KAIRA CAN COMPANY LIMITED
DEFINITIONS \ ABBREVIATIONS
ACT ................................................ COMPANIES ACT, 1956 AND SUBSEQUENT AMENDMENTS THEREOF
ARTICLES ..................................... ARTICLES OF ASSOCIATION OF THE COMPANY
AY ................................................... ASSESSMENT YEAR
BOARD .......................................... BOARD OF DIRECTORS OF THE COMPANY
BSE ................................................ THE STOCK EXCHANGE, MUMBAI
COMPANY/ISSUER/KCCL ............ KAIRA CAN COMPANY LIMITED
CAF ................................................ COMPOSITE APPLICATION FORM
CDSL ............................................. CENTRAL DEPOSITORY SERVICES (I) LTD
CLIENT ID ..................................... BENEFICIARY ACCOUNT NUMBER WITH A DEPOSITORY
PARTICIPANT
DMRC ............................................ DELHI METRO RAILWAY CORPORATION
EPS ................................................ EARNINGS PER SHARE
FEMA ............................................. FOREIGN EXCHANGE MANAGEMENT ACT
FII ................................................... FOREIGN INSTITUTIONAL INVESTORS
FY ................................................... FINANCIAL YEAR
GCMMF LTD ................................. GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LIMITED
HUF ................................................ HINDU UNDIVIDED FAMILY
IT ACT ........................................... INCOME TAX ACT, 1961 AND SUBSEQUENT AMENDMENTS
THEREOF
LOF/LOO ....................................... LETTER OF OFFER
MMPD ............................................ MILK AND MILK PRODUCTS DIVISION AT TURBHE, NAVI MUMBAI
NAV ................................................ NET ASSET VALUE
NSDL ............................................. NATIONAL SECURITIES DEPOSITORY LIMITED
NRIs ............................................... NON RESIDENT INDIANS
OCBs ............................................. OVERSEAS CORPORATE BODIES
PAN/GIR ......................................... PERMANENT ACCOUNT NUMBER/ GENERAL INDEX REGISTER
PAT ................................................. PROFIT AFTER TAX
PBIDT ............................................ PROFIT BEFORE INTEREST DEPRECIATION AND TAX
PBT ................................................ PROFIT BEFORE TAX
RBI ................................................. RESERVE BANK OF INDIA
RECORD DATE ............................. THE DATE TO BE DECLARED BY THE BOARD OF DIRECTORS IN
CONSULTATION WITH THE MUMBAI STOCK EXCHANGE TO
DETERMINE THE ELIGIBILITY OF MEMBERS FOR THE RIGHTS
EQUITY SHARES.
R&TA/REGISTRAR ........................ REGISTRAR AND TRANSFER AGENT / REGISTRAR TO THE ISSUE
ROC ............................................... REGISTRAR OF COMPANIES, MAHARASHTRA, MUMBAI
Rs. .................................................. INDIAN RUPEES, THE LAWFUL CURRENCY OF INDIA.
SEBI ............................................... SECURITIES AND EXCHANGE BOARD OF INDIA
SEBI (SAST) REGULATIONS ....... SECURITIES & EXCHANGE BOARD OF INDIA (SUBSTANTIAL
ACQUISITION OF SHARES & TAKEOVERS) REGULATIONS, 1997
1
KAIRA CAN COMPANY LIMITED
RISK FACTORS & MANAGEMENT’S PERCEPTION THEREOF
Internal Risk Factors
1.
The requirement of the funds are Company’s own estimates and have not been appraised by any
Financial Institution or Bank. The deployment of the funds collected from this Issue will be at the
discretion of the Company’s Management.
Management’s Perception:
The requirement for the funds are prepared by the professionals employed by the Company and
deliberated in detail by the Senior Management of the Company. Since the appraisal of the plans and
projections are not mandatory in respect of the proposed offer of Rights Equity Shares, the plans and
projections are not subjected to any appraisals.
2.
There are 59 cases pertaining to various Civil, Taxation and Labour laws in which company is one of the
parties to the disputes. Besides, the company has filed 2 criminal prosecutions for dishonour of cheques
and has also initiated a declaratory suit in respect of its Registered Office situated at Tiecicon House,
Dr.E.Moses Road, Mumbai – 400 011.
The following is a consolidated list of litigations and disputes concerning the Company :
List of litigations and disputes concerning the Company
Civil Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1.
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
Special Civil
Judge (S.D.)
Anand
07.05.04
Suit filed by KCCL to recover
dues for the goods sold.
Summons are issued. The matter
is at hearing stage.
21,06,445/-
2.
KCCL
Vs.
M/s. Canara Canning & Ors.
Joint Civil
116/2003
Judge (S.D.)
Court, Anand.
25.09.03
Suit filed by KCCL to recover
dues for the goods sold.
The Court has passed an ex-parte
order in favour of the company
ordering the respondents to pay
the dues. Decree has been drawn
and transferred to Udupi Court.
3,21,978/-
3
KCCL
Vs.
National Insurance Company.
State
Commission
70/2001
20.02.01
Complaint filed by KCCL to
recover damages to the
insured goods.
Stage of Interim hearing and
amendments to the complaint filed
is over. Now the case is to come
up for final hearing.
10,61,886/-
4.
Kaira Can Company Ltd.
Vs.
Barkha & Others.
High Court,
Mumbai
496/2001
12.02.01
KCCL packs and distributes
Amul Milk. Case filed by KCCL
for restraining the defendants
under the Trade Marks Act from
packing and selling milk under
the brands AMAN and AMAN
TAAZA since these brands are
deceptively similar with brands
AMUL and AMUL TAAZA.
Notice is to be served on some of
the defendants who do not have
fixed address.
Interim Ex-parte order is passed
in our favour.
Suit to
restrain the
usage of
Trademark
and hence
no
pecuniary
value.
5.
KCCL
V/s.
Eastern Overseas Ltd.
High Court,
Mumbai
3879/98
14.08.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
17,70,199/-
6.
KCCL
V/s.
Vishal Agritech Ltd.
High Court,
Mumbai
4542/98
31.07.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
4,41,500/-
7.
KCCL
V/s.
Ravileela Dairy Products Ltd.
High Court,
Mumbai
3824/98
31.07.98
Suit filed by the Company to
recover the dues for goods
sold.
Matter has not reached on the
Board.
4,86,433/-
2
58/2004
Amount
(Rs.)
KAIRA CAN COMPANY LIMITED
8.
KCCL
V/s.
New India Assurance Co. Ltd.
Consumer
Disputes
Redressal
Forum,
High Court,
Mumbai.
2730/97
20.06.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not reached on the
Board.
43,44,000/-
9.
KCCL V/s.
1) APL Korea –
American President
Lines Limited,
2) APL Agencies Pvt. Ltd.,
New India Ass. Co. –
Insurance Claim
High Court,
Mumbai
2783/97
30.04.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not yet reached the
Board.
9,22,713/-
10. KCCL
Vs.
ION Exchange (India) Ltd.
& Others.
Small Causes 648/97
Court No.13
20.03.97
Suit filed by Kaira Can Company The matter is to reach the hearing
Ltd seeking declaration that the stage.
Company is a legal tenant in
respect of its Registered Office
premises.
11. KCCL
Vs.
Vakratunda Distributors.
High Court,
Mumbai
05.10.96
Suit filed by the Company to
Ex-parte decree awarded in
recover the dues for goods sold. favour of the company to be
executed.
4718/96
Declaratory
Suit and
hence no
pecuniary
value.
3,09,494/-
There are two other matters in which the Company is a party involving a sum of Rs. 83,756/-.
Criminal Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1.
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
Spl. Civil
Judge (S.D.),
Anand
441/2004
442/2004
443/2004
444/2004
496/2004
497/2004
20.01.04 Six cheques issued by the
20.01.04 defendants for payment for
20.01.04 goods sold by KCCL to them
20.01.04 were dishonoured. KCCL filed
23.01.04 six complaints u/s 138 of
23.01.04 Negotiable Instruments Act,
1881 for dishonour of cheques.
Summons served. The case is
pending awaiting hearing.
2.
KCCL
Vs.
Canara Canning.
(Two Cases)
Metropolitan
Magistrate’s
Court at
Ballard Pier,
Mumbai.
(i) 541/S/
2003
and
(ii) 542/S/
2003
26.6.03
Cheques worth Rs. 1,50,000/and Rs. 1,71,978/- respectively
issued by M/s. Canara Canning
to the company for cans
supplied to them were
dishonoured. The company has
filed criminal complaints u/s 138
of Negotiable Instruments Act,
1881 through Company
Secretary.
Summons served upon the party.
The matter is to come up for
hearing.
Amount
(Rs.)
22,01,865/-
3,21,978/-
Central Excise Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1
KCCL, Anand
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT,
W.R.,
Mumbai
Case File
No. 43
17.11.99
Duty credited for goods
purchased not allowed and
asked to reverse. The Company
reversed the duty under protest
and filed the case.
Appeal pending with CESTAT.
2
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL,
Himmatnagar.
Commissioner Case File
Central
No. 37
Excise
Ahmedabad
III
12.03.99
Alleged less payment of Excise
Duty amount. Department has
filed the case.
Show Cause Notice is replied
Hearing took place on 16.07.99.
Decision awaited.
Amount
(Rs.)
1,30,849/-
23,39,528/-
3
KAIRA CAN COMPANY LIMITED
3
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL, Himmatnagar.
Commissioner Case File
Central
No. 36
Excise,
Ahmedabad
25.02.99
CENVAT availed on components
deduction not allowed from the
assessable value of final
products.
Show Cause Notice is replied.
The case is pending for final
disposal.
34,10,016/-
4
KCCL,
Anand.
Vs.
Assistant Commissioner
Central Excise, Anand
Commissioner Case File
(Appeals)
No. 20
Central
Excise,
Mumbai.
29.01.99
Duty paid OTS Cans despatched
from Anand rejected by customer
and returned to the Company.
The same were off loaded in a
godown outside the factory.
Repaired OTS Cans were
despatched to customer under
Excise Invoice.
Stay & appeal pending with
Appellate Commissioner,
Ahmedabad. Stay is not
received.
2,85,721/plus
30,000/interest
3,15,721/-
5
KCCL,
Kanjari
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT
W.R.,
Mumbai
Case File
No. 13
29.01.99
On account of shortage of input
compared to output in 1996,
following duties and penalties
levied:1) Duty - Rs. 6,16,666/2) Penalties- Rs. 2,00,000/-
1) Duty paid - Rs. 6,16,666/2) Penalties on the Managing
Director and the employees.
Rs. 2,00,000/- paid.
3) For Penalty of Rs. 3,00,000/on the Company,
unconditional stay granted by
CESTAT on 27.04.04.
Main appeal pending.
11,16,666/-
6
Commissioner Central
Excise, Vadodara
Vs.
KCCL, Anand.
Commissioner Case File
of Central
No. 10
Excise,
Vadodara.
14.12.96
Demand of duty on lacquered
tinplate sheets under Rule 57G
of Central Excise Act and
Customs Act.
The Company has filed its
representation. The matter is at
the hearing stage.
28,32,848/-
Sales Tax Matters
Sr. Parties
No.
Sales Tax Officer, Anand
Vs.
KCCL
Adjudicating Case No. Date of
Authority
filing
Issues
Status
S.T.O.,
Mehsana.
Rejection by Sales Tax Dept. of
Sales Tax form ‘H’ given by Merry
Weather Foods Products Ltd. for
the year 1991-92.
Pending Last Hearing on
10.10.2002
04.09.97
Amount
(Rs.)
1,85,862/-
There are two other matters on Sales Tax involving a total sum of Rs. 72,336/-.
Income Tax Matters
Disputes under Income Tax Act lying with Commissioner of Income Tax (Appeals) amounts to Rs. 80,40,214/- out of which Rs. 58,66,996/
- are paid / adjusted and Net Balance in this respect is Rs. 21,73,218/-.
Labour Law Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
1
Civil Court
Anand
KCCL
Vs.
Krishna Corporation, Anand
4
Sp.Civil
Appl.
102/00
Issues
10.2.2000 KCCL had paid to the Contractor,
compensation including Provident
Fund and Bonus amount for
distribution to the workers. The
Contractor neither deposited the
Provident Fund amount nor paid
the Bonus to the Contract Worker.
KCCL has sued the Contractor to
recover such undeposited / unpaid
amount. The Contractor in his
counter claim has asked for refund
of his Security Deposit.
Status
The case is to reach
evidence stage.
Amount
(Rs.)
KCCL’s
claim Rs.
10,24,421/Krishna
Corpn.’s Rs.
8,50,000/Claim
KAIRA CAN COMPANY LIMITED
2
Ramesh M & 138 Ors.
Vs.
KCCL & Others.
Labour
Court
Nadiad
Ref.119
to
257/2000
15.2.2000 The case is against the Labour
Contractor in which KCCL is made
a party. The Contract Workers
have alleged non-payment of their
dues and have filed a Joint
application.
The case has reached for
Contract Workers evidence
filing stage.
Rs.
17,32,20,095/-
Note:There are 36 other cases on labour law matters to which the Company is made a party. Out of these, 18 cases pertain to imposition
of fine by the Factory Inspector for non-issuance of Identity Cards to Casual and Contract Workers. The remaining cases are filed by
the Workers / employees who were dismissed for various reasons. The liability, if any, in respect of each of the above mentioned cases
is not expected to exceed Rs. 1 lakh. The total liability in respect of the above mentioned 36 cases is expected to be below Rs. 12 lakhs.
Management’s Perception:
The Company has consulted experts in various fields in relation to the cases/proceedings filed against or
by the Company. In view of the advises received from experts based upon the facts of each of the cases/
proceedings vis-à-vis the provisions of law, the stand taken by the Company is considered sound and
correct.
3.
The audited accounts for the financial year 2003-2004 exhibits contingent liability to the tune of
Rs.1,01,32,034/-.
Management’s Perception:
The contingent liabilities contained in the 41st Annual Report is in consonance with the norms stipulated
by accounting standards. The management of the Company does not envisage crystallization of such
other contingent liabilities. A sum of Rs. 72,65,945/- has been paid/ adjusted against such contingent
liabilities and net contingent liabilities amounting to Rs. 28,66,089/-.
External Risk Factors
1.
The prospects of Company’s business significantly depends upon the performance of GCMMF. As per
the agreement dated 04.04.03 between GCMMF and KCCL, the milk required for processing, packing
and distribution by the company under Amul brand name would be required to be sourced / procured /
purchased exclusively through GCMMF and that it would not pack any other milk either in it’s own brand
name or in any other brand name during the three year validity period of the said agreement. The
average of past financial years’ gross sales of the company to GCMMF is 14% to the average of the
company’s gross sales of its products during the said period of three years.
Management’s Perception:
The Company has been trading with the GCMMF since over a period of 40 years. GCMMF’s own
progress has been impressive. The management of the Company is of the opinion that GCMMF will
continue its progress and consequently the Company’s business will not bear any adverse impact on that
account. The agreement for processing, packing and distributing the milk was renewed in the past and
the management believes that the above mentioned agreement shall be renewed before its’ expiry period.
The management also expects to maintain the company’s gross sales of its products to at around 14%
of its gross sales to GCMMF.
2.
The Company imported tinplate (main raw material), stores and spares and capital goods worth
Rs.1711.34 lakhs during the financial year ended 31.03.2004. The Company faces a potential foreign
exchange risk at such imports.
Management’s Perception:
The Company imports tinplates, components and lacquer to partially meet its requirement of raw
materials and also to meet customer’s specifications. The major portion of the cans produced out of the
imported raw materials is exported (including deemed exports) and thus the potential foreign exchange
risk resulting out of import of raw materials is negated to a large extent by exports realisations. It may be
noted in this connection that the Company had exported cans (including deemed exports) to the tune of
Rs.1259.35 lakhs during the year ended 31st March, 2004.
5
KAIRA CAN COMPANY LIMITED
3.
Changes in government policy, particularly with respect to duties, as well as changes in laws could have
a bearing on the industry’s and the Company’s performance.
Management’s Perception:
This business risk is common and applicable to every organisation. However, since the Company is
engaged in more than one line of business, the impact of changes in government policies adversely
impacting one of its business will have relatively lower impact on the overall performance of the Company
due to the business mix.
4.
Poysha Industrial Company Ltd., the erstwhile parent organisation was ordered for liquidation by the
Bombay High Court in January, 1998.
Management’s Perception:
The Company does not have any investment in Poysha Industrial Company Ltd. and therefore there is no
financial impact on the Company resulting out of the liquidation of Poysha Industrial Co. Ltd.
5.
The Company’s shares can be said to be insignificantly traded on Mumbai Stock Exchange.
Management’s Perception :
The buying and selling of equity shares held by shareholders are purely subjective decisions and the
Company’s management does not have any control over buying and/or selling of shares and/or prices
and/or volume thereof.
HIGHLIGHTS OF THE ISSUE
1.
42 years old Company having diverse business interests.
2.
Earning per share of Rs.7.79 for the Financial Year ended 31st March, 2003 and Rs.6.12 for the year
ended 31st March, 2004.
3.
Company having track record for dividend payments continuously for the last 19 financial years with a
minimum dividend of 20% in 1995 and since 1996, a dividend of 25%.
4.
Strong business association with Gujarat Co-operative Milk Marketing Federation Ltd.
5.
The Company is recipient of the Tinplate Promotion Council’s award for Excellence-2003 and for largest
exporter (User Sector) as Deemed Exporter.
6
KAIRA CAN COMPANY LIMITED
KAIRA CAN COMPANY LIMITED
Regd. Office: Tiecicon House, Dr.E.Moses Road, Mumbai – 400 011. MAHARASHTRA.
www.kairacan.com
Anand Office: Post Box No.23, Kaira Can-GCMMF Complex, ANAND – 388 001. GUJARAT
Phone No: 5660 8711 (4 Lines), Fax : 5663 5401, E-mail : kairacan@bom5.vsnl.net.in
Dear Shareholder(s)
SUB: OFFER OF 48,533 EQUITY SHARES OF RS.10 EACH, FOR CASH AT A PREMIUM OF RS. 90 PER
SHARE, AGGREGATING RS. 48,53,300/- ON A RIGHTS BASIS, IN THE RATIO OF 1 (ONE) EQUITY
SHARE FOR EVERY 18 (EIGHTEEN) EQUITY SHARES HELD ON THE RECORD DATE.
The Board of Directors of the Company (hereinafter referred to as “The Board”), pursuant to the Special
Resolution passed at the Extra Ordinary General Meeting held on 11th March, 2004 and the Board Resolution
dated 12th February, 2004 have decided to offer 48,533 Equity Shares at Rs.10/- each for cash at a premium
of Rs.90 per Share aggregating to Rs. 48,53,300/- to the existing equity share holders of the Company on
rights basis in the ratio of 1 (one) equity share for every 18 (eighteen) equity shares held as on the Record
Date.
I.
GENERAL INFORMATION
LISTING
The equity shares of the Company are listed on the BSE. Applications have been made to the BSE for inprinciple approval for listing of the shares arising out of the Rights Issue. Application will also be made to BSE
for permission to deal in and for an official quotation in respect of the equity shares arising out of the present
Rights Issue. If permission to deal in and for an official quotation of the equity shares is not granted by any of
the stock exchanges mentioned in the offer document, the Company shall forthwith repay without interest all
monies received from the applicants. In case of delay, interest shall be paid in accordance with provisions of
Section 73 of the Act.
ISSUE PROGRAMME
The subscription list will open at the commencement of banking hours and will close at the close of banking
hours on the days as mentioned below:
ISSUE OPENS ON
:
Monday,
10th January, 2005
LAST DATE FOR RECEIVING APPLICATIONS FOR SPLIT FORMS
:
Monday,
24th January, 2005
ISSUE CLOSES ON
:
Tuesday, 8th February, 2005
ISSUE MANAGEMENT TEAM
A.
LEAD MANAGER TO THE ISSUE :
The size of the Rights Equity Issue being less than Rs.50 lakhs, it is optional for the Company to appoint
a Lead Manager. Accordingly, Company has not appointed any Lead Manager for the issue.
B. REGISTRAR TO THE ISSUE :
COMPUTECH SHARECAP LIMITED
(Unit: Kaira Can Company Limited)
147, Mahatma Gandhi Road,
Opp.Jehangir Art Gallery,
Fort, Mumbai – 400 023.
Ph.: 22671824-25-26. Fax: 22670380.
7
KAIRA CAN COMPANY LIMITED
C. BANKERS TO THE ISSUE:
CORPORATION BANK
Capital Market Branch
45, Nariman Bhavan, 227,
Backbay Reclamation,
MUMBAI – 400 021.
Ph. : 22841406 / 2764. Fax: 22843823.
D. COMPANY SECRETARY & COMPLIANCE OFFICER:
SHRI D. R. MEHTA
Tiecicon House, Dr.E.Moses Road, Mumbai – 400 011.
Phone No: 5660 8711 (4 Lines), Fax : 5663 5401,
Email : kairacan@bom5.vsnl.net.in
CREDIT RATING/DEBENTURE TRUSTEE:
This being a Rights Issue of Equity Shares, Credit Rating and appointment of Debenture Trustees is not
required.
BANKERS TO THE COMPANY :
BANK OF BARODA
Corporate Financial Services Branch,
Ballard Pier, MUMBAI – 400 001.
AUDITORS TO THE COMPANY :
C.C. CHOKSHI & CO.
12, Dr. A.B.Road, Opp. Shivsagar Estate,
Worli, Mumbai – 400 018.
Tel.: 56679000. Fax: 9000100.
UNDERWRITERS TO THE ISSUE:
The Proposed Issue of Equity Shares is not underwritten.
APPLICATION IN FICTITIOUS NAMES
Attention of the applicants is specifically drawn to the provisions of Sub-section (1) of Section 68A of the
Companies Act, 1956 which is reproduced below:
“Any person who(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares
therein, or
(b) otherwise induces a Company to allot or register any transfer of shares therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five
years.”
ALLOTMENTS / REFUNDS
All Share Certificates/ Letters of Allotment and refund orders of value over Rs.1500/- will be despatched by
Registered Post and refund orders of value less than Rs.1500/- will be despatched under certificate of
posting, at the sole risk of the applicant, within six weeks from the date of closure of the subscription List. In
case of any delay on the part of the Company, the Company will pay interest at the rates prescribed in subsections (2) and (2A) of section 73 of the Act.
8
KAIRA CAN COMPANY LIMITED
DECLARATION
The Board of Directors of Kaira Can Company Limited states that :
i.
All the monies received against this issue shall be transferred to a separate bank account other than the
bank account referred to in sub-section (3) of section 73.
ii.
Details of all monies utilized out of issue referred to in sub-item (i) shall be disclosed under an
appropriate separate head in the Balance Sheet of the Company indicating the purpose for which such
monies had been utilized: and
iii.
Details of all unutilized monies out of issue of shares, if any, referred to in sub-item (i) shall be disclosed
under an appropriate separate head in the Balance Sheet of the Company indicating the form in which
such unutilized monies have been invested.
iv.
It is the primary obligation of the Issuer Company to update the offer document and keep the public
informed of any material changes till the listing of the shares issued and the commencement of trading.
v.
Draft copies of the Letter of Offer have been forwarded for information to The Stock Exchange, Mumbai.
The final Letter of Offer will also be filed with them as per regulatory requirements. Filing of this Letter of
Offer with ROC is not required. Printed copies of this Letter of Offer will be forwarded to SEBI for their
information and records.
MINIMUM SUBSCRIPTION
i.
If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription
shall be refunded to the applicants within forty-two days from the date of closure of the Issue.
ii.
If there is delay in the refund of subscription by more than eight days after the Company becomes liable
to repay the subscription amount (i.e. forty two days after closure of the issue) the Company will pay
interest for the delayed period at rates prescribed under sub-section (2) and (2A) of Section 73 of the
Companies Act, 1956.
II.
IMPORTANT INFORMATION
1.
This offer is made to the existing shareholders whose names appear on the Register of Members of the
Company as on the Record Date i.e. 27th December,2004.
2.
Please read this Letter of Offer and the instructions contained in the accompanying Composite
Application Form carefully before making any investment in the issue.
3.
The instructions contained in the enclosed CAF are an integral part of this Letter of Offer and must be
carefully followed. Applications not conforming to the instructions are liable to be rejected.
4.
All enquiries, communications and clarifications in connection with this Letter of Offer should be
addressed to the Registrars to the Rights Issue quoting the Registered Folio Number or Client ID No., the
CAF No. and the name of the first shareholder as mentioned in the CAF at the following address :
COMPUTECH SHARECAP LIMITED
(Unit: Kaira Can Company Limited)
147, Mahatma Gandhi Road
Opp. Jehangir Art Gallery
Fort, Mumbai – 400 023.
Ph.: 22671824-25-26. Fax: 22670380.
Under no circumstances should any request be sent to the Company.
5.
Adequate Funds will be provided to the Registrars to the Issue for posting of the Refund Orders/ Letters
of Allotment / Shares certificates by registered post/ courier as applicable.
6.
SECURITIES & EXCHANGE BOARD OF INDIA – DISCLAIMER CLAUSE :
As required a copy of this Letter of Offer has been submitted to SEBI.
9
KAIRA CAN COMPANY LIMITED
It is to be distinctly understood that submission of offer document 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
scheme or the project for which the issue is proposed to be made or for the correctness of the
statements made or opinions expressed in the offer document. Company management has certified that
the disclosures made in the offer document are generally adequate and are in conformity with SEBI
guidelines for Disclosures and Investor Protection in force for the time being. This requirement is to
facilitate investors to take an informed decision for making investment in the proposed issue.
It should also be clearly understood that while the Issuer Company is primarily responsible for the
correctness, adequacy and disclosure of all relevant information in the offer document. Company
Management has represented to SEBI and certifies the following Due Diligence in accordance with SEBI
(Merchant Bankers) Regulations, 1992:
i.
We have reviewed various documents including those relating to litigation like commercial disputes,
patent disputes, disputes with collaborators etc. and other materials in connection with the finalization
of the offer document pertaining to the said issue;
ii.
On the basis of such review and discussions, Directors and officers of the Company, other agencies,
verification of the statements concerning the objects of the issue, projected profitability, price
justification and the contents of the documents mentioned in the Annexure and other papers are
furnished by the Company.
WE CONFIRM that:
(a) the offer document forwarded to SEBI is in conformity with the documents, materials and papers
relevant to the issue;
(b) all the legal requirements connected with the said issue, as also the guidelines, instructions, etc.
issued by SEBI, the Government and any other competent authority in this behalf have been
duly complied with; and
iii.
We confirm that, all the intermediaries’ names in the Letter of Offer are registered with SEBI and till
date such registration is valid.
