VARDHAMAN ACRYLICS Share price

HISTORY OF THE COMPANYOverviewVardhman Spinning and General Mills Limited (VSGML) (a companybelonging to the Vardhman Group) and U. P. State IndustrialDevelopment Corporation Limited (UPSIDC) had vide the 'FinancialCollaboration Agreement for Acrylic Fibre Project in AssistedSector' dated August 31 1990 mutually agreed to form a publiclimited company for manufacturing Acrylic Fibre. AccordinglyVardhman Acrylics Limited ("VAL' or "the Company") wasincorporated on December 24 1990 under the Companies' Act 1956as a public limited company bearing Certificate of IncorporationNo. 20-12572 of 1990. On December 26 1990 the signatories tothe Memorandum of Association of Vardhman Acrylics Limitedsubscribed to equity capital of the company comprising 70 equityshares of Rs. 10 each. The Company obtained the certificate ofcommencement of business bearing No.16-19212 dated April 261991.The first issue of shares (70 shares) by VAL was made to thesignatories of the Memorandum of Association of VAL. Thesignatories were the representatives of VSGML and UPSIDC. Theirnames and holdings are given below:Sr. No. Name No. of Shares Representing1. Mr. Ratan Chand Oswal 10 VSGML2. Mr. S.P. Oswal 10 VSGML3. Mr. Ashok Kumar Oswal 10 VSGML4. Mr. Mahesh Arora 10 VSGML5. Mr. Yogesh Verma 10 VSGML6. Mr. Piyush Kumar Alok 10 UPSIDC7. Mr. T.K. Mitra 10 UPSIDCUPSIDC at the time of the above agreement was holding a letterof intent from the Government of India for establishing a plantto manufacture Acrylic Fibre in the state of Uttar Pradesh.UPSIDC agreed to use and exploit the letter of intent incollaboration with VSGML and hence the above collaborationagreement was entered into. However the actual implementationand setting up of the project was deferred since a revisedfeasibility study did not find the project viable at that time.Subsequently UPSIDC vide its letter ref. 8494/SIDC/ DEV-PR-384dated March 25 1994 terminated the collaboration agreement withVSGML. Thereafter UPSIDC also withdrew its nominee directorsfrom the board of Vardhman Acrylics Limited and accordingly theshares held by the representatives of UPSIDC were transferred tothe representatives of VSGML.In September 1995 Mahavir Spinning Mills Limited (MSML) i.e.another company belonging to the Vardhman Group incorporated acompany named Vardhman Fibres Limited to set up a project forthe manufacture of Acrylic Fibre in Bharuch Gujarat. VardhmanFibres Limited entered into Technology supply Contract onSeptember 29 1995 with Kawasaki Heavy Industries Limited Japanfor transfer of technology of Japan Exian Company Limited.Vardhman Fibres Limited also entered into Equipment SupplyContract on September 29 1995 with Marubeni Corporation Japanfor supply of proprietary and special plant and equipment..Subsequently the Vardhman Group decided to implement theAcrylic Fibre project in Vardhman Acrylics Limited. Accordinglythe registered office of VAL was transferred from UP to Punjaband all contracts originally signed by Vardhman Fibres Limitedwith M/s Marubeni Corp. and Kawasaki Heavy Engg. IndustriesLimited were re-assigned to VAL.MSML purchased 10 equity shares of VAL from Mr. Mahesh Arora(one of the subscribers to the Memorandum) and became a memberof the Company in December 1995. Further the other shareholders(except Mr. Ratan Chand Oswal) transferred their holding in VALto the current shareholders of VAL i.e. Mr. Piyush Kumar Aloksold 10 shares to Mr. Sachit Jain Mr. T. K. Mitra sold 10shares to Mrs. Shakun Oswal Yogesh Sharma sold 10 shares toParas Finance and Trading Company. The ten shares held by Mr.Ratan Chand Oswal were transmitted in August 1999 to the trusteeof the Rattan Chand Oswal Memorial Trust on his death.In March 1996 VAL issued shares on a rights basis in the ratioof 10 equity shares for every 1 equity share held by the thenexisting shareholders. MSML was the only member to subscribe tothe rights and was allotted 100 equity shares in March 1996. Theother shareholders did not subscribe to their entitlement hencetheir entitlement lapsed. As a result of the subscription in therights issue by MSML Vardhman Acrylics Limited became asubsidiary of Mahavir Spinning Mills Limited.Sequence of share transactions in chronological order is givenbelow:Sr. No. Date Transaction1. 26-12-1990 70 equity shares subscribed at the time of incorporation by representatives of VSGML and UPSIDC2. 30.12.1995 Purchase of 10 equity shares by MSML from Mr. Mahesh Arora3. 30.12.1995 (a) Purchase of 10 equity shares by Mr. Sachit Jain from Mr. Piyush Kumar Alok (b) Purchase of 10 equity shares by Mrs Shakun Oswal from Mr. T .K. Mitra4. 30.01.1996 Purchase of 10 equity shares by Paras Finance & Trading Company from Mr Yogesh Verma.5. 02.03.1996 Allotment of 100 equity shares to MSML on Rights basisAt present VAL is a subsidiary of Mahavir Spinning MillsLimited. The Company has its plant at Jhagadia Distt. BharuchGujarat with a capacity to manufacture 16500 tonnes per annumof Acrylic Staple Fibre/Tow. The Company's project tomanufacture Acrylic Staple Fibre/Tow commenced its commercialproduction with effect from March 161999.