LETTER OF OFFER

ASHU MOTOR & GENERAL FINANCE LIMITED

(Originally Incorporated as a Private Limited Company under the Companies Act, 1956, on 19-10-1981 in the name and style of ASHU MOTOR & GENERAL FINANCE PRIVATE LIMITED. The Company was subsequently converted to Ashu Motor & General Finance Ltd., on 30-01-95. Fresh Certificate of Incorporation, consequent upon change of name on conversion to Public Limited Company was granted by the Registrar of Companies -U.P., Kanpur).

Registered Office : 53, Shivlok, WK Road, Meerut (U.P).

Corporate office : A - 308, Defence Colony, New Delhi-110024.

Phone No : 011-4604800 , Fax # 011-4604801.

OFFER OF 4,00,025 EQUITY SHARES OF RS.10/-EACH FOR CASH AT A PREMIUM OF RS.10/- PER SHARE AGGREGATING TO RS.80,00,500/- TO THE EQUITY SHAREHOLDERS OF THE COMPANY ON A RIGHTS BASIS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY EIGHT EQUITY SHARES HELD( HEREINAFTER REFFERRED TO AS ‘RIGHT SHARES’), EACH SUCH RIGHT SHARE ACCOMPANIED BY THREE DETACHABLE WARRANTS(12,00,075), EACH WARRANT ENTITLING THE HOLDER THEREOF TO APPLY FOR UPTO SIX EQUITY SHARES OF RS.10 EACH FOR CASH AT PAR (TOTAL UPTO 18 EQUITY SHARES ON THREE WARRANTS) AT THE END OF FIRST YEAR, SECOND YEAR AND THIRD YEAR RESPECTIVELY FROM THE DATE OF ALLOTMENT OF THE AFORESAID RIGHT SHARES, OR EARLIEAR AS MAY BE DECIDED BY THE BOARD OF DIRECTORS AT THEIR SOLE DISCRETION, TOTAL AMOUNT TO BE RAISED AGGREGATING TO RS.8,00,05,000/- COMPRISING OF EQUITY SHARE CAPITAL OF RS.7,60,04,750/- AND SHARE PREMIUM OF RS.40,00,250.

GENERAL RISKS

Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this Offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Offer. For taking an investment decision, investors must rely on their own examination of the Issuer and the Offer including the risk involved. The securities have not been recommended or approved by Securities and Exchange Board of India nor does Securities and Exchange Board of India guarantee the accuracy or adequacy of this document.

Investors are advised to refer to the RISK FACTORS on page ---- before making an investment in this Offer.

ISSUER'S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which, make this document as a whole or any such information or the expression of such opinions or intentions misleading in any material respect.

The investors are advised to refer to the para on financial performance of the Company and Stock Market Data before making investment in this issue.
 
 
 
 
 
 

LISTING ARRANGEMENTS

The existing Equity shares of the Company are listed on Stock Exchanges at U.P. and Delhi and Application will be made to these Stock Exchanges for permission to deal in and for quotation in respect to the Equity Shares arising out of the present Right Issue.
 
 

ISSUE OPENS ON :

LAST DATE FOR RECEIVING :

THE REQUESTS FOR SPLIT FORMS

ISSUE CLOSES ON :

LEAD MANAGER TO THE ISSUE REGISTRARS TO THE ISSUE ARYAMAN FINANCIAL SERVICES LTD. RCMC SHARE REGISTRY PVT. LTD. 35, Atlanta IIIrd Floor, Nariman Point, 1515, Ist Floor, Bhisham Pitamah Marg, Kotla

Mumbai-400021. Mubark Pur,(Near South Extn.) New Delhi-3.

Ph. : 022-2826464 Ph : 011 - 4692346, 4601017.

Fax # 022-2826467 Fax # 011 - 4692345
 
 

TABLE OF CONTENTS

Risk Factors and Management Perception thereofHighlights

Statutory Declarations
 
 

I.GENERAL INFORMATION

I..1 Disclaimer Clause I..2 Registered Office of the Company

I.3 Listing

I..4 Filing

I..5 Credit Rating

I.6 Minimum Subscription

I..7 Cautionary Note

I..8 Standby Arrangements

I.9 Declaration

I.10 Utilisation of Proceeds

I.11 Issue Programme

II.CAPITAL STRUCTURE

3. TERMS OF PRESENT ISSUE

III.1 Authority for the Present Issue

III.2 Basis of Offer

III.3 Right Entitlements

III.4 Terms of Payment

III.5 ranking of Equity Shares

III.6 Acceptance of Offer

III.7 Renunciation

III.8 Renouncees

III.9 Split Forms

III.10 Additional Right Shares

III.11 Option to Subscribe

III.12 How to Apply

III.12.1 Options Available

III 12.2 Procedure for Application on Plain Paper

III 12.3 Joint Application

III 12.4 Application under Power of Attorney

III 12.5 General Instructions

III 13 Payments-How to be made

III 14 Basis of Allotment

III 15 Issue of Letter of Allotment/Share Certificate

3. 16 Last Date for Submission of Application

III.18 Disposal of Application with Stockinvest

3. 19 Standby Arrangements

III.21 Tax Benefits to the Company and Shareholders

4. PARTICULARS OF THE ISSUE

IV.2 Cost of Project and Means of Finance

5. COMPANY, MANAGEMENT AND PROJECT

V.2 Subsdiaries

V.3 Promoters and their Background

V.4 Management of the Company

V.5 Litigation against the Promoters

V. 6 Project

V.7 SWOT Analysis

V.8 Location

V.9 Plant & Machinery

V.10 Market

V.11 Marketing and Selling Arrangements

V.12 Raw Materials

V.13 Utilities

V.14 Environmental clearances

V.15 Competition

V.16 Implementation Schedule

VI. FINANCIAL INFORMATION

VI.1 Financial Performance of the Company for the last five years

VI.2 Key Accounting Ratios, Capitalization Statement and Taxation Statement

VI.3 Significant Accounting Policies and Notes to the Accounts

VI.4 Statement by the Directors

VI.5 Management Discussions and Analysis of financial condition and results of the operation as reflected in the financial Statements

VI.6 Forecast of future Profits

VI.7 Justification of Premium

7. GENERAL INFORMATION

VII.2 Working Results and Other Information

VII.3 Particulars regarding previous capital issue made by the Company

VII.4 Investor Grievance and Redressal System

VII.5 Company under the same management

VII.6 Litigations Defaults and Material Development

VII.7 Change in Board of Directors during last 3 years

VII.8 Risk Factors

VII.9 Material Contracts and Documents

VII.10 Declaration
 
 
 
 

RISK FACTORS AND MANAGEMENT’S PERCEPTION

INTERNAL

1. The fund requirements have been estimated by the Company and no Financial Institution /Bank has appraised/ funded the same.
2. In the absence of stake of any financial institution/bank in the new project, there shall be no monitoring of the funds raised through this issue and deployment of the funds so raised shall be left entirely at the discretion of the Company’s management.

3. The Company’s working capital requirement for the new project has not been appraised by its principle banker.

6. Listing of Shares at Stock Exchanges does not ensure easy liquidity. The Equity shares, Though listed at the Stock Exchange at Delhi and Kanpur, have been timely traded.
7. Neither the past financial performance of the Company , nor the Market price of Equity shares quoted

EXTERNAL

1. Television media is largely Government controlled and changes in the government policies may effect the income generation of the Company.

2. Competition from existing and new entrants in the industry may effect the profitability and operations of the Company.

HIGHLIGHTS

1. The Company have been involved in the production/direction of serials and feature films.

2. The promoters have experience in the same line of business.

4. The Project relates to a booming industry.

5. Listing at Delhi and U.P. Stock Exchanges.

ASHU MOTOR & GENERAL FINANCE LIMITED

(Originally Incorporated as a Private Limited Company under the Companies Act, 1956, on 19-10-81 in the name and style of ASHU MOTOR & GENERAL FINANCE PRIVATE LIMITED The Company was subsequently converted to Ashu Motor & General Finance Ltd., on 30-01-95. Fresh Certificate of Incorporation, consequent upon change of name on conversion to Public Ltd Company was granted by the Registrar of Companies - Kanpur).

Registered Office : 53, Shivlok, WK Road, Meerut (U.P).

Corporate office : A - 308,IInd Floor, Defence Colony, New Delhi-110024.

Phone No : 011-4604800 , Fax # 011-4604801.

Dear Equity Shareholders,

Your Directors are pleased to make an Offer of 4,00,025 equity shares of Rs.10/-each for cash at a premium of Rs.10/- per share aggregating to Rs.80,00,500/- to the equity shareholders of the company on a rights basis in the ratio of one equity share for every eight equity shares held( hereinafter referred to as ‘right shares’), each such right share accompanied by three detachable warrants(12,00,075), each warrant entitling the holder thereof to apply for upto six equity shares of Rs.10 each for cash at par at the end of first year, second year and third year respectively from the date of allotment of the aforesaid right shares, or earlier as my be decided by the Board of Directors at its sole discretion , total amount to be raised aggregating to Rs.8,00,05,000/- comprising of equity share capital of Rs.7,60,04,750/- and share premium of Rs.40,00,250.

STATUTORY DECLARATIONS

1. Except elsewhere stated in this document in the opinion of the Directors of the Company, there are no circumstances that have arisen since the date of the last financial statement disclosed in the Letter of Offer, that materially or adversely affect or are likely to affect the performance or profitability of the Company, or value of its assets, or ability to pay its liabilities within the next twelve months.

2. The Company accepts no responsibility for statements made otherwise than in the Letter of Offer or in the advertisement or any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at their own risk.

3. The present right issue to the Equity Shareholders of the Company is made pursuant to the Resolution passed by the members of the Company at the Annual General meeting held on 11.8.1999 read with resolution passed by the Board of Directors at the meeting held on 9th February 2000.