The filing of offer document does not, however, absolve the Company from any liabilities under Section
63 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances
as may be required for the purpose of the proposed issue. SEBI, further reserves the right to take up, at
any point of time, with the Company any irregularities or lapses in the offer document.
7.
THE STOCK EXCHANGE, MUMBAI – DISCLAIMER CLAUSE :
The Stock Exchange, Mumbai (“the Exchange”) has given vide its letter dated 8th December 2004,
permission to this company to use the Exchange’s name in this Letter of Offer as the Stock Exchange on
which this company’s securities are proposed to be listed. The Exchange has scrutinised this letter of
offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this
Company. The Exchange does not in any manner:
i)
Warrant, certify or endorse the correctness or completeness of any of the contents of this letter of
offer; or
ii)
Warrant that this company’s securities will be listed or will continue to be listed on the Exchange; or
iii)
Take any responsibility for the financial or other soundness of this company, its promoters, its
management or any scheme or project of this company;
and it should for any reason be deemed or construed that this letter of offer has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any
securities of this company may do so pursuant to independent inquiry, investigation and analysis and
shall not have any claim against the Exchange whatsoever by reason of any loss which may be
suffered by such person consequent to or in connection with such subscription/acquisition whether by
reason of anything stated or omitted to be stated herein or for any other reason whatsoever.
10
KAIRA CAN COMPANY LIMITED
8.
THE STOCK EXCHANGE, MUMBAI–IN-PRINCIPLE APPROVAL
The Stock Exchange, Mumbai where the shares of the Company was forwarded copies of the Draft Letter
of Offer. The Stock Exchange, Mumbai have, vide their letter dated 8th December,2004 approved the use of
their names in the Letter of Offer. The disclaimers required to be included, by the Stock Exchange, in the
Letter of Offer are reproduced in this Letter of Offer along with other necessary changes.
9.
LISTING
All necessary steps for the purpose of getting the securities listed at the Stock Exchange, Mumbai within
specified time will be taken and necessary application forms will be submitted to the Stock Exchange,
Mumbai in time.
10. FILING
A Copy of this Letter of Offer has been filed with Stock Exchange, Mumbai. This Letter of Offer is not
required to be filed with the Registrar of Companies. Printed copies of this Letter of Offer will be
forwarded to SEBI for their information as required by statute.
11. STATUTORY DECLARATIONS
a.
Subscriptions received against the issue will be kept in specific bank accounts and the Company will
not have access to such funds unless it has received minimum subscription of 90% of the issue and
the permission of the Stock Exchange, Mumbai to use the amount of subscription has been
received. The Company will obtain the permission of Stock Exchange, Mumbai by producing
sufficient documentary evidence of subscription to the extent of 90% or more on the closure of issue,
to utilize the funds collected as per the present issue.
b.
The Board of Directors of Kaira Can Company Limited (the Company) have decided to make this
offer to the shareholders pursuant to the Resolution passed at the Extra Ordinary General Meeting
held on 11th March, 2004 and the Board Resolution dated 12th February, 2004.
c.
The Company, its directors, the Company’s associates, group companies, and companies with which
any of the directors of the Issuer are associated as directors or promoters, have not been prohibited
from accessing the capital market under any order or directions passed by SEBI.
12. CORPORATE GOVERNANCE
The Corporate Governance Code is not applicable as the share capital of the Company is less than
Rupees Three Crores.
13. APPROVALS
The Company has the necessary approvals from government/ municipal authorities as required for
carrying on its present business.
14. CAUTION STATEMENT / COMPANY DISCLAIMER
The Issuer Company accepts no responsibility for any statement made otherwise than in the Letter of
Offer or in any advertisement or any material issued by or at the instance of the Company. Anyone
placing reliance on any other source of information would be doing so at his/her/their own risk.
15. INFORMATION ABOUT THE ISSUE AND THE ISSUER
All information shall be made available by the Issuer to the public and investors at large and no selective
or additional information would be available for any section of the investors in any manner whatsoever,
including at road shows, presentations, in research or sales reports, at bidding centres, etc.
11
KAIRA CAN COMPANY LIMITED
III. CAPITAL STRUCTURE OF THE COMPANY
PARTICULARS
A.
B.
C.
D.
E.
F.
NOMINAL
VALUE
Rs. in lacs
AUTHORIZED :
20,00,000 Equity Shares of Rs.10/- each
SHARE
PREMIUM
Rs. in lacs
AGGREGATE
VALUE
Rs. in lacs
200.00
—
200.00
20,000 11% Redeemable Cumulative
Preference Shares of Rs.100/- each
20.00
—
20.00
ISSUED, SUBSCRIBED & PAID UP:
8,73,600 Equity shares of Rs.10/- each
fully paid up.
87.36
—
87.36
4.85
43.68
48.53
92.21
43.68
135.89
SHARE PREMIUM ACCOUNT
BEFORE THE ISSUE
—
—
—
SHARE PREMIUM ACCOUNT
AFTER THE ISSUE
—
43.68
43.68
PRESENT ISSUE:
48,533 Equity Shares of Rs.10/- each for
cash at a premium of Rs. 90 per share.
PAID UP EQUITY SHARE CAPITAL
AFTER THE ISSUE
NOTES TO THE CAPITAL STRUCTURE OF THE COMPANY
a.
The current Capital Structure of the Company has been built-up as under:Date of
Allotment
Number of
Shares Issued
Issue Price
(Rs. per Share)
Cumulative Paid-up
Capital (Rs.)
01.03.1962
4
100
400
08.08.1964
520
100
52400
25.02.1965
4000
100
452400
11.08.1965
3000
100
752400
24.06.1967
2476
100
1000000
*17.03.1973
5000
100
1500000
08.03.1977
4500
100
1950000
14.01.1978
19500
100
3900000
*05.03.1980
15600
100
5460000
*15.03.1982
32760
100
8736000
*Issued as Bonus Shares.
The Equity Shares of the company were split on 01.12.1982 from Rs. 100 to Rs. 10 per share.
b.
Details of Share Premium Account
Prior to the present issue of equity shares, Company has neither offered nor issued any equity shares for
premium and hence the Company at present does not have any share premium account.
12
KAIRA CAN COMPANY LIMITED
c.
The Company’s Shareholding Pattern
Description
Pre-Issue shareholding
as on
October 30, 2004
*Post-Issue shareholding
No of Shares
% to Total
Equity
No of Shares
% to Total
Equity
5,53,673
63.38
5,84,432
63.38
2,05,340
23.50
2,16,748
23.50
a) Promoters and Promoters’ Group
b) Non-promoter (public holding)
1)
Bodies Corporates (Indian)
2)
Individuals
i)
Resident individual
90,848
10.40
95,895
10.40
ii)
Non-resident individual
23,739
2.72
25,058
2.72
8,73,600
100.00
9,22,133
100.00
Total
* The Post Issue shareholding is based on the assumption that all the shareholders including the
promoters and their group will subscribe to their entire respective rights entitlement.
The Company was promoted in the year 1962 by Shri H.N.Kapadia as a major Promoter. The Company
became a subsidiary of Poysha Industrial Company Limited on 08.08.1964. Poysha Industrial Company
Limited was controlled by Kapadia Group and J.R.Mehta Group. Kapadia Group subsequently over a
period of time acquired the shares held by other Promoters and Poysha Industrial Company Limited. On
14th January, 1978 Kaira Can Company Limited ceased to be subsidiary of Poysha Industrial Company
Limited. Poysha Industrial Company Limited was ordered to wind up by the Bombay High Court on
09.01.1998. Shri H.N.Kapadia, the original Promoter of the Company expired on 20th January, 2000. Shri
P.N.Kapadia, Shri U.R.Kapadia and Shri N.G.Sheth, directors are now having the managerial control over
the Company. They and their immediate relatives alongwith other companies under their control are
having controlling interest in terms of SEBI’s (Disclosure & Investors Protection) Guidelines, 2000.
d.
Details of Equity shares issued by the Company to the Promoter Group from time to time
Date of allotment
No. of
shares
Face Value
(Rs.)
Consideration
(Rs.)
Lockin
period
Remarks
01.03.1962
4
100
400
—
—
08.08.1964
520
100
52400
—
—
25.02.1965
4000
100
400000
—
—
11.08.1965
3000
100
300000
—
—
24.06.1967
1426
100
247600
—
—
17.03.1973
4475
100
—
—
Bonus
08.03.1977
3004
100
450000
—
Rights
14.01.1978
9855
100
1950000
—
Rights
05.03.1980
6651
100
—
—
Bonus
15.03.1982
13967
100
—
—
Bonus
13
KAIRA CAN COMPANY LIMITED
e. Pre-issue Shareholding pattern of Promoter Group
Description
Pre-Issue shareholding
as on
October 30, 2004
No of Equity
Shares
% to Total
Equity
*Post-Issue shareholding
No of Equity
Shares
% to Total
Equity
i) INDIVIDUALS
a.
Promoter Directors
1,16,494
13.33
1,22,966
13.33
b.
Relatives and friends of promoters
& directors
2,76,522
31.66
2,91,884
31.66
1,47,604
16.90
1,55,804
16.90
ii) BODY CORPORATES
a.
Companies in which 10% or more
of the share capital is held by the
promoter/ his immediate relatives/
firms, or HUF in which the
promoter/ his immediate relative
is a member
b.
Companies in which company
mentioned in ‘c’ above holds
10% or more of the share capital
2,486
0.28
2,624
0.28
c.
HUF in which aggregate share of
the promoter and his immediate
relatives is equal or more than
10% of the total
10,567
1.21
11,154
1.21
5,53,673
63.38
5,84,432
63.38
TOTAL
l
(*) The Post-Issue promoters’ group holding is based on the assumption that the promoters and their
relatives and friends will subscribe to their entire respective rights entitlements without requiring the
promoters to subscribe for additional shares. In case of under-subscription, the promoters and/or their
relatives and friends will subscribe to additional shares to that extent the post-Rights Issue holdings of the
Promoters Group will be different from the above.
Notes:
l
The face value of the shares of the Company were changed from Rs.100/- per Share to Rs.10/- per
Share vide the resolution passed by the members in the Annual General Meeting of the Company held
on 1st December, 1982 and is effective as and from that date onwards.
l
The promoters and/or their group reserve their right to renounce in full or any portion of their rights
entitlement. In case of under-subscription, the promoters and/or their group intend to apply for additional
shares to make the Rights Issue fully subscribed to the extent of 100% of the Offer. Allotment of shares
against the promoters’ and their relatives’ application(s) for additional shares in excess of their respective
rights entitlements will be governed by the first proviso to Regulation 3 (1) (b) read with Regulation 3 (1)
(e) of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997.
Allotment to promoters of any unsubscribed portion, over and above their entitlement shall be done in
compliance with clause 40A of the Listing Agreement. The subscription and acquisition of additional
Equity Shares by promoters and/or their group, if any, will not result in change of control of the
management of the company and shall be exempt in terms of provision to Regulation 3(1)(b)(ii) of the
SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. The promoters confirm that, in
case, public shareholding in the company falls below permissible minimum level because of the
promoters and / or their group subscribing to Equity Shares over and above their entitlements, they will
comply with the provisions of Clause 17 of SEBI (Delisting of Securities) Guidelines, 2003. Also, all the
formalities in this regard will be completed within a period of 3 months from the date of intimation by the
Stock Exchange of the fall in public shareholding below the permissible minimum level.
14
KAIRA CAN COMPANY LIMITED
l
The inter-se transfer (renunciation) of rights entitlements within the promoter group, and subscription to
additional shares as described above, if any, will not attract the provisions of Regulations 10, 11 and 12
of the SEBI (SAST) Regulations.
l
The above disclosures are made to conform to the disclosure requirements for availing the exemptions
to Regulations 10, 11 and 12 of the SEBI (SAST) Regulation. In this respect it is further disclosed that
there will be no change in the control or management of the Company pursuant to the promoters
subscribing to additional shares as described herein.
f.
List of Core Promoters / holding by Directors / persons in control and their Shareholding as at
October 30, 2004
i)
Holding by Directors/ Persons in control
Name
Shri Premal Kapadia
Shri Utsav Kapadia
Shri Nanak Sheth
Total
ii)
Holding
81964
29890
4640
Percent
9.38
3.42
0.53
116494
13.33
Holding
13000
7000
127604
2486
Percent
1.49
0.80
14.61
0.28
150090
17.18
Holding by Group Companies
Name
Dryden Pvt. Ltd.
Farm Chemicals Pvt. Ltd.
Harshadray Pvt. Ltd.
Harshadray Investment Pvt. Ltd.
Total
The above-mentioned companies are owned by the Company’s promoters and members of their family.
Persons in control of the above companies are Shri Premal Kapadia, Shri Utsav Kapadia and Shri Nanak
Sheth, who are in control of the Issuer Company.
iii) Holdings of Directors and Relatives of the Promoters
Name
Rekha Kapadia
Premal Kapadia
Lalan Kapadia
Shefali Kapadia
Utsav Kapadia
Rama Kapadia
Anandi Vangal
Rasiklal Kapadia (Karta)
Sharda Kapadia
N.G.Sheth
Saloni Kapadia
Aditya Kapadia
Madhav Kapadia
Selina Sheth
Sujata Kapadia
Sushila Kapadia
Alisa Sheth
Total
Holding
Percent
96950
81964
78978
34492
29890
28050
17714
10567
5300
4640
3500
3300
3260
2128
2100
550
200
11.10
9.38
9.04
3.95
3.42
3.21
2.03
1.21
0.61
0.53
0.40
0.38
0.37
0.24
0.24
0.06
0.02
403583
46.19
15
KAIRA CAN COMPANY LIMITED
g.
Concentration of Holdings
i)
Names of Ten largest shareholders as on October 30, 2004 (Date of filing of the Draft Letter
of Offer with the Stock Exchange)
Name of the Shareholder
Gujarat Co-operative Milk Marketing Federation Ltd.
Harshadray Pvt. Ltd.
Rekha Kapadia
Premal Kapadia
Lalan Kapadia
Shefali Kapadia
Utsav Kapadia
Rama Kapadia
Gouri Mistry
Priti Chanderia
ii)
Percentage
198016
127604
96950
81964
78978
34492
29890
28050
28000
21499
22.67
14.61
11.10
9.38
9.04
3.95
3.42
3.21
3.21
2.46
Names of Ten largest shareholders as on October 30, 2002 (Two years prior to filing of Draft
Letter of Offer with the Stock Exchange)
Name of the Shareholder
Gujarat Co-operative Milk Marketing Federation Ltd.
Harshadray Pvt. Ltd.
Rekha Kapadia
Lalan Kapadia
Narendra Kapadia (Karta)
Shefali Kapadia
Utsav Kapadia
Gouri Mistry
Premal Kapadia
Priti Chanderia
h.
No of shares held
No of shares held
Percentage
198016
119124
96950
78978
64536
34492
29890
28000
27764
21499
22.67
13.64
11.10
9.04
7.39
3.95
3.42
3.21
3.17
2.46
Other Notes to the Capital Structure
1. The present holdings of the promoters and promoter group (including the promoters’ and their relatives)
in the paid up capital of the Company is 553673 fully paid equity shares, which is 63.38% of the existing
paid up capital of the Company. They are entitled to 30759 Right Equity shares. The promoters and/or
their group along with their relatives and group companies intend to subscribe to the unsubscribed portion
to complete 100% subscription of the present Rights Issue. Under such circumstances, the promoters’
are likely to acquire additional shares beyond their respective entitlements where the issue is
undersubscribed. Any such additional shares applied for by the promoter group and allotted by the
Company shall be governed by Regulation 3 (1) (b) read with 3(1) (e) of the SEBI (SAST) Guidelines and
the first proviso thereto.
2. The Rights Issue as approved by the members in their Extra Ordinary General Meeting held on 11th
March, 2004 is in the ratio of 1 new Equity Share for every 18 Equity Shares held; fractions, if any, to be
rounded off to the nearest of the full value. Accordingly, equity shareholder, who does not become entitled
for Rights Equity Shares on the basis of ratio of 1:18 Equity Shares, will not be offered any shares as
their rights.
3. The Promoters undertake to inform the Issuer and the Issuer undertakes to report to the Mumbai Stock
Exchange, all transactions in shares by the promoters, promoter group and the immediate relatives of the
promoters, within 24 hours of the transactions entered in to, from the date of filing the Draft Letter of
Offer with SEBI till the date of closure of the Issue.
16
KAIRA CAN COMPANY LIMITED
4. The total issue price is due on application and as such the securities offered through this Rights Issue
will be fully paid up on allotment.
5. The details of the purchase/ sale of securities of the Company by the promoters and/ or their Directors/
Group Companies during the six months preceding the date of submission of the Draft Letter of Offer to
SEBI are as under:
Purchaser’s / Seller’s
Name
Shares Sold/
Purchased
Maximum Price
& Relevant Date
Minimum price
& Relevant Date
-NIL6. Presently, NRIs are holding 23,739 Equity shares representing 2.72% of the total issued capital. In terms
of the present Rights Issue NRIs are entitled for 1319 equity shares.
7. The total number of members of the Company as on the date of filing of the Letter of Offer with Stock
Exchange is 150.
8. The Issuer undertakes that at any given time there shall be only one denomination for the equity shares
of the Company and that the Issuer shall comply with such disclosure and accounting norms as specified
by SEBI from time to time.
9. The Company has not raised any bridge loan against the proceeds of this issue. However, the company
reserves the right to raise any bridge loans at the appropriate time.
10. The Company/ Directors have not entered into any buyback and/ or standby arrangements for purchase
of equity shares of the Company with any person.
11. As on date there are no pending warrants, options, rights to convert any debenture(s), loan(s) or other
instrument(s) entitling any person to get further shares in the Company.
12. The Company has not entered into any contract or arrangement preceding the date of this Letter of Offer
whereby any option or preferential right of any kind has been given to any person(s) to subscribe for any
shares of the Company.
13. The issuer undertakes that no further issue of capital will be made whether by way of issue of bonus
shares, preferential allotment, Rights Issue or public issue or by the way of share swap under any
scheme of merger / amalgamation, or in any other manner, during the period commencing from the
forwarding of Letter of Offer to SEBI till the securities have been listed or all monies have been refunded
to all investors.
IV. TERMS OF THE PRESENT ISSUE
AUTHORITY FOR THE PRESENT ISSUE
The present issue of equity shares is being made pursuant to a Special Resolution passed by the
shareholders under Section 81(1) of the Act at the Extra-Ordinary General Meeting held on 11th March, 2004.
The Board of Directors have approved the Rights Issue in the ratio of one (1) equity share for every eighteen
(18) equity shares held at their meeting held on 12th February, 2004.
BASIS OF OFFER
Equity Shares of Rs.10/- each for cash at a premium of Rs.90/- each in the ratio of one (1) new equity share
for every eighteen (18) equity shares held are being offered to the Members of the Company whose names
appear on the Register of Members of the Company, as on the record date which will be fixed by the
Company in consultation with the BSE.
ENTITLEMENT AND TREATMENT OF FRACTIONAL ENTITLEMENTS
If the shareholding is not an exact multiple of 18 shares, then to the extent of holding exceeding an exact
multiple of 18 shares, the fractional entitlement shall be rounded to the nearest full number for the purpose of
making the offer. The number of Equity Shares thus offered to you is shown in Block II of Part A of the
17
KAIRA CAN COMPANY LIMITED
enclosed CAF(s). However, shareholders whose fractional rights are ignored and who do not get entitlement of
any shares and who apply for additional shares shall be given preference in allotment of one additional share.
For this purpose, the Company shall consolidate unutilized fractional entitlements into Rights Equity shares.
These consolidated unutilized fractional entitlements of Rights Equity shares shall be first utilized for allotment
of one equity share to such shareholders whose entitlement is for less than one share, and is offered and
applies for additional shares. The Rights Equity shares remaining after such allotment will then be utilized for
allotment of one additional share on a fair and equitable basis to those shareholders whose fractional rights
have been ignored and have applied for additional shares. If any consolidated rights equity shares are left
over after allotment of an additional equity share to each of the shareholders whose fractional entitlements
were ignored, they shall be utilized for allotment to shareholders who have applied for additional shares. In
case this results in the number of equity shares to be allotted to exceed the number of shares offered, the
difference shall be adjusted against the promoters’ entitlements.
However, where shareholders whose fractional entitlements are ignored resulting into not becoming entitled for
any Rights Equity shares (i.e. zero entitlement), such CAF with zero entitlement cannot be renounced. Where
such forms are renounced and if the renouncee applies for additional shares, such renouncee will not be
allotted any shares.
RIGHTS ENTITLEMENT
As your name appears in the Register of Members of the Company on the Record Date, you are entitled to
this Rights Offer on the basis mentioned above. The number of Equity Shares to which you are entitled is
shown in Block II of Part A of the CAF.
NOMINATION
In terms of Section 109 (A) of the Companies Act, 1956 nomination facility is available in case of equity
shares. The applicant may nominate any person by filling the relevant details in the CAF at the space
provided for the purpose.
TERMS OF OFFER
The Equity Shares now offered are subject to the terms of this Letter of Offer, CAF, Memorandum and
Articles of Association of the Company, the Listing Guidelines issued from time to time by the Government of
India & SEBI rules and guidelines, the relevant provisions of the Act, and such terms and conditions as may
be incorporated in the share certificates or any deed or document executed by the Company regarding the
Rights Issue.
ACCEPTANCE OF OFFER
You may accept and apply for the Equity Shares hereby offered to you either wholly or partly by filling the
enclosed CAF and submitting the same along with application money to the Bankers to the Issue at their
branches mentioned in the application form before the close of banking hours on 8th February,2005 (Closing
date of the Rights issue). The Board will have the right to extend the last date for receipt of CAF by such
period as they may deem fit, but in no case the offer for subscription to the issue would be kept open for
more than 60 (sixty) days.
HOW TO APPLY
You may apply for the Equity Shares offered wholly or in part by filling in the enclosed CAF and submitting the
same along with the application money to the Bankers to the issue at their designated branches on or before
the closure of the subscription list. The CAF should be complete in all respects, as explained in the
instructions indicated in the CAF. The CAF parts should not be detached under any circumstances; otherwise
the application(s) will be rejected forthwith. Applications should be made on the printed CAF provided by the
Company or on blank paper in case of non-receipt of CAF.
You may exercise any one of the following options with regard to the Equity Shares offered to you, using the
18
KAIRA CAN COMPANY LIMITED
enclosed CAF:
OPTION AVAILABLE
ACTION REQUIRED
l
Accept whole or part of the Equity Shares offered
to you without renouncing the balance.
l
Accept your entitlement to all equity shares offered Fill in and sign Part A including BLOCK IV
to you and apply for additional equity shares.
relating to additional equity shares applied for.
l
Renounce all the Equity Shares offered to you, to Fill in and sign Part B indicating the number of
one person (joint renouncees are deemed as one Equity Shares renounced in BLOCK VII &
person) without your applying for any of the equity handover the ENTIRE FORM to the renouncee.
shares offered to you.
The Renouncee / joint renouncee(s) must fill in
and sign Part C of CAF.
l
Accept a part of your entitlement and renounce the
balance or part of it to one or more Renouncee(s)
OR
Renounce Equity Shares of your entitlement to
more than one person (joint renouncees are
deemed as one person)
l
Fill in and sign Part A and Indicate in BLOCK III
of Part A the number of Equity Shares accepted.
Fill in and sign Part D for the Split Form and
send the ENTIRE CAF to the Registrar to the
issue, according to the numbers of rights to be
renounced in favour of the renouncees.
On receipt of Split Forms:
- For the Equity shares you are accepting, fill in
& sign Part A of one of the split forms.
- For the Equity Shares you are renouncing fill in
and sign Part B of the respective split form(s) as
given above in this table.
If an application is made jointly with any person(s) who is/are not already joint holders or if there is a change
in the sequence of joint holders, it will amount to renunciation and the procedure mentioned above will have
to be followed.
SUBSCRIPTION MONEY BANK ACCOUNT
Subscription monies received in respect of the Rights Issue will be kept in a separate bank account and the
Company will not have access to such funds unless it satisfies the BSE with suitable documentary evidence
that the minimum subscription of 90% of the issue has been received.
Where, an applicant is allotted lesser number of equity shares than those applied for, the excess amount paid
on application will be refunded to the applicant within six weeks from the closure of subscription list in terms
of Section 73 of the Act. The Board reserves the full, unqualified and absolute right to accept or reject an
application in whole or in part, in either case without assigning any reason thereof.
TERMS OF PAYMENT
All Applicants are required to pay Rs.100 per Equity Share on application :
Particulars
On application per share
Face Value
Premium
Total
Rs.10/-
Rs.90/-
Rs.100/-
APPLICATION FOR ADDITIONAL EQUITY SHARES
You are also eligible to apply for additional Equity Shares over and above the number of Equity Shares offered
to you provided that you have applied for all the equity shares offered, without renouncing the rights, in full or
in part, in favour of any other person(s). Renouncees applying for all the Equity Shares renounced in their
favour may also apply for additional equity shares.
If you desire to apply for additional Equity Shares, you may fill the number of additional Equity Shares in Part
A of the CAF. The allotment of additional Equity Shares will be at the sole discretion of the Board on an
equitable basis with reference to the number of Equity Shares held by you on the Record Date in consultation
with the BSE. In case of requests for additional Equity Shares by Non-Residents, the allotment may be
subject to approval of RBI or FIPB as may be relevant. The Board may reject any application for additional
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KAIRA CAN COMPANY LIMITED
Equity Shares without assigning any reasons thereof.
RENUNCIATION
You may renounce all or any of the equity shares, you are entitled to, in favour of any individual, limited
Companies, or statutory corporations / institutions. However, renunciation in favour of more than three persons
as joint holders, trust / societies (unless the ‘trust’ is registered under the Societies Registration Act, 1860 or
any other applicable trust laws and is authorized under its constitution to hold shares in a Company), minors
(unless acting through natural or legal guardians), partnerships firms or their nominees, or HUF or jointly to
any of them will not be accepted.
Any renunciation from Resident(s) to Non-Resident(s) and from Non-Resident(s) to Resident(s) or NonResident(s) to Non-Resident(s) is subject to requisite approval of the RBI and the said permission being
attached to the CAF.
PROCEDURE FOR RENUNCIATION TO RENOUNCEE IN WHOLE
If you wish to renounce this offer in whole, please complete PART ‘B’ of the CAF enclosed with the Letter of
Offer for the number of Equity shares renounced and deliver the CAF duly signed to the person(s) in whose
favour the Equity Shares are so renounced. All joint holders must sign as per specimen signatures recorded
with the Company at the place provided for the purpose and in the same order. The person(s) in whose
favour the offer has been renounced should complete and sign PART C of the CAF. In case of joint
renouncees all joint renouncees must sign.
