DRAFT LETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
This Draft Letter of Offer (as defined below) is sent to you as a shareholder of Zenotech Laboratories Limited in terms of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. If you require any clarifications about the action to be taken, you may consult your stock broker or investment consultant or the Manager to the Offer (as defined below) or the Registrar to the Offer (as defined below). In case you have recently sold your shares in Zenotech Laboratories Limited please hand over this Draft Letter of Offer and the accompanying Form of Acceptance cum Acknowledgement (as defined below) and transfer deed to the member of the stock exchange through whom sale was effected.
OPEN OFFER BY Sun Pharmaceutical Industries Limited, CIN: L24230GJ1993PLC019050 and having its registered office at SPARC Tandalja, Vadodara-390202, Gujarat, India (hereinafter referred to as “Acquirer”) Tel No: +91 265 6615500 Fax No: +91 265 2354897 Website: www.sunpharma.com
TO THE ELIGIBLE SHAREHOLDERS OF Zenotech Laboratories Limited CIN: L27100AP1989PLC010122 and having registered office at: Survey No. 250-252, Turkapally Village, Shameerpet Mandal, Hyderabad- 500078, Telangana (hereinafter referred to as “Target Company”) Tel No: +91 90 32044 584/585/586
TO ACQUIRE Up to 9,693,332 (Nine Million Six Hundred Ninety Three Thousand and Three Hundred Thirty Two) fully paid equity Shares (as defined below) representing 28.16% of the fully diluted share capital of the Target Company, at an offer price of INR 20.87 (Indian Rupees Twenty and Eighty Seven Paise Only) per equity share payable in cash (“Offer Price”) in terms of Regulations 3(1), 4, and 5(1) of the SEBI (SAST) Regulations (as defined below).
Notes: 1. The Offer is being made by the Acquirer pursuant to the PA (as defined below) and the DPS (as defined below) made in terms of Regulations 3(1), 4, and 5(1) and other applicable provisions of the SEBI (SAST) Regulations. 2. The Offer is not conditional upon any minimum level of acceptance in terms of Regulation 19(1) of the SEBI (SAST) Regulations. 3. The Offer is not a competing offer in terms of Regulation 20 of the SEBI (SAST) Regulations. 4. NRIs (as defined below) and OCBs (as defined below) tendering Shares in the Offer must obtain all requisite approvals, if any, required to tender the Shares held by them, in this Offer and submit such approvals along with the documents required to accept this Offer. If holders of the Shares who are not persons resident in India (including the NRIs, the OCBs and the foreign institutional investors) had required any approvals (including from the FIPB or any other regulatory body) in respect of the Shares held by them, they will be required to submit such previous approvals that they would have obtained for holding the Shares, along with the other documents required to be tendered to accept this Offer. If the approvals mentioned above, as may be applicable, are not submitted, the Acquirer reserves the right to reject such Shares tendered in this Offer. 5. Upward revision, if any, in the Offer Price and/or Offer Size in accordance with the SEBI (SAST) Regulations shall be informed by way of a public announcement in the same newspapers where the DPS appeared. Such revision in the Offer Price, if any, would be applicable to all the Shares validly tendered anytime during the Tendering Period. 6. No competing offer has been made as of the date of this Draft Letter of Offer. 7. A copy of the PA, the DPS and this Draft Letter of Offer (including the Form of Acceptance cum Acknowledgment) are also available on the website of the SEBI (as defined below): www.sebi.gov.in.
MANAGER TO THE OFFER REGISTRAR TO THE OFFER
Citigroup Global Markets India Private Limited Link Intime India Private Limited 1202, 12th Floor, First C-13, Pannalal Silk Mills Compound, International Financial LBS Marg, Center, G-Block, Bandra Kurla Complex Bhandup West, Mumbai - 400 078 Bandra (East), Mumbai 400 051 Tel: (022) 6171 5400; Tel: (91 22) 6175 9999 Fax: (022) 2596 0329; Fax: (91 22) 6175 9961 Email: [email protected] E-mail: [email protected] Investor grievance e-mail: [email protected] Contact Person: Siddhartha Singh Website: linkintime.co.in SEBI Registration No.: INM000010718 Contact Person: Mr. Ganesh Mhatre SEBI Registration No.: INR000004058
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INDICATIVE SCHEDULE OF MAJOR ACTIVITIES RELATING TO THE OFFER IS AS FOLLOWS:
Nature of Activity Day & Date Issuance of the PA Friday, April 11, 2014 Publication of the DPS in the newspapers Monday, March 30, 2015 Filing of the Draft Letter of Offer with SEBI Wednesday, April 08, 2015 Last date for the public announcement of a competing offer being Thursday, April 23, 2015 made* Last date for receipt of comments from SEBI on the Draft Letter of Thursday, April 30, 2015 Offer (in the event SEBI has not sought clarification or additional information from the Manager to the Offer) Identified Date# Wednesday , May 06, 2015 Last date by which the Letter of Offer is required to be dispatched Wednesday, May 13, 2015 to the Eligible Shareholders (as defined below) Last date for upward revision of the Offer Price/Offer Size Thursday, May 14, 2015 Last day by which the independent committee of the board of Friday, May 15, 2015 directors of the Target Company shall give its recommendation## Date of publication of the Offer opening public announcement Tuesday, May 19, 2015 Date of commencement of the Tendering Period Wednesday, May 20, 2015 (Offer Opening Date) Date of expiry of the Tendering Period (Offer Closing Date) Tuesday, June 02,2015 Date by which all requirements including payment of consideration Tuesday, June 16, 2015 would be completed Last date for publication of Post-offer public announcement in the Tuesday, June 23, 2015 newspapers in which the DPS has been published
*As on date there has been no competing offer.
# Identified Date is only for the purpose of determining the Eligible Shareholders as on such date to whom this Draft Letter of Offer shall be mailed. It is clarified that all the Eligible Shareholders (registered or unregistered) who own the Shares are eligible to participate in the Offer at any time before expiry of the Tendering Period.
Note: Duly signed Form of Acceptance cum Acknowledgment/transfer deed(s) together with share certificate(s) (in case of physical shares) or copies of delivery instruction slips (in case of dematerialized shares) should be dispatched by registered post/courier or hand delivered to the Registrar to the Offer or its collection centers so as to reach on or before Closure of the Tendering Period (i.e., before June 02, 2015).
## Date of publication of the recommendation.
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RISK FACTORS
The risk factors set forth below pertain only to the Offer and are not intended to be a complete analysis of all risks in relation to the Offer or in association with the Acquirer or the Target Company, but are only indicative. The risk factors set forth below do not relate to the present or future business or operations of the Target Company and any other related matters, and are neither exhaustive nor intended to constitute a complete analysis of the risks involved in participation or otherwise by an Eligible Shareholder (as defined below) in the Offer. The Eligible Shareholders are advised to consult their stock brokers, tax or investment consultants, if any, for analyzing all the risks with respect to their participation in the Offer.
A. RISKS RELATING TO THE OFFER
1. The Offer involves an offer to acquire up to 28.16% of the Voting Share Capital (as defined below). In the case of oversubscription in the Offer, as per the SEBI (SAST) Regulations, 2011 acceptance would be determined on a proportionate basis and hence there is no certainty that all the Shares tendered by the shareholders in the Offer will be accepted.
2. In the event that (a) there is any litigation leading to a “stay” of the Offer, or (b) SEBI instructing the Acquirer not to proceed with the Offer, then the Offer process may be delayed beyond the schedule of activities indicated in this Draft Letter of Offer. Consequently, the payment of consideration to the shareholders of the Target Company whose Shares have been accepted in the Offer as well as the return of Shares not accepted by the Acquirer may be delayed.
3. Shareholders should note that shareholders who have tendered Shares in acceptance of the Offer shall not be entitled to withdraw such acceptance during the Tendering Period (as defined below) even if the acceptance of Shares under the Offer and dispatch of consideration gets delayed. The tendered Shares and documents would be held by the Registrar to the Offer, till such time as the process of acceptance of tenders and the payment of consideration is completed.
4. The Shares tendered in the Offer will be held in trust by the Registrar to the Offer until the completion of the Offer formalities. During such period, there may be fluctuations in the market price of the equity shares of the Target Company. Accordingly, the Acquirer make no assurance with respect to the market price of the Shares both during the Tendering Period and upon the completion of the Offer, and disclaims any responsibility with respect to any decision by any shareholder of the Target Company on whether to participate or not to participate in the Offer.
5. The Eligible Shareholders are advised to consult their respective tax advisors for assessing the tax liability pursuant to this Offer, or in respect of other aspects such as the treatment that may be given by their respective assessing officers, and the appropriate course of action that they should take. The Manager to the Offer does not accept any responsibility for the accuracy or otherwise of the tax provisions set forth in this Draft Letter of Offer.
6. The Manager to the Offer accepts no responsibility for statements made otherwise than in the PA, the DPS, and this Draft Letter of Offer or in the post issue advertisement or any corrigendum issued by or at the instance of the Acquirer. Any person placing reliance on any other source of information will be doing so at its own risk.
7. The Manager to the Offer does not accept any responsibility for the accuracy or otherwise of the information dealing with the Target Company including information obtained from public sources.
B. RISKS RELATING TO THE ACQUIRER AND THE TARGET COMPANY
1. The Acquirer makes no assurance with respect to the future financial performance of the Target Company and disclaims any responsibility with respect to any decision by the shareholders on whether or not to participate in the Offer.
2. The Acquirer makes no assurance with respect to its investment/divestment decisions relating to its proposed shareholding in the Target Company.
3. The Acquirer does not provide any assurance with respect to the market price of the equity Shares of the Target Company before, during or after the Offer and expressly disclaim any responsibility or obligation of any kind (except as required by applicable law) with respect to any decision by any Eligible Shareholder on whether to participate or not to participate in the Offer.
4. The Acquirer will not be responsible in any manner for any loss of equity share certificate(s) and Offer acceptance documents during transit. The Eligible Shareholders of the Target Company are advised to adequately safeguard their interest in this regard.
The risk factors set forth above are not intended to cover a complete analysis of all risks as perceived in relation to the Offer or in association with the Acquirer or the Target Company, but are only indicative. They do not relate to the present or future business or operations of the Target Company or any other related matters, and are neither exhaustive nor intended to constitute a complete analysis of the risks involved in the participation by an Eligible Shareholder in the Offer. Eligible Shareholders are advised to consult their stock broker, investment consultant or tax advisors, for further risks with respect to their participation in the Offer.
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C. CURRENCY OF PRESENTATION
In this Draft Letter of Offer, all references to INR, Rs., Rupees are to the Indian National Rupee(s). In this Draft Letter of Offer, any discrepancy in any table between the total and sums of the amount listed is due to rounding off and/or regrouping.
INDEX
NO. SUBJECT PAGE 1. DISCLAIMER CLAUSE 5 2. DETAILS OF THE OFFER 6 3. BACKGROUND OF THE ACQUIRER 8 4. BACKGROUND OF THE TARGET COMPANY 19 5. OFFER PRICE AND FINANCIAL ARRANGEMENTS 24 6. TERMS AND CONDITIONS OF THE OFFER 26 7. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT OF THE OFFER 27 8. DOCUMENTS FOR INSPECTION 35 9. DECLARATION BY THE ACQUIRER 36
KEY DEFINITIONS
TERM DEFINITION Acquirer Sun Pharmaceutical Industries Limited. Board of Directors Board of directors of the Target Company. BSE The BSE Limited. CDSL Central Depository Services (India) Limited. Chartered Accountant A chartered accountant within the meaning of the Chartered Accountants Act, 1949. Closure of the Tendering Period June 02, 2015. DIN Director identification number. DP Depository participant. DPS Detailed Public Statement dated March 30, 2015, issued by the Manager to the Offer, on behalf of the Acquirer, in relation to the Offer and published in the newspapers on March 30, 2015 in accordance with Regulations 3(1), 4, and 5(1) read with Regulations 13(4), 14 and 15(2) and other applicable regulations of the SEBI (SAST) Regulations. Draft Letter of Offer This Draft Letter of Offer filed with SEBI in accordance with Regulation 16(1) of SEBI (SAST) Regulations on April 07, 2015. DTAA Double Taxation Avoidance Agreement. Eligible Shareholder/s All the public shareholders of the Target Company excluding the Acquirer, persons acting in concert with the Acquirer, Ranbaxy Laboratories Limited (“Ranbaxy”), persons acting in concert with Ranbaxy, persons who are signatories to the Transaction Documents or such other persons as are excluded by law. FII(s) Foreign Institutional Investor(s), as defined under Section 115AD of the Income Tax Act, which includes sub-accounts of FIIs and if any Foreign Institutional Investor(s) have been reorganized as FPIs, such FPIs. FIPB Foreign Investment Promotion Board. Form of Acceptance cum Acknowledgement Form of Acceptance cum Acknowledgement, which is annexed to this Draft Letter of Offer. FPI Foreign Portfolio Investor. Identified Date May 06, 2015, i.e., the date falling on tenth Working Day prior to the commencement of the Tendering Period, for the purposes of determining the Eligible Shareholders to whom the Draft Letter of Offer shall be sent. Income Tax Act Income-tax Act, 1961 (as amended).
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INR Indian Rupees, the lawful currency of India. Manager to the Offer Citigroup Global Markets India Private Limited 1202, 12th Floor, First International Financial Center, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051. NECS National Electronic Clearance System. NEFT National Electronic Funds Transfer. NRI Non-resident Indian, as defined under Foreign Exchange Management (Deposit) Regulations, 2000. NSDL National Securities Depository Limited. NSE National Stock Exchange of India Limited. OCB Overseas corporate body, as defined under Foreign Exchange Management (Deposit) Regulations, 2000. Offer This open offer, which is being made by the Acquirer to the Eligible Shareholders, for acquiring up to 9,693,332 (Nine Million Six Hundred Ninety Three Thousand and Three Hundred and Thirty Two) fully paid up equity Shares representing 28.16% (twenty eight point sixteen per cent) of the Voting Share Capital of the Target Company. Offer Price INR 20.87. PA Public announcement dated April 11, 2014 in relation to the Offer and filed with the BSE on April 11, 2014, sent to the Target Company on April 12, 2014 and filed with SEBI on April 15, 2014. PAN Permanent account number. RBI Reserve Bank of India. Registrar to the Offer Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup West, Mumbai - 400 078. RTGS Real Time Gross Settlement. SEBI Securities and Exchange Board of India. SEBI (SAST) Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended). SEBI Act Securities and Exchange Board of India Act, 1992 (as amended). Shares Each fully paid-up equity share of the Target Company of the face value of INR 10. Target Company Zenotech Laboratories Limited, a public limited company incorporated under the laws of India and having its registered office at Survey No. 250-252, Turkapally Village, Shameerpet Mandal, Hyderabad- 500078, Telangana. Tax Residence Certificate Certificate with respect to tax residence of an Eligible Shareholder to be furnished for the purposes of claiming benefit under any DTAA. Tendering Period Period commencing on May 20, 2015 and ending on June 02, 2015 (both days inclusive). Voting Share Capital Fully diluted voting share capital of the Target Company. Working Day A working day of SEBI.
1. DISCLAIMER CLAUSE
IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF THE DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (SAST) REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE ELIGIBLE SHAREHOLDERS OF ZENOTECH LABORATORIES LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER OR THE TARGET COMPANY WHOSE SHARES ARE PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE MANAGER TO THE OFFER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ACQUIRER DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MANAGER TO THE OFFER HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED APRIL 08, 2015 TO SEBI IN ACCORDANCE WITH THE SEBI (SAST) REGULATIONS. THE FILING OF THE DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAYBE REQUIRED FOR THE PURPOSE OF THE OFFER.
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2. DETAILS OF THE OFFER
2.1 BACKGROUND TO THE OFFER
2.1.1 This Offer is a mandatory offer made under Regulations 3(1), 4, and 5(1) of the SEBI (SAST) Regulations, pursuant to an indirect acquisition of voting rights in and control over the Target Company by the Acquirer.
2.1.2 On April 6, 2014, the board of directors of the Acquirer and Ranbaxy approved a scheme of arrangement under the provisions of Sections 391 to 394 and other applicable provisions of the Companies Act, 1956 and corresponding provisions of the Companies Act, 2013 (“Scheme”) whereby subsequently, Ranbaxy has merged into the Acquirer (“Primary Acquisition”). Ranbaxy, the Acquirer and their respective promoters have also executed certain documents to implement the Scheme (“Transaction Documents”). The Scheme was approved by the High Court of Gujarat on November 14, 2014 and by the High Court of Punjab and Haryana on March 09, 2015 and has become effective on March 24, 2015.