4. This offer is being made on a right basis in the ratio of 1 (One) Equity Share for every 8 (eight) Equity Shares of Rs. 10 at a premium of Rs. 10 each to those Equity Shareholders whose name appear on the Register of Members at the close of business hours on 16th February,2000 i.e. the Record date , being the date fixed by the Company in consultation with the U.P. Stock Exchange Association Ltd, Kanpur and further each equity share is accompanied by three detachable warrants, each warrant entitling the equity share holder to apply for upto six equity shares of Rs.10 each for cash at par at the end of first year, second year and third year from the date of allotment of the aforesaid equity shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

I. GENERAL INFORMATION:

I.1 DISCLAIMER CLAUSE:

As required, a copy of this Letter of Offer has been submitted to SEBI. It is to be distinctly understood that submission of Letter of Offer to SEBI should not ,in any way, be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the issue is proposed to be made, or for the correctness of the statements made or opinions expressed in the Letter of Offer. The Lead Manager, Aryaman Financial Services Limited, has certified that the disclosures made in the Letter of Offer are generally adequate and are in conformity with SEBI guidelines for Disclosure and Investor Protection in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue.

It should also be clearly understood that while the issuer company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the Letter of Offer, the Lead Manager expected to exercise Due Diligence to ensure that the company discharges its responsibility adequately in this behalf and towards this purpose, the Lead Manager, Aryaman Financial Services Limited has furnished to SEBI a Due Diligence Certificate dated February 12, 2000 in accordance with the SEBI (Merchant Bankers) Regulations 1992 which reads as follows :

with SEBI and till date such registration is valid.

The filing of the Letter of offer does not, however, absolve the Company from any liabilities under section

63 of the Companies Act, 1956 or from the requirement of obtaining the such statutory or other clearances as may be required for the purpose of the Issue. SEBI, further reserves the right to take up at any point of time, with the Lead Manager(s) (Merchant Bankers) any irregularities or lapses in the Letter of Offer .

The Company accepts no responsibility for statements made otherwise than in this Letter of Offer or in advertisements or any other material issued by or at the time instance of the Company and that anyone placing reliance on any other source of information would be doing so at his or her risk.
 
 

DISCLAIMER CLAUSE OF THE U.P. STOCK EXCHANGE

The U.P. Stock Exchange has given vide its letter dated permission to the Company to use the Exchange’s name in thie Offer document as one of the Stock Exchanges on which this Company,s securities are proposed to be listed. The Exchange has scrutinised this Offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner :

1. warrant, certify or endorse the correctness or completeness of any of the contents of this offer document; or
2. warrant that this Company’s securities will be listed or will continue to be listed on the Exchange ; or
3. take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company.

I.2 REGISTERED OFFICE OF THE COMPANY: 53, Shivlok, WK Road,

Meerut (U.P).

I.3 LISTING

The Equity Shares of the Company are listed in U.P. and Delhi Stock Exchanges. Application will be made to these Stock Exchanges for permission to deal in and for quotation in respect to the Equity Shares arising out of the present Right Issue.

I.4. FILING

This Letter of Offer has been filed with the Regional office of the SEBI at Delhi and the Stock Exchange, U.P. and Delhi.

I.5 CREDIT RATING:

This being an issue of equity shares, credit rating is not required.

I.6 MINIMUM SUBSCRIPTION:

If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the Issue, or if subscription levels falls below 90% after the closure of the Issue on account of cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith return the entire subscription amount received within 42 days from the date of closure of issue. If there is delay beyond 8 days after the Company becomes liable to pay the amount, the company will pay interest for the delayed period at prescribed rates in subsection (2) and (2A) of Section 73 of the Companies Act, 1956.
 
 
 
 
 
 
 
 
 
 

I.7 CAUTIONARY NOTE

As a matter of abundant caution, attention of applicants is specially drawn to the provisions of sub-section(1) of Section 68(A) of the Companies Act,1956 which is re-produced below:-

Any Person who:-

1. makes, in a fictitious name, an application to a company for acquiring, or subscribing for,any shares therein, or

The Company has not made any stand-by arrangements for the present Rights Offer.
 
 

I.9 DECLARATION

The Company shall despatch the Letter(s) of Allotment/Share Certificate(s) /Letter(s) of Regret alongwith Refund Orders if any , as far as possible within a period of 42 days from the closure of the Subscription list. The Company shall pay interest @ 15 % p.a. if the allotment is not made and/or the allotment letter /refund orders are not despatched to the investor within 30 days from the date of closure of the issue for the period of delay beyond 30 days.

Letter(s) of Allotment/Share Certificate(s)/Refund Orders in excess of Rs. 1500/- will be despatched by Registered post to the sole/first applicants address, at the applicant’s sole risk. Refund Orders of value upto Rs. 1500/- will be sent to the applicants under the Certificate of Posting.

I.10 UTILISATION OF PROCEEDS

Statement by the Board of Directors

1. All monies received out of the Right Issue of Equity Shares shall be transferred to a separate bank account other than the bank account referred to in subsection (3) of Section 73 of the Companies Act,1956.

2. Details of all monies utilised out of the issue referred to in sub-item (a) shall be disclosed under an appropriate head in the Balance Sheet of the Company indicating the purpose for which such monies had been utilised ; and

3. Details of all unutilised monies out of the Right Issue of Shares, if any, referred to in sub-item (a) shall be disclosed under an appropriate separate head in the Balance Sheet of the Company indicating the form in which such unutilised monies have been invested.

I.11 ISSUE PROGRAMME

ISSUE OPENS ON :

LAST DATE FOR RECEIVING :

THE REQUESTS FOR SPLIT FORMS

ISSUE CLOSES ON :

ISSUE MANAGEMENT TEAM

LEAD MANAGERS TO THE ISSUE : ARYAMAN FINANCIAL SERVICES LIMITED

35, Atlanta,IIIrd Floor,

Nariman Point, Mumbai-400021.

Ph. : 022-2826464

Fax # 022-2826467

REGISTRARS TO THE ISSUE : RCMC SHARE REGISTRY P LTD.

1515, Ist Floor, Bhisham Pitamah Marg,

Kotla Mubark Pur, (Near South Extn.),

New Delhi - 110003.

Ph : 011-4692346, 4601017

Fax # 011-4692345

COMPANY'S COMPLIANCE OFFICER : Mr. Naveen Rastogi

Company Secretary

A-308, IInd Floor,

Defence Colony, New Delhi.

Ph. -011-4604800

BANKERS TO THE ISSUE : State Bank of India,

New Issue Division,

Parliament Strreet, New Delhi.
 
 

AUDITOR’S : M/s Mehra & Co.

524, Patel Nagar, Meerut, U.P.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

II. CAPITAL STRUCTURE OF THE COMPANY: SHARE CAPITAL SHARE PREMIUM

(In Rupees)

SHARE CAPITAL A. AUTHORISED

1,20,00000 Equity Shares of 10/- each 12,00,00,000 -B. ISSUED, SUBSCRIBED AND PAID UP 32,00,200 Equity Shares of Rs.10/- each 3,20,02,000 -C. PRESENT ISSUE IN TERMS OF THIS LETTER OF OFFEER (i) 4,00,025 Equity Shares of Rs. 10/- each at

a premium of Rs. 10/- each 40,00,250 40,00,250

(ii)24,00,150 Equity Shares of Rs.10/- each

for cash at par in lieu of Ist detachable

warrants 2,40,01,500 -

( iii) 24,00,150 Equity Shares of Rs.10/- each

for cash at par in lieu of IInd detachable

warrants 2,40,01,500 -

4. 24,00,150 Equity Shares of Rs.10/- each

warrants 2,40,01,500 -

------------------ 7,60,04,750

---------------- ----------------

10,80,06,750 40,00,250

---------------- ----------------

D. ISSUED EQUITY CAPITAL AFTER THE PRESENT ISSUE :

AFTER THE ALLOTMENT 3,60,02,250 -

AFTER IST CONVERSION OF WARRANTS 6,00,03,750 -

AFTER IIND CONVERSION OF WARRANTS 8,40,05,250 -

AFTER IIIRD CONVERSION OF WARRANTS 10,80,06,750 -
 
 
 
 
 
 

E. SHARE PREMIUM ACCOUNT

Before the Issue NIL

After the Issue 40,00,250

NOTES TO THE CAPITAL STRUCTURE:

1. The Authorised Share Capital of the Company has been increased from Rs. 3,30,00,000 (Rupees Three Crore Thirty Lacs) to Rs. 12,00,00,000 (Rupees Twelve Crore) vide Shareholders approval taken at the Annual General Meeting of the Company held on 11th August,1999. The Authorised Share Capital comprises of 120 lacs Equity Share of Rs. 10/- each aggregating to Rs. 1200 lacs.

2. Break up of the subscribed capital of the Company is as follows :

3. Shareholding pattern of the Company as on the date of filing is as follows :
 

	No. of Shareholders	No. of Shares	% Holding
Promoter	3	2,29,900	7.18
Promoter Group	13	20,72,800	64.78
Public	2927	8,97,500	28.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

4. The Promoters presently hold 2,29,900 Equity Shares of Rs. 10 each, representing 7.18 % of the subscribed share capital of the Company. The Promoters have confirmed to the Company that they will subscribe to the Right Issue for an amount in the aggregate atleast equal to their Right Entitlement. The Promoters undertake to apply for additional Equity Shares beyond their entitlement, if the issue is undersubscribed.

5. The Promoters have purchased 23900 equity shares of the Company at a price of Rs. /- per share

6. The Promoter’s existing equity holding is less than 20 % of the issued capital therefore, in the event of the right issue not being fully subscribed , the Promoters shall subscribe to the unsubscribed portion (i.e , the portion of the right issue , which has not been taken up by the existing shareholders or by the renouncees) in the following manner :

1. The Promoter’s additional contribution to the unsubscribed portion of the rights may be to such extent as is necessary to enable them to reach at least 20% of the expanded capital and the balance may be disposed of by the Board of Directors of the Company in such manner as they may deem fit.
2. If the unsubscribed portion is not sufficient to enable the Promoters to reach 20 % of the issued capital, the promoters shall take the entire unsubscribed portion of the right issue.

