LETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This letter of Offer is sent to you as a registered equity shareholder of Himalaya Granites Limited (the Company ) as on the Record Date in accordance with Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998, as amended. If you require any clarifications about the action to be taken, you should consult your Stock Broker or Investment Consultant or the Manager to the Buyback Offer (VC Corporate Advisors Pvt. Ltd.) or to the Registrar to the Buyback Offer (S. K. Infosolutions Private Limited). Please refer to the section on Definitions for the definition of capitalized terms used therein. HIMALAYA GRANITES LIMITED CIN: L13206TN1987PLC015161 Registered Office: Panchalam Village, Melpettai Post, Tindivanam,Tamilnadu-604 307 Telefax: 044-26693378, Website: www.hgl.co.in, Email: investors@hgl.co.in Contact person: Mr. Ramesh Kumar Haritwal, Tel: (011) 42791324, Fax: (011) 42791330, Email: investors@hgl.co.in Cash offer to buyback not exceeding 7,00,000 (Seven Lakhs Only) fully paid up equity shares of face value of Rs. 10/- each representing 23.29% of the total number of equity shares in the issued, subscribed, paid up equity share capital of the Company from all the existing public shareholders/beneficial owners of the Company as on the record date i.e. December 04, 2015 on a proportionate basis through the tender offer route at a price of Rs. 30/- (Rupees Thirty Only) per equity share for an aggregate amount of Rs. 2,10,00,000/- (Rupees Two Crores Ten Lakhs Only). 1) The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company, Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the Companies Act ), the Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the Share Capital Rules ) and in compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the Buyback Regulations ) including any amendments, statutory modifications of re- enactments thereof, and such other approvals, permissions and exemptions as may be required, from time to time, from the BSE Limited (the BSE ) where the equity shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which may be agreed to by the Board and/ or any other committee thereof. The Buyback would be undertaken in accordance with Circular No. CIR/CFD/POLICYCELL/1/2015 dated April 13, 2015 issued by the Securities and Exchange Board of India, which prescribes mechanism for acquisition of shares through Stock Exchange. In this regard, the Company will request BSE to provide the Acquisition Window. For the purpose of this Buyback, BSE would be the designated Stock Exchange. 2) The Buyback Offer Size is 23.34% of the fully paid-up equity share capital and free reserve as per audited accounts of the Company for the financial year ended March 31, 2015 and is within the statutory limits of 25% of the fully paid-up equity share capital and free reserves as per the last audited accounts of the Company. 3) This letter of Offer will be sent to the Equity Shareholder(s)/Beneficial Owner(s) of Equity shares of the Company as on the Record Date i.e., December 04, 2015. 4) The procedure for Tender and Settlement is set out in paragraph 20 of this Letter of Offer. The Form of Acceptance-cum-Acknowledgement ( Tender Form ) is enclosed together with this Letter of Offer. 5) For mode of payment of consideration to the Equity Shareholders refer Paragraph 20.10 of Letter of Offer. A copy of the Public Announcement and this Letter of Offer (including Tender Form) will be available on the website of Securities and Exchange Board of India- www.sebi.gov.in 7. Equity Shareholders are advised to refer to paragraph 17 (Details of Statutory Approvals) and paragraph 21 (Note on Taxation) before tendering their Equity Shares in the Buyback. BUYBACK OPENS ON: THURSDAY, JANUARY 14, 2016 BUYBACK CLOSES ON: THURSDAY, JANUARY 28, 2016 LAST DATE OF RECEIPT OF COMPLETED TENDER FORM AND OTHER SPECIFIED DOCUMENTS INCLUDING PHYSICAL SHARE CERTIFICATES BY THE REGISTRAR AND TRANSFER AGENT: SATURDAY, JANUARY 30, 2016 All future correspondence in relation to Buyback, if any should be addressed to the Manager to the Buyback Offer or the Registrar to the Buyback Offer at the respective addresses mentioned below: MANAGER TO THE OFFER: VC CORPORATE ADVISORS PRIVATE LIMITED SEBIREGN NO: INM000011096 (Contact Person: Mr. Anup Kumar Sharma) 31 Ganesh Chandra Avenue, 2 nd Floor, Suite No 2C, Kolkata-700 013. Phone No : (033) 2225-3940 / 3941 Fax : (033) 2225-3941 Email: mail@vccorporate.com REGISTRAR TO THE OFFER: S. K. INFOSOLUTIONS PRIVATE LIMITED SEBIREGN. NO: INR000003886 (Contact Person: Mr. Dilip Bhattacharya) 34/1A, Sudhir Chatterjee Street, Kolkata- 700 006 Tel No.: (033) 2219-4815/6797 Fax: (033) 2219-4815 E-mail: skcdilip@gmail.com
TABLE OF CONTENTS: Sr. No. Subject Page No 1 Schedule of Activities 2 2 Definition of Key Terms 3 3 Disclaimer Clause 4 4 Text of the Resolution passed at the Board Meeting 4 5 Details of Public Announcement 7 6 Details of the Buyback 7 7 Authority for the Buyback 8 8 Necessity of the Buyback 9 9 Management Discussions and Analysis of the Likely Impact of Buyback on the Company 9 10 Basis of Calculating Buyback Price 10 11 Sources of funds for the Buyback 11 12 Details of the Escrow account and the Amount to be deposited therein 11 13 Capital Structure and Shareholding Pattern 11 14 Brief Information of the Company 12 15 Financial Information about the Company 14 16 Stock Market data 17 17 Details of the statutory approvals 17 18 Details of the Registrar to the Buyback 18 19 Process and methodology for Buyback 18 20 Procedure for Tender/offer and Settlement 20 21 Note on Taxation 23 22 Declaration by the Board of Directors 24 23 Auditors Certificate 25 24 Documents for Inspection 27 25 Details of the Compliance Officer 27 26 Details of the Remedies available to the Shareholders/ Beneficial Owners 27 27 Details of the Investor Service Centres 27 28 Details of the Manager to the Buyback 27 29 Declaration by the directors regarding the authenticity of the information in the offer document 28 1. SCHEDULE OF ACTIVITIES OF THE OFFER ACTIVITY DATE DAY Date of Board Meeting Approving the Proposal of The Buyback October 10, 2015 Saturday Date of declaration of results of the Postal ballot for special resolution by