2.1.3 Prior to the implementation of the Scheme, Ranbaxy held 16,127,293 (Sixteen Million One Hundred and Twenty Seven Thousand Two Hundred and Ninety Three) Shares representing 46.84% of the Voting Share Capital of the Target Company. The merger of Ranbaxy into the Acquirer pursuant to the Scheme has resulted in the Acquirer owning 46.84% of the voting rights held by Ranbaxy in, and control over, the Target Company, although the acquisition of voting rights in or control over the Target Company is not the objective of the Primary Acquisition.
2.1.4 Accordingly, this Offer is being made pursuant to Regulation 3(1) and Regulation 4 read with Regulation 5(1) and Regulation 13(2)(e) of the SEBI (SAST) Regulations for and on behalf of the Acquirer to the Eligible Shareholders.
2.1.5 In terms of Regulation 13(4) of the SEBI (SAST) Regulations, in the case of an indirect acquisition which is not a deemed direct acquisition, a detailed public statement is required to be issued by the Acquirer no later than five working days of the completion of the primary acquisition of Shares or voting rights in, or control over the company or entity holding Shares or voting rights in, or control over the Target Company. Since the Primary Acquisition concluded on March 24, 2015 i.e. the effective date of the Scheme, the DPS was published on March 30, 2015 in terms of Regulation 13(4) of the SEBI (SAST) Regulations.
2.1.6 Some of the key features of the Scheme and the Transaction Documents are as follows:
The Scheme inter-alia provides for the amalgamation of Ranbaxy into the Acquirer which will combine the business, activities and operations of Ranbaxy and the Acquirer into a single company with effect from the Appointed Date i.e. April 01, 2014 based on a share exchange ratio of 0.80 equity shares of the face value of Rs. 1 (Indian Rupee One Only) each of the Acquirer for every 1 equity share of Rs. 5 (Indian Rupees Five Only) each of Ranbaxy.
In addition to the above, the Transaction Documents set out certain inter-se rights and obligations between Daiichi Sankyo Company Ltd (“Daiichi”), which is one of the promoters of the Target Company and the Acquirer in relation to Daiichi’s shareholding in the Acquirer. These rights and obligations include certain share transfer restrictions on Daiichi in relation to its shareholding in the Acquirer and its right to nominate one director on the board of the Acquirer.
2.2 DETAILS OF THE OFFER
2.2.1 The PA announcing the Offer, in terms of Regulations 3(1), 4, and 5(1) read with Regulations 13(2), 14, and 15(1) and other applicable regulations of the SEBI (SAST) Regulations, was released to BSE on April 11, 2014, sent to the Target Company on April 12, 2014 and filed with SEBI on April 15 2014.
2.2.2 The Acquirer published the DPS in accordance with Regulations 3(1), 4, and 5(1) read with Regulations 13(4), 14, and 15(2) on March 30, 2015 in the following newspapers:
NEWSPAPER LANGUAGE EDITIONS Financial Express English Mumbai, Ahmedabad, Delhi, Kolkata, Hyderabad, Chennai, Bangalore, Pune, Lucknow, Chandigarh, Kochi
Jansatta Hindi Delhi, Kolkata, Chandigarh, Lucknow
Nava Telangana Telugu Hyderabad
2.2.3 A copy of the DPS was also sent to SEBI, the BSE, and the Target Company at its registered office. The DPS and the PA are also available on the SEBI website: www.sebi.gov.in.
2.2.4 This Offer for 9,693,332 (Nine Million Six Hundred and Ninety Three Thousand Three Hundred and Thirty Two) Shares (“Offer Size”), representing 28.16% of the Voting Share Capital is being made to all the Eligible Shareholders of the Target Company in terms of Regulation 7(6) of SEBI (SAST) Regulations. At the time of the PA for the Offer, 9,693,332 Shares constituted
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28.12% of the Voting Share Capital, assuming full conversion of 42,500 (Forty Two Thousand and Five Hundred) employee stock options granted by the Target Company as disclosed in the annual report of the Target Company for the financial year 2013. However, the Target Company has confirmed that as on the date hereof, there are no outstanding employee stock options accordingly, 9,693,332 (Nine Million Six Hundred and Ninety Three Thousand Three Hundred and Thirty Two) Shares i.e. the Offer Size, constitute 28.16% of the Voting Share Capital.
2.2.5 This Offer is being made at the Offer Price, i.e. INR 20.87 (Indian Rupees Twenty and Eighty Seven Paise Only) per Share which includes interest computed at the rate of 10% (ten per cent) per annum for the period between April 6, 2014 and the date of the DPS i.e. March 30, 2015 in terms of Regulation 8(12) of SEBI (SAST) Regulations.
2.2.6 The Offer Price will be paid in cash in accordance with Regulation 9(1) (a) of the SEBI (SAST) Regulations.
2.2.7 The Offer is not a competing offer in terms of Regulation 20 of the SEBI (SAST) Regulations. There have been no competing offers as of the date of this Draft Letter of Offer.
2.2.8 This Offer is not conditional upon any minimum level of acceptance in terms of Regulation 19(1) of SEBI (SAST) Regulations. This Offer is a mandatory indirect offer in compliance with Regulations 3(1), 4 and 5(1) of the SEBI (SAST) Regulations.
2.2.9 There is no differential price being offered for the Shares tendered in the Offer.
2.2.10 As of the date of this Draft Letter of Offer, there are no (i) partly paid-up equity shares; or (ii) outstanding convertible instruments (warrants/fully convertible debentures/partly convertible debentures) issued by the Target Company. (Source: BSE website, Target Company confirmation and Target Company Annual Report 2013-2014)
2.2.11 All Shares validly tendered by the Eligible Shareholders in this Offer will be acquired by the Acquirer, in accordance with the terms and conditions set forth in this Draft Letter of Offer. The Eligible Shareholders who tender their Shares in this Offer shall ensure that the Shares are clear from all liens, charges and encumbrances. The Acquirer shall acquire the Shares of the Eligible Shareholders who validly tender their Shares in this Offer, together with all rights attached thereto, including all rights to dividends, bonuses and rights offers declared thereof.
2.2.12 As of the date of this Draft Letter of Offer, subject to Section 6 (Terms and Conditions of the Offer) below, to the best of the knowledge of the Acquirer, there are no statutory approvals required by the Acquirer to complete this Offer. However, in case of any statutory approvals being required by the Acquirer at a later date before the Closure of the Tendering Period, this Offer shall be subject to such approvals and the Acquirer shall make the necessary applications for such approvals.
2.2.13 NRIs and OCB holders of the Shares, if any, in the Offer must obtain all requisite approvals, if any, required to tender the Shares held by them, in this Offer and submit such approvals along with the documents required to accept this Offer. Further, if holders of the Shares who are not persons resident in India (including the NRIs, the OCBs, FPI and FII) had required any approvals (including from the RBI or FIPB or any other regulatory body) in respect of the Shares held by them, they will be required to submit such previous approvals that they would have obtained for holding the Shares, along with the other documents required to be tendered to accept this Offer. In the event such approvals mentioned above, as may be applicable, are not submitted, the Acquirer reserves the right to reject such Shares tendered in this Offer
2.2.14 In the event that the Shares accepted in the Offer results in the shareholding in the Target Company exceeding the maximum permissible non-public shareholding, the Acquirer shall be required to bring down the non-public shareholding to the level specified and within the time permitted under Securities Contract (Regulation) Rules, 1957, as amended.
2.3 OBJECT OF THE ACQUISITION
2.3.1 Prior to the Primary Acquisition, Ranbaxy held 16,127,293 (Sixteen Million One Hundred and Twenty Seven Thousand Two Hundred and Ninety Three) Shares representing 46.84% of the Voting Share Capital of the Target Company. The merger of Ranbaxy into the Acquirer pursuant to the Scheme has resulted in the Acquirer owning 46.84% of the voting rights held by Ranbaxy in, and control over, the Target Company, although the acquisition of voting rights in or control over the Target Company is not the objective of the Primary Acquisition.
2.3.2 Accordingly, this Offer is being made pursuant to Regulation 3(1) and Regulation 4 read with Regulation 5(1) of the SEBI (SAST) Regulations for and on behalf of the Acquirer to the Eligible Shareholders.
2.3.3 In terms of Regulation 25(2) of the SEBI (SAST) Regulations, the Acquirer does not currently have any intention to alienate, restructure, dispose-off or otherwise encumber any assets of the Target Company or any of its subsidiaries in the succeeding 2 (two) years from the completion of this Offer, except in the ordinary course of business and other than as already agreed, disclosed and/or publicly announced by Target Company. The Acquirer undertakes that it will not restructure, sell, lease, dispose-off or otherwise encumber any substantial assets of the Target Company or any of its subsidiaries other than in the ordinary course of business and other than as already agreed, disclosed and/or publicly announced by the Target Company in the succeeding 2 (two) years from the completion of this Offer, except with the prior approval of the shareholders of the Target Company through a special resolution, passed by way of postal ballot.
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3. BACKGROUND OF THE ACQUIRER
3.1 Acquirer-Sun Pharmaceutical Industries Limited
3.1.1 The Acquirer is a public limited company, registered under the laws of India on March 01, 1993.
3.1.2 The Acquirer is a pharmaceutical company engaged in the development, manufacturing and commercialization of pharmaceutical products including a variety of pharmaceutical formulations and active pharmaceutical ingredients in the United States of America, India and several other global markets.
3.1.3 There has not been any change in the name of the Acquirer.
3.1.4 The registered office of the Acquirer is situated at SPARC Tandalja, Vadodara-390202, Gujarat, India, Tel No.: +91 265 6615500 Fax No: +91 265 2354897.
3.1.5 The Acquirer does not belong to any specific group.
3.1.6 The Acquirer has complied with the corporate governance conditions as stipulated in clause 49 of the listing agreement executed with the BSE and NSE. The Acquirer has adopted adequate control systems and adherence to corporate governance to enable its board of directors to effectively discharge its responsibilities in the best interest of its stakeholders, customers, employees and the society.
3.1.7 Details of compliance officer of the Acquirer is as follows:
Name: Mr. Ashok Bhuta Contact: +91 22 66893500 Email: [email protected]
3.1.8 The issued and paid up share capital of the Acquirer is INR 2,071,163,910 (Indian Rupees Two Billion Seventy One Million One Hundred and Sixty Three Thousand Nine Hundred and Ten Only) comprising 2,071,163,910 shares as on December 31, 2014. The equity shares of the Acquirer are listed on the NSE and the BSE. The closing price of the equity shares of the Acquirer, traded on BSE, as on April 07, 2015 was INR 1,151.95.The closing price of the equity shares of the Acquirer, traded on NSE, as on April 07, 2015 was INR 1,152.05.
3.1.9 The Acquirer is not prohibited from dealing in securities by the SEBI, in terms of a direction issued under Section 11B of the Securities and Exchange Board of India Act, 1992 (as amended) or any other regulations made thereunder.
3.1.10 Major contingent liabilities of the Acquirer on a standalone basis as on March 31, 2014 are INR 210.32 crores for Letter of Credits for Imports and INR 492.78 crores for Income Tax on account of Disallowances/Additions.
3.1.11 By virtue of the Primary Acquisition, all employees of Ranbaxy became employees of the Acquirer. Accordingly, Mr. Surinder Kumar Kohli, an employee of the Acquirer is on the board of the Target Company and in terms of the SEBI (SAST) Regulations, he has recused himself and has not participated, and will not participate in any deliberations of the Board of Directors or vote on any matter in relation to the Offer.
3.2 The shareholding pattern of the Acquirer as on December 31,2014 is as follows:
Sr. Shareholder’s No. of Equity Shares Held % of Shareholding No. Category 1. Promoters 1,318,346,400 63.65
2. FIIs / Mutual Funds 549,841,012 26.55 / FIs / Banks
3. Public 202,976,498 9.80
Total Paid Up 2,071,163,910 100.00 Capital (Source: BSE website, as of December 31, 2014)
3.3 The promoters of the Acquirer who are persons in control of the Acquirer are the following:
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1. Dilip Shantilal Shanghvi 2. Viditi Investment Pvt Ltd 3. Tejaskiran Pharmachem Industries Pvt Ltd 4. Family Investment Pvt Ltd 5. Quality Investment Pvt Ltd 6. Virtuous Finance Pvt Ltd 7. Virtuous Share Investments Pvt Ltd 8. Aditya Medisales Ltd 9. Raksha Sudhir Valia 10. Sholapur Organics Pvt Ltd 11. Sudhir Vrundavandas Valia 12. Unimed Investments Ltd 13. Jayant Shantilal Sanghvi 14. Vibha Dilip Shanghvi 15. Kumud Shantilal Shanghvi 16. Aalok Dilip Shanghvi 17. Vidhi Dilip Shanghvi 18. Jeevanrekha Investrade Pvt Ltd 19. Kumud S Shanghvi Trustee of Shanghvi Family & Friends Benefit Trust 20. Package Investrade Pvt Ltd 21. Varsha Kiran Doshi 22. Shanghvi Finance Pvt Ltd 23. Dipti Nirmal Modi 24. Asawari Investment & Finance Pvt Ltd 25. Flamboyawer Finance Pvt Ltd 26. Sanghvi Properties Pvt Ltd 27. Gujarat Sun Pharmaceutical Industries Pvt Ltd 28. Nirmit Exports Pvt Ltd
3.4 As on the date of this Draft Letter of Offer, the Acquirer owns 16,127,293 (Sixteen Million One Hundred and Twenty Seven Thousand Two Hundred and Ninety Three) Shares, constituting 46.84 % of the Voting Share Capital of the Target Company pursuant to the consummation of Primary Acquisition (as detailed in Paragraph 2 of this Draft Letter of Offer above).
3.5 The applicable provisions of Chapter II of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 are not applicable since the Acquirer never directly acquired or sold any equity shares of the Target Company prior to November 22, 2011 i.e. the date of repeal of the erstwhile Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 by the SEBI (SAST) Regulations. Other than as set out below, the applicable provisions of Chapter V of the SEBI (SAST) Regulations have been complied with by the Acquirer within the time specified under the SEBI (SAST) Regulations.
3.5.1 There has been a delay of 1 day in filing the disclosure under Regulation 29(1) of the SEBI (SAST) Regulations pursuant to the acquisition of 46.84% of the voting rights held by Ranbaxy in the Target Company pursuant to the Primary Acquisition and the Scheme.
3.6 Names, dates of appointment, designation, details of experience and qualifications of the directors on the board of directors of the Acquirer are as follows:
Sr. No. Name of the Director Designation Date of Qualifications Experience Director Identificatio Appointment n Number
1. Israel Makov 05299764 Chairman 29/05/2012 M.Sc. in Chairman of Economics Given Imaging, a pioneer developer and the world's leading provider of capsule endoscopy;
Chairman of Biolight, a life sciences
9
investment company;
Chairman of Micromedic Technologies Ltd., a cluster of companies engaged in cancer diagnostics, and Chairman of Eltav, a pioneer of wireless monitoring of industrial valves.
Former Chairman of Netafim, the global leader in smart irrigation solutions. Former President and CEO of Teva Pharmaceutica l Industries Ltd.
2. Dilip S. Shanghvi 00005588 Managing 01/03/1993 B.com Founder of the Director Acquirer and has extensive industrial experience in the pharmaceutica l industry.
Chairman and Managing Director of Sun Pharma Advanced Research Company Ltd., and Chairman of the Shantilal Shanghvi Foundation.
He is also the Chairman of Taro Pharmaceutica l Industries Ltd.
3. Sudhir V. Valia 00005561 Whole-time 31/01/1994 B.com, FCA Member of the Director Institute of Chartered Accountants of India and has more than
10
three decades of taxation and finance experience.
He has been a director of the Acquirer since the inception of the company and is also on the board of Taro Pharmaceutica ls Ltd.
4. Sailesh T. Desai 00005443 Whole-time 25/03/1999 B.Sc He has more Director than 28 years of industrial experience, 18 of which have been in the pharmaceutica l industry.
He has comprehensiv e corporate affairs experience.
5. S. Mohanchand 00087414 Director 29/05/1997 I.Sc An Dadha entrepreneur with more than five decades of experience in the pharmaceutica l industry in India.
Founder and Managing Director of the erstwhile Tamil Nadu Dadha Pharmaceutica ls Limited.
He is also a Trustee on many charitable and religious trusts.
Former member of the Tamil Nadu Government constituted Drug Committees, namely the Drug Advisory Committee and the
11
Committee for the Development of Drug Industries in Tamil Nadu.
Presently, he is also a director in Sun Pharma Advanced Research Company Limited, Wardex Pharmaceutica ls Limited and Dadha Pharma Private Limited.
6. Hasmukh S. Shah 00152195 Director 23/03/2001 M.A. Four decades (Economics) of experience in senior management, most notably as former Chairman and Managing Director of Indian Petrochemical Corporation Ltd.
Chairman of Gujarat Gas Company Ltd. as well as the Vice Chairman of GE Capital and advisor to GE in India.