Shareholding prior to the Right Issue : Two years from the date of Allotment in the Right Issue

Shares aquired by way of additional : Three years from the date of allotment in the Right Issue

contribution to the unsubscribed portion

of the Right Issue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

7. Details regarding the ten largest shareholders of the Company.

1. As on ( date of signing of the Letter of Offer) and (ten days prior to the signing

b. As on ( two years prior to the date of signing of the Letter of Offer)
 
 
 

S.No.	Name of Shareholder	No. of Shares	% of Capital
1.	Mr. P. N. Rastogi	2,24,400	7.01
2.	Mr. Sudhir Rastogi	2,22,000	6.93
3.	Mr. Nathu	2,22,000	6.93
4.	Mr. Irahad Ahmed Ali	2,22,000	6.93
5.	Mr. Ambrish Rastogi	2,22,000	6.93
6.	Mr. Suresh Gupta	1,99,500	6.23
7.	Mr. Ram Kumar	1,96,200	6.13
8.	Mr. Avnish Rastogi	1,67,200	5.22
9.	Mr. Ravish Gupta	1,60,700	5.02
10.	Mr. Sunil Rastogi	1,57,200	4.91

8. There are no buyback, standby or similar arrangements for purchase of shares Offered to through this

Letter of Offer by the promoters, directors and the lead managers.

III. TERMS OF THE PRESENT ISSUE

a. Equity Shareholders

The Equity Shares being issued are subject to the provisions of the Companies Act, 1956 (hereinafter referred to as The Act), the terms of this letter of Offer, the terms and conditions mentioned in the enclosed Composite Application Form (CAF), the Memorandum & Articles of Association of the Company, Guidelines, Notifications and regulations for the issue of capital and the listing of securities issued from time to time by the Government of India, SEBI, Stock Exchange and/or other authorities.
 
 
 
 
 
 
 
 

b. Accompanied Detachable Warrants

The warrants issued with the Equity Shares are tradeable for which purpose applications have been made to the Stock Exchanges where the Equity Shares of the Company are listed.

The Registered warrant holders will be entitled to apply for upto six equity shares of Rs.10 each for cash at par for each warrant aggregating to total 18 Equity Shares on three warrants.

The warrant by itself does not give to the holder hereof any rights of Shareholders of the Company.

III.1 AUTHORITY FOR THE PRESENT ISSUE

Pursuant to section 81 of the Act the present offer has been authorised by a special resolution passed by the shareholders of the Company at the Annual General Meeting of the Company held on 11.08.1999 and a Resolution passed by the Board of Director in its meeting held on 9/2/2000.

III.2 BASIS OF OFFER

4,00,025 equity shares of Rs.10/-each for cash at a premium of Rs.10/- per share aggregating to Rs.80,00,500 are being offered on a rights basis in the ratio of 1;8 equity share to those equity shareholders of the company whose names appear on the Register of Members of the Company at the close of business hours on being the Record date fixed by the company in consultation with U.P. Stock Exchange and each such right shares accompanied by three detachable warrants(12,00,075), each warrant entitling the equity share holder to apply for upto six equity shares of Rs.10 each for cash at par at the end of first year, second year and third year from the date of allotment of the aforesaid equity shares., or earlier as may be decided by the Board of Directors at their discretion. Total amount to be raised aggregating to Rs.8,00,05,000/- comprising of equity shares capital of Rs.7,60,04,750/- and share premium of Rs.40,00,250.

III.3 RIGHTS ENTITLEMENT

As an Equity Shareholder of the Company as on the Record Date, you are entitled to this Right Offer. The number of Equity Shares to which you are entitled is shown in column 3 of Part A of the enclosed Composite Application Form (CAF).

Fractinal entitlements shall be ignored. However, shareholders whose fractional rights are being ignored shall be given preferential allotment of one additional share, if they apply for additional shares.

III.4 TERMS OF PAYMENT

Each Equity Share of Rs. 10/- as being offered at a premium of Rs. 10/- per share.

Equity Premium Total

On Application Rs.2.50 per share Rs.2.50 per share Rs.5.00 per share

On Allotment Rs.7.50 per share Rs.7.50 per share Rs.15.00 per share

III.5 RANKING OF EQUITY SHARES

The Equity Shares issued in terms of the offer shall rank pari passu with the existing equity shares of the Company except that the equity shares shall not be entitled to dividend, if any, declared or paid by the Company for the period prior to the date of allotment thereof. These equity shares shall have a right only to proportionate dividend declared or to be declared by the Company for the period commencing from the date of allotment thereof till the end of the relevant financial year.
 
 

III.6 ACCEPTANCE OF OFFER

1. You may accept and apply for the Equity Shares hereby Offered to you wholly or in part by filling in Part "A" of the enclosed CAF and submitting the same along with payment of application money to any designated branch of the Bankers to the Issue specified on the reverse of the CAF before the close of the banking hours on .The Board / Committee of Directors ('the Board") of the Company will have the right to extend the last date for receipt of CAF for such period as they deem fit but in no case the Offer for subscribing to the Issue would be kept open for more than sixty (60) days.If the application is not received by the Bankers to the Issue before the date aforesaid, the Offer contained in this letter shall be deemed to have been declined by you, and the Board shall have full discretion and absolute authority to Offer them to whomsoever they may deem fit.
2. The Company will not be liable for any postal delays and any application received by mail after closure of the issue date is liable to be returned to the applicants. The date of mailing by the is not the criteria.

III.7 RENUNCIATION

This offer is renounceable wholly or in part in favour of Indian nationals residing in India, minors through a natural/legal guardian, limited companies, statutory corporations/institutions, trusts or societies ( if such societies or trusts are registered under the Societies Registration Act, 1860 or other applicable laws and are authorised under their Memorandum and Articles of Association and/or their Rules and Bye laws to hold Shares of the Company).

Any renunciation from Non-Residents to Residents or from Non-Residents to other Non-Residents or from Residents to Non-Residents is subject to the renouncers/ renouncee, obtaining the necessary approval of the Reserve Bank of India under the Foreign Exchange Regulation Act, 1973 and the said permission being attached to the Forms. Allotment of Shares to the non resident shall be in accordance with RBI Guidelines.

A person in whose favour the shares are renounced has no further right to renounce. Renouncees are eligible to apply for additional shares.

The right of renunciation, however, is subject to the express condition that the Board shall be entitled in its absolute discretion, to reject the request for allotment to any renouncee(s), without assigning any reason thereof.

Renunciation in whole :

If you wish to renounce this offer in whole these Equity Shares to one renouncee (joint renouncees being treated as one) you will fill in and sign the Form of Renunciation i.e. Part "B" of the CAF and hand over the form in entirety to the renouncee. The renouncees should fill in the Part "C" of the CAF and send the same together with a remittance for the amount payable to any of the Banker(s) to the Issue at their branches mentioned on the reverse of the CAF so as to reach them not later than the close of the banking hours on -------------------. In the case of jointholdings, all jointholders must sign in the same order and as per specimen(s) recorded with the Company.
 
 
 
 
 
 

Renunciation in Part and Splitting

If you wish to accept part of the Equity Shares Offered to you and renounce the balance in favour of one or more renouncees (or sets of renouncees), the CAF must first be split by applying to the the Registrar to the Issue. Please indicate your requirement of the split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrars of Issue so as to reach them by

If you wish to apply for equity shares jointly with any person or persons who is/are not already jointholder(s) with you, then it will amount to renunciation and the procedure as detailed above shall have to be followed.

III.8 RENOUNCEES

Renouncees are also eligible to apply for additional equity shares.

Please also note the following:

Part A of the CAF must not be used by any person(s) in whose favour this issue has been renounced. This will render the application invalid.

A person in whose favour the equity shares are renounced has no further right to renounce.
 
 

III.9 SPLIT FORMS :

Split forms cannot be resplit. Only the person to whom the Offer is made and not the renouncee shall be entiltled to obtain split forms. All requests for split forms should be forwarded to the Registrar to the Issue by filing in Part D of the CAF. Requests for split forms will be entertained only once.
 
 

III. 10 ADDITIONAL RIGHT SHARES

You are eligible to apply for additional Equity Shares over and above your entitlement provided you have applied for all rights shares without renouncing them in whole or in part In case you wish to apply for additional Equity Shares you may fill in the number of additional Equity Shares as provided in Block II of Part `A' of the CAF. The allotment of additional Equity Shares shall be made at the discretion of the Board and in the event of over subscription it will be considered on an equitable basis with reference to the number of shares held by you on the Record Date and in consultation with The Stock Exchange, U.P.

Further, in the case of requests for additional Equity Shares from NRI shareholders, the allotment will be subject to the approval of the Reserve Bank of India.
 
 

III. 11 OPTIONS TO SUBSCRIBE

The Company has not entered into any contract or arrangement preceding the date of this letter of Offer whereby any option or preferential right of any kind has been or is proposed to be given to any person or persons subscribe for any shares of the Company.
 
 

III.12 HOW TO APPLY

Applications for Equity Shares should be made only using the enclosed CAF provided by the Company and should be complete in all respects in its entirety as per the instructions set out in the said Form. No part of the CAF should be torn and detached under any circumstances otherwise the application will be rejected forthwith.
 

