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, 2 nd 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.
84
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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
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,
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
INDUSTRY AND MARKET DATA ............................................................................................................................ 6
DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 7
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
46
The brief details of the working capital borrowings as of December 31, 2014.
Name of Lender Nature of
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.
Name of Lender Nature of
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
• At the end of 9th
year from Date of Allotment: 30%
“CARE
AA-“
Secured Refer Note
1 below
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
47
of the principal
• At the end of 10th
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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 - -
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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:
• 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
• At the end of 9th
year from Date of Allotment: 30% of the principal
• At the end of 10th
year from Date of Allotment: 30% 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
Trustee to the Issue IDBI Trusteeship Services Limited
Registrars & Transfer
Agent
Sharepro Services (India) Pvt. Ltd.
Settlement mode of the
instrument
All payments to be made by 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
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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
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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
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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
60
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
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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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
62
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
63
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
65
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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.
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
68
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:
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
71
ANNEXURE 1: CARE RATING LETTER AND RATING RATIONALE
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
72
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
73
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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:
• 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
• At the end of 9th
year from Date of Allotment: 30% of the principal
• At the end of 10th
year from Date of Allotment: 30% 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
Trustee to the Issue IDBI Trusteeship Services Limited
Registrars & Transfer
Agent
Sharepro Services (India) Pvt. Ltd.
Settlement mode of the
instrument
All payments to be made by 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
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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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).
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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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.
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(This Information Memorandum is neither a Prospectus nor a Statement in Lieu of Prospectus)
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ANNEXURE 3: UNDERTAKING BY THE COMPANY
The Company undertakes that –
• In the event the Debentures are issued in physical form, the Company shall use a common form of transfer.
• It will provide a compliance certificate duly certified by the Trustee to the 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
J. K. Cement Limited
Authorised Signatory
Name: Mr. Shambhu Singh
Designation: Assistant Vice President (Legal) & Company Secretary
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
ANNEXURE 4: APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES