English Indian Clays Limited
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English Indian Clays Limited DRAFT LETTER OF OFFER (For Private Circulation to Equity Shareholders of the Company only) ENGLISH INDIAN CLAYS LIMITED (Incorporated on November 18, 1963 under the Companies Act, 1956) Registered Office: TC-79/4, Veli, Thiruvananthapuram- 695021 (Kerala). Tel: 0471-2741133/ 2741433/2741633 Fax : 0471- 2742233 Email ID: [email protected] Corporate Office: 801-803, Tower ‘B’, Global Business Park, Gurgaon-122001 (Haryana) Tel: 0124 – 2803379/80/81 Fax : 0124 - 2803372 Email ID: [email protected] Website: www.eiclclays.com Contact Person / Compliance Officer: Mr. P S Saini, Company Secretary Tel: 0124-2803379/80/81/82 Fax: 0124 – 2803372 Email ID: [email protected] ISSUE OF 7,44,830 EQUITY SHARES OF RS 10/- EACH FOR CASH AT A PREMIUM OF RS 990/- ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF THE COMPANY IN THE RATIO OF 1 (ONE) EQUITY SHARE FOR EVERY 6 (SIX) EQUITY SHARES HELD ON RECORD DATE i.e. [.], AGGREGATING TO RS. 74,48,30,000 (RUPEES SEVENTY FOUR CRORE FORTY EIGHT LACS THIRTY THOUSAND ONLY) GENERAL RISKS Investments in equity and equity related securities involve 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 offering. For taking an investment decision investors must rely on their own examination of the issuer and the offer including the risks 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. Specific attention of the Investors is invited to the statement of Risk Factors pertaining to Company, Project and this Issue on Page No. 08 of the LOF. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Offer Document 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 Offer Document is true and correct in all material repects 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 makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE PNR Securities Limited RCMC Share Registry Pvt Limited R-5, Green Park Market, Relan House, B-106, Sector -2, New Delhi-110 016 Noida, Uttar Pradesh - 201301 Tel: 011 – 42009000 Tel.: 0120 – 4015880/4015886 Fax: 011 – 41755800 Fax: 0120 – 4015886 SEBI Registration No: INM000000727 SEBI Registration No: INR000000429 Email: [email protected] E-mail: [email protected] Web site: www.pnrgroupindia.com Website: www.rcmcdelhi.com Contact Person: Ms. Aruna Sharma Contact Person: Mr. Rakesh Adhana ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR SPLIT FORMS ISSUE CLOSES ON [.] [.] [.] __ LISTING The Company’s existing Equity Shares are listed on the Bombay Stock Exchange Limited, Mumbai (BSE). The Equity Shares to be issued through this Issue would also be listed on the Stock Exchange mentioned above. The in-principle approval for listing of equity shares arising from this issue has been obtained from BSE vide their Letter No. [.] dated [.] . 1 English Indian Clays Limited TABLE OF CONTENTS SECTION I: GENERAL......................................................................................................... 3 DEFINITIONS AND ABBREVIATIONS ................................................................................ 3 CONVENTIONAL / G ENERAL TERMS ....................................................................................................................3 OFFER RELATED TERMS ...................................................................................................................................4 COMPANY / I NDUSTRY RELATED TERMS .............................................................................................................5 ABBREVIATIONS ................................................................................................................................................5 SECTION II : RISK FACTORS ............................................................................................................7 FORWARD LOOKING STATEMENTS AND MARKET DATA ........................................................................................7 RISK FACTORS .................................................................................................................................................8 NOTES TO THE RISK FACTORS .........................................................................................................................14 SECTION III: INTRODUCTION........................................................................................... 16 INDUSTRY SUMMARY................................................................................................................................16 THE ISSUE...................................................................................................................................................18 SUMMARY FINANCIAL INFORMATION .....................................................................................................19 GENERAL INFORMATION ..........................................................................................................................21 CAPITAL STRUCTURE ...............................................................................................................................26 OBJECTS OF THE ISSUE...........................................................................................................................36 BASIS FOR ISSUE PRICE ..........................................................................................................................45 STATEMENT OF TAX BENEFITS ...............................................................................................................47 SECTION IV: ABOUT THE ISSUER COMPANY ............................................................... 57 INDUSTRY & B USINESS OVERVIEW ...................................................................................................................57 COMPANY OVERVIEW ......................................................................................................................................62 HISTORY AND CORPORATE STRUCTURE ...........................................................................................................77 MAIN OBJECTS ...............................................................................................................................................81 OUR MANAGEMENT .........................................................................................................................................82 ORGANISATION STRUCTURE OF THE COMPANY ................................................................................................90 KEY MANAGEMENT PERSONNEL ......................................................................................................................91 PROMOTERS AND THEIR BACKGROUND ............................................................................................................93 DIVIDEND POLICY .........................................................................................................................................106 COMPANY OVERVIEW ......................................................................................................................................57 SECTION V : FINANCIAL STATEMENTS ........................................................................107 AUDITORS REPORT.................................................................................................................................107 MANAGEMENT ’S DISCUSSION AND ANALYSIS ..................................................................................................146 SECTION VI : LEGAL AND OTHER INFORMATION .......................................................154 OUTSTANDING LITIGATION , D EFAULTS AND MATERIAL DEVELOPMENTS ...........................................................154 CASES AGAINST THE COMPANY .....................................................................................................................154 GOVERNMENT APPROVALS / L ICENSING ARRANGEMENTS ...............................................................................163 SECTION VII: OTHER REGULATORY AND STATUTORY DISCLOSURES...................170 SECTION VIII : OFFERING INFORMATION .....................................................................178 SECTION IX : DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES OF ASSOCIATION ..................................................................................................................200 SECTION X: OTHER INFORMATION...............................................................................229 MATERIAL CONTRACTS .................................................................................................................................229 DOCUMENTS FOR INSPECTION .......................................................................................................................229 DECLARATION