jk cement limited cin: l17229up1994plc017199 jk cement.pdffax: (91 512) 2399854; web site: ; e-mail:...

Serial No.: 1

Private & Confidential – For Private Circulation Only

Addressed to: [●]

(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)

Dated: 6.5.15

INFORMATION MEMORANDUM

JK CEMENT LIMITED

CIN: L17229UP1994PLC017199 Our Company was incorporated on November 24, 1994 as J.K. Cement Limited and received its certificate of commencement of business

on December 30, 1994.

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]

ISSUE BY WAY OF PRIVATE PLACEMENT BY OUR COMPANY OF UPTO 1,000 LISTED, RATED, SECURED, NON-CONVERTIBLE,

NON CUMULATIVE, REDEEMABLE DEBENTURES OF THE FACE VALUE OF RS. 1,000,000 (RUPEES TEN LAKHS ONLY) EACH FOR

CASH AT PAR, AGGREGATING UPTO RS. 1,000 MILLION (“DEBENTURES”), THROUGH THE “ISSUE”. THE PRESENT OFFER IS FOR

1000 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. 1000 MILLION

GENERAL RISK

Investors are advised to read the Information Memorandum carefully before taking an investment decision in this Issue. For taking an investment decision

the investor must rely on their examination of our Company and the Issue including the risks involved and consider the section entitled “Risk Factors” in this Information Memorandum before investing. 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 Information Memorandum.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibilities for, and confirms that this Information Memorandum (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 Information Memorandum 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 January 13, 2015 to the Debentures proposed to be issued by

our Company pursuant to this Information Memorandum, 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’). The Issuer, with prior

notification to the Debenture Trustee, may get the Debentures listed on other recognized stock exchanges as it deems fit. Our Company shall comply with

the requirements of the listing agreement to the extent applicable to it on a continuous basis.

TRUSTEE TO THE ISSUE

IDBI TRUSTEESHIP SERVICES LIMITED

Asian Building, Ground Floor, 17-R, Kamani Marg, Ballard Estate,

Mumbai – 400 001, Maharashtra, India

Tel: (91 22) 4080 7000 Fax: (91 22) 6631 1776

E-mail: [email protected]

Investor Grievance E-mail: [email protected] Contact Person: Mr. Kunal Antani SEBI Reg. No.: IND000000460

REGISTRAR TO THE ISSUE

SHAREPRO SERVICES (INDIA) PRIVATE LIMITED 13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone,

Exchange Lane, Andheri (E),

Mumbai – 400 072, Maharashtra, India Tel: (91 22) 67720300 / 400

Fax: (91 22) 28591568

Email:[email protected] Investor Grievance Email: [email protected]

Website: www.sharepro.com

Contact Person: Mr. Rajesh D. Jadhav SEBI Reg. No.: INR000001476

Issue Time Table

Issue Open Date 6.5.15 Issue Closing Date 6.5.15

Issue Pay-in Date 6.5.15 Deemed Date of Allotment 6.5.15

Our 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 our 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 our Company.

NOTE: This Information Memorandum of private placement is neither a prospectus nor a statement in lieu of a prospectus. This Information

Memorandum has been prepared for the issue of Non-Convertible Debentures by our 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.



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TABLE OF CONTENTS

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

DISCLAIMER IN RESPECT OF JURISDICTION ...................................................................................................... 3

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

CONFIDENTIALITY ................................................................................................................................................... 4

ISSUE OF DEBENTURES IN DEMATERIALISED FORM ...................................................................................... 4

FORWARD LOOKING STATEMENTS ..................................................................................................................... 5

INDUSTRY AND MARKET DATA ............................................................................................................................ 6

DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 7

RISK FACTORS ........................................................................................................................................................... 9

DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES ACT,

2013 AND THE RULES MADE THEREUNDER ..................................................................................................... 22

A BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF OUR COMPANY ................................................. 24

FINANCIAL PERFORMANCE ................................................................................................................................. 30

GENERAL INFORMATION ...................................................................................................................................... 35

I. REGISTERED AND CORPORATE OFFICE OF OUR COMPANY ............................................................... 35

II. COMPANY SECRETARY AND COMPLIANCE OFFICER FOR THE ISSUE ............................................. 35

III. CHIEF FINANCIAL OFFICER OF OUR COMPANY ..................................................................................... 35

IV. TRUSTEE TO THE ISSUE ................................................................................................................................ 35

V. REGISTRAR TO THE ISSUE ........................................................................................................................... 35

VI. NAME AND ADDRESS AND OTHER DETAILS OF BOARD OF DIRECTORS OF OUR COMPANY .... 36

VII. CREDIT RATING AGENCY ............................................................................................................................ 40

VIII. DETAILS OF AUDITOR OF OUR COMPANY .............................................................................................. 40

IX. BRIEF HISTORY OF OUR COMPANY SINCE OUR INCORPORATION GIVING DETAILS OF OUR

FOLLOWING ACTIVITIES ....................................................................................................................................... 41

X. DETAILS OF PROMOTERS OF OUR COMPANY ......................................................................................... 48

XI. OTHER ISSUE DETAILS ................................................................................................................................. 49

SUMMARY TERM SHEET ....................................................................................................................................... 53

TERMS AND CONDITIONS OF THE ISSUE AND ISSUE PROCEDURE ............................................................ 58

DECLARATION ......................................................................................................................................................... 70

ANNEXURE 1: CARE RATING LETTER AND RATING RATIONALE .............................................................. 71

ANNEXURE 2: TERM SHEET .................................................................................................................................. 74

ANNEXURE 4: APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE

DEBENTURES (SERIES D) ........................................................................................................................................ 1



2

DISCLAIMER

GENERAL DISCLAIMER

The distribution of this Information Memorandum and the offer of Debentures is being made strictly on a private

placement basis and is not intended to be circulated to more than 200 (two hundred) persons, provided that any offer

of Debentures made to QIBs shall not be considered while calculating the limit of 200 (two hundred) persons.

Multiple copies hereof given to the same entity shall be deemed to be given to the same person and shall be treated

as such. It does not constitute and shall not be deemed to constitute an offer or an invitation to subscribe to the

Debentures to the public of India in general. This Information Memorandum should not be construed to be a

prospectus or a statement in lieu of prospectus under the Companies Act. Apart from this Information

Memorandum, no offer document or prospectus has been prepared in connection with the offering of this Issue or in

relation to our Company nor is such a prospectus required to be registered under applicable laws. Accordingly, this

Information Memorandum has neither been delivered for registration nor is it intended to be registered.

This Information Memorandum has been prepared in conformity with the Companies Act and the SEBI Debt

Regulations. Pursuant to Section 42 of the Companies Act read with Rule 14(3) of the PAS Rules, our Company

shall file a copy of this Information Memorandum with the ROC and SEBI within a period of 30 (thirty) days of

circulation of this Information Memorandum.

This Information Memorandum and the contents hereof are restricted only for the intended recipient(s) who

have been addressed directly and specifically through a communication by our Company and only such

recipients are eligible to apply for the Debentures. All invited Eligible Investors are required to comply with

the relevant regulations or guidelines applicable to them for investing in this Issue. The Information

Memorandum is not intended for distribution to any other person and should not be reproduced by the

recipient. Any distribution or reproduction of this Information Memorandum in whole or in part or any

public announcement or any announcement to third parties regarding the contents of this Information

Memorandum is unauthorized. Failure to comply with this instruction may result in a violation of the SEBI

Debt Regulations or other applicable laws of India and other jurisdictions.

Each copy of this Information Memorandum is serially numbered and the person, to whom a copy of the

Information Memorandum is sent, is alone entitled to apply for the Debentures. No invitation is being made to any

persons other than those to whom Application Forms along with this Information Memorandum being issued have

been sent. Any application by a person to whom the Information Memorandum has not been sent by our Company

shall be rejected without assigning any reason.

DISCLAIMER OF THE ISSUER

This Information Memorandum has been prepared to provide general information about our Company to certain

potential Investors to whom it is addressed and who may be willing to subscribe to the Debentures. This Information

Memorandum does not purport to contain all the information that any potential Investor may require.

Our Company having made all reasonable enquiries, accepts responsibility and confirms that, as at the date hereof,

this Information Memorandum (including the documents incorporated by reference herein, if any) contains all

information that is material in the context of the Issue, is accurate in all material respects and does not contain any

untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in the

light of the circumstances under which they are made, and are not misleading. No person has been authorized to give

any information or to make any representation not contained or incorporated by reference in this Information

Memorandum or in any material made available by our Company to any potential Investor pursuant hereto and, if

given or made, such information or representation must not be relied upon as having been authorized by our

Company.

The intermediaries and their agents or advisors associated with this Issue have not separately verified the

information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made

and no responsibility is accepted by any such intermediary as to the accuracy or completeness of the information

contained in this Information Memorandum or any other information provided by our Company. Accordingly, the



3

legal advisors to our Company and other intermediaries associated with this Issue shall have no liability in relation

to the information contained in this Information Memorandum or any other information provided by our Company

in connection with the Issue.

Our Company does not undertake to update the Information Memorandum to reflect subsequent events after the date

of the Information Memorandum and consequently it should not be relied upon with respect to such subsequent

events without first confirming its accuracy with our Company. Neither the intermediaries nor their agents nor

advisors associated with this Issue undertake to review the financial condition nor affairs of our Company during the

life of the arrangements contemplated by this Information Memorandum or have any responsibility to advise any

Investor or potential Investor in the Debentures of any information available with or subsequently coming to the

attention of the intermediary, agent or advisor.

Each person receiving this Information Memorandum acknowledges that: (i) such person has been afforded an

opportunity to request and to review and has received all additional information considered by it to be necessary to

verify the accuracy of or to supplement the information herein; and (ii) such person has not relied on any

intermediary associated with this Issue in connection with its investigation of the accuracy of such information or its

investment decision. Each person in possession of this Information Memorandum should carefully read and retain

this Information Memorandum. However, each such person in possession of this Information Memorandum is not to

construe the contents of this Information Memorandum as investment, legal, accounting, regulatory or tax advice,

and such persons in possession of this Information Memorandum should consult with its own advisors as to all legal,

accounting, regulatory, tax, financial and related matters concerning an investment in the Debentures.

The Issue of Debentures is not an acceptance of public deposit since the offer is being made to only those persons

and entities who are eligible to subscribe to unsecured debentures in accordance with and subject to the Companies

Act and the Companies (Acceptance of Deposits) Rules, 2014 viz. the Eligible Investors.

DISCLAIMER IN RESPECT OF JURISDICTION

The Issue is a placement of Debentures to Investors eligible to invest under the laws of India as at the date hereof.

No steps have been taken or will be taken to facilitate the placement of Debentures in any other jurisdictions. This

Information Memorandum is not intended for distribution to, or use by, any person or entity in any jurisdiction or

country where distribution or use of such information would be contrary to law or regulation. This Issue is made to

Investors as specified under “Eligible Investors” of this Information Memorandum, who shall be specifically

approached by our Company. This Information Memorandum does not constitute an offer to sell or an invitation to

subscribe to Debentures offered hereby to any person to whom it is not specifically addressed. Persons into whose

possession this Information Memorandum comes are required to inform themselves about and to observe any such

restrictions. The Information Memorandum is made available to Investors in the Issue on the strict understanding

that it is confidential and may not be transmitted to others, whether in electronic form or otherwise. Any disputes

arising out of this Issue will be subject to the jurisdiction of the courts of New Delhi.

DISCLAIMER OF THE SECURITIES AND EXCHANGE BOARD OF INDIA

This Information Memorandum 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 Information Memorandum. The issue of Debentures being made on

private placement basis, filing of this Information Memorandum is not required with SEBI. However SEBI reserves

the right to take up at any point of time, with our Company, any irregularities or lapses in this Information

Memorandum.

DISCLAIMER OF THE STOCK EXCHANGE

As required, a copy of this Information Memorandum has been filed with the BSE Limited (hereinafter referred to as

“BSE”) pursuant to the SEBI Debt Regulations, as amended from time to time, for hosting the same on its website.



4

It is to be distinctly understood that submission of this Information Memorandum to the BSE or hosting the same on

its website should not in any way be deemed or construed to mean that this Information Memorandum has been

reviewed, cleared or approved by the BSE, nor does the BSE in any manner warrant, certify or endorse the

correctness or completeness of any of the contents of this Information Memorandum, nor does the BSE warrant that

the Issuer’s Debentures will be listed or will continue to be listed on the BSE, nor does the BSE take any

responsibility for the soundness of the financial and other conditions of the Issuer, its promoters, its management or

any scheme or project for which the Issue is proposed to be made. 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 BSE whatsoever by reason of any loss which may be suffered by such

person consequent to or in connection with such subscription or acquisition whether by reason of anything stated or

omitted to be stated herein or any other reason whatsoever.

CONFIDENTIALITY

The information and data contained herein is submitted to each recipient of this Information Memorandum on a

strictly private and confidential basis. By accepting a copy of this Information Memorandum, each recipient agrees

that neither it nor any of its employees or advisors will use the information contained herein for any purpose other

than evaluating the specific transactions described herein or will divulge to any other party any such information.

This Information Memorandum must not be photocopied, reproduced, extracted or distributed in full or in part to

any person other than the recipient without the prior written consent of our Company.

ISSUE OF DEBENTURES IN DEMATERIALISED FORM

Pursuant to Regulation 20(1)(c) of the SEBI Debt Regulations, Our Company has made arrangements with the

Depositories for the issue of the Debentures in dematerialised form.

Our Company shall take necessary steps to credit the Debentures allotted to the Beneficiary Account maintained by

the Investor with its Depository Participant. Our Company will allot the Debentures to Investors on the Deemed

Date of Allotment after verification of the Application Form, the accompanying documents and on realisation of the

application money.



5

FORWARD LOOKING STATEMENTS

All statements in this Information Memorandum 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 our

Company’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 Information Memorandum

(whether made by our Company or any third party) are predictions and involve known and unknown risks,

uncertainties and other factors that may cause our Company’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. Important factors that could cause actual results to differ materially from our

expectations include, among others:

• our ability to mine sufficient limestone for Company’s operations

• our ability to implement our expansion and modernization plans for its existing manufacturing facilities

• our ability to manage Company’s growth

• unable to reduce its cost of power and fuel.

• availability of adequate debt and equity financing at reasonable terms

• any disruptions in supply and transport

• our ability to renew or maintain its statutory and regulatory permits and approvals required to operate our

business

• our ability to manage and integrate any strategic acquisitions or investments

• changes in legislation governing the rules implementing them or the regulator enforcing them in any one of

those jurisdictions

• competition in the Indian markets

• general, political, economic, social and business conditions in Indian and other global markets;

• performance of the Indian debt and equity markets

• other factors discussed in this Information Memorandum, including those under the section entitled “Risk

Factors”.

The forward looking statements contained in this Information Memorandum are based on the beliefs of the

management of our Company, as well as the assumptions made by and information available to management as at

the date of this Information Memorandum. There can be no assurance that the expectations will prove to be correct.

Our Company 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 our Company are expressly qualified in their

entirety by reference to these cautionary statements.

Forward looking statements speak only as at the date of this Information Memorandum. None of our Company, our

Directors, our officers or any of our respective affiliates or associates has any obligation to update or otherwise

revise any statement reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying

events, even if the underlying assumptions do not come to fruition.



6

INDUSTRY AND MARKET DATA

Market data and certain industry forecasts used throughout this Information Memorandum 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 our Company does not make any

representation as to the accuracy of that information.



7

DEFINITIONS AND ABBREVIATIONS

The Company / our

Company / Issuer / 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.