TO RENOUNCE IN PART
If you wish to accept this offer in part and renounce the balance of this offer or renounce in favour of more
than one person, the CAF must first be split into the requisite number of forms, by applying to the Registrars
to the Issue. Please indicate your requirement of split forms in the space provided for this purpose in PART
D of the CAF and return the entire CAF to the Registrars to the issue so as to reach them latest by the close
of business hours on or before the last date for receiving requests for split forms i.e. 24th January, 2005. On
receipt of split form from the Registrar, procedure as aforementioned in the box appearing in this offer
document under the heading ‘How to Apply’, will have to be followed for each split form representing the
number of rights to be renounced.
If you wish to apply for Equity Shares jointly with any person(s) who is /are not already joint holder(s) with you,
then it would amount to renunciation and the procedure of renunciation mentioned above shall have to be
followed. Even a change in sequence of name of joint holders shall amount to renunciation and the procedure
as stated above shall have to be followed.
Further, this right of renunciation is subject to the express condition that the Board shall be entitled in its
absolute and unqualified discretion to reject any such request for allotment of Equity Shares from
renouncee(s) without assigning any reason thereof save where the Equity Shares have been renounced in
favour of a person who is already a member of the Company.
Please note that any person(s) other than those in whose favour this offer has been made must not use Part
A of the CAF, else the application will be rendered invalid.
REQUEST FOR SPLIT FORMS
Only the person(s) to whom this Letter of Offer has been addressed, and not the renouncee, shall be entitled
to obtain Split Forms. Request for Split Forms will be entertained only once. Split Forms cannot be re-split.
CAF MISPLACED/ NOT TRACEABLE
Where CAF is misplaced/ not traceable by the applicant, the Registrar to the Issue will issue a duplicate CAF
on request of the applicant who should furnish the Folio No. and his/her/their full name and address to the
Registrar to the Issue. Please note that those who are making application on duplicate forms should not utilise
the original CAF for any purpose, including renunciation, even if it is received subsequently. If the applicant
violates any of these requirements, he / she shall face risk of rejection of both the applications.
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KAIRA CAN COMPANY LIMITED
APPLICATIONS ON PLAIN PAPER
Shareholders who have not received the original CAF or are not in a position to obtain duplicate CAF, he/she
may send their application(s) to the Registrar to the Issue on a blank paper furnishing the following details by
Registered Post :1. Name of the Shareholder, alongwith names of the joint holders, if any.
2. Address.
3. Registered Folio Number or DP-Client ID Number.
4. Number of shares held on the record date.
5. Certificate number(s) and distinctive numbers.
6. Number of shares to which entitled.
7. Total number of shares applied for.
8. Total amount paid with the application.
9. Particulars of cheque/ demand draft.
10. PAN/ GIR number in case of application for 200 shares or more.
11. Details of Savings/ Current Bank Account for refund purposes.
12. In case of Non-Resident(s), NRE/ FCNR/ NRO Account No.
13. Signature of the shareholder(s) as per the specimen and in the same sequence as lodged with the
Company/ DP.
The application mentioning the above details, along with the cheque/ demand draft payable at Mumbai only,
should be sent to the Registrar to the Issue by Registered Post Only to reach on or before the last date for
submission of the CAF.
The cheque/ demand draft should be made payable to “Kaira Can Company Limited-Rights Issue” and
should be crossed “A/c Payee Only”. If the application is made on a blank paper, the shareholder should not
apply again on the CAF or renounce the same. Violation of the above may result in rejection of applications.
INSTRUCTIONS FOR EQUITY SHAREHOLDERS
MODE OF PAYMENT
For Indian Resident Applicants, Non-Resident Indian and Other Applicants
On Application: Rs.100 per share (inclusive of the premium of Rs.90)
Payment(s) must be made by cheque / demand draft drawn on any bank (including a co-operative bank)
which is situated at and is a member or a sub-member of the Bankers’ Clearing House located at the centre
where the CAF is submitted. A separate cheque / draft must accompany each CAF. Only one mode of
payment for each CAF will be accepted. Money Orders and outstation cheques will not be accepted and
applications accompanied by any such instruments will be rejected.
Shareholders/ renouncees residing at places other than those mentioned in the CAF and not having collection
centers in their city should send their application by Registered Post ONLY, to the Registrars to the Issue,
Computech Sharecap Limited enclosing a demand draft drawn on a clearing bank and payable at Mumbai
only, net of bank charges and postal charges, so as to reach them before the closure of the issue.
Such demand draft should be made payable to “Kaira Can Company Limited – Rights Issue”. All cheques/
drafts must be crossed ‘A/c Payee Only’. However, the Collection Centre receiving the application will
acknowledge receipt of the application by stamping and returning the acknowledgement slip at the bottom of
each CAF. The Company is not responsible for any postal loss in transit on this account.
The Company will not accept any applications.
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KAIRA CAN COMPANY LIMITED
QUOTING OF PAN/GIR NO. IN THE APPLICATION FORMS
Where an application is for allotment of securities in response to a Rights Issue, for a total value of
Rs.50,000/- or more i.e., the total number of securities applied for multiplied by the issue price, is Rs.50,000/- or
more, the applicant or in the case of applications in joint names, each of the applicants, should mention his/
her permanent account number allotted under the Income Tax Act, 1961 or where the same has not been
allotted, the GIR number and the Income-Tax Circle/ Ward/ District in the appropriate space provided in the
CAF. In case where neither PAN nor GIR number has been allotted, the fact of non-allotment should be
mentioned in the CAF. Applications without this information will be considered incomplete and are liable to be
rejected.
FOR NON-RESIDENT APPLICANTS
Non-Resident Shareholders are requested to follow the additional instructions given below. The instructions
applicable to Resident Applicants will also apply, to the extent applicable.
Payment by non-residents must be made by demand draft/ cheque payable at Mumbai or funds may be
remitted from abroad in any of the following ways:
1.
Application with repatriation benefits
(a) By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from
abroad (submitted along with Foreign Inward Remittance Certificate); or
(b) By cheque/ draft on a Non-Resident External (NRE) or FCNR Account maintained in Mumbai; or
(c) By Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in India and
payable at Mumbai; or
(d) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.
2.
Application without repatriation benefits
As far as non-residents holding shares on non-repatriable basis is concerned, in addition to the modes
specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account
maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but
payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis.
All cheques/drafts submitted by non-residents should be drawn in favour of the Bankers to the Issue and
marked “Kaira Can Company Limited – Rights Issue-NRI” payable at Mumbai and must be crossed “A/c
Payee only” for the amount payable. The CAF duly completed together with the amount payable on
application must be deposited with the Controlling Branch of the Collecting Bank indicated on the reverse of
the CAF before the close of banking hours on the Issue Closing Date. A separate cheque or bank draft must
accompany each CAF.
Applicants may note that where payment is made by drafts purchased from NRE/FCNR/NRO accounts as the
case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been
issued by debiting the NRE/FCNR/NRO account should be enclosed with the CAF. Otherwise the application
shall be considered incomplete and is liable to be rejected.
Note:
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment
in Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act,
1961.
In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity
Shares cannot be remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with the
Controlling Branch of the Collecting Bank indicated on the reverse of the CAF before the close of banking
hours on the aforesaid Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
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KAIRA CAN COMPANY LIMITED
In case application received from Non-Residents, allotment, refunds and other distribution, if any, will be made
in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment,
remittance and subject to necessary approvals.
For further instructions please read the CAF carefully.
APPLICATION UNDER POWER OF ATTORNEY OR APPLICATIONS BY LIMITED COMPANIES
In the case of applications under Power of Attorney or Applications by Limited Companies or by Corporate
Bodies, the relevant power of attorney or the relevant authority as the case may be, or a duly certified copy
thereof must be attached to the application form or lodged separately with the Registrars to the Issue
simultaneously with the submission of the CAF mentioning the serial number of the CAF and the bank branch
where the application has been submitted, failing which the application is liable to be rejected.
APPLICATION NUMBER ON THE CHEQUE / DEMAND DRAFT
To avoid any misuse of instruments, the applicants are advised to write the application number and name of
the first applicant on the reverse side of the cheque/ demand draft.
NOTE ON CASH PAYMENT
Subscriptions against applications for equity shares should not be effected in cash and must be effected by
‘Account Payee’ cheques or ‘Account Payee’ bank drafts, if the amount payable is Rs.20,000/- or more. If
cash payment is effected in contravention of this provision, the application is liable to be rejected.
EQUITY SHARES IN DEMATERIALIZED FORM
Applicants to the Equity Shares of the company issued through this Rights Issue shall be allotted the Equity
Shares in dematerialised (electronic) form at the option of the applicant. The company and the Registrar to
the company – M/s. Computech Sharecap Limited have signed a tripartite agreement with CDSL on 26th April,
2001 and NSDL on 10 th July, 2001 which enables the investors to hold and trade in securities in a
dematerialised form, instead of holding the securities in the form of physical certificates.
In this Rights Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their
Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant.
Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF.
Applications, which do not accurately contain this information, will be given the securities in physical form. No
separate applications for securities in physical and dematerailsed form should be made. If such applications
are made, the application for physical securities will be treated as multiple applications and is liable to be
rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat
and balance, if any, will be allotted in physical shares.
The Equity Shares of the company issued under the Rights Issue will be listed on BSE.
Procedure for availing facility for allotment of Equity Shares in this Issue in the electronic form is as under:
1.
Open a beneficiary Account with any Depository Participant (care should be taken that the Beneficiary
Account should carry the name of the holder in the same manner as is exhibited in the records of the
company. In case of joint holding, the Beneficiary Account should be opened carrying the names of the
holders in the same order as with the company). In case of Investors having various folios in the
company with different joint holders, the investors will have to open separate accounts for such holdings.
Those Equity Shareholders who have already opened such Beneficiary Account(s) need not adhere to
this step.
2.
For Equity Shareholders already holding Equity Shares of the company in dematerialised form as on
Record Date, the beneficiary account number shall be printed on the CAF. For those who open accounts
later or those who change their accounts and wish to receive their Rights Equity Shares by way of credit
to such account, the necessary details of their beneficiary account should be filled in the space provided
in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in
dematerialized form even if the original equity shares of the company are not dematerialized.
Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity
Shareholders and the names are in the same order as in the records of the company.
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KAIRA CAN COMPANY LIMITED
3.
Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those with the
applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the names
of the applicants and the order in which they appear in the CAF should be same as registered with the
applicant’s Depository Participant.
4.
If incomplete/ incorrect Beneficiary Account details are given in the CAF the applicant will get Right Equity
Shares in physical form.
5.
The Rights Equity Shares allotted to investors opting for dematerialized form, would be directly credited
to the Beneficiary Account as given in the CAF after verification. Allotment advice, Refund Order (if any)
would be sent directly to the applicant by the Registrar to the Issue but the applicant’s Depository
Participant will provide to him the confirmation of the credit of the Rights Equity Shares to the applicant’s
Depository Account.
6.
Renouncees will also have to provide the necessary details about their Beneficiary Account for allotment
of securities in this Issue. In case these details are incomplete or incorrect, the applicant will receive the
shares in physical form.
DEPOSITORY OPTION TO INVESTORS
Trading in the securities shall be in dematerialized form only for all investors. As per the provisions of the
Depositories Act, 1996, the shares of a body corporate can be traded only in a dematerialized form, i.e., not
in the form of physical certificates but be fungible and be represented by the statement issued through
electronic mode. The Company will opt for this method subject to investors exercising their option to hold the
shares in dematerialized form, for which necessary columns have been provided in the respective Application
Forms. Tripartite agreements have been signed between the Company, the Registrar, and NSDL/ CDSL
respectively.
1.
Investors have an option to seek allotment of equity shares in electronic mode or physical mode.
2.
The option for receiving shares in dematerialized form should be indicated in the relevant blocks in the
CAF.
3.
Investors opting for receiving equity shares in dematerialized form need to have a beneficiary Account
with a Depository Participant prior to submitting the CAF.
4.
CAF with incomplete/ incorrect beneficiary account details may result in physical form.
5.
Responsibility for correctness of applicant’s details given in the Application Form vis-à-vis those with his/
her Depository Participant, would rest with the investor.
6.
Shares in electronic form can be traded only in Stock Exchanges having electronic connectivity with
NSDL/ CDSL.
7.
Please indicate the number of shares subscribed for in dematerialized form in the space provided in the
CAF.
LAST DATE FOR SUBMISSION OF COMPOSITE APPLICATION FORM
The last date for receipt of CAF by the Banker to the Issue together with the amount payable to application
is 8th February,2005.
If the relevant CAF(s) together with amount payable is not received by the Bankers/ Registrars to the issue on
or before the close of banking hours as aforesaid the offer contained in this letter of Offer shall be deemed to
have been declined and the Board shall be at liberty to dispose of the Equity Shares hereby offered as
provided under “Basis of Allotment.”
INCOMPLETE APPLICATIONS
CAFs that are not accompanied by the proper amounts calculated as aforesaid are liable to be rejected.
MINIMUM SUBSCRIPTION
The minimum subscription which must be raised by the issue of shares is 90% of the total issue, which
amounts to Rs. 43,68,000/- being the aggregate issue price of 48,533 Equity Shares of Rs.10/- each for cash
24
KAIRA CAN COMPANY LIMITED
at a premium of Rs.90 per share offered in terms of this Letter of Offer. The Board of Directors will proceed to
allot the shares on receipt of the application money for minimum 43,680 Equity Shares.
If the Company does not receive the minimum subscription of 90% of the issued amount on the date of the
closure of the issue or if the subscription amount falls below 90% after the closure of issue on account of
cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith refund the
entire subscription amount received within 42 days from the date of the closure of the issue. If there is a delay
beyond 8 days after the Company becomes liable to pay the amount, the Company shall pay interest for the
delayed period as per Section 73 of the Companies Act, 1956.
BASIS OF ALLOTMENT
In the event of the issue being over subscribed, the basis of allotment will be made only within the overall size
of the Rights Issue, as stated in the Letter of Offer, and the Board will proceed to allot the Equity Shares in
consultation with BSE in the following order of priority.
1.
Full allotment to the shareholders who have applied to their Rights entitlement, either in full or in part and
also to the renouncee(s) who have applied for Equity Shares renounced in their favour either in full or in
part (subject to other provisions contained under the paragraph titled “Renunciation”.)
2.
Allotment of one additional share to such shareholders whose fractional entitlements have been ignored,
and have applied for additional shares.
3.
Allotment to the shareholders who have applied for additional shares provided that they have not
renounced any shares and have applied for all the Equity Shares offered to them, provided there is a
surplus after making full allotment under (1) & (2) above. This shall be at the absolute discretion of the
Board or the Committee of the Board authorized in this behalf by the Board and the decision of the Board
or such Committee shall be final and binding. The allotment of such additional equity shares applied for
will be made as far as possible on an equitable basis with reference to the number of equity shares held
by the shareholders on the Record Date and in consultation with the BSE.
4.
Allotment to renouncees who having applied for all the shares renounced in their favour have applied for
additional shares, will be considered provided there is a surplus of unallotted shares remaining after
allotment of shares as aforesaid in point nos. 1,2 and 3 above.
5.
The issue will become under-subscribed where the number of shares subscribed considering the number
of shares applied by shareholders and renouncees as per entitlement and the additional shares applied
by the shareholders is less than the number of shares offered in this Issue. Such under-subscribed
portion can be applied for only after the closure of the issue. The promoters and / or their group and/or
their friends and relatives can subscribe to such under-subscribed portion. If the promoters desire to
subscribe such under-subscribed portion and if disclosure is made pursuant to SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997, such allotment of the under-subscribed portion
will be governed under Regulation 3(1)(b) of SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997.
The promoters and/or their group Companies and their friends and relatives of promoters reserve their right
to renounce full or any portion of their Rights entitlement.
The basis of allotment would be signed as correct by the appropriate authority of the BSE, in addition to the
Lead Merchant Banker and the Registrar to the issue.
RANKING OF EQUITY SHARES
The Equity Shares offered and allotted through this Letter of Offer shall be subject to the Memorandum and
the Articles of Association of the Company and shall rank pari-passu with the existing Equity Shares in all
respects, including Dividend, with the existing Equity Shares of the Company.
DISPOSAL OF APPLICATION AND APPLICATION MONEY
No receipt will be issued for application money received. However, the Bankers to the Issue receiving the
CAF(s) will acknowledge its receipt by stamping and returning the acknowledgement slip at the bottom of
each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application in
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KAIRA CAN COMPANY LIMITED
whole or in part and in either case without assigning any reason therefore. In case an application is rejected in
full, the whole of the application money received will be refunded and where an application is accepted in part
the excess money will be refunded after adjusting the money payable for the shares allotted. All refunds will be
made within six weeks of the date of closing of the Rights Issue.
ARRANGEMENT FOR DISPOSAL OF ODD LOTS
The shares of the company are tradable in compulsory demat segment and the minimum trading lot is one
Equity Share. Since the company has made arrangements for fractional entitlements to be converted to
nearest whole integers, the company has not made any arrangement for disposal of odd lots. For
shareholders seeking allotment in physical form, one single consolidated certificate shall be issued against
their entitlement unless otherwise desired by the shareholder(s). The company shall split the shares and
return the same to the shareholder, into lots as specified and specifically requested in writing by the
shareholder (who holds physical certificates) within 7 days from the date of receipt of such request by the
company.
RIGHTS OF EQUITY SHARE HOLDERS
The Equity Shares as aforesaid shall rank pari passu with the existing Equity Shares of the Company, save
and except that the Right Equity shall rank for and participate in dividend, if any, declared by the Company in
respect of the Financial Year in which such Right Equity Shares are issued. The Shareholders are entitled to
receive bonus and Rights shares, as and when issued. Further the rights of the above and other holders of
shares are subject to the provisions of the Act, the Memorandum and the Articles, the terms of this Letter of
Offer and other laws applicable from time to time.
UTILIZATION OF PROCEEDS
The Subscription received against this Rights Issue will be kept in a separate bank account and the Company
shall have access to such funds so collected to the extent of Issue Size upon satisfying Stock Exchange
Authorities with suitable documentary evidence that the minimum subscription of 90% of the issue amount
has been received by the Company.
REFUNDS FOR APPLICATION MADE BY CHEQUES / DRAFTS
Refunds, if any, will be made along with Allotment Letters/ Shares Certificates and / or regret letters by
cheque / pay order drawn on the Bankers to the Company and will be despatched within six weeks from the
date of closure of issue, by registered post if the amount of such refund exceeds Rs.1500/-, and by UPC in
the case of refund below Rs.1500/-, in either case at the risk of the applicant. The Company agrees that it
shall pay interest @ 15% per annum if the allotment has not been made and / or the allotment letters / refund
orders have not been despatched to the investors within six weeks from the date of closure of the issue.
Such cheque/pay order will be payable at par during their validity period at all centres where the applications
are received or such places as may be approved by the BSE. In case of joint applications, Refund Orders, if
any, will be made out in the First applicant’s name appears on the CAF.
REFUNDS FOR APPLICATIONS BY NRIs / FIIS
In case of NRIs / FIIs who remit their application money from funds held in NRE / FCNR / NRO accounts,
refund/ payment of interest/ dividends and other disbursements, if any, shall be credited only to such account
and details thereof should be furnished in the column provided for the purpose in the CAF. In case NRIs who
remit their application money through Indian Rupee drafts purchased from abroad, refunds/ payments of
interest/dividends and other disbursements, if any, will be made in US Dollars at the exchange rate prevailing
at such time subject to the permission of the RBI. The Company will not be responsible for any loss on
account of exchange fluctuations or converting their Indian Rupee amount into US dollars.
COMPLETION OF NECESSARY LISTING FORMALITIES
The company undertakes to complete the necessary formalities for listing of the Rights Equity Shares to
enable the commencement of trading in these Shares within a period of seven working days from the
finalisation of basis of allotment.
26
KAIRA CAN COMPANY LIMITED
DELIVERY OF SHARE CERTIFICATES
In case of company issuing Letter of allotment, the share certificates will be delivered within three months
from the date of allotment.
Allotment of Equity Shares and export of Letters of allotment/ share certificates to Non-residents would be
subject to approval of the RBI as may be required under the Foreign Exchange Management Act, 1999. The
Company will make requisite applications to the RBI at appropriate time.
DESPATCH OF ALLOTMENT LETTERS/ SHARE CERTIFICATES/ REGRET LETTERS/ REFUND ORDERS
The Company will issue, or credit the allotted securities to the respective DP accounts or despatch Letters of
Allotment/ Share Certificates and/ or Letters of Regret along with refund orders, if any, within a period of six
weeks from the date of closure of the issue, by Registered Post. If such money is not repaid, within eight
days from the day the Company becomes liable to pay it, the Company shall, as stipulated under Section 73
(2A) of the Act, pay that money with interest @15% p.a. Letters of Allotment/ Share Certificates/ Refund
Orders above the value of Rs.1500/- will be despatched by Registered Post to the sole/ first applicant’s
registered address. However, Refund Orders for value not exceeding Rs.1500/- shall be sent to the applicants
under Certificate of Posting. The Letters of Allotment/ Share Certificates/ Refund Orders etc. are mailed at the
investors’ sole risk and responsibility. Such cheques or pay orders will be payable at par at all the centres
where the applications were originally accepted and will be marked “A/c Payee” and would be drawn in the
name of the sole/first applicant. Adequate funds would be made available to the Registrars to the Issue for
this purpose.
Particulars of the applicant’s Savings/ Current Bank Account must be given in the space provided in the
application form so as to enable the Registrars to print the same on the refund order, if any. Provision of Bank
account details in the space provided for in the CAF has now been made mandatory and CAFs not containing
such details are liable to be rejected.
The Company agrees that as far as possible allotment of securities offered to the public shall be made within
30 days of the closure of the issue.
Interest in case of delay in Allotment / Despatch
The Company agrees that it shall pay interest @ 15% per annum if the allotment has not been made and/ or
the allotment letters/ refund orders/ Share Certificates have not been despatched to the investors within six
weeks from the date of closure of the issue.
All the cheques/ refund orders and Letter(s) of allotment/ Share Certificates will be despatched to the first
named/ sole applicant at his/ her own risk. The cheques/ refund orders will be payable at par in India at all
the places where the applications were originally accepted. The instruments will be marked “Account Payee”
and in the name of the sole/ first applicant. Bank charges, if any for encashing such cheques/ Pay Orders will
be payable by the applicants.
The Company has given an undertaking that the requisite funds will be made available to the Registrar for
complying with the requirement of despatch of refund orders/ allotment letters/ share certificates and that it
shall ensure despatch of refund orders of value over Rs.1500/- and share certificates by Registered Post only.
GENERAL INSTRUCTIONS
l
All applications should be made on the printed CAF provided by the Company and be complete in all
respects. CAF found incomplete with regard to any of the particulars required to be given therein, and /
or which is not completed in confirmity with the terms of this Letter of Offer, are liable to be rejected and
the money paid, if any, in respect thereof will be refunded without interest.
l
Please read the instructions in the enclosed CAF carefully.
l
Communications in connection with your application for equity shares including any change in your
registered address should be addressed to the Registrars.
l
Application Forms must be filled in ENGLISH in BOLD LETTERS.
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KAIRA CAN COMPANY LIMITED
l
A Magistrate under his/ her official seal must attest any thumb impression and any signature other than in
English, Marathi, Hindi and Gujarati.
l
In case of application made under Power of Attorney or by Limited Companies or Bodies Corporate for
Registered societies, a certified copy of the relevant Power of Attorney or the relevant resolution or
authority to make the application, as the case may be along with a certified copy of the Memorandum or
Articles of Association and/or Bye Laws, must be lodged for scrutiny separately (giving the serial number
of CAF) with the Registrar and must not be attached to CAF at the time of making the Application. In
case the Power of Attorney is already registered with the Company, then the same need not be furnished
again. However, the serial number of such Registration must be mentioned below the signature of the
Applicant.
l
In case of Joint Holders, all joint Holders must sign the relevant parts of the Application Form in the
same order and as per the specimen signature recorded with the Company.
l
In case of joint applications, refunds and all payments will be made to the person whose name appears
first on the application form and all communications will be addressed to him/ her.
l
To prevent fraudulent encashment of refund orders by third parties, the sole/ First Applicant must indicate
Savings Bank/ Current Account number and the name of the bank and its branch with which such
account is held in the space provided in the CAF for the purpose so that Refund Orders are printed with
these details.
l
The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C and D
of the Application Form(s) is/ are detached or separated, such applications will forthwith be rejected.
l
Shareholders must submit the CAF along with remittance only to the Bankers to the issue mentioned
elsewhere in this Letter of Offer or to the Registrars to the Issue wherever permitted under this Letter of
Offer or CAF.
l
No separate receipt will be issued for the application money. However the Banker to the Issue receiving
the CAF will acknowledge receipt of the application by stamping and returning to the applicant, the
Acknowledgement Slip at the bottom of the CAF.
l
Any dispute or suit action or proceedings arising out of or in relation to this Letter of Offer or in respect
of any matter or thing herein contained and claimed by either party against the other shall be instituted or
adjudicated upon or decided solely by the appropriate Court where the Registered Office of the Company
is situated.
l
The Last Date for receipt of CAF along with the amount payable is 8th February, 2005.
l
The Board will have the right to extend the Last Date for receipt of CAF for such period or periods as it
may determine from time to time, but not exceeding 60 days from the date of opening of the subscription
list.
l
If the CAF together with the amount payable there under is not received by the Bankers to the Issue on
or before the closure of the banking hours on the aforesaid Last Date or such Last Date as may be
extended by the Board, the offer contained in this Letter of Offer shall be deemed to have been declined
and the Board shall be at liberty to dispose the Rights hereby offered.
l
Applicants who wish to send their applications by post must send the same by Registered Post only to
the Registrar to the Issue at the address mentioned on the cover page of the Letter of Offer so as to
reach them before the close of banking hours on the Last Date as mentioned above.
l
The Company is not liable to accept such applications as are sent by post and are received after the
closure of the Rights Issue.
V.
TAX BENEFITS
The Company has been advised by the Auditors of the Company, C.C. Chokshi & Co., Chartered
Accountants, vide their letter dated 24th September, 2004 that under the current provisions of the Income
Tax Act, 1961 and the existing laws for the time being in force, the following benefits, inter alia, will be
available to the Company and its members:
28
KAIRA CAN COMPANY LIMITED
Quote:
Ref.: I/1201/5737
The Board of Directors
Kaira Can Company Limited
Tiecicon House
Dr.E. Moses Road, Worli,
MUMBAI – 400 011
24th September, 2004
Sub : Offer Document - Tax Benefits.
