisions of the Income Tax Act, shares can be classified under the following two
categories:
i). Shares held as investment (Income from transfer taxable under the head “Capital Gains”)
ii). Shares held as stock-in-trade (Income from transfer taxable under the head “Profits and Gains from
Business or Profession”)
b) Based on the provisions of the Income Tax Act, shareholders can be classified under the following categories:
i) Resident Shareholders being:
• Individuals, HUF, AOP and BOI
• Others
ii) Non- Resident shareholders being:
• NRIs
• FIIs
• Others: Company; other than company
21.2) SHARES HELD AS INVESTMENT
a) For Non-Residents, taxability of capital Gains would be subject to beneficial provisions of applicable DTAA
b) The taxability as per the provisions of the Income Tax Act is discussed below.
c) Nature of Capital Gains as per the provisions of the Income Tax Act
As per the provisions of the Income Tax Act, for the purpose of determining as to whether the capital gains are
short term or long term in nature:
i) Where a capital asset, being listed equity shares of the company being bought back, is held for a period of
less than or equal to 12 months prior to the date of transfer, the same shall be treated as a short term
capital asset, and the gains arising therefrom shall be taxable as short term capital gains (STCG).
ii) Similarly, where the listed equity shares are held for a period of more than 12 months prior to the date of
transfer, the same shall be treated as a long- term capital asset, and the gains arising therefrom shall be
taxable as long-term capital gains (LTCG).
d) Capital Gains on Buyback of shares are governed by the provision of Section 46A of the Income Tax Act. As
per the provisions of Section 46A, Buyback of shares held as Investment, would attract capital gains in the
hands of shareholders as per the provisions of Section 48 of the Income Tax Act.
Buyback of Shares through a Recognized Stock exchange
(b)(i) Where transaction for transfer of such equity shares (i.e buyback) is entered into through a recognized
stock exchange and such transaction is chargeable to Securities Transaction Tax (STT), the taxability is as
under (for all categories of shareholders):
a) LTCG arising from such transaction would be exempt under Section 10(38) of the Income tax Act;
and
b) STCG arising from such transaction would be subject to tax @ 15% under section 111A of the
Income tax Act.
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Further, in case of resident Individual or HUF, the benefit of maximum amount which is not chargeable to
income tax is considered while computing the tax on such STCG.
In addition to the above STCG tax, Surcharge, Education Cess and Secondary and Higher Education CESS
are leviable as under:
• In case of foreign companies and FIIs: Surcharge @ 5% is leviable where the total income
exceeds Rs. 10 crores and @ 2% where the total income exceeds Rs. 1 crore. Education Cess @
2% and Secondary and Higher Education Cess @ 1% is leviable in all cases.
• In case of other non resident assessees (ie other than foreign companies): Surcharge @ 12% is
leviable where the total income exceeds Rs. 1 crore. Further, Education Cess @ 2% and
Secondary and Higher Education Cess @ 1% is leviable in all cases.
• In case of domestic companies: Surcharge @ 12% is leviable where the total income
exceeds Rs. 10 crores and @ 7% where the total income exceeds Rs. 1 crore is leviable in all
cases.
• In case of resident assesses (ie other than domestic companies): Surcharge @ 12% is leviable
where the total income exceeds Rs. 1 crore. Also, Education Cess @ 2% and Secondary and
Higher Education Cess @ 1% is leviable.
21.3) SHARES HELD AS STOCK IN TRADE
a) If the shares are held as stock-in-trade by any of the Shareholders of the Company, then the gains would
be characterized as business income. In such a case, the provisions of section 46A of the Income Tax Act
would not apply.
b) Resident Shareholders
i) For individuals, HUF, AOP, BOI, profits would be taxable at slab rates.
ii) For persons other than individuals, HUF, AOP, BOI profits would be taxable @ 30%.
No benefit of indexation by virtue of period of holding would be available in any case. In addition to the
above, in the case of domestic companies, Surcharge @ 12% is leviable where the total income exceeds Rs.
10 crores and @ 7% where the total income exceeds Rs. 1 crore. In all other cases, Surcharge @ 12% is
leviable where the total income exceeds Rs. 1 crore. Education Cess @ 2% and Secondary and Higher
Education Cess @ 1% is leviable in all cases.
c) Non- Resident Shareholders
i) For Non Residents, taxability of profits as business income would be subject to beneficial provisions of
applicable DTAA.
ii) Where DTAA provisions are not applicable:
• For non-resident individuals, HUF, AOP, BOI, profits would be taxable at slab rates.
• For foreign companies, profits would be taxed in India @ 40%
• For other non-Resident shareholders, such as foreign firms, profit would be taxed @ 30%
In addition to the above, in the case of foreign companies, Surcharge @ 5% is leviable, where the total
Income exceeds Rs. 10 Crores and @ 2% where the total Income exceeds Rs. 1 crores. In all the other
cases, Surcharge @ 12% is leviable where the total income exceeds Rs. 1 Crores. Education Cess @ 2%
and Secondary and Higher Education Cess @ 1% is leviable in all cases.
21.4) TAX DEDUCTION AT SOURCE
a) In case of Resident Shareholders
i) In absence of any specific provision under the Income Tax Act, the Company shall not deduct tax on the
consideration payable to resident shareholders pursuant to the said Buyback.
b) In case of Non- Resident Shareholders
i) Since the buyback is through the stock exchange, the responsibility of discharge of the tax due on the gains (if
any) is on the non-resident shareholder. It is therefore recommended the non-resident shareholder may
consult their custodians/ authorized dealers/ tax advisors appropriately.
21.5) THE TAX RATES AND OTHER PROVISIONS MAY UNDERGO CHANGES
22. DECLARATION BY THE BOARD OF DIRECTORS
Declaration as required under Clause (ix) and (x) of the Schedule II, Par A to the Securities and Exchange Board of
India (Buyback of Securities) Regulations, 1998, as under:
i) The Board of Director Confirms that are no defaults subsisting in repayment of deposits, redemptions of
debentures or preference shares or repayment of term loans to any financial institutions or banks.
ii) The Board of Directors confirm that based on a full enquiry conducted into the affairs and prospects of
the Company and taking into account all the liabilities including prospective and Contingent liabilities
payable as if the Company were being wound up under the companies Act, the board of Directors have
formed an opinion that
a) that immediately following the date of the Letter of Offer, there will be no grounds on which the
Company can be found unable to pay its debts;
25
b) as regards its prospects for the year immediately following the date of the Letter of Offer, approving
the Buyback and having regards to the Board’s intentions with respect to the management of the
Company’s business during that year and to the amount and character of the financial resources,
which will, in the their view, be available to the Company during that year, the Company will be able
to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of
one year from the date of the Letter of Offer, as the case may be;
This declaration is made and issued by the Buyback Committee (under the authority of the board of
Directors) in terms of the Resolution passed at the meeting held on November 19, 2015.
For and on behalf of the Board of Directors of Himalaya Granites Limited
Sd/-
Ramesh Kumar Haritwal
Compliance Officer and Managing
Director & CEO
Sd/-
Mathangi Ramanujam
Director
23. AUDITORS CERTIFICATE The text of the Report dated 10.10.2015 received from M/s. D. Dhandaria &Company; the Statutory Auditors of
the Company, addressed to the Board of Directors of the Company is reproduced below:
To,
The Board of Directors,
Himalaya Granites Limited,
Panchalam Village, Melpettai Post, Tindivanam,
Tamilnadu-604 307,
Sub: Proposed Buyback Offer of Equity Shares of Himalaya Granites Limited (the “Company”)
Dear Sir,
At the request of the Company, vide their letter dated 05.10.2015, we the statutory auditors of the Company,
having its registered office at Panchalam Village, Melpettai Post, Tindivanam, Tamilnadu- 604 307 are providing
the certificate on the proposed Buyback of Equity Shares of the Company. The Certificate is required for the
purpose of inclusion of the same a) in the explanatory statement to be annexed to the notice for general
meeting through postal ballot for authorizing buyback by passing a special resolution and b) in the Public
Announcement and Letter Of Offer for buyback of its share by the Company and for submission to the Securities
and Exchange Board of India (SEBI).