Applicant An Eligible Investor who applies for issuance of the Debentures pursuant to the terms

of the Information Memorandum and the Application Form

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 All days except Sunday and any public holiday in accordance with the Negotiable

Instruments Act, 1881

Credit Rating Agency /

“CARE”

Credit Analysis & Research Limited

CDSL Central Depository Services (India) Limited

Companies Act The Companies Act, 2013, as amended from time to time

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 Information Memorandum

Debentureholder (s) Persons who are for the time being holders of the Debentures and whose names are

most recently entered into the Register of Debentureholder(s) and shall include the

Beneficial Owners

Trustee to the Issue IDBI Trusteeship Services Limited

Depository(ies) or

Depository Participants

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

Limited (CDSL)

Information Memorandum Information Memorandum dated for private placement of upto 1,000 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. 1,000 million

DP A depository participant as defined under the Depositories Act

EFT Electronic Fund Transfer

Eligible Investors Has the meaning set forth in the section entitled “Summary Term Sheet”

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

FII Foreign institutional investor registered with SEBI in accordance with Securities and



8

Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as

amended

FPI Foreign portfolio investor who are registered in accordance with the Securities and

Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, as amended

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

MnTPA Million ton per annum

NEFT National Electronic Fund Transfer

NRIs Non Resident Indians

NSDL National Securities Depository Limited

Issue Pay-in Date [●]

PAN Permanent Account Number

PAS Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended from

time to time

QFI Qualified Foreign Investor who have opened a dematerialised account with a qualified

depository participant in accordance with the circulars and guidelines issued by SEBI

and RBI

RBI Reserve Bank of India constituted under the RBI Act

RBI Act Reserve Bank of India Act, 1934, as amended from time to time

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 SEBI (Issue and Listing of Debt Securities) Regulations, 2008 as amended by the

SEBI (Issue and Listing of Debt Securities) (Amendment) Regulations, 2012, each as

amended from time to time

TDS Tax Deducted at Source under the Income Tax Act

WDM Wholesale Debt Market



9

RISK FACTORS

We believe that the following factors may affect our ability to fulfill our obligations under the Debentures. All of

these factors are contingencies which may or may not occur and our Company is not in a position to express a view

on the likelihood of any such contingency occurring. These risks may include, among others, business aspects, equity

market, bond market, interest rate, market volatility and economic, political and regulatory risks and any

combination of these and other risks. If any of the following risks, or other risks that are not currently known or are

now deemed immaterial, actually occur, our Company’s business, results of operations and financial condition could

suffer, the price of Debentures could decline, and the Investor may lose all or part of their investment. In addition,

more than one risk factor may have a compounding effect which may not be predictable.

Prospective Investors should carefully consider all the information in this Information Memorandum, including the

risks and uncertainties described below, before making an investment in the Debentures. To obtain a complete

understanding, prospective Investors should read this section in conjunction with the remaining sections of this

Information Memorandum and reach their own views prior to making any investment decision. The ordering of the

risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the

importance of one risk factor over another.

Risks Relating to our Company

1. Company’s business is dependent upon its ability to mine sufficient limestone for Company’s operations.

Our 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 our existing

plant locations. Our Company own the freehold rights to some of the land where its quarries are located. We are

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 twenty (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 twenty (20) years at a time subject to certain

conditions. The 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 our Company’s mining

leases have expired and it has applied for the renewal of these leases with the government of the State of Rajasthan.

Our 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.

In case our Company’s 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, our ability to

operate our 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 our 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 our 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

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



10

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 is unable to

implement its expansion and modernization plans for its existing manufacturing facilities.

Our Company has already created additional capacity, through implementation of new Cement project at Mangrol

and a split Grinding Unit at Jhajjar including modernizing and optimizing its existing plants and facilities. Our

Company, through our step down subsidiary, J.K. Cement Works (Fujairah) FZC, UAE jointly with the Government

of Fujairah, has set up a greenfield dual process cement plant having a capability of producing either 0.6 MnTPA of

white cement or 1.0 MnTPA of grey cement or a combination of both. Our Company has already achieved

Commercial production in the month of September, 2014. Our Company has also expanded our operations at

Mangrol, Rajasthan by setting up a 1.5 MnTPA plant with a split grinding unit of 1.5 MnTPA in Jhajjar, Haryana.

Our Company has achieved Commercial production of our Split grinding Unit at Jharli in June 2014 and Integrated

Cement Unit at Mangrol, Rajasthan in September, 2014. There is no time and/or cost overrun in the project.

Consequent upon expansion Company’s grey cement installed capacity (including overseas) has reached to 11.5

MnTPA from existing capacity of 7.5 MnTPA and white cement installed capacity ( including overseas) has

reached to 1.2 MnTPA from existing capacity of 0.6 MnTPA. With this we have become the second largest white

cement player in the world. Wall Putty existing capacity stands at 0.5 MnTPA. Company plans to add 0.2 MnTPA

Wall Putty capacity at J.K.White, Katni, M.P. in phases.

We also intend to increase revenues in the short-term by increasing output and capacity through optimization

including improving certain processes and adding new equipment. Company’s business and future results of

operations may be adversely affected if it does not operate at its optimum level.

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

operation.

Our Company has experienced rapid growth in recent years and expect its business to continue to grow as it gain

access to better financial resources. Further, if this growth continues, it will place significant demands on our

Company and require us 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 our 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 24.89% of its total

expenditure in Fiscal 2014 and 27.25% of its total expenditure in Fiscal 2013. It has a coal-based and waste-heat-

recovery-based captive power generation capacity of more than 139 MW (including 22 MW of Waste Heat

Recovery), spread across its plants. It also purchase power through the Rajasthan State Electricity Board, Karnataka

Power Transmission Corporation Limited, VS Lignite Power Private Limited and The Tata Power Company

Limited.

Given the significant costs incurred by our Company towards fuel and power, we have always focused on ways to

reduce such costs. Company’s projects, including a greenfield dual process cement plant in Fujairah and 3 MnTPA

grey cement plant at Mangrol, Rajasthan with split grinding unit at Jhajjar, Haryana, have the latest technologies

which helps our Company substantially to reduce our costs. There can, however, be no assurance that it will be able



11

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 our Company unable to reduce our average cost of power

generation, our business and results of operations may be adversely affected. Further, there can also be no assurance

that our Company will continue to get the contracted quantity of power at contracted rate from V.S. Lignite Power

Private Limited.

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 our 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 our Company,

or any material amendment or modification of the Memorandum of Association of our 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 our 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 our Company will be successful in arranging adequate working capital for

its existing or expanded operations, which may adversely affect our 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 December 31, 2014, the aggregate outstanding amount in relation to Company’s working

capital facilities was Rs. 1802.6 million consisting of fund-based and non-fund based facilities of Rs. 804.2 million

and Rs. 998.4 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. As of the date of this

Information Memorandum, our Company’s distribution network for grey cement products consists of 185 feeder

depots serviced by 18 regional sales offices and over 5978 stockists located in various states.

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 our Company who has a day-to-day contact with customers, we are exposed to the risk of our 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 about our Company’s brand and products.

8. Disruptions in supply and transport could affect Company’s business.



12

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 our Company’s inputs or

finished products could have an adverse effect on our 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 our Company do identify suitable candidates, we 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 our Company acquire another company, we 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.

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

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

As of December 31, 2014, our Company had 2,499 full-time employees at all of its facilities.



13

Most of the workers of our Company are represented by labour unions. While we considers the current labour

relations to be good, there can be no assurance that our Company will not experience future disruptions to our

operations due to disputes or other problems with its work force, which could adversely affect its business and future

result of operations. Our Company employs sizeable contract labourers at our 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 our 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, our Company’s ability to grow and our control over various business functions.

12. Our 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.

Our 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 our white cement operations. Our Company is also dependent on various domestic

suppliers for the supply of coal and petcoke, although we uses imported coal as well. If our 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, our business and results of operations may be materially and

adversely affected.

As some of our Company’s annual coal requirement is sourced from coal mines owned by government undertakings,

our 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 our Company and other users of coal can source

from a particular mine dependant on our 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 our Company may also adversely impact our ability to manufacture cement to

acceptable yield levels and quality standards and may have an adverse affect on our 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 our 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 our Company,

accounting for most of the capacity within the country.

Some of our Company’s competitors are larger than our Company, have greater financial resources than us, and may

be able to deliver products on more attractive terms or to invest larger amounts of capital into our 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 our Company on pricing of products. Our Company’s

business could be adversely affected if we are 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 our Company, we may

be required to lower the prices it charge for our products and our 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 our



14

Company’s target customers. If our Company cannot compete in pricing, provide competitive products or services

or expand into new markets, this could have a material adverse effect on our 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.

Our Company currently has operations and staff spread across eleven states in India. Consequently, we are 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, Entry Tax, 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 our Company’s key personnel could adversely affect our business and our ability to pursue

our 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

our Company’s failure to replace such key personnel could have a negative impact on our Company’s business,

including our ability to bid for and execute new projects as well as on our ability to meet our 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). Our

Company cannot guarantee that this rating will not be downgraded. The Investor reserves its right to reset the

interest rate based on the downgraded rating with effect from the date of downgrading. Further, if the rating falls

below the investible grade as per the guidelines applicable to the Investor, it reserves right to recall its outstanding

principal amount on the debentures along with all other monies/accrued interest due in respect thereof including

compensation for all real/notional losses calculated on the basis as the Investor may deem fit.

17. There has been limited trading in the debentures of such nature and the price of the Debentures may be

volatile and subject to fluctuations

Our Company intend to list the Debentures on the WDM segment of the BSE and such other recognized stock

exchanges that our Company may deem fit after giving prior notification to the Debenture Trustee. There has been

only a limited trading in debentures of such nature in the past. Although the Debentures shall be listed on WDM

segment of BSE, there can be no assurance that a market for these Debentures would be available on a sustained

basis. The liquidity and market prices of the Debentures can be expected to vary with changes in market and

economic conditions, our Company’s financial condition and prospects and other factors that generally influence

market price of Debentures. Such fluctuations may significantly affect the liquidity and market price of the

Debentures, which may trade at a discount to the price at which the Debentures are being issued. Further, the price

of the Debentures may fluctuate after this Issue due to a wide variety of factors, including: (a) changes in the

prevailing interest rate; (b) volatility in the Indian and global securities markets; (c) our Company’s operational

performance, financial results and ability to expand its business; (d) developments in India’s economic liberalization



15

and deregulation policies, particularly in the port sector; (e) changes in India’s laws and regulations impacting our

Comapny’s business; (f) the entrance of new competitors and their positions in the market; and (g) announcements

by our Company of our financial results. There is no assurance that an active trading market for the Debentures can

be sustained after this Issue, or that the price at which the Debentures are initially offered would correspond to the

prices at which they would be traded in the market subsequent to the Issue.

18. The Debentureholder (s) 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.

Our 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 our financial condition, profitability

and the general economic conditions in India and in the global financial markets. Our Company cannot assure you

that we 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 our Company will create appropriate security in favour of the Trustee

for the Debentureholder(s) on the assets to ensure at least 1.25 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 our Company is to obtain

approval from the first charge holders for creating security in respect of the Debentures.

There are other lenders of our Company who have pari passu charge over the security provided for the Debentures.

While our Company is required to maintain an asset cover of 1.25 times the outstanding amount of the Debentures,

upon our Company’s bankruptcy, winding-up or liquidation, the other lenders will rank pari passu with the

Debentureholder(s) and to that extent, may reduce the amounts recoverable by the Debentureholder(s).

Further, our Company will obtain in due course the approval from our existing first charge holders for ceding pari

passu first charge on the security to secure the Debentures. Our Company may be unable to obtain this approval and

create security within the time period stipulated in this Information Memorandum. This may have a bearing on the

amounts recoverable on the Debentures.

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

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

Section 71 of the Companies Act 2013 read with Rule 18(7) of the Companies (Share Capital and Debentures)

Rules, 2014 stipulates that any company that intends to issue debentures must create a DRR to which adequate

amounts shall be credited out of the profits of our 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 our Company is unable to generate adequate profits, the DRR created by us may not be adequate to meet the value

of the Debentures. This may have a bearing on the timely redemption of the Debentures by our Company.

21. Changes in interest rates may affect the price of our 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. Our Company may raise further borrowings.

Our 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



16

public or a section of the public and/or members of our 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) after

compliance of applicable laws and without approval from or notice to the existing Debentureholder(s)/ Trustee.

23. There is no assurance that the Debentures issued pursuant to this Issue will be listed on the BSE in a timely

manner, or at all.

In accordance with Indian law and practice, permissions for listing and trading of the Debentures issued pursuant to

this Issue will not be granted until after the Debentures have been issued and allotted. Approval for listing and

trading will require all relevant documents authorising the issuing of Debentures to be submitted. While our

Comapny will use our best efforts to ensure that all steps for completion of the necessary formalities for allotment,

listing and commencement of trading at BSE are taken within 15 days of the Issue Closing Date, there can be no

assurance that the same will be completed in a timely manner. There could be a failure or delay in listing the

Debentures on the BSE. There is assurance that the monies refundable to the Applicant, due to (a) withdrawal of

Applications, (b) withdrawal of the Issue, or (c) failure to obtain the final approval from BSE for listing of the

Debentures, will be refunded in a timely manner. If permission to list the Debentures is not granted by the BSE, our

Company will forthwith repay, without Interest, all monies received from the Applicants in accordance with all

laws, and pursuant to this Information Memorandum.

24. Debentures may not be a suitable investment for all Investors.

Each potential Investor must determine the suitability of its investment in light of its own circumstances. In

particular, each potential Investor should: (a) have sufficient knowledge and experience to make a meaningful

evaluation of the Debentures, the merits and risks of investing in the Debentures and the information contained or

incorporated by reference in this Information Memorandum; (b) have access to, and knowledge of, appropriate

analytical tools to evaluate, in the context of its particular financial situation, an investment in the Debentures and

the impact such investment will have on its overall investment portfolio; (c) have sufficient financial resources and

liquidity to bear all of the risks of an investment in the Debentures; (d) understand thoroughly the terms of the

Debentures; and (e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for

economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

25. Third party statistical and financial data in this Information Memorandum may be incomplete or unreliable.

This Information Memorandum includes information on the Republic of India, the Indian economy and the industry

in which our Company operates, taken from third parties, which our Company believe is reliable. However, the

information taken from third parties and included in this Information Memorandum may be inaccurate and outdated,

and our Company makes no representation or warranty, express or implied, as to the accuracy or completeness of

this information. Statements from third parties that involve estimates are subject to change, and actual amounts may

differ materially from those included in this Information Memorandum. Our Company also cannot provide any

assurance that the third parties have used correct or sound methodology to prepare the information included in this

Information Memorandum.

26. Our Company and our Promoters are involved in certain material litigations that, if determined against us or

our Promoters, may have an adverse effect on the business, financial condition and results of operation.

Details of criminal prosecution against the promoter

1) Criminal complaint No. 1992/2001 was filed on September 22, 1997 by Jt. Labour Commissioner, Kota against

Shri Y.P. Singhania and 9 Others which is currently pending before the ACJM-IV, Kota, Rajasthan. The case

has been filed under section 30A read with section 10(K) under Industrial Disputes Act (Rajasthan Amendment

1970)1947 for alleged violation of order passed by Govt. of Rajasthan under section 10(K) of Industrial

Disputes Act with a prayer to summon and punish the accused persons. The Criminal Complaint proceeding is

yet to start due to non- service of summon to all accused named in the Complaint. There is no financial

implication.



17

2) Criminal complaint No.1993 of 2001 was filed on December 18, 1997 by Jt. Labour Commissioner, Kota

against Shri Y.P. Singhania and 8 Others which is currently pending before the ACJM-IV, Kota, Rajasthan. The

case has been filed under section 30A read with section 10(K) under Industrial Disputes Act (Rajasthan

Amendment-1970) 1947 for alleged violation of order passed by State Govt. of Rajasthan under section 10(K)

of Industrial Disputes Act with a prayer to summon and punish the accused persons. The Criminal Complaint

proceeding is yet to start due to non-service of summon to all accused named in the Complaint. There is no

financial implication.

3) Criminal complaint No. 4449/2006 was filed on December 18, 1997 by Labour Enforcement Office (Central)

Ahmedabad against Shri Y.P. Singhania and 3 Others before the MM, Ahmedabad. The case has been filed

under the provision of section 11 read with section 9(2) of Payment of Gratuity Act, 1972 for alleged violation

of provision of Payment of Gratuity Act, 1972 with a prayer to summon and punish the accused persons.

Against the order of M.M., Ahmedabad, the Hon’ble Gujarat High Court vide its order dated September 12,

2013 was pleased to stay the proceedings of the Court below.

Civil Case pending against our Company

1) The Competition Commission of India (CCI) had upheld the complaint of Builders Association of India,

alleging cartelization by some cement manufacturing companies including the Company and imposed a penalty

of Rs. 12,854 lacs on the Company. The Company had filed an appeal against the order before Competition

Appellate Tribunal (COMPAT). COMPAT has stayed the penalty imposed by CCI in an interim order upon

deposit of 10% of penalty amount till the final disposal of appeal. The Company has deposited Rs. 1,285 lacs in

the form of fixed deposit favouring COMPAT. Based on expert legal advice Company continues to believe that

it has fair chances before COMPAT and accordingly no provision has been made in accounts. However, the

Company is showing this as Contingent Liability in the Notes on Accounts.

