CMYK
DRAFT RED HERRING PROSPECTUS
Dated []
Please read Section 60B of the Companies Act, 1956
The Draft Red Herring Prospectus will be updated upon RoC filing
100% Book Building Offer
SRS ENTERTAINMENT LIMITED
An ISO 9001:2000 Company
[Originally incorporated as SRS Commercial Co. Limited on August 29, 2000 with Registrar of Companies, NCT of Delhi and Haryana at New Delhi and name of the
Company was changed to SRS Entertainment Limited on January 25, 2005 under a fresh Certificate of Incorporation]
Registered Office: C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094
Telephone: (011) 55418111, 55292497, 55418110; Fax: (011) 22577796
E-mail: info@srs-world.com; Website: www.srs-world.com
Contact Person: Mr. Arun Kumar Gupta, CFO and Compliance Officer; Telephone: (0129) 5008350, 5003266; E-mail: srsco@srs-world.com
[The Company has changed its registered office from 804, Manjusha, 57, Nehru Place, New Delhi - 110019 to E-985, Near Mala Devi School, 100 ft. Road, Babarpur,
Shahdara, Delhi - 110094 vide resolution dated December 01, 2000 and subsequently to the present location C-4/1, 100 Ft. Road, Shahdara, Delhi - 110094 vide
resolution dated April 23, 2003]
Public Issue of 2,28,57,200 Equity Shares of Rs.10/- each of SRS Entertainment Limited (“SRSEL”) (the “Company”) at a price of Rs. [] per equity share for
cash aggregating Rs.[] Lacs (hereinafter referred to as the “Issue”). The Issue comprises 42,87,200 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs
reserved for Promoter Group of the Company, 22,85,720 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs reserved for the Shareholders of Group
Companies of the Company, 22,85,720 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs reserved for Employees of the Company and Net Issue to public
of 1,39,98,560 Equity Shares of Rs.10/- each aggregating to Rs. [] Lacs. The Issue would constitute 45.81% of the post Issue paid-up capital of the Company.
Price Band: Rs. [] To Rs. [] Per Equity Share Of Face Value Of Rs. 10 Each
The Issue Price Is [] Times Of The Face Value At The Lower End Of The Price Band And [] Times Of The Face Value At The Higher End Of The Price Band.
This Issue is being made through the 100% Book Building Process wherein up to 50% of the Net Issue to public shall be allocated on a discretionary
basis to Qualified Institutional Buyers. Further, not less than 15% of the Net Issue to public shall be available for allocation on a proportionate basis
to Non-Institutional Bidders and not less than 35% of the Net Issue to public shall be available on a proportionate basis to Retail Individual Bidders,
subject to valid bids being received at or above the Issue Price.
RISKS IN RELATION TO FIRST ISSUE
This being the first Issue by SRS Entertainment Limited, there has been no formal market for the securities of the Company. The face value of the
shares is Rs.10/- each and the Issue Price is [] times of the face value. The Issue Price (as determined and justified by the Book Running Lead
Manager and the Issuer Company as stated under “Introduction - Basis of Issue Price” paragraph on page no. 31 of the Draft Red Herring
Prospectus) should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can be given
regarding an active or sustained trading in the shares of the Company nor regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISK
Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this issue unless they can
afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this
offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. The
securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or
adequacy of this document. Specific attention of investors is invited to the statement of ‘Risk factors’ on page no. viii of the Draft Red Herring
Prospectus.
COMPANY’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Red Herring Prospectus 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 the Draft Red
Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions
expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such
information or the expression of any such opinions or intentions misleading in any material respect.
BOOK RUNNING LEAD MANAGER
JOINT BOOK RUNNING LEAD MANAGER
REGISTRAR TO THE ISSUE
UTI BANK
Solutions for a lifetime
UTI Bank Limited
Allianz Securities Limited
Karvy Computershare Private Limited
Central Office: Maker Towers ‘F’,
11th Floor, Cuffe Parade, Colaba,
Mumbai – 400 005
Tel.: (022) 2218 9106 - 09
Fax.: (022) 2216 2467
E-mail: utibmbd@utibank.co.in
Website: www.utibank.com
33, Vaswani Mansion,
6th Floor, Dinsha Vachha Road,
Churchgate, Mumbai – 400 020
Tel.: (022) 2287 0580
Fax.: (022) 2287 0581
E-mail: srs@aslfinancial.com
Website: www.aslfinancial.com
Karvy House, 46, Avenue 4,
Street No.1, Banjara Hills,
Hyderabad 500 034
Tel.: (040) 2331 2454
Fax.: (040) 2331 1968
E-mail: srs.ipo@karvy.com
Website: www.karvy.com
Bid / Issue Opens On [], 2005
ISSUE PROGRAMME
Bid / Issue Closes On [], 2005
LISTING
The Equity Shares issued through the Draft Red Herring Prospectus are proposed to be listed on The Bombay Stock Exchange Limited (Designated
Stock Exchange) and The National Stock Exchange of India Limited. The Company has received in-principle approvals for listing its Equity Shares
from the aforesaid stock exchanges through their letters dated ________ and _________ respectively.
CMYK
TABLE OF CONTENTS
SECTION
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
TITLE
DEFINITIONS, TECHNICAL GLOSSARY AND ABBREVATIONS
RISK FACTORS
1. Forward Looking Statements
2. Risk Factors
INTRODUCTION
1. Summary
2. General Information
3. Capital Structure
4. Objects of the Issue
5. Basis of Issue Price
ABOUT SRS ENTERTAINMENT LIMITED
1. Industry Overview
2. Business Overview
3. History and Corporate Structure
4. Management
5. Promoters and Promoter Group
6. Group Companies
7. Currency of Presentation
8. Dividend Policy
FINANCIAL STATEMENTS
1. Financial Information of SRS Entertainment Limited
2. Changes in Accounting Policies in the last three years
3. Managements' Discussion and Analysis of Financial Condition and
Results of Operations as reflected in the Financial Statements
LEGAL and OTHER INFORMATION
1. Outstanding Litigations and Material Developments
2. Government Approvals / Licensing Arrangements
OTHER REGULATORY AND STATUTORY INF
INFORMATION
ORMATION
ISSUE INFORMATION
1. Terms of the Issue
2. Issue Structure
3. Issue Procedure
DESCRIPTION OF EQUITY SHARES AND TERMS OF THE ARTICLES
OF ASSOCIATION
OTHER INFORMATION
1. List of Material Contracts and Documents for Inspection
2. Declaration
PAGE NO.
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5
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31
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69
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104
111
114
118
125
127
131
147
160
162
i
DEFINITIONS, TECHNICAL GLOSSARY AND ABBREVIATIONS
Terms
“SRS Entertainment Limited”
or
“SRSEL”
or
“the
Company” or "our Company"
“we” or “us” and “our”
Description
Refers to SRS Entertainment Limited, a public limited company incorporated
under the Companies Act, 1956
Unless the context otherwise require, refers to SRS Entertainment Limited
Issue Related Terms
Terms
Allotment
Description
Unless the context otherwise requires, transfer of Equity Shares from the
Company to the successful applicants
Bankers to the Issue
[•], each of whom is registered with SEBI and with whom the Public Issue
Account will be opened
Bid
An offer made during the Bidding Period by a prospective investor to subscribe to
Equity Shares of the Company at a price within the Price Band, including all
revisions and modifications thereto.
Bid Amount
The amount equal to highest value of the optional Bids indicated in the Bid-cumApplication Form payable by the Bidder on submission of the Bid in the Issue
Bid Closing Date/ Issue Closing The date after which the Members of the Syndicate will not accept any Bids for
the Issue, which shall be the date notified in a widely circulated English national
Date
newspaper, Hindi national newspaper and regional newspaper
Bid Opening Date/ Issue The date on which the Members of the Syndicate shall start accepting Bids for the
Issue, which shall be the date notified in a widely circulated English national
Opening Date
newspaper, Hindi national newspaper and regional newspaper
Bid-cum-Application Form
The form in terms of which the Bidder shall make an offer to subscribe to the
Equity Shares of the Company and which will be considered as the application for
issue of the Equity Shares pursuant to the terms of the Draft Red Herring
Prospectus.
Bidder
Any prospective investor who makes a Bid pursuant to the terms of the Draft Red
Herring Prospectus
Bidding Period / Issue Period
The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date
inclusive of both days and during which prospective Bidders can submit their
Bids
Book Building Process
Book building route as provided under Chapter XI of the SEBI Guidelines, in
terms of which, this Issue is being made
CAN/
Confirmation
of The note or advice or intimation of allocation of Equity Shares sent to the Bidders
Allocation Note
who have been allocated Equity Shares in the Book Building Process
Cap Price
The higher end of the Price Band, above which the Issue Price will not be
finalised and above which no bids will be accepted
Cut-off Price
Cut-off price refers to any price within the Price Band. A Bid submitted at Cut-off
is a valid Bid at all price levels within the Price Band
Depositories Act
Depositories Act, 1996, as amended from time to time
Depository
A depository registered with SEBI under the SEBI (Depositories and Participants)
Regulations, 1996, as amended from time to time
Depository Participant
A depository participant as defined under the Depositories Act
Designated Date
The date on or after which funds are transferred from the Escrow Account to the
Public Issue Account after the Prospectus is filed with the RoC, following which
the Board of Directors shall allot Equity Shares to the successful Bidders
Designated Stock Exchange
The Bombay Stock Exchange Limited
Draft Red Herring Prospectus Draft Red Herring Prospectus dated September 12, 2005 as filed with SEBI for its
/Offer Document
comments
Equity Shares
Equity Shares of the Company of face value of Rs.10/- each unless otherwise
specified in the context thereof
Escrow Account
Account opened with an Escrow Collection Bank(s) and in whose favour the
Bidder will issue cheques or Drafts in respect of the Bid Amount when
submitting a Bid.
Escrow Agreement
Agreement entered into amongst the Company, the Registrar, the Escrow
Collection Bank(s), the BRLM and the JOINT BRLM for collection of the Bid
ii
Amounts and for remitting refunds, if any, of the amounts collected, to the
Bidders.
Escrow Collection Bank(s)
The banks, which are clearing members and registered with SEBI as Banker to
the Issue at which the Escrow Account will be opened.
Face Value
Par value of equity capital per Equity Share (presently Rs.10 per Equity Share)
Floor Price
The lower end of the Price Band, below which the Issue Price will not be
finalised and below which no Bids will be accepted
IPO Committee
A Committee constituted by the Board of Directors comprising of Mr. R. K.
Aggrawal, and Mr. Sunil Jindal for the purpose of carrying out various activities
in relation to the Issue
Issue Price
The price at which Allotment of Equity Shares will be made in this Issue as
determined by the Company and in consultation with the BRLM and Joint
BRLM, on the Pricing Date.
Issue/ Initial Public Offer / "IPO" Public Issue of 2,28,57,200 Equity Shares of face value of Rs.10/- each at the
Issue Price by the Company under the Draft Red Herring Prospectus
Net Issue
Issue size less 42,87,200 equity shares reserved for Promoters of the Company,
less 22,85,720 Equity Shares reserved for the Shareholders of the Group
Companies of the Company and less 22,85,720 equity shares reserved for
Employees of the Company
NRIs/ Non-Residents
Non-Resident is a person resident outside India, as defined under FEMA and who
is a citizen of India or a Person of Indian Origin under FEMA (Transfer or Offer
of Security by a Person Resident Outside India) Regulations, 2000
Pay-in-date
The last date specified in the CAN sent to the Bidders
Pay-in-Period
This term means
i. with respect to Bidders whose Margin Amount is 100% of the Bid Amount,
the period commencing on the Bid Opening Date and extending until the Bid
Closing Date, and
ii. with respect to Bidders whose Margin Amount is less than 100% of the Bid
Amount, the period commencing on the Bid Opening Date and extending
until the closure of the Pay-in-Date
Price Band
The Price band of a minimum price (Floor Price) of Rs. [•] and the maximum
price (Cap Price) of Rs. [•] and includes revision thereof
Pricing Date
The date on which the Company in consultation with the BRLM and Joint BRLM
finalises the Issue Price
Public Issue Account
In accordance with Section 73 of the Companies Act, 1956, an account opened
with the Banker(s) to the Issue to receive monies from the Escrow Account for
the Issue on the Designated Date
QIB Portion
The portion of the Issue being mandatory, 69,99,280 Equity Shares of Rs.10 each
at the Issue Price, available for allocation to QIBs
Qualified Institutional Buyers/ Public Financial Institutions as specified in Section 4A of the Companies Act,
Scheduled Commercial Banks, Mutual Funds registered with SEBI, Venture
QIBs
Capital Funds registered with SEBI, State Industrial Development Corporations,
Insurance Companies registered with the Insurance Regulatory And Development
Authority (IRDA), Provident Funds with a minimum corpus of Rs.2500 lacs and
Pension Funds with a minimum corpus of Rs.2500 lacs
Red Herring Prospectus
Means the Red Herring Prospectus issued in accordance with Section 60B of the
Companies Act, which does not have complete particulars on the price at which
the Equity Shares are issued and size of the Issue. The Red Herring Prospectus
would be filed with the RoC at least three days before the opening of the Bid/
Issue and will become a Prospectus after filing with the RoC after the pricing and
allocation.
Registrar/ Registrars to the Issue Karvy Computershare Private Limited
Reserved Categories
Means reservation for allocation to:
i. Promoter Group of the Company
ii. Permanent Employees and Directors of the Company *
iii. Shareholders of Group Companies i.e., Akriti Financial Services (P)
Limited and Ferro Plast Limited *
* as on cut-off date [•]
Retail Individual Bidders
Individual Bidders (including HUFs) who have not Bid for an amount in excess
iii
of Rs.1,00,000 in any of the bidding options in the Issue.
The portion of the Issue being a minimum of 48,99,496 Equity Shares of Rs.10
each available for allocation to Retail Individual Bidder(s)
Revised Form
The form used by the Bidders to modify the quantity of Equity Shares or the Bid
Price in any of their Bid cum Application Forms or any previous Revision
Form(s).
SEBI (DIP) Guidelines
SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on
January 27, 2000, as amended, including instructions and clarifications issued by
SEBI from time to time
SEBI Act
Securities and Exchange Board of India Act, 1992, as amended from time to time
Stock Exchanges
The Bombay Stock Exchange Limited and The National Stock Exchange of India
Limited
Syndicate
The Syndicate Members collectively
Syndicate Agreement
The agreement to be entered into among the Company and the members of the
Syndicate in relation to the collection of Bids in this Issue
Syndicate Members
Intermediaries registered with SEBI and eligible to act as underwriters. Syndicate
Members are appointed by the BRLM and Joint BRLM
TRS or Transaction TRS or The slip or document issued by the Syndicate Members to the Bidder as proof of
Transaction Registration Slip
registration of the Bid
Underwriters
The BRLM, Joint BRLM and the Syndicate Members
Underwriting Agreement
The Agreement dated [•] among the Syndicate and the Company to be entered
into on or after the Pricing Date.
Retail Portion
Company/Industry related Terms
Terms
Description
Article(s) of Association
Articles of Association of SRS Entertainment Limited
Auditors
The statutory auditors of the company viz. M/s T.K. Gupta & Associates,
Chartered Accountants
BOD/ Board/ Board of Directors The Board of Directors of SRS Entertainment Limited or a Committee thereof,
except where mentioned otherwise
Cineplex
A complex of movie theaters and coffee lounge
Director(s)
Director(s) of SRS Entertainment Limited unless otherwise specified
DJ
Disk Jockey
Employees
The following persons as on the cut-off date [•]
(a) a permanent employee of the Company working in India or out of India; and
(b) a Director of the Company, whether a whole time director, part time director
or otherwise
F&B
Food and Beverages
Food Court
7 Dayz Multiethnic Food Court/Fine Dine Restaurant
Group Companies
1. Akriti Financial Services (P) Limited
2. Ferro Plast Limited
I.T.
Information Technology
I.T.E.S.
Information Technology Enabled Services
ITES/BPO
Information Technology Enabled Services and Business Process Outsourcing
Memorandum / Memorandum of The Memorandum of Association of SRS Entertainment Limited
Association
Multiplex
Includes Cineplex, Food Court /restaurants, shopping mall and SRS Value Bazaar
Project
The Proposed expansion plans of the Company to set up by way of:
ವ Ownership model including Multiplex
ವ Leasehold model including Cineplex, restaurants/Food Court and SRS Value
Bazaar
ವ Franchisee model including Cineplex and Food Court
Promoters
1. Mr. Sunil Jindal
2. Mr. Raju Bansal
iv
Promoter Group
Registered Office of the
Company
Retail Stores/ Bazaar(s)
Reverse Osmosis
SRS Cinemas
SRS Multiplex / SRSM
SRS Value Bazaar
Tier II Cities
Abbreviations
Abbreviations
A/c
Act/Companies Act
AGM
AS
BRLM
BSE
CAGR
Capital or Share Capital
CDSL
Joint BRLM
DP
DPC
EGM/ EOGM
EPS
FEMA
FIPB
FY / Fiscal / Financial Year
GOI
HSEB
HUDA
HUF
Indian GAAP
IT Act
KVA
MoU
Family members of Promoters
1. Mr. Lalit Bansal
2. Mr. N. C. Bansal
3. Mr. Bishan Bansal
4. Mr. Suresh Bansal
5. Ms. Sanjna Bansal
Corporate bodies:
1. Bansla Finlease Limited
2. BTL Commercial Limited
3. BTL Impex (India) Limited
4. BTL Industries Limited
5. BTL Investments Limited
6. BTL Sales Limited
7. Madhavtech India (P) Limited
8. Neelabh Engineers (P) Limited
9. North Delhi Credit & Investments Limited
10. Parvati Finlease Limited
C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094
SRS Value Bazaar, i.e., retail stores proposed to be set up by the Company
A water purification process
Brand name of theatre screens poposed to be set up
Existing Multiplex located at City Centre, Sector 12, Faridabad, (NCR), Haryana
121007
Retail stores proposed to be set up by the Company
Urban areas having a population of more than 10 lakh but less than 30 lakh, other
than the “Big Six” Metros [Mumbai, Delhi, Kolkata, Chennai, Bangalore,
Hyderabad]
Full Form
Account
The Companies Act, 1956, as amended from time to time
Annual General Meeting
Accounting Standards as issued by the Institute of Chartered Accountants of India
Book Running Lead Manager, in this case being UTI Bank Limited
The Bombay Stock Exchange Limited
Compounded Annual Growth Rate
Capital of the Company
Central Depository Services (India) Limited
Joint Book Running Lead Manager, in this case being Allianz Securities Limited
Depository Participant
Damp Proof Coarse
Extraordinary General Meeting
Earnings Per Share
Foreign Exchange Management Act, 1999, as amended from time to time, and the
regulations framed thereunder
Foreign Investment Promotion Board
Financial year ending March 31
Government of India
Haryana State Electricity Board
Haryana Urban Development Authority
Hindu Undivided Family
Generally Accepted Accounting Principles in India
The Income Tax Act, 1961 as amended
kilovolt Ampere
Memorandum of Understanding
v
Mts.
N.A.
NAV
NCR
N.I Act
NPV
NRE Account
NRIs
NRO Account
NSDL
NSE
OCB(s)
p.a.
P/E Ratio
PAN
PAT
RBI
RoC
RoE
RoNW
Rs.
SEBI
sq. ft.
TAN
USD / US$
VCDs
Meters
Not Applicable
Net Asset Value
National Capital Region
Negotiable Instruments Act, 1881 as amended
Net Present Value
Non Resident External Account
Non Resident Indians
Non Resident Ordinary Account
National Securities Depository Limited
National Stock Exchange of India Limited
Overseas Corporate Bodies
per annum
Price/Earnings Ratio
Permanent Account Number
Profit after Tax
Reserve Bank of India
Registrar of Companies
Return on Equity
Return on Net Worth
Indian Rupees
The Securities and Exchange Board of India constituted under the SEBI Act, 1992
Square feet
Tax Deduction and Collection Account Number
United States Dollar
Video Compact Disks
CURRENCY OF PRESENTATION
In the Draft Red Herring Prospectus, all references to “Rs.” refer to Rupees, the lawful currency of India and
“USD” or “US$” refer to the United States Dollar, the lawful currency of the United States of America.
References to the singular also refer to the plural and one gender also refers to any other gender, wherever
applicable.
The words “ Lakh” or “ Lac” mean “ one hundred thousand” and the word “ million” means “ ten lacs” and the
word “ crore” means “ ten million” or “ one hundred Lacs”. In the Draft Red Herring Prospectus unless the
context otherwise requires, the terms ‘we’, ‘us’ and ‘our’ refer to SRS Entertainment Limited.
In the Draft Red Herring Prospectus, any discrepancies in any table between total and the sums of the amount
listed are due to rounding off.
vi
FORWARDFORWARD-LOOKING STATEMENTS
We have included statements in the Draft Red Herring Prospectus which contain words or phrases such as
“will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”,
“plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar
expressions or variations of such expressions, that are “forward-looking statements”.
Actual results may differ materially from those suggested by the forward-looking statements due to risks or
uncertainties associated with our expectations with respect to, but not limited to, our ability to successfully
implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general
economic and political conditions in India which have an impact on our business activities or investments, the
monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and
globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in the
industry.
For further discussion of factors that could cause our actual results to differ, please refer to the section titled
“Risk Factors” beginning on page no. viii of the Draft Red Herring Prospectus. By their nature, certain market
risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a
result, actual future gains or losses could materially differ from those that have been estimated. Neither the
Company nor the Book Running Lead Manager, nor any of their respective affiliates have any obligation to
update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the
occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with
SEBI requirements, the Company and the Book Running Lead Manager will ensure that investors in India are
informed of material developments until such time as the grant of listing and trading permission by the Stock
Exchanges.
Use of Market Data
Market data used throughout the Draft Red Herring Prospectus was obtained from internal Company reports and
industry publications. Industry publications generally state that the information contained in those publications
has been obtained from sources believed to be reliable, but that their accuracy and completeness are not
guaranteed and their reliability cannot be assured. Some of the industry data reproduced in the Draft Red
Herring Prospectus has been obtained from http://www.ibef.org website. Although we believe market data used
in the Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal
company reports, while believed by us to be reliable, have not been verified by any independent sources.
vii
RISK FACTORS
Any investment in Equity Shares involves a high degree of risk and so you should carefully consider the risks
described below before you make an investment decision. Risks have been quantified, wherever possible. If any
of the following risks actually occur, our business, financial condition and results of operations could suffer, the
trading price of our Equity Shares could decline and you may lose all or part of your investment.
INTERNAL RISK FACTORS
1.
The Company has not declared dividend since inception.
Management Perception:
Our Company was incorporated on August 29, 2000, but began commercial operations on November 12,
2004. Due to this, our Company has not declared dividend in the past. However, this is not an indicative of
future Company policy for dividend declaration. Any future declaration of dividends is subject to
availability of profits and other financial and economic considerations.
2.
The Company has not registered some of the
the brand names it proposes to establish through the Project. As a
result, the Company may have lesser recourse to initiate legal proceedings to protect the inin-house brands.
This may lead to a dilution in the brand value of the inin-house brands.
The Company presently has two trademarks registered in the name of the SRS Commercial Co. Limited viz.
SRS World and SRS Cinemas. The Company applied for registration of trademarks for SRS Value Bazaar
and SRS Club. Pending the registration of these trademarks the Company may have a lesser recourse to
initiate legal proceedings to protect the in-house brands. This may lead to a dilution in the brand value of
the in house product brands.
Management Perception
Our success with our in-house brands depends, partly on our ability to protect and defend our current and
future intellectual property rights relating to such brands. We are in the business of building retail and
entertainment brands, failure to obtain the registration may have an adverse impact on our business. If, we
fail to adequately protect our intellectual property and market products/services under brands similar to our
brands.
3.
The business plans of the Company may need substantial capital and additional financing in tthe
he form of
debt and/or equity to meet the requirements.
Management Perception
Our proposed business plan is substantially funded through this IPO and partly by Promoters equity and
debt. However, the actual amount and timing of future capital requirements may differ from estimates
including but not limited to unforeseen delays or cost over runs, unanticipated expenses, market
developments or new opportunities in the industry. We may also not be able to generate internal cash in our
Company as estimated and may have to resort to alternate sources of funds. Sources of additional financing
may include commercial borrowings, vendor financing, or further issue of equity or debt instruments. If we
decide to raise additional funds through the debt route, the interest obligations would increase and we may
be subject to additional covenants, which could limit our ability to access cash flows from the operations. If
we decide to raise additional funds through equity route, your shareholding in the Company could get
diluted.
4.
Any adverse impact on the title/ownership rights/development rights of the landlords (including the
Promoters/ Promoter Group) from whose real estate premises the Company would carry out its operations
may impede the Company’s effective operations of its Multiplexes/Cineplexes/Bazaars/restaurants in the
future.
Management Perception
With a view to deepen our penetration into several cities across the country, our Company plans to obtain a
few properties on which a part of the Project will be operated, by entering into transactions in the nature of
long-term lease or sub-lease or leave and licence or conducting basis and /or other contractual arrangements
basis with third parties and/or our Promoters or the Promoter Group Companies. Any adverse impact on the
title /ownership rights/development rights of our landlords (including our Promoters or the Promoter Group
Companies) from whose real estate premises we propose operate our Multiplexes/
Cineplexes/Bazaars/restaurants may impede our Company’s effective operations.
viii
5.
The Company has not yet executed the required definitive agreements or arrangements for fully utilizing
the Issue proceeds. Also, it has not yet finalised consultants and contractors for several of the proposed new
Multiplex/Cineplex/retail
Multiplex/Cineplex/retail stores/restaurants.
Management Perception
We have executed preliminary contractual agreements for the three properties that we propose to acquire
each at Agra, Ludhiana and Muzaffarnagar, the lease sites at Jodhpur and Amritsar for the Cineplex and
Food Court, at Gurgaon for the Food Court. However, final contractual agreements have not been entered
into. We have not entered into any agreements for the three locations where SRS Value Bazaar and Food
Court/ restaurants are proposed to be set up on lease basis for which we are raising funds through this Issue.
We have not yet finalised consultants and contractors for our proposed Project, nor have we placed orders
for the equipment and furniture that we may require. Should we not execute our expansion plan as
envisaged because of this there could be time and cost overruns affecting the performance of our Company.
Further, our expansion plan includes the lease model to be implemented in seven cities. In such cases, any
delay on the part of the lessor to give possession of the property in a timely manner would delay the
implementation of the Project and besides delays it may also cause may cause substantial cost overruns.
6.
The Company has not entered into definitive agreement or placed orders for construction,
construction, machinery and
equipment required to operate the proposed Project.
Management Perception
The deployment of funds as stated in the “Introduction - Objects of the Issue” is entirely at our discretion
and is not subject to monitoring by any independent agency. All the figures included under the
“Introduction - Objects of the Issue” are based on our own estimates. The estimated capital expenditure
including contingency provisions towards the Project is estimated to be Rs. 10623.70 Lacs and out of the
total working capital reqirement of Rs.906.30 Lacs, Rs. 681.30 Lacs that will be financed out of the
proceeds of this Issue.
For more information regarding the status of the Project see “Introduction - Objects of the Issue” and
“Business Overview - Location of the Project” on page no. 24 and 50 respectively of the Draft Red Herring
Prospectus.
7.
NonNon-receipt of Government and other regulatory approvals may affect the proposed expansion plan
Management Perception:
We have not yet applied for and/or received all the government and other regulatory approvals required
with regard to the new Multiplexes/Cineplexes/retail stores/restaurants proposed to be set by us. In case of
non receipt or delayed receipt of the same, we may not be able to implement our proposed expansion plan
as scheduled, which may lead to cost overrun and have impact on our growth and financial condition.
However, we are of the view that the abovesaid approvals/ permissions can only be applied/ obtained at the
stage once the project commences. For details on the applicable government and/or regulatory approvals
refer to “Legal Information - Government Approvals / Licensing Arrangements” on page no.114 of the
Draft Red Herring Prospectus.
8.
Success of the business is substantially dependent on the m
management
anagement team, inability to retain them could
adversely affect the businesses of the Company
Management Perception
We have a strong team of professionals to oversee the operations and growth of our businesses, including
our Managing Director, CEO and several Key Management personnel. Our success is substantially
dependent on the expertise and continuity of quality services of our management team. The loss of the
services of such personnel may have an adverse effect on our business, financial condition and results of
operations.
9.
As per the Project Appraisal Report by UTI Bank Limited dated September 05, 2005, the Company/Project
is subject to the following weaknesses:
i. New promoters:
The promoters of the company are new in the above business and therefore they have very little hands on
experience of running a entertainment & retail industry business. Though they have proved their project
execution skills by successfully setting up SRS Multiplex, their management skills in running the business
through various business cycles is to be established.
ix
ii. Operating Efficiency:
Currently the company is operating a single project SRS Multiplex at Faridabad. With regard to the current
small scale of operations, the scale of operations is going to increase manifolds in future with the
completion of various activities in the project. The company’s capability in efficiently operating such a new
business on large scale is to be established.
10. The Company has issued Equity Shares in the past 12 months to some of its prom
promoter/promoter
oter/promoter
group/investors at a price of Rs.10/Rs.10/- and Rs.20/Rs.20/- per share.
Management Perception
We have allotted 10,00,000 Equity Shares at Rs.10/- each and 1,35,38,500 Equity Shares at Rs.20/- each of
our Company to some of our Promoters/promoter group/ investors in the last 12 months from the date of the
Draft Red Herring Prospectus. (For further details please refer to ‘Notes to Capital Structure’ under the
section titled “Intorduction - Capital Structure” on page no.10 of the Draft Red Herring Prospectus).
11. In the future, the Company may not be entitled to Entertainment Tax benefits in the states of Uttar Pradesh,
Haryana, Rajasthan and Punjab, where setting up of Multiplexes/ Cineplexes is planned under the Project
Management Perception:
Multiplexes/Cineplexes/retail stores/restaurants proposed to be set up by the Company, as stated in the
section "Introduction - Objects of the Issue", will become operative after two or three years. Government
Policies may change by that time. It might be possible that the above exemptions may not be available to
the Company when the Cineplexes become operative. However, presently there is no indication of any such
change happening in the Government policy.
Currently, the respective State Government policies provide the following for multiplex business:
State
Entertainment tax rate
Government Policy
Haryana
50%
No tax exemption available
Punjab
Tax exemption for 5 years for multiplexes
having capacity of minimum 1000 seats, set up
in an area of 4000 square yards and minimum
investment of Rs.2000 lacs.
Rajasthan
Tax exempt for 3 years as follows:
• 75% for the 1st year
• 50% for the 2nd year
• 25% in the 3rd year
Uttar Pradesh
60%
Tax Exemption for 5 year for multiplexes
(project) worth Rs.150 lacs or more.
We are aware of the existing policies and the proposed Multiplexes/Cineplexes will be built keeping in
mind the relevant rules and regulations to avail the aforesaid benefits in respective states.
12. Sustainability of income from leased property will depend on the performance of its clients operating out of
the shopping mall at the Multiplexes
Management Perception:
The location of SRS Multiplex has the advantage of being accessible to the population of Faridabad as well
as being within reach of the population of New Delhi. The complex, being situated near the main DelhiAgra highway in the city center of Faridabad has the potential to attract tourists who visit the Taj Mahal and
Mathura. Also, the brands having their presence at SRS Multiplex are renowned names. Therefore, we do
not envisage a problem of performance by such brands.
In the future also, we intend to set up the Project at the best available sites in the cities our Company plans
to penetrate and tie up with well established and renouned brands for the shopping malls.
13. Misuse of the Company’s brand name SRS Cinemas and the brand 7 Dayz provided by M/s Seven Dayz
Restaurants (P) Limited.
The Company proposes to lend its brands SRS Cinemas and the brand 7 Dayz, which is provided by M/s
Seven Dayz Restaurants (P) Limited, to the various parties with whom it proposes to enter into agreements
x
for implementation of the franchise model, Such parties may misuse the brands or commit any act of
commission or omission that may erode the value of these brands.
Management Perception:
As per the MoU entered into by our Company and M/s Richi Look Marketing (P) Limited, a company
appointed for implementing the franchise model, our Company will have recourse in terms of legal
proceedings etc. to safeguard our interests and the value of our intellectual property rights.
Besides, we will take necessary steps to avoid occurance of such embarassing situations. Our Company
proposes to recruit a quality control executive at each of the sites. Such personnel will be responsible to
ensure that the processes defined by the Company are strictly followed and there in no negligence
committed in the quality control systems or misuse of the said brands.
14. The multiplex business is cyclical in nature during the different periods of the year.
Management Perception:
Our business is cyclical during the different periods of the year. Our revenues are higher during the AprilJune and October-December quarters. Any substantial decrease in our sales in these quarters can have a
material adverse impact on our financial performance. Our revenues increase in the third quarter of the
financial year (October-December quarter) due to the occurrence of festivals like Durga Puja, Diwali,
Christmas, etc, as well as during the summer vacation season (April-June quarter). Also, major big banner
Hindi movies are released during the above mentioned quarters. As a result of this, the quarter to quarter
comparison of financial results may not be accurate or meaningful indicator of our future performance.
15. Success of the Cineplex business depends upon the commercial success of various films.
Management Perception:
Success of the Cineplex business depends upon the commercial success of various films. In cases where a
film is not a box office success, it may not attract crowds subsequently we will not enjoy high capacity
utilization. Further, lack of quality content in a film will be reflected in the box office performance and will
in turn impact our profitability. The profitability of the Cineplex business will also depend on the purchase
price of the film. There is no guarantee that the box office performance will be commensurate with the price
paid.
16. Fluctuations in exchange rates may adversely affect the cost of our Project.
Management Perception:
We intend to use part of proceeds from the Issue to meet capital expenditure required for the expansion plan
described in section “Introduction - Objects of the Issue” beginning on page no.24 of the Draft Red Herring
Prospectus. Some of the equipment we intend to deploy is expected to be imported and be paid for in
foreign currency. Changes in foreign exchange rates affecting the value of the Rupee adversely may affect
the cost of the Project.
17. The Company has not received final sanction for debt of Rs.2000.00 Lacs required for the Project
Management Perception:
We have received in-principle approval for the debt portion of the means of finance from UTI Bank Limited
amounting to Rs. 2000 lacs. Any delay in getting the final sanction from the bank may cause delay in
implementation of our Project.
18. Outstanding litigation
xi
Home Stores (India) Limited (HSL) moved an arbitration application in the Hon’ble Hight Court of Delhi,
under Section 11(6)(b) of the Arbitration and Conciliation Act, 1956, against the Company alleging that the
Company had failed to adhered to the time schedule as per the lease deed entered with the Company for
providing on leasehold propoerty at SRS Multiplex. As per the said lease deed, HSL paid a sum of
Rs.5,44,480 at the time of signing the lease deed on account of security deposit. HSL has demanded a sum
of Rs. 20 lac for the losses suffered by it on account of the non completion of the project and its
consequential handing over by the Company. HSL has also prayed to the Hon’ble High Court for the
appointment of Arbitrator and the disputes and difference arisen between the parties to be referred to the
said Arbitrator. A show cause notice dated August 04, 2005 was received by the Company on August 22,
2005 and the matter has been listed for further directions on October 04, 2005
Management Perception:
We received the 'full occupation certificate' from HUDA upon completion of construction of the Multiplex
building on August 11, 2004. However, HSL never came forward for taking the possession of the premises
despite our several requests. Vide our letter dated January 21, 2005, we terminated the lease deed and
demanded a sum of Rs.5,35,283 from HSL on account of rent and 'common area maintainence' charges
(including service tax) with effect from October 22, 2004 till January 15, 2005. Immediately on receiving
the notice from HSL,we, through our advocates gave reply on June 14, 2005 whereby the our claim was
reiterated. Claim of HSL was denied. Appointment of Mr. Anand Srivastava as arbitrator was disputed and
called upon HSL to concur in the appointment of Mr. Sanjeev Singh Advocate as the arbitrator.
For more information regarding litigations involving our Directors or our Promoters/ Promoter Group
please refer to the section titled "Outstanding Litigation and Material Development" on page no.111 of the
Draft Red Herring Prospectus.
19. Related party transactions
The Company’s paid up capital constitutes of 2,70,38,500 equity shares of Rs.10/- each out of which
1,80,58,700 equity shares (constituting 66.79% of the total pre-Issue shareholding) are held by 10 (ten)
corporate shareholders which form part of the Promoter Group.
Out of these 10 companies, being the majority shareholders (pre-Issue) of the Company, 5 companies have
also entered into Lease Agreements in respect of commercial space situated at SRS Multiplex at Faridabad.
Management Perception:
The above transactions are in the ordinary course of business. Refer to "Financial Information" on page no.
91 of the Draft Red Herring Prospectus for details on Related Party Transactions.
External Risk Factors
1.
The retail/entertainment industry is prone to unforeseen shifts in tastes and preferences of audiences, which
could have an impact on the operations of the Company.
Management Perception
Our success will depend on our ability to understand the business environment and change our business
strategy accordingly.
2.
Competition from existing shopping malls, single cinema theaters and multiplexes and future entrants in the
retail/shopping malls
malls and Cineplex business in which the Company operates and proposes to operate. The
concentration of shopping malls and multiplexes in a particular area will impact the footfalls and in turn
adversely impact the profitability.
Management Perception
Our success will depend in developing the business strategy to cope with the competition by adopting new
strategies in accordance with the changing circumstances.
3.
Changes in cinema/theatre technology may render our current technologies obsolete or require us to make
substantial capital investments.
Management Perception
The Company would adopt strategy to shift the equipments to other areas where existing technology may be
useful and adopt new technology in the areas wherever required to meet and respond to the competition.
xii
4.
Public places such as Multiplex/Cineplex/retail stores/restaurants could be likely targets for unforeseen acts
of violence (including terrorist acts and rioting), which may impact the retail and entertainment business
Management Perception
Any violence in public places such as retail stores and malls could cause damage to life and property, and
also impact consumer sentiment and their willingness to visit public places.
5.
One of the major segments in which the Company operates, the retail industry, is restricted in its ability to
raise financial resources for its growth
Management Perception
The retail sector has not been granted industry status by the Government of India. The capital requirements
for a retailer are in the real estate (which banks have historically restricted lending to) and for meeting
working capital requirements. Banks and financial institutions are further reluctant to lend to the sector
because of lack of collaterals since most of the assets are on lease.
While some of the leading retailers are still able to get bank funding, the smaller ones are constrained for
growth funding. Similarly, equity options are also restricted with Foreign Direct Investment not being
permitted in the retail trading sector.
6.
Retail sector generally depends upon various external merchandisers/vendors on whom absolute control is
not possible
Management Perception
Generally, the retail sector depends upon various vendors to provide them the merchandise. Operations
could be adversely affected if supplies of merchandise are not obtained in a timely manner from the vendors
or if the supply of such merchandise is discontinued or if vendors are not able to meet with the growth
requirements.
7.
Regional conflicts in South Asia could adversely affect the Indian economy, disrupt the Company’s
operations and cause its business to suffer.
Management Perception
South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighbouring
countries, such as between India and Pakistan. In recent years there have been military confrontations along
the India-Pakistan border. Military activity or terrorist attacks in the future could influence the Indian
economy. This could have a material adverse effect on the market for securities of Indian companies,
including the Equity Shares and also on the market for the Company’s offering.
8.
Multiplicity of local taxes and levies including VAT, service tax and entertainment tax may impact the
growth of organised retail and entertainment
entertainment industries.
Management Perception
Each state in India has different local taxes and levies including sales tax, VAT, Entertainment Tax, octroi,
etc, which has enhanced the complexity for organised retailers as well as added to their costs. Incidence of
various levies as well as the requirement to mention the Maximum Retail Price (MRP) on various products
has led to organised retailers functioning in a sub optimal level, impacting their competitiveness vs.
unorganised players who also gain by way of tax evasion. Unfavourable changes in these local taxes and
levies might marginally impact the performance adversely since these are indirect levies and are recovered
from the ultimate consumer(s).
9.
The fortunes of the retail and enertainment sector, especially of companies retailing lifestyle products, are
linked to the overall performance of the economy
Management Perception
The retail sector is dependent on consumer spend for its performance. Overall economic conditions can
impact the consumer spend, and more so in areas such as lifestyle products. Any impact on the Indian
economy due to internal or external reasons could impact consumer spend. Since retailers have fixed costs
in the short term, any downtrend in the economy can impact the retail sector adversely and impact fashion
and lifestyle retailers even more.
xiii
10. Availability of large quantities of retail space can be affected by change in interest rates or banking policies
Management Perception
Prevailing interest rates in the economy as well as the yields available on the lease of property have been
instrumental in making real estate available for retail by permitting investors to borrow and invest in real
estate and lease it to retail companies. Any change in interest rates, or yields on property or change in
banking policies pertaining to lending against real estate or securitisation of lease rentals could impact
availability of real estate for retail.
11. Attrition rates at the entry level are very high for the industry
Management Perception
Our industry competes with other emerging service sectors such as ITES in its ability to hire and retain
quality people in addition to competition amongst the players in the sector. Hence, availability of trained
manpower poses a key risk for the retail sector.
As organised retail grows rapidly, there will be further pressure on existing players as new entrants would
look for trained manpower at various levels. Opening up of Foreign Direct Investment (FDI) in retail could
see the entry of international retail majors and put further pressure on the manpower.
12. Stability of policies and political situation in India can determine the fortunes of the industry
Management Perception
The Indian Central and State Governments play an important role for the sector by regulating policies and
regulations governing businesses, including malls/mutilpex/retail. We cannot assure that the current policies
will continue in future. The rate of economic liberalisation could change and specific laws and policies
affecting our industries and other policies affecting investment in our securities could change as well. A
significant change in India’s economic liberalisation and deregulation policies could disrupt business and
economic conditions in India and thereby affect our business.
13. Any change in the current policies pertaining to foreign direct investment in the retail sector could impact
our business.
Unstable internal and international political environment could impact the economic performance in both
short term and long term.
14. There has be
been
en no public market for the Equity Shares of our Company and the prices of the Equity Shares
may fluctuate.
Management Perception
There can be no assurance that an active trading market for the Equity Shares will develop or be sustained
after this Issue or that the prices at which the Equity Shares are sold in this Issue will correspond to the
prices at which the Equity Shares will trade in the market subsequent to this Issue.
15. After this Issue, price of the Company's Equity Shares may be highly volatile,
volatile, or an active trading market
for the Equity Shares may not develop. The prices of the Equity Shares on the Stock Exchanges may
fluctuate as a result of several factors, including:
• Volatility in the Indian and global securities market;
• Results of operations and performance of the Company, in terms of market share;
• Performance of the competitors, the Indian film exhibition industry, organised and unorganised
retail sector and the perception in the market about investments in these sectors;
• Performance of the Indian economy;
• Changes in Government policies;
• Changes in the estimates of our performance or recommendations by financial analysts;
• Significant developments in India’s economic liberalisation and deregulation policies; and
• Significant developments in India’s fiscal and environmental regulations.
16. Force Majeure: In future there might be a natural calamity like earthquake, Tsunami, volcano, etc. or some
unforseen event that is beyond the control of the Company that might prevent it from performing its
business obligations and could disrupt its properties.
xiv
NOTES TO RISK FACTORS
1.
Public Issue of 2,28,57,200 Equity Shares of Rs.10 each of SRS Entertainment Limited (the “Company”) at
a price of Rs. [•] per Equity Share for cash aggregating Rs. [•] Lacs.
2. Investors are advised to refer to the section titled "Introduction - Basis of Issue Price" on page no.31 before
investing in this Issue.
3. Networth as on June 30, 2005 is Rs.2636.49 Lacs.
4. The Book value per share as on June 30, 2005 is Rs. 15.47
5. The investors may contact the Book Running Lead Manager for any clarifications or information pertaining
to the Issue.
6. Average cost of acquisition per share by Mr. Sunil Jindal and Mr. Raju Bansal is Rs.10 per equity share
7. The Promoters do not have any interest in the business of the Company, except to the extent of investments
made by them and their Promoter Group / investment companies in SRSEL. For details on the same, please
refer to page no.88 of the Draft Red Herring Prospectus.
8. The Investors are advised to refer to the section titled ‘Introduction - Basis of Issue Price’ on page no. 31 of
the Draft Red Herring Prospectus before making an investment in the Issue.
9. Trading in Equity Shares of the Company for all the investors shall be in dematerialized form only.
10. Investors may note that in case of over-subscription in the Issue, allotment to Non-Institutional Bidders and
Retail Bidders shall be on a proportionate basis. For more information, see the section titled ‘Basis of
Allotment’ on page no. 143 of the Draft Red Herring Prospectus.
xv
INTRODUCTION
You should read the following Summary with the Risk Factors from page no.viii and more detailed information
about us and our Financial Statements included elsewhere in the Draft Red Herring Prospectus.
Summary
Industry
Industry
SRSEL lays great emphasis on growth of the retail sector to determine its future growth pattern. Multiplexes
today reflect the emergence of organised Indian retail industry. They have also emerged as the fastest growing
niche in the Indian media sector. Their rise reflects:
Metamorphosis of Indian retail (rise of organised retail, malls etc)
Increasing disposable incomes
Rising aspirations of the urban consumer and a change in consumer behaviour
which has altered the spending pattern of the urban consumer.
Going by this trend, the business model of SRSEL is a blend of the retail and entertainment sectors. It includes
construction and management of Multiplex, which includes Cineplex, shopping malls, coffee lounge, Food
Court, health club etc.
Entertainment:
Though distribution and exhibition are the last links in the chain bringing filmed entertainment to the masses,
they are of paramount importance, as the success of the film depends on successful distribution and exhibition.
In India the current infrastructure for Film exhibition is inadequate to meet existing and potential demand. For a
nation with 50,000 lac admissions every year (roughly a weekly entry of about 1000 lac), there are only around
12,900 theatres spread over the country. Further to this, the theatrical sales constitute dominant source of
revenues for the film industry and represent box office ticket sales to the viewers at the cinema halls. Ticket
sales constitute to be around 90% of the total revenues in the film industry. (Source FICCI Report)
The trends suggest that with the advent of multiplexes and modern theatres the exhibition business has indeed
become lucrative. To take guidance from international trends, theatre occupancy in England, Germany, US and
Australia tripled with the multiplex boom and similar growth could be expected in India with adequate
exhibition infrastructure - multiplexes, megaplexes and miniplexes. In fact, only 32% of the screens in the US
are single theatre screens, the rest falling under either multiplexes, megaplexes or miniplexes category whereas
the in India 95% of the screens are in single screen theaters.
Improving Movie Going Habits
The attendance level in the contemporary theatre has reduced over the years but with the advent of multiplexes
and megaplexes the trend has reversed. By moving up the value chain companies can generate higher revenues.
Higher prices can be charged for additional value delivered.
International trends
So far various international markets are highly under screened. Looking at the present structure, The US has
about 9000 persons per screen, Europe around 27000 people per screen, Latin America around 69000 and Asia
around 105000 people per screen. This shows that Indian Multiplex market is extremely under screened. This
survey also states that factors like location, type of theatre, dining and shopping are most important features in
selecting a theatre and entertainment joint.
Retail:
The retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new
formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls
begun their journey from metros and are now turning towards second-rung cities introducing the Indian
consumer to a shopping experience like never before. Rated the fifth most attractive emerging retail market,
India is being seen as a potential goldmine. It has been ranked 2nd in a Global Retail Development Index of 30
developing countries drawn up by A. T. Kearney.
Real Estate:
India is ranked 5th in the list of 30 emerging retail markets and organized retail segment is expected to grow
from a mere 2% to 20% by the end of the decade.
1
The Company’s Business
The business model of SRS Entertainment Limited is a “hybrid” model, which involves a mix of entertainment
cum retailing and real estate. The Company’s maiden project, SRS Multiplex, is a unique complex, combining a
3 screen Cineplex with most facilities of a modern shopping mall. SRS Multiplex commenced operations from
November 12, 2004 and has been proved profitable within the first 6 months of its operation. The average ticket
prices at SRS PVR Cinemas range from Rs.75/- to Rs.150/-. All the showrooms and shop blocks in the mall
have been completely sold / leased out.
Some of the leading brands in sunglasses, apparels both formal and casual wear, gold/silver jewellery, women
wears both ethnic and western, music, are available at SRS Multiplex
SRSM offers a wide variety of restaurants that offer visitors a range of delicacies to chose from. Some of the
available cuisines are Mexican, Indian, continental and also fast food including burgers, pizzas, pastries, hot and
cold drinks, ice cream parlours etc.
The Company's first retail store, SRS Value Bazaar is proposed to be set up at the Multiplex and will begin
commercial operations in October 2005. SRS Value Bazaar would be a hyper-market in the retail business of
various products at the sites in the format and type of retail chain with different content of products depending
on needs and aspirations of customers. The discount store concept in the form of SRS Value Bazaar would
provide value for money to the population at large apart from the target segment and ensure additional footfalls
for the entire Multiplex.
The Issue
Equity Shares offered for Issue by the
Company
2,28,57,200 Equity Shares
of which:
Promoter Group reservation portion
Shareholders of Group Companies of the
Company reservation portion
Employee reservation portion
Net Issue to the Public:
QIB Portion
Non-Institutional Portion
Retail Portion
Equity Shares outstanding prior to the Issue
Equity Shares outstanding after the Issue
Use of proceeds by the Company
42,87,200 Equity Shares
Constituting 18.76% of the Issue size
(allocation on firm allotment basis)
22,85,720 Equity Shares
Constituting 10% of the Issue size
(allocation on proportionate basis)
22,85,720 Equity Shares
Constituting 10% of the Issue size
(allocation on proportionate basis)
69,99,280 Equity Shares
Constituting 50% of the Net Issue to the public
(allocation on discretionary basis)
20,99,784 Equity Shares
Constituting15% of the Net Issue to the public
(allocation on proportionate basis)
48,99,496 Equity Shares
Constituting 35% of the Net Issue to the public
(allocation on proportionate basis)
2,70,38,500 Equity Shares
4,98,95,700 Equity Shares
See the section titled “Introduction - Objects of the Issue” on
page no.24 of the Draft Red Herring Prospectus
Summary of Consolidated Financial Statements
The following summary has been prepared in accordance with Indian GAAP, in conjunction with our
audited financial statements (as restated) for the financial years 2003, 2004 and 2005 and quarter ending
June 30, 2005, which appear in section titled ‘Management's' Discussion and Analysis of Financial
Condition and Results of Operations’ on page no. 104 of the Draft Red Herring Prospectus. Our financial
year ends on March 31 of each year.
2
Statement of Profit and Loss Account - As Restated
Particulars
Quarter ended
June 30, 2005
Income
A) Sales :
a) Operational Revenue Company
b) Products traded by the Company
Sub(a)) + (b)
Sub-Total (a
(c ) Other Operational Income
(d) Other Income
(e) Interest
Total (A)
Expenditure
Work Cost/Operational Exp.
Staff Costs
PVR Share
Administration Expenses
Selling & Other Expenses/ Sales
Promotion
Interest
Fringe Benefit Tax
Depreciation
Preliniminery Expenses W/off
Total (B)
(Rupees in Lacs)
For the year ended March 31,
2005*
2004
2003
369.20
34.88
404.08
185.70
11.80
0.00
601.58
453.17
35.62
488.79
275.10
1.47
0.00
765.36
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.13
0.00
1.13
93.68
27.17
6.57
116.20
14.56
245.63
33.95
6.20
87.26
15.14
0.00
0.00
0.00
0.00
0.00
0.00
0.15
0.00
0.00
0.00
51.27
0.50
29.70
0.46
340.11
72.59
0.00
45.00
1.83
507.60
0.00
0.00
0.00
0.00
0.00
0.89
0.00
0.00
0.03
1.07
Net Profit before tax
261.47
257.76
0.00
0.06
Taxation
22.00
20.21
0.00
0.02
Deferred Tax
8.20
18.46
0.00
0.00
Profit After Tax
231.27
219.09
0.00
0.04
Profit B/f for Last Years
219.14
0.05
0.05
0.01
Profit Transferred to Reserve & Surplus
450.41
219.14
0.05
0.05
* Figures for F.Y2005 represent months November 2004 to March 2005 only as the Company commenced
commercial operations of SRS Multiplex on November 12, 2004.
Statement of Assets and Liabilities - As Restated
Particulars
A.
B.
Fixed Assets :
Gross Block
Less Depreciation
Net Block
Add :- Capital Work in Progress
Less : Revaluation Reserve
Net Block after adjustment
for Revaluation Reserve
SubSub-Total
Investment
SubSub-Total
C.
Current Assets,
Assets, Loans and
Advances :
Inventories
Sundry Debtors
Cash and Bank Balances
Quarter Ended
on 30.06.2005
2005
(Rupees in Lacs)
As at March 31,
2004
2003
4099.89
74.70
4025.19
603.11
0.00
4628.30
4088.99
45.00
4043.99
568.64
0.00
4612.63
0.00
0.00
0.00
2337.30
0.00
2337.30
0.00
0.00
0.00
982.36
0.00
982.36
4628.30
4612.63
2337.30
982.36
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.47
399.42
149.32
1.71
198.67
131.78
0.00
0.00
77.96
214.62
0.00
11.48
3
D.
E.
F.
Loans and Advances
Other Current Assets
SubSub-Total
Liabilities and Provisions :
Secured Loans
Unsecured Loans
Current Liabilities and Provisions
SubSub-Total
Total
Networth
Represented by
1. Share Capital
2. Reserves
Less Revaluation Reserve
Reserves (Net of
Revaluation Reserves)
Less Preliminary Expenses yet not
w/off
Networth
288.34
0.00
838.55
71.06
0.00
403.22
0.23
0.00
78.19
0.12
0.00
226.22
1530.00
1111.21
189.15
2830.36
2636.49
1368.85
1153.93
196.75
2719.53
2296.32
999.62
94.34
71.68
1165.84
1249.84
610.96
32.76
23.35
667.30
541.51
1848.04
804.26
0.00
804.26
1739.60
572.98
0.00
572.98
1250.00
0.04
0.00
0.04
541.70
0.04
0.00
0.04
15.81
16.27
0.20
0.23
2636.49
2296.32
1249.84
541.51
Cash Flow Statement
(Rupees in Lacs)
Particulars
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net increase/(decrease) in cash or cash
equivalent
Quarter ended
June 30, 2005
(171.09)
(38.23)
226.86
17.54
For the year ended March 31,
2004
2003
2005
119.77
263.06
(225.54)
(2338.21)
(1355.14)
(818.04)
2272.27
1158.54
1040.11
53.83
66.46
(3.47)
Figures in brackets represent cash outflow
4
GENERAL INFORMATION
SRS ENTERTAINMENT LIMITED
The Company was incorporated as ‘SRS Commercial Co. Limited’ on August 29, 2000 under the Companies
Act 1956. It changed its name to 'SRS Entertainment Limited' on January 25, 2005 under a fresh Certificate of
Incorporation. Registered Office of the Company is located at C-4/1, 100 Ft. Road, Shahdara, Delhi - 110094.
Registration number of the Company is 55-107484. The Registrar of Companies, NCT Delhi and Haryana
having its office at New Delhi is the concerned Registrar of Companies in case of our Company. The Company
has changed its registered office from 804, Manjusha, 57, Nehru Place, New Delhi to E-985, Near Mala Devi
School, 100 ft. Road, Babarpur, Shahdara, Delhi vide resolution dated 1.12.2000 and to the present location C4/1, 100 Ft. Road, Shahdara, Delhi 110094 vide resolution dated 23.4.2003. The head office of the Company is
located at E-18, Nehru Ground, NIT Faridabad - 121001
Board of Directors of SRS Entertainment Limited
Sr. No.
1
2
3
4
5
6
7
8
Name
Dr. Raj Kumar Aggarwal
Mr. Sunil Jindal
Mr. Raju Bansal
Mr. Vinod Gupta
Mr. R. S. Gupta
Mr. Pavan Kumar Vijay
Mr. K. M. Mehta
Mr. Devendra Singh
Designation
Chairman – Independent and Non Executive Director
Managing Director
Executive Director
Executive Director
Non-Executive Director
Independent and Non-Executive Director
Independent and Non Executive Director
Independent and Non Executive Director
Brief Description of the Chairman, Managing Director and Executive Directors is given below:
Dr. Raj Kumar Aggarwal, Chairman
Dr. Aggarwal is a practicing chartered accountant by profession and has extensive experience spanning over
twenty years. He is 43 years of age. He is well known and respected in the fields of project finance, corporate
restructuring and taxation. He has served as the Chairman of the North Indian Regional Council of the Institute
of Company Secretaries of India during the year 2003. Dr. Aggarwal holds a Masters Degrees in Commerce and
is a Bachelor of Law. Additionally, he is a fellow member of the Institute of Chartered Accountants of India and
the Institute of Company Secretaries of India as also an associate member of the Institute of Cost and Works
Accountants of India.
Mr. Sunil Jindal, Managing Director
SRS Entertainment Limited is promoted by Mr. Sunil Jindal. He is a first generation promoter, 28 years of age, a
law graduate and designated as the Managing Director of SRSEL. He has been in the business of finance for
over five years and has been instrumental in the growth of business as well as diversified business activities. He
has also promoted Akriti Financial Services (P) Limited. He supervises the day-to-day operations apart from the
strategic planing for growth and expansion of the Company. Mr. Jindal's ability to visualize, plan, execute and
manage the trends in the retail industry has resulted in the growth of SRS Multiplex in a short period.
Mr. Raju Bansal, Executive Director
Mr. Bansal is 28 years of age. He is a promoter of SRS Entertainment Limited as well as Ferro Plast Limited.
His active involvement and role in conceptualisation of the SRS Multiplex has been decisive in its success. He
has been in the business of finance for more than four years and has played a vital role in the conceptualisation
and implementation of SRSM.
Mr. Vinod Gupta, Director
Mr. Gupta, aged 51 years, is an Arts Graduate and also has been managing business of Vinod Gas Agency and
has earned good reputation in the field of Petroleum Products. He has an experience of more than 25 years. He
was involved in the SRS Multiplex project since its foundation and has been a decision maker for procurement
of materials, equipment, recruitment of personnel etc.
Bankers to the Company
Union Bank of India
F-14/15, Connaught Place
New Delhi-110 001
5
Tel No.: (011) 23354234, 23314777
Fax: (011) 23323809
E-mail: ubirodel@ndf.vsnl.net.in
Issue Management
Management Team
Book Running Lead Manager to the Issue
UTI Bank Limited
Central Office, Maker Towers ‘F’ 11th Floor,
Cuffe Parade, Colaba,
Mumbai – 400 005
Tel.: (022) 2218 9106 - 9
Fax: (022) 2216 2467
Web site: www.utibank.com
E-mail: utibmbd@utibank.co.in
Contact person: Ms. Shilpa Jaisingh
Registrars to the Issue
Karvy Computershare Private Limited
Karvy House, 46, Avenue 4, Street No.1, Banjara
Hills,
Hyderabad 500 034
Tel.: (040) 2331 2454
Fax.: (040) 2331 1968
E-mail: srs.ipo@karvy.com
Contact Person: Mr. Ganapathy Subramaniam
Auditors to the Company
T.K. Gupta
Gupta & Associates
4228/1, Ansari Road,
Darya Ganj,
New Delhi - 110002
Tel: (011) 23269898, 23264006
Fax: (011) 23255308
E-mail: tkguptaca@rediffmail.com
Company Secretary
Ms. Navneet Chha
Chhabra
bra
SRS Multiplex,
City Centre, Sector-12,
Faridabad, (NCR), Haryana 121007.
Telephone: (0129) 5008350, 5003266
Fax: (0129) 2433255
E-mail:navneet@srs-world.com
Joint Book Running Lead Manager to the Issue
Allianz Securities Limited
33, Vaswani Mansion,
6th Floor, Dinsha Vachha Road, Churchgate,
Mumbai – 400 020
Tel. : (022) 2287 0580
Fax. : (022) 2287 0581
Website: www.aslfinancial.com
E-mail: srs@aslfinancial.com
Contact Person: Mr. Sanjay Dewan
Legal Advisor to the Issue
Issue
Vaish Associates
10 Hailey Road,
Apts. 5, 6 and 7,
New Delhi – 110001
Tel: (011) 52492510
Fax: (011) 23320484/ 52492600
E-mail: vaishlaw@vsnl.com
Bankers to the Issue
[• ]
Compliance Officer
Mr. Arun Kumar Gupta
SRS Multiplex,
City Centre, Sector-12,
Faridabad, (NCR), Haryana 121007.
Mobile: +91 9810672518
Telephone: (0129) 5008350, 5003266
Fax: (0129) 2433255
E-mail: srsco@srs-world.com
Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any preissue/post-issue related problems such as non-receipt of Red Herring Prospectus/ Letter of Allotment/ Share
Certificate(s)/ Warrant Certificate(s)/ Refund Orders/ Demat Credit.
Statement of InterInter-Se Allocation of Responsibility
The responsibilities and coordination for various activities in this Issue have been distributed between the
BRLM and Joint BRLM as under:
Sr. No.
Activities
Responsibility
1
Capital structuring with the relative components and
formalities such as type of Instruments etc.
Due diligence of the Company’s operations
/management/business plans/legal etc.
Drafting and Design of Red Herring Prospectus and
of statutory advertisement including memorandum
containing salient features of the Prospectus. The
UTI Bank
CoCoordinator
UTI Bank
UTI Bank
UTI Bank
UTI Bank
UTI Bank
2
3
6
5
4
6
7
8
9
10
11
12
13
BRLM shall ensure compliance with stipulated
requirements and completion of prescribed
formalities with the Stock Exchanges, Registrar of
Companies and SEBI.
Appointment of various agencies connected with the
Issue including Printers, Advertising Agency,
Bankers to the Issue etc.
Appointment of Registrar to the Issue
Company positioning and pre-marketing exercise,
finalise media and public relation strategy, drafting
and approval of all publicity material other than
statutory advertisement as mentioned in (3) above
including corporate advertisement, brochure, etc.
Qualified Institutional Bidder (QIBs) Category:
Finalising the list and division of investors for oneto-one meetings, Co-ordinating institutional investor
meetings, finalising pricing decision and institutional
allocation in consultation with the Company
Non Institutional and Retail Marketing of the Issue,
which will cover inter alia:
_ Formulating marketing strategy
_ Preparation of publicity budget
_ Finalise Media and Public Relation strategy
_ Finalising centers for holding conferences for
brokers, press, etc.
_ Follow-up on distribution of publicity and issue
material including bid cum application form,
prospectus and deciding on the quantum of the
issue material
Appointment of Syndicate Members
Running the Book, interaction and co-ordination
with Stock Exchanges for book-building software,
bidding terminals and mock trading
Finalisation of Prospectus and RoC Filing etc.
The post bidding activities including, management of
escrow accounts, co-ordinate non-institutional
allocation, intimation of allocation, dispatch of
refund orders to Bidders etc.
The post issue activities for the Issue will involve
essential follow up steps, which include the
finalisation of listing of Equity Shares and dispatch
of allotment advice and refund orders, with the
various agencies connected with the work such as the
Registrars to the Issue, Bankers to the Issue and the
bank handling refund business.
UTI Bank
UTI Bank
UTI Bank, Allianz
UTI Bank, Allianz
Allianz
UTI Bank
UTI Bank, Allianz
UTI Bank
UTI Bank, Allianz
Allianz
UTI Bank, Allianz
UTI Bank, Allianz
Allianz
Allianz
UTI Bank, Allianz
UTI Bank, Allianz
UTI Bank
Allianz
UTI Bank, Allianz
Allianz
Even if many of these activities will be handled by other intermediaries/agencies, the designated BRLM/Joint
BRLM shall be responsible for ensuring that these intermediaries/agencies fulfill their functions and enable it
to discharge this responsibility through suitable agreements with the Company.
Credit Rating
This being an Issue of Equity Shares credit rating for this Issue is not required.
Trustees
As this is an Issue of Equity Shares, the appointment of Trustees is not required.
Monitoring
Monitoring Agency
This Issue being for less than aggregate Rs.50,000 Lacs, appointment of a Monitoring Agency is not
applicable.
7
Project Appraisal
The Project, for which funds are being raised through the Issue, has been appraised by UTI Bank Limited for
financing the debt requirement. UTI Bank Limited has given its consent for its name being included as
appraising agency and for their appraisal report being used in this document.
Book Building Process
Book building refers to the collection of Bids from investors, which is based on the Price Band, with the Issue
Price being finalised after the Bid/ Issue Closing Date. The principal parties involved in the Book Building
Process are:
1. The Company
2. Book Running Lead Manager
3. Joint Book Running Lead Manager
4. Syndicate Members
5. Escrow Collection Bankers
6. Registrar to the Issue
SEBI, through its guidelines, has permitted an Issue of securities to the public through the 100% Book Building
Process, wherein at least 50% of the Issue shall be allocated on a discretionary basis to Qualified Institutional
Buyers (QIBs). Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis
to Non Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a
proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue
Price. The Company will comply with these guidelines for this Issue. In this regard, the Company has
appointed the BRLM/Joint BRLM to procure subscriptions to the Issue. The process of book building, under
SEBI Guidelines, is relatively new and the investors are advised to make their own judgment about investment
through this process prior to making a Bid in the Issue. Pursuant to recent amendments to SEBI Guidelines,
QIBs are not allowed to withdraw their Bid after the Bid/ Issue Closing Date. See page no.125 for the section
titled “Issue Information - Terms of the Issue” in the Draft Red Herring Prospectus.
Steps to be taken by the Bidders for bidding:
Check whether he/ she is eligible for bidding;
Bidder necessarily needs to have a demat account; and
Ensure that the Bid cum Application Form is duly completed as per instructions given in the Draft Red
Herring Prospectus and in the Bid cum Application Form.
Illustration
Illustration of Book Building and Price Discovery Process (Investors should note that the following is solely
for the purpose of illustration and is not specific to the Issue)
Bidders can bid at any price within the price band. For instance, assuming a price band of Rs.20 to Rs.24 per
share, issue size of 3,000 equity shares and receipt of five bids from bidders details of which are shown in the
table below. A graphical representation of the consolidated demand and price would be made available at the
bidding centres during the bidding period. The illustrative book as shown below shows the demand for the
shares of our Company at various prices and is collated from bids from various investors.
Number of equity shares
Bid for
500
1000
2000
2500
Bid Price (Rs.)
24
23
21
20
Cumulative equity shares
shares
Bid for
500
1500
5000
7500
Subscription
16.67%
50.00%
166.67%
250.00%
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to
issue the desired quantum of shares is the price at which the book cuts off i.e., Rs.22 in the above example. The
issuer, in consultation with the BRLM will finalise the issue price at or below such cut off price i.e. at or below
Rs.22. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in
respective category.
Underwriting Agreement
After the determination of the Issue Price and prior to filing of the Prospectus with RoC, the Company, on its
behalf, will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be
issued through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the
8
BRLM/Joint BRLM shall be responsible for bringing in the amount devolved in the event that the members of
the Syndicate do not fulfill their underwriting obligations.
The Underwriters have indicated their intention to underwrite the following number of Equity Shares:
(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with (RoC)
Name and Address of the
Underwriters
Indicated Number of Equity Shares
to be Underwritten
[•]
[•]
The above Underwriting Agreements are dated [•].
Amount Underwritten
(Rupees in Lacs)
[•]
[•]
In the opinion of our Board of Directors (based on a certificate given by the Underwriters), the resources of the
above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting
obligations in full. The above-mentioned Underwriters are registered with SEBI under Section 12(1) of the
SEBI Act or registered as brokers with the Stock Exchange(s).
Our Board of Directors, at their meeting held on [•], have accepted and entered into the underwriting Agreement
mentioned above on behalf of the Company. Allocation among Underwriters may not necessarily be in
proportion to their underwriting commitments. Notwithstanding the above table, the BRLM, Joint BRLM and
the Syndicate Members shall be responsible for ensuring payment with respect to Equity Shares allocated to
investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to
other obligations defined in the underwriting agreement, will also be required to procure/subscribe to the extent
of the defaulted amount.
Allocation to QIBs is discretionary as per the terms of the Draft Red Herring Prospectus and may not be
proportionate in any way and the patterns of allocation to the QIBs could be different for the two Underwriters.
9
CAPITAL STRUCTURE
The capital structure of the Company is as under:
As on September 11, 2005
Particulars
(Amount in Rupees Lacs)
Face
Value
Aggregate
Value
(A) Authorised Share Capital
6,00,00,000 Equity shares of Rs.10/- each
6000.00
6000.00
(B) Issued, Subscribed and paidpaid-up capital
2,70,38,500 Equity shares of Rs.10/- each
2703.85
2703.85
2285.72
[•]
428.72
[•]
228.57
[•]
228.57
[•]
(D) Net Issue to the public in terms of the Draft Red Herring Prospectus
1,42,84,274 Equity Shares of Rs.10/- each
1428.42
[•]
(E) Paid up capital after the Issue of Equity shares
4,98,95,700 Equity Shares of Rs.10/- each
4989.57
[•]
(C) Present Issue
2,28,57,200 Equity Shares of Rs.10/- each
Out of which
42,87,200 Equity Shares of Rs.10/- each are reserved for allotment to the
Promoters of the Company on a firm allotment basis *
22,85,720 Equity Shares of Rs.10/- each are reserved for allotment to the
Shareholders of Group Companies of the Company on a proportionate basis
22,85,720 Equity Shares of Rs.10/- each are reserved for allotment to the
Employees of the Company on a proportionate basis
(F) Share Premium Account
Existing Share Premium Account
On the Issue of Equity Shares
-
1353.85
[•]
* 42,87,200 Equity Shares of Rs.10 each at the 'Cut-Off' price will be allotted to the Promoter Group of the
Company on firm allotment basis, towards 'Promoters Contribution in the Project'. The Promoters have vide
their letter dated August 25, 2005 undertaken to bring Rs. [•], being the amount due at the higher end of the
price band of Rs. [•] to Rs. [•], amounting to Rs. [•] Lacs, one day prior to the Issue Opening date and the
same will be deposited in an escrow account to be opened with the Banker to the Issue, which will be a
Scheduled Commercial bank as required by SEBI (DIP) Guidelines, 2000.
These equity shares will be subscribed
under:
Sr.
Name of Investor
No.
1.
Bansla Finlease Limited
2.
BTL Commercial Limited
3.
BTL Impex (India) Limited
4.
BTL Industries Limited
5.
6.
BTL Investments Limited
BTL Sales Limited
7.
Madhavtec India (P)
Limited
Neelabh Engineering (P)
Limited
North Delhi Credit
Investments Limited
8.
9.
to by the corporate bodies forming part of the Promoter Group as
Registered O
Office
ffice Address
C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094
C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094
E-985, 100 Ft. Road, Near Babarpur Bus
Terminal. Shahdra, Delhi – 110032
E-985, 100 Ft. Road, Near Babarpur Bus
Terminal. Shahdra, Delhi – 110032
C-4/1, 100 Ft. Road, Shahdara, Delhi – 110094
E-985, 100 Ft. Road, Near Babarpur Bus
Terminal. Shahdra, Delhi 110032
D-15/2, New Govindpura, Street No.9, Delhi
– 55
D-15/2, New Govindpura, Street No.9, Delhi
– 55
E-985, 100 Ft. Road, Near Babarpur Bus
Terminal. Shahdra, Delhi – 110032
No. of shares of
Rs. 10/10/- each
12,85,714
2,85,714
1,42,857
2,85,714
11,44,345
2,85,714
1,42,857
1,42,857
2,85,714
10
10.
Parvati Finlease Limited
C-8, LGF – II, East of Kailash, New Delhi
2,87,202
TOTAL
42,87,200
The abovementioned equity shares will be locked-in for 1 year from the date of allotment in the Issue.
Notes
1.
Share Capital History of the Company
Date of
Allotment and
Date when
Made fully
PaidPaid-up
29.08.2000
Face
Value
(Rs.)
Cumulative
no. of shares
Offer
Price
Price
(Rs.)
Nature of
payment
700
10.00
700
10.00
Cash
31.12.2001
99, 300
10.00
1,00,000
10.00
Cheque
31.03.2002
8,30,000
10.00
9,30,000
10.00
Cheque
10.08.2002
17,47,000
10.00
26,77,000
10.00
Cheque
30.09.2002
5,00,000
10.00
31,77,000
10.00
Cheque
16.12.2002
8,62,000
10.00
40,39,000
10.00
Cheque
29.03.2003
13,78,000
10.00
54,17,000
10.00
Cheque
12.06.2003
8,70,000
10.00
62,87,000
10.00
Cheque
31.08.2003
24,74,000
10.00
87,61,000
10.00
Cheque
05.11.2003
15,75,800
10.00
1,03,36,800
10.00
Cheque
20.02.2004
21,63,200
10.00
1,25,00,000
10.00
Cheque
07.01.2005
10,00,000
10.00
1,35,00,000
10.00
Cheque
28.02.2005
15,00,000
10.00
1,50,00,000
20.00
Cheque
28.03.2005
20,38,500
10.00
1,70,38,500
20.00
Cheque
1,00,00,000
10.00
2,70,38,500
20.00
Cheque
12.08.2005 *
No. of shares
allotted
Nature of Issue and
reason for allotment
Subscription to
Memorandum of
Association
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
Preferential
Allotment
2,70,38,500
* 1,00,00,000 equity shares of Rs.10/- each at Rs.20/- each have been allotted to the following:
(Rupees in Lacs)
Entities
No. of equity shares
Amount
Promoter Group:
Bansla Finlease Limited
15,36,750
3,07,35,000
BTL Commercial Limited
4,00,700
80,14,000
BTL Investments Limited
25,50,050
5,10,01,000
BTL Sales Limited
2,55,000
51,00,000
Madhavtech India (P) Limited
75,000
15,00,000
Parvati Finlease Limited
9,25,000
1,85,00,000
Sub total (a)
57,42,500
11,48,50,000
Others:
Private Corporate bodies:
11
Akriti Financial Services (P) Limited
Avisha Credit Capital Limited
Ferro Plast Limited
Master Finlease Limiteds
Vijay Finlease Limited
Individuals:
Mr. Raj Kumar Singla
Ms. Mona Arora
Mr. Sourabh Gupta
Mr. S. S. Gupta
Sub total (b)
Total (a + b)
20,000
24,05,000
8,65,000
7,00,000
2,55,000
4,00,000
4,81,00,000
1,73,00,000
1,40,00,000
51,00,000
5,000
500
5,000
2,000
42,57,500
1,00,00,000
1,00,000
10,000
1,00,000
40,000
8,51,50,000
20,00,00,000
Funds raised from this preferential allotment have been used to partially meet the fund requirement towards the
Project. For the schedule of "Objects of the Issue - Funds Deployed" please refer to page no. 29 of the Draft Red
Herring Prospectus.
2.
Details of increase in Authorised Capital
Particulars of the Increase
Sr. No.
(Rupees in Lacs)
From
To
1
10
100.00
2
100
300.00
3
300
1250.00
4
1250
1500.00
5
1500
2000.00
6
2000
6000.00
Date of Meeting
Nature
Nature of Meeting
01.03.2002
15.05.2002
01.08.2002
06.01.2005
10.03.2005
30.06.2005
EOGM
EOGM
EOGM
EOGM
EOGM
EOGM
3.
There has been no issue of shares for consideration other than cash / cheque.
4.
The Company has not issued any Equity Shares out of the revaluation reserves.
5.
As on date of filing of draft Red Herring Prospectus with SEBI, the issued capital of the Company is
fully paid up.
6.
Promoters' Contribution and Lock-in
a)
3 years lock-in (Promoters' contribution and lock-in in respect of promoters whose name figure in
Draft Red Herring Prospectus as Promoters)
Name of the Promoter
Date on which Nature of Number of Face Value Issue/transf % of post
equity shares
payment Equity
(Rs.)
er Price
issue paid
were
of
Shares
(Rs.)
up capital
allotted/transferr considera
ed and made
tion
fully paidpaid-up
Sunil Jindal
29.08.2000
Cheque
100
10
10 0.0002
31.12.2001
Cheque
500
10
10 0.0010
15.04.2004
Cheque
1,20,000
10
10 0.2405
1,20,600
0.2417
Raju Bansal
Bishan Bansal
Lalit Kumar Bansal
12.06.2003
20.02.2004
12.06.2003
10.08.2002
Cheque
Cheque
Cheque
Cheque
25,000
20,000
45,000
10
10
25,000
25,000
10
60,000
10
10
10
10
10
the
LockLock-in
period $
3 years
0.0501
0.0401
0.0902
3 years
0.0501
0.0501
3 years
0.1203
12
05.11.2003
20.02.2004
N. C. Bansal
Sanjana Bansal
Suresh Kumar Bansal
Bansla Finlease Limited
BTL Commercial Limited
16.12.2002
05.11.2003
20.02.2004
20.02.2004
12.06.2003
20.02.2004
10.08.2002
30.09.2002
16.12.2002
29.03.2003
12.06.2003
31.08.2003
05.11.2003
24.01.2005
10.08.2002
12.06.2003
20.02.2004
BTL Impex (India) Limited 31.08.2003
BTL Industries Limited
BTL Investments Limited
BTL Sales Limited
31.03.2002
29.03.2003
31.08.2003
05.11.2003
20.02.2004
10.08.2002
16.12.2002
29.03.2003
12.06.2003
12.06.2003
12.06.2003
31.08.2003
20.02.2004
16.12.2002
29.03.2003
31.08.2003
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
1,32,500
5,000
1,97,500
10
10
30,000
1,32,500
10,000
1,72,500
10
10
10
5,000
5,000
10
25,000
10,000
35,000
10
10
2,00,000
20,000
4,19,500
6,50,000
53,000
6,75,000
50,000
20,67,500
10
10
10
10
10
10
10
7,16,000
27,000
2,40,000
1,70,000
11,53,000
10
10
10
10
3,50,000
3,50,000
10
1,50,000
1,88,000
8,30,000
3,70,800
98,200
16,37,000
10
10
10
10
10
10,000
72,500
4,30,000
3,10,000
7,000
1,000
160,000
175,000
11,65,500
10
10
10
10
10
10
10
10
35,000
60,000
95,000
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
45
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
0.2656
0.0100
0.3958
3 years
0.0601
0.2656
0.0200
0.3457
3 years
0.0100
0.0100
3 years
0.0501
0.0200
0.0701
3 years
0.4008
0.0401
0.8408
1.3027
0.1062
1.3528
0.1002
4.1436
3 years
1.4350
0.0541
0.4810
0.3407
2.3108
3 years
0.7015
0.7015
3 years
0.3006
0.3768
1.6635
0.7432
0.1968
3.2808
3 years
0.0200
0.1453
0.8618
0.6213
0.0140
0.0020
0.3207
0.3507
2.3359
3 years
0.0701
0.1203
0.1904
13
05.11.2003
15.04.2004
20.02.2004
15.04.2004
15.04.2004
Madhavtech India (P)
Limited
Neelabh Engineers (P)
Limited
North Delhi Credit &
Investments Limited
Cheque
Cheque
Cheque
Cheque
Cheque
1,90,000
1,50,000
7,65,000
2,50,000
2,00,000
17,45,000
10
10
10
10
10
10
10
10
10
10
0.3808
0.3006
1.5332
0.5010
0.4008
3.4973
31.03.2002
Cheque
95,000
10
10
0.1904
10.08.2002
30.09.2002
16.12.2002
12.06.2003
31.08.2003
05.11.2003
20.02.2004
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
Cheque
2,00,000
1,30,000
45,000
48,000
80,000
50,000
30,000
6,78,000
10
10
10
10
10
10
10
10
10
10
10
10
10
10
0.4008
0.2605
0.0902
0.0962
0.1603
0.1002
0.0601
1.3588
3 years
3 years
31.03.2002
Cheque
1,25,000
10
10
0.2505
10.08.2002
30.09.2002
16.12.2002
12.06.2003
Cheque
Cheque
Cheque
Cheque
2,20,000
30,000
80,000
4,000
4,59,000
10
10
10
10
10
10
10
10
0.4409
0.0601
0.1603
0.0080
0.9199
1,50,000
10
10
0.3006
1,50,000
10
10
0.3006
3 years
20.0530
3 years
10.08.2002
Cheque
Total
1,00,05,600
3 years
$
Lock-in period shall start from the date of allotment of Equity Shares in terms of the Draft Red Herring
Prospectus.
b) 1 year lock-in
Name of the Promoter
Date on which
equity shares
were
allotted/transfer
red and made
fully paidpaid-up
Nature of Number of
payment Equity
of
Shares
considerat
ion
Sunil Jindal
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
15.04. 2004
cheque
cheque
cheque
cheque
cheque
Bansla Finlease Limited
28.03. 2005
12.08. 2005
cheque
cheque
BTL Commercial Limited
07.01. 2005
28.03. 2005
12.08. 2005
cheque
cheque
cheque
100
100
500
6,300
9,000
16,000
550,000
1536,750
2086,750
20,000
309,000
400,700
729,700
Face Value Issue/transf % of post Lock
Lock--in
er Price issue paid period $
(Rs.)
(Rs.)
up capital (years)
10
10
10
10
10
20
20
20
20
10
10
10
20
20
10
10
10
10
20
20
0.00
0.00
0.00
0.01
0.02
0.03
1.10
3.08
4.18
0.04
0.62
0.80
1.46
14
1 year
1 year
1 year
BTL Impex (India) Limited
28.03. 2005
cheque
BTL Investments Limited
28.03. 2005
12.08. 2005
cheque
cheque
BTL Sales Limited
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
28.03. 2005
12.08. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
Madhavtech India (P)
Limited
07.01. 2005
cheque
12.08. 2005
cheque
North Delhi Credit &
Investments Limited
28.03. 2005
cheque
Parvati Finlease Limited
12.08.2005
cheque
Akriti Financial Services (P) 12.08. 2005
Limited
cheque
Ferro Plast Limited
12.08. 2005
cheque
Avisha Credit Capital
Limited
12.01. 2005
cheque
12.01. 2005
28.02. 2005
12.08. 2005
cheque
cheque
cheque
Amit Goel
15.01. 2005
cheque
Anshul Maheshwari
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Anjana Maheshwari
24.01. 2005
24.01. 2005
cheque
cheque
Bindu Sethi
24.01. 2005
05.04. 2005
cheque
cheque
222,500
222,500
555,000
2550,050
3105,050
3105,050
10,000
6,500
10,000
1,500
10,000
50,000
50,000
1,000
200
10,000
5,000
3,000
,500
250,000
185,000
255,000
847,700
130,000
10
20
10
10
20
20
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
10
10
75,000
205,000
97,000
10
20
10
20
10
20
10
20
10
20
10
20
10
10
10
20
20
20
10
20
10
10
10
20
20
20
10
10
20
20
10
10
20
48
97,000
925,000
925,000
20,000
20,000
865,000
865,000
50,000
200,000
1250,000
2405,000
3905,000
50,000
50,000
10,000
10,000
10000
30,000
5,000
1,000
6,000
20,000
5,000
0.45
0.45
1.11
5.11
6.22
0.02
0.01
0.02
0.00
0.02
0.10
0.10
0.00
0.00
0.02
0.01
0.01
0.00
0.50
0.37
0.51
1.70
0.26
0.15
0.41
0.19
1 year
1 year
1 year
1 year
0.19
1.85
1.85
0.04
1 year
0.04
1.73
1.73
0.10
1 year
0.40
2.51
4.82
7.83
0.10
0.10
0.02
0.02
0.02
0.06
0.01
0.00
0.01
0.04
0.01
15
1 year
1 year
1 year
1 year
1 year
1 year
Boats India (P) Limited
24.01. 2005
cheque
Chander Bhan Sharma
24.01. 2005
24.01. 2005
cheque
cheque
Dayawati
24.01. 2005
cheque
Deepak Mangla
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
cheque
cheque
Hema Aggarwal
24.01. 2005
24.01. 2005
cheque
cheque
Himanshu Jain
24.01. 2005
cheque
Harish Kumar Maheshwari
24.01. 2005
cheque
Kamlesh Jindal
15.01. 2005
cheque
Kamlesh Maheshwary
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
Kailash M. Mehta
24.01. 2005
24.01. 2005
cheque
cheque
Kanika Anand
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Lakshmi Gupta
15.01. 2005
cheque
Manu Consultants Limited
28.03. 2005
cheque
Moksh Pal Singh
15.01. 2005
cheque
Manohar Lal
15.01. 2005
15.01. 2005
15.01. 2005
15.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
25,000
30,000
30,000
5,000
1,000
6,000
5,000
5,000
200
200
1,000
1,000
10,000
8,000
20,400
4,000
500
4,500
60,000
60,000
10,000
10,000
10,000
10,000
20,000
10,000
10,000
10,000
4,000
1,000
10,000
5,000
70,000
5,000
1,000
6,000
10,000
10,000
10,000
30,000
30,000
30,000
16,000
16,000
84000
84,000
84,000
70,000
10,000
10,000
10,000
10,000
2,000
10
20
10
10
20
20
10
20
10
10
10
10
10
10
20
20
20
20
20
20
10
10
20
20
10
20
10
20
10
44
10
10
10
10
10
10
10
10
20
20
20
20
20
20
20
20
10
10
20
20
10
10
10
20
20
20
10
42
10
20
10
41
10
10
10
10
10
10
10
40
40
40
40
40
40
40
0.05
0.06
0.06
0.01
0.00
0.01
0.01
0.01
0.00
0.00
0.00
0.00
0.02
0.02
0.04
0.01
0.00
0.01
0.12
0.12
0.02
0.02
0.02
0.02
0.04
0.02
0.02
0.02
0.01
0.00
0.02
0.01
0.14
0.01
0.00
0.01
0.02
0.02
0.02
0.06
0.06
0.06
0.03
0.03
0.17
0.17
0.17
0.14
0.02
0.02
0.02
0.02
0.00
16
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
05.04. 2005
cheque
Manju Rani Jain
24.01. 2005
cheque
Mukesh Kumar Aggarwal
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Master Finlease Limited
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
28.02. 2005
28.03. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
Mona Arora
12.08. 2005
cheque
Manish Jain
24.01. 2005
cheque
Naresh Kumar
15.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
Narender Kumar Singhal
15.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Nitesh Maheshwary
24.01. 2005
cheque
Narender Kumar Jain
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Prem Sagar Singla
31.12. 2001
cheque
Poonam Munjal
24.01. 2005
24.01. 2005
cheque
cheque
Parveen Kumar Gupta
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Parvesh Mahajan
24.01. 2005
24.01. 2005
24. 01. 2005
cheque
cheque
cheque
Paramjeet Singh Bakshi
24.01. 2005
cheque
4,000
200,000
10,000
10,000
2,000
2,000
500
4,500
30,000
270,000
500,000
200,000
150,000
100,000
250,000
700,000
2200,000
500
500
1,000
1,000
10,000
20,000
10,000
2,000
500
1,000
1,500
45,000
10,000
10,000
10,000
30,000
10,000
10,000
15,000
4,000
1,000
20,000
50,000
50,000
2,000
500
2,500
5,000
500
200
5,700
5,000
500
200
5,700
10,000
10
40
10
20
10
10
10
20
20
20
10
10
10
10
10
10
10
10
20
20
20
20
20
20
20
20
10
20
10
20
10
10
10
10
10
10
10
20
20
20
20
20
20
20
10
10
10
43
43
43
10
20
10
10
10
20
20
20
10
10
10
10
20
20
10
10
10
20
20
20
10
10
10
20
20
20
10
20
0.01
0.40
0.02
0.02
0.00
0.00
0.00
0.01
0.06
0.54
1.00
0.40
0.30
0.20
0.50
1.40
4.41
0.00
0.00
0.00
0.00
0.02
0.04
0.02
0.00
0.00
0.00
0.00
0.09
0.02
0.02
0.02
0.06
0.02
0.02
0.03
0.01
0.00
0.04
0.10
0.10
0.00
0.00
0.01
0.01
0.00
0.00
0.01
0.01
0.00
0.00
0.01
0.02
17
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
24.01. 2005
24.01. 2005
cheque
cheque
Rajat Fincap (P) Limited
30.09. 2002
29.03. 2003
20.02. 2004
cheque
cheque
cheque
Raju Gupta
15.01. 2005
cheque
Rakesh Maheshwary
24.01. 2005
cheque
Rajinder Maheshwary
24.01. 2005
cheque
Rai Chand Jain
24.01. 2005
cheque
Rajiv Arora
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Ramesh Maheshwari
24.01. 2005
24.01. 2005
cheque
cheque
Rakesh kumar Mahajan
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Raj Kumar Singla
12.08. 2005
cheque
Rita Goyal
28.03. 2005
cheque
Surbhi Gupta
15.01. 2005
15.01. 2005
15.01. 2005
cheque
cheque
cheque
Sahil Gupta
15.01. 2005
15.01. 2005
cheque
cheque
Sukesh Gupta
15.01. 2005
15.01. 2005
cheque
cheque
Sheenam Maheshwary
24.01. 2005
cheque
Smita Arora
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
Shipra Sharma & Satish
Sharma
24.01. 2005
cheque
24.01. 2005
cheque
24.01. 2005
24.01. 2005
cheque
cheque
Satish Sharma (HUF)
10,000
5,000
25,000
50,000
50,000
145,000
245,000
20,000
20,000
10,000
10,000
10,000
10,000
2,000
2,000
10,000
2,000
500
12,500
2,000
1,000
3,000
5,000
500
200
5,700
5,000
5,000
5,000
5,000
10,000
10,000
10,000
30,000
10,000
10,000
20,000
20,000
10,000
30,000
5,000
5,000
10,000
2,000
3,000
1,000
16,000
10,000
1,000
11,000
10,000
4,000
10
10
20
20
10
10
10
10
10
10
10
42
10
20
10
20
10
20
10
10
10
20
20
20
10
10
20
20
10
10
10
20
20
20
10
20
10
20
10
10
10
42
42
42
10
10
42
42
10
10
43
43
10
20
10
10
10
10
20
20
20
20
10
20
10
20
10
10
20
20
0.02
0.01
0.05
0.10
0.10
0.29
0.49
0.04
0.04
0.02
0.02
0.02
0.02
0.00
0.00
0.02
0.00
0.00
0.03
0.00
0.00
0.01
0.01
0.00
0.00
0.01
0.01
0.01
0.01
0.01
0.02
0.02
0.02
0.06
0.02
0.02
0.04
0.04
0.02
0.06
0.01
0.01
0.02
0.00
0.01
0.00
0.03
0.02
0.00
0.02
0.02
0.01
18
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
Sandeep Kumar Maheshwary 24.01. 2005
cheque
Sneh Lata
24.01. 2005
Sucon (India) (P) Limited
28.03. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
cheque
cheque
cheque
cheque
cheque
Sunita Maheshwari
24.01. 2005
cheque
Suresh Maheshwari
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Shashi Mehta & Kailash M.
Mehta
24.01. 2005
cheque
24.01. 2005
cheque
Sanjeev Kumar Khanna
24.01. 2005
cheque
Suman Gupta
24.01. 2005
24.01. 2005
24.01. 2005
cheque
cheque
cheque
Sanjay Mittal
28.03.2005
cheque
S. C. Aggarwal
28.03.2005
cheque
Subhash Goel
28.03.2005
cheque
Shyam Sunder Garg
28.03.2005
cheque
Sourabh Gupta
12.08. 2005
cheque
S. S. Gupta
12.08. 2005
cheque
Vijay Finlease Limited
12.08. 2005
cheque
Vikas K. Modi
24.01. 2005
cheque
Varsha Gupta
15.01. 2005
cheque
14,000
5,000
5,000
2,000
2000
76,500
10,000
10,000
2,000
1,000
500
100,000
2,000
2,000
10,000
10,000
10,000
30,000
5,000
1,000
6,000
10,000
10,000
5,000
500
200
5,700
2,500
2,500
3,000
3,000
5,000
5,000
3,000
3,000
5,000
5,000
2,000
2,000
2,55,000
2,55000
5,000
5,000
20,000
20,000
10
20
10
20
10
10
10
10
10
10
20
20
20
20
20
20
10
20
10
10
10
20
20
20
10
20
10
20
10
20
10
10
10
20
20
20
10
20
10
20
10
20
10
20
10
20
10
20
10
20
10
20
10
43
0.03
0.01
0.01
0.00
0.00
0.15
0.02
0.02
0.00
0.00
0.00
0.20
0.00
0.00
0.02
0.02
0.02
0.06
0.01
0.00
0.01
0.02
0.02
0.01
0.00
0.00
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.00
0.00
0.51
0.51
0.01
0.01
0.04
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
1 year
$
Lock-in period shall start from the date of allotment of Equity Shares in terms of the Draft Red Herring
Prospectus
7.