1) We have been informed that the board of directors of the Company in their meeting held on 10.10.2015
have decided to Buyback shares as allowed under Section 68 and 70(1) of the Companies Act, 2013, as
amended from time to time (the “Act”) at a price of Rs. 30/- per share. In terms of the requirements of
Clause (xi) of Schedule II, Part A of the Securities and Exchange Board of India (Buyback of Securities),
Regulations, 1998 as amended from time to time, (hereinafter called the “Buyback Regulations”) we
confirm as under:
a) We have enquired into the state of affairs of the Company in relation to its audited accounts
for the year ended March 31, 2015.
b) The amount of permissible capital payment towards Buyback of Equity Shares (including Premium) if any,
as ascertained below in our view has been properly determined in accordance with Section 68 of the
Companies Act, 2013.
Particulars Amount (Rs)
Issued, Subscribed and Paid-up share capital as at March 31, 2015 3,00,50,000
Free reserves as at March 31, 2015
-General Reserve 6,30,94,248
-Balance in Statement of Profit & Loss (2,31,74,079)
Securities Premium Account 2,00,00,000
Total 8,99,70,169
Maximum amount permissible for buy-back i.e. 25% of the total paid-up
capital and free reserves
2,24,92,542
2) The opinion expressed by the directors of the Company in the Declaration as to any of the matters
mentioned in the declaration as per Schedule II- Clause (x) of the rules is reasonable;
3) The Board of Directors of the Company is responsible for :
i) Properly determining the amount of capital payment for buyback;
26
ii) making a full enquiry into the affairs and prospects of the Company and forming the opinion that the
Company will not be rendered insolvent within a period of one year from the date on which the results
of the postal ballot for buyback will be declared.
4) Based on the representation made by the Company and other information and explanations given to us,
which to the best of our knowledge and belief were necessary for this purpose, we report that we are not
aware of anything to indicate that the opinion expressed by Directors in the declaration as to any of the
matters mentioned in the declaration as approved by the Board of Directors in their meeting held on
10.10.2015 is unreasonable in the circumstances in the present context.
5) The completeness of the above details is the responsibility of the Company’s management. Our
responsibility is to perform the above mentioned procedures. We have performed the above mentioned
procedures in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes
issued by the Institute of Chartered Accountants of India (“ICAI”). The above mentioned procedures
include examining evidence supporting the particulars in the statement on a test basis. Our procedures do
not include verification of compliance with any Act, guidance, notifications or any other statute thereof.
Our scope of work did not involve us performing audit tests for the purpose of expressing an opinion of
fairness or accuracy of any financial information. We have not performed an audit, the objective of which
would be the expression of an opinion on the specified elements, accounts or items thereof, for the
purpose of this report. Accordingly, we do not express such opinion. Apart from the compliance with
amount of permissible capital payment computed as above, we make no representations regarding
compliance with the Company Law or any other statutory requirements.
6) Compliance with the provisions of the Act and Rules is the responsibility of the Company’s management.
Our responsibility is to verify the factual accuracy based on our review procedures. This report is intended
solely for your information and for the purpose of inclusion of the same a) in the explanatory statement to
be annexed to the notice for general meeting through postal ballot for authorizing buyback by passing a
special resolution and b) in the Public Announcement and Letter Of Offer for buyback of its share by the
Company and is not to be used, referred or distributed for any other purpose without our written consent.
Nothing contained in this report should be construed to be representation as to the future. We do not
accept or assume any liability or duty of care for any other purpose, save where expressly agreed by our
prior consent in writing.