the November 19, 2015 Thursday equity shareholders of the Company, approving the Buyback Offer. Date of Public Announcement for the buyback November 23, 2015 Monday Record date for determining the Buyback entitlement and the names of the December 04, 2015 Friday eligible shareholders Date of Opening of the buyback Offer January 14, 2016 Thursday Date of Closing of the Buyback Offer January 28, 2016 Thursday Last date of receipt of completed Tender Form and other specified documents January 30, 2016 Saturday including physical share certificates by the Registrar and Transfer Agent Last Date of verification by the Registrar February 04, 2016 Thursday Last date of providing acceptance to the Stock Exchange by the Registrar February 04, 2016 Thursday Last date of Settlement of Bids on the Stock Exchange February 08, 2016 Monday Last date of dispatch of Share certificate(s)/return of unaccepted demat shares February 08, 2016 Monday by Stock Exchange to Selling Member Last date of Extinguishment of equity shares February 18, 2016 Thursday 2
2. DEFINITION OF KEY TERMS Acceptance Acceptance of Equity Shares, tendered by Eligible Persons in the Buyback Offer Act The Companies Act, 2013 Additional Shares / Additional Equity Shares Company / the Company Board of Directors/ Board BSE Buyback Entitlement Buyback Offer / Buyback / Offer CDSL DP Eligible Person(s) Equity Shares / Shares Escrow Account Form/ Tender Form LOF/ Offer Document Non-Resident Shareholders NSDL Offer Price / Buyback Price Offer Size / Buyback Size PA / Public Announcement RBI Record Date Registrar to the Offer / Registrar to the Buyback Regulations / SEBI Regulations / SEBI Buyback Regulations / Buyback Regulations SEBI Small Shareholder Stock Exchanges/Stock Exchange VCAPL/ Manager to the Buyback Eligible Equity Shares tendered by an Eligible Person over and above the Buyback Entitlement of such shareholder. Himalaya Granites Limited Board of Directors of the Company, or the Committee of Directors or Buyback Committee for the purpose of the Buyback. BSE Limited The number of Equity Shares that a Shareholder is entitled to tender in the Buyback Offer, based on the number of Equity Shares held by that Shareholder, on the Record date and the Ratio of Buyback applicable in the category, to which such Shareholder belongs to. Offer by Himalaya Granites Limited to buy back up to maximum of 7,00,000 fully paid-up Equity Shares of face value of Rs. 10/- each at a price of Rs. 30/- per Equity Share from all the Equity Shareholders of the Company through Tender Offer process, on a proportionate basis. Central Depository Services (India) Limited Depository Participant Person(s) eligible to participate in the Buyback Offer and would mean all Equity Shareholders / Beneficial Owner(s) of Equity Shares of the Company as on the Record Date i.e., December 04, 2015. Fully paid up Equity Shares of face value of Rs. 10/- each of Himalaya Granites Limited The Escrow Account opened with HDFC Bank Form of Acceptance cum Acknowledgement Letter of Offer Includes Non-Resident Indians (NRI), Foreign Institutional Investors (FII) and Overseas Corporate Bodies (OCB) National Securities Depository Limited Price at which Equity Shares will be bought back from the Shareholders i.e. Rs. 30/- per fully paid up Equity Share, payable in cash Number of Equity Shares proposed to be bought back (i.e. 7,00,000 Equity Shares) multiplied by the Offer Price (i.e. Rs. 30/- per Equity Share) aggregating to Rs. 2,10,00,000/- (Rupees Two Crores and Ten Lakhs Only). Public Announcement regarding the Buyback dated November 23, 2015, issued in Financial Express (English), Jansatta (Hindi) and MalaaiSudar (Tamil) on November 23, 2015. Reserve Bank of India The date for the purpose of determining the entitlement and the names of the Shareholders, to whom the Letter of Offer and Tender Offer Form will be sent and who are eligible to participate in the proposed Buyback offer in accordance with the Regulations. The Record Date in this Buy Back offer is December 04, 2015. S. K. Infosolutions Private Limited Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 including any statutory modifications or re-enactments thereof The Securities and Exchange Board of India A Shareholder, who holds Equity Shares whose market value, on the basis of closing price on the BSE as on Record Date i.e. December 04, 2015 is not more than two lakh rupees. BSE, being the Stock Exchange where the shares of the Company are listed. VC Corporate Advisors Private Limited 3
3. DISCLAIMER CLAUSE As required, a copy of this Letter of Offer has been submitted to Securities and Exchange Board of India (SEBI). It is to be distinctly understood that submission of the Letter of Offer to SEBI should not, in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of the Company to meet the Buyback commitments of for the correctness of the statements or opinions expressed in the Offer document. The Manager to the Buyback Offer, M/s VC Corporate Advisors Pvt Ltd has certified that the disclosures made in the Offer document are generally adequate and are in conformity with the provisions of Companies Act and Buyback Regulations. This requirement is to facilitate investors to take an informed decision for tendering their Equity Shares in the Buyback. It should be clearly understood that while the company is primarily responsible for the correctness, adequacy and disclosures of all relevant information in the Offer Document, the Manager to the Buyback Offer is expected to exercise due diligence to ensure that the Company discharges its duty adequately in this behalf and towards this purpose, the Manager to the Buyback Offer, M/s. VC Corporate Advisors Pvt Ltd has furnished to SEBI a Due Diligence Certificate dated December 01, 2015 in accordance with Buyback Regulations which read as follows: We have examined various documents and materials contained in the annexure to this letter, as part of the due-diligence carried out by us in connection with the finalization of the Public Announcement and the Letter of Offer. On the basis of such examination and the discussions with the Company, we hereby state that: The Public Announcement and the Letter of Offer are in conformity with the documents, materials and papers relevant