1 year
The Promoter’s contribution is not being brought-in less than the specified minimum lot of Rs. 25,000/per application from each individual and Rs.1,00,000/- from companies.
19
8.
The Company, its Promoters, Directors and Book Running Lead Manager have not entered into any
buy-back, stand-by and similar arrangements for purchase of securities being offered through the Draft
Red Herring Prospectus.
9.
Currently there are no shares under lock-in.
10.
The Equity Shares to be held by the Promoter Group under lock-in period shall not be sold /
hypothecated / transferred during the lock-in period. However, the Equity Shares held by Promoter
Group, which are locked in, may be transferred to and among Promoter Group or to a new promoter or
persons in control of the Company, subject to the continuation of lock-in with the transferees for the
remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997 as applicable. The Promoter Group may pledge their Equity Shares with banks or
financial institutions as additional security for loans whenever availed by them from banks or financial
institutions.
11.
In case of over-subscription, allotment will be on proportionate basis as detailed in para "Statutory and
other Information - Basis of Allotment" on page no.143 of the Draft Red Herring Prospectus. An oversubscription to the extent of 10% of the Net Issue to public can be retained for the purpose of rounding
off to the nearer multiple of [•] (which is minimum allotment lot), while finalising the allotment.
Consequently, the actual allotment may go up by a maximum of 10% of the Net Issue to public, as a
result of which, the post Issue paid up capital would also increase by the excess amount of allotment so
made. In such an event, the shares held by the Promoter and subject to lock-in shall be suitably
increased; so as to ensure that 20% of the post Issue paid-up capital is locked in.
12.
The securities through this Public Issue shall be made fully paid up or will be forfeited within 12
months from the date of allotment of the securities offered through the Draft Red Herring Prospectus.
13.
Unsubscribed portion in any Reserved Category would be added to any other Reserved Category. The
unsubscribed portion, if any, after such interse adjustments among the Reserved Categories shall be
added back to the Net Issue to the public and first be distributed equally between the Retail Portion and
the Non-Institutional Portion in accordance with the description in section titled "Statutory and other
Information - Basis of Allotment” as described in page no. 143.
14.
Undersubscription:
15.
Unsubscribed portion in any Reserved Category may be added to any other Reserved Category
The unsubscribed portion, if any, after such interse adjustments among the Reserved Categories
shall be added back to the Net Issue to the public
In case of undersubscription in the Net Issue to the public portion, spillover to the extent of
undersubscription shall be permitted from the Reserved category to the Net Issue portion.
Details of major shareholders:
a)
Top ten shareholders as on date of filing of the Red Herring Prospectus with the RoC
Name of shareholder
BTL Investments Limited
Bansla Finlease Limited
Avisha Credit Capital Limited
BTL Sales Limited
Master Finlease Limited
BTL Commercial Limited
BTL Industries Limited
Parvati Finlease Limited
Madhavtech India (P) Limited
Ferro Plast Limited
No. of Shares
42,70, 550
41,54,250
39,05,000
25,92,700
22,00,000
18,82,700
16,37,000
9,25,000
8,83,000
8,65,000
20
b) Top ten shareholders ten days prior to the date of filing of the Red Herring Prospectus with the RoC
Name of shareholder
No. of shares
BTL Investments Limited
42,70, 550
Bansla Finlease Limited
41,54,250
Avisha Credit Capital Limited
39,05,000
BTL Sales Limited
25,92,700
Master Finlease Limited
22,00,000
BTL Commercial Limited
18,82,700
BTL Industries Limited
16,37,000
Parvati Finlease Limited
9,25,000
Madhavtech India (P) Limited
8,83,000
Ferro Plast Limited
8,65,000
c) Top ten shareholders two years prior to the date of filing of the Red Herring Prospectus with the RoC
Name of shareholder
No. of shares
Bansla Finlease Limited
20,17,500
BTL Industries Limited
14,68,000
BTL Impex (India) Limited
10,66,000
BTL Investments Limited
10,02,500
Madhavtech India (P) Limited
5,98,000
BTL Commercial Limited
4,67,000
Neelabh Engineers (P) Limited
4,59,000
BTL Sales Limited
1,90,000
Rajat Fincap (P) Limited
1,84,000
North Delhi Credit & Investments Limited
1,50,000
16.
Aggregate shareholding of the Promoter Group and of the Directors of the Promoters, where the
promoter is a company is as follows:
Particulars
a.
b.
c.
d.
e.
f.
Promoter
Immediate Relatives of the
Promoter
Companies in which 10% or
more of the share capital is
held by the Promoter / an
immediate relative of the
Promoter / a firm or HUF in
which the Promoter or any
one or more of his
immediate relatives is a
member
Companies
in
which
Company mentioned in c.
above holds 10% or more of
the share capital
HUF or firm in which the
aggregate share of the
promoter and his immediate
relatives is equal to or more
than 10% of the total
All
persons
whose
shareholding is aggregated
for the purpose of disclosing
in the prospectus as
"Shareholding
of
the
PrePre-Issue as on September 06,
2005
No. of Shares @
% Holding
Holding
Rs. 10/10/- each
1,81,600
0.68
4,35,000
1.61
PostPost-Issue
No. of Shares @
Rs. 10/10/- each
1,81,600
4,35,000
% Holding
0.36
0.87
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1,76,23,700
65.18
2,23,45,900
44.79
21
Promoter's Group".
Total
17.
67.46
2,25,27,500
Shareholding pattern of the Company as on September 11, 2005is as follows:
Name of shareholders
No. of equity shares of Rs.10
each
Promoters
Mr. Sunil Jindal
1,36,600
Mr. Raju Bansal
45,000
I
1,81,600
Promoter Group:
Corporate bodies:
BTL Investments Limited
Bansla Finlease Limited
BTL Commercial Limited
BTL Impex (I) Limited
BTL Industries Limited
BTL Sales Limited
North Delhi Credit & Investments Limited
Madhavtech India (P) Limited
Neelabh Engineers (P) Limited
Parvati Finlease Limited
II
Individuals:
Mr. Lalit Bansal
Mr. N. C. Bansal
Mr. Bhishan Bansal
Mr. Suresh Bansal
Ms. Sanajna Bansal
III
SubSub-total (a) (I+II+III)
Others
Corporate Bodies
Individuals
HUF
SubSub-total (b)
Total
18.
1,82,40,300
45.15
% of shareholding
0.51
0.17
0.67
42,70,550
41,54,250
18,82,700
5,72,500
16,37,000
25,92,700
2,47,000
8,83,000
4,59,000
9,25,000
1,76,23,700
15.79
15.36
6.96
2.12
6.05
9.59
0.91
3.27
1.70
3.42
65.18
1,97,500
1,72,500
25,000
35,000
5,000
4,35,000
1,82,40,300
0.73
0.64
0.09
0.13
0.02
1.61
67.46
76,06,000
11,78,200
14,000
87,98,200
2,70,38,500
28.13
4.36
0.05
32.54
100.00
Pre and post Issue shareholding pattern of the Company is as follows:
Pre Issue
Category
No. of shares
%
Promoters
1,81,600
0.67
Promoter Group
1,80,58,700
66.79
Others
87,98,200
32.54
Public
0
0.00
TOTAL
2,70,38,500
100.00
PostPost-Issue
No. of shares
1,81,600
2,23,45,900
1,33,69,640
1,39,98,560
4,98,95,700
4,98,95,700
%
0.36
44.79
26.80
28.06
100.00
19.
There have been no transactions by the Promoters, their relatives and associates, and the Directors of
the Company, directly or indirectly, in the Equity Shares of the Company during the last 6 months.
20.
The Company has not granted any options or shares of the Company under any scheme of Employee
Stock Options or Employee Stock Purchase to its employees.
22
21.
The Company does not have any proposal, intention, negotiation or consideration to alter the capital
structure by way of split/ consolidation of the denomination of the shares/ issue of shares on a
preferential basis or issue of bonus or rights or public issue of Equity Shares or any other securities
within a period of six months from the date of opening of the present Issue or from the date the
application moneys are refunded on account of failure of the Issue.
22.
However, if business needs of the Company so require, the Company may alter the capital structure by
way of split/ consolidation of the denomination of the shares/ issue of shares on a preferential basis or
issue of bonus or rights or public issue of shares or any other securities during the period of six months
from the date of listing of the Equity Shares issued under the Red Herring Prospectus or from the date
the application moneys are refunded on account of failure of the Issue, after seeking and obtaining all
the approvals which may be required for such alteration.
23.
At any given time, there shall be only one denomination of the Equity Shares. The Company shall
comply with such disclosure and accounting norms as may be specified by the SEBI from time to time.
24.
The number of shareholders as on September 11, 2005 is 87 (Eighty Seven).
25.
The promoters, directors and Book Running Lead Managers to the Issue have not paid any amount,
whether direct or indirect and in cash or kind, in the nature of discount, commission, allowance or
otherwise to any person.
23
OBJECTS OF THE ISSUE
The object of the issue is to raise funds for the proposed expansion plans of the Company. The object is also to
create a public trading market for its shares by listing them on the Stock Exchanges, which will enhance our
visibility and brand name and enable us to use our equity shares for strategic growth opportunites. The net
proceeds from the Issue after deducting underwriting Commission and management fees, brokerage; fees to
various advisors and all other Issue related expenses from the Issue of shares are intended to be deployed in
setting up the Project in the following manner:
A. Owned Model:
(i)
Funding the capital expenditure required for the expansion;
(ii)
To meet working capital requirement;
B. Lease Model:
Leased Premises including SRS Value Bazaars/ Food Courts/ Restaurants/Multiplexes/cinemas or any
combination thereof:
(i)
To meet capital expenditure
(ii)
To meet working capital requirement;
C. Franchise Model
(i)
To meet expenditure towards human resource training, software development etc.
The other object of the Issue is to get the shares listed on the Stock Exchanges and to provide liquidity to our
existing investors.
The main object clause and objects incidental or ancillary to the main objects clause of the Memorandum of
Association of the Company enables the Company to undertake the existing activities and the activities for
which funds are being raised by the Company, through the Issue.
The Cost of Project and Funds Requirement as appraised by UTI Bank Limited is as follows:
Disclaimer Clause: This Project Appraisal Report (Report) contains proprietary and confidential information regarding SRS
Entertainment Limited (SRS). The Report has been prepared by UTI Bank Limited (UTIB) based on the information
provided by SRS and the published information available.
The financial projections in the Report have been prepared for the limited purpose of circulation among the
Banks/FIs/Institutions who have shown their interest in financing the project. The financial projections represent, to the best
of knowledge and judgment, SRS’s expected financial position, results of operations and cash flow situation for the
projection period. These projections are subject to changes in economic conditions, legislation and other force-majeure
circumstances.
UTIB has not independently verified all of the information contained in this Report and the work performed by UTIB is not
in the nature of audit or due-diligence. Neither UTIB, nor any of the directors, employees or advisors make any expressed or
implied representation or warranty and no responsibility or liability is accepted by any of them with respect to the estimates
or forecasts set forth in this Report or the underlying assumptions on which they are based or any credit or investment
decision taken on the basis of this Report.
This Report is furnished on strictly confidential basis and is for the sole use of the person / company to whom it is addressed.
Neither this Report, nor the information contained herein, may be reproduced or passed to any person or used for any other
purpose other than stated above.
(Rupees in Lacs)
A
I
Sr.
Sr. No.
1.
2.
3.
Project Cost
Capital Expenditure
Model
Ownership
Lease
Franchise
Cost per location
2558.00
638.00
-
No. of locations
3
4
5
Amount
7674.00
2552.00
100.00
24
II
III
Working capital requirement
Contingencies
Sub total (a)
B
Issue Expenses
Expenses
Sub total (b)
Grand Total (a + b)
10326.00
906.30
297.70
11530.00
470.00
470.00
12000.00
Detailed breakbreak-up of funds requirement
A. Project Cost
I. Capital Expenditure
1. Ownership Model
The Company proposes to buy land and construct a structure on it for Multiplexes, which would also include
Cineplexes, shopping mall, lobby etc. The land is being located at a prime location which is convenient to the
customers and has a sufficient parking place. The structure would be built along with the interior designing,
furniture and fixtures and equipment which would be having aesthetic looks and design.
SRSEL proposes to own 3 (three) of such Multiplexes. Accordingly, total cost of construction of the three
owned Multiplexes is estimated to be:
(Rupees in Lacs)
Sr. No.
Cost Head
Cost per facility
Cost of 3 facilities
1.
Property
1920.00
5760.00
2.
Theatres - SRS Cinemas
306.00
918.00
3.
SRS Value Bazaar
208.00
624.00
4.
7 Dayz restaurants
124.00
372.00
Total
2,558.00
7674.00
2. Lease Model
The total cost estimated by SRSEL to implement the leased model at the proposed locations is as under:
(Rupees in Lacs)
Sr. No.
Cost Head
Cost per facility
Cost of 4 facilities
1.
Theatres - SRS Cinemas
306
1224
2.
SRS Value Bazaar
208
832
3.
7 Dayz Restaurants
124
496
Total
638
2552
3. Franchise Model
The total cost for implementing the franchise model is estimated as Rs.100 Lacs. This would be utilised towards
software development costs and providing manpower training.
(Rupees in Lacs)
Table
Page
Amount
No. of
Total
Sr.
Referenc
No.
per
locations
no.
Cost Head
e
location
Installation of software, radio
O
60
19.60
5
98.00
connectivity and training &
1
development
.40
5
2.00
2
Miscellaneous Expenses
20.00
5
100.00
Total Cost
Break up of cost (facility wise)
The owned Multiplexes would contribute a major head for the Project cost and the same for each proposed site,
would be as follows:
25
Owned Multiplexes
1
2
3
4
5
6
7
Cost Head
Land
Building including common
Interiors
Plant & Machinery
Air Conditioning
Lifts & Escalators
Architect Fees
Misc. Expenses 3% of Item No.
(2, 3,4 & 5)
Total Cost
Table
Reference
Page
Nos.
A
52
B
C
G
K/1
52
53
55
57
Amount
per location
320.00
972.90
No. of
locations
3
3
(Rupees in Lacs)
Total
960.00
2918.70
336.00
125.00
93.10
25.00
48.00
3
3
3
3
3
1008.00
375.00
279.30
75.00
144.00
1,920.00
3
5760.00
Cineplex - SRS Cinemas
1
2
3
4.
5.
6.
Cost Head
Interior, Furniture
and Including
electrical Fixture &
Fire Fighting
Equipment cost
Computers,
Plazamas, Display
Monitors, & Soft
wares Etc.
Theaters Seats
Air Conditioning
Architect Fees
Total Cost
No. of locations
Owned
Lease
(Rupees in Lacs)
Total
Location
Amount
Table
Reference
Page
No.
H/1&2
55
52.80
3
4
7
369.60
P
60
147.60
3
4
7
1033.20
L
57
40.00
3
4
7
280.00
H/3
D
K/2
55
53
57
30.00
30.60
5.00
306.00
306.00
306.00
3
3
3
3
3
-
4
4
4
4
4
7
7
7
7
3
4
210.00
214.20
35.00
2142.00
918.00
1224.00
Owned
Lease
Amount
SRS Value Bazaar
1
2
3
4.
5.
6.
7.
Cost Head
Interior, Furniture
and Including
electrical Fixture
Air Conditioning
ducting etc.
Computers,
Plazams, Soft
wares, Monitors
etc.
Equipments
Civil Work & Fire
Fighting, Wooden
Partitions,
Individual Counter
& Racks
Architect Fees
Miscellaneous
Expenses
Table
Reference
I/1 & 2
Page
No.
56
Amount
47.00
E
54
27.20
M
58
40.00
I/3
I/4
K/3
56
56
57
25.00
64.80
3.00
1.00
No. of
of locations
Owned
Lease
(Rupees in Lacs)
Total
Location
Amount
3
4
7
329.00
3
4
7
190.40
3
4
7
280.00
3
4
7
175.00
3
4
7
453.60
3
4
7
21.00
3
4
7
7.00
26
Total Cost
Cost
Owned
Lease
208.00
208.00
208.00
3
3
-
4
4
7
3
4
1456.00
624.00
832.00
7 Dayz Food Court/Restaurants
1
2
3
4
5
6
7
Cost Head
Interior, Furniture
and Including
electrical Fixture
Air conditioning
Computer,
monitors &
Palazama
Kitchen Equipment
Seating Chairs &
Tables
Civil Work
including Fire
Fighting &
counters
Architect Fees
Total Cost
Table
Reference
J/1
(Rupees in Lacs)
Total
Location
Amount
7
288.75
Page
No.
56
Amount
41.25
F
N
54
59
6.80
20.00
3
3
4
4
7
7
47.60
140.00
J/2
J/3
56
56
41.20
3.00
3
3
4
4
7
7
288.40
21.00
J/4
56
9.75
3
4
7
68.25
K/4
57
2.00
124.00
124.00
124.00
3
3
3
-
4
4
4
7
7
3
4
14.00
868.00
372.00
496.00
Owned
Lease
No. of locations
Owned
Lease
3
4
II. Working Capital Requirement
Particulars
SRS Value Bazaar
Stock
Trade Debtors
Less: Trade Creditors
Sub-total (a)
7 Dayz
Stock
Sub-total (b)
Cost Per Location
106.08
62.40
42.37
126.11
(Rupees in Lacs)
Total Cost
742.56
436.80
296.58
882.78
3.36
23.52
3.36
23.52
Total
129.47
906.30
Margin Funding from Term Loan
32.37
225.00
Out of the total requirement of Rs. 906.30 Lacs towards the working capital, Rs.225 Lacs will be utilised from
the term loan.
III. Contingencies
The company estimates contingency of Rs. 297.70 Lacs which approx. is 3% of the total capital cost of the
Project taking in view of escalation of the cost of project.
B. Issue Expenses
27
Issue expenses to be met out of the funds raised from the Issue is estimated at Rs.470 Lacs. For details on Issue
expenses please refer to “ General Information – Issue Expenses” on page no. 122 of the Draft Red Herring
Prospectus.
Appraisal
The Project has been appraised by UTI Bank Limited for meeting the debt requirement for the Project.
Means of Finance
Sr. No.
a.
b.
c.
(Rupees in Lacs)
Project Cost
Means
Equity:
i. Preferential Allotment (1)
ii. IPO Proceeds
Debt (2)
Internal Accruals (3)
Total [(a) + (b) + (c)]
2000.00
[•]
2000.00
Balance
12000.00
(1)
Preferential allotment refers to the preferential allotment of 1,00,00,000 Equity Shares of Rs. 10/- each at
Rs.20/- each made by the Company on August 12, 2005. For details on the allotment please refer to the section
"Capital Structure - Share Capital History of the Company " on page no. 11 and "Legal Information - Material
Developments" on page no. 111 of the Draft Red Herring Prospectus.
The amount of Rs.2000 Lacs so raised have been deployed in the Project. For details on deployment of the same
please refer to the section titled “Introduction - Objects of the Issue - Funds Deployed” on page no. 29 of the
Draft Red Herring Prospectus.
(2)
SRSEL has received the in-principal approval for the debt component of Rs.2000 Lacs from UTI Bank
Limited.
(3)
If funds raised from this IPO are in short of our requirement to meet the proposed expansion programme, such
amount will be met through the internal accruals of the Company.
In the event that funds raised from the IPO are in excess of our stated requirement, the same will be used as
follows:
a) Further expansion plans of the Company over and above the Project,
b) Branding of our SRS Multiplex, SRS Value Bazaars and SRS Cinemas to gain mind-share of customers and
create customer loyalty, and
c) Advertising and promotional campaigns to earn local market-share and improve profitability
Schedule of Implementation as estimated by the Company
City
Agra
Owned
Leased
Food
SRS
SRS
SRS
Mall
SRS
Bazaar Court Cinema Cinema Bazaar
Sep’ 07 Sep’ 07 Sep’ 07 Sep’ 07
-
Ludhiana
Muzaffarnagar
Sep’ 07 Sep’ 07 Sep’ 07 Sep’ 07
Mar' 08 Mar' 08 Mar’ 08 Mar' 08
Food
Court
-
Franchise
SRS Restaurant/F
Cinema ood Court
-
-
-
-
-
Gurgaon(1)
-
-
-
-
Mar’ 06
-
Mar’ 06
-
-
Gurgaon(2)
-
-
-
-
Mar' 07
-
Mar' 07
-
-
Jodhpur
-
-
-
-
Mar’ 07 Mar’ 07 Mar’ 07
-
-
Amritsar
-
-
-
-
Sep’ 07
Ambala
-
-
-
-
Jalandhar
-
-
-
-
Jaipur
-
-
-
-
-
Sep’ 07
-
-
Sep’ 06
-
Sep’ 06
Sep’ 06
-
Sep’ 07
-
Sep’ 07
Sep’ 07
-
-
-
Mar’ 07
Mar’ 07
28
Meerut
-
-
-
-
-
Sep’ 07
-
Sep’ 07
Sep’ 07
Panipat
-
-
-
-
-
-
-
Sep’ 07
Sep’ 07
Funds Deployed
The Company has deployed Rs.1997.03 Lacs towards Project cost, the break-up of which, as certified by T. K.
Gupta and Associates, Chartered Accounts dated August 20, 2005 is provided below:
(Rupees in Lacs)
Sr. No.
Particulars
Amount
1
Advance to Era Infrastructure Limited
840.00
2
Advance to Ayushi Steel Co. (P) Limited
400.00
3
Advance to J V Steel Traders
75.00
4
Advance to Kanika Strips (P) Limited
253.00
5
Advance to Mani Mahesh Metals (P) Limited
40.00
6
Advance to SRS Buildcon (P) Limited
250.00
7
Advance to Tarang Buildcon P Limited
100.00
8
Omaxe Construction Limited
1.51
9
Tulip Info Sevices (P) Limited
2.51
10
P R infrastructure Limited
1.51
11
Issue related expenses
33.50
(Advance to Issue management team, RoC etc.)
Total
1997.03
Sources of financing of funds
funds already deployed
The Company has made a preferential allotment of 1,00,00,000 Equity Shares of Rs. 10/- each at Rs.20/- each
on August 12, 2005 to its Promoters, Promoter Group and others. The same has been detailed in the section
titled "Capital Structure - Share Capital History" on page no. 11 of the Draft Red Herring Prospectus.
Details of Balance Fund Deployment
(Rupees in Lacs)
Activities
Setting Up of
Multiplexes
–
owned
SRS Cinemas
SRS
Value
Bazaar
7
Dayz
Restaurants
Screen
on
Franchises Basis
Issue Expenses
Contingency
Working Capital
Requirement
Total
Total
Project
Cost
Already
Spent/Give
n as
Advance
upto
August 22,
2005
Balance Amount
31.3.2006
31.3.2006
1210.00
31.3.2007
752.00
31.3.2008
1840.00
31.3.2009
0.00
5.53
0.00
484.47
140.00
1200.00
810.00
458.00
500.00
0.00
0.00
868.00
0.00
200.00
600.00
68.00
0.00
2142.00
0.00
50.00
50.00
0.00
0.00
470.00
297.70
906.30
33.50
0.00
0.00
436.50
0.00
106.30
0.00
0.00
400.00
0.00
0.00
400.00
0.00
297.70
0.00
12000.00
1997.03
1997.03
2627.27
3812.00
3266.00
297.70
5760.00
1958.00
1890.00
1456.00
Interim use of Funds
Pending utilization of the proceeds out of the Issue for the purposes described above, the Company intends to
temporarily invest the funds in high quality, interest /dividend bearing short term / long term liquid instruments
including deposits with banks for the necessary duration. Such investments would be in accordance with the
investment policies approved by the Board of Directors from time to time.
29
BASIS OF ISSUE PRICE
Qualitative Factors
The Company is strategically positioned to leverage its strength in the domestic market, due to its competitive
strengths that include the following:
1.
SRS Entertainment Limited is an ISO: 9001:2000 certified Company.
2.
Ability to identify locations:
One of the key factors for the success of any Multiplex is its location. The Company believes that its
skill in identifying locations is one of its key strengths. The Company's management comprises of
persons experienced in project conceptualisation and implementation.
3.
Strong project management skills:
The Company’s management team comprises of young and dynamic individuals. They preempted the
changing trends of the economy and the growing aspirations of the Indian population. Therefore, the
Company’s first Multiplex, SRS Multiplex is a one of its kind mall in Faridabad, India. The credit for
its planning, execution and successful implementation lies on the shoulders of the Company's
management and their ability to conceptualise and bring to reality the dream Project of SRS Multiplex.
4.
Capital-efficient project design and execution:
The Company's projects are planned and conceived in a manner that each location would be profitable
on a stand alone basis. Apart from standalone profitability of each site, it also strives efficient use of
capital. This is because the Company has examined the demographic and economic bounty at each
location before deciding upon the nature of arrangement and facilities to be made available at
respective locations.
5.
Focus:
The Company has focused, developed and maintained a 'family outing' approach while setting up SRS
Multiplex. There is something of entertainment for everyone. E.g., 3 screen Cineplex for the entire
family to watch movies together, Dazzel Resto Bar for the young-at-heart, mehndi corner for ladies,
Little Freedom for kids etc. This approach not only gels with the Company’s concept of entertainment
but also is a mechanism to add multiple revenue streams and de-risk the business model.
6.
Selection of brands:
Carrying the Company's focus forward, the selection of brands operating out of SRSM has been done
in a way so as to appeal the middle and upper middle class population. There is a kids zone for
children, for men there is a one big mega store named Planet Fashion that houses brands like Louis
Philippe, Van Heusen, Allen Solly and Oswals, women focused brands like Sangini Jewelers, Shringar
Place, Nari Collection and Silver and Chant and many brands that enjoy popularity among all genders
and age groups like Rayban, Archies, Titan and Music World. For the ones with a sensitive taste bud,
there is choice of McDonalds, Yellow Chilly, Pizza Hut, Dazzle Bar, 7 Dayz, Cowboyz and Khana
Karkhana.
7.
Marketing strength:
The Company believes that SRS Multiplex has been accepted in Faridabad. It enjoys strong brand
recall due to marketing through newspaper ads, radio spots, direct mailers and the use of promotions
like paid previews, contests, and blood donation campaigns. Premieres of films are also used as an
important marketing tool.
Quantitative Factors
SRSEL was incorporated August 29, 2000, but the commercial operations of its first Multiplex, SRS Multiplex
commenced on November 12, 2004. Therefore, computing ratios related to profitability, e.g. EPS and RoNW,
are not relevant from F.Y 2000 to F.Y 2004.
1.
Financial Performance
Particulars
Sales
Quarter ending
June 30, 2005
601.58
(Rupees in Lacs)
For the year ended March 31,
2005 *
2004
2003
765.36
0.00
1.13
30
Profit after Tax
Equity Capital
Reserves and Surplus
231.27
1848.04
804.26
219.09
1739.60
572.98
0.00
1250.00
0.04
0.04
541.70
0.04
* The period for which the revenue earned is for 140 days from 12th November 2004 to 31st March 2005
2.
Adjusted Earnings Per Share (EPS)
EPS
Quarter ended June 30, 2005 (1)
F.Y 2005 (2)
Weighted Average EPS
(1)
(2)
3.
Weight
5.43
4.43
5.10
2
1
Annualised Basic and Diluted EPS
The period for which the revenue earned is for 140 days and EPS has been annualised
Price/ Earning Ratio (P/E) in relation to Issue Price
Based on
Weighted Average EPS
[•] x
EPS as on June 30, 2005
[•] x
There are no comparable companies that operate in entertainment cum retail sector and the real estate sector
similar to that of SRSEL and currently listed in India. Therefore, comparison of industry P/E is not possible.
4.
Return on Networth (RoNW)
June 30, 2005 (1)
F.Y 2005 (2)
Weighted Average RoNW (%)
(1)
(2)
RoNW
Weight
35.08%
25.44%
31.87%
2
1
Annualised Basic and Diluted EPS
The period for which the revenue earned is for 140 days and EPS has been annualised
5.
Minimum Return on Total Net Worth post-Issue to maintain pre-Issue EPS is [•]
6.
Book Value per share (BVPS)
BVPS
As at Quarter ended June 30, 2005
As at March 31, 2005
After the Issue
15.47
13.50
[•]
Issue Price = [•
[ •]
7.
Comparison of Accounting Ratios with Peers
There are no companies which are strictly comparable with SRSEL. However, following companies have
been considered for the purpose of comparison of ratios:
Parameter
Adlabs Films
Shoppers' Stop
(Figures as of March 31, 2004)
EPS (Rs./unit)
7.88
2.19
Book Value (Rs./unit)
48.76
14.31
Return on Networth (%)
12.39
14.30
P/E Multiple**
57.70
352.80
**Based on September 06, 2005 closing prices as available on Capitaline Plus
8.
The face value of the Equity Shares is Rs.10 each
9.
Issue Price is [•] times the Issue Price at the lower end of the price band and [•] times at the higher end
of the price band.
The final price would be determined on the basis of the demand from the investors.
31
TAX BENEFITS
To
The Board of Director
SRS Entertainment L
Limited
imited
E-18, Nehru Ground
NIT Faridabad
Dear Sir,
As required, we are giving here under a statement of possible Tax benefits available to M/s SRS Entertainment
Limited (formerly known as SRS Commercial Limited) and its shareholders.
We hereby report that the enclosed annexure states the possible tax benefits available to M/s SRS Entertainment
Limited (formerly Known as SRS Commercial Limited) (the "Company”) and its shareholders under the current
direct tax laws. Several of these benefits are dependent on the Company or its shareholders fulfilling the
conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to
derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the
Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed herein are
not exhaustive.
This statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences
and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the
specific tax implications arising out of their participation in the issue.
We do not express any opinion or provide any assurance as to whether:
The Company or its shareholders will continue to obtain these benefits in future; or
The conditions prescribed for availing the benefit have been / would be met with.
The contents of this annexure are based on information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company and
the interpretation of current tax laws.
For T. K. GUPTA & ASSOCIATES
T. K. GUPTA
(PARTNER)
Date: August 29, 2005
Place: New Delhi
32
Benefits available to the Company Under the Income Tax Act, 1961.
1.
Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of share holders.
2.
As per the provisions of section 10(38), long term capital gain arising to the share holders from the
sale/transfer of long term capital assets being an Equity Shares in any company or unit of an equity oriented
mutual fund ( i.e. a capital assets held for the period of 12 months or more) entered into a recognized stock
exchange in India and being such transaction, which chargeable to security transaction tax is exempt from
tax
3.
In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase and
sale of equity share in a company through the recognized stock exchange is liable to securities transaction
tax @ 0.075% of the value payable by both buyer and seller (0.1% with effect from 1 June, 2005 as per the
Finance Act, 2005). The non-delivery based sale transactions are liable to tax @ 0.015% of the value
payable by the seller (0.02% with effect from 1 June, 2005 as per the Finance Act, 2005).
4.
In terms of section 88E of the Act, the securities transaction tax paid by the share holder in respect of
taxable securities transaction entered into in the course of business would be eligible for rebate from the
amount of income-tax on the income chargeable under the head ’Profit and gains under Business or
profession’ arising from taxable securities transactions as such no deduction in respect amount paid on
account of securities transaction tax will be allowed in computing the income chargeable to tax as capital
gain.
5.
In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
Company would be entitled to exemption from tax on gains arising from transfer of the long term capital
asset (not covered by section 10 (38) if such capital gain is invested in any of the long-term specified assets
within a period of 6 months after the date of such transfer for a period of at least 3 years, in the manner
prescribed in the said section. Where the long-term specified asset is transferred or converted into money at
any time within a period of three years from the date of its acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in which the longterm specified asset is transferred or converted into money.
6.
Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) on the transfer of investment in shares
will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company
forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held
for a period of at least one year. Eligible public issue means issue of equity shares which satisfies the
following conditions, namely a) the issue is made by a public company formed and registered in India;
b) the shares forming part of the issue are offered for subscription to the public;
There is a legal uncertainty over whether the benefit under this Section can be extended to shares forming
part of the offer for sale by the selling shareholders.
7.
As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares
in any company through a recognized stock exchange or from the sale of units of equity-oriented mutual
fund shall be subject to tax @ 10% (plus applicable service tax & education cess) provided such transaction
is subject to Securities Transaction Tax.
8.
Under Section 112(1)(b) of the Act and other relevant provision of the Act, long-term capital gains [not
covered under section 10(38) arising on transfer of share in the company, if share are held for a period
exceeding 12 months, shall be taxed at a rate 20% (plus applicable surcharge and education cess) after
indexation as provided in the proviso to the section 48 or at 10% (plus applicable surcharge and education
cess) (without indexation), at the option of share holder.
Benefits available
available to the Members of the company Under the Income Tax Act, 1961.
33
1.
Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred to in
section 115-O of the Act is exempt from income tax in the hands of share holders.
2.
As per the provisions of section 10(38), long term capital gain arising to the share holders from the
sale/transfer of long term capital assets being an Equity Shares in any company or unit of an equity oriented
mutual fund ( i.e. a capital assets held for the period of 12 months or more) entered into a recognized stock
exchange in India and being such transaction, which chargeable to security transaction tax is exempt from
tax
3.
In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No.2) Act, 2004,
transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder,
shall be chargeable to securities transaction tax. As per the said provisions, any delivery based purchase and
sale of equity share in a company through the recognized stock exchange is liable to securities transaction
tax @ 0.075% of the value payable by both buyer and seller (0.1% with effect from 1 June, 2005 as per the
Finance Act, 2005). The non-delivery based sale transactions are liable to tax @ 0.015% of the value
payable by the seller (0.02% with effect from 1 June, 2005 as per the Finance Act, 2005).
4.
In terms of section 88E of the Act, the securities transaction tax paid by the share holder in respect of
taxable securities transaction entered into in the course of business would be eligible for rebate from the
amount of income-tax on the income chargeable under the head ’Profit and gains under Business or
profession’ arising from taxable securities transactions as such no deduction in respect amount paid on
account of securities transaction tax will be allowed in computing the income chargeable to tax as capital
gain.
5.
In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
Company would be entitled to exemption from tax on gains arising from transfer of the long term capital
asset (not covered by section 10 (38) if such capital gain is invested in any of the long-term specified assets
within a period of 6 months after the date of such transfer for a period of at least 3 years, in the manner
prescribed in the said section. Where the long-term specified asset is transferred or converted into money at
any time within a period of three years from the date of its acquisition, the amount of capital gains
exempted earlier would become chargeable to tax as long term capital gains in the year in which the longterm specified asset is transferred or converted into money.
6.
Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long-term
capital gains (in cases not covered under section 10(38) of the Act) on the transfer of investment in shares
will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company
forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held
for a period of at least one year. Eligible public issue means issue of equity shares which satisfies the
following conditions, namely a) the issue is made by a public company formed and registered in India;
b) the shares forming part of the issue are offered for subscription to the public;
There is a legal uncertainty over whether the benefit under this Section can be extended to shares forming
part of the offer for sale by the selling shareholders.
7.
Under Section 54F of the Act, where in case of individual or HUF capital gain arising from transfer of long
term capital assets [other than a residential house and those exempt u/s10(38) ] then such capital gain,
subject to the conditions to the extent specified there in, will be exempt if the net sales consideration from
such transfer is utilized for purchase of residential house property with in a period of one year before or two
year after the date on which transfer took place or for construction of residential house property with in
period of three years after the date of transfer.
8.
As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares
in any company through a recognized stock exchange or from the sale of units of equity-oriented mutual
fund shall be subject to tax @ 10% (plus applicable service tax & education cess) provided such transaction
is subject to Securities Transaction Tax.
9.
Under Section 112(1)(b) of the Act and other relevant provision of the Act, long-term capital gains [not
covered under section 10(38) arising on transfer of share in the company, if share are held for a period
exceeding 12 months, shall be taxed at a rate 20% (plus applicable surcharge and education cess) after
34
indexation as provided in the proviso to the section 48 or at 10% (plus applicable surcharge and education
cess) (without indexation), at the option of share holder.
10. In accordance with the provisions of Section 10(32) of the Act, any income of minor children clubbed with
the total income of the parent under Section 64(1A) of the Act will be exempt from tax to the extent of Rs.
1,500 per minor child per year.
Benefits available to Mutual Funds
1.
In case of a shareholder being a Mutual fund, as per the provisions of Section 10(23D) of the Act, any
income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or
Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions
and Mutual Funds registered with SEBI / regulation thereunder or authorised by the Reserve Bank of India,
subject to the conditions as the Central Government may by notification in the Official Gazette specify in
this behalf, would be exempt from Income Tax on all their income, including income from investment in
the shares of the company.
Benefits available to Venture Capital Companies /Funds
1.
In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section
10(23FB) of the Act, any income of Venture Capital Companies / Funds registered with the Securities and
Exchange Board of India, would exempt from Income Tax, on all their income, including dividend from
and income from sale of shares of the company, subject to the conditions specified.
Benefits available under the Wealth Tax Act, 1957
1.
As per the prevailing provisions of the above Act, no Wealth Tax shall be levied on value of shares of the
Company.
Benefits available under the Gift Ta
Tax
x Act
1.
Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares
will not attract gift tax.
Note:
1.
All the above benefits are as per the current tax laws as amended by the Finance Act, 2005.
2.
All the above benefits are as per the current tax law and will be available only to the sole / first named
holder in case the shares are held by joint holders.
3.
In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further
subject to any benefits available under the double taxation avoidance agreements, if any, between India and
the country in which the non-resident has fiscal domicile.
4.
In view of the individual nature of tax consequences, each investor is advised to consult his / her own tax
advisor with respect to specific tax consequences of his / her participation in the scheme. However, a
shareholder is advised to consider in his / her / its own case. The tax implications of an investment in the
Equity Shares, particularly in view of the fact that certain recently enacted legislations may not have direct
legal precedent or may have a different interpretation on the benefits which an investor can avail.
35
ABOUT SRS ENTERTAINMENT LIMITED
INDUSTRY OVERVIEW
Introduction
The Company lays great emphasis on growth of the retail sector to determine its future growth pattern.
Multiplexes today reflect the emergence of organised Indian retail industry. They have also emerged as the
fastest growing niche in the Indian media sector. Their rise reflects:
Metamorphosis of Indian retail (rise of organised retail, malls etc)
Increasing disposable incomes
Rising aspirations of the urban consumer and a change in consumer behaviour
which has altered the spending pattern of the urban consumer.
Going by this trend, the business model of SRSEL is a perfect blend of the retail and entertainment sectors. It
includes development and management of Multiplex, which includes Cineplex, shopping malls, coffee lounge,
food court, health club etc.
The estimated consumption spend in India has doubled from US$250bn to US$500bn in the last 5 years, based
on the changing demographics. In particular, the sharp rise in the number of ‘upper end’ and ‘rich’ households
(as per the recent NCAER survey) is indicative of the potential consumption spend. People are richer, younger
and more aspirational than ever before, supporting the growth in the retail and entertainment sectors.
Retail
Overview
Retailing in India has traditionally been the domain of the unorganised sector. The retail landscape is dominated
by the local setups like kirana shops, family run general stores and small local merchandise retailers. In fact
India has 120 lac retail outlets, the world’s largest retail network. The retail sector generates 15% of the total
employment in the country and is the largest contributor to India’s GDP.
Current trends
The retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new
formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls
begun their journey from metros and are now turning towards second-rung cities introducing the Indian
consumer to a shopping experience like never before. Rated the fifth most attractive emerging retail market,
India is being seen as a potential goldmine.
Key drivers for growth
1. Changing demographics / Attitudinal shift supported by the rising income levels, increasing proportion of
the ‘young’ middle class (with almost 70 lac individuals entering the 20-34 age group every year) backed
by easy finance options and low nominal interest rates. Further, the attitudinal shift towards both a
preference for value-added products and convenience also supports the ‘mall’ culture.
2.
Burgeoning middle class.
As per a study conducted by the NCAER the Indian middle class (household income between Rs 0.20-10
lac) at 570 lac in 2001- 02 is expected to cross 920 lac by 2005-06 and 1530 lac by 2009-10.
3.
Surge in mall construction.
The number of malls is expected to rise from the current 40 to around 300 by 2007. Close to 500 lac sq. ft.
of retail space is being planned for the next 2 years. Over the medium term, retailing could substantially
enhance the overall productivity. Moreover, it is the sector that could potentially provide the forward
linkages for mass marketing of processed and packaged goods including farm goods. The growth of the
organised retailing sector, would, however, be in part dependent on the government facilitating 100%
foreign direct investment (FDI) in retailing, providing the necessary supply chain infrastructure and the
relatively high cost of real estate – all of which continue to be constraints in the rapid growth of organised
retailing in India.
4.
Scalable and profitable retail models are well established for most of the categories
36
Last few years have seen development of the scalable and profitable retail models across categories. Large
Indian corporate groups like Tata, , Raheja, , , Piramal Group, Pantaloon have taken big leap in setting up
the retail chain business. Various other renowned groups have expressed serious interest in investing in
retailing. In addition, foreign investors and private equity players are also firming up plans to identify
investment opportunities in the Indian retail sector. Investments into the sector are estimated at Rs. 2,0002,500 crore in the next 2-3 years, and over Rs. 20,000 crore by the end of 2010, as reported by KSA
Technopak. Successful development of value based concepts such as Big Bazaar, Giant and Vishal Mega
Mart as well as development of retail space in smaller cities and towns will drive organised retail into the
next level of cities. Small towns with a population of 5-10 lacs are witnessing a defined increase in
disposable income coupled with high aspirational levels leading to enhanced spending on consumer goods
along with lesser aversion to credit. Thus, the ‘retail boom’, 85% of which has so far been concentrated in
the metros is beginning to percolate down to smaller cities and towns. The contribution of these tier-II cities
to total organised retailing sales is expected to grow to 20-25%.
5.
Retail space no longer a constraint
Mall developers across the country are creating superior real estate options at a frenzied pace. From 35-40
operational malls currently occupying approximately 6 million sq ft of retail space, India is expected to
have over 300 new malls by 2007, thereby adding retail space to the tune of 50 million sq ft. Further, by
2010, 500-600 malls occupying approx 120 million sq ft are at various stage of planning. Of the 300 malls
expected to be launched by 2007, about 50% are estimated to come up in 6 metros - NCR, Mumbai,
Bangalore, Kolkata, Hyderabad and Chennai with NCR and Mumbai alone accounting for almost 60 of
these new malls. However, by 2010, mall developments are anticipated to spread across 60 cities in the
country.
6.
India on the radar of global retailers
Over the last few years, many international retailers have entered the Indian market on the strength of rising
affluence levels of the young Indian population along with the heightened awareness of global brands and
international shopping experiences and the increased availability of retail real estate space. Luxury brands
such as LVMH, Ermenegildo Zegna, Bvlgari, Escada, Hugo Boss, Tommy Hilfiger, Cartier, etc have
entered the Indian market with presence mostly in five-star hotels in New Delhi and Mumbai. Many others
are firming up plans to set up shop in the country to offer new-age global Indians an aspirational lifestyle
they have demanded for long. A significant trend is that most of these brands are introducing their latest
collections in India in line with developed markets even at the cost of taking a hit on their profitability due
to the high import duties. This bears testimony to the seriousness with which luxury retailers are exploring
the Indian market with a view to long-term sustainability. Development of India as a sourcing hub will
further make India an attractive retail opportunity for the global retailers.
Retailers like Wal-Mart, GAP, Tesco, JC Penney, H&M, Karstadt-Quelle, etc are stepping up their sourcing
requirements from India and moving from third-party buying offices to establishing their own wholly
owned/wholly managed sourcing and buying offices which will further make India an attractive retail
opportunity for the global players. Buying volumes for many of these players are already in the range of Rs.
1,000 - 2,000 crore per year, with reported plans to step up to Rs. 10,000 - 15,000 crore within the next 3-4
years.
7.
Suppliers/brands willing to partner with retailers
Manufacturers in industries such as FMCG, consumer durables, paints, etc are waking up to the growing
clout of the retailers as a shift in bargaining power from the former to the latter becomes imminent.
Already, a number of manufacturers in India, in line with trends in developed markets, have set up
dedicated units to service the retail channel. Also, instead of viewing retailers with suspicion, or as a
‘necessary evil’ as was the case earlier, manufacturers are beginning to acknowledge them as channel
members to be partnered with for providing solutions to the end-consumer more effectively.
The way ahead
The focal point of organised retail has been the explosive development of shopping malls and entertainment
centres in India over the past three years. According to the Indian branch of the International Council for
Shopping Centres, 40 malls have been built in India in the last three years, with 300 more scheduled to be
completed by 2007. The pace of development of amusement and entertainment centres in India is extremely
high. India is scheduled to complete the same number of entertainment project in 4 years that took other
countries, even developed ones, almost 30 years to develop.
37
A.T. Kearney has estimated India's total retail market at US $202.6 billion which is expected to grow at a
compounded 30% over the next five years.
• In 2003-04, organised retailing, which has an annual growth rate of 8.5%, swept past the Rs.200 billion
mark (US $4.5 billion), a figure that appears quite small if one were to compare the extent of the total
market.
• Organised retail, at present comprises merely 2% of the total market in India. This means that the
untapped segment amounts to a whopping Rs.9,800 billion (approx. US $225 billion).
• The share of modern retail is likely to grow from its current 2% to 15-20% over the next decade,
analysts feel.
According to a study conducted by KSA Technopak, a retail consultancy firm, major part of the investment over
the next two years is likely to go into development of 93 malls in 14 major cities. Of the 93 malls, about 39 will
be launched in 2005 and the remaining 54 in 2006. By 2010, about 300 malls are estimated to come up. Also,
development of malls is likely to spread across 60 cities by the end of the decade.
The National Capital region (NCR) comprising of New Delhi, Gurgaon, Noida and Faridabad will see the
maximum development with 14 retail malls with a cumulative space of 3.35 million square feet expected to be
operational in 2005. This is on account of the high spending power traditionally demonstrated in this region.
