Burnpur Cement Limited
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DRAFT PROSPECTUS Dated [] (To be updated on filing with ROC) BURNPUR CEMENT LIMITED (Originally incorporated as Ashoka Concrete & Allied Industries Private Limited on June 19, 1986 with the Registrar of Companies, West Bengal Kolkata. The name of the Company was changed to Burnpur Cement Private Limited on September 18, 2001. Subsequently the Company was converted into a Public Limited Company under section Sec. 44 of the Companies Act, 1956 on November 12, 2001 and the name of the Company was changed to Burnpur Cement Limited and a fresh Certificate of Incorporation obtained from the Registrar of Companies, West Bengal Kolkata. For details of changes in Registered Office of the Company please refer to page no 9 of this Draft Prospectus.) Registered Office: Cement house, Saradapally, Ashoknagar P.O. Asansol- 713304, Dist.: Burdwan (West Bengal), India Tel.: (0341)2250663, 2250859/61/62; Fax: (0341) 2250860; E-mail: [email protected]; Website: www.burnpurcement.com; Plant: Vill-Palasdiha Panchgachia Road P.O. - Kanyapur, Dist. Burdwan West Bengal Pincode-713341 Tel: (0341) 2250454, 2252965; Contact Person/Compliance Officer: Mr. Manoj Agarwal, Company Secretary PRESENT ISSUE ISSUE OF 3,18,25,100 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PREMIUM OF RS. [] PER EQUITY SHARE AGGREGATING TO RS. 3182.51 LACS (AT THE LOWER END OF THE PRICE BAND OF RS.10/-PER EQUITY SHARE) AND RS. 3819.01 LACS (AT THE HIGHER END OF THE PRICE BAND OF RS. 12/-PER EQUITY SHARE) (HEREINAFTER REFERRED TO AS "THE ISSUE") OFFER THROUGH THIS DRAFT PROSPECTUS 2,19,00,000 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PREMIUM OF RS. [] PER EQUITY SHARE. THE ISSUE COMPRISES A RESERVATION FOR ELIGIBLE EMPLOYEES OF UPTO 10,95,000 EQUITY SHARES OF RS.10/- EACH (HEREINAFTER REFERRED TO AS THE "EMPLOYEE RESERVATION PORTION") AND THE NET ISSUE TO THE PUBLIC OF 2,08,05,000 EQUITY SHARES OF RS.10/- EACH (HEREINAFTER REFERRED TO AS THE "NET ISSUE") PRESENT ISSUE WOULD CONSTITUTE 74.02% OF THE FULLY DILUTED POST-ISSUE PAID UP CAPITAL OF THE COMPANY. THE NET ISSUE TO THE PUBLIC WOULD CONSTITUTE 48.39% OF THE FULLY DILUTED POST ISSUE PAID UP CAPITAL OF THE COMPANY. Price Band: Rs. 10/- to Rs. 12/- per Equity Share of Rs. 10/- each The Company will determine the Issue Price before filing the Prospectus with RoC RISK IN RELATION TO THE ISSUE This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Share of the Company. The face value of the Equity Share is Rs 10/- and the Issue Price is 1.0 time of the face value at the lower end of the price band and 1.2 times at the higher end of the price band. The Issue Price (has been determined and justified by the Lead Manager and the Issuer Company as stated under the paragraph "Basis for Issue Price" on page no 39 of this Draft 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 or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares will be traded after listing. The Company has not opted for IPO grading. 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 the 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 Draft Prospectus. Specific attention of the investors is invited to the section "Risk Factors" beginning on page vii of this Draft Prospectus. ISSUER'S ABSOLUTE RESPONSIBILITY The Company having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft 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 Draft 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 Draft Prospectus are proposed to be listed on the Bombay Stock Exchange Limited ("BSE") and the National Stock Exchange of India Limited ("NSE"). The Company has received in-principle approvals from BSE and NSE vide their letters dated [] and [], respectively for the listing of Equity Shares being issued in terms of this Draft Prospectus. For the purpose of this Issue, BSE shall be the Designated Stock Exchange. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE SREI CAPITAL MARKETS LIMITED NICHE TECHNOLOGIES PRIVATE LIMITED 'Vishwakarma', 86 C, Topsia Road (South) D-511, Bagree Market, 71, B R B Basu Road Kolkata - 700 046, West Bengal, India Kolkata - 700 001, West Bengal, India Tel : +91 33 3987 3810/3845 Tel : +91 33 2234 3576/2235 7271/7270 Fax: +91 33 3987 3861/3863 Fax: +91 33 2215 6823 E-mail: [email protected] E-mail: [email protected] Website: www.srei.com Website: www.nichetechpl.com ISSUE PROGRAM ISSUE OPENS ON : [] ISSUE CLOSES ON : [] TABLE OF CONTENTS TITLE PAGE NO. SECTION I DEFINITIONS AND ABBREVIATIONS Conventional / General Terms i Issue Related Terms i Technical and Industry Terms iii Abbreviations iii SECTION II RISK FACTORS Certain Conventions; Use of Market Data v Forward Looking Statements v Risk Factors vii SECTION III INTRODUCTION Summary 1 The Issue 6 Summary of Financial Data 7 General Information 9 Capital Structure 14 Objects of the Issue 25 Basic Terms of Issue 37 Basis for Issue Price 39 Statement of Tax Benefits 42 SECTION IV ABOUT THE COMPANY Industry Overview 51 Business Overview 66 Brief History Of The Company And Other Corporate Matters 90 Management And Organization 94 Promoters And Their Background 106 Related Party Transactions 110 Currency Of Presentation 110 Dividend Policy 110 SECTION V FINANCIAL INFORMATION Auditors Report & Restated Statement of Accounts 112 Financial And Other Information Of Companies, firms 142 Promoted/Controlled by the Promoters Management Discussion And Analysis Of The Financial 150 Condition And Results Of The Operations SECTION VI LEGAL AND OTHER INFORMATION Outstanding Litigations and Defaults 161 Material Developments 163 Government Approvals and Licenses 164 SECTION VII OTHER REGULATORY AND STATUTORY DISCLOSURES 166 SECTION VIII ISSUE RELATED INFORMATION Terms of the Issue 174 Issue Procedure 178 SECTION IX MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 197 OF THE COMPANY SECTION X OTHER INFORMATION Material Contracts and Documents for Inspection 233 Declaration 235 ii SECTION I: DEFINITIONS AND ABBREVIATIONS Conventional/General Terms Terms Description “Burnpur Cement Unless the context otherwise requires, refers to, Burnpur Cement Limited, Limited ” or a public limited company incorporated under the Companies Act and “Burnpur” or “the having its registered office at Cement house, Saradapally, Ashoknagar, Issuer Company” or P.O. Asansol- 713304, West Bengal, India. “the Issuer” or “the Company” or “we” or “us” or “our Company” or “BCL” Articles/Articles of The Articles of Association of Burnpur Cement Limited as amended from Association/AOA time to time. Auditors The statutory auditors of the Company, viz. M/s N K Agarwal & Co., Chartered Accountants. Board/Board of The Board of Directors of the Company or a committee constituted thereof. Directors Companies Act/ the The Companies Act, 1956, as amended from time to time. Act Director(s) Director(s) of the Burnpur Cement Limited, from time to time, unless otherwise specified. Equity Shares Equity shares of the Company of face value of Rs.10/- each unless otherwise specified in the context thereof. Group BCL Developers. Companies/Firms Memorandum/MOA/ The Memorandum of Association of Burnpur Cement Limited. Memorandum of Association Promoter(s) Shall mean jointly Mr. Ashok Gutgutia, Mrs. Shashi Gutgutia, Insight Consultants Private Limited, Bharat Cement Private Limited and Goyal Auto Distributors Private Limited Promoters’ Group As defined in Explanation II of Clause 6.8.3.2 of SEBI (Disclosure and Investor Protection) Guidelines, 2000 and amendments thereof Promoters’ Group includes: Asha Devi Bhartia A.K. Gutgutia & Sons R.A. Gutgutia & Co. Income Tax Act The Income Tax Act, 1961, as amended from time to time Fiscal/FY/ Financial Twelve months ending March 31st of a particular year unless otherwise Year specified. You, Your, Yours Unless the context otherwise requires, refers to, investors Issue Related Terms Term Description Allotment Issue or transfer of Equity Shares pursuant to the Offer, to the successful applicants in the issue. Allottee The successful applicant to whom the Equity Shares are being/have been issued. Applicant Any prospective investor who makes an application for Equity Shares in terms of this Draft Prospectus Application Form The Form in terms of which the investors shall apply for the Equity Shares of the Company Banker(s) to the [●] Issue i BSE Bombay Stock Exchange Limited Committee Committee of the Board of Directors of the Company authorized to take decisions on matters related to/incidental to this issue Depositories Act The Depositories Act, 1996, as amended from time to time.