jk cement limited · 3 for the purpose of soliciting subscription from eligible investors in the...

DISCLOSURE DOCUMENT

Private & Confidential – For Private Circulation Only

(This Disclosure Document/Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus). This Disclosure Document prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 as amended

JK CEMENT LIMITED Registered & Corporate Office: Kamla Tower, Kanpur, Uttar Pradesh - 208 001, India

Contact Person: Mr. Shambhu Singh, Compliance Officer; Tel.: (91 512) 2371478/79/80/81; Fax: (91 512) 2399854; Web site: www.jkcement.com; E-Mail: [email protected]

DISCLOSURE DOCUMENT FOR PRIVATE PLACEMENT OF UPTO 2,000 LISTED, RATED, SECURED, NON-

CONVERTIBLE, NON CUMULATIVE, REDEEMABLE DEBENTURES OF THE FACE VALUE OF RS. 1,000,000 EACH FOR

CASH AT PAR, AGGREGATING UPTO RS. 2,000 MILLION (“DEBENTURES”), THROUGH THE “ISSUE”.

GENERAL RISK

Investors are advised to read the Disclosure Document carefully before taking an investment decision in this Issue. For taking an investment decision the investor must rely on their examination of the Company and the Issue including the risks involved. The Debentures have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibilities for, and confirms that this Disclosure Document (including the documents incorporated by reference herein, if any) 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 this Disclosure Document is true and correct in all material respects 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 document as a whole or any of such information or the expression of any such opinions or intensions misleading in any material respect.

CREDIT RATING

“CARE AA-” (pronounced “CARE double A minus”) assigned by CARE vide their letter dated June 17, 2013/July 5, 2013 indicates high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

LISTING

The Debentures shall be listed on the Wholesale Debt Market (WDM) segment of [BSE Limited] (“BSE” or the ‘Stock Exchange’).

ARRANGER TO THE ISSUE

MOTILAL OSWAL INVESTMENT

ADVISORS PRIVATE LIMITED

Motilal Oswal Tower, Junction of Gokhale & Sayani Road, Prabhadevi, Mumbai – 400 067 Tel: (91 22) 3980 4380 Fax: (91 22) 3980 4315 Email: [email protected]

TRUSTEE TO THE ISSUE

IDBI TRUSTEESHIP SERVICES

LIMITED Asian Building, Ground Floor, 17-R, Kamani Marg, Ballard Estate, Mumbai – 400 001

REGISTRAR AND TRANSFER AGENT

SHAREPRO SERVICES (INDIA) PVT.

LTD. 13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone, Exchange Lane, Andheri (E), Mumbai – 400 072 Tel: (91 22) 67720300 / 400 Fax: (91 22) 28591568 Email:[email protected]

Issue Time Table

Issue Open Date Monday, July 15, 2013 Issue Closing Date Saturday, August 10, 2013

Issue Pay-in Date Monday, July 15, 2013 Deemed Date of Allotment Saturday, August 10, 2013

The Company reserves the right to change the issue closing date and in such an event, the Deemed Date of Allotment for the Debentures may also be revised by the Company at its sole and absolute discretion. In the event of any change in the above issue programme, the investors will be intimated about the revised issue programme by the Company.

NOTE: This Disclosure Document of private placement is neither a prospectus nor a statement in lieu of a prospectus. This Disclosure

Document has been prepared for the issue of Non-Convertible Debentures by the Company. This is only an information brochure

intended for private use and should not be construed to be a prospectus and/or an invitation to the public for subscription to Debentures

under any law for the time being in force.

DISCLOSURE DOCUMENT

TABLE OF CONTENTS

DISCLAIMER ............................................................................................................................................................... 2

DISCLAIMER OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ....................................................... 3

INDUSTRY AND MARKET DATA ............................................................................................................................ 4

DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 5

RISK FACTORS ........................................................................................................................................................... 7

GENERAL INFORMATION ...................................................................................................................................... 14

I. REGISTERED AND CORPORATE OFFICE OF THE ISSUER .................................................................. 14

II. COMPANY SECRETARY AND COMPLIANCE OFFICER FOR THE ISSUE ......................................... 14

III. CHIEF FINANCIAL OFFICER OF THE ISSUER ........................................................................................ 14

IV. ARRANGER OF THE ISSUER ..................................................................................................................... 14

V. TRUSTEE TO THE ISSUE ............................................................................................................................ 14

VI. REGISTRAR TO THE ISSUE ....................................................................................................................... 15

VII. NAME AND ADDRESS AND OTHER DETAILS OF BOARD OF DIRECTORS OF THE ISSUER ....... 15

VIII. CREDIT RATING AGENCY ......................................................................................................................... 17

IX. DETAILS OF AUDITOR OF THE ISSUER.................................................................................................. 17

X. A BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER ........................................... 17

XI. FINANCIAL PERFORMANCE ..................................................................................................................... 24

XII. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION GIVING DETAILS OF ITS FOLLOWING ACTIVITIES .......................................................................................................................... 26

XIII. DETAILS OF PROMOTER OF THE COMPANY ........................................................................................ 33

XIV. OTHER ISSUE DETAILS .............................................................................................................................. 34

XV. SUMMARY TERM SHEET ........................................................................................................................... 35

XVI. TERMS AND CONDITIONS OF THE ISSUE AND ISSUE PROCEDURE ............................................... 40

XVII. OTHER TERMS AND CONDITIONS OF THE ISSUE ............................................................................... 42

XVIII. DECLARATION ............................................................................................................................................ 50

ANNEXURE 1: CARE RATING LETTER AND RATING RATIONALE .............................................................. 51

ANNEXURE 2: TERM SHEET .................................................................................................................................. 56

ANNEXURE 3: UNDERTAKING BY THE COMPANY ......................................................................................... 58

ANNEXURE 4: APPLICATION FORM ...................................................................................................................... 1

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DISCLAIMER

DISCLAIMER OF THE ISSUER

This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended and Securities and Exchange Board of India (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012 issued vide circular no. LAD-NRO/GN/2012-13/19/5392 dated October 12, 2012, as amended. This Disclosure Document does not constitute an offer to the public in general to subscribe for or otherwise acquire the Debentures to be issued by J. K. Cement Limited (the “Issuer”/ the “JKC”/ “the Company”). This Disclosure Document is for the exclusive use of the addressee and it should not be circulated or distributed to third party (ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Debentures issued by the issuer. This Debenture Issue is made strictly on private placement basis. Apart from this Disclosure Document, no offer document or prospectus has been prepared in connection with the offering of this Debenture Issue or in relation to the issuer. This Disclosure Document is not intended to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the debentures issued by JKC. This Disclosure Document has been prepared to give general information regarding JKC to parties proposing to invest in this issue of Debentures and it does not purport to contain all the information that any such party may require. JKC believes that the information contained in this Disclosure Document is true and correct as of the date hereof. JKC does not undertake to update this Disclosure Document to reflect subsequent events and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with JKC. However, JKC reserves its right for providing the information at its absolute discretion. JKC accepts no responsibility for statements made in any advertisement or any other material and anyone placing reliance on any other source of information would be doing so at his own risk and responsibility. Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Debentures. It is the responsibility of the prospective subscriber to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the Debentures. It is the responsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the Debentures under the relevant laws and regulations in force. Prospective subscriber should conduct their own investigation, due diligence and analysis before applying for the Debentures. Nothing in this Disclosure Document should be construed as advice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Debentures. The prospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe for the Debentures. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these Debentures and matters incidental thereto. This Disclosure Document is not intended for distribution. It is meant for the consideration of the person to whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on private placement basis and this offer does not constitute a public offer/invitation. The Issuer reserves the right to withdraw the private placement of the Debenture Issue prior to the issue closing date(s) in the event of any unforeseen development adversely affecting the economic and regulatory environment or any other force majeure condition including any change in applicable law. In such an event, the Issuer will refund the application money, if any, along with interest payable on such application money, if any. DISCLAIMER OF THE ARRANGER

The role of the Arranger in the assignment is confined to marketing and placement of the Debentures on the basis of this Disclosure Document as prepared by the Issuer. The Arranger has neither scrutinized/ vetted nor have they done any due-diligence for verification of the contents of this Disclosure Document. The Arranger shall use this document

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for the purpose of soliciting subscription from eligible investors in the Debentures to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the aforesaid use of this document by the Arranger should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Arranger; nor do they in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor do they take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project. The Arranger or any of their directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this Disclosure Document.

DISCLAIMER OF THE SECURITIES AND EXCHANGE BOARD OF INDIA

This Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Disclosure Document. The issue of Debentures being made on private placement basis, filing of this Disclosure Document is not required with SEBI. However SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Disclosure Document.

DISCLAIMER OF THE STOCK EXCHANGE

As required, a copy of this Disclosure Document has been submitted to the BSE Ltd. (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Disclosure Document with BSE or hosting the same on its website should not in any way be deemed or construed that the Disclosure Document has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Company. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

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FORWARD LOOKING STATEMENTS All statements in this Disclosure Document that are not statements of historical fact may constitute “forward looking statements”. Readers can identify forward-looking statements by terminology like “aim”, “anticipate”, “intend”, “believe”, “continue”, “estimate”, “expect”, “may”, “objective”, “plan”, “potential”, “project”, “pursue”, “shall”, “should”, “will”, “would” or other words or phrases of similar import. All statements regarding the Issuer’s expected financial condition and results of operations, business, plans and prospects are forward looking statements. These forward looking statements and any other projections contained in this Disclosure Document (whether made by the Issuer or any third party) are predictions and involve known and unknown risks, uncertainties and other factors that may cause the Issuer’s actual results, performance and achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements or other projections. The forward looking statements contained in this Disclosure Document are based on the beliefs of the management of the Issuer, as well as the assumptions made by and information available to management as at the date of this Disclosure Document. There can be no assurance that the expectations will prove to be correct. The Issuer expressly disclaims any obligation or undertaking to release any updated information or revisions to any forward looking statements contained herein to reflect any changes in the expectations or assumptions with regard thereto or any change in the events, conditions or circumstances on which such statements are based. Given these uncertainties, recipients are cautioned not to place undue reliance on such forward looking statements. All subsequent written and oral forward looking statements attributable to the Issuer are expressly qualified in their entirety by reference to these cautionary statements.

INDUSTRY AND MARKET DATA

Market data and certain industry forecasts used throughout this Disclosure Document have been obtained from market research, publicly available information and industry publications. Industry publications generally state that the accuracy and completeness of that information is not guaranteed. Similarly, industry forecasts and market research while believed to be reliable, have not been independently verified and the Issuer does not make any representation as to the accuracy of that information.

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DEFINITIONS AND ABBREVIATIONS

The Company / Issuer / JKC/ We/ Us

JK Cement Limited, a company incorporated under the Companies Act, 1956 and having with its registered office at Kamla Tower, Kanpur, Uttar Pradesh 208 001,India

AAIFR Appellate Authority for Industrial and Financial Reconstruction

“We”, “us”, “our” Unless the context otherwise indicates or implies, refers to J. K. Cement Limited and its Subsidiaries and Associates.

Allotment Intimation An advice informing the allottee of the number of Letter(s) of Allotment/Debenture(s) allotted to him in Electronic (Dematerialised) Form

Allot/Allotment/Allotted Unless the context otherwise requires or implies, the allotment of the Debentures pursuant to the Issue.

Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Debentures and which will be considered as the application for allotment of Debentures in the Issue.

Articles / Articles of Association

The articles of association of the Company, as amended.

Beneficial Owner(s) Debentureholder(s) holding Debentures(s) in dematerialized form (Beneficial Owner of the Debenture(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996)

Board/Board of Directors The board of directors of the Company as constituted from time to time, including any committees thereof.

Book Closure / Record Date

15 calendar days before each interest due date /redemption date. In case the record date/ book closure date falls on Sunday/Holiday, the day prior to the said Sunday/Holiday shall be the record date/ book closure date.

BSE BSE Limited

Business Day A day (other than a Saturday or Sunday or Holiday) on which banks are open for business in New Delhi, Mumbai and Kanpur.

Credit Rating Agency / “CARE”

Credit Analysis & Research Ltd.

CDSL Central Depository Services (India) Limited

Coupon Payment Date Date of payment of interest on the Debentures

Deemed Date of Allotment Subscription Date, being the date on which the Debentures shall deemed to have been allotted to the Subscribers.

Debenture(s)/NCDs Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures of Rs. 1,000,000/- each of J. K. Cement Limited offered through private placement route under the terms of this Disclosure Document

Debentureholder(s) Any person who is a holder of any Debenture at any time (including the Subscribers)

Trustee to the Issue IDBI Trusteeship Services Limited

Depository(ies) or Depository Participants

National Securities Depository Limited (NSDL) / Central Depository Services (India) Limited (CDSL)

Disclosure Document Disclosure Document dated June 28, 2013 for private placement of upto 2,000 Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures of the face value of Rs. 1,000,000 each for cash at par, aggregating upto Rs. 2,000 million

DP Depository Participant

Financial Year / FY Period of twelve months period ending March 31, of that particular year

FII Foreign Institutional Investors

GIR General Index Registration Number

I.T. Act The Income-tax Act, 1961 as amended from time to time

ISIN International Securities Identification Number

Memorandum / MoA Memorandum of Association of the Company

MF Mutual Funds

NEFT National Electronic Fund Transfer

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NRIs Non Resident Indians

NSDL National Securities Depository Limited

Issue Pay-in Date [●]

PAN Permanent Account Number

RBI Reserve Bank of India

Registrar/Registrar to the Issue

Registrar to the Issue, in this case being Sharepro Services (India) Pvt. Ltd.

ROC The Registrar of Companies, Uttar Pradesh

RTGS Real Time Gross Settlement, an electronic funds transfer facility provided by RBI

RBI The Reserve Bank of India

SEBI Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992 (as amended from time to time)

SEBI Debt Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 read with Securities and Exchange Board of India (Issue and Listing of Debt Securities)(Amendment) Regulations, 2012 issued vide Circular No. LAD-NRO/GN/2012-13/5392 dated October 12, 2012 as amended from time to time.

TDS Tax Deducted at Source

WDM Wholesale Debt Market

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RISK FACTORS

The following are some of the risks envisaged by the Company’s management. Investors should consider the same carefully for evaluating the Company and its business before making any investment decision. Unless the context requires otherwise, the risk factors described below apply to the Company only. If any one of the risks occurs, the Company’s business, financial conditions and results of operations could suffer and therefore the value of the Debentures could decline. The Company believes that the factors described below represent the principal risks inherent in investing in the Debentures issued under this Disclosure Document, but the inability of the Company, as the case may be, to pay necessary amounts, on or in connection with the Debentures, may occur for other reasons and the Company does not represent that the statements below regarding the risks of holding any Debentures are exhaustive. Potential investors should also read the detailed information set out elsewhere in this Disclosure Document and reach their own views prior to making any investment decision.

Risks Relating to the Company

1. Company’s business is dependent upon its ability to mine sufficient limestone for Company’s operations. Company meet most of its requirements for limestone, the key raw material for cement production, from eight quarries for its grey cement operations two quarries for its white cement operations, all located near its plants. The Company own the freehold rights to some of the land where its quarries are located. The Company is required to obtain the grant of a lease from the concerned State Governments in order to mine the limestone deposits. Its mining leases were initially granted for terms of 20 years and in accordance with the Mines and Minerals (Regulation and Development) Act, 1957, as amended and the Mineral Concession Rules, 1960, as amended. These mining leases are renewable for additional terms of 20 years at a time subject to certain conditions. Mining rights are subject to compliance with certain conditions, and the GoI and State Governments have the power to take action with respect to mining rights, including imposing fines or restrictions, revoking the mining rights or changing the amount of royalty payable for mining the quarries. Certain of Company’s mining leases have expired and it has applied for the renewal of these leases with the government of the State of Rajasthan. The Company has however not received renewals of these leases until date, although it continues to mine limestone from these quarries and pay royalty on such limestone mined to the appropriate authorities. There can be no assurance that mining royalties will not be increased in the future. Further, a joint venture company, Bander Coal Private Limited has been incorporated with equity contribution by Century Textiles and Industries Limited and AMR Iron & Steel Pvt. Ltd. This entity has filed revised mine plan for underground mining of coal over project area of 1,643.67 hectares in Tehsil : Chimur, Dist: Chandrapur, Maharashtra official approval of mining plan is awaited.. Although Company believe that its mining rights are sufficient to meet current and projected production levels, if its mining rights are revoked or not renewed upon expiration, or significant restrictions on the usage of the rights are imposed or applicable environmental standards are substantially increased, its ability to operate Company’s plants adjacent to the affected mining sites could be disrupted until alternative limestone sources are located, which could materially and adversely affect its financial condition and results of operations.

