HITTCO TOOLS Share price

The company was incorporated as a public limited company onthe 4th January 1995. Its present authorised capital standsat Rs.650 lacs. The company is promoted by Mr.SurendraBhandari his associates and members of his family andB.I.Holdings (Bangalore) Private Limited. an investmentcompany promoted by Mr.Surendra Bhandari. The company hasfiled with the Secretariat of Industrial Approvals (SIA)the Industrial Entrepreneur''s Memorandum vide letter datedthe 14th September 1995 for the manufacture of drills andtaps and has received the acknowledgement (No.5588/SIA/IMO/95 dated 10-11-1995).The company had initially decided to locate the project inGummidipoondi in Tamilnadu and has acquired landadmeasuring 2.50 acres in the SIPCOT Industrial Complex atGummidipoondi on lease. The company subsequently decided toalter the project concept and to locate the same at PeenyaIndustrial Area where the promoters already have anexisting base. The project can be segregated into twodistinct components: (a) to take on lease the assets of anexisting profit-making two decades old proprietory concernof Mr.Surendra Bhandari named Hindustan Tools Corporation.as a going concern and (b) to expand installed capacityand establish facilities to diversify the product range onits own account.Lease arrangement between the Company and Hindustan ToolsCorporationHindustan Tools Corporation was established in 1971 as aproprietory concern of Mr.Surendra Bhandari to manufacturea range of drills and has over the years. established thebrand name HITTCO in the domestic markets. The firm has agood track record of performance and growth. and details inthis regard are given elsewhere in this Prospectus. Thelease arrangement between the company and Hindustan ToolsCorporation has been made effective from the 15th September1995 and will be in force for a period of twentyfive years.In terms of the arrangement the company has acquired theentire assets of Hindustan Tools Corporation other thansundry debtors and sundry creditors on a lease basis as agoing concern for a consideration of Rs90 lacs. Thisamount is viewed as reasonable by KSIIDC who has appraisedthe project and sanctioned the term loan. The benefits tothe company besides the use of the fixed assets of valueapproximately Rs.16832 lacs as per approved valuer''sreport includes the use of the well-established brand nameHITTCO as also a well-trained workforce and an establishedmarketing office network For more details in regard tovaluation please see paragraph under the head cost ofproject.