He has held positions such as Joint Secretary to the Prime Minister, as Secretary of Post and Telegraph, as Chairman of the National Institute of Design, the Institute of Rural Management, Anand and the Gujarat Council of Science & Technology.
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Former Chairman of the Gujarat Ecology Commission, the Gujarat Institute of Desert Ecology, the Centre for Fuel Studies and Research, the Expert Committee on Disinvestment (Government of Gujarat), the Advisory Committee on Natural Gas, Government of Maharashtra and the Vikram A. Sarabhai Community Science Centre.
He has been member of the Board of Governors of the Indian Institute of Technology, Powai, and is a member of the BAIF Board of Trustees. He is also a member of the Governing Council at the Dhirubhai Ambani Institute of Information and Communicatio n Technology.
Former Chairman of the Board at Shaily Engineering Plastics Ltd. and Director on the Boards of Supreme Petrochemical s Ltd., Atul Ltd., Deepak Nitrite Ltd.,
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Microinks Ltd., Cosmo Films Ltd., Dinesh Remedies Ltd., Taro Pharmaceutica l Industries Ltd., and advisor to British Gas India.
7. Ashwin S. Dani 00009126 Director 28/01/2004 B.Sc (Hons), Non-executive B.Sc (Tech), Vice Chairman MSI Polymer of Asian Science and Paints Limited. Dip. In Colour science Former Vice Chairman and Managing Director of Asian Paints Limited.
Past president of the Indian Paint Association (IPA) and has received a number of awards for his contribution to the paint industry.
Former member of the Central Board of Trustees- Employees Provident Fund of the Government of India and also the President of the Board of Governors of the UDCT Alumni Association, Mumbai.
Currently, he is a member of the Board of Management of Institute of Chemical Technology (formerly UDCT), Mumbai.
8. Keki M. Mistry 00008886 Director 28/08/2002 FCA and Vice Chairman Member of and CEO of
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Michigan Assc. the Housing of Certified Development Public Finance Accountants, Corporation USA Ltd.
He holds directorships for the following companies: HDFC Developers Ltd., Shrenuj and Company Ltd., HDFC Standard Life Insurance Corporation Ltd., HDFC ERGO General Insurance Corporation Ltd., Infrastructure Leasing and Financial Services Ltd., The Great Eastern Shipping Company Ltd., NexGen Publishing Ltd., HDFC Asset Management Company Ltd., Greatship (India) Ltd., Intelenet Global Services Ltd., Griha Investments (Mauritius), Association of Leasing and Financial Services Companies, India Value Fund Advisors Private Ltd. and Torrent Power Ltd.
9. Rekha Sethi 06809515 Additional 13/02/2014 Graduate in Director Director English General of the Literature and All India Post Graduate Management Diploma in Association Advertising and (AIMA), the Marketing apex body for management in India.
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Member of the Indo- Netherlands Joint Working Group on Corporate Governance and Corporate Social Responsibility set up by Ministry of Corporate Affairs, Government of India, Advisory Board of the Switzerland based St Gallen Foundation think tank, Leaders of Tomorrow – Knowledge Pool.
3.7 Brief financial information of the Acquirer:
3.7.1 The financial information set forth below has been extracted from the audited standalone financial statements of the Acquirer as at and for the financial years ended March 31, 2012, March 31, 2013, March 31, 2014 and the interim unaudited standalone financial information, which has been subject to limited review by the Acquirer’s auditors, as at and for the nine month period ending December 31, 2014.
Financial Period Nine Months ending December 2014 2011-2012 2012-2013 2013-2014 INR (in Income Statement INR (in Millions)* INR (in Millions)* INR (in Millions)* Millions)**
Income from operations 40,155.6 24,321.4 28,287.9 17,380.6
Other Income (1) 3,432.8 2,366.1 1,777.6 42.8
Total Income 43,588.4 26,687.5 30,065.5 17,423.4
Total Expenditure (22,569.4) (19,194.6) (28,117.2) (19,271.3)
Exceptional Items (2,999.2) - (28,756.0) - Profit Before Depreciation Interest and Tax 18,019.8 7,492.9 (26,807.7) (1,847.9)
Depreciation (757.2) (858.2) (1,019.4) (1,548.2)
Interest (4.3) (4.4) (183.8) (121.9)
Profit Before Tax 17,258.3 6,630.3 (28,010.9) (3,518.0)
Provision for Tax (283.4) (1,464.8) (274.3) (93.6)
Profit After Tax 16,974.9 5,165.5 (28,285.2) (3,611.6)
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as at 30 Sep, Balance Sheet as at 31 Mar, 2012 * as at 31 Mar, 2013 * as at 31 Mar, 2014 * 2014 ** Sources of funds
Paid up share capital 1,035.6 1,035.6 2,071.2 2,071.2 Reserves and Surplus (excluding revaluation reserves) 77,745.6 76,853.2 72,007.6 69,307.0
Networth 78,781.2 77,888.8 74,078.8 71,378.2
Secured loans 403.0 431.3 88.1 436.0
Unsecured loans - - 24,002.0 -
Other liabilities (2) 2,345.6 2,979.1 27,184.1 27,171.9
Total 81,529.8 81,299.2 1,25,353.0 98,986.1
Uses of funds
Net fixed assets 12,261.7 14,838.3 17,476.3 21,327.7
Investments (3) 44,377.8 43,175.4 70,157.3 62,180.2
Loans & Advances (4) 7,291.5 13,405.9 10,708.1 13,117.3
Other assets (5) 28.3 78.3 1.1 -
Net current assets (6) 17,570.5 9,801.3 27,010.2 2,360.9 Total miscellaneous expenditure not written off - - - -
Total 81,529.8 81,299.2 1,25,353.0 98,986.1
Nine Months ending December 2014 2011-2012 2012-2013 2013-2014 INR (in Other Financial Data INR (in Millions)* INR (in Millions)* INR (in Millions)* Millions)**
Dividend 4,401.2 5,177.9 3,106.7
Dividend (%) on Profit 25.93% 100.24% NM Earnings Per Share (7) (Face Value INR 1) (In Rs.) 16.4 2.5 (13.7) (1.7) (Source: Acquirer filings)
*As per annual report ** As per press release
(1) Adjusted for interest expense of INR 183.8 million, INR 4.4 million and INR 4.3 million in FY14, FY13 and FY12 respectively. For the nine month period ending 31 December, 2014, Other Income is net of impact of MTM loss on forward foreign exchange contracts and loss on foreign currency translations (other than those included in purchases and sales).
(2) Other liabilities include deferred tax liabilities, other long term liabilities and long term provisions.
(3) Investments include current and non-current investments.
(4) Loans & advances include current and non-current loans and advances.
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(5) Other assets include deferred tax assets and other non-current assets.
(6) Net current assets calculated as: Inventories + Trade Receivables + Cash and Cash Equivalents + Other Current Assets - Trade Payables - Other Current Liabilities - Short Term Provisions.
(7) EPS in FY2011-12 is unadjusted for bonus Shares issued in FY2013-14.
3.7.2 The key financial information of the Acquirer, as derived from its audited consolidated financial statements as at and for the twelve month period ended March 31, 2014, March 31, 2013, March 31, 2012 and the interim unaudited consolidated financial information, as at and for the nine month period ending December 31, 2014 is as follows:
Financial Period Nine Months ending 2011-2012 2012-2013 2013-2014 December 2014 Income Statement INR (in Millions) INR (in Millions) INR (in Millions) INR (in Millions)
Income from operations 80,194.9 1,12,998.6 1,60,803.6 1,30,003.7 Other Income 4,715.1 3,880.9 5,522.3 2,116.0 Total Income 84,910.0 1,16,879.5 1,66,325.9 1,32,119.7 Total Expenditure (Including Exceptional Items) (48,151.7) (69,872.0) (1,15,960.8) (71,593.4) Profit Before Depreciation Interest and Tax 36,758.3 47,007.5 50,365.1 60,526.3 Depreciation (2,911.6) (3,361.7) (4,092.3) (4,267.9) Interest (282.0) (431.6) (441.9) (489.3) Profit Before Tax 33,564.7 43,214.2 45,830.9 55,769.1 Provision for Tax (3,131.9) (8,455.5) (7,021.7) (5,468.6) Profit from Continuing Operations 30,432.8 34,758.7 38,809.2 50,300.5 Loss from Discontinuing Operations (11.1) (65.3) (19.2) 0.0 Minority Interest (3,854.8) (4,862.8) (7,375.3) (6,420.1) Profit for the Year 26,566.9 29,830.6 31,414.7 43,880.4
Balance Sheet as at 31 Mar, 2012 as at 31 Mar, 2013 as at 31 Mar, 2014 as at 30 Sep, 2014 Sources of funds Paid up share capital 1,035.6 1,035.6 2,071.2 2,071.2 Reserves and Surplus (excluding revaluation reserves) 1,21,322.2 1,48,861.7 1,83,178.3 2,18,014.8 Networth 1,22,357.8 1,49,897.3 1,85,249.5 2,20,086.0 Minority Interest 11,614.5 16,350.8 19,211.8 23,421.4 Secured loans (1) 1,319.1 1,099.3 747.4 2,271.2 Unsecured loans (2) 1,888.2 1,497.8 24,861.2 1,578.8 Other liabilities (3) 3,028.6 10,013.5 28,864.3 30,407.1 Total 1,40,208.2 1,78,858.7 2,58,934.2 2,77,764.5
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Uses of funds
Net fixed assets 32,741.9 50,771.3 58,242.0 66,600.7 Goodwill on Consolidation 10,218.1 11,329.5 18,346.2 22,765.9 Investments (4) 22,128.7 24,115.7 27,860.2 25,176.7 Loans & Advances (5) 16,374.2 19,173.6 22,957.3 29,207.7 Other assets (6) 7,009.2 9,254.5 11,868.0 13,940.7 Net current assets (7) 51,736.1 64,214.1 1,19,660.5 1,20,072.8 Total miscellaneous expenditure not written off 0.0 0.0 0.0 0.0 Total 1,40,208.2 1,78,858.7 2,58,934.2 2,77,764.5
Nine Months ending 2011-2012 2012-2013 2013-2014 December 2014 Other Financial Data INR (in Millions) INR (in Millions) INR (in Millions) INR (in Millions) Dividend Declared 4,401.0 5,178.0 3,107.0
Dividend (%) 16.6% 17.4% 9.9% Earnings Per Share (8) (Face Value INR 1) (In Rs.) 25.7 14.4 15.2 21.2 (Source: Acquirer filings)
(1) Secured loans include the secured portion of long term, short term borrowings and current maturities of long term debt.
(2) Unsecured loans include the unsecured portion of long term, short term borrowings and current maturities of long term debt.
(3) Other liabilities include deferred tax liabilities, other long term liabilities and long term provisions.
(4) Investments include current and non-current investments.
(5) Loans & advances include current and non-current loans & advances.
(6) Other assets include deferred tax assets and other non-current assets.
(7) Net current assets calculated as: Inventories + Trade Receivables + Cash and Cash Equivalents + Other Current Assets - Trade Payables - Other Current Liabilities (Excluding current maturities of long term debt) - Short Term Provisions.
(8) EPS in FY2011-12 is unadjusted for bonus Shares issued in FY2013-14.
4. BACKGROUND OF THE TARGET COMPANY
4.1 The Target Company, a public limited company, was incorporated on June 15, 1989. The Target Company was incorporated and registered in the name Maa Shakti Tube Mill Private Limited. The name of the Target Company was changed to Sunline Tubes Private Limited with effect from April 01, 1992. It was converted into a public limited company on August 25, 1993 and came to be known as Sunline Tubes Limited and was subsequently renamed as Sunline Technologies Limited effective from December 06, 2000. Sunline Technologies Limited entered into a scheme of amalgamation with Zenotech Laboratories Private Limited and pursuant to the said scheme changed its name to Zenotech Laboratories Limited on August 10, 2004.
4.2 The Target Company has its registered office at Survey No. 250-252, Turkapally Village, Shameerpet Mandal, Hyderabad- 500078, Telangana.
4.3 The Shares of the Target Company are listed on the BSE (Scrip Code: 532039). The corporate identification number (CIN) of the Target Company is L27100AP1989PLC010122.
4.4 Based on the information available on the website of the stock exchange, the Shares are infrequently traded on the BSE (within the meaning of Regulation 2(1)(j) of the SEBI (SAST) Regulations).
4.5 The issued, subscribed and paid-up share capital of the Target Company as on the date of Draft Letter of Offer is INR 344,275,000 (Indian Rupees Three Hundred Forty Four Million Two Hundred and Seventy Five Thousand) consisting of 34,427,500 (Thirty Four
19
Million Four Hundred and Twenty Seven Thousand Five Hundred) Shares of face value of INR 10 (Indian Rupees Ten Only) each. The Target Company has not issued and allotted any securities after the date of the PA.
4.6 The Target Company is a potential sick company in terms of the Section 23 of the Sick Companies (Special Provisions) Act, 1985. (Source: Target Company Annual Report 2013-2014)
4.7 BSE vide its notice dated March 27, 2012 suspended trading of equity shares of 49 companies including the Target Company for allegedly not complying with the provisions of the listing agreement. The Target Company has obtained an order from the Andhra Pradesh High Court where the court has suspended the BSE notice dated March 27, 2012 until further orders. No further orders have been passed in this regard. Trading in the Shares is not currently suspended on the BSE. (Source: Target Company confirmation)
4.8 There has been no merger/de-merger, spin off during last 3 (three) years involving the Target Company.
4.9 The key financial information set forth below has been extracted from the audited standalone financial statements as at and for the financial years ended March 31, 2012, March 31, 2013 and March 31, 2014 and the interim unaudited standalone financial information, which has been subject to limited review by the Target Company’s auditors, as at and for the nine month period ending December 31, 2014.
Financial Period Nine Months ending 2011-2012 2012-2013 2013-2014 December 2014 Income Statement INR (in Millions) INR (in Millions) INR (in Millions) INR (in Millions) Income from operations 21.8 30.4 27.6 31.9 Other Income 1.3 1.4 23.9 1.5 Total Income 23.2 31.9 51.4 33.3 Total Expenditure (Including Exceptional Items) (85.8) (237.2) (197.6) (156.1) Profit Before Depreciation Interest and Tax (62.6) (205.4) (146.1) (122.7) Depreciation (34.9) (35.2) (35.6) (30.5) Interest (1) (5.1) (14.7) (46.9) (48.9) Profit Before Tax (102.6) (255.2) (228.6) (202.1) Provision for Tax - - - - Profit After Tax (102.6) (255.2) (228.6) (202.1)
2011-2012 2012-2013 2013-2014 As at 30 Sep, 2014 Balance Sheet INR (in Millions) INR (in Millions) INR (in Millions) INR (in Millions) Sources of funds Paid up share capital 344.3 344.3 344.3 344.3 Reserves and Surplus (excluding revaluation reserves) 172.0 (83.2) (311.8) (403.6) Networth 516.3 261.0 32.5 (59.3) Share application money pending allotment 0.1 0.1 0.1 0.1 Secured loans 51.4 161.1 30.6 30.3 Unsecured loans 1.1 1.1 438.6 451.1 Other Liabilities (2) 2.4 4.6 4.9 2.3 Total 571.3 428.0 506.7 424.6
Uses of funds
Net fixed assets 621.4 588.9 562.5 541.7
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Loans & Advances (3) 38.8 36.8 32.3 31.7 Net current assets (4) (88.9) (197.6) (88.1) (148.8) Total miscellaneous expenditure not written off - - - - Total 571.3 428.0 506.7 424.6
Nine Months ending 2011-2012 2012-2013 2013-2014 December 2014 Other Financial Data INR (in Millions) INR (in Millions) INR (in Millions) INR (in Millions) Dividend
Dividend (%) - - - -
Earnings Per Share (Face Value INR 10) (In Rs.) (2.98) (7.41) (6.64) (5.87)
(1) Total Finance Cost.
(2) Consists of LT Provisions.
(3) Consists of LT + ST Loans and Advances.
(4) Calculated as: Inventories + Trade Receivables + Cash & Cash Balances + Other Current Assets - Trade Payables - Other Current Liabilities (Excluding Current Maturities of Long Term Debt) - Short Term Provisions.