There are numerous uncertainties inherent in estimating quantities of reserves, including many factors beyond Company’s control. In general, estimates of reserves by independent consultants or the Company, including estimates of reserves, are based upon a number of variable factors and assumptions, such as geological and geophysical characteristics of the reserves, historical production performance from the properties, the quality and quantity of technical and economic data, extensive engineering judgments, the assumed effects of regulation by GoI agencies and future operating costs. All such estimates involve uncertainties, and classifications of reserves are only attempts to define the degree of likelihood that the reserves will result in revenue for the Company. For those reasons, estimates of the economically recoverable reserves attributable to any particular group of properties and classification of such reserves based on risk of recovery, prepared by different engineers or by the same engineers at different times, may vary substantially. In addition, such estimates can be and will be subsequently revised as additional pertinent data becomes available prompting revision. Actual reserves may vary significantly from such

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estimates. To the extent actual reserves are significantly less than Company’s estimates, its financial conditions and results of operations are likely to be materially and adversely impacted. While these estimates are based on detailed studies conducted by independent experts, there can be no assurance that these estimates would not be materially different from estimates prepared by other experts in accordance with different internationally recognized codes.

2. Company’s business and future results of operations may be adversely affected if Company unable to

implement its expansion and modernization plans for its existing manufacturing facilities. Company proposes to create additional capacity, including through modernizing and optimizing its existing plants and facilities. The Company, through its Subsidiary, J.K. Cement Works (Fujairah) FZC, UAE jointly with the Government of Fujairah, are in the process of setting up a greenfield dual process cement plant having a capability of producing either 0.6 MT of white cement or 1 MT of grey cement or a combination of both. It has awarded the EPC contract for the said plant which is expected to commence commercial operations by March 2014. The Company is also in the process of expanding its operations at Mangrol, Rajasthan by setting up a 3 MnTPA plant with a split grinding unit of 1.5 MnTPA in Jhajjar, Haryana. It also intend to increase revenues in the short-term by increasing output and capacity through optimization including improving certain processes and adding new equipment. It expect to incur significant capital expenditure for such plans, which may involve risks associated with major projects, such as cost overruns, delays in implementation, technical and economic viability and changes in market conditions. Company’s business and future results of operations may be adversely affected if it unable to implement its expansion and modernization plans for their existing manufacturing facilities.

3. An inability to manage Company’s growth could have an adverse effect on its business and results of

operation.

The Company has experienced rapid growth in recent years and expect its business to continue to grow as it gain access to better financial resources. For example, Company’s total income has grown from Rs. 25,936.45 million in Fiscal 2012 to Rs. 29,607.67 million in Fiscal 2013, at a CAGR of 14.15% and its profit after tax has increased from Rs. 1,745.74 million in Fiscal 2012 to Rs. 2,307.67 million in Fiscal 2013, at a CAGR of 32.19%. There can be no assurance that the past increases in Company’s revenue and profits will be sustained. Further, if this growth continues, it will place significant demands on the Company and require it to continuously evolve and improve its operational, financial and internal controls across their organization. In particular, continued expansion increases the challenges involved in:

• preserving a uniform culture, values and work environment across the Company’s projects;

• developing and improving Company’s internal administrative infrastructure, particularly its financial, operational, communications, internal control and other internal systems;

• recruiting, training and retaining sufficient skilled management, technical and marketing personnel; and

• maintaining high levels of client satisfaction. Any inability to manage the above factors may have an adverse effect on Company’s revenues, business and results of operations.

4. Company’s business and future results of operations may be adversely affected if it unable to reduce its cost

of power and fuel. Power and fuel expenses are Company’s most significant expenses and together comprised approximately 30.33% of its total expenditure in Fiscal 2012 and 28.75% of its total expenditure in Fiscal 2013. It has a coal-based and waste-heat-recovery-based captive power generation capacity of more than 100 MW, spread across its plants. It also purchase power through the Rajasthan State Electricity Board, Karnataka Power Transmission Corporation Limited, VL Lignite Power Private Limited and The Tata Power Company Limited. Given the significant costs incurred by the Company towards fuel and power, it has always focused on ways to reduce such costs. Company’s current expansion projects, including a greenfield dual process cement plant in Fujairah and the setting up of a 3 MnTPA plant at Mangrol, Rajasthan with split grinding unit at Jhajjar , Haryana,

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will have the latest technologies which it believe will help them substantially reduce its costs. There can, however, be no assurance that it will be able to achieve such cost efficiency. Further, there can also be no assurance that Company’s captive power plants will continue to achieve the power generation levels that it expect or that Company will be able to achieve its targeted return on investment on its projects. In the event that the Company unable to reduce its average cost of power generation, its business and results of operations may be adversely affected.

5. A failure to comply with financial and other restrictive covenants imposed on Company under its financing

agreements could cause them to default on these agreements, which could adversely affect its ability to

conduct Company’s business and operations. Under Company’s financing agreements with various lenders, it has agreed to restrictive covenants that require, among other things, that it maintain certain levels of debt to equity ratio, capital and asset quality. Specifically, Company require the consent of its lenders for effecting any change in the management or control or the majority shareholding of the Company, any merger, amalgamation or other restructuring which leads to a delisting of the Equity Shares from the stock exchanges or which affects the control of the existing shareholders over the Company, or any material amendment or modification of the Memorandum of Association of the Company. Company believe that its relationship with its lenders is good, and it has in the past obtained consents from them to undertake various actions and have informed them of its activities from time to time. Compliance with the various terms is, however, subject to interpretation and it cannot assure you that Company has requested or received all consents from its lenders that are required by its financing documents. As a result, it is possible that a lender could assert that the Company has not complied with all terms under its existing financing documents. Any failure to comply with the requirement to obtain a consent, or other condition or covenant under Company’s financing agreements that is not waived by its lenders or is not otherwise cured by them, may lead to a termination of its credit facilities, acceleration of all amounts due under such facilities and trigger cross default provisions under certain of Company’s other financing agreements, and may adversely affect its ability to conduct its business and operations or implement Company’s business plans.

6. There can be no assurance that the Company will be successful in arranging adequate working capital for its

existing or expanded operations, which may adversely affect its financial condition and results of operations. Company’s business requires a significant amount of working capital to finance the purchase of raw materials and packing materials for its grey and white cement products, and for its limestone mining operations. In the past, Company has funded its working capital through cash flow from operations and credit lines extended by its suppliers and transporters. As of March 31, 2013, the aggregate outstanding amount in relation to Company’s working capital facilities was Rs. 2,704.9 million consisting of fund-based and non-fund based facilities of Rs. 1,886.5 million and Rs. 818.4 million, respectively. However, there can be no assurance that Company will, in the future, be successful in arranging adequate working capital for its existing or expanded operations, which may adversely affect its financial condition and results of operations. In addition, Company may in the future need to incur additional indebtedness to satisfy its working capital needs.

7. Company depends on its distribution network for the sale of its products. Company’s products are currently marketed through a widespread distribution network. Company’s distribution network for grey cement products consists of 138 feeder depots serviced by 16 regional sales offices located in various states. Company’s white cement network comprises 51 feeder depots serviced by 16 regional sales offices located in various states. In addition, Company has more than6,800 stockists that store and distribute its grey and white cement products. Company continues to focus on building a dedicated and motivated dealer network spread across the country. Company’s efficient services and incentives have helped it to build up a network of loyal dealers. Since it is the dealers and not the Company who have a day-to-day contact with customers, it is exposed to the risk of its dealers failing to adhere to the standards set for them in respect of sales and after-sales service, which in turn could affect customer’s perception of the Company’s brand and products.

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8. Disruptions in supply and transport could affect Company’s business. The production of cement is dependent on a steady supply of various raw materials. These inputs are transported to Company’s plants by land, and cement is transported to its customers by land and rail transport. Transport of Company’s inputs and finished products is subject to various bottlenecks and other hazards beyond its control, including poor road and other transport infrastructure, accidents, adverse weather conditions, strikes and civil unrest. Either an increase in the price of transportation or interruptions in transportation of the Company’s inputs or finished products could have an adverse effect on its business, financial condition and results of operations. In addition, cement is a perishable product as its quality deteriorates upon contact with moisture over a period of time. Therefore, prolonged storage or exposure to moisture during transport may result in such cement stocks being written off. Similarly, Company’s cement is sold in bags that may split open during transport, again resulting in such stock being written off. Although Company has not encountered any significant disruption to the supply and transportation of inputs and finished products to date, no assurance can be given that any such disruption will not occur in the future as a result of these factors and that such disruptions will not be material. Company typically use third party transportation providers for the supply of its raw materials and for deliveries of its products to Company’s customers. Transportation strikes by members of various Indian truckers’ unions have had in the past, and could have in the future, an adverse effect on Company’s receipt of supplies and its ability to deliver its products. In addition, transportation costs have been steadily increasing. Continuing increases in transportation costs or unavailability of transportation services for Company’s products may have an adverse effect on its business and results of operations. An increase in the freight costs or unavailability of carriers for transportation of Company’s products to its export markets may also have an adverse effect on Company’s business and results of operations. These fluctuations may increase its costs and adversely affect its operating margins.

9. If Company not able to renew or maintain its statutory and regulatory permits and approvals required to

operate its business, it may have a material adverse effect on its business. Company require certain statutory and regulatory permits, licenses and approvals to operate its business. In the future, Company will be required to renew such permits, licenses and approvals, and obtain new permits, licenses and approvals for any proposed operations. While Company believe that it will be able to renew or obtain such permits, licenses and approvals as and when required, there can be no assurance that the relevant authorities will issue any of such permits or approvals in the time-frame anticipated by Company or at all. Failure by Company to renew, maintain or obtain the required permits or approvals may result in the interruption of its operations and may have a material adverse effect on Company’s business, financial condition and results of operations.

10. Company may undertake strategic acquisitions or investments, which may prove to be difficult to integrate

and manage or may not be successful. In the future, Company may consider making strategic acquisitions of other cement companies whose resources, capabilities and strategies are complementary to and are likely to enhance its business operations in the different geographical regions that it operate in. It is also possible that it may not identify suitable acquisition or investment candidates, or that if the Company do identify suitable candidates, it may not complete those transactions on terms commercially acceptable to Company or at all. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may adversely affect its competitiveness or its growth prospects. If the Company acquire another company, it could face difficulty in integrating the acquired operations which could disrupt its ongoing business, distract Company’s management and employees and increase its expenses. There can be no assurance that it will be able to achieve the strategic purpose of such acquisition or operational integration or its targeted return on investment.

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11. The future results of operations the Company could be adversely affected by strikes, work stoppages or

increased wage demands by its employees or inability to attract and retain skilled personnel.

As of March 31, 2013, the Company had 2,317 full-time employees, of which 666 employees were employed at the corporate and marketing offices of the Company, and 1,651 employees were employed at all of its facilities. Most of the workers of the Company are represented by labour unions. While it considers the current labour relations to be good, there can be no assurance that the Company will not experience future disruptions to its operations due to disputes or other problems with its work force, which could adversely affect its business and future results of operations. The Company employs sizeable contract labourers at its facilities. The numbers of contract labourers vary from time to time based on the nature and extent of work contracted to independent contractors. All contract labourers engaged at its facilities are assured minimum wages that are fixed by the State Government from time to time. Any upward revision of wages that may be required by the State Government to be paid to such contract labourers, or offer of permanent employment or the unavailability of the required number of contract labourers, may adversely affect the business and future results of the Company’s operations. Company’s ability to meet future business challenges depends on its ability to attract and recruit talented and skilled personnel. It faces strong competition to recruit and retain skilled and professionally qualified staff. The loss of key personnel or inability to manage the attrition levels in different employee categories may materially and adversely impact business, the Company’s ability to grow and its control over various business functions.

12. The Company is dependent upon the continued supply of coal, petcoke, other raw materials and fuel, the

supply and costs of which can be subject to significant variation due to factors outside its control. The Company currently rely on a number of domestic suppliers to provide certain raw materials, including gypsum and additives such as laterite, red ochre, bauxite and iron ore for its grey cement operations as well as white clay, feldspar and fluorspar for its white cement operations. The Company is also dependent on various domestic suppliers for the supply of coal and petcoke, although it uses a small amount of imported coal as well. If Company is unable to obtain adequate supplies of raw materials or fuel in a timely manner or on acceptable commercial terms, or if there are significant increases in the cost of these supplies, its business and results of operations may be materially and adversely affected. As some of the Company’s annual coal requirement is sourced from coal mines owned by government undertakings, the Company is exposed to the risk of increases in coal prices by the government. In addition, the government-organized coal linkage committee determines the amount of coal Company and other users of coal can source from a particular mine dependant on its demand. The quality of coal, especially its carbon content, may vary significantly depending upon the quality of the reserves from which the coal originates. Any deterioration in the quality of the coal supplied to the Company may also adversely impact its ability to manufacture cement to acceptable yield levels and quality standards and may have an adverse affect on its operations.

13. The Indian cement market in general and the northern Indian cement market in particular, are extremely

competitive. Company’s principal markets for grey cement are Haryana, Delhi, Punjab, Western Uttar Pradesh, Maharashtra, Karnataka, Kerala, Goa and some parts of Madhya Pradesh, Gujarat and Andhra Pradesh. White cement manufactured by the Company has a pan-India market and is also exported to certain countries. The grey cement industry in India, especially in northern India, continues to be highly fragmented as compared to other cement producing countries. The international players, notably, Holcim, Lafarge, and Italcementi, over a period of time, have acquired certain local interests as part of their entry strategy into India. In comparison, the white cement industry in India is a concentrated market with the two largest players, Ultratech Cement Limited and the Company, accounting for most of the capacity within the country. Some of the Company’s competitors are larger than the Company, have greater financial resources than the Company, and may be able to deliver products on more attractive terms or to invest larger amounts of capital into their businesses, including expenditure for better and more efficient production capabilities. These competitors may limit its opportunity to expand its market share and may compete with the Company on pricing of products. The

12

Company’s business could be adversely affected if Company unable to compete with its competitors and sell cement at competitive prices. For example, if any of its current or future competitors develop more efficient production facilities, enabling them to produce cement and clinker at a significantly lower cost and sell at lower prices than the Company, it may be required to lower the prices it charge for their products and its business and results of operations could be adversely impacted. Current and future competitors may also introduce new and more competitive products and supporting services, make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including distributors of its products, thereby increasing their ability to address the needs of the Company’s target customers. If Company cannot compete in pricing, provide competitive products or services or expand into new markets, this could have a material adverse effect on its business, financial condition and prospects.

14. Company’s business is subject to a significant number of tax regimes and changes in legislation governing

the rules implementing them or the regulator enforcing them in any one of those jurisdictions could

negatively and adversely affect its results of operations.

The Company currently has operations and staff spread across eleven states in India. Consequently, it is subject to the jurisdiction of a number of tax authorities and regimes. The revenues recorded and income earned in these various jurisdictions are taxed on differing bases, including net income actually earned, net income deemed earned and revenue-based tax withholding. The final determination of the tax liabilities involves the interpretation of local tax laws and related regulations in each jurisdiction as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in tax laws, could impact the determination of its tax liabilities for any given tax year. Taxes and other levies imposed by the Central or State governments in India that affect its industry include customs duties, excise duties, VAT, income tax, service tax and other taxes, duties or surcharges introduced from time to time. The Central and State tax scheme in India is extensive and subject to change from time to time.

15. The departure of the Company’s key personnel could adversely affect its business and its ability to pursue its

growth strategies. Company’s success depends on its ability to retain senior executives and key employees. Company’s continued success will depend on its ability to attract, recruit and retain a large group of experienced professionals and staff. If any senior executives or key employees were to leave, it could face difficulty replacing them. Their departure and the Company’s failure to replace such key personnel could have a negative impact on Company’s business, including its ability to bid for and execute new projects as well as on its ability to meet its earnings and profitability targets and to pursue Company’s growth strategies. As Company’s business grows, it may not be able to attract suitable employees which may have an adverse affect in its results of operations and financial performance.

Risks Relating to the Debentures

16. Any downgrading in credit rating of the Debentures may affect the value of the Debentures. The Debentures have been rated by CARE as having “CARE AA-” (pronounced as CARE double A minus). The Issuer cannot guarantee that this rating will not be downgraded. Such a downgrade in the credit rating may lower the value of the Debentures and may also affect the Company’s ability to raise further funds.

17. The Debentures may be Illiquid. It is not possible to predict if and to what extent a secondary market may develop for the Debentures or at what price the Debentures will trade in the secondary market or whether such market will be liquid or illiquid. As specified in this Disclosure Document, the Company has made an application to the BSE to list the Debentures on it. If the Debentures are so listed, no assurance can be given that any such listing will be maintained. The fact that the Debentures may be listed or quoted or admitted to trading does not necessarily lead to greater liquidity than if they were not so listed or quoted or admitted to trading.

13

18. You may not be able to recover, on a timely basis or at all, the full value of the outstanding amounts and/or

the interest accrued thereon in connection with the Debentures.

The Company’s ability to pay interest accrued on the Debentures and/or the principal amount outstanding in connection therewith would be subject to various factors inter-alia including its financial condition, profitability and the general economic conditions in India and in the global financial markets. The Company cannot assure you that it would be able to repay the principal amount outstanding on the debentures and/or the interest accrued thereon in a timely manner or at all. Although the Company will create appropriate security in favour of the Trustee for the Debentureholders on the assets to ensure at least 1.3 times asset cover for the Debentures, the realizable value of the assets charged as security, when liquidated, may be lower than the outstanding principal and/or interest accrued thereon in connection with the Debentures. A failure or delay to recover the expected value from a sale or disposition of the assets charged as security in connection with the Debentures could expose you to a potential loss.

