14.09.2020 To, BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001 Scrip Code: BSE – 500016 Dear Sir / Madam, Sub: Filing of Draft Letter of Offer dated September 14, 2020 In compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please see attached herewith the Draft Letter of Offer dated September 14, 2020. Please take the same into your records and do the needful. __________________________________________________________________________ No.145, Sterling Road, Nungambakkam, Chennai 6000034, Tamil Nadu, India Ph.: 044- 2530 3404; e-mail: [email protected]; Draft Letter of Offer Dated: September 14, 2020 For Eligible Shareholders only ARUNA HOTELS LIMITED Aruna Hotels Limited (―Company‖ or ―Issuer‖) was originally incorporated as ‗Aruna Sugars Limited‘ on September 09, 1960 as a public limited company under the provision of Companies Act, 1956 with the Registrar of Companies, Madras (―RoC‖). The name of our Company was changed to ‗Aruna Sugars & Enterprises Limited‘ and the Registrar of Companies, Tamil Nadu issued a fresh certificate of incorporation dated July 03, 1986. Thereafter, pursuant to a special resolution of our Shareholders passed in the annual general meeting dated September 28, 2000 the name of our Company was changed to ‗Aruna Sunrise Hotels Limited‘ and a fresh certificate of incorporation dated October 25, 2000 was issued to our Company by the Registrar of Companies, Chennai at Tamil Nadu. Subsequently, pursuant to the special resolution of our Shareholders passed in the annual general meeting dated September 30, 2002, the name of our Company was changed to ‗Aruna Hotels Limited‘ and a fresh certificate of incorporation dated January 14, 2003 was issued to our Company by the Assistant Registrar of Companies, Chennai at Tamil Nadu. For further details pertaining to the change in name and registered office of our Company, please refer the chapter ‗History and Certain Corporate Matters‘ on page 119 of this Draft Letter of Offer. Registered Office: Aruna Centre, 145, Sterling Road, Nungambakkam, Chennai – 600 034, Tamil Nadu, India, Tel: +91 44 2530 3404; Contact Person: Lakshmi Kumar, Company Secretary and Compliance Officer; E-mail: [email protected]; Website: www.arunahotels.com; Corporate Identification Number: L15421TN1960PLC004255 OUR PROMOTER: S. BALASUBRAMANIAN ADITYAN FOR PRIVATE CIRCULATION TO ELIGIBLE EQUITY SHAREHOLDERS OF ARUNA HOTELS LIMITED (“OUR COMPANY” OR “THE ISSUER”) ONLY ISSUE OF UP TO [●]/- EQUITY SHARES WITH A FACE VALUE OF ₹ 10/- EACH (“RIGHTS EQUITY SHARES”) OF OUR COMPANY FOR CASH AT A PRICE OF ₹ [●]/- PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER RIGHTS EQUITY SHARE) (THE “ISSUE PRICE”) FOR AN AMOUNT AGGREGATING UPTO ₹ 2,490 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 IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE CHAPTER TITLED “TERMS OF THE ISSUE” ON PAGE 194 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 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 Rights Equity Shares 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 statements in the section titled “Risk Factors” beginning on page 25 of this Draft Letter of Offer. ISSUER’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 the 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 of our Company are listed only on BSE Limited (―BSE”). Our Company has received ‗in-principle‘ approval from the BSE for listing the Rights Equity Shares to be allotted pursuant to this Issue vide its letter dated [●]. 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 CAMEO CORPORATE SERVICES LIMITED 605, Center Point, 6th floor, Subramanian Building, Andheri Kurla Road, J. B. Nagar, No. 01, Club House Road, Andheri (East), Mumbai - 400 059, Chennai- 600 002, Maharashtra, India. Tamil Nadu, India. Telephone: +91 22 4082 0914/0915 Telephone: +91044 4002 0700/ 0710/ 2846 0390 Facsimile: +91 22 4082 0999 Facsimile: N.A. E-mail: [email protected] Email: [email protected] Website: www.saffronadvisor.com Website: www.cameoindia.com Investor grievance: [email protected] Investor grievance e-mail: [email protected] Contact Person: Amit Wagle / Gaurav Khandelwal Contact Person: Sreepriya K. SEBI Registration Number: INM 000011211 SEBI Registration No.: INR000003753 Validity of Registration: Permanent Validity of Registration: Permanent ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR ON MARKET RENUNCIATION ISSUE CLOSES ON [●] [●] [●] 0 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 ................................................................................ 14 FORWARD - LOOKING STATEMENTS .................................................................................................. 17 SUMMARY OF THIS DRAFT LETTER OF OFFER ................................................................................. 19 SECTION II - RISK FACTORS ............................................................................................................... 25 SECTION III – INTRODUCTION ........................................................................................................... 59 THE ISSUE ................................................................................................................................................... 59 SUMMARY OF FINANCIAL INFORMATION ......................................................................................... 60 GENERAL INFORMATION ....................................................................................................................... 65 CAPITAL STRUCTURE ............................................................................................................................. 71 OBJECTS OF THE ISSUE ........................................................................................................................... 83 BASIS FOR ISSUE PRICE .......................................................................................................................... 88 STATEMENT OF TAX BENEFITS ............................................................................................................ 91 SECTION IV – ABOUT THE COMPANY .............................................................................................. 94 INDUSTRY OVERVIEW ............................................................................................................................ 94 OUR BUSINESS ........................................................................................................................................ 106 KEY INDUSTRIAL REGULATIONS AND POLICIES ........................................................................... 110 HISTORY AND CERTAIN CORPORATE MATTERS ........................................................................... 119 OUR MANAGEMENT .............................................................................................................................. 128 OUR PROMOTER AND PROMOTER GROUP ....................................................................................... 141 OUR GROUP COMPANIES ...................................................................................................................... 146 RELATED PARTY TRANSACTIONS ..................................................................................................... 152 DIVIDEND POLICY .................................................................................................................................