We refer to your letter dated 15th June, 2004 and our discussions in the above matter.
We are informed that the company is proposing to issue right equity shares for partially and/or fully funding
the working capital / other capital expenditure requirements of the company.
As desired by you, given below is the current position of tax benefits available to the Company and to its
shareholders as per the provisions of the Income-tax Act, 1961, the Wealth-tax Act, 1957 and the Gift-tax Act,
1958 for inclusion in the Offer Document for the proposed issue of shares.
The current position of major tax benefits available to the Company and to its shareholders is provided for
general information purposes only. Each shareholder is advised to consult its own tax consultant with respect
to the specific tax implications arising out of its participation in the issue, particularly in view of the fact that
there could be different interpretations of a legislation.
The contents of this note is based on the information, explanations and representations obtained from the
company and on the basis of our understanding of the business activities and operations of the company.
While all reasonable care has been taken in the preparation of the note, C.C. Chokshi & Co. accept no
responsibility for any errors or omissions therein or any loss sustained by any person who relies on it.
All the provisions set out below are subject to conditions specified in the respective sections.
TAX BENEFITS
(Subject to notes below)
I
Benefits Available to the Shareholders of the Company
A. Under the Income-tax Act, 1961 (“the Act”)
A.1 Resident Shareholders
(1) Under section 10(34) of the Act, any income by way of dividends referred to in section 115O (i.e. dividends declared, distributed or paid on or after 1 April 2003 by the Company) is
exempt from tax.
(2) Under section 10(38) of the Act, any income arising from the transfer of a long-term capital
asset, being an equity share in the company is exempt from tax where the transaction of
sale of such equity share or unit is entered into on or after the date on which Chapter VII of
the Finance (No. 2) Act, 2004 comes into force and the transaction is chargeable to
securities transaction tax under that Chapter.
(3) In accordance with section 10(23D) of the Act and subject to the provisions of Chapter XIIE of the Act, any income of:
(a) a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992
or regulations made thereunder;
(b) such other Mutual Fund set up by a public sector bank or a public financial institution
or authorised by the Reserve Bank of India and subject to such conditions as the
Central Government may, by notification in the Official Gazette, specify in this behalf
will be exempt from income-tax.
29
KAIRA CAN COMPANY LIMITED
(4) Under section 48 of the Act, if the Company’s shares, being long-term capital assets (i.e.
being held for more than twelve months), are sold, the long-term capital gains (in cases not
covered under section 10(38) of the Act) if any shall be calculated after indexing the cost of
acquisition.
(5) Under section 54EC of the Act, and subject to the conditions and to the extent specified
therein, long-term capital gains (in cases not covered under section 10(38) of the Act)
arising on transfer of the shares of the Company shall be exempt from tax if the gains are
invested within six months from the date of transfer in the purchase of a long-term specified
asset.
In such a case, the cost of such long-term specified asset will not qualify for tax rebate
under section 88.
If the long-term specified asset is transferred or converted (otherwise than by transfer) into
money at any time within a period of three years from the date of acquisition, the amount of
capital gains on which tax was not charged earlier shall be deemed to be income
chargeable under the head “Capital Gains” of the year in which the specified asset is
transferred or converted (otherwise than by transfer) into money.
(6) Under section 54ED of the Act, and subject to the conditions and to the extent specified
therein, long term capital gains (in cases not covered under section 10(38) of the Act) on
the transfer of the shares of the Company, after the shares are listed, will be exempt from
tax if the gains are invested in equity shares forming part of an eligible issue of capital,
within a period of six months after the date of such transfer. “Eligible issue of capital”
means an issue of equity shares which satisfies the following conditions, namely –
(a) the issue is made by a public company formed and registered in India;
(b) the shares forming part of the issue are offered for subscription to the public.
In such a case, the cost of such equity shares will not qualify for tax rebate under section 88.
(7) Under section 54F of the Act, and subject to the conditions and to the extent specified
therein, long term capital gains (in cases not covered under section 10(38) of the Act)
arising on the transfer of the shares of the Company held by an individual or Hindu
Undivided Family (HUF) shall be exempt from tax if the net consideration is utilised, within
a period of one year before, or two years after the date of transfer, in the purchase of a
residential house, or for construction of a residential house within three years. Such benefit
will not be available:
(a) if the individual or Hindu Undivided Family(i)
owns more than one residential house, other than the new residential house, on
the date of transfer of the shares; or
(ii) purchases another residential house within a period of one year after the date of
transfer of the shares; or
(iii) Constructs another residential house within a period of three years after the date
of transfer of the shares and
(b) the income from such residential house, other than the one residential house owned on
the date of transfer of the shares, is chargeable under the head “Income from house
property”.
(8) Under section 111A of the Act, short term capital gains arising from the transfer of a capital
asset, being an equity share in the company shall be taxed at a rate of 10% (plus
applicable surcharge and education cess) where the transaction of sale of such equity
share is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act,
2004 comes into force and the transaction is chargeable to securities transaction tax under
that Chapter.
30
KAIRA CAN COMPANY LIMITED
(9) Under section 112 and other relevant provisions of the Act, long term capital gains, (in cases
not covered under section 10(38) of the Act), arising on transfer of shares in the Company,
shall be taxed at a rate of 20% (plus applicable surcharge and education cess) after
indexation as provided in the second proviso to section 48. The amount of such tax shall
however, not exceed 10% (plus applicable surcharge and education cess) without indexation,
if the transfer is made after listing of the shares of the Company.
A.2 Non Resident Shareholders [Other than FIIs and foreign companies]
(1) A non-resident Indian (i.e. an individual being a citizen of India or person of Indian origin who is
not a ‘resident’) has an option to be governed by the provisions of Chapter XII-A of the Act, viz.
“Special Provisions Relating To Certain Incomes of Non-Residents” which are as follows:(a) Under section 115E of the Act, where shares in the company are acquired or subscribed for
in convertible foreign exchange by a non-resident Indian, capital gains arising to the nonresident Indian on transfer of shares held for a period exceeding 12 months shall (in cases
not covered under section 10(38) of the Act) be concessionally taxed at the rate of 10%
(plus applicable Surcharge and education cess) (without indexation benefit).
(b) Under section 115F of the Act and subject to the conditions and to the extent specified
therein long term capital gains (in cases not covered under section 10(38) of the Act)
arising to a non-resident Indian from the transfer of shares of the company subscribed to in
convertible foreign exchange shall be exempt from Income tax, if the net consideration is
reinvested in specified assets within six months of the date of transfer. If the specified asset
is transferred or converted (otherwise than by transfer) into money at any time within a
period of three years from the date of acquisition, the amount of capital gains on which tax
was not charged earlier shall be deemed to be income chargeable under the head “Capital
Gains” of the year in which the specified asset is transferred or converted (otherwise than
by transfer) into money.
(c) Under section 115G of the Act, it shall not be necessary for a Non-Resident Indian to
furnish his return of income if his income chargeable under the Act consists of only
investment income or long term capital gains or both arising out of specified assets
acquired, purchased or subscribed in convertible foreign exchange and tax deductible at
source has been deducted therefrom.
(2) Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O
(i.e. dividends declared, distributed or paid on or after 1 April 2003 by the Company) is exempt
from tax.
(3) Under section 10(38) of the Act, any income arising from the transfer of a long-term capital
asset, being an equity share in the company is exempt from tax where the transaction of sale of
such equity share is entered into on or after the date on which Chapter VII of the Finance (No.
2) Act, 2004 comes into force and the transaction is chargeable to securities transaction tax
under that Chapter.
(4) Under the first proviso to section 48 of the Act, in case of a non-resident, in computing the
capital gains arising from transfer of shares of the Company acquired in convertible foreign
exchange, the capital gains/ loss will be computed by converting the cost of acquisition,
consideration for transfer and expenditure incurred wholly and exclusively in connection with
such transfer into the same foreign currency which was utilised in the purchase of the shares
and the capital gains computed in such foreign currency shall be reconverted into Indian
currency, such that the aforesaid manner of computation of capital gains shall be applicable in
respect of capital gains accruing/arising from every reinvestment thereafter and sale of shares
or debentures of an Indian company including the Company. Further no cost indexation is
allowable in such a case.
(5) Under section 54ED of the Act, and subject to the conditions and to the extent specified therein,
long term capital gains (in cases not covered under section 10(38) of the Act) on the transfer of
the shares of the Company, after the shares are listed, will be exempt from tax if the capital
31
KAIRA CAN COMPANY LIMITED
gains are invested in equity shares forming part of an eligible issue of capital, within a period of six
months after the date of such transfer. “Eligible issue of capital” means an issue of equity shares
which satisfies the following conditions, namely –
(a) the issue is made by a public company formed and registered in India;
(b) the shares forming part of the issue are offered for subscription to the public.
In such a case, the cost of such equity shares will not qualify for tax rebate under section 88.
(6) Under section 54F of the Act, and subject to the conditions and to the extent specified therein,
long term capital gains (in cases not covered under section 10(38) of the Act) arising on the
transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF)
shall be exempt from tax if the net consideration is utilised, within a period of one year before,
or two years after the date of transfer, in the purchase of a residential house, or for construction
of a residential house within three years. Such benefit will not be available:
(a) if the individual or Hindu Undivided Family(i)
owns more than one residential house, other than the new residential house, on the
date of transfer of the shares; or
(ii) purchases another residential house within a period of one year after the date of
transfer of the shares; or
(iii) constructs another residential house within a period of three years after the date of
transfer of the shares; and
(b) the income from such residential house, other than the one residential house owned on the
date of transfer of the original asset, is chargeable under the head “Income from house
property”.
(7) Under section 111A of the Act, short term capital gains arising from the transfer of a capital
asset, being an equity share in the company shall be taxed at a rate of 10% (plus applicable
surcharge and education cess) where the transaction of sale of such equity share is entered into
on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force and
the transaction is chargeable to securities transaction tax under that Chapter.
(8) Under section 112 and other relevant provisions of the Act, long term capital gains, (in cases not
covered under section 10(38) of the Act), arising on transfer of shares in the Company, shall be
taxed at a rate of 20% (plus applicable surcharge and education cess). The tax shall however,
not exceed 10% (plus applicable surcharge and education cess) of the gains if the transfer is
made after listing of the shares of the Company.
A.3 Foreign Institutional Investors (FIIs)
(1) Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O
(i.e. dividends declared, distributed or paid on or after 1 April 2003 by the Company) is exempt
from tax.
(2) Under section 10(38) of the Act, any income arising from the transfer of a long-term capital
asset, being an equity share in the company is exempt from tax where the transaction of sale of
such equity share or unit is entered into on or after the date on which Chapter VII of the
Finance (No. 2) Act, 2004 comes into force and the transaction is chargeable to securities
transaction tax under that Chapter.
(3) Under section 54ED of the Act and subject to the conditions and to the extent specified therein,
long term capital gains (in cases not covered under section 10(38) of the Act) on the transfer of
the shares of the Company, after the shares are listed, will be exempt from capital gains tax if
the capital gains are invested in equity shares forming part of an eligible issue of capital, within
a period of six months after the date of such transfer. “Eligible issue of capital” means an issue
of equity shares which satisfies the following conditions, namely –
(a) the issue is made by a public company formed and registered in India;
32
KAIRA CAN COMPANY LIMITED
(b) the shares forming part of the issue are offered for subscription to the public.
In such a case, the cost of such equity shares will not qualify for tax rebate under section 88.
(4) Under section 111A and other relevant provisions of the Act, short term capital gains arising
from the transfer of a capital asset, being an equity share in a company shall be taxed at a rate
of 10% (plus applicable surcharge and education cess) where the transaction of sale of such
equity share is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act,
2004 comes into force and the transaction is chargeable to securities transaction tax under the
Chapter.
(5) Under section 115AD of the Act, FIIs will be taxed at 10% (plus applicable surcharge and
education cess) on long-term capital gains(in cases not covered under section 10(38) of the Act)
and at 30% (plus applicable surcharge and education cess) on short-term capital gains arising
on the sale of the shares of the Company.
However the short term capital gains refered to in section 111A of the Act shall be taxable at the
rate of 10% (plus applicable surcharge and education cess).
B. Under the Wealth Tax Act, 1957
Shares of the company will not be treated as an asset within the meaning of section 2(ea) of the
Wealth Tax Act, 1957, hence the shares will not be liable to wealth-tax.
C. Under the Gift Tax Act, 1958
Gift of shares of the company made on or after October 1, 1998 would not be liable to Gift tax.
II
Benefits Available to the Company
(1) In accordance with and subject to the provisions of section 32, the Company will be entitled to claim
depreciation in respect of tangible assets and intangible assets being in the nature of copyrights and
trademarks or any other business or commercial rights of similar nature at the rates prescribed
under the Income tax Rules. In respect of intangible assets, depreciation will be allowed only in
respect of assets which are acquired on or after 1 April 1998.
(2) Under section 10(34) of the Act, any income by way of dividends referred to in section 115-O (i.e.
dividends declared, distributed or paid on or after 1 April 2003 by the Company) is exempt from tax.
(3) Under section 10(35) of the Act, the following income shall be exempt in the hands of the company–
(a) Income received in respect of the units of a Mutual Fund specified under clause (23D) of
section 10; or
(b) Income received in respect of units from the Administrator of the specified undertaking; or
(c) Income received in respect of units from the specified company;
The exemption does not apply to any income arising from transfer of units of the Administrator of the
specified undertaking or of the specified company or of a mutual fund, as the case may be.
(4) Under section 10(36) of the Act, any income arising from the transfer of a long term capital asset
being an eligible equity share in a company purchased on or after the 1st day of March, 2003 and
before the 1st day of March, 2004 and held for a period of twelve months or more is exempt from
tax.
For this purpose, “eligible equity share” means(a) any equity share in a company being a constituent of BSE – 500 Index of the Stock Exchange,
Mumbai as on the 1st day of March 2003 and the transaction of purchase and sale of such
equity share are entered into on a recognised Stock Exchange in India; or
(b) an equity share in a company allotted through a public issue on or after the 1st day of March
2003 and listed in a recognized Stock Exchange in India before the 1st day of March 2004 and
the transaction of sale of such share is entered into on a recognised Stock Exchange in India.
33
KAIRA CAN COMPANY LIMITED
(5) Under section 10(38) of the Act, any income arising from the transfer of a long-term capital asset,
being an equity share in a company or a unit of an equity oriented fund is exempt from tax where
the transaction of sale of such equity share or unit is entered into on or after the date on which
Chapter VII of the Finance (No. 2) Act, 2004 comes into force and the transaction is chargeable to
securities transaction tax under that Chapter.
(6) Under section 54EC of the Act , and subject to the conditions and to the extent specified therein,
long-term capital gains (in cases not covered under sections 10(36) and 10(38) of the Act) arising on
transfer of a long-term capital asset shall be exempt from tax if the gains are invested within six
months from the date of transfer in the purchase of a long-term specified asset.
(7) Under section 54ED of the Act, and subject to the conditions and to the extent specified therein, long
term capital gains (in cases not covered under sections 10(36) and 10(38) of the Act) on the transfer
of listed securities or units will be exempt from tax if the capital gains are invested in equity shares
forming part of an eligible issue of capital, within a period of six months after the date of such
transfer. “Eligible issue of capital” means an issue of equity shares which satisfies the following
conditions, namely–
(a) the issue is made by a public company formed and registered in India;
(b) the shares forming part of the issue are offered for subscription to the public.
(8) Under section 111A of the Act, short term capital gains arising from the transfer of a capital asset,
being an equity share in a company or a unit of an equity oriented fund shall be taxed at a rate of
10% (plus applicable surcharge and education cess) where the transaction of sale of such equity
share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act,
2004 comes into force and the transaction is chargeable to securities transaction tax under that
Chapter.
(9) Under section 112 and other relevant provisions of the Act, long term capital gains, (in cases not
covered under sections 10(36) and 10(38) of the Act), arising on transfer of shares in the Company,
shall be taxed at a rate of 20% (plus applicable surcharge and education cess) after indexation as
provided in the second proviso to section 48. The amount of such tax shall however, not exceed
10% (plus applicable surcharge and education cess) without indexation, if the transfer is made in
respect of listed securities or units.
Notes
1.
All the above benefits are as per the current tax law as amended by the Finance (No. 2) Act, 2004.
2.
In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further
subject to any benefits available under the applicable Double Taxation Avoidance Agreements, if any.
3.
In view of the individual nature of tax consequences, each shareholder is advised to consult its own tax
advisor with respect to specific tax consequences of its participation in the scheme.
4.
The tax benefits listed above are not exhaustive.
Our views expressed herein are based on the facts and assumptions indicated above. No assurance is given
that the revenue authorities/courts will concur with the views expressed herein. Our views are based on the
existing provisions of law and its interpretation, which are subject to change from time to time. We do not
assume responsibility to update the views consequent to such changes. The views are exclusively for the use
of Kaira Can Company Ltd. and shall not, without our prior written consent, be disclosed to any other person.
Yours faithfully,
For C.C.CHOKSHI & CO.
Sd/Place : Mumbai
34
Authorised Signatory
KAIRA CAN COMPANY LIMITED
VI. PARTICULARS OF THE ISSUE
OBJECTS OF THE ISSUE – for funding, partially and/or fully, the working capital requirement and/or other
capital expenditure of the Company and/or funding partially and/or fully the food parlour division and/or other
projects.
FUNDS REQUIREMENT AND MEANS OF FINANCE:
The funds in relation to the above objects, as estimated by the management of the company, are required for
meeting the Working Capital needs of the company. The assessment of the Working Capital requirement and
means of finance thereof upto 31.3.05 is as under:A) Current Assets
1.
(Rs. in Lacs)
INVENTORY:a)
Raw Materials
1040.00
b)
Process Stock
710.00
c)
Finished Goods
600.00
d)
Stores & Spares
240.00
2590.00
2.
RECEIVABLES
750.00
3.
CASH & BANK BALANCES
75.00
4.
OTHER CURRENT ASSETS
515.00
Total Current Assets
(A)
3930.00
(B)
2134.00
(A - B)
1796.00
B) Less: Current Liabilities
CREDITORS, ETC.
Working Capital Gap
Less: Bank Finance
1300.00
Net Working Capital Gap
496.00
To be funded by Rights Issue
48.53
To be funded from DEBT / INTERNAL ACCRUALS
447.47
Notes:
1.
The Company has not availed of any unsecured loans except the Inter Corporate Deposits stated in Note
no. 2 herein below, from its group companies
2.
The Company has availed the following Inter Corporate Deposits from its group companies
Sr. Receipt
No. No.
Name
Rs. In
Lacs
Rate Of
Interest
Date Of
Availing
Due Date For
Repayment
Period
1
1297
Harshadray P. Ltd.
2.00
11%
17.07.04
17.01.05
6 Months
2
1292
Harshadray P. Ltd.
50.00
13%
03.04.04
03.10.04
6 Months
3
1294
Harshadray Inv. P. Ltd.
25.25
11%
26.08.04
26.02.05
6 Months
4
1295
Dryden Pvt. Ltd.
1.50
11%
28.08.04
28.02.05
6 Months
5
1296
Farm Chemicals P. Ltd.
3.25
11%
28.08.04
28.02.05
6 Months
Total
82.00
35
KAIRA CAN COMPANY LIMITED
3. The Issue expenses have been estimated as follows:
(Rupees)
Fees to Registrar
Fees to Bankers to the issue
25,000
1,500
Legal Advisor’s & Certification Fees
1,00,000
Printing Expenses
1,25,000
Mailing Expenses
5,000
Publication Expenses
1,25,000
Other Expenses
1,18,500
5,00,000
VII. COMPANY & MANAGEMENT
HISTORY, BACKGROUND & PRESENT ACTIVITIES OF THE COMPANY
The Company was incorporated as Kaira Can Company Private Limited on 1st March, 1962 in the State of
Maharashtra. On 24th August, 1964, the Company was converted into Public Limited Company and the word
‘Private’ was deleted by the office of the Registrar of Companies, Mumbai as on that date. The Company is
engaged in the manufacture of Open Top Sanitary Cans, Lithographed and Plain Metal Containers and
Special Containers. The Company largely caters to the requirements of the dairies under the Gujarat Cooperative Milk Marketing Federation Ltd., for the packaging of Baby Food, Ghee and other “Amul Range” of
dairy products. The Company supplies metal containers to the agro-based food and fruits processing
industries.
The Company is also in the business of manufacturing Ice cream cones since financial year 2000-2001. The
plant is located at Vithal Udyognagar, GIDC, Vallabh Vidyanagar, Gujarat.
The Company has commenced since financial year 1992-93, the business of processing, packing and
distributing of Amul milk and is having a packing station at Turbhe (Navi Mumbai).
The Company is in new line of business of food parlour. It is operating outlets for selling Amul products and
their food items at Delhi Metro Railway Stations since April, 2003.
MAIN OBJECTS OF THE COMPANY AS SET OUT IN THE MEMORANDUM AND ARTICLES OF
ASSOCIATION
The Company was incorporated in the year 1962. The objects as set out in the Object Clause of
Memorandum of Association are reproduced as follows.
(1) To manufacture open top sanitary cans, general line cans and special containers for Dairy industry.
(2) To carry on all and any of the business as manufacturers of and exporters, importers, buyers, sellers and
dealers in Drums, Barrels, Cans, containers and vessels, made of or capable of being manufactured from
tin plates, stainless steel or other metal sheets, plastic aluminium, cardboards and paper, of all and any
kinds and descriptions whatsoever.
(3) To carry on all and any of the business as manufacturers, designers and decorators of, and embossers,
painters, printers and lithographers of, and exporters, importers, buyers, sellers and dealers in, tin and
metal plates and other articles made of tin, metal or other material, of any kinds and descriptions, and as
sheet iron and tinplate workers and japanners letterpress or blockprinters, designers and draughtsmen
engravers, photographers, electrotypers, photographic printers, photo-lithographers, publishers, card-box
makers, booksellers, stationers, stereotypers and advertising agents and as printers in general including
as printers on paper, card board, polythene, polyviyal compounds, aluminium, tin-plates and other metal
and alloy sheets and on any other materials and articles.
(4) To carry on all or any of the businesses as merchants and manufacturers of and/or dealers in block
plates and every description of articles including utensils cans containers boxes and vessels made of or
capable of being manufactured from tinplates, tin, metal, metal sheets, plastic or otherwise.
36
KAIRA CAN COMPANY LIMITED
(5) To carry on all or any of the businesses of mechanical, electrical, mining, motor, hydraulic, water supply,
constructional and general engineers, tinplate and steelplate makers, iron founders, brass-founders,
metalworkers, toolmakers, machine makers, boiler makers, mill wrights, machinists, iron and steel
converters, smiths, woodworkers, builders, painters, gas makers, paper and pulp manufacturers and
merchants, colliery proprietors, iron masters and patent fuel manufacturers.
(6) To own, work, manage, buy, sell, import, export, manufacture, assemble, instal, improve, repair, convert,
alter, let on hire and deal in plant & machinery, installations, tools, implements, apparatuses, machine
parts & accessories, appliances, hardware and rolling stock, of all and any kinds.
(7) To carry on all or any of the businesses as timber merchants, saw-mill proprietors and timber-growers;
and to buy, sell, grow, prepare for market, manipulate, import, export and deal in timber and wood of all
kinds and any goods and articles in the manufacture of which timber or wood is either wholly or partly
used.
(8) To carry on all or any of the businesses as chemists, oil, and colourmen, manufacturers, buyers, sellers,
importers and exporters of and dealers in chemical industrial and other preparations and articles,
compounds, cements, oils, paints, pigments, compositions and varnishes, dyes, paints and colours and
electrical, chemical, photographical and scientific apparatuses, appliances and materials and as dealers
in grain, seeds, flax, cotton, lubricating and burning oils, grease, petrol, benzol or other petrol substitutes.
(9) To conduct any chemical or other investigations researches or experiments with a view to inventing,
perfecting, or improving any process which may seem capable of being used in any business which the
Company is authorised to carry on.
(10) To carry on all or any of the businesses as owners, explorers, workers, exercisers and developers of
mines; and to crush, win, get quarry, smelt, calcine, refine, dress, amalgamate, manipulate, and prepare
for market any kinds and descriptions of ores metal and mineral substances; and to grant prospecting,
mining and other licences, rights or privileges; and to carry on any other metallurgical operations which
may seem conductive to any of the Company’s objects.
(11) To search for, win, work, raise and prepare for market and dispose of coal, iron, tin, clay, slate, oil or
other valuable substances of any kinds in or under any property of the Company and to open and work
mines, wells and quarries, and provide plant and other things necessary or desirable for any of the above
purposes.
(12) To carry on business as general merchants, manufacturers, contractors, agents, importers, exporters,
factors, warehousemen, shipowners and carriers by land and sea, and as clearing and forwarding agents.
(13) To carry on all kinds of agency business, and to take part in the management supervision or control of
the business or operations of any other company, association, firm or person, and to act as Managing
Agents, Agents, Secretaries and Treasurers or other officers of any such company, association, firm or
person, and in connection therewith to appoint and remunerate any Directors, accountants, assistants and
other officers or experts or agents.
(14) To sink wells and shafts, lay down pipes, construct, maintain and improve any tramways, telegraph lines,
canals, reservoirs, watercourses, warehouses, sheds and building and other works and constructions,
and to pay or contribute to the expenses of constructing, maintaining and improving any such works and
constructions and to use, lease out, sell or otherwise dispose of them.
(15) To carry on financial business in all the branches and departments, including the borrowing, raising or
taking up of money, the lending or advancing of money upon or without security, the discounting, buying
and selling of, and dealing in bills of exchange, promissory notes, coupons and drafts, and bills of lading
and other documents of title of goods, warrants, debentures, certificates, scrip and other instruments and
securities whether transferable or negotiable or not, and the granting and issuing of letters of credit and
circular notes.
(16) To give, take, let or sublet contracts or subcontracts for or undertake or carry out the demolition, digging
up, salvage, or breaking of immovable estates and properties and of vehicles and vessels of transport by
sea, air or land, including ships, boats, steamers, aeroplanes and other aircrafts, railway trains and
wagons, tram cars and motor vehicles, and of mills, factories, mines, installations, plant and machinery
37
KAIRA CAN COMPANY LIMITED
and structures, of all and any kinds and descriptions respectively, and/or acquire the same respectively with
a view of demolition, digging up, salvage or breaking up thereof and for use for disposal of the materials,
articles, things, fittings, fixtures, components, and parts so obtained therefrom.