19. There are other lenders who have pari passu charge over the security provided and the Company is to obtain

approval from the first charge holders for creating security in respect of the Debentures. There are other lenders of the Company who have pari passu charge over the security provided for the Debentures. While the Company is required to maintain an asset cover of 1.3 times the outstanding amount of the Debentures, upon the Company’s bankruptcy, winding-up or liquidation, the other lenders will rank pari passu with the Debentureholders and to that extent, may reduce the amounts recoverable by the Debentureholders. Further, the Company will obtain in due course the approval from its existing first charge holders for ceding pari passu first charge on the security to secure the Debentures. The Company may be unable obtain this approval and create security within the time period stipulated in this Disclosure Document. This may have a bearing on the amounts recoverable on the Debentures.

20. If the Company does not generate adequate profits, it may not be able to maintain an adequate Debenture

Redemption Reserve, (“DRR”) for the Debentures issued pursuant to this Disclosure Document.

Section 117C of the Companies Act states that any company that intends to issue debentures must create a DRR to which adequate amounts shall be credited out of the profits of the Company until the debentures are redeemed. The Ministry of Corporate Affairs has, through its circular dated April 18, 2002, specified that the quantum of DRR to be created before the redemption liability actually arises in normal circumstances should be ‘adequate’ to pay the value of the debentures plus accrued interest, (if not already paid), till the debentures are redeemed and cancelled. Accordingly, if the Company is unable to generate adequate profits, the DRR created by it may not be adequate to meet the value of the Debentures. This may have a bearing on the timely redemption of the Debentures by the Company.

21. Changes in interest rates may affect the price of the Company’s Debentures. All securities where a fixed rate of interest is offered, such as the Debentures, are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing economy, are likely to have a negative effect on the price of the Debentures.

22. The Company may raise further borrowings and charge its assets after receipt of necessary consents from its

existing lenders. The Company may, subject to receipt of all necessary consents from its existing lenders and the Trustee to the Issue, raise further borrowings and charge its assets. The Company is free to decide the nature of security that may be provided for future borrowings and the same may rank pari passu with the security created for this Issue. In such a scenario, the Debentureholders will rank pari passu with other creditors and to that extent, may reduce the amounts recoverable by the Debentureholders upon the Company’s bankruptcy, winding-up or liquidation.

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GENERAL INFORMATION

I. REGISTERED AND CORPORATE OFFICE OF THE ISSUER

REGISTERED & CORPORATE OFFICE:

JK CEMENT LIMITED

Kamla Tower,Kanpur,Uttar Pradesh 208001 Tel.: (91 0512) 2371478/79/80/81 Fax: (91 0512) 2399854 Website: www.jkcement.com

II. COMPANY SECRETARY AND COMPLIANCE OFFICER FOR THE ISSUE

MR SHAMBHU SINGH

J. K. Cement Limited Kamla Tower,Kanpur,Uttar Pradesh 208001 Tel.: (91 0512) 2371478/79/80/81 Fax: (91 0512) 2332665 Email: [email protected]

Contact No.: (91 0512) 2371478/79/80/81

III. CHIEF FINANCIAL OFFICER OF THE ISSUER

MR. A. K. SARAOGI

J. K. Cement Limited Kamla Tower,Kanpur,Uttar Pradesh 208001 Tel.: (91 512) 2371478/79/80/81 Fax: (91 512) 2399854 Email: [email protected]

Contact No.: (91 512) 2371478/79/80/81

IV. ARRANGER OF THE ISSUER

MOTILAL OSWAL INVESTMENT ADVISORS PRIVATE LIMITED

Motilal Oswal Tower, Junction of Gokhale & Sayani Road, Prabhadevi, Mumbai – 400 067 Tel: (91 22) 3980 4380 Fax: (91 22) 3980 4315 Email: [email protected]

V. TRUSTEE TO THE ISSUE

IDBI TRUSTEESHIP SERVICES LIMITED Asian Building, Ground Floor, 17-R, Kamani Marg, Ballard Estate, Mumbai – 400 001

15

VI. REGISTRAR TO THE ISSUE

SHAREPRO SERVICES (INDIA) PVT. LTD.

13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone, Exchange Lane, Andheri (E), Mumbai – 400 072 Tel: (91 22) 67720300 / 400 Fax: (91 22) 28591568 Email:[email protected] Contact Person: Mr. Rajesh D. Jadhav

VII. NAME AND ADDRESS AND OTHER DETAILS OF BOARD OF DIRECTORS OF THE ISSUER

The following table sets forth details regarding the Board of Directors of the Issuer as on the date of this Disclosure Document.

Sr.

No.

Name and

Designation

Address DIN Date of

Birth

Director of

the Company

Since

Other Directorship

1. Mr. Gaur Hari Singhania Chairman and Non-

Executive Director

11, Ganga Kuti, Cantt, Kanpur – 208 004

00054848

June 12, 1935

November 24, 1994

1 Jaykay Enterprises

Limited

2 Juggilal Kamlapat

Cotton Spinning and

Weaving Mills

Company Limited

3 Key Corp Limited

4 J.K. Traders Limited

5 Yadu International

Limited

6 G. H. Securities

Private Limited

2. Mr. Yadupati Singhania Managing Director

and Chief Executive

Officer

11, Ganga Kuti, Cantt, Kanpur – 208 004

00050364

September 29,1953

November 24, 1994

1 J.K. Traders Limited

2 Jaykaycem

(Northern) Limited


Limited

4 Juggilal Kamlapat

Cotton Spinning and

Weaving Mills

Company Limited

5 Jaykaycem (Central)

Limited

6 J.K. Cement

(Western) Limited

7 Jay Kay Cem

(Eastern ) Limited

8 Bhagwandas Goenka

Educational

Institution

9 Ace Investments

Private Limited

10 Express Newspapers

Private Limited

11 Yadu International

Limited

12 Yadu Securities

Private Limited

13 Employer's

Association of

Northern India

16

14 Juggilal Kamlapat

Holding Limited

15 Uttar Pradesh Cricket

Association

3. Mr. Kailash Nath Khandelwal Non Executive, non

independent Director

50, MIG Bungalow, W-Block, Keshav Nagar, Juhi, Kanpur-14

00037250

December 6, 1944

February 9, 2004

1 Khandelwal

Extractions Limited

2 Juggilal Kamlapat

Holding Limited

3 Solar Housing &

Infrastructure Ltd

4. Mr. Krishna Behari Agarwal Non Executive,


7/177B, Swaroop Nagar, Kanpur – 208 002

00339934

July 1, 1939

August 25, 2007

1 Key Corp Limited


Limited

3 Juggilal Kamlapat

Cotton Spinning and

Weaving Mills

Company Limited

5. Mr. Jyoti Prasad Bajpai Non Executive,


11/214, Souter Ganj, Kanpur-208 001

00005996

August 13, 1936

November 24, 1994

1 Jaykaycem (Central)

Limited

2 J. K. Cement

(Western) Limited

3 Jaykaycem

(Northern) Limited

4 Uttar Pradesh

Cricket Association

6. Mr. Suparas Bhandari Non Executive,


X-24 (FF), Hauz Khas, New Delhi – 110 016

00159637

December 3, 1945

July 29, 2006 1 Bhanaji Solar Power

Private Limited

2 Bhanaji Mines and

Minerals Pvt. Ltd.

7. Mr. Jayant Narayan Godbole Non Executive,


604A, Cottage Land CHS, Plot No 16/A, Sector 19/A, Nerul (E), Navi Mumbai - 400 076

00056830

February 17, 1945

July 29, 2006 1 EMBIO Limited 2 Gillanders Arbuthnot

& Co Ltd 3 IMP Powers Limited 4 Emami Paper Mills

Limited 5 The Oudh Sugar Mills

Limited 6 Madhya Bharat Papers

Limited 7 Zuari Global Limited 8 Saurashtra Cement

Limited 9 Gujarat Alkalies and

Chemicals Limited 10 Kesar Terminals &

Infrastructure Limited 11 IDBI Asset

Management Limited 12 Zuari Agro Chemicals

Limited 13 Kesar Multimodal

Logistics Limited 14 IITL Projects Limited

8. Mr. Achintya Karati Non Executive,


29/203, East End Apartments, Mayur Vihar, Phase-I, New Delhi – 110 096

00024412

March 23, 1946

October 24, 2005

1 Delton Cables Limited 2 Uflex Limited 3 Shyam Telecom

Limited 4 Sangam (India)

Limited 5 Techprocess Payment

Services Limited 6 TFS Business Advisors

India Private Limited 7 Jay Bharat Maruti

17

Limited 8 Devenio Optimus

Advisors Pvt. Ltd.

9. Mr. Raj Kumar Lohia Non Executive,


113/91, Swaroop nagar, Kanpur – 208 002

00203659

August 21, 1954

September 30, 2004

1 Lohia Corp Limited 2 Lohia Sales and

Services Limited 3 Lohia Packaging

Machines Limited 4 Lohia Filament

Machines limited 5 Bajaj Steel Industries

Limited 6 Merchant Chamber of

Uttar Pradesh 7 Plastics Machinery

Manufacturers Association of Indi

10. Mr. Ashok Sharma Non Executive,


704, Kalpana Tower, 3/16A, Vishnu Puri, Kanpur – 208 002

00057771

June 12, 1951

October 24, 2005

Nil

None of the current members of the Board of J. K. Cement Limited appear in the RBI’s defaulter list or ECGC’s default list.

CHANGES IN MEMBERS OF THE BOARD SINCE LAST THREE YEARS

There is no change in the board of directors of the Company during last three years.

VIII. CREDIT RATING AGENCY

CREDIT ANALYSIS AND RESEARCH LIMITED

B-47, 3rd Floor, Inner Circle, Connaught Place, New Delhi – 110 001 Tel: (91 11) 4533 3200 Fax: (91 11) 4533 3238

IX. DETAILS OF AUDITOR OF THE ISSUER

P.L. TANDON & CO.

“Westcott Building”

Mahatma Gandhi Road,

P.O Box No.-113

Kanpur-208 001, India

X. A BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF THE ISSUER

a) Business Overview

The Company is one of the leading cement manufacturers in India with a presence both in the grey cement and white cement segments. The Company believes that it is also the second largest white cement manufacturer in India based on published production capacities of other white cement manufacturers in India. Its principal markets for grey cement cover 14 states in the Northern, Central, Western and some parts of Southern India. White cement manufactured by the Company has a pan-India market and is also exported to South Africa, Nigeria, Singapore, Bahrain, Bangladesh, Sri Lanka, Kenya, Tanzania, UAE and Nepal.

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The Company is an affiliate of the J.K. organization, which was founded by Late Lala Kamlapat Singhania. The J.K. organization includes various industrial and commercial companies with operations in a broad range of industries. The Company has five plants across Rajasthan and Karnataka have a grey cement capacity of 7.47 MnTPA. It also has a white cement capacity of 0.60 MnTPA and a 0.30 MnTPA capacity of value added building products (wall putty) at Gotan, Rajasthan. Further, it has coal-based and waste-heat-recovery-based captive power generation capacity of more than 100 MW, spread across its plants. The Company is in the process of increasing its grey cement capacity by 3.00 MnTPA at Mangrol, Rajasthan, including a split grinding unit in Haryana with coal-based captive power plant of 25 MW and waste-heat based plant of 10 MW. The Company further intend to increase its capacity of white cement based wall putty by 0.30 MnTPA, in a phased manner. Besides, it is also in the process of setting up a green field white cement plant with a capacity of 0.60 MnTPA or 1.00 MnTPA of grey cement or a combination of both in a free trade zone at Fujairah, U.A.E. All these expansions are expected to be completed by September 2014, consequent to which it expect to have a grey cement capacity of 10.50 MnTPA, white cement capacity of 1.20 MnTPA and wall putty capacity of 0.60 MnTPA. The location and capacities, as of March 31, 2013 of each of the Company’s plants in India are as set forth below:

Location Capacity (MnTPA)

Grey Cement

Nimbahera, Rajasthan 3.25

Mangrol, Rajasthan 0.75

Gotan, Rajasthan 0.47

Muddapur, Karnataka 3.00

Total 7.47

White Cement


Wall Putty


During Fiscal 2013, in respect of the Company’s grey cement plants, production increased by 6.89% at 5.68 MnTPA, compared to 5.32 MnTPA in Fiscal 2012. Production of white cement increased by 16.69% at 0.44MnTPA as compared to 0.37 MnTPA in Fiscal 2012. Further, production of white cement based wall Putty was 0.26 MnTPA for the Fiscal 2013 as compared to 0.18 MnTPA in Fiscal 2012. Increase in volume of white cement and value added products, including wall putty, and other cost cutting measures resulted in higher contribution during Fiscal 2013 as compared to the previous Fiscal. Company’s total income has grown from Rs. 25,936.43 million in Fiscal 2012 to Rs. 29,607.67 million in Fiscal 2013, at a CAGR of 14.15% and its profit after tax has increased from Rs. 1,745.74 million in Fiscal 2012 to Rs. 2,307.67 million in Fiscal 2013, at a CAGR of 32.19%. The Company believe, it were one of the first Indian cement manufacturers to produce white cement in India. It has established its dry process white cement plant in 1984. The Company sell its white cement throughout India and believe its brand name is well recognized and accepted by most major industrial consumers. The Company’s brands are known for its quality and strength in the cement industry. White cement is sold under the brand name “J.K. White”. It produces Ordinary Portland Cement (“OPC”) of 43-grade and 53-grade marketed under the brand name “J.K. Cement” and “Sarvashaktiman”. The Company’s Portland Pozzolana Cement (“PPC”) and Portland Slag Cement (“PSC”) are marketed under the brand name “J.K. Super”. The Company also sells wall putty for plastering walls and ceiling under the brand name “J.K. Wall Putty”. The Company believe that its access to high quality limestone reserves that are suitable for production of white cement provides them with a competitive advantage, as access to such reserves is a significant barrier for new entrants. Company’s limestone reserves for both grey and white cement are of high quality and are expected to

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meet its existing and planned limestone requirements for approximately 30 years based on geological surveys conducted by independent agencies on its mines from time to time between 1996 and 2012. Most of Company’s manufacturing plants are well connected by road and rail. For instance, its Nimbahera and Gotan plants have railway sidings at the plant sites that enable them to access the railway directly and reduce its transportation cost. Further, Company’s brown field expansion project at Mangrol, Rajasthan for grey cement will have railway siding facilities both at the integrated plant and at the split grinding site at Jhajjar, Haryana. Company believe that it has a well developed distribution network for grey cement and a strong national distribution network for white cement with a total of over 189 feeder depot warehouses and more than 6,800 stockists/ dealers that store and sell grey and white cement products.

b) Company’s Strengths

The Company believes that it possesses a number of competitive strengths, which will enable them to successfully execute its business strategies, including the following:

• Significant experience and track record

The Company has significant experience in the cement manufacturing space in the country and have established a track record of manufacturing high quality grey and white cement. It has over 36 years of experience, which it believe, provides the Company with the experience and skills to maximize production efficiency, expand production capacity timely and control costs. Over the years, the Company believe that it has developed long-term customer relationships and a strong reputation for quality. The Company has been continuously adding its grey cement manufacturing capacities and it has increased from 0.30 MnTPA at single location in 1974 to 7.47 MnTPA at multiple locations by 2009. The Company believes that it were among the first to set up a dry process white cement plant in 1984. It export white cement to various countries and have established track record with foreign customers. Further, experience gathered over the years by the Company’s management team ensures that it meet the set standards of quality and workmanship in a cost effective manner. The Company is dedicated to the development of expertise and know-how of its employees and continue to ensure that they have the necessary training and tools needed to be successful in a challenging environment.

• Established brand name and reputation

Over the past three decades, Company has built a strong reputation among cement purchasers by consistently providing quality products. Company sell its white cement throughout India and believe its brand name is well recognized and accepted by most major industrial consumers. Company produce OPC of 43-grade and 53-grade marketed under the brand name “J.K. Cement” and “Sarvashaktiman”. The PPC and PSC are marketed under the brand name “J.K. Super”. White cement is sold under the brand name “J.K. White”. The Company also produces wall putty for plastering walls and ceiling and sells it under the brand name “J.K. Wall Putty”. The Company believes that its brand commands respect and credibility. It intends to continue to leverage the goodwill of its brand to enhance relationships with existing clients, seek new clients as well as diversify its business in allied sectors to help the Company to grow its operations.

• Presence in the white cement industry

White cement, including wall putty, accounted for 25.8% of Company’s total net sales and 35% of its adjusted PBIDT in Fiscal 2013. Unlike grey cement, the white cement industry in India is highly concentrated with the two largest players accounting for almost all of India’s production capacity. Consequently, prices of white cement have been relatively less volatile and sales of white cement have generated more stable cash flows for the Company even during industry downturns in grey cement. Further, the Company, jointly with the Government of Fujairah, are in the process of setting up a greenfield dual process cement plant having a capability of producing either 0.60 MnTPA of white cement or 1.00 MnTPA of grey cement or a combination of both. The Company believes that its position as the second largest producer of white cement (including wall

20

putty), in India, together with its nationwide delivery network, significantly enhances the overall brand image of the Company.

Availability of limestone reserves suitable for white cement production being concentrated at select locations in the country, high capital costs and technical investment, a pan-India marketing network and limited demand for white cement act as significant entry barriers in this segment.