The Tier-II Cities
Urban areas having a population of more than five to ten lakh but other than the “Big Six” metros (Mumbai,
Delhi, Kolkata, Chennai, Bangalore, Hyderabad) are considered as Tier-II cities. (Source: Indian Industry: A
Monthly Review (April 2005), CMIE)
They are generally characterised by the following traits compared to the metros:
lower population
less developed physical and civil infrastructure
less cosmopolitan in nature i.e. higher levels of heterogeneity in the demography
lower penetration of organised business
lower costs of living
Popular examples of Tier-II cities are Ahmedabad, Baroda, Indore, Nagpur, Agra, Lucknow, Chandigarh, etc.
More recently, Tier-II cities have attracted the attention of the booming I.T. and I.T.E.S. industry that are
rapidly opening offices and facilities in these cities on account of their unique advantages like availability of
skilled manpower at lower costs, large land area available at attractive rates and lower costs of operation.
Thus, the economic benefits of the technology boom in India is spreading beyond the traditional hubs and is
moving into newer cities. This has resulted in the youth population in these areas having higher income and
consequently higher discretionary spending power. Coupled with the increasing exposure to globalisation and
the aspirational needs to mimic the trends of their metropolitan brethren, it has led to the development of
potentially lucrative pockets which have been so far under-developed.
The Tier-II cities are also characterised by the existence of industries unique to each location. For example, the
sugar mills of Agra, the diamond merchants of Surat, the cloth traders of Ahmedabad, and so on. These
industries have yielded several success stories over the decades and have led to the development of several high
income families in each city. So far, these consumers have had very little opportunity to experience the modern
amenities offered by the upscale retail and entertainment avenues in the metros.
38
Entertainment
Overview
Multiplexes, a new concept in movie exhibition in India has substantial revenue and entertainment potential. A
multiplex embodies the luxuries, amenities of the modern day theatre; multiple screen choices, state-of-art
technology, ergonomic seating, eye-catching architecture and top of the line cafes and food courts. Currently
there are about 50 - 55 multiplexes operational in India with prominent ones being in Mumbai, Pune, Delhi, and
Bangalore.
Indian Film Industry
The Indian film industry, with an output of 800-850 movies a year, ranks as the world’s largest and most prolific
film industry in the world. Though there has been a discernible trend towards corporatisation and organised
financing, film production continues to be a fragmented and unorganised business. Despite the pervasive
influence of films on the Indian public, the quality of movie theatres is very poor. With an estimated 13,000
movie theatres in India, most of them single-screeners and family-owned, film-exhibition business continues to
be a highly fragmented segment.
Film exhibition: Multiplexes are catalyzing investments and consolidation
The impact in the Metros and larger cities is unmistakable where multiplexes have mushroomed over the last
few years. State governments have also done their bit by announcing tax holidays for multiplexes, thereby
stimulating investments and helping projects to achieve a faster breakeven. Most of the players are rolling out
‘multiplex chains’ by either leasing out space in upcoming malls or leasing old single-screen theatres and
converting them into multiplexes. The new players are bringing in modern retailing practices to maximize
profitability of their properties. Their rising ‘clout’ in the film-exhibition segment is helping them to strike better
deals with film distributors.
Based on media reports, it is estimated that the segment is in the process of adding around 200 additional
screens to the existing 150 in the next 2-3 years Most of the players are rolling out ‘multiplex chains’ by either
leasing out space in upcoming malls or leasing old single-screen theatres and converting them into multiplexes.
The new players are bringing in modern retailing practices to
maximize profitability of their properties. Their rising ‘clout’ in the film-exhibition segment is helping them to
strike better deals with film distributors. Based on media reports, it is estimated that the segment is in the
process of adding around 200 additional screens to the existing 150 in the next 2-3 years
Key metrics: Ticket price, F&B spend and number of patrons
The above three variables have the maximum impact on EBIDTA margins of a multiplex and the key operating
challenge is to maximize these variables. Costs such as distributor share (as % age of ticket receipts), property
rentals etc vary minimally in the medium term.
Current trends
One of the advantages of a multiplex is that a patron, has multiple movie options at any given point in time. This
allows a movie patron to watch another movie, if the tickets for the movie of his choice are not immediately
available. It also allows the movie patron to revisit the theater complex at a greater frequency as compared to a
single screen theater, Multiplexes generally offer international quality audio and video equipment apart from
quality seating and ambience, thus providing a patron with a high quality viewer ship experience.
Key factors for growth
a) Organised Retail boom
There has been a boom in the organised retail market in India. There are malls coming in many cities and towns.
One of the key elements driving the success of a mall is its ability to drive footfalls consistently. Hence each
mall design looks at a mix of tenants – large and small. Multiplexes are one of the anchor tenants to large format
malls. This gives a mall assured footfalls as movies have a higher frequency of consumption.
b) Highly fragmented industry
The Exhibition business is currently highly fragmented, with no single entity having control over a large number
of theaters. This offers an opportunity for a multiplex player to set up a chain of multiplexes and thus build
control over a large number of screens. With increasing control on screens the bargaining power increases with
distributors, vendors and other suppliers
c)
Quality Theater Complexes
39
Films are a key destination for entertainment. Exhibition is the last mile in the film value chain where the patron
interacts with the film. The poor condition of most single screens has turned away family audiences.
Multiplexes offer the quality ambience and service levels. Although multiplex tickets are usually priced at a
premium to the ticket prices of single screens, they continue to attract patrons (both individuals and families) on
account of the better quality of service and ambience that they provide.
d) Entertainment Tax Benefits
The existing rate of Entertainment tax in various states is high. This has resulted in a pressure on profitability for
a number of players in the exhibition business. As a result, exhibitors (especially the single screen owners) have
not been able to channelise investments for maintaining and/or upgrading their theaters. A worsening quality of
theaters has resulted in a lower audience turnout, which put a further strain on profitability.
e) Growing corporatisation:
Over the last 5 years, the Film Industry is gradually getting corporatised. Several production houses have also
raised capital from the equity markets. This is resulting in a growth in the number of films produced by top
quality producers / directors. A lot of niche / innovative films are also being produced by such production
houses. All this is directly beneficial to Multiplexes.
Advantages of multiplexes over single screen theatres
• The Entertainment Tax exemption being offered by various state governments is proving to be a major
incentive for new multiplexes. For instance in Maharashtra, theatres pay 31% of the ticket price as
entertainment tax, which directly affects the revenues and profits of the theatre owners.
• The ultimate aim of a multiplex is to provide wholesome entertainment to a family ranging from movies,
games and food courts.
• Multiplexes offer flexibility in terms of the wider variety of content that can be screened. Most multiplexes
built are of the 3 screen format thus offering a greater variety of movies to the discerning viewer.
• Due to a larger number of screens, timings of movies can be staggered allowing greater flexibility to
viewers.
• Multiplexes offer a quality conscious consumer the Value For Money concept – better ambience, better
viewing, parking facilities etc.
Though distribution and exhibition are the last links in the chain bringing filmed entertainment to the masses,
they are of paramount importance, as the success of the film
depends on successful distribution and exhibition. In India the
current infrastructure for Film exhibition is inadequate to
meet existing and potential demand. For a nation with 5,000
million admissions every year (roughly a weekly entry of
about 100 million), there are only around 12,900 theatres
spread over the country. Further to this, the theatrical sales
constitute dominant source of revenues for the film industry
and represent box office ticket sales to the viewers at the
cinema halls. (Source FICCI Report)
The trends suggest that with the advent of multiplexes and
modern theatres the exhibition business has indeed become lucrative. To take guidance from international
trends, theatre occupancy in England, Germany, US and Australia
tripled with the multiplex boom and similar growth could be
expected in India with adequate exhibition infrastructure multiplexes, megaplexes and miniplexes. In fact, only 32% of the
screens in the US are single theatre screens, the rest falling under
either multiplexes, megaplexes or miniplexes category whereas
the in India 95% of the screens are in single screen theaters.
Improving Movie Going Habits
The attendance level in the contemporary theatre has reduced over
the years but with the advent of multiplexes and megaplexes the
trend has reversed. By moving up the value chain companies can
generate higher revenues. Higher prices can be charged for
additional value delivered.
40
International trends
So far various international markets are highly under screened. Looking at the present structure, The US has
about 9000 persons per screen, Europe around 27000 people per screen, Latin America around 69000 and Asia
around 105000 people per screen. This shows that Indian Multiplex market is extremely under screened. This
survey also states that factors like location, type of theatre, dining and shopping are most important features in
selecting a theatre and entertainment joint.
Favourable Demographics
Some key finding of the study conducted to study the demographics of the Indian entertainment consumer.
• Maximum film-watchers fall in age of 15 years to 55 years.
• 49% of the teenagers are frequent movies goers
• Due to the population boom of 1980’s and 1990’s more and more people are expected to come in the
category of 13+ and 18+. Thus market for frequent movie goers is expected to increase.
• Indian entertainment market is heavily under screened as compared to the US and European markets.
Actually, one of the main reasons for the depressed industry scenario in developed countries is large
number of screens per million of population.
• India is primarily at the single screen theatre stage with few multiple screen cinema halls existing in metro
cities. Increase in number of screens in India due to advent of multiple screen cinemas and multiplexes will
be beneficial for the industry as pointed out earlier with overseas examples illustrating that cinema
attendance goes up with multiplexes.
• An average Indian spends about 30% of his annual income on family entertainment (activities housed in
family entertainment centers for e.g. multiplexes and megaplexes) (source: study by KSA Technopak)
Government Policies
Entertainment tax is a state subject in India and hence is levied on cinemas, theatres and other forms of
entertainment. Quite a few state governments such as Maharashtra, Gujarat, West Bengal, Madhya Pradesh and
Uttar Pradesh have announced an entertainment tax holiday to new mulitplexes being set up in their respective
states. The Governments of Maharashtra and Gujarat have been amongst the first to come out with such policies,
which envisage exemption from entertainment tax – 100% for first 3 years and 75 per cent for the balance two
years for multiplex operators. At the Central level, the Union government has given section 80 I B benefits of
50 per cent income tax deduction to multiplexes being set up in non-metro cities.
Entertainment Tax Holiday (ETH) is definitely the single most significant factor in the commercial feasibility of
multiplexes. However the success of multiplexes in Delhi (where this holiday is not available) point out to the
fact that a good operational exhibition facility with premium pricing can still attract audience. The ETH would
improve the project payback period and also enable multiplex owners to invest in other entertainment facilities,
which would generate revenues to compensate when the rebate expires after 5 years
Entertainment Tax Rates and Govt. Polices for Multiplexes
States
Bihar
Entertainment Tax Rates
110%
Madhya Pradesh
50%
Maharashtra
45%
Uttar Pradesh
60%
Haryana
Punjab
50%
-
Rajasthan
-
Government Policies
Further compounding of taxes from 10 to
30% based on gross collection capacity per
show
Further compounding of taxes at 10% to
45% based on gross collection capacity
Tax Exemption for 3 Years and 75% rebate
for following two years to multiplexes with
more than 4 screens and capacity > 1200
seats.
Tax Exemption for 5 year for multiplexes
(project) worth Rs.150 lacs or more.
No tax exemption available
Tax exemption for 5 years for multiplexes
having capacity of minimum 1000 seats, set
up in an area of 4000 sq. yards and
minimum investment of Rs.2000 lacs.
Tax exempt for 3 years as follows:
• 75% for the 1st year
41
Gujarat
50%
• 50% for the 2nd year
• 25% in the 3rd year
Tax Exemption for 3 Years and 75% rebate
for following two years to multiplexes with
more than 4 screens and capacity > 1200
seats.
Real Estate
Driven by the positive growth in industry, real estate in India is booming. The development of real estate
focusses on two primary areas: retail and residential.
The global real-estate consulting group Knight Frank has ranked India 5th in the list of 30 emerging retail
markets and predicted an impressive 20% growth rate for the organised retail segment by 2010. The organised
segment is expected to grow from a mere 2% to 20% by the end of the decade, it said.
Investment in the retail real estate segment yields 13-16% return which is quite high when compared with the
returns from the residential and office segments. There are, of course, exceptions such as the National Capital
Region, where the prices of residential property have appreciated by 20 to 30% over the last one year.
According to a survey by real estate consulting firm CB Richard Ellis (CBRE), office space in Mumbai is more
expensive than Manhattan. The CBRE survey, called Global Market Rents, has ranked Mumbai as the world's
15th most expensive place, Manhattan, the 20th, while Delhi stands at the 32nd position.
The cost of occupation in Mumbai is $56.83 per square feet per annum, while in Manhattan, it is $52.04 per sq ft
and in Delhi, it is $40.62. Technically, occupation cost represents rent plus local taxes and service charges.
Key trends of the real estate boom:
Over 300 malls with a combined retail space of 2.5 crore square feet are sprouting across the country at an
investment of Rs 12,500 crore, eight times of Rs 1,500 crore invested till last year.
According to an ICICI study, malls are estimated to become a Rs.38,447 crore ($8.3 billion) sector by 2010.
As the competition in the market is intense, builders are going out of their way to be different. Specialised
malls have become the order of the day. Gurgaon, on the suburbs of New Delhi will soon have an auto mall
and jewellery mart, while Bangalore is about to get an exclusive furniture mall.
Similarly in the home segment, which is driven by the availability of easy home finance, most builders are
trying to woo investors with interesting features, each more tempting than the other.
Closed-circuit television and earthquake proofing are expected as standard features in most upmarket
blocks. Evershine Builders, for instance, is providing a range of facilities from modular kitchens to piped
gas and Internet connections.
42
BUSINESS OVERVIEW
The Company's business model is a “hybrid” model, which involves a mix of entertainment cum retailing and
real estate. The Company’s maiden project, SRS Multiplex, is a unique complex, combining a 3 screen Cineplex
with most facilities of a modern shopping mall.
SRS Multiplex commenced operations on November 12, 2004 and has been profitable since commencement. It
is located on NH-2, Delhi-Agra Road at Faridabad, just 25 kms away from Connaught Place in New Delhi. The
complex is spread over 23,000 sq. ft. with a total built up area of 1,22,000 approx sq. ft., of which total
commercial leasable area expands to 33,358.35 sq. ft. and 3.5 acres of parking space to accommodate over 2,500
vehicles at a time. The location is significant as it has the advantage of being accessible to the population of
Faridabad as well as being within reach of the affluent population of New Delhi. The complex being situated on
the main Delhi-Agra highway has the potential to attract tourists who visit the Taj Mahal and Mathura.
SRS Multiplex was conceived to provide entertainment experience combining high-tech architecture,
technology and world class amenities to provide a truly global experience to visitors. The Company has
incorporated several new design concepts and ideas to ensure that SRS Multiplex offers an experience that is not
provided anywhere else in India. The Company contracted the services of Gautam & Gautam Associates for
conceptualising the architecture of the complex while the task of construction was undertaken by Era
Construction India Limited
Some of the major architectural and design features that highlight SRSM and renders it the remarkableness are:
A star shaped atrium
Ecological form building
Modern technology with structure of steel and glass in vibrant colours
A video wall in the central lobby with a mini water fall Guang
A separate tower for the high speed Zen 2 lift from China: this lift tower is the sole entry point for
members of the exclusive SRS Club and Cineplex patrons
Glass Tunnel housing the Autowalk Travelator: this tunnel is 40 feet above the ground and connects
the Cineplex with the Zen 2 lift tower
A swimming pool that is housed indoors on the roof top and is dust free
Fire-retardant fabric is used throughout the Cineplex
The average capacity utilization of the Cineplex is approximately 40% and ticket prices range from Rs.75/- to
Rs.150/- per ticket. The total shopping area leased out stands at 32,936.41 sq. ft.. Of which 13,665.47 sq. ft. area
has been sold and leased back by the Company.
Floor Wise Features
The complex is divided into 5 floor levels and Roof Top with each housing different facilities.
Lower Ground Level Facilities
Little Freedom: Children’s Play Area
The children play area includes the facility of modern games like, Bowling Alley, Air Hockey, Video
games, Catchers, Pool Table and kids rides etc. This Little Freedom spans over 4000 sq. ft. area of SRSM.
Mini Theatre
Mini Theater has capacity of 72 luxury seats. This provides the facility for corporate members to arrange
conferences, presentations, annual general meetings, product launches, training program, tele conferences
etc.
SRS Value Bazaar
The Company is in the process of establishing a branded chain of value based mass retailing stores
christened “SRS Value Bazaar”. SRSEL will inaugurate its first SRS Value Bazaar at SRS Multiplex. The
Bazaar will be spread over an elaborate area of 16000 sq. ft. It is expected to be opened to public by around
October 2005. The concept of the bazaar is reflected in its title “Sab Kuch Sab Khush”.
Ground Level Facilities
43
Yellow Chilly
A premier restaurant conceptualised by one of the leading chef of India Mr. Sanjeev Kapoor, who is also
the host of a popular teleserial Khanna Khazana aired on Zee TV, has set up a chain of Yellow Chilly
restaurants. The restaurant has made a mark as super specialty curtsy for food lovers.
Music World
A grand collection of all types of audio and video cassettes, CDs and DVDs of all various classical, film,
non film, folks etc. are available. The chain of music world was setup by famous R.P.G. Group owner of
HMV Brand has drizzling environment and unique collection.
World of Titan
India’s Brand Icon in the field of watches, with its brands has presence in SRSM.
Airtel
A full service outlet providing the sale of all types of Nokia mobile phones and service to the prepaid and
postpaid customers of Airtel.
Rayban
A leading brand in the spectacles market has its presence at the ground level.
Dukes
A varied collection of t-shirts, trousers, shirts, shorts, jeans (denim and non denim), sweaters, pull overs,
track suits, jackets etc. for all age groups and weather.
S F Jeans
A brand owned by the Madura Garments having the collections of shirts, t-shirts, jeans, shorts and other
denim collections.
Sangini
An exclusive outlet of diamond jewellery that caters to the sophisticated audience.
Nokia
This leading mobile manufacturer has its presence in SRSM with its wide range of mobile phones and
accessories.
Mc-Donald
The leading international chain of fast food restaurants. It has seating capacity for more than 60 people.
Cream Bell
This is an exclusive ice cream outlet.
There are various other brands/ outlets having their presence at SRSM and attract varied audiences. Some of
them are:
Sanjh Savera
U.S. Garments
Orchid Blues
AMPm Kitchen Corner
Walk and Style
Silver and Chants
First Level Facilities
Food Court – “7 Dayz” family restaurant
A multi cuisine ethnic food court with specialisation of North Indian, Chinese, Fast Food, South Indian and
Italian food under one roof. This restaurant has attracted the attention of many mall developers around the
country due to the delicious cuisine offered at the food court.
Pizza Hut
44
Pizza Hut is a brand well known among the gourmet. They have a chain of Pizza Hut restaurants around the
country. One of such restaurants is presence at SRSM too. It uses the common seating capacity which is
approximately 130 seats.
Nescafe
The coffee shop with decent seating arrangements
Juice Zone
A juice junction for refreshing moods and providing of all type of seasonal and Non seasonal variey
Planet Fashion
A mega store having the unique brand of Madura Garments viz. Van Heusen, Allen Solly, Luise Philppe,
Peter England etc.
Archies
A gift and card store for all ages, occasion and remberences.
Cowboyz
A fresh bakery shop with wide variety of pastries, patties, cakes, biscuit and burger etc.
Candico and many more
A corridor stall of Indian and imported candies.
There are a few other outlets at this floor like the Damini Creation and Spicy Western Wear that provide
exclusive wear.
This floor also provides entertainment for the ladies shopping at SRSM. A corner has been reserved for a
mehndi-wala. This is a unique ladies corner for decorating the hands with beautiful design, fragrance and colour
heena.
Second Level Facilities
• SRS PVR Cinemas
This floor houses the Cineplex with three theme based screens with the concept of the SUN, MOON and
GALAXY. It has been christened SRS PVR Cinemas. At present, the combined Cineplex capacity at SRSM is
900 seats. This is bifurcated as 450 seats at Sun, 225 each at Moon and Galaxy. The total operational capacity of
the Cineplex is 776 seats. The screen size of Sun Auditorium is around 14.78 metres in width and 6.275 metres
in lenght which is among the large screen size available in multiplexes in India. Moon and Galaxy each have
screen size of 12.30 metres in width and 5.23 metres in lenght.
• Visitors Lounge
A spacious furnished and luxurious lounge has been provided for the waiting customers, near the screens. It has
a seating capacity for upto 40 people.
• Coffee Lounge
Two coffee lounges having the capacity of 40 people each for birthday parties, Kitty parties and similar
occasion near the theatre.
• Travelator
India’s first and only auto walk system at the SRS Multiplex by OTIS. A luxury, which is often facilitated at
International Airports, has its presence in India. This is the first Travelator which has been installed in India.
Third Level Facilities
• Dazzel Restro Bar
The classical dine and wine restaurant with a small discotheque forms part of of SRS Multiplex. The DJ keeps
the environment warm and cozy with the harmonious music and tunes. It has a seating capacity of
approximately 90 seats
45
Roof Top Facilities
• Crystal Restaurant
An open air roof top restaurant near the periphery of swimming pool provide the hill top experience. It also
includes pool facing bar with Indian and imported drinks has its magnificent presence. The management of this
restaurant is with Dazzle Restro Bar. Its seating capacity is upto 70 seats
• Swimming Pool
An imported Australian pool at the roof above the screen is first of its kind in Asia. It was the dream facility of
SRSEL for being the very first and only in India for the club members of SRS Multiplex.
The following facilities are also proposed to be included in the SRS Club:
Health Club
Slimming Center
Steam Bath
Sauna Bath
Jacuzzi
Yoga
Agreement with Pepsi Foods (P) Limited
The Company has entered into an ‘exclusive pouring and promotions’ agreement with Pepsi Foods (P) Limited.
As per the agreement Pepsi will provide advertisement and promotional support for SRS Multiplex for
consideration that its products will be sold at the SRS PVR Cinemas and food court at the SRS Multiplex.
Business Model
The current business model comprises of revenue and costs from entertainment and real estate sectors. Details of
the same is as under:
46
Business Model
Income
Costs
Cineplex Operations
Movie tickets and Snack
bar sales
Entertainment
Tax
Distribution
Costs
Shopping Mall
Sale and Lease of
Commercial Space
Direct Costs
F&B
SRS Club
Monthly and Annual
Membership Fee
Advertising Displays
Personnel
Rentals
Renting out of
Advertising space and
Displays on the premises
Utilities
Promotional
activities Arranged by
sponsors within/ outside
the premises
Housekeeping
& Security
Party Lawn
Catering and Space
charges
Kids Park
Income from Rides and
Swings
Promotion &
Marketing
Other Costs
Parking Charges
47
Business Model
Income
SRS Cinemas
Movie tickets and Snack
bar sales
SRS Value Bazaars
Sale of products
Costs
Entertainment
Tax
Distribution
Costs
Direct Costs
F&B
Shopping Mall
Sale and Lease of
Commercial Space
SRS Club
Personnel
Monthly and Annual
Membership Fee
Rentals
Advertising
Displays
Utilities
Renting out of
Advertising space and
Promotional
activities Arranged by
sponsors within/ outside
the premises
Housekeeping
& Security
Promotion &
Marketing
Party Lawn
Catering and Space
charges
Other Costs
Kids Park
Income from Rides and
Swings
Parking Charges
Going ahead, with the proposed commencement of commercial operations of SRS Value Bazaar, the Company
will set foot into the retail segment as well. The proposed business model will be as under:
48
Location of the Project
The Company’s business model is based on the latent demand for upscale entertainment and retail options in
non-metro urban cities, also known as Tier-II cities. These areas are increasing grabbing the attention of Fast
Moving Consumer Goods (FMCG) companies and F&B retailers. It is estimated that the growth of organised
retail in Tier-II cities will outstrip the relative growth in the metros by three times.
The Company has devised a three pronged approach:
1. Ownership model
SRSEL proposes to expand the mall operations under the SRS Multiplex business model by buying land and
building smaller replicas of the existing SRS Multiplex in three different cities. The cities have been identified
as:
City
State
Agra
Uttar Pradesh
Ludhiana
Punjab
Muzaffarnagar
Uttar Pradesh
These Multiplexes will provide SRS Cinemas, SRS Value Bazaars, 7 Dayz Restaurant – Food Court, other
restaurants and a shopping area that will house various leading brands.
2. Lease Model
SRSEL plans to expand its operations through leasing of properties. Four of such sites, i.e., two at Gurgaon and
one each at Amritsar and Jodhpur would provide SRS Cineplex and 7 Dayz Restaurant – Food Court. At
Jodhpur, the Company also plans to also introduce the SRS Value Bazaar. SRS Value Bazaar would also be set
up, on lease arrangement basis, at three other locations, i.e., Ambala, Jalandhar and Meerut. At these locations
the Company proposes to implement the SRS Cineplex and 7 Dayz Restaurant – Food Court on a franchise
arrangement basis described below.
The following table provides city wise overview of facilities proposed to be provided under the lease model:
City
State
SRS Cineplex
Food
SRS
Value
Court/restaurant
Bazaar
Gurgaon, Omaxe Haryana
☺
☺
Plaza,
Gurgaon, Omaxe Haryana
☺
☺
Wedding Mall
Amritsar
Punjab
☺
☺
Jodhpur
Rajasthan
☺
☺
☺
Ambala
Haryana
☺
Jalandhar
Punjab
☺
Meerut
Uttar Pradesh
☺
City
Gurgaon, Omaxe Plaza
Gurgaon, Wedding Mall
State
Haryana
Haryana
Lessor
Omaxe Construction Limited
Omaxe Construction Limited
Date of
Agreement
22.08.2005
22.08.2005
M/s Omaxe Construction Limited is in process of development and construction of two shopping malls cum
multiplex named Omaxe Plaza and Wedding Mall at Gurgaon. The Company has entered into agreements with
Omaxe Construction Limited to take on lease, premises for running theatres at the said malls cum multiplex. For
details on the agreements please refer to the section titled "History and Corporate Structure - Other Agreements"
on page no. 72 of the Draft Red Herring Prospectus.
The Company has already entered into MoUs for two properties details of which are as follows:
City
State
Lessor
Date of MoU
Amritsar
Punjab
P R Infrastructure Limited
17.07.2005
Jodhpur
Rajasthan
Tulip Info Services (P) Limited
08.07.2005
Details of the aforesaid MoUs is as follows:
49
• MoU with P R Infrastructure Limited
MoU has been signed between SRSEL and M/s P R Infrastructure Limited for their upcoming shopping mall at
Batala, Verka Chowk, Amritsar for 4 theatre screens in a super area of 23000 sq. ft. for period of 9 years divided
into 3 slots of 3 years each. A ticket window would be provided at the ground floor at an approximate area of
150 sq.ft.
• MoU with Tulip Info Services (P) Limited
MoU has been signed with M/s Tulip Info Services (P) Limited. The company plans to set up a shopping mall at
Jodhpur, Rajasthan in collaboration with His Highness Gaj Singh, referred as Majestic Stadia. SRSEL would be
running 4 screen theatres and a food court on an approximate super area of 50,000 sq. ft. for a total period of 9
years.
3. Franchise Model
SRSEL has entered into a MoU with M/s Richi Look Marketing (P) Limited to provide marketing assistance to
implement the franchisee model. The Company would authorise Richi Look to use/franchise the brand for SRS
Cinemas and 7 Dayz. SRSEL would provide recruitment advice and training to the personnel and put the I.T.
and allied infrastructure in place. For this, SRSEL proposes to develop a software that would facilitate the
centrally controlled system for logistics, purchases, revenue generated etc. at each of the sites.
SRSEL, with the assistance of Richi Look, would implement the franchisee model in the following sites:
City
State
Ambala
Haryana
Jallandhar
Punjab
Jaipur
Rajasthan
Meerut
Uttar Pradesh
Panipat
Haryana
Plant, machinery, technology, process:
Land and Building
The Company is in the process of acquiring land at Agra, Ludhiana and Muzzafarnagar, where it plans to
construct and manage Multiplexes on ownership basis. The Company through SRS Buildcon (P) Limited has
identified properties at Agra and Ludhiana and necessary due deligence is being conducted for acquisition. The
Company is also in the process of identifying property at Muzzafarnagar through Tarang Buildcon (P) Limited
Sr.
No.
1
2.
3.
4.
5.
6.
Particulars
Civil Work
Finishing &
Furnishing
(Civil work)
Fire Fighting
Furniture &
Fixtures (Wood
work)
Architect Fees
Furniture &
Fixture
(Including
Lighting
Fixture)
Name of Vendor/Supplier
ERA Infrastructure India
Limited
ERA Infrastructure India
Limited
Area
(Sq. Ft.)
80000
Rate Per Unit
(Rs.)
550.00
(Rupees in Lacs)
Amount
440.00
80000
425.00
340.00
ERA Infrastructure India
Limited
ERA Infrastructure India
Limited
80000
65.00
52.00
80000
84.00
67.20
Gautam & Gautam
Associates
ERA Infrastructure India
Limited
80000
31.25
25.00
80000
92.00
73.70
1247.25
1247.25
997.90
997.90
Equipment
50
The Company is currently negotiating with various suppliers for supply of various fixtures, furniture,
equipments, hardware and software required to operate the Project. The details of the equipment with the
respective suppliers and consultants the Company is in dialogue is as given hereunder:
Table - A
Owned Multiplexes - Detail of Building Including Common Interiors
Sr.
No.
Particulars
1
Civil Work
2.
Finishing &
Furnishing
3.
Fire
Fighting
4.
Furniture &
Fixtures
5.
Furniture &
Fixture
(Including
Lighting
Fixture)
Name of
Vendor/Suppli
er
ERA
Infrastructure
India Ltd.
ERA
Infrastructure
India Ltd.
ERA
Infrastructure
India Ltd.
ERA
Infrastructure
India Ltd.
ERA
Infrastructure
India Ltd.
Rate Per
Unit (RS.)
Unit
80000
Sq.
Ft.
550.00
440.00
3
1320.00
80000
Sq.
Ft.
425.00
340.00
3
1020.00
80000
Sq.
Ft.
65.00
52.00
3
156.00
80000
Sq.
Ft.
84.00
67.20
3
201.60
80000
Sq.
Ft.
92.00
73.70
3
221.10
1216.00
972.90
3
2918.70
Total
Amount
(Rupees in Lacs)
Amount
No. of
locations
Area
Table - B
Owned Multiplexes - Detail of Plant & Machinery
Sr.
Description
No.
1
2
3
4
5
6
7
8
Vendor
Sub Head 1 - Wiring for Light Points, MEC Electrical
Power Points, UPS Lighting Etc.
Engineers &
Contractors
Sub Head 2 - Telephone Conducting MEC Electrical
& wiring
Engineers &
Contractors
Sub Head 3 - CCTV System/TV
MEC Electrical
System
Engineers &
Contractors
Sub Head 4 - Data Networking
MEC Electrical
Engineers &
Contractors
Sub Head 5 - Music System:/
MEC Electrical
Speakers for Audies
Engineers &
Contractors
Sub Head 6 - Intelligent fire alarm
MEC Electrical
system
Engineers &
Contractors
Sub Head 7 - Lighting Distribution
MEC Electrical
Board
Engineers &
Contractors
Sub Head 8 - MV Panel Boards,
MEC Electrical
Starters, Control Console Etc.
Engineers &
Unit Price Per
Location/Property
24.50
(Rupees in Lacs)
No. of
Location
/ Property
Total Cost
3
73.50
3.50
3
10.50
4.85
3
14.55
2.10
3
6.30
7.85
3
23.55
24.25
3
72.75
4.75
3
14.25
84.50
3
253.50
51
Contractors
9
10
11
12
13
14
Sub Head 9 - Earthling & Lightening MEC Electrical
Protection
Engineers &
Contractors
Sub Head 10 - Cables, Cable Trays & MEC Electrical
Steel Structure for walk ways
Engineers &
Contractors
Sub Head 11 - Sub-Station System
MEC Electrical
Engineers &
Contractors
Sub Head 12 – D. G. Set & Allied
MEC Electrical
works (1 X 500 KVA + 2 X 250
Engineers &
KVA)
Contractors
Sub Head 13 - External / Facade
MEC Electrical
Lighting
Engineers &
Contractors
Sub Head 14 - Lighting Fixtures
MEC Electrical
Engineers &
Contractors
12.75
3
38.25
49.50
3
148.50
30.15
3
90.45
61.50
3
184.50
6.10
3
18.30
19.70
3
59.10
336.00
3
1,008.00
Table C
Owned Multiplexes - Air conditioning
Description
Vendor
Sub Head 1 - Machinery
Suvidha Engineers
Project
Sub Head 2- Piping
Suvidha Engineers
Project
Sub- Head 3 Air Distribution Suvidha Engineers
Project
Sub -Head 4- Insulation
Suvidha Engineers
Project
Sub -Head 5-Electrical
Suvidha Engineers
Works
Project
TOTAL
Unit
Qty.
(Rupees in Lacs)
No. of
Total
locations
3
216.00
Rate
Lot
1
72.00
Lot
1
24.00
3
72.00
Lot
1
10.00
3
30.00
Lot
1
10.00
3
30.00
Lot
1
9.00
3
27.00
125.00
375.00
Table D
SRS Cinemas - Air conditioning
Description
Sub head 1 – machinery,
ahu,fcu’s
Sub head 2- piping
Vendor
Suvidha Engineers
Project
Suvidha Engineers
Project
Sub- head 3 air distribution Suvidha Engineers
Project
Sub –head 4- insulation
Suvidha Engineers
Project
Sub –head 5-electrical works Suvidha Engineers
Project
TOTAL
Unit
Lot
Lot
Lot
Lot
Lot
Qty.
Rate
(Rupees in Lacs)
No. of
Amount
locations
1
19.50
7
136.50
1
3.50
7
24.50
1
4.80
7
33.60
1
1.25
7
8.75
1
1.55
7
10.85
30.60
7
214.20
52
Table E
SRS Value Bazar - Air conditioning
Description
Vendor
Sub head 1 – machinery, ahu,fcu’s
Suvidha
Engineers
Projects
Suvidha
Engineers
Projects
Suvidha
Engineers
Projects
Suvidha
Engineers
Projects
Suvidha
Engineers
Projects
Sub head 2- piping
Sub- head 3 air distribution
Sub -head 4- insulation
Sub -head 5-electrical works
Unit Qty.
Rate
(Rupees in Lacs)
No .of
Amount
locations
7
118.30
Lot
1
16.90
Lot
1
3.00
7
21.00
Lot
1
4.60
7
32.20
Lot
1
1.15
7
8.05
Lot
1
1.55
7
10.85
7
190.40
TOTAL
27.20
Table F
7 Dayz Food Court - Air conditioning
Description
Sub head 1 – machinery, ahu,fcu’s
Sub head 2- piping
Sub- head 3 air distribution
Sub -head 4- insulation
Sub -head 5-electrical works
TOTAL
Vendor
Suvidha
Engineers
Project
Suvidha
Engineers
Project
Suvidha
Engineers
Project
Suvidha
Engineers
Project
Suvidha
Engineers
Project
Lot
1
(Rupees in Lacs)
No. of
Total
locations
7
31.50
4.50
Lot
1
0.40
7
2.80
Lot
1
1.50
7
10.50
Lot
1
0.15
7
1.05
Lot
1
0.25
7
1.75
6.80
7
47.60
Unit
Qty.
Rate
53
Table G
Owned Multiplexes – Lifts & Escalators
(Rupees in lacs)
Sr.
No.
1
2
3
4
Description
Vendor
OTIS Elevator
Company (India)
Ltd.
4.2 M Esclators
OTIS Elevator
Company (India)
Ltd.
Charges towards Erection &
OTIS Elevator
Service Tax
Company (India)
Ltd.
OTIS Elevator
Customs Duty (35% of 14.85 Lacs) Company (India)
Ltd.
Total
Total
Price
No. of
Location
/ Property Total Cost
Cost
Qty
Unit
Price
2
23.00
46.00
3
138.00
2
14.85
29.70
3
89.10
2
3.50
7.00
3
21.00
2
5.20
10.40
93.10
3
3
31.20
279.30
Passanger Glass Elevaors
Table H
Details of interiors ,Furniture and seats of theatres
(Rupees in lacs)
S.
Particulars
No.
1 Interior, Furnishing &
Fire Fighting
(Including Acoustics,
Civil work &
Electrical fixtures)
Miscellaneous
2 expenses
3 Seats
Vendor /
Contractor
ERA
Infrastructure
(India) Ltd.
TOTAL
1+2
ERA
Infrastructure
(India) Ltd.
Total
Area
Unit
18000Sq. Ft.
1000Nos.
Rate
(Rs.)
293
3000
Amount
No.of
locations
Total Amount
52.74
7
369.18
0.06
7
0.42
52.80
7
369.60
30.00
82.74
7
7
210.00
579.60
54
Table I
SRS Value Bazar - Interior, Furniture,Equipment
Furniture,Equipment and Civil Work
(Rupees in lacs)
Sr.
Vendor /
Particulars
Contractor
No.
1
Interior
&
Furnishing
ERA
Infrastructure
(Including
(India) Ltd.
Electrical
fixtures)
2
Miscellaneous
Expenses
3
4
TOTAL
Equipments
Area
Unit
16000
Sq. Ft.
Rate
(Rs.)
293.00
Turnkey
No.of
locations
Amount
Total
Amount
46.88
7
328.16
0.12
7
0.84
47.00
ERA
Infrastructure
(India) Ltd.
Civil Work &
Fire
Fighting, ERA
Infrastructure
Wooden
(India) Ltd.
Partitions,
Individual
Counter & Racks
Turnkey
16000
Sq. Ft.
25.00
405.00
64.80
329.00
17.50
7
7
45.36
Table - J
7 Dayz Restaurants - Interior, Furniture, Kitchen Equipments, Chairs and Civil Work
(Rupees in lacs)
Sr.
No.
1
2
3
4
Particulars
Vendor \ Contractor Area
Interior
&
ERA Infrastructure
Furnishing
(Including
(India) Ltd.
Electrical
fixtures)
Equipments
ERA Infrastructure
(India) Ltd.
Seating Chairs ERA Infrastructure
& Tables
(India) Ltd.
Civil
Work
including Fire
Fighting
& ERA Infrastructure
(India) Ltd.
counters
Unit Rate (Rs.) Amount
4000 Sq. Ft.
Sets
50 (4+1)
4000 Sq. Ft.
No.of
Locations
Total Amount
1031.25
41.25
7
288.75
Trunkey
41.20
7
288.40
6000
3.00
7
21.00
243.75
9.75
7
68.25
55
Table K
Architect Fees
Sr.No.
Description
1
2
3
Owned Multiplexes
SRS Cinemas
SRS Value Bazar
4
7 Dayz Restaurants
Name
Rate
per location
25.00
5.00
3.00
Gautam & Gautam
Associates
(Rupees in lacs)
No. of
Total
locations
3
75.00
7
35.00
7
21.00
2.00
7
Total
14.00
145.00
Table L
SRS Cinemas - Detail Computers, Plazamas, Display Monitors, & Soft wares Etc.
Sr.
No.
Description
1
Server
2
Display Server
3
Nodes - a) For Ticket
Counter (4 Nos)
b) For Back Office
(8 Nos)
4
Touch Screen for Cash Counter
5
Bar Code Reader
6
Swap Card Reader
8
Thermal Printer
9
Lazor Printer
10 Ticket Printer
11 All in One Printer
12 Photo State Machine
Vendor
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Net Working (A- 24 Port
Switch, B- 24 Port Switch, CNetwork Cable, D-UTP
Micro-Chip
Computers
Connector
E-Wall Mountal Jack-RJ-45, FRouter
14 UPS 8 KVA Online UPS
Micro-Chip
Computers
15 UPS 1 KVA Offline UPS
Micro-Chip
Computers
16 Soft ware
Micro-Chip
Computers
(Rupees in lacs)
No. of
Location Total Cost
/Property
Qty
Unit
Price
Total
Price
3
1.40
4.20
7
29.40
1
0.55
0.55
7
3.85
12
0.38
4.56
7
31.92
6
00.90
5.40
7
37.80
4
00.10
00.40
7
2.80
10
0.11
1.1
7
7.7
10
00.18
1.80
7
12.60
3
00.20
00.60
7
4.20
4
.550
2.20
7
15.40
1
00.95
00.95
7
0.665
1
1.25
1.25
7
8.75
4.112
7
28.784
13
2
1.65
3.30
7
23.10
3
0.8
0.24
7
1.68
0.00
56
17
A- Window 2003 Premier
Server
B-Operating system
18
C-Office 2003 Professional
19
D-Nortran antivirus
20
PC Any Where
21
Cinema Operational Software
Vista
22 Less: Discount
Total
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
3
00.60
1.80
7
12.60
2
00.065
1.43
7
10.01
16
00.16
2.56
7
17.92
00.40
7
02.80
3
0.11
0.33
7
2.31
01
4.00
4.00
(0.27)
40
7
7
7
28.00
(1.86)
280.00
Table M
SRS Value Bazaar - Detail Computers, Plazamas, Display Monitors, & Soft wares Etc.
S.No.
Description
Vendor
1
IBM Server
2
Nodes - a) For Office
System
(4 Nos)
Micro-Chip Computers
b) For A/c (2
Nos)
c) For Data Entry
Touch Screen for Cash
Micro-Chip Computers
Counter
Bar Code Reader
Micro-Chip Computers
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Thermal Printer
Lazor Printer
Dot Matrix Printer
All in One Printer
Photo State Machine
Print Server
Net Working (A- 24 Port
Switch, B- 24 Port Switch,
C- Network Cable, D-UTP
Connector
E-Wall Mountal Jack-RJ-45
UPS 8 KVA Online UPS
Soft ware
A- Window 2003 Premier
Server
B-Operating system
C-Office 2003 Professional
D-Nortran antivirus
Bazaar Software
Designing Machine
HP Scanner
HP Inkjet Printer
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Qty
(Rupees in lacs)
No. of
Unit
Total Price Location
Price
/Property
Total Cost
3
4.5
13.50
7
94.50
9
0.38
3.42
7
23.94
5
00.90
4.50
7
31.50
5
5
4
1
1
1
2
00.10
00.18
00.20
00.285
00.95
1.25
00.08
00.50
00.90
00.80
0.285
00.95
1.25
00.16
7
7
7
7
7
7
7
3.50
6.30
5.60
1.995
0.665
8.75
1.12
00.526
7
3.68
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
Micro-Chip Computers
2
1.65
3.30
7
23.10
0.00
3
14
9
17
01
2
1
1
00.60
00.065
00.16
1.80
00.91
1.44
00.30
4.50
1.20
0.32
0.38
7
7
7
7
7
7
7
7
12.60
6.37
10.08
02.10
31.50
8.40
2.24
2.66
4.50
.60
0.32
0.38
57
18
Less: Discount
Total
(0.09)
40
7
7
(.60)
280.00
Table N
Plazamas,
amas, Display Monitors, & Soft wares Etc.
7 Dayz Food Courts - Detail Computers, Plaz
(Rupees in lacs)
Sr.
No.
Description
1
Server – a) For Primary Domain
b) For Backup Domain
2
Nodes a) For Cash Counter(6Nos)
b) For Back Office (7 Nos)
(Discount Rs. 40,000/-)
Thermal Printer
3
4
Bar Code Reader
6
Photo State Machine
6
All-in-One Printer
7
Dot Matrix Printer
8
Print Server
Vendor
Micro-Chip
Computers
Qty
No. of Total Cost
Unit Price Total Price Location
/Property
2
1.40
2.80
7
19.60
Micro-Chip
Computers
13
0.38
4.54
7
31.78
Micro-Chip
Computers
6
00.18
1.08
7
7.56
6
00.10
00.60
7
4.20
1
1.25
1.25
7
8.75
1
00.095
00.095
7
0.66
3
00.18
00.54
7
3.78
2
00.08
00.16
7
1.12
00.632
7
4.42
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
9
Net Working (A- 24 Port Switch, B24 Port Switch, C- Network Cable, Micro-Chip
Computers
D-UTP Connector
E-Wall Mountal Jack-RJ-45
10 UPS 8 KVA Online UPS
Micro-Chip
Computers
11 Soft ware
Micro-Chip
Computers
A- Window 2003 Premier Server
Micro-Chip
Computers
B-Operating system
Micro-Chip
Computers
C-Office 2003 Professional
Micro-Chip
Computers
D-Nortran antivirus
Micro-Chip
Computers
12 Food Court software
Micro-Chip
Computers
13 Less: Discount
Total
2
1.65
3.30
7
23.10
2
00.60
1.20
7
8.40
13
00.065
00.845
7
5.91
13
00.16
2.08
7
14.56
00.30
7
02.10
00.75
(0.17)
20
7
7
7
5.25
(1.20)
140.00
15
01
00.75
Table O
58
SRS Cinemas - Detail of Radio
Radio Connectivity for Franchises Model
Sr.
No.
Description
1
VIP 110-24 Ethernet Radio with
standard accessories
2
24 DBI Antenna
3
4
5
6
7
(Rupees in Lacs)
No. of
Qty Unit Price Total Price Location
/Property Total Cost
Vendor
Micro-Chip
Computers
8 Pin connector for CAT 5 Cable
15 Meter light weight self supported
tower
Earthling Pit
Installation & Commissioning & Maint
Charges
Software Consultancy & installation
charges
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Micro-Chip
Computers
Total
5
0.90
4.50
5
22.50
5
0.065
0.325
5
1.63
5
00.015
0.075
5
.37
5
0.75
3.75
5
18.75
5
0.07
0.35
5
1.75
5
00.50
2.50
5
12.50
-
-
8.10
5
40.50
98.00
Table P
(Rupees in lacs)
Sr.
No.
A
1
2
Particulars
Projection System
Strong Millennium II Projector
with automatic 2 lens turret and
Dolby Digital Reader
Water cooled film trap
Vendor
Qty.
Cine Cita (P)
Ltd.
Cine Cita (P)
Ltd.
Unit
Price
Rs.
Price per
Location
Rs.
No. of
Cineplex
Total Cost
2255400
7
157.87
8400
8400
7
0.58
1 458800
458800
7
32.12
2 475600
951200
7
66.58
3 304700
914100
7
63.98
2
51000
102000
7
7.15
1
22400
22400
7
1.58
3
22000
66000
7
4.62
3 130000
390000
7
27.30
3 751800
1
3
Strong Highlight II Console 4500
W with High Reactance Power Cine Cita (P)
Ltd.
Supply
4
Strong Highlight II Console
Cine Cita
2500-3000 W with High
Reactance Power Supply
Ltd.
5 Strong 35 mm AP 3 deck platter Cine Cita
Ltd.
6 AP Make Up Table for AP platter Cine Cita
Ltd.
7 Heat Filter
Cine Cita
Ltd.
8 Strong projector prewire
Cine Cita
Ltd.
9 Automation CNA-100-C1
Cine Cita
Ltd.
10 Splicing tape (imported)
Cine Cita
Ltd.
11 Cue foil tape (imported)
Cine Cita
Ltd.
Sub Total A
(P)
(P)
(P)
(P)
(P)
(P)
(P)
3
500
1500
7
0.10
3
1000
3000
51,72,800
7
7
0.21
362.09
(P)
59
B
Package price (Imported
projection)
12 Reel Arm Set (local)
13 Film guide rollers set of 4 (local) Cine
Ltd.
14 Loop accumulator and additional
Cine
rollers (approx) for interlock
Ltd.
(local)
15 Rewinder (local)
Cine
Ltd.
16 Splicer (local)
Cine
Ltd.
Sub Total B
C
17 Schneider Integrated Anamorphic
Cine
lens size 60 mm to 80 mm
Ltd.
18 Schneider Widescreen lens size Cine
60 mm to 80 mm
Ltd.
19 Osram 4000 W/HS OFR Xenon Cine
bulb
Ltd.
20 Osram 3000 W/HS OFR Xenon Cine
bulb
Ltd.
Sub Total C
D
21 Slide projector (imported)
Cine
Ltd.
22 Projection port (local)
Cine
Ltd.
23 Slide projector port (local)
Cine
Ltd.
24 Viewer port (local)
Cine
Ltd.
Sub Tota
Totall D
E
Harkness Matt Plus Screen (per
25 sq.mtrs) (approx screen size)
26 Packing charges (Rs.)
27 Screen Frames
Sub Total E
F Audio System
28
CP650D
29 JBL 4632T
30
JBL 3632
31
JBL 4642A
32 JBL 8330A
33 Brackets for surround speakers
3
18000
54000
3
4000
12000
7
0.84
1
25000
25000
7
1.75
2
800
1600
7
0.11
2
4000
8000
1,00,600
7
7
0.56
7.04
3 116500
349500
7
24.47
3
45700
137100
7
9.59
1
53460
53460
7
3.75
2
42140
84280
6,24,340
7
7
5.89
43.70
3
33200
99600
7
6.97
3
10000
30000
7
2.10
3
10000
30000
7
2.10
3
10000
30000
1,89,600
7
7
2.10
13.27
222
1800
398700
7
27.91
60000
7
4.20
300000
7,58,700
7
7
21.00
53.11
3.78
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cine Cita (P)
Ltd.
Cine Cita (P)
Ltd.
Cine Cita (P)
Ltd.
3 100000
7
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
-
7
7
-
Cita (P)
3 593000
1779000
7
124.53
3 116100
348300
7
24.38
6
80400
482400
7
33.76
6
66000
396000
7
27.73
40
14300
572000
7
40.04
40
600
24000
7
1.68
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
60
34 CL1
35 CL2
36 XLS 402
37 XLS 602
38 Crown SST 4632T
39 Crown SST 3632
40 Booth Monitor
41 Rack 40 ru
42 Rack 32 ru
43 Cables & connectors (from
projector to processor &
processor to amplifiers)
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cine
Ltd.
Cita (P)
3
37700
113100
7
7.91
9
53500
481500
7
33.71
4
20200
80800
7
5.65
8
26900
215200
7
15.06
3
18000
54000
7
3.78
6
10000
60000
7
4.20
3
21000
63000
7
4.41
2
27500
55000
7
3.85
2
24000
48000
7
3.36
Cine Cita (P)
Ltd.
3
7500
22500
47,94,800
7
7
1.58
335.64
Kitchen Rama
2 180535
361070
7
25.27
Kitchen Rama
2
95000
190000
7
13.30
Kitchen Rama
2 438000
876000
7
61.33
Kitchen Rama
2
20580
41160
7
2.88
Kitchen Rama
2
24750
49500
7
3.47
Kitchen Rama
2
74875
149750
7
10.48
Kitchen Rama
2
51840
103680
7
7.27
Kitchen Rama
4
4800
19200
7
1.34
Kitchen Rama
4
10170
40680
7
2.85
Kitchen Rama
8
28000
224000
7
15.68
Kitchen Rama
1 200000
200000
7
14.00
Kitchen Rama
1
25000
25000
7
1.75
Kitchen Rama
1
35000
35000
7
2.45
Kitchen Rama
1 202000
202000
7
14.14
Kitchen Rama
1 163000
163000
7
11.41
Kitchen Rama
2 125000
250000
7
17.50
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Cita (P)
Sub Total F
Kitchen Equipments - Candy
G
44 Pop Corm Warmers ( Gold
Medal)
45 Hot Dispenser Cabinet Unit
46 Pop Crn Machine
47 Butter Dispenser
48 Nacho Warmers
49 Hot Dog Grills
50 Bun Warmers
51 Straw Dispenser
52 Napkin Dispenser
53 Cup Dispenser
54 Smoke less Fryer
55 Dump Stataion
56 Ice Shaver
57 Two Door Refregerator
58 Ice Cube Machine
59 Cold Display Cabinet
61
60 Miscellaneous Equipments
Sub Total G
Total - (A+B+C+D+E+F+G)
189120
3119160
14760000
7
13.24
218.35
1033.20
Orders for the above equipment have not been placed as all equipment is readily available in the market,
delivery is quick and installation time is not substantial. The said amount is to the tune of 60.31% of the total
Project cost required for the expansion.
Technology - Video Security System
The basic components of video security systems are security cameras with multiplexers, time lapse VCRs and
monitors. The Company has installed the complete state-of-the-art digital video security system at SRS
Multiplex including quality CCD cameras connected to a digital video recorder system. It is installed at the
basement of the Multiplex and a trained personnel is always monitoring the screen round the clock. Moreover, a
screen is also installed in the cabins of the Managing Director and Chairman for surveillance purposes.
The video security system is a means of significant improvement in loss prevention and safety control for the
multiplex. Video Security tracks employees, locations, entryways corridors and open areas.
The video security has been installed for the following purposes:
(i)
To help 'Identify' perpetrators.
(ii)
To help 'Prevent' accidents or wrongdoing.
(iii)
To help 'Protect' people and property.
(iv)
To help 'Observe' processes.
Infrastructure facilities at SRS Multiplex
Raw Materials
The Company does not have any manufacturing activities and therefore, there is no raw material requirement.
Manpower
The Company sources its manpower requirements from consultancy firms like MSR Marketing (P) Limited,
Satmaya Trading Co. (P) Limited etc. As on September 06, 2005, the Company has more than 80 regular
employees on its rolls.
Power
At SRS Multiplex the Company has made necessary arrangements to meet its power requirements. It has
obtained approval for 1750 KVA of electricity line from HSEB. As a measure of precaution, SRSEL has
installed two DG Sets of capacity of 500 KVA each and one DG set of 160 KVA at SRS Multiplex. The DG sets
are sufficient to generate power in the event of power failure.
Water
Water is not required as such for the operation of Multiplex/cinemas/ retail stores/restaurants. The requirement
of water is restricted to human consumption, cooking and cleaning purposes. For this purpose, a water treatment
plant, based on Reverse Osmosis process has been installed at SRS Multiplex.
Sewage
The Company has obtained approval from HUDA for managing sewage at SRS Multiplex. An Effluent
Treatment Plant of Migrani make has been installed.
Fire Fighting Facilities
At SRS Multiplex the Company has installed Fire Hydrant and Sprinkler system which essentially consists of
pipes connected to a source of water supply and provided with outlets for tapings water under pressure. Water
outlets are applied at desired points manually through hoses during fire fighting operations.
A man-made water storage tank of 60 cum capacity in two interconnected compartments with a common suction
sump to facilitate cleaning and maintenance.
Marketing
1. Marketing Arrangements for SRS Multiplex
SRS Multiplex has established itself as one of the premier Multiplex providing some of the best facilities. The
Company has been advertising in the newspapers, Radio FM, direct marketing and promotion events like paid
62
previews, contests, DJ, social events like dance competition, fancy dress, singing competition etc. Different
brands having their shopping set up in the Multiplex also manage their individual schemes/ campaign for
promotional purpose which indirectly add to the promotion of SRS Multiplex. Hoardings have been installed at
prominent places at Faridabad to promote the SRS brand.
Film premiers are shown at cinemas at SRS Multiplex.
The Company has appointed M/s Happenings as the marketing and advertising and promotion agency. M/s
Happenings has been entrusted the responsibility of space selling and ad selling for SRS Multiplex.
Although the agreement is in nature of being executed in the normal course of business, it aids the
promotion of SRS Multiplex. The agreement was entered into on April 16, 2005.
The brand objective of the Company is to expand its customer base, ensure customer loyalty by creating a
world class shopping and movie watching experience and thus increase depth of the Company's consumer
relationship.
2. Marketing arrangement for the proposed Project
The existing leading brands in apparels, fast food, jewellery etc. which have associated with the Multiplex has
given the Company confidence to extend these brands to the other Multiplexes. With the SRS brand being
extended to SRS Value Bazaar and SRS Cinemas, the Company expects to enjoy strong brand recollection. This
would help the Company to sell space, services and facilities at the forthcoming Multiplex/
Cineplex/Bazaars/restaurants.
In the coming years, marketing communications will be carried out along the following lines:
Direct Mass Media
Print and outdoor mass media using top end print media like local dailies, magazines and moving further to
electronic media including radio and television
Events led communications
Large events creating localised excitement; focus to be on events that can be televised/ advertised in mass
media; also focus on sponsoring events targeting the young population. Premieres of films will also be used as
an important marketing tool.
Business strategy
The Company plans to target potential cities in North India as such cities are catching up with Metros in
terms of culture, disposable income and lifestyle. The cities have been chosen based on the population,
education centers providing penetration among the youth and being the advantage of among the first in such
cities.
SRS Value Bazaar would be a hyper-market in the retail business of various products at the sites in the
format and type of retail chain with different content of products depending on needs and aspirations of
customers. The discount store concept in the form of SRS Value Bazaar would provide value for money to
the population at large apart from the target segment and ensure additional footfalls for the entire Multiplex.
SRS Value Bazaar is a unique concept. It would be located in own multiplexes and in leased multiplexes of
the Company. The Company would procure raw material and other ingredients centrally so as to make the
system cost effective. The first store, to be opened at Faridabad, would be a trend setter in the opening of
other stores. The store will operate as a discount store and provide various categories including apparels and
accessories for all ages and gender, cosmetics, home textiles, household appliances, linen etc.
SRS Cinemas would be a chain of Cineplexes being owned/ leased/ managed by the Company. The present
project envisages Cineplex set up in 7 cities across the country, having 21 screens with a capacity of about
20,000 seats.
With the increasing numbers in terms of locations, the Company is growing horizontally by opening of new
Multiplexes/ Cineplex/ Bazaar and Food Courts which would provide economies of scale as the outsourcing
/ purchasing for all the locations would be done centrally.
63
The children games and club facilities would provide entertainment to all age groups providing a complete
family entertainment centre.
A membership drive for the exclusive SRS Club would provide discounts, privileges at all the SRS
locations.
To enhance the corporate value by its very name SRS – ‘Sab Raho Saath’, providing a feeling of
togetherness, happiness and fun.
The existing total operative capacity at SRS PVR Cinemas is 776 seats. The following table shows the capacity
utilization for the months April to July 2005:
Sr. No.
Month
Capacity utilization
1
April
22.51%
2
May
38.54%
3
June
44.75%
4
July
46.47%
Competitive Strengths
SRS Multiplex is well placed in the highly competitive retail and entertainment sector, in Faridabad. Few of its
competitive strengths are:
Professional and young management team possessing a good business acumen
Strong communication skills
Focus
Innovative and focused marketing strategies
Understanding of entertainment, retail and real estate businesses
Purchase of property
The Company plans to purchase property at 3 places viz. Agra, Ludhiana and Muzaffarnagar. The Company has
given advance worth Rs.250 lacs for the purchase of properties. These properties are planned to be located at
premium places in these cities. For details of the advance payment, refer to section “Introduction - Objects of
the Issue - Funds Deployed” on page no. 29 of the Draft Red Herring Prospectus.
64
KEY INDUSTRY REGULATIONS AND POLICIES
The Government of India and the respective State Governments have formulated various legislations over the
years, which apply to companies engaged in the business of entertainment, real estate, retail and eateries in
India.
The Company (SRS Entertainment Limited) currently has one Multiplex comprising of shopping center, theatre
screens, eateries, etc. located at Faridabad (NCR–Delhi) and has plans to come up with other similar Mutilpexes
in different States and is therefore subject to various State enactments also.
Under the provisions of various Central Government and State Government statutes / legislation, each of the
multiplex is required to obtain and renew certain licenses/ registrations and / or permissions with respect to
respective business/ operations/ matters.
Pursuant to the applicable laws in force in various States in India in which the Company's Multiplex/ Cineplex/
restaurant would be situated, each of the operation requires mandatory registrations/ licenses/ consents/
permissions under the statutes listed out below (the list of requisite statutes/ legislation set out below is by way
of illustration and is not exhaustive for the present purpose): -
Sr. No.
Industry
Relevant Laws to be complied with
1.
Real Estate
i.
ii.
iii.
iv.
v.
2.
Retail
vi.
vii.
viii.
ix.
x.
i.
ii.
iii.
iv.
3.
4.
Entertainment
Eateries
i.
ii.
iii.
iv.
v.
i.
ii.
iii.
iv.
v.
Transfer of Property Act, 1882;
Foreign Direct Investment Policy;
Respective State’s Rent Control Act, 1958;
The Building and other Construction Workers’
(Regulation of Employment & Conditions of Service)
Act, 1996;
The Contract Labour (Regulation and Abolition) Act,
1970;
The Employers’ Liability Act, 1938;
The Environment Protection Act, 1986;
The Industrial Dispute Act, 1947;
The Minimum Wages Act, 1948;
The Workmen’s Compensation Act, 1923
Foreign Direct Investment Policy;
Central Sales Tax Act and/ or State Sales Tax Act(s) or,
as the case may be, Value Added Tax Act;
Respective
State’s
Shops
and
Commercial
Establishment Act;
Other miscellaneous indirect tax statutes
Cinematography Act, 1952;
Cine-Workers and Cinema Theatre Workers Regulation
of Employment Act;
Advertisement Act of 1954;
Respective State’s Cinema Regulation Act;
Copyright Act, 1957
Prevention of Food Adulteration Act, 1954;
Prevention of Food Adulteration Rules, 1955;
Respective State’s Food Adulteration Rules;
Value Added Tax Act;
Consumer Protection Act, 1986.
Broad overview of some of the relevant legislations/ enactments is as under:
The Cinematograph
Cinematograph Act, 1952
The Cinematograph Act, 1952 (the “Act
Act”)
Act has been enacted to make provisions for the certification of
cinematograph films for exhibition and for regulating exhibition of films by means of cinematographs.
65
The Act authorizes the Central Government to constitute Board of Film Certification (the “Board
Board”)
Board in
accordance with the Cinematograph (Certification) Rules, 1983 for the purpose of sanctioning films for public
exhibition in India. The Board may certify films for either restricted or unrestricted exhibition, or in the
alternative, may prohibit the exhibition of the film.
The certificate issued by the Board is valid for a period of 10 (ten) years.
years In terms of the Act, an establishment
that exhibits films would have to obtain a license for such exhibition to confirm that the establishment has
complied with the provisions of the Act and that the safety standards of the establishment are adequate. Noncompliance with the provisions of the Act would attract penalties in the form of imprisonment and/or fines.
The Cinematograph Film Rules, 1948
In terms of the Cinematograph Film Rules, 1948 (the “Rules”),
“Rules” a license must be obtained prior to storing of any
film unless specifically exempted. Any person transporting, storing or handling films would have to ensure
compliance with the provisions of the Rules pertaining to precautions against fire, restriction of access to films
by unauthorized personnel, supervision of operations, minimum space between workers, storage of any loose
films, minimum specifications for aisle space and exits in storage rooms, electrical installations in the storage
rooms etc. The Rules also specify the form and the procedure for applying for licenses, renewal of licenses,
transfer of licenses, procedure for transport of film, refusal of licenses and cancellation of licenses.
The Punjab Cinema Regulation Act, 1952/ The Punjab Cinema Regulation Rules, 1952
Punjab Cinema Regulation Act, 1952 (the “PCR Act”)
Act” extends to the whole of the State of Punjab and Haryana.
This is State enactment to make provisions for regulating exhibitions by means of cinematographs in the State of
Punjab and Haryana. Under the provisions of this Act, no person shall give an exhibition by means of
cinematograph, elsewhere than in a place licensed under this Act or otherwise than in compliance with any
condition and restriction imposed by such license.
The Punjab Entertainment Duty Act, 1955/ The Punjab Entertainment Duty Rules, 1956
The Punjab Entertainment Duty Act, 1955 (the “PED Act”)
Act” extends to the whole of the State of Punjab and
Haryana. The applicability of the PED Act has been extended to Haryana in terms of Haryana Adaptation of
Laws (State and Concurrent Subjects) Order, 1968.
The PED Act, inter alia, provides for the levy of an entertainment duty in respect of admission to public
entertainments. The PED Act provides that a person admitted to an entertainment shall be liable to pay an
entertainment duty at a rate not exceeding one hundred and twenty five percent of the amount of payment for
admission, which the Government may specify, by a notification in this behalf, and the said duty shall be
collected by the proprietor and rendered to the Government in the manner prescribed. Proprietor in relation to
any entertainment includes the owner, partner or a person responsible for the management thereof.
The Punjab Entertainments Tax (Cinematograph Shows) Act, 1954/ The Punjab Entertainments Tax
(Cinematograph Shows) Rules, 1954
The Punjab Entertainments Tax (Cinematograph Shows) Act, 1954 (the “PET Act”)
Act” extends to the whole of the
State of Punjab and Haryana. The applicability of the PET Act has been extended to Haryana in terms of
Haryana Adaptation of Laws (State and Concurrent Subjects) Order, 1968.
The PET Act, inter alia, provides for levy, charge and payment to the State government, on all public
cinematograph exhibitions to which persons are admitted on payment, and entertainment at such rates as the
State government may, from time to time, by notification fix, but not exceeding ten percent of the entertainment
duty payable at the rate notified under Section 3 of the Punjab Entertainment Duty Act, 1955.
The Punjab Shops and Commercial Establishments Act, 1958
The Punjab Shops and Commercial Establishments Act, 1958, (the “PSCE Act”)
Act” inter alia, provides for the
regulation of conditions of work and employment in shops and commercial establishments. The PSCE Act is
applicable to the Sates of Punjab and Haryana. Further according to Section 4 of the PSCE Act, provisions of
sections 9 and 10, in relation to opening & closing hours and close day are applicable to Cinema Houses. Other
provisions regarding registration, maintaining of employees’ records, etc. have also to be complied with.
The Haryana Value Added Tax Act, 2003/ Central Sales Tax Act, 1956
The Haryana Value Added Tax Act, 2003 (the “HVAT Act”)
Act” was introduced in the State of Haryana with effect
from April 1, 2003. Every dealer who is liable to pay tax has to apply for registration under the HVAT Act /
Central Sales Tax Act within the prescribed time limit.
Section 3 of the HVAT Act provides that every dealer who would have continued to be liable to pay tax under
the Haryana General Sales Tax Act of 1973 (the “HGST Act”)
Act” had HVAT Act not come into force, and every
66
other dealer whose gross turnover during the year immediately preceding the appointed day exceeded the
taxable quantum as defined or specified in the HGST Act, shall [subject to the provisions of sub-section (4)] be
liable to pay tax on and from the appointed day on the sale of goods effected by him in the State.
Value Added Tax (VAT)
In terms of the policies enumerated in the Central Government’s budget proposals for the fiscal year 2005-06,
implementation of value added tax (“VAT”) is to be completed across all the States in India within this fiscal
year. VAT levy will be administered by the Value Added Tax Act and the Rules made thereunder. Initially, it
will replace the present levy of local sales tax. Under the current single-point system of tax levy, the
manufacturer or importer of goods into a State is liable to sales tax. There is no sales tax on the further
distribution channel. VAT, is a multi-point levy on each of the entities in the supply chain with the facility of
set-off of input tax (i.e., the tax paid at the stage of purchase of goods by a trader and on purchase of raw
materials by a manufacturer). Only the value addition at each stage of distribution is subject to VAT.
VAT has been introduced and implemented in the States of Punjab and the National Capital Territory of Delhi
with effect from April 1, 2005.
The Haryana Local Area Development Tax Act, 2000
The provisions of Haryana Local Area Development Act (the “Act”)
“Act” have become effective from 5.5.2000.
Section 3 of the Act provides that there shall be levied and collected a tax (“LADT”
“LADT”)
“LADT” on entry into a local area,
of all goods (except those specified in Schedule A to the Act), for consumption or use therein, at such rates not
exceeding twenty percent of the value of petroleum based fuels and not exceeding ten percent of the value of
other goods, as may, by notification, be specified by the State Government, and different dates and different
rates may be specified in respect of different goods or different classes of goods or different local areas. The
LADT shall be paid by the importer. However, an importer shall not be liable to pay tax so long as the aggregate
value of taxable goods he brings into or receives on their entry into any local area does not, in a year, exceed ten
lakh rupees or such other sum as the State Government may, by notification, specify. It has been further
provided that an importer who has once become liable to pay tax under this Act shall continue to be so liable
until the expiry of three consecutive years during each of which the aggregate value of any taxable goods he
brings into or receives on their entry into any local area does not exceed the amount specified.
Foreign Investment Regulations
As per the current policy on foreign direct investment, foreign direct investment in Indian companies carrying
on business in the Indian retail-trading sector is prohibited.
Fiscal Regulations
Income earned by way of profits by a company incorporated in India is subject to levy of income tax on it in
accordance with the tax rate prescribed in the Income-tax Act read with Rules framed thereunder.
The Company, like other companies, is eligible to avail certain benefits/ exemptions/ deductions available under
the Income-tax Act. For details of the tax benefits see ‘Tax Benefits’ on page no. 33 of the Draft Red Herring
Prospectus.
67
HISTORY AND CORPORATE STRUCTURE
History
Address of the
Corporate Office
Constitution
Registered/
Activity
Existing
C-4/1, 100 Ft. Road, Shahdara, Delhi - 110094
Public Limited Company
Proposed
Construction and management of multiplexes, amusement
parks, cinema halls, hotels, clubs and commercial and
residential buildings.
Same as above
Date of incorporation
January 25, 2005
Complexes located at:
Existing
Proposed
Setor-12, NH-2, Delhi-Agra Road, Faridabad (NCR)
Haryana 121007
Please refer to para "Business Overview - Location of the
Project" on page no.50 of the Draft Red Herring Prospectus
SRSEL was incorporated as 'SRS Commercial Co. Limited' under the Companies Act, 1956 on August 29, 2000
which was engaged in the business of trading in commodities. Witnessing the rapid development in the National
Capital Region in terms of civic infrastructure, quality of population, standards of living and general economic
growth, the Company decided to venture into a different line of business to capitalize on the retail and
entertainment business potential in the country. Thereafter, it changed its name to SRS Entertainment Limited
on January 25, 2005 with the main object to engage in activities of construction and management of
Multiplexes, Amusement Parks, Cinema Halls, Hotels, Clubs and Commercial and Residential Buildings etc. in
and outside India.
The Company started with a small beginning by getting, in auction, land from HUDA in January 2002. This was
a significant event which later on developed into a magnificient mall. After extensive surveys and closely
studying similar projects in other parts of the country and the world, the Company gradually gathered the
resources for building the SRS Multiplex at Faridabad. It was entrusted the support of banks, collaborators etc.
SRS Multiplex started commercial operations November 12, 2004. SRS Multiplex is an integrated project
consisting of a 3 screen multiplex, a modern shopping mall, a family restaurant and food court and a health club
with a rooftop swimming pool. The big names like Mcdonalds, Pizza Hut, Nescafe, Rayban, Airtel, Music
World etc. to name a few add glory to the Multiplex. M/s ERA Construction was the main contractor for
building up the project alongwith other different contractors for different contracts. SRS Multiplex received
compliments from various celebrities and dignitaries for its attractiveness and colourfullness. The Multiplex’s
enjoys recognition and is well accepted by the passers-by. Now, the Company receives many offers for similar
replica for other cities. For its SRS Multiplex, the Company tied up with PVR Limited for content and
management of the 3 screens built on the nature’s theme of Sun, Moon and Galaxy. The latest movies having
strong mass appeal are displayed on the screens. The food joints have been selected on their various tastes from
spicy to sweets.
Main Objects of the Company
The main objects of the Company as detailed in its Memorandum are:
1. To carry on the business of all kinds of entertainment, running and managing the multiplex, Cinema halls,
open/digital theatres, stage programmes, restaurants, bar, café, discotheques, club, gymnasium, swimming
pool, amusement parks, children games and sports centre, video games parlor, casino, hotels, holiday
resorts, beauty parlor and saloon, recreational and other activities, banquet halls, marriage home,
departmental store, auditorium and all other activities required for running the business of multiplex.
2. To carry on the business of production, direction, exhibition, distribution, purchase, sale, marketing of
movies or films of Bollywood and/or Hollywood and to enter into partnership, joint venture, franchise or
any type of association with any other person, firm or company engaged in doing any of these things.
3. To carry on the business of consultancy and marketing of activities related to entertainment and in
particular to sell or otherwise provide on rent, the space for advertisements to the persons, firms, corporate
68
4.
5.
or any body interested for the same, to organise events, road shows, etc., for the purpose of marketing and
business promotion, within and outside the multiplex, restaurant, banquet, cinema halls and any other
building.
To buy, exchange or otherwise acquire an interest in any immovable property for the purpose of
construction of multiplex, cinema halls, open/digital theatres, restaurants, bar, discotheques, club,
gymnasium, swimming pool, amusement parks, beauty parlor and saloon, recreational and sports museum,
banquet halls, departmental store, auditorium and any other type of building.
To get the rights for broadcasting, telecasting and marketing the musical programmes, serials, quiz
programmes, thrillers, family dramas, news, sports etc., whether in all or in episodes and to broadcast and
telecast the same.
Changes to the main object of the Memorandum of Association
Sr.
No.
1.
Date of
Resolution
20. 09. 2002
2.
06. 12. 2004
Particulars
Insertion of New Clause No.6 in the Main Object Clause
6.
To carry on the business of multiplexes, cinema halls,
open theatres, stage programmes, disco halls, disco theque, Bar,
club, Gym, Banquet halls, swimming pool restaurants, amusement
parks, Recreational and sports activities, Beauty Parlour,
Departmental store and all other activities required for running the
business of multiplexes.
Replacing Clauses 1-6 by inserting new Clauses no. 1-5
To carry on the business of all kinds of entertainment, running and
managing the multiplex, Cinema halls, open/digital theatres, stage
programmes, restaurants, bar, café, discotheques, club,
gymnasium, swimming pool, amusement parks, children games
and sports center, video game parlor, casino, hotels, holiday
resorts, beauty parlor and saloon, recreational and sports activities,
banquet halls, marriage home, departmental store, auditorium and
all other activities required for running the business of multiplex.
Passed as
Special
Resolution
Special
Resolution
To carry on the business of production, direction, exhibition,
distribution, purchase, sale, marketing of movies or films of
Bollywood and/or Hollywood and to enter into partnership, joint
venture, franchise or any type of association with any other
person, firm or company engaged in doing any of these things.
To carry on the business of consultancy and marketing of
activities related to entertainment and in particular to sell or
otherwise provide on rent, the space for advertisement to the
persons, firms, corporate or anybody interested for the same, to
organize events, road shows etc., for the purpose of marketing and
business promotion, within and outside the multiplex, restaurant,
banquet, cinema halls and any other building.
4.
To buy, exchange or otherwise acquire an interest in any
immovable property for the purpose of construction of multiplex,
cinemas halls, open/digital theatres, restaurants, bar, discotheques,
club, gymnasium, swimming pool, amusement parks, beauty
parlor and saloon, recreational and sports museum, banquet halls,
departmental store, auditorium and any other such type of
building.
3.
04. 02. 2005
5.
To get the rights for broadcasting, telecasting and
marketing the musical programmes, serials, quiz programmes,
thrillers, family dramas, news, sports etc., whether in all or in
episodes and to broadcast and telecast the same.”
Amendment of existing clause no.2, 7, 13, 18, 34
Special
Resolution
69
Insertion of new clauses in Objects Incidental or ancillary to the
attainment of the Main Objects – 13A, 35, 36 and 37
13A.
Subject to the provisions of Section 78, 79, 80 and 81 of
the Companies Act, 1956, rules and regulations made there under
and the directions issued by the RBI or under FEMA, to receive
money as Share capital from any person, Corporations, Company
or Organisations whether in India and/or abroad and to describe
the same as investment made by NRI’s/ FII and to apply to any of
the Stock Exchange as recognised by SEBI for listing of its
securities
35.
To undertake, carryout, promote and sponsor any
programme for promoting the business of the company or for any
social or charitable purpose and to increase any expenditure on the
same programme and in order to implement any such programme
do all the activities as it may deem fit.
36.
Subject to the provisions of the Companies Act, 1956, to
give to any director, officers, servants or employees of the
company any share or interest in the profits of the company
business by way of commission or otherwise carried on by own
means or through the agency of any subsidiary company and for
that purpose to enter into any arrangements which the company
may think fit.
To do all event and every thing necessary, suitable or proper for
the accomplishment of any of the purposes or the attainment of
any of the objects of the company.
Major Events
Event
Got Allotment Letter from HUDA
Bhoomi poojan and start of construction
Sanction of Term Loan of Rs.1000 Lac by PNB, Janpath, New Delhi
Got DPC Certificate from HUDA
Soft launch of SRS Multiplex
Final launch of SRS Multiplex on the eve of Deepawali
Sanction of Term Loan of Rs.1850lac from Union Bank of India (UBI), Connaught
Place, New Delhi under Union Rental Scheme @ 9.75% p. a.
Sanction Letter No.CP:ADV:2005:642 from UBI for reduction in rate of interest by 1%
thereby making it 8.75%
MoU with Tulip Info Services (P) Limited for leased space measuring 50,000 Sq. Ft.
construction and management of Cineplex, Restaurant and SRS Value Bazaar at
Jodhpur, Rajasthan.
MoU with P. R. Infrastructure for leased space measuring 23,000 Sq. Ft. construction
and management of Cineplex and Restaurant at Amritsar
Grant of ISO 9001:2000 Certification
Franchise agreement with Richi Look Marketing (P) Limited – Cineplex
Agreement with Omaxe Construction Limited for leased space measuring 18,000 sq.ft.
each for construction and management of Theatre at Omaxe Plaza and Wedding Mall at
Gurgaon
Date
28.01.2002
26.06.2002
05.12.2002
10.12.2002
22.10.2004
12.11.2004
20.05.2005
13.06.2005
08.07.2005
17.07.2005
19.08.2005
22.08.2005
22.08.2005
Subsidiaries
The Company has not promoted any other company and hence does not have subsidiaries.
Shareholders Agreements
70
The Company has not entered into agreement with any of it shareholders. The Company is also not a party to
any agreement between any of its shareholders.
Other Agreements
1. M/s Seven Dayz Restaurants (P) Limited (Seven Dayz)
On August 22, 2005, the Company entered into an MoU with Seven Dayz that gives the Company an exclusive
right to use the brand ‘7 Dayz’ for the food courts/restaurants. Seven Dayz will not have any right/control over
the properties on which by way of SRSEL the ‘7 Dayz’ is used and shall only be entitled to royalty/fee. The
profit or loss arising out of operating the business of food courts/restaurants run/managed through the agreement
shall be sole responsibility of SRSEL. The consideration, defined as royalty/fee is Rs.1,00,000/- per annum
which shall be paid by SRSEL by cheque/ demand draft.
The MoU requires the two parties to enter into definitive agreements within 60 days from the date of the MoU.
The definitive agreement shall be in force for a minimum period of nine years commencing from the date of
commencement of commercial operation of Cineplex/Food Court and can be renewed for a further period by the
parties at mutually acceptable terms and conditions.
2. M/s Omaxe Construction Limited (Omaxe)
i.
Omaxe Plaza
On August 22, 2005, the Company entered into an agreement with Omaxe Construction Limited for obtaining
on lease the multiplex theatre to run 2 screens theatre on 2nd floor in Omaxe Plaza, measuring approximately
18,000 sq. ft. Under the terms of the agreement, Omaxe would provide on lease the multiplex at Omaxe Plaza to
SRSEL to run a two screen theatre. Possession of the said premises will be given to SRSEL in October 2005 for
the purpose of carrying out interior fit outs. SRSEL will pay consideration by way of monthly lease rent of
Rs.3,78,000 (Rs.21/- per sq. ft.) to Omaxe. The agreement is valid for a period of nine years from the date of
grant of Completion Certificate by the concerned authorities.
ii.
Wedding Mall
On August 22, 2005, the Company entered into an agreement with Omaxe Construction Limited for obtaining
on lease the multiplex theatre to run 3 screens theatre on 3rd and 4th floor in the Wedding Mall measuring
approximately 18,000 sq. ft. of. Under the terms of the agreement, Omaxe would provide on lease the multiplex
at Wedding Mall to SRSEL to run a three screen theatre. Possession of the said premises will be given to
SRSEL in February 2007 for the purpose of carrying out interior fit outs. SRSEL will pay consideration by way
of monthly lease rent of Rs.3,78,000 (Rs.21/- per sq. ft.) to Omaxe. The agreement is valid for a period of nine
years from the date of grant of Completion Certificate by the concerned authorities.
3. Gautam & Gautam Associates
On August 17, 2005 the Company appointed Gautam & Gautam Associates for carrying on the work of
architects for the Project.
4. PVR Limited
On July 28, 2004, the Company entered into an agreement with PVR for the operation and management of the
SRS PVR Cinemas. Under the terms of the agreement, PVR provides management consultancy to SRSEL for
Cineplex at SRSM for the consideration of 5% of the gross turnover of the Cineplex at SRSM. The gross
turnover, as defined in the agreement, means the turnover of the Multiplex Cinema including without limitation
all revenue eared by the Company from concession, cafeteria sales, advertising inside the auditorium and in the
foyer area for show window, product display etc. marketing and promotions, campaigns less entertainment tax
applicable and paid by the Company on Cineplex admissions at SRSM. The agreement is valid for a period of
nine years from the commencement date which is November 12, 2004, the date when SRSEL inaugurated
SRSM at Faridabad, Haryana.
71
MANAGEMENT
I.
Board of Directors
Sr.
No.
Name,
Designation,
Father's name and Age
Present
Address
1
Mr.
Raj
Kumar
Aggarwal
Chairman
S/o Mr. Shri Niwas
Aggarwal
43 years
367, Sector 9, Faridabad
(Haryana)
2
Mr. Sunil Jindal
Managing Director
S/o Mr. Girraj Singh
Jindal
26 years
538, Sector14, Faridabad
(Haryana)
B. Com, L.L.B.;
Business
5 years
21.12.2004 as
Managing
Director
01.12.2004 as
Additional
Director
3
Mr. Raju Bansal
Executive Director
S/o Mr. Nanak Chand
Bansal
28 years
Mr. Pavan Kumar
Vijay
Director
S/o Late Sh. R B
Vijay
41 years
D-884, Chawla
Colony,
Ballabgrah,
Faridabad
(Haryana)
7/9, Sarvpriya
Vihar,
New
Delhi 110016
B. Com;
Business
4 years
21.01.2002
Ferro
Limited
M. Com,
L L B,
F.C. S.
Professional
16 years
10.8.2005
5
Mr. Vinod Kumar
Gupta
Non
Executive
Non
Director
S/o Late Mr. Chunni
Lal
50 years
B-9, Chawla
Colony,
Ballabgarh,
Faridabad
(Haryana)
B.A.;
Business
25 years
25.02.2002
Corporate
Professionals India
(P) Limited
Corporate
Professional Infra
Structure
(P)
Limited
Corporate
Professionals.com
(P) Limited
BLB Limited
P
K
Vijay
Financial Services
(P) Limited
Madhavtech India
(P) Limited
Neelabh Engineers
(P) Limited
6
Shri Kailash M. Mehta
Independent Director
S/o Late Mr. M. M.
Mehta
1055, Sector –
28, Faridabad
B. E.
(Mechanical)
and PGDIM
Retired
28.03.2005
4
Qualification,
Occupation and
Experience
M. Com, C.A.,
C.S., C.W.A.,
L.L.B., Ph.D.;
Professional
20 years
Date of
Appointment
and Term
04. 04. 2005
as Chairman
01. 02. 2005
as Additional
Director
Directorship in other
companies
Corporate
Professional Infra
Structure
(P)
Limited
Vijay
Finlease
Limited
Akriti
Financial
Services
(P)
Limited
RRA
Mutual
Benefit
Co.
Limited
Corporate
Professionals India
(P) Limited
BTL Investments
Limited
Akriti
Financial
Services
(P)
Limited
Plast
-
72
7
8
63 years
Mr. Devendra Singh
Independent Director
S/o Mr.. Balbir Singh
46 years
646, Sector –
16A,
Faridabad
Mr. R. S. Gupta
NonNon-Executive
Director
S/o Late Mr. B. R.
Gupta
34 years
309/12,
Jawahar
Colony,
Gurudwara
Road,
Faridabad
30 Yrs.
B. Sc. and
L.L.B
Professional
25 years
B.E (Textiles)
Business
20 years
28.03.2005
SRS
Retreat
Services
(P)
Limited
Fortune Portfolio
(P) Limited
14.06.2005
-
Brief
Brief profile of directors other than the Chairman, Managing Director and Executive Directors
Mr. Pavan Kumar Vijay, Director
Mr. Pavan Kumar Vijay is the Managing Director of Corporate Professionals, a multidisciplinary corporate
consultation company. He has served as the President of the Institute of Company Secretaries of India (ICSI) in
the year 2003. He is M.Com, LL.B. and Fellow Member of the ICSI. He has richly contributed as a member of
various committees of Ministry of Company Affairs (MCA), SEBI, Stock Exchanges, Industry Associations and
professional bodies. He is member, Business Advisory Group of the Bombay Stock Exchange Limited;
Member, Capital Market and Financial Services Committee of the PHDCCI, Special Invitee-“E-Corporate
Business Working Group” of the DCA and Co-opted Member of the Executive Committee of the Association of
NSE Members of India. He is also actively involved and contributing as a trustee for Consumer Education and
Research Centre (CERC), Ahmedabad, a centre for promoting consumer education and awareness.
Mr. Kailash M. Mehta, Director
Mr. Mehta has done B. E. (Mechanical) and PGDIM and has earned an experience of more than 30 years. He
has worked with Sandvik Asia Limited, a Swedish Company as Regional Manager, Central Zone for 27 years
and has served NSIC (PTC) as Deputy Director for 4 years.
Mr. Devendra Singh, Director
Kanwar Singh is a Science and Law Graduate. He is a practicing advocate and has an experience of more than
25 years. He supervises the legal matters of the Company.
Mr. R. S. Gupta, Director
Mr. Gupta is an Engineer and his experience spans beyond 35 years. He has worked with Muradabad Syntex
Limited as Production Manager for around 20 years and has earned good reputation.
Terms of Appointment and Compensation
Compensation of Directors
1.
Terms of Appointment and Compensation of Mr. Sunil Jindal, Managing Director:
i. Salary: Rs. 1,00,000/- Per Month
ii. House Rent Allowance: Rs.30,000/- per month
iii. Conveyance Allowance: Rs.10,000/- per month
iv. Medical Allowance: Rs.10,000/- per month
v. Perquisites:
(a) Telephone: Actual telephone charges
(b) Newspaper and mazagines: Actual expenses towards newspaper and magazines
(c) Statutory Benefits: All statutory benefits applicable to the Company from time to time shall be
payable as per applicable provisions
(d) Gratuity: Gratuity payable shall not exceed half month's salary for each completed year of service.
vi. Sitting Fees: Rs.5000 for Board Meeting and Rs.2000 for Committee Meeting
vii. Others: Reimbursement of actual entertainment expenses, actual traveling and hotel expenses for the
Company’s business and/or allowances as per the Company’s Rules.
viii. Termination: Tenure ends on December 21, 2009 (a period of 5 years from date of appointment) as per
the terms of the resolution dated December 21, 2004.
73
2. Terms of Appointment and Compensation of Mr. Raju Bansal, Executive Director:
i.
Salary: Rs. 80,000/- Per Month
ii.
House Rent Allowance: Rs.24,000/- per month
iii.
Conveyance Allowance: Rs.10,000/- per month
iv.
Medical Allowance: Rs.10,000/- per month
v.
Perquisites:
(a) Telephone: Actual telephone charges
(b) Newspaper and mazagines: Actual expenses towards newspaper and magazines
(c) Statutory Benefits: All statutory benefits applicable to the Company from time to time shall be
payable as per applicable provisions
(d) Gratuity: Gratuity payable shall not exceed half month's salary for each completed year of service.
vi.
Sitting Fees: Rs.5000 for Board Meeting and Rs.2000 for Committee Meeting
vii.
Others: Reimbursement of actual entertainment expenses, actual traveling and hotel expenses for the
Company’s business and/or allowances as per the Company’s Rules.
viii.
Termination: Tenure ends on December 21, 2009 (a period of 5 years from date of appointment) as per
the terms of the resolution dated December 21, 2004.
Terms of Appointment and Compensation of other Directors
Name of Director
Mr. Vinod Gupta
Mr. R. S. Gupta
Mr. Raj Kumar Aggarwal
Mr. Pavan Kumar Vijay
Mr. K. M. Mehta
Mr. Devendra Singh
Term/period
Retire by Rotation
Retire by Rotation
Retire by Rotation
Retire by Rotation
Retire by Rotation
Retire by Rotation
Remuneration /
Compensation
NIL
Rs. 25000 Per Month
NIL
NIL
NIL
NIL
Perquisites
NIL
NIL
NIL
NIL
NIL
NIL
Sitting
Fees*
5000
5000
5000
5000
5000
5000
* Rs.5000 each is for Board Meetings. Additionally, Rs.2000 will be paid as Sitting fees to the Directors for
Committee Meetings.
Corporate Governance compliance
Corporate governance is administered through the Board of Directors and the committees of the Board.
However, primary responsibility for upholding high standards of corporate governance and providing necessary
disclosures within the framework of legal provisions and institutional conventions with commitment to enhance
shareholders’ value vests with the Board of Directors.
Pursuant to listing of the Equity Shares, the Company would be required to enter into listing agreements with
The National Stock Exchange of India Limited and The Bombay Stock Exchange Limited.
The Company is in compliance with the applicable provisions of listing agreement pertaining to corporate
governance, including appointment of independent Directors and constitution of the following committees of the
Board of Directors:
Audit Committee
The Audit Committee consists of Dr. R. K. Aggarwal, Mr. Sunil Jindal and Mr. K. M. Mehta. Any two members
would constitute a quorum for a meeting of the Audit Committee which will be chaired by Mr. R. K. Aggarwal.
The Audit Committee acts as an interface between the management and the statutory and internal auditors
overseeing the internal audit functions. The Audit Committee was first constituted by the Board of Directors in
its meeting held on June 12, 2003 pusuant to compliance of the Companies Act, 1956. The Audit Committee
was reconstituted on January 04, 2005 and March 28, 2005.
The committee is entrusted with the functions, scope and powers as envisaged in Section 292 (a) of the
Companys Amendment Act, 2000 and/or any modification / amendment thereof from time to time.
Remuneration Committee
The Remuneration Committee consists of Dr. R. K. Aggarwal, Mr. K. M. Mehta and Mr. R. S. Gupta. All the
members of the committee are non-executive independent directors. Any two members would constitute quorum
for a meeting of the Remuneration Committee. The Remuneration Committee is broadly responsible to review
74
and approve the compensation package for senior management personnel including the Managing Director and
Chief Executive Officer.
The committee is scheduled to meet once a year and will be chaired by Mr. R. K. Aggarwal. The Company
Secretary of the Company, Ms. Navneet Chhabra would act as the secretary of the committee.
Investor Grievance Committee
The Investor Grievance Committee of our Company consists of Dr. R. K. Aggarwal, Mr. Sunil Jindal and Mr.
Raju Bansal. This committee was constituted by the Board of Directors in its meeting held on June 14, 2005
pursuant to clause 49 of the Listing Agreement. It has been constituted for addressing the grievances of the
shareholders/ investors, and to suggest and monitor measures to improve investors’ satisfaction. The committee
will meet once a month and the meeting will be chaired by Mr. R. K. Aggarwal.
The Committee shall have the authority to approve transfers, transmission, issue of certificates and other related
work. The Committee also looks into redressal of shareholder and investor complaints, issue of duplicate share
certificates. It shall have full access to information contained in the records of the Company and external
professional advice, if necessary.
Shareholding of Directors including Qualification Shares
The following table details the shareholding of our Directors, as at the date of the Draft Red Herring Prospectus:
Name of Director
No. of Shares of
Rs.10/Rs.10/- each
1,36,600
45,000
Mr. Sunil Jindal
Mr. Raju Bansal
There is no requirement of holding qualification shares to become a Director of the Company in the Articles of
Association of the Company.
Details of Borrowing Powers of Directors
The borrowing power of the Board of Directors of the Company has been increased upto Rs.10000 Lacs vide
resolution dated 12.8.2005 passed in the EOGM of the company. The Company has presently utilised Rs. 1850
Lacs under union rent scheme of Union Bank of India, Connaught Palace, New Delhi. The Company has
approached UTI Bank Limited for its debt requirement for the proposed project and UTI Bank Limited has vide
its letter no. UTIBK/RMD-DEL/AM/172 dated September 8, 2005.
Interest of the Directors
Except to the extent of the shareholding in the Company, the Directors do not have any other interest in the
Company.
In term of Section 301 of the Companies Act, 1956 no notice has been received from the Directors of the
Company that need to be entered in the register maintained under section 301 of the Companies Act, 1956.