to the Buyback offer; All the legal requirements connected with the said offer including SEBI (Buy Back of Securities) Regulations, 1998, as amended, have been duly complied with; The disclosures in the Public Announcement and the Letter of Offer are, to the best of our knowledge, true, fair and adequate in all material respects for the shareholders of the Company to make a well informed decision in respect of the captioned Buyback offer. Funds used for buy back shall be as per the provisions of the Companies Act, 2013. The filing of Offer Document with SEBI, does not, however, absolve the Company from any liabilities under the provisions of the Companies Act, 2013, as amended or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed Buyback. Promoters / Directors declare and confirm that no information / material likely to have a bearing on the decision of investors has been suppressed / withheld and / or incorporated in the manner that would amount to mis-statement / misrepresentation and in the event of it transpiring at any point of time that any information / material has been suppressed / withheld and / or amounts to a mis-statement/ misrepresentation, the Promoters / Directors and the Company shall be liable for penalty in terms of the provisions of the Companies Act, 1956 as amended and the SEBI (Buy Back of Securities) Regulations, 1998, as amended. Promoters / Directors also declare and confirm that funds borrowed from Banks and Financial Institutions will not be used for the Buyback. 4. TEXT OF THE RESOLUTION PASSED AT THE BOARD MEETING RESOLVED THAT pursuant to the provisions of Article 33 of the Articles of Association of the Company, as amended, and the provisions of Section 68, 69,70 and all other applicable provisions, if any, of the Companies Act, 2013 and in compliance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 1998, including any statutory modifications or re-enactments thereof ( SEBI Buyback Regulations ), and such other approvals, permissions and sanctions as may be necessary and subject to such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (the "Board" which expression shall include any committee constituted by the Board to exercise its powers, including the powers conferred by this resolution), the Board hereby approves the buy back by the Company of its fully paid-up equity shares of Rs. 10/- each not exceeding 7,00,000 (Seven Lakhs) equity shares (representing 23.29% of the total paid-up equity capital of the Company) at a price of Rs. 30/- (Rupees Thirty only) per equity share (the Buy Back Offer Price ) payable in cash for an aggregate amount of Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only) (the Buyback Offer Size ) which is within 25% of the fully paid-up equity share capital and free reserves of the Company as per the audited accounts of the Company for the year ended March 31, 2015 from the shareholders of the Company on a proportionate basis, through the Tender Offer route as prescribed under the SEBI Buyback Regulations (hereinafter referred to as the "Buyback"). 4
RESOLVED FURTHER THAT the buyback is being proposed in keeping with the Company s desire to enhance overall shareholders value and the buyback would lead to reduction in total number of equity shares. RESOLVED FURTHER THAT the Company may implement the Buyback which is within 25% of its fully paid-up equity share capital and free reserves of the Company as per the approval granted by way of this resolution and in compliance with proviso to Section 68 (2)(c) of the Companies Act, 2013, and in accordance with the SEBI Buyback Regulations. RESOLVED FURTHER THAT as required by Regulation 6 of the SEBI Buyback Regulations, the Company may buy back equity Shares from the existing shareholders on a proportionate basis through tender offer mechanism, provided 15% of the number of equity shares which the Company proposes to buyback or number of equity shares entitled as per the shareholding of small shareholders, whichever is higher, shall be reserved for the small shareholders, as defined in the SEBI Buyback Regulations. RESOLVED FURTHER THAT a draft copy of the postal ballot notice along with the postal ballot form to be send to the shareholders for approval of the Buyback as placed before the board be and is hereby approved and Mr. Ramesh Kumar Haritwal, Managing Director & CEO of the Company be and is hereby authorised to issue the aforesaid notice under his signature to the shareholders and all other persons entitled to receive the same and to do all such acts, matters, deeds and things as may be required in connection with postal ballot. RESOLVED FURTHER THAT Mr. Dilip Kumar Sarawagi, Practicing Company Secretary, Proprietor of M/s. DKS & Co., of 173, M. G. Road, 1st Floor, Kolkata - 700 007 be and is hereby appointed as the Scrutinizer for conducting the postal ballot and e- voting process in a fair and transparent manner at a remuneration of Rs. 20,000/- excluding applicable taxes and out-ofpocket expenses, if any. RESOLVED FURTHER THAT the Company do utilize the services of Central Depository Services (India) Limited for providing e-voting platform in compliance with the provisions of Section 108 of the Act, 2013 read with applicable provisions of the Companies (Management and Administration)Rules, 2014 and Clause 35B of the Listing Agreement with the Stock Exchanges as may be in force from time to time. RESOLVED FURTHER THAT the draft calendar of events as placed before the members of the Board, be and is approved. RESOLVED FURTHER THAT the Board of Directors hereby confirms that: a) all equity shares of the Company are fully paid up; b) the Company has noted that it shall not issue and allot any equity shares including by way of bonus, till the date of closure of this Buyback; c) the Company shall not buy back its shares from any person through negotiated deal whether on or off the stock exchanges or through spot transactions or through any private arrangement in the implementation of the Buyback; d) that the aggregate amount of the Buyback i.e. Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only) does not exceed 25% of the total paid-up capital and free reserves as per the audited balance sheet as on March 31, 2015; e) that the maximum number of equity shares proposed to be purchased under the Buyback i.e. 7,00,000 (Seven Lakhs) equity shares, does not exceed 25% of the total number of shares in the paid-up equity capital as per the audited balance sheet as on March 31, 2015; f) no default, has been made by the Company in the repayment of deposits accepted either before or after the commencement of the Companies Act, 2013, interest payment thereof, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable to thereon to any financial institution or banking company; g) the debt equity ratio of the Company after the Buyback will be well within the limit of 2:1 as prescribed under the Companies Act, 2013 (to the extent applicable), as the case may be. RESOLVED FURTHER THAT as required by Clause (x) of Part A of Schedule II of the SEBI Buyback Regulations, the Board hereby confirms that they have made a full enquiry into the affairs and prospects of the Company and that they have formed the opinion: (a) That immediately following the date of the Board Meeting held on 10.10.2015 and the date on which the results of the postal ballot will be declared, there will be no grounds, on which the Company can be found unable to pay its debts; (b) That as regards the Company s prospects for the year immediately following the date of the Board Meeting as well as the year immediately following date on which the results of the postal ballot will be declared approving the Buy Back and having regards to the Board s intentions with respect to the management of the Company s business during that year and to the amount and character of the financial resources which will, in Board s view, be available to the 5
Company during that year, the Company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from date of the Board meeting approving the Buy Back or within a period of one year from the date on which the results of the postal ballot will be declared as the case may be; (c) In forming its opinion aforesaid, the Board has taken into account the liabilities as if the Company were being wound up under the provisions of the Companies Act, 2013 (including prospective and contingent liabilities). RESOLVED FURTHER THAT the proposed Buyback be implemented from the existing shareholders other than those who are Promoters, Promoters Group and Persons Acting in concert (such shareholders herein after collectively known as Persons in Control ) that persons in control will be such persons as have been disclosed under the filings made by the Company from time to time under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations 2011 ( SEBI Takeover Regulations ) as the Board may consider appropriate, from out of its free reserves and/or Share Premium Account and/or cash balances and/ or internal accruals and/or such other sources or by such mechanisms as may be permitted by Law, and on such terms and conditions as the Board may decide from time to time, and in the absolute discretion of the Board, as it may deem fit. RESOLVED FURTHER THAT the Company shall not use borrowed funds, directly or indirectly, whether secured or unsecured, of any form and nature, from banks and financial institutions for paying the consideration to the equity shareholders who have tendered their equity shares in the Buyback. RESOLVED FURTHER THAT the Company shall not Buyback the locked-in equity shares or other specified securities, if any and non-transferable equity shares or other specified securities, if any, till the pendency of the lock-in or till the equity shares or other specified securities become transferable; RESOLVED FURTHER THAT as per the provisions of Section 68(8) of the Companies Act, 2013, the Company will not issue same kind of shares or other specified securities shares within a period of 6 months after the completion of the Buyback except by way of bonus shares or equity shares issued in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity shares. RESOLVED FURTHER THAT as per the provisions of Regulation 19(f) of SEBI Buyback Regulations, the Company shall not raise any further capital for a period of one year from the date of closure of the buyback offer, except in discharge of its subsisting obligations. RESOLVED FURTHER THAT the powers of the Board of Directors in respect of the buy-back be delegated to a committee ( Buy Back Committee ) consisting of the following directors of the company namely Mr. Ramesh Kumar Haritwal, Managing Director & CEO, Mr. Beni Gopal Saraf, Independent Director and Mr. Mahesh Kumar Malpani, Independent Director of the Company and the quorum for the meeting of the Buy Back Committee shall be presence of two members at the meeting. RESOLVED FURTHER THAT that the Buy Back Committee is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion deem necessary, expedient, usual or proper as the Buy Back Committee may consider to be in the best interests of the shareholders, including but not limited to finalizing the terms of the Buy Back, record date, entitlement ratio, the specific price for the Buy Back, the actual number of Equity Shares to be bought back, mechanism for the Buy Back, opening of Escrow Bank Account and Special Bank Account or Special Demat Account, authorizing the persons to operate the said accounts, appointment of intermediaries or agencies for the implementation of the Buy Back and sign and execute the incidental documentation as also to prefer applications to the appropriate authorities for their requisite approvals and to initiate all necessary actions for preparation and issue of various documents including but not limited to Public Announcement, Declaration of Solvency, Draft Letter of Offer, Letter of Offer, Corporate Actions with Depositories, extinguishment of Share Certificates and filing with appropriate authorities in connection with the Buy Back on behalf of Board of Directors. RESOLVED FURTHER THAT the Buy Back Committee be and is hereby authorized to decide the related issues as may be required to regulate its working, to delegate all or any of the authorities conferred upon it to any Director(s) or Officer(s) or authorized representative(s) of the Company. RESOLVED FURTHER THAT a register of securities bought back shall be maintained wherein the details of equity shares bought back, consideration paid for the equity shares bought back, date of cancellation of equity shares and date of extinguishing and physically destroying of equity shares and such other particulars as may be prescribed, shall be entered and that any Director of the Company be and is hereby authorized to authenticate the entries made in the said register. 6