4.10 Due to the missing and non-availability of the books of account and other related records and documents of overseas subsidiaries of the Target Company, the consolidated accounts and the required statements have not been prepared by the Target Company. (Source: Target Company confirmations)
4.11 The table below sets out the share capital structure of the Target Company as of the date of this Draft Letter of Offer:
Paid-up Equity Shares of the Target No. of Shares / Voting Rights % of Shares / Voting Rights Company Fully paid-up equity shares 3,44,27,500 100%
Partly paid-up equity shares Nil Nil
Total paid-up equity shares 3,44,27,500 100%
Total voting rights in the Target Company 3,44,27,500 100%
4.12 Under the Zenotech Stock Option Scheme 2005, the Target Company had allotted 125,000 (One Hundred and Twenty Five Thousand) Shares to the then directors during the financial years 2007 - 08 and 2008 - 09 and 2,500 (Two Thousand and Five Hundred) Shares to certain employees during the financial year 2010 -11 (aggregating to 127,500 (One Hundred and Twenty Seven Thousand and Five Hundred) equity Shares), which have not been listed on the BSE on account of missing statutory records, documents and registers of the Target Company, including the minutes of the meetings of the Board of Directors. No return of allotment with respect to these Shares was filed with the Registrar of Companies, Hyderabad. As on the date of this Draft Letter of Offer, there are no employee stock options outstanding towards the Target Company. (Source: BSE website. Target Company confirmations and Target Company Annual Report 2013-2014).
4.13 There are ongoing litigations between the erstwhile promoters of the Target Company (i.e. Dr. Jayaram Chigurupati and others) and Ranbaxy and Daiichi. The Acquirer by virtue of the Primary Transaction has assumed all litigations as existed against Ranbaxy. On account of such litigations, Ranbaxy and Daiichi could only take over the possession of the Target Company’s premises effective from November 12, 2011 pursuant to an order passed by the Company Law Board. On taking over possession of the premises of the Target Company, an assessment by Ranbaxy and Daiichi revealed that, inter-alia, certain books and records, documents and statutory registers and records of the Target Company until November 11, 2011 were missing, which are still not in their possession. Further, it was also revealed that 127,500 (One Hundred and Twenty Seven Thousand Five Hundred Only) equity Shares (referred to in Paragraph 4.12 above) allotted prior to November 11, 2011 were not listed on the BSE. In order to recover the related missing records the Target Company has filed a criminal complaint against Dr. Jayaram Chigurupati with respect to the missing statutory records / books / registers belonging to the Target Company as required to be maintained under the provisions of Companies Act 1956, Listing Agreement and other corporate laws. The complaint has been registered vide F.I.R. No. 357 of 2012
21
at Banjara Hills Police Station. The matter is currently under investigation by the Police. (Source: Target Company confirmations)
4.14 Pre and Post-Offer Shareholding Pattern of the Target Company
Share Shareholding & Voting Shares / Voting Rights Shares / Voting Rights to holder Shareholding / Voting Rights Prior to the Agreed to be Acquired be Acquired in the Open ’s Rights after the Agreement / which Triggered off the Offer (Assuming Full Categ Acquisition and Offer Acquisition and Offer* Regulations** Acceptance) ory
(A) (B) (C) (A) + (B) + (C) = (D) No. % No. % No. % No. % (1) Promo
ter Group a. 1,61,27 Ranba 46.84% (1,61,27,293) (46.84%) - - - - ,293 xy b. 68,86,5 20.00% - - - - 68,86,500 20.00% Daiichi 00 Total 1 2,30,13 66.84% - - - - 68,86,500 20.00% (a+b) ,793
(2) Acquir
er a. 2,58,20,62 Acquir - - 1,61,27,293 46.84% 96,93,332 28.16% 75.00% 5 er*** 2,58,20,62 Total 2 - - 1,61,27,293 46.84% 96,93,332 28.16% 75.00% 5
(3) Partie s to agree ment - - NA NA NA NA other than (1) & (2)
(4) Public (other than parties to
agree ment, acquir ers & PAC) a. FIs / MFs / Will depend on response Will depend on response FIIs / 4,414 0.01% NA NA from each category from each category Banks, SFIs (Indicat
22
e names ) b. 1,14,09 33.14% NA NA Others ,293 (Indicate the total number of shareholders in the public category) Total 4 1,14,13 33.15% NA NA (28.16%) 17,20,375 5.00% (a+b) ,707 (96,93,332) GRAN D 3,44,27 3,44,27,50 TOTAL 100.00% NA NA 100.00% ,500 0 (1+2+3 +4)
* Prior to the implementation of the Scheme, the Acquirer had neither acquired nor sold any Shares.
** The Offer was triggered on account of the Scheme whereby Ranbaxy merged into the Acquirer.
*** Also includes Shares of the Target Company, owned by the Acquirer, after the PA until the date of the Draft Letter of Offer, pursuant to the Scheme as detailed under Paragraph 2 (Background to the Offer).
4.15 The present composition of the Board of Directors of the Target Company is as under:
Name Designation/ Category Dr. R. S. Bakshi Independent Director Mr. Surinder Kumar Kohli Additional Director (Non-Executive) Ms. Kavita R. Shah Additional Director (Non-Executive) Mr. Vijay Agarwal Additional Director (Non-Executive)
(Source: Target Company confirmation, BSE website and Target Company Annual Report 2013-2014)
4.16 By virtue of the Primary Acquisition, all employees of Ranbaxy became employees of the Acquirer. Accordingly, Mr. Surinder Kumar Kohli, an employee of the Acquirer is on the board of the Target Company, and in terms of the SEBI (SAST) Regulations, he has recused himself and has not participated, and will not participate in any deliberations of the Board of Directors or vote on any matter in relation to the Offer.
4.17 As of the date of this Draft Letter of Offer, there are no (i) partly paid-up equity shares; and (ii) outstanding convertible instruments (warrants/fully convertible debentures/partly convertible debentures) issued by the Target Company. (Source: BSE website, Target Company confirmations and Target Company Annual Report 2013-2014)
4.18 The information stated in this Section 4 (Background of the Target Company) has been, unless otherwise specified sourced from or confirmed by the Target Company or obtained from publicly available sources.
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5. OFFER PRICE AND FINANCIAL ARRANGEMENT
5.1 Offer Price
5.1.1 The Shares of the Target Company are listed on the BSE.
5.1.2 The annualized trading turnover in the Shares on BSE based on trading volume during the 12 (twelve) calendar months prior to the month in which the PA is made as given below:
STOCK EXCHANGE NUMBER OF SHARES WEIGHTED AVERAGE NUMBER (A) as % of (B) TRADED (A) OF SHARES (B) BSE 190,252 34,427,500 0.6%
(Source for BSE trading information: BSE website)
5.1.3 In terms of Regulation 2(1)(j) of the SEBI (SAST) Regulations, the Shares are infrequently traded on BSE.
5.1.4 The Offer Price of INR 20.87 (Indian Rupees Twenty and Eighty Seven Paise Only) per Equity Share is justified in terms of Regulations 8(3) and 8(4) of SEBI (SAST) Regulations, in view of the following:
(a) Highest negotiated price per Share, if any, of the Target Company for any Nil acquisition under the Primary Acquisition attracting the obligation to make the PA of the Offer
(b) Volume-weighted average price paid or payable for any acquisition, whether Nil by the Acquirer or by any person acting in concert with the Acquirer, during the fifty-two weeks immediately preceding 6 April 2014 (being the earlier of the date on which the Primary Acquisition is contracted, and the date on which the intention or the decision to enter into the Primary Acquisition is announced in the public domain)
(c) Highest price paid or payable for any acquisition, whether by the Acquirer or Nil by any person acting in concert with the Acquirer, during the twenty-six weeks immediately preceding 6 April 2014 (being the earlier of the date on which the Primary Acquisition is contracted, and the date on which the intention or the decision to enter into the Primary Acquisition is announced in the public domain)
(d) Highest price paid or payable for any acquisition, whether by the Acquirer or Nil by any person acting in concert with the Acquirer, between 6 April 2014 (being the earlier of the date on which the Primary Acquisition is contracted, and the date on which the intention or the decision to enter into the Primary Acquisition is announced in the public domain) and the date of the PA (being 11 April 2014)
(e) Volume-weighted average market price of the equity Shares for a period of NA 60 (sixty) trading days immediately preceding 6 April 2014 (being the earlier of the date on which the Primary Acquisition is contracted, and the date on which the intention or the decision to enter into the Primary Acquisition is announced in the public domain) as traded on the BSE where the maximum volume of trading in the Shares of the Target Company are recorded during such period, provided that such Shares are frequently traded.
(f) Other financial parameters including Book Value, Comparable Trading INR 19 (Indian Rupees Multiple, and other customary parameters (Please see Note 2 below) Nineteen) per Share
(g) Price at (f) above including interest in terms of Regulation 8(12) of the SEBI INR 20.87(Indian Rupees (SAST) Regulations Twenty and Eighty Seven Paise Only per Share (Please see Note 3 below)
(h) Per Equity Share value, as required under Regulation 8(5) of SEBI (SAST) NA Regulations. (Please see Note 1 below)
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Note 1: In terms of Regulation 8(5) of the SEBI (SAST) Regulations, the (i) proportionate net asset value of the Target Company as a percentage of the consolidated net asset value of Ranbaxy;(ii) proportionate sales turnover of the Target Company as a percentage of the consolidated sales turnover of Ranbaxy; or (iii) proportionate market capitalization of the Target Company as a percentage of the enterprise value of Ranbaxy, is less than fifteen percent. Accordingly, the per Share value under Regulation 8(5) of SEBI (SAST) Regulations is not required to be computed.
Note 2: M/s Bansi S. Mehta & Co., Chartered Accountants, (Address: Merchant Chamber, 3rd Floor, 41, New Marine Lines, Mumbai 400 020; Telephone: + 91 22 2201 4922/2200 4002; firm registration number: 100991W) in its report dated April 10, 2014, has provided a report on the fair value of the Shares based on Regulation 8(4) of the SEBI (SAST) Regulations, as referred to at point (f) of Paragraph 5.1.4.
Note 3: In terms of regulation 8(12) of the SEBI (SAST) Regulations, in case of an indirect acquisition other than indirect acquisition referred in Regulation 5(2) of SEBI (SAST) Regulations, the offer price is enhanced by an amount equal to a sum determined at the rate of 10% (ten per cent) per annum for the period between the earlier of the date on which the primary acquisition is contracted or the date on which the intention or the decision to make the primary acquisition is announced in the public domain, and the date of the detailed public statement, provided that such period is more than five working days.
The Scheme was approved by the board of directors of the Acquirer and Ranbaxy on April 06, 2014.The Offer Price has been enhanced by an interest component, which has been calculated from the period commencing on April 06, 2014 and ending on March 30, 2015, being the date of the DPS. The interest works out to INR 1.87 (Indian Rupee One and Eighty Seven Paise Only) per Share. Accordingly, the Offer Price including interest works out to INR 20.87 (Indian Rupees twenty and eighty seven Paise Only). Therefore, in terms of Regulation 8(3) and 8(4) of the SEBI (SAST) Regulations, the Offer Price of INR 20.87 (Indian Rupees twenty and eighty seven Paise Only) per Share is justified.
5.1.5 There have been no corporate actions by the Target Company warranting adjustment of any of the relevant price parameters under Regulation 8(9) of the SEBI (SAST) Regulations. (Source: Target Company confirmations and BSE website)
5.1.6 The Acquirer is permitted to make upward revisions in the Offer Price at any time prior to 3 (three) Working Days before the commencement of the Tendering Period in accordance with Regulation 18(4) of the SEBI (SAST) Regulations. The Acquirer has decided not to increase the Offer Price. Further, in the event of further acquisition of Shares by the Acquirer during the Offer period, whether by way of market purchases or otherwise, at a price higher than the Offer Price, the Offer Price will be revised upwards to be equal to or more than the highest price paid for such acquisition in terms of Regulation 8(8) of the SEBI (SAST) Regulations. However, the Acquirer shall not acquire any Shares after three Working Days prior to the commencement of the Tendering Period, and until the expiry of the Tendering Period.
5.1.7 In the event of an upward revision in price, the Acquirer is required to: (a) make corresponding increases to the amounts kept in the escrow account under Regulation 17 of the SEBI (SAST) Regulations; (b) make a public announcement in the newspapers where the DPS was published; and (c) simultaneously with the issue of such announcement inform SEBI, the BSE and the Target Company at its registered office of such revision.
5.2 Financial Arrangements
5.2.1 The total funding requirement for this Offer assuming full acceptance of this Offer is INR 202,299,839 (Indian Rupees Two Hundred and Two Million Two Hundred Ninety Nine Thousand Eight Hundred and Thirty Nine Only) (“Maximum Consideration”).
5.2.2 The Acquirer has made firm financial arrangements for fulfilling the payment obligations under this Offer. Further, the Acquirer has furnished an unconditional, irrevocable on demand bank guarantee dated March 24, 2015 and amendment dated March 26, 2015 in favour of the Manager to the Offer from Citibank N.A. having guarantee number 5521605946 (68571), (the “Bank Guarantee”) for INR 50,700,000 (Indian Rupees fifty million seven hundred thousand only), which is equal to 25.06 % of the Maximum Consideration. The Manager to the Offer has been duly authorized to realize the value of the Bank Guarantee in terms of the SEBI (SAST) Regulations. Otherwise than in case of the Offer being withdrawn, the Bank Guarantee is valid until (i) December 31, 2015; or (ii) expiry of period specified under Regulation 17(6) of SEBI (SAST) Regulations, whichever occurs earlier.
5.2.3 In accordance with Regulation 17 of the SEBI (SAST) Regulations, the Acquirer and Citibank N.A., a national banking association organized under the laws of the United States of America, carrying on the business of banking in India as a scheduled commercial bank and having its principal office in India at 11th floor, First International Financial Centre, C - 54 and 55, G - Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051 (“Escrow Bank”) and the Manager to the Offer have entered into an Escrow Agreement on March 23, 2015 (“Offer Escrow Agreement”). Pursuant to the Offer Escrow Agreement, the Acquirer has established an escrow account under the name and title of “SUN PHARM IND LTD ESC ZEN OP OFF” (“Offer Escrow Account”) with the Escrow Bank and have made a cash deposit of INR 2,100,000 (Indian Rupees Two Million One Hundred Thousand Only) i.e. 1.04% of the Maximum Consideration, in the Offer Escrow Account. The cash deposit has been confirmed by way of a confirmation letter dated March 25, 2015 issued by the Escrow Bank. .
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5.2.4 In case of any upward revision in the Offer Price or the size of the Offer, the cash in the Offer Escrow Account shall be computed on the revised consideration calculated at such revised offer price or offer size and any additional amounts required will be funded via the Offer Escrow Account and the Bank Guarantee by the Acquirer, in terms of Regulation 17(2) of the SEBI (SAST) Regulations.
5.2.5 The Offer will be funded with internal accruals of the Acquirer.
5.2.6 The Manager to the Offer has been duly authorized to realize the monies lying to the credit of the Offer Escrow Account in terms of SEBI (SAST) Regulations.
5.2.7 M/s S. H. Bathiya & Associates LLP, Chartered Accountants, having its office at 2, 4th Floor, Tardeo AC Market, Tardeo Road, Mumbai - 400 034, Tel.: + 91 22 4275 8000, Fax.: +91 22 4275 8080 Firm Registration Number: 101046W have confirmed, by way of a certificate dated March 27, 2015 (“Chartered Accountants’ Certificate”), that the Acquirer has adequate financial resources through verifiable means available for meeting their obligations under the SEBI (SAST) Regulations for a value up to the Maximum Consideration.
5.2.8 On the basis of the aforesaid financial arrangements and the Chartered Accountants’ Certificate, the Manager to the Offer is satisfied about the ability of the Acquirer to implement this Offer in accordance with the SEBI (SAST) Regulations and confirms that adequate funds are available through verifiable means to implement this Offer.
6. TERMS AND CONDITIONS OF THE OFFER
6.1 The Offer is being made by the Acquirer to all Eligible Shareholders of the Target Company. The Draft Letter of Offer together with the Form of Acceptance cum Acknowledgement and transfer deed (for the Eligible Shareholders holding Shares in the physical form) will be mailed to those Eligible Shareholders whose names appear on the register of members of the Target Company and to the beneficial owners of the Shares whose names appear as beneficiaries on the beneficial record of the respective depositories, at the close of business on the Identified Date (i.e. May 06, 2015). Owners of Shares who are not registered as Eligible Shareholders are also eligible to participate in the Offer at any time prior to the Closure of the Tendering Period.
6.2 Every Eligible Shareholder, regardless of whether such person held Shares on the Identified Date, or has not received the Draft Letter of Offer, is entitled to participate in the Offer.
6.3 The Acquirer shall accept the Shares tendered pursuant to the Offer subject to the following:
6.3.1 Applications in respect of Shares that are the subject matter of litigation or any proceedings before statutory authorities, wherein the Eligible Shareholders may be prohibited from transferring the Shares during the pendency of the said litigation, are liable to be rejected if directions or orders regarding these Shares are not received together with the Shares tendered under the Offer. The applications in some of these cases may be forwarded (as per the discretion of the Acquirer) to the concerned statutory authorities for further action by such authorities. Shares tendered under the Offer that are subject to any charge, lien or encumbrance are liable to be rejected in the Offer.
6.3.2 The Acquirer will only acquire Shares which are free from all liens, charges and encumbrances and together with all rights attached thereto, including the right to all dividends, bonus and rights declared hereafter.