(17) To work as managing agents and secretaries and treasurers of any companies or bodies corporate and
to carry on business as agents, selling agents, buying agents, publicity agents, brokers, commission
agents, indenters, indenting agents, canvassers, advertisers, publicity agents, stockists, and distributors,
for any persons firms and companies, including without prejudice to the said generality and in particular,
for importers, exporters, buyers, sellers, manufactures, shippers, merchants, tradesmen, insurers,
financiers, builders, property owners, transporters and carriers by land and/or sea and/or rivers and/or air
and generally to undertake and carry out agencies and agency work of any kinds whatsoever and transact
all manner of agency booking, commission, canvassing, distributing, publicity and advertising business.
(18) To conduct all or any of the several operations connected with the importing, exporting, purchase, sale,
manufacture, packing, warehousing, consignment, shipment, transhipment, transport, insurance and the
carrying and despatch of goods, commodities, merchandise, articles and chattels of all and any kinds or
descriptions, whether herein specified or not.
(19) To carry on business as financiers, capitalists, commercial agents, loan brokers, mortgage brokers,
financial agents, and advisers and as estate brokers.
(20) To carry on business as estate agents and estate managers, and to collect rents of repair, look after and
manage immoveable properties of or for any persons firms and companies governments and states as
well as this company, to give take let and sub-let rent-farming contracts, and to carry out undertake, or
supervise any building, constructing altering, improving, demolishing and repairing operations and all other
works and operations in connection with immoveable estates and properties.
(21) To undertake and execute or let or sub-let any contracts for works involving the supply or use of any
machinery, and to carry out any ancillary or other works comprised in such contracts provided that the
Company does not carry on Banking business as defined in Banking Companies Act.
(22) To purchase, take on lease or otherwise acquire, and to sell, dispose of and deal in mines and mining
rights and metalliferous lead and property supposed to contain metals minerals or precious stones of all
kinds, and undertakings connected therewith, and to work, exercise, develop and turn to account any
mines and mining rights, and undertakings connected therewith, and to buy, sell, refine, treat, manipulate,
and deal in metals, minerals, and precious stones of all kinds.
(23) To search for, inspect, examine and explore, work, take on lease, purchase or otherwise acquire lands
and places, which may seem capable or possibly capable of affording a supply of stone, mineral oil,
metal or other valuables, substance, or material, and to establish utilise and turn to account pumping
stations, pipe-lines, and other works and conveniences suitable for the purpose of the company.
(24) To establish, acquire by purchase, lease, hire, exchange, license or otherwise upon any arrangement,
construct, improve, maintain, develop, work, manage, carry out, superintend, or control any roads, way,
tramways, railways, branches or sidings or railways, bridges, watercourses, manufactories, warehouses,
mills, factories, workshops, markets, reservoirs, tanks, bridges, hydraulic works, electric works, shops,
stores, embankments, smelting works, furnaces, cooling-lines, bustees, villages, houses, and other works,
and conveniences, and to contribute to, subsidise, or otherwise assist or take part in, the construction,
improvement, maintenance, developments, working, carrying out supervision or control thereof.
(25) To sink well and shafts, and to make, build, construct, lay down and maintain, reservoirs, waterworks,
cisterns, culverts, filter-beds, main and other pipes, and appliances, and to execute and do all other
works and things necessary or convenient for obtaining, storing, selling, delivering, measuring and
distributing water, or otherwise for the purposes of the company.
(26) To carry on the business of electricians, suppliers of electricity for the purposes of light, heat, motivepower, or otherwise.
(27) To carry on business of importing, exporting, buying and selling and distributing and as merchants and
dealers in hardware, motor vehicles and radios, parts and accessories of motor vehicles and radios of all
and any kinds.
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KAIRA CAN COMPANY LIMITED
(28) To carry on business as storekeepers in all or any lines.
(29) To carry on all or any of the business as druggists, makers, exporters, importers, buyers, sellers, and
dealers of and in chemicals, heavy chemicals, drugs and medicinal preparations, pharmaceutical and
surgical goods and articles, oils, perfumes and scents, manure and cattlefeed, oilmans store, furniture,
household goods and decorations, plastic and plastic goods, metal vessels, and as carpenters,
furnishers, interior decorators and cutlery merchants, and to manufacture make sell and deal in
advertising tablets and dispersers calendars cartons and labels.
(30) To carry on business or businesses of importing, exporting, buying, acquiring, selling, making,
manufacturing, preparing, planting, growing, cultivating, exchanging, hiring, letting out on hire, disposing
of or dealing in, and/or as buying agents, selling agents, commission agents, brokers, indentors, indenting
agents, canvassers, exporters, importers, buyers, sellers, merchants, manufacturers, distributors,
stockists, dealers, publicity agents and advertisers, of in or for all and any kinds and descriptions of
goods, materials, commodities, substances, merchandises, chattels, and effects, goods, articles, and
things, (whether solid liquid or gaseous and whether specified in this memorandum or not and whether
wholesale or retail), which the Company is generally, specially, expressly, or impliedly authorised by this
memorandum to carry on or which is usually carried on by persons engaged in any of the said business
or which may seem to the Company to be capable of being carried on profitably or conveniently in
connection with or in addition to any of the said businesses or as may be considered necessary or
convenient for any business for the time being on or proposed to be carried on by the Company.
(31) To carry on any business, whether herein specified or not shether mercantile, financial, industrial,
manufacturing agency, transport or otherwise, which may seem to the Company capable of being
profitably or conveniently carried on in connection with or in addition to any existing or proposed business
of the Company or calculated directly or indirectly to enhance the value of or render profitable any of the
Company’s property, or rights for the time being.
(32) To lend moneys to any persons, firms, companies, governments, and states, on any terms and whether
without or with upon or against securities of any kinds and descriptions, including without prejudice to the
said generality and in particular pledges, hypothecations and mortgages of moveable property and
mortgages of and charges upon immoveable property of all and any descriptions, legal and/or equitable,
as well as securities founded on any rights, benefits or concessions of any kinds or nature, and to
customers and others having dealings with the Company.
(33) To receive and accept moneys as deposit with or without allowances or interest and/or for commission
and/or any other consideration provided that the Company does not carry on Banking business as
defined in the Banking Companies Act.
(34) To borrow or raise moneys or secure the payment of moneys and/or fulfilment of any obligations in such
manner as may be thought fit, and without prejudice to the said generality and in particular by the issue
of debentures and debenture stock, perfectual, terminable or otherwise, or by bonds, mortgages, pledges,
hypothecations, liens or any other security or securities founded or based or charged upon all or any of
the rights or properties, (present and/or future) moveable or immoveable or of whatsoever kind and
nature including uncalled capital of the Company, and/or by trust deeds or other assurances, and to
purchase, redeem, renew and pay of any of such securities as aforesaid, wholly or in part.
(35) To be interested in, promote or undertake the formation and establishment of or foster finances, subsidise
or acquire any industries, undertakings, institutions, companies, or businesses as may be thought fit.
(36) To give guarantee for the performance or discharge of any obligations, liabilities of duties of or the
payment of moneys by any persons, firms or companies or governments or states and to give
indemnities of all kinds.
(37) To act as agents for the issue and placing of and to underwrite shares, debentures, debenture stock and
other securities or any obligations of any companies or proposed companies.
(38) To undertake and execute any trusts or agencies, and to act as executor or administrator, receiver,
trustee, manager, committee, treasurer, attorney, liquidator or registrar and generally to undertake offices
of trust or confidence of any kinds, and to perform and discharge the duties and obligations thereof,
either gratuitously or otherwise.
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KAIRA CAN COMPANY LIMITED
(39) To purchase, take on lease or by exchange or otherwise acquire immoveable properties and estates,
lands, houses, and structures and other properties, immoveable and/or moveable of any tenures and
kinds, and any rights, interests, easements, licences, or shares, therein respectively, for or by way of
capital investments and/or for use for any of the objects and purposes of the Company, upon such terms
and for such consideration as may be thought fit and in particular and without prejudice to the said
generality, for cash and/or for shares, wholly or partly paid up or credited as paid up and/or debentures
or debenture stock of the Company, and to sell, lease out, hire out, alienate, transport, assign or
exchange or dispose of all or any of the immoveable properties, estates, lands, houses, structures and
other properties or any rights, interests, easements licences or shares therein respectively and to create,
sell and dispose of freehold and leasehold ground rents, and to make advances upon the security of land
or house or other property or any rights or interests thherein.
(40) To acquire and undertake the whole or any part of the business property and liabilities of any person, firm
or company carrying on any business which the Company is authorised to carry on or possessed of any
rights or property which may seem suitable for any of the purposes of this Company, on such terms and
for such consideration (whether in cash and/or in the shape of shares and/or debentures or debenture
stock and/or any rights of or in this Company) as may be thought fit.
(41) To acquire by subscription, purchase or otherwise and to take and hold or sell or re-issue with or without
guarantee or otherwise deal with any shares, stocks, debentures, debenture stock, securities, or other
interests of or in any other company or companies to promote or join in the promotion or establishment
of or subsidise or otherwise assist any other company or companies, if this Company may think it
necessary convenient or profitable to do so.
(42) To purchase, take on lease or in exchange or hire or otherwise acquire any immoveable or moveable
properties of whatsoever tenures estates or kinds, or any concessions rights or privileges, which the
Company may think necessary, convenient or profitable, and in particular any lands, buildings, structures,
easements, concessions, licences, machinery, plant, tools, implements, goods and stock-in-trade, and
either to retain any property, easements, concessions, rights, licences or privileges so acquired, for any
purposes of the Company, or to sell, lease out, dispose of the same or turn the same to account as may
seem expedient.
(43) To apply for purchase or otherwise acquire by patents, brevets d’invention, licences concessions and the
like, conferring any exclusive or non-exclusive or absolute or limited right to use or any secret or other
information as to any inventions, formulae, designs, schemes, or processes, which may seem capable of
being used for any of the purposes of the Company or the acquisition of which may seem calculated
directly or indirectly to benefit the Company, and to use exercise, develop or grant licences in respect of
or otherwise turn to account the property rights or information so acquired.
(44) To employ experts to investigate and inquire into the conditions, prospects, value, character and
circumstances, of any business concerns and undertakings, and generally, of any assets, property or
rights.
(45) To establish branches or appoint agencies for or in connection with any of the objects purposes or
business of the Company, and to regulate or discontinue any of such branches or agencies, and to
transact all kinds of agency businss and in particular in relation to the investment of money, the purchase
or sale of any property of goods and the collection and receipt of money.
(46) To adopt such means of making known, publishing and advertising any of the businesses, products,
goods and services of the Company as may seem expedient and, without prejudice to the said generality
and in particular, by advertising in the press, by circulars, by purchase or acquisition otherwise and
exhibition of works of art or interest, by publication of books or other literatures, and by granting prizes,
rewards and donations.
(47) To establish and support or aid in the establishment and support of associations, institutions, funds
(including provident funds and benefit funds), trusts and conveniences, calculated to benefit employees
or ex-employees of the Company in any businesses and the dependents or connections of any such
persons, and to grant pensions, gratuities, allowances or charitable aids to any of such persons or any of
their connections or dependents and to make payments towards their insurance and to subscribe or
guarantee moneys for any charitable or benevolent objects, or for any public or general useful objects.
40
KAIRA CAN COMPANY LIMITED
(48) To enter into any arrangements with any state, government or authority whatsoever, central provincial,
municipal, local or otherwise, whether of or in India or any other countries, that may seem conducive to
the Company’s objects or any of them, and to obtain from any state, government, or authority, any rights,
concessions, and privileges, which the Company may think it desirable to obtain, and to carry out
exercise and comply with any such arrangements, rights, privileges and concessions.
(49) To apply for and obtain any orders, acts, enactments, regulations, ordinances, flats and notifications of
any government, state, or legislature, for enabling the Company to carry out or give effect to or facilitate
any of its objects or for effecting any modifications of the Company’s constitution or for any other
purposes which may seem expedient, and to oppose any proceedings or applications which may seem
calculated directly or indirectly to prejudice the Company’s interest.
(50) To enter into partnerships or any other arrangements for sharing any profits or losses, or for any union of
interest, joint adventure, reciprocal concessions, co-operation or pool, or otherwise, with any persons, firm
or companies carrying on engaged in or about to carry on or engage in or being authorised to carry on
or engage in any business or transaction which may seem capable of being conducted so as directly or
indirectly to benefit this Company.
(51) To sell, lease, hire out, grant licences easements, and other rights over or in any other manner deal with
or dispose of, the business, property or properties, including moveable and properties, undertaking,
assets, rights, concessions, and effects of the Company or any part thereof, for such consideration and
upon such terms as may be thought fit, and in particular and without prejudice to the said generality, for
shares wholly or partly paid up, debenture, debenture stock, bonds, or securities of any other company.
(52) To promote or join in the promotion or procure the registration incorporation or other recognition of any
company or companies for the purposes of acquiring all or any of the property, rights and liabilities
thereof of for or in any connection with any arrangements by or with this Company, as may seem to be
advantageous or suitable for the Company.
(53) To invest and deal with the moneys of the Company not immediately required, in such manner as may
from time to time be determined.
(54) To draw, make, accept, endorse, discount, execute and issue bills of exchange, promissory notes,
hundies, cheques, bonds, bills of lading, railway receipts, stamps, and other documents as to goods,
warrants, debentures and other negotiable or non-negotiable or transferable or non-transferable
instruments or securities, and to open, operate on or close banking accounts and overdraft accounts and
other accounts of any kinds or nature whatsoever.
(55) To pay all charges and expenses incurred or sustained in or about the promotion, incorporation, and
establishment of the Company which the Company shall consider to be preliminary, including therein the
costs charges and expenses of and incidental to advertising, commissions for underwriting, brokerage,
printing and stationery, and the promotion and establishment of agencies and local boards.
(56) To establish and maintain local registers, agencies, and branch places of business and procure the
company to be registered or recognised and carry on business in any part or parts of the world.
(57) To amalgamate with any other company or companies having objects altogether or in parts similar to
those of this Company.
(58) To remunerate any persons, firms, or companies for services rendered or to be rendered in placing or
assisting to place or guaranteeing the placing of any shares in this Company’s capital, or any debenture,
debenture stock, or other securities of this Company, or in or about the formation or promotion of this
Company, or the acquisition of any rights or property of or for this Company, or the conduct of its
business.
(59) To pay or satisfy any money, dues, and remuneration, either in cash or in kind or by the issue or
allotment of shares, debentures, or other securities of the Company, or by the granting of options to take
the same, or in any other manner as allowed by law.
(60) To sell, improve, manage, develop, exchange, enfranchise, lease, mortgage, dispoe of turn to account or
otherwise deal with, all or any part of the property undertaking and rights of the Company for the time being.
(61) To distribute any of the property of the Company in specie or kind amont the members.
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KAIRA CAN COMPANY LIMITED
(62) To do all or any of the above acts, matters and things in any part or parts of the world whatsoever, either
as principals, agents, sub-agents, trustees, contractors, sub-contractors, or otherwise, and either by or
through agents, sub-agents, sub-contractors, trustees or otherwise, and either alone or in conjunction with
any person, firm, company or body politic or corporate.
(63) To do all such other acts and things as may be incidental or the Company may think to be conducive.
And it is hereby declared that the word “Company” or “company” (save when used in reference to this
Company) in this clause shall be deemed to include any partnership or other body of persons whether
incorporated or not incorporated or public and wheresoever resident or domiciled AND THAT the objects
set forth in any of the sub-clause of this clause shall not be in any wise limited or restricted by reference
to or inference from the terms of any other sub-clause of this clause or by the name of the Company
AND THAT any general expression in any of the sub-clause of this clause shall not be narrowed or
restricted by construction ejusdem generis or otherwise AND THAT none of the sub-clauses of this
clause or objects therein specified or powers thereby conferred shall be deemed subsidiary or auxiliary
merely to the objects mentioned in the first or any other sub-clauses of this clause AND THAT this
Company shall have full power to exercise from time to time all or any of the powers conferred by any
and every of the sub-clauses of this clause in any part or parts of the world and notwithstanding that the
business undertaking property or acts proposed to be transacted acquired dealt with or performed do not
fall within the objects of the first sub-clause of this clause.
PROMOTERS
Kaira Can Company Ltd was initially promoted in the year 1962 by Shri H.N. Kapadia, Shri J.R. Mehta, Shri
C.C. Desai and Shri Amin Manaswi with Shri H.N.Kapadia as main promoter. The Company became a
subsidiary of Poysha Industrial Company Limited on 08.08.1964. Poysha Industrial Company Limited was
controlled by Kapadia Group and J.R.Mehta Group. Kapadia Group subsequently over a period of time
acquired the shares held by other Promoters and Poysha Industrial Company Limited. On 14th January, 1978
Kaira Can Company Limited ceased to be a subsidiary of Poysha Industrial Company Limited. Poysha
Industrial Company Limited was ordered to be wound up by the Bombay High Court on 09.01.1998. Shri
H.N.Kapadia, the original Promoter of the Company expired on 20th January, 2000. Shri P.N.Kapadia, Shri
U.R.Kapadia and Shri N.G.Sheth, directors are now having the managerial control over the Company. They
and their immediate relatives alongwith other companies under their control are having controlling interest in
terms of SEBI’s (Disclosure & Investors Protection) Guidelines, 2000.
BOARD OF DIRECTORS
Name, Address, Designation and age
Other Directorships
Shri P.N.Kapadia - Chairman
(Son of Shri Narendra N.Kapadia)
“Haveli”, 11th Floor
19th L.D.Ruparel Marg
Mumbai – 400 006.
Age : 54 years.
Occupation : Industrialist.
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42
Tecnimont ICB Pvt. Ltd. – Chairman & Managing Director
Harshadray Private Ltd. – Director
Farm Chemicals Pvt. Ltd. – Director
Dryden Private Ltd. – Director
TUV India Pvt. Ltd. – Director
Harshadray Investment Ltd. – Director
Modern Machinery and Equipment Ltd – Director
Titanor Components Ltd – Director
The West Coast Paper Mills Ltd. – Director
Silicon Interfaces Pvt. Ltd. – Director
Silicon Interfaces America Inc., USA – Director
Protos Engineering Co. Pvt. Ltd. – Director
Delimon Protos India Pvt. Ltd. – Director
Sortimat Protos Automation Pvt. Ltd. – Director
Alkyl Amines Chemicals Ltd. – Director
Thyssenkrupp Industries India Pvt. Ltd. – Director
Firsteservice.com (India) Pvt. Ltd. – Director
Integrated Industrial Quality Management Consultants
Pvt. Ltd. – Director
KAIRA CAN COMPANY LIMITED
Shri U.R.Kapadia – Managing Director
(Son of late Shri Rasiklal M.Kapadia)
131, Meher Naz
Cuffe Parade, Colaba
Mumbai – 400 005.
Age : 51 years
Occupation : Business Executive.
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Tecnimont ICB Pvt. Ltd. – Director
Harshadray Private Limited – Director
Harshadray Investment Pvt. Ltd. – Director
Dryden Private Limited – Director
Modern Machinery and Equipment Ltd. – Director
Farm Chemicals Pvt. Ltd. – Director
Annakrish Investment And Trading Pvt. Ltd. – Director
Balmer Lawrie-Van Leer Ltd – Director
Protos Engineering Co. Pvt. Ltd. – Director
Silicon Interfaces Private Ltd – Director
FirsteService.Com(I) Pvt. Ltd. – Director
TUV India Pvt. Ltd. – Director
Shri N.G.Sheth
(Son of Gunnendra L. Sheth)
D-2A/4, Vasant Vihar
New Delhi – 110 057
Age : 62 years
Occupation : Business Executive.
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Tecnimont ICB Pvt. Ltd. – Executive Director
Harshadray Pvt. Ltd. – Director
Harshadray Investment Pvt. Ltd. – Director
Dryden Pvt. Ltd. – Director
Modern Machinery & Equipment Ltd. – Director
TUV India Pvt. Ltd. – Director
UT Pumps & Systems Ltd. – Director
Premier Energy Technologies Pvt. Ltd. – Director
Goldstar Estates(P) Ltd – Director
Power Parts & Energy India Pvt. Ltd. – Director
Farm Chemicals Pvt. Ltd. – Director
Protos Eng. Co. Pvt. Ltd. – Director
Shri B.M.Vyas
(Son of Shri Mahendrakumar Vyas)
2, Sahyog Co-op. Hsg. Soc. Dairy Road,
Anand – 388 001.
Age : 53 years
Occupation : Service.
l Gujarat Co-operative Milk Marketing Federation Ltd. –
Managing Director
l Mehsana Dist. Co-op. Milk Union – Director
l Kaira Dist. Co-op. Milk Union – Director
Shri V.J. Matthai
(Son of Shri John Matthai)
Nestle 1, Flat No.404
Pandurang Budhkar Marg,
Worli, Mumbai – 400 025.
Age : 45 years
Occupation : Service.
Nil
CORPORATE GOVERNANCE AND SUB-COMMITTEES
Since the paid up capital of the Company is less than Rupees Three Crores, implementation of Code of
Corporate Governance is optional for the Company. Considering the size of the Company, the board and the
Senior Management has opted for not implementing the said Code for the present. However, if the need to
implement the same is felt in future, the Management has kept its options open.
Composition of Board of Directors:
Shri P.N.Kapadia
—
Chairman
Promoter
Shri U.R.Kapadia
—
Managing Director
Promoter
Shri N.G.Sheth
—
Director
Promoter
Shri B.M.Vyas
—
Director (Nominee of GCMMF Ltd.)
Shri V.J.Matthai
—
Director (Nominee of GCMMF Ltd.)
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KAIRA CAN COMPANY LIMITED
Share Transfer & Shareholder Investor Grievance Committee:
The Share Transfer and Shareholders Investor Grievance Committee comprises of Shri P.N. Kapadia,
Chairman and Shri U.R. Kapadia, Managing Director. The Company’s Compliance Officer and Company
Secretary Shri Devang R. Mehta, assists the Share Transfer and Shareholders Investor Grievance Committee.
Managerial Remuneration Committee
The Managerial Remuneration Committee comprises of Shri P.N.Kapadia, Chairman, Shri U.R.Kapadia,
Managing Director and Shri N.G.Sheth, Director.
Other Promoter Interests
The Promoter Directors do not have any sole proprietorship and/ or partnership firms and therefore they do
not have any such interest.
Changes in Directors during the last five years
Sl. Name and Address
No.
Date of
Cessation
Date of
Appointment
Remarks if any
Cessation
1.
Shri Harshad Kapadia
Ocean View Annex
3rd Floor, Bhulabhai Desai Road
MUMBAI – 400 026
20.01.2000
01.03.1962
Deceased
2.
Shri Nanak G. Sheth
D-2A/4, Vasant Vihar
NEW DELHI – 110 057.
—
27.04.2000
—
MANAGEMENT
The Company is managed by Board comprising of Directors having wide business experience and
professional qualifications. The management of the day-to-day operations of the Company is looked after by
Shri Utsav R. Kapadia, Managing Director, who is B.Tech. in Metallurgical Engineering from IIT, M.Sc.
Industrial Metallurgy and Management Techniques (U.K.) and M.Sc. in Welding Technology. He is well
experienced in Corporate Business management and is successfully discharging the responsibilities as
Managing Director since 01.07.1994. During his tenure as a Managing Director, the company has progressed
satisfactorily.
KEY MANAGEMENT PERSONNEL
The Company’s key management team comprises of experienced and professionally qualified personnel.
Following is the profile of the senior management staff at Kaira Can Company Limited.
Name
Age
Date of
Joining
Shri R.O.Mody
70
22.01.1979
General Manager B.Com, ACA
– Finance &
Accounts
35 years
Accounting,
finance and
taxation
Tak
Machinery
Ltd.
Shri K.M.Prabhu
57
05.03.1995
General Manager BE, DMS
–Operations
25 years
Operational in
charge of Cans
and Cone
Division
Vickers.
Shri K.Jagannathan
46
04.07.1991
General Manager M.Com, ICWA
– Commercial
20 years
Head of
Commercial
function and
Milk Division
Poysha Indl.
Co. Ltd.
44
Designation
Qualifications Experience Main
responsibility
Previous
employment
KAIRA CAN COMPANY LIMITED
Shri A.B.Kulkarni
44
02.03.1991
General Manager BE
– Planning
20 years
Head of material
procurement for
Can division and
DMRC Food
outlet incharge
Shri D.R.Mehta
40
25.06.2001
Company
Secretary
20 years
Legal, Secretarial, Cable Corpn.
Administration,
of India Ltd.
Human Resources
and EDP Head
M.Com, LLB,
ACS, MBA
(Finance)
Poysha Indl.
Co. Ltd.
MATERIAL CHANGE IN KEY MANAGERIAL PERSONNEL
No Changes have taken place in the key managerial personnel of the Company in the last three years:
VIII. BUSINESS
The Company’s turnover during the Financial Year 2003-04 was at Rs. 136.90 crores. The turnover for the
First Quarter of the Financial Year 2004-05 is Rs. 3685.32 lacs. The Divisional Operations are as follows:Operation of Can Division
The Company’s Can manufacturing units are at the following three locations :
Sl.No.
Location
1.
Post Office No.23, Amul Dairy Compound,
ANAND – 388 001.
Gujarat.
2.
Kanjari – 387325, Dist. Kheda,
Gujarat.
3.
Dudhsagar Dairy Campus,
Mehsana – 384002
Gujarat.
Licenced Capacity
(Qty./MT)
Installed Capacity
(Qty./MT)
4400
4000
10500
10500
3500
3500
The Company manufactures Open Top Sanitary (OTS) cans, lithographed and Plain Metal Containers and
Special Containers. The Company largely caters to the requirements of the dairies under the Gujarat Cooperative Milk Marketing Federation Limited for the packaging of Baby Food, Ghee and other ‘Amul Range’
of dairy products. OTS cans are supplied and used for packing dairy products, processed foods, ready to use
vegetables, fruit pulps, juices, fish, dry fruits, etc. Aerosol cans are supplied and used for packing insecticides,
pesticides, air-freshners, deodorants, perfumes, etc. The main raw material for manufacturing cans is Prime
Electrolytic Tinplate, which is sourced from domestic as well as international markets. Other raw materials
includes aluminium foils, copper wires, printing inks, coatings, lacquer and varnish. The Company also
manufactures metal containers, printed sheets and components of tin containers for exports. The alternative
modes of packaging and overcapacity within can making industry has constrained the growth of this division.
Operation of Sugar Cone
The unit to produce Rolled Sugar Cones is located at GIDC, Vithal Udyog Nagar in Gujarat with an installed
capacity of 300 lacs of cones per annum. The Rolled Sugar Cones are used for ice-cream filling. The cones
are manufactured on a fully automatic high-speed imported machine with German technology under stringent
hygienic conditions. Wheat flour mixed with water, sugar, edible oil, emulsifying and stabilising agent and
caramel are used as raw materials in making cones. The Company supplies cones to ice-cream
manufacturers such as Amul and others.