5. DETAILS OF PUBLIC ANNOUNCEMENT The Public Announcement dated November 23, 2015 was made in the following newspapers, in accordance with Regulation 8(1) of the Buyback Regulations, within Two working days from the date of passing of the Special Resolution by the Equity Shareholders of the Company approving the Buyback through Postal ballot, results of which were declared on November 19, 2015. Publication Language Edition The Financial Express English All editions Jansatta Hindi All editions Malaai Sudar Tamil Chennai Edition For compliances with the requirements of the Buyback Regulations, The Company will publish further notices or corrigenda in the above 3 newspapers in the editions as mentioned above i.e., The Financial Express (English- All Editions), Jansatta (Hindi- All Editions) and Malaai Sudar (Tamil- Chennai Edition) The Public Announcement is available on the SEBI website- www.sebi.gov.in 6. DETAILS OF THE BUYBACK Himalaya Granites Limited has announced the Buyback of not exceeding 7,00,000 Equity shares from all the existing public shareholders/ beneficial owners of equity shares, on a proportionate basis, through the Tender Offer route at a price of Rs. 30/- (Rupees Thirty Only) per equity share payable in cash for an aggregate amount of Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only). The maximum number of equity shares proposed to be bought back represents 23.29% of the total number of equity shares in the Issued, Subscribed and Paid-Up Equity share capital of the Company. The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company, Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the Companies Act ), the Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the Share Capital Rules ) and in compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the Buyback Regulations ) including any amendments, statutory modifications of re- enactments thereof, and such other approvals, permissions and exemptions as may be required, from time to time, from the BSE Limited (the BSE ) where the equity shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which may be agreed to by the Board and/ or any other committee thereof. The Buyback would be undertaken in accordance with Circular No. CIR/CFD/POLICYCELL/1/2015 dated April 13, 2015 issued by the Securities and Exchange Board of India, which prescribes mechanism for acquisition of shares through Stock Exchange. In this regard, the Company will request BSE to provide the Acquisition Window. For the purpose of this Buyback, BSE would be the designated Stock Exchange. The Buyback Offer Size is 23.34% of the fully paid-up equity share capital and free reserve as per audited accounts of the Company for the financial year ended March 31, 2015 and is within the statutory limits of 25% of the fully paid-up equity share capital and free reserves as per the last audited accounts of the Company. The Buyback Offer Size does not include any expenses incurred or to be incurred for the buyback like SEBI filling fees, advisors fees, brokerage, Securities Transaction Tax, Public Announcement Publication expenses, printing and Dispatch expenses, and other incidental and related expenses. The aggregate shareholding of the Promoters, Promoter Group, directors of the Promoter Group companies holding shares in the Company and of Persons who are in control of the Company as on the date of the Public Announcement (i.e., November 23, 2015) is as follows: a) Shareholding of the companies/entities forming part of the Promoter Group Sl.No. Name No. of Equity shares % of Shareholding 1 Shiv Prakash Mittal 12,500 0.42 2 Shiv Prakash Mittal on behalf of Shiv Prakash Mittal HUF 1,09,250 3.64 3 Rajesh Mittal 3,21,250 10.69 4 Karuna Mittal 1,250 0.04 5 Saurabh Mittal 3,10,000 10.31 6 Parul Mittal 600 0.02 7 Shobhan Mittal 27,500 0.92 8 Surbhi Mittal 27,500 0.92 7
Sl.No. Name No. of Equity shares % of Shareholding 9 Saurabh Mittal on behalf of Trade Combines, Partnership Firm 1,83,700 6.11 10 Shobhan Mittal on behalf of Trade Combines, Partnership Firm 1,28,700 4.28 11 Greenply Industries Ltd. 3,80,583 12.66 12 S M Management Pvt. Ltd. 2,14,117 7.13 13 Greenply Leasing & Finance Pvt. Ltd. 100 0.00 Total 17,17,050 57.14 b) Shareholding of Directors of the Promoter Group Companies [mentioned in point (a) above]: Name Directorships held in companies mentioned under point no. (a) above No. of Equity Shares % of Shareholding Mr. Shiv Prakash Mittal Greenply Industries Limited 12,500 0.42 Mr. Rajesh Mittal Greenply Industries Limited and S M Management Private Limited 3,21,250 10.69 Ms. Karuna Mittal S M Management Private Limited 1,250 0.04 Mr. Saurabh Mittal Greenply Leasing and Finance Private Limited 3,10,000 10.31 Ms. Parul Mittal Greenply Leasing and Finance Private Limited 600 0.02 Mr. Shobhan Mittal Greenply Industries Limited 27,500 0.92 c) Shareholding of Directors or Key Managerial Personnel of the Company: Name No. of Equity Shares % of Shareholding Mr. Ramesh Kumar Haritwal 200 0.00 Mr. Pradip ManharlalDomadia 700 0.02 Mr. Saurabh Mittal 3,10,000 10.31 Mr. Saurabh Mittal on Behalf of Trade Combines, Partnership Firm 1,83,700 6.11 d) Details of the Shares purchased or sold by persons including the Promoters or Directors for a period of Six months preceding the date of Board Meeting at which the Buyback was approved till the date of notice convening the General Meeting. Sr. No. Name of the Acquirer/Seller Designation No. of equity shares Acquired/(Sold) Price per Shares (Rs.) Date of Acquisition/Sale Mode of Acquisition 1 Mr. Saurabh Mittal (Acquirer) Non- Executive Chairman 3,00,000 Without Consideration i.e., Gift 8 th October 2015 Interse Transfer of Shares amongst Promoters Group 2 Mr. Rajesh Mittal (Seller) Part of Promoter s Group (3,00,000) Without Consideration i.e., Gift 8 th October 2015 Interse Transfer of Shares amongst Promoters Group e) In terms of the Buyback Regulations under the Tender Offer Route, the Promoter and Promoter Group of the Company have expressed their intention not to participate in the proposed Buyback and have irrevocably waived their rights as shareholders in respect of this Buyback offer. f) Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the Equity Shareholders upto their entitlement, the aggregate shareholding of the Persons in Control, post Buyback will increase to 74.49% of the Post Buyback Equity Share Capital of the Company. Post Buyback the Non- Promoter Shareholding of the Company will not fall below the Minimum Statutory Limit as per the Listing Norms. 