Change in directors during the last three years
The following changes have taken place in the Board of Directors of the Company during the last three years:
Name
Date of
appointment
Date of cessation
Nature of change
Anil Jindal
21.01.2002
20.12.2004
Sunil Jindal
29.08.2000
16.05.2002
Sunil Jindal
01.12.2004
N.A.
Appointed as Additional Director and
confirmed at AGM dated 27.06.2002 and
elected as Managing Director w.e.f.
17.05.2003 Resigned as Director and
Managing Director w.e.f. 20.12.2004
Appointed as First Director and Resigned
from Directorship w.e.f. 16.05.2002
Appointed as Additional Director and
elected as Managing Director w.e.f.
21.12.2004. and reappointed as director at
AGM dated 25.07.2005
Anil Goyal
21.01.2002
28.03.2005
Appointed as Additional Director and
75
Raj
Aggarwal
II.
Kumar
01.02.2005
N.A.
Kailash M Mehta
28.03.2005
N.A.
Devendra Singh
28.03.2005
N.A.
Rajesh Mangla
21.01.2002
14.06.2005
Raju Bansal
21.01.2002
N.A.
R.S. Gupta
14.06.2005
N.A.
Pavan Vijay
10.08.2005
N.A.
confirmed at AGM dated 27.06.2002
Resigned from Directorship by giving
resignation letter dated 28.03.2005
Appointed as Additional Director and
confirmed at AGM dated 25.07.2005 and
elected as Chairman w.e.f. 01.04.2005
Appointed as Additional Director and
confirmed at AGM dated 25.07.2005
Appointed as Additional Director and
confirmed at AGM dated 25.07.2005
Appointed as Additional Director and
confirmed at AGM dated 27.06.2002 and
Appointed as Whole-time Director w.e.f.
01.4.2005 and
Resigned as Director
and whole time Director w.e.f.
14.06.2005
Appointed as Additional Director and
confirmed at AGM dated 27.06.2002
Appointed as Additional Director and
confirmed at AGM dated 25.07.2005
Appointed as Additional Director
Management Organisation structure
76
Chairman
Raj Kumar Aggarwal
Managing
Director
Sunil Jindal
Director
Pawan Kumar
Vijay
Director
K.M. Mehta
Director
Vinod Gupta
Director
Raju Bansal
Director
R. S. Gupta
Director
Devendra
Singh
C.E.O.
Ashok Bansal
Management
Representative
HOD Admin & H.R.
Suresh Arora
HOD
I.T.
Department.
Narender Vaid
Asst. Manager
I. T.
Varun Gupta
C.O.O. & CS
Navneet
Chhabra
Mall
Manager &
Cinema
Engineer
Duty Managers
Amit
Vipul
Hardware &
Software Staff
Supervisor
House
Keeping
Lakhan
III.
Cinema
Manager
Ashish Negi
Supervisor
Security &
Parking
D. N.
Duty
Officers
V. P. Retail
Operations
Rahul Das
Sr. Manager
Marketing
Rahul Gupta
Manager
Marketing
Sanjiv Grover
Asst
Manager
Marketing
Sushil Jain
Incharge
Purchase &
Store
Ajay Jain
C. F. O
Arun Gupta
C.A.O.
Seema Narang
Sr. Accountant
Mr. Ramesh
Chand
Acco
unt
Staff
Incharge
Electrical
. Shiv
Ratan
HOD
Technical
DP Singh
Manager Finance
Dheeraj Gupta
Incharg
e Civil
Sachin
Incharg
e
A. C.r.
Alok
Incharge
Plumbing &
ETP
. Hari Rawat
Key Management Personnel
77
Sr.
No.
Name
1
Mr. Ashok
Bansal
Ms.
Navneet
Chhabra
Mr. Rahul
Das
2
3
Age
(years)
Designation
Qualification
59
CEO
25
COO and
Company
Secretary
Vice
President Retail
Operations
44
B.E (Textiles)
Total
experienc
e (years)
35
01.06.2005
M.Com, C.S.
21/2
10.02.2003
B.A (Hons)
20
01.07.2005
Date of
appointment
Previous
employment
4
Mr. Arun
Kumar
Gupta
24
CFO and
Compliance
Officer
B.Com, C.A.
3
01.09.2004
5
Mrs.
Seema
Narang
Mr.
Narendra
Vaid
31
CAO
B.A., B. Ed
12
01.10.2004
32
Head (IT)
9
01.01.2005
7
Mr. D. P.
Singh
40
18
01.10.2004
8
Mr.
Parvesh
Kumar
30
Mall
Manager
(Technical)
Mall
Manager
(Maintenanc
e) and
Cinema
Engineer
B.E.
(Electronics),
MCSE,
CCNA
Civil
Engineer
10
01.11.2004
6
Civil
Engineer
President –
Euro cot Spin
Apollo Tyres
Karam Chand
Thapar
(Africa)
Limited
Ashco, Inc.
J.B.Nayak &
Son’s
Assam
Company
India Limited
S P Chopra
and
Co.,
Chartered
Accountants
BTL
Investments
Limited
Proprietary
business
Era
Constructions
India Limited
Airforce
Naval
Housing
Board
None of the Directors and Key Management Personnel, except Ms. Navneet Chhabra and Mrs. Seema Narang
have family relation between them. As on September 06, 2005 all the employees named above are on the roll of
the Company as permanent employees.
Brief
Brief profile of key Management personnel
Mr. Ashok Bansal, CEO
He has been a veteran in the industry and has worked as President Euro cot Spin Limited; Vice President
Parasrampuria International; Manager Indo Thai Synthetics Limited, Thailand etc. He is a B.E. and has
experience of over 35 years. He has taken up the assignment at SRSEL recently. He has been instrumental in
tying up for new projects at various places through his initiatives. He would be a key person in the Company's
future endeavours.
Ms. Navneet
Navneet Chhabra, COO and Co. Secretary
She is Post Graduate in Commerce, the member of Institute of Company Secretaries of India and currently
pursuing law from Delhi University. She has joined the Company as Company Secretary and Sr. Manager
(Project) and within a short span of 1½ years got this position. She is the person responsible for complete
cinema operations of the Multiplex.
Mr. Rahul Das
78
Mr. Das is a B.A (Hons) Graduate in Economics. His experience spans over 20 years. He held independent
charge as profit center head in Karam Chand Thapar (Africa) Limited Prior to that he was the Vice-President
International Sourcing with Ashco, Inc. He has also been a partner in J.B. Nayak & Son’s and assistant manager
with the Assam Company India Ltd, Assam.
Mr. Arun Kumar Gupta, CFO
Mr. Gupta is a qualified Chartered Accountant from the Institute of Chartered Accountants of India. He has
varied experience in the field of Finance, Accounts and Taxation. He has been assigned the complete
responsibility of Accounts, Finance and Taxation Department.
Mrs. Seema Narang, CAO
Mrs. Narang has varied experience in accounts. She takes care of Internal Control and Audit System and was
completely involved in the feasibility study of the existing Project.
Mr. Narender Singh Vaid, Head (I. T.)
Mr. Vaid has done his B. E. (Electronics) from Aurangabad University. He is MicroSoft Support Engineer
(MCSE) and presently pursuing Cisco Certified Network Administrator (CCNA). Having an experience of more
than 9 years, he heads the I.T. Department and looks after all requirements be it software, hardware,
development of website etc.
Mr. D. P. Singh, Mall Manager (Technical)
Mr. D. P. Singh is a Civil Engineer from State Board of Technical Education Haryana. He has been with the
Project from the first day and has an experience of more than 18 years in the field of construction. After seeing
his hard work and zeal, he has been entrusted to take care of all electrical, air-conditioning and all related
activities.
Mr. Parvesh Kumar, Mall Manager (Maintenance) and Cinema Engineer
Mr. Parvesh is a qualified Civil Engineer from C. R. Institute of Engineering, Rohtak. He is with the Project
since its inception. Having an experience of more than 10 years, he is an expert in structures and finishing of the
buildings. He looks after the engineering matters of SRSM in particular the cinema operations.
Shareholding of key Management personnel
None of the Key Management Personnel hold any shares in the Company.
Changes of key Management personnel in the last one year
There is no change in the key management personnel otherwise than by way of retirement in the normal course
of service in the last one year prior to the date of filing the Draft Red Herring Prospectus with SEBI.
Compensation of key Management personnel
Currently, the Company does not have performance linked bonus or a profit sharing scheme for the employees.
The key Management personnel of the Company do not have any interest in the Company other than to the
extent of the remuneration o benefits to which they are entitled to as per their terms of appointment and
reimbursement of expenses incurred by them in the ordinary course of business.
Employees
The total manpower on the rolls of the Company is more than 80 as on the date of the Draft Red Herring
Prospectus. For entire manpower requirement, the Company banks mainly on manpower consultancy firms.
Disclosures Regarding Employees Stock Option Scheme / Employees Stock Purchase Scheme
Till date, the Company has not introduced any Employees Stock Option Scheme / Employees Stock Purchase
Scheme, as required by the Guidelines or Regulations of SEBI relating to Employee Stock Option Scheme and
Employee Stock Purchase Scheme.
Payment or Benefit to Officers of the Company
Except the payment of salaries and perquisites, the Company makes ex-gratia payments to its officers as and
when it deems fit.
79
PROMOTERS
1. Mr. Sunil Jindal
Mr. Sunil Jindal is the founder promoter of SRS Entertainment Limited. He is aged 28
years and is the Managing Director of the Company. He is a Law Graduate and has
over 5 years of experience in the business and financial activities. He has also
promoted Akriti Financial Services (P) Limited where he a director. He also serves as
a director of BTL Investments Limited and has been instrumental in the growth of its
business as well as diversified the business activities. He supervises the day-to-day
operations of SRSEL apart from the strategic planing for growth and expansion of the
Company.
Mr. Sunil Jindal’s personal details are as under:
Voter ID No.
N.A.
Driving License No.
3196/F/2005
2. Mr. Raju Bansal
Mr. Raju Bansal is the founder promoter of SRS Entertainment Limited. He is aged 28
years and is the Executive Director of the Company. He is a Commerce graduate and
has over 4 years of experience in the business of financial activities. Other than
SRSEL, he has also promoted Ferro Plast Limited. His active involvement and role in
conceptualisation and implementation of the SRS Multiplex has been critical to its
success.
Mr. Raju Bansal's personal details are as under:
Voter ID No.
HR/06/53/0140005
Driving License No.
3514/D/1995
Copy of the Permanent Account Number, Bank Account Number and passport of the above have been submitted
to the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.
Promoter Group
A.
Relatives of Promoters
The other individuals who form part of the Promoter Group of SRS Entertainment Limited are Mr. Lalit Bansal,
Mr. N. C. Bansal, Mr. Bishan Bansal, Mr. Suresh Bansal and Mrs. Sanjna Bansal. These individuals are not
holding any directorships in the Company and are not involved in the day-to-day management of the Company.
B.
Corporate Bodies
1. Bansla Finlease Limited
The company was incorporated on October 11, 1991 as Bansla Finlease (P) Limited and received a fresh
Certificate of Incorporation on February 20, 1996 subsequent upon change of name to Bansla Finlease Limited
on conversion to public limited company. The registration number of the company with ROC is 55-45921. The
company is engaged in the activity of financing of vehicles, consumer goods etc.
It is promoted by Mr. Sushil Singla, Mr. Rajesh Singla and Mr. Vinod Jindal. The Board of Directors of the
company comprises of Mr. Sushil Singla, Mr. Sanjay Singla, Mr. Praveen Singla, Mr. Rajesh Singla, Mr. Vinod
Jindal and Mr. Bishan Bansal.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Mr. Sushil Singla
Mr. Rajesh Singla
Mr. Vinod. Jindal
Relatives, Friends & Associates
No. of Shares
1,24,325
1,05,300
1,07,600
74,12,775
% of Shareholding
1.54
1.30
1.34
95.82
80
Total
80,81,800
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
2004200320022004-05
2003-04
2002-03
Income
242.71
167.54
77.60
Expenses
234.77
160.27
72.74
Profit/ (Loss) Before Tax (PBT)
7.95
7.26
4.86
Profit/ (Loss) after Tax (PAT)
4.38*
5.82
4.43
Equity Share Capital
808.18
700.00
662.35
Share Application Money
1.62
31.00
9.30
Reserve And Surplus
339.56
10.65
8.75
EPS
0.05
0.08
0.07
NAV
14.20
10.15
10.13
*The company earned higher PBT in F.Y2005 as compared to the previous year. However, the company
enjoyed lower depreciation benefit as per Income Tax Act as compared to previous years. Therefore, higher
provision for tax has been made in F.Y2005.
Particulars
2. BTL Commercial Limited
The company was originally incorporated on October 16, 2000 as Manu Commercial Limited and received
certificate of commencement of business on the same day. Thereafter, on November 14, 2003 name of the
company was changed to BTL Commercial Limited. Registration number of the company with ROC is 55107788. It trades in Tea under the brand name of “Rahee”. The primary business area of the company is
Haryana and Delhi.
It is promoted by Mr. Vinod Jindal and Mrs. Ritu Jindal. Its Board of Directors include Mr. Vinod Jindal, Mrs.
Ritu Jindal and Mrs. Shashi Jindal
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Sh. Vinod Jindal
Smt. Ritu Jindal
Relatives, Friends & Associates
Total
No. of Shares
% of Shareholding
69,050
1,31,600
12,99,350
15,00,000
4.60
8.78
86.62
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
Income
Expenses
Profit/ (Loss) Before Tax (PBT)
Profit/ (Loss) after Tax (PAT)
Equity Share Capital
Share Application Money
Reserve & Surplus
EPS
NAV
20042004-05
90.74
89.38
1.37
1.03
150.00
41.46
185.09
0.07
22.11
20032003-04
31.80
30.91
0.89
0.88
117.24
0.00
53.98
0.08
14.26
(Rupees in Lacs)
20022002-03
32.77
31.92
0.85
0.04
60.00
6.84
0.79
0.01
9.36
3. BTL Impex (India) Limited
BTL Impex (India) Limited was originally incorporated on February 27, 1997 as G.S.J.P. Leasing & Credits
Limited which received Certificate of Commencement of business on the same day. Name of the company was
subsequently changed to BTL Home Finvest Limited and finally to BTL Impex (India) Limited. The registration
81
number of the company with ROC is 55-85457. The company has the authorised service station and sub
dealership of TVS motors and direct selling agents of various finance companies to finance of vehicles.
The company is promoted by Mrs. Ritu Jindal and Mr. Rishi Prakash Chikkara. Its Board of Directors are Mrs.
Ritu Jindal, Mr. Rishi Prakash and Mrs. Sangeeta Kapoor.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
No. of Shares
% of Shareholding
Promoters
Mrs. Ritu Jindal
68,300
4.91
Mr. Rishi Prakash Chikkara
32,400
2.33
Relatives, Friends & Associates
12,89,600
92.76
Total
13,90,300
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
2004200320022004-05
2003-04
2002-03
Income
136.00
23.24
5.02
Expenditure
130.60
22.50
4.91
PBT
1.46
0.75
0.10
PAT
(0.35)*
0.69
0.06
Share Capital
139.03
116.12
50.00
Share Application Money
3.30
5.80
0.00
Reserves & Surplus
84.35
16.89
0.08
EPS
0.00
0.06
0.01
NAV
15.69
10.96
9.99
* The company has made provission for deffered tax liability to the tune of Rs.1,70,200 for the prior years in the
current year.
Particulars
4. BTL Industries Limited
The company was originally incorporated on January 22, 1997 as Brightways Trade-Finlease Limited and
received certificate of commencement of business on February 03, 1997. Name of the company was changed to
BTL Industries Limited on January 13, 1998. The registration number of the company with ROC is 55-84630.
The company is doing business in Haryana & Delhi with the brand name of “Rahee”. The products are refined
oil, mustered oil and other kiryana items
The company is promoted by Mr. Girraj Prasad Jindal and Mr. Karamvir Singh and its Board of Directors
comprises of Mr. Girraj Prasad Jindal, Mr. Karamvir Singh and Mr. Khem Chand.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters:
Sh. Girraj Prasad Jindal
Sh. Karamvir Singh
Relatives, Friends & Associates
Total
No. of Shares
% of Shareholding
1,28,300
1,14,600
13,19,275
15,62,175
8.21
7.34
84.45
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
Income
Expenses
20042004-05
418.82
412.71
(Rupees in Lacs)
2003
200303-04
53.17
47.28
20022002-03
53.42
51.39
82
Profit/ (Loss) Before Tax (PBT)
6.11
5.89
2.03
Profit/ (Loss) after Tax (PAT)
3.86*
5.42
1.86
Equity Share Capital
156.22
111.79
95.57
Share Application Money
0.00
0.02
9.20
Reserve & Surplus
196.69
63.95
11.54
EPS
0.25
0.48
0.19
NAV
22.59
15.72
11.21
*The company earned higher PBT in F.Y2005 as compared to the previous year. However, the company
enjoyed lower depreciation benefit as per Income Tax Act as compared to previous years. Therefore, higher
provision for tax has been made in F.Y2005.
5. BTL Investments Limited
The company was originally incorporated on May 19, 1995 as RRA Capital Services (P) Limited. Subsequently,
changed its name to RRA Capital Services Limited upon conversion to public company limited. Finally its name
was changed to BTL Investments Limited on September 05, 1997. The registration number of the company with
ROC is 55-68803. The company has been awarded ISO 9001:2000 certificate for its qualitative services. The
company is engaged in the activity of financing of vehicles, consumer goods etc..
It is promoterd by Mr. Naresh Goel, Mr. Nanak Chand Tayal and Mr. Dinesh Kumar Goel. Its Board of
Directors comprises of:
1.
Mr. Naresh Goel
2.
Ms. Manju Rani Jain
3.
Mr. Sunil Jindal
4.
Mr. Nanak Chand Tayal
5.
Mr. Dinesh Kumar Goel
6.
Mr. Vipin Nalwa
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Naresh Goel
Nanak Chand Tayal
Dinesh Kumar Goel
Relatives, Friends & Associates
Total
No. of Sh
Shares
ares
1,14,300
1,03,400
1,14,700
72,47,475
75,79,875
% of Shareholding
1.51
1.36
1.52
95.61
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
2004200320022004-05
2003-04
2002-03
Income
389.75
379.78
150.19
Expenses
383.95
374.73
143.19
Profit/ (Loss) Before Tax (PBT)
5.80
5.05
7.01
Profit/ (Loss) after Tax (PAT)
3.41*
4.49
6.45
Equity Share Capital
757.99
700.00
700.00
Share Apllication Money
31.22
0.00
29.95
Reserve And Surplus
188.93
11.56
11.98
EPS
0.04
0.06
0.09
NAV
12.49
10.17
10.17
*The company earned higher PBT in F.Y2005 as compared to the previous year. However, the company
enjoyed lower depreciation benefit as per Income Tax Act as compared to previous years. Therefore, higher
provision for tax has been made in F.Y2005.
Particulars
6. BTL Sales Limited
The company was incorporated on November 01, 1990 as Pappu Investment Company (India) Private Limited.
On June 11, 1996 it was converted to a public limited company and nme changed to Pappu Investment
83
Company (India) Limited. Subsequently, on November 18, 2003 its name was changed from Gomti Manutrade
Limited to BTL Sales Limited and the company received a fresh Cetificate of Incorporation. The registration
number of the company with ROC is 55-41949. The company deals in manufacturing and trading of milk, edible
oil, Vanspati Ghee, and other consumable items.
Promoters of the company are Mr. Dheeraj Gupta and Mrs. Sanjana Bansal. Its Board of Directors are Mr.
Dheeraj Gupta, Mr. Nitin Kumar and Mrs. Sanjan Bansal.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Mr. Dheeraj Gupta
Mrs. Sanjna Bansal
Relatives, Friends & Associates
Total
No. of Shares
% of Shareholding
80,500
80,500
10,16,720
11,77,720
6.84
6.84
86.32
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
20042004-05
180.56
179.55
1.01
0.60
117.77
0.00
203.96
0.05
27.24
Income
Expenses
Profit/ (Loss) Before Tax (PBT)
Profit/ (Loss) after Tax (PAT)
Equity Share Capital
Share Application Money
Reserve & Surplus
EPS
NAV
20032003-04
1.66
1.64
0.02
0.01
74.25
43.65
64.32
0.00
18.57
(Rupees in Lacs)
20022002-2003
0.53
0.46
0.07
0.04
10.00
12.98
0.05
0.04
9.28
7. Madhavtech India (P) Limited
The company was incorporated on February 22, 2000. The registration of the company with ROC is 55-103892.
The company deals in manufacturing and trading of ferrous and nonferrous plastic mould components.
Promoters of the company are Mr. Vinod Gupta, Mr. Rakesh Gupta, Mr. Ashish Gupta and Mr. Rahul Gupta.
It’s Board of Directors comprrise of Mr. Vinod Gupta and Mr. Ashish Gupta.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters Share Holding
Mr. Vinod Gupta
Mr. Rakesh Gupta
Mr. Ashish Gupta
Mr. Rahul Gupta
Total
No. of Shares
% of Shareholding
100
100
2,26,250
2,26,500
4,52,950
0.025
0.025
49.95
50.00
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
Income
Expenses
20042004-05
2.65
0.24
20032003-04
0.71
0.29
(Rupees in Lacs)
20022002-03
0.35
0.38
84
Profit/ (Loss) Before Tax (PBT)
2.41
0.42
(0.03)
Profit/ (Loss) after Tax (PAT)
2.28
0.31
(0.03)*
Equity Share Capital
45.29
37.55
31.17
Share Application Money
0.00
0.00
0.42
Reserve & Surplus
78.61
53.33
34.20
EPS
0.50
0.08
0.00
NAV
27.29
24.10
20.82
*In F.Y 2003, the company has suffered a loss of approximately Rs.0.15 lacs on sale of quoted investment.
8. Neelabh Engineers (P) Limited
The company was incorporated on December 22, 1996. Its registration number with ROC is 55-33403. The
company deals in manufacturing of automobile parts.
The company is promotered by Mr. Vinod Gupta, Mrs. Monica Gupta and Vinod Kumar HUF. The Board of
Directors of the company comprises of Mr. Vinod Gupta and Mrs. Monica Gupta.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Mr. Vinod Kumar
Mrs. Monica Gupta
Vinod Kumar HUF
Total
No. of Shares
% of Shareholding
1,41,100
100
39,000
1,80,200
78.30
0.06
21.64
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
Income
Expenses
Profit/ (Loss) Before Tax (PBT)
Profit/ (Loss) after Tax (PAT)
Equity Share Capital
Share Application Money
Reserve & Surplus
EPS
NAV
20042004-05
0.00
0.00
0.00
0.00
18.02
1.85
26.85
0.00
24.41
20032003-04
0.00
0.00
0.00
0.00
18.02
1.70
26.85
0.00
24.46
(Rupees in Lacs)
2002
200202-03
0.00
0.00
0.00
0.00
17.72
1.70
26.40
0.00
24.66
9. North Delhi Credit & Investments Limited
The company was incorporated on December 02, 1993. The registration number of the company with ROC is
55-56269. The company is engaged in the activity of money lending/financing and as an investment company
by acquiring the shares in the other companies.
It is promoted by Mr. Raju Gupta and Mr. Dinesh Khatri. Borad of Directors of the company are Mr. Raju
Gupta and Mr. Dinesh Khatri
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing this Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Sh. Raju Gupta
Sh. Dinesh Khatri
Relatives, Friends & Associates
No. of Shares
89,400
1,03,200
13,43.645
% of Shareholding
6.72
5.82
87.46
85
Total
15,36,245
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
2004200320022004-2005
2003-2004
2002-2003
Income
31.42
40.82
30.87
Expenses
30.11
39.59
29.73
Profit/ (Loss) Before Tax (PBT)
1.31
1.23
1.14
Profit/ (Loss) after Tax (PAT)
0.85*
1.04
0.97
Share Capital
153.62
128.04
108.41
Share Application Money
0.00
0.00
24.50
Reserves & Surplus
138.65
61.72
1.80
EPS
0.06
0.08
0.09
NAV
19.03
14.82
10.17
*The company earned higher PBT in F.Y2005 as compared to the previous year. However, the company
enjoyed lower depreciation benefit as per Income Tax Act as compared to previous years. Therefore, higher
provision for tax has been made in F.Y2005.
Particulars
10. Parvati Finlease Limited
The company was incorporated on May 23, 1996. The registration number of the company with ROC is 5579137. The company is engaged in the activity of money lending/financing and as an investment company by
acquiring the shares in the other companies.
Promotes of the company are Mr. Ashwani Taneja and Mrs. Meena Aggarwal. Its Board of Directors Mr.
Ashwani Taneja, Mrs. Meena Aggarwal and Mr. Ritesh Aggarwal.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing this Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Mr. Ashwani Taneja
Mrs. Meena Aggarwal
Relatives, Friends & Associates
Total
No. of Shares
% of Shareholding
30,010
2,50,010
1,29,150
4,09,170
7.34
61.10
31.56
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
Particulars
Income
Expenses
Profit/ (Loss) Before Tax (PBT)
Profit/ (Loss) after Tax (PAT)
Share Capital
Share Application Money
Reserves & Surplus
EPS
NAV
20042004-2005
3.68
3.35
0.33
0.21
40.92
51.05
0.63
0.05
10.15
20032003-2004
2.43
2.22
0.21
0.14
40.92
28.80
0.42
0.03
10.10
(Rupees in Lacs)
20022002-2003
1.93
1.73
0.21
0.13
40.92
13.80
0.28
0.03
10.05
There is no change in the management in any of the above Promoter Group companies during the last three
financial years.
The Permanent Account Numbers, Bank Account Numbers, the Company Registration Numbers and the
addresses of the Registrars of Companies where the Promoter Group companies are registered have been
submitted to the National Stock Exchange of India Limited and The Bombay Stock Exchange Limited.
86
Common Pursuits
There are no common pursuits in the business of our Company and our Promoter Group companies.
Interest of Promoters
The Promoters do not have any interest in the business of SRSEL, except to the extent of investments made by
them and their Promoter Group / investment companies in SRSEL and earning returns thereon. For details of the
salary and remuneration of the Managing Director, please refer to the section titled “Terms of Appointment and
Remuneration of Directors” on page no. 74 of the Draft Red Herring Prospectus.
The Company has entered into various agreements/transactions with its Promoter Group companies. For further
details, please refer to “Risk Factors” on page no. viii of the Draft Red Herring Prospectus and “Related Party
Transactions” in the para below.
Payment of benefit to Promoters of the Issuer Company
No other payment or benefit is given to our Promoters save in their capacity as shareholders or remuneration as
Executive Directors.
87
GROUP COMPANIES
1.
Akriti Financial Services (P) Limited
The company was incorporated on May 23, 1996 as Akriti Financial Services Private Limited The registration
number of the company with ROC is 55-79126. The company is engaged in the activity of financing of articles
or commodities of all and every kind of description by way of hire purchase, installment purchase or deferred
payment or similar transaction.
It is promoted by Mr. Raj Kumar Aggarwal, and Mr. Sunil Jindal. The Board of Directors of the company
comprises of Mr. Raj Kumar Aggarwal, Mrs. Shakuntla Devi, Mr. Sunil Jindal and Mr. Ritesh Kumar
Aggarwal.
Shareholding Pattern:
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of Shareholder
Promoters
Mr. Raj Kumar Aggarwal
Mr. Sunil Jindal
Sub-total
Non Promoters
Total
No. of Shares
10
40,000
40,010
11,86,710
12,26,720
% of Shareholding
-3.26
3.26
96.74
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
20042004-05
20032003-04
20022002-03
Income
9.36
2.35
1.13
Expenses
7.87
2.04
1.45
Profit/ (Loss) Before Tax (PBT)
1.49
0.31
(0.32)*
Profit/ (Loss) after Tax (PAT)
1.37
0.28
(0.32)
Equity Share Capital
122.67
99.42
84.42
Share Application Money
38.30
67.28
58.38
Reserve And Surplus
88.50
65.25
50.25
EPS
0.11
0.03
--NAV
249.30
232.13
192.58
* The company sustained loss in the F.Y. 2003 because it did not receive dividend income on its investments in
unquoted securities.
Particulars
2.
Ferro Plast Limited
The company was incorporated on December 04, 1973 as Ferro Plast Private Limited and received a fresh
Certificate of Incorporation on April 8, 1996 subsequent upon change of name to Ferro Plast Limited on
conversion to public limited company. The registration number of the company with ROC is 55-6980. The
company is engaged in the business as factors, financers, guarantors, finance brokers and agent to do business of
financing by way of Hire purchase, leasing, installment purchase or similar transaction.
It is promoted by Mr. Rajeev Vashisht, Mrs. Annapurna Gupta and Mr. Raju Bansal. The Board of Directors of
the company comprises of Mr. Rajeev Vashisht, Mrs. Annapurna Gupta, Mr. Raju Bansla and Mr. Sunil
Aggarwal.
The shareholding pattern of this company as on the date of filing the Red Herring Prospectus with RoC is as
under:
Name of
of Shareholder
Promoters
Mr Rajeev Vashisht
No. of Shares
% of Shareholding
435
0.36
88
Mrs. Annapurna Gupta
Mr. Sunil Aggarwal
Mr. Raju Bansal
Sub-total
Non Promoters
Total
25,000
310
2,255
28,000
92,275
1,20,275
20.79
0.26
1.87
23.28
73.72
100.00
100.00
Financial Performance:
Financial highlights for the last three years is as follows:
(Rupees in Lacs)
200420032004-05
2003-04
Income
8.39
3.43
Expenses
7.78
3.33
Profit/ (Loss) Before Tax (PBT)
0.61
0.10
Profit/ (Loss) after Tax (PAT)
0.42
0.09
Equity Share Capital
120.28
116.53
Share Application Money
46.54
12.38
Reserve And Surplus
27.25
23.50
EPS
0.35
0.08
NAV
194.07
152.26
* The negative reserves and surplus is due to accumulated loss of prior years
Particulars
20022002-03
3.12
2.95
0.17
0.16
93.03
35.60
(0.57)*
0.17
127.76
Related Party Transactions
For related party transactions kindly refer to the section titled ‘Financial Information - Related Party Disclosure"
on page no. 103 of the Draft Red Herring Prospectus.
Currency of presentation
For currency of presentation used in the Draft Red Herring Prospectus kindly refer to the section titled
‘Currency of Presentation’ on page no. vi of the Draft Red Herring Prospectus.
Dividend Policy
The declaration and payment of dividends will be recommended by our Board of Directors and our
shareholders, in their discretion, and will depend on a number of factors, including but not limited to our
earnings, capital requirements and overall financial condition. The Company has not declared or paid dividend
since its inception since the Company began commercial operations in November 2004.
89
FINANCIAL INFORMATION
REPORT OF THE AUDITORS ON FINANCIAL INFORMATION
To
The Board of Directors
SRS Entertainment Limited,
Limited,
(Formerly Known as SRS Commercial Co. Limited)
Delhi
Dear Sir(s),
We have examined and found correct the Audited Accounts of SRS Entertainment Limited for the past five
financial years/period ended 31/03/2001, 2002, 2003, 2004, 2005 and for the quarter ended on 30th June 2005
being the last date upto which the accounts of the Company have been made up and audited by us. Subject to
paragraph 3(f) of Auditors Report and Notes on Accounts in Schedule IV of the said audited financial
statements, at the date of signing this report, we are not aware of any material adjustment which would affect the
result shown by these accounts in accordance with the requirement of Part II of Schedule II to the Companies
Act, 1956.
In accordance with the requirements of Paragraph B (1) of Part II of Schedule II to the Companies Act 1956 (the
Act), the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (SEBI
Guidelines) and our terms of reference with the Company dated 22nd January, 2005 requesting us to make this
report for the purpose of the Offering Memorandum as aforesaid, we report that:
The restated profits of the Company for the financial years/period ended 31stMarch 2001, 2002, 2003, 2004,
2005 and quarter ended on 30.06.2005 are as set out in Annexure I to this report. These profits have been arrived
at after charging all expenses including depreciation and after making such adjustment and regroupings as in our
opinion are appropriate and more fully described in the Significant Accounting Policies and Notes appearing in
Annexure III & IV respectively to this report.
The restated assets and liabilities of the Company as at 31st March, 2001, 2002, 2003, 2004, 2005 and quarter
ended on 30.06.2005 are as set out in Annexure II to this report after making such adjustments and regroupings
as in our opinion are appropriate and more fully described in the Significant Accounting Policies and Notes
appearing in AnnexureIII & IV respectively to this report.
The restated cash flow statement of the Company as at 31stMarch, 2001, 2002, 2003, 2004, 2005 quarter ended
on 30.06.2005 and are as shown in Annexure V to this report.
The company has not paid any dividend during the years/period ended 31st March , 2001, 2002, 2003, 2004,
2005 and quarter ended on 30.06.2005.
We have examined the following financial information relating to the Company and as approved by the Board
of Directors for the purpose of inclusion in the Offer document:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Accounting Ratios as appearing in Annexure VI to this report.
Capitalisation Statement as at 31st March, 2005 and as at 30.06.2005 as appearing in Annexure VII to this
report
Statement of tax shelters as appearing in Annexure VIII to this report.
Details of other income as appearing in Annexure IX to this report
Details of sundry debtors as appearing in Annexure X to this report
Details of loans and advances as appearing in Annexure XI to this report
Details of unsecured loans as appearing in Annexure XII to this report
Details of secured loans as appearing in Annexure XIII to this report.
There are no related party disclosures.
In our opinion the above financial information of the Company read with Significant Accounting Policies and
notes on account attached in Annexure III & IV to this report, after making adjustments and re-grouping as
considered appropriate has been prepared in accordance with Part II of Schedule II of the Act and the SEBI
Guidelines.
90
This report is intended solely for your information and for inclusion in the Offer document in connection with
the specific Public Offer of equity shares of the Company and is not to be used, referred to or distributed for any
other purpose without our written consent.
Thanking you,
For T.K. Gupta & Associates
Chartered Accountants
Membership No. 82235
Place: New Delhi
Date: September 06, 2005
91
ANNEXURE – I
STATEMENT OF PROFITS AND LOSSES
Particulars
Income
A) Sales :
a) Operational Revenue
Company
b) Products traded by the
Company
SubSub-Total (a) + (b)
(c ) Other Operational Income
(d) Other Income
(e) Interest
Total (A)
Expenditure
Work Cost/Operational Exp.
Staff Costs
PVR Share
Administration Expenses
Selling & Other Expenses/
Sales Promotion
Interest
Fringe Benefit Tax
Depreciation
Preliniminery Expenses W/off
Total (B)
Net Profit before tax
Taxation
Deferred Tax
Profit After Tax
Profit B/f for Last Years
Profit Transferred to Reserve &
Surplus
Qtr.
Ended on
30.06.20
05
20042004-05
20032003-04
20022002-03
(Rupees in Lacs)
2001--02
20002001
2000-01
369.20
453.17
0.00
0.00
0.00
0.00
34.88
35.62
0.00
0.00
46.30
0.00
404.08
185.70
11.80
0.00
601.58
488.79
275.10
1.47
0.00
765.36
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1.13
0.00
1.13
46.30
0.00
0.00
1.97
48.27
0.00
0.00
0.29
0.39
0.68
93.68
27.17
6.57
116.20
14.56
245.63
33.95
6.20
87.26
15.14
0.00
0.00
0.00
0.00
0.00
0.00
0.15
0.00
0.00
0.00
43.80
0.00
0.00
0.63
0.00
0.00
0.00
0.00
0.33
0.00
51.27
0.50
29.70
0.46
340.11
72.59
0.00
45.00
1.83
507.60
0.00
0.00
0.00
0.00
0.00
0.89
0.00
0.00
0.03
1.07
3.81
0.00
0.00
0.03
48.27
0.30
0.00
0.00
0.03
0.66
261.47
22.00
8.20
231.27
219.14
450.41
450.41
257.76
20.21
18.46
219.09
0.05
219.14
0.00
0.00
0.00
0.00
0.05
0.05
0.06
0.02
0.00
0.04
0.01
0.05
0.00
0.00
0.00
0.00
0.01
0.01
0.02
0.01
0.00
0.01
0.00
0.01
92
ANNEXURE – II
STATEMENT OF ASSETS AND LIABILITIES
Particulars
A.
B.
Qtr.
Ended on
30.06.200
5
Fixed Assets :
Gross Block
Less Depreciation
Net Block
Add :- Capital Work in
Progress
Less : Revaluation
Reserve
Net Block after
adjustment
for Revaluation Reserve
SubSub-Total
Investment
SubSub-Total
C.
D.
E.
F.
Current Assets, Loans
and
Advances :
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Other Current Assets
SubSub-Total
Liabilities and
Provisions :
Secured Loans
Unsecured Loans
Current Liabilities and
Provisions
SubSub-Total
Networth
Represented by
1. Share Capital
2. Reserves
Less Revaluation
Reserve
Reserves (Net of
Revaluation Reserves)
Less Preliminary
Expenses yet not w/off
Networth
20042004-05
20032003-04
20022002-03
(Rupees in Lacs)
2001--02
20002001
2000-01
4099.89
74.70
4025.19
603.11
4088.99
45.00
4043.99
568.64
0.00
0.00
0.00
2337.30
0.00
0.00
0.00
982.36
0.00
0.00
0.00
126.89
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4628.30
4612.63
2337.30
982.36
126.89
0.00
4628.30
4612.63
2337.30
982.36
126.89
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0
0.0
37.43
37.43
6.00
6.00
1.47
399.42
149.32
288.34
0.00
838.55
1.71
198.67
131.78
71.06
0.00
403.22
0.00
0.00
77.96
0.23
0.00
78.19
214.62
0.00
11.48
0.12
0.00
226.22
0.00
21.44
14.96
0.00
0.08
36.48
0.00
2.40
8.90
0.00
0.08
11.38
1530.00
1111.21
189.15
1368.85
1153.93
196.75
999.62
94.34
71.68
610.96
32.76
23.35
9.89
35.35
55.76
9.89
2.70
0.31
2830.36
2636.49
2719.53
2296.32
1165.84
1249.84
667.30
541.51
101.00
99.80
12.90
4.48
1848.04
804.26
0.00
1739.60
572.98
0.00
1250.00
0.04
0.00
541.70
0.04
0.00
100.07
0.00
0.00
5.07
0.01
0.00
804.26
572.98
0.04
0.04
100.07
5.08
15.81
16.27
0.20
0.23
0.27
0.30
2636.49
2296.32
1249.84
541.51
99.80
4.48
93
ANNEXURE - III
SIGNIFICANT ACCOUNTING POLICIES:
Statement of Significant Accounting Polices
1. Basis of accounting: The accounts of company are prepared under historical cost convention and in
accordance with applicable accounting standards except where otherwise stated. Accounting policies not
specifically referred to are consistent with generally accepted accounting practices. Revenue / Income and
Costs and Expenditure are generally accounted on accrual basis, as they are earned or incurred.
2.
Fixed Assets and Depreciation:
All the fixed assets purchased are stated at cost of acquisition except in case of those assets which are
revalued.
3.
Depreciation: Depreciation of other assets is provided on "Straight line Method”, at the rates prescribed by
Schedule XIV to the Companies Act, 1956.
4.
Sundry Debtors/Loans and Advances: are stated net of provision for identified doubtful debts/advances.
5.
Valuation of work in progress: The work in progress has been determined by the Management at the
estimated realizable cost.
6.
Revenue Recognition: In respect of Construction contracts, revenue is recognised on Percentage completion
method based on the Bills submitted, certified and sanctioned by the appropriate authorities. The relevant
cost is recognized in accounts in the year of recognition of the revenue. The total costs of contract are
estimated, based on technical and other estimates Revenue from theater business is recognised on the basis
of tickets sold for the period under accounting and revenue from candy bar is recognised at the time of
factual sale at the counter. Revenue from other services is recognized on due basis which is in terms of
accounting standard issued by the ICAI on Revenue Recognition. The Non Refundable Life membership
fees of the club member is treated as revenue in nature and revenue recognized on mercantile basis.
7.
Borrowing cost: Borrowing cost is accounted on accrual basis.
8.
Contract Receipts - Joint venture: Proportionate Consolidation method of accounting and reporting is
followed in respect of Joint venture entered into by the Company. The Income from such joint venture is
recognised on the basis of Bills submitted, certified and sanctioned by the appropriate authorities. The
actual expenses for such Project in Joint Venture are accounted on the basis of the Profit sharing ratio.
9.
Earning Per Share: Earning per Share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares outstanding during the
period.
10. Taxation: Provision for Income tax comprises of current tax and deferred tax charge or release. Deferred tax
is recognised, subject to consideration of prudence, on timing differences, being difference between taxable
and accounting income/expenditure that originate in one period and are capable of reversal in one or more
subsequent period(s). Deferred tax assets are not recognised unless there is "virtual certainty" that sufficient
future taxable income will be available against which such deferred tax assets will be realised
11. Contingencies: Liabilities which are material and whose future outcome cannot be ascertained with
reasonable certainty are treated as contingent and disclosed by way of notes to the accounts.
12. Retirement Benefits:
The retirement benefit in the form of Provident Fund and Pension Schemes, whether in pursuance of any
law or otherwise, is accounted on accrual basis and charged to the profit and loss account of the year.
94
ANNEXURE IV
Notes on Accounts:
1.
Contingent Liabilities not provided for:
The company has no outstanding contingent liabilities since its inception up to last audited period ending
March 2005.
2.
Other additional quantitative information pursuant to para 3, 4-C, and 4-D of part - II of Schedule VI of the
Companies Act, 1956 is not ascertainable and amenable and hence not included in the Report.
3.
CIF Value of imports
The company has imported capital goods amounting to Rs. NIL during the qtr. ended on 30th June 2005 and
Rs. 110.65 Lacs in the F.Y2004-05. There are no other income/expenses in foreign currency.
4.
Directors remuneration:
During the quarter ended on 30th June 2005 directors received the remuneration of Rs. 3.00 Lacs and NIL
during the previous year 2004-05.
5.
Auditors remuneration
(Rupees in Lacs)
Qtr. Ended on
Particulars
2004200320022004-05
2003-04
2002-03
30.06.2005
Audit fees
NIL
1.03
0.16
0.16
The auditors remuneration has been approved by the shareholders.
20012001-02
0.05
20002000-01
0.01
6.
Income tax assessment has been completed upto the assessment year F.Y. 2003-04
7.
The Deferred Tax liability comprises of tax effect of timing differences on account of:
Deferred tax liability has arisen during the quarter ended on 30th June 2005 Rs.8.19 Lacs and in the previous
F.Y. 2004-05 amounting to Rs.18.46 Lacs on account of timing difference in the depreciation (as per
Balance Sheet). There are no other deferred tax liabilities of deferred tax assets.
8.
As the company’s business activity comprises of different segments of revenue that arises from the activity
of multiplex viz. theater revenue, lease rent, Advertisement Space Selling/Space Selling and Parking
revenue and club member ship fees. During the quarter ended on 30th June 2005 the company has accepted
the application of 478 persons.
9.
The balance on all personal accounts is subject to confirmation by the parties and reconciliation, if any.
10. Previous year figures have been shown regrouped / rearranged, where considered necessary.
11. There are no amounts outstanding in respect of unpaid dividend / fixed deposits for more than seven years
to be transferred to Investors Education and Protection Fund.
95
ANNEXURE – V
CASH FLOW STATEMENT
Particulars
A
B
C
Cash Flow arising from
Operating Activities
Net profit before taxation
Add back
Depreciation
Interest & Financial
Charges
Deduct
Interest income
Preliminary Expenses
Operating Profit before
Working Capital changes
Add
(Increase)/Decrease in
Trade Debtors
(Increase)/Decrease in
Inventories
(Increase)/Decrease in
Loans & Advances and
others
Deduct
(Increase)/Decrease in
Trade Payable
Cash generated from
operations
Adjustment for
Interest & Financial
Charges paid
Income Tax paid net of
refund
Net cash in flow from
Operating activities ‘A’
Cash flow from investing
activities
Outflow
Investment in Fixed
Assets(including CWIP)
Purchase of Investment
Other Expenditure
Inflow
Interest Income
Sale of Investment
Net cash flow from
Investing Activities (B)
Cash Flow from Financing
Activities
Inflow
Inflow
Increase in Share capital
Share Premium
Increase in Borrowing- Net
Qtr.