6.4 The acceptance of locked-in Shares by the Acquirer is subject to applicable law and the continuation of the residual lock-in period in the hands of the Acquirer.
6.5 The Offer is not conditional and is not subject to any minimum level of acceptance. The acceptance of the Offer must be unconditional and is entirely at the discretion of the Eligible Shareholders. Each Eligible Shareholder, to whom the Offer is being made, is free to offer his Shares, in whole or in part, while accepting the Offer.
6.6 The acceptance of the Offer must be unconditional, should be absolute and unqualified, and should be on the enclosed Form of Acceptance cum Acknowledgement and sent along with the other documents duly filled in and signed by the applicant Eligible Shareholder(s).
6.7 The Tendering Period will open on May 20, 2015 and close on June 02, 2015.
6.8 Eligible Shareholders who have accepted the Offer by tendering their Shares and requisite documents in terms of the PA, the DPS, and this Draft Letter of Offer are not entitled to withdraw such acceptance during the Tendering Period.
6.9 If the Shares tendered in the Offer are more than the Shares to be acquired under the Offer, the acquisition of Shares from each Eligible Shareholder will be on a proportionate basis as detailed in Paragraph 7.11.4 of this Draft Letter of Offer.
6.10 The Acquirer will not be responsible for any loss of share certificate(s) and the Offer acceptance documents during transit and the Eligible Shareholders are advised to adequately safeguard their interests in this regard.
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6.11 Accidental omission to dispatch this Draft Letter of Offer to any person to whom the Offer has been made or non-receipt of this Draft Letter of Offer by any such person shall not invalidate the Offer in any way.
6.12 Statutory and Other Approvals
6.12.1 As of the date of this Draft Letter of Offer, subject to Paragraph 6.12.2 below, to the best of the knowledge of the Acquirer, there are no statutory approvals required by the Acquirer to complete this Offer. However, in case of any statutory approvals being required by the Acquirer at a later date, this Offer shall be subject to such approvals and the Acquirer shall make the necessary applications for such approvals.
6.12.2 NRIs and OCBs tendering Shares in the Offer must obtain all requisite approvals, if any, required to tender the Shares held by them in this Offer and submit such approvals along with the documents required to accept this Offer. If holders of the Shares who are not persons resident in India (including the NRIs, the OCBs and the foreign institutional investors) had required any approvals (including from the FIPB or any other regulatory body) in respect of the Shares held by them, they will be required to submit such previous approvals that they would have obtained for holding the Shares, along with the other documents required to be tendered to accept this Offer. If the approvals mentioned above, as may be applicable, are not submitted, the Acquirer reserves the right to reject such Shares tendered in this Offer.
6.12.3 In case of delay in receipt of any statutory approvals mentioned above or which may be required by the Acquirer at a later date, as per Regulation 18(11) of the SEBI (SAST) Regulations, SEBI may, if satisfied, that non-receipt of approvals was not attributable to any willful default, failure or neglect on the part of the Acquirer to diligently pursue such approvals, grant an extension of time for the purpose of completion of this Offer, subject to the Acquirer agreeing to pay interest to the Eligible Shareholders at such rate, as may be specified by the SEBI from time to time. Provided where the statutory approvals extend to some but not all holders of the Shares, the Acquirer will have the option to make payment to such holders of the Shares in respect of whom no statutory approvals are required in order to complete this Offer.
6.12.4 The Acquirer will have the right not to proceed with this Offer in accordance with Regulation 23 of the SEBI (SAST) Regulations, in the event the statutory approvals indicated above are not granted. In the event of withdrawal of this Offer, a public announcement will be made within 2 (two) Working Days of such withdrawal, in the same newspapers in which the DPS is published and such public announcement will also be sent to the BSE, the SEBI and the Target Company at its registered office.
7. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT OF THE OFFER
7.1 A tender of Shares pursuant to any of the procedures described in this Draft Letter of Offer will constitute a binding agreement between the Acquirer and the tendering Eligible Shareholder, including the tendering Eligible Shareholder’s acceptance of the terms and conditions of this Draft Letter of Offer. The acceptance of this Offer is entirely at the discretion of the Eligible Shareholders. The acceptance of this Offer by the Eligible Shareholders must be absolute and unqualified. In the event of any change or modification is made to the Form of Acceptance cum Acknowledgement or if any acceptance to this Offer which is conditional and incomplete in any respect, the Manager to the Offer and the Acquirer reserve the right to reject the acceptance of the Offer by such Eligible Shareholder.
7.2 The instructions, authorizations and provisions contained in the Form of Acceptance cum Acknowledgement constitute a part of the terms of this Draft Letter of Offer.
7.3 This Draft Letter of Offer together with the Form of Acceptance cum Acknowledgement, will be mailed to the Eligible Shareholders, whose names appear on the register of members of the Target Company, as on the close of business on the Identified Date (i.e. May 06, 2015) and to the beneficial owners of the Shares of the Target Company whose names appear in the beneficial records of the respective depositories and the registrar and share transfer agent of the Target Company as on the close of business on the Identified Date (i.e. May 06, 2015). Accidental omission to dispatch this Draft Letter of Offer to any Eligible Shareholder to whom this Offer has been made or non-receipt of this Draft Letter of Offer by any such Eligible Shareholder shall not invalidate this Offer in any way.
7.4 Every Eligible Shareholder (registered or unregistered), regardless of whether she/he held Shares on the Identified Date, or has not received this Draft Letter of Offer, is entitled to participate in the Offer any time before the Closure of the Tendering Period.
7.5 Eligible Shareholders can also download this Draft Letter of Offer and the Form of Acceptance cum Acknowledgement from the SEBI website: www.sebi.gov.in and send in their acceptances by filling such form.
7.6 Eligible Shareholders who wish to accept the Offer and tender their Shares, held either in physical or in dematerialised form, can send or hand deliver the Form of Acceptance cum Acknowledgement duly signed along with all the relevant documents as mentioned in this Draft Letter of Offer, at any of the collection centres of the Registrar to the Offer mentioned below during working hours on or before the Closure of the Tendering Period, i.e., no later than closing of business hours on Tuesday, June 02, 2015, in accordance with the procedure as set out in this Draft Letter of Offer:
Conta Tel. Mode of City Address Fax No. E-mail ID ct No. Delivery
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Perso n Link Intime India Pvt. Ltd, Ganes C-13, Panalal Silk Mills 022- Hand Delivery 022- Mumbai h Compound, L B S 6171 & Registered 25960329 Mhatre Marg,Bhandup (W),Mumbai 5400 Post -400078. Link Intime India Pvt. Ltd, 303, 3rd Floor, Shoppers Plaza V, Opp. Municipal Market, Behind Shoppers Plaza II, Off C G Road, Navrangpura, 079- Hitesh Ahmedabad - 380009 079-2646 ahmedabad@li Ahmedabad 2646 Hand Delivery
Patel Link Intime India Pvt. Ltd, 5179 nkintime.co.in 5179 303, 3rd Floor, Shoppers Plaza V, Opp. Municipal Market,, Behind Shoppers Plaza II, Off C G Road, Navrangpura, Ahmedabad - 380009 Link Intime India Pvt. Ltd., bangalore@link Nagen 080- 543/A, 7TH Main , 3rd intime.co.in Bangalore dra 2650 Hand Delivery Cross, Hanumanthanagar, [email protected] Rao 9004 080- Bangalore - 560 019 om 26509004 0265 Link Intime India Pvt. Ltd., B - Tower, 102 B & 103, 2356 Alpesh Sangrila Complex, First 573 / 0265- vadodara@linki Baroda Hand Delivery
Gandhi Floor, Radhakrishna Char 2356 2356791 ntime.co.in Rasta, Akota, Vadodara - 796 / 390020 2356 794 0422 Link Intime India Pvt. - S. Ltd,Surya 35, Mayflower 2314 0422- coimbatore@lin Coimbatore Dhanal Avenue, Behind Senthil Hand Delivery
792 / 2314792 kintime.co.in akshmi Nagar, Sowripalayam Road, 2315 Coimbatore 641 028 792 033- Link Intime India Pvt. Ltd, 033- S.P. 2289 kolkata@linkinti Kolkata 59C,Chowringhee Road,3rd 22890539/ Hand Delivery
Guha 0539 me.co.in Floor,Kolkata -700020 40 /40 Link Intime India Pvt. Ltd., 011- Swapa 44 Community Centre 2nd 4141 011- delhi@linkintim New Delhi n Floor, Nariana Industrial 0592 Hand Delivery 41410591 e.co.in Naskar Area Phase I, Near PVR, /93/9 Nariana, New Delhi 110 028 4 020- Link Intime India Pvt. Ltd, Rajeev 2616 Block No 202 2nd Floor, a 0084 020 - pune@linkintim Pune Akshay Complex, Near Hand Delivery
Kotesh , 26163503 e.co.in Ganesh Temple, Off Dhole war 2616 Patil Road, Pune 411 001. 1629 044- C/o SGS Corporate 2815 Solutions India Pvt. Ltd., 2672 Indira Devi Complex, II Chennai Mrs.So , Hand Delivery Floor, No.20, Gopalakrishna lly Soy 044- Street, Pondy Bazaar, T. 4207 044- 2815 chennai@sasp Nagar, Chennai- 600 017
0906 2672 artners.com
7.7 The Shares and all other relevant documents should only be sent to the Registrar to the Offer, and not to the Manager to the Offer, the Acquirer, or the Target Company.
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7.8 Applicants who cannot hand deliver their documents at any of the collection centers referred to above, may send the same by registered post with acknowledgement due or by courier, at their own risk and cost, to the Registrar to the Offer at its address: C- 13, Pannalal Silk Mills Compound, LBS Marg, Bhandup, West, Mumbai 400 078, so as to reach the Registrar to the Offer on or before closing of business hours on Tuesday, June 02, 2015, i.e., Closure of the Tendering Period, clearly marking the envelop “Zenotech Laboratories Limited – Open Offer”.
7.9 PROCEDURE FOR SHARES HELD IN PHYSICAL FORM
7.9.1 Eligible Shareholders who are holding the Shares in physical form and who wish to tender their Shares in the Offer will be required to duly complete, sign and send the Form of Acceptance cum Acknowledgement in accordance with the instructions contained therein, by sole/joint Eligible Shareholders whose name(s) appears on the share certificate(s) and in the same order and as per the specimen signature lodged with the registrar and share transfer agent of the Target Company. This order cannot be changed or altered nor can any new name be added for the purpose of accepting the Offer. Original share certificate(s) and valid transfer deed(s), duly completed and signed in accordance with the instructions specified in this Draft Letter of Offer and the Form of Acceptance cum Acknowledgement, along with self-attested copy of PAN card of all the transferors are required to be submitted.
7.9.2 Valid transfer deed(s) should be duly signed as transferor(s) by the sole/joint Eligible Shareholder(s) in the same order and as per specimen signatures lodged with the registrar and share transfer agent of the Target Company and duly witnessed at the appropriate place. The transfer deed(s) should be left blank, except for the signatures and witness details as mentioned above. Attestation, where required (as indicated in the transfer deed(s)) (thumb impressions, signature difference, etc.), should be done by a magistrate, notary public or special executive magistrate or a similar authority holding a public office and authorized to use the seal of his office or a member of a recognized stock exchange under its seal of office and membership number or manager of the transferor’s bank. Notwithstanding that the signature(s) of the transferor(s) has been attested as aforesaid, if the signature(s) of the transferor(s) differs from the specimen signature(s) recorded with the registrar and share transfer agent of the Target Company or are not in the same order, such Shares are liable to be rejected in the Offer.
7.9.3 For Shares held in physical form by resident Eligible Shareholders, the Acquirer may, in its sole discretion, deem the Shares to have been accepted under the Offer in case of non-receipt of the duly completed Form of Acceptance cum Acknowledgement, but receipt of other documents (including the original share certificates, valid transfer deeds and PAN), prior to the Closure of the Tendering Period.
7.9.4 Persons who: (a) have acquired the Shares but whose names do not appear in the register of members of the Target Company on the Identified Date; or (b) are unregistered owners of Shares; or (c) have acquired the Shares after the Identified Date; or (d) have not received this Draft Letter of Offer, may send their application in writing to the Registrar to the Offer, on plain paper stating the name, address, number of Shares held, number of Shares tendered, distinctive numbers, folio numbers along with the following documents to prove their title to such Shares and as are applicable: broker note, succession certificate, original share certificate/original letter of allotment and transfer deeds (one per folio), duly signed by such Eligible Shareholders (in case of joint holdings in the same order as per the specimen signatures lodged with Target Company), and witnessed (if possible) by a notary public or a bank manager or the member of a recognized stock exchange with membership number, as the case may be so as to reach the Registrar to the Offer on or before the closing of the business hours on the date of Closure of the Tendering Period (i.e. June 02, 2015). Alternatively, such Eligible Shareholders, if they so desire, may apply on the Form of Acceptance cum Acknowledgement together with the information requested above. Such Eligible Shareholders can obtain this Draft Letter of Offer and the Form of Acceptance cum Acknowledgement from the Registrar to the Offer by making an application in writing to that effect or from the SEBI website: www.sebi.gov.in.
7.9.5 Unregistered Eligible Shareholders should enclose:
7.9.5.1 A Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein;
7.9.5.2 Original share certificate(s);
7.9.5.3 Original broker contract note; and
7.9.5.4 Valid transfer deed(s) as received from market. The details of the transferee should be left blank, failing which the tender will be invalid under the Offer. Unregistered Eligible Shareholders should not sign the transfer deed. The details of the transferee will be filled upon verification of the Form of Acceptance cum Acknowledgement and other documents and the same being found valid. All other requirements for valid transfer will be preconditions for acceptance.
7.9.5.5 In case of Shares held in physical mode by unregistered Eligible Shareholders who have sent their share certificates and transfer deeds for transfer to the Target Company/its transfer agents, the acceptance shall be accompanied by the acknowledgment of lodgment with, or receipt by, the Target Company/its transfer agents, of the share certificate(s) and the transfer deed(s).
7.9.5.6 No indemnity will be required from unregistered Eligible Shareholders.
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7.10 ELIGIBLE SHAREHOLDERS WHO ARE HOLDING SHARES IN DEMATERIALIZED FORM
7.10.1 Eligible Shareholders holding Shares of the Target Company in dematerialized form and who wish to tender their Shares under the Offer will be required to submit the duly completed and signed Form of Acceptance cum Acknowledgement (in accordance contained therein by all beneficial holders of the Shares, as per the records of the DP) to the Registrar to the Offer either by registered post/courier or by hand delivery so as to reach on or before closing of business hours on the date of Closure of the Tendering Period (i.e., June 02, 2015) along with a photocopy of the delivery instructions in “off-market” mode or counterfoil of the delivery instructions in “off-market” mode, duly acknowledged by the DP, in favour of the special depository account (“Depository Escrow Account”). The credit for the delivered Shares should be received in the Depository Escrow Account on or before the Closure of the Tendering Period (i.e., June 02, 2015).
7.10.2 For each delivery instruction, the beneficial owner should submit a separate Form of Acceptance cum Acknowledgement. The Registrar to the Offer is not bound to accept those acceptances, for which corresponding Shares have not been credited to the Depository Escrow Account or for Shares that are credited in the Depository Escrow Account but the corresponding Form of Acceptance cum Acknowledgement has not been received as on the Closure of the Tendering Period.
7.10.3 The Registrar to the Offer has opened the Depository Escrow Account with NSDL for receiving Shares during the Tendering Period from the Eligible Shareholders who hold Shares in dematerialized form. The details of the Depository Escrow Account are mentioned below:
DEPOSITORY PARTICIPANT NAME Ventura Securities Ltd DP IDENTIFICATION NUMBER IN303116 CLIENT IDENTIFICATION NUMBER 11629418 ACCOUNT NAME LIIPL ZENOTECH OPEN OFFER ESCROW DEMAT ACCOUNT DEPOSITORY National Securities Depository Limited ISIN INE541A01023 MARKET “Off-Market” mode DATE OF CREDIT On or before June 02, 2015
7.10.4 Eligible Shareholders having their beneficiary account in CDSL shall use the inter-depository delivery instruction slip for the purpose of crediting their Shares in favor of the Depository Escrow Account with NSDL.
7.10.5 In the case of registered resident Eligible Shareholders, non-receipt of the aforesaid documents, but receipt of the Shares in the Depository Escrow Account by the Registrar to the Offer, the Acquirer may, in their sole discretion, deem the Shares to have been accepted under the Offer.