III.12.1 OPTIONS AVAILABLE	ACTION REQUIRED
Accept whole or part of the Equity Shares Offered to you without renouncing the balance	Fill in the respective columns/Blocks in Part A and sign Part A only (all the joint holders must sign)
Accept your entitlement to all equity shares Offered to you and apply for additional equity shares.	Fill the respective columns/ Blocks in Part A and sign Part A only (all the joint holders must sign).
Renounce all the Equity Shares Offered to you to one person (joint renouncees are deemed as one person) without your applying for any of the Equity Shares Offered to you.	Fill in and sign Part B indicating the number of Equity Shares renounced in the respective column / block (all the joint holders must sign) and hand over the entire form to the renouncee The renouncee/joint renouncees are required to fill in and sign Part C.
Accept a part of your entitlement and renounce the balance or part of it to one or more persons (renouncees).                         OR             Renounce your entitlement or part of it in marketable lot to one or more persons (joint renouncees are deemed as one person).	Fill in and sign Part D for required number of split forms and send the entire CAF to the Registrar to the Offer. On receipt of the split forms take action as indicated below: For the Equity Shares you want to accept fill in and sign Part A. (all jointholders must sign) For the equity shares you are renouncing, fill in Part B. Each of the renouncees should then fill in and sign Part C for the Equity Shares accepted by him/her. (all the jointholders must sign) Fill in and sign Part B for shares renounced. Renouncees must fill in and sign Part C.
Introduce a joint holder or change the sequence of joint holders	This will be treated as a renunciation. Fill in and sign Part B. Renouncees must fill in and sign Part C.

 

Notes :

1. The last date for receipt of request for split forms is
2. Part B of the CAF must not be used by any person(s) in whose favour this entitlement has been renounced.
3. While applying for or announcing right shares , joint holders must sign in the same order and as per the specimen signatures registered with the Company.

III 12.2 PROCEDURE FOR APPLICATION ON PLAIN PAPER

Where Shareholders have neither received the Original Composite Application Forms nor are they in a position to obtain duplicate Form(s), they have the additional facility of making an application to subscribe to the Rights Offered through this Letter of Offer on plain paper. Such an application on plain paper should contain the necessary particulars such as :

• Name
• Address
• Number of Shares held
• Ledger Folio number(s)
• Number of Equity Shares Entitled for
• Number of Equity Shares Applied for
• Additional Equity Shares Applied for (if any)
• Amount Paid with the application mentioning the particulars of Cheque, Demand Draft or Stockinvest (as the case may be).
• Permanent Account Number (PAN)/GIR No. in case applications for shares are for value of Rs. 50,000 or more.
• Bank Account Number and Name of Bank and Branch for refund purposes.

Registrars Address :

RCMC SHARE REGISTRY PVT. LTD.

1515, Ist Floor, Bhisham Pitamah Marg, Kotla Mubark Pur, (Near South Extn.) New Delhi - 110003.

Phone No: (011) 4692346, 46010117 Fax : (011) 4692345

Attention is drawn to the fact that the Shareholders making the Applications otherwise than on the CAF as mentioned above, shall not be entitled to renounce their Rights and should not utilise the CAF for any purpose including Renunciation even if the same is received subsequently. Any Applications, in violation of these requirements, shall face the risk of rejection.

III 12.3 JOINT APPLICATION

In case of joint holders, all jointholders must sign the relevant portion of the CAF in the same order as per the specimen signature recorded with the Company. Further in case of joint application, refund orders 9if any) and interest/dividend warrants etc. will be made out in favour of the first Applicant whose name appears in the Application Form at the Address mentioned therein.

III 12.4 APPLICATION UNDER POWER OF ATORNEY

In case of applications made under a Power of Attorney by limited companies or bodies corporate or societies, the certified copy of the Power of Attorney or the relevant authority , as the case may be , must be lodged separately , along with a photocopy of Application Form and a certified copy of the Memorandum and Articles of Association at the office of the Registrar to the issue simultaneously with the submission of the Application Form indicating the name of the Applicant along with the Address , Application Serial No. , date of submission of the Application Form , name of the Bank and Branch where it was deposited , cheque/ draft no. and bank and branch on which the cheque/draft was drawn. In case such information and documents are not received by the Registrar to the issue , the applications may not be considered and are liable to be rejected.
 
 

III 12..5 GENERAL INSTRUCTIONS

4. The Board will have a right to extend the date of the closure of issue for such period as it may determine from time to time but not exceeding a period of 60 days from the date of opening of the issue.

A. FOR RESIDENT INDIAN SHAREHOLDERS

1.Payments should be made in Cash or by Cheque or by Bank Draft or Stockinvest. Money/Postal Orders will not be accepted.

2. Cheques/Bank Drafts/Stockinvests should be drawn on any Bank (including a Co-operative Bank), which is situated at and is a member or sub-member of the Bankers' Clearing House located at the Center where the application is accepted.
1. Outstation Cheques/Bank Drafts will not be accepted and applications accompanied by such Cheques or Bank Drafts will be rejected.

Stockinvest and partly with Cheque will not be accepted.

5. All Cheques / Drafts accompanying the applications must be crossed A/c Payee Only" and must be made payable to the Bankers to the Issue with whom the application is lodged and be marked "ASHU Motor and General Finance Ltd.- RIGHTS ISSUE".
1. All Stockinvests must be made payable to the Company viz. . and not to the Bankers to the Issue. Please mention the CAF number on the reverse of the Cheque/Draft/Stockinvest.

Stockinvest can be used in lieu of Cash/Cheque/Bank Draft for making applications. Individual investors and Mutual Funds have the option to use stockinvest in lieu of cash/cheque/demand draft for making applications. All other category of investors cannot use Stockinvests. Value of stockinvests should not exceed Rs.50,000/- in case of individuals. All procedures and conditions mentioned earlier for applying by cheques/drafts will also apply to applications made by stockinvest. Some details of the Stockinvest scheme are given below:

1. Stockinvest is issued to the applicants to be used for applying for issue of shares/debentures /bonds only.
2. Stockinvests would be issued by banks only to individual investors and mutual funds. Stockbrokers, corporate bodies, banks and financial institutions are not allowed the facility of using Stockinvests.
3. Stockinvest can be obtained from any Bank issuing these instruments by making necessary application and depositing the amounts with them. Stockinvest would be issued by banks only against term deposits, credit balances available in savings bank or current accounts.
4. Stockinvest would be issued for the denomination specified by the investor to the issuing branch. The applicant will authorise payment of the maximum sum payable towards application money for the shares applied on the left side of the Stockinvest. The payee will fill in the actual amount receivable on the right side indicating the number of shares for which the payment is appropriated. The amount indicated on the left side should be within the overall ceiling for Stockinvest indicated on the top right side.
5. The applicant using the Stockinvest should submit the application along with the Stockinvest for the amount payable on application.
6. Stockkinvest is paid on the payee filling in the required particulars on the right side under due authorisation and discharged by the authorised signatory and presenting it for payment.
7. Stockinvest is neither transferable nor negotiable. The issuing bank undertakes to pay the lower of the two sums indicated in the face of the instrument (representing the application money payable on his entitlement of shares/debentures/bonds according to the basis of allotment and his application) in terms of the authorisation given by the accountholder. Payment will be made only by credit to the payees' account with their banker.
8. Stockinvest is valid for four months from the date of issue indicated on its face and no amount can be claimed on the Stockinvest by the issuing bank branch unless it is presented to it within four months.

1. Stockinvest is payable at all branches of the issuing bank including all the centers where stock exchanges are present.

11. It is understood at the explicit undertaking of the account holder an amount equivalent to the sum mentioned on the left hand side of the Stockinvest is either debited to his account or a lien marked on his deposit account from the date of issue, till full liability under the Stockinvest is extinguished.

i. Valid instrument is presented by the controlling branch of the bank after allotment.

ii. The canceled instrument is surrendered by the investor.

iii. An indemnity is executed in favor of the bank after the validity period of the Stockinvest is

over, in cases where the investor has not received the advice of allotment/cancelled stock

invest.
 
 

m) The canceled instrument would be directly sent back to the investor by the company.

14. The bank shall not be liable for any delay, error, fraud, forgery or any other lapse in the issue or encashment of the Stockinvest. It shall also not be liable for any losses / damages in case of death / insanity or insolvency of the drawer before actual allotment / delivery of the relative shares / debentures / bonds by the payee company.

16. Stockinvest should be utilised by the purchaser(s) and the purchasers' name/name of one of the purchasers should invariably indicated as the first applicant in the share application form. Thus, if the signature of the purchaser on the Stockinvest and the signature of the first applicant on the application form does not tally, the application would be treated as having been accompanied by a third party Stockinvest and such applications will be rejected.
17. Stockinvest are to be used by the purchaser(s) within ten days of issue and for the purpose, the last day for use of the Stockinvest for submitting share application to the bank is indicated on the face of the Stockinvest with a notation 'To be used before --------- '.
18. Separate Stockinvest of suitable and appropriate denomination (wherever applicable) should be submitted with each application form for the shares applied for. In case of Stockinvests of fixed denomination, the investor can fill an amount less than the denomination amount depending upon the money required to be paid on application for the shares applied for.

The applicant has to fill in the following particulars :

(i) Title of the account as mentioned in this Letter of Offer, that is .

(ii) No of Shares applied for,

(iii) The amount payable on application for the Shares applied for,

(iv) Name, address and application form number on the reverse of the Stockinvest

The instrument should be thereafter signed by the applicant which should also bear the stamp of the Bank issuing the Stockinvest and should be crossed Account Payee only. Service charges for the issuing of Stockinvest must be borne by the Applicant. The Applicant should not fill in the portion to be entered by the Registrar to the Offer.

The Registrar to the Offer will enter particulars of the Equity Shares allotted and also the amount in the right hand portion of the stock invest.

THE STOCKINVEST INSTRUMENT SHOULD BE USED WITHIN TEN DAYS FROM THE DATE THEREOF, FAILING WHICH SUCH APPLICATIONS ARE LIABLE TO BE REJECTED.

THE NAME OF THE PURCHASER / ONE OF THE PURCHASERS SHOULD INVARIABLY BE INDICATED AS FIRST APPLICANT IN THE SHARE APPLICATION FORM.

The above information is given for benefit of investors and the company is not liable for any modification of the terms of Stockinvest or procedure thereof by issuing Banks or by any other authority.

