JUNCTION FABRICS and APPARELS LIMITED (Formerly Known As Junction Fabrics and Apparels Private Limited) Corporate Identity Number: - U18101TZ2011PLC017586
Total Page:16
File Type:pdf, Size:1020Kb
Prospectus Dated: June 01, 2015 Please read Section 32 of the Companies Act, 2013 100 % Fixed Price Issue JUNCTION FABRICS AND APPARELS LIMITED (Formerly known as Junction Fabrics and Apparels Private Limited) Corporate Identity Number: - U18101TZ2011PLC017586 Our Company was incorporated as Junction Fabrics and Apparels Private Limited on November 15, 2011 under the provisions of Companies Act, 1956 with Registrar of Companies, Coimbatore, Tamil Nadu vide registration no. (CIN: U18101TZ2011PTC017586). Pursuant to Shareholders Resolution passed at the Extra Ordinary General Meeting held on March 05, 2015 our Company was converted into a Public Limited Company and the name of our Company was changed to “Junction Fabrics and Apparels Limited” vide a fresh Certificate of Incorporation dated March 24, 2015 issued by the Registrar of Companies, Coimbatore, Tamil Nadu. For details of the changes in our Name and Registered Office, please see section titled “History and Certain Corporate Matters” on page 108 of this Prospectus. Registered Office: No. 18(1) 24, Workshop Street, Khaderpet, Tirupur, Tamil Nadu – 641-601. Tel No: +91-0421-2200115, 2200359, 4336896 E-mail: [email protected] Website: www.junctionfabrics.in Contact Person: Ms. Kiran Agarwal (Company Secretary & Compliance officer) PROMOTER OF OUR COMPANY: MR. PREM DINANATH AGGARWAL & MRS. SHIKHA AGGARWAL PREM THE ISSUE PUBLIC ISSUE OF 10,00,000 EQUITY SHARES OF FACE VALUE OF ` 10.00 EACH OF JUNCTION FABRICS AND APPARELS LIMITED (“OUR COMPANY” OR “THE ISSUER”) FOR CASH AT A PRICE OF `16.00 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ` 6.00 PER EQUITY SHARE) (“ISSUE PRICE”) AGGREGATING TO `160.00 LAKHS (“THE ISSUE”), OF WHICH 56,000 EQUITY SHARES OF FACE VALUE OF `10.00 EACH FOR A CASH PRICE OF ` 16.00 PER EQUITY SHARE, AGGREGATING TO ` 8.96 LAKHS WILL BE RESERVED FOR SUBSCRIPTION BY MARKET MAKER (“MARKET MAKER RESERVATION PORTION”). THE ISSUE LESS THE MARKET MAKER RESERVATION PORTION I.E. ISSUE OF 9,44,000 EQUITY SHARES OF FACE VALUE OF ` 10.00 EACH AT AN ISSUE PRICE OF ` 16.00 PER EQUITY SHARE AGGREGATING TO `151.04 LAKHS (IS HEREINAFTER REFERRED TO AS THE “NET ISSUE”). THE ISSUE AND THE NET ISSUE WILL CONSTITUTE 37.14% AND 35.06%, RESPECTIVELY OF THE POST ISSUE PAID UP EQUITY SHARE CAPITAL OF OUR COMPANY. FOR FURTHER DETAILS, PLEASE REFER TO SECTION TITLED "BASIC TERMS OF THE ISSUE" BEGINNING ON PAGE 61 OF THIS PROSPECTUS. THE FACE VALUE OF THE EQUITY SHARES IS ` 10.00 EACH AND THE ISSUE PRICE IS `16.00. THE ISSUE PRICE IS 1.60 TIMES OF THE FACE VALUE. THIS ISSUE IS BEING MADE IN TERMS OF CHAPTER XB OF THE SEBI (ICDR) REGULATIONS, 2009, AS AMENDED. THIS ISSUE IS A FIXED PRICE ISSUE AND ALLOCATION IN THE NET ISSUE TO THE PUBLIC WILL BE MADE IN TERMS OF REGULATION 43(4) OF THE SEBI (ICDR) REGULATIONS, 2009, AS AMENDED. FOR FURTHER DETAILS, PLEASE REFER TO SECTION TITLED "ISSUE PROCEDURE" BEGINNING ON PAGE 216 OF THIS PROSPECTUS. Retail Individual Investors may participate in the Issue through an Application Supported by Blocked Amount ("ASBA") process providing details about the bank account which will be blocked by the Self Certified Syndicate Banks ("SCSBs"). However, investors other than Retail Individual Investors shall compulsorily participate through the ASBA process only providing details about the bank account which will be blocked by the SCSBs. In case of delay, in refund if any, our Company shall pay interest on the application money at the rate of 15% per annum for the period of delay. For further details, please refer to section titled "Issue Procedure" beginning on page 216 of this Prospectus. ELIGIBLE INVESTORS For details in relation to Eligible Investors, please refer to section titled "Issue Procedure" beginning on page 216 of this Prospectus. RISK IN RELATION TO THE FIRST ISSUE This being the first public issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares of the Company is `10.00 per equity share and the Issue Price is 1.60 times of the face value. The Issue Price (has been determined and justified by our Company in consultation with the Lead Manager as stated under the paragraph ‘Basis for Issue Price’ on page 62 of this Prospectus) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments 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 Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Prospectus. Specific