2) The Company challenged the constitutional validity of Rajasthan Entry Tax Act, 1999 by way of a Writ Petition

before the Hon’ble Rajasthan High Court, Jodhpur Bench and the Hon’ble Court was pleased to pass an interim

order of stay of entire demand. However provision of year wise tax liability was provided in the Books of

Account of the Company. Similar writ petition(s) were also preferred by all the Rajasthan Entry Tax payers.

The Division Bench of Hon’ble Rajasthan High Court, Jodhpur Bench vide their common Judgement and Order

dated December 18, 2014 disposed of/dismissed all the Writ Petitions/Revisions pending before the Bench. The

Hon’ble Division Bench did not pass any final order in the matter but instead referred the matter to Hon’ble

Supreme Court and vacated all interim orders of stay of demand. Against the Judgement & Order dated

December 18, 2014 the Company preferred SLP (C ) No.376 of 2015 in which Supreme Court vide Order dated

January 12, 2015 issued notice and passed interim order of stay and directed to pay 50% of tax/demand and

furnish Bank Guarantee for 50% of tax/demand. Our Company accordingly complied with the interim order of

Hon’ble Supreme Court and paid Rs. 2,831 lacs and furnish bank guarantee.

27. We have entered into certain transactions with related parties in the past and may continue to do so in the

future. These transactions or any future transactions with our related parties could potentially involve

conflicts of interest.

We have entered into certain transactions with related parties, including our Promoters and Promoter Group and may

continue to do so in the future. While we believe that all such transactions have been conducted on an arms-length

basis, there can be no assurance that we would not have achieved more favorable commercial terms with other

parties. Furthermore, we may enter into related party transactions in the future, and such transactions may

potentially involve conflicts of interest. Specifically certain land which is currently used by the Company has been

acquired from our Promoters. There can be no assurance that such transactions, individually or in the aggregate, will

not have an adverse effect on our results of operations and financial condition. For more information please see refer

Page [•] of this Information Memorandum.



18

External Risk Factors

28. Any downgrade of India’s sovereign debt rating by an international rating agency could have a negative

impact on our Company’s results of operations and financial condition.

Any downgrade of India’s credit rating for domestic and international debt by international rating agencies may

adversely impact on our Company’s ability to raise additional financing and the interest rates and commercial terms

on which such additional financing is available. This could have an adverse effect on our Company’s ability to

obtain financing to fund its growth on favourable terms or at all and, as a result, could have a material adverse effect

on our results of operations, financial condition and prospects.

29. Financial instability in other countries may cause increased volatility in Indian financial markets.

The Indian market and the Indian economy are influenced by economic and market conditions in other countries,

particularly emerging market countries in Asia. Financial turmoil in Europe, USA and elsewhere in the world in

recent years has affected the Indian economy. Although economic conditions are different in each country,

investors’ reactions to developments in one country can have adverse effects on the securities of companies in other

countries, including India. A loss of investor confidence in the financial systems of other emerging markets may

cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any

worldwide financial instability could also have a negative impact on the Indian economy. Financial disruptions may

occur again and could harm our Company’s business, our future financial performance.

The global credit and equity markets have experienced substantial dislocations, liquidity disruptions and market

corrections in recent years. Since September 2008, liquidity and credit concerns and volatility in the global credit

and financial markets increased significantly with the bankruptcy or acquisition of, and government assistance

extended to, several major U.S. and European financial institutions. These and other related events, such as the

European sovereign debt crisis, have had a significant impact on the global credit and financial markets as a whole,

including reduced liquidity, greater volatility, widening of credit spreads and a lack of price transparency in global

credit and financial markets.

In response to such developments, legislators and financial regulators in the United States and other jurisdictions,

including India, have implemented a number of policy measures designed to add stability to the financial markets.

However, the overall impact of these and other legislative and regulatory efforts on the global financial markets is

uncertain, and they may not have the intended stabilising effects. In the event that the current difficult conditions in

the global credit markets continue or if there are any significant financial disruption, such conditions could have an

adverse effect on our Company’s business and future financial performance.

30. A slowdown in economic growth in India could cause our Company’s business to suffer.

Our Company’s performance and growth is dependent on the state of the overall Indian economy. The Indian

economy has shown varying but sustained growth over recent. Any slowdown in the Indian economy could

adversely affect our Company’s business and the businesses of our customers. The Indian economy, which

recovered from the global economic crisis of 2008 and 2009 with a period of significant growth, has more recently

been adversely affected by challenging global market and economic conditions that has caused and may continue to

cause a downturn in the rate of economic growth in India. The current economic slowdown has had, and could

continue to have, and any future slowdown in the Indian economy could have, a material adverse effect on the

capital expenditure budgets of ourcustomers and, as a result, on our financial condition and results of operations.

31. A decline in India’s foreign exchange reserves may affect liquidity and interest rates in the Indian economy,

which could adversely affect us.

High foreign exchange reserves balance the volatility in exchange rates and provides a conducive environment to

businesses allowing exporters and importers to engage in futures contracts. We will benefit from large forex reserves

as they can access more liquidity and there will be increased demand in the Indian economy. Also, the expectation

of the currency and the economy being crisis-proof raises confidence among investors.



19

A material decline in India’s foreign exchange reserves could result in reduced liquidity, fall in demand and higher

interest rates in the Indian economy which in turn, could adversely affect the business and future financial

performance of our Company.

32. The risks to the financial stability of India have increased and could adversely affect our business.

The risks to financial stability of India have worsened, primarily due to global risks and domestic macroeconomic

conditions. The risks to domestic growth are accentuated by fiscal and external sector imbalances. The RBI also

reported that funding strains coupled with sovereign risks have led to fears of a precipitous deleveraging process that

could hurt global financial markets and the wider economy through asset sales and contractions in credit. While the

direct impact of such deleveraging is not expected to be significant on the availability of domestic credit in India,

specialised types of financing could be impacted. While we may make use of such financings from time to time, we

have little or no control over any of these risks or trends and may be unable to anticipate changes in economic

conditions. Adverse effects on the Indian banking system could impact our funding and adversely affect our

business, operations and financial condition and the market price of the Debentures.

India’s trade relationships with other countries can also influence India economic conditions. If India’s trade deficits

increase or become unmanageable, the Indian economy, and therefore our business, future financial performance

and the trading price of the Debentures could be adversely affected.

33. Depreciation of the Rupee against foreign currencies may have an adverse effect on our business,

financial condition and results of operations.

Depreciation of the Rupee against these currencies will increase the Rupee cost to our Company of servicing and

repaying our foreign currency borrowings. A depreciation of the Rupee would also increase the costs of imports by

our Company and may have an adverse impact on our business, financial condition and results of operation. In

addition, we have hedging policy and arrangements with respect to our foreign currency exposure may not, when

implemented, fully protect us from foreign exchange rate fluctuations.

34. We are subject to Indian accounting standards that may make evaluating our financial performance

difficult.

Our financial statements are in conformity with Indian GAAP, consistently applied during the periods stated, except

as provided in the auditor’s report, and no attempt has been made to reconcile any of the information given in this

Information Memorandum to any other principles or to base it on any other standards.

35. The effects of the planned convergence with and adoption of International Financial Reporting

Standards (“IFRS”).

On February 25, 2011, the Ministry of Corporate Affairs of the Government of India announced through a press

release that 35 Indian Accounting Standards (“Ind AS”) were to be converged with the IFRS. However, the date of

implementation of Ind AS is yet to be notified by the Ministry of Corporate Affairs. Because there is a significant

lack of clarity on the adoption of and convergence with IFRS and there is not yet a significant body of established

practice on which to draw in forming judgments regarding its implementation and application, we have not

determined with any degree of certainty the impact that such adoption will have on our financial reporting.

Therefore, there can be no assurance that our financial condition, results of operations, cash flows or changes in

shareholders’ equity will not appear materially worse under IFRS than under Indian GAAP. In our Company’s

transition to IFRS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing

its management information systems. Moreover, there is increasing competition for the small number of available

IFRS-experienced accounting personnel as more Indian companies begin to prepare IFRS financial statements.

There can be no assurance that our Company’s adoption of IFRS will not adversely affect our reported results of

operations or financial condition.

36. The proposed new taxation system could adversely affect our business and the trading price of the

Debentures.



20

Government has proposed two major reforms in Indian tax laws, namely the goods and services tax and the direct

taxes code. The goods and services tax would replace the indirect taxes on goods and services such as central excise

duty, service tax, customs duty, central sales tax, state VAT, surcharge and cess currently being collected by the

central and state Governments. As of the date of this Information Memorandum, the goods and services tax has not

been implemented, and the Government has not indicated an implementation date. The direct taxes code aims to

reduce distortions in tax structure, introduce moderate levels of taxation and expand the tax base. It also aims to

provide greater tax clarity and stability to investors who invest in Indian projects and companies. It seems to

consolidate and amend laws relating to all direct taxes like income tax, dividend distribution tax, fringe benefit tax

and wealth tax and facilitate voluntary compliance.

As the taxation system is going to undergo significant overhaul, its long-term effects on our business are unclear as

of the date of this Information Memorandum and there can be no assurance that such effects would not adversely

affect our business, future financial performance and the trading price of the Debentures.

With respect to GAAR, the provisions have been introduced in the Finance Act, 2012 to come into effect in near

future. The GAAR provisions intend to catch arrangements declared as “impermissible avoidance arrangements,”

which is any arrangement the main purpose or one of the main purposes of which is to obtain a tax benefit and

which satisfy at least one of the following tests (i) creates rights, or obligations, which are not ordinarily created

between persons dealing at arm’s length; (ii) results, directly or indirectly, in misuse, or abuse, of the provisions of

the Income Tax Act, 1961; (iii) lacks commercial substance or is deemed to lack commercial substance, in whole or

in part; or (iv) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona

fide purposes. If GAAR provisions are invoked, then the tax authorities have wide powers, including denial of tax

benefit or a benefit under a tax treaty.

37. Companies operating in India are subject to a variety of central and state government taxes and surcharges.

Taxes and other levies imposed by the central and state governments in India that affect our tax liability include

central and state taxes and other levies, income tax, value added tax, service tax, stamp duty and other special taxes

and surcharges which are introduced on a temporary or permanent basis from time to time. Moreover, the central

and state tax scheme in India is extensive and subject to change from time to time. For example, a new direct tax

code is proposed to be introduced before the Indian Parliament. In addition, there is a proposal to introduce a new

goods and services tax and the scope of the service tax is proposed to be enlarged. The central or state governments

may in the future increase the corporate income tax it imposes. Any such future increases or amendments may affect

the overall tax efficiency of companies operating in India and may result in significant additional taxes becoming

payable. Additional tax exposure could adversely affect our business and results of operations.

38. Any legal and regulatory changes in the future could have a negative impact on our results of operations

and financial condition.

Future government policies and changes in laws and regulations in India and comments, statements or policy

changes by any regulator, as well as any future government policies and changes in laws and regulations in India or

other countries where our Company has a significant presence may adversely affect the Debentures, and restrict our

ability to do business in our target markets. The timing and content of any new law or regulation is not within our

control and such new law, regulation, comment, statement or policy change could have an adverse effect on our

business, results of operations and financial condition. Further, the SEBI, the BSE, other recognized stock

exchanges where we may decide to get the Debentures listed after giving prior notification to the Debenture Trustee

or other regulatory authorities may require clarifications on this Information Memorandum, which may cause a

delay in the issuance of Debentures or may result in the Debentures being materially affected or even rejected.

39. Natural calamities could have a negative impact on the Indian economy and may cause Issuer’s business to

suffer.

India has experienced natural calamities such as earthquakes, tsunami, floods and drought in the past few years. The

extent and severity of these natural disasters determines their impact on the Indian economy. For example, as a

result of drought conditions in the country during fiscal year 2003, the agricultural sector recorded negative growth

for that period. The erratic progress of the monsoon in 2004 affected sowing operations for certain crops. Further



21

prolonged spells of below normal rainfall or other natural calamities could have a negative impact on the Indian

economy, thus adversely affecting our business and results of operations.

40. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could

adversely affect the financial markets and could have a material adverse effect on the business, financial

condition and result of operations of our Company.

Terrorist attacks and other acts of violence or war may negatively affect the Indian markets in which oursecurities

trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business

confidence, make travel and other services more difficult and eventually adversely affect our business. Any

deterioration in relations between India and its neighbouring countries may result in actual or perceived regional

instability. Events of this nature in the future could have a material adverse effect on our ability to develop our

operations. As a result, the business prospects, result of operations and financial condition of our Company could be

adversely affected by any such events.

41. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could

have a material adverse effect on the business, financial condition and result of operations of our Company.

The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern such as swine

influenza around the world could have a negative impact on economies, financial markets and business activities

worldwide, which could have a material adverse effect on the business, financial condition and result of operations

of our Company. A future outbreak of an infectious disease among humans or animals (if any) or any other serious

public health concern may have an adverse effect on the business, financial condition and result of operations of our

Company.

42. Acts of violence could adversely affect the financial markets, which may result in loss of customer

confidence and may adversely affect the business, result of operations, financial condition and cash flows of

our Company.

Certain events that are beyond our control, including terrorist attacks and other acts of violence or war, may

adversely affect worldwide financial markets and could potentially lead to economic recession or loss of investor

confidence, which could adversely affect the business, result of operations, financial condition and cash flows, and

more generally, any of these events could lower confidence in India’s economy. Southern Asia has, from time to

time, experienced instances of civil unrest and political tensions and hostilities among neighbouring countries.

Further, if India were to become engaged in armed hostilities, particularly hostilities that were protracted or involved

the threat or use of nuclear weapons, business conditions in India and consequently, the business and result of

operations of our Company could be adversely affected.

43. The business and activities of our Company may be regulated by the Competition Act.

The Competition Act seeks to prevent business practices that have a material adverse effect on competition in India.

Under the Competition Act, any arrangement, understanding or action in concert between enterprises, whether

formal or informal, which causes or is likely to cause a material adverse effect on competition in India is void and

attracts substantial monetary penalties. Any agreement that directly or indirectly determines purchase or sale prices,

limits or controls production, shares the market by way of geographical area, market, or number of customers in the

market is presumed to have a material adverse effect on competition. Provisions of the Competition Act relating to

the regulation of certain acquisitions, mergers or amalgamations which have a material adverse effect on

competition and regulations with respect to notification requirements for such combinations came into force on June

1, 2011. The effect of the Competition Act on the business environment in India is unclear. If our Company is

affected, directly or indirectly, by the application or interpretation of any provision of the Competition Act, or any

enforcement proceedings initiated by the CCI, or any adverse publicity that may be generated due to scrutiny or

prosecution by the CCI, we may have a material adverse effect on our business prospects, results of operations and

financial condition.



22

DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES

ACT, 2013 AND THE RULES MADE THEREUNDER

The table below sets out the disclosure requirements as provided in PAS-4 and the relevant pages in this Information

Memorandum where these disclosures, to the extent applicable, have been provided.