Ended on
30.06.20
05
2005
2004
(Rupees in Lacs)
2001
2002
2003
262.43
257.77
0.00
0.09
0.04
0.04
29.70
51.27
45.00
0.00
0.00
0.00
0.89
0.00
1.42
0.00
0.41
72.59
7.14
0.00
336.26
0.00
1.83
377.19
0.00
0.00
0.00
0.00
0.03
0.95
1.97
0.03
(0.54)
0.38
0.03
0.04
(200.75)
(198.67)
0.00
21.44
(19.04)
(2.36)
0.24
(1.71)
214.61
(214.61)
0.00
0.00
(214.77)
(70.83)
(0.12)
(0.02)
0.22
(0.28)
(38.30)
86.38
48.33
(32.40)
55.75
0.01
(117.32)
201.21
263.06
(224.64)
36.39
(2.59)
51.27
0.00
0.89
1.42
0.41
2.50
72.59
8.85
0.00
0.02
0.01
0.01
(171.09)
119.77
263.06
(225.55)
34.96
(3.01)
(45.37)
(2320.32)
(1354.94)
(855.47)
(126.89)
0.00
0.00
0.00
0.00
(17.89)
0.00
(0.20)
0.00
0.00
(31.43)
0.00
(6.00)
(0.33)
7.14
0.00
(38.23)
0.00
0.00
(2338.21)
0.00
0.00
(1355.14)
0.00
37.43
(818.04)
1.97
0.00
(156.35)
0.38
0.00
(5.95)
108.44
0.00
161.15
489.60
353.85
369.22
708.30
0.00
388.66
441.64
0.00
601.07
95.00
0.00
0.00
5.07
0.00
9.89
96
Misc. Income (Exchange
Rates)
Increase (Decrease)
Unsecured Loans
Net Cash in Financing
Activities (c )
Net Increase/(Decrease) in
cash and cash equivalents
Cash and cash equivalent
(opening balances)
Cash and cash equivalents
(closing balances)
0.00
0.00
0.00
0.00
0.00
0.00
(42.73)
1059.60
61.58
(2.59)
32.65
2.70
226.86
2272.27
1158.54
1040.12
127.65
17.66
17.54
53.83
66.46
(3.47)
6.26
8.70
131.78
77.95
11.49
14.96
8.70
0.00
149.32
131.78
77.95
11.49
14.96
8.70
ANNEXURE – VI
STATEMENT OF ACCOUNTING RATIOS
For the Financial Year ended March 31 Qtr. Ended
on
30.06.2005
Adjusted Net Profit/(Loss) A
231.27
Weighted Average Number of Equity
170.38
Shares outstanding during the period
/year (B)
No. of Outstanding at the end of
170.38
year/period ©
Net Worth (D)
2636.49
EPS (A/B)=E
1.35
EPS Basic (Rs Per Share)
5.43
(Annualised)=E*4 ( For P/Y
E*365/140)
Return on Net worth (RONW)(%)
8.77%
Return on Net worth (RONW)(%)
35.08%
(Annualised) = E*4 ( For P/Y
E*365/140)
Net Asset value per Share (NAV) –Rs
15.47
2005
2004
2003
2002
2001
219.09
128.84
0.00
84.48
0.04
26.07
0.00
0.28
0.01
0.01
170.39
125.00
54.17
9.30
0.01
2296.32
1.70
4.43
1249.84
0.00
0.00
541.51
0.00
0.00
99.80
0.00
0.00
4.48
0.00
0.00
9.54%
25.44%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
13.50
10.00
10.00
10.00
8.78
97
ANNEXURE – VII
CAPITALISATION STATEMENT
Particulars
Short Term Debts
Unsecured Loans
Total Short Term Debt (A)
Long Term Debt
Secured Loans
Total Long Term Debt (B)
Qtr. Ended on
30.06.2005
31/3/2005
(Rupees in Lacs)
31/03/2004
1111.21
1111.21
1153.93
1153.93
94.34
94.34
1530.00
1530.00
1368.85
1368.85
999.62
999.62
Shareholders funds
Share Capital
1703.85
1703.85
Share Application Money
144.19
35.75
Share Premium
353.85
353.85
Reserve & Surplus
450.41
219.14
Less:- Misc. Exp. Not yet w/off
(15.81)
(16.27)
Total shareholders fund (C)
2636.49
2296.32
Long term Debt/Equity Ratio (A/C)
0.58:1
0.59:1
Post issue capitalization cannot be determined till the completion of book building process.
1250.00
0.00
0.00
0.05
(0.20)
1249.85
0.80:1
98
ANNEXURE
ANNEXURE – VIII
TAX SHELTER STATEMENT
Particulars
Tax Rate (including
Surcharge & Cess)
Profit as per Profit & Loss
Account
Tax at Notional Rate
Adjustments
Difference between Tax
depreciation and Book
Depreciation
Net Adjustments
Tax Saving thereon (As per
Balance Sheet)
Tax as per MAT (As per
Balance Sheet)
Tax Provided in the books
Qtr.
Ended on
30.06.200
5
33.66%
20042004-05
20032003-04
20022002-03
(Rupees in Lacs)
200120002001-02
2000-01
36.59%
36.59%
35.70%
35.70%
39.55%
261.47
257.77
0.00
0.06
0.00
0.01
88.01
94.32
0.00
0.02
0.00
0.00
97.25
235.48
0.00
0.00
0.00
0.00
97.25
32.73
235.48
86.17
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
22.00
20.21
0.00
0.01
0.00
0.01
22.00
20.21
0.00
0.02
0.01
0.01
ANNEXURE – IX
DETAILS OF OTHER INCOME
Particulars
Particulars
Misc. Display Charges
Misc. Trade Receipts
Club Registration Fees
Interest Received
Total
Qtr. Ended on
30.06.2005
0.78
0.08
3.80
7.14
11.80
20042004-05
1.47
0.00
0.00
0.00
1.47
20032003-04
0.00
0.00
0.00
0.00
0.00
20022002-03
0.00
1.13
0.00
0.00
1.13
(Rupees in Lacs)
20012001-02
20002000-01
0.00
0.00
0.00
0.00
0.00
0.00
0.29
0.00
0.00
0.29
99
DETAILS OF INVESTMENT
A. Unquoted Shares
Particulars
(a) North Delhi Credit &
Investment Limited
(b) BTL Home Finvest Limited
(c) BTL Investments Limited
(d) J.D. Sons Steel (P) Limited
(e) Rajat Fincap (P) Limited
Total
(Rupees in Lacs)
2001--02
20002001
2000-01
Qtr.
Ended
on
30.06.20
05
0.00
20042004-05
20032003-04
20022002-03
0.00
0.00
0.00
0.00
6.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.00
9.60
18.50
6.33
37.43
0.00
0.00
0.00
0.00
6.00
B. Quoted Shares
The Company did not make any investment in quoted shares during the period/years ending on March 31 2005,
2004, 2003, 2002 and 2001 and quarter ended on 30.06.2005.
ANNEXURE – X
AGE WISE ANALYSIS OF SUNDRY DEBTORS
Sundry Debtors (Unsecured)
Particulars
More than Six Months
Less than Six Months
Considered Good
Considered Doubtful
Total
Qtr. Ended
on
30.06.2005
0.00
399.42
399.42
0.00
399.42
20042004-05
20032003-04
(Rupees in Lacs)
200120002001-02
2000-01
20022002-03
0.00
198.67
0.00
0.00
0.00
0.00
0.00
21.44
0.00
2.40
198.67
0.00
198.67
0.00
0.00
0.00
0.00
0.00
0.00
21.44
0.00
21.44
2.40
0.00
2.40
ANNEXURE
ANNEXURE – XI
DETAILS OF LOANS & ADVANCES
Particulars
a) Loan to Parties
(Unsecured considered Good)
b) Advances recoverable in cash
or in kind or of for value to be
received.
Advance to Suppliers,
Contractors & Others
Staff Imp rest & Advances
Pre- Paid Expenses
Security Deposits
Service Tax Recoverable
Advance Tax & TDS
Qtr.
Ended
on
30.06.20
05
0.00
20042004-05
20032003-04
20022002-03
(Rupees in Lacs)
2001--02
20002001
2000-01
0.00
0.00
0.00
0.00
0.20
200.74
1.61
0.00
0.00
0.00
0.00
5.81
24.20
45.23
1.01
11.34
5.77
13.76
40.77
0.30
8.85
0.00
0.00
0.00
0.00
0.23
0.00
0.00
0.00
0.00
0.12
0.00
0.00
0.00
0.00
0.08
0.00
0.00
0.00
0.00
0.08
100
SubSub-Total
288.33
288.33
Total
71.06
71.06
0.23
0.23
0.12
0.12
0.08
0.08
0.08
0.28
ANNEXURE – XII
STATEMENT OF UNSECURED
UNSECURED LOANS
Qtr.
Ended on
30.06.200
5
20042004-05
20032003-04
20022002-03
(Rupees in Lacs)
200120002001-02
2000-01
A. Other loans
(i) ICD
From Bodies Corporate
Sub Total (i)
425.99
425.99
498.02
498.02
50.42
50.42
30.17
30.17
0.00
0.00
0.00
0.00
(ii) Others
From Individual
From H.U.F
From Bodies Corporate
Trade Deposits
Sub Total (ii)
Total
3.35
0.00
656.17
25.70
685.22
1111.21
5.33
0.00
626.91
23.67
655.91
1153.93
0.00
2.65
41.27
0.00
43.92
43.92
94.34
0.00
2.59
0.00
0.00
2.59
32.76
0.56
4.78
30.00
0.00
35.34
35.34
0.00
2.70
0.00
0.00
0.00
2.70
ANNEXURE – XIII
STATEMENT OF SECURED LOANS
Detail of secured loan outstanding as on 30.6.2005
Particulars of
loans
Bank
Nature
of Loan
Sanctioned
Amount
Amount
Outstanding
Term Loan
(Under Union
Rent Scheme)
Union
Bank of
India
Term
Loan(U
nder
Union
Rent
Scheme
)
1850. Lacs
1530.00
Rate of
Interest
Interest
P.A.
8.75%
Repayment
Term
Securities
offered
Monthly
Installment of
Net Rent
collection
after TDS
(Appox. Rs.
25.00 Lacs.
Mortgage of
SRS
Multiplex
and Personal
Guarantee of
Three
Director
Repayment
Term
Securities
offered
Qtr.
Installments
of Rs. 67.50
Lacs
Mortgage of
SRS
Multiplex
Detail of secured loan outstanding as on 30.06.2005.
Particulars of
loans
Term Loan
Bank
Nature
of Loan
Sanctioned
Amount
Amount
Outstanding
Punjab
Term
1350. Lacs
*NIL
National
Loan
Bank,
Janpath,
New
Delhi
The term loan from of PNB has been takeover by the Union Bank of India.
Rate of
Interest
P.A.
13.75%
Detail of secured loan outstanding as on 31.03.2
31.03.2005,
005, 31.3.2004, 2003, 2002, and 2001
101
Particulars
Secured Loan from Bank
20042004-05
1279.30
20032003-04
999.62
20022002-03
610.96
20012001-02
9.89
1279.30
999.62
610.96
9.89
Total
(Rupees in Lacs)
20002000-01
9.89
9.89
ANNEXURE – XIV
RELATED PARTY DISCLOSURES
List of related parties with whom transactions have taken place:
1.
Key Management personnels (Directors)
2.
Relatives of key Management personnel
3.
Entities & Associates
The related party disclosures entered into by the Company are reported to be NIL in the audited financial
statements for the year ended on 31st March 2005 and quarter ended on 30th June 2005.
102
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You should read the following discussions of financial condition and results of operations together with audited
financial statement for the year ending on March 31, 2001, 2002, 2003, 2004 and 2005 under Indian GAAP
including scheduled, Annexure and notes thereto and the reports thereon, which appear in the Draft Red Herring
Prospectus. These financial statements are prepared in accordance with Indian GAAP, the Companies Act and
SEBI Guidelines and restated as described in the Auditor’s Report of T. K. Gupta & Associates dated August
29,2005 in the section with the title “Financial Information” at page no. 91 of the Draft Red Herring Prospectus.
Unless otherwise stated, the financial information used in this section is derived from our audited
unconsolidated financial statements under Indian GAAP, as restated.
Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12-month
period ended March 31 of that year.
Overview of the Business
The Company's business model is a “hybrid” model, which involves a mix of entertainment cum retailing and
real estate.
The Company’s maiden project, SRS Multiplex began commercial operations from November 12, 2004. The
Multiplex is a unique complex, combining a 3 screen Cineplex, all the facilities of a modern shopping mall, a
club house, restaurants/Food Court and a coffee loungecoffee lounge.
The second is in the real estate sector. The Multiplex consists of 23,000 sq. ft. area of shopping complex. This is
either let out on either lease rental basis or sold. Many brands such as Rayban, Airtel, Pizza Hut, Mc-Donalds
etc. have their presence in the Multiplex.
Going ahead, the Company plans to foray into the retail segment by launching a chain of its retail stores under
the name and style "SRS Value Bazaar". The Bazaar will offer lifestyle products in several price ranges to cater
to the aspirational needs of the consumers in each of their locations. The products stocked in these Bazaars will
reflect the unique tastes and purchasing power capacities of each city individually.
The first SRS Value Bazaar is being set up in the SRS Multiplex at Faridabad. This is expected to become
operative from October 01, 2005. Products such as garments, accessories, household items, groceries, cosmetics
etc will be made available at this bazaar at discounted rates upto 40%. The Company plans to make the SRS
Value Bazaar a common feature of its proposed Project and expects it to become a major revenue driver for the
Company.
Significant developments subsequent to the last financial year
The Directors of the Company confirm that in their opinion, no circumstances have arisen since the date of the
last financial statements as disclosed in the Red Herring Prospectus and which materially and adversely affect or
is likely to affect the trading or profitability of the Company, or the value of its assets, or its ability to pay its
liabilities within the next twelve months.
Factors that may affect Results of the Operations
Several factors have affected our results of operations, financial condition and cash flow significantly in the F.Y
2004-05. These factors include:
New films are being released across a larger number of theaters with a larger number of prints in order to
maximize theatrical revenues in the shortest time period;
Entertainment tax sops for developing and operating multiplexes are being offered by certain states. This
has encouraged the growth of multiplexes and also encouraged single screen theaters to convert into
multiplexes.
Growth in multiplexing – catching the retail boom.
These factors and a number of future developments may affect our results of operations, financial condition and
cash flow in future periods. We believe that the following future developments may affect our future results of
operations, financial condition and cash flow:
Retail
Multiplexes are fast emerging as the one of the key anchor tenants for most organised retail outlets in India.
Improving regulatory environment.
103
Multiplexing – highly fragmented industry with scattered ownership – opportunities exists for nationwide
film exhibition chain through chain of multiplexes.
For more information on these and other factors/developments which have or may affect us financially, please
refer to the other parts of this “Managements' Discussion and Analysis of Financial Condition and Results of
Operations” section and the section titled “Risk Factors” on page no. viii.
Discussion on Results of Operations
The following table gives the details of our operations for FY 2005 and for the three month period ended June
30, 2005
(Rupees in Lacs)
Particulars
For 3 months ended For the financial year
June 30, 2005
ended March 31, 2005
Revenue
Operational Income
404.08
488.79
Other Operational Income
185.70
275.10
Other Income
11.80
1.47
Total
601.58
765.36
Expenditure
Work Cost/Operational Exp.
Staff Costs
PVR Share
Administration Expenses
Selling & Other Expenses/ Sales Promotion
Interest
Fringe Benefit Tax
Depreciation
Preliniminery Expenses W/off
Total
93.68
27.17
6.57
116.20
14.56
51.27
0.50
29.70
0.46
340.11
245.63
33.95
6.20
87.26
15.14
72.59
0.00
45.00
1.83
507.60
F.Y 2005
SRS Multiplex commenced commercial operations on November 12, 2004 at Faridabad (NCS - Delhi). Hence,
the revenues and expenditure for the F.Y2005 may not be considered representative of the entire year.
The three months ended June 30, 2005
Good season, Good movies, Business season etc. therefore, revenues were encouraging. Expenditure on SRS
Value Bazaar, club house etc. at SRS Multiplex.
Revenue
Particulars
Revenue
Operating Revenue
Other
Operating
Revenue
Other Income
Total
For 3 months
ended
June
30, 2005
Ratio
to
income (%)
total
For the financial
year ended March
31, 2005
404.08
185.70
67.17
30.87
500.32
275.10
64.40
35.41
11.80
601.58
1.96
100.00
1.47
776.89
0.19
100.00
Ratio
to
income (%)
total
Operational Revenue
Operation revenue means the revenue from theaters viz. sale of cinema tickets and sale of candy bar at snack
counter inside the theater and space selling.
104
Particulars
Box Office Collection
Sale of Snacks at Candy
Bar
Space Selling
SRS Club Revenue
Total
For 3 months
ended June 30,
2005
125.57
34.88
Ratio to total
income (%)
20.87
5.80
For the financial
year ended March
31, 2005
130.52
31.81
4.63
239.00
404.08
0.77
39.73
67.17
337.99
0.00
500.32
Ratio
to
income (%)
total
16.80
4.09
43.51
0.00
64.40
Other Operational Revenue
The other operational revenue means the revenue from Lease rent from commercial area at multiplex, revenue
from parking area, revenue from common area maintenance charges from the tenants and recovery of electricity
charges from the tenants and advertisement display charges at various location of the mall.
Particulars
For 3 months Ratio to total For the financial Ratio to
to total
ended June income (%)
year ended March income (%)
30, 2005
31, 2005
Lease Rent
Parking Revenue
Common
Area
Maintenance Charges
Electricity and water
Charges
Advertisement
display
charges
Total
89.30
21.75
10.70
14.84
3.62
1.78
115.14
36.25
18.80
14.82
4.67
2.42
14.83
2.46
24.19
3.11
49.12
8.17
80.72
10.39
185.70
30.87
275.10
35.41
Other Income
The other income includes the miscellaneous income such as display charges on day-to-day basis and
miscellaneous liability written off on account of short and excess and miscellaneous charges recovered from the
tenants such as sound license fees
Operating Expenses
Operating expenses means distributors share, Entertainment tax payable to the State Government, Show tax
payable to the municipal corporation and purchase cost of the snacks sold at candy bar inside the theater and
cost of space selling.
Particulars
For 3 months Ratio to total For the financial Ratio
to
total
ended June 30, income (%)
year ended March income (%)
2005
31, 2005
Cost of Purchase of
12.56
2.09
11.53
1.48
snack sold at Candy
Bar
Distributors Share
37.60
6.25
40.15
5.17
Entertainment Tax
41.86
6.96
43.50
5.60
PVR Share
6.57
1.09
6.20
0.80
Show Tax
0.27
0.04
0.42
0.05
Cost of Space Selling
1.39
0.23
161.56
20.80
Total
100.25
16.66
263.36
33.90
Operating Margin
The operating margin means the gross total of operating and other operating revenue/income and
deduction/subtraction of operating expenses.
105
Particulars
Operating Revenue
Less
Operating
Expenses
Operating Profit
For 3 months
ended June 30,
2005
404.08
100.25
Ratio to
income (%)
303.83
total
67.17
16.66
For the financial
year ended March
31, 2005
500.32
263.36
50.51
236.96
Ratio to
income
income (%)
total
64.40
33.90
30.50
Cost and Expenses
We are continuously focus our efforts toward achieving the process improvement in our business. We have
invested in technology over a period of time so that we can monitor business activity on day to day basis.
(a)
(b)
(c)
Personal Expenses includes the expenses on salary to the staff including the P.F. and E.S.I expenses,
and staff welfare expenses.
Office and administrative expenses includes the Electricity and water expenses, Security and house
keeping, Auditors remuneration, Printing and stationery, Postage and courier, Repair and Maintenance,
Insurance, Rates and taxes, ROC Expenses and Miscellaneous Expenses.
Marketing Expenses includes Sales Promotion Expenses and Tour and traveling Expenses.
Exceptional Item of Expenditure
There is no exceptional item of expenditure incurred up to the date filing the Draft Red Herring Prospectus with
SEBI.
Interest
Interest and Financial charges
Interest and financial charges comprise of interest payments to banks and financial institutions, others and bank
charges. In absolute terms interest and financial charges stood at 9.48% of the total revenues for F.Y 2005.
While, we managed to maintian it at 8.52% of the total revenues as on June 30, 2005.
The cost of borrowing on the basis of average borrowed funds has come down to 8.75% from 13.75% as the
Company has borrowed capital from Union Bank of India and the same used to repay PNB.
Depreciation
Fixed assets are stated at their original cost of acquisition less accumulated depreciation. Cost includes all cost
to bring the assets to present condition. Expenditure incurred up to the date of launching of SRS Multiplex, to
the extent attributable to the construction of fixed assets are also capitalised.
Depreciation is provided, pro rata to the period of use, by straight line method at the rates prescribed in the
Schedule XIV of the companies Act, 1956.
Taxes on Income and D
Deferred
eferred Tax provision
Income Taxes are accounted for in accordance with Accounting Standard 22 on “Accounting for Taxes on
Income”. Taxes comprise both current tax and deferred tax.
Current Tax is measured at the amount expected to be paid /recovered from taxation authorities using the
applicable tax rates and tax laws.
The tax effect of the timing difference that result between taxable income and accounting income and are
capable of reversal in one or more subsequent periods are recorded as a deferred tax assets or deferred tax
liability. They are measured using the substantively enacted tax rates and tax regulation.
Selling and other expenses/ Promotional Expenses
Selling and other expenses/ promotional expenses in the three months ended June 30, 2005 was Rs. 14.56 Lacs.
This is 2.42% of the total revenue.
Cash Flows
The table below summarises our cash flows for the quarter ending June 30, 2005, F.Y 2005 and F.Y 2004
Particulars
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net increase/(decrease) in cash or cash equivalent
June 30, 2005
(171.09)
(38.23)
226.86
17.54
20042004-05
119.77
(2338.21)
2272.27
53.83
20032003-04
263.06
(1355.14)
1158.54
66.46
Net Worth
106
Networth
Represented by
Share Capital
Reserves
Less Revaluation Reserve
Reserves (Net of
Revaluation Reserves)
Less Preliminary Expenses yet not w/off
Networth
June 30, 2005
March 31, 2005
1848.04
804.26
0.00
804.26
1739.60
572.98
0.00
572.98
15.81
2636.49
16.27
2296.32
Borrowings
Historical and Planned Capital Expenditure
In the Financial Year 2003, we made the addition to the fixed assets including capital work in progress
amounting to Rs. 891.07 Lacs on the construction of SRS Multiplex.
In the Financial Year 2004, we made the addition to the fixed assets including capital work in progress
amounting to Rs. 1354.94 Lacs on the construction of SRS Multiplex.
In the Financial Year 2005, we made the addition to the fixed assets including capital work in progress
amounting to Rs. 2275.33 Lacs on the construction of SRS Multiplex.
In the quarter ending June 30, 2005, we made the addition to the fixed assets including capital work in progress
amounting to Rs. 46.76 Lacs towards further investment on expansion of SRS Multiplex.
Our capital expenditure plan as per our objects for the current issue is below:
The total cost of our proposed Project is Rs. 12000 Lacs. We have already given as advance of Rs. 1997.03 Lacs
on capex. The balance amount of will be funded through IPO proceeds and debt of Rs. 2000 Lacs. Shortfall, if
any, will be met through the internal accruals of the Company.
For details on deployment of the funds to be raised from the Issue kindly refer to the section “Introduction Objects of the Issue – Funds Deployed” on page no. 29 of the Draft Red Herring Prospectus.
In case of any short fall/cost overrun, we intend meeting the fund requirements through our internal accruals.
Our internal accruals for the F.Y2004-05 as per last audited accounts are Rs.219.09 Lacs.
Current Assets
The current assets include the inventory, Sundry Debtors and cash and bank balance.
An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:
1.
Unusual or infrequent events or transactions:
The Company has sold property in SRS Multiplex and earned revenue of Rs. 337.99 lacs in F.Y.2005 which
reduced to Rs. 4.63 lacs in the quarter ended June 30, 2005. We donot expect this income to be recurring in
nature and therefore, may not be consistently sustainable source of revenue in the future.
2.
Significant economic changes that materially affected or are likely to affect income from continuing
operations:
Any major changes in policies of the Government would have significant impact on the profitability of the
Company.
Except the above, there are no significant economics changes that may materially affect or likely to affect
income from continuing operations.
3.
Known trends or uncertainties that have had or are expected to have a material adverse impact on sales,
revenue or income from continuing operations:
Apart from the risks as disclosed under heading “Risk Factors” beginning from page no. viii of the Draft
Red Herring Prospectus, there are no other known trends or uncertainties that have had or are expected to
have a material adverse impact on revenue or income from continuing operations.
4.
Future changes in relationship between costs and revenues, in case of events such as future increase in
labour or material costs or prices that will cause a material change are known:
107
Nil
5.
The extent to which material increases in net sales or revenue are due to increased sales volume,
introduction of new products or services or increased sales prices
The growth in revenues is in line with rising trend in the business of our Company.
6.
Total turnover of each major industry segment in which the company operated
Our Company operated in two industry segments viz. Entertainment and Real Estate. Turnover for the
quarter ended June 2005 from each of the segments is Rs.404.08 Lacs from entertainment and Rs. 185.70
lacs from real estate.
7.
Status of any publicly announced new products or business segment
Our Company has publicly announced the launch of SRS Value Bazaar at SRS Multiplex. We expect to
commence its operations on October 01, 2005. This will also mark our Company’s foray into the retail
sector. We expect this business segment to be one of the major revenue drivers for the Company in the
future.
8.
The extent to which business is seasonal:
Other than as described in the section titled "Risk Factors" on page no. viii in the Draft Red Herring
Prospectus, to the best of our knowledge, there are no known factors, which are seasonal in nature and
which we feel will have a material impact on the operations and finances of the Company.
9.
Any significant dependence on a single or few suppliers or customers:
SRS Multiplex enjoys a diversified client base as it operates in the retail cum entertainment segment. It has
location advantage, as it is accessible to the population of Faridabad as well as within reach of the affluent
population of New Delhi. The Multiplex is situated near the main Delhi-Agra highway in the city center of
Faridabad and has the potential to attract tourists who visit the Taj Mahal and Mathura. Hence, there is no
dependence on any single customer. However, we are confined to the local vicinity for our customer base.
10. Competitive conditions:
I. Competitive Conditions
The entertainment and retail businesses are subject to stiff competition. We believe that we are well
positioned to promote SRS Multiplex as a preferred Multiplex destination to the customers in the region in
which we are presently operating.
On account of our competitive strengths, we feel that we are in a position to serve our customers to their
satisfaction. Few of our strengths are:
Professional and young management team
Strong communication skills
Innovative and focused marketing strategies
Understanding of entertainment, retail and real estate businesses
II. With the changing consumer aspirations and drive for better life style, the tier-II cities have witnessed a
similar change towards such aspirations as seen in Metros. The educated and youth population with higher
disposable incomes would drive customer aspirations for better entertainment alternatives, life style products
and visiting of eatery places.
We are in the process of consistently evaluating opportunities and may form an alternative formats within
our proposed offering as per our perspective of the new opportunities available in the market place.
Our growth and strategies are based on increasing in the cities of operation selectively in two or more
formats of retail/ entertainment/ eatery joints.
Furthering SRS brand has a complete entertainment experience through unique and innovative promotions
enhancing the merchandise categories growing through economies of scale, developing new private labels,
offer better variety in each category, enhancing our operational experience through better systems and
process.
Promotions
108
The promotions are targeted at enhancing the funds in shopping and providing the customers with unique
experience. In the past, we have organised many promotional events which include:
Dance competition
Singing competition
Lori Festival
Competition
Presently operating from a single multiplex at Faridabad, we have been able to overcome any competition as
there is negligible presence of other Malls.
The twin city of Gurgaon happens to be the best overtaking in other cities in the country in terms of total
Malls/ Multiplex area. Faridabad being the other city touching the capital of the country has been witnessing
a series of new structures coming up. There are about 9 more multiplexes coming up over a length of about
12 kms. These would, in future, cause competition in terms of cineplexes. However, it will take atleast 2
years for our new projects to be set up as most of the present new projects are at the lower ground level and it
will take more than 2 years to start operations.
Benefiting from the first strength, in the future we would be facing competition from other retailers of
similar products and services. These include stand alone stores in the unorganised sector as well as other
chain of stores/ cinemas in the vicinity.
109
LEGAL INFORMATION
INFORMATION
Outstanding Litigations
Apart from a Arbitration applicationed stated herein below, there are no present or threatened litigation by or
against the Company and there is no show cause notice or legal notice, which has been served on the Company.
The status of litigation as per representation by the management of the Company is given below:
A. Involving the Company
There is no other litigation outstanding against or by the Company except:
Arbitration Application by The Home Stores (India) Limited V/s SRS Entertainment Limited
Home Stores (India) Limited (HSL) had pursuant to lease deed dated August 11, 2004 executed with the
Company agreed to take on lease 6806 sq.feet Super Area or 5445 Sq. feet Carpet Area on the Lower Ground
Floor in the SRS Multiplex at rent of Rs. 2,72,240 per month. As per the said lease deed, HSL was to take
possession of the premises on August 16, 2004 and to deposit Rs.8,16,720 towards security deposit equivalent to
three months rent. HSL paid Rs.5,44,480 on execution of the lease deed.
Subsequently HSL moved a Arbitration Application in the Hon’ble Hight Court of Delhi, under Section 11(6)(b)
of the Arbitration and Conciliation Act, 1956, against the Company alleging that the Company had failed to
adhered to the time schedule as per the lease deed and had breached the terms and conditions of thelease deed.
HSL demanded a sum of Rs.20 lac for the losses suffered by it on account of the non completion of the project
and its consequential handing over by the Company. HSL has also prayed to the Hon’ble High Court for the
appointment of Arbitrator and the disputes and difference arisen between the parties to be referred to the said
Arbitrator. A show cause notice dated August 04, 2005 was received by the Company on August 22, 2005 and
the matter has been listed for further directions on October 04, 2005.
B. Involving the Directors of the Company
I.
Filed by the Directors of the Company
1. Raj Kumar Aggarwal Vs. Ansal Housing & Construction Limited
This is a Consumer Complaint filed by Mr. R.K Aggarwal against M/s Ansal Housing & Construction Limited.
Mr. Aggarwal had booked a commercial flat in Vikasdeep at Plot No. 18 Laxmi Nagar District Center New
Delhi. Certain disputes and differences had arisen between the parties towards the full and final settlement of the
last installment as a consequence of which the Complainant has filed the Consumer Complaint.
In this Complaint the Complainant has prayed to the Consumer Court to direct the Respondent to hand over the
vacant and peaceful possession of Flat No 716, 7th Floor Vikasdeep building. Award compensation of Rs.
4,50,000/- and the cost of the proceedings. The matter is pending adjudication.
2. Raj Kumar Aggarwal Vs. M/s K. K Sharma & Company and Kiran Kumar Sharma
This is a Criminal Complaint filed under Section 138 of the Negotiable Instruments Act, 1881. The
Complainant had given a loan to the accused against the satisfaction of which the accused had given a cheque of
Rs. 2,06,000. The cheque bounced on being presented by the Complainant for collection to the bank. Aggrieved
by the bouncing of the cheque the Complainant has filed a Criminal Complaint before Additional Chief Judicial
Magistrate, Faridabad. The matter is pending adjudication.
C. Involving the Promoters and Group Companies
(a)
There is no litigations outstanding against or by the individual Promoters of Company
(b)
The litigation outstanding by or against the promoter Group Companies is given in below:
I.
Filed against the Promoter Group of the Company
i.
Individuals:
1. Satish Kumar Vs. Lalit Kumar
This is a civil appeal filed by Mr. Satish Kumar against the judgment and decree dated 8.19.2003 by Shri R.K
Jain Civil Judge Junior Division Faridabad in Civil Suit No 724 of 1998 vide which the suit of the
110
plaintiff/respondent has been decreed with cost and with the prayer for the acceptance of the appeal and setting
aside the judgment and decree of the learned lower court and dismissing the suit of the respondent with cost.
The matter is pending adjudication.
2. State Vs. Raju, Nanak Chand, Lalit Kumar and Suresh
This is a Criminal Complaint pending before the Court of M/s Madhu Khanna Judicial Magistrate 1st Class,
Faridabad. In the charge sheet it has been alleged that the accused voluntarily caused grievous hurt to one Mr.
Parmod and Suresh by means of blunt weapon and thereby committed an offence punishable u/s 325 IPC read
with 34 Indian Penal Code. All the accused have pleaded not guilty and accordingly demanded a trial. The
matter is pending adjudication.
3. Ved Wati and Master Sandip Kumar Vs. Nanak Chand
This is s a suit for declaration and consequential relief filed by the Plaintiffs in the Court of Civil Judge Senior
Division Faridabad. This is a dispute in relation to 2/3 of a piece of land situated at Village Dayalpur, Tehasil
Balabgarh District Faridabad.
In this suit it has been prayed by the Plaintiffs that a decree for declaration to the effect that the Plaintiffs are the
owners and in possession/ co sharers of the subject land to the extent of 2/3rd share and the sale deed dated
24.02.1997 executed in favour of the defendant be declared null and void and not binding on the right, title and
interest of the Plaintiff.
An alternative prayer has been made to the effect that in the event the Plaintiffs are not found to be in the
possession of the subject property they many be declared in possession of the said property. The Plaintiff has
also prayed for a permanent injunction preventing the Defendant for alienating the said property. The matter is
pending adjudication.
II.
Filed by the Promoter Group of the Company
i.
Individuals:
1. Lalit Kumar Vs. Satish Kumar
This is an execution petition filed by Mr. Lalit Kumar for the purpose of the recovery of a sum or Rs 1,93,056/against the Judgment Debtor Mr. Satish Kumar. A Decree of ejectment and recovery has already been passed in
favour of Mr. Lalit Kumar.
The execution petition has been stayed as the Judgment Debtor has filed an appeal.
2. Lalit kumar Bansal Vs. Smt. Shyamoo
This is a proceeding instituted by Mr. Lalit Kumar Bansal against Smt. Shyamoo in respect of a property
situated at Palwal. The said property was purchased by Mr. Lalit Kumar from Shri Mohan Lal who had
mortgaged the said property for Rs.3,000/- with the Smt Shyamoo. Mr. Lalit Kumar has filed the preset
proceedings seeking possession of the said property.
3.
Ved Prakash, Parbhu Dayal, Chetan Pal Singh, Vinod Kumar, Lalit Kumar, Manoj Kumar, Bishan Sarup
and Amit Kumar Vs. State of Haryana
This is an application under Section 144 of the Code of Civil Procedure for the restoration of possession before
the Sub Divisional Officer (Civil) Ballabgarh.
The petitioners had moved an application for the restoration of possession but the same was ordered to be
stayed sine die vide order dated 5.12.2003on account of pendensy of ROR No 167-168 of 2001-2. Aggrieved
form the order dated 5.12.2003 the petitioner preferred a revision before Shri Gulab Singh Sorad, IAS,
Commissioner Gurgaon Division, Gurgaon bearing executive revision No 59 of 2002-3. The said revision
petitions of the petitioners were accepted vide order dated 13.10.2004 and it was ordered that possession be
delivered to the owners to the disputed land. The petitioners are the owners of this land having purchased the
same from Col. Sir Harinder Singh Ex Ruler of Faridkot in 1989. There fore it has been prayed that the
possession be kindly be restored back to
The Petitioners in respect of khasra no. 158/2 measuring 1 Kanal 15 Marala situated within the Revenue Estate
of Ballabgarh. The petition is pending.
ii.
Group Companies:
Since, the following Promoter Group Companies are engaged in the activity of automobile financing etc., these
cases are filed by them for recovery of business dues.
1.
Bansla Finlease Limited
111
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
2.
3.
Defendant/Accused
Rati Ram
Harun
Param Singh
Fazru
Ramanand
Zakir Hussain
Narpat Singh
Mahinder
Sabbir Ahmed
Mubin
Sirajudeen
Akthar
Imran
Shamsher Singh
Amount Involved (Rs.)
249,471
1,98,162
1,50,000
1,41,607
98,460
82,860
55,741
43,130
30,000
27,600
21,972
20,151
20,000
10,420
Nature of
of Case
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
Stage of Case
Pre Summoning Evidence
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Pre Summoning Evidence
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
BTL Commercial Limited
7,73,990
5,50,000
4,06,920
70,000
51,225
Nature
of Case
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
Suruchi Sharma
Sanjay Gambhir
50,000
46,370
138 of N. I. Act
138 of N. I. Act
8.
Pardeep Kumar Jain
44,462
138 of N. I. Act
9.
10.
11.
Narender Vashisht
Narender Vashisht
Rakesh Gupta
30,000
20,000
20,000
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
12.
13.
14.
15.
16.
Rakesh Kumar
Narender Vashisth
Leela Dhar Gupta
Leela Dhar Gupta
Parveen Kumar Sethi
18,000
17,000
10,000
10,000
8,096
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
Sr. No.
Defendant/Accused
1.
2.
3.
4.
5.
Shaheen Amin
Ram Chand Dhingra
Garg Trading Co.
Leela Dhar Gupta
RK Bansal
6.
7.
Amount Involved (Rs.)
Stage of Case
Notice to Accused
Notice to Accused
Notice to Accused
Pre Summining Evidence
Bailable warrants of
Accused
Notice to Accused
Non Bailable warrants of
Accused
Bailable warrants of
Accused
Notice to Accused
Pre Summining Evidence
Bailable warrants of
Accused
Pre Summining Evidence
Notice to Accused
Pre Summining Evidence
Notice to Accused
Notice to Accused
BTL Investments Limited
1.
2.
3.
4.
5.
6.
JS Manchanda
Aamin Khan & Other
Parkash Chand
Lajpat Rai
Hari Chand
Harun
6,00,920
3,60,346
2,33,605
2,31,460
2,25,600
1,86,729
Nature
of Case
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
7.
8.
9.
10.
Lajpat Rai
Saroj Garg
Mukesh sharma
Ravinder
1,83,425
1,35,304
1,20,000
81,257
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
11.
Harun S/o Israil
70,000
138 of N. I. Act
Sr. No.
Defendant/Accused
Amount Involved (Rs.)
Stage of Ca
Case
se
Notice to Accused
Notice to Accused
Fraiming of Charge
Notice to Accused
Notice to Accused
Bailable Warrants of
Accused
Notice to Accused
Complainat's Evidence
Complainat's Evidence
Non Bailable Warrants of
Accused
Notice to Accused
112
4.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Ghanshyam
Dinesh Kuamr
Jan Mohmed
Sahabuddin
Mahender Singh
Harun
Bal Mukand
Jormal
Jaibir Singh
Bacchu Singh
Maqsood Ahmed
65,535
65,000
64,000
63,195
60,000
60,000
52,121
44,103
41,806
40,266
30,015
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
Suit for Recovery
138 of N. I. Act
23.
24.
25.
Rati Khan
Ajad Singh
Satbir
27,819
25,500
21,000
Suit for Recovery
138 of N. I. Act
138 of N. I. Act
26.
Kartar Singh
10,160
138 of N. I. Act
27.
Rati Ram
9,030
138 of N. I. Act
Notice to Accused
Complainat's Evidence
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Notice to Accused
Bailable Warrants of
Accused
Notice to Accused
Notice to Accused
Non Bailable Warrants of
Accused
Bailable Warrants of
Accused
Bailable Warrants of
Accused
North Delhi Credit & Investment Limited
1.
2.
3.
Inderveer
Salim
Shyam Lal
1,77,895
1,64,258
1,23,784
Nature
of Case
138 of N. I. Act
138 of N. I. Act
138 of N. I. Act
4.
Chatter Lal
1,10,000
138 of N. I. Act
5.
Partap Attosh
46,861
138 of N. I. Act
Sr. No.
Defendant/Accused
Amount Involved (Rs.)
Stage of Case
Notice to Accused
Notice to Accused
Non Bailable warrants of
Accused
Bailable warrants of
Accused
Notice to Accused
Material Developments since last Balance Sheet date
We the Board of Directors of SRS Entertainment Limited certify that there are no material developments since
the last balance sheet date save and except:
The Company has issued 1,00,00,000 equity shares of Rs.10 each for Rs.20 each on preferential basis to its
Promoters, Promoter Group Companies and others for a total amount of Rs.2000 Lacs. Details of the transaction
have been provided at page no. 11 of the Draft Red Herring Prospectus.
It should be noted that after the aforesaid allotment, Earning Per Share (EPS) of the Company stands dilitued to
Rs.5.06 per share from Rs.5.43 (annualised) per share as on June 30, 2005
113
GOVERNMENT APPROVALS/LICENSING ARRANGEMENTS
Technical Approvals
The Company has taken obtained Structural Safety Certificate, confirming that "Plot No. 1132, Sector-19
Faridabad" is designed confirming to Indian Standard Certifications and National Building Code Provisions
including that of earthquake design requirements, from Technical Projects Consultants, New Delhi.
All Government and other approvals:
The Company has received the following Government approvals/licenses/permissions:
1. Certificate of Incorporation
2.
3.
Certificate of Commencement of Business
Trade mark/ patent/ registered mark:
i.
SRS CINEMAS
Trade Mark No.: 01298237
Date of Registration: July 26, 2004
ii.
SRS WORLD
Trade Mark No.: 01298238
Date of Registration: July 26, 2004
4.
Certificate of Importer Exporter Code No. 050264625 dated February 22, 2001
5.
Permanent Account Number : AAGCS8846R
6.
TAN No. : RTKSO4931D
7.
The following approvals have been received in respect to SRS Multiplex::
Sr.
No.
1
Particulars
Authority
NOC No.1483
HUDA
2
Inspection Repot DG
set Mem.No.4828
3
NOC/Permission
Mem.No.4799
4
Permission No.4108
5
Sales Tax
Registration
Registration
Certificate
Electrical
Inspectorate
Haryana
Electrical
Inspectorate
Haryana
Executive
Engineer
Provincial
Division PWD
Haryana
Sales Tax,
Haryana
Labour Inspector
6
7
8
9
Load Sanction 750 to
1750 KVA Haryana
State Electricity
Board SDO
Installation of
Transformers 2000
KVA Chief Electrical
Inspector
Licence to Run
SDO ‘OP’
Senior Division
(East),
Faridabad.
S.E. (OP)
Circle
DHBVNL
Faridabad
D.M. Faridabad
under Act
Covered
N.A.
Date
Validity
Remarks
01.07.2004
--
Drainage
Indian Electricity
Rules, 1956
05.11.2004
--
DG Set
Indian Electricity
Rules, 1956
04.11.2004
--
Compliance of electric
Safety Audit I,II & III
Cinematography
Rules, 1952
03.11.2004
--
Building of Cinema
Central Sales
Tax Act,1956
Punjab Shop &
Commercial
Establishment
Act,1958
Haryana
Electricity
Reforms Act,
1997
--
17.09.2004
--
Sales Tax Regn.No.
6131217476
22.09.2004
31.03.2006
15.04.2005
--
Load Sanction
27.03.2005
--
Installation of
Transformers 2000
KVA
-
05.08.2005
04.11.2005
Cinema Licence
114
10
11
12
13
Cinema
HUDA
Water Connection
Certificate of
Registration, Haryana
VAT
Allotment of
Provident Fund Code
Number
Executive
Engineer
HUDA,
Faridabad
Assessing
Authority
Regional
Provident Fund
Commissioner,
Haryana
-
13.07.2004
-
Water connection
Haryana Value
Added Tax Act,
2003
Employees’
Provident Funds
& Miscellaneous
Provisions
Act,1952
Employee State
Insurance Act,
1948
17.09.2004
-
VAT Registration
11.10.2004
-
Provident Fund
06.07.2005
-
Employee State
Insurance Corporation
--
22.06.2004
--
Approval for
construction.
Permission to maintain
green area without
permanent structures
for beautification of
area.
Permission granted for
stopgap arrangement
to the existing system.
Allotment of
Employee State
Insurance
Corporations Code
Number
Approval for
construction and
maintenance of
parking and common
area
Permission for
development of green
area
Regional
Director,
Employees State
Insurance
Corporation
Administrator
HUDA,
Faridabad
Administrator,
Huda
--
18.03.2005
--
Permission for
release of enhanced
contractual demand
of 750 KVA.
Inspection Of 1000
KVA Transformer
SE (OP) Circle,
DHBVNL,
Faridabad.
--
12.01.2005
--
Chief Electrical
Inspector
--
04.06.2004
--
18
Extension of load to
1600KW
03.12.2004
--
19
Full Occupation
Certificate
SE (OP) Circle,
-DHBVNL,
Faridabad
Estate Officer,
HUDA (Erection
HUDA, Faridabad of buildings)
Regulations,
1979
11.08.2004
--
20
Estate Officer,
-HUDA, Faridabad
14.05.2004
--
21
Certificate of NonEncumbrance
Property
Possession Certificate
15.03.2002
--
22
DPC Certificate
10.12.2002
--
23
Allotment Letter
Junior Engineer, -HUDA, Faridabad
Sub-Divisional
-Engineer
Estate Officer,
-HUDA, Faridabad
28.01.2002
--
24
Fire NoC
--
10.08.2005
09.08.2006
14
15
16
17.
Assistant
Divisional Fire
During inspection,
installations were
found to be complying
with the relevant
provisions of the Act.
Extension of load
sanctioned by the
authority.
Construction of
Building completely in
compliance of
approved building
plans and rules/
regulations of HUDA
Certifying that the
property is free of any
encumbrance.
Possession of the plot
permitted
Construction of plot
Letter for allotment as
per Form CC made on
free hold acquired by
way of bid
In respect of Multiplex
at Faridabad
115
Officer, Faridabad
The following licenses required for the Project are pending receipt:
i.
Registration of the brand name SRS Value Bazaar has been applied for by the Company which is
pending with the relevant governemt authority.
ii. The Company is yet to apply for the abovementioned Government approvals/ Licences required for
implementing the Project. The above list is indicative of the approvals required by the Company to
inplement the Project and not exhaustive.
No consent of the Government of India is required by the Company for this Issue.
The Company has complied with all the applicable guidelines / directions issued by RBI from time to time.
As certified by the Legal Advisor to the Issue, except as stated above, the Company has received all the
necessary consents, licenses, permissions and approvals form the Government/RBI and various government
agencies, which are required for its present business.
It must, however, be distinctly understood that in granting the above consents/licenses/permissions/approvals,
the Government/RBI does not take any responsibility for the financial soundness of the Company or for the
correctness of any of the statements or any commitments made or opinions expressed.
116
OTHER REGULATORY AND STATUTORY DISCLOSURES
The Equity Shares now being offered are subject to the provisions of the Act and the terms and conditions of the
Draft Red Herring Prospectus, the CAF, the Memorandum and Articles of Association of the Company, the
approvals from the Government of India, FIPB and RBI, if applicable, the provisions of the Act, guidelines
issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued
by Government of India and/or other statutory authorities and bodies from time to time, Listing Agreements
entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the allotment
advise or letter of allotment or Security Certificate and rules as may be applicable and introduced from
time to time, the FEMA and the Letters of Allotment/Equity Shares to be issued. Over and above such terms and
conditions, the Equity Shares shall also be subject to applicable laws, guidelines, notifications and regulations
relating to issue of capital and listing of securities issued from time to time by SEBI, the Government of India,
RBI and or other authorities.
Authority to the Offer
The Issue of Equity Shares has been authorised by special resolutions adopted pursuant to Section 81(1A) of the
Companies Act, at an Extra Ordinary General Meeting of the members of the Company held on June 30, 2005
and an Annual General Meeting of the members held on July 25, 2005. The Board of Directors has pursuant to
resolutions passed at the meeting held on June 30, 2005 authorised a Committee, referred to as IPO Committee,
to take decisions on behalf of the Board in relation to the Issue.
Prohibition by SEBI
The Company, its Directors, Promoters, entities forming the Promoter Group, other companies/entities
promoted by the Promoters, and companies/entities with which the Directors of the Company are associated as
directors, have not been prohibited from accessing the capital markets under any order or direction passed by
SEBI. None of the Directors or the persons in control of the Promoter companies have been prohibited from
accessing the capital markets or restrained from buying/selling/dealing in securities under any order or direction
passed by SEBI.
