«TABLE OF CONTENTS DEFINITION, TECHNICAL GLOSSARY AND ABBREVIATIONS FORWARD-LOOKING STATEMENTS RISK FACTORS SUMMARY SUMMARY OPERATING AND FINANCIAL ...»
Mr. Rangilal Gupta received Rs. 5,000 during the during current financial year for nine months period ended December 31, 2004, towards sitting fees at the rate of Rs. 2,500 (increased to Rs. 5,000 with effect from December 29, 2004) per Board/Committee meeting Mr. S.D. Nailwal Mr. S.D. Nailwal was appointed as a additional director with effect from September 25, 2004 by a resolution passed at a Board meeting held on September 2004. At present he is a part-time additional director and his appointment is subject to re-appointment in the ensuing AGM.
Mr. S.D. Nailwal received Rs. 2,500 during the during current financial year for nine months period ended December 31, 2004, towards sitting fees at the rate of Rs. 2,500 per Board meeting Nature and Interest of Promoters/Directors Except as stated in the section titled “Related Party Transactions” on page 105 of this Draft Red Herring Prospectus, the Promoters, JAL, do not have any interest in our business except to the extent of investments made by them in us and earning returns thereon.
We do not pay any remuneration to our part-time Directors but we pay sitting fees of Rs. 2,500 for attending each meeting of the Board/ Committee except to Mr. J. N. Gaur and Mr. R. K. Narang, Wholetime Directors. The Whole time Directors are interested to the extent of remuneration paid to them for services rendered as our officer or employee.
All our Directors may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or committee thereof as well as to the extent of other remuneration and/or reimbursement of expenses payable to them under the Articles. All the Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them or their friends and relatives in the Company, or that may be purchased for and allotted to them out of the present Offer in terms of this Draft Red Herring Prospectus and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares.
The Directors may also be regarded as interested in the Equity Shares, if any, held by or that may be subscribed by and allotted to the companies, firms and trust, in which they are interested as Directors, Members, partners and/or trustees.
All Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by us with any company in which they hold Directorships or any partnership firm in which they are partners. No Director of our Company is interested in the appointment of the BRLMs, Lead Manager and Registrar. No Director of the Company is interested in any property acquired by the Company within two years of the date of this Draft Red Herring Prospectus.
Except as stated otherwise in this Draft Red Herring Prospectus, the Company has not entered into any contract, agreements or arrangement during the preceding two years from the date of this Draft Red Herring Prospectus in which the directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements are proposed to be made to them.
Borrowing Powers of Directors
Article 59 of the Articles of Association, inter alia, provides that the Board may, from time to time at its discretion, subject to the provisions of Sections 58A, 292 and 293 of the Act and of these Articles, accept, deposits from Members either in advance of calls or otherwise and generally raise or borrow moneys, either from the Directors, their friends and relatives or from others for the purposes of the Company and/or secure the payment of any such sum or sums of money, provided however, where the moneys to be borrowed together with the moneys already borrowed (apart from the temporary loans obtained from the Company’s bankers in the ordinary course of business) and then remaining outstanding and undischarged at that time exceed the aggregate, for the time being, of the paid up capital of the Company and its free reserves, that is to say, reserves, not set apart for any specific purposes, the Board shall not borrow such money without the consent of the Company in General Meeting by an ordinary resolution. The Board may raise and secure the payment of such sum or sums in such manner and upon such terms and conditions in all respects as it thinks fit, and in particular by receiving deposits, issue of bonds, debentures, perpetual, redeemable, debenture stock, or any security of the Company or by mortgage or charge or other security upon all or any part of the property or undertaking of the Company (both present and future), including its uncalled capital for the time being; provided that the Board shall not give any option or right to any person for making calls on the shareholders of the Company in respect of the amount unpaid for the time being on the shares held by them, without the previous sanction of the Company in General Meeting.
Article 60, inter alia, provides that subject to the provisions of the Act, and these Articles, the debentures, debenture stock, bond or other securities may be issued at a discount, premium or otherwise and with any special privileges and conditions as to redemption, surrender, drawings, attendance at General Meeting of the Company, allotment of share, appointment of Directors and otherwise, Debentures, debenture stock bond, and other securities may be made assignable, free from any equities between the Company and the person to whom the same may be issued. Provided that debenture/debenture stock, loan/loan stock with the right of conversion into equity shares, shall not be issued except with the sanction of the Company in General Meeting.