• Extensive marketing and distribution network

The Company has a wide distribution network for grey cement as well as white cement across the country. Company’s distribution network for grey cement products consists of 138 feeder depots serviced by 16 regional sales offices. Company’s white cement network comprises 51 feeder depots serviced by 16 regional sales offices. In addition, it has more than 6,800 stockists and dealers that store and sell its grey and white cement products. The Company believes that the extent of this network, and its relationships with its stockists and dealers, enables them to market and distribute its cement widely and efficiently. Further, Company directly sell its products to builders, EPC contractors and government entities for various projects undertaken by them.

c) Key Milestone /Events

Year Event

May 1975

• Entered cement business with 0.3 mtpa plant at Nimbahera, becoming one of the first few

to enter the cement business

Nov 2004

• Acquired a cement manufacturing units from J.K. Synthetics Ltd, on a going concern basis, with a capacity to manufacture 3.55 mtpa of grey cement and 0.3 mtpa of white cement along with 15 MW of captive power plant

June 2005 • The Company got listed on the Bombay Stock Exchange (“BSE”)

Mar 2006 • Successfully raised Rs. 2,960 mn through the Follow on Public Offer (“FPO”)

2007 • Enhanced grey cement capacity by 0.50 mtpa, set up a 20MW coal based power plant and 13.2MW of heat recovery based power plant at Nimbahera and enhanced white cement capacity by 0.1 mtpa at Gotan, through IPO proceeds

• Acquired a 0.1 mtpa white cement unit at Gotan from Nihon Nirmaan and subsequently in 2009, converted the unit to produce 0.47 mtpa grey cement

Sep 2009 • Commissioned a 3 mtpa Greenfield plant in south at Muddapur, Karnataka

Nov 2011 • Foundation laying ceremony at Fujairah to set up dual process plant

July 2012 • “National Award for Excellence in Cost Management – 2011” from The Institute of Cost Accountants of India

Oct 2012 • Foundation laying ceremony for brown field expansion at Mangrol

Nov 2012 • “Best Employer Award - 2011” from Employer’s Association of Rajasthan

• Foundation laying ceremony for setting up a split grinding unit at Jhajjar, Haryana

Dec 2012 • Company’s long term credit rating upgraded from A+ to AA- by CARE Rating.

d) Plant Locations

Plant Location

INDIA

GREY Cement • Kailash Nagar, Nimbahera, Dist. Chittorgarh, Rajasthan

• Mangrol, Dist. Chittorgarh, Rajasthan

• Gotan, Dist. Nagaur, Rajasthan

• Muddapur, Dist: Bagalkot, Karnataka

• Jharli, Dist: Jhajjar, Haryana (under implementation)

WHITE Cement • Gotan, Dist. Nagaur, Rajasthan

Thermal Power • Bamania, Shambhupura, Dist. Chittorgarh, Rajasthan

• Kailash Nagar, Nimbahera, Dist. Chittorgarh, Rajasthan

• Gotan, Dist. Nagaur, Rajasthan

• Muddapur, Dist: Bagalkot, Karnataka

Waste Heat Recovery Power Plant (For captive consumption)

• Kailash Nagar, Nimbahera, Dist. Chittorgarh, Rajasthan

21

OVERSEAS

Dual process White /Grey Cement Plant (under implementation)

• Plot No.7, Habhab, Tawian Fujairah, UAE

e) Mapping of existing plant locations and market reach

f) Types of Cement

Grey Cement

Grey cement produced by JK cements consists of OPC, PPC and PSC. OPC has two grades that the Company produce, that are differentiated by their compressive strengths, expressed in mega pascals (“MPa”), as specified by the BIS. These grades are 53-grade OPC and 43-grade OPC, with 53-grade OPC having the highest compressive strength. The customer selects the grade of OPC based on the intended application. The Company’s most popular cement, by sales volume, is 43-grade cement, with 53-grade cement being used in applications which require high strength characteristics.

Ordinary Portland Cement

OPC is produced by inter-grinding cement clinker prepared in a rotary cement kiln with gypsum. Each metric ton of OPC requires approximately 0.95 metric tons of clinker and approximately 0.05 metric tons of gypsum. The range of applications, the physical and chemical requirements specified by BIS and strength of the three grades of OPC are discussed below:

53-grade OPC (IS:12269-1987): 53-grade OPC is a high strength cement. According to the BIS requirements, 53-grade OPC must have a 28-day compressive strength of no less than 53 MPa. For certain specialized products, such as pre-stressed concrete and certain pre-cast concrete items requiring high strength, 53-grade OPC is considered useful as it can produce high-grade concrete at lower cement content levels. The Company produce 53-grade OPC by exposing the clinker to the grinding process for longer period of time, which results in a higher density and stronger cement. As the grinding process requires a significant amount of power, finer grinding for the 53-grade OPC requires more power and is therefore priced higher compared to lower grades of OPC.

22

53-grade OPC can be used for the following applications:

1. Resource conservation challenge works. 2. Precast concrete items such as paving blocks, tiles and building blocks. 3. Prestressed concrete components. 4. Runways, concrete roads, bridges.

43-grade OPC (IS-8112:1989): According to the BIS requirements, 43-grade OPC must have a 28-day compressive strength of no less than 43 MPa. 43 Grade OPC is the most popular general-purpose cement in India and constitutes a significant portion of total production of cement in India. It is commonly used in the following applications:

1. General civil engineering construction work. 2. Resource conservation challenge works (preferably where grade of concrete is up to M-30). 3. Precast items such as blocks, tiles and pipes. 4. Asbestos products such as sheets and pipes.

Portland Pozzolana Cement

The Company also manufacture PPC (IS:1489 (Part-1) – 1991) under the brand name “J.K. Super”. PPC is also known as blended cement or silicate cement, and this blended cement has become increasingly popular in the market in recent years. Each ton of PPC requires approximately 0.75 tons of clinker, 0.05 tons of gypsum and 0.20 tons of fly ash, a pozzolanic material that is a by-product of thermal power plants. In the manufacture of PPC, a portion of the clinker is replaced with fly ash. This enables the cement manufacturer to produce a higher quantity of cement per ton of clinker. As a result, the cement manufacturer can increase its production capacity by making a limited investment in grinding capacity without a corresponding investment in earlier stage production equipment such as kilns. Further, the only cost incurred for fly ash is transportation cost from the thermal power plants that generate it to the cement manufacturing site, as fly ash is currently available free of cost. The use of fly ash therefore significantly reduces the overall cost of production of cement. The Company has encouraged customer awareness and acceptance of PPC (through training programs designed by the Company for engineers and masons) as it has lower production costs and offers higher margins than OPC. The advantage of PPC is its low heat of hydration and corresponding resistance to exposure to various environmental chemicals such as salt water. It is particularly suitable for marine and hydraulic construction and other mass concrete structures. This cement has durability that is equivalent to OPC and can be used most of the applications where OPC is used. The production process for PPC is similar to that for OPC, but fly ash, the pozzolonic material which is generally used, is mixed with clinker in the cement mill stage of manufacturing. As PPC is generally sold at a comparable price to OPC and the cost of production of PPC is comparatively lower, PPC’s margins per ton are generally higher compared to OPC. Portland Slag Cement(“PSC”)

PSC produced by intimately inter grinding a mixture of Portland cement clinker and granulated blast furnace slag in widely varying proportions. The PSC produced by the Company complies with IS: 455-1989. Portland slag cement (“PSC”) imparts better performance than OPC because of factors such as –

• Low free lime leads to reduction in leaching

• Low heat of hydration in concrete gives a durable structures

• Better workable and dense mortar.

• High ultimate strength.

• Develop a gel like structure which reduces the permeability and making the structures less porous,

thus increasing the durability.

• Reduced alkali –aggregates reaction due to low alkali content.

• Corrosion resistant concrete.

• Helps in low carbon emission as lesser amount of clinker is used and hence environment friendly

• It can be used in any type of structures from foundation to roof.

23

g) Greenfield Expansion - Foray into International Markets

J.K. Cement Ltd. has added yet another feather to its cap with the announcement of its maiden overseas plant at Fujairah, UAE which has a capital outlay of US$ 150 million. The plant’s foundation stone laying ceremony was held on November 14th, 2011in the presence of His Highness H.H. Sheikh Mohammed Bin Hamad Al Sharqi - Crown Prince of Fujairah. Also gracing the occasion were Shri Yadupati Singhania – MD & CEO, J.K. Cement Ltd., Shri Raghavpat Singhania – Special Executive, Mr. A.K. Saraogi – CFO & President (CA), Mr. N. Gowrishankar – Unit Head (J.K. Cement Works, Fujairah) and Mr. D. Ravisankar – President, J.K. Cement Works, Nimbahera. Expected to commission production by end of March 2014, the plant is being set up in technical collaboration with M/s. Taheiyo Engineering Corporation of Japan who are pioneers in the field and have the most modern quality control and environment friendly technology. The capacity of the Grey cum White cement plant is slated to be at 1,750 tonnes per day (tpd) for White Cement clinker and 2,800 tonnes per day (tpd) Grey cement clinker. With the commissioning of this plant, the Company would become one of the top 5 producers of White Cement in the World. With Fujairah plant, J.K Cements is set to spread its wings and explore opportunities beyond India’s shores. The proposed plant at Fujairah will have a capacity of 0.60 million tonnes per annum for White Cement with a flexibility to change over its operation to produce upto 1.0 million tonnes per annum of Grey Cement. The plant shall have the flexibility to have 100% white cement, a mix both of white cement and grey cement or 100% grey cement, depending upon the market demand. Thus, JK cements plans to cater to the demand in the region as well as to the neighboring countries through this manufacturing facility.

24

XI. FINANCIAL PERFORMANCE

The brief highlights of the Company’s consolidated financial performance in the last three years are as under:

Consolidated Profit & Loss Account

(Rs in Million)

Particulars For the year ended March 31,

2013 2012 2011

Income

Revenue From Operations 29,119.7 25,467.9 20,943.5

Other Income 488.0 468.6 299.3

Total Revenue 29,607.7 25,936.4 21,242.8

Expenses

Cost of Materials Consumed 3,978.4 3,121.7 2,771.5

Purchases of Stock-in-Trade 5.3 5.0 4.6

Changes in inventories of finished goods work-in-progress and Stock-in-Trade -367.5 -68.8 -168.4

Employee Benefits Expense 1,590.3 1,359.1 1,281.7

Finance Costs 1,398.3 1,443.0 1,185.4

Depreciation and amortization expense 1,286.9 1,256.2 1,127.6

Other Expenses 18,340.6 15,911.8 14,290.4

Total Expenses 26,232.2 23,028.0 20,492.8

Profit before exceptional items and

extraordinary items and tax 3,375.4 2,908.5 750.0

Exceptional Item 78.2 -72.5

Profit before tax and extraordinary items 3,375.4 2,830.3 822.5

Tax Expense:

Current Tax 876.1 703.3 164.0

Less: MAT Credit entitlement - 0.0 -164.0

Earlier Years Tax (4.6) 199.1 -54.7

Deferred Tax 199.4 182.1 251.0

Profit for the year 2,304.6 1,745.7 626.2

Add: Share of loss transferred to Minority Interest 3.1 - -

Net Profit for the period 2,307.7 1,745.7 626.2

25

Consolidated Balance Sheet

(Rs in Millions)

Particulars As at March 31,

2013 2012 2011

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 699.3 699.3 699.3

Reserves and Surplus 16,206.2 14,521.6 13,249.8

16,905.5 15,220.9 13,949.1

Minority Interest 47.7 - -

Non Current Liabilities

Long Term Borrowings 11,895.10 11,351.20 12,592.40

Of which Non Current maturities of Long Term Borrowings 10,595.3 9,967.2 10,583.6

Deferred Tax Liability (Net) 2,490.4 2,291.1 2,108.9

Other Long Term Liabilities 871.1 771.5 616.5

Long Term Provisions 145.1 110.8 92.0

14,101.9 13,140.6 13,401.0

Current Liabilities

Short term Borrowings 1,886.5 840.6 599.0

Trade Payables 1,965.7 1,772.4 1,752.7

Other Current Liabilities 4,516.1 4,266.2 3,941.9

- of which Current maturities of Long Term Borrowings

1,299.8 1,384.0 2,008.8

Short Term Provisions 654.1 519.1 343.1

9,022.5 7,398.2 6,636.7

Total Liabilities 40,077.5 35,759.7 33,986.8

ASSETS

Non Current Assets

Fixed Assets

Tangible Assets 23,664.9 23,126.7 22,890.8

Intangible Assets 24.8 39.4 76.9

Capital Work-in-Progress 2,544.8 904.1 1,027.8

Intangible Assets under Development 1.1 0.7 0.5

Total Net Fixed Assets 26,235.6 24,070.9 23,996.0

Non-Current Investments 324.3 92.3 42.3

Long term Loans and Advances 2,758.7 844.2 594.5

Other Non Current Assets 0.0 - 78.8

Total Non Current Assets 29,318.7 25,007.4 24,711.6

Current Investments - - -

Current Assets

Inventories 4,613.8 3,628.3 3,210.2

Trade Receivables 1,152.7 837.2 607.6

Cash and Cash Equivalents 3,753.3 4,332.2 3,214.5

Short Term Loans and Advances 1,171.2 1,839.3 2,184.8

Other Current Assets 67.9 115.4 58.1

Total Current Assets 10,758.9 10,752.4 9,275.2

Total Assets 40,077.5 35,759.7 33,986.8

26

Other Financial Parameters

Particulars For the year ended March 31,

2013 2012 2011

Net Sales 29,119.7 25,467.9 20,943.5

EBIDTA 6,060.6 5,607.7 3,063.0

EBIT 4,773.7 4,273.3 2,007.9

PAT 2,307.7 1,745.7 626.2

Dividend Amount (including tax thereon) 531.8 406.4 162.5

Current Ratio 1.2 1.5 1.4

Interest Coverage Ratio (EBIDTA/Interest) 4.3 3.9 2.6

Gross Debt/Equity Ratio ((LTD+STD)/Networth excluding revaluation reserve) 0.85 0.84 0.99

Debt Service Coverage Ratio (EBIDTA/Principal repayment and interest cost) 2.1 1.7 1.0

The debt equity ratio prior to and after issue of the debt security:

(Amount Rs in Million)

Particulars As at March 31, 2013 After the Issue

Long Term Borrowings 10,595.3 12,595.3

Short Term Borrowings 1,886.5 1,886.5

Total Debt 12,481.8 14,481.8

Total Shareholder’s Fund 16,905.5 16,905.5

Less : Revaluation Reserve 2,272.6 2,272.6

Networth (excluding revaluation reserve) 14,632.9 14,632.9

Total Debt-Equity Ratio 0.85 0.99

Project cost and means of financing, in case of funding of new projects:

Not Applicable

XII. BRIEF HISTORY OF THE ISSUER SINCE ITS INCORPORATION GIVING DETAILS OF ITS

FOLLOWING ACTIVITIES

a) Equity Capital history of the Issuer

Date of

Allotment

No. of

Equity

Shares

Issued

Face

Value

per

Share

(Rs.)

Issue

Price

(Rs.)

Consideration Cumulative

No. of

Shares

Cumulative

Paid-up

Share

Capital

(Rs.)

Cumulative

Equity Share

Premium

(Rs.)

Nature of

Allotment

December 20, 1994

700 10 10 Cash 7,00 7000 Nil Subscription on signing of Memorandum of Association

September 16, 2002

119,700 10 10 Cash 120,400 1,204,000 Nil Further allotment

March 4, 2004

35,925,000 10 10 Cash 36,045,400 360,454,000 Nil Further allotment

March 29, 2004

500,000 10 10 Cash 36,545,400 365,454,000 Nil Further allotment

October 16, 2004

5,954,900 10 10 Cash 42,500,300 425,003,000 Nil Further allotment

27

Date of

Allotment

No. of

Equity

Shares

Issued

Face

Value

per

Share

(Rs.)

Issue

Price

(Rs.)

Consideration Cumulative

No. of

Shares

Cumulative

Paid-up

Share

Capital

(Rs.)

Cumulative

Equity Share

Premium

(Rs.)

Nature of

Allotment

March 10, 2005

7,426,950 10 10 Other than Cash

49,927,250 499,272,500 Nil Allotment to the shareholders of J.K. Synthetics Ltd. pursuant to the order of the AAIFR dated January 23, 2003

March 13, 2006

20,000,000 10 148 Cash 69,927,250 699,272,500 2,760,000,000 Issued pursuant to the IPO

b) Capital Structure of the Issuer

The Authorized Capital of the Company as on the date of this Disclosure Document is as under:

Sr No. Class No. of Shares Nominal Value (Rs.) Amount (in Rs.)

1 Equity 80,000,000 10.00 800,000,000

2 Preference - - -

Total 80,000,000 10.00 800,000,000

The issued, subscribed and paid-up capital of the Company as on the date of this Disclosure Document is as under:

Sr No. Class No. of Shares Nominal Value (Rs.) Amount (in Rs.)