S. No. Disclosure Requirements Relevant Page of this

Information Memorandum

1. GENERAL INFORMATION

a. Name, address, website and other contact details of the Company indicating both

Registered Office and Corporate Office

1 & 35

b. Date of incorporation of the Company 1

c. Business carried on by the Company and its subsidiaries with the details of branches or

units, if any

24 - 29

d. Brief particulars of the management of the Company 40

e. Names, addresses, DIN and occupations of the directors 7, 36 - 39

f. Management’s perception of risk factors 9-21

g. Details of default, if any, including therein the amount involved, duration of default and

present status, in repayment of –

52

i) statutory dues 52

ii) debentures and interest thereon 52

iii) loan from any bank or financial institution and interest thereon 52

h. Names, designation, address and phone number, email ID of the nodal/ compliance

officer of the Company, if any, for the private placement offer process

1, 35 & 68

2. PARTICULARS OF THE OFFER

a. Date of passing of board resolution 57, 58 & 78

b. Date of passing of resolution in the general meeting, authorizing the offer of securities 57, 58 & 78

c. Kinds of securities offered (i.e. whether share or debenture) and class of security 53, 55, 64, 65 & 75

d. price at which the security is being offered including the premium, if any, along with

justification of the price

54, 62 & 75

e. name and address of the valuer who performed valuation of the security offered

f. Amount which the Company intends to raise by way of securities 53, 58

g. Terms of raising of securities:

Duration, if applicable 53, 74

Rate of dividend 53, 74

Rate of interest 53, 74

Mode of payment 53, 74

Repayment 53, 74

h. Proposed time schedule for which the offer letter is valid 53, 74

i. Purposes and objects of the offer 53, 74

j. Contribution being made by the promoters or directors either as part of the offer or

separately in furtherance of such objects

48

k. Principle terms of assets charged as security, if applicable 64

3. DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS,

LITIGATION ETC.

a. Any financial or other material interest of the directors, promoters or key managerial

personnel in the offer and the effect of such interest in so far as it is different from the

interests of other persons

39 - 40

b. Details of any litigation or legal action pending or taken by any Ministry or Department

of the Government or a statutory authority against any promoter of the offeree company

during the last three years immediately preceding the year of the circulation of the offer

letter and any direction issued by such Ministry or Department or statutory authority upon

conclusion of such litigation or legal action shall be disclosed

51

c. Remuneration of directors (during the current year and last three Financial Years) 39

d. Related party transactions entered during the last three Financial Years immediately

preceding the year of circulation of offer letter including with regard to loans made or,

guarantees given or securities provided

50

e. Summary of reservations or qualifications or adverse remarks of auditors in the last five

Financial Years immediately preceding the year of circulation of offer letter and of their

50



23

S. No. Disclosure Requirements Relevant Page of this

Information Memorandum

impact on the financial statements and financial position of the company and the

corrective steps taken and proposed to be taken by the Company for each of the said

reservations or qualifications or adverse remark

f. Details of any inquiry, inspections or investigations initiated or conducted under the

Companies Act, 2013 or any previous company law in the last three years immediately

preceding the year of circulation of offer letter in the case of the Company and all of its

subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines

imposed, compounding of offences in the last three years immediately preceding the year

of the offer letter and if so, section-wise details thereof for the Company and all of its

subsidiaries

51

g. Details of acts of material frauds committed against the Company in the last three years,

if any, and if so, the action taken by the Company

51

4. FINANCIAL POSITION OF THE COMPANY

a. the capital structure of the Company in the following manner in a tabular form- 41

(i)(a) the authorised, issued, subscribed and paid up capital (number of securities, description

and aggregate nominal value)

(b) size of the present offer 41

(c) paid up capital 53, 74

(A) after the offer 41

(B) after conversion of convertible instruments (if applicable) 41

(d) share premium account (before and after the offer) 41

(ii) the details of the existing share capital of the issuer company in a tabular form, indicating

therein with regard to each allotment, the date of allotment, the number of shares allotted,

the face value of the shares allotted, the price and the form of consideration

41

Provided that the issuer company shall also disclose the number and price at which each

of the allotments were made in the last one year preceding the date of the offer letter

separately indicating the allotments made for considerations other than cash and the

details of the consideration in each case

48

b. Profits of the Company, before and after making provision for tax, for the three Financial

Years immediately preceding the date of circulation of offer letter

30 - 33

c. Dividends declared by the Company in respect of the said three financial years; interest

coverage ratio for last three years (Cash profit after tax plus interest paid/interest paid)

34

d. A summary of the financial position of the Company as in the three audited balance

sheets immediately preceding the date of circulation of offer letter

31

e. Audited cash flow statement for the three years immediately preceding the date of

circulation of offer letter

32 - 33

f. Any change in accounting policies during the last three years and their effect on the

profits and the reserves of the Company

50

5. A DECLARATION BY THE DIRECTORS THAT - 70

a. the Company has complied with the provisions of the Act and the rules made thereunder

b. the compliance with the Act and the rules does not imply that payment of dividend or

interest or repayment of debentures, if applicable, is guaranteed by the Central

Government

c. the monies received under the offer shall be used only for the purposes and objects

indicated in the Offer letter



24

A BRIEF SUMMARY OF THE BUSINESS / ACTIVITIES OF OUR COMPANY

a) Business Overview

Our Company is one of the leading cement manufacturers in India with a presence both in the grey cement and

white cement segments. Our Company believe that we are the second largest white cement manufacturer in

India based on published production capacities of other white cement manufacturers in India. Our principal

markets for grey cement cover 13 states in the Northern, Central, Western and some parts of Southern India.

White cement manufactured by our Company has a pan-India market and is also exported to South Africa,

Nigeria, Singapore, Bahrain, Bangladesh, Sri Lanka, Kenya, Tanzania, UAE and Nepal.

Our 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.

Our Company has five plants in the state of Rajasthan, one plant each in the state of Haryana and Karnataka and

an aggregate grey cement installed capacity works out to 10.47 MnTPA. It also has a white cement capacity of

0.60 MnTPA and 0.50 MnTPA capacity of value added building products (wall putty) at Gotan, Rajasthan.

Further, our Company has coal-based and waste-heat-recovery-based captive power generation capacity of

more than 140.7 MW, spread across our various plants. Our Company has also declared Commercial

Production of our Dual process cement plant at Fujairah with a capacity of 0.60 MnTPA of White Cement or

1.00 MnTPA of Grey Cement.

The location and capacities, as of December 31, 2014 of each of our Company’s plants in India are as set forth

below:

Location Capacity (MnTPA)

Grey Cement

Nimbahera, Rajasthan 3.25

Mangrol, Rajasthan 2.25

Gotan, Rajasthan 0.47

Muddapur, Karnataka 3.00

Jharli, Haryana 1.50

Total 10.47

White Cement


Wall Putty


We believe, we 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. Our Company sell our white cement throughout India

and believe our brand name is well recognized and accepted by most major industrial consumers. Our

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”. We produces Ordinary Portland Cement (“OPC”) of 43-grade and 53-grade marketed

under the brand name “J.K. Cement” and “Sarvashaktiman”. Our Company’s Portland Pozzolana Cement

(“PPC”) and Portland Slag Cement (“PSC”) are marketed under the brand name “J.K. Super”. We also sells

wall putty for plastering walls and ceiling under the brand name “J.K. Wall Putty”.

We believe that our 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.

Our Company’s limestone reserves for both grey and white cement are of high quality and are expected to meet

our 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 2014.

Most of Company’s manufacturing plants are well connected by road and rail. For instance, our Nimbahera and

Gotan plants have railway sidings at the plant sites that enable them to access the railway directly and reduce

our transportation cost. Further, Company’s brown field expansion project at Mangrol, Rajasthan for grey



25

cement will have railway siding facilities both at the integrated plant and at the split grinding site at Jharli,

Jhajjar, Haryana. We believe that we have a well developed distribution network for grey cement and a strong

national distribution network for white cement with a total of over 185 feeder depot warehouses and more than

5,978 stockists/ dealers that store and sell grey and white cement products.

b) Company’s Strengths

We believe that we possess a number of competitive strengths, which will enable them to successfully execute

its business strategies, including the following:

• Significant experience and track record

Our 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. We have over 40 years of experience,

which we believe, provides us the experience and skills to maximize production efficiency, expand production

capacity timely and control costs. Over the years, we believe that we have developed long-term customer

relationships and a strong reputation for quality. Our Company has been continuously adding our grey cement

manufacturing capacities and we have increased from 0.30 MnTPA at single location in 1974 to 10.47 MnTPA

at multiple locations by 2014. We believe that we were among the first to set up a dry process white cement

plant in 1984. We exports white cement to various countries and have established track record with foreign

customers.

Further, experience gathered over the years by our Company’s management team ensures that we meet the set

standards of quality and workmanship in a cost effective manner. We are dedicated to the development of

expertise and know-how of its employees and continue to ensure that we have the necessary training and tools

needed to be successful in a challenging environment.

• Established brand name and reputation

Over the past four decades, our Company has built a strong reputation among cement purchasers by

consistently providing quality products. Our Company sell our white cement throughout India and believe that

our 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”. Our Company also produces wall putty for plastering walls and ceiling and sells it under the brand

name “J.K. Wall Putty”.

Our Company believes that our brand commands respect and credibility. We intends to continue to leverage the

goodwill of our brand to enhance relationships with existing clients, seek new clients as well as diversify our

business in allied sectors to help our Company to grow our operations.

• Presence in the white cement industry

White cement, including wall putty contributes significantly to our Company’s total net sales and operating

profit in fiscal 2014. 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 our

Company even during industry downturns in grey cement. Further, our Company, jointly with the Government

of Fujairah, has set 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. With this our Company

became one of the second largest producer of White Cement in the World.

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.



26

• Extensive marketing and distribution network

Our Company has a wide distribution network for grey cement as well as white cement across the country. Our

distribution network for grey cement products consists of 123 feeder depots serviced by 18 regional sales

offices. Our white cement network comprises 62 feeder depots serviced by 18 regional sales offices. In addition,

we have over 5,978 stockists and dealers that store and sell its grey and white cement products. We believe that

our network, and our relationships with our stockists and dealers, enables us to market and distribute our cement

widely and efficiently. Further, we directly sell our products to builders, EPC contractors and government

entities for various projects undertaken by them.

c) Key Milestone /Events

Period Event

May 1975

• Entered cement business with 0.3 MnTPA 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 MnTPA of grey cement and 0.3 MnTPA of white

cement along with 15 MW of captive power plant

June 2005 • Our Company got listed on the BSE

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

2007 • Enhanced grey cement capacity by 0.5 MnTPA, 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 MnTPA at Gotan, through IPO proceeds

• Acquired a 0.1 MnTPA white cement unit at Gotan from Nihon Nirmaan and subsequently

in 2009, converted the unit to produce 0.47 MnTPA grey cement

Sep 2009 • Commissioned a 3.0 MnTPA reenfield 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 • “Best Employer Award – 2012” from Employer’s Association of Northern India

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

June 2014 • Commencement of commercial production at Split grinding Unit at Jharli, Jhajjar, Haryana

September,

2014 • Commencement of commercial production at Integrated Cement Unit at Mangrol,

Rajasthan.

September,

2014 • Commencement of commercial production at J. K. Cement Works (Fujairah) FZC.

d) Plant /Facility Locations

Plant / Facility 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

White Cement • Gotan, Dist. Nagaur, Rajasthan

Thermal Power

• Bamania, Shambhupura, Dist. Chittorgarh, Rajasthan

• Kailash Nagar, Nimbahera, Dist. Chittorgarh, Rajasthan

• Mangrol, Dist: Chittorgarh, Rajasthan

• Gotan, Dist. Nagaur, Rajasthan

• Muddapur, Dist: Bagalkot, Karnataka

Waste Heat Recovery Power Plant • Kailash Nagar, Nimbahera, Dist. Chittorgarh, Rajasthan



27

(For captive consumption) • Mangrol, Dist : Chittorgarh, Rajasthan

OVERSEAS

Dual process White /Grey Cement Plant • Plot No.7, Habhab, Tawian Fujairah, UAE

e) Our Products

Grey Cement

Grey cement produced by our Company consists of OPC, PPC and PSC.

OPC has two grades that we 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. Our 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. Our 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.

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



28

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

We 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 at a

nominal cost. The use of fly ash therefore significantly reduces the overall cost of production of cement. We

have encouraged customer awareness and acceptance of PPC (through training programs designed by our

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 our 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.



29

f) Greenfield Expansion - Foray into International Markets

Our step down subsidiary, J. K. Cement Works (Fujairah) FZC, has commenced the commercial production at

Fujairah in September 2014. 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, our Company became one of the top producers of White Cement in the World.

With Fujairah plant, our Company has spread our wings and explored opportunities beyond India’s shores. The

plant at Fujairah has a capacity of 0.60 MnTPA for White Cement with a flexibility to change over its operation

to produce upto 1.0 MnPTA of Grey Cement. The plant shall have the flexibility to have 100% white cement, a

mix of both of white cement and grey cement or 100% grey cement, depending upon the market demand. Thus,

our plan to cater to the demand in the region as well as to the neighboring countries through this manufacturing

facility.

g) Business of our Subsidiaries

Name of the

Company

Nature of

Company

Country of

Incorporation

Holding as of

December 31,

2014

Business Description

J.K. Cement (Fujairah)

FZC (JKCF)

Wholly

owned

Subsidiary

United Arab

Emirates (U.A.E.)

100.0% Trading and investment in cement and

allied products

J.K. Cement Works

(Fujairah) FZC

Step down

Subsidiary

United Arab

Emirates (U.A.E.)

90.0% ( held

by JKCF)

Manufacturing and trading of all types of

cement and other allied products

*Bander Coal

Company Pvt. Ltd

Joint

Venture

India 37.5% Mining of Coal from the Captive Coal

Blocks/Deposits available or allocated

and distribute coal produced from Bander

Coal Block for captive consumption.

* The Govt. of India, Ministry of Coal vide letter F.No.13016/78/2008-CA-I dated 17.2.2014 deallocated Bander

Coal Block whereupon the object for which the joint venture company was incorporated become redundant



30

FINANCIAL PERFORMANCE

The following table sets out a summary of the key operational and financial parameters of our Company based on

the audited consolidated financial information of our Company as at and for the years ended March 31, 2014, 2013

and 2012 and the limited review standalone financial information for the half year ended September 30, 2014. This

information should be read in conjunction with, and is qualified in its entirety by reference to our Company’s

consolidated audited financial statements and the related notes thereto and the limited review consolidated financial

statements which are available with the Debenture Trustee.

Our Company’s financial statements prepared under India GAAP as at and for the year ended March 31 2014, 2013

and 2012 were audited and for the half year ended September 30, 2014 was reviewed by M/s. M/s P.L. Tandon &

Co., Chartered Accountants, and their audit reports and limited review report respectively in relation thereto are

available with the Debenture Trustee.

Profit & Loss Account for the year ended 31.3.2012, 31.3.2013, 31.3.2014 and Standalone result for the half

year period from April 01, 2014 to September 30, 2014.

(Rs in Million)

Particulars April – Sept’14 For the year ended March 31

2014 2013 2012

Income

Revenue From Operations 16,339.0 27,958.5 29,119.7 25,467.9

Other Income 269.9 482.7 488.0 468.6

Total Revenue 16,608.9 28,441.2 29,607.7 25,936.5

Expenses

Cost of Materials Consumed 2,554.8 4,622.3 4,206.6 3,121.7

Purchases of Stock-in-Trade 5.8 9.8 5.3 5.0

Changes in inventories of finished goods

work-in-progress and Stock-in-Trade 358.8 -385.7 -367.5 -68.8

Employee Benefits Expense 970.0 1,695.9 1,590.3 1,359.1

Finance Costs 865.2 1,526.2 1,398.3 1,443.0

Depreciation and amortization expense 581.2 1,342.1 1,286.9 1,256.2

Other Expenses 10,541.8 18,488.9 18,112.3 15,911.8

Total Expenses 15,877.6 27,299.50 26,232.2 23,028.0

Profit before exceptional items and

extraordinary items and tax

731.3 1,141.7 3,375.5 2,908.5

Exceptional Item - - 78.2

Profit before tax and extraordinary items 731.3 1,141.7 3,375.5 2,830.3

Tax Expense:

Current Tax 6.5 288.0 876.1 703.4

Less: MAT Credit entitlement -35.1 - 0.0

Earlier Years Tax -54.9 (4.6) 199.1

Deferred Tax 21.3 194.2 199.4 182.1

Profit for the year 703.5 749.5 2,304. 6 1,745.7

Add: Share of loss transferred to Minority

Interest - 22.1 3.1 -

Net Profit for the period 703.5 771.6 2,307.7 1,745.7



31

Balance Sheet

(Rs in Millions)