7.10.6 Persons who, (i) have acquired the Shares, but whose names do not appear in the register of members of the Target Company on the Identified Date; (ii) have acquired the Shares after the Identified Date; or (iii) have not received this Draft Letter of Offer, may participate in the Offer by submitting an application on plain paper giving details regarding their name, address, number of Shares held, number of Shares tendered, DP name, DP ID, beneficiary account number together with photocopy or counterfoil of the delivery instruction slip in “off-market” mode duly acknowledged by the DP for transferring the Shares in favour of Depository Escrow Account as per the details given in the table in Paragraph 7.10.3 so as to reach the Registrar to the Offer on or before the date of closing of the business hours on the date of Closure of the Tendering Period i.e., June 02, 2015. Alternatively, such Eligible Shareholders, if they so desire, may apply on the Form of Acceptance cum Acknowledgement together with the information requested above. Such Eligible Shareholders can obtain this Draft Letter of Offer and the Form of Acceptance cum Acknowledgement from the Registrar to the Offer by making an application in writing to that effect or from the SEBI website: www.sebi.gov.in.
7.11 THE SHARES, SHARE CERTIFICATES, TRANSFER DEEDS, FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT AND/OR OTHER RELEVANT DOCUMENTS SHOULD NOT BE SENT TO THE ACQUIRER, THE TARGET COMPANY OR THE MANAGER TO THE OFFER
7.11.1 Eligible Shareholders who have sent their Shares for dematerialization need to ensure that the process of getting Shares dematerialized is completed well in time so that the credit in the Depository Escrow Account is received on or before the date of closing of the business hours on the date of Closure of the Tendering Period (i.e., June 02, 2015). Else, the application will be rejected. It is the sole responsibility of the Eligible Shareholders to ensure credit of their Shares in the Depository Escrow Account prior to the Closure of the Tendering Period.
7.11.2 NRIs and OCBs tendering Shares in the Offer must obtain all requisite approvals, if any, required to tender the Shares held by them, in this Offer and submit such approvals along with the documents required to accept this Offer. If holders of the Shares who are not persons resident in India (including the NRIs, the OCBs and the foreign institutional investors) had required any approvals (including from the FIPB or any other regulatory body) in respect of the Shares held by them, they will be required to submit such previous approvals that they would have obtained for holding the Shares along with the other documents required to be tendered to accept this Offer. If the approvals mentioned above, as may be applicable, are not submitted, the Acquirer reserves the right to reject such Shares tendered in this Offer.
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7.11.3 Eligible Shareholders should also provide all relevant documents, which are necessary to ensure transferability of the Shares in respect of which the application is being sent. Such documents may include, but are not limited to:
7.11.3.1 Duly attested death certificate and succession certificate/probate/letter of administration (in case of single Eligible Shareholder) if the original Eligible Shareholder has expired;
7.11.3.2 Duly attested power of attorney if any person apart from the Eligible Shareholder has signed the Form of Acceptance cum Acknowledgement and/or transfer deed(s);
7.11.3.3 In case of companies, the necessary corporate authorization (including certified copy of board resolutions and/or general meeting resolutions) and specimen signatures of authorized signatories;
7.11.3.4 No objection certificate from any lender, if the Shares in respect of which the acceptance is sent, were under any charge, lien or encumbrance;
7.11.3.5 Banker’s certificate certifying inward remittances of funds for acquisition of Shares; and
7.11.3.6 Any other relevant documents.
7.11.4 If the aggregate valid responses to the Offer by the Eligible Shareholders are more than the Shares agreed to be acquired under the Offer, then the Acquirer will accept the offers received from the Eligible Shareholders on a proportionate basis, in consultation with the Manager to the Offer, taking care to ensure that the basis of acceptance is decided in a fair and equitable manner.
7.11.5 Payment to those Eligible Shareholders whose share certificates and/or other documents are found valid and in order, will be made by way of a crossed account payee cheque/demand draft/pay order/through Direct Credit (“DC”)/ NECS/ NEFT/ RTGS. So as to avoid fraudulent encashment in transit, the Eligible Shareholders holding Shares in physical form should provide details of bank account of the first/sole Eligible Shareholder as provided in the Form of Acceptance cum Acknowledgement and the consideration cheque or demand draft will be drawn accordingly. In the event such details are not provided, the payment instruments shall be prepared based on the bank account details available with the registrar and transfer agent of the Target Company. In the absence of bank account details, the Registrar to the Offer will incorporate the address available in their records on the payment instrument being dispatched. For Shares that are tendered in dematerialized form, the bank account details as obtained from the beneficiary position download to be provided by the depositories will be considered and the payment shall be processed with the said bank particulars, and not any details provided in the Form of Acceptance cum Acknowledgement. In case of Eligible Shareholders holding Shares in physical form, if the bank account details are not provided, then the consideration will be dispatched in the name of the sole/first named holder at her/his registered address (at their own risk). The decision regarding: (a) the acquisition (in part or full), of the Shares tendered pursuant to the Offer; or (b) rejection of the Shares tendered pursuant to the Offer along with: (i) any corresponding payment for the acquired Shares; and/or (ii) return of share certificates for any rejected Shares or Shares accepted in part, will be dispatched to the Eligible Shareholders by registered post or by ordinary post as the case may be, at the Eligible Shareholder’s sole risk. Shares held in dematerialized form to the extent not acquired will be credited back to the respective beneficiary account with their respective DPs as per the details furnished by the beneficial owners in the Form of Acceptance cum Acknowledgement.
7.11.6 For Eligible Shareholders who do not opt for electronic mode of transfer or whose payment consideration is rejected/not credited through DC/NECS/NEFT/RTGS, due to technical errors or incomplete/incorrect bank account details, payment consideration will be dispatched through registered/speed post at the Eligible Shareholder’s sole risk and the payment instruments shall be prepared based on the bank account details available with the Registrar to the Offer. In the absence of bank account details, the Registrar to the Offer will incorporate the address available in their records on the payment instrument being dispatched.
7.11.7 The unaccepted share certificates, transfer forms and other documents, if any, will be returned by registered post at the Eligible Shareholders’ sole risk. Unaccepted Shares held in dematerialized form will be credited back to the beneficial owners’ depository account with the respective DP as per details received from their DP. It will be the responsibility of the Eligible Shareholders to ensure that the unaccepted Shares are accepted by their respective DPs when transferred by the Registrar to the Offer. Eligible Shareholders holding Shares in dematerialized form are requested to issue the necessary standing instruction for the receipt of the credit, if any, in their account with a DP. Eligible Shareholders should ensure that their depository account is maintained till the Offer formalities are completed.
7.11.8 The Registrars to the Offer will hold in trust the Shares and share certificate(s), Shares lying in credit of the Depository Escrow Account, Form of Acceptance cum Acknowledgement, and the transfer deed(s) on behalf of the Eligible Shareholders who have accepted the Offer, until the cheques/drafts for the consideration and/or the unaccepted Shares/share certificates are dispatched/returned.
7.11.9 All bankers’ cheques/demand drafts will be drawn in the name of the first holder, in case of joint holder(s). In case of unregistered owners of Shares, payment will be made in the name of the person stated in the contract note. It is mandatory for the Eligible Shareholders to provide their bank account details in the Form of Acceptance cum Acknowledgement for incorporation in the bankers’ cheque/demand draft. In the event such details are not provided, the payment instruments shall be
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prepared based on the bank account details available with Registrar to the Offer. In the absence of bank account details, the Registrar to the Offer will incorporate the address available in their record on the payment instrument being dispatched.
7.11.10 Pursuant to Regulation 18(9) of the SEBI (SAST) Regulations, Eligible Shareholders who have accepted the Offer by tendering the requisite documents in terms of this Draft Letter of Offer are not allowed to withdraw the same.
7.11.11 The Acquirer will not be responsible in any manner for any loss of share certificate(s) and/or offer acceptance documents during transit and the Eligible Shareholders of the Target Company are advised to adequately safeguard their interest in this regard. In case of any lacunae or defect or modifications in the documents or forms submitted, the acceptance is liable to be rejected.
7.12 COMPLIANCE WITH TAX REQUIREMENTS
7.12.1 General
7.12.1.1 As per the provisions of Section 195(1) of the Income Tax Act, any person responsible for paying to a non-resident any sum chargeable to tax is required to deduct tax at source (including surcharge and education cess as applicable). The consideration received by the non-resident Eligible Shareholders for Shares accepted in the Offer may be chargeable to tax in India either as capital gains under Section 45 of the Income Tax Act or as business profits, depending on the facts and circumstances in respect of such Eligible Shareholder. The Acquirer is required to deduct tax at source (including surcharge and education cess) at the applicable rate as per the Income Tax Act on such capital gains/business profits subject to benefit available to such Eligible Shareholder under the applicable DTAA. Further, the payment of any interest (paid for delay in payment of Offer Price) by the Acquirer to a non-resident Eligible Shareholder may be chargeable to tax, as interest income under the Income Tax Act. The Acquirer is required to deduct tax at source (including surcharge and education cess) at the applicable rate as per the Income Tax Act on such interest or at the rate under the applicable DTAA.
7.12.1.2 The payment of any interest by the Acquirer to a resident Eligible Shareholder may be chargeable to tax, as interest income under the Income Tax Act. The Acquirer is required to deduct tax at source at the applicable rate under Section 194A of the Income Tax Act on such interest (paid for delay in payment of Offer Price).
7.12.1.3 All Eligible Shareholders whether resident or non-resident (including FIIs) are required to submit their PAN for income-tax purposes. In case the PAN is not submitted or is invalid or does not belong to the Eligible Shareholder, the Acquirer will arrange to deduct tax on any taxable payment or consideration paid to such Eligible Shareholder at the rate of 20% (twenty per cent) (as provided in Section 206AA of the Income Tax Act) or at the rate in force or at the applicable tax rate, as may be applicable to the relevant category of Eligible Shareholder under the Income Tax Act, whichever is higher.
7.12.1.4 Each Eligible Shareholder shall certify its tax residence status (i.e., whether resident or non-resident) and its tax status (i.e., whether individual, firm, company, association of persons/ body of individuals, trust, any other, etc.) by selecting the appropriate box in the Form of Acceptance cum Acknowledgement. In case of ambiguity, incomplete or conflicting information or the information not being provided to the Acquirer, it will be assumed that the Eligible Shareholder is a non-resident Eligible Shareholder and taxes shall be deducted treating the Eligible Shareholder as a non-resident and at the maximum marginal rate as may be applicable, under the Income Tax Act, to the relevant category to which the Eligible Shareholder belongs, on the entire consideration and interest if any, payable to such Eligible Shareholder.
7.12.1.5 Any non-resident Eligible Shareholder claiming a benefit under any DTAA between India and any other foreign country should furnish a valid ‘Tax Residence Certificate’ provided to him/it by the Income Tax Authority of such other foreign country of which he/it claims to be a tax resident. In addition, the non-resident Eligible Shareholder is required in terms of Section 90(5) of the Income Tax Act to furnish prescribed additional information in the prescribed form (Form 10F). The information that is to be provided in Form 10F are as follows:
7.12.1.5.1 Legal status (individual, company, firm, etc.);
7.12.1.5.2 Nationality of an individual or country/specified territory of incorporation or registration in case of other entities;
7.12.1.5.3 The non-resident tax payer’s tax identification number in the country or specified territory of residence or a unique identification number of the non-resident tax payer of the country or the specified territory of residence;
7.12.1.5.4 Period for which the residential status, as mentioned in the Tax Residency Certificate, is applicable; and
7.12.1.5.5 Address of the non-resident tax payer in the country or specified territory outside India, during the period for which the Tax Residency Certificate is applicable. Further, a non-resident tax payer is required to keep and maintain all documents substantiating the aforesaid information and furnish the same when required by the Indian tax authorities. The particulars already included in the Tax Residency Certificate are not required to be furnished separately.
7.12.1.5.6 The Acquirer will not accept any request from any Eligible Shareholder, under any circumstances, for non-deduction of tax at source or deduction of tax at a lower rate, on the basis of any self-computation/computation by any tax consultant, of capital gain and/or interest, if any and tax payable thereon.
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7.12.1.5.7 Securities transaction tax will not be applicable to the Shares accepted in the Offer.
7.12.2 Tax implications in case of Non-resident Eligible Shareholders (other than FIIs)
7.12.2.1 Remittance of consideration: All non-resident Eligible Shareholders, who desire that no tax should be deducted at source or tax should be deducted at a lower rate or on a lesser amount, shall be required to submit certificate from the Indian income tax authorities under Section 195(3) of the Income Tax Act or Section 197 of the Income Tax Act along with the Form of Acceptance cum Acknowledgement certifying the amount of tax required to be deducted at source by the Acquirer before remitting the consideration to the Eligible Shareholders whose Shares have been validly accepted in this Offer. The Acquirer will arrange to deduct taxes at source in accordance with such certificate.
7.12.2.2 In case the aforesaid certificate for no deduction or lower deduction of tax is not submitted, the Acquirer will arrange to deduct tax at the maximum marginal rate as may be applicable to the relevant category to which the Eligible Shareholder belongs, under the Income Tax Act on the entire consideration and interest amount payable to such Eligible Shareholder.
7.12.2.3 The Acquirer will not take into consideration any other details and documents (including self-certified computation of tax liability or the computation of tax liability certified by any tax professionals including a chartered accountant, etc.) submitted by the Eligible Shareholder for deducting a lower amount of tax at source. NRIs, OCBs and other non-resident Eligible Shareholders (excluding FIIs) holding Shares as capital account will be required to certify the period of its holding (i.e., whether Shares are held for more than 12 (twelve) months) of Shares in the Target Company by selecting the appropriate box in the Form of Acceptance cum Acknowledgement along with proof such as a dematerialised account statement or broker’s note.
7.12.2.4 All NRIs, OCBs and other non-resident Eligible Shareholders (excluding FIIs) are required to submit their PAN for income tax purposes. In case the PAN is not submitted or is invalid or does not belong to the Eligible Shareholder, the Acquirer will arrange to deduct tax at the rate of 20% (twenty per cent) (as provided in Section 206AA of the Income Tax Act) or at the rate in force or at the applicable rate, as may be applicable, to the category of Eligible Shareholder under the Income Tax Act, whichever is higher, on the entire consideration amount payable to such Eligible Shareholder that is taxable under the Income Tax Act.
7.12.2.5 Treaty Benefits: Any NRIs, OCBs and other non-resident Eligible Shareholders (excluding FIIs) claiming benefit under any DTAA between India and any other foreign country should furnish the ‘Tax Residence Certificate’ provided to him/it by the Income Tax Authority of such other foreign country of which it claims to be a tax resident and a self-declaration stating that the Eligible Shareholder is eligible for claiming benefit under the DTAA entered into between India and the country of its tax residence, and that the Eligible Shareholder does not have a permanent establishment in India in terms of such DTAA. Further, the Eligible Shareholder will be required to furnish such other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act as detailed in Paragraph 7.12.1.5 of this Draft Letter of Offer. In the absence of such Tax Residence Certificate/certificates/declarations/ information/documents, the Acquirer will arrange to deduct tax in accordance with the provisions of the Income Tax Act and without having regard to the provisions of any DTAA.
7.12.3 Tax Implications in case of FIIs
7.12.3.1 Tax Benefits for FIIs in respect of the consideration paid by the Acquirer: As per the provisions of Section 196 D(2) of the Income Tax Act, no deduction of tax at source is required to be made from any income by way of capital gains arising from the transfer of securities referred to in Section 115AD of the Income Tax Act, to an FII.
7.12.3.2 A FII should certify the nature of its income arising from the sale of the Shares as per the Income Tax Act (whether capital gains or otherwise) by selecting the appropriate option provided in the Form of Acceptance cum Acknowledgement for this purpose. In the absence of an FII certifying to the effect that its income from sale of Shares is in the nature of capital gains, the Acquirer will deduct tax at the maximum rate applicable to the category to which such FII belongs on the entire consideration payable to such FII along with applicable surcharge and education cess.
7.12.3.3 Notwithstanding anything contained in Paragraph 7.12.3.2 above, in case an FII furnishes a certificate from the income tax authorities under Section 195(3) or Section 197 of the Income Tax Act along with the Form of Acceptance cum Acknowledgement for deduction of tax at lower rate, the Acquirer will arrange to deduct taxes at source in accordance with such certificate.
7.12.3.4 Interest Payments: For interest payments by the Acquirer for delay in payment of Offer Price, if any, FIIs will be required to submit a certificate from the income tax authorities under Section 195(3) or Section 197 of the Income Tax Act for deduction of tax at lower rate certifying the amount of tax to be deducted by the Acquirer before remitting the consideration. The Acquirer will arrange to deduct taxes at source in accordance with such certificate.
7.12.3.5 In case the aforesaid certificate is not submitted, the Acquirer will arrange to deduct tax at the maximum marginal rate as may be applicable to the relevant category to which the FII Eligible Shareholder belongs under the Income Tax Act on the entire consideration payable as interest to such Eligible Shareholder.
7.12.3.6 All FIIs shall submit their PAN for income tax purposes. In case PAN is not submitted or is invalid or does not belong to the
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Eligible Shareholder, the Acquirer will arrange to deduct tax at the rate of 20% (twenty per cent) (as provided in Section 206-AA of the Income Tax Act) or at the rate in force or at the rate, as may be applicable to the category of the FII Eligible Shareholder under the Income Tax Act, whichever is higher, on the entire consideration amount payable to such Eligible Shareholder.
7.12.3.7 Treaty Benefits: Any FII claiming benefit under any DTAA between India and any other foreign country should furnish a “Tax Residence Certificate” provided to it by the income tax authority of such other foreign country of which it claims to be a tax resident and a self-declaration stating that the FII does not have a business connection in India as defined in Section 9(1)(i) of the Income Tax Act or a permanent establishment in India, in terms of the DTAA and the FII is eligible for claiming benefit under the DTAA entered between India and the country of its tax residence. Further, the FII will also be required to furnish such other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act as detailed in Paragraph 7.12.1.5 of this Draft Letter of Offer. In the absence of such Tax Residence Certificate/certificates/declarations/information/documents, the Acquirer will arrange to deduct tax in accordance with the provisions of the Income Tax Act and without having regard to the provisions of any DTAA.
7.12.4 Tax Implications in case of resident Eligible Shareholders
7.12.4.1 Remittance of consideration: In the absence of any specific provision under the Income Tax Act, the Acquirer will not deduct tax on the consideration payable to resident Eligible Shareholders for the acquisition of Shares. Such resident Eligible Shareholders will be liable to pay tax on their income as per the provisions of the Income Tax Act as applicable to them.
7.12.4.2 For interest payments by the Acquirer for delay in payment of Offer Price, if any, the Acquirer will arrange to deduct tax at the rate of 10% (ten per cent) on the interest amount (as provided in Section 194A of the Income Tax Act).
7.12.4.3 All resident Eligible Shareholders shall submit their PAN for income tax purposes. In case the PAN is not submitted or is invalid or does not belong to the Eligible Shareholder, the Acquirer will arrange to deduct tax at the rate of 20% (twenty per cent) (as provided in Section 206-AA of the Income Tax Act).
7.12.4.4 Notwithstanding anything contained in Paragraphs 7.12.4.2 and 7.12.4.3 above, no deduction of tax shall be made at source by the Acquirer where the total amount of interest payable to a resident Eligible Shareholder does not exceed INR 5,000 (Indian Rupees Five Thousand only) or where a self-declaration in Form 15G or Form 15H (as provided in the Income Tax Rules, 1962 (as amended)), as may be applicable, has been furnished by a resident Eligible Shareholder. The self-declaration in Form 15G and Form 15H will not be regarded as valid unless the resident Eligible Shareholder furnished its PAN in such declaration. Additionally, no tax is to be deducted on the amount of interest in case of a resident Shareholder being a Mutual Fund as per Section 10(23D) of the Income Tax Act or a Bank/an entity specified under Section 194A (3)(iii) of the Income Tax Act if it submits a copy of relevant registration or notification along with the Form of Acceptance cum Acknowledgement.
7.12.5 Issue of tax deduction at source certificate
The Acquirer will issue a certificate in the prescribed form to the Eligible Shareholders (both resident and non-resident) who have been paid the consideration and interest, after deduction of tax at source on the same, certifying the amount of tax deducted at source and other prescribed particulars in accordance with the provisions of the Income Tax Act read with the Income Tax Rules, 1962 (as amended).
7.12.6 Tax Implications in foreign jurisdictions
7.12.6.1 Apart from the above, the Acquirer is entitled to deduct tax in accordance with the tax laws applicable in overseas jurisdictions where the non-resident Eligible Shareholder is a resident for tax purposes (the “Overseas Tax”). For this purpose, the non- resident Eligible Shareholder shall furnish a self-declaration stating the quantum of the Overseas Tax to be deducted as per the relevant tax laws of the country in which the non-resident Eligible Shareholder is a tax resident and the Acquirer will be entitled to rely on this representation at their sole discretion.
7.12.6.2 Notwithstanding the details given above, all payments will be made to Eligible Shareholders subject to compliance with prevailing tax laws.
7.12.6.3 The tax deducted by the Acquirer while making payment to a Eligible Shareholder may not be the final tax liability of such Eligible Shareholder and shall in no way discharge the obligation of the Eligible Shareholder to appropriately disclose the amounts received by it, pursuant to the Offer, before the income tax authorities in the jurisdiction where it is a tax resident. The tax rates and other provisions may undergo change.
7.12.7 Eligible Shareholders who wish to tender their Shares must submit the following information along with the Form of Acceptance cum Acknowledgement:
7.12.7.1 Information requirement from non-resident Shareholder:
7.12.7.1.1 Self-attested copy of PAN card;
7.12.7.1.2 Certificate from the Income-tax Authorities for no/lower deduction of tax;
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7.12.7.1.3 Self-attested declaration in respect of residential status, status of Eligible Shareholders (e.g. individual, firm, company, trust, or any other please specify);
7.12.7.1.4 Tax Residency certificate and Form 10F;
7.12.7.1.5 Relevant Documents certifying period of holding;
7.12.7.1.6 In case of FII, self-attested declaration certifying the nature of income arising from the sale of equity Shares is capital gains;
7.12.7.1.7 In case of FII, self-attested declaration stating that the it does not have a business connection in India as defined in Section 9(1)(i) of the Income Tax Act or a permanent establishment in India
7.12.7.1.8 SEBI registration certificate for FII; and
7.12.7.1.9 RBI and other approval(s) obtained for acquiring the Shares, if applicable.
7.12.7.2 Information requirement in case of resident Shareholder:
7.12.7.2.1 Self-attested copy of PAN card;
7.12.7.2.2 Self-attested declaration in respect of residential status, status of Eligible Shareholders (e.g. individual, firm, company, trust, or any other - please specify);
7.12.7.2.3 If applicable, self-declaration form in Form 15G or Form 15H (in duplicate), as applicable for interest payment, if any;
7.12.7.2.4 Certificate from the income tax authorities (applicable only for the interest payment, if any) for no/lower deduction of tax; and
7.12.7.2.5 For Mutual Funds/Banks/other specified entities under Section 194A (3)(iii) of the Income Tax Act – Copy of relevant registration or notification (applicable only for the interest payment, if any).
7.13 The tax deducted under the Offer is not the final liability of the Eligible Shareholders or in no way discharges the obligation of Eligible Shareholders to disclose the consideration received pursuant to the Offer in their respective tax returns. The tax rates and other provisions may undergo changes.
7.14 Eligible Shareholders who wish to tender their Shares must submit the information all at once as given in the Form of Acceptance cum Acknowledgement and those that may be additionally requested for by the Acquirer. The documents submitted by the Eligible Shareholders along with the Form of Acceptance cum Acknowledgement will be considered as final. Any further/delayed submission of additional documents, unless specifically requested by the Acquirer may not be accepted. In case the documents/information as requested in this Draft Letter of Offer/Form of Acceptance cum Acknowledgement are not submitted by an Eligible Shareholder, or the Acquirer considers the documents/information submitted by an Eligible Shareholder to be ambiguous/incomplete/conflicting, the Acquirer reserves the right to withhold tax on the gross consideration at the maximum marginal rate as applicable to the category of the shareholder.
7.15 Based on the documents and information submitted by the Eligible Shareholders, the final decision to deduct tax or not, or the quantum of taxes to be deducted rests solely with the Acquirer.
7.16 Taxes once deducted will not be refunded by the Acquirer under any circumstances.
7.17 The Acquirer shall deduct tax (if required) as per the information provided and representation made by the Eligible Shareholders. In the event of any income tax demand (including interest, penalty, etc.) arising from any misrepresentation, inaccuracy or omission of information provided/to be provided by the Eligible Shareholders, such Eligible Shareholders will be responsible to pay such income tax demand (including interest, penalty, etc.) and provide the Acquirer with all information/documents that may be necessary and co-operate in any proceedings before any income tax/appellate authority.
7.18 All Eligible Shareholders are advised to consult their tax advisors for the treatment that may be given by their respective assessing officers in their case, and the appropriate course of action that they should take. The Acquirer and the Manager to the Offer do not accept any responsibility for the accuracy or otherwise of such advice. The aforesaid treatment of tax deduction at source may not necessarily be the treatment also for filing the return of income.
8. DOCUMENTS FOR INSPECTION
8.1 The following documents are available for inspection to the Eligible Shareholders at the office of the Manager to the Offer at 1202, 12th Floor, First International Financial Center, G-Block, Bandra Kurla Complex Bandra (East), Mumbai 400 051; between 10.00 a.m. and 6.00 p.m. on all Working Days (except Saturdays, Sundays and bank holidays) during the Tendering Period:
8.1.1 Copies of the certificate of incorporation and constitution documents of the Acquirer;
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8.1.2 Copy of the Scheme and the Transaction Documents;
8.1.3 Chartered Accountant certificate certifying the adequacy of financial resources with the Acquirer to fulfill the obligations under the Offer;
8.1.4 Copy of the letter issued by the Escrow Agent confirming the amounts kept in the Escrow Account – Cash and a lien in favour of the Manager to the Offer in accordance with the terms of the Offer Escrow Agreement;
8.1.5 Copy of the Bank Guarantee issued by the Escrow Bank;
8.1.6 Copy of the audited annual reports of the Acquirer for the last 3 (three) financial years;
8.1.7 Copy of the audited annual reports of the Target Company for the last 3 (three) financial years;
8.1.8 Copy of the PA, the DPS and the Offer opening public announcement;
8.1.9 Copy of the recommendation made by the Target Company’s committee of independent directors, as issued under Regulation 26(7) of the SEBI (SAST) Regulations;
8.1.10 Copy of the letter from SEBI containing its comments on this Draft Letter of Offer;
8.1.11 Copy of the agreement entered with the DP for opening of the Depository Escrow Account for the purposes of the Offer; and
8.1.12 Copy of the Offer Escrow Agreement.
9. DECLARATION BY THE ACQUIRER
9.1 The Acquirer and its directors accept responsibility for the obligations of the Acquirer as laid down in terms of the SEBI (SAST) Regulations. The Acquirer and its directors accept full responsibility for all the information contained in this Draft Letter of Offer. Unless otherwise stated, all information pertaining to the Target Company has been obtained from publicly available sources and the accuracy thereof has not been independently verified by the Manager to the Offer.
9.2 The person(s) signing this Draft Letter of Offer are duly and legally authorized by the Acquirer to sign this Draft Letter of Offer.
Signed by
______For and on behalf of Acquirer Name : :Ashok Bhuta Designation :Compliance Officer Date : :April 8, 2015
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FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT
ZENOTECH LABORATORIES LIMITED THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
(Please send this Form of Acceptance cum Acknowledgement with enclosures to any of the Collection Centers as mentioned in the Letter of Offer)
(All terms and expressions used herein shall have the same meaning as ascribed thereto in the Letter of Offer)
OFFER OPENS ON : Wednesday, May 20, 2015 OFFER CLOSES ON : Tuesday, June 02,2015
To
Link Intime India Private Limited C-13, Pannalal Silk Mills Compound,LBS Marg, Bhandup West, Mumbai - 400 078 Tel: (022) 6171 5400; Fax: (022) 2596 0329; Email: [email protected] Contact Person: Mr. Ganesh Mhatre
Dear Sir
Sub: Open offer (“Offer”) for acquisition of up to 9,693,332 (Nine Million Six Hundred Ninety Three Thousand and Three Hundred Thirty Two) representing 28.16% of the paid up equity share capital of Zenotech Laboratories Limited (the “Target Company”) of Rs 10/- (Rupees ten only) each (the “Shares”) at a price of Rs 20.87 (Indian Rupees Twenty and Eighty Seven Paise Only) per Share by Sun Pharmaceutical Industries Limited (the “Acquirer”) under Regulations 3(1), 4, and 5(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SEBI (SAST) Regulations”).
I/We refer to the PA, DPS and the Letter of Offer for acquiring the Shares held by me/us.
I/We, the undersigned, have read the PA, DPS and Letter of Offer and understood their contents including the terms and conditions mentioned therein and have unconditionally accepted the terms and conditions as mentioned therein.
I/We acknowledge and confirm that all the particulars/statements given herein are true and correct.
NAME HOLDER NAME OF THE PERMANENT ACCOUNT (IN BLOCK LETTERS) SHAREHOLDER NUMBER (PAN) (Please write names of the joint Sole/First holders in the same order as appearing in the share certificate(s)/demat account)
Second
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NAME HOLDER NAME OF THE PERMANENT ACCOUNT (IN BLOCK LETTERS) SHAREHOLDER NUMBER (PAN) Third
CONTACT NUMBER(S) TEL NO. (WITH STD CODE) : MOBILE NO.:
FULL ADDRESS OF THE FIRST HOLDER(with pin code)
PIN -
EMAIL ADDRESS
FOR ELIGIBLE SHAREHOLDERS HOLDING SHARES IN DEMATERIALIZED FORM
I/We, holding Shares in the dematerialized form, accept the Offer and enclose the photocopy of the delivery instruction in “Off-market” mode, duly acknowledged by the Depository Participant (DP) in respect of my Shares as detailed below:
DP NAME DP ID CLIENT ID NO. OF SHARES
I/We have executed an off-market transaction for crediting the Shares to the Depository Escrow Account as detailed below (please applicable box):
□ via a delivery instruction from my account with NSDL. □ via an inter-depository delivery instruction from my account with CDSL.
DP NAME Ventura Securities Ltd DP ID NUMBER IN303116 CLIENT ID 11629418 ACCOUNT NAME LIIPL ZENOTECH OPEN OFFER ESCROW DEMAT ACCOUNT DEPOSITORY National Securities Depository Limited ISIN INE541A01023
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DATE OF CREDIT On or before June 02, 2015 MARKET “Off-Market” mode
Eligible Shareholders should ensure that the Shares are credited in the aforementioned account before the close of business hours on Tuesday, June 2, 2015.
I/We note and understand that the Shares would lie in the Depository Escrow Account until the time the Acquirer dispatches the purchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents, signatures and receipt of statutory approvals as mentioned in the Letter of Offer. I/We note that such approvals may get delayed resulting in a consequent delay of payment to the Eligible Shareholders.
Enclosures (please applicable box(es))
□ No objection certificate from any lender, if the Shares in respect of which the acceptance is sent, were under any charge, lien or encumbrance. □ Photocopy or counterfoil of the delivery instructions in “off market” mode duly acknowledged by the Eligible Shareholders’ DP. □ Duly attested power of attorney, if any person apart from the Eligible Shareholder, has signed the Form of Acceptance cum Acknowledgement or transfer deed(s). □ Corporate authorization in case of companies along with board resolution and specimen signatures of authorized signatories. □ Duly attested death certificate and succession certificate (in case of single Eligible Shareholder) in case the original Eligible Shareholder has expired. □ Others (please specify):
FOR ELIGIBLE SHAREHOLDERS HOLDING SHARES IN PHYSICAL FORM
I/We accept the Offer and enclose the original Share certificate(s) and duly signed Share transfer deed(s) in respect of my/our Shares as detailed below.
NO LEDGER CERTIFICATE DISTINCTIVE NO(S) NO OF FOLIO NO(S) NO(S) FROM TO SHARES 1. 2. 3. 4. 5. (In case the space provided is inadequate, please attach a separate sheet with details.) TOTAL NO OF SHARES
I/We note and understand that the Registrar to the Offer will hold the original Share certificates and valid Share transfer deeds in trust for me/us until the time the Acquirer dispatches the purchase consideration as mentioned in the Letter of Offer. I/We also note and understand that the Acquirer will pay the purchase consideration only after verification of the documents, signatures and receipt of statutory approvals as mentioned in the Letter of Offer. I/We note that such approvals may get delayed resulting in a consequent delay of payment to the Eligible Shareholders.
Enclosures (please applicable box(es))
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□ No objection certificate from any lender, if the Shares in respect of which the acceptance is sent, were under any charge, lien or encumbrance. □ Duly attested power of attorney, if any person apart from the Eligible Shareholder, has signed the Form of Acceptance cum Acknowledgement or transfer deed(s). □ Corporate authorization in case of companies along with board resolution and specimen signatures of authorised signatories. □ Duly attested death certificate and succession certificate (in case of single Eligible Shareholder) in case the original Eligible Shareholder has expired. □ Others (please specify):
FOR ALL ELIGIBLE SHAREHOLDERS*
I/We confirm that our residential status under the Income Tax Act, 1961 (“Income Tax Act”) is (please applicable box):
□ Resident □ Non-resident. If yes, please state country of tax residency: ______
I/We confirm that our status is (please applicable box):
□ Individual □ Firm □ Company □ Association of Person/Body of Individual □ Trust □ NRI –Repatriable □ NRI–Non Repatriable □ FII – Corporate □ FII – Others □ Foreign Venture Capital Investor (FVCI) □ Foreign Company □ Overseas Corporate Bodies (OCB) □ Pension/Provident Fund □ Financial institutions □ Insurance companies □ Bank □ Any other - please specify below:
______
______
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FOR FII AND FII SUB-ACCOUNT ELIGIBLE SHAREHOLDERS:
I/We confirm that the Shares are held by me/us on (please applicable box(es)):
□ Investment/Capital Account and income arising from sale of the Shares is in the nature of capital gain. □ Trade Account and income arising from sale of the Shares is in the nature of business income.