1 Equity 69,927,250 10.00 699,272,500

2 Preference - - -

Total 69,927,250 10.00 699,272,500

c) Changes in its capital structure as on last quarter end, for the last five years

There has been no change in the capital structure of the Company during the last five years.

d) Details of any acquisition or amalgamation or reorganization of reconstruction during last one year

None

e) Brief History of the Issuer

The Company is promoted by Dr. Gaur Hari Singhania, Mr. Yadupati Singhania, Yadu International Limited and Juggilal Kamlapat Holding Limited. The Company was incorporated under the Companies Act as J.K. Cement Limited on November 24, 1994 and obtained its certificate of commencement of business on the same date. One of the main objects of the Company, as contained in its Memorandum of Association, is the acquisition of the whole or substantially the whole of the undertakings and properties comprising the JKSL Cement Division. Due to continuous losses, the net worth of JKSL became negative and consequently, JKSL applied to the BIFR which registered JKSL as a sick company on April 2, 1998. Subsequently, the matter was referred to the AAIFR, which formulated a Scheme of Rehabilitation for JKSL. Pursuant to the Scheme of Rehabilitation, the JKSL Cement Division was acquired by the Company as a ‘going concern’ on ‘as-is-where-is’ basis through a slump sale, with effect from November 4, 2004. Prior to the acquisition, the Company did not have any substantial business activity.

28

f) Main Objects of the Company

The main objects as contained in the Company’s Memorandum of Association are:

i. To produce, manufacture, treat, process, refine, import, export, purchase, sell and generally to deal in, and to act as brokers, agents, stockists, distributors and suppliers of all kinds of cement (whether port land, pozzolana, white coloured, alumina, blast furnaces, masonary, rapid hardening low heat and all other varieties of cement, silica or otherwise), cement products of any description, such as pipes, poles, slabs, asbestos sheets, blocks, bricks, tiles, gardenwares, prefabricated slabs or building materials, and articles, things, compounds and preparations connected with the aforesaid products and in connection therewith to take on lease connected with the aforesaid products and deal in the crushing and marketing of various minerals, e.g. red oxide, ochres, bauxite, barites, calcite, gypsum, laterite, lime stone, all types of clays, soapstone, quarts, marble, granite, iron ore, all types of coal, lignite, and silica by taking on lease or otherwise, various mines and putting up machinery for pulverizing the various minerals.

ii. To acquire the whole or substantially whole of the undertaking and properties under the Scheme of arrangement under section 391 and 394 of the Companies Act, 1956 or any other Scheme approved by any statutory authority (ies) under any applicable Laws or Acts, of J.K. Synthetics Limited namely J.K. Cement Works, Nimbahera, J.K. Cement Works, Mangrol, J.K. White Cement Works, Gotan, J.K. Power, Bamania.

iii. To carry on all or any of the business as manufacturers of and dealers in lime, plasters, refractories, castables, cement paints, ready mix mortars, grinding media, concentrates and all type of building aggregates, clay, sand, minerals, earth, artificial stone and marbles and other chemicals connected with cement and building material industry.

iv. To carry on the business of builders, contractors, sub contractors, undertaking and executing contracts, works of construction of building-residential, commercial and industrial, dams, bridges including roads, highways, railways and airports and other superstructures and installation of all types of structures and foundations etc. whether on B.O.T. (Build Operate and Transfer) basis or otherwise.

v. To carry on business of and as Engineers (Civil, Mechanical, Electrical and otherwise for construction purposes), architects, surveyors, designers, decorators, furnishers, quarry masters, valuers, arbitrators Engineering consultants and to construct, execute, carry out, supervise, maintain, improve, work, develop, control, manage, alter, repair, pull down, restore and remodel, in any part of India or in any part of the world, civil works and their conveniences of all kinds, or otherwise assist or take part in the construction, maintenance, development, working control and management thereof.

vi. To carry on the business of electric power supply company in all the branches, and to construct, lay down, establish, fix and carry out all necessary power stations, wires, lines, accumulators, and works and generate by whatever means, manufacture, accumulate, distribute and supply electricity and to light cities, towns, streets, docks, markets, theatres, buildings and places, both public and private and to sell power to any board/authority whether private or public.

vii. To carry on the business of buyers and sellers and to act as agent, distributors, representatives, traders, stockists, importers, exporters, entitlement negotiators, suppliers and commission agents of products and commodities and materials in any form or shape manufactured or supplied by any company, firm, association of persons, body, whether incorporate or not, individual, Government, semi-Government, or any local authority, and for that purpose buy, sell, exchange, alter market, pledge, distribute, or otherwise deal in commodities, goods, manufactured articles materials and things of every description and kind.

viii. To carry on and undertake the business of finance, investment and trading, hire purchase, leasing, subscribing shares and debentures of other company and to finance lease operations of all kinds purchasing, selling, hiring or letting on hire all kinds of plant and machinery and equipments that the company may think fit and to undertake housing finance and financing of all and every kind and description and deferred payment of similar transactions and to subsidize, finance or assist in subsidizing or financing the sale and maintenance of any goods, article or commodities.

29

g) Corporate Structure Of The Issuer

A. Subsidiary/Joint Venture Companies

Name of the Company Nature of

Company

Country of Incorporation Holding as of

March 31, 2013

J.K. Cement (Fujairah) FZC Subsidiary United Arab Emirates (U.A.E.) 100%

J.K. Cement Works (Fujairah) FZC Step down Subsidiary

United Arab Emirates (U.A.E.) 90%

Bander Coal Company Pvt. Ltd Joint Venture India 37.50%

B. Group / Associate Companies

1) Juggilal Kamlapat Holding Ltd 2) Yadu International Ltd 3) Jaykay Enterprises Ltd 4) J.K. Cotton Spg. & Wvg. Mills Co. Limited 5) Jaykaycem (Eastern) Ltd 6) Jaykaycem(Central) Ltd 7) J.K.Cement(Western) Ltd 8) J.K.Traders Limited 9) Yadu Securities Private Ltd. 10) Jaykaycem (Northern) Limited 11) G.S. Securities Private Limited

h) Shareholding pattern of the Issuer as of March 31, 2013

Sr.

No.

Category No of Shares held No. of Shares

in demat

form

% holding

1 Promoters and Promoter Group 46,648,641 46,648,521 66.71

2 Mutual Funds/UTI 6,103,854 6,080,045 8.73

3 Financial Institutions/Banks 8,344 2,807 0.01

4 Insurance Companies 937,828 937,818 1.34

5 Foreign Institutional Investors 7,586,132 7,561,060 10.85

6 Bodies Corporate 2,085,958 2,073,584 2.98

7 Individuals –Resident Public 6,180,771 5,661,047 8.84

8 Others 375,722 320,192 0.54

Grand Total 69,927,250 69,285,074 100.00

i) A list of highest ten holders of Equity Shares of the Issuer as on March 31, 2013 along with particulars as

to number of shares held by them

The list of top 10 shareholders as of March 31, 2013 is given below:

Sr.

No.

Name of the Shareholder No. of

Share held

% Share

Held

Category

1 Yadu International Ltd. 22,655,100 32.40 Promoters and Promoter Group

2 Yadupati Singhania 13,246,086 18.94 Promoters and Promoter Group

3 Juggilal Kamlapat Holding Limited 7,050,000 10.08 Promoters and Promoter Group

4 Reliance Capital Trustee Co. Ltd. A/c Reliance Tax Saver (ELSS) Fund 1,935,000 2.77

Mutual Fund

30

5 Smallcap World Fund. Inc 1,788,638 2.55 Foreign Institutional Investors

6 Templeton India Equity Income Fund 1,556,040 2.25 Mutual Fund

7 Templeton Global Investment Trust – Templeton Emerging Markets Small Cap Fund 1,390,213 1.98

Mutual Fund

8 Kavita Y Singhania 1,301,611 1.86 Promoters and Promoter Group

9 Fidelity Investment Trust – Fidelity Series Emerging Markets Fund 1,118,165 1.59

Mutual Fund

10 Gaur Hari Singhania 1,041,973 1.49 Promoters and Promoter Group

Note: Identified folios of the Promoters have been clubbed for ascertaining the share holding of above category.

j) Details regarding the Auditors of the Company

Auditor Name Address Auditor Since

P.L. Tandon & Co.

“Westcott Building”, Mahatma Gandhi Road,

P.O Box No.-113, Kanpur-208 001,

Uttar Pradesh, India

November 24, 1994

Details regarding change in Auditors during last 3 years

No Change

k) Details of past borrowings of the Company

A. The brief details of the secured loan facilities of the Company as of March 31, 2013.

Name of Lender Nature of

Facility

Sanctioned

Amt (Rs

mn)

Outstanding

Amt (Rs

mn)

Interest

Rate

Repayment Terms Security

Consortium Loan (for Karnataka Plant)*

Term Loan 5,250.0 2,799.9 11.00% 28 Equal Quarterly Installments w.e.f 1-Apr-2010

Refer Note 1

Consortium Cost Escalation Loan (for Karnataka Plant)**

Term Loan 900.0 615.2 11.00% 28 Equal Quarterly Installments w.e.f 1-Apr-2011

Refer Note 1

Allahabad Bank State Bank of India IDBI Bank Ltd.

Term Loans 500.00

200.00

300.00

243.0

158.5

257.1

11.20% 11.15% 12.00%

28 Quarterly Installments w.e.f 1-Jan-2012 24 Quarterly Installments w.e.f.1-April-2012 28 Quarterly Installments w.e.f. 1-April-2012

Refer Note 2

Canara Bank Canara Bank

Term Loans 400.00

200.00

99.6

57.0

12.50% 12.50%

28 Equal quarterly Instalments w.e.f. 1-May-2008 28 Equal quarterly Installments w.e.f 1-Aug-2008

Refer Note 3

IDBI Bank Ltd. Term Loan 1,250.00 391.7 11.75% 54 Equal Monthly Installments w.e.f 1-Apr-2010

Refer Note 2

State Bank of India Dena Bank Export-Import Bank of India

Term Loans 750.00

500.00

250.00

500.0

250.0 100.0

11.15% 11.00% 11.36%

23 Quarterly Installments w.e.f. 30-June-2014 28 Equal quarterly Installments w.e.f.12-June-2015 20 Equal quarterly Installments w.e.f.18-July-2014

Refer Note 2

Indian Bank ING Vysya Bank

Term Loans 400.00

500.00

313.7

105.8

11.70% 9.50%

28 Quarterly Installments w.e.f.1-April-2012 20 Quarterly Installments w.e.f.31-July-2010

Refer Note 4

Total Term Loans 11,400.00 5,891.5

* Consortium includes IDBI Bank Ltd., Canara Bank, United Bank of India, Andhra Bank, Indian Bank, Indian Overseas Bank, Jammu &

Kashmir Bank, Dena Bank, Export-Import Bank of India.

** Consortium includes IDBI Bank Ltd., United Bank of India, Andhra Bank, Indian Bank, Jammu & Kashmir Bank and Dena Bank

31

Note 1: Term Loans related to Cement Plant in Karnataka: Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable assets, present and future (save and except book debts) pertaining to J.K. Cement Works, Muddapur, Karnataka subject to prior charges in favour of working capital lenders on inventories and other current assets. Note 2: Term Loans related to specified Cement Plants in Rajasthan: Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all the movable assets of the Company both present and future save and except inventories, book debts, cash and bank balances and all assets pertaining to J.K. Cement Works, Gotan, J.K. Cement Works, Muddapur, Karnataka and properties having exclusive charge of other lenders.

Note 3: Term Loans related to specified Cement Plants in Rajasthan: Secured by equitable mortgage of immovable properties and hypothecation of movable assets pertaining to undertaking of J.K. Cement Works, Gotan except current assets and vehicles.

Note 4: Term Loans related to the properties: Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.

Details of other secured term loans

1) In addition to above loans, there was a vehicle loan of Rs. 59.5 million as on March 31, 2013. The vehicle loans are secured by hypothecation of vehicles. The maturity profile of the vehicle loans are given below:

Year FY2014 FY2015 FY2016 FY2017 FY2018 Total

Principal (Rs in Mn) 32.02 19.84 5.96 0.86 0.77 59.5

2) Interest free loan against VAT payment from Govt. of Karnataka was of Rs. 287.9 million as on March 31, 2013. This loan is secured by second Pari Passu charge by way of equitable mortgage of land building and plant and machinery pertaining to J.K. Cement Works, Muddapur, Karnataka and bank guarantee. Second charge on assets are yet to be created. The loan is payable after September 2021 onwards.

a) The brief details of the working capital borrowings as of March 31, 2013.

Name of Lender Nature

of

facility

Sanctioned

Amt (Rs.

mn)

Outstandi

ng Amt

(Rs. mn)

Interest

Rate

Security

Fund based facility (Consortium)*

Cash Credit

2,250.0 1,886.5 10.70% Secured by first charge on current assets of the Company namely inventories, book debts, etc. and second charge on fixed assets of the Company except the fixed assets pertaining to J.K. Cement Works, Gotan and the assets having exclusive charge of other lenders.

Non Fund based facility (Consortium) *

Various Non Fund based

facilities

2,000.0 818.4 NA

* Consortium includes Allahabad Bank, IDBI Bank Ltd., United Bank of India, Andhra Bank, Indian Bank, Indian

Overseas Bank and Dena Bank.

B. The brief details of the unsecured loan facilities of the Company as of March 31, 2013.

Name of Lender Nature of

Facility

Sanctioned

Amount

(Rs Mn)

Outstandin

g Amount

(Rs. Mn)

Interest

rate

Repayment Terms

(Rs. Mn)

Govt. of Rajasthan Deferred Sales Tax liability

NA 529.0 Interest free

Rs. 87.2 mn would be repaid in 20 equal installments w.e.f. June’13. Balance Rs.441.8 would be repaid in 32 installments w.e.f. March’27. This does not include Rs. 50.8 million to be paid by July, 2013.

32

C. The brief details of the NCDs of the Company and list of Top 10 Debentureholders as of March 31,

2013.

Debenture

Series

Tenor Coupon Amount

(Rs mn)

Date of Allotment Redemption

date/

schedule

Credit

Rating

by

CARE

Secured/

Unsecured

Security

NCD Series A & B 2010-2011

10 years

10.25% Qtly.

10.50% Qtly.

11.00% Annually

4,000.0 April 16, 2010, August 20, 2010, August 25, 2010, September 9, 2010, November 2, 2010, January 1, 2011, January 24, 2011, February 5, 2011, February 15, 2011 and March 28, 2011

Payable in 4 annual

installments of 20%, 20%, 30% and 30% of principal

amount at the end of 7th,

8th, 9th and 10th Year

respectively from the date of issue. (Out of total NCD of Rs. 4,000 million there is Put/Call

option at the end of 5th

year in case of NCD

aggregating Rs.530.0 million)

A+ at the time

of original allotment and current rating is “CARE AA-“

Secured Refer Note 1 below

Note 1: First pari passu charge on the Company’s moveable & immovable properties viz. Land, buildings, structures, plant and machinery located at company’s existing (1) grey cement plant, waste heat recovery plant and thermal power plant for captive use at Nimbahera, (2) Grey cement plant at Mangrol, (3) Thermal Power Plant at Bamania, (4) White Cement Plant and thermal power plant for captive use at Gotan. The details of Top 10 Debentureholders as of March 31, 2013 is given below:

Sr. No. Name of the Debentureholder No. of NCDs held Amount (Rs million)

1 Life Insurance Corporation of India 900 900

2 Allahabad Bank 650 650

3 Life Insurance Corporation of India – MF 600 600

4 IDBI Bank Ltd. 330 330

5 Syndicate Bank 200 200

6 NPS Trust A/c-SBI Pension Fund Scheme 175 175

7 Canara Bank 150 150

8 United Bank of India 150 150

9 NPS Trust – A/c LIC Pension Fund Scheme-CG 120 120

10 Punjab & Sind Bank 100 100

l) Amount of Corporate Guarantees issued by the Issuer in favour of various counter parties including its

subsidiaries, joint venture entities, group companies etc.

The Company has issued Corporate Guarantee to secure Loan of USD 98 million sanctioned by IDBI Bank Limited, Canara Bank and Export and Import Bank of India to the Company’s step down subsidiary namely J.K. Cement Works (Fujairah) FZC, UAE.

33

m) Commercial Paper issued by the Issuer

The Company has been issuing Commercial Paper from time to time and repaying on redemption. No Commercial Paper was outstanding as on March 31, 2013.

n) Other borrowings (including hybrid debt like Foreign Currency Convertible Bonds (FCCBS), Optionally

Convertible Bonds/ Debentures/ Preference Shares)

The Company has not issued any hybrid debt like Foreign Currency Convertible Bonds (FCCBs), Optionally Convertible Bonds/ Debentures/ Preference Shares etc.

o) Servicing behaviour on existing debt securities, default(s) and/or delay(s) in payments of interest and

principal of any kind of term loans, debt securities and other financial indebtedness including corporate

guarantee issued by the Issuer in the past 5 years.

The Company is discharging all its liabilities in time and would continue doing so in future as well. The Company has been paying regular interest and principal whenever due.

p) Outstanding borrowings/ debt securities issued for consideration other than cash, whether in whole or

part, at a premium or discount, on in pursuance of an option

The Company confirms that other than and to the extent mentioned elsewhere in this Disclosure Document, it has not issued any debt securities or agreed to issue any debt securities or availed any borrowings for a consideration other than cash, whether in whole or in part, at a discount or in pursuance of an option since inception.

q) Any material event/ development or change at the time of issue or subsequent to the issue which may

affect the issue or the investor’s decision to invest / continue to invest in the debt securities.