Particulars Standalone Consolidated as at March 31,

As at

September 30,

2014

2014 2013 2012

EQUITY AND LIABILITIES

Shareholders’ Funds

Share Capital 699.3 699.3 699.3 699.3

Reserves and Surplus 17,323.8 16,762.3 16,206.2 14,521.6

18,023.1 17,461.6 16,905.5 15,220.9

Minority Interest 144.9 47.7 -

Non Current Liabilities

Long Term Borrowings 22,481.5 25,771.1 11,895.10 11,351.20

Of which Non Current maturities of

Long Term Borrowings 21,137.0 24,415.2 10,595.3 9,967.2

Deferred Tax Liability (Net) 2,797.6 2,684.6 2,490.4 2,291.1

Other Long Term Liabilities 1,111.4 972.5 871.1 771.5

Long Term Provisions 171.9 147.7 126.3 110.8

25,217.90 28,220.0 14,083.1 13,140.6

Current Liabilities

Short term Borrowings 2,380.6 2,060.1 1,886.5 840.6

Trade Payables 1,989.2 4,400.9 1,965.7 1,772.4

Other Current Liabilities 6,797.7 4,996.9 4,516.1 4,266.2

- of which Current maturities of

Long Term Borrowings 1344.4 1,355.9 1,299.7 1,384.0

Short Term Provisions 50.5 349.1 672.90 519.1

11,218.0 11,807.0 9,041.2 7,398.2

Total Liabilities 54,459.0 57,633.5 40,077.5 35,759.8

ASSETS

Non Current Assets

Fixed Assets

Tangible Assets 33,455.3 23,258.0 23,664.9 23,126.7

Intangible Assets 5.7 10.7 24.8 39.4

Capital Work-in-Progress 3,011.1 17,874.0 2,544.8 904.1

Intangible Assets under

Development 1.4 1.1 0.7

Total Net Fixed Assets 36,472.1 41,144.1 26,235.6 24,070.9

Non-Current Investments 2,549.0 210.1 324.3 92.3

Long term Loans and Advances 1,372.2 2,721.6 2,758.7 844.2

Other Non Current Assets 0.0 0.0 -

Total Non Current Assets 40,393.3 44,075.8 29,318.7 25,007.4

Current Investments 550.0 465.0 - -

Current Assets

Inventories 4,664.5 5,419.5 4,613.8 3,628.3

Trade Receivables 1,945.1 1,117.1 1,152.7 837.2

Cash and Cash Equivalents 3,097.3 4,086.4 3,753.3 4,332.2

Short Term Loans and Advances 3,660.4 2,325.6 1,171.2 1,839.3

Other Current Assets 148.4 144.1 67.9 115.4

Total Current Assets 14,065.7 13,557.7 10,758.9 10,752.4

Total Assets 54,459.0 57,633.5 40,077.5 35,759.8



32

Consolidated Cash Flow statement

CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEARS

2013-2014 2012-2013 2011-2012

Rs./Lacs Rs./Lacs Rs./Lacs

a) Cash flow from operating activities

Profit before Tax as per Profit & Loss

Account 11417.76 33754.37 28,302.76

Adjusted for :

Depreciation 13504.21 12868.80 12,561.97

Interest 14348.70 13617.16 14,068.19

Interest received (3578.48) (3815.24) (2,959.88)

Dividend Income (1.98) (4.44) -

Profit on sale of Investments (74.50) 0.00 (25.34)

Loss on sale of assets(Net) 62.12 217.15 56.98

Mines restoration Charges 17.27 61.29 182.49

- 24277.34 - 22944.72 - 24,671.95

Operating Profit before Working

Capital Changes 35695.10 56699.09 52,974.71

Adjusted for :

Trade & Other Receivables (9015.70) (2803.38) 1,315.02

Inventories (1668.44) (9854.68) (4,181.00)

Trade Payable & Other Liabilities 19080.07 8395.93 5966.08 (6691.98) 8,833.33 5,967.35

Cash Generated from Operations 44091.03 50007.11 58,942.06

Adjusted for :

Tax Paid (2346.36) (7742.08) (5,337.45)

Corporate Dividend Tax (772.47) (567.20) (226.88)

Dividend paid (4545.27) (3496.36) (1,398.55)

(7664.10) (11805.64) - (6,962.88)

Net cash from operating activities 36426.93 38201.47 51,979.18

b)Cash flow used in investing activities

Acquisition/Purchase of fixed assets

including capital advances (155946.90) (54636.79)

(16,615.34)

Sale of fixed assets 184.29 161.09 135.61

Purchase of Investments (11108.03) (7319.57) (14,245.00)

Sale of Investments 7674.50 5004.44 13,745.00

Exchange Rate Fluctuation Reserve on

Conversion 297.27 294.83 (3.49)

Dividend 1.98 - 25.34

Interest Income 3146.05 3828.21 2,299.83



33

Net cash used in investing activities (155750.84) (52667.79) (14,658.05)

c) Cash flow from financing activities

J.K. Cement (Fujairah) FZC [ Wholly

Owned Subsidiary ] - 4389.21 (4,383.85)

Fresh Capital Introduced 1122.83 -

Loan to Associates (364.00) 15.00 593.88

Captial subsidy received 77.69 84.41 592.64

Deferred Sales Tax / VAT (1260.37) 510.45 5,100.44

Long Term Borrowings 157942.39 20139.28 2,292.25

Cash Credit/OD Accounts 1735.75 10582.72 (18,108.46)

Repayment of Long Term Borrowings (19725.15) (15284.29) (13,926.27)

Interest Paid (17673.61) (13587.07) 126.64

Security Deposits 1014.56 - 1,550.69

Loss on Exchange Rate Fluctuation - - (182.49)

Vehicle Loans & Others (214.77) 942.89 200.00

Net Refunds From Associate Companies - 885.00

(26,144.53)

Net cash used in financing activities 122655.32 8677.60

Net increase/ (decrease) in Cash and

Cash Equivalents (a+b+c) 3331.41 (5788.72) 11176.6

Opening balance of Cash and Cash

Equivalents 37533.07 43321.79 32145.19

Closing balance of Cash & Cash

Equivalents 40864.48 37533.07 43321.79

Other Financial Parameters

Particulars For the year ended March 31,

Six month

period

ended

September

30, 2014

2014 2013 2012

Net Sales 16,339.0 27,815.4 29,040.4 25,378.5

EBIDTA 1950.5 3564.9 5,642.9 5,197.1

EBIT 1,369.3 2,222.9 4,355.6 3,940.9

PAT 703.5 771.5 2,307.7 1,745.7

Dividend Amount (including tax

thereon)

245.4 531.8 406.4

Current Ratio 1.3 1.1 1.2 1.5

Interest Coverage Ratio (cash profit

plus interest paid/Interest paid)

1.83

2.16 5.77 4.74

Gross Debt/Equity Ratio

((LTD+STD)/Networth excluding

revaluation reserve)

1.41

1.67 0.81 0.89

Debt Service Coverage Ratio

(EBIDTA/Principal repayment and

interest cost)

1.22

1.19 2.48 2.10



34

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

(Rs in Million)

Particulars

As at September

30, 2014

As at March 31,

2014

After the Issue

Long Term Borrowings 21,137.04 24,415.2 25,415.2

Long Term Borrowings (maturing within 12

months)

1,344.41

1,355.9 2,060.1

Total Debt 22,481.45 25,771.1 27,475.3

Total Shareholder’s Fund 18,023.1 17,606.5 17,461.5

Less : Revaluation Reserve 2,089.8 2,150.7 2,150.7

Networth (excluding revaluation reserve) 15,933.3 15,455.8 15,310.8

Total Debt-Equity Ratio 1.4 1.7 1.79

For this disclosure, our Company has used the figures of audited consolidated financial information as at March 31,

2014 and standalone financial information, since available, for the half year period ended September 30, 2014.

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

We shall utilise the proceeds of the Issue for funding our long term growth and general corporate purposes, interalia

including capital expenditure and working capital or any other purposes as may be permissible under applicable law.

Pending utilisation of the proceeds of the NCD as here in before, our Company intends to temporarily invest in high

quality interest bearing instruments including deposits with banks and investments in mutual funds.

We undertakes that proceeds of the current issue of Debentures shall not be used for any purpose which may be in

contravention of the regulations, guidelines or norms issued by the RBI, SEBI, BSE or Registrar of Companies, as

applicable.



35

GENERAL INFORMATION

I. REGISTERED AND CORPORATE OFFICE OF OUR COMPANY

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


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 OUR COMPANY

MR. A. K. SARAOGI

J. K. Cement Limited


Tel.: (91 512) 2371478/79/80/81

Fax: (91 512) 2399854


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

IV. TRUSTEE TO THE ISSUE

IDBI TRUSTEESHIP SERVICES LIMITED

Asian Building, Ground Floor,

17-R, Kamani Marg, Ballard Estate,


Tel: (91 22) 4080 7000

Fax: (91 22) 6631 1776

E-mail: [email protected]

Investor Grievance E-mail: [email protected]

Contact Person: Mr Kunal Antani

SEBI Reg. No.: IND000000460

V. REGISTRAR TO THE ISSUE

SHAREPRO SERVICES (INDIA) PVT. LTD.

13AB, Samhita Warehousing Complex, 2nd Floor, Sakinaka Telephone, Exchange Lane, Andheri (E),


Tel: (91 22) 67720300 / 400

Fax: (91 22) 28591568

Email:[email protected]

Website: www.shareproservices.com

Contact Person: Mr. Rajesh D. Jadhav

SEBI Reg. No.: INR000001476



36

VI. NAME AND ADDRESS AND OTHER DETAILS OF BOARD OF DIRECTORS OF OUR COMPANY

The following table sets forth details regarding our Board of Directors as on the date of this Information

Memorandum.

Sr.

No.

Name and

Designation

Address DIN Date of

Birth

Director of

our

Company

Since

Other Directorship

1. 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

3 Jaykay Enterprises

Limited 4 J.K. Cotton 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

14 Juggilal Kamlapat Holding Limited

15 Uttar Pradesh Cricket

Association

2. 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

3. Mr. Krishna Behari

Agarwal

Non Executive,


7/177B, Swaroop

Nagar, Kanpur – 208

002

00339934

July 1,

1939

August 25,

2007

1 Key Corp Limited

2 Jaykay Enterprises

Limited 3 J.K. Cotton Limited

4. 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.

5. 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



37

11 IDBI Asset Management Limited

12 Zuari Agro Chemicals

Limited 13 Kesar Multimodal

Logistics Limited

14 IITL Projects Limited

6. Mr. Achintya Karati

Non Executive,


29/203, East End

Apartments, Mayur

Vihar, Phase-I

Extension, 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

Limited

8 Devenio Optimus Advisors Pvt. Ltd.

7. 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

8. Mr. Paul Heinz

Hugentobler

Non Executive, non


Eschenweg 10, 8645,

Jona Switzerland

00452691 February

14, 1949

May 17, 2014 Holcim Services

(South Asia) Limited

Siam City Cement

Public Company

Limited, Thailand

9. Mrs. Sushila

Singhania

Non Executive, non


11, Ganga Kuti, Cantt,

Kanpur – 208 004

00142549

August

1,1935

July 26, 2014 G.H. Securities Private

Limited

Yadu International

Limited

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.

Brief Profiles of Directors

Mr. Yadupati Singhania

Managing Director and Chief Executive Officer (B. Tech from IIT Kanpur)

� Helped to evolve India’s cement industry for over three decades;

� Played a pivotal role in the introduction of international quality white cement in India;

� Director of the Employers Association of Northern India and Chancellor of Sir Padampat Singhania

University, Udaipur

� President of Kanpur Productivity Council and member of the Board of Governors of the National Council

for Cement and Building Material and Jodhpur Chamber of Commerce;

� Member of the Managing Committee of Cement Manufacturers Association;

� Deeply involved in social entrepreneurship; Member of Rotary Club;

Smt.Sushila Devi Singhania



38

Non Executive, Non Independent Director (Graduate of Arts)

� Scion of renowned Jalan family representing Surajmall Nagarmall group, famous industrial house.

� Having keen interest in industry and commerce.

� A Member of Managing Committee of Seth Anandram Jaipuria School, Kanpur, President of Juari Devi

Girls Inter College, Kanpur and President of Juari Devi Girls Post Graduate College, Kanpur.

� Has been actively associated with programmes for welfare and upliftment of economically weaker sections,

children and women and also with religious activities.

� Acting as Director of M/s. Yadu International Ltd. and M/s. G.H.Securities Limited.

Mr. Achintya Karati

Non-Executive Independent Director(Law Graduate from Calcutta University)

� Served as Senior Advisor to ICICI Securities Limited and also with ICICI Prudential Life Insurance

Company Limited;

� Vast experience in finance and legal affairs, spanning over three decades;

� Diverse expertise across commercial, legal and secretarial matters;

� Retired as Country Head, Government and Institutional Solutions Group, ICICI Bank Limited (erstwhile

Industrial Credit and Investment Corporation of India Limited) in March 2004;

� Served as Deputy Zonal Manager (North) and Head of Major Client Group (North) in ICICI Limited;

Mr. Jayant Narayan Godbole

Non-Executive Independent Director(B.Tech (Hons) from IIT Mumbai, Certificate in Financial Management)

� Possesses more than 4 decades of rich experience in the field of conceiving, implementing and operating

mega projects abroad;

� He functioned as Chairman and Managing Director of IDBI in 2005 at the time of retirement. During his

stints with IDBI and IIBI he was responsible for Corporate Finance, restructuring and rehabilitation of sick

units, Venture capital, merchant banking and investors’ relation;

� Stabilised the Corporate Debt Restructuring (CDR) mechanism in India as the Chairman of an Empowered

Group;

Mr. K. N. Khandelwal

Non-Executive Non-Independent Director (Commerce Graduate and a Chartered Accountant)

� Served as President (Finance and Accounts) of Jaykay Enterprises Limited;

� Commenced his career with J.K. Synthetics Limited in 1969;

Dr. K. B. Agarwal

Non-Executive Independent Director (Graduate of Law, PhD, ICWA and CS)

� Rich experience in Finance, Accounts and Capital Market;

� Former President of Merchants’ Chamber of U.P. and U.P. Stock Exchange Limited. Associated with FICCI

and ASSOCHAM, and was also involved with various Government committees;

Mr. Paul Hugentobler

Non-Executive Non-Independent Director (Civil Engineer & Degree in Economic Science)

� A Swiss national, he Joined Holcim Group Support Ltd as Project Manager in 1980



39

� He is graduated in Civil Engineering from Swiss Federal Institute of Technology, Zurich and Economic

Science from Graduate School of Economics and Business of St. Gallen.

� Served as Holcim Ltd Area Manager for the Asia Pacific Region

� From 1999 to 2000, he also served as CEO of Siam City Cement (Public) Company Limited, headquartered

in Bangkok, Thailand and till now he continues to be a Director.

� Until his retirement in February 2014, he was appointed as a member of the Executive Committee at Holcim

Ltd with the responsibility for South Asia and ASEAN except the Philippines

� He joined J.K. Cement Ltd as a Director w.e.f 17th May, 2014.

Mr. Raj Kumar Lohia

Non-Executive Independent Director(Bachelor of Arts in Economics)

� A leading industrialist of Kanpur.

� 3 decades of rich experience in commerce and industry;

� Director of the Company since 2004 and also on the Board of other companies;

� Recipient of several awards including the Excellence Award 2005 for contribution in the field of

entrepreneurship;

Mr. Suparas Bhandari

Non-Executive Independent Director(Graduate of Science and Law)

� Founder Chairman and Managing Director of Agriculture Insurance Company of India Limited with

extensive insurance industry experience for more than four decades

� Served as the General Manager of Oriental Insurance Company of India Limited and Assistant General

Manager of United Insurance Company of India Limited

Interest of the Directors

Other than as already disclosed in the Information Memorandum, our Directors do not have any financial or other

material interest in the Issue of Debentures.

Changes in members of the board since last three years

There is change in the Board of Directors of our Company during last three years.

Remuneration of the Directors

(Rs in million) Sr. No. Name of the Director From April 1,

2014 to

December 31,

2014

Fiscal 2014 Fiscal 2013 Fiscal 2012

1. Mr. Yadupati Singhania 60.19 66.20 119.60 103.00

2. Mr. Kailash Nath Khandelwal 0.34 1.10 0,94 0.88

3. Mr. Krishna Behari Agarwal 0.42 1.18 0.94 0.88

4. Mr. Suparas Bhandari 0.10 0.72 0.74 0.69

5. Mr. Jayant Narayan Godbole 0.18 0.73 0.73 0.68

6. Mr. Achintya Karati 0.12 0.78 0.77 0.77

7. Mr. Raj Kumar Lohia 0.16 0.89 0.75 0.76

8. Mr. Paul Heinz Hugentobler* 2.12 N.A. N.A. N.A.

9. Mrs. Sushila Singhania** 0.04 N.A. N.A. N.A.

* Joined w.e.f. May 17, 2014

** Joined w.e.f. July 26, 2014



40

Organization chart

Our Company’s management organization structure is set forth below:

Key Managerial Personnel

Name Designation PAN Date of Appointment

Mr. A.K.Saraogi President Corporate

Affairs & Chief Financial

Officer

ACCPS4027R November 4, 2004

Mr. Shambhu Singh Assistant Vice President

(Legal) & Company

Secretary

ALUPS1039E July 21, 2008

Interest of Key Managerial Personnel

Other than as already disclosed in the Information Memorandum, the Key Managerial Personnel of our Company do

not have any financial or other material interest in the Issue of Debentures.