attention of the investors is invited to the section titled ‘Risk Factors’ beginning on page 13 of this Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY Our Company having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to our Company and this Issue, which is material in the context of this Issue, that the information contained in this 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 makes this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through this Prospectus are proposed to be listed on the SME Platform of BSE Limited (“BSE”). In terms of the Chapter XB of the SEBI (ICDR) Regulations, 2009, as amended, we are not required to obtain an in-principle listing approval for the shares being offered in this issue. However, our Company has received an in-principle approval letter dated April 29, 2015 from BSE for using its name in this offer document for listing of our shares on the SME Platform of BSE. For the purpose of this Issue, the Designated Stock Exchange will be the BSE Limited. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE HEM SECURITIES LIMITED BIGSHARE SERVICES PRIVATE LIMITED 203, Jaipur Tower, M I Road, Jaipur – 302001, Rajasthan, India. E-2, Ansa Industrial Estate, Sakhivihar Road, Sakinaka, Andheri (East),Mumbai – Tel. No.: +91- 141 – 4051000 400 072, Maharashtra, India Fax No.: +91- 141 – 5101757 Tel. No.: +91-22 – 40430200 Website: www.hemonline.com Fax No.: +91-22 – 28475201 Email: [email protected] Website: www.bigshareonline.com Investor Grievance Email: [email protected] Email: [email protected] Contact Person: Ms. Yashika Gianchandani / Mr. Akun Goyal Contact Person: Mr. Ashok Shetty SEBI Regn. No. INM000010981 SEBI Regn. No. MB/INR000001385 ISSUE PROGRAMME ISSUE OPENS ON: Thursday, June 25, 2015 ISSUE CLOSES ON: Monday, June 29, 2015 Junction Fabrics and Apparels Limited TABLE OF CONTENTS SECTION CONTENTS PAGE NO. I GENERAL DEFINITIONS AND ABBREVIATIONS 2 CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION & MARKET 10 DATA & CURRENCY OF FINANCIAL PRESENTATION FORWARD LOOKING STATEMENTS 12 II RISK FACTORS 13 III INTRODUCTION SUMMARY OF OUR INDUSTRY 29 SUMMARY OF OUR BUSINESS 32 SUMMARY OF OUR FINANCIALS 34 THE ISSUE 38 GENERAL INFORMATION 39 CAPITAL STRUCTURE 45 OBJECTS OF THE ISSUE 56 BASIC TERMS OF ISSUE 61 BASIS FOR ISSUE PRICE 62 STATEMENT OF TAX BENEFITS 65 IV ABOUT THE ISSUER COMPANY INDUSTRY OVERVIEW 73 OUR BUSINESS 83 KEY INDUSTRY REGULATIONS AND POLICIES 97 HISTORY AND CERTAIN CORPORATE MATTERS 108 OUR MANAGEMENT 111 OUR PROMOTER 125 OUR PROMOTER GROUP AND PROMOTER GROUP ENTITIES 128 DIVIDEND POLICY 133 V FINANCIAL INFORMATION OF THE COMPANY AUDITOR’S REPORT ON STANDALONE RESTATED FINANCIAL STATEMENT 134 STATEMENT OF FINANCIAL INDEBTEDNESS 170 MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS & 174 RESULTS OF OPERATIONS VI LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS 186 GOVERNMENT AND OTHER APPROVALS 191 OTHER REGULATORY AND STATUTORY DISCLOSURES 195 VII ISSUE RELATED INFORMATION TERMS OF THE ISSUE 209 ISSUE STRUCTURE 214 ISSUE PROCEDURE 216 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES 238 VIII MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 240 IX OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 268 DECLARATION 269 1 Junction Fabrics and Apparels Limited SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS General Terms Term Description “Junction Fabrics And Unless the context otherwise requires, refers to Junction Fabrics And Apparels Apparels Limited”, Limited, (Formerly known Junction Fabrics And Apparels Private Limited) a “Junction”, “JFAL ”, “We” or Company originally incorporated under the Companies Act, 1956 vide a Certificate “us” or “our Company” or of Corporation issued by the Registrar of Companies, Tamil Nadu, Coimbatore as “the Issuer’ Junction Fabrics And Apparels Private Limited. “you”, “your” or “yours” Prospective investors in this Issue. Company Related Terms Terms Description AOA / Articles / Articles of Articles of Association of Junction Fabrics And Apparels Limited (formerly known Association as Junction Fabrics And Apparels Private Limited), as amended from time to time. Auditors/ Statutory Auditors The Statutory Auditors of Junction Fabrics And Apparels Limited being Balaji & Thulasiraman, Chartered Accountants. Audit Committee The Committee of the Board of Directors constituted as the Company‘s Audit Committee in accordance with Section 177 of the Companies Act, 2013 and Clause 52 of the SME Listing Agreement to be entered into with the BSE.