(Note: In case the Shares are held on Trade Account, kindly enclose a certificate obtained from Indian tax authorities under section 195(3) or 197 of the Income Tax Act, specifying the rate at which tax shall be deducted. In the absence of such a certificate tax will be deducted at the maximum marginal rate, applicable to the category to which such FII belongs, on the entire consideration payable)
Declaration for Treaty Benefits (please the box if applicable):
□ I/We confirm that there I/we is/are tax resident/s of and satisfy all conditions to claim benefits under DTAA entered into by India and the country of which I am/we are tax resident/s. (Note: If this box is not ticked, tax will be deducted without considering Treaty Benefits at the maximum marginal rate applicable to the category to which such FII belongs)
In order to avail benefit of lower rate of tax deduction under the DTAA, if any, kindly enclose a ‘Tax Residence Certificate’ stating that you are a tax resident of your country of residence / incorporation and that you do not have a permanent establishment in India in terms of the DTAA entered into between India and your country of residence, along with such other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act. In case there is a permanent establishment in India, kindly enclose a certificate from Indian tax authorities, specifying the rate of tax to be deducted.
I/We have enclosed the following documents (please applicable box(es)):
□ Self-attested copy of PAN card. □ SEBI registration certificate for FII (including sub-account of FII). □ Certificate from the Income-tax Authorities for no/lower deduction of tax. □ Tax Residence Certificate and Form 10F. □ Relevant documents certifying period of holding. □ In case of FII, self-attested declaration certifying the nature of income arising from the sale of equity Shares is capital gains. □ In case of FII, self-attested declaration stating that it does not have a business connection in India as defined in Section 9(1)(i) of the Income Tax Act or a permanent establishment in India □ Other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act (Paragraph 7of the Letter of Offer). □ Copy of any statutory approvals including approvals from the RBI, the FIPB, if any, for acquiring Shares hereby tendered in the Offer.
FOR NON-RESIDENT ELIGIBLE SHAREHOLDERS (OTHER THAN FII AND FII SUB-ACCOUNTS)
I/We confirm that the tax deduction on account of Shares held by me/us is to be deducted on (please applicable box(es)):
□ Long-term capital gains (Shares are held by me/us for more than 12 (twelve) months). □ Short-term capital gains (Shares are held by me/us for 12 (twelve) months or less).
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□ Trade Account.
(For determination of the nature and period of holding, kindly enclose a proof for date of purchase such as demat account statement or brokers note. Further, kindly enclose a certificate obtained from Indian tax authorities under section 195(3) or 197 of the Income Tax Act, specifying the rate at which tax shall be deducted. In the absence of such a certificate tax will be deducted at the maximum marginal rate applicable to the category to which such Eligible Shareholders belong on the entire consideration payable).
Declaration for Treaty Benefits (please if applicable):
□ I/We confirm that there I/we is/are tax resident/s of and satisfy all conditions to claim benefits under DTAA entered into by India and the country of which I am/we are tax resident/s. (Note: If this box is not ticked, tax will be deducted without considering Treaty Benefits at the maximum marginal rate applicable to the category to which such Eligible Shareholder belongs)
In order to avail benefit of lower rate of tax deduction under the DTAA, if any, kindly enclose a ‘Tax Residence Certificate’ issued by the tax authorities of country of which you are a tax resident along with such other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act.
I/We have enclosed the following documents:
□ Self-attested copy of PAN card. □ Certificate from the Income-tax Authorities for no/lower deduction of tax. □ Self-attested declaration in respect of residential status, status of Eligible Shareholders (e.g. individual, firm, company, trust, or any other please specify) □ Proof for period of holding of shares such as demat account statement or brokers note. □ Tax Residence Certificate and Form 10F. □ Other documents and information as prescribed in terms of Section 90(5) of the Income Tax Act (Paragraph 7of Letter of Offer). □ Copy of any statutory approvals including approvals from the RBI, the FIPB, if any, for acquiring Shares hereby tendered in the Offer. If the Shares are held under the general permission of the RBI, non-resident Eligible Shareholders should furnish a copy of the relevant notification/circular pursuant to which the Shares are held and state whether the Shares are held on repatriable or non-repatriable basis. □ In case of OCB Eligible Shareholders, copy of the RBI approval for tendering Shares under the Offer, the source of funds for initial acquisition of Shares and the nature of the holding of Shares (repatriable/non- repatriable basis).
I/We confirm that the details of Overseas Tax to be deducted on the consideration payable by the Acquirer is as follows:
AMOUNT OF OVERSEAS TAX RATE AT OVERSEAS TAX IS TO BE DEDUCTED ON THE GROSS CONSIDERATION COUNTRY IN WHICH THE OVERSEAS TAX HAS TO BE DEPOSITED DETAILS OF AUTHORITY WITH WHOM SUCH OVERSEAS TAX HAS TO BE DEPOSITED
FOR RESIDENT ELIGIBLE SHAREHOLDERS
I/We have enclosed the following documents (please applicable box(es)):
□ Self-attested copy of PAN card. □ Self-attested declaration in respect of residential status, status of Eligible Shareholders (e.g. individual,
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firm, company, trust, or any other - please specify). □ Certificate from the income tax authorities for no/lower deduction of tax. □ Self-declaration form in Form 15G/Form 15H (in duplicate), if applicable. □ For specified entities under Section 194A(3)(iii) of the IT Act, self-attested copy of relevant Registration or notification (applicable only for interest payment, if any). □ In case of Mutual Funds/Banks/other specified entities under Section 194A (3)(iii) of the Income Tax Act Eligible Shareholders, copy of relevant registration or notification. * All Eligible Shareholders are advised to refer to Paragraph 7.12 7.12 of the Letter of Offer, on tax provisions, regarding important disclosures on taxation of the consideration to be received by them.
FOR ALL ELIGIBLE SHAREHOLDERS
I/We confirm that the Shares of Zenotech Laboratories Limited, which are being tendered herewith by me/us under the Offer, are free from liens, charges and encumbrances of any kind whatsoever.
I/We also note and understand that the obligation on the Acquirer to pay the purchase consideration arises only after verification of the certification, documents and signatures submitted along with this Form of Acceptance cum Acknowledgment by the Eligible Shareholders.
I/We confirm that there is no tax or other claims pending against me/us which may affect the legality of the transfer of Shares under the Income Tax Act.
I/We confirm that in case the Acquirer is of the view that the information / documents provided by the Eligible Shareholder is inaccurate or incomplete or insufficient, then tax may be deducted at source at the applicable maximum marginal rate on the entire consideration paid to the Eligible Shareholders.
I/We confirm that in the event of any income tax demand (including interest, penalty, etc.) arising from any misrepresentation, inaccuracy or omission of information provided/to be provided by me/us, I/We will indemnify the Acquirer for such income tax demand (including interest, penalty, etc.) and provide the Acquirer with all information/documents that may be necessary and co-operate in any proceedings before any income tax/appellate authority.
I/We authorize the Acquirer to accept the Shares so offered which it may decide to accept in consultation with the Manager to the Offer and the Registrar to the Offer and in terms of the Letter of Offer and I/We further authorize the Acquirer to return to me/us, Share certificate(s)/Shares in respect of which the Offer is not found valid/not accepted without specifying the reasons thereof.
I/We authorize the Acquirer, the Registrar to the Offer and the Manager to the Offer to send by registered post/speed post at my/our risk, the draft/cheque/warrant, in full and final settlement of the amount due to me/us and/or other documents or papers or correspondence to the sole/first holder at the address mentioned below. In case I/we have tendered my/our Shares in dematerialized form, I/We authorize the Acquirer, Registrar to the Offer and the Manager to the Offer to use my/our details regarding my/our address and bank account details as obtained from my/our DP for the purpose of mailing the aforementioned instruments.
I/We authorize the Acquirer to accept the Shares so offered or such lesser number of Shares that it may decide to accept in terms of the Letter of Offer and I/We authorize the Acquirer, the Registrar to the Offer and the Manager to the Offer to approach the Target Company to split/consolidate the share certificates comprising the Shares that are not acquired to be returned to me/us and for the aforesaid purposes the Acquirer are hereby authorized to do all such things and execute such documents as may be found necessary and expedient for the purpose.
BANK DETAILS
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So as to avoid fraudulent encashment in transit, Eligible Shareholder(s) holding Shares in physical form should provide details of bank account of the first/sole Eligible Shareholder and the consideration cheque or demand draft will be drawn accordingly.
NAME OF THE BANK BRANCH
ACCOUNT NUMBER SAVINGS/CURRENT/OTHERS: PLEASE SPECIFY)
IFSC CODE MICR CODE
For the Shares that are tendered in demat form, the bank account details as obtained from the beneficiary position download to be provided by the depositories will be considered and the consideration payment will be issued with the said bank particulars, and not the details provided herein.
Yours faithfully,
Signed and Delivered,
FULL NAME(S) OF THE ELIGIBLE SHAREHOLDERS SIGNATURE FIRST/SOLE HOLDER
JOINT HOLDER 1
JOINT HOLDER 2
Place: ______Date: ______
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………………………………………………Tear along this line……………………………………………………………….
Acknowledgement Slip Zenotech Laboratories Limited Open Offer (To be filled in by the Eligible Shareholder) (Subject to verification)
Received from Mr/Ms ______a Form of Acceptance cum Acknowledgement for ______Shares along with:
□ Copy of depository instruction slip for ______(number of Shares) from DP ID ______Client ID ______□ ______Share certificate(s) ______transfer deed(s) under folio number(s) ______
for accepting the Offer made by the Acquirer.
STAMP OF SIGNATURE OF DATE OF COLLECTION OFFICIAL: RECEIPT: CENTRE:
Note: All future correspondence, if any, should be addressed to the Registrar to the Offer
Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup West, Mumbai - 400 078 Tel: (022) 6171 5400; Fax: (022) 2596 0329; Email: [email protected] Investor grievance e-mail: [email protected] Website: linkintime.co.in Contact Person: Mr. Ganesh Mhatre SEBI Registration No.: INR000004058
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INSTRUCTIONS:
PLEASE NOTE THAT NO SHARES/FORMS SHOULD BE SENT DIRECTLY TO THE ACQUIRER, THE TARGET COMPANY OR TO THE MANAGER TO THE OFFER.
(1) All queries pertaining to the Offer may be directed to the Registrar to the Offer.
(2) Eligible Shareholders are required to deliver the following documents:
(a) For Shares held in dematerialized form:
(i) Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein by all the beneficial holders of the Shares, as per the records of the DP.
(ii) Photocopy of the delivery instruction in “Off-market” mode or counterfoil of the delivery instruction slip in “Off-market” mode, duly acknowledged by the DP.
Further, please note the following:
(i) For each delivery instruction, the beneficial owner should submit a separate Form of Acceptance cum Acknowledgement.
(ii) The Registrar to the Offer is not bound to accept Forms of Acceptance cum Acknowledgement, for which corresponding Shares have not been credited to the Depository Escrow Account or for Shares that are credited in the Depository Escrow Account but the corresponding Form of Acceptance cum Acknowledgement has not been received as on the closure of the Tendering Period. However, in the latter case, the Acquire may, in its sole discretion, deem the shares to be accepted under the Offer.
(b) For Shares held in physical mode by registered Eligible Shareholders:
(i) Form of Acceptance cum Acknowledgement duly completed and signed, in accordance with the instructions contained therein, by the holders of the Shares. In case of Shares held in joint names, names should be filled up in the same order in which they hold Shares. This order cannot be changed or altered nor can any new name be added for the purpose of accepting the Offer;
(ii) Original Share certificate(s); and
(iii) Valid Share transfer deed(s) duly signed by transferor (by all the Eligible Shareholders in case the Shares are in joint names) as per the specimen signatures lodged with the Target Company and duly witnessed at the appropriate place(s). Please do not fill in any details in the transfer deed.
(3) In case of Shares held in joint names, names should be filled up in the same order in the Form of Acceptance cum Acknowledgement and in the transfer deed(s) as the order in which they hold Shares, and should be duly witnessed. This order cannot be changed or altered nor can any new name be added for the purpose of accepting the Offer.
(4) In case where the signature is subscribed by thumb impression, the same shall be verified and
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attested by a Magistrate, Notary Public or Special Executive Magistrate or a similar authority holding a Public Office and authorized to use the seal of his office.
Persons who own physical Shares (as on the Identified Date or otherwise) but are not the registered holders of such Shares and who desire to accept the Offer, will have to communicate their acceptance in writing to the Registrar to the Offer at the collection centers as mentioned in the Letter of Offer. The application should enclose: (a) Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein; (b) Original Share certificate(s); (c) Original broker contract note; (d) Valid Share transfer deed(s) duly executed in favour of the unregistered owner as the proposed transferee(s) along with self-attested copy of PAN Card of all the proposed transferee(s). All other requirements for valid transfer (including matching of signatures) will be preconditions for acceptance; (e) An additional valid Share transfer form(s) duly signed by the unregistered owner as transferor(s) by the sole/joint Eligible Shareholder(s) in the same order and duly witnessed at the appropriate place. The transfer form should be left blank, except for the signatures and witness details as mentioned above. Attestation, where required (as indicated in the Share transfer deed) (thumb impressions, signature difference, etc.) should be done by a Magistrate, Notary Public or Special Executive Magistrate or a similar authority holding a public office and authorized to use the seal of his office or a member of a recognized stock exchange under their seal of office and membership number or manager of the transferor’s bank.
(5) Non-resident Eligible Shareholders (including NRIs, OCBs and FIIs) should enclose copy(ies) of permission received from the RBI to acquire Shares held by them.
(6) Eligible Shareholders are also advised to refer to paragraph 7of the Letter of Offer, on tax provisions, regarding important disclosures on taxation of the consideration to be received by them.
(7) NRIs, OCBs and foreign Eligible Shareholders are required to furnish Banker’s Certificate certifying inward remittances of funds for acquisition of Shares. Further, the OCB/NRI Eligible Shareholders are also required to submit the RBI approval for tendering shares under the Offer (if applicable to them).
(8) In case of bodies corporate, certified copies of appropriate authorization (including Board/shareholder resolutions, as applicable) authorizing the sale of Shares along with specimen signatures duly attested by a bank must be annexed. The common seal should also be affixed.
(9) All Eligible Shareholders should provide all relevant documents which are necessary to ensure transferability of the Shares in respect of which the acceptance is being sent. Such documents may include (but not be limited to):
(a) Duly attested death certificate and succession certificate (in case of single Eligible Shareholder) in case the original Eligible Shareholder has expired.
(b) Duly attested power of attorney if any person apart from the Eligible Shareholder has signed Form of Acceptance cum Acknowledgement or transfer deed(s).
(c) No objection certificate from any lender, if the Shares in respect of which the acceptance is sent, were under any charge, lien or encumbrance.
The Shares and all other relevant documents should be sent only to the Registrar to the Offer, and NOT to the Manager to the Offer, the Acquirer or the Target Company.
Eligible Shareholders who wish to accept the Offer and tender their Shares, can hand deliver the Form of Acceptance cum Acknowledgement and other related documents, at any of the collection centers of Link Intime India Private Limited mentioned in the Letter of Offer, anytime between 10:00 am to 4:00 pm from Monday to Friday and between 10:00 am to 1:00 pm on Saturday, no later than 4:00 pm on Tuesday, June 2, 2015 . The
48 collection centers will be closed on Sundays and public holidays.
Eligible Shareholders who cannot hand deliver their documents at any of the collection centers, may send the same by registered post with acknowledgement due or by courier, at their own risk and cost, to the Registrar to the Offer at its address: 13, Pannalal Silk Mills Compound, LBS Marg,Bhandup West, Mumbai - 400 078 , so as to reach the Registrar to the Offer on or before 4:00 pm on Tuesday June 2, 2015 , i.e., Closure of the Tendering Period, clearly marking the envelop “Zenotech Laboratories Limited – Open Offer”..
FOR TERMS AND CONDITIONS OF THE OFFER AND DETAILED PROCEDURE FOR TENDERING THE SHARES IN THIS OFFER REFER TO THE LETTER OF OFFER
Note: All future correspondence, if any, should be addressed to the Registrar to the Offer
Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup West, Mumbai - 400 078 Tel: (022) 6171 5400; Fax: (022) 2596 0329; Email: [email protected] Contact Person: Mr. Ganesh Mhatre
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