VII. CREDIT RATING AGENCY

CREDIT ANALYSIS AND RESEARCH LIMITED

B-47, 13th

Floor, E-1 Block,

Videocon Tower, Jhandewalan Extension,

New Delhi – 110 055

Tel: (91 11) 4533 3200

Fax: (91 11) 4533 3238

VIII. DETAILS OF AUDITOR OF OUR COMPANY

P. L. TANDON & CO.

“Westcott Building”

Mahatma Gandhi Road,

P.O Box No.-113

Kanpur-208 001, India



41

IX. BRIEF HISTORY OF OUR COMPANY SINCE OUR INCORPORATION GIVING DETAILS OF

OUR FOLLOWING ACTIVITIES

a) Equity Capital history of our Company

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 700 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

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 our Company

Our authorized capital as on the date of this Information Memorandum is given below:

Sr No. Class No. of Shares Face 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 our Company as on the date of this Information Memorandum is given

below:

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

Since the Company proposed to issue Secured, Redeemable Non-Convertible Debenture(s) of face value of Rs.

10,00,000/- (Rs. Ten Lakhs) aggregating upto Rs. 100 Crore there will not be any change in issued, subscribed, paid

up capital and share premium account post the present issue of NCDs.



42

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

There has been no change in the capital structure of our 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 our Company

Our Company is promoted by Dr. Gaur Hari Singhania, Mr. Yadupati Singhania, Yadu International Limited and

Juggilal Kamlapat Holding Limited. Our 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 December 30, 1994.

One of the main objects of our 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 J.K. Synthetics Ltd (‘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 our 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, our Company did not have any substantial business activity.

f) Main Objects of our Company

The main objects as contained in our 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,



43

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.

g) Corporate Structure of our Company

A. Subsidiary/Joint Venture Companies

Name of the Company Nature of

Company

Country of Incorporation Holding as of

December 31,

2014

J.K. Cement (Fujairah) FZC

(JKCF)

Subsidiary United Arab Emirates (U.A.E.) 100%

J.K. Cement Works (Fujairah)

FZC

Step down

Subsidiary

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

JKCF

Bander Coal Company Pvt. Ltd Joint Venture India 37.50%

h) Shareholding pattern of our Company as of December 31, 2014

Sr.No. Category No of Shares held No. of Shares in demat

form

% holding

1 Promoters and Promoter Group 46,799,619 46,799,499 66.93

2 Mutual Funds/UTI 5,884,132 5,860,323 8.41

3 Financial Institutions/Banks 27,770 22,238 0.04

4 Insurance Companies 750,090 750,080 1.07

5 Foreign Institutional Investors 7,021,632 6,996,560 10.04

6 Bodies Corporate 4,599,221 4,587,277 6.58

7 Individuals –Resident Public 4,616,902 4,123,138 6.60

8 Others 227,884 192,054 0.33

Grand Total 69,927,250 69,331,169 100.00

i) A list of highest ten holders of Equity Shares of our Company as on December 31, 2014 along with

particulars as to number of shares held by them

The list of top 10 shareholders as of December 31, 2014 is given below:



44

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 7,228,418 10.34 Promoters and Promoter Group

4 HDFC Standard Life Insurance

Company Limited 2,596,740 3.71

Body Corporate

5 Fidelity Investment Trust Fidelity

Series Emerging Markets Fund 2,530,490 3.62

Foreign Institutional Investor

6 Templeton Global Investment Trust –

Templeton Emerging Markets Small

Cap Fund 1,502,198 2.15

Foreign Institutional Investor

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

8 Franklin Templeton Investment Funds 1,038,881 1.49 Foreign Institutional Investor

9 Dr. Gaur Hari Singhania 1,041,973 1.49 Promoters and Promoter Group

10 Franklin Templeton Mutual Fund A/c.

Franklin India Prima Fund 952,757 1.36

Mutual Fund

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

j) Details regarding the Auditors of our 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

As at the date of this Information Memorandum, there have been no changes in our auditors during the last three

years.

k) Details of past borrowings of our Company

A. The brief details of the secured loan facilities of our Company as of December 31, 2014.

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 1,336.2 11.00%

28 Equal Quarterly Installments w.e.f 1-Apr-2010

Refer Note 1

Consortium Cost

Escalation Loan (for Karnataka Plant)**

Term Loan 900.0 357.7

11.00%

28 Equal Quarterly Installments w.e.f

1-Apr-2011

Refer Note 1

Consortium Loan (for

Mangrol/Jharli Plant

Plant)***

Term Loan 12,000.00 10,450.6 10.75% 40 Equal Quarterly Installments w.e.f

1-Oct-2016

Refer Note 2

Allahabad Bank

State Bank of India

IDBI Bank Ltd.

Term Loans 500.00

200.00

300.00

250.0

99.9

182.1

11.25%

11.00%

11.50%

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 4

Canara Bank

EXIM Bank

Term Loans 500.00

500.00

500.0

504.3

11.25%

11.05%

18 Equal quarterly Instalments commencing from April 1, 2015

28 Equal quarterly Installments

commencing from June 30, 2016.

Refer Note 3

State Bank of India

Dena Bank

Export-Import Bank

Term Loans 750.00

500.00

250.00

669.6

500.00

225.0

11.10%

11.00%

11.25%

23 Quarterly Installments w.e.f. 30-

June-2014

28 Equal quarterly Installments w.e.f.12-June-2015

20 Equal quarterly Installments

Refer Note 4



45

of India w.e.f.18-July-2014

State Bank of India Term Loan 500.00 500.00 10.50% 32 Quarterly Installments w.e.f. 30-June-2015

Refer Note 6

Allahabad Bank Term Loan 250.00 250.0 10.75% 32 Quarterly Installments commencing after moratorium of two years from the date of first

disbursement.

Refer Note 7

Indian Bank

ING Vysya Bank

Term Loans 400.00

500.00

199.4

23.5

11.25%

9.50%

28 Quarterly Installments w.e.f.1-

April-2012

20 Quarterly Installments w.e.f.31-July-2010

Refer Note 5

Total Term Loans 23300.00 16048.3

* 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

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

Bank, Jammu & Kashmir Bank, Dena Bank, StateBank of India, Union Bank of India,Oriental Bank of Commerce.. Note 1:: 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: Secured by First parri-passu charge on all immovable fixed assets (save & except mining land) and all movable fixed assets (save & except book debts) pertaining to Company’s new cement Plants at Mangrol, Rajasthan and split Grinding unit at Jharli, Haryana and second

charge on current assets related to above plants.

Note 3: 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: Secured by first pari-passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all the movable

assets of our 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, new cement plant at Mangrol and Jharli.

Note 5: Secured by exclusive charge by way of equitable mortgage over the immovable assets and hypothecation of movable assets pertaining to the specified properties.

Note 6: Secured by first parri passu charge by way of equitable mortgage of all the immovable assets except mining land and hypothecation of

all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.

Note 7: Secured by first parri passu charge by way of equitable mortgage of all the immovable assets and hypothecation of all movable fixed assets, present and future pertaining to J.K. Cement Works, Muddapur, Karnataka.

Details of other secured term loans

1) In addition to above loans, there was a vehicle loan of Rs. 404.74 lacs as on December 31, 2014. The

vehicle loans are secured by hypothecation of vehicles. The maturity profile of the vehicle loans are given

below:

Year FY2014-15 FY2015-16 FY2016-17 FY2017-18 Total

Principal (Rs in million) 21.14 11.49 4.58 0.77 37.98

2) Interest free loan against VAT payment from Govt. of Karnataka was of Rs. 287.92 million as on

December 31, 2014. 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.



46

The brief details of the working capital borrowings as of December 31, 2014.


facility

Sanctioned

Amt (Rs. mn)

Outstanding

Amt (Rs.

mn)

Interest

Rate

Security

Fund based facility

(Consortium)*

Cash Credit 3,750.0 804.16 10.75%

p.a.

Secured by first charge on current assets of

our Company namely inventories, book

debts, etc. and second charge on fixed assets of our 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

3,000.0 998.4 NA

*Fund Based facility does not include Commercial Paper (Unsecured) having outstanding of Rs. 100

Crores as on 31.12.2014. ** Consortium includes Allahabad Bank, IDBI Bank Ltd., United Bank of India, Andhra Bank, Indian Bank,

Indian Overseas Bank and Dena Bank, State Bank of India & Canara Bank.

Repayment terms/ Schedule: working capital facilities were sanctioned for a period of one year and renewal

on yearly basis.

B. The brief details of the unsecured loan facilities of our Company as of December 31, 2014.


Facility

Sanctioned

Amount

(Rs Mn)

Outstanding

Amount (Rs.

Mn)

Interest

rate

Repayment Terms

Govt. of Rajasthan Deferred

Sales Tax

liability

NA 488.2 Interest

free

Repayment on quarterly

basis from 7(seven) years

from the date of availing

deferment benefits.

C. The brief details of the NCDs of our Company and list of Top 10 Debentureholder(s)

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

NCD Series

C 2013-2014

10

years

10.50%

Qtly.

10.50% Half

Yearly.

11.00% Quarterly

11.00%

Half Yearly

2,000.00 July 23, 2013

August 2, 2013

August 8, 2013 September 13, 2013

October 1, 2013

October 9, 2013

In 4 annual

installments as

given below:

• At the end of 7th

year from Date of

Allotment: 20% of the principal

• At the end of 8th year from Date of

Allotment: 20%

of the principal


year from Date of Allotment: 30%

“CARE

AA-“

Secured Refer Note

1 below



47

of the principal


year from Date of

Allotment: 30% of the principal

• Out of Rs. 200 Crores in respect

of NCDs worth

Rs. 70 Crores, the investor(s) have

the option to

exercise put/call option after 5

years from the

date of allotment.

Note 1:

Security for NCDs for Rs 4,000 million

Secured by first mortgage on the Company’s flat at Ahmedabad and also against 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 (i). Inventories, book debts, cash and bank balance and all assets pertaining to

J.K. Cement works Gotan, J.K. Cement Works, Muddapur, Karnataka (ii). Properties for office and guest house

including those having exclusive charge of other lenders and (iii) New Cement plant at Mangrol and Jharli

Security for NCDs for Rs 2,000 million

Secured by first mortgage on our Company’s flat at Ahmedabad and also against first pari passu charge by way of

equitable mortgage of all immovable assets except mining land and hypothecation of all movable fixed assets,

present and future pertaining to our existing cement plant at village Muddapur, Karnataka.

The details of Top 10 Debentureholder(s) as of December 31, 2014 are 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 400 400

6 Canara Bank 550 550

7 Union Bank of India 500 500

8 Andhra Bank 250 250

9 Bank of India 250 250

10 Oriental Bank of Commerce 250 250

l) Amount of Corporate Guarantees issued by our Company in favour of various counter parties including

its subsidiaries, joint venture entities, group companies etc.

Our 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 our Company’s step down subsidiary namely J.K. Cement

Works (Fujairah) FZC, UAE.

m) Commercial Paper issued by our Company

Our Company has been issuing Commercial Paper from time to time and repaying on redemption. Commercial

Papers having outstanding of Rs. 1000 million as on December 31, 2014.



48

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

Convertible Bonds/ Debentures/ Preference Shares)

Our 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 our Company in the past 5 years.

Our Company is discharging all our liabilities in time and would continue doing so in future as well. Our 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, in pursuance of an option

Our Company confirms that other than and to the extent mentioned elsewhere in this Information Memorandum, we

have 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.

We hereby declare that to the best of our 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 our Company.

r) Contribution being made by the promoters or directors either as part of the offer or separately in

furtherance of such objects

Not Applicable

X. DETAILS OF PROMOTERS OF OUR COMPANY

The details of the promoter’s holding in our Company as of the date of this Information Memorandum 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 0.006 - -

9 Kavita Y Singhania 1,301,611 1,301,611 1.861 - -

10 Manorama Devi Singhania 31,465 31,465 0.044 - -

11 Sushila Devi Singhania 920,957 920,957 1.317 - -

12 J.K. Traders Ltd. 211,254 211,254 0.302 - -

13 J.K. Cotton. Ltd. 48 48 Negligible - -



49

14 Juggilal Kamlapat Holding Ltd. 7,228,418 7,228,418 10.337 - -

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

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

17 Yadu International Ltd. 40 40 Negligible - -

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

19 Nithipati Singhania 33,848 33,848 0.048 - -

20 Ramapati Singhania 47,624 47,624 0.068 - -

21 Ramapati Singhania 2,038 2,038 0.002 - -

22 Abhishek Singhania 30,371 30,371 0.043 - -

23 Ajay Kumar Saraogi 3,340 3,340 0.004 - -

24 Amrita Saraogi 4,000 4,000 0.005 - -

25 Anil Kumar Agrawal 3,940 3,940 0.005 - -

26 Kailash Nath Khandelwal 1,000 1,000 0.001 - -

27 Prashant Seth 20 20 Negligible - -

28 Pushpa Saraogi 5,040 5,040 0.007 - -

29 Radhani Khandelwal 500 500 Negligible - -

30 Satish Kumar Agrawal 40 40 Negligible - -

Total 46,801,619 46,801,619 66.929 - -

XI. 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 our 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

Limited review report of the Auditor for the half yearly unaudited financials for the period ended

September 30, 2014 have been 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.

The Shareholders in the 20th

Annual General Meeting of our Company held in Kanpur, Uttar Pradesh on

July 26, 2014 had approved the Qualified Institutions Placement (“QIP”) to Qualified Institutional Buyers

(“QIB”) upto Rs. 3,000 million in accordance with the applicable laws and subject to the approval of the

shareholders.

Since March 31, 2014, in the opinion of our Company, other than as disclosed in this Information

Memorandum, there has not arisen any circumstance that materially or adversely affects the profitability of

our Comapny taken as a whole or the value of their consolidated assets or our ability to pay our material

liabilities over the next 12 months. Other than as disclosed in this Information Memorandum, there are no

other material events or developments or changes at the time of this Issue or subsequent to the Issue which

may affect the Issue or the Investors’ decision to invest or continue to invest in the Issue.

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.



50

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.

1,000 million. Credit Rating Letter dated 13th

January, 2015 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 Information Memorandum.

The Debentures are not guaranteed.

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

indicating the designated stock exchange

The Debentures of our Company are proposed to be listed on the WDM segment of the BSE. We shall

comply with the requirements of the Debt Listing Agreement to the extent applicable to us on a continuous

basis.

We reserve the right to get the Debentures listed on other recognized stock exchanges as we may deem fit

after giving prior notification of such proposed listing to the Debenture Trustee.

h. Any change in the accounting policies during the last three years and their effect on the profits and

reserves of the Issuer.

None

i. Summary of reservations or qualifications or adverse remarks of auditors in the last five financial

years immediately preceding the year of circulation of offer letter and of their impact on the financial

statements and financial position of the company and the corrective steps taken and proposed to be

taken by the company for each of the said reservations or qualifications or adverse remark

None

j. Related Party Transactions entered during the last three financial years immediately preceding the

year of circulation of the Information Memorandum including with regard to loans

made or guarantees given or securities provided

Related Parties Disclosures

Transaction with Subsidiary Company Amount (Rs. in lacs)

S.

No.

Name of the Company From Apr’14 to

Dec’14

FY 2014

FY 2013 FY 2012

1 J.K. Cement (Fujairah) FZC 2990.75 - - 4670.35



51

Transaction with Associate Companies Amount(Rs. in lacs)

S.

No.

Name of the Company From Apr’14 to

Dec’14

FY 2014

FY 2013 FY 2012

1 Jaykay Enterprises Ltd. 91,78 211.08 172.36 181.25

2 J.K. Cotton Ltd. 39.11 48.17 27.14 25.6

3 Jaykaycem (Central) Ltd. 900.00 364.0 - -

4 J.K. Cement (Western) Ltd. - - 15.00 -

The aforesaid disclosures of related party transactions are as on 31.12.2014 and the Company expects that

it will continue to enter into related party transactions in future.

k. Dividend

The following table sets forth certain details regarding the dividend paid by our Company on the equity shares

for Fiscal 2014, 2013 and 2012:

Particulars Fiscal 2014 Fiscal 2013 Fiscal 2012

Face value of Equity Shares (Rs. per share) 10 10 10

Interim dividend on Equity Shares (Rs. per share) - - -

Final dividend of Equity Shares (Rs. per share) 3.00 6.50 5.00

Total dividend on Equity Shares (Rupees in Lacs) 2097.82 4545.27 3496.36

Dividend tax (gross) (Rupees in Lacs) 356.52 772.47 567.20

l. Details of any litigation or legal action pending or taken by any Ministry or Department of the

Government or a statutory authority against any promoter of the Issuer during the last three years

immediately preceding the year of the circulation of the Information Memorandum and any direction

issued by such Ministry or Department or statutory authority upon conclusion of such litigation or

legal action.