7. AUTHORITY FOR THE BUYBACK The Buyback is in accordance with the provisions contained in the Article 33 of the Articles of Association of the Company, Section 68, 69, 70, 110 and all other applicable provisions, if any, of the Companies Act, 2013 (the Companies Act ), the Companies (Share Capital and Debentures) Rules, 2014 (hereinafter referred to as the Share Capital Rules ) and in compliance with the Securities and Exchange Board of India (Buyback of Securities) Regulations 1998, (the Buyback 8
Regulations ) including any amendments, statutory modifications of re- enactments thereof, and such other approvals, permissions and exemptions as may be required, from time to time, from the BSE Limited (the BSE ) where the equity shares of the Company are listed and from any other statutory and /or regulatory authority, as may be required and which may be agreed to by the Board and/ or any other committee thereof. On October 10, 2015, the Board of Directors passed a resolution to Buyback Equity shares of the company and sought approval of its shareholders, as a special Resolution through the Postal Ballot notice dated October 10, 2015, the results of which were declared on November 19, 2015, which is the date when the Special Resolution is deemed to have been passed by the Shareholders. 8. NECESSITY OF THE BUYBACK Share buyback is the acquisition by a Company of its own shares. The objective is to return surplus cash to the public shareholders holding equity shares of the Company. The Board at its meeting held on October 10, 2015, considered the amount in accumulated free reserves as well as the cash liquidity reflected in the audited accounts for the financial year ending March 31, 2015 and considering these, the Board decided to allocate a sum of Rs.2,10,00,000 (Rupees Two Crores and Ten Lakhs only) for distributing to the public shareholders holding equity shares of the Company through the Buyback. After considering several factors and benefits to the public shareholders holding equity shares of the Company, the Board decided to recommend Buyback of not exceeding 7,00,000 (Seven Lakhs only) equity shares (representing 23.29% of the total number of equity shares in the paid-up equity share capital of the Company) at a price of Rs. 30/- (Rupees Thirty only) per equity share for an aggregate consideration of Rs.2,10,00,000 (Rupees Two Crores and Ten Lakhs only). Buyback is a more efficient form of distributing surplus cash to the public shareholders holding equity shares of the Company, inter-alia, for the following reasons: a. The Buyback will help the Company to distribute surplus cash to its public shareholders holding equity shares broadly in proportion to their shareholding, thereby, enhancing the overall return to them; b. The Buyback, which is being implemented through the Tender Offer route as prescribed under the Buyback Regulations, would involve allocation of 15% of the outlay to small shareholders. The Company believes that this reservation of 15% for small shareholders would benefit a large number of public shareholders, who would get classified as small shareholder ; c. The Buyback would help in improving return on equity, by reduction in the equity base, thereby leading to long term increase in shareholders value; d. The Buyback gives an option to the public shareholders holding equity shares of the Company, who can choose to participate and get cash in lieu of Equity Shares to be accepted under the Buyback Offer or they may choose to not participate and enjoy a resultant increase in their percentage shareholding, post the Buyback Offer, without additional investment; The Buy Back offer price of Rs. 30/- (Rupees Thirty Only) represents a premium of 267.37% over the volume weighted average market price of the equity shares on BSE for 3 months preceding the date of intimation to the BSE for the Board Meeting to consider the proposal of the Buyback. 9. MANAGEMENT DISCUSSION AND ANALYSIS OF THE LIKELY IMPACT OF THE BUYBACK ON THE COMPANY 9.1 The Buyback is not likely to cause any material impact on the profitability/earnings of the Company except a reduction in the investment income, which the Company could have otherwise earned on the amount distributed towards Buyback. Assuming there is full response to the buyback, the funds deployed by the Buyback would be Rs. 2,10,00,000 (Rupees Two Crores and Ten Lakhs Only). This shall impact the investment Income earned by the Company, on account of the reduced amount of funds available for investments. 9.2 The buyback will not in any manner impair the ability of the Company in meeting to pursue growth opportunities or meet its cash requirements for business operations. 9.3 The Promoter and Promoter Group of the Company have expressed their intention not to participate in the proposed Buyback, in writing and have irrevocably waived their rights as shareholders in respect of this Buyback offer. 9