The Company hereby declares that to the best of its knowledge and belief, there has been no material event, development or change at the time of Issue which may affect the Issue or the investor’s decision to invest/ continue to invest in the debt securities of the Company.

XIII. DETAILS OF PROMOTERS OF THE COMPANY

The details of the promoter’s holding in the Company as of the date of this Disclosure Document are given below:

Sr.

No. Name of the Shareholder

Total

number of

Equity

Shares

No of

Equity

Shares in

demat form

Total

shareholding

as % of total

number of

Equity Shares

No. of

Shares

Pledged

% of shares

pledged

with respect

to shares

owned

1

Gaur Hari Singhania jointly with Vasantlal D.Mehta & Raghubir Prasad Singhania

20 20 Negligible

- -

2 Gaur Hari Singhania 1,030,757 1,030,757 1.470 - -

3 Gaur Hari Singhania 3,000 3,000 Negligible - -

4 Gaur Hari Yadupati Singhania 8,196 8,196 0.010 - -

5 Yadupati Singhania 13,238,403 13,238,403 18.930 - -

6 Yadupati Singhania 7,683 7,683 0.010 - -

7 Govind Hari Singhania 28,623 28,623 0.040 - -

8 Kalpana Singhania 4,263 4,263 0.010 - -

9 Kavita Y Singhania 1,301,611 1,301,611 1.860 - -

10 Manorama Devi Singhania 31,465 31,465 0.040 - -

11 Sushila Devi Singhania 920,957 920,957 1.320 - -

12 G.H. Securities Pvt. Ltd. 12,980 12,980 0.020 - -

13 J.K. Traders Ltd. 211,254 211,254 0.300 - -

34

14 J.K. Cotton Spinning & Weaving Mills Co. Ltd.

48 48 Negligible

- -

15 Juggilal Kamlapat Holding Ltd. 7,050,000 7,050,000 10.080 - -

16 G.H. Securities Pvt. Ltd. 20 20 Negligible - -

17 Yadu International Ltd. 22,655,060 22,655,060 32.400 - -

18 Yadu International Ltd. 40 40 Negligible - -

19 Yadu Securities Pvt. Ltd. 9,960 9,960 0.010 - -

20 Yadu Securities Pvt. Ltd. 40 40 Negligible - -

Total 46,514,380 46,514,380 66.518 - -

XIV. OTHER ISSUE DETAILS

a. Abridged version of Audited Consolidated (wherever available) and standalone financial information (like

Profit & Loss Statement, Balance Sheet and Cash Flow Statement) for at least last three years and auditor

qualifications, if any.

Copies of the annual report of the Company for the last 3 years containing audited Consolidated and Standalone financial statements along with Auditors Report thereon have been attached herewith

b. Abridged version of Latest Audited / Limited Review Half Yearly Consolidated (wherever available) and

Standalone Financial Information (like Profit & Loss statement, and Balance Sheet) and auditors

qualifications, if any

Not Applicable as financials for year ended March 31, 2013 is attached herewith.

c. Any material event / development of change having implications on the financials / credit quality (e.g any

material regulatory proceeding against Issuer/ Promoter, tax litigations resulting in material liabilities,

corporate Restructuring event etc) at the time of issue which may affect the issue or the investor’s decision

to invest /continue to invest in the debt securities.

Other than details disclosed in this Disclosure Document there is no material event/development or change at the time of issuance of this Disclosure Document which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities. The Board of Directors of the Company at its meeting held on Jan 8, 2013 have approved the Qualified Institutions Placement(“QIP”) to Qualified Institutional Buyers (“QIB”) upto Rs. 2,000 million in accordance with the applicable laws and subject to the approval of the shareholders. The shareholders of the Company have approved the QIP on February 9, 2013.

d. The names of the trustee to the Issue shall be mentioned with statement to the effect that trustee to the

Issue has given his consent to the Issuer for his appointment under Regulation 4(4) and in all the

subsequent periodical communications sent to the holders of debt securities. The trustee of the proposed Debenture Issue is IDBI Trusteeship Services Limited. The copy of consent letter from Trustee is enclosed as part of material contracts/ documents.

e. The detailed rating rationale (s) adopted (not older than one year on the date of opening of the issue)/

credit rating letter issued (not older than one month on the date of opening of the issue) by the rating

agencies shall be disclosed. CARE has assigned “AA-” (pronounced “Double A minus”) for the proposed Debenture Issue upto Rs. 2,000 million. Credit Rating Letter dated June 17, 2013/July 5, 2013 from CARE is enclosed herewith as Annexure I.

f. If the security is backed by a guarantee or letter of comfort or any other document / letter with similar

intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment

structure (procedure of invocation of guarantee and receipt of payment by the investor along with

timelines), the same shall be disclosed in the Disclosure Document. Not Applicable

35

g. Names of all the recognized stock exchanges where the debt securities are proposed to be listed clearly

indicating the designated stock exchange Securities are proposed to be listed at BSE Limited (BSE).

h. Other Details

i. Debenture Redemption Reserve (“DRR”) creation - relevant regulations and applicability.

The Company will create Debenture Redemption Reserve (DRR) as may be required in case of privately placed debentures. As per circular no.9/2002 dated April 18, 2002 issued by the Government of India with respect to creation of Debenture Redemption Reserve, for manufacturing and infrastructure companies, the adequacy of DRR is defined at 25% of the value of debentures issued through private placement route. In terms of the provisions of Companies Act, 1956, the Company is required to create Debenture Redemption Reserve out of profits, if any, earned by the Company. The Company shall create a Debenture Redemption Reserve (‘DRR’) and credit to the DRR such amounts as applicable under provisions of Section 117C of the Companies Act 1956 (as amended from time to time) or any other relevant statute(s), as applicable.

ii. Issue/instrument specific regulations - relevant details (Companies Act, RBI guidelines, etc).

The Company is complying with all the provisions of the Companies Act, SEBI and other applicable regulatory guidelines. This issue of Non-convertible Debentures is subject to the provisions of the Companies Act, 1956, the Memorandum and Articles of Association, the terms of this Disclosure Document and Application Form. Over and above such terms and conditions, the Debentures shall also be subject to other terms and conditions as may be incorporated in the Trustee Agreement/ Letters of Allotment/ Debenture Certificates, guidelines, notifications, regulations relating to the issue of debentures and SEBI Debt Regulations.

iii. Application Process

Please refer Section XVI and XVII of this Disclosure Document.

XV. SUMMARY TERM SHEET

In terms of this Disclosure Document, the Company intends to raise an amount of upto Rs. 2,000 million through the issue of Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures of face value Rs. 1,000,000 each through private placement and proposes to list such Debentures on the WDM segment of the BSE. Further details about the Debentures sought to be listed are enclosed as Annexure II of the Disclosure Document.

Security Name J.K. Cement Limited,

Issuer J.K. Cement Limited

Arranger Motilal Oswal Investment Advisors Private Limited

Type of Instrument Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures issued by the Issuer

Nature of Instrument Secured

Seniority At par with other Secured Lenders of the Issuer having pari-passu charge of security offered for NCD

Issue Size Upto Rs. 2,000 million

Tenor 10 years from the Deemed Date of Allotment

Option to retain

oversubscription

Nil

Objects of Issue General Corporate Purpose including regular capital expenditure and misc. capital expenditure not constituting a project

Utilization of proceeds General Corporate Purpose including regular capital expenditure and misc. capital expenditure not constituting a project

36

Denomination of the

Instrument/ Face Value

Rs. 1,000,000/- per Debenture

Premium / Discount on

Issue

Nil

Mode of Issuance On private placement basis to all Eligible Investors

Eligible Investors a. Scheduled Commercial Bank b. Non Banking Finance Companies (NBFCs) c. Foreign Institutional Investors (FIIs) d. Mutual Funds/Trusts e. Insurance Companies/Pension Funds f. Corporates/ Bodies Corporate g. High Networth Individuals h. Such other category of investors as expressly authorized to invest in the

Debentures. All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

Minimum Application 10 Debentures and in multiple of 10 Debentures thereafter

Listing Proposed on the Wholesale Debt Market (WDM) segment of BSE Limited (BSE). The Debentures will be listed within the statutory time period allowed under the SEBI Debt Regulations.

Rating of the instrument Credit rating of CARE AA-;

Coupon Rate 10.50% p.a.; payable semi-annually on an Actual/Actual basis

Step Up/ Step Down

Coupon Rate /Condition

None

Issuance and Trading Mode In demat mode only

Coupon Payment frequency Semi annually in arrears

Coupon Payment Dates Semi annually till maturity of Debentures

Coupon Type Fixed

Coupon Reset process

(including rates, spread,

effective date, interest rate

cap and floor etc.

Not Applicable

Day count basis Actual/Actual

Interest on Application

Money

Interest at the coupon rate (subject to deduction of Income Tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or reenactment thereof, as applicable) will be paid to the applicants on the application money for the Debentures for the period starting from and including the date of realisation of application money in JKC’s Bank Account upto one day prior to the Deemed Date of Allotment

Default Interest Rate 2% per annum

Redemption Amount Rs. 1,000,000/- per Debenture

Redemption Premium/

Discount

Not Applicable

Issue Price At par

Discount at which security

is issued and the effective

yield as a result of such

discount

Not Applicable

Repayment Date In 4 annual installments as given below:

• At the end of 7th year from Date of Allotment: 20% of the principal




Put/Call Option No

37

Put Option Price Not Applicable

Put Option Date Not Applicable Put Notification Time Not Applicable Call Option Price Not Applicable Call Option Date Not Applicable Call Notification Time Not Applicable Issue Opening Date Monday, July 15, 2013

Issue Closing Date Saturday, August 10, 2013

Issue Pay-in Date Monday, July 15, 2013 to Saturday, August 10, 2013

Deemed Date of Allotment Saturday, August 10, 2013

Trustee to the Issue IDBI Trusteeship Services Limited

Registrars & Transfer

Agent

Sharepro Services (India) Pvt. Ltd.

Settlement mode of the

instrument

All payments to be made by the Issuer to the Debentureholders shall be made through any of the following modes:

• Direct Credit

• Real Time Gross Settlement (RTGS)

• National Electronic Fund Transfer (NEFT) Whose name appears on the list of beneficial owners given by Depository to the Company as on the Record Date

Depository NSDL and/or CDSL

Business Day Convention ‘Business Day’ shall be a day (other than a Saturday or Sunday or Holiday) on which banks are open for business in New Delhi, Mumbai and Kanpur. If any Coupon Payment Date and / or redemption date falls on a day which is not a business day, payment of interest and / or principal amount shall be made on the next business day without liability for making payment of interest for the delayed period.

Record Date / Book Closure

Date

15 days prior to each Coupon Payment Date and redemption date.

Security The NCDs to be secured by first pari-passu charge along with existing lenders on specified moveable/immovable fixed assets related to the Issuer’s existing cement plant at village Muddapur, Taluka Mudhol, Dist: Bagalkot, Karnataka except mines. The Security cover will be atleast 1.3 times of the outstanding face value of Debentures at all times during the tenor of the Issue. Issuer shall create and perfect security in favour of the Debentureholders within 90 days of the Issue Pay-In Date.

Mode of Transfer Issue and transfer of Debentures shall be in dematerialized form and would be in accordance with the Depositories Act, 1996, the regulations made thereunder and the rules, regulations and byelaws of NSDL/CDSL, as the case may be. The Debentures will not have any lock-in period and shall be freely transferable at all points of time.

Transaction Documents The Issuance will be subject to execution of definitive documentation in form and content satisfactory to all parties (the “Transaction Documents”). The Transaction Documents shall include but not be limited to inter alia Debenture Subscription Agreement and Debenture Trust Deed, Security documents, DPN, any other as advised by investors/legal counsel The Transaction Documents shall include various provisions, including but not limited to, provisions on conditions precedent, events of default, cross default, representations and warranties, undertakings, covenants, as is customary in transactions of similar nature.

Conditions Precedent Customary for an issuance of this nature including :

• All requisite corporate authorizations of the Issuer

• Credit Rating of “CARE AA-”

38

• Letter from BSE conveying its in-principle approval for listing of Debentures

• Letter from the Trustees conveying their consent to act as Trustee for the Debentureholders

• All necessary documentation, security and other arrangements have been agreed to satisfaction of the Investor and executed by all the relevant parties thereto.

Conditions Subsequent JKC shall ensure that the following documents are executed / activities are completed as per time frame mentioned elsewhere in this Disclosure Document: 1. Credit of demat account(s) of the allottee(s) by number of Debentures allotted

within 15 days from the Deemed Date of Allotment. 2. Making application to BSE within 15 days from the Deemed Date of

Allotment to list the Debentures and seek listing permission within 20 days from the Deemed Date of Allotment in terms of sub-section (1) of Section 73 of the Companies Act, 1956 (1 of 1956).

3. Execution of Debenture Trust Deed for creation of security within time frame prescribed in the relevant regulations / act / rules etc.

Besides, JKC shall perform all activities whether mandatory or otherwise, as mentioned elsewhere in this Disclosure Document and Transaction Document.

Events of Default • Non-payment, non-delivery

• Breach of covenants

• Breach of obligations

• Misrepresentation

• Cross default to other obligations of the Issuer

• Insolvency / Insolvency Proceedings

• Unlawfulness

• Repudiation

• Failure to create security within the stipulated timeline

• Litigation

• Material adverse change

• Cessation of business by the Issuer

• Others, as necessary

Provisions related to Cross

Default Clause

Not Applicable

Remedies Upon the occurrence of any of the Events of Default, subject to applicable cure period, the Trustee shall on instructions from majority Debentureholder(s) constituting 75% holding of Series C Debentures, declare the amounts outstanding to be due and payment forthwith and the Trustee shall have the right to enforce the Security under the applicable laws.

Role and Responsibilities of

Trustee

The Trustee shall perform its duties and obligation and exercise its rights and discretions, in keeping with the trust reposed in the Trustee by the holder(s) of the Debentures and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustee. The Trustee shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture Trusteeship Agreement, the Trust Deed, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty. The Trustee shall be vested with the requisite powers for protecting the interest of holder(s) of the Debentures including but not limited to the right to appoint a nominee director on the Board of JKC in consultation with institutional holders of such Debentures. The Trustee shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions

39

regarding creation of security for the Debentures and Debenture Redemption Reserve. JKC shall, till the redemption of Debentures, submit its latest audited / limited review half yearly consolidated (wherever applicable) and standalone financial information such as, Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustee within the timelines as mentioned in simplified Listing Agreement issued by SEBI. Besides, JKC shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustee and Trustee shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Debentureholder(s) within two working days of their specific request.

Financial Covenants • Promoters directly or indirectly to always maintain 51% ownership and management control of the Issuer

Additional Covenants • Trust Deed Creation: In the event of delay in execution of Debenture Trust Deed and creation of security, the Issuer shall refund the subscription with agreed rate of interest (Coupon Rate) or will pay penal interest of 2% per annum over the Coupon Rate till these conditions are complied with, at the option of the investor..

• Default in Payment: In the event of delay in the payment of interest amount and / or principal amount on the due date(s), JKC shall pay additional interest of 2.00% per annum over the Coupon Rate payable on the Debentures, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

• Delay in Listing: JKC shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In the event of delay in listing of Debentures beyond 20 days from the Deemed Date of Allotment, JKC shall pay penal interest of 1.00% per annum over the Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Debenture to the Debentureholder(s).

Representation Warranties

& Undertakings

Customary for an issuance of this nature.

Indemnity The Issuer will indemnify, hold harmless and defend the Investors from and against all liabilities that may be imposed on, incurred by or asserted in any matter relating to or arising out of, in connection with or as a result of any Transaction Documents including but not limited to those arising out of arising out of inaccuracy in or breach of the representations, warranties or covenants by the Issuer.

Fees and expenses All expenses incurred towards execution of this transaction including documentation, stamp duty, fees for legal counsel and documentation shall be borne by the Issuer. All expenses in relation the appointment of the security trustee and other agents shall be payable by the Issuer.

Taxes & Other Deductions All payments made by the Issuer in respect of the Transaction documentation shall be made free and clear of any present and future taxes, value-added taxes (including goods and services taxes), withholdings, stamp duties, levies, deductions and charges of whatever nature. If the Issuer is required to make a tax deduction from a payment to the Debentureholders or the Trustee to the Issue, such Issuer shall make that tax deduction on increased amount such the post such deduction the net proceeds are equal to the original payment liability without such deduction (“tax gross up”).

Board Authority The private placement of Debentures under this Disclosure Document is being made pursuant to the resolution of the Board of Directors of the Company at its meeting held on May 11, 2013

Governing Law and

Jurisdiction

This Term Sheet and the subsequent transaction documents shall be interpreted under and be governed by the laws of the Republic of India and arbitration in Mumbai.

40

Clear Market The Issuer would ensure that it will not bring any other primary issue of Debentures within next one month from signing of the final term sheet.

Note 1: Payment of Interest is subject to deduction of tax at source, as applicable.

