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LETTER OF OFFER                         THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION  This Letter of O...
Activity                                              Original Schedule                      Revised SchedulePublic Announ...
RISK FACTORSRelating to TransactionThe transaction is a preferential allotment of shares to the Acquirer, SAAG Mauritius L...
approved by the shareholders by way of passing a special resolution in the Extraordinary General Meeting      (EGM) of the...
3.    RATIONALE FOR THE OFFER a)    The offer to the shareholders of RRGL is made pursuant to the direct acquisition of th...
A jeet        A dditional   He is the Chief Executive Officer /    Bachelor of Science       21   2 3 .0 1 .2 0 0 4   N o ...
e) Brief Audited Financials for the period 21st January 2004 (Date of Incorporation) till 31st March, 2004.Particulars    ...
Receivables:Other receivable is stated at nominal value as reduced by the appropriate allowances for estimated irrecoverab...
seals since 1992 and also engaged in the Information Technology (IT) industry through the provision of        control syst...
Dato’A bu    Director    He is an Independent Non-Executive          Bachelor of Economics           23 May    No 6, SS2/5...
g)       Brief Audited Financials of SCB on a consolidated basisProfit & Loss Account for the year ended 31st December    ...
Other Financial Data                    RM            Rs.               RM          Rs.            RM             Rs.     ...
are consolidated using the acquisition method of accounting. On acquisition, the assets and liabilities of the relevantsub...
All translation gains or losses are taken up and reflected in the translation adjustment account under shareholders’ equit...
Freehold buildings                                                     1% - 2%       Long-term leasehold industrial land a...
Cash Flow StatementsThe Group and the Company adopt the indirect method in the preparation of the cash flow statements. Ca...
The Committee is responsible for determining and recommending to the Board the framework or policy for the remunerationof ...
5.4 Ms Bharati AnandMs Bharati Anand, wife of Mr. Ananthakrishnan, aged about 31 years, is residing at No. 16, Balaji Aven...
d) Current capital structure Build-up since inceptionDate              No and %of        Cumulative      Mode of allotment...
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  1. 1. LETTER OF OFFER THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Letter of Offer (LOO) is sent to you as equity shareholder(s) of RR Greenhands Infrastructure India Limited. If you require any Clarifications about the action to be taken, you may consult your stock broker or investment consultant or Karvy Investor ServicesLtd.(Manager to the Offer) or Karvy Computershare Pvt Ltd(Registrar to the Offer). In case you have sold your shares in the Company,please hand over this LOO and the accompanying Form of Acceptance cum acknowledgment and Transfer Deed to the Member of Stock Exchange through whom the said sale was effected. CASH OFFER AT A PRICE OF RS. 10/- (RUPEES TEN ONLY) PER EQUITY SHARE [Pursuant to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto] TO ACQUIRE from existing equity shareholders upto 21,00,000 equity shares of Rs. 10/- each representing 20% of the voting share capital of RR GREENHANDS INFRASTRUCTURE INDIA LIMITED #58,Thirumalai Pillai Road, T.Nagar, Chennai-600017 Ph: 044-52121927; Contact Fax: 044-52035887 By M/s SAAG (MAURITIUS) LTD St.James Court,Suite 307,St.Denis Street,Port Louis,Republic of Mauritius Phone/Fax:(230)2103273 And MR. R.SRIRAM resident of No 16, Balaji Avenue,1st Street, T. Nagar, Chennai-600017, Ph: 044-55192100 (HEREINAFTER REFERRED TO AS “ACQUIRERS”) Along With M/S. SAAG CONSOLIDATED (M) BHD Unit No. 19-5, Block C1, Dataran Prima, Jalan PJU 1/41, 47301 Petaling Jaya, Selangor Darul Ehsan Malaysia Tel: +60 (3) 7884 8200, Fax: +60 (3) 7880 7958 And MR.R.RAJU, MR. R.ANANTHAKRISHNAN, MRS.BHARATHI ANAND all being residents of No 16, Balaji Avenue,1st Street, T. Nagar, Chennai-600017, Ph: 044-55192100 (HEREINAFTER COLLECTIVELY REFERRED TO AS “PERSONS ACTING IN CONCERT/PACs”)Approval from RBI will be required for acquisition of shares from NRI shareholders, if any. As on date no other approvals, statutory orotherwise, are required under the Companies Act 1956, Monopolies and Restrictive Trade Practices Act, 1969, the Foreign ExchangeManagement Act, 1999 and /or any other applicable laws and from any bank and/ or financial institutions for the said acquisition.The shareholders shall have the option to withdraw acceptance tendered by them upto three working days prior to thedate of closure of the offer i.e. on or before 18 August, 2004.In case of any upward revision/withdrawal of the offer, the Public Announcement for the same would be made in the same newspaperswhere the original Public Announcement has appeared. The last date for such upward revision, if any, is 12 August 2004. Acquirers will paythe same price for all equity shares tendered during the offer period.The Offer is not subject to minimum level of acceptance.The procedure for acceptance is set out in section 12 of this Letter of Offer. A form of acceptance cum acknowledgement, Form ofWithdrawal and instrument of transfer are enclosed with this Letter of Offer.Equity Shareholders may note that if there is a competitive bid,The public offers under all the subsisting bids shall close on the same date.As the offer price can not be revised during 7 working days prior to the closing date of the offers / bids, it would,therefore, be in the interest of shareholders to wait till the commencement of that period to know the final offer priceof each bid and tender their acceptance accordingly.A copy of the Public Announcement & Letter of Offer (including form of acceptance cum acknowledgement and form of withdrawal) is alsoavailable at the website of SEBI www.sebi.gov.in Manager to the Offer Registrar to the Offer KARVY INVESTOR SERVICES LTD KARVY COMPUTERSHARE PVT.LTD “Karvy House”,46, Avenue 4, Street No1, Karvy House”,46, Avenue 4, Street No1, Banjara Hills, Hyderabad – 500 034. Banjara Hills, Hyderabad – 500 034 Phone Nos.: 040 – 23374714/23312454 Phone Nos.:040-23320251/23320751 Fax No. : 040 – 23374714; Fax No. : 040 23311968 ; Email : mbd@karvy.com E mail : murali@karvy.com Contact person : Mr. P S Shastry Contact person : Mr. Murali Krishna
  2. 2. Activity Original Schedule Revised SchedulePublic Announcement (PA) 4 June, 2004(Friday) 4 June,2004 (Friday)Last date for competitive bid 25June, 2004(Friday) 25 June, 2004 (Friday)Specified Date 1 July, 2004(Thursday) 1 July, 2004 (Thursday)Date by which Letter of Offer to be posted to 14 July, 2004 (Wednesday) 21 July, 2004(Wednesday)the shareholdersDate of Opening of the Offer 26 July, 2004(Monday) 26 July, 2004(Monday)Last date for revising the offer price/ Number of shares 13 August, 2004(Friday) 12 August, 2004(Thursday)Last Date for withdrawal of acceptance by shareholders 19 August, 2004(Thursday) 18 August, 2004(Wednesday)who have accepted the OfferDate of Closure of the Offer 24 August, 2004(Tuesday) 24 August, 2004(Tuesday)Date by which acceptance/ rejection under the 23 September, 2004(Thursday) 22 September, 2004(Wednesday)Offer would be communicated and the correspondingpayment for the acquired shares and/ or the unacceptedshares/ share certificates will be dispatched/ credited. INDEXSr.No. Subject Page No. 1 Disclaimer clause 1 2 Details of the offer 1 3 Rationale for the Offer 3 4 Background of the Acquirers 3 5 Background of the PACs 6 6 Statutory Approval 16 7 Delisting Option to RRGL 16 8 Background of the Target Company/ RRGL 16 9 Offer Price 20 10 Financial Arrangement 22 11 Terms & Conditions of the offer 22 12 Procedure for acceptance and settlement of the offer 23 13 General 25 14 Documents for inspection 26 15 Declaration by the Acquirers and PACs 26 DEFINITIONSAcquirers M/s SAAG (Mauritius) Ltd /SML & Mr. R SriramSCB M/s SAAG Consolidated (M) BhdPersons Acting in Concert/PACs Mr. R.Raju, Mr. R.Ananthakrishnan, Ms. Bharathi Anand and M/s. SAAG Consolidated (M) BhdDate of Public Announcement 4 June, 2004Letter of Offer/LOO This Letter of OfferPersons Eligible to participate in the Offer Equity shareholders of RR Greenhands Infrastructure India Limited (other than the Acquirers and Persons Acting in concert) whose names appear on the Register of the Members of RR Greenhands Infrastructure India Limited at the close of business hours on 1 July, 2004 (the “Specified Date”) and also to those persons who own the shares at any time prior to the closure of the offer, but are not the registered equity shareholders.SEBI Securities and Exchange Board of IndiaSpecified Date 1 July, 2004The Regulations / SEBI (SAST) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations1997 Regulations 1997 and subsequent amendments thereofTarget Company / RRGL/ the Company RR Greenhands Infrastructure India LimitedManager to the Offer/ Merchant Banker Karvy Investor Services LimitedBook Value per share/BV [(Share Capital + Reserves (net of revaluation reserves) – (Miscellaneous expenses to the extent not written off)]/ Number of SharesRegistrar To The Offer Karvy Computershare Pvt LtdBSE The Stock Exchange, MumbaiMSE The Madras Stock ExchangeDP Depository ParticipantUSD United States DollarRM Malaysian Ringgit i
  3. 3. RISK FACTORSRelating to TransactionThe transaction is a preferential allotment of shares to the Acquirer, SAAG Mauritius Ltd(SML). The shares are still in theprocess of being listed on the MSE and BSE. Other than this there is no other risk with the transaction.Relating to the Proposed Offer1) Transfer of equity shares received from NRI shareholders under the offer is subject to receipt of RBI approval for thesame.2) If the aggregate of the valid responses to the offer exceeds offer size, then the acquirers shall accept the validapplications received on a proportionate basis in accordance with Regulation 21(6) of the Regulations.3) The Target Company has complied with the applicable SEBI (SAST) Regulations with a delay and SEBI has initiatedadjudication proceedings against the target company. This may result in the Company having to pay penalty for thedelayed period.In Associating with the Acquirers and PACSML does not have any prior business ventures in India. The success of SML’s business venture in India depends to asignificant extent upon SML’s abilities and efforts to retain and maintain the current management team and skilled personnelwho have contributed to the growth of RRGL.1. DISCLAIMER CLAUSEIT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAYBE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE LETTEROF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURESCONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THISREQUIREMENT IS TO FACILITATE THE EQUITY SHAREHOLDERS OF RR GREENHANDS INFRASTRUCTURE INDIALTD TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITYEITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRERS OR THE COMPANY WHOSE SHARES/CONTROL ISPROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSEDIN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRERS AREPRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANTINFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCETO ENSURE THAT ACQUIRERS DULY DISCHARGE THEIR RESPONSIBILITY ADEQUATELY.IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER KARVY INVESTOR SERVICES LIMITEDHAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 17 JUNE 2004 TO SEBI IN ACCORDANCE WITH THESEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS 1997 AND SUBSEQUENTAMENDMENT(S) THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRERSFROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THEPURPOSE OF THE OFFER.SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH THE MANAGER TO THE OFFER,ANY IRREGULARITIES OR LAPSES IN LETTER OF OFFER. THE ACQUIRERS &THE PACs ACCEPT NO RESPONSIBILITYFOR STATEMENTS MADE OTHERWISE THAN IN THE LETTER OF OFFER OR IN THE ADVERTISEMENT OR ANYMATERIAL ISSUED BY OR AT THE INSTANCE OF THE ACQUIRERS AND THE MANAGER TO THE OFFER, ANDANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS/HER/THEIR RISK.2. DETAILS OF THE OFFER2.1 Background of the offera) The Offer is being made by SAAG (Mauritius) Ltd (SML) and Mr.R.Sriram (Acquirers) along with M/s. SAAG Consolidated (M) Bhd(SCB), Mr R. Raju, Mr R.Ananthakrishnan and Ms.Bharathi Anand (PACs) to the Equity Shareholders of RR Greenhands Infrastructure India Ltd (hereinafter referred to as “Target Company” / “RRGL”).The Acquirers and PACs together hold 6098200 (58.08%) shares of the Target Company as on the date of the Public Announcement.b) The Board of Directors of RR Greenhands Infrastructure (India) Limited at it’s meeting held on 31st May, 2004 has made a preferential allotment of 46,53,800 Equity shares to SML at a price of Rs10/- (Rupees Ten Only) per share(‘the preferential allotment”). The preferential allotment of equity shares had been 1
  4. 4. approved by the shareholders by way of passing a special resolution in the Extraordinary General Meeting (EGM) of the Company held on 17 th May 2004. The price of Rs.10/- per share has been arrived at in terms of the Guidelines for Preferential Allotment prescribed by SEBI. The said equity shares will be subject to “lock-in” as per the aforementioned Guidelines. Prior to the aforementioned preferential allotment, SML did not hold any equity shares of RRGL. Following the preferential allotment SML held 44.32% of the post preferential issue capital of the target company. On 17/06/2004 SML further acquired 7,01,200 shares from SAAG Consolidated Bhd(“SCB”) at a price of Rs 6.35/- (Rupees Six paise thirty five Only) per share. The provisions of Regulation 22(17) of the Regulations have been complied with. With this acquisition SML totally holds 51% of the Equity Capital of the Target Company. SML is a wholly owned subsidiary of SCB.c) The above has resulted in consolidation of the shareholding and therefore the provisions of Regulation 11(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto (Hereinafter referred to as the “Regulations”) have been attracted. The Acquirers along with the PACs have announced an offer under the Regulations to acquire by tender upto 21,00,000 fully paid-up equity shares of Rs.10/- each of RRGL representing 20% of the post preferential issue paid up equity share capital from the remaining shareholders of RRGL (other than “Acquirers and PACs”), at a price of Rs.10/- per fully paid-up equity share (the “Offer Price”) payable in cash (the “Offer”). RRGL does not have any partly paid up equity shares.d) The present Directors of RRGL are Mr.R.Raju (Chairman),Mr.R.Sriram (Managing Director),Mr.V.Vasudevan, Mr.R.Ananthakrishnan and Mr.G.V.Satish Narayana. The constitution of the Board of Directors is proposed to change after the offer to Mr Tan Sri Dr. Mohamed Yusof Bin Hashim, Mr. Ajeet Ahluwalia, Mr. Anand Subramanian – Alternate Director to Ajeet Ahluwalia, Mr. Loganathan Ramanujam - Alternate Director to Tan Sri Dr. Mohamed Yusof Bin Hashim, Mr.R.Raju, Mr.R.Sriram, Mr. Shankar and Mr. Thiagarajan.e) The offer is not subject to any minimum level of acceptance and is not a conditional offer.f) The Acquirers, PACs and RRGL are not included in the list of persons / entities debarred from accessing the capital market under Section 11 B of the SEBI Act, 1992 and no action has been initiated by SEBI against them under any other Regulation made under the SEBI Act.2.2 Details Of The Proposed Offera) The Acquirers and PACs have announced their intention to make a public offer to the existing equity shareholders of RRGL at a price of Rs. 10/- per share through a public announcement which was published on Friday, 4 June, 2004 in compliance with Regulation 15 of the Regulations in all editions of ‘Business Line’ being an English National Daily, ‘Pratahkal’ being an Hindi National Daily, ‘Makkal Kural’(Tamil) being a regional language daily with wide circulation at the place where the registered office of the Company is located. A copy of the Public Announcement is also available on the SEBI website at www.sebi.gov.in.b) The Acquirers and PACs announced an open offer under Regulation 11(1) of the Regulations, to acquire by tender upto 21,00,000 equity shares of Rs.10/- each of RRGL representing 20% of the paid up equity share capital from the remaining equity shareholders of RRGL (other than the Acquirers and PACs) on the terms and subject to the conditions set out in this Letter of Offer, at a price of Rs. 10/- (Rupees Ten Only) per equity share (the “Offer Price”) payable in cash (the “Offer”).c) The equity shares of RRGL are listed on the Stock Exchange, Mumbai (“BSE”) and the Madras Stock Exchange( “MSE”). The equity shares of the Company are infrequently traded on the BSE and MSE in terms of explanation (i) to Regulation 20(5) of the SEBI (SAST) Regulations, 1997. They are included in the ‘Z’ category by BSE. The offer price of Rs.10/- per share has been determined as per Regulation 20(5) of the Regulations.d) The equity shares of RRGL to be acquired, pursuant to the Offer, shall be free from all liens, charges and encumbrances and together with all rights attached thereto, including the rights to all dividends or other distributions hereinafter declared, made or paid.e) Since the date of the Public Announcement, SML on 17/06/2004 acquired 7,01,200 shares from SCB at a price of Rs 6.35/- (Rupees Six paise Thirty-five Only) per share. Other than this the Acquirers and PACs have not acquired any Equity Share of RRGL since the date of the Public Announcement to the date of this Letter of Offer. Any upward revision in the Offer with respect to the Offer Price will be announced in the above-mentioned newspapers and same price would be payable by the Acquirers and PACs for all the shares tendered anytime during the Offer. 2
  5. 5. 3. RATIONALE FOR THE OFFER a) The offer to the shareholders of RRGL is made pursuant to the direct acquisition of the shares and the consequent consolidation of shareholding of RRGL and in accordance with Regulations 11(1) of the SEBI (SAST) Regulations. b) SCB through its subsidiary companies is principally involved in the supply of engineering equipment, spare parts and provision of value added services and information technology solutions to the oil and gas industry. RRGL is principally involved in business activities relating to infrastructure and housing development projects in India. Thus, RRGL represents an investment opportunity through which SCB can benefit from India’s growing infrastructure construction industry. With the skills and expertise SCB has developed in the oil and gas sector in Malaysia, SCB plans to export its expertise to India through RRGL and take advantage of the many opportunities in the infrastructure construction and oil and gas sectors available in India. The Acquirers and the PACs undertake not to sell, dispose-off or otherwise encumber any substantial assets of RRGL in the next 2 (two) years, except in the ordinary course of business of RRGL. The Acquirers and PACs will not dispose off, sell or otherwise encumber any substantial assets of RRGL except with the prior approval of the shareholders. 4. BACKGROUND OF THE ACQUIRERS 4.1 SAAG (Mauritius) Ltd a) SAAG (Mauritius) Ltd, Phone/Fax Number:(230) 210 3273 was incorporated on 21 January, 2004 under the laws of Mauritius. The Principal office of the Acquirer is St. James Court, Suite 307, St.Denis Street, Port Louis, Republic of Mauritius. It is wholly owned by SAAG Consolidated (M) Bhd (SCB)(formerly known as Britac Berhad). The Authorised and Paid-up Equity Capital of SAAG (Mauritius) Ltd is USD 1,00,000(equivalent to Rs.45.48 lakhs) and USD 10,000(equivalent to Rs.4.55 lakhs) respectively. The face value per share is USD 1.00. M/s. SAAG Consolidated (M) Bhd (SCB) is a Company incorporated under the laws of Malaysia with its address at Unit No. 19-5, Block C1, Dataran Prima, Jalan PJU 1/41, 47301  Petaling Jaya, Selangor Darul Ehsan Malaysia. Tel: +60 (3) 7884 8200, Fax: +60 (3) 7880 7958. b) SML was incorporated for the purpose of investing in RRGL with it’s principal object being that of investment holding as permitted under the laws being in force in the Republic of Mauritius. The nature of operations carried out by SML is that of investment holding. The equity shares of the company are not listed in any of the Stock Exchanges. c) Though the Acquirer, SML and the PAC, SCB are not directly related to Mr R.Sriram and the other PACs at present, they plan to jointly, through, RRGL, take advantage of the many opportunities in the infrastructure construction and oil and gas sectors available in India. d) Details of the Board of Directors of SML as on date of Public Announcement are as follows: No of years Qualifications/ No of Date of ResidentialName Designation Brief Bio-data of years of Experience A ppointment A ddress experienceDenis Sek Director His areas of expertise include B. Com, MBA . 20 2 1 .0 1 .2 0 0 4 88 MarondeSum A ccounting, Internal/External Member of the Street, A uditing, Management Certified General Pereybère, Consultancy, Taxation, Offshore A ccountants Republic of Services etc. A fter completing his A ssociation of Mauritius degrees he trained at Touche Ross Canada. & Co (now Deloitte & Touche) in Montreal, Canada. He has held senior positions at Bank of Montreal, Canada and Guardian Trust Company Ltd, Canada..Swarnalata Director Ms Ghoorbin is the Manager of A Master’s graduate 8 2 1 .0 1 .2 0 0 4 No . 28,Ghoorbin Corporate Services in charge of of the Faculty of Law Residence daily administration and of the Faculté de Mont Royal, management of the local and Droit, d’Economie et A venue offshore portfolio of clients. She des Sciences Sivananda, was trained at Kemp Chatteris Politiques, A ix-en- Rose Hill Deloitte & Touche and has held Provence, France. senior positions at KPMG Peat Marwick International Ltd. 3
  6. 6. A jeet A dditional He is the Chief Executive Officer / Bachelor of Science 21 2 3 .0 1 .2 0 0 4 N o .1 0 ,A hluwalia Director Executive Director of SCB. He Degree in Chemical Jalan Sri started his career with Ernst & Engineering,Masters Hartamas Young in London. In 1997, he in Technology and 13,50480 joined Perwira A ffin Bank as Development from Kuala A ssistant General Manager of Imperial College, Lumpur, Corporate Finance. In 1998, he University of Malaysia was appointed Managing Director London; MBA , the of Nikkei Pacific Corporate London Business A dvisors Sdn Bhd, headquartered School, University of in Kuala Lumpur. Prior to joining London. He is a SCB, he was Senior A dviser of fellow member of Sierac Corporate A dvisors Sdn the Institute of Bhd. Chartered A ccountants in England and Wales,an associate member of the Securities Institute of United KingdomLoganathan K A dditional He commenced his career with Bachelor of Business 21 2 3 .0 1 .2 0 0 4 N o .2 2 ,Ramanujam Director Southern Bank Berhad. From A dministration from Jalan 1985 to 1990, he was the Finance University of Jejawi,Bukit and Commercial Manager in a A rkansas, USA . Bandaraya, local subsidiary of a listed Bangsar, company in United Kingdom. 59100 Subsequently he joined OSK Kuala Securities Berhad as a dealers Lumpur, representative where he gained Malaysia experience in corporate finance and knowledge of regulations in relation to the Securities Industry.A nand A dditional He is an Executive Director at SCB. Bachelor of 23 2 3 .0 1 .2 0 0 4 No 6, JalanSubramanian Director He has been involved in Commerce Degree 16/20A , accounting, corporate finance, from University of Section internal audit, structuring mergers Mysore, India and is 16,46350 and acquisitions since 1981. He an associate member Petaling was the Senior Vice President of the Institute of Jaya, Corporate Finance & Information Chartered Selangor, Systems of Emrail Sdn Bhd from A ccountants of Malaysia June 2000 to December 2002 India.A bu Bakar A dditional He is an Independent Non- Dato’ A bu Bakar 37 2 3 .0 1 .2 0 0 4 No 6,Bin A bdul Director Executive Director at SCB. He holds a Bachelor of SS2/58,Hamid started his career as A gricultural Economics Degree 47300, Economist in the Federal (Hons) from Petaling A gricultural Marketing A uthority University of Malaya Jaya, (FA MA ) in 1967 and was its and a Diploma of Selangor, Director General from 1995 to International Trade Malaysia 1998. Between 1996 and 1998 he from the Indian was also Chairman of Koperasi Institute of Foreign Kakitangan Kementerian Pertanian Trade in New Delhi, Malaysia Berhad, the Deputy India. Chairman of the A ssociation of Food Marketing A gencies in A sia and the Pacific, a Board Member of FA MA Corporation Sdn Bhd and Muda A gricultural Development A uthority (MA DA ). Presently, he sits on the Board of A bric Berhad, a company listed on the Second Board of the Bursa Malaysia Securities Berhad. 4
  7. 7. e) Brief Audited Financials for the period 21st January 2004 (Date of Incorporation) till 31st March, 2004.Particulars Rs USDIncome Nil NilOther income Nil NilTotal Nil NilExpenditure (18190) (400)Profit/ (Loss) before Interest Depreciation & Tax (18190) (400)Interest (65211) (1434)Depreciation Nil NilProfit / (Loss) Before Tax (83401) (1834)Provision for Taxation Nil NilProfit / (Loss) After Tax (83401) (1834)Balance Sheet (Audited)Particulars As on 31/03/2004 Rs USDSources of fundsPaid up share capital 454750 10000Reserves and Surplus (excluding revaluation reserves) (83401) (1834)Networth 371348 8166Secured loans - -Unsecured loans - -Total 371348 8166Use of funds - -Net fixed assets - -Investments - -Net current Assets 371348 8166Miscellaneous expenditure not written off - -P&L A/c - -Total 371348 8166Other Financial Data - -Dividend (%) - -Earning Per Share (Rs (8.2) (0.18)Return on Networth (%) (22.46) (22.46)Book Value Per Share (Rs.) 37.2 0.82Source: Audited Results for the period 21 st January 2004 to 31 st March, 2004.[1US$ = Rs.45.475, Source: www.reuters.com, June 1, 2004]Significant Accounting Policies:Basis of Accounting:The financial statements of the Company have been prepared under the historical cost convention.Foreign Currency Conversion:Transactions in foreign currencies are converted into US dollar at the exchange rates prevailing at the transaction dates or,when settlement has not yet been made at the end of the financial period, at the approximate exchange rates prevailingat that date. All foreign exchange gains or losses are taken up in the income statement.The closing rates used in the conversion of foreign currency amounts are as follows:Foreign currencies USD1 India Rupee 0.022661 Ringgit Malaysia 0.26274Income Tax:The tax effects of transactions are recognized using the “liability” method and all taxable temporary differences arerecognized. As at the end of the financial period, there are no material temporary differences. 5
  8. 8. Receivables:Other receivable is stated at nominal value as reduced by the appropriate allowances for estimated irrecoverable amounts.Allowance for doubtful debts is made based on estimates of possible losses which may arise from non-collection of certainreceivable account.Provisions:Provisions are made when the Company has a present legal or constructive obligation as a result of past events, when itis probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of theamount can be made.Cash Flow Statement:The Company adopts the indirect method in the preparation of the cash flow statement.Cash equivalents are short term, highly liquid investments with maturities of three months or less from the date ofacquisition and are readily convertible to cash with insignificant risk of changes in value.4.2 Mr.R.Srirama) Mr R Sriram, son of Mr R.Raju, aged about 36 years, is residing at No. 16, Balaji Avenue, 1st street, T Nagar, Chennai- -600017. Ph: 044-55192100. He is an Engineer and has obtained a degree in B.Tech from The Indian Institute of Technology, Chennai and MS in Soil Mechanics and Construction Management from Oklahoma University, USA. He has about 15 years of experience in the construction industry. He joined IC & SR(Industrial Consultancy & Sponsored Research), Indian Institute of Technology, Chennai as a Senior Project Officer in 1990. He has been involved in the management of RR Greenhands Infrastructure India Ltd since 1994. He is presently the Managing Director of RR Greenhands Infrastructure India Ltd. He is also a Director in Lucid Software Pvt Ltd. His Net Worth as on 31/03/ 2004 as certified by Mr. Panchapakesan (Membership No.200092), partner of Balakrishnan and Panchapakesan,Chartered Accountants having office at No.5, Sannathi Street, Poonamallee, Chennai 600056, Tel.No.28344625 vide certificate dated 15 May, 2004 is Rs.272 lakhs (Rupees Two hundred and Seventy Two Lakhs Only). He holds 6,53,100 shares in RRGL as on the date of the Public Announcement. These shares were allotted to him prior to the Initial Public Offer(IPO) of the Company.b) Brief Financials of Lucid Software Pvt Ltd Date of Incorporation : 28 February 2000 Nature of Business : Software Development and Testing Services Rs. in lakhs Particulars 2001 2002 2003 Equity Capital 14.54 14.54 14.54 Share Application Money - 34.69 50.75 Reserves(excluding revaluation reserves) (22.39) (19.49) (19.38) Total Income 12.14 92.13 41.37 Profit After Tax (22.39) 2.90 0.11 Earnings per Share Negative 1.99 0.08 Net Asset Value Negative 19.75 31.11Source: Audited accounts for the years 2000-01,2001-02, 2002-03 of Lucid Software Pvt Ltd5. BACKGROUND OF PACs5.1 M/s. SAAG Consolidated (M)Bhd (SCB)a) M/s. SAAG Consolidated (M) Bhd (SCB) was incorporated on 02 November, 1982 under the laws of Malaysia with its address at Unit No. 19-5, Block C1, Dataran Prima, Jalan PJU 1/41, 47301  Petaling Jaya, Selangor Darul Ehsan Malaysia. Tel: +60 (3) 7884 8200, Fax: +60 (3) 7880 7958.b) SCB is principally involved in investment holding and provision of management services.  SCB through its group companies has been a leading supplier to the oil and gas industry for over two decades and is well reputed as a manufacturer, supplier and service provider of equipment and machinery to the oil and gas industry in Malaysia. SCB through its principal operating subsidiary, SAAG Oil and Gas Sdn. Bhd.(formerly known as Britac-SAAG Oil And Gas Sdn. Bhd.is licensed by Petronas Nasional Bhd to provide value added services, information technology solutions and equipment to oil, gas and related industries in Malaysia. It is also a licensee from Gas Malaysia, Construction Industry Development Board (CIDB), Tenaga Nasional Berhad and Ministry of Finance. The SCB group has been involved in the manufacture and assembly of mechanical 6
  9. 9. seals since 1992 and also engaged in the Information Technology (IT) industry through the provision of control systems in the area of SCADA (Supervisory Control and Data Acquisition) since 1996. Recently, SCB through its new acquisitions have been involved in providing workover and well maintenance services, consultancy, project management, drilling, general engineering and construction works. c) SML is a wholly owned subsidiary of SCB. Though SCB is not directly related to the Acquirer Mr R. Sriram and the PACs at present, SCB plans to jointly, in the future through, RRGL, take advantage of the many opportunities in the infrastructure construction and oil and gas sectors available in India. d) SCB has no identifiable promoters. The Substantial shareholders and their respective shareholdings as on December 31, 2003 are as follows: Shareholder No. of shares held % held TCP Holdings Sdn. Bhd (TCPH) 2,394,177 14.96 V-Quantum (M) Sdn. Bhd. 2,257,600 14.11 Ee Chee Beng 84,500 0.53 Others(each holding less than 0.53%) 11,263,723 70.40 Total 16,000,000 100 e) SCB has complied with applicable provisions of Chapter II of SEBI (SAST) Regulations within the specified time. f) Details of the Board of Directors of SCB as on date of Public Announcement are as follows: Qualifications/ No of years Date of Residential Name Designation Brief Bio-data of Experience A ppointment A ddressA jeet Executive He started his career with Ernst & Bachelor of Science Degree 12 December No.10, JalanA hluwalia Director Young in London. In 1997, he joined in Chemical 2002 Sri Hartamas Perwira A ffin Bank as A ssistant General Engineering,Masters in 13,50480 Manager of Corporate Finance. In Technology and Kuala 1998, he was appointed Managing Development from Imperial Lumpur, Director of Nikkei Pacific Corporate College, University of Malaysia A dvisors Sdn Bhd, headquartered in London; MBA , the London Kuala Lumpur. Prior to joining SCB, he Business School, University was Senior A dviser of Sierac Corporate of London. He is a fellow A dvisors Sdn Bhd. member of the Institute of Chartered A ccountants in England and Wales,an associate member of the Securities Institute of United Kingdom.Loganathan K Executive He commenced his career with Bachelor of Business 29 January No.22, JalanRamanujam Director Southern Bank Berhad. From 1985 to A dministration degree from 2003 Jejawi,Bukit 1990, he was the Finance and University of Ozarks, Bandaraya, Commercial Manager in a local A rkansas;Masters in Bangsar, subsidiary of a listed company in Business A dministration 59100 Kuala United Kingdom. Subsequently he from University of Lumpur, joined OSK Securities Berhad as a A rkansas, USA . Malaysia dealers representative where he gained experience in corporate finance and knowledge of regulations in relation to the Securities Industry.A nand Executive He has been involved in accounting, Bachelor of Commerce 19 December No 6, JalanSubramanian Director corporate finance, internal audit, Degree from University of 2002 16/20A , structuring mergers and acquisitions Mysore, India and is a an Section since 1981. He was the Senior Vice associate member of the 16,46350 President Corporate Finance & Institute of Chartered Petaling Information Systems of Emrail Sdn Bhd A ccountants of India Jaya, from June 2000 to December 2002 Selangor, Malaysia 7
  10. 10. Dato’A bu Director He is an Independent Non-Executive Bachelor of Economics 23 May No 6, SS2/58,Bakar Bin Director at SCB. He started his career Degree (Hons) from 2001 47300,A bdul Hamid as A gricultural Economist in the University of Malaya and a Petaling Jaya, Federal A gricultural Marketing Diploma of International Selangor, A uthority (FA MA ) in 1967 and was its Trade from the Indian Malaysia Director General from 1995 to 1998. Institute of Foreign Trade Between 1996 and 1998 he was also in New Delhi, India. Chairman of Koperasi Kakitangan Kementerian Pertanian Malaysia Berhad, the Deputy Chairman of the A ssociation of Food Marketing A gencies in A sia and the Pacific, a Board Member of FA MA Corporation Sdn Bhd and Muda A gricultural Development A uthority (MA DA ). Presently, he sits on the Board of A bric Berhad, a company listed on the Second Board of the Bursa Malaysia Securities Berhad.Ir.Hon Hin Director He is an Independent Non-Executive Graduated from Universiti 23 May 38, JalanSee Director at SCB. He commenced his Teknologi Malaysia with a 2001 SS22A /3, career in Hargill Engineering (M) Sdn Diploma in Mechanical Damansara Bhd in 1979 before joining Hashim & Engineering and completed Jaya,47400 NEH Sdn Bhd as a Mechanical Engineer the Council of Engineering Petaling in 1980. He was subsequently Part II Examination from Jaya,Selangor, appointed as its A ssociate Director in the United Kingdom. He is Malaysia 1991 and a Board Director in 1994. a member of the Institution Presently, Ir Hon sits on the Board of of Engineers, Malaysia, A bric Berhad, a company listed on the A ssociation of Consulting Second Board of the Bursa Malaysia Engineers, Malaysia and a Securities Berhad. He also sits on the registered Professional Board of several other private limited Engineer in Malaysia. companies.Tengku Daud Director He is an Independent Non-Executive He holds a Bachelor of 5 December C-10-19,Shaifuddin Director at SCB. He started his career in Science (Hons) Degree in 2003 PerdanaBin Tengku A ugust 1983 with Petronas Carigali Physics with Geophysics. Selatan,Zainuddin Sdn Bhd as a Geophysicist. He was Persiaran attached with Petronas Carigali Sdn Serdang Bhd until October 1997 heading Perdana,Tam- various projects. Subsequently in an Serdang November 1997 he joined Petronas Perdana,433- MJSB Sdn Bhd as a Marketing Manager 00 Seri (“Special Project”). He served Petronas Kembangan, MJSB Sdn Bhd until March 1998 prior Selangor, to assuming his present position as Malaysia Managing Director of Corro-Shield (M) Sdn Bhd.Dr.A bu Director He is an Independent Non-Executive He holds a Bachelor of 29 March A 2-2, Desa U-Hassan Bin Director at SCB. He started his career Science Degree, Master in 2004 Thant,JalanSulaiman in 1977 as a lecturer in University of Science and a doctorate Taman U- Malaya. In 1980, he joined Esso from University of London. Thant,55000 Production Malaysia Inc as an analyst. Kuala Lumpur, He has been working in various Malaysia technical, professional and managerial positions with Esso Companies in Malaysia including 2 years assignment with Exxon Company International, New Jersey, USA . In 1994, he was appointed to the Board of Esso Malaysia Bhd as an Executive Director and later in June 2003, he retired from Esso Malaysia Bhd. None of the directors of SCB are on the Board of RRGL. 8
  11. 11. g) Brief Audited Financials of SCB on a consolidated basisProfit & Loss Account for the year ended 31st December Particulars 2003   2002   2001     RM Rs.in lacs RM Rs.in lacs RM Rs.in lacs Income from operations 43660446 5234.89 48448251 5808.95 63676845 7634.85 Other income 1388974 166.54 1977785 237.14 1951270 233.96 Total Income 45049420 5401.43 50426036 6046.08 65628115 7868.81 Total Expenditure 48624993 5830.14 48673378 5835.94 63170973 7574.20 Profit/ (Loss) before (3575573) (428.71) 1752658 210.14 2457142 294.61 Depreciation Interest & Tax Interest 2937648 352.22 662702 79.46 386942 46.39 Depreciation 844214 101.22 689431 82.66 905112 108.52 Share in results of 791803 94.94 791008 94.84 532691 63.87 associated company Profit/(Loss) Before Tax (6565632) (787.22) 1191533 142.86 1697779 203.56 Provision for Taxation 952354 114.19 663962 79.61 375698 45.05 Profit/(Loss) After Tax (7517986) (901.41) 527571 63.26 1322081 158.52 Minority Interests 2390071 286.57 (44367) (5.32) 276632 33.17 Net Profit/(Loss) for the year (5127915) (614.84) 483204 57.94 1598713 191.69Balance Sheet for the year ended 31st December Particulars 2003   2002   2001     RM Rs.in lacs RM Rs.in lacs RM Rs.in lacs Sources of funds             Paid up share capital 16000000 1918.40 16000000 1918.40 16000000 1918.40 Reserves and Surplus 7733064 927.19 12743537 1527.95 12546513 1504.33 (excluding revaluation reserves) Networth 23733064 2845.59 28743537 3446.35 28546513 3422.73 Hire Purchase Payables- Non current Portion & 1844654 221.17 372603 44.68 1081549 129.68 Deferred Tax Liability Unsecured loans 45000000 5395.50 45000000 5395.50 0 0.00 Minority Interests 2659974 318.93 708184 84.91 694411 83.26 Total 73237692 8781.20 74824324 8971.44 30322473 3635.66 Use of funds             Net fixed assets 46614619 5589.09 4924609 590.46 5788142 694.00 Investments 6992368 838.38 6490541 778.22 1446881 173.48 Goodwill on consolidation 3741443 448.60 0.00 0.00 0 0.00 Net current Assets 15889262 1905.12 63409174 7602.76 23087450 2768.19 Total 73237692 8781.20 74824324 8971.44 30322473 3635.66 9
  12. 12. Other Financial Data RM Rs. RM Rs. RM Rs. Dividend (%)             Earning Per Share (0.32) (3.84) 0.03 0.36 0.10 1.20 Return on Networth (%) Negative Negative 1.68 5.60 Book Value Per Share 1.48 17.78 1.80 21.54 1.78 21.39Source: Audited Annual Financial Statements of SCBConversion : 1 RM=Rs.11.99 as on June 01, 2004Source : reutersh) Major Contingent liabilities in the past 3 years (Figures in RM) Particulars 2003 2002 2001 Corporate guarantee given to financial institutions for credit facilities 20,133,075 20,301,075 23,000,000 granted to certain subsidiary companies Corporate guarantee given to a financial institution for performance indemnity 1,469,747 - - guarantee granted to a subsidiary company Total 21,602,822 20,301,075 23,000,000i) Reasons for fall/rise in total income and Profit After Tax (PAT) in the last 3 yearsFor the financial year ended 31 December 2002, the Group’s revenue declined significantly by 23.92% to RM48.45 millionas compared to the previous financial year of RM63.68 million. The significant decline was mainly due to the delay in therenewal of Petronas licence to supply equipment and services to the gas and petroleum industries which affected therevenue for the fourth quarter of 2002. However, the licence was subsequently renewed in February 2003. The Group’sprofit before tax and Minority Interests (MI) declined by 29.80% to RM1.19 million as compared to RM1.70 million for theprevious financial year. The decrease was caused in part by the termination of a major agency line and the delay in therenewal of Petronas licence during the year. Income tax expense for the Group is high despite a loss before tax due tocertain items which are not deductible for tax purposes.For the financial year ended 31 December 2003, the Group’s revenue declined by 9.88% to RM43.66 million as comparedto the previous financial year of RM48.45 million. The decline was due to uncertainties caused by delays to the renewalof Petronas license experienced in early 2003 and loss of a significant principal during the fourth quarter of 2002. TheGroup recorded a loss before tax and MI of RM6.57 million as compared to profit before tax and MI of RM1.19 million for theprevious financial year. This was mainly due to finance costs arising from the RM45.0 million term loan obtained at the endof 2002, overall reduction in margins achieved on sales of engineering equipment and certain debtors and stock balancesrelating to prior years which have been provided for. Income tax expense for the Group is high despite lower profit beforetax due to certain items which are not deductible for tax purposes.j) On 17/03/2004 SCB acquired 7,01,200 shares of the Target Company at a price of Rs 6.35/-(Rupees Six paise thirtyfive Only) per share. On 17/06/2004 SCB sold the 7,01,200 shares acquired to SML at a price of Rs 6.35/- (Rupees Sixpaise thirty five Only) per share. As on the date of the Letter Of Offer, SCB does not hold any shares in the TargetCompany. In this regard SCB has complied with the applicable provisions of the SEBI(SAST) Regulations and the SEBI(Prohibition of Insider Trading)Regulations, 1992.k) Significant Accounting policies of SCBBasis of AccountingThe financial statements of the Group and of the Company have been prepared under the historical cost conventionmodified by the Directors’ revaluation of the Company’s investment in subsidiary companies.Basis of ConsolidationThe consolidated financial statements include the audited financial statements of the Company and of all its subsidiarycompanies made up to 31 December 2003. Subsidiary companies are those companies in which the Group has power toexercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiary companies 10
  13. 13. are consolidated using the acquisition method of accounting. On acquisition, the assets and liabilities of the relevantsubsidiary companies are measured at their fair values at the date of acquisition. The interest of minority shareholders isstated at the minority’s proportion of the fair values of the assets and liabilities recognised. The results of subsidiarycompanies acquired or disposed of during the financial year are included in the consolidated financial statements from theeffective date of acquisition or up to the effective date of disposal. All significant inter-company balances and transactionsare eliminated on consolidation. The gain or loss on disposal of a subsidiary company is the difference between the netdisposal proceeds and the Group’s share of its net assets.Goodwill on ConsolidationGoodwill on consolidation represents the excess of the purchase price over the fair values of the net identifiable assets ofthe subsidiary company at the effective date of acquisition. Goodwill on consolidation is amortised over a period of tenyears.RevenueRevenue of the Company consists of income from provision of management services and income arising from investmentactivities. Revenue of the subsidiary companies consists of gross invoice value of goods sold less returns and discounts,information technology services rendered and commission receivable on agency agreement with principal suppliers.Revenue of the Group and of the Company is recognised as follows: Sale of goods upon delivery of products and when the risks and rewards of ownership have passed Provision of services when services are rendered Dividend income when the shareholder’s right to receive dividend payment is established Interest income on an accrual basis Agency commission income upon delivery of products in accordance with agency agreement entered into Contract income based on percentage of completion method. The percentage of completion is determined based on the proportion of contract costs incurred for work performed todate bear to the total estimated contract costs.Foreign Currency ConversionTransactions in foreign currencies are converted into Ringgit Malaysia at the approximate exchange rates prevailing at thetransaction dates or, where settlement has not yet been made at the end of the financial year, at the approximateexchange rates prevailing at that date. All foreign exchange gains or losses are taken up in the income statements. TheGroup’s foreign incorporated subsidiary companies are those operations that are not an integral part of the operations ofthe Company. For the purpose of consolidation, the financial statements of the foreign incorporated subsidiary companieshave been translated into Ringgit Malaysia as follows: All assets and liabilities - at year-end rate Share capital and reserves - at historical rate Revenue and expenses - at average rate for the yearThe closing rates used in converting foreign currency amounts and the translation of foreign incorporated subsidiarycompanies’ financial statements are as follows: Particulars 2003 2002 1 Singapore Dollar (“SGD”) 2.2315 2.1915 1 Brunei Dollar (“BND”) 2.2315 2.1915 1 Philippine Peso (“PHIL PESO”) 0.0685 0.0715 1 Hong Kong Dollar (“HKD”) 0.4894 0.4872 1 Great Britain Pound (“GBP”) 6.7560 6.0930 1 United States Dollar (“USD”) 3.8000 3.8000 11
  14. 14. All translation gains or losses are taken up and reflected in the translation adjustment account under shareholders’ equity.Such translation gains or losses are recognised as income or expenses in the income statement, in the period in which theoperations are disposed of. Difference in exchange arising from the translation of the opening net investments in foreignsubsidiary companies, and from the translation of the results of those companies at the average exchange rate, are takento translation adjustment account.Income TaxIn previous financial years, the tax effects of transactions are recognised, using the “liability” method, in the yearsuch transactions enter into the determination of net income, regardless of when they are recognised for taxpurposes. However, where timing differences would give rise to net deferred tax assets, the tax effects aregenerally recognised on actual realisation. During the financial year, the Group and the Company adopted theprovisions of MASB Standard No. 25, Income Taxes in respect of the recognition of deferred tax assets andliabilities. Upon adoption of MASB 25, the tax effects of transactions are recognised using the “liability” methodand all taxable temporary differences are recognised. Where temporary differences would give rise to netdeferred tax asset, the tax effects are recognised to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences can be utilised. There is, however, no significanteffect on the financial statements of the Group and of the Company for the current and previous financial yearsarising from the adoption of MASB 25.Long-Term ContractsWhen the outcome of a contract can be estimated reliably, revenue and costs are recognized by reference tothe stage of completion of the contract activity at the balance sheet date, as measured by the proportionthat contract costs incurred for work performed to date bear to the estimated total contract costs. Variationsin contract work, claims and incentive payments are included to the extent that they have been agreed withthe customers. When the outcome of a contract cannot be estimated reliably, contract revenue is recognisedto the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognisedas expenses in the period in which they are incurred. When it is probable that total contract costs will exceedtotal contract revenue, the expected loss is recognised as an expense immediately as provision for foreseeableloss.Jointly Controlled Operations (Joint Venture)The joint ventures between the Company and SAAG-Embah and SAAG-Ecodrill are unincorporated jointly controlledoperations. The Company’s interests in joint ventures have been brought to account by including the Company’sproportionate share of assets employed in the joint ventures, the proportionate share of liabilities incurred in relation tothe joint ventures and its proportionate share of income and expenses in relation to the joint ventures in their respectiveclassification categories in the financial statements.Impairment of AssetsThe carrying amounts of property, plant and equipment, investment in subsidiary companies and associatedcompany, and goodwill on consolidation are reviewed at each balance sheet date to determine whether there isany indication of impairment. If any such an indication exists, the asset’s recoverable amount is estimated. Animpairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds itsrecoverable amount. All impairment losses are recognised in the income statements. An impairment loss in respectof goodwill is not reversed unless the loss is caused by a specific external event of an exceptional nature that isnot expected to recur and subsequent external events have occurred that reverse the effect of the event. Inrespect of other assets, an impairment loss is reversed if there has been a change in the estimate used todetermine the recoverable amount. An impairment loss in respect of other assets is only reversed to the extentthat the asset’s carrying amount does not exceed the carrying amount that would have been determined, netof depreciation or amortisation, if no impairment loss had been recognised. All reversals are recognised in theincome statements.Property, Plant and Equipment and DepreciationProperty, plant and equipment are stated at cost, less accumulated depreciation and any impairment losses. Gainor loss arising from the disposal of an asset is determined as the difference between the estimated net disposalproceeds and the carrying amount of the asset, and is recognised in the income statements. Depreciation ofproperty, plant and equipment, except for freehold land and work-in-progress which are not depreciated, iscomputed on the straight-line method at the following annual rates based on the estimated useful lives of thevarious assets: 12
  15. 15. Freehold buildings 1% - 2% Long-term leasehold industrial land and building Over the lease period of 50 to 97.5 years Machinery and tools 10% Furniture, fittings and fixtures 10% Office equipment 10% to 33 1/3% Renovations 20% Motor vehicles 20% Training equipment 10% Workover rig and equipment 5%Property, Plant and Equipment under Hire-Purchase ArrangementsProperty, plant and equipment acquired under hire-purchase arrangements are capitalised in the financial statements andthe corresponding obligations treated as liabilities. Finance charges are allocated to the income statements to give aconstant periodic rate of interest on the remaining hire-purchase liabilities.Associated CompaniesAn associated company is a non-subsidiary company in which the Company holds as long-term investment not less than20% of the equity voting rights and in which the Company is in a position to exercise significant influence in its management.The Company’s investment in associated companies is accounted for under the equity method of accounting based onthe audited financial statements of the associated companies made up to 31 December 2003. Under this method ofaccounting, the Company’s interest in the post-acquisition profit and reserves of the associated companies is included inthe consolidated results while dividend received is reflected as a reduction of the investment in the consolidated balancesheet. The carrying value of the investment approximates the underlying equity interest in net assets of the associatedcompanies. Unrealised profits and losses arising on transactions between the Company and its associated companies areeliminated to the extent of the Company’s equity interest in the relevant associated companies except where unrealisedlosses provide evidence of an impairment of the asset transferred.InvestmentsInvestment in an unquoted direct subsidiary company, which is eliminated on consolidation, is stated at Directors’ valuationless any impairment losses in the Company’s financial statements. Investment in other subsidiary companies, which iseliminated on consolidation, is stated at cost less impairment losses in the Company’s financial statements. Investment inunquoted associated companies is stated at cost less any impairment losses in the Company’s financial statements. Otherinvestments are stated at cost less allowance for diminution in value of investment to recognise any decline, other than atemporary decline, in the value of the