The Registrar to the Offer have been authorised by the Company vide a Board Resolution dated 09.02.2000 to sign on behalf of the Company for realising the proceed of the stock invest of the successful allottees or to affix non-allotment advice on the instrument or to cancel the stock invest of the non-allottees with more than one stock invest. The cancelled instruments shall be sent back by the Registrar to the investor directly. All other conditions mentioned earlier for making an application through Cheques / Demand Drafts will also apply mutatis mutandis to applications made with Stockinvests.
 
 

III. 14 BASIS OF ALLOTMENT

The basis of allotment shall be finalised by the Board of Directors in consultation the U.P. Stock Exchange in the following order of priority:

a) Allotment(s) in full, to the shareholders who have applied for their Rights entitlement either in full or in part and also to the renouncee(s) who have applied for the Equity Shares renounced in their favour either in full or in part (subject to the provisions contained under the paragraph titled "Renunciation").

b) Allotment (s), on an equitable basis to the Shareholders who, having applied for all the Equity Shares

Offered to them as Rights, have applied for additional Equity Shares, provided there is any surplus after

making full allotment under (a) above, on equitable basis and in consultation with The Stock Exchange,

U.P.

3. Preferential allotment of one additional share each to shareholders whose fractional rights have been ignored and have applied for additional shares.
4. Allotment (s), on an equitable basis to the renouncees who have applied for all the equity shares renounced to them and have also applied for additional Equity Shares provided there is any surplus after making full allotment under (a) and (b) above.

5. Allotment to any other person(s) as the Directors of the company may, in their absolute discretion deem fit, provided there is a surplus available after making full allotment under (a) and (b) and (c) above.

In the event of oversubscription, allotment will be made only within the overall size of the Rights Issue, as retention of oversubscription is not permissible.

III. 15 ISSUE OF LETTERS OF ALLOTMENT/SHARE CERTIFICATES

The allotment letters / Share Certificates / refund orders will be dispatched to the Sole/first applicant at the applicant's sole risk within six weeks from the date of closing of the subscription list. The Company shall ensure dispatch of refund orders of value upto Rs. 1500/- under certificate of posting and those over Rs. 1500/- and share certificates by registered post only and that adequate funds for the purpose is made available to Secretarial Department of the Company. In case the company issues Allotment letters, the relative Share certificates will be delivered (in exchange for the allotment letters) within three months from the date of allotment.

Further as far as possible allotment of securities and dispatch of allotment letters/refund orders hereby offered shall be made within a period of 30 days of the closure of the issue. The company shall pay interest @ 15% if the allotment is not made and/or refund orders are not dispatched to the investors within 30 days from the closure of the issue for the period of delay beyond 30 days.

III. 16 LAST DATE FOR SUBMISSION OF APPLICATION

Unless the application submitted in the prescribed application form, duly completed and signed and received by the Banker to the Issue or any of its designated collection centres specified in the CAF, by the close of banking hours on , __________________ 2000 together with the remittance for amount payable on application, the Offer herein made shall be deemed to have been declined by you and shares Offered to you shall be utilised by the Board for allotting equity shares as mentioned under the heading "Unsubscribed Equity Shares" above.

III.17 REJECTION OF APPLICATION

The Board of Directors/reserve its full, unqualified and absolute right to accept or reject any application in whole or in part in consultation with the , U.P. Stock Exchanges and in either case without assigning any reason thereof. In the event of any shares applied for not being allotted in full, the excess application money of such applications will be refunded in accordance with the provisions of section 73 of the Companies Act,1956. The Company will be liable, in case of delayed refunds after 30 days, except to application through stockinvests, to pay interest @ 15% p.a. for the period of delay beyond 30 days from the closure of this issue.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

III. 18 DISPOSAL OF APPLICATIONS WITH STOCKINVEST

The procedure for disposal of applications made by Cash / Cheque / Demand Draft will apply mutuatis mutandis to Stockinvest, except that.

1) In case of non-allottees the Registrar to the issue shall return the instrument to the applicants with stamps of "CANCELED" and "NOT ALLOTTED" within six weeks from the closure of the Subscription List. The Bank will lift the lien on the account of the Applicant on receipt of the Stockinvest.

2) On allotment / partial allotment, Registrar to the issue shall fill in the amount which would be less than or equal to the amount filled in by the Investor before presenting the Stockinvest to the respective issuing banker for payment to the extent of allotment. The Bank will lift the lien on the balance amount, if any.

3) Multiple applications received with a single Stockinvest and single application with more than one Stockinvest are liable for rejection.

The Registrar to the issue have been authorised by the Company through Board Resolution passed on to sign on behalf of the company for realising the proceeds of Stockinvests from the issuing Bank or to affix non-allotment advice on the Stockinvest or to cancel the Stockinvests of the non-allottees or partially successful allottees. The canceled Stockinvest shall be sent back by the Registrar to the Offer to the investors directly. In case the canceled/partially utilised STOCKINVEST is not received by an investor from the Registrar to the Offer, lien will be lifted by the issuing bank on expiry of four months from the date of issue of the STOCKINVEST against an Indemnity Bond from the Investor.

Inquiries relating to Stockinvest may be addressed only to the Registrar to the issue and not to the issuing Bank/Company.
 
 

III.19 STAND-BY ARRANGEMENTS

The Company has not made any standby arrangements for the present Rights issue.
 
 

III.20 ARRANGEMENT FOR ODD LOT SHARES :

The Company has not made any arrangements for disposal of odd lot shares arising out of this Offer. For all odd lot shares arising out of this Offer, the Company will issue share certificates in the denomination of 1-2-5-10-20 shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

III.21 TAX BENEFITS TO THE COMPANY AND SHAREHOLDERS

The Board of Directors of the Company has been advised by the Company’s Auditors , M/s Mehra & Co. Chartered Accountants, vide their letter dated under the Income Tax Act, 1961, and other applicable tax laws for the time being in force , the following principal tax benefits and deductions will, interalia , be available to the Company and its members.

A. TO THE COMPANY

1. The company to entitled to 100 % on energy saving and pollution control machine under section 32 of the income tax Act 1961.
2. The company would be entitled to depreciation on lumpsum consideration paid in acquiring know how likely to assist in manufacture.
3. The company would be entitled to a deduction of the whole of the capital expenditure (other than on land) incurred on scientific research related to the business carried on by the company in the year in which such expenditure is incurred under section 35 of the Income Tax Act.
4. The expenditure incurred by the company being in the nature of preliminary expenses and share issue expenses as specified under Section 35D of the Income Tax Act, 1961 can be amortized over a period of ten years. Subject to overall limit provided under that section. Hovever the above expenditure incurred after 31.03.98 can be amortized over a period of five years.
5. The company would be entitled do deduction of an amount equal to 30% of additional wages paid to the new regular workman employed by the company for three assessment years relevant to the previous year in which such employment is provided.
6. As per the provision of Section 10 (23G) of the Income Tax Act 1961 the taxable income of the company would not include any income by way of dividends other then dividend refer to in section 115-O, interest on long term capital gains of an infrastructure capital fund or an infrastructure capital company from investment made on or after 1st June 1998 by way of shares or long term finance in any enterprise wholly engaged in the business of (1) developing, (ii) maintaining and operation or (iii) developing maintaining and operating any infrastructure facility and which has been approved by the Central Government in accordance with the rules made in this behalf and which satisfies the prescribed conditions.
7. The taxable income of the company would not include dividend income which is declared, distributed or paid by a domestic company in accordance with and subject to the provisions of Section 10 (33) READ WITH Section 115-O and the income received in respect of units from the Unit Trust of India established under Unit Trust of India Act 1963 or income received in respect of the unit of mutual fund specified under Clause (23D) of Section 10.

TO THE RESIDENT /INDIAN PUBLIC

1. The taxable income of the shareholders would not include the dividend income which is declared, distributed or paid by the company in accordance with and subject to the provision of section 10 (33) read with Section 115-O of the income tax Act 1961.
2. Income of mutual funds set up by the public sector banks or public financial institutions authorized y the SEBI or the RBI will be exempt from income tax on their income from investment in shares of the company subject to the provision of section 10(23-D) of the income Tax Act 1961.
3. If the company's shares are sold by an assessee after being held for twelve months or more, the gain, if any, would be long term. Long term capital gain will be computed after indexing the cost of the acquisition improvement and will be taxed at 20%.
4. Under Section 48 of the income tax Act the long term capital gain arising out of sale of shares of the company, being listed securities, held for more than 12 months will be computed alter indexing the cost of acquisition /improvement from the full value of consideration.
5. Under the provisions of Section 112 of the Income Tax Act, 1961, the tax payable in respect of long term capital gains in the case of listed securities including the shares of the Company shall not exceed 10% of the amount of capital gains before giving effect to the provisions of indexation under Section 48 of the Income Tax Act, 1961.

