. Announcement for the Open Offer, they could not form part of the . on the above matters as per the requirements of the business and in line PUBLIC ANNOUNCEMENT . Public Announcement or the draft Letter of Offer. with opportunities from time to time. In any event such steps relating to For the attention of the Shareholders of . Simultaneous to the submission of the demerger proposal to L&T, we . sale of or encumbrance, if any, of the substantial asset of L&T and . restructuring as aforesaid will be governed by the applicable provisions Larsen & Toubro Limited . had informed the stock exchanges of the same on January 27, 2003. Further, as directed in your letter under reply, we have also made a . of the Regulations, Companies Act, 1956 and/or other applicable laws at . the relevant time, and will be subject to prior approval of shareholders of [Registered Office: L&T House, Ballard Estate, Mumbai 400 001] . further disclosure to the stock exchanges on February 26, 2003. We propose to make suitable disclosures in the finalised Letter of . L&T. Offer and in the further public announcement once SEBI clears our . BACKGROUND TO THE OFFER . l . This further Public Announcement is being made as per the directions of . Submission of letter of resignation by the Representatives to the . proposal to proceed with our existing Offer. On November 18, 2001, Grasim Industries Limited (“Grasim” or . SEBI. This is in connection with the Public Announcement (“Public . Board of Directors of the company.” . 3. The present Offer is a voluntary offer under Regulation 10 read with . “Purchaser”) acquired 25,000,000 Equity Shares, aggregating 10.05% Announcement”) by JM Morgan Stanley Private Limited (“JMMS”) as . 4. The reasons for the premium paid by GIL for acquisition of L&T . Regulation 14 (1) of the Regulations. The Offer was not triggered . of the paid-up and voting share capital of Larsen and Toubro Limited Managers to the Offer on behalf of Grasim Industries Limited (“Grasim”) . shares over then prevailing market price to RIL . either under Regulation 10 or Regulation 12 of the Regulations pursuant . (hereinafter referred to as “L&T” or “Target Company”) from Reliance and Samruddhi Swastik Trading and Investments Limited (“Samruddhi”) . It is evident from the above that GIL’s public announcement did . to the sale/purchase agreement with Reliance Industries Limited . Industries Limited (“Seller” or “Reliance”) pursuant to a Share Purchase to the shareholders of Larsen & Toubro Limited (“L&T”) on . not contain material disclosures which are specified under . Agreement (SPA) at a price of Rs. 306.60 per fully paid-up equity share . entered into way back on November 18, 2001. Hence, we respectfully . October 14, 2002 pursuant to and in compliance with the Securities and . Regulations 16 (ix) and 16 (xix) of SEBI (Substantial Acquisition of . submit that it was not necessary to include salient features of the said . of L&T. Some of the usual salient features of the SPA are as follows: Exchange Board of India (Substantial Acquisition of Shares and . Shares and Takeovers) Regulations 1997. transaction in the Public Announcement, any more than the disclosures . l The Seller confirms that upon the sale of the shares as aforesaid, it Takeovers) Regulations, 1997 (the “Regulations”) and the subsequent . The above findings of the investigations conducted by SEBI are . already made regarding the price, number and percentage of shares . does not hold either by itself or through its affiliates or associates any public announcements of November 21, 2002 and November 30, 2002. communicated to you in terms of Regulation 42(1) of SEBI (Substantial . acquired in November 2001 which are adequate to enable the . shares of L&T or any instrument that would confer or will provide a The terms used but not defined in this public announcement shall have . Acquisition of Shares and Takeovers) Regulations 1997 and you are . shareholders to take an informed decision. right to acquire any equity shares or any other instrument that provides . the same meaning assigned to them in the Public Announcement. advised to provide your comments on the same within 15 days from the . However, if you feel that we should make some more disclosures as . or will provide voting rights. Securities and Exchange Board of India (“SEBI”), vide their letter . receipt of this communication. pointed out by you, we would have no objection to include the same . l The Seller undertakes that upon execution of this agreement, the No. TO/AT/4910/03 dated March 5, 2003, addressed to JMMS, has . Further, you are also advised to disseminate immediately the following . in the finalised Letter of Offer. Seller and its subsidiaries, affiliates or associates will not acquire any directed to make the following further disclosures: . price sensitive information to all the stock exchanges where the scrip of . 4. We also respectfully submit that even in respect of Open Offers . equity shares of L&T or any other instrument that would confer a right 1. Findings of the investigation conducted by SEBI as . Grasim Industries Ltd. is listed: . triggered under the Regulations through Sale/Purchase agreement, . to acquire any equity shares of L&T. The Seller further undertakes not communicated to Grasim vide letter No. IES/SR/SS/4297/03 . GIL made a proposal to L&T on January 27, 2003 and this proposal was . there is no requirement under the Regulations to disclose the reason . to deal in the equity shares of L&T or any other instrument that dated February 25, 2003, which reads as under: . provides voting rights. The Seller makes this covenant so as to bind . circulated by L&T’s Board in its meeting held on January 29, 2003. GIL . for premium paid over the then prevailing market price, nor is there . “As you are aware, Chairman, SEBI ordered an investigation into the . made proposal for vertical demerger of L&T’s cement business into a . any market practice to disclose the same. It is for this reason that we . themselves, their affiliates, associates and any person acting at their affairs relating to possible acquisition of shares and/or control of L&T Ltd. did not disclose the reason for paying premium for acquisition of L&T . behest. separate company and for making an open offer for acquiring control . by persons acting individually or in concert and to ascertain whether . over the proposed new cement company by GIL at price of Rs. 130/- . shares over the then prevailing market price in the Public . l The Seller acknowledges that the obligations as mentioned in the two any provisions of the SEBI Act, 1992 and various Rules and Regulations . per share. Further, it has been stated by GIL in the same proposal to . Announcement or in the draft Letter of Offer. points above, shall be of an enduring nature and in any event the made there under have been violated, more particularly as to whether . L&T Board that the value (price of Rs. 130 per share for cement business) . If however you still require us to make any disclosure on this aspect of . Seller shall be obliged to comply with the same for a minimum period any person/ entity is guilty of having contravened the provision of the . is based on a combination of methods and the ratio of equity value of the . of 5 years from the date hereof. the matter, we will be prepared to do so as you may require. SEBI Act, 1992 or SEBI (Substantial Acquisition of Shares and Takeovers) . l . remaining L&T business to the equity value of cement business is . In view of the above, we respectfully submit that our Merchant Bankers . Following the sale of the equity shares as aforesaid the Sellers Regulations, 1997 framed there under. 1.25:1. In other words, GIL has valued the cement business of L&T at . have made all the disclosures as required under the Regulations . and /or representatives will in good faith arrange to convene Board Investigation revealed that: . Rs. 130 per share and remaining businesses of L&T at Rs. 162.50 per . meeting(s) of L&T as soon as possible to inter-alia transact the . especially Regulation 16(ix) and 16(xix) in letter and spirit and these . GIL made a public announcement on October 13, 2002 and offered to . share and hence the total equity value of L&T is Rs. 292.50 per share . disclosures fully complied with the relevant provisions of the Regulations . following business and support the same :- . purchase upto 20% of the paid-up equity share capital of L&T at Rs.190 . as per GIL’s valuation.” . l . on the date of the Public Announcement. Informing the Board of Directors of L&T in respect of the shares per share and GIL has stated that “This offer is being made pursuant to . 2. Reply of Grasim vide letter dated February 28, 2003 (to the . We will however make further disclosure in the Letter of Offer and / or to . acquired by the Purchaser from the Seller under the spot delivery Regulation 10 and other provisions of chapter III of and in compliance . SEBI’s letter No. IES/SR/SS/4297/03 dated February 25, 2003), . contract. make further Public Announcement on the points mentioned by you. with the Regulations, for the purpose of substantial acquisition of shares”. which reads as follows: . We trust that our above submissions and explanations fully meet your . l Submission of the letter of resignation by its Representatives to the Regulation 10 of SEBI (Substantial Acquisition of Shares and Takeovers) . “We refer to your captioned letter and also to our letter dated February .