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EXPLANATORY
STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 IN RESPECT OF
THE BUSINESS SET OUT IN THE NOTICE OF GENERAL MEETING OF THE COMPANY TO BE HELD
ON WEDNESDAY, 21 APRIL, 2004. Item No. 1
The Company
proposes to issue up to 82,69,788 New Equity Shares of Rs. 10/- each for cash
at a premium of Rs. 50/- per share
("Rights Shares") by way of rights to the holders of existing
Equity Shares of the Company on a date to be determined by the Board of
Directors of the Company ("the Board") in the manner referred to in
the Special Resolution set out under Item No. 1 of the Notice. The purpose of
the issue is, inter alia, to strengthen the Company's equity base and also to
meet a part of the fund requirements of the Company. The proposed issue will
be made in conformity with the guidelines and approvals of the prescribed
authorities and will also be subject to such consents, approvals and
permissions as may be necessary. The Rights
Shares will be offered for subscription to the Members by means of a Letter
of Offer in the proportion of one Rights Share for every eight existing
Equity Shares held by the Members on a date to be fixed by the Board ("Record
Date") with an option to such shareholders, who would accept the offer
in full, to apply for additional shares. The Members will also have the right
to renounce the offer wholly or partly in favour of any other person(s). The
Rights Shares shall rank pari passu in all respects with the existing Equity
Shares of the Company. Section 81(IA)
of the Companies Act, 1956 ("the Act") provides, inter alia, that
further shares may be offered by a Company to any person in any manner if a
Special Resolution to that effect is passed by the Company in General
Meeting. The Special Resolution set out against item number 1 of the Notice
is to seek the approval of the Company in General Meeting pursuant to the
aforesaid provisions of the Act and the Board recommends passing of the
Resolution in the interest of the Company. Mr. R. P
Goenka, Chairman, Mr. Sanjiv Goenka, Vice- Chairman and Mr. P. B. Ghosh,
Director of the Company, hold 26400, 120194 and 560 equity shares of Rs. 10
each respectively in the Company and may be deemed to be concerned or
interested in the aforesaid Resolution to the extent of the Rights Shares
that may respectively be offered and allotted to them. The nominees
of the Financial Institutions and the Government of West Bengal who are on
the Board of the Company may also be deemed to be concerned or interested in
the Resolution to the extent of such Rights Shares as may be offered and
allotted to the respective Financial Institutions/Government which they
represent. No other Director is concerned or interested in the said Special
Resolution. |
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Item No. 2
In terms of the recently concluded
exercise of restructuring the Company's debt due to the Indian Lenders, three
Institutions referred to in para (a) of the Ordinary Resolution against Item
No.2 of the convening Notice have converted / agreed to convert their
erstwhile guarantee assistance sanctioned to the Company into term loans
while four Institutions / Bank listed in para (c) of the said Resolution have
converted a part of their outstanding debt into Non- Convertible Debentures
for which IDBI Trusteeship Services Limited has been appointed to act as
Trustees. The restructured debt package of the Company includes UCO Bank's
refinance loan referred to in para (b) of the aforesaid Resolution. The above
financial assistance and two series of existing Non-Convertible Debentures
referred to in para (d) and (e) of the aforesaid Resolution are required to
be secured by the Company by a mortgage over its immovable properties and a hypothecation
of its movable assets. Such security will
rank pari passu with the security created/ to be created by the Company in
favour of its other first charge holders who have sanctioned various
facilities to the Company from time to time. After creation of the said
security, security created by the Company earlier on the facilities, which
have since been retired or converted into debentures, shall stand released. The Ordinary
Resolution set out under Item no.2 of the Notice is for obtaining the approval
of the Members in a General Meeting in terms of the
provisions of Section 293(1)(a) of the Companies Act, 1956 to enable the
Company to create the aforesaid mortgage and/ or charge to secure the said
financial assistance as listed in the said Resolution. The Board of Directors
of the Company recommends that the Resolution be passed in the interest of
the Company. Mr. Pradip Roy, Mr. Tarun Kumar Ray,
Mr. Sudhin Roy Chowdhuri and, Mr. K. M. Jaya Rao, Nominees of Industrial
Development Bank of India, IFCI Limited, Life Insurance Corporation of India
and ICICI Bank Limited respectively on the Board of Directors of the Company,
may be deemed to be interested or concerned in the Resolution. No other
Director of the Company is interested or concerned in the said Resolution.
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