TO THE NON RESIDENT INDIAN

1. In accordance with the provisions of section 112(1)(c) of the Income Tax Act1961 long term capital gains arising from transfer of shares of the company being listed securities by a foreign company or a non resident (not being a company) shall not exceed 10% of the amount of capital gains computed under section 48 of the Income Tax Act 1961.
2. In accordance with the provisions of section 115 A D of the Income Tax Act 1961 Foreign Institutional Investors will be liable to a reduced rate of tax on income in respect of securities at 20% on short term capital gains at 30% and long term capital gains at 10% arising from the transfer of shares subject to the condition prescribed in the said section.
3. Non resident Indians who acquire company’s share by effecting payments in convertible foreign exchange have the option under section 115E of the Income Tax Act 1961of being taxed on long term capital gains in respect of transfer of such shares at a flat rate of 10% with out aggregating their other taxable income in India which is taxed as a separate block.
4. Long term capital gains arising on sale of shares (which were acquired by effecting payment in convertible foreign exchange) of the company shall be exempted from income tax under Section 115-F of the Income Tax Act to the extent of the net consideration in reinvested in specified assets with in six month of the date of transfer. The amount so exempted shall be chargeable to tax if the new assets are transferred with in three years from the date of acquisition of the specified assets in the assessment year relating to the previous year in which the assets are transferred.
5. Under 54EA and Section 54EB capital gains arising on transfer of long term capital assets including the shares of the company would not be charged to tax on investment of net consideration (Section 54EA) or capital gains (Section 54EB) in any of the assets specified for this purpose in accordance with and subject to the conditions stipulated in these Sections of the Income Tax Act.
6. A Non Resident Indian need not furnish his Return of Income under Section 115 G of the Income Tax Act if His only source of income is investment income or long term capital gains or both, provided tax has been deducted at source from such income This however does not include dividend income which is no taxable.
7. If Non Resident Indian in any previous year becomes assessable as resident in India in respect of the total income of any subsequent year, then he may under Section 115-H of the Income Tax Act furnish to the income tax officer a declaration in writing along with return of Income under section 139 for the assessment year for which he is so assessable, to the effect that the provisions of chapter XII A of the income tax Act shall continue to apply to him derived from any foreign exchange asset, being an asset of the nature referred to in section 115 C and if he does so the provisions of the said Chapter shall continue to apply to him in relation to such income for that assessment year and for every subsequent assessment year until the transfer or conversion (otherwise than by transfer)into money of such assets.
8. Under Section 48 of the Income Tax Act 1961 capital gains arising from the transfer of capital assets being shares in the company, shall be computed by converting the cost of acquisition expenditure incurred wholly and exclusively in connection with such transfer and the full value of the


consideration into the same foreign currency as was initially utilized in the purchase of the shares and the gain so computed in foreign currency shall be reconverted into rupees at the rate of exchange prescribed in this behalf. The capital gains so computed in rupees shall be charged to income tax. However, cost indexation benefits are not available to non-resident members.

9. Under Section 115 –I, a Non Resident Indian if he elects not to be governed by the above mentioned special provisions of Chapter XII-A then he, on income (not being dividend income) derived by him, will be entitled to tax benefit as applicable to residents.

C. WEALTH TAX

The investment in shares of the company will be exempt from Wealth Tax without any monetary limit.

D. GIFT TAX

Gifts made by Non Resident member, who is either Indian Citizen or a person of Indian origin to any of his relatives in India in the form of shares of the company, such shares being acquired by him out of convertible foreign exchange, shall be exempted from Gift Tax under Section 5(1)(id) of the Gift Tax Act1958. More over there will be no gift tax for the gifts made after 1.10.98.

For Mehra & Co.

Chartered Accountants

Sd/-

Chander Mehra.

F.C.A.

Membership No 14242

Dated 28.01.2000

IV. PARTICULARS OF THE ISSUE.

IV.1 OBJECTS OF THE ISSUE

The Company has already diversified its operations by entering into entertainment industry. For meeting the enhanced requirement of funds for producing feature films and serials , purchasing of studios and office equipments and hiring and renovating the office/studio it needs to increase its capital. Thus the Company proposes to raise its capital base by way of right issue of equity shares. The expenses of the present right issue will also be met out of the proceeds of the isssue.

IV.2. COST OF PROJECT AND MEANS OF FINANCE :
 

Particulars	Rs. in Lacs	Rs. in Lacs	Rs. in Lacs.	Rs. in Lacs
Year ending March,31	2001	2002	2003	2004
Plant & Machinery	20	25	-	100
Interior	05	05	-	-
Office Equipment	2.5	-	-	-
Public Issue	12	-	-	-
Lease	06	-	-	-
Working Capital for production activity	34.5	210	240	140
Total	80	240	240	240
	-

MEANS OF FINANCE
 

Particulars	Rs. in Lacs	Rs. in Lacs	Rs. in Lacs	Rs. in Lacs
Year ending March 31	2001	2002	2003	2004
Equity	80	240	240	240

V COMPANY, MANAGEMENT AND PROJECT

V.1 HISTORY OF THE COMPANY ,PRESENT BUSINESS AND MAIN OBJECTS

Ashu Motor & General Finance Ltd. , was incorporated as a Private Ltd Company under the Companies Act,1956, on 19-10-81 in the name of Ashu Motor & General Finance Private Limited During the initial period, the company mainly engaged in the field of financing and hire-purchase at a very small level. The Original promoters of the company were Mr.Bupinder Kumar, and Mr. Ajai Rastogi . The Original promoters /Directors left the company due to their pre-occupations and with the passage of time the board was transformed to the new set of Board in 1995 who have the vision to meet the challenges in the financial services industry and capitalize upon the liberalization of the Indian Economy. The Company has changed hands into Mr.Alok Rastogi , Mr.Mukul Singhal & Mr.Raj Gopal Iyer.

The Company was subsequently converted to Public Limited Company in the name and style as Ashu Motor & General Finance Ltd. on 30-01-1995. Fresh Certificate of Incorporation, consequent upon conversion to Public Limited Company was granted by the Registrar of Companies. (ROC), Kanpur. The Company come out with a Public issue of 8,00,000 Equity Shares of Rs. 10/- each for cash at par in September,1995 to expand its operations in the field of leasing , hire-purchase, investment, bill discounting and short-term advances.

Meanwhile Mr. Mukul Singhal and Mr. Raj Gopal Iyer resigned from their Directorship and then ceased to be the Promoters.

MAIN OBJECTS OF THE COMPANY

The objects of the Company are set out in the Memorandum of Association of the Company. The main objects are as follows :

1. To carry on in India and elsewhere in all their branches the Business of hire purchase, housing, Motor and general finance and investment in shares and securities. To lend or advance money either with or without security and to arrange, to negotiate loan and to carry on the business of financiers, finance broker, money lender and bill brokers but the company shall not carry on any banking business as defined in banking regulation Act 1949.

2. To carry on the business of financers, lessor and hire purchasers of every type of property, lending or advancing money on the security of movable or immovable property as specified in object clause, legal claims, chooses in action or other rights and to promote or finance or assist in promoting and financing business undertaking and industries.

3. To carry on the business as producers , distributors, importers, exporters, exibitors and financier of cinematographic films, acquisition and self production of feature films as film , serials, cartoon films, and acquisition of other related copy right to make, run, hire and manage studios, laboratories, theaters and to rendering technical services connected their with such as recording, editing, dubbing, graphics, shooting, floors, studios, shootings, quitrents and all other related facilities for video and to act as dealers importers and exporters of software, musical instruments, records, compact disc, U-Matic audio and video or related with.

4. To manufacture, assembles, market, buy, sell, lease, import, export, franchise produce or otherwise deal in computer software, data processing, computers, computer system, computer goods and components, computer hardware, computer peripherals and accessories, all kinds of business machines, all kinds of office equipment, systems and components, any application of the above.

5. To establish and operates computer centre, education / café data information processing centre internet service provider and bureaus and to render services or give / take franchise to any Indian or Foreign company in joint venture or collaboration to customers in India or elsewhere by providing them jobs at data processing centre and to impart training electronic data processing computer software and hardware to customers and others.

PRESENT BUSINESS

The Company is presently engaged in the production of feature films.

V.2 SUBSIDIARIES :

The Company does not have any subsidiary at present.

V.3 PROMOTERS, AND THEIR BACKGROUND

Ashu Motor & General Finance limited was promoted by Mr. Bhupender Kumar & Mr. Ajay Kumar.

The original promoters have transferred their shareholding to the present management and reducing their shareholding in the Company to Nil.

Sh.Alok Rastogi S/o. Mr. Raj Tilak Rastogi is about 30 yrs old and is a science graduate. He has an experience of five years as senior executive and was the incharge of fund managing and also knows production controlling activity of feature films.

Mr. Promod Grover aged about 32 years is a commerce graduate having 10 years of experience in marketing with corporate clients .
 
 

Mr. Manoj Kumar aged about 35 years, Law Graduate, has an experience of 5 years of the Legal Department and has been overall incharge of the affairs of the Company and also looking after the business development and distribution as well as liasioning with the various departments.

V.4 MANAGEMENT OF THE COMPANY

A.BOARD OF DIRECTORS

The Company is managed by the Board of Directors, Consisting of Experienced persons :
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

BOARD OF DIRECTORS AS ON 11.1.2000

Name, Designation, Address & Occupation Directorship held in other Companies1. Shri Manoj Kumar NIL

(Director)

A-5, Shastri Nagar

Garh Road

Meerut.

(Business)

2. Shri Aslok Rastogi, NIL

(Director)

523, Patel Nagar,

Meerut.

(Business)

3. Shri Pramod Grover NIL

(Director)

Flat No. 457,

Sector 7,

R.K. Puram,

New Delhi.

(Business)

B. DETAILS OF KEY MANAGERIAL PERSONNEL

Besides the Board of Directors the top management team of Company consists of the following personnel :

Miss Neelu Hassan aged about 25 years is Chief Manager Entertainment and Senior Artists and have experience of entertainment industry She has acted in feature films and TV Serials. Her Qualification is Graduation
 
 

Mr. Manas aged about 30 years is working as Manager Software . He has 10 years experience in Computer hardware and software industry working as free lancer/consultant.

Mr. Taposh Pal aged about 32 years is the Accounts Officer of the Company. His Qualification is post graduation in commerce and for the last 9 years he has been responsible for all the finance and accounts work of the Company.

Mr. Sonu Kumar aged about 25 years is Senior Public Relation Officer is looking after public relation department.

V.5 LITIGATIONS AGAINST THE PROMOTERS

There are no pending disputes/litigations against the promoters and the Company.
 
 

V.6 PROJECT

The Company is implementing a project for diversifying its operations into entertainment and media industry. The Company proposes to set up facilities for producing feature films and Serials to be telecasted on a wide range of TV Channels .
 
 

V.7 SWOT ANALYSIS

STRENGHS

1. Already released one feature film which was a profit making venture.

1. Industry characterised by high employee turnover.
 
 

OPPORTUNITIES

1. Fast growing demand for films and serials.

2. Increase in number of television/satellite channels and hence the need of video software.

3. Export potential.

THREATS

1. Stiff competition both from private and state sectors.

2. Possibility of global players entering Indian market.

3. Technological Obsolescence.

V.8 LOCATION

The Company proposes to set up full fledged studio at Delhi and Mumbai. The studios will be equipped for production of TV serials and feature films and also for post production facilities.
 