Note 2: The Company reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule

without giving any reasons or prior notice. In such a case, investors shall be intimated about the revised time

schedule by the Company. The Company also reserves the right to keep multiple Deemed Date(s) of Allotment at its

sole and absolute discretion without any notice. In case if the Issue Closing Date / Issue Pay-in Date is changed

(pre-poned / post-poned), the Deemed Date of Allotment may also be changed (pre-poned / postponed) by the

Company at its sole and absolute discretion. Consequent to change in Deemed Date of Allotment, the Coupon

Payment Dates and / or redemption date may also be changed at the sole and absolute discretion of the issuer.

XVI. TERMS AND CONDITIONS OF THE ISSUE AND ISSUE PROCEDURE

The Debentures being issued are subject to the applicable provisions of the Memorandum and Articles of Association of the Company, Letter of Allotment, Debenture Certificates to be issued and the Terms and Conditions of the Private Placement and Debenture Trust Deed to be executed by the Company with the Trustee.

a) Nature of Instrument and Issue Size

The Company proposes to issue upto 2,000 Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures of face value of Rs. 1,000,000/- (Rupees One million) each aggregating upto Rs. 2,000 million (Rupees Two thousand million only) on the main terms and conditions herein set forth.

The Debentures shall be issued in terms of a registered Debenture Trust Deed executed by the Company in favour of the Trustee for the benefit of the Debentureholder(s).

b) Authority for the Issue

The present Issue of Debentures by the Company is made pursuant to the Resolution of the Board of Directors of the Company passed at their meeting held on May 11, 2013. The Borrowing is within the total borrowing limits as set out in the resolution passed under Section 293 (1) (d) of the Companies Act, passed at the Annual General Meeting of the Company held on July 30, 2011. The Company has all the corporate, regulatory and contractual approvals including lenders approval (if so required under any of the relevant financing documents) to issue the Debentures. The approval for creation of pari passu first charge on the Fixed Assets of the Company from its first charge holders shall be obtained by the Company.

c) Details of utilization of the Issue proceeds

The proceeds of the current Issue will be utilised by the Company for General Corporate Purpose including regular capital expenditure and miscellaneous capital expenditure not constituting a project d) How to apply

All applications for the Debenture(s) must be in the prescribed Application Form and be completed in block letters in English. Forms must be accompanied by Cheque(s)/ Demand Draft(s) drawn in favor of “J.K. Cement Ltd” and crossed “A/c payee” only. Cheque(s) / Demand Draft(s) may be drawn on any bank including a co-operative bank, which is a member or a sub-member of the Banker’s Clearing House. The applicant should mention his/her Permanent Account Number (PAN) allotted under the Income Tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Investors may also remit the application money through RTGS as per details given below:

41

Bank IDBI Bank Ltd

Address of the Bank Jeevan Vikas, MG Road, Near Statue Junction, Kanpur branch, Uttar Pradesh, India – 208 001

IFSC Code IBKL0000090

Account Number 090655100000019

Name of Beneficiary J. K. Cement Ltd

Outstation cheques, cash, money orders, postal orders and stock invest will NOT be accepted. Over and above the aforesaid Terms and Conditions, the said Debenture(s) shall be subject to the Terms and Conditions incorporated in the Term sheet, Terms and Conditions to be incorporated in the Debenture Certificate to be issued to the allottees (if held in physical form) and/or the Debenture Trust Deed / Trustee Agreement and all other applicable laws / guidelines.

e) Who Can Apply Nothing in this Disclosure Document shall constitute and/ or deem to constitute an offer or an invitation to an offer, to be made to the Indian public or any section thereof through this Disclosure Document, and this Disclosure Document and its contents should not be construed to be a ‘prospectus’ under the Companies Act. This Disclosure Document and the contents hereof are restricted for only the intended recipient(s) who have been addressed directly through a communication by the Company and only such recipients are eligible to apply for the Debentures. The following categories of investors may apply for debentures, subject to fulfilling their respective investment norms/ rules by submitting all the relevant documents along with the Application Form:

• Mutual Funds

• Foreign Institutional Investors

• Scheduled Commercial Banks

• Regional Rural Banks

• Financial Institutions

• Insurance Companies

• Companies, Bodies Corporate authorized to invest in debentures

• High Networth Individuals

• Such other category of investors as expressly authorized to invest in the Debentures.

All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.

f) Documents to be provided by Investors

Investors need to submit the following documentation, along with the Application Form, as Applicable

• Memorandum and Articles of Association / Documents Governing Constitution

• Resolution authorizing investment

• Certified True Copy of Power of Attorney

• Form 15 AA for investors seeking exemption from Tax deduction at source from interest on the application money.

• Specimen signatures of the authorized signatories duly certified by an appropriate authority

• SEBI Registration Certificate (for Mutual Funds)

• PAN to be submitted.

g) Force Majeure

The Company reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment

42

h) Applications, Under Power of Attorney/ Relevant Authority

In case of an application made under a Power of Attorney or resolution or authority, a certified true copy thereof along with the Memorandum and Articles of Association and / or Bye-laws must be attached to the Application form at the time of making the application, failing which, the Issuer reserves the full, unqualified and absolute right to accept or reject any application in whole or in part and in either case without assigning any reason thereto. Names and specimen signatures of all the authorized signatories must also be lodged along with the submission of the completed application. i) Issue of Debentures in Dematerialized Form:

The Company has made depository arrangements with NSDL/CDSL for the issue of Debentures in dematerialized form. The Debentures will be issued only in Dematerialized form and the investors can deal with the same as per the provisions of Depositories Act, 1996/Rules, as notified by NSDL/CDSL from time to time.

j) A statement containing particulars of the Dates of, and parties to all material contracts, agreements

involving financial obligation of the Issuer.

By very nature and volume of its business, the Company is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Company. However, copies of certain contracts, arrangements or documents, entered into by the Company in relation to or pertaining to this Issue, as disclosed below (not being contracts entered into the ordinary course of business carried on by the Company) which are or may be deemed to be material have been entered into by the Company and may be inspected at the Registered Office of the Company between 11.00 a.m. and 4.00 p.m. on any working day from the date of this Disclosure Document until the Issue Closing Date.

1. Certified true copy of the Memorandum and Articles of Association of J. K. Cement Limited; 2. Copy of certificate of Incorporation of the Company 3. Copies of Annual Reports of J. K. Cement Limited for last 3 financial years; 4. Certified true copy of the Board resolution dated May 11, 2013 approving the proposed issue of Debentures

on private placement basis. 5. Certified copy of the resolution passed by the Shareholders dated July 30, 2011 under section 293(1)(d) of

the Companies Act,1956. 6. Certified copy of the shareholder resolution dated August 4, 2012 authorising re-appointment of M/s. P. L.

Tandon & Co. as Auditor of the Company. 7. Copy of the letter dated June 24, 2013 from the Company appointing IDBI Trusteeship Services Limited as

Trustee to the Issue 8. Copy of letter issued by Credit Rating Agency, CARE dated June 17, 2013 and July 5, 2013 assigning

“CARE AA-“ rating for an amount upto Rs. 2,000 million to be raised through issue of Debentures. 9. Consent letter dated June 25, 2013 from IDBI Trusteeship Services Limited to act as Trustee to the Issue. 10. Consent letter dated June 25, 2013 from Sharepro Service (India) Private Limited to act as Registrar and

Transfer Agent. 11. Copy of Agreement between the Company and NSDL.

XVII. OTHER TERMS AND CONDITIONS OF THE ISSUE

a) Market Lot

The market lot will be one Debenture (“Market Lot”). Since the debentures are being issued only in dematerialized form, the odd lots will not arise either at the time of issuance or at the time of transfer of debentures.

b) Issue of Letter(s) of Allotment

The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL) / Central Depository Services (India) Limited (CDSL) / Depository Participant will be given initial credit within 15 days from the Deemed Date of allotment.

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The initial credit in the account will be akin to the Letter of Allotment. On completion of all the statutory formalities, such credit in the account will be akin to Debenture Certificate.

c) Issue of Debenture Certificate(s)

Subject to the completion of all statutory formalities within time frame prescribed in the relevant regulations/ act/ rules etc., the initial credit akin to a Letter of Allotment in the Beneficiary Account of the investor would be replaced with the number of Debentures allotted. The Debentures since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Debentures shall be allotted in dematerialised form only.

d) Face Value, Issue Price, Effective Yield for Investor

As each Debenture has a face value of Rs. 1 million and will be issued at par. Since there is no premium or discount on either issue price or on redemption value of the Debentures, the effective yield for the investors held to maturity shall be same as the coupon rate on the Debentures.

e) Fictitious Applications

In terms of Section 68 of the Companies Act, 1956, any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the bonds, or otherwise included a body corporate to allot, register any transfer of bonds therein to them or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to 5 years.

f) Interest on Application Money

Interest at the coupon rate (subject to deduction of income tax under the provisions of Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to all the applicants on the application money for the Debentures. Such interest shall be paid from the date of realization of cheque(s) / demand draft(s) / RTGS up to one day prior to the Deemed Date of Allotment. The interest on application money will be computed on an Actual / Actual day’s basis. Such interest would be paid on all the valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of Debentures than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money. The interest cheque(s)/ demand draft(s) for interest on application money (along with refund Orders, in case of refund of application money, id any shall be dispatched by the Company within 15 days from the Deemed Date of Allotment and the relative interest warrant(s) along with the Refund Order(s), as the case may be, will be dispatched by registered post to the sole / first applicant, at the sole risk of the applicant.

g) Dispatch of Refund Orders

The Issuer shall ensure dispatch of Refund Order(s) by Registered Post only and adequate funds for the purpose shall be made available to the Registrar to the Issue by the Issuer.

h) Payment of Interest

The interest will be payable to the Debentureholder(s) whose names appear in the List of Beneficial Owners given by the Depository to the Company on the Record Date / Book Closure Date. Payment of interest will be made by the way of cheque(s) / interest warrant(s) / demand draft(s)/ credit through RTGS system/ ECS or any other acceptable mode prevalent at the time of payment. In case of cheque/ demand draft, the same will be dispatched to the sole / first applicant, 7 days before the due date(s) by certificate of posting or any other acceptable mode at the sole risk of the applicant.

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i) Computation of Interest

Interest for each of the interest periods shall be computed as per 'Actual/ Actual day count convention on the face value amount of Debentures outstanding at the Coupon Rate rounded off to the nearest Rupee. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the principal outstanding on the Debentures.

j) Deduction of Tax at Source:

Tax as applicable under the Income Tax, 1961, or any other statutory modification(s) or re-enactment(s) thereof will be deducted at source. Tax exemption certificate / document, under Section 193 of the Income Tax Act, 1961, if any, must be lodged at the registered office of the Company, along with the Application Form at least 15 days before the interest payment becoming due, failing which interest payments will be made after deduction of applicable tax at source. Tax exemption certificate in respect of non-deduction of tax on Interest on Application Money, must be submitted along with the Application Form to the satisfaction of the Issuer. Regarding deduction of Tax at Source and the requisite declaration forms to be submitted, prospective investor is advised to consult his tax advisor before investing in the Debentures to be issued by the Company.

k) Tax Benefits

The Debentures holder(s) are advised to consult their own tax advisers on tax implications of the acquisition, ownership and sale of Debentures, and income arising thereon.

l) Redemption

The face value of the Debentures will be redeemed at par. In case if the redemption date falls on a day which is not a Business Day then the payment due shall be made on the next Business Day.

m) Payment on Redemption

Payment on redemption will be made by cheque(s) / warrant(s) in the name of the Debentures holder whose name appears on the List of Beneficial owners given by the Depository to the Company as on the Record Date. On the Company dispatching the redemption warrants to such Beneficiary (ies) by registered post/ courier, the liability of the Company shall stand extinguished. The Company may also use credit through RTGS/NEFT as a mode of transfer of redemption proceeds. The Debentures shall be taken as discharged on payment of the redemption amount by the Company on maturity to the list of Beneficial Owners as provided by NSDL / CDSL. Such payment will be a legal discharge of the liability of the Company towards the Debentureholders. On such payment being made, the Company will inform NSDL / CDSL and accordingly the account of the Debentures holders with the NSDL / CDSL will be adjusted. The Company’s liability to the Dentures holder(s) towards all their rights including for payments or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Company will not be liable to pay any interest or compensation from the date of redemption. On the Company dispatching the amount specified above in respect of the Debentures, the liability of the Company shall stand extinguished. In case if the principal redemption date falls on a day which is not a Business Day, then the payment due shall be made on the next Business day along with interest of that period.

n) Debenture Redemption Reserve

As per circular no.9/2002 dated April 18, 2002 issued by the Government of India with respect to creation of Debenture Redemption Reserve, for manufacturing and infrastructure companies, the adequacy of DRR is defined at 25% of the value of debentures issued through private placement route. In terms of the provisions of Companies Act, 1956, the Company is required to create Debenture Redemption Reserve out of profits, if any, earned by the

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Company. The Company shall create a Debenture Redemption Reserve (‘DRR’) and credit to the DRR such amounts as applicable under provisions of Section 117C of the Companies Act 1956 (as amended from time to time) or any other relevant statute(s), as applicable.

o) Notices

All notices of Debentureholder(s) required to be given by the issuer or the Trustee shall have and shall be deemed to have been given if published in one English and one Hindi language daily National newspaper and may, at the sole discretion of the Issuer or the Trustee, but without any obligation, be sent by ordinary post to the original sole/ first allotees of the Debenture(s) or if notification and mandate has been received by the Issuer, pursuant to the provisions contained herein above, to the sole/first transferees.

All notices to be given by the Debentureholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by Registered Post or such other mode to the Registrars to the Issue or to such persons at such address as may be notified by the Company from time to time.

p) Minimum Subscription

As the current issue of Debentures is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Company shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

q) Underwriting

The present Issue of Debentures is not underwritten.

r) Security

Debentures to be issued by the Issuer in pursuance of this Disclosure Document together with interest, costs, charges, remuneration of the Debenture Trustee and all other moneys payable in respect thereof shall be secured by way of creation of a first pari-passu charge by way of mortgage/hypothecation on selected fixed assets of the Issuer, both present and future of value not less than 1.3 times the outstanding amount of the Debentures at all the times during the tenure of the Debentures. Assets proposed to be provided as security are currently charged to other lenders, hence, NOCs for creation of security will be obtained from existing charge holders. The Issuer shall be at liberty from time to time during the continuance of the security to issue at such future dates and in such denomination as it considers advisable, further convertible and/or non-convertible debentures and/or to raise further loans, advances and/or avail further financial and/or guarantee facilities from financial institutions, banks, and/or any other persons or entities in any other form by creating further charge on the assets/properties charged/mortgaged to the Debenture Trustee in respect of the Debentures to be issued in pursuance of this Disclosure Document, subject to obtaining the prior written consent of the Debenture Trustee which shall not be held back without any justified reason. The security will be created by the Issuer as aforesaid in favour of the Trustee within 90 days or such period as may be permitted by the concerned statutory authorities, whichever is earlier from the Issue Pay-in Date of the Debentures on such of the assets for which the Issuer obtains, after all due diligence and efforts, the requisite consents and permissions applicable under the law or in accordance with the conditions of holding of such assets for creating the above mentioned charge/mortgage. The Issuer shall maintain a minimum asset cover of 1.3 times of the total amount outstanding at all times.

s) Undertaking by the Issuer

The Issuer undertakes that

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• the complaints received in respect of the Issue shall be attended to by the Issuer expeditiously and satisfactory;

• it shall take all steps for completion of formalities for listing and commencement of trading at all the concerned stock exchange where securities are to be listed and taken within the statutory time prescribed for the same;

• the funds required for dispatch of refund orders by registered post shall be made available to the Registrar to the Issue by the Issuer Company;

• no further issue of securities shall be made till the securities offered through this Disclosure Document are listed or till the application money are refunded on account of non-listing etc, under-subscription etc;

• necessary co-operation to the credit rating agency shall be extended in providing true and adequate information till the debt obligation in respect of the instrument are outstanding.

t) Depository Arrangements

The Company has entered into necessary depository arrangements with National Securities Depository Ltd. (NSDL) and/or Central Depository Services (India) Ltd. (CDSL) for dematerialisation of the Debentures offered under the present issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Company has signed two tripartite agreements as below:

• Tripartite Agreement between the Company, National Securities Depository Limited (NSDL) and the Registrar for dematerialisation of the Debentures offered under the present issue.

• Tripartite Agreement between the Company, Central Depository Services (India) Limited (CDSL) and the Registrar for dematerialisation of the Debentures offered under the present issue.

Investors can hold the Debentures only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.

u) Procedure for applying for Demat Facility

1. Applicant(s) should have/ open a Beneficiary Account with any of the Depository Participants (DPs) of NSDL or CDSL.

2. The applicant(s) must specify the beneficiary account number and Depository Participant’s ID in the relevant columns of the Application Form.

3. If incomplete/ incorrect beneficiary account details are given in the Application Form which does not match with the details in the depository system, the allotment of Debentures shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.

4. The Debentures shall be directly credited to the Beneficiary Account(s) as given in the Application Form and after due verification, allotment advice/ refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit will be provided to the applicant by the Depository Participant of the applicant.