None

m. Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act

or any previous company law in the last three years immediately preceding the year of circulation of

Information Memorandum in the case of Issuer and all of its subsidiaries. Also if there were any

prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three

years immediately preceding the year of the Information Memorandum and if so, section-wise details

thereof for the Issuer and all of its subsidiaries.

No inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous

company law in the last three years or prior thereto and further there were no prosecution filed, fines

imposed, compounding of offences in the last three years for the Issuer and its subsidiaries.

n. Details of acts of material frauds committed against the Issuer in the last three years, if any,

and if so, the action taken by the Issuer.

The Company had lodged an First Information Report against two former Marketing Officials with Belgaum

Police Station for committing fraud against the Company involving Rs. 20.17 lacs for diverting grey cement

consignments to third parties which were ordered and/or meant for Authorised Dealers. The matter is

currently pending.

o. Other Details

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

Our Company will create Debenture Redemption Reserve (DRR) as may be required in case of privately

placed debentures in accordance with applicable laws, rules and regulations.



52

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

This issue of Non-convertible Debentures is subject to the provisions of the Companies Act, the

Memorandum and Articles of Association, the terms of this Information Memorandum 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 Debenture Trust Deed/ Letters of Allotment/ Debenture Certificates, guidelines,

notifications, regulations relating to the issue of debentures and SEBI Debt Regulations.

iii. Application Process

Please refer Section “Terms and conditions of the Issue and Issue Procedure” of this Information

Memorandum.

iv. Sharing of Information

The Debentureholder(s) may, at its option, but subject to applicable laws, use on its own, as well as exchange,

share or part with any financial or other information about the Debentureholder(s) available with our

Company, with our subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies,

statutory bodies, as may be required and neither our Company nor our subsidiaries and affiliates nor their

agents shall be liable for use of the aforesaid information.

p Details of default, including therein the amount involved, duration of default and present status, in

repayment of :-

i. Statutory dues : NIL

ii. Debenture and Interest thereon : NIL

iii. Loan from any Bank or financial institution and interest thereon : NIL



53

SUMMARY TERM SHEET

In terms of this Information Memorandum, our Company intends to raise an amount of upto Rs. 1,000 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 Information

Memorandum.

Security Name J.K. Cement Limited,

Issuer J.K. Cement Limited

Type of Instrument Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures

issued by our Company

Nature of Instrument Secured

Seniority At par with other secured lenders of our Company having pari-passu first charge of

security offered for NCD

Issue Size Upto Rs. 1,000 million. The present offer is for 1000 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. 1000 million

Tenor 10 years from the Deemed Date of Allotment

Option to retain

oversubscription

Nil

Objects of Issue and/or

details of utilization of

proceeds

Funding long term growth and general corporate purposes, interalia including

capital expenditure and working capital or any other purposes as may be

permissible under applicable law. Pending utilisation of the proceeds of the NCD as

here in before, our Company intends to temporarily invest in high quality interest

bearing instruments including deposits with banks and investments in mutual funds.

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.

Our Company also reserves the right to get the Debentures listed on such other

recognized stock exchanges as our Company may deem fit after giving prior

notification of such proposed listing to the Debenture Trustee.

Rating of the instrument Credit rating of CARE AA- (Double A Minus)

Coupon Rate 9.65% p.a.; payable quarterly on an Actual basis

Step Up/ Step Down None



54

Coupon Rate /Condition

Issuance and Trading Mode In demat mode only

Coupon Payment frequency quarterly in arrears

Coupon Payment Dates quarterly 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

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 our Company’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 /Redemption

Date

In 4 annual installments as given below:


year from Date of Allotment: 20% of the principal







Put/Call Option No

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 6.5.15

Issue Closing Date 6.5.15

Issue Pay-in Date 6.5.15

Deemed Date of Allotment 6.5.15


Registrars & Transfer

Agent

Sharepro Services (India) Pvt. Ltd.

Settlement mode of the

instrument

All payments to be made by our Company to the Debentureholder(s) 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 our

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



55

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 our Company’s existing

cement plant at village Muddapur, Taluka Mudhol, Dist: Bagalkot, Karnataka

except mines. The Security cover will be atleast 1.25 times of the outstanding face

value of Debentures at all times during the tenor of the Issue.

Our Company shall create and perfect security in favour of the Debentureholder(s)

within 90 days or prior thereto at the instance of the Investor from 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 our Company

• Credit Rating of “CARE AA-”

• 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

Debentureholder(s)

• all consents, authorizations and approvals (both statutory and regulatory)

pertaining to the Issue, including but not limited to those under the Companies

Act and the SEBI Debt Regulations Conditions Subsequent Our Company shall ensure that the following documents are executed / activities

are completed as per time frame mentioned elsewhere in this Information

Memorandum:

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 Section 40 of the Companies

Act, 2013

3. Execution of Debenture Trust Deed for creation of security within time frame

prescribed in the relevant regulations / act / rules etc.

Besides, our Company shall perform all activities whether mandatory or otherwise,

as mentioned elsewhere in this Information Memorandum and Transaction

Document.

Events of Default • Non-payment, non-delivery

• Breach of covenants

• Breach of obligations

• Misrepresentation



56

• Cross default to other obligations of our Company

• Insolvency / Insolvency Proceedings

• Unlawfulness

• Repudiation

• Failure to create security within the stipulated timeline

• Litigation

• Material adverse change

• Cessation of business by our Company

• In addition to the above, the Debenture Trust Deed will set out certain events

of default the occurrence of which will lead to all other amounts, if any,

payable under the Debentures becoming immediately due and payable upon

notification of the Debenture Trustee.

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 Debentures issued herein, 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, Information Memorandum 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 our Company in consultation with and if

required by 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 regarding creation of security for the Debentures

and Debenture Redemption Reserve.

Our Company shall, till the redemption of Debentures, submit our 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,

we 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 our Company

Additional Covenants • Trust Deed Creation: In the event of delay in execution of Debenture Trust

Deed and creation of security, our Company 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), our Company shall pay additional

interest of 2% per annum over the Coupon Rate payable on the Debentures, on

such amounts due, for the defaulting period i.e. the period commencing from



57

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: Our Company 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, our Company shall pay penal interest of 1% 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 Our Company 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 inaccuracy in or breach

of the representations, warranties or covenants by us.

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 our Company. All expenses in relation to the appointment of the security trustee

and other agents shall be payable by our Company.

Taxes & Other Deductions All payments made by our Company 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 our Company is required to make a tax

deduction from a payment to the Debentureholder(s) or the Trustee to the Issue, we

shall make that tax deduction on increased amount such that 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 Information Memorandum is

being made pursuant to the resolution of the Shareholders of the Company at the

meeting held on July 26, 2014 and resolution of the Board of Directors held on

February 14, 2015.

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 Uttar

Pradesh.

Clear Market Our Company 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: Our 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 our Company. Our 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 our

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 our Company.



58

TERMS AND CONDITIONS OF THE ISSUE AND ISSUE PROCEDURE

The Debentures being offered pursuant to this Information Memorandum are subject to the provisions of the

Companies Act, the SEBI Debt Regulations, the Memorandum and Articles of Association of our Company, the

terms of this Information Memorandum, Application Form, and other terms and conditions as may be incorporated

in the Debenture Trust Deed. This section applies to all the Applicants. Please note that all the Applicants are

required to make payment of the full Application Amount along with the Application Form.

a) Nature of Instrument and Issue Size

Our Company proposes to issue upto 1,000 Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable

Debentures of face value of Rs. 1,000,000/- (Rupees One million) each aggregating upto Rs. 1,000 million (Rupees

One 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 our Company in favour of

the Trustee for the benefit of the Debentureholder(s).

b) Authority for the Issue

The present Issue of Debentures by our Company is made pursuant to the resolution passed by the Shareholders of

the Company held on 26th July, 2014 and the meeting of Board of Directors held on February 14, 2015. The

Borrowing is within the total borrowing limits as set out in the resolution passed under Section 180(1)(c) of the

Companies Act, passed at the Annual General Meeting of our Company held on July 26, 2014. Our 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 our Company from our first charge holders

shall be obtained by our Company.

c) How to apply

Only Eligible Investors as given hereunder may apply for the Debentures by completing the Application Form in the

prescribed format in BLOCK LETTERS in English in accordance with the instructions contained therein. Signatures

shall be made in English. The minimum number of Debentures that can be applied for and the multiples thereof shall

be set out in the relevant Application Form. No application can be made for a fraction of a Debenture. Application

Forms should be duly completed in all respects and applications not completed in the said manner are liable to be

rejected. The name of the Applicant’s bank, type of account and account number must be duly completed by the

Applicant. This is required for the Applicant’s own safety and these details will be printed on the refund orders and

interest or redemption warrants.

All payments to be made for subscription to the Debentures shall be made from the bank account of the Eligible

Investor subscribing to the Debentures and our Company shall keep the record of the Bank account from where such

payments for subscriptions have been received, provided that monies payable on subscription to Debentures to be

held by joint holders shall be paid from the bank account of the person whose name appears first in the Application

Form.

The Applicant may transfer payments required to be made in relation to any by EFT or RTGS, to the bank account

of our Company in accordance with the details mentioned below:

Bank IDBI Bank Limited

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



59

Money orders or postal orders will not be accepted. The payments can be made by RTGS, the details of which are

given above. No cash will be accepted. An application once submitted cannot be withdrawn. The applications should

be submitted during normal banking hours at the Registered Office of our Company, mentioned below:

J. K. Cement Limited, Kamla Tower, Kanpur,Uttar Pradesh – 208 001

The applications would be scrutinised and accepted in accordance with the terms and conditions specified in this

Information Memorandum. We are entitled at its sole and absolute discretion to accept or reject any application, in

part or in full without assigning any reason whatsoever. Any application, which is not complete in any respect, is

liable to be rejected.

The Investor or Applicant shall apply for the Debentures in electronic, i.e., dematerialised form only. Applicants

should mention their Depository Participant’s name, DP ID and Beneficiary Account number in the Application

Form. In case of any discrepancy in the information of Depository or Beneficiary Account, we shall be entitled to

not credit the beneficiary’s demat account pending resolution of the discrepancy.

Our Company assumes no responsibility for any application or cheques or demand drafts lost in mail or in transit.

Every application shall be required to be accompanied by the bank account details of the Applicant and the magnetic

ink character reader code of the bank for the purpose of availing direct credit of redemption amount and all other

amounts payable to the Debentureholder(s) through EFT or RTGS.

The Applicant is requested to contact the office of our Company as mentioned above for any clarifications.

d) Application Procedure

Potential Investors will be invited to subscribe by way of Application Form as provided by our Company during the

period between the Issue Opening Date and the Issue Closing Date (both days inclusive). We reserve the right to

close the Issue at the earlier date on the Issue being fully subscribed.

e) Application Size

Applications are required to be for a minimum of 10 Debenture and multiples of 10 Debenture thereafter.

f) Who Can Apply

Nothing in this Information Memorandum 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 Information Memorandum, and this

Information Memorandum and its contents should not be construed to be a ‘prospectus’ under the Companies Act.

This Information Memorandum and the contents hereof are restricted for only the intended recipient(s) who have

been addressed directly through a communication by our Company and only such recipients are eligible to apply for

the Debentures. Only Investors who are identified as Eligible Investors in the section entitled “Summary Term

Sheet”, when specifically approached, are eligible to apply for the Debentures. Any transfer or sale of Debentures by

a Debentureholder also needs to be made to Eligible Investors only.

(a) Application by scheduled commercial banks or Eligible Financial Institutions

The application must be accompanied by certified true copies of (i) board resolution authorising investments or

letter of authorization or power of attorney and (ii) specimen signatures of authorized signatories.

(b) Application by insurance companies

The applications must be accompanied by certified true copies of (i) Memorandum and Articles of Association or

constitution or bye-laws, (ii) Resolution authorising investment and containing operating instructions, (iii) Specimen



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signatures of authorised signatories and (iv) Form 15 AA for claiming exemption from deduction of tax on the

interest income (including interest on application money), if applicable.

(c) Applications by corporate bodies or companies or statutory corporations or NBFCs and RNBCs

The applications must be accompanied by certified true copies of (i) Memorandum and Articles of Association (ii)

resolution authorizing investment and containing operating instructions, and (iii) specimen signatures of authorized

signatories.

(d) Application by mutual funds

i. a separate application can be made in respect of each scheme of an Indian mutual fund registered with SEBI

and that such applications shall not be treated as multiple applications.

ii. the applications made by the asset management companies or custodians of a mutual fund shall clearly

indicate the name of the concerned scheme for which application is being made.

iii. The applications must be accompanied by certified true copies of (i) SEBI registration certificate (ii)

resolution authorizing investment and containing operating instructions and (iii) specimen signatures of

authorized signatories.

DISCLAIMER: PLEASE NOTE THAT ONLY THOSE PERSONS TO WHOM THIS INFORMATION

MEMORANDUM HAS BEEN SPECIFICALLY ADDRESSED ARE ELIGIBLE TO APPLY. HOWEVER, AN

APPLICATION, EVEN IF COMPLETE IN ALL RESPECTS, IS LIABLE TO BE REJECTED WITHOUT

ASSIGNING ANY REASON FOR THE SAME. THE LIST OF DOCUMENTS PROVIDED ABOVE IS ONLY

INDICATIVE, AND AN INVESTOR IS REQUIRED TO PROVIDE ALL THOSE DOCUMENTS,

AUTHORIZATIONS OR INFORMATION, WHICH ARE LIKELY TO BE REQUIRED BY OUR COMPANY.

OUR COMPANY MAY, BUT IS NOT BOUND TO REVERT TO ANY INVESTOR FOR ANY ADDITIONAL

DOCUMENTS OR INFORMATION, AND CAN ACCEPT OR REJECT AN APPLICATION AS IT DEEMS FIT.

INVESTMENT BY INVESTORS FALLING IN THE CATEGORIES MENTIONED ABOVE ARE MERELY

INDICATIVE AND OUR COMPANY DOES NOT WARRANT THAT THEY ARE PERMITTED TO INVEST

IN ACCORDANCE WITH EXTANT LAWS, REGULATIONS, ETC. EACH OF THE ABOVE CATEGORIES

OF INVESTORS IS REQUIRED TO CHECK AND COMPLY WITH EXTANT RULES, REGULATIONS AND

GUIDELINES, ETC. GOVERNING OR REGULATING THEIR INVESTMENTS AS APPLICABLE TO THEM

AND OUR COMPANY IS NOT, IN ANY WAY, DIRECTLY OR INDIRECTLY, RESPONSIBLE FOR ANY

STATUTORY OR REGULATORY BREACHES BY ANY INVESTOR, NEITHER IS OUR COMPANY

REQUIRED TO CHECK OR CONFIRM THE SAME.

g) 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

• Government notification or certificate of incorporation

• Power of attorney (original and certified true copy)

• Resolution authorizing investment along with operating instructions

• 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.

• Form 15H for claiming exemption from TDS on interest on application money, if any

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

• SEBI Registration Certificate (for Mutual Funds)

• PAN to be submitted.

Note: Participation by potential Investors in the Issue may be subject to statutory and/or regulatory

requirements applicable to them in connection with subscription to Indian securities by such categories of

persons or entities. Applicants are advised to peruse the Debenture Trust Deed and further ensure that they

comply with all regulatory requirements applicable to them, including exchange controls and other



61

requirements. Applicants ought to seek independent legal and regulatory advice in relation to the laws

applicable to them.

h) Force Majeure

Our 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

i) Applications, Under Power of Attorney/ Relevant Authority

A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and

specimen signature(s) of all the authorized signatories and the tax exemption certificate or document, if any, must be

lodged along with the submission of the completed Application Form. Further modifications or additions in the

power of attorney or authority should be notified to us or to our agents or to such other person(s) at such other

address(es) as may be specified by our Company from time to time through a suitable communication.

In case of an application made by companies under a power of attorney or resolution or authority, a certified true

copy thereof along with memorandum and articles of association and/or bye-laws along with other constitutional

documents must be attached to the Application Form at the time of making the application, failing which, our

Company reserve 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.

j) Issue of Debentures in Dematerialized Form:

Our 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.

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

involving financial obligation of our Company.