investments.Short-term Investment in Quoted SharesShort-term quoted investments on the balance sheet date are stated at the lower of cost and market value. Market valueis calculated by reference to the stock exchange’s last done prices at the close of business on the balance sheet date.InventoriesInventories are valued at the lower of cost (determined on a ‘first-in, first-out’ basis) and net realisable value. The cost oftrading merchandise comprises the original cost of purchase plus the cost incurred in bringing the inventories to theirpresent location and condition. Work-in-progress represents all contract costs incurred directly on short-term contract jobsfor which the work done have not yet been completed and are valued at the lower of cost and net realisable value.Contract cost consists of direct materials, direct labour and other direct expenses. Net realisable value represents theestimated selling price in the ordinary course of business less selling and distribution costs and all other estimated costs tocompletion. In arriving at net realisable value, due allowance is made for damaged, obsolete or slow-moving inventories.ReceivablesTrade and other receivables are stated at nominal value as reduced by the appropriate allowances for estimated irrecoverableamounts. Allowance for doubtful debts is made based on estimates of possible losses which may arise from non-collectionof certain receivable accounts.ProvisionsProvisions are made when the Group and the Company have a present legal or constructive obligation as a result of pastevents, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliableestimate of the amount can be made. 13
  16. 16. Cash Flow StatementsThe Group and the Company adopt the indirect method in the preparation of the cash flow statements. Cash equivalentsare short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are readilyconvertible to cash with insignificant risk of changes in value.l) The status of Corporate GovernanceThe Board of Directors of SCB is committed to ensuring that highest standards of corporate governance are implementedand practiced throughout the Group to protect and enhance shareholders’ value. The SCB Group has best endeavored tocomply with the Principles and Best Practices prescribed in the Malaysian Code of Corporate Governance (“Code”) as wellas those in the Listing Requirements of the Bursa Malaysia.BOARD OF DIRECTORSBoard ResponsibilityThe Board retains full and effective control over the entire affairs of the Group. This includes responsibility for determiningthe Group’s strategic direction, overall corporate governance, effective and efficient conduct of business activities of theGroup. Key matters, such as approval of annual and interim financial results, material acquisitions and disposals, materialagreements, major capital expenditures, budgets and business plans are reserved for the Board. The Board has delegatedcertain responsibilities to three (3) committees namely the Audit, Nomination and Remuneration Committees, whichoperates within approved terms of reference. The Audit Committee has been in existence for several years whilst theRemuneration Committee was established in 2002 and the Nomination Committee was established on 20 October 2003.These committees assist the Board in discharging its duties by examining particular issues and reporting their recommendationsto the Board. The ultimate decision on all matters lies with the entire Board.Board Composition and BalanceThe Board currently has seven (7) Directors comprising three (3) Executive Directors and four (4) Independent Non-Executive Directors. The Company has complied with Paragraph 15.02 of the Listing Requirements of the Bursa Malaysiawhich requires at least two (2) or one-third (1/3) of the members, whichever is the higher, to be Independent Directors.Together, the Directors amongst them have substantial years of experience in engineering, finance, business, and marketing.The current composition reflects the required mix of skills, experience and other qualities for the successful managementof the Group’s business activities.Board MeetingsThe Board meets at least four (4) times a year, with additional meetings convened as and when urgent and importantdecisions are required to be made. During the financial year ended 31 December 2003, the Board met six (6) times.Appointments to the BoardIn accordance with the Company’s Articles of Association, the Directors shall have the power to appoint additional Directorsfrom time to time. New appointees will be considered and evaluated by the Nomination Committee. The Committee willthen recommend the candidates for Board’s consideration.BOARD COMMITTEESAudit CommitteeThe Audit Committee presently comprises three (3) Board representatives out of whom two (2) are Independent Non-Executive Directors. Dato’ Abu Bakar Bin Abdul Hamid, an Independent Non-Executive Director is the Chairman of theAudit Committee.Nomination CommitteeThe current members of the Nomination Committee are as follows:-Dato’ Abu Bakar Bin Abdul Hamid - Chairman / Independent Non-Executive DirectorIr Hon Hin See - Member / Independent Non-Executive DirectorThe Committee is responsible for reviewing the Board’s structure, size and composition. It assesses the effectiveness ofthe Board as a whole and the contribution of each individual Director on an annual basis. It also recommends the appointmentof Directors in Board Committees as well as reviews its required mix of skills, experience and other qualities, including corecompetencies which Non-Executive Directors should bring to the Board.Remuneration CommitteeThe current members of the Remuneration Committee are as follows:-Dato’ Abu Bakar Bin Abdul Hamid - Chairman / Independent Non-Executive DirectorIr Hon Hin See - Member / Independent Non-Executive DirectorLoganathan a/l K. Ramanujam - Member/Executive Director 14
  17. 17. The Committee is responsible for determining and recommending to the Board the framework or policy for the remunerationof the Directors so as to ensure that the Company attracts and retains Directors with relevant experience and expertiseto assist in managing and operating the Group effectively. The component parts of remuneration are structured so as tolink rewards to corporate and individual performance, in the case of Executive Directors. The performance appraisal systemis in the process of being implemented for the Group. In the case of Non-Executive Directors, the level of remunerationreflects the experience and level of responsibilities undertaken by the particular Non-Executive Directors concerned.The Remuneration Committee ensures that Executive Directors are fairly rewarded for their individual contributions to theCompany’s performance. The determination of the Non-Executive Directors’ remuneration is the responsibility of theBoard as a whole subject to approval of shareholders at the Annual General Meeting. The Directors are not involved in theapproval of their own remuneration package.m) There are no pending litigations on SCB at the company level.n) Name and Contact details of the Compliance Officer.Vijeyalatha a/p V.Rajaratnam, Company Secretary/Legal Manager, Unit 19-5, Block C1,Dataran Prima, Jalan PJU 1/41,47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia, Tel No. : 603-7884 8200o) There are no mergers /demerger, spin off during last 3 years involving SCB.p) SCB was incorporated on 2/11/1982 in Malaysia as a private limited company; converted into a public company on 10/05/1994. Its name changed from Sistem Alat-Alat Gas Sdn Bhd to SAAG Corporation Sdn Bhd on 7/05/1994, to SAAG Corporation Bhd on conversion to a public company and to Britac Bhd on 26/06/2001. It was later changed to SAAG Consolidated (M) Bhd on 19/06/2003.q) SCB has not promoted any Company in India.r) The equity shares of the company are traded in the Trading /Services category on the Second Board of Bursa Malaysia Securities Berhad (formerly known as Malaysia Securities Exchange Berhad). The market price of the scrip as on June 1, 2004 was RM 2.30(equivalent to Rs 27.58). The Authorised and Paid-up Equity Capital of SCB as on 31 December 2003 is RM 5,00,00,000 (equivalent to Rs 5995.0 lakhs) and RM 1,60,00,000 (equivalent to Rs 1918.40 lakhs) respectively. The face value per share is RM 1.00(equivalent to Rs.11.99).5.2 Mr. R.RajuMr. R.Raju, aged 65 years, residing at No. 16, Balaji Avenue,1st street, T.Nagar, Chennai 600017 Phone: 044-55192100 isthe founder of the RR Group. He is among the pioneers in Real Estate and Apartment concept in Chennai. He has anexperience of more than three decades in the Real Estate business. He is involved in the business development of RRGLand guides the company with respect to planning and business processes. His net worth as on 31/03/2004 as certified byMr.Panchapakesan (Membership No.200092), Partner, Balakrishnan and Panchapakesan, Chartered Accountants, No.5,Sannathi Street, Poonamallee, Chennai 600056, Tel. No. 28344625 vide certificate