5. Interest or other benefits with respect to the Debentures would be paid to those Debentureholders whose names appear on the list of beneficial owners given by the Depositories to the Company as on Record Date/ Book Closure Date. In case, the beneficial owner is not identified by the Depository as on the Record Date/ Book Closure Date due to any reason whatsoever, the Company shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the Depository and intimated to the Company. On receiving such intimation, the Company shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.

6. Applicants may please note that the Debentures shall be allotted and traded on the stock exchange only in dematerialised form.

v) Mode of Transfer/ Transmission of Debentures

The Debentures shall be transferred and/or transmitted subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his Depository Participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/

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redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) not with the Company. Transfer of Debentures to and from NRIs/ OCBs, in case they seek to hold the Debentures and are eligible to do so, will be governed by the then prevailing guidelines of RBI.

w) Undertaking to use a common form of transfer

The Debentures will be issued in dematerialized form only and there would be no physical holding. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The Issuer undertakes that there will be a common transfer form / procedure for transfer of debentures.

x) Trustee for the Debentureholders

IDBI Trusteeship Services Limited has been appointed to act as Trustee to the Issue. All the remedies of the Debentureholders for the amounts due on the Debentures will be vested with the Trustee on behalf of the Debentureholders. The Debentures holders shall without any further act or deed be deemed to have irrevocably given their consent to and authorized the Trustee or any of their agents or authorized officials to do interalia, acts/deeds and things necessary in respect of or relating to the security to be created for securing the Debentures being issued in terms of this Disclosure Document. Any payment made by the Issuer to the Trustee on behalf of the Debentureholders shall discharge the Issuer pro tanto to the Debentureholders. The Trustee will protect the interest of the Debentureholder(s) in regard to timely payment of interest and repayment of principal and they will take necessary action, subject to and in accordance with the Debenture Trust Deed, at the cost of the Issuer. No Debentureholder shall be entitled to proceed directly against the Issuer unless the Trustee, having become so bound to proceed, fails to do so. The Debenture Trust Deed shall more specifically set out rights and remedies of the Debentureholders and the manner of enforcement thereof.

y) Right to Accept or Reject Applications

The Company reserves its full, unqualified and absolute right to accept or reject any application, in part or in full, without assigning any reason thereof. The rejected applicants will be intimated along with the refund warrant, if applicable, to be sent. Interest on application money will be paid from the date of realization of fund till one day prior to the date of refund. The Application Forms that are not complete in all respects are liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to:

a) Number of Debentures applied for is less than 10 Debentures (Rs 10 million); b) Application exceeding the issue size; c) Bank Account details not given; d) Details for issue of Debentures in electronic/ dematerialized form not given; e) PAN/GIR and IT Circle/ Ward/ District not given; f) In case of applications under Power of Attorney by limited companies, corporate bodies, etc. relevant

documents not submitted; In the event, if any Debenture(s) applied for is/ are not allotted in full, the excess application monies of such Debentures will be refunded, as may be permitted.

z) PAN/GIR Number

All applicants should mention their Permanent Account Number or the GIR Number allotted under Income Tax Act, 1961 and the Income Tax Circle/War/District. In case where neither the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the Application Form in the space provided.

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aa) Record Date/ Book Closure Date

Debenture Register would be closed for interest payment 15 calendar days before each interest due date /redemption date. Interest shall be paid to the person whose name appears as sole/ first in the register of Debentureholders/ beneficiaries as provided by the Depositories on the Record Date. In the event of the Company not receiving any notice of transfer at least 15 days before the respective date of payment of interest and/ or principal repayment date, the transferees for the Debentures shall not have any claim against the Company in respect of interest so paid to the registered Debentureholders. In case Record Date/ Book Closure Date falls on Sunday/Holiday, the day prior to the said Sunday/Holiday shall be the Record Date/ Book Closure Date.

bb) Future Borrowings

The Company shall be entitled, from time to time, to make further issue of debentures, other debt securities (whether pari passu or junior to the Debentures) and other instruments and securities to any person or persons including to the public or a section of the public and/or members of the Company and/or to raise further loans, advances and/or avail further financial and/or guarantee facilities from financial institutions, banks and/or any other person(s) without any further approval from or notice to the Debentureholders/ Trustee. TheTrustee is authorized to provide No Objection Certificate on behalf of Debentureholders to (a) cede pari-passu first charge on the assets under charge of the Trustee to raise additional borrowing by the Company and (b) to release the charge on part of such assets at the request of the Company provided the assets cover does not fall below 1.3 times.

cc) Right to Re-purchase and Re-issue the Debentures

The Company will have the power exercisable at its sole and absolute discretion from time to time to repurchase some, or all of its Debentures in the secondary market or otherwise, at any time prior to the specified date of redemption. In the event a part or all of its Debentures being repurchased as aforesaid or redeemed under any circumstances whatsoever, the Company shall have, and shall be deemed always to have had, the power to reissue the Debentures either by reissuing the same Debentures or by issuing other debentures in their place. Further, in respect of such re-purchased/redeemed debentures, the Company shall have the power, exercisable either for a part or all of those debentures, to cancel, keep alive, appoint nominee(s) to hold or reissue at such price and on such terms and conditions as it may deem fit and as permitted by law.

dd) Rights of Debentureholder(s)

Debentureholder(s) will not be entitled to any rights and privileges of shareholders other than those available to them under the law. The Debentures shall not confer upon the holders the right to receive notice, or to attend and vote at the general meetings of the Company. The principal amount and interest, if any, on the Debentures will be paid to the Debentureholder only, or in the case of joint holders, to the person whose name stands first in the register of Debentureholders maintained by the Company. The Debentures shall be subject to other terms and conditions incorporated in the debenture certificate and the trust deed. ee) Modification of Rights:

The rights, privileges, terms and conditions attached to the Debentures may be varied, modified or abrogated with the consent, in writing, of those Debentureholders who hold at least three fourth of the outstanding amount of the Debentures or with the sanction accorded pursuant to a special resolution passed at a meeting of the Debentureholders, provided that nothing in such consent or resolution shall be operative against the Company where such consent or resolution modifies or varies the terms and conditions of the Debentures, if the same are not accepted in writing by the Company.

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ff) List of Beneficial Owners

The Company shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.

gg) Register of Debenture holders

The Register of Debentureholders containing necessary particulars will be maintained by JKC, at such a place, as it may decide.

hh) Succession

In the event of the demise of the sole/first holder of the Debenture(s) or the last survivor, in case of joint holders for the time being, the Company shall recognize the executor or administrator of the deceased Debentureholder, or the holder of succession certificate or other legal representative as having title to the Debenture(s). The Company shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Company may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Debenture(s) standing in the name of the deceased Debentureholder on production of sufficient documentary proof or indemnity. Where a non-resident Indian becomes entitled to the Debentures by way of succession, the following steps have to be complied with:

• Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Debenture was acquired by the NRI as part of the legacy left by the deceased holder.

• Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

ii) Signatures

Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal. jj) Nomination Facility

As per Section 109 A of the Companies Act, 1956, only individuals applying as sole applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Debentures shall vest in the event of his death. Non-individuals including holders of Power of Attorney can not nominate. kk) Governing Laws and Jurisdiction

The Debentures are governed by and will be construed in accordance with the Indian law. The Company’s obligations under the Debentures shall, at all times, be subject to the directions of the Reserve Bank of India and the SEBI. The Debentureholders, by purchasing the Debentures, agree that the courts of Uttar Pradesh shall have exclusive jurisdiction with respect to matters relating to the Debentures.

ll) Investor Relations and Grievance Redressal

The Company endeavors to resolve the investor’s grievance within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Debentures applied for, amount paid on application, may be addressed to the Compliance Officer at the Registered Office of JKC. All investors are hereby informed that the Company has appointed a Compliance Officer who may be contacted in case of any preissue /

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post-issue related problems such as non-credit of letter(s) of allotment/ Debenture certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are furnished below: Mr. Shambhu Singh

JK CEMENT LIMITED

Kamla Tower,Kanpur,Uttar Pradesh 208 001 Tel.: (91 0512) 2371478/79/80/81 Fax: (91 0512) 2332665 Email: [email protected]

Contact No.: (91 512) 2371478/79/80/81

XVIII. DECLARATION

It is hereby declared that this Disclosure Document contains full disclosures in accordance with SEBI Debt Regulations. The security that has been offered for the Debentures will be charged in favour of the Trustee after obtaining the necessary approval for creation of first pari passu charge on the Fixed Assets from the first charge holders. The Company also confirms that this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made, misleading. The Disclosure Document also does not contain any false or misleading statement. The Company accepts no responsibility for the statement made otherwise than in the Disclosure Document or in any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his own risk. Signed pursuant to the authority granted by Board of Directors of the Company at its Board meeting held on May 11, 2013. For J. K. CEMENT LIMITED

Authorised Signatory

Name: Mr. Shambhu Singh Designation: Sr. General Manager (Legal) & Company Secretary

Date: July 22, 2013

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ANNEXURE 1: CARE RATING LETTER AND RATING RATIONALE

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ANNEXURE 2: TERM SHEET

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ANNEXURE 3: UNDERTAKING BY THE COMPANY

The Company undertakes that –

• In the event the Debentures are issued in physical form, the Company shall use a common form of transfer.

• It will provide a compliance certificate duly certified by the Trustee to the Debentureholders, (on a yearly basis), in respect of compliance with the terms and conditions of Issue as contained in the Disclosure Document.

• Every credit rating obtained shall be periodically reviewed by the Credit Rating Agency and any revision in the rating shall be promptly disclosed by the Company to the Stock Exchange. Any change in rating shall be promptly disseminated to Debentureholders and prospective investors in such manner as stock exchange may determine from time to time. All information and reports on the Debentures, including compliance reports filed by the Company and the Trustee to the Issue, shall be disseminated to the Debentureholders and the general public by placing them on the website of the Company and shall through the Trust Deed, request the Trustee to the Issue to place the same on the website.

• The Disclosure Document is compliant with all disclosures required to be made for listing of Non-Convertible Debentures on a private placement basis on a recognized stock exchange, as specified in Schedule I of the SEBI Debt Regulations.

For and on behalf of J. K. Cement Limited

Authorised Signatory

Name: Mr. Shambhu Singh Designation: Sr. General Manager (Legal) & Company Secretary

July 22, 2013

DISCLOSURE DOCUMENT

ANNEXURE 4: APPLICATION FORM

J. K. CEMENT LIMITED

Registered & Corporate Office: Kamla Tower, Kanpur, Uttar Pradesh 208 001 Contact Person: Mr. Shambhu Singh, Compliance Officer; Tel.: (91 0512) 2371478/79/80/81;

Fax: (91 0512) 2399854; Web site: www.jkcement.com; E-Mail: [email protected]

Application Form No._[ ]_______ Date: To. The Compliance Officer Kamla Tower, Kanpur, Uttar Pradesh - 208 001 Dear Sirs, Having read and understood the contents of the Disclosure Document, we apply for allotment to us of the fully redeemable, Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures. The amount payable on application as shown below is remitted herewith. On allotment, please place our name on the Register of Debentureholders. We bind ourselves to the terms and conditions as contained in the Transaction Document for Private Placement.

(PLEASE READ THE INSTRUCTIONS CAREFULLY BEFORE FILLING THIS FORM)

No. of Debentures applied for (In words) No. of Debentures applied for (In figures) Total Amount Payable (Rs.) (in words)

Total Amount Payable (Rs.) (In figures)

Cheque DD Date Cheque / DD No.

Cheque/ demand draft drawn on

Office Use only

Date of receipt of application

Date of realization of cheque/DD

We are applying as {Tick (��) whichever is applicable}

1 Company / Body Corporate 2 Nationalized/ Commercial Bank 3 Regional Rural Bank

4 Foreign Institutional Investors 5 Financial Institution 6 Insurance Companies

7 Mutual Fund 8 Others (Please specify) 9

Investment Details

Instrument Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures (“NCD”/ “Debenture”)

Face Value Rs 1 million per Debenture

Min. Application 10 Debentures and in multiples of 10 Debentures thereafter

Credit Rating “CARE AA-”

Tenure 10 years

Coupon Rate 10.50% per annum

Interest Payment Semi annually in arrears

Redemption Redemption of the Debentures by the Issuer on a redemption date, in accordance with the terms hereof

Application Details

First Applicant’s Name in Full (Block letters)

Second Applicant’s Name in Full

Third Applicant’s Name in Full

Mailing Address in Full (Do not repeat name. Post Box No. alone is not sufficient.)

Pin: Tel: Fax: Email:

Tax Details PAN or GIR No. IT Circle / Ward / District

Not Allotted

Details of Bank Account (required for payment of interest/redemption proceeds)

Bank Name & Branch Nature of Account & Account No. IFSC Code for RTGS

Demat Details

DP Name DP ID No. Client ID No. Beneficiary Account No.

Tax Deduction Status: (Please tick one)

Fully Exempt (Please furnish exemption certificate

Tax to be deducted at Source:

Specimen Signature

Name of the Authorised Signatory Designation Signature

1.

2.

3.

……………………………………………………………….TEAR HERE……………………………………………………..

ACKNOWLEDGEMENT SLIP

J. K. Cement Limited Registered & Corporate Office: Kamla Tower, Kanpur, Uttar Pradesh 208 001

Contact Person: Mr. Shambhu Singh, Compliance Officer; Tel.: (91 0512) 2371478/79/80/81; Fax: (91 0512) 2399854; Web site: www.jkcement.com; E-Mail: [email protected]

Application Form No.[ ]_ Date: ____________

Received from ____________________________________Address_____________________________________________

____________________________________________________________________________________________________

an application for _________________ Debentures of J. K. Cement Limited on private placement along with Cheque/DD/ RTGS No. ____________________ Drawn on___________________________________ Dated ___________________ for

Rs. ______________________(Rupees________________________________________________________________ only)

(Note: Cheques and Drafts are subject to realization)

INSTRUCTIONS

Applicants are advised to read Disclosure Document of JKC carefully in order to satisfy themselves before making an application for subscription. For a copy of Disclosure Document, the applicant may request the Company. 1) Application Forms must be completed in BLOCK LETTERS IN ENGLISH. A blank space must be left between two or

more parts of the name. For Example

A B C D E L I M I T E D

2) Signatures should be made in English. Signatures made in any other Indian language must be attested by an authorized official of a Bank or by a Magistrate/Notary Public under his/her official seal.

3) Application shall be for a minimum number of 10 Debentures and multiples of 10 Debentures thereafter

4) Applications can be made in single or joint names; in case of joint names, all payments will be made out in favour the applicant whose name appears first in the Application Form; all notices, correspondence and communication will be addressed to the first applicant.

5) For payment can be made through Cheque(s)/Demand Draft(s), NEFT/ RTGS. The Company’s Account and RTGS details are given in the Disclosure Document. For payment in any other mode such as Cash, outstation cheques, money orders, postal orders and stock invest shall NOT be accepted.

6) As a matter of precaution against possible fraudulent encashment of interest warrants due to loss/ misplacement, applicants are requested to mention the full particulars to their bank account, as specified in the Application Form. Interest warrants will then be made out in favour of the bank for credit to the sole/first applicant’s account. Cheques will be issued as per the details in the register of Subordinated Debentureholders at the risk of the sole/first applicant.

7) The PAN/ GIR Number and IT Circle/Ward/District of the Sole/First Applicant and Joint Applicant(s) should be mentioned in the Application Form. In case neither the PAN nor GIR Number has been allotted, the fact of non allotment should be mentioned in the space provided and Form 60 should be submitted duly signed. In absence of PAN no. it may be noted that TDS will be deducted at a higher rate if applicable.

8) Income-tax as applicable will be deducted at source at the time of payment of interest on application money and on the regular payments of interest. Those desirous of claiming exemptions of tax are required to submit relevant certificate issued by the Income-Tax Officer and/or submit Form 15AA /15H in duplicate as prescribed in the Income-tax Rules, 1962 along with the Application Form.

9) Receipt of applications will be acknowledged stamping the “Acknowledgement Slip” appearing below the Application Form. No separate receipt will be issued.

10) Application under Power of Attorney: In the case of applications made under Power of Attorney or by limited companies, corporate bodies, etc. a certified true copy of the Power of Attorney or the relevant authority, as the case may be along with a certified copy of the Memorandum & Articles of Association and/or Bye Laws and/or the Deed of Trust and the certified true copy of the Issuer Resolution, must be lodged along with the application or sent directly to J. K. Cement Limited along with a copy of the Application Form.

11) The applications would be scrutinized and accepted as per the provisions of the terms and conditions of the private placement annexed to the Disclosure Document. J. K. Cement Limited is entitled, at its sole and absolute discretion, to accept or reject any application, in part or in full, without assigning any reason. An Application Form that is not

complete in any respect is liable to be rejected.

12) All future communication should be addressed to the Registrar of Debentures, JKC (whose address is given below) or to such other person at such address as may be notified by JKC from time to time.

SHAREPRO SERVICES (INDIA) PVT. LTD.

13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone, Exchange Lane, Andheri (E), Mumbai – 400 072 Tel: (91 22) 67720300 / 400 Fax: (91 22) 28591568 Email:[email protected] Contact Person: Mr. Rajesh D. Jadhav

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