SRS ENTERTAINMENT LIMITED an ISO 9001:2000 Company [Originally Incorporated As SRS Commercial Co

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SRS ENTERTAINMENT LIMITED an ISO 9001:2000 Company [Originally Incorporated As SRS Commercial Co C M Y K DRAFT RED HERRING PROSPECTUS Dated [] Please read Section 60B of the Companies Act, 1956 The Draft Red Herring Prospectus will be updated upon RoC filing 100% Book Building Offer SRS ENTERTAINMENT LIMITED An ISO 9001:2000 Company [Originally incorporated as SRS Commercial Co. Limited on August 29, 2000 with Registrar of Companies, NCT of Delhi and Haryana at New Delhi and name of the Company was changed to SRS Entertainment Limited on January 25, 2005 under a fresh Certificate of Incorporation] Registered Office: C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094 Telephone: (011) 55418111, 55292497, 55418110; Fax: (011) 22577796 E-mail: [email protected]; Website: www.srs-world.com Contact Person: Mr. Arun Kumar Gupta, CFO and Compliance Officer; Telephone: (0129) 5008350, 5003266; E-mail: [email protected] [The Company has changed its registered office from 804, Manjusha, 57, Nehru Place, New Delhi - 110019 to E-985, Near Mala Devi School, 100 ft. Road, Babarpur, Shahdara, Delhi - 110094 vide resolution dated December 01, 2000 and subsequently to the present location C-4/1, 100 Ft. Road, Shahdara, Delhi - 110094 vide resolution dated April 23, 2003] Public Issue of 2,28,57,200 Equity Shares of Rs.10/- each of SRS Entertainment Limited (“SRSEL”) (the “Company”) at a price of Rs. [] per equity share for cash aggregating Rs.[] Lacs (hereinafter referred to as the “Issue”). The Issue comprises 42,87,200 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs reserved for Promoter Group of the Company, 22,85,720 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs reserved for the Shareholders of Group Companies of the Company, 22,85,720 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs reserved for Employees of the Company and Net Issue to public of 1,39,98,560 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs. The Issue would constitute 45.81% of the post Issue paid-up capital of the Company. Price Band: Rs. [] To Rs. [] Per Equity Share Of Face Value Of Rs. 10 Each The Issue Price Is [] Times Of The Face Value At The Lower End Of The Price Band And [] Times Of The Face Value At The Higher End Of The Price Band. This Issue is being made through the 100% Book Building Process wherein up to 50% of the Net Issue to public shall be allocated on a discretionary basis to Qualified Institutional Buyers. Further, not less than 15% of the Net Issue to public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue to public shall be available on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. RISKS IN RELATION TO FIRST ISSUE This being the first Issue by SRS Entertainment Limited, there has been no formal market for the securities of the Company. The face value of the shares is Rs.10/- each and the Issue Price is [] times of the face value. The Issue Price (as determined and justified by the Book Running Lead Manager and the Issuer Company as stated under “Introduction - Basis of Issue Price” paragraph on page no. 31 of the Draft Red Herring Prospectus) should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given regarding an active or sustained trading in the shares of the Company nor regarding the price at which the Equity Shares will be traded after listing. GENERAL RISK Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue 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 Issue including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is invited to the statement of ‘Risk factors’ on page no. viii of the Draft Red Herring Prospectus. COMPANY’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Red Herring Prospectus 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 the Draft Red Herring Prospectus is true and correct in all material aspects 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 of such information or the expression of any such opinions or intentions misleading in any material respect. BOOK RUNNING LEAD MANAGER JOINT BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE UTI BANK Solutions for a lifetime UTI Bank Limited Allianz Securities Limited Karvy Computershare Private Limited Central Office: Maker Towers ‘F’, 33, Vaswani Mansion, Karvy House, 46, Avenue 4, 11th Floor, Cuffe Parade, Colaba, 6th Floor, Dinsha Vachha Road, Street No.1, Banjara Hills, Mumbai – 400 005 Churchgate, Mumbai – 400 020 Hyderabad 500 034 Tel.: (022) 2218 9106 - 09 Tel.: (022) 2287 0580 Tel.: (040) 2331 2454 Fax.: (022) 2216 2467 Fax.: (022) 2287 0581 Fax.: (040) 2331 1968 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.utibank.com Website: www.aslfinancial.com Website: www.karvy.com ISSUE PROGRAMME Bid / Issue Opens On [], 2005 Bid / Issue Closes On [], 2005 LISTING The Equity Shares issued through the Draft Red Herring Prospectus are proposed to be listed on The Bombay Stock Exchange Limited (Designated Stock Exchange) and The National Stock Exchange of India Limited. The Company has received in-principle approvals for listing its Equity Shares from the aforesaid stock exchanges through their letters dated ________ and _________ respectively. C M Y K TABLE OF CONTENTS SECTION TITLE PAGE NO. I. DEFINITIONS, TECHNICAL GLOSSARY AND ABBREVATIONS ii II. RISK FACTORS 1. Forward Looking Statements vii 2. Risk Factors viii III. INTRODUCTION 1. Summary 1 2. General Information 5 3. Capital Structure 10 4. Objects of the Issue 24 5. Basis of Issue Price 31 IV. ABOUT SRS ENTERTAINMENT LIMITED 1. Industry Overview 37 2. Business Overview 44 3. History and Corporate Structure 69 4. Management 73 5. Promoters and Promoter Group 81 6. Group Companies 89 7. Currency of Presentation 90 8. Dividend Policy 90 V. FINANCIAL STATEMENTS 1. Financial Information of SRS Entertainment Limited 91 2. Changes in Accounting Policies in the last three years 95 3. Managements' Discussion and Analysis of Financial Condition and 104 Results of Operations as reflected in the Financial Statements VI. LEGAL and OTHER INFORMATION 1. Outstanding Litigations and Material Developments 111 2. Government Approvals / Licensing Arrangements 114 VII. OTHER REGULATORY AND STATUTORY INFORMATION 118 VIII. ISSUE INFORMATION 1. Terms of the Issue 125 2. Issue Structure 127 3. Issue Procedure 131 IX. DESCRIPTION OF EQUITY SHARES AND TERMS OF THE 147 ARTICLES OF ASSOCIATION X. OTHER INFORMATION 1. List of Material Contracts and Documents for Inspection 160 2. Declaration 162 i DEFINITIONS, TECHNICAL GLOSSARY AND ABBREVIATIONS Terms Description “SRS Entertainment Limited” Refers to SRS Entertainment Limited, a public limited company incorporated or “SRSEL” or “the under the Companies Act, 1956 Company” or "our Company" “we” or “us” and “our” Unless the context otherwise require, refers to SRS Entertainment Limited Issue Related Terms Terms Description Allotment Unless the context otherwise requires, transfer of Equity Shares from the Company to the successful applicants Bankers to the Issue [•], each of whom is registered with SEBI and with whom the Public Issue Account will be opened Bid An offer made during the Bidding Period by a prospective investor to subscribe to Equity Shares of the Company at a price within the Price Band, including all revisions and modifications thereto. Bid Amount The amount equal to highest value of the optional Bids indicated in the Bid-cum- Application Form payable by the Bidder on submission of the Bid in the Issue Bid Closing Date/ Issue Closing The date after which the Members of the Syndicate will not accept any Bids for Date the Issue, which shall be the date notified in a widely circulated English national newspaper, Hindi national newspaper and regional newspaper Bid Opening Date/ Issue The date on which the Members of the Syndicate shall start accepting Bids for the Opening Date Issue, which shall be the date notified in a widely circulated English national newspaper, Hindi national newspaper and regional newspaper Bid-cum-Application Form The form in terms of which the Bidder shall make an offer to subscribe to the Equity Shares of the Company and which will be considered as the application for issue of the Equity Shares pursuant to the terms of the Draft Red Herring Prospectus. Bidder Any prospective investor who makes a Bid pursuant to the terms of the Draft Red Herring Prospectus Bidding Period / Issue Period The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids Book Building Process Book building route as provided under Chapter XI of the SEBI Guidelines, in terms of which, this Issue is being made CAN/ Confirmation of The note or advice or intimation of allocation of Equity Shares sent to the Bidders Allocation Note who have been allocated Equity Shares in the Book Building Process Cap Price The higher end of the Price Band, above which the Issue Price will not be finalised and above which no bids will be accepted Cut-off Price Cut-off price refers to any price within the Price Band.
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