Eligibility for the Issue
As per clause 2.2.1 of SEBI Guidelines, an unlisted company may make an initial public offering of equity
shares, only if it meets the following conditions; with eligibility criteria calculated in accordance with
unconsolidated financial statements under Indian GAAP:
a) The Company has net tangible assets of at least Rs.300 Lacs in each of the preceding three full years (of 12
months each) of which not more than 50% are held in monetary assets.
b) The Company has a track record of distributable profits as per Section 205 of Companies Act, for at least
three out of immediately preceding five years.
For calculating distributable profits in terms of Section 205 of the Companies Act extra-ordinary items shall not
be considered;
c) The Company has a net worth of at least Rs.100 Lacs in each of the preceding three full years of 12 months
each;
d) In case the Company has changed its name within the last one year, atleast 50% of the revenues for the
preceding one full year is earned by the Company from the activity suggested by the new name; and
e) The aggregate of the proposed Issue and all previous issues made in the same financial year in terms of size
(i.e. offer through offer Document + firm allotment + promoters contribution through offer document) does not
exceed five (5) times its pre-issue networth as per the audited balance sheet of the last financial year.
In terms of a certificate issued by M/S T. K. Gupta and Associates, the statutory auditors dated August 25, 2005
the Company satisfies the above eligibility criteria as follows:
(Rupees in Lacs)
Particulars
2005
2004
2003
2002
2001
Particulars
Net Tangible Assets (1)
Monetary Assets (2)
Monetary Assets as % of Net
Tangible Assets
4614.34
401.52
8.70
2337.30
78.19
3.35
1196.98
11.60
0.97
91.25
72.12
79.04
0.00
11.38
N.A.
117
Net Profits as restated
Net Worth as restated (3)
Distributable Profits (4)
219.09
2296.32
219.09
0.00
1249.84
0.00
0.04
541.51
0.04
0.00
99.80
0.00
0.01
4.48
0.01
(1)
Net tangible assets means the sum of all net assets of the Company excluding intangible assets as defined in
Accounting Standard 26 issued by ICAI.
(2)
Monetary Assets comprise cash and bank balances, public deposit account with the Government and interest
accrued thereon.
(3)
Net worth have been computed as the aggregate of equity share capital and reserves, excluding miscellaneous
expenditures, if any.
(4)
Distributable profits have been computed in terms of section 205 of the Companies Act.
Name of the Company was changed from 'SRS Commercial Company Limited' to 'SRS Entertainment Limited'
on January 25, 2005. This was done to better reflect the nature of activities of the Company, which began
commercial operations of SRS Multiplex, the first Multiplex of the Company, in November 2004.
The Company meets all the conditions mentioned above. However, the Equity Shares are being offered through
the book building route in accordance with clauses 2.2.2 and 2.2.2A of the SEBI Guidelines, wherein:
Atleast 50% of the Net Issue to public (i.e., 83,85,000 equity shares) will be allotted to the Qualified
Institutional Buyers (QIBs), failing which the full subscription monies shall be refunded
The post-issue face value capital of the Company shall be Rs. 4989.57 Lacs.
Undertaking by the Company
The Company undertakes that the number of allottees in the proposed Issue shall be atleast 1,000, otherwise, we
shall forthwith refund the entire subscription amount received. In case of delay, if any, in refund, we shall pay
interest on the application money at the rate of 15% per annum for the period of delay.
Disclaimer Clause
AS REQUIRED, A COPY OF THIS DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED TO
THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY
UNDERSTOOD THAT THE SUBMISSION OF DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD
NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR
APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY EITHER
FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS
PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR
OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS.
THE BOOK RUNNING LEAD MANAGERS UTI BANK LIMITED HAVE CERTIFIED THAT THE
DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE
AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE
DISCLOSURE AND INVESTOR
PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO
FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE
PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER
COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND
DISCLOSURE OF ALL RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE BOOK
RUNNING LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT
THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF
BEHALF AND
TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS UTI BANK LIMITED, HAVE
FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 12, 2005 IN
ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS
FOLLOWS:
WE HAVE EXAMI
EXAMINED
NED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION
LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC.
AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN
CONNECTION WITH THE FINALISATION OF THE DRAFT
DRAFT RED HERRING PROSPECTUS
PERTAINING TO THE SAID ISSUE;
ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS
DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE
STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITIBALITY, PRICE
118
JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE
AND OTHER PAPERS FURNISHED BY THE COMPANY;
WE CONFIRM THAT:
THE DRAFT RED HERRING PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE
DOCUMENTS, MATERIALS
MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE
GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER
COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH;
THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND
ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELLWELL-INFORMED DECISION AS TO
INVESTMENT IN THE PROPOSED ISSUE;
BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING
PROSPECTUS
PROSPECTUS ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID;
AND
IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE
UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS
THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE
COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES
ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER
CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI
FURTHER RESERV
RESERVES
ES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE BOOK
RUNNING LEAD MANAGER(S) (MERCHANT BANKERS) ANY IRREGULARITIES OR LAPSES IN
THE DRAFT RED HERRING PROSPECTUS.
Caution
The Company accepts no responsibility for statements made otherwise than in the Draft Red Herring Prospectus
or in any advertisement or other material issued by the Company or by any other persons at the instance of the
Company and anyone placing reliance on any other source of information would be doing so at his own risk.
The Book Running Lead Manager and the Company shall make all information available to the Equity
Shareholders and no selective or additional information would be available for a section of the Equity
Shareholders in any manner whatsoever including at presentations, in research or sales reports, etc. after filing
of the Draft Red Herring Prospectus with SEBI. The Book Running Lead Manager and the Company shall
update the Draft Red Herring Prospectus and keep the public informed of any material changes till the listing
and trading commences.
Disclaimer With Respect To Jurisdiction
The Draft Red Herring Prospectus has been prepared under the provisions of Indian Laws and the applicable
rules and regulations hereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the
appropriate court(s) in New Delhi, India only.
The Draft Red Herring Prospectus has been filed with SEBI, Mittal Court, 'A' Wing, Nariman Point, Mumbai
400 021, for its observations. The final Red Herring Prospectus will be filed with the Designated Stock
Exchange as per the provisions of the Act.
Disclaimer Clause of the Stock Exchange
Disclaimer Clause of BSE
The Bombay Stock Exchange Limited (the "Exchange") has given vide its letter dated [•] permission to the
Company to use the Exchange's name in the Draft Red Herring Prospectus as one of the stock exchanges on
which this Company's securities are proposed to be listed. The Exchange has scrutinised the Draft Red Herring
Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this
Company. The Exchange does not in any manner:
Warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red Herring
Prospectus; or
Warrant that this Company's securities will be listed or will continue to be listed on the Exchange; or
119
Take any responsibility for the financial or other soundness of this Company, its promoters, its management or
any scheme or project of this Company; and its should not for any reason be deemed or construed that the Draft
Red Herring Prospectus has been cleared or approved by the Exchange.
Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant
to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever
by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other
reason whatsoever.
Disclaimer Clause of NSE
As required, a copy of the Draft Red Herring Prospectus has been submitted to National Stock Exchange of
India Limited (hereinafter refereed to as NSE). NSE has given vide its letter dated [•] permission to the Issuer to
use the Exchange's name in the Draft Red Herring Prospectus as one of the stock exchanges on which this
Company's securities are proposed to be listed. The Exchange has scrutinised the Draft Red Herring Prospectus
for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is
to be distinctly understood that the aforesaid permission given by NSE that the Draft Red Herring Prospectus
has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or
completeness of any of the contents of the Draft Red Herring Prospectus nor does it warrant that the Issuer's
securities will be listed or will continue to be listed on the Exchange nor does it take any responsibility for the
financial or other soundness of this Company, its promoters, its management or any scheme or project of this
Issuer.
Filing
A copy of the Draft Red Herring Prospectus, along with the documents required to be filed under Section 60B of
the Companies Act, would be delivered for registration to the RoC and a copy of the Prospectus to be filed
under Section 60 of the Companies Act would be delivered for registration with RoC. A copy of the Draft Red
Herring Prospectus has been filed with SEBI at Ground Floor, Mittal Court, “A” Wing, Nariman Point, Mumbai
400 021.
Listing
Applications have been made to The Bombay Stock Exchange Limited and National Stock Exchange of India
Limited for permission to deal in and for an official quotation of our Equity Shares. We have nominated The
Bombay Stock Exchange Limited as the Designated Stock Exchange for the Issue.
If the permissions to deal in and for an official quotation of our Equity Shares are not granted by any of the
Stock Exchanges mentioned above, our Company shall forthwith repay, without interest, all moneys received
from the applicants in pursuance of the Draft Red Herring Prospectus. If such money is not repaid within eight
days after our Company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the
Bid/Issue Closing Date, whichever is earlier), then our Company and every director of our Company who is an
officer in default shall, on and from expiry of eight days, will be jointly and severally liable to repay the money,
with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the
Companies Act.
Our Company shall ensure that all steps for the completion of necessary formalities for listing and
commencement of trading at both the Stock Exchanges mentioned above are taken within seven working days
of finalisation and adoption of the basis of allotment for the Issue.
Impersonation
As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection
(1) of Section 68A of the Companies Act, 1956 which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any
Equity Shares therein, or otherwise induces a Company to allot, or register any transfer of Equity Shares therein
to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may
extend to five years”
Consents
The written consents of Directors, Company Secretary, Book Running Lead Manager to the Issue, Legal
Advisor to the Issue, Registrar to the Issue, Statutory Auditors of the Company, Bankers to the Company and
Bankers to the Issue to act in their respective capacities, have been obtained and filed along with a copy of the
Draft Red Herring Prospectus with the Registrar of Companies, NCT Delhi & Haryana at New Delhi as required
120
under Section 60 of the Companies Act and such consents have not been withdrawn up to the time of delivery of
the Red Herring Prospectus for registration.
Expert Opinion
The Company has not obtained any expert opinions related to the present Issue, except the opinion of the
Statutory Auditors, M/s T. K. Gupta & Associates, Chartered Accountants on the tax benefits available to the
investors.
Issue Expenses
Public Issue expenses are estimated as follows:
Sr. No.
1
2
3
4
5
6
Particulars
Fees of Book Running Lead Manager, Registrar, Legal Advisor,
Auditors, Tax Auditors, etc.
Printing and Stationery, Distribution, Postage, etc.
Brokerage and Selling Commission
Advertisement and Marketing Expenses
Other Expenses (incl. Filing Fees, Listing Fees, Depository Charges,
etc.)
Contingencies
Total
Details of Fees Payable
Particulars
Book Running Lead
Manager
Registrar to the Issue
Legal Advisor
Total
Amount
Lacs)
(Rupees
[•]
[•]
[•]
[•]
in
% of total
Expenses
[•]
Issue
[•]
[•]
[•]
(Rupees in Lacs)
Amount
[•]
[•]
[•]
[•]
[•]
[•]
[•]
% of total Issue Size
[•]
[•]
[•]
[•]
Fees Payable to Book Running Lead Manager to the Issue
The total fees payable to the Book Running Lead Manager will be as per the Memorandum of Understanding
signed with the Book Running Lead Manager, copy of which is available for inspection at the Registered Office
of the Company.
Fees Payable to Registrar to the Issue
The total fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding signed with
the Registrar, copy of which is available for inspection at the Registered Office of the Company.
The Registrar will also be reimbursed with all relevant out-of-pocket expenses such as cost of stationery,
postage, stamp duty, communication expenses, etc. Adequate funds will be provided to the Registrar to the Issue
to enable them to send refund order(s) / letter(s) of allotment / share certificate(s) by registered post.
Underwriting Commission, Brokerage and Selling Commission
The Underwriting Commission will be paid not more than 2.5% of the Public Issue Size.
Brokerage for the Issue will be paid not more than @ 1.5% of the Issue Price of the Equity Shares by the
Company on the basis of the allotments made against the applications bearing the stamp of a member of any
recognised Stock Exchange in India in the ‘Broker’ column. Brokerage at the same rate will also be payable to
the Bankers to the Issue in respect of the allotments made against applications procured by them provided the
respective forms of application bear their respective stamp in the Broker column. In case of tampering or overstamping of Brokers’/ Agents’ codes on the application form, the Company’s decision to pay brokerage in this
respect will be final and no further correspondence will be entertained in this matter.
The Company, at its sole discretion, may consider payment of additional incentive in the form of kitty or
otherwise to the performing brokers on such terms and mode as may be decided by the Company.
Previous Public or Rights Capital issues by the Company (during the last five years)
This is the first Public /Rights issue by the Company.
Previous Issue of Shares Otherwise than for Cash
121
Except as stated in 'Capital Structure' on page no. 10 of the Draft Red Herring Prospectus, we have not issued
any equity shares for consideration otherwise than for cash.
Commission or Brokerage on Previous Issues
Since this is an initial public offer, no sum has been paid or is payable as commission or brokerage for
subscribing to or procuring or agreeing to procure subscription for any of the equity shares of the Company
since its inception.
Particulars in regard to other listed companies under the same management within the meaning of section 370
(1)(B) of the Companies Act, 1956 which made any capital Issue during the last three years
There is no company under the same management within the meaning of erstwhile section 370 (1)(B) of the
Companies Act, 1956:
Promise visvis-à-vis Performance
a) Issuer Company:
Since this is an initial public offer by the Issuer Company, this is not applicable
b) Listed ventures of Promoters:
All the companies are closely held private companies and none of them have made any public offer during the
last three years.
Stock Market Data
This being the first public issue by the Company, no stock market data is available.
Investor
Investor Grievances and Redressal System
The agreement between the Registrar to the Issue, Karvy Computershare Private Limitedand the Company will
provide for retention of records with the Registrar to the Issue for a period of at least one year from the last date
of dispatch of letters of allotment, demat credit and refund orders to enable investors to approach the Registrar
to the Issue for redressal of their grievances. All grievances relating to the Issue may be addressed to the
Registrar to the Issue, giving full details such as name, address of the applicant, number of Equity Shares
applied for, amount paid on application and the bank branch or collection center where the application was
submitted.
There are no complaints and/or grievances from the investors which are pending. All the complaints and/or
grievances have been satisfactorily replied.
We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine
investor grievances will be seven business days from the date of receipt of the complaint. In case of non routine
complaints and complaints where external agencies are involved, we will seek to redress these complaints as
expeditiously as possible.
We have appointed Mr. Arun Kumar Gupta (CFO) as the Compliance Officer and he may be contacted in case
of any pre issue or post-issue related problems. His contact details are as under:
Mr. Arun Kumar Gupta
CFO and Compliance Officer
SRS Entertainment Limited
SRS Multiplex, City Centre, Sector-12,
Faridabad, (NCR), Haryana 121007.
Mobile: +91 9810672518
Telephone: (0129) 5008350, 5003266
Fax: (0129) 2433255
E-mail: srsco@srs-world.com
Changes in the auditors
Following are the details of changes in Auditors of the Company in the last three years:
Sr. No.
Name of Auditor
Reason for
Change
Date of
Meeting
Nature of
Meeting
122
Appointed
In place of
M/s. T. K. Gupta & M/s Rakesh Raj & Resignation
28.12.2004
Associates
Associates
2
M/s Rakesh Raj & M/s A. C. Aggarwal & Resignation
07.07.2003
Associates
Co.
Other than the above, there was no change in Auditors during preceeding three years.
1
EOGM
EOGM
Capitalisation of Reserves or profits (during the last five years)
There has been no capitalisation of reserves or profits of the Company in the last five years.
Revaluation of assets, if any (during the last five years)
None of the assets of the Company have been revalued during last five years.
123
OFFERING INFORMATION
ISSUE INFORMATION
1. TERMS OF THE ISSUE
The Equity Shares being issued are subject to the provisions of the Companies Act, Memorandum and Articles,
the terms of the Draft Red Herring Prospectus, Bid cum Application Form, the Revision Form, the CAN and
other terms and conditions as may be incorporated in the allotment advice and other documents/ certificates that
may be executed in respect of the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications
and regulations relating to the issue of capital and listing of securities issued from time to time by SEBI,
Government of India, Stock Exchanges, RBI, Registrar of Companies and/or other authorities, as in force on the
date of the Issue and to the extent applicable.
Ranking of Equity Shares
The Equity Shares being offered shall be subject to the provisions of the Memorandum and Articles and shall
rank pari passu in all respects with the other existing equity shares of the Company including rights in respect of
dividend. The allottees will be entitled to dividend or any other corporate benefits, if any, declared by the
Company after the date of Allotment.
Mode of payment of dividend
The declaration and payment of dividends will be recommended by the Board of Directors and shareholders, in
their discretion, and will depend on a number of factors, including but not limited to earnings, capital
requirements and overall financial condition.
Face Value and Issue Price
The Equity Shares with a face value of Rs.10/- each are being offered in terms of the Draft Red Herring
Prospectus at a price band of Rs.[.] to Rs.[.] per Equity share.
At any given point of time, there shall be only one denomination for the Equity Shares of the Company, subject
to applicable laws.
Rights of the Equity Shareholder
• Subject to applicable laws, the equity shareholders shall have the following rights:
• Right to receive dividend, if declared;
• Right to attend general meetings and exercise voting powers, unless prohibited by law;
• Right to vote on a poll either in person or by proxy;
• Right to receive offers for rights shares and be allotted bonus shares, if announced;
• Right to receive surplus on liquidation;
• Right of free transferability; and
• Such other rights, as may be available to a shareholder of a listed public Company under the Companies
Act and Memorandum and Articles of Association of the Company.
For a detailed description of the main provisions of the Company’s Articles of Association relating to voting
rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, see “Description
of Equity Shares and Terms of Articles of Association of the Company” on Page no. 147 in the Draft Red
Herring Prospectus.
Market Lot
In terms of Section 68B of the Companies Act, the Equity Shares of the Company shall be allotted only in
dematerialised form. In terms of existing SEBI Guidelines, the trading in the Equity Shares of the Company
shall only be in dematerialised form for all investors.
Since trading of the Equity Shares will be dematerialised mode, the tradable lot is one equity share.
Nomination Facility to the Investor
In accordance with Section 109A of the Companies Act, the sole or first bidder, along with other joint bidders,
may nominate any one person in whom, in the event of the death of sole bidder or in case of joint bidders, death
of all the bidders, as the case may be, the Equity Shares transmitted, if any, shall vest. A person, being a
nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with
Section 109A of the Companies Act, be entitled
124
to the same advantages to which he or she would be entitled if he or she were the registered holder of the equity
share(s).
Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any
person to become entitled to equity share(s) in the event of his or her death during the minority. A nomination
shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating.
In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the
provisions of Section 109A of the Companies Act, shall upon the production of such evidence as may be
required by the Board, elect either:
• to register himself or herself as the holder of the equity shares; or
• to make such transfer of the equity shares, as the deceased holder could have made.
Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself
or herself or to transfer the equity shares, and if the notice is not complied with within a period of ninety days,
the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the
equity shares, until the requirements of the notice have been complied with.
Since the allotment of Equity Shares in the Issue will be made only in dematerialised mode, there is no need to
make a separate nomination with us. Nominations registered with respective depository participant of the
applicant would prevail. If the investors require changing the nomination, they are requested to inform their
respective depository participant.
Minimum Subscription
If the Company does not receive the minimum subscription of 90% of the Issue amount, including devolvement
of the members of the Syndicate, if any, within 60 days from the Bid/Issue Closing Date, the Company shall
forthwith refund the entire subscription amount received. If there is a delay beyond 8 days, the Company and
every director of the Company who is an officer in default, becomes liable to repay the amount with interest as
per Section 73 of the Companies Act.
If the number of allottees in the proposed Issue is less than 1,000 allottees, The Company shall forthwith refund
the entire subscription amount received.
Withdrawal
Withdrawal of the Issue
The Company, in consultation with the BRLM and Joint BRLM, reserves the right not to proceed with the Issue
anytime after the Bid/ Issue Opening Date without assigning any reason thereof.
Arrangements for disposal of odd lots
The Company’s shares will be traded in dematerialised form only and therefore the marketable lot is 1 share.
Therefore, there is no possibility of odd lots.
Restrictions on transfer of shares and alteration of capital structure
The Company does not have any proposal, intention, negotiation or consideration to alter the capital structure by
way of split/ consolidation of the denomination of the shares/ issue of shares on a preferential basis or issue of
bonus or rights or public issue of Equity Shares or any other securities within a period of six months from the
date of opening of the present Issue.
However, if business needs of the Company so require, the Company may alter the capital structure by way of
split/ consolidation of the denomination of the shares/ issue of shares on a preferential basis or issue of bonus or
rights or public issue of shares or any other securities. The Company may issue options to its employees
pursuant to an employee stock option plan or, if the Company enters into acquisitions or joint ventures, it may
consider raising additional capital to fund such activity or use Equity Shares as currency for acquisition or
participation in such joint ventures.
125
ISSUE STRUCTURE
Public Issue of 2,28,57,200 Equity Shares of Rs. 10/- each at the Issue Price of Rs. [•] for cash aggregating Rs.
[•] Lacs is being made through a 100% book building process. Details of the issue structure are tabulated below:
126
Reserved
portion for
Promoters
of the
Company
Number
Shares *
of
Reserved
portion for
Shareholders of
Group
Companies of
the Company
Up to 22,85,720
Equity Shares
Reserved
portion for
Employees
of the
Company
Equity
Up to
42,87,200
Equity
Shares
Percentage of Issue
size available for
Allocation
Up to
18.76% of
Issue size
** Up to 10%
of Issue size
** Up to
10% of
Issue size
Basis of Allotment if
respective category is
oversubscribed
Minimum Bid
N.A.$
Proportionate
Proportionat
e
N.A.$
[•]
Equity
Shares
and
thereafter
in
multiples of [•]
Equity Shares
[•] Equity
Shares and
thereafter in
multiples of
[•] Equity
Shares
Maximum Bid
N.A.$
Such number of
Equity Shares
that the number
of
Equity
Shares Bid for
should
not
exceed
22,85,720
Equity Shares
Mode of Allotment
Compulsor
y in
Compulsory in
Dematerialised
Such
number of
Equity
Shares that
the number
of
Equity
Shares Bid
for should
not exceed
22,85,720
Equity
Shares
Compulsory
in
Up to
22,85,720
Equity
Shares
QIBs
NonNonInstitutional
Bidders
Retail
Individual
Bidders
Up
to
69,99,280
Equity
Shares or
Net Issue to
public less
allocation
to
NonInstitutional
Bidders and
Retail
Individual
Bidders
Up to 50%
of Net Issue
to public or
Net Issue
size
less
allocation
to
NonInstitutional
Bidders and
Retail
Individual
Bidders
Discretiona
ry
Minimum
of
20,99,784
Equity
Shares or
Net Issue to
public less
allocation
to QIBs and
Retail
Individual
Bidders
Minimum
of
48,99,496
Equity
Shares or
Net Issue to
public less
allocation
to QIBs and
NonInstitutional
Bidders
Minimum
15% of Net
Issue
to
public
or
Net Issue
size
less
allocation
to QIBs and
Retail
Individual
Bidders
Minimum
35% of the
Net Issue to
public
or
Net Issue
size
less
allocation
to QIBs and
NonInstitutional
Bidders
Proportiona
te
Proportiona
te
Such
number of
Equity
Shares that
the
Bid
Amount
exceeds Rs.
1,00,000
and
in
multiples of
[•] Equity
Shares
Such
number of
Equity
Shares not
exceeding
the
Net
Issue size
subject to
applicable
limits
Such
number of
Equity
Shares that
the
Bid
Amount
exceeds Rs.
1,00,000
and
in
multiples of
[•] Equity
Shares
Such
number of
Equity
Shares not
exceeding
the
Net
Issue size
subject to
applicable
limits
[•] Equity
Shares and
thereafter in
multiples of
[•] Equity
Shares
Compulsor
y in
Compulsor
y in
Compulsor
y in
Such
number of
Equity
Shares so as
to
ensure
that the Bid
Amount
does
not
exceed Rs.
1,00,000
127
Reserved
portion for
Promoters
of the
Company
Trading Lot
Who can Apply
Demateriali
sed form
One
N.A.$
Terms of Payment
N.A$
Reserved
portion for
Shareholders of
Group
Companies of
the Company
form
One
Shareholders of
the
Group
Companies of
the Company,
i.e,
Akriti
Financial
Services
(P)
Limited
and
Ferro
Plast
Limited, as on
[•]
Margin Amount
Reserved
portion for
Employees
of the
Company
QIBs
NonNonInstitutional
Bidders
Retail
Individual
Bidders
Dematerialis
ed form
One
Employees
of
the
Company as
on [•]
Demateriali
sed form
One
Public
financial
institutions,
as specified
in
section
4A of the
Companies
Act,
scheduled
commercial
banks,
mutual
funds,
venture
capital
funds, and
State
Industrial
Developmen
t
Corporations
, Insurance
companies
registered
with
Insurance
Regulatory
and
Developmen
t Authority
Provident
Funds with
minimum
corpus
of
Rs.
2500
lacs
and
Pension
Funds with
minimum
corpus
of
Rs.
2500
lacs who are
authorised
under their
constitution
to hold and
invest
in
Equity
Shares
Demateriali
sed form
One
Resident
Indian
individuals,
HUF (in the
name
of
Karta),
companies,
corporate
bodies,
societies
and trusts
Demateriali
sed form
One
Individuals
(including
HUFs)
applying for
up to Rs.
1,00,000
Margin
Margin
Margin
Margin
128
Reserved
portion for
Promoters
of the
Company
Margin Amount
N.A $
Reserved
portion for
Shareholders of
Group
Companies of
the Company
applicable
to
reserved portion
for
Shareholders of
Group
Companies of
the Company at
the time of
submission of
Bid-cumApplication
Form to the
members of the
Syndicate
Full
Amount
Bidding
Bid
on
Reserved
portion for
Employees
of the
Company
QIBs
NonNonInstitutional
Bidders
Retail
Individual
Bidders
Amount
applicable to
reserved
portion for
Employees
of
the
Company at
the time of
submission
of Bid-cumApplication
Form to the
members of
the
Syndicate
Full
Bid
Amount on
Bidding
Amount
applicable
to
QIB
Bidders at
the time of
submission
of Bid-cumApplication
Form to the
members of
the
Syndicate
Amount
applicable
to
NonInstitutional
Bidders at
the time of
submission
of Bid-cumapplication
Form to the
members of
the
Syndicate
Amount
applicable
to
Retail
Bidders at
the time of
submission
of Bid cum
Application
Form to the
members of
the
Syndicate
NIL
Full
Bid
Amount on
Bidding
Full
Bid
Amount on
Bidding
* Subject to valid bids being received at or above the Issue Price, under-subscription, if any, in any category,
would be allowed to be met with spill-over from any other categories at the discretion of the Company, the
BRLM and the Joint BRLM.
** Unsubscribed portion in any Reserved Category would be added to any other Reserved Category. The
unsubscribed portion, if any, after such interse adjustments among the Reserved Categories shall be added back
to the Net Issue to the public and first be distributed equally between the Retail Portion and the NonInstitutional Portion in accordance with the description in section titled "Statutory and other Information - Basis
of Allotment” as described in page no. 143. In the event that the demand in either of the Retail Portion or the
Non-Institutional Portion has been met, the Equity Shares shall be allocated to a category in which the demand
has not been met. The remaining undersubscribed Equity Shares, if any, after allocation to the Retail Portion and
the Non-Institutional Portion as aforesaid, shall be allocated to the QIB Portion in accordance with the
description in section titled “Statutory and other Information - Basis of Allotment” as described in page no. 143.
$
Oversubscription in the Promoters reservation category is not possible as the investors and number of shares
proposed to be applied for by each entity has been finalised. Amount payable by each of them, at the cap price,
will brought-in one day before the Bid/Issue open date. For details please refer to “Capital Structure” on page no
10 of the Draft Red Herring Prospectus.
129
ISSUE PROCEDURE
Book Building Procedure
The Issue is being made through the 100% Book Building Process wherein upto 50% of the Issue shall be
available for allocation on a discretionary basis to QIBs. Further, not less than 15% shall be available for
allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% shall be available for
allocation on a proportionate basis to the Retail Individual Bidders, subject to valid Bids being received at or
above the Issue Price within price band.
Bidders are required to submit their Bids through the members of the Syndicate. We, in consultation with the
BRLM and Joint BRLM reserve the right to reject any Bid procured by any or all members of the Syndicate
without assigning any reason thereof from QIBs.
In case of Non-Institutional Bidders and Retail Individual Bidders, the Company would have a right to reject the
Bids only on technical grounds.
Investors should note that Equity Shares would be allotted to all successful allottees only in the dematerialised
form.
Illustration of Book Building and Price Discovery Process (Investors may note that this illustration is
is solely for
the purpose of easy understanding and is not specific to the Issue)
Bidders can bid at any price within the price band. For instance, assume a price band of Rs. 31 to Rs. 38 per
share, issue size of 7000 equity shares and receipt of five bids from bidders out of which one bidder has bid for
500 shares at Rs.38 per share while another has bid for 1,500 shares at Rs.37 per share. A graphical
representation of the consolidated demand and price would be made available at the bidding centers during the
bidding period. The illustrative book as shown below shows the demand for the shares of the Company at
various prices and is collated from bids from various investors.
Bid Quantity
Bid Price (Rs.)
Cumulative Quantity
Subscription
500
38
500
30.33
1000
37
1500
40.44
2500
35
4000
180.56
3000
33
7000
300.34
4000
31
11000
450.65
The price discovery is a function of demand at various prices. The highest price at which the issuer is able to
issue the desired quantum of shares is the price at which the book cuts off i.e. Rs. 33 in the above example. The
issuer, in consultation with the BRLM, will finalise the Issue Price at or below such cut off price i.e. at or below
Rs. 33. All bids at or above this Issue Price and cutoff bids are valid bids and are considered for allocation in
respective category.
BidBid-cumcum-Application Form
Bidders shall only use the specified Bid-cum-Application Form bearing the stamp of a member of the Syndicate
for the purpose of making a Bid in terms of the Draft Red Herring Prospectus. The Bidder shall have the option
to make a maximum of three Bids in the Bid-cum-Application Form and such options shall not be considered as
multiple bids. Upon the allocation of Equity Shares, dispatch of CAN, and filing of the Prospectus with the
RoC, the Bid-cum-Application Form shall be considered as the Application Form. Upon completing and
submitting the Bid-cum-Application Form to a member of the Syndicate, the Bidder is deemed to have
authorised the Company to make the necessary changes in the Draft Red Herring Prospectus and the Bid-cumApplication Form as would be required for filing the Prospectus with he ROC and as would be required by ROC
after such filing, without prior or subsequent notice of such changes to the Bidder.
The prescribed colour of the Bid-cum-Application Form for various categories, is as follows:
Category
Colour of Bid Cum Application Form
Indian Public applying on a non-repatriation basis
White
Reserved Categories, i.e., Shareholders of Group Companies
Pink
of the Company and Employees of the Company
Who can Bid?
1. Indian nationals resident in India who are major, in single or joint names (not more than three);
2. Hindu Undivided Families or HUFs in the individual name of the Karta. The Bidder should specify that the
Bid is being made in the name of the HUF in the Bid cum Application Form as follows: “Name of Sole or
130
First bidder: ABC Hindu Undivided Family applying through ABC, where ABC is the name of the Karta”.
Bids by HUFs would be considered at par with those from individuals;
3. Companies, corporate bodies and societies registered under the applicable laws in India and authorised to
invest in the Equity Shares;
4. Indian Mutual Funds registered with SEBI;
5. Indian Financial Institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI
regulations, as applicable);
6. Venture Capital Funds registered with SEBI;
7. State Industrial Development Corporations;
8. Trust/ society registered under the Societies Registration Act, 1860, as amended, or under any other law
relating to Trusts/ society and who are authorised under their constitution to hold and invest in Equity
Shares;
9. Scientific and/ or Industrial Research Organisations authorised to invest in Equity Shares.
10. Insurance companies registered with the Insurance Regulatory and Development Authority;
11. Provident funds with minimum corpus of Rs. 2500 lacs and who are authorised under their constitution to
hold and invest in Equity Shares;
12. Pension funds with minimum corpus of Rs. 2500 lacs and who are authorised under their constitution to
hold and invest in Equity Shares
Note:
Note The BRLM, Joint BRLM, Syndicate Members and any associate of the members of the BRLM, Joint
BRLM and Syndicate Members (except asset management companies on behalf of mutual funds, Indian
financial institutions and public sector banks) cannot participate in that portion of the Issue where allocation is
discretionary unless otherwise permitted by SEBI.
As per the current regulations, OCBs cannot Bid in this offer.
Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or maximum
number of Equity Shares that can be held by them under the relevant regulations or statutory guidelines.
As per the current regulations, the following restrictions are applicable for investments by mutual funds:
No mutual fund scheme shall invest more than 10% of its net asset value in the Equity Shares or equity related
instruments of any company provided that the limit of 10% shall not be applicable for investments in index
funds or sector or industry specific funds. No mutual fund under its scheme should own more than 10% of any
company’s paid-up capital carrying voting rights.
As per the current regulations, the following restrictions are applicable for SEBI registered Venture Capital
Funds:
The SEBI (Venture Capital Funds) Regulations, 1996 prescribe investment restrictions on venture capital funds
registered with SEBI. Accordingly, the holding by any individual venture capital fund registered with SEBI
should not exceed 25% of our Company’s paid-up capital. The aggregate holdings of venture capital funds
registered with SEBI could, however, go up to 100% of our Company’s paid-up equity capital. However, as of
this date, no such resolution has been recommended for adoption.
The above information is given for the benefit of the Bidders. We, the BRLM and the Joint BRLM are not liable
for any amendments or modification or changes in applicable laws or regulations, which may happen after the
date of the Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and
ensure that the number of Equity Shares bid for do not exceed the applicable limits under laws or regulations.
The Equity Shares have not been and will not be registered under the U.S. Securities Act 1933, as amended (the
“Securities Act ”) or any state securities laws in the United States and may not be offered or sold within the
United States or to, or for the account or benefit of, “U.S. persons ”(as defined in Regulation S of the Securities
Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act. Accordingly, the Equity Shares will be offered and sold only (i) in the United States to
“Qualified Institutional Buyers”, as defined in Rule 144A of the Securities Act, and (ii) outside the United States
in compliance with Regulation S and the applicable laws of the jurisdiction where those offers and sales occur.
Maximum and Minimum Bid Size
For Retail Individual
Individual Bidders
131
The Bid must be for a minimum of [•] Equity Shares and in multiples of [•] Equity Shares thereafter, subject to
maximum Bid amount of Rs.1,00,000. In case of revision of Bids, the Retails bidders have to ensure that the Bid
amount does not exceed Rs.1,00,000. In case the maximum Bid amount is more than Rs.1,00,000, then the same
would be considered for allocation under the Non-Institutional Bidders category. The cut-off option is an option
available only to the Retail
Individual Bidders indicating their agreement to bid and purchase the equity shares at the final offer price as
determined at the end of the Book Building process.
For NonNon-Institutional Bidders and QIBs Bidders
The Bid must be for a minimum of such number of Equity shares, so as to ensure that the minimum Bid amount
exceeds Rs.1,00,000/-. Above this minimum Bid Amount, the Bid should be in multiples of [•] equity shares. A
Bid cannot be submitted for more than the size of the Issue.
However, the maximum Bid by a QIB should not exceed the investment limits prescribed for them by the
regulatory or statutory authorities governing them. Under SEBI existing guidelines a QIB Bidder cannot
withdraw its Bid after the Bid/Issue Closing Date.
In case of revision in Bids, the Non-Institutional Bidders who are individuals have to ensure that the Bid
Amount is greater than Rs.1,00,000/-. In case the Bid Amount reduces to Rs.1,00,000/- or less due to a revision
in Bids, the same would be considered for allocation under Retail portion.
Information
Information for the Bidders
1. The Company will file the Red Herring Prospectus with the RoC at least three days before the Bid/ Issue
Opening Date.
2. The members of the Syndicate will circulate copies of the Red Herring Prospectus along with the Bid-cumApplication Form to potential investors.
3. Any investor (who is eligible to invest in the Equity Shares) who would like to obtain the Red Herring
Prospectus and/ or the Bid-cum-Application Form can obtain the same from the Company’s registered
office or from any of the BRLM, Joint BRLM or Syndicate Members.
4. The Bids should be submitted on the prescribed Bid-cum-Application Form only. Bid-cum-Application
Forms should bear the stamp of the members of the Syndicate. Bid-cum-Application Forms, which do not
bear the stamp of the members of the Syndicate, will be rejected.
5. Investors who are interested in subscribing for the Company’s Equity Shares should approach the BRLM,
Joint BRLM or Syndicate Members or their authorised agent(s) to register their Bid.
Method and Process of Bidding
1. The Company, the BRLM and JOINT BRLM shall declare the Bid/Issue Opening Date, Bid/Issue Closing
Date and Price Band at the time of filing the Red Herring Prospectus with RoC and also publish the same in
three widely circulated newspapers (one each in English and Hindi) and one regional newspaper. This
advertisement shall be made as per the applicable SEBI (DIP) Guidelines.
Investors who are interested in subscribing for The Company’s Equity Shares should approach any of the
BRLM, Joint BRLM or Syndicate Member or their authorised agent(s) to register their Bid.
2. The Bidding Period shall be open for atleast 3 working days and not more than 10 working days. In case the
price band is revised, the revised price band will be published in two widely circulated national newspapers
(one each in English and Hindi) and one regional newspaper and the Bidding period will be extended for a
further period of three days, subject to the total Bidding period not exceeding 13 days. During the bidding
period, The Bidders may approach the Syndicate to submit their Bid. Every Member of the Syndicate shall
accept Bids from all clients/investors who place orders through them and shall have the right to vet the bids.
3. Each Bid-cum-Application Form will give the Bidder the choice to bid for up to three optional prices (for
details refer to the paragraph entitled “Bids at Different Price Levels” on page no. 134 below) and specify
the demand (i.e. the number of Equity Shares bid for) in each option. The price and demand options
submitted by the Bidder in the Bid-cum-Application Form will be treated as optional demands from the
Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity
Shares bid for by a Bidder at or above the Issue Price will be considered for allocation and the rest of the
Bid(s), irrespective of the Bid Price, will become automatically invalid.
4. The Bidder cannot bid on another Bid-cum-Application Form after his or her Bids on one Bid-cumApplication Form have been submitted to any member of the Syndicate. Submission of a second Bid-cumApplication Form to either the same or to another member of the Syndicate will be treated as multiple bids
and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point
of time prior to the allocation or allotment of Equity Shares in this Issue. However, the Bidder can revise
132
5.
6.
the Bid through the Revision Form, the procedure for which is detailed under the paragraph “Build up of
the Book and Revision of Bids” on page no. 136 of the Draft Red Herring Prospectus.
The BRLM, JOINT BRLM and Syndicate Members will enter each bid option into the electronic bidding
system as a separate Bid and generate a Transaction Registration Slip, (“TRS”), for each price and demand
option and give the same to the Bidder. Bidders should make sure that they ask for a copy of the
computerised TRS for every Bid Option from the Syndicate Member. Therefore, a Bidder can receive up to
three TRSs for each Bid-cum-Application Form.
Along with the Bid-cum-Application Form, all Bidders will make payment in the manner described under
the paragraph “Terms of Payment and Payment into Escrow Account” on page no. 135 of the Red Herring
Prospectus.
Bids at Different Price Levels
1. The Price Band has been fixed at Rs. [•] to Rs. [•] per Equity Share of Rs.10 each, Rs. [•] being the Floor
Price and Rs. [•] being the Cap Price. The Bidders can bid at any price with in the Price Band, in multiples
of Re 1.
2. In accordance with SEBI Guidelines, the Company in consultation with the BRLM and Joint BRLM, can
revise the Price Band during the Bidding period, in which case the Issue will be kept open for a period of
three days after the revision of the Price Band, subject to the total Bidding Period not exceeding thirteen
days. The Price Band can be revised during the Bidding Period in which case the maximum revisions on
either side of the Price Band shall not exceed 20% fixed initially and as disclosed in the Red Herring
Prospectus.
3. Any revision in the Price Band shall be widely disseminated including by informing the stock exchanges by
issuing a public notice in two national languages (One each in English and Hindi) and one regional
newspaper also indicating the change on the relevant websites and the terminals of the members of
Syndicate.
4. The Company in consultation with the BRLM and Joint BRLm can finalise the Issue Price within the Price
Band in accordance with this clause, without the prior approval of, or intimation to the Bidders.
5. The Bidder can bid at any price within the Price Band. The Bidder has to bid for the desired number of
Equity Shares at a specific price. Retail Individual Bidders may bid at “Cut off”. However, bidding at “Cutoff” is prohibited for QIB or Non Institutional Bidders and such Bids from QIBs and Non Institutional
Bidders shall be rejected.
6. Retail Individual Bidders who bid at the Cut-Off agree that they shall purchase the Equity Shares at any
price within the Price Band. Retail Individual Bidders bidding at Cut-Off shall deposit the Bid Amount
based on the Cap Price in the Escrow Account. In the event the Bid Amount is higher than the subscription
amount payable by the Retail Individual Bidders (i.e. the total number of equity shares allocated in the Issue
multiplied by the Issue Price), Retail Individual Bidders shall receive the refund of the excess amounts from
the Escrow Account.
7. In case of an upward revision in the Price Band announced as above, the Retail Bidders who had bid at Cutoff could either (i) revise their Bid or (ii) make additional payment based on the Cap of the Revised Price
Band, with the members of the Syndicate to whom the Original Bid was submitted. In case the total amount
(i.e. the original Bid amount plus additional payment) exceeds Rs.1,00,000 , the Bid will be considered for
allocation of under the Non-Institutional portion in terms of the Red Herring Prospectus. If however the
Bidder does not either revise the Bid or make additional payment and the offer price is higher than the cap
of the Price Band prior to revision, the number of Equity Shares bid for shall be adjusted for the purpose of
allocation, such that no additional payment would be required from the Bidder.
8. In case of downward revision in the Price Band announced as above, Retail Bidders who have bid at CutOff could either revise their Bid or the excess amount at the time of bidding would be refunded from the
Escrow Account.
9. In the event of any revision in the Price Band, whether upwards or downwards, the Minimum Application
shall remain [•] Equity Shares irrespective of whether the Bid Amount payable on such Minimum
Application size is not in the range of Rs.5,000/- to Rs.7,000/-.
Option to Subscribe
Equity Shares being issued through this Prospectus can be applied for in the dematerialised form only.
Escrow Mechanism
Escrow Account for the Issue
The Company shall open Escrow Accounts with one or more Escrow Collection Banks in whose favour the
Bidders shall make out the cheque or demand in respect of his or her Bid and/or revision of the bid. Cheques or
demand drafts received for the full Bid amount from Bidders in a certain category would be deposited in the
133
Escrow Account for the Issue. The Escrow Collection Banks will act in terms of the Red Herring Prospectus and
an Escrow Agreement. The monies in the Escrow Account for the Issue shall be maintained by the Escrow
Collection Bank(s) for and on behalf of the Bidders. The Escrow Collection Bank(s) shall not exercise any lien
whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the
Designated Date, the Escrow Collection Banks shall transfer the monies from the Escrow Account to the Public
Issue Account with the Bankers to the Issue as per the terms of the Escrow Agreement with the Company.
Payments of refunds to the Bidders shall also be made from the Escrow collection Banks are per the terms of the
Escrow Agreement and the Red Herring Prospectus.
The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an
arrangement between the Escrow Collection Bank(s), The Company, the Registrar to the Issue, BRLM and Joint
BRLM, and Syndicate Members to facilitate collections from the Bidders.
Terms of Payment and Payment into the Escrow Collection
Collection Account
In case of Non-institutional Bidders and Retails Individual Bidders, each Bidder shall, with the submission of
the Bid cum Application Form draw a cheque or demand draft for the maximum amount of his Bid in favour of
the Escrow Account of the Escrow Collection Bank (for details refer to the paragraph Payment Instructions on
page no. 140 of the Draft Red Herring Prospectus) and submit the same to the members of the Syndicate with
whom the Bid is being deposited.
Bid cum Application Forms accompanied by cash and Stockinvest shall not be accepted.
The maximum bid price has to be paid at the time of submission of the Bid cum Application Form based on the
highest bidding option of the Bidder. The members of the Syndicate shall deposit the cheque or demand draft
with the Escrow Collection Bank(s), which will hold the monies for the benefit of the Bidders till such time as
the Designated Date. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds from the
Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account or Refund Account
with the Bankers to the Issue, as applicable.
In case of QIBs, the members of the Syndicate may, at their discretion, waive such payment at the time of the
submission of the Bid cum Application Form. Where such payment at the time of submission of the Bid cum
Application Form is waived at the discretion of the members of the Syndicate, the Issue Price shall be payable
for the allocated Equity Shares no later than the date specified in the CAN, which shall be subject to a minimum
period of two days from date of communication of the allocation list to the members of the Syndicate by the
BRLM and Joint BRLM. If the payment is not made favoring the Escrow Account within the time stipulated
above, the application of the Bidder is liable to be rejected. However, if the members of the Syndicate do not
waive such payment, the full amount of payment has to be made at the time of submission of the Bid cum
Application Form.
Where the Bidder has been allocated lesser number of Equity Shares than he or she had bid for, the excess
amount paid on bidding, if any, after adjustment for allocation, will be refunded to such Bidder within 15 days
from the Bid/Issue Closing Date.
Electronic Regi
Registration
stration of Bids
(a) The members of the Syndicate will register the Bids using the on-line facilities of NSE and BSE. There will
be at least one on-line connectivity to each city where the Bids are accepted.
(b) NSE and BSE will offer a screen-based facility for registering Bids for the Issue. This facility will be
available on the terminals of the members of the Syndicate and their authorised agents during the Bidding
Period. Members of the Syndicate can also set up facilities for off-line electronic registration of Bids
subject to the condition that they will subsequently download the off-line data file into the on-line facilities
for book building on a regular basis. On the Bid Closing Date, the Company shall upload the Bids till such
time as may be permitted by the Stock Exchanges.
(c) The aggregate demand and price for bids registered on the electronic facilities of NSE and BSE will be
downloaded on a regular basis, consolidated and displayed on-line at all bidding centers. A graphical
representation of consolidated demand and price would be made available at the bidding centers during the
bidding period.
(