9.4 The Buyback of Equity shares of the Company will not result in a change in control or otherwise effect the existing management structure of the Company. 9.5 Assuming response to the Buyback is to the extent of 100% (full acceptance) from all the public Equity Shareholders upto their entitlement, the aggregate shareholding of the Promoter Group/Persons in Control, post Buyback will increase to 74.49% from 57.14% (Pre- Buyback shareholding) and the aggregate shareholding of the Public in the Company shall decrease to 25.51% (Post Buyback shareholding) from 42.86% (Pre Buyback shareholding). 9.6 Consequent to the Buyback and based on the number of Equity shares bought back from the Non- resident Shareholders, Indian Financial Institutions, Mutual Funds and the Public including other bodies corporate, their shareholding would undergo a change. 9.7 The debt-equity ratio post buyback will be compliant with the permissible limit of 2:1 prescribed by the Companies Act, even if the response to the buyback is to the extent of 100% (full acceptance). 9.8 The Company shall not issue any equity shares or other securities (including by way of Bonus) till the date of closure of buyback. 9.9 The Company shall not raise further capital for a period of one year from the closure of Buyback except in discharge of subsisting obligations. 9.10 Salient Financial Parameters consequent to the Buyback based on the latest audited results as on March 31, 2015 are as under: Parameters Pre- Buyback Post- Buyback** Networth^ (Rs in lacs) 899.70 689.70 Return on Networth^ (2.57%) (3.40%) Earnings Per Equity Share (net of tax) (basic & (0.78) (1.02) Diluted) Rs. Book value per share (Rs)^ 29.94 29.92 P/E based as on latest audited financial results * Not meaningful Not meaningful Total Debt/Equity Ratio - - Notes: ^Pre and Post Buyback Calculations are based on financial numbers as on March 31, 2015. *Since there is negative EPS for the year ended 31.03.2015, the P/E ratio cannot be computed. ** The Post buyback numbers are calculated by reducing the net worth by the proposed buyback amount (assuming full acceptance). 10. BASIS OF CALCULATING THE BUYBACK PRICE 10.1 The Buyback Offer Price has been arrived at after considering various factors such as the volume weighted average market prices of the equity shares of the Company on BSE where the equity shares of the Company are listed for a period of 3 months preceding the date of intimation to the BSE for the Board Meeting to consider the proposal for the Buyback, the net worth of the Company and the impact of the Buyback on the key financial ratios of the Company. The volume weighted average market price of equity Shares for a period of 3 months preceding the date of intimation to the BSE for the Board Meeting to consider the proposal for the Buyback is Rs. 8.17/-.The Buy Back offer price of Rs. 30/- (Rupees Thirty Only) represents a premium of 267.37% over the volume weighted average market price of the equity shares on BSE for 3 months preceding the date of intimation to the BSE for the Board Meeting to consider the proposal of the Buyback. 10.2 For trends in the Market price of the equity shares please refer to paragraph 16. 10.3 The closing Market Price of equity Shares as on the date of intimation to BSE for the Board Meeting for considering the Buyback, was Rs. 8.49/- 10.4 The Buyback offer price represents a premium of 0.20% over the, Pre- Buyback, Company s Book value per share of Rs. 29.94/- as at March 31, 2015. 10.5 The Loss per share of the Company Pre- Buyback as on March 31, 2015 was Rs. (0.78) which will increase to Rs. (1.02) Post buyback assuming full acceptance of the Buyback. 10
10.6 The Return of net worth of the Company Pre- Buyback as on March 31, 2015 was negative 2.57% which will increase to negative 3.40% Post Buyback, assuming full acceptance. 11. SOURCES OF FUNDS FOR THE BUYBACK 11.1 Assuming full acceptances, the funds that will be employed by the Company for the purpose of Buyback of 7,00,000 equity shares at a price of Rs. 30/-per equity share would be Rs. 2,10,00,000/- (Rupees Two Crores and Ten Lakhs Only). 11.2 The funds for the Buyback will be sourced from cash balances available with the Company and/or liquidation of financial instruments held by the Company. These funds have been generated through internal accruals. The Company does not intend to raise additional debt for the explicit purposes of the Buyback. Accordingly, borrowed funds will not be used for the Buyback. However, if required, the Company may borrow funds in the ordinary course of its business. 12. DETAILS OF THE ESCROW ACCOUNT AND THE AMOUNT DEPOSITED THEREIN 12.1 In accordance with the Regulation 10 of the Buyback Regulations, an Escrow agreement has been entered into between the Company, VC corporate Advisors Private Limited and HDFC Bank Limited( Escrow agent ) having its branch at Central Plaza, 2/6 Sarat Bose Road, Kolkata- 700 020. 12.2 In accordance with the Escrow agreement, the Company has opened an Escrow account in the name and style Himalaya Granites Limited-Buyback Offer Escrow Account bearing Account No: 00140350010095 with the Escrow agent. The Company has Deposited cash of Rs. 52,50,000 (Rupees Fifty Two Lakhs Fifty Thousand Only) This amount of cash deposited is equal to the amount required to be deposited in accordance with the Buyback Regulations. The Merchant Banker has been empowered to operate the Escrow account in terms of the Buyback Regulations. 12.3 M/s. A. Mallik & Associates, Chartered Accountants (Firm Registration number 318085E), located at 6/47, Bijoygarh, Kolkata 700 032, signing through their Partner Mr. Arunava Mallik (Membership Number: 053709) have certified, vide their certificate dated November 23, 2015, that the Company has adequate funds for the purposes of buyback of 7,00,000 Equity Shares at Rs.30 each. 12.4 The Manager to the Buyback Offer has satisfied itself in regard to the ability of the Company to Implement the Buyback Offer in accordance with the Buyback Regulations. 13. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN 13.1 The capital Structure of the Company as on the date of the Public announcement is as follows: Particulars No. of Shares Amount (Rs. Lacs) Authorized Equity Share Capital 40,00,000 4,00,00,000 Issued, Subscribed and Paid-up Equity Shares 30,05,000 3,00,50,000 13.2 The Company has not bought back any equity shares under any buyback programme, during the 3 years preceding the date of the Public Announcement. 13.3 As on the date of the Public Announcement there are no outstanding preference shares, partly paid-up equity shares or outstanding convertible instruments or calls in arrears. 13.4 The shareholding pattern of the Company pre- buyback, taken on December 04, 2015, as well as Post Buyback shareholding pattern, is as shown below: Particulars Promoters and persons acting in Concert (Collectively the Pre- Buyback No. of equity shares % of existing equity share capital Post Buyback No. of equity shares % of Post- Buyback equity share capital 1717050 57.14 1717050 74.49 11
