Bannari Amman Spinning Mills Limited

Draft Letter of Offer Dated: April 26, 2021 For Eligible Shareholders only BANNARI AMMAN SPINNING MILLS LIMITED Bannari Amman Spinning Mills Limited (“Company” or “Issuer”) was originally incorporated as ‘Shiva Textiles (CBT) Limited’ on July 10, 1989 as a public limited company under the Companies Act, 1956 with the Registrar of Companies, Tamil Nadu, Madras and consequently a certificate of incorporation dated July 10, 1989 and a certificate of commencement of business dated September 14, 1989 was issued to our Company. The name of our Company was changed to ‘Bannari Amman Spinning Mills Limited’, pursuant to a special resolution of our Shareholders passed in an extra-ordinary general meeting dated September 30, 1991 and a fresh certificate of incorporation dated October 11, 1991, consequent to such name change was issued to our Company by the Registrar of Companies, Tamil Nadu, Coimbatore. There has not been any change in the registered office of our Company since incorporation. Registered Office: 252, Mettupalayam Road, Coimbatore - 641 043, Tamil Nadu, India; Tel: +91 422 243 5555; Fax: N.A. E-mail: [email protected]; Website: www.bannarimills.com; Contact Person: Nachimuthugounder Krishnaraj, Company Secretary and Compliance Officer; Corporate Identification Number: L17111TZ1989PLC002476 OUR PROMOTERS- SANGAMPALAYAM VEDANAYAGAM ARUMUGAM, MURUGAN ENTERPRISE PRIVATE LIMITED AND SAKTHI MURUGAN TRANSPORTS PRIVATE LIMITED FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF BANNARI AMMAN SPINNING MILLS LIMITED (THE “COMPANY” OR THE “ISSUER”) ONLY WE HEREBY CONFIRM THAT NONE OF OUR PROMOTERS OR DIRECTORS IS A WILFUL DEFAULTER AS ON DATE OF THIS DRAFT LETTER OF OFFER ISSUE OF UPTO [●] EQUITY SHARES OF FACE VALUE ₹ 05 EACH (“RIGHTS EQUITY SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) (THE “ISSUE PRICE”), AGGREGATING UPTO ₹ 10,000 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF [●] RIGHTS EQUITY SHARE(S) FOR EVERY [●] FULLY PAID-UP EQUITY SHARE(S) HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [●] (THE “ISSUE”). THE ISSUE PRICE FOR THE RIGHTS EQUITY SHARES IS [●] TIMES THE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER TITLED “TERMS OF THE ISSUE” ON PAGE 225 OF THIS DRAFT LETTER OF OFFER. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in the Issue unless they can afford to take the risk of losing their entire investment. Investors are advised to read the risk factors carefully before taking an investment decision in the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue, including the risks involved. The Rights Equity Shares 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 the contents of this Draft Letter of Offer. Specific attention of the investors is invited to the section titled “Risk Factors” on page 24 of this Draft Letter of Offer. OUR COMPANY’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer 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 Draft Letter of Offer 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 Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions, misleading in any material respect. LISTING The existing Equity Shares are listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) (together, the “Stock Exchanges”). Our Company has received ‘in-principle’ approvals from BSE and NSE for listing the Rights Equity Shares to be allotted pursuant to this Issue vide their letters dated [●] and [●], respectively. For the purpose of this Issue, the Designated Stock Exchange is BSE. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE SAFFRON CAPITAL ADVISORS PRIVATE LIMITED Link Intime India Private Limited 605, Center Point, 6th floor, C – 101, 1st Floor, 247 Park, Andheri Kurla Road, J. B. Nagar, L.B.S. Marg, Vikhroli (West), Andheri (East), Mumbai - 400 059, Mumbai – 400 083, Maharashtra, India Maharashtra, India. Telephone: +91 22 4918 6200 Telephone: +91 22 4082 0914/915 Facsimile: +91 22 4918 6195 Facsimile: +91 22 4082 0999 E-mail: [email protected] E-mail: [email protected] Website: www.linkintime.co.in Website: www.saffronadvisor.com Contact person: Sumeet Deshpande Investor grievance: [email protected] Investor grievance: [email protected] Contact Person: Amit Wagle / Gaurav Khandelwal CIN: U67190MH1999PTC118368 SEBI Registration Number: INM 000011211 SEBI Registration No: INR000004058 Validity of Registration: Permanent Validity of Registration: Permanent ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR ISSUE CLOSES ON APPLICATION FORMS [●] [●] [●] THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 1 TABLE OF CONTENTS SECTION I – GENERAL ........................................................................................................................ 3 DEFINITIONS AND ABBREVIATIONS ................................................................................................ 3 NOTICE TO INVESTORS ...................................................................................................................... 12 PRESENTATION OF FINANCIAL INFORMATION ........................................................................... 15 FORWARD - LOOKING STATEMENTS ............................................................................................. 18 SUMMARY OF THIS DRAFT LETTER OF OFFER ............................................................................ 20 SECTION II - RISK FACTORS ........................................................................................................... 24 SECTION III – INTRODUCTION ...................................................................................................... 56 THE ISSUE .............................................................................................................................................. 56 GENERAL INFORMATION .................................................................................................................. 58 CAPITAL STRUCTURE ......................................................................................................................... 63 OBJECTS OF THE ISSUE ...................................................................................................................... 69 STATEMENT OF TAX BENEFITS ....................................................................................................... 74 SECTION IV – ABOUT THE COMPANY ......................................................................................... 80 INDUSTRY OVERVIEW ....................................................................................................................... 80 OUR BUSINESS ...................................................................................................................................... 92 OUR MANAGEMENT .......................................................................................................................... 108 OUR PROMOTERS............................................................................................................................... 118 RELATED PARTY TRANSACTIONS ................................................................................................ 120 DIVIDEND POLICY ............................................................................................................................. 121 SECTION V – FINANCIAL INFORMATION ................................................................................. 122 RESTATED FINANCIAL INFORMATION ........................................................................................ 122 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS ....................................................................................................................................... 182 FINANCIAL INDEBTEDNESS ............................................................................................................ 194 MARKET PRICE INFORMATION ...................................................................................................... 204 SECTION VI – LEGAL AND OTHER INFORMATION ............................................................... 207 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ........................................... 207 GOVERNMENT AND OTHER STATUTORY APPROVALS ........................................................... 216 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................ 217 SECTION VII – ISSUE INFORMATION ......................................................................................... 225 TERMS OF THE ISSUE .......................................................................................................................

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