 

V.9 PLANT AND MACHINERY Rs. in lacs

S.No. Particulars No.s Cost

1. D-30Camcorder with 3P 1 20

2. D-30 Camera with BVW- 50 1 25
1. Beta Editing Table 2 100

Total 145

------

V.10 MARKET

The Company’s business will include production of feature films, TV Serials of its own, producion of TV Serials for outside agencies on contract basis and providing video production facilities to other video producers.

The Country has witnessed a substantial growth in the films and television serial markets , the main reason being the increase in the number of Television Channels available to the Indian television viewers.

Transmission facilities of a proposed and recently introduced channels are superior to those of existing domestic channels, as is borne out by the fact that while domestic channels accept video tapes in low band format for transmission, overseas channels use tapes only in Beta format. The industry is therefore expected to see an increased demand for high quality post production processing.

As of now the existing facilities in India in quality video post production are considered inadequate. The Company aims to provide not only sophistecated postproduction facilities based on state of art digital technology but also the entire range of video processing technology under one roof to suit the client needs.

V.11 MARKETING AND SELLING ARRANGEMENTS

Electronics /Magnetic data Storage Devices e.g. Shooting Equipments, CD/Audio & Video Tape/Floppy Diskettes, Eastman Colour negative, Sound negative etc. are the only consumables required for video production , feature film and post production facilities.

V.13 UTILITIES

Power

To run the equipments, the Company needs a single/three phase connection.

Water

Water is required for human consumption and other general purposes. The Company has sufficient water supply at its offices and studio.

Manpower

All the Manpower relating to the projects including technical and non-technical are easily available in the market on job work basis.
 
 
 
 

V.14 ENVIRONMENTAL CLEARANCE

The production process does not generate any effluent. Therefore, no environmental clearance from state pollution control board is required.

V.15 COMPETITION

The Company is placed in the fast growing and dynamic industry of Media and Entertainment. With the advent of several channels such as Zee TV , EL TV, Sony TV in addition to Doordarshan , the field of Satellite Television is witnessing a boom. Besides these Channels, international channels like star television network are also operating in India.

With regard to film production the Company will also face competition from various large banners.

By hiring experienced Directors, technicians, artists and purchasing quality equipments , the Company plans to carve a niche for itself and thus face the competition successfully.

V.16 IMPLEMENTATION SCHEDULE

Schedule of implementation is as under :

1. The Company will acquire the Plant & Machinery as given below :

ii) D-30 Camera with BVW-50 After first conversion of detachable warrants

iii) Beta Editing Table After third conversion of detachable warrants

2 The Company will start the production of TV Serials and feature films simultaneously immediately after the realisation of money from the right issue.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

VI FINANCIAL INFORMATION

VI. 1 FINANCIAL PERFORMANCE OF THE COMPANY FOR THE LAST FIVE YEARS

1. The financial highlights of the company during the last five financial years as per audited accounts duly supported by Auditors certificate are as under :

1. Statement of Profit & Loss : ( Rs. in Lacs)

Income 1995 1996 1997 1998 1999

----------------------------------------------------------------------------------------------------------------

Interest 1.38 4.40 0.05 0.25 1.60

Hire Charges - - 3.34 - -

Rental Income 0.67 1.82 1.68 1.02 1.02

Other Income 0.05 0.02 0.35 0.72 0.87

Commission - - - 3.85 2.04

Tele-Serial/Film - - - -

--------------------------------------------------------------------------------------------------------------

Total 2.10 6.24 5.42 5.84 5.53

--------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------

Expenditure 1995 1996 1997 1998 1999

----------------------------------------------------------------------------------------------------------------

Staff cost - 0.28 0.14 0.24 -

Interest 1.18 0.49 - - -

Other Admn. Expn. 0.24 1.21 1.17 1.55 1.51

Rent 0.02 0.08 - - -

Depreciation 1.30 2.01 2.47 2.57 2.36

Preliminary Expn., - 1.40 1.40 1.40 1.40

-------------------------------------------------- -------------------------------------------------------------

Total 2.74 5.47 5.18 5.76 5.27

---------------------------------------------------------------------------------------------------------------

Net Profit before Tax (0.64) 0.77 0.24 0.08 0.26

Taxation (0.03) 0.19 0.13 0.12 0.09

Net Profit after Tax / (0.67) 0.58 0.11 (0.04) 0.17

Prior period items/

Extra-ordinary items

Interest on Tax refund - 0.02 0.05 - -

Net Profit/(Loss) (0.67) 0.60 0.16 (0.04) 0.17

--------------------------------------------------------------------------------------------------------------
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Balance Sheet

Year/Period ending March 1995 1996 1997 1998 1999

Duration(months) 12 12 12 12 12

Sources of funds

-Share Capital 80.00 320.02 320.02 320.02 320.02

-Share Application Money 25.00 - - - -

-Reserves & Surplus - 0.47 0.63 0.59 0.76

-Unsecured loans 9.84 4.85 - - -

-Current Liabilities 1.35 0.25 0.05 0.05 0.13

---- ----------------------------------------------------------------------------------------------------------

Total 116.19 325.59 320.70 320.66 320.91

--------------------------------------------------------------------------------------------------------------

Application of Funds
 
 

Net Fixed Assets 78.63 85.30 84.89 83.46 80.33

Investments 26.28 144.81 150.22 120.35 120.35

Current Assets 8.99 0.98 2.35 46.30 11.48

Loans & Advances 0.82 81.87 72.01 60.73 100.33

Misc. Expenditure 1.47 12.63 11.23 9.82 8.42

not w/o

---- ----------------------------------------------------------------------------------------------------------

Total 116.19 325.59 320.70 320.66 320.91

--------------------------------------------------------------------------------------------------------------
 
 

VI.2 KEY ACCOUNTING RATIOS, CAPITALIZATION STATEMENT AND TAXATION

STATEMENT

Key Accounting Ratios, Capitalization Statement and Taxation Statement as certified by the Auditors to the Company M/s Mehra & Co. , Chartered Accountants are as follows :

1995 1996 1997 1998 1999

-Debt Equity Ratio 0:1 0:1 0:1 0:1 0:1

-Earning Per Share - 0.02 0.01 - 0.01

(Before Tax/Dividend)

-Net Assets Value per Shares Rs .10 Rs. 10.02 Rs.10.02 Rs. 10.02 Rs.10.02

Return on average Net Worth - - - - -
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Capitalization Statement

Pre-issue As adjusted

at for issue
 
 

Short Term Debt - -Long Term Debt - -Shareholders Funds Share Capital 320.02 760.04 Reserves & Surplus 0.76 0.76Total Shareholders Funds 320.78 760.80 Long Term Debt / Equity 0:1 0:1
 
 

Taxation Statement

Year ending 1995 1996 1997 1998 1999

Net Profit (0.67) 0.60 0.16 0.04 0.17

Tax at Notional Rate - 0.19 0.13 - 0.09

Adjustments:

Export profit - - - - -

Depreciation between Tax Dep.

And Book Depreciation - - - - -

Other adjustments - - - - -

Net adjustments - - - - -

Tax savings thereon - - - - -

Total Taxation - - - - -
 
 

VI.3 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Conventions

1. The financial statements are prepared under historical cost convention in accordance with the generally accepted accounting principles and provisions of the Companies Act,1956
2. The Company generally follows merchantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2. Fixed Assets and Depreciation

3. Investments

4. Deferred Revenue Expenditure

2. NOTES TO THE ACCOUNTS

1. In the opinion of the management the current assets, Loans & Advances have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.
2. Depreciation on fixed assets has been provided on straight line basis as per the provisions of the Companies Act,1956 on the following basis :

1. For full year on the opening balance
2. On pro rata basis for the Assets purchased during the year and/or disposed during the year.

3. Investments have been verified and certified by the management. Investments of the Company in the form of shares and govt. securities are either lodged or transferred or held with valid transfer forms as certified.

Except elsewhere mentioned in this Letter of Offer, in the opinion of the Directors, there are no circumstances that have arisen since the date of the last financial statements disclosed in the Letter of Offer that materially and adversely affects or is likely to affect the trading or profitability of the company, or the value of its assets, or its ability to pay its liabilities within the next twelve months.
 
 
 
 
 
 
 
 
 
 

VI.5 MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF THE OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS

The Company was originally engaged in the business of financial services but due to bad phase of financial sector during these five years the Company could not do well as there was no safe and right opportunuties available in the market. Therefore, the Directors decided to diversify to media and entertainment industry and it expects to reap up profits in near future.

VI. 6 FORECAST OF FUTURE PROFITS

Forecast of estimated profits for the current year as certified by the Auditors to the Company, , Chartered Accountants on are as follows :

( Rs. In Lakhs) (Rs. In Lakhs)

Year ending March 31, 2000 Year ending March 31,2001

Sales 85 19.50 Other Income 1Total Income 86 19.50PBITD 7.00 9.28Interest - 0.53Depreciation - 2.50PBT 7.00 6.78

Tax - 0.53PAT 7.00 6.25

Notes : No provision for Depreciation , Interest and Tax has been made for year ending 31st March,2000.

VI.7 JUSTIFICATION OF PREMIUM

Neither the past financial performance of the Company nor the Market price of Equity shares quoted at the Stock Exchange justifies premium being charged. In view of recent successful release of feature film , however ,the, Company has established its credentials in the entertainment industry at initial level . This has enhanced the future prospects of the Company. The management is, therefore, confident that the premium of Rs. 10/- per share is justifiable. The confidence is further supported by the fact that the Promoters have undertaken to subscribe the entire issue which remains unsubscribed.

VII GENERAL INFORMATION

VII. 1 STOCK MARKET DATA

The existing shares of the Company are listed on Stock Exchange at Delhi and U.P but the Shares have thinly been traded on U.P. Stock Exchange Information regarding the Company’s Share prices at Stock Exchange at Delhi is given below :

YEARLY HIGHEST/LOWEST/CLOSING MARKET PRICES

FROM : JANUARY 1997 TO DECEMBER 1999

_____________________________________________________________________________________

Year Highest Date Lowest Date Closing Date

__________________________________________________________________________________

Jan-Dec 1997 8.00 01/01/97 2.75 27/11/97 3.35 30/12/97

Jan-Dec 1998 7.00 30/07/98 1.00 24/08/98 1.75 05/11/98

Jan-Dec 1999 15.00 21/12/99 0.70 08/09/99 9.00 30/12/99

_________________________________________________________________________________

MONTHLY HIGHEST /LOWEST MARKET PRICES

FROM : JULY,99 TO DECEMBER 99

__________________________________________________________________________________

Month Highest Date Lowest Date Closing Date

__________________________________________________________________________________

July 1999 No Rate Reported

August 1999 1.00 30/08/99 1.00 30/08/99 1.00 31/08/99

September1999 1.90 29/09/99 0.70 08/09/99 1.90 29/09/99

October 1999 2.00 01/10/99 1.20 28/10/99 1.25 28/10/99

November 1999 2.10 05/11/99 1.25 03/11/99 1.80 30/11/99

December 1999 15.00 21/12/99 2.00 07/12/99 9.00 30/12/99

___________________________________________________________________________________

VII. 2 WORKING RESULTS AND OTHER INFORMATION

The following information is given by way of additional information in terms of Ministry of Finance Circular No. F/2/5/SE/76 dated 5.2.77 read with amendment of even no. dated 8.3.77

1. Working Results of the Company (unaudited) for the period ended December,1999 is as follows :

Net Sales 81.69

Other Income 0.08

Total Income 81.76

PBDIT 5.35

Interest -

Depreciation -

Profit Before Tax 5.35

Provision for Tax -

Profit After Tax 5.35
 
 

2. There are no material changes and commitments affecting the financial position of the Company since the last date of the Balance Sheet save as mentioned elsewhere in this Letter of Offer.

3. a) Week end prices of the Equity Shares for the last four weeks on Stock Exchange at Delhi are given below :

(Rs.)

7th January,2000 8.50

14th January, 2000 5.10

21st January,2000 6.25

2. Current market price of the Equity Shares on Delhi Stock Exchange is Rs. 11.00 on dated 27th January,2000

3. Highest and Lowest market price of the Equity Shares of the Company during the period fom 1st April, 1999 to December, 1999.

The Company has made one issue in the last five years

Issue Opening Date : September 28th, 1995

Date of closure of the issue : October 11th, 1995

Type of Issue

Public Issue of 8,00,000 equity Shares of Rs. 10/- each for cash at par aggregating Rs. 80 Lacs.

Date of dispatch of share certificates : 7th Dec,1995

Date of listing on Stock Exchanges :

U.P Stock Exchange : 8th Dec,1995

Delhi Stock Exchange : 13th Dec,1995
 
 

PERFORMANCE VS PROMISES

A. PROFITABILITY

----------------------------------------------------------------------------------------------------------------------------------------

Source 1995-96 1996-97 1997-98 1998-99

Projected Actual Projected Actual Projected Actual Projected Actual

---------------------------------------------------------------------------------------------------------------------------------------Sales/Income from Operation 73.12 6.24 186.54 5.41 281.42 5.83 385.72 5.84

Profit before Taxation 41.57 0.80 107.63 0.24 162.64 0.08 216.24 0.26

Profit After Taxation 41.57 0.61 107.63 0.24 162.64 (0.04) 216.24 0.17

Dividend Nil Nil 12% Nil 20% Nil 25 % Nil
 
 

B. SOURCES AND USES OFFUNDS

----------------------------------------------------------------------------------------------------------------------------------------------------------

Particulars Projected 96 Actual 96 Projected 97 Actual97 Projected 98 Actual 98 Projected 99 Actual 99

----------------------------------------------------------------------------------------------------------------------------------------------------------

SOURCES OF FUNDS

Share Capital 215 320.02 - - - - - -

Deposits from public 50 - 100 - 100 - 50 -

Deposits from lessees 23 - 17.5 - 42 - 34 -

Increasing in bank borrowing - - 100 - 50 - 100 -

Increase in other current liabilities 28.66 - 48.4 - 25.6 - 16 -

Sale proceed of fixed assets - - - - - - 14 1

PBT 41.57 0.79 107.63 0.24 162.24 0.08 216.24 0.26

Depreciation 16.90 2.01 22.95 2.71 39.37 2.57 59.93 2.36

Loss on sale of fixed Assets - - - - - - 6.55 -

Preliminary expenses write off 1.7 1.4 1.7 1.4 1.7 1.4 1.7 1.4

USES OF FUNDS

Dividend paid - - 38.4 - 64 - 80 -

Payment of Tax - 0.19 - - - 0.12 6.78 0.08

Purchase of assets for lease 140 - 175 - 240 - 280 -

For other 10 8.68 - 2.06 - - - -

Increase in current assets 159.41 81.05 176.44 - 75 - 85 -

Pre & pub Issue Expenses 15.7 12.7 - - - - - -

Repayment of FD - - - - 30 - 30 -

Short Term advances 39.19 - 10.00 - 10 - 10 -

Repayment of security deposit - - - - - - 14 -

Unsecured Loan 9.84 5 - 4.85 - - - -

Deposits 0.21 - - - - - - -

Notes:

1.The variations in the projected and actual sources and uses of funds have been approved by the Company in the Extraordinary

Ordinary General Meeting held on 3rd January,2000.

2.The reason for variation is that the financial Sector has faced its worst ever phase during these years and the Company could not do well due to absence of safe and right opportunities in the market.

VII.4 INVESTOR GRIEVANCE AND REDRESSAL SYSTEM

The Company has 2943 shareholders to whom it has been providing satisfactory service. Share Transfer meetings are held atleast once a month. The work of Share Transfer is supervised by the Company Secretary of the Company.

VII.5 COMPANY UNDER THE SAME MANAGEMENT

There are no Companies under the same management as defined in the Section 370 (1B) of the Companies Act,1956.
 
 
 
 
 
 

VII. 6 LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS

Litigations

There is no outstanding litigation pertaining to matters likely to affect the operations and finances of the company including tax liabilities of any nature. No criminal/civil prosecution has been launched against the Company or the Directors for alleged offenses under the enactments specified in para 1 of part 1 of Schedule XIII of the Companies Act,1956.

Defaults

The Company has not defaulted in meeting any statutory /institutional /bank dues.

Material Development Subsequent to last Balance Sheet Date i.e 31st, March,1999

The Company has released one feature film in the Month of December named TABAHHI, the destroyer.

VII.7 CHANGE IN BOARD OF DIRECTORS IN LAST THREE YEARS
 
 

Name of Director Date of Joining Date of Retirement ReasonMukul Singhal 2.1.95 28.10.99 Because of pre-occupation

VII.8. RISK FACTORS

INTERNAL

1. The fund requirements have been estimated by the Company and no Financial Institution /Bank has appraised/ funded the same.
2. In the absence of stake of any financial institution/bank in the new project, there shall be no monitoring of the funds raised through this issue and deployment of the funds so raised shall be left entirely at the discretion of the Company’s management.

3. The Company’s working capital requirement for the new project has not been appraised by its principle banker.

6. Listing of Shares at Stock Exchanges does not ensure easy liquidity. The Equity shares, Though listed at the Stock Exchange at Delhi and Kanpur, have been timely traded.
7. Neither the past financial performance of the Company , nor the Market price of Equity shares quoted

EXTERNAL

1. Television media is largely Government controlled and changes in the government policies may effect the income generation of the Company.

2. Competition from existing and new entrants in the industry may effect the profitability and operations of the Company.

The contracts and documents mentioned below may be inspected by the persons to whom this offer is being made at the Registered Office of the Company during business hours on any working day from the date of this letter of offer until the closing of the subscription list.

1. Memorandum and Articles of Association of the Company.
2. Copies of Certificate of Incorporation and Certificate for commencement of business.
3. Memorandum of Understanding dated 6th day of January,2000 between the Company and M/s Aryaman Financial Services Ltd., the Lead Manager to the issue.
4. Memorandum of Understanding dated 6th January 2000 between the Company and M/s. RCMC Share Registry Pvt. Ltd., the Registrars to the issue.
5. Copy of Special Resolution under Section 81 of the Companies Act,1956 passed at the Annual General Meeting held on August 11,1999 authorising further issue of Equity Shares of the Company.

All the provisions of the Act and all guidelines, instructions etc. Issued by SEBI, Government and any other competent authority in this behalf have been duly complied with and no statement made in this Letter of Offer is contrary to the provisions of the Act and rules made thereunder.

I, declare and confirm that no information / material likely to have a bearing on the decision of the investors in respect of the shares Offered in terms of this Letter of Offer has been suppressed / withheld and / or incorporated in a manner that would amount to mis-statement / mis-representation and in the event of it transpiring at any point of time till allotment / refund, as the case may be, that any information material has been suppressed / withheld and / or amounts to mis-statement / mis-representation, I undertake to refund the entire application moneys to all the subscribers within seven days thereafter, without prejudice to the provisions of Section 63 of the Act.
 
 
 
 
 
 

There is no material development after the date of the last financial statements disclosed in the Offer document, which is likely to affect the company's performance and prospects. No circumstances have arisen since the date of last financial statements disclosed in the Offer document, that materially and adversely affect or are likely to affect the trading and profitability of the company, or the value of its assets, or its ability to pay up its liabilities within the next 12 months.

The Company accepts no responsibility for the statements made otherwise than in this Letter of Offer or in the advertisements or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his own risk.

Yours faithfully,

For and on behalf of the Board of Director
 
 
 
 
 
 
 
 

Place :

Date :

Enclosure :