By very nature and volume of its business, our 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 our Company. However, copies of certain contracts, arrangements or documents,

entered into by our 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 our Company) which are or may be deemed to be material

have been entered into by our Company and may be inspected at the Registered Office of our Company between

11.00 a.m. and 4.00 p.m. on any working day from the date of this Information Memorandum until the Issue Closing

Date.

1. Certified true copy of the Memorandum and Articles of Association of our Company;

2. Copy of certificate of Incorporation of our 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 February 14, 2015 approving the proposed issue of

Debentures on private placement basis;

5. Certified copy of the resolution passed by the Shareholders dated July 26, 2014 under section 180(1)(c) of

the Companies Act, 2013;

6. Certified copy of the shareholder resolution dated July 26, 2014 authorising re-appointment of M/s. P. L.

Tandon & Co. as Auditor of our Company;

7. Copy of the letter dated from our Company appointing IDBI Trusteeship Services Limited as Trustee to the

Issue;

8. Copy of letter issued by Credit Rating Agency, CARE dated January 13, 2015 assigning “CARE AA-“

rating for an amount upto Rs. 1,000 million to be raised through issue of Debentures

9. Consent letter dated from IDBI Trusteeship Services Limited to act as Trustee to the Issue.

10. Consent letter dated from Sharepro Service (India) Private Limited to act as Registrar and Transfer Agent.

11. Copy of Tripartite Agreement between our Company, NSDL and Registrar and Transfer Agent.

12. Copy of Tripartite Agreement between our Company, CDSL and Registrar and Transfer Agent.



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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 NSDL or CDSL will be given initial credit within 15 days from the

Deemed Date of allotment.

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 36 of the Companies Act, 2013, 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 our 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

Our Company 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 us.



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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 our 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.

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) Tax Deduction 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 our 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 our Company.

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 our 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 our Company as on the Record Date. On our

Company dispatching the redemption warrants to such Beneficiary (ies) by registered post/ courier, the liability of

our Company shall stand extinguished. Our 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 our 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 our Company towards the Debentureholder(s). On such payment being made, our Company will inform NSDL /

CDSL and accordingly the account of the Debentures holders with the NSDL / CDSL will be adjusted.

Our Company’s liability to the Debentureholder(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 our Company will not be liable

to pay any interest or compensation from the date of redemption. On our Company dispatching the amount specified

above in respect of the Debentures, the liability of our Company shall stand extinguished.



64

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, 2013, our Company is required to create Debenture Redemption Reserve out of profits, if any, earned by our

Company. Our Company shall create a Debenture Redemption Reserve (‘DRR’) and credit to the DRR such

amounts as applicable under provisions of Section 71 of the Companies Act 2013 (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 our Company or the Trustee shall have and shall be

deemed to have been given if published in national daily newspapers in English Hindi language and may, at the sole

discretion of our Company 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 our Company, 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 our 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 our 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 Information Memorandum together with interest, costs,

charges, remuneration of the Debenture Trustee and all other moneys payable in respect thereof shall be secured

against 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 1.25 times of the outstanding face value of Debentures at all times during the tenor

of the Issue.

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 security will be created by our Company as aforesaid in favour of the Trustee within 90 days or prior thereto at

the instance of the Investor . from the Issue Pay-in Date of the Debentures on such of the assets for which our

Company 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.

Our Company shall maintain a minimum asset cover of 1.25 times of the total amount outstanding at all times.

s) Undertaking by our Company



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Our Company undertakes that

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

• we 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 our Company;

• no further issue of securities shall be made till the securities offered through this Information Memorandum 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

Our Company has entered into necessary depository arrangements with NSDL and 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, our Company has signed two tripartite agreements as below:

• Tripartite Agreement between our Company, NSDL and the Registrar for dematerialisation of the

Debentures offered under the present issue.

• Tripartite Agreement between our Company, 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 Debentureholder(s) whose

names appear on the list of beneficial owners given by the Depositories to our 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, our 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 our Company. On receiving such intimation, our 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



66

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/

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 our 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. Our Company undertakes that there will be a common transfer form /

procedure for transfer of debentures.

x) Trustee for the Debentureholder(s)

IDBI Trusteeship Services Limited has been appointed to act as Trustee to the Issue. All the remedies of the

Debentureholder(s) for the amounts due on the Debentures will be vested with the Trustee on behalf of the

Debentureholder(s).

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 Information Memorandum. Any payment made by our Company to the Trustee on behalf of the

Debentureholder(s) shall discharge us pro tanto to the Debentureholder(s). 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 our Company. No

Debentureholder shall be entitled to proceed directly against our Company 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

Debentureholder(s) and the manner of enforcement thereof.

y) Right to Accept or Reject Applications

We reserve our 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/Ward/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.



67

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 Debentureholder(s)/

beneficiaries as provided by the Depositories on the Record Date. In the event of our 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 our Company in respect of interest so paid to the

registered Debentureholder(s). 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

Our 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 our 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 Debentureholder(s)/ Trustee.

The Issuer may raise further borrowings to be secured against first pari passu charge on the assets related to its

cement plant at Muddapur or to partially release these assets with the consent of the Debentureholder, which shall

not be unreasonably withheld by the Debentureholder, provided assets cover of 1.25 times of the Debenture

outstanding amount is available.

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

Our Company will have the power exercisable at its sole and absolute discretion from time to time to repurchase

some, or all of our 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, our 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, our 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 our 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 Debentureholder(s) maintained by our 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 Debentureholder(s) 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

Debentureholder(s), provided that nothing in such consent or resolution shall be operative against our 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 our Company.

ff) List of Beneficial Owners



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Our 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 Debentureholder(s) containing necessary particulars will be maintained by our Company, 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, our 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). Our 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. Our 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 72 of the Companies Act, 2013, 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. Our 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 Debentureholder(s), 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

Our 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 & Corporate Office of our Company. All

investors are hereby informed that our Company has appointed a Compliance Officer who may be contacted in case

of any preissue / 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:



69

Mr. Shambhu Singh

JK CEMENT LIMITED

Kamla Tower,Kanpur,Uttar Pradesh 208 001

Tel.: (91 0512) 2371478/79/80/81

Fax: (91 0512) 2332665


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



70

DECLARATION

Declaration by our Company

Our Company hereby declares that this Information Memorandum contains full disclosure in accordance with SEBI

Debt Regulations.

Our Company also confirms that this Information Memorandum does not omit disclosure of any material fact which

may make the statements made therein, in the light of the circumstances under which they are made, misleading.

The Information Memorandum also does not contain any false or misleading statement. Our Company accepts no

responsibility for the statements made otherwise than in this Information Memorandum or in any other material

issued by or at the instance of the Issuer and that anyone placing reliance on any other source of information would

be doing so at his own risk.

Our Company declares that all the relevant provisions of the relevant regulations or guidelines issued by SEBI and

other applicable laws have been complied with and no statement made in this Information Memorandum is contrary

to the provisions of the regulations or guidelines issued by SEBI and other applicable law, as the case may be.

Declaration by the Directors

(i) Our Company has complied with the provisions of the Companies Act, 2013 and the rules made thereunder;

(ii) The compliance with the Companies Act, 2013 and the rules made thereunder does not imply that payment of

interest or repayment of Debentures is guaranteed by the Central Government; and

(iii) the monies received under the offer shall be used only for the purposes and objects indicated in the Information

Memorandum.

I am authorized by the Board of Directors of our Company vide resolution dated [●] to sign this form and declare

that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of the subject matter of

this form and matters incidental thereto have been complied with. Whatever is stated in this form and in the

attachments thereto is true, correct and complete and no information material to the subject matter of this form has

been suppressed or concealed and is as per the original records maintained by the promoters subscribing to the

Memorandum of Association and Articles of Association It is further declared and verified that all the required

attachments have been completely, correctly and legibly attached to this form.

For J. K. CEMENT LIMITED

Authorised Signatory

Name: Mr. Shambhu Singh

Designation: Assistant Vice President (Legal) & Company Secretary

Date: March 23, 2015

Place: Kanpur



71

ANNEXURE 1: CARE RATING LETTER AND RATING RATIONALE



72



73



74

ANNEXURE 2: TERM SHEET

Security Name J.K. Cement Limited,

Issuer J.K. Cement Limited

Type of Instrument Listed, Rated, Secured, Non-Convertible, Non Cumulative, Redeemable Debentures

issued by our Company

Nature of Instrument Secured

Seniority At par with other secured lenders of our Company having pari-passu first charge of

security offered for NCD

Issue Size Upto Rs. 1,000 million. The present offer is for 1000 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. 1000 million

Tenor 10 years from the Deemed Date of Allotment

Option to retain

oversubscription

Nil

Objects of Issue and/or

details of utilization of

proceeds

Funding long term growth and general corporate purposes, interalia including

capital expenditure and working capital or any other purposes as may be

permissible under applicable law. Pending utilisation of the proceeds of the NCD as

here in before, our Company intends to temporarily invest in high quality interest

bearing instruments including deposits with banks and investments in mutual funds.

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 i. Scheduled Commercial Bank

j. Non Banking Finance Companies (NBFCs)

k. Foreign Institutional Investors (FIIs)

l. Mutual Funds/Trusts

m. Insurance Companies/Pension Funds

n. Corporates/ Bodies Corporate

o. High Networth Individuals

p. 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.

Our Company also reserves the right to get the Debentures listed on such other

recognized stock exchanges as our Company may deem fit after giving prior

notification of such proposed listing to the Debenture Trustee.

Rating of the instrument Credit rating of CARE AA- (Double A Minus)

Coupon Rate 9.65% p.a.; payable quarterly on an Actual basis

Step Up/ Step Down

Coupon Rate /Condition

None

Issuance and Trading Mode In demat mode only

Coupon Payment frequency quarterly in arrears

Coupon Payment Dates quarterly till maturity of Debentures

Coupon Type Fixed

Coupon Reset process

(including rates, spread,

Not Applicable



75

effective date, interest rate

cap and floor etc.

Day count basis 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 our Company’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 /Redemption

Date

In 4 annual installments as given below:









Put/Call Option No

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 6.5.15

Issue Closing Date 6.5.15

Issue Pay-in Date 6.5.15

Deemed Date of Allotment 6.5.15


Registrars & Transfer

Agent

Sharepro Services (India) Pvt. Ltd.

Settlement mode of the

instrument

All payments to be made by our Company to the Debentureholder(s) 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 our

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 our Company’s existing



76

cement plant at village Muddapur, Taluka Mudhol, Dist: Bagalkot, Karnataka

except mines. The Security cover will be atleast 1.25 times of the outstanding face

value of Debentures at all times during the tenor of the Issue.

Our Company shall create and perfect security in favour of the Debentureholder(s)

within 90 days or prior thereto at the instance of the Investor from 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 our Company

• Credit Rating of “CARE AA-”

• 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

Debentureholder(s)

• all consents, authorizations and approvals (both statutory and regulatory)

pertaining to the Issue, including but not limited to those under the Companies

Act and the SEBI Debt Regulations Conditions Subsequent Our Company shall ensure that the following documents are executed / activities

are completed as per time frame mentioned elsewhere in this Information

Memorandum:

4. Credit of demat account(s) of the allottee(s) by number of Debentures allotted

within 15 days from the Deemed Date of Allotment.

5. 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 Section 40 of the Companies

Act, 2013

6. Execution of Debenture Trust Deed for creation of security within time frame

prescribed in the relevant regulations / act / rules etc.

Besides, our Company shall perform all activities whether mandatory or otherwise,

as mentioned elsewhere in this Information Memorandum and Transaction

Document.

Events of Default • Non-payment, non-delivery

• Breach of covenants

• Breach of obligations

• Misrepresentation

• Cross default to other obligations of our Company

• Insolvency / Insolvency Proceedings

• Unlawfulness

• Repudiation

• Failure to create security within the stipulated timeline

• Litigation

• Material adverse change



77

• Cessation of business by our Company

• In addition to the above, the Debenture Trust Deed will set out certain events

of default the occurrence of which will lead to all other amounts, if any,

payable under the Debentures becoming immediately due and payable upon

notification of the Debenture Trustee.

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 Debentures issued herein, 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, Information Memorandum 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 our Company in consultation with and if

required by 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 regarding creation of security for the Debentures

and Debenture Redemption Reserve.

Our Company shall, till the redemption of Debentures, submit our 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,

we 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 our Company

Additional Covenants • Trust Deed Creation: In the event of delay in execution of Debenture Trust

Deed and creation of security, our Company 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), our Company shall pay additional

interest of 2% 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: Our Company 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, our Company shall pay penal interest of 1% 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).



78

Representation Warranties

& Undertakings

Customary for an issuance of this nature.

Indemnity Our Company 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 inaccuracy in or breach

of the representations, warranties or covenants by us.

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 our Company. All expenses in relation to the appointment of the security trustee

and other agents shall be payable by our Company.

Taxes & Other Deductions All payments made by our Company 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 our Company is required to make a tax

deduction from a payment to the Debentureholder(s) or the Trustee to the Issue, we

shall make that tax deduction on increased amount such that 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 Information Memorandum is

being made pursuant to the resolution of the Shareholders of the Company at the

meeting held on July 27, 2014 and resolution of the Board of Directors held on

February 14, 2015 .

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 Uttar

Pradesh.

Clear Market Our Company would ensure that it will not bring any other primary issue of

Debentures within next one month from signing of the final term sheet.



79

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 Debentureholder(s), (on a yearly

basis), in respect of compliance with the terms and conditions of Issue as contained in the Information

Memorandum.

• 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 Debentureholder(s) 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

Debentureholder(s) 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 Information Memorandum 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


Authorised Signatory

Name: Mr. Shambhu Singh

Designation: Assistant Vice President (Legal) & Company Secretary

Serial No.: 1


Addressed to: [●]


Dated: 6.5.15

ANNEXURE 4: APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES

(SERIES D)

J. K. CEMENT LIMITED CIN: L17229UP1994PLC017199

Registered & Corporate Office: Kamla Tower, Kanpur, Uttar Pradesh 208 001

Contact Person: Mr. Shambhu Singh, Compliance Officer; Telephone: (91 0512) 2371478/79/80/81;

Facsimile: (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 Information Memorandum dated March [●], 2015 issued by J. K. Cement

Limited, 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 Debentureholder(s). We bind ourselves to the terms and conditions as contained in the

Information Memorandum for Private Placement. We note that our Company is entitled in its absolute discretion to

accept or reject this application whole or in part without assigning any reason whatsoever.

I/we understand that all capitalized terms which have not been defined will have the same meaning as in the

Information Memorandum.

(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)

RTGS or Cheque

or Demand Draft

or EFT or fund

transfer Date

Cheque or

Demand Draft

No. or UTR No.

in case of RTGS

or Ac no incase

of EFT

EFT or RTGS or Cheque

or Fund Transfer or

Demand Draft drawn on

(Name of Bank and

Branch)

Office Use only

Date of receipt of

application and Cheque

Date of realization of

cheque/DD

We apply 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 9.65% p.a.; payable quarterly on an Actual/Actual basis

Interest Payment quarterly in arrears

Redemption Redemption of the Debentures by our Company 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

We the undersigned, are agreeable to holding the Debentures of our Company in dematerialised form. Details of my/our

Beneficial Owner account are given below:

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


CIN: L17229UP1994PLC017199

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 FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES (SERIES D) Application Form No.[ ]_ Date: ____________

Received from ____________________________________Address_____________________________________________

____________________________________________________________________________________________________

an application for _________________ Debentures under Series ___ 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 Information Memorandum of J. K. Cement Limited carefully in order to satisfy themselves

before making an application for subscription. For a copy of Information Memorandum, 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), EFT/ RTGS. The Company’s Account and RTGS details

are given in the Information Memorandum. 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 Debentureholder(s) 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 our Company’s 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 Information Memorandum. 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) The Applicant represents and confirms that it has understood the terms and conditions of the Debentures including the

“Risk Factors” of the Information Memorandum and is authorised and eligible to invest in the same and perform any

obligations related to such investment.

13) All future communication should be addressed to the Registrar, our Company (whose address is given below) or to such

other person at such address as may be notified by our Company from time to time.

SHAREPRO SERVICES (INDIA) PRIVATE LIMITED

13AB, Samhita Warehousing Complex, 2nd

Floor, Sakinaka Telephone,

Exchange Lane, Andheri (E), Mumbai – 400 072

Tel: (91 22) 6772 0300 / 400

Fax: (91 22) 2859 1568

Email:[email protected]

Contact Person: Mr. Rajesh D. Jadhav

*******