dated 15 May,2004 is Rs.200 lakhs(Rupees Two Hundred Lakhs only). He had acquired 294000 shares of RRGL on 21/06/2000. This acquisition being aninterse transfer of shares among the promoters was exempt under the Regulations. An application to SEBI for the sameis being made. He subsequently sold 203900 shares of RRGL on 18/03/2004. He holds 90100 shares in RRGL as on thedate of the Public Announcement.5.3 Mr. R.AnanthakrishnanMr. R.Ananthakrishnan, s/o Mr.R.Raju, aged 31 years, resides at No. 16, Balaji Avenue, 1st street, T.Nagar,Chennai 600017 Phone: 044-55192100.He is an MBA in finance from the University of Hull, London and did hisgraduation in Commerce from Vivekananda College, Chennai. He is a Director in Alderis Consultants Pvt Ltd.Alderis Consultants Pvt Ltd(ACL) was incorporated on 18.02.2004 for the purpose of providing accounting andfinancial advisory services. There have been no operations in ACL since incorporation. The networth of Mr.Ananthakrishnan as on 31/03/2004 as certified by Mr. Panchapakesan, Partner, Balakrishnan and Panchapakesan,Chartered Accountants, No.5, Sannathi Street, Poonamallee, Chennai 600056, Tel. No. 28344625(MembershipNo.200092) vide letter dated 15 May, 2004 is Rs.50 lakhs approx(Rupees Fifty lakhs approximately). He is currentlyon the Board of Directors of RRGL. He had acquired 5000 shares of RRGL on 10/06/1995 and 91100 shares ofRRGL on 11/01/1996. He sold 3500 shares of RRGL on various dates in between January 2000 and June 2000bringing his shareholding down to 92600 shares. He further acquired 294000 shares of RRGL on 21/06/2000.This acquisition being an interse transfer of shares among the promoters was exempt under the Regulations. Anapplication to SEBI for the same is being made. He sold 3200 shares on various dates between July 2000 andOctober 2000 bringing his shareholding down to 383400. He sold 383400 shares of RRGL on 18/03/2004. Hedoes not hold any shares in RRGL as on the date of the Public Announcement. 15
  18. 18. 5.4 Ms Bharati AnandMs Bharati Anand, wife of Mr. Ananthakrishnan, aged about 31 years, is residing at No. 16, Balaji Avenue, 1 ststreet, T.Nagar, Chennai 600017 Phone: 044-55192100. Her Net Worth as on 31/03/2004 as certified by Mr.Panchapakesan (Membership No.200092), partner of Balakrishnan and Panchapakesan, Chartered Accountantshaving office at No.5, Sannathi Street, Poonamallee, Chennai 600056, Tel.No.28344625 vide certificate dated15 May, 2004 is Rs. 23.75 lakhs (Rupees Twenty Three Lakhs Seventy Five Thousand only). She had acquired113900 shares in RRGL on 29/05/2000 and had sold the same on 18/03/2004. This aquisition being an intersetransfer of the shares amoung the promoters was exempt under the Regulations. An application to SEBI for the same isbeing made. She does not hold any shares in RRGL as on the date of the Public Announcement.6. STATUTORY APPROVALSa) No approval from any bank or financial institutions is required for the purpose of this Offer, to the best of the knowledge of the Acquirers.b) Approval from RBI will be required for acquisition of shares from NRI shareholders, if any.c) The shares under this offer will be acquired by the Acquirer, Mr R.Sriram, out of his domestic financial resources. To the knowledge of the Acquirers and PACs, no other statutory approvals are required to acquire the shares that may be tendered pursuant to the Offer. If any statutory approvals become applicable at a later date, the offer would be subject to such statutory approvals. In case the statutory approvals are not obtained, the Acquirer and PACs will not proceed with the Offer.d) In case of delay in receipt of statutory approval, if any SEBI has power to grant extension of time to Acquirers and PACs for payment of consideration to shareholders, subject to Acquirers and PACs agreeing to pay interest for the delayed period as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations. Further, if the delay occurs on account of willful default by Acquirers and PACs in obtaining the requisite approval, Regulation 22(13) of SEBI (SAST) Regulations will also become applicable.7. DELISTING OPTION TO RRGLIf, pursuant to this Offer and any acquisition of shares by the Acquirers and PACs from the open market orthrough negotiations or otherwise made in compliance with the SEBI (SAST) Regulations 1997, the publicshareholding is reduced to 10% or less of the paid up and voting share capital of RRGL, then in accordance withRegulation 21(3) of the regulations, the Acquirers and PACs shall comply with the provisions of the SEBI Delistingof Securities Guidelines, 2003.8. BACKGROUND OF RRGLa) RR Greenhands Infrastructure India Limited is a public limited company having its registered office at #58,Thirumalai Pillai Road, T.Nagar, Chennai-600017.Ph:044-52121927, Contact Fax: 044-52035887. RRGL was incorporated in the year 1995 under the name Kaashyap Foundations Limited. The name was subsequently changed on 26 June,2000 to “RR.com” and then to “RR Greenhands Infrastructure India Limited” on 7 March,2002.b) RRGL is principally involved in business activities relating to infrastructure and housing development projects. The company obtained the certificate of commencement of business on 8th March 1995. In addition to the Registered Office, RRGL has it’s Administrative Office at 51, R.K. Mutt road, Mylapore, Chennai 600004. Other than this RRGL does not have any other offices or manufacturing facilities.c) The present Directors of RRGL are Mr. R.Raju (Chairman),Mr.R.Sriram (Managing Director), Mr.V.Vasudevan, Mr.R.Ananthakrishnan and Mr.G.V.Satish Narayana. The authorized share capital of RRGL is Rs.10, 50,00,000/-(Rupees Ten crore fifty lakhs only) The issued, subscribed and paid up capital of RRGL as on the date of this public announcement is Rs.10, 50,00,000/-(Rupees Ten crore fifty lakhs only) divided into 1,05,00,000 Equity Shares of Rs.10/- each fully paid up. There are no partly paid up shares. There has been no merger/demerger/spin off in the Target company during the past three years. Paid up equity share capital of RRGL No. of shares /voting rights % of shares/voting rights Fully paid up equity shares 1,05,00,000 100 Partly paid up equity shares NIL NIL Total paid up equity shares 1,05,00,000 100 Total voting rights in the Target Company 1,05,00,000 100 16
  19. 19. d) Current capital structure Build-up since inceptionDate No and %of Cumulative Mode of allotment Identity of allottees Status ofcomplianceofallotment shares issued paid up (promoters/ capital expromoters/others)04.02.1995 700 (0.01%) 700 Initial Subscription of Promoters RRGL had complied shares with the relevant provisions10.06.1995 1024900 1025600 Allotted to promoters Promoters, Directors RRGL had complied (9.76%) their friends and with the relevant relatives provisions29.06.1995 724000(6.89%) 1749600 Allotted to promoters Promoters, Directors RRGL had complied their friends and with the relevant relatives provisions11.01.1996 *4096600 5846200 Initial Public Offer Public through pro- RRGL had complied (39.02%) spectus with the relevant provisions31.05.2004 4653800(44.32%) 10500000 Preferential allotment SAAG (Mauritius) Ltd RRGL had complied with the relevant provisionsTotal 10500000Note: * This does not include an additional number of 1,53,800 shares allotted on 11/01/1996 but forfeited during theyear 2001-02 due to non-receipt of call in arrears.e) The equity shares of RRGL are listed on The Stock Exchange Mumbai (BSE) and the Madras Stock Exchange (MSE) and have not been traded for the past many years. Hence, the equity shares are termed as infrequently traded on the BSE and MSE in terms of explanation (i) to Regulation 20(5) of the Regulations.f) The total Income of the Company for the year-ended 31st March 2004 was Rs. 1133.73 lakhs with a net profit of Rs.6.54 lakhs. As per the audited financial results for the nine month period ended 31st December, 2003 the Company has reported a total income of Rs. 370.62 lakhs and a net profit of Rs.0.34 lakhs.g) There are no outstanding instruments in the nature of warrants / fully convertible debentures / partly convertible debentures etc. which are convertible into equity at any later date. Other than the shares issued under the preferential allotment, there are no equity shares under lock in period.h) The composition of the Board of Directors as on the date of Public Announcement (June 4, 2004) is as follows: Name Designation Qualifications No of years Date of Address of Experience Appointment R . Raju Chairman SSLC 41 27.01.1995 No.16,Balaji Avenue,T.Nagar, Chennai 600017 R . Sriram Managing B.Tech,M.S 15 03.12.2001 No.16,Balaji Director Avenue,T.Nagar, Chennai 600017 V. Vasudevan Director B.Com, 25 31.05.1995 No.19,Rukmani Street, B.L.,A.C.S. West Mambalam, Chennai 600033 R.Ananthakrishnan Director MBA 13 23.08.1999 No.16,BalajiAvenue, T.Nagar, Chennai 600017 G.V.Satish Narayana Director M.Tech 13 07.09.1999 Y-89,Annanagar, Chennai 600040 17 *

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