Article 61, inter alia, provides that subject to the provisions of the Act, if the Directors or any of them or any other person shall incur or be about to incur any liability or become personally liable, whether as principal or as surety, for the payment of any sum primarily due from the Company, the Board may execute or cause to be executed any mortgage, charge or security over or affecting the whole or any part of the assets of the Company by way, of indemnity to secure the Directors or persons so becoming liable as aforesaid from any loss in respect of such liability.
Revaluation of Assets We have not revalued any of our assets since its inception.
Classes of Shares Our Authorised Capital is Rs. 5000 million, which is divided into 500 million Equity Shares of Rs.10 each.
Payment or Benefit to Promoters or Officers of the Company Except as stated otherwise in this Draft Red Herring Prospectus, no amount or benefit has been paid or given within the two preceding years or is intended to be paid or given to any of our promoters or employees except the normal remuneration for services rendered as employees and equity shares of Jaiprakash Industries Limited (now JAL) at a price of Rs. 18 per share under the Employee Share Purchase Scheme in 2002 framed under the SEBI Guidelines.
The main provisions of the Articles of Association of the Company (hereinafter referred to the “Articles”) post listing
of our equity shares, inter alia, are as under:
Capital And Increase/Reduction Of Capital Share Capital and Power to issue Preference Shares Article 3 provides that the authorised share capital of the Company shall be such amount and be divided into such shares as may from time to time be provided in clause V of the Memorandum of Association, with power to increase or reduce the capital and divide the shares in the capital of the Company for the time being into equity share capital and preference share capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions as may be determined in accordance with these presents and to modify or abrogate any such rights, privileges or conditions in such manner as may for the time being be permitted by the said Act.
Further Issue of Shares
Article 3A(1), inter alia, provides that, where at the time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of
further shares, either out of the unissued capital or out of the increased share capital then:
(a) such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the Company, in proportion, as near as circumstances admit, to the capital paid up on those shares at that date;
(b) such offer shall be made by a notice specifying the number of shares offered, limiting the time to not less than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined;
(c) the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub clause (b) hereof shall contain a statement of this right. Provided that the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him.
(d) after expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose off them in such manner and to such person (s) as they may think, in their sole discretion, fit.
Article 3A(2), inter alia, provides that notwithstanding anything contained in Article 3A (1) above, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of Article 3A (1) hereof) in any manner whatsoever, (a) if a special resolution to that effect is passed by the Company in General Meeting or (b) where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the company.
Article 3A (3) inter alia provides that nothing in Article 3A (1) (c) above hereof shall be deemed:
(a) to extend the time within which the offer should be accepted ; or (b) to authorise any person to exercise the right of renunciation for a second time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.
Article 3A (4) inter alia provides nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of an option attached to the debenture issued or loans raised by the company;
(i) to convert such debentures or loans into shares in the company; or (ii) to subscribe for shares in the company (whether such option is conferred in these Articles or otherwise).
Provided that the terms of issue of such debentures or the terms of such loans include a term providing for such option
and such term:
(a) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with Rules, if any, made by that Government in this behalf; and (b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the Company in General Meeting before the issue of the debentures or raising of the loans.
Dematerialisation of Securities Article 3B, inter alia, provides that the Company shall be entitled to dematerialise its securities and to offer securities in a dematerialised form pursuant to the Depositories Act, 1996.
Further, every person subscribing to securities offered by the Company shall have the option to receive security certificate or to hold the securities with a depository. Such person who is of the securities can at any time opt out of a depository, if permitted by the law, in respect of any security in the manner provided by the Depositories Act, and the Company shall, in the manner and within the time prescribed, issue to the beneficial owner the required Certificate of Securities.
If a person opts to hold his security with a depository, the Company shall intimate such depository the details of allotment of the security, and on receipt of the information, the depository shall enter in its record the name of the allottee as the beneficial owner of the security.
Similar other provisions regarding holding of securities in fungible form, rights of the Depositories and beneficial owners, etc. are contained in this Article 3B.
Redemption of Preference Shares, if any Article 4 provides that unless the Company in General Meeting otherwise determine or the terms of issue of Redeemable Preference shares otherwise provide, the redemption of Redeemable Preference shares shall be effected in
the manner set out below:
(a) The redemption shall be made by repayment of capital paid up on such shares, together with premium, if any, agreed to be paid on redemption at any time or times after such date or dates as the Directors may determine.
(b) Such shares may be redeemed in entirety or in parts. In the latter case, the Directors may decide the number of shares and the individual shares to be redeemed on each occasion in such manner as they may deem fit.