Public Announcement For the attention of the shareholders of IBP Co. Limited Registered Office: IBP House, 34-A, Nirmal Chandra Street, Kolkata 700 013 This Public Announcement is being issued by ICICI Securities and Finance Company Limited (“ICICI Securities”), the Manager to Offer, on behalf of Indian Oil Corporation Limited (the “Acquirer”), pursuant to Regulation 10 and Regulation 12 and in compliance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereto (“SEBI (SAST) Regulations”) 1. The Offer 1.1 Indian Oil Corporation Limited (“IndianOil”), a public sector undertaking having its registered office at Indian Oil Bhavan, G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai - 400051 has agreed to acquire, under a share purchase agreement (the “Agreement”) dated February 8, 2002, with the Government of India (“GOI”), a part of the latter’s shareholding constituting 74,37,808 fully paid-up equity shares of Rs.10/- each, representing 33.58% of the total equity share capital of IBP Co. Ltd. (“IBP / Target Company”) at a price of Rs.1551.10 per share (“Bid Price”) payable in cash (the “Acquisition”). IBP is a public sector undertaking in terms of the SEBI (SAST) Regulations. Pursuant to the acquisition of the above shares by IndianOil, the shareholding of GOI in IBP shall be reduced to 57,58,290 equity shares representing 26.00% of the total equity share capital of IBP. 1.2 Pursuant to the SEBI (SAST) Regulations, IndianOil is making an offer to the public shareholders of IBP Co. Limited to acquire 44,29,454 fully paid up equity shares (“shares”) of Rs.10/- each representing 20% of the paid up equity share capital of IBP at a price of Rs.1,551.10 per share (“Offer Price”) payable in cash (“the Offer”) subject to Terms and Conditions mentioned hereinafter. 1.3 IndianOil and its Directors do not hold any equity shares directly in IBP as on the date of this Public Announcement. Also, IndianOil, or any of its directors have not acquired any shares of IBP during the 12 months preceding the date of Public Announcement. 1.4 The key terms and conditions of the Share Purchase Agreement and the Shareholders Agreement, dated February 8, 2002 are as follows: · The Board of Directors of IBP shall be reconstituted upon the Closing Date i.e. February 19, 2002 with management control vested in IndianOil. · On Closing Date, i.e. February 19, 2002, IndianOil shall pay the consideration to GOI and the shares under the Agreement would be transferred to IndianOil. · The GOI has, for a period of two years after the expiry of one year from the Closing Date, additional right of a put option requiring IndianOil to purchase from the GOI some or all of the shares held by the GOI at that time. · In the event the GOI does not exercise the put option, then, upon expiry of three years from the Closing Date and for a period of two years, thereafter, IndianOil shall have the option requiring the GOI to sell to IndianOil, all but not less than all of the shares held by GOI in IBP at that time. · In case of non-compliance of any provisions of the SEBI (SAST) Regulations by the Acquirer, transfer of shares or change of management or control of IBP shall vest back with the GOI and the Acquirer shall be liable to such penalty as may be imposed by the GOI. 1.5 In terms of Regulation 11(3) of the SEBI (SAST) Regulations, IndianOil shall not be required to make another public announcement at the subsequent stage of further acquisition of shares, if any, as stated in para 1.4 above. 1.6 The Offer is not conditional on any minimum level of acceptances. 1.7 The shares of IBP are listed/permitted to trade on The Calcutta Stock Exchange Association Ltd. (“CSE”), National Stock Exchange of India Limited (“NSE”), The Stock Exchange, Mumbai (“BSE”), Delhi Stock Exchange Association Ltd.(“DSE), Madras Stock Exchange Ltd. (“MSE”), The Stock Exchange Ahmedabad and the Guwahati Stock Exchange Limited. Based on available information, the shares of IBP are frequently traded on NSE, BSE and CSE and may be infrequently traded on the other stock exchanges within the meaning of Regulation 20 of the SEBI (SAST) Regulations. Keeping in view the financial bids were opened on January 31, 2002, the average of the weekly high and low of closing prices (“Average Price”) for the shares of IBP for the 26 week period ending January 30, 2002 on NSE is Rs.359.83 per share, on BSE is Rs.359.03 per share and on CSE is Rs.361.34 per share. The financial performance parameters based on the audited financials for the year ended March 31, 2001 for IBP are Return on Networth 14.69%, Book Value per Share Rs.166.63, Earnings per Share Rs.24.48 and P/E multiple of 63.40 (based on the Offer Price) vs the Industry P/E Multiple of 11.5 (Source: Capital Market Vol XVI/24, dated February 17, 2002). The Offer Price is highest of the Bid Price and the Average Price and considering the aforesaid financial parameters of IBP, the Offer Price is justified in terms of Regulation 20 of the SEBI (SAST) Regulations. 2. Information on the Acquirer 2.1 IndianOil was incorporated on June 30, 1959 as a Government Company under the name and style of Indian Oil Company Ltd. Upon merger with Indian Refineries Ltd. on September 1, 1964, the name of the company was changed to Indian Oil Corporation Limited. IndianOil has its registered office at Indian Oil Bhavan, G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai 400051. 2.2 IndianOil is a public sector undertaking, with Government of India as the majority shareholder, holding 82.03% of IndianOil’s paid up share capital. IndianOil is primarily engaged in the business of refining and marketing of petroleum products. Apart from a combined refining capacity of 47.50 million tons per annum, it has the largest network of over 6,523 km onshore crude oil and petroleum product pipelines in the country. With sales of 47.8 million tons in 2000-2001. IndianOil holds over 53.5% of the market share of petroleum products in India. 2.3 Financial information for IndianOil is as follows: Total Revenue for the year ended March 31, 2001 was Rs.119,116.97 crores as compared to Rs.100,030.55 crores for the year ended March 31, 2000. Profit after Tax for the year ended March 31, 2001 was Rs.2,720.34 crores as compared to Rs.2,443.41 crores for the year ended March 31, 2000. As on March 31, 2001, the equity share capital was Rs.778.67 crores (March 31, 2000: Rs.778.67 crores) and reserves were Rs.15,192.30 crores (March 31, 2000: Rs.13,286.08 crores). For the year ended March 31, 2001, return on networth was 17.03%, book value per share was Rs.205.10, earnings per share was Rs.34.94 and P/E multiple of 5.61 based on the closing price of IndianOil on BSE on February 7, 2002 (Source: The Economic Times). IndianOil is listed on The Stock Exchange Mumbai (“BSE”), National Stock Exchange of India Limited (“NSE”), Calcutta Stock Exchange Association Ltd. (“CSE”), Delhi Stock Exchange Association Limited (“DSE”) and Madras Stock Exchange Ltd. (“MSE”). 3. Information on IBP Co. Limited (“IBP”) 3.1 IBP is an existing public limited company under Companies Act, 1956 and having its registered office at IBP House, 34A, Nirmal Chandra Street, Kolkata 700013. IBP is primarily engaged in the marketing of refined oil in different parts of the country. As per the annual report of IBP for the year ending March 31, 2001, IBP has a network of 1539 retail outlets with a total retail sales volume of 4.91 million kilo litres as of March 31, 2001. In addition IBP has 376 Superior Kerosene Oil/ Light Diesel Oil Dealerships and 25 LPG distributors. 3.2 The total issued, subscribed and paid-up capital and voting rights of IBP consist of 2,21,47,269 fully paid-up equity shares of Rs.10/- each aggregating to Rs.22.15 crores. There are no partly paid-up shares as on the date of this Public Announcement, save and except 195 Fully Convertible Debentures issued in 1993 which are convertible into 195 shares of Rs.10/- each. No person, directly or indirectly, has any agreement or option or right capable of becoming an agreement for the subscription or issue of shares. 3.3 The shares of IBP are listed/permitted to trade on The Calcutta Stock Exchange Association Ltd. (“CSE”), National Stock Exchange of India Ltd. (“NSE”), The Stock Exchange, Mumbai (“BSE”), Delhi Stock Exchange Association Ltd.(“DSE), Madras Stock Exchange Ltd. (“MSE”), The Stock Exchange Ahmedabad and the Guwahati Stock Exchange Ltd. 3.4 Total Revenue for the year ended March 31, 2001 was Rs.8,671.54 crores compared to Rs.6,680.94 crores for the year ended March 31, 2000. Profit after Tax for the year ended March 31, 2001 was Rs.54.22 crores compared to Rs.41.71 crores for the year ended March 31, 2000. As on March 31, 2001, equity share capital was Rs.22.15 crores (March 31, 2000: Rs.22.15 crores) and reserves were Rs.346.94 crores (March 31, 2000: Rs.317.10 crores). For the year ended March 31, 2001 return on networth was 14.69%, book value per share was Rs.166.63 and earning per share was Rs.24.48.