Particulars Promoters ) Foreign Investors (Including Non Resident Indians, FIIs and Foreign Mutual Funds) Financial Institutions/Banks & Mutual Funds promoted by Banks/Institutions Others (Public, Public Bodies Corporate etc.) Pre- Buyback No. of equity shares % of existing equity share capital Post Buyback No. of equity shares % of Post- Buyback equity share capital 1386 0.05 587950 25.51 100 0.00 1286464 42.81 13.5 Assuming 100% response to the Buyback Offer, the Issued, Subscribed and Paid-up Equity Share Capital of the Company after the completion of the Buyback Offer is as follows: Particulars No. of shares Amount(Rs.) Issued, Subscribed and paid up 23,05,000 2,30,50,000 equity share 13.6 Assuming response to the Buyback is 100% (full acceptance) from all the equity shareholders upto their entitlement, the aggregate shareholding of the Promoter Group/ Persons in control Post Buyback, will increase to 74.49% of the Post Buyback equity share capital of the Company. 14. BRIEF INFORMATION ABOUT THE COMPANY 14.1 The Himalaya Granites Limited was incorporated on December 11, 1987 under the Companies Act 1956 as a Private Limited company under the name of Himalaya Granites Private Limited. The name of the Company was changed to Himalaya Granites Limited through resolution passed by the shareholders on February 28, 1994 and fresh Certificate of Incorporation to this effect was issued on March 21, 1994. The registered office of the Company is situated at Panchalam Village, Melpettai Post, Tindivanam, Tamil Nadu- 604307. 14.2 The Company currently has closed down manufacturing /production activities and the substantial part of the income is earned by let out of part of its factory shades and office space. 14.4 Details of the changes in share capital of the company since incorporation: Date of the Board No. of equity % of total outstanding resolution authorizing shares issued equity share capital allotment Cumulative equity share capital No. of equity shares Total Amt.(Rs) 11.12.1987 (date of Incorporation) Class A with face value of Rs. 100/-) Class B with face value of Rs. 10/- Class A with face value of Rs. 100/-) Class B with face value of Rs. 10/- Class A with face value of Rs. 100/-) Class B with face value of Rs. 10/- 5 0 0.0002 0 5 0 500 03.03.1989 1000 10000 0.03 0.33 1005 10000 200500 23.05.1989 0 212500 0.03 7.40 1005 222500 2325500 12
Date of the Board resolution authorizing allotment No. of equity shares issued % of total outstanding equity share capital Cumulative equity share capital No. of equity shares Total Amt.(Rs) 25.09.1989 0 67450 0.03 9.65 1005 289950 3000000 21.03.1990 6495 129850 0.25 13.97 7500 419800 4948000 11.04.1990 0 5200 0.25 14.14 7500 425000 5000000 11.03.1993 0 302000 0.25 24.19 7500 727000 8020000 Vide resolution passed at EGM held on 28.02.1994, each 10 shares of class B of Rs. 10/ each were consolidated to one share of Rs. 100/- each. Thereafter Class A & B shares were merged into one class. Then all the shares of Rs. 100 each were subdivided into Ten shares of Rs. 10/- each the details of which are given below. 26.69 802000 8020000 19.07.1994 1203000 40.03 2005000 20050000 17.12.1994 100000 3.33 2105000 21050000 11.02.1995 900000 29.95 3005000 30050000 14.5 Details of the Board of Directors as on the date of PA: Sl. No. Name, Qualification, occupation and Age 1 Name: Saurabh Mittal, Qualification: B. Com, Occupation: Business, Age: 40 years Date of Designation Appointment/ reappointment 02.01.1996 Non-Executive Chairman Other Directorships 1.Greenlam Industries Limited 2.Prime Properties Pvt Ltd. 3. Greenply Leasing & Finance Pvt. Ltd 4. S. M. SafeinvestPvt. Ltd. 5. Greenlam VT Industries Pvt Ltd. 6. Greenlam Asia Pacific Pte. Ltd., incorporated in Singapore. 7. Greenlam America Inc., Incorporated in USA 8. Greenlam Europe (UK) Ltd., Incorporated in UK. 9. Greenlam Holding Co. Ltd., Incorporated in Thailand. 10. Greenlam Asia 13
Sl. No. Name, Qualification, occupation and Age 2 Name: Ramesh Kumar Haritwal, Qualification:B.Com, Occupation: Service, Age:52 years 3 Name: Mr. Beni Gopal Saraf, Qualification:B.Com, Occupation: Service, Age:68 4 Name: Mr. Mahesh Kumar Malpani, Qualification:B.Com, Occupation: Service, Age:62 5 Name: Mr. Pradip Manharlal Domadia, Qualification:B.Com, LLB, FCA & FCS, Occupation: Service, Age:63 6 Name: Ms. Mathangi Ramanujam, Qualification: MBA, Occupation: Service, Age: 49 Date of Appointment/ reappointment Designation 31.05.2007 Managing Director & CEO 31.01.2005 Independent Director 26.03.2009 Independent Director 30.05.2012 Independent Director 13.02.2015 Non- Executive Director Other Directorships Pacific (Thailand) Co. Ltd., Incorporated in Thailand. NIL Shriswasti Clothings Pvt Ltd Mitsan Agencies Pvt Ltd, Showan Agencies Pvt Ltd NIL NIL 14.6 The details of changes in the Board of Directors during the 3 years preceding the date of Public Announcement is as under: Name of Director Appointment/Resignation Effective Reasons date Ms. Mathangi Ramanujam Appointment 13.02.2015 As per section 149 of the Companies Act 2013 read with Rule 3(Appointment & Qualification of Directors) Rules 2014. 14.7 Person in Control of the Company are not concerned or interested either directly or indirectly for participating in the Buyback. The Persons in Control have consented not to participate in the Buyback. Consequent to the Buyback and depending upon the response to the Buyback offer, the holding of promoters would increase from the pre- Buyback Shareholding of 57.14% to a maximum post-buyback Shareholding of 74.49% (assuming that all the 7,00,000 Equity Shares are bought back in the proposed Buyback offer). The Buyback will not result in change in control or otherwise affect the existing management structure of the Company. 15. FINANCIAL INFORMATION ABOUT THE COMPANY 15.1) Financials of the company for the Last 3 yrs: Key Financials 30.09.2015 (unaudited) Year ended 31 March,2015 (Audited figures) Year ended 31 March, 2014 (Audited figures) Year ended 31 march, 2013 (Audited figures) Revenue operations from 0 199900 147400 251550 Other income 4756468 9055258 7780355 11915436 Total Revenue 4756468 9255158 7927755 12166986 Changes in Inventories of Finished Goods, 0 205804 435269 394710 14