For D Dhandaria & Company
Chartered Accountants
ICAI Firm Registration No. 306147E
(Dindayal Dhandaria)
Partner
Place: Tinsukia Membership Number: 010928
Date: 10.10.2015
27
24. DOCUMENTS FOR INSPECTION
The following material documents are available for inspection by the shareholders of Himalaya Granites Limited at
their Registered Office at Panchalam Village, Melpettai Post, Tindivanam, Tamil Nadu-604 307 from to 11AM to
1 PM on any day except Saturdays, Sundays and public holidays, during the Tendering Period.
a) Copy of the Certificate of Incorporation and the Memorandum and Articles of Association of Himalaya
Granites Limited.
b) Copy of the Annual Reports of Himalaya Granites Limited for the year ended March 31, 2013, March 31,
2014 and March 31, 2015.
c) Copy of the Resolution passed by the Board of Directors at its meeting held on October 10, 2015
approving proposal for Buyback.
d) Copy of the Certificate dated October 10, 2015 received from M/s D Dhandaria & Company, the
Statutory Auditors of the company, in terms of Clause (xi) of Part A to Schedule II of the Buyback
Regulations.
e) Copy of the Postal Ballot notice to the equity shareholders dated October 10, 2015, along with the
Explanatory Statement.
f) Copy of the Special Resolution passed by the equity shareholders of the Company by Postal Ballot, the
results of which were announced on November 19, 2015.
g) Copy of the Declaration of Solvency and an Affidavit in form SH-9 as prescribed under section 68(6) of
the Companies Act.
h) Copy of the Escrow Agreement
i) Copy of the Certificate from CA
j) Copy of the Public Announcement published in the newspapers on November 23, 2015.
k) Copy of SEBI observation letter reference no. CFD/DCR1/OW/35687/2015 Dated December 29, 2015.
25. DETAILS OF THE COMPLIANCE OFFICER
Mr. Ramesh Kumar Haritwal
Address: 1501-1505, NarainManzil
23, Barakhamba Road, New Delhi - 110001
Tel no. 011-42791324, Email id: [email protected]
26. DETAILS OF THE REMEDIES AVAILABLE TO THE SHAREHOLDERS/BENEFICIAL OWNERS a) In case of any Grievance related to the buyback Offer (i.e. non receipt of the buyback consideration, Share
certificate, Demat Credit, etc) the investors can approach the compliance officer/or the Manager to the
buyback Offer/or The Registrar to the buyback for redressal.
b) If the Company makes any default in complying with the provisions of Section 68(6) of the companies Act or
any rules made thereunder or any regulation or under clause (f) of sub- section (2) of the Companies Act,
the company or any officer of the Company who is in default shall be punishable for a term and its limit or
with a fine or its limit or with both in terms of Companies Act.
c) The address of the Concerned office of the Registrar of Companies is as follows: Registrar of Companies, Chennai Tamil Nadu
Block No.6,B Wing 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai - 600034
27. DETAILS OF THE INVESTOR SERVICE CENTRES
M/s. S.K. Infosolutions Pvt. Ltd.
34/1A, Sudhir Chatterjee Street
Kolkata - 700 006, Tel : (033)2219-4815/6797, Fax : (033) 2219-4815
Email id: [email protected]
28. MANAGER TO THE BUYBACK OFFER
VC CORPORATE ADVISORS PRIVATE LIMITED
SEBIREGN NO: INM000011096
(Contact Person: Mr. Anup Kumar Sharma)
31 Ganesh Chandra Avenue, 2nd
Floor, Suite No –2C, Kolkata-700 013
Phone No : (033) 2225-3940
Fax : (033) 2225-3941
Email: [email protected]
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29. DECLARATION BY THE DIRECTORS REGARDING AUTHENTICITY OF THE INFORMATION IN THE OFFER
DOCUMENT
As per Regulation 19(1)(a) of the Buyback regulation, the Board of Directors of the Company accept full
responsibility for the information contained in this Letter of Offer. The letter of Offer is issued under the
authority of the Board of Directors by the Buyback Committee through resolution passed by the buyback
committee meeting held on November 19, 2015.
For and on behalf of the Board of Directors of Himalaya Granites Limited Sd/-
Ramesh Kumar Haritwal
Compliance Officer and Managing Director
&CEO
Sd/-
Mathangi Ramanujam
Director
Date: 01.01.2016 Place: Kolkata