Operation of Milk Division
The Company has established a milk pasteurizing plant at D-59, TTC Industrial Area, MIDC Turbhe, Navi
Mumbai with the guidance from Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF Ltd). The
present installed capacity of the plant is 2,50,000 litres of milk per day. Pasteurized milk is received through
45
KAIRA CAN COMPANY LIMITED
insulated road tankers from Kaira Union, Valsad Union, Sumul Union, etc. The Company pasteurizes the milk
before supplying the same to dealers for distribution in Mumbai and its suburbs. This division has shown
consistent growth since its establishment in Financial Year 1991-92.
Operation of Food Outlets at DMRC
GCMMF has entrusted the Company with the management of exclusive Amul shops under the name ‘Utterly
Delicious’ at Delhi Metro Railway Corporation (DMRC) since April, 2003. Currently, the Company manages
outlets and one kiosk at DMRC stations at Shahdara, Seelampura, ISBT and Tishazani, where Amul products
ice-creams, softees, pizzas and flavoured milk are sold. The Company has also started selling Amul milk at
these outlets. DMRC has added and started running four more stations at Phul Bangash, Tri Nagar,
Vivekanandpuri and Pratap Nagar. GCMMF has finalised the terms with DMRC for opening new outlets at
these stations. GCMMF will entrust our company with the management of these Amul outlets shortly. With the
addition of more stations on DMRC, the traffic flow is expected to improve and with that, our sales too.
CHANGE IN AUDITORS:
There is no change in Auditors during the last three years.
IX. COMPANY’S FINANCIAL PERFORMANCE IN LAST 5 YEARS
REPORT OF THE AUDITORS ON FINANCIAL INFORMATION
The Board of Directors,
Kaira Can Company Limited
1st Floor, Tiecicon House
Dr E.Moses Road
Mumbai-400011
Dear Sirs,
1)
2)
We have examined the accompanying statement of Profits and Losses of Kaira Can Company Limited
(“the company”) for each of the five financial years ended 31st March, 2000, 2001, 2002, 2003 and 2004
and the statement of assets and liabilities of the company as on those dates enclosed as Annexure-I to
this Report. These statements are the responsibility of the Company’s management, have been prepared
by the company and audited by us in terms of the requirements of :
a.
Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956
b.
The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000
(“the Guidelines”) issued by Securities & Exchange Board of India (“SEBI”) on January 19, 2000 in
pursuance of Section 11 of the Securities and Exchange Board of India Act 1992, read together with
the related clarifications issued by SEBI and
c.
The instructions dated 2nd September 2004 received from company, requesting us to issue a report
for the purpose of inclusion in the offer document being issued by the Company in connection with
the Rights Issue of equity shares in the company.
We have also reviewed the unaudited financial statement for the half year ended September 30, 2004
included in Annexure-I. This statement is the responsibility of the Company’s Management and has been
approved by the Board of Directors.
A review of interim financial information consists principally of applying analytical procedures for financial
data and making inquiries of persons responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with the generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
3)
We report as under:
(i)
46
The statement of profit and loss accounts of the company for each of the five financial years ended
31st March,2000,2001,2002,2003 and 2004 and the statement of assets and liabilities as on those
dates as stated in paragraph 1 above reflect the profits and losses and assets and liabilities
extracted from the Profit and Loss accounts and Balance sheets for those years read with the
KAIRA CAN COMPANY LIMITED
respective significant accounting policies and notes thereon, audited by us, after making such
adjustments, regroupings and disclosures as were, in our opinion, appropriate and required to be
made in accordance with the provisions of paragraph 6.18.7 of the Guidelines and Part II of the
Schedule II to the Companies Act,1956 and have found to be correct.
(ii) Based on our review conducted as stated in paragraph 2 above, nothing has come to our notice that
causes us to believe that the unaudited financial statement for the half year ended September 30,
2004 prepared in accordance with accounting standards and other recognized accounting practices
and policies, contains any material misstatement.
4)
We further report that in respect of the five financial years ended 31st March, 2000, 2001, 2002, 2003 and
2004, the rates of dividends paid / payable by the company are as set out in Annexure-II.
5)
This Report is intended solely for your information and for the purpose of inclusion in the Offer Document
in connection with the proposed Rights Issue of equity shares by the Company and is not to be used,
referred to or distributed for any other purpose without our prior consent.
Yours faithfully,
For C.C.Chokshi & Co
Chartered Accountants
R.Laxminarayan
Partner
Membership No. 33023
Mumbai:
Date: 23rd December, 2004
1.
2.
Significant events during the last five years :
i)
The company has started manufacturing of Rolled sugar cones for filling up ice creams in Vithal
Udoynagar unit, in Kheda District, Gujarat in the year January, 2001 to cater to the demand from
Gujarat Co-operative Milk Marketing Federation Limited(GCMMF).
ii)
The company has started operating Amul food outlets from the year April, 2003 at the four metro
railways stations completed in the first phase of Delhi Metro Railway Corporation(DMRC). At these
outlets, the company is selling Amul products and other food items marketed by GCMMF. GCMMF
has already finalised the terms with DMRC for opening additional outlets at these stations and
offered an opportunity to the company for operating the same.
Notes applicable to Financial statements for the year ended 31st March,2004 unless otherwise stated.
Contingent Liabilities as of 31st March,2004.
Sr.No
Particulars
1
Disputed demands of Central Excise Department not provided for
Advance paid against said liability
2
Disputed demands of Sales Tax Authorities not provided for
Advance paid against said liability
3
Claims against the Company not acknowledged as debts
4
Disputed demands of Income-tax department not provided for
Amount adjusted by Income-tax department out of refunds of
subsequent assessment years.
5
Disputed demands of Notified Area Authority – Gujarat Industrial
Development Act not provided for
Amount(Rs)
11,31,721
11,01,721
4,47,548
2,97,228
4,42,273
80,40,214
58,66,996
70,278
Common notes for the Financial years ended March 31, 2000 to 2004
l
Loans and Advances include an amount of Rs.43,43,683/- being insurance claims recoverable from
an Insurance Company in respect of loss/damage to raw materials and finished goods during transit
and remaining outstanding from the financial year ended 31st March, 1991. Since the said insurance
47
KAIRA CAN COMPANY LIMITED
claims involving substantial amounts remained to be settled by the Insurance Company for a long time,
the company has filed a suit against the insurance company in Mumbai High Court for recovering the
claims which is pending disposal by the High Court.
In view of the above, the realisable amount cannot be ascertained with reasonable accuracy. Under the
circumstances, the pending claims are considered as good and recoverable and no provision is
considered necessary in the accounts in respect thereof.
l
Export Benefits/Incentives are accounted on accrual basis. Accordingly, estimated import duty benefit
for the five financial years against Exports effected during the respective years has been taken into
account for the years as incentive accruing in respect of duty free imports of Raw Materials yet to be
made as of the year end in respect of the aforesaid exports. The company has subsequently till the
signing of the audit report imported Raw Materials and availed import duty benefits and balance are yet
to be imported. Further company intends to utilise the import benefit for the raw material in transit. In
cases, where import licences have lapsed, steps are being taken to revalidate such import licences. A
detailed break-up of year wise accrual of benefit and its utilisation and the balance left is given below:
Financial
year
Benefits
accrued as
of year end
Benefit on Raw
materials in
transit
(Rs)
Import duty benefit
availed till the date
of signing respective
year audit report
(Rs)
(Rs)
*Balance for which
imports are yet to be
made in subsequent
years
(Rs)
1999-2000
89,15,613
58,92,318
—
30,23,300
2000-2001
2,30,66,876
1,02,93,917
1,01,75,080
25,97,879
2001-2002
3,81,75,347
2,28,76,239
1,18,38,564
34,60,544
2002-2003
3,49,18,609
2,13,66,652
35,40,957
1,00,11,000
2003-2004
3,29,71,824
2,36,23,989
46,76,896
46,70,939
st
* The imports have been made in the subsequent years except for the year ended 31 March, 2004
which is yet to be made.
l
Notes to accounts for the year ended 31st March, 2001
Hitherto, it was the practice of the company to account for leave encashment benefits to employees
on payment basis. During the year the company has changed its accounting policy and liability for
leave encashment has been provided based on actuarial valuation in accordance with the Accounting
Standard 15 “Accounting for Retirement Benefits in the Financial Statement of Employers” issued by
The Institute of Chartered Accountants of India. However such change in method of accounting has
no material impact on the profit for the year ended 31st March, 2001.
l
Deferred Tax:
The company has adopted the accounting standard AS-22 “Accounting for taxes on Income” issued by
the Institute of Chartered Accountants of India from the year commencing on 1st April, 2001. The net
deferred tax liability of Rs. 86,66,514/- as of 1st April, 2001 has been debited to General reserves.
The break up of net deferred tax liability as at 31st March 2004 is as under:
Particulars
Timing Difference on account of: Difference
between book depreciation and depreciation
under Income Tax Act 1961.
Deferred Tax Liability
(Rs)
—
1,46,21,523
53,009
—
Provisions for Doubtful debts and advances
1,18,000
—
TOTAL
1,71,009
1,46,21,523
Expenditure under Section 43B of the
Income-tax Act 1961
Net Deferred Tax Liability
48
Deferred Tax Asset
(Rs)
1.44,50,514
KAIRA CAN COMPANY LIMITED
l
Leases:
A.
Hire Purchase Agreements
(i)
In accordance with Accounting Standard 19 “Leases” issued by the Institute of Chartered
Accountants of India and made mandatory, all assets acquired under Hire Purchase agreements on
or after April 1st, 2001 are capitalised and a loan liability recognised. Consequently, depreciation is
provided on such assets. Installments paid are allocated to the liability and the interest is charged to
Profit & Loss Account.
(ii) a)
Assets acquired on Hire Purchase agreements mainly comprise cars and machinery. The
agreements provide for revision of installments in the event of changes in taxes, etc. if any,
leviable on installments. There are no exceptional / restrictive covenants in the Hire Purchase
agreements.
b)
The minimum installments as at 31.03.2004 and the present value as at 31.03.2004 of minimum
installments in respect of assets acquired under Hire Purchase agreements are as follows:
Minimum Installments
(i)
Payable not later than 1 year.
Amount (Rs.)
41,96,009
(ii) Payable later than 1 year and not later than 5 year.
32,66,617
TOTAL Minimum Installments (i) + (ii)
74,62,626
Less: Future Finance charges
9,74,645
Present Value of Minimum Installments
64,87,981
Present Value of Minimum Installments
Amount (Rs.)
(i)
Payable not later than 1 year.
35,85,347
(ii) Payable later than 1 year and not later than 5 year.
29,02,634
TOTAL Present Value of Minimum Installments
64,87,981
B. Operating Lease
The company has taken various residential / commercial premises and plant and machinery under
cancelable operating Leases. These lease agreements are normally renewed on expiry. The lease
payments recognised in Profit & Loss Account for the year ended 31st March, 2004 is
Rs. 82,39,735/-.
l
The Company has adopted the mandatory Accounting Standards issued by the Institute of Chartered
Accountants of India to the extent they have come into force in the respective years.
SIGNIFICANT ACCOUNTING POLICIES
Significant Accounting Policies adopted by the Company in the preparation and presentation of financial
statements:
A.
Basis of Accounting:
The accounts are prepared on accrual basis under the historical cost convention in accordance with
generally accepted accounting principles [ ‘ GAAP ’ ] and in compliance with the accounting standards
referred to in Section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act.
The preparation of financial statements in conformity with GAAP requires that the management of the
company makes estimates and assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the disclosures relating to contingent
liabilities as of the date of the financial statements. Examples of such estimates include the useful lives
of fixed assets, provision for doubtful debts / advances, future obligations in respect of retirements benefit
plans, etc. Actual results could defer from these estimates.
49
KAIRA CAN COMPANY LIMITED
B. Fixed Assets
(i)
Fixed Assets are recorded at cost of acquisition or construction. They are stated at historical cost.
Fixed Assets acquired on lease basis from Leasing Companies prior to 1st April, 2001 are not
included in the Schedule of Fixed Assets.
(ii) Lease Rentals paid in respect thereof are charged to Profit and Loss Account.
(iii) Depreciation has been calculated on straight line basis in accordance with the provisions of Section
205(2)(b)of the Companies Act, 1956 at the rates and in the manner specified in Schedule XIV of
the said act.
C. Investments
Long Term Investments are shown at cost. Provision is made for any diminution, other than temporary, in
the value of investments.
D. Employee Benefits:
(i)
Provident Fund :- Contribution paid under statute to Government/ Recognised provident fund is
charged to revenue.
(ii) Gratuity :- Gratuity contribution made to Gratuity Fund on the basis of actuarial valuation is charged
to revenue.
(iii) Superannuation fund :- Contribution made to recognised superannuation fund in respect of eligible
employees is charged to revenue.
(iv) Leave encashment :- Provision for leave encashment is made on the basis of actuarial valuation.
E.
Valuation of Inventories:
(i)
Stores and Spare Parts are valued at first-in first-out cost or Net Realisable Value whichever is lower.
(ii) Raw materials are valued at first-in first-out cost or Net Realisable Value whichever is lower. The
cost includes purchase price as well as incidental expenses.
(iii) Process Stock is valued at absorption cost.
(iv) Finished Goods (Containers, Can making machinery, Ice cream cones, Milk and Food Products) are
valued at cost or Net Realisable value whichever is lower.
F.
Foreign currency Transactions:
(i)
Transactions in foreign currencies are recorded at the original rate of exchange in force at the time
of occurrence of transactions.
(ii) Current assets and Current liabilities in foreign Currencies not covered by forward contracts are
restated at rates ruling at the year end. The resultant exchange differences are dealt with in the
Profit and Loss Account.
(iii) In respect of transactions for purchase of materials covered under forward exchange contracts, the
difference between forward rate and the exchange rate at the inception of a forward exchange
contract is recognised as income or expense over the life of the contract.
(iv) Increase / decrease in the liability, as at the end of the financial year in consequence of a change in
the rate of exchange in respect of foreign currency loans for plant and machinery acquired from
outside India, is adjusted to cost thereof.
G. Export Benefits/Incentives:
Export benefits/incentives in respect of import duty benefits under DEEC scheme are accounted on
accrual basis on the basis of exports made under DEEC scheme.
H. Revenue Recognition:
Revenue in respect of Insurance/other claims, interest etc. is recognised only when it is reasonably
certain that the ultimate collection will be made.
50
KAIRA CAN COMPANY LIMITED
I.
Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to
the acquisition / construction of qualifying fixed assets are capitalised upto the date when such assets are
ready for their intended use and other borrowing costs are charged to Profit & Loss Account.
J.
Segment Accounting Policies:
(a) Segment assets and liabilities:
All segment assets and liabilities are directly attributable to the segment.
Segment assets include all operating assets used by the segment and consist principally fixed
Assets, inventories, sundry debtors, loans and advances and operating cash & bank balances.
Segment assets and liabilities do not include intercorporate deposits, share capital, reserves and
surplus, borrowings and income tax (both current and deferred).
(b) Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective segment. It does not include
interest income / expenses on intercorporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole
and provision for contingencies and income tax.
K. Taxes on income:
In accordance with Accounting Standard 22 “Accounting for Taxes on Income”, issued by the Institute of
Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits
for the year is accounted for using the tax rates and laws that have been enacted or substantively
enacted as of the balance sheet date.
Deferred tax assets arising from timing differences are recognised to the extent there is reasonable
certainty that the assets can be realised in future.
L.
Leases
(a) Lease transactions entered into prior to April 1, 2001:
Lease rentals in respect of assets acquired under lease are charged to Profit & Loss Account.
(b) Lease transactions entered into on or after April 1, 2001 :
i.
Assets acquired under lease where the Company has substantially all the risks and rewards
incidental to ownership are classified as finance leases. Such assets are capitalised at the
inception of the lease at the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each lease rental paid is allocated
between the liability and the interest cost, so as to obtain a constant periodic rate of interest on
the outstanding liability for each period.
ii.
Assets acquired on leases where a significant portion of the risks and rewards incidental to
ownership is retained by the lessors are classified as operating lease. Lease rentals are charged
to the Profit & Loss Account on accrual basis.
M. Treatment of Contingent Liabilities:
Contingent Liabilities are disclosed by way of note on the Balance Sheet. Provision is made in accounts
for those liabilities which are likely to materialise after the year-end and having effect on the position
stated in the Balance Sheet as at the year-end.
51
KAIRA CAN COMPANY LIMITED
Annexure-I(i)
STATEMENT OF PROFITS & LOSSES
(Rs.in lacs)
Year ended March 31
PARTICULARS
30-09-04
(Unaudited)
2004
2003
2002
2001
2000
3,580.53
6,125.76
6,182.63
6,750.88
6,224.11
6,103.95
350.85
629.29
688.30
726.05
714.14
797.68
Net Sales
3,229.68
5,496.47
5,494.33
6,024.83
5,509.97
5,306.27
- of Traded Products
3,658.18
7,178.82
5,268.18
4,560.90
3,275.03
2,799.96
Total Sales
6,887.86
12,675.29
10,762.51
10,585.73
8,785.00
8,106.23
131.00
329.72
349.19
381.75
230.67
89.16
70.73
157.48
127.82
129.14
74.38
46.43
Increase / (Decrease) in Inventories
(490.40)
527.85
150.54
33.45
80.26
(16.20)
TOTAL
6,599.19
13,690.34
11,390.06
11,130.07
9,170.31
8,225.62
Raw material Consumption
1,857.34
4,237.58
3,896.29
4,148.27
3,681.68
3,456.55
Purchase of Trading Goods
(Milk & Food Products)
3,303.37
6,499.02
4,771.36
4,093.84
2,923.68
2,508.81
Staff Cost
232.11
442.29
422.12
394.82
362.57
337.57
Other Mfg. Expenses
610.39
1,386.99
1,221.52
1,348.72
1,143.77
1,024.64
Administrative Expenses
332.78
687.11
661.25
712.59
630.70
465.85
20.34
36.37
36.88
34.77
46.03
79.26
131.52
230.68
203.81
190.89
189.06
195.57
41.22
82.97
74.01
65.76
45.81
37.27
6,529.07
13,603.01
11,287.24
10,989.66
9,023.30
8,105.52
70.12
87.33
102.82
140.41
147.01
120.10
- Current Tax
19.00
14.00
20.18
25.00
51.00
40.00
- Deferred Tax
7.00
19.82
14.59
23.44
12.34
9.37
—
2.40
38.04
(0.29)
0.50
(0.06)
44.12
55.91
106.09
91.68
84.17
70.67
INCOME
Sales
- of Manufactured Products
Less: Excise Duty
Export Benefits / Incentives
Other Income
LESS : EXPENDITURE
Selling & Distn. Exps
Interest
Depreciation
Total Expenditure
PROFIT BEFORE TAX
Less : Provision for Tax
Add : Excess Provision for Taxes
in respect of earlier years (Net)
PROFIT FOR THE YEAR
52
KAIRA CAN COMPANY LIMITED
Annexure-I(ii)
STATEMENT OF ASSETS AND LIABILITIES
(Rs.in lacs)
As at March 31st
PARTICULARS
30-09-04
(Unaudited)
2004
2003
2002
2001
2000
A)
FIXED ASSETS
i)
Gross Block
2,104.09
2,102.38
1,922.70
1,831.43
1,663.18
1,452.22
Less: Provision for Depreciation
1,054.47
1,013.24
934.16
860.15
795.80
752.27
Net Block
1,049.62
1,089.14
988.54
971.28
867.38
699.95
ii)
Capital Work in Progress
Net Block After Adjustment
B)
INVESTMENTS
C)
CURRENT ASSETS, LOANS
AND ADVANCES
i)
Inventories
ii)
Sundry Debtors
iii)
Cash & Bank Balances
iv)
Loans & Advances
—
32.96
6.22
1.95
988.54
1,004.24
873.60
701.90
3.43
3.43
3.32
2.82
3.43
3.43
2,509.48
2,864.60
2,303.94
2,402.75
1,888.35
1,729.71
853.23
710.07
644.91
540.61
641.57
466.21
82.97
70.32
76.84
98.26
66.70
121.16
574.82
716.78
664.40
708.32
539.53
4,328.96
4,219.81
3,742.47
3,706.02
3,304.94
2,856.61
1,197.24
1,327.63
1,329.90
1,119.17
908.12
835.39
Unsecured Loans
218.28
301.21
164.33
132.05
92.33
79.38
Net Deferred Tax Liabilities
151.51
144.51
124.69
110.10
86.66
74.32
1,567.03
1,773.35
1,618.92
1,361.32
1,087.11
989.09
2,595.29
2,362.24
1,964.44
2,284.95
2,112.28
1,647.80
34.56
35.78
41.17
38.47
24.07
26.64
2,629.85
2,398.02
2,005.61
2,323.42
2,136.35
1,674.44
4,196.88
4,171.37
3,624.53
3,684.74
3,223.46
2,663.53
1,185.13
1,141.01
1,109.80
1,028.34
958.51
898.41
87.36
87.36
87.36
87.36
87.36
87.36
16.30
16.30
16.30
16.30
16.30
16.30
5.00
5.00
5.00
5.00
5.00
5.00
978.62
978.62
943.62
868.62
798.62
735.97
97.85
53.73
57.52
51.06
51.23
53.78
1,097.77
1,053.65
1,022.44
940.98
871.15
811.05
1,185.13
1,141.01
1,109.80
1,028.34
958.51
898.41
LESS : LIABILITIES
Secured Loans
E)
—
1,089.14
883.28
(A+B+C)
D)
—
1,049.62
LESS : CURRENT LIABILITIES
AND PROVISIONS
Liabilities
Provisions
(D+E)
NET WORTH [(A+B+C) - (D+E)]
REPRESENTED BY
i)
Share Capital - Equity
8,73,600 of Equity Shares of Rs.10/- each
fully paid up. Of the above 5,33,600 shares
are alloted as fully paid up by way of Bonus
Shares by capitalisation from General
Reserve A/c.
ii)
Reserve & Surplus
Capital Reserve
Capital Redemption Reserve
General Reserve
Surplus in Profit & Loss Account
NET WORTH
53
KAIRA CAN COMPANY LIMITED
Annexure-I(iii)
IMPACT OF AUDITORS’ QUALIFICATIONS ON PROFIT & LOSS ACCOUNT
(Rs.in lacs)
Year ended March 31
PARTICULARS
2004
2003
2002
2001
2000
Net Profit After Tax
55.91
106.09
91.68
84.17
70.67
29.95
63.32
22.25
15.71
18.59
—
—
—
—
12.68
25.96
42.77
69.43
68.46
39.40
Less: Adjustments due to audit qualification*.
Export benefit (in the form of duty free imports to be
made in subsequent year) included in profit.
Non Provision of Doubtful Debts in books of a/c’s
Net Profit After Tax (After Audit Qualification)
* In case of pending insurance claim amounting to Rs. 43.44 lacs, same has not been adjusted as the effect of
which could not be determined.
Annexure-I(iv)
SCHEDULE OF OTHER INCOME EXCEEDING 20% OF THE PROFIT
(Rs.in lacs)
Year ended March 31
PARTICULARS
30-09-04
(Unaudited)
2004
2003
2002
2001
2000
1.55
10.56
10.17
5.53
3.69
7.43
Miscellaneous Receipts
(on sale of Drums, boards etc.)
15.93
43.61
22.20
41.81
30.10
31.20
Jobwork Receipts
51.11
96.53
86.90
54.94
–
–
0.19
1.27
2.46
21.94
6.74
2.13
–
0.11
0.69
0.86
10.70
1.35
68.78
152.08
122.42
125.08
51.23
42.11
1.95
5.40
5.40
3.95
3.00
4.17
–
–
–
0.11
0.15
0.15
1.95
5.40
5.40
4.06
3.15
4.32
–
–
–
–
20.00
–
–
–
–
–
20.00
–
70.73
157.48
127.82
129.14
74.38
46.43
Recurring - From Business Activities
Interest Received from parties on
Bills Discounting
Profit on Sale of Fixed Assets (Net)
Excess provision in respect of previous year
Sub total
Recurring - From other Activities
Rent of Premises given on lease
Dividend Received
Sub total
Non -recurring - From other Activities
Compensation received on surrender of
Tenancy - rights
Sub total
TOTAL
54
KAIRA CAN COMPANY LIMITED
Annexure-I(v)
STATEMENT SHOWING EFFECT OF TAX SHELTER ON PROFITS AFTER TAX
(Rs.in lacs)
Year Ended March 31
PARTICULARS
30-09-04
(Unaudited)
2004
2003
2002
2001
2000
70.12
87.33
102.82
140.41
147.01
120.10
36.59%
35.88%
36.75%
35.70%
39.55%
38.50%
Tax at Notional Rate {A}
25.66
31.33
37.79
50.13
58.14
46.24
Diff.between Tax Depreciation &
Book Depreciation
18.78
(46.10)
(44.57)
(73.06)
(34.58)
(26.24)
Other Adjustments
—
(2.64)
0.13
(21.46)
(46.85)
(51.51)
Export Profit
—
(0.55)
(1.53)
(3.10)
(3.90)
(0.92)
18.78
(49.29)
(45.97)
(97.62)
(85.33)
(78.67)
Tax Saving on {B} {C}
6.87
(17.68)
(16.89)
(34.85)
(33.75)
(30.29)
Total Taxation {A + C}
32.53
13.65
20.89
15.28
24.39
15.95
—
—
—
—
—
—
32.53
13.65
20.89
15.28
24.39
15.95
Net Profit Before Tax & Extra Ordinary Items
Notional Tax Rate
Net Adjustments {B}
Taxation on Extra Ordinary Items
Tax Payable
Annexure-I(vi)
SUNDRY DEBTORS
(Rs.in lacs)
PARTICULARS
As on
30-09-04
(Unaudited)
As on
31-03-2004
92.53
70.07
Other Debts
760.70
640.00
Total
853.23
710.07
(Unsecured ,considered Good)
Debt outstanding for a period exceeding 6 months
Annexure-I(vii)
CAPITALIZATION STATEMENT
PARTICULARS
(Rs. In lacs)
Pre-issue
as on 31-03-2004
As adjusted
for issue
Short Term Debts
1,471.76
1,471.76
Long Term Debts
157.08
157.08
1,628.84
1,628.84
87.36
92.22
Reserve and Surplus
1,053.65
1,097.45
Total Shareholders Funds
1,141.01
1,189.67
1.43
1.37
Total Debts
Shareholders Funds
Share Capital – Equity
DEBT / EQUITY RATIO
55
KAIRA CAN COMPANY LIMITED
Annexure-I(viii)
STATEMENT OF ACCOUNTING RATIOS - RATIO ANALYSIS
(Rs.in lacs)
Year Ended 31
PARTICULARS
30-09-04
(Unaudited)
2004
2003
2002
2001
2000
44.12
55.91
106.09
91.68
84.17
70.67
873600
873600
873600
873600
873600
873600
EPS Basic (Annualised)(Rs)
5.05
6.40
12.14
10.49
9.63
8.09
EPS Diluted *
5.01
6.34
—
—
—
—
1,185.13
1,141.01
1,109.80
1,028.34
958.51
898.41
3.7%
4.9%
9.6%
8.9%
8.8%
7.9%
135.66
130.61
127.04
117.71
109.72
102.84
Profit After Tax
No. of Equity Shares
Net Worth
Return on Net Worth(%)
NAV per share(Rs)
* After considering proposed Rights Issue.
Annexure-I(ix)
STATEMENT OF UNSECURED LOANS AS AT 31-MAR-2004.
Sr. Name of Lender
No.
Nature of
Loan
1
*Public / Share Holders
2
(Rs.in lacs)
Amount
Rate of
Interest
Fixed
Deposits
139.21
8.50%
9.00%
Harshadray Private Ltd.
Inter
Corporate
Deposit
132.00
ranging from
11- 13 %
Payable within 1 Year
3
Harshadray Investments Pvt. Ltd.
——”——-
25.25
11.00%
Payable within 1 Year
4
Farm Chemicals Pvt. Ltd
——”——-
3.25
11.00%
Payable within 1 Year
5
Dryden Pvt. Ltd.
——”——-
1.50
11.00%
Payable within 1 Year
TOTAL
Repayment Schedule
Within 1 year - Rs. 56.81 lacs
Within 2 years - Rs.46.50 lacs
Within 3 years - Rs.35.90 lacs
301.21
* In case of Fixed deposit, the holders have right to withdraw the deposit after the expiry of the six months from the
date of deposit.
Annexure-I(x)
STATEMENT OF SECURED TERM LOANS AS AT 31-MAR-2004.
Sr. Name of Lender
No.
Nature of
Loan
Amount
Rate of
Interest
1
Bank of Baroda
Term Loan
2
HDFC Bank Ltd
Repayment Schedule
92.20
ranging from
12.5 - 14 %
As per amortisation
schedule
Hire purchase 64.88
Loan
ranging from
6 - 11 %
As per amortisation
schedule
Notes
1
Term loans from a bank are secured by a charge on movable assets, hypothecation of specific machinery of the Icecream cone division and the Milk and Milk Products division of the company, and are further secured by a first charge
on the company’s immovable properties situated at Village Kanjari in the State of Gujarat, both present and future.
2
Hire purchase loans are secured by a lien on Vehicles / Machinery purchased under hire purchase agreements.
56
KAIRA CAN COMPANY LIMITED
Annexure-II
DETAILS OF DIVIDEND PAID
(Rs. in lacs)
Year Ended March 31
PARTICULARS
No. Of Shares on Which Dividend is paid/payable
Rate of Dividend
Amount of Dividend paid on Equity Shares
2004
2003
2002
2001
2000
873,600
873,600
873,600
873,600
873,600
25%
25%
25%
25%
25%
21.84
21.84
21.84
21.84
21.84
Note : Income Tax on dividend is not included in the amount of dividend paid on equity shares
X.
MANAGEMENT DISCUSSION AND ANALYSIS ON PERFORMANCE OF THE COMPANY
Can Division
The growth of metal container industry in India continues to be stagnant, mainly on account of alternative
packaging. The Company has been able to achieve a turnover of Rs.6029 lakhs of metal containers and its
components during the year 2003-04 as compared to Rs.6085 lakhs for the previous year despite severe
competition in a depressed demand environment during the year.
The Company has executed export orders of metal components, etc. to the extent of Rs.648 lakhs to the
Middle East inspite of cut-throat competition faced by the Company from other can manufacturers. We expect
to achieve exports during the current year almost the same as of previous year.
During the year 2003-04, the sales volume of aerosol cans was Rs.103 lakhs as against Rs.98 lakhs in the
previous year. The Company expects to achieve higher sales volume of aerosol cans during the current year
by focusing more on quality cans for wider consumer base.
In order to improve the volume of business, the Company continues to explore ‘niche’ markets such as the
supply of ‘necked-in’ easy open end juice cans to agro-based industries and ‘necked-in’ easy open end
condensed milk cans to GCMMF.
In view of the increase in steel prices, indigenous as well as imported, we have been able to get the price
increase from most of our customers and negotiations are underway for the price increase with others.
Viewed in the context of steep rise in raw material cost and restraints on containers’ price correction due to
severe competitive scenario in the can business, the performance of the Company during the year is
comparable with the previous year and is satisfactory. However, with the consistent and vigorous efforts being
made by the Company for the product mix usage of raw materials, other cost reduction measures coupled
with enhancing the operating efficiency and quality improvement, the Company expects improved performance
for the current year.
The Company largely caters to the requirements of the dairies under the GCMMF for packaging of baby food,
ghee and other Amul range of dairy products. GCMMF’s own progress has been impressive and consequently
the Company’s business has a better future.
The reform process initiated by the Central Government since last few years is showing positive results in the
growth of the economy in general and agro-based and food processing industries with which our Company’s
future is largely associated, in particular, which will increase the demand for ‘Open Top Sanitary (OTS)’ cans.
The Company is now more favourably placed to stand against international competition.
Aerosol cans are supplied and used for packing insecticides, pesticides, air-freshners, deodorants, perfumes,
etc. As the consumer demand is growing for these products, the Company is planning to enlarge the
customer base by catering to the needs of aerosol container industry.
57
KAIRA CAN COMPANY LIMITED
Milk & Milk Products Division
The Company continues to make good progress in this division. The Company has achieved a better
performance by attaining an increased sales turnover from Rs.5239 lakhs for the previous year to Rs.7093
lakhs during the year 2003-04 – a growth of 35%. In order to widen the net of operation of milk distribution
and to increase further the sales volume, the Company has expanded the milk processing and packing
capacity upto 2,50,000 litres per day. The Company expects to market about 1,75,000 litres per day by
December, 2004. The Company has successfully managed the business of Amul Milk since 1992-93 and
expects to achieve even better performance during the current year.
The story of Amul inspired ‘Operation Flood’, which heralded the ‘White Revolution’ in India is known to
everybody. With the ever increasing growth in population, the consumer demand for milk is growing and we
expect to market about 2,50,000 litres per day during the year 2005-06.
Sugar Cone Division
Sugar Cone Division continues to make a steady progress. During the year 2003-04, the Company has
achieved marginally higher volume of turnover (inclusive of job-work) of Rs.213 lakhs as compared to Rs.210
lakhs for the year 2002-03. The Company expects to achieve almost the same progress during the current
year.
The Company’s manufacturing capacity is about 330 lakhs cones per year on three shifts basis and the
present turnover is approx. 300 lakhs cones per year. The pattern of consumption of ice-cream in India has
undergone a sea-change and with the development of infrastructure like roads and cold storage facilities all
over the country, there is a tremendous growth potential in this business. The Company has future plans to
install additional equipment in order to further increase its manufacturing capacity of ice-cream cones.
Food Parlour Division
At the behest of GCMMF, the Company is operating Amul food outlets from April, 2003, at the four Metro
railway stations completed in the first phase of Delhi Metro Railway Corporation (DMRC). At these outlets, the
Company is selling Amul products and their food items such as ice-cream, softy, pizza, Amul milk, flavoured
milk, etc. DMRC has further completed four more stations in the second phase. GCMMF has already finalised
the terms with DMRC for opening new outlets at these stations and has offered an opportunity to the
Company for operating these outlets. DMRC has plans to extend the railway line by adding more stations in
the next phase/s. With the addition of more stations, the traffic flow is expected to improve which would boost
the sales at these outlets.
Once all the proposed 40 Metro railway stations are completed by DMRC and alongwith that shopping
arcades at these railway stations are constructed, the commuter flow will be tremendously increased. As the
traffic flow increases, our sales will get a further boost which will help to improve our bottom line.
The following is a summary of the financial results of last 4 years.
(Rs. in lacs)
6 months
ended
30.09.2004
2003-04
2002-03
2001-02
2000-01
Total Income
6,600
13,690
11,390
11,130
9,170
Total Expenditure
6,529
13,520
11,213
10,924
8,977
Net Profit / (Loss)
44
56
106
92
84
PARTICULARS
58
KAIRA CAN COMPANY LIMITED
NECESSARY INFORMATION REQUIRED BY CLARIFICATION XIII OF SEBI GUIDELINES FOR
DISCLOSURE AND INVESTOR PROTECTION ARE GIVEN BELOW:
Unusual and infrequent events or transactions
The global markets have recently been impacted by the issues relating to weapons of mass destruction
claimed by the government of the United States of America to be illegally stored by the Iraqi government.
The United States of America has taken action to evacuate the said weapons from Iraq. At the same time
several members of the Security Council of the United Nations opposed this stand. The current uncertainty of
the actions that may be taken by respective nations is impacting business. The outcome of this matter may
impact the foreign exchange rates and consequently import of raw materials for cans and export of cans and
to that extent, the Company’s business. There are no other uncertainties that are expected to have any
adverse material impact on sales revenue or income from continuing operations.
Significant economic changes likely to materially affect the income from continuing operations.
There are no significant economic changes, which are likely to affect income from continuing operations.
Known trends or uncertainities that have had or are expected to have a material adverse impact on
sales, revenue or income from continuing operations
1.
Market for can business is restricted due to increasing usage of alternative packaging materials.
2.
Demand for cans and ice cream cones being derived demand, their take off depends upon the demand
for the items filled in the cans and cones.
3.
The customer for the milk business being public by and large, the milk business inherits the uncertainities
associated with fast moving consumer goods.
4.
The development of food parlour business on DMRC is expected to take some time and it largely
depends upon the completion of the DMRC project as a whole.
5.
Future changes in relationship between costs and revenues in the events such as labour or material
costs or prices that will cause a material change.
6.
The Company is functioning in a competitive business environment in relation to all its products. Increase
or decrease in any of the cost component including labour, material or tax structure and increase or
decrease in selling prices shall change the relationship between the costs and revenues in future. The
revenues, costs and consequently profitability may change due to such changes in future.
The extent to which business is seasonal
By and large, sale of OTS Cans is high during mango season i.e., first quarter of the year comprising of April,
May and June. The first half of the current financial year contributes approximately 25 percentage to the
annual sales of can division. The offtake of ice-creams is high during summer. Sale of milk on festival days
is higher compared to that on non-festival days. Sale of Food in Outlets is more or less even.
Dependence on single or new suppliers or customers
Company depends upon GCMMF for supplies of milk for it’s Milk Division and products for it’s Food Parlour
business. Sales to GCMMF constitutes about 14% of its annual sales turnover.
Competitive Conditions
As stated earlier, Company is functioning in competitive business environment. However, its business
association with GCMMF coupled with product diversification and professional management gives it
competitive edge over others.
59
KAIRA CAN COMPANY LIMITED
XI. SUBSIDIARIES AND GROUP COMPANIES
The Company does not have any subsidiary.
The details of group companies are as follows :
Sr. Name of Company
No.
Date of
incorporation
Main business
1.
Harshadray Pvt. Ltd. (HPL)
23.01.1953
Indenting Agents and Investments
2.
Harshadray Investments Pvt.Ltd.
(Wholly Owned Subsidiary of HPL)
24.03.1975
Investments
Hame Agencies Pvt. Ltd.
(Wholly Owned Subsidiary of HPL)
07.02.1979
Indenting Agents and Trading
4.
Dryden Pvt. Ltd.
19.09.1952
Investments
5.
Farm Chemicals Pvt. Ltd.
02.09.1975
Investments
3.
All of the above companies are functioning as separate entities having no business connection with Kaira Can
Company Ltd, except to the extent of common directorship and to the tune of Inter Corporate Deposits placed
by M/s. Harshadray Private Limited with Kaira Can Company Ltd. Their respective financial overview is as
follows :
1.
Harshadray Pvt. Ltd.(HPL) – Financial Overview
(Rs. in Lakhs)
Particulars
Equity Capital
Reserves
Sales & Income
Profit After Tax
Earnings per Share
of Rs. 100/- each
Net Asset Value
Net Fixed Assets
Net Current Assets
Investments
2.
Y.E.
31.03.2000
Y.E.
31.03.2001
Y.E.
31.03.2002
Y.E.
31.03.2003
19.71
2412.93
1411.45
1134.55
19.71
2419.58
385.77
23.54
19.71
2439.28
537.61
61.36
19.71
2191.92
343.24
(242.81)
Rs. 5755.65
2587.73
83.55
391.84
2112.34
Rs. 119.46
2636.57
245.55
133.34
2257.78
Rs. 311.26
2862.27
160.20
422.49
2279.58
Rs. (1231.81)
2289.02
196.44
(7.93)
2100.51
Harshadray Investments Pvt. Ltd. (Wholly Owned Subsidiary of HPL) – Financial Overview
(Rs. in Lakhs)
Particulars
Equity Capital
Reserves
Sales & Income
Profit After Tax
Earnings per Share
of Rs. 100/- each
Net Asset Value
Net Fixed Assets
Net Current Assets
Investments
60
Y.E.
31.03.2000
Y.E.
31.03.2001
Y.E.
31.03.2002
Y.E.
31.03.2003
0.50
40.50
4.51
3.15
0.50
42.21
3.34
3.09
0.50
39.55
3.51
(2.66)
1.00
37.84
4.72
(1.17)
Rs. 629.02
41.00
—
16.07
24.93
Rs. 617.40
42.71
24.94
17.77
—
—
40.05
—
0.70
39.35
—
38.84
—
25.37
13.47
KAIRA CAN COMPANY LIMITED
3.
Hame Agencies Pvt. Ltd. (Wholly Owned Subsidiary of HPL) – Financial Overview
(Rs. in Lakhs)
Particulars
Y.E.
31.03.2000
Y.E.
31.03.2001
Y.E.
31.03.2002
Y.E.
31.03.2003
2.50
2.50
2.50
2.50
Reserves
58.95
60.67
55.75
48.74
Sales & Income
83.79
—
23.09
110.02
Profit After Tax
17.23
1.72
(4.92)
(7.12)
Rs. 58.92
Rs. 6.88
—
—
Net Asset Value
61.44
63.16
109.72
101.24
Net Fixed Assets
2.90
1.86
1.42
1.08
Net Current Assets
16.60
44.76
81.97
76.37
Investments
41.94
16.54
26.33
23.79
Equity Capital
Earnings per Share
of Rs. 100/- each
4. Dryden Pvt. Ltd. – Financial Overview
(Rs. in Lakhs)
Particulars
Y.E.
31.03.2000
Y.E.
31.03.2001
Y.E.
31.03.2002
Y.E.
31.03.2003
0.50
0.50
0.50
1.00
12.62
12.62
20.08
19.83
1.14
1.14
9.56
0.45
(0.10)
—
7.46
0.25
—
—
Rs. 1492.91
Rs. 25.14
Net Asset Value
21.94
21.93
20.65
20.83
Net Fixed Assets
0.19
0.12
0.07
0.04
Net Current Assets
3.35
3.43
2.49
2.70
18.39
18.39
18.08
18.08
Equity Capital
Reserves
Sales & Income
Profit After Tax
Earnings per Share
of Rs. 100/- each
Investments
5. Farm Chemicals Pvt. Ltd. – Financial Overview
(Rs. in Lakhs)
Particulars
Y.E.
31.03.2000
Y.E.
31.03.2001
Y.E.
31.03.2002
Y.E.
31.03.2003
Equity Capital
3.00
3.00
3.00
3.00
Reserves
2.95
3.25
3.14
3.50
Sales & Income
0.32
0.55
0.30
0.85
Profit After Tax
0.18
0.30
(0.11)
0.36
Rs. 6.00
Rs. 10.00
—
Rs. 12.00
Net Asset Value
5.95
6.25
6.14
6.50
Net Fixed Assets
5.49
4.49
5.71
3.21
Net Current Assets
0.46
1.76
0.44
3.29
Earnings per Share
of Rs. 100/- each
61
KAIRA CAN COMPANY LIMITED
COMMON PURSUITS
The business line pursued by group companies and Kaira Can Company Limited are separate and as such there
is no conflict of business interests. The group companies have a separate setup and are functioning as
independent organisations.
XII. PROMISES VS PERFORMANCE:
The Company has not issued any fresh equity shares during past ten years either through public issue or
Rights Issue.
LISTED VENTURE OF THE PROMOTERS:
There is no other listed venture of the promoters other than Kaira Can Company Ltd.
XIII. STOCK MARKET DATA:
Year
Highest
Lowest
Rate (Rs.)
Date
Rate (Rs.)
Date
2001
—
—
—
—
2002
172.80
29.05.2002
110.00
29.04.2002
297.00
12.11.2003
207.00
11.09.2003
2003
st
st
* Calendar Year – 1 January to 31 December
Stock Data for last six months as per BSE
Sl.
No.
Date
No. of Deal(s)
No. of Shares
Traded
Value
Rs. in lakh(s)
1
06.04.2004
1
25
0.0800 High
2
12.04.2004
1
150
0.3500 Low
3
07.05.2004
1
1
0.0001 High
4
04.05.2004
1
10
0.2000 Low
5
21.07.2004
1
2
0.0001 High
6
21.07.2004
1
2
0.0001 Low
7
09.08.2004
1
1
0.0001 High
8
09.08.2004
1
1
0.0001 Low
9
03.09.2004
1
10
0.0300 High
10
03.09.2004
1
10
0.0300 Low
Week end price of Equity Shares of Kaira Can Company Limited on the Mumbai Stock Exchange:
Sl.
No.
62
Date
No. of Deal(s)
No. of Shares
Traded
Value
Rs. in lakh(s)
1
06.04.2004
1
25
0.0800 High
2
12.04.2004
1
150
0.3500 Low
3
07.05.2004
1
1
0.0001 High
4
04.05.2004
1
10
0.2000 Low
5
21.07.2004
1
2
0.0001 High
6
21.07.2004
1
2
0.0001 Low
7
09.08.2004
1
1
0.0001 High
8
09.08.2004
1
1
0.0001 Low
9
03.09.2004
1
10
0.0300 High
10
03.09.2004
1
10
0.0300 Low
KAIRA CAN COMPANY LIMITED
The market price of the equity shares of the Company on 11.03.2004 (the date of EGM on which the
Company approved amended Rights Equity Issue was on 11.03.2004) was Rs.343/-.
The market price of the equity shares of the Company on 23rd March, 2004 after the date on which the
resolution of the Board of Directors approving the issue was Rs.377.40.
The shares of the company were not traded Ex-rights till the date of this letter of offer and hence such price
is not available.
PARTICULARS PERTAINING TO THE ISSUE OF CAPITAL BY THE COMPANY
The Company has not made any issue of equity capital through a rights or public issue in the last ten years.
XIV. INVESTORS’ GRIEVANCES AND REDRESSAL SYSTEM
Investor’s grievances pertaining to this issue will be handled by the Registrar to the Issue namely M/s.
Computech Sharecap Ltd. Fortnightly status report of the complaints received and redressed by them
would be forwarded to the Company. The Company would also be coordinating with the Registrars to the
issue in attending to the grievances of the investors. The Company’s standard requirement is to address
all investor grievances within a maximum period of two weeks.
Company Secretary, Shri Devang R. Mehta is the Compliance Officer for the Company who would directly
deal with SEBI and Stock Exchange officers with respect to implementation of various laws, rules,
regulations and other directives issued by them. The Compliance officer will be available at the
Registered Office of the Company at Tiecicon House, Dr. E.Moses Road, MUMBAI – 400 011.
INVESTOR GRIEVANCES REDRESSAL REPORT FOR 1st APRIL, 2004 TO 30th SEPT., 2004.
Nature of Complaint/Applicant
Received
Resolved
Pending
1st April, 2004 to 30th Sept., 2004
NIL
NIL
NIL
DISCLAIMER BY THE DIRECTORS
THE DIRECTORS OF THE COMPANY HEREBY STATE THAT IN THEIR OPINION THERE IS NO
MATERIAL DEVELOPMENT AFTER THE DATE OF THE LAST FINANCIAL STATEMENTS DISCLOSED IN
THE OFFER DOCUMENT WHICH IS LIKELY TO MATERIALLY AND ADVERSELY AFFECT OR IS LIKELY
TO AFFECT THE TRADING OR PROFITABILITY OF THE COMPANY OR THE VALUE OF ITS ASSETS,
OR ITS ABILITY TO PAY ITS LIABILITIES WITHIN THE NEXT TWELVE MONTHS.
XV. LITIGATION/ DISPUTES/ DEFAULTS/ CRIMINAL CASES:
Concerning Directors in personal capacity
There are no criminal/ civil prosecutions or litigations towards tax liabilities against any of the Directors of
the Company in personal capacity.
There are no criminal litigations against the Company or any of the Member of the Board in his capacity
as a Director of the Company.
Concerning the Company
Civil Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1.
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
Special Civil
Judge (S.D.)
Anand
07.05.04
Suit filed by KCCL to recover
dues for the goods sold.
Summons are issued. The matter
is at hearing stage.
21,06,445/-
2.
KCCL
Vs.
M/s. Canara Canning & Ors.
Joint Civil
116/2003
Judge (S.D.)
Court, Anand.
25.09.03
Suit filed by KCCL to recover
dues for the goods sold.
The Court has passed an ex-parte
order in favour of the company
ordering the respondents to pay
the dues. Decree has been drawn
and transferred to Udupi Court.
3,21,978/-
58/2004
Amount
(Rs.)
63
KAIRA CAN COMPANY LIMITED
3
KCCL
Vs.
National Insurance Company.
State
Commission
70/2001
20.02.01
Complaint filed by KCCL to
recover damages to the
insured goods.
Stage of Interim hearing and
amendments to the complaint filed
is over. Now the case is to come
up for final hearing.
10,61,886/-
4.
KCCL
Vs.
Barkha & Others.
High Court,
Mumbai
496/2001
12.02.01
KCCL packs and distributes
Amul Milk. Case filed by KCCL
for restraining the defendants
under the Trade Marks Act from
packing and selling milk under
the brands AMAN and AMAN
TAAZA since these brands are
deceptively similar with brands
AMUL and AMUL TAAZA.
Notice is to be served on some of
the defendants who do not have
fixed address.
Interim Ex-parte order is passed
in our favour.
Suit to
restrain the
usage of
Trademark
and hence
no
pecuniary
value.
5.
KCCL
V/s.
Eastern Overseas Ltd.
High Court,
Mumbai
3879/98
14.08.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
17,70,199/-
6.
KCCL
V/s.
Vishal Agritech Ltd.
High Court,
Mumbai
4542/98
31.07.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
4,41,500/-
7.
KCCL
V/s.
Ravileela Dairy Products Ltd.
High Court,
Mumbai
3824/98
31.07.98
Suit filed by the Company to
recover the dues for goods
sold.
Matter has not reached on the
Board.
4,86,433/-
8.
KCCL
V/s.
New India Assurance Co. Ltd.
Consumer
Disputes
Redressal
Forum,
High Court,
Mumbai.
2730/97
20.06.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not reached on the
Board.
43,44,000/-
9.
KCCL V/s.
1) APL Korea –
American President
Lines Limited,
2) APL Agencies Pvt. Ltd.,
New India Ass. Co. –
Insurance Claim
High Court,
Mumbai
2783/97
30.04.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not yet reached the
Board.
9,22,713/-
10. KCCL
Vs.
ION Exchange (India) Ltd.
& Others.
Small Causes 648/97
Court No.13
20.03.97
Suit filed by Kaira Can Company The matter is to reach the hearing
Ltd seeking declaration that the stage.
Company is a legal tenant in
respect of its Registered Office
premises.
11. KCCL
Vs.
Vakratunda Distributors.
High Court,
Mumbai
05.10.96
Suit filed by the Company to
Ex-parte decree awarded in
recover the dues for goods sold. favour of the company to be
executed.
4718/96
Declaratory
Suit and
hence no
pecuniary
value.
3,09,494/-
There are two other matters in which the Company is a party involving a sum of Rs. 83,756/-.
Criminal Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
1.
Spl. Civil
Judge (S.D.),
Anand
64
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
441/2004
442/2004
443/2004
444/2004
496/2004
497/2004
Issues
20.01.04 Six cheques issued by the
20.01.04 defendants for payment for
20.01.04 goods sold by KCCL to them
20.01.04 were dishonoured. KCCL filed
23.01.04 six complaints u/s 138 of
23.01.04 Negotiable Instruments Act,
1881 for dishonour of cheques.
Status
Summons served. The case is
pending awaiting hearing.
Amount
(Rs.)
22,01,865/-
KAIRA CAN COMPANY LIMITED
2.
Kaira Can Company Ltd.
Vs.
Canara Canning.
(Two Cases)
Metropolitan
Magistrate’s
Court at
Ballard Pier,
Mumbai.
(i) 541/S/
2003
and
(ii) 542/S/
2003
26.6.03
Cheques worth Rs. 1,50,000/and Rs. 1,71,978/- respectively
issued by M/s. Canara Canning
to the company for cans
supplied to them were
dishonoured. The company has
filed criminal complaints u/s 138
of Negotiable Instruments Act,
1881 through Company
Secretary.
Summons served upon the party.
The matter is to come up for
hearing.
3,21,978/-
Central Excise Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
Amount
(Rs.)
1
KCCL, Anand
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT,
W.R.,
Mumbai
Case File
No. 43
17.11.99
Duty credited for goods
purchased not allowed and
asked to reverse. The Company
reversed the duty under protest
and filed the case.
Appeal pending with CESTAT.
2
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL,
Himmatnagar.
Commissioner Case File
Central
No. 37
Excise
Ahmedabad
III
12.03.99
Alleged less payment of Excise
Duty amount. Department has
filed the case.
Show Cause Notice is replied
Hearing took place on 16.07.99.
Decision awaited.
23,39,528/-
3
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL, Himmatnagar.
Commissioner Case File
Central
No. 36
Excise,
Ahmedabad
25.02.99
CENVAT availed on components
deduction not allowed from the
assessable value of final
products.
Show Cause Notice is replied.
The case is pending for final
disposal.
34,10,016/-
4
KCCL,
Anand.
Vs.
Assistant Commissioner
Central Excise, Anand
Commissioner Case File
(Appeals)
No. 20
Central
Excise,
Mumbai.
29.01.99
Duty paid OTS Cans despatched
from Anand rejected by customer
and returned to the Company.
The same were off loaded in a
godown outside the factory.
Repaired OTS Cans were
despatched to customer under
Excise Invoice.
Stay & appeal pending with
Appellate Commissioner,
Ahmedabad. Stay is not
received.
2,85,721/plus
30,000/interest
3,15,721/-
5
KCCL,
Kanjari
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT
W.R.,
Mumbai
Case File
No. 13
29.01.99
On account of shortage of input
compared to output in 1996,
following duties and penalties
levied:1) Duty - Rs. 6,16,666/2) Penalties- Rs. 2,00,000/-
1) Duty paid - Rs. 6,16,666/2) Penalties on the Managing
Director and the employees.
Rs. 2,00,000/- paid.
3) For Penalty of Rs. 3,00,000/on the Company,
unconditional stay granted by
CESTAT on 27.04.04.
Main appeal pending.
11,16,666/-
6
Commissioner Central
Excise, Vadodara
Vs.
KCCL, Anand.
Commissioner Case File
of Central
No. 10
Excise,
Vadodara.
14.12.96
Demand of duty on lacquered
tinplate sheets under Rule 57G
of Central Excise Act and
Customs Act.
The Company has filed its
representation. The matter is at
the hearing stage.
28,32,848/-
1,30,849/-
Sales Tax Matters
Sr. Parties
No.
Sales Tax Officer, Anand
Vs.
KCCL
Adjudicating Case No. Date of
Authority
filing
Issues
Status
S.T.O.,
Mehsana.
Rejection by Sales Tax Dept. of
Sales Tax form ‘H’ given by Merry
Weather Foods Products Ltd. for
the year 1991-92.
Pending Last Hearing on
10.10.2002
—
04.09.97
Amount
(Rs.)
1,85,862/-
There are two other matters on Sales Tax involving a total sum of Rs. 72,336/-.
65
KAIRA CAN COMPANY LIMITED
Income Tax Matters
Disputes under Income Tax Act lying with Commissioner of Income Tax (Appeals) amounts to Rs. 80,40,214/- out of which Rs. 58,66,996/
- are paid / adjusted and Net Balance in this respect is Rs. 21,73,218/-.
Labour Law Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
1
KCCL
Vs.
Krishna Corporation, Anand
Civil Court
Anand
Sp.Civil
Appl.
102/00
2
Ramesh M & 138 Ors.
Vs.
KCCL & Others.
Labour
Court
Nadiad
Ref.119
to
257/2000
Issues
Status
Amount
(Rs.)
10.2.2000 KCCL had paid to the Contractor,
compensation including Provident
Fund and Bonus amount for
distribution to the workers. The
Contractor neither deposited the
Provident Fund amount nor paid
the Bonus to the Contract Worker.
KCCL has sued the Contractor to
recover such undeposited / unpaid
amount. The Contractor in his
counter claim has asked for refund
of his Security Deposit.
The case is to reach
evidence stage.
KCCL’s
claim Rs.
10,24,421/Krishna
Corpn.’s Rs.
8,50,000/Claim
15.2.2000 The case is against the Labour
Contractor in which KCCL is made
a party. The Contract Workers
have alleged non-payment of their
dues and have filed a Joint
application.
The case has reached for
Contract Workers evidence
filing stage.
Rs.
17,32,20,095/-
Note:There are 36 other cases on labour law matters to which the Company is made a party. Out of these, 18 cases pertain to imposition
of fine by the Factory Inspector for non-issuance of Identity Cards to Casual and Contract Workers. The remaining cases are filed by
the Workers / employees who were dismissed for various reasons. The liability, if any, in respect of each of the above mentioned cases
is not expected to exceed Rs. 1 lakh. The total liability in respect of the above mentioned 36 cases is expected to be below Rs. 12 lakhs.
XVI. BASIS OF ISSUE PRICE
l
The issue price of Rs.100 per share has been arrived at on the following basis:
l
The Company has an established presence in the packaging and food industry with an established
marketing network.
l
The present Rights issue of Equity shares is for partially funding Working Capital requirements of the
Company and in the considered opinion of the management, the Rights Issue funds will help the
Company in meeting partially its financial planning.
l
This offer is made as per the terms of the special resolution approving the terms of the issue Rights
equity shares, passed by members of the Company under Section 81(1) of the Act at the Extra Ordinary
General Meeting of the Company held at the Registered Office of the Company on March 11, 2004.
QUANTITATIVE FACTORS
1.
66
Adjusted Earning per share (EPS)
(Rupees)
a
2001-2002
10.49
b
2002-2003
12.14
c
2003-2004
6.40
d
Weighted Average
9.00
KAIRA CAN COMPANY LIMITED
2.
Price Earning ratio (P/E) in relation to Issue Price
a
Based on 2003-2004 EPS
Rs. 15.63
b
Industry P/E *
Food
Packaging
i
Highest
70.90
14.30
ii
Lowest
1.70
1.40
iii
Average
36.30
7.85
* Source: The Capital Market : 13-26 September, 2004
3.
Return on Net worth
%
PAT
Networth
(Rs. in lacs)
(Rs. in lacs)
Weights
Products
a
2001-2002
8.92%
91.68
1028.34
1
9.00%
b
2002-2003
9.56%
106.09
1109.80
2
19.00%
c
2003-2004
4.90%
55.91
1141.01
3
15.00%
d
Weighted Average
7.12%
7.12%
4.
Minimum Return on Total Net Worth after Issue, Needed to maintain EPS at Rs. 6.40 would
be 4.96%.
5.
Net Asset Value (NAV)
6.
a
As at 31-Mar-2004
(Rs. In lacs)
1,141.01
b
After Issue
(Rs. In lacs)
1,189.53
c
Issue Price
(Rupees)
100.00
Value as per erstwhile Controller of Capital Issues (CCI) Guidelines
Since the Equity shares of the company are thinly traded, the company management had arranged for an
independent valuation of its Equity shares from M/s. C.C.Chokshi & Co. as per the guidelines issued by
the erstwhile Controller of Capital Issues (CCI). The valuation of Equity shares arrived at by M/s.
C.C.Chokshi & Co. as per the CCI Guidelines is Rs. 85.12.
CAPITALIZATION OF RESERVES AND PROFITS
Bonus Shares issue details of the Company since incorporation till date is as follows:Sl.
No.
Financial
Year
No. and Face Value
of Bonus Equity
Shares
1
1972-73
2
2
1979-80
1982-83
Ratio
Profit for
that Year
(Rupees)
Amount
Capitalized
(Rupees)
5000
of Rs. 100/- each
1:2
2,97,751
5,00,000
15,600
of Rs. 100/- each
2:5
15,69,655
15,60,000
32,760
of Rs. 100/- each
3:5
40,69,995
32,76,000
Total
53,36,000
REVALUATION OF ASSETS
There are no revaluation reserves in the books of the Company.
MATERIAL DEVELOPMENTS AFFECTING PERFORMANCE OF THE COMPANY
There are no material developments other than those already stated herein that may materially affect the
performance of the Company.
67
KAIRA CAN COMPANY LIMITED
MATERIAL DEVELOPMENTS SUBSEQUENT TO LAST BALANCE SHEET
There are no material developments subsequent to the last balance sheet date, other than those already
stated herein that may materially affect the performance of the Company.
ADVERSE EVENTS
There has been no adverse event affecting the operations of the Company during, or occurring within one
year prior to the date of filing of the Letter of Offer with SEBI other than those already stated herein.
FINANCIAL AND OTHER GENERAL INFORMATION
The Provisional (Unaudited) working results of the company for the period from 01.04.04 to 30.09.04 are
given below:(Rounded off to the nearest rupees in lacs)
Sr.No.
Particulars
Amount
1
Net Sales/ Income from Operations
2
Other Income
3
Total Income
4
Estimated Gross Profit / (Loss) excluding
Depreciation and Taxes
202
7,090
5
Provision for Depreciation
6
Provision for Taxes
7
6,888
111
41
- Current Tax
19
- Deferred Tax
7
Estimated Net Profit / (Loss)
26
44
Week end price of equity Shares of Kaira Can Company Ltd on The Stock Exchange, Mumbai:
Sl.
No.
Date
No. of Deal(s)
No. of Shares
Traded
Value
Rs. in lakh(s)
1
06.04.2004
1
25
0.0800 High
2
12.04.2004
1
150
0.3500 Low
3
07.05.2004
1
1
0.0001 High
4
04.05.2004
1
10
0.2000 Low
5
21.07.2004
1
2
0.0001 High
6
21.07.2004
1
2
0.0001 Low
7
09.08.2004
1
1
0.0001 High
8
09.08.2004
1
1
0.0001 Low
9
03.09.2004
1
10
0.0300 High
10
03.09.2004
1
10
0.0300 Low
The shares of the company were not traded Ex-rights till the date of this letter of offer and hence such price
is not available.
XVII. RISK FACTORS & MANAGEMENT’S PERCEPTION THEREOF
RISK FACTORS & MANAGEMENT’S PERCEPTION THEREOF
Internal Risk Factors
1.
68
The requirement of the funds are Company’s own estimates and have not been appraised by any
Financial Institution or Bank. The deployment of the funds collected from this Issue will be at the
discretion of the Company’s Management.
KAIRA CAN COMPANY LIMITED
Management’s Perception:
The requirement for the funds are prepared by the professionals employed by the Company and
deliberated in detail by the Senior Management of the Company. Since the appraisal of the plans and
projections are not mandatory in respect of the proposed offer of Rights Equity Shares, the plans and
projections are not subjected to any appraisals.
2.
There are 59 cases pertaining to various Civil, Taxation and Labour laws in which company is one of the
parties to the disputes. Besides, the company has filed 2 criminal prosecutions for dishonour of cheques
and has also initiated a declaratory suit in respect of its Registered Office situated at Tiecicon House,
Dr.E.Moses Road, Mumbai – 400 011.
The following is a consolidated list of litigations and disputes concerning the Company :
List of litigations and disputes concerning the Company
Civil Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1.
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
Special Civil
Judge (S.D.)
Anand
07.05.04
Suit filed by KCCL to recover
dues for the goods sold.
Summons are issued. The matter
is at hearing stage.
21,06,445/-
2.
KCCL
Vs.
M/s. Canara Canning & Ors.
Joint Civil
116/2003
Judge (S.D.)
Court, Anand.
25.09.03
Suit filed by KCCL to recover
dues for the goods sold.
The Court has passed an ex-parte
order in favour of the company
ordering the respondents to pay
the dues. Decree has been drawn
and transferred to Udupi Court.
3,21,978/-
3
KCCL
Vs.
National Insurance Company.
State
Commission
70/2001
20.02.01
Complaint filed by KCCL to
recover damages to the
insured goods.
Stage of Interim hearing and
amendments to the complaint filed
is over. Now the case is to come
up for final hearing.
10,61,886/-
4.
KCCL
Vs.
Barkha & Others.
High Court,
Mumbai
496/2001
12.02.01
KCCL packs and distributes
Amul Milk. Case filed by KCCL
for restraining the defendants
under the Trade Marks Act from
packing and selling milk under
the brands AMAN and AMAN
TAAZA since these brands are
deceptively similar with brands
AMUL and AMUL TAAZA.
Notice is to be served on some of
the defendants who do not have
fixed address.
Interim Ex-parte order is passed
in our favour.
Suit to
restrain the
usage of
Trademark
and hence
no
pecuniary
value.
5.
KCCL
V/s.
Eastern Overseas Ltd.
High Court,
Mumbai
3879/98
14.08.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
17,70,199/-
6.
KCCL
V/s.
Vishal Agritech Ltd.
High Court,
Mumbai
4542/98
31.07.98
Suit filed by KCCL to recover
dues for goods sold.
Matter has not reached on the
Board.
4,41,500/-
7.
KCCL
V/s.
Ravileela Dairy Products Ltd.
High Court,
Mumbai
3824/98
31.07.98
Suit filed by the Company to
recover the dues for goods
sold.
Matter has not reached on the
Board.
4,86,433/-
8.
KCCL
V/s.
New India Assurance Co. Ltd.
Consumer
Disputes
Redressal
Forum,
High Court,
Mumbai.
2730/97
20.06.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not reached on the
Board.
43,44,000/-
58/2004
Amount
(Rs.)
69
KAIRA CAN COMPANY LIMITED
9.
KCCL V/s.
1) APL Korea –
American President
Lines Limited,
2) APL Agencies Pvt. Ltd.,
New India Ass. Co. –
Insurance Claim
High Court,
Mumbai
2783/97
30.04.97
Suit filed by the Company to
recover damages to the insured
goods.
Matter has not yet reached the
Board.
10. KCCL
Vs.
ION Exchange (India) Ltd.
& Others.
Small Causes 648/97
Court No.13
20.03.97
Suit filed by Kaira Can Company The matter is to reach the hearing
Ltd seeking declaration that the stage.
Company is a legal tenant in
respect of its Registered Office
premises.
11. KCCL
Vs.
Vakratunda Distributors.
High Court,
Mumbai
05.10.96
Suit filed by the Company to
Ex-parte decree awarded in
recover the dues for goods sold. favour of the company to be
executed.
4718/96
9,22,713/-
Declaratory
Suit and
hence no
pecuniary
value.
3,09,494/-
There are two other matters in which the Company is a party involving a sum of Rs. 83,756/-.
Criminal Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1.
KCCL
Vs.
Transglobe Foods Ltd. Rajkot
Spl. Civil
Judge (S.D.),
Anand
441/2004
442/2004
443/2004
444/2004
496/2004
497/2004
20.01.04 Six cheques issued by the
20.01.04 defendants for payment for
20.01.04 goods sold by KCCL to them
20.01.04 were dishonoured. KCCL filed
23.01.04 six complaints u/s 138 of
23.01.04 Negotiable Instruments Act,
1881 for dishonour of cheques.
Summons served. The case is
pending awaiting hearing.
2.
Kaira Can Company Ltd.
Vs.
Canara Canning.
(Two Cases)
Metropolitan
Magistrate’s
Court at
Ballard Pier,
Mumbai.
(i) 541/S/
2003
and
(ii)542/S/
2003
26.6.03
Cheques worth Rs. 1,50,000/and Rs. 1,71,978/- respectively
issued by M/s. Canara Canning
to the company for cans
supplied to them were
dishonoured. The company has
filed criminal complaints u/s 138
of Negotiable Instruments Act,
1881 through Company
Secretary.
Summons served upon the party.
The matter is to come up for
hearing.
Amount
(Rs.)
22,01,865/-
3,21,978/-
Central Excise Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
Issues
Status
1
KCCL, Anand
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT,
W.R.,
Mumbai
Case File
No. 43
17.11.99
Duty credited for goods
purchased not allowed and
asked to reverse. The Company
reversed the duty under protest
and filed the case.
Appeal pending with CESTAT.
2
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL,
Himmatnagar.
Commissioner Case File
Central
No. 37
Excise
Ahmedabad
III
12.03.99
Alleged less payment of Excise
Duty amount. Department has
filed the case.
Show Cause Notice is replied
Hearing took place on 16.07.99.
Decision awaited.
23,39,528/-
3
Commissioner Central
Excise, Ahmedabad – II
Vs.
KCCL, Himmatnagar.
Commissioner Case File
Central
No. 36
Excise,
Ahmedabad
25.02.99
CENVAT availed on components
deduction not allowed from the
assessable value of final
products.
Show Cause Notice is replied.
The case is pending for final
disposal.
34,10,016/-
70
Amount
(Rs.)
1,30,849/-
KAIRA CAN COMPANY LIMITED
4
KCCL,
Anand.
Vs.
Assistant Commissioner
Central Excise, Anand
Commissioner Case File 29.01.99 Duty paid OTS Cans despatched
(Appeals)
No. 20
from Anand rejected by customer
Central
and returned to the Company.
Excise,
The same were off loaded in a
Mumbai.
godown outside the factory.
Repaired OTS Cans were
despatched to customer under
Excise Invoice.
Stay & appeal pending with
Appellate Commissioner,
Ahmedabad. Stay is not
received.
2,85,721/plus
30,000/interest
3,15,721/-
5
KCCL,
Kanjari
Vs.
Commissioner (Appeals)
Central Excise, Vadodara.
CESTAT
W.R.,
Mumbai
Case File
No. 13
29.01.99
On account of shortage of input
compared to output in 1996,
following duties and penalties
levied:1) Duty - Rs. 6,16,666/2) Penalties- Rs. 2,00,000/-
1) Duty paid - Rs. 6,16,666/2) Penalties on the Managing
Director and the employees.
Rs. 2,00,000/- paid.
3) For Penalty of Rs. 3,00,000/on the Company,
unconditional stay granted by
CESTAT on 27.04.04.
Main appeal pending.
11,16,666/-
6
Commissioner Central
Excise, Vadodara
Vs.
KCCL, Anand.
Commissioner Case File
of Central
No. 10
Excise,
Vadodara.
14.12.96
Demand of duty on lacquered
tinplate sheets under Rule 57G
of Central Excise Act and
Customs Act.
The Company has filed its
representation. The matter is at
the hearing stage.
28,32,848/-
Sales Tax Matters
Sr. Parties
No.
Sales Tax Officer, Anand
Vs.
KCCL
Adjudicating Case No. Date of
Authority
filing
Issues
Status
S.T.O.,
Mehsana.
Rejection by Sales Tax Dept. of
Sales Tax form ‘H’ given by Merry
Weather Foods Products Ltd. for
the year 1991-92.
Pending Last Hearing on
10.10.2002
04.09.97
Amount
(Rs.)
1,85,862/-
There are two other matters on Sales Tax involving a total sum of Rs. 72,336/-.
Income Tax Matters
Disputes under Income Tax Act lying with Commissioner of Income Tax (Appeals) amounts to Rs. 80,40,214/- out of which
Rs. 58,66,996/- are paid / adjusted and Net Balance in this respect is Rs. 21,73,218/-.
Labour Law Matters
Sr. Parties
No.
Adjudicating Case No. Date of
Authority
filing
1
KCCL
Vs.
Krishna Corporation, Anand
Civil Court
Anand
Sp.Civil
Appl.
102/00
2
Ramesh M & 138 Ors.
Vs.
KCCL & Others.
Labour
Court
Nadiad
Ref.119
to
257/2000
Issues
Status
Amount
(Rs.)
10.2.2000 KCCL had paid to the Contractor,
compensation including Provident
Fund and Bonus amount for
distribution to the workers. The
Contractor neither deposited the
Provident Fund amount nor paid
the Bonus to the Contract Worker.
KCCL has sued the Contractor to
recover such undeposited / unpaid
amount. The Contractor in his
counter claim has asked for refund
of his Security Deposit.
The case is to reach
evidence stage.
KCCL’s
claim Rs.
10,24,421/Krishna
Corpn.’s Rs.
8,50,000/Claim
15.2.2000 The case is against the Labour
Contractor in which KCCL is made
a party. The Contract Workers
have alleged non-payment of their
dues and have filed a Joint
application.
The case has reached for
Contract Workers evidence
filing stage.
Rs.
17,32,20,095/-
71
KAIRA CAN COMPANY LIMITED
Note:There are 36 other cases on labour law matters to which the Company is made a party. Out of these, 18 cases pertain to imposition
of fine by the Factory Inspector for non-issuance of Identity Cards to Casual and Contract Workers. The remaining cases are filed by
the Workers / employees who were dismissed for various reasons. The liability, if any, in respect of each of the above mentioned cases
is not expected to exceed Rs. 1 lakh. The total liability in respect of the above mentioned 36 cases is expected to be below Rs. 12 lakhs.
Management’s Perception:
The Company has consulted experts in various fields in relation to the cases/proceedings filed against or
by the Company. In view of the advises received from experts based upon the facts of each of the cases/
proceedings vis-à-vis the provisions of law, the stand taken by the Company is considered sound and
correct.
3.
The audited accounts for the financial year 2003-2004 exhibits contingent liability to the tune of
Rs.1,01,32,034/-.
Management’s Perception:
The contingent liabilities contained in the 41st Annual Report is in consonance with the norms stipulated
by accounting standards. The management of the Company does not envisage crystallization of such
other contingent liabilities. A sum of Rs. 72,65,945/- has been paid/ adjusted against such contingent
liabilities and net contingent liabilities amounting to Rs. 28,66,089/-.
External Risk Factors
1.
The prospects of Company’s business significantly depends upon the performance of GCMMF. As per
the agreement dated 04.04.03 between GCMMF and KCCL, the milk required for processing, packing
and distribution by the company under Amul brand name would be required to be sourced / procured /
purchased exclusively through GCMMF and that it would not pack any other milk either in it’s own brand
name or in any other brand name during the three year validity period of the said agreement. The
average of past financial years’ gross sales of the company to GCMMF is 14% to the average of the
company’s gross sales of its products during the said period of three years.
Management’s Perception:
The Company has been trading with the GCMMF since over a period of 40 years. GCMMF’s own
progress has been impressive. The management of the Company is of the opinion that GCMMF will
continue its progress and consequently the Company’s business will not bear any adverse impact on that
account. The agreement for processing, packing and distributing the milk was renewed in the past and
the management believes that the above mentioned agreement shall be renewed before its’ expiry period.
The management also expects to maintain the company’s gross sales of its products to at around 14%
of its gross sales to GCMMF.
2.
The Company imported tinplate (main raw material), stores and spares and capital goods worth
Rs.1711.34 lakhs during the financial year ended 31.03.2004. The Company faces a potential foreign
exchange risk at such imports.
Management’s Perception:
The Company imports tinplates, components and lacquer to partially meet its requirement of raw
materials and also to meet customer’s specifications. The major portion of the cans produced out of the
imported raw materials is exported (including deemed exports) and thus the potential foreign exchange
risk resulting out of import of raw materials is negated to a large extent by exports realisations. It may be
noted in this connection that the Company had exported cans (including deemed exports) to the tune of
Rs.1259.35 lakhs during the year ended 31st March, 2004.
3.
Changes in government policy, particularly with respect to duties, as well as changes in laws could have
a bearing on the industry’s and the Company’s performance.
Management’s Perception:
This business risk is common and applicable to every organisation. However, since the Company is
engaged in more than one line of business, the impact of changes in government policies adversely
72
KAIRA CAN COMPANY LIMITED
impacting one of its business will have relatively lower impact on the overall performance of the Company
due to the business mix.
4.
Poysha Industrial Company Ltd., the erstwhile parent organisation was ordered for liquidation by the
Bombay High Court in January, 1998.
Management’s Perception:
The Company does not have any investment in Poysha Industrial Company Ltd and therefore there is no
financial impact on the Company resulting out of the liquidation of Poysha Industrial Co. Ltd.
5.
The Company’s shares can be said to be insignificantly traded on Mumbai Stock Exchange.
Management’s Perception :
The buying and selling of equity shares held by shareholders are purely subjective decisions and the
Company’s management does not have any control over buying and/or selling of shares and/or prices
and/or volume thereof.
XVIII.
MATERIAL CONTRACTS & DOCUMENTS FOR INSPECTION
The following contracts (not being contracts entered by the Company in the ordinary course of
business carried on by the Company) which are or may be deemed material have been entered or to
be entered into by the Company. These contracts may be inspected at the Registered Office of the
Company or at the Corporate Office of the Company between 10.00 am to 12.00 noon on any working
day from the date of the Letter of Offer until the Closure of the issue.
MATERIAL CONTRACTS
Copy of agreement dated 10th July, 2001 between Kaira Can Company Limited and Computech Sharecap
Limited, the Registrar to the Issue.
Copy of letter dated 26th October, 2004 issued by Kaira Can Company Limited to Corporation Bank, Bankers
to the Issue and their letters dated 19th August, 2004 and 27th October, 2004.
Copy of Tripartite agreement dated 10th July, 2001 between the Company, NSDL and Computech Sharecap
Limited.
Copy of Tripartite agreement dated 26th April, 2001 between the Company, CDSL and Computech Sharecap
Limited.
DOCUMENTS FOR INSPECTION:
Memorandum and Articles of Association of Kaira Can Company Limited.
Copy of Certificate of Incorporation of the Company.
Resolutions passed by the members at the Extra Ordinary General Meeting held on 11th March, 2004.
Copies of Annual Reports of the company for the last five accounting years.
Letter from the Auditors of the Company dated 24th September, 2004 certifying the availability of tax benefits
as mentioned in the Letter of Offer.
Copy of the Auditors Report for the half year ended 30th September, 2004 and the preceding five financial
years, dated 23rd December, 2004.
Copy of consents of the Registrar to the Issue, Banker to Issue, Auditors to the Company, Company
Secretary and Compliance Officer, Directors of the Company for inclusion of their names in the Letter of Offer.
Copy of Listing Agreement with BSE and the application made by the Company for in-principle approval for
listing of the Rights shares on the BSE.
Letter No.Dcs/smg/sdm/rk/vm/04 dated 8th December, 2004 from BSE according their in-principle approvals for
listing of the shares to be issued under the present Rights Issue, and to include their name in the Letter of
Offer.
Board Resolution for appointment of the Managing Director dated 29th April, 2004.
73
KAIRA CAN COMPANY LIMITED
Copies of following valid Factory Licences:Sl.
No.
Location of Factory
Product
Licence /
Approval No.
Dated
1
2
3
4
5
Anand Unit
Mehsana Unit
Kanjari Unit
Vijaya Nagar Unit
Vashi Unit
Cans
Cans
Cans
Cones
Milk Processing
073216
085960
002025
013521
PLN/NDM/65/ 2000/12856/Thn.
05/08/1991
14/10/1997
07/11/2003
11/01/2001
27/12/2000
XIX. DECLARATION
No statement in this Letter of Offer shall contravene any of the provisions of the Companies Act, 1956 and
the rules made there under. All the legal requirements connected with the said issue as also the guidelines,
instructions, etc. issued by SEBI, Govt. and any other competent authority in this behalf have been duly
complied with.
In opinion of the Board of Directors of the Company there have not arisen, since the date of the last financial
statement disclosed in this Letter of Offer, any circumstances that materially and adversely affected or is likely
to affect the trading or the profitability of the Company or the value of its assets, to its ability to pay its
liabilities within the next twelve months.
The natural persons in control of bodies corporate forming part of the Promoter group are Shri P.N.Kapadia,
Shri U.R. Kapadia and Shri N.G. Sheth and their family members, relatives & associates. None of the bodies
corporate / natural persons have been restrained from accessing the capital market for any reasons by the
SEBI or any other authorities.
NOTE:
The Company accepts no responsibility for statements made otherwise than in the letter of offer or in the
advertisement or any other material issued by or at the instance of the Company and that any one placing
any reliance on any other source of information would be doing so at his / her / their own risk.
For Kaira Can Company Limited
sd/1)
P.N.Kapadia – Chairman and Director
Place: Mumbai
2)
U.R.Kapadia – Managing Director
Date : 23rd December, 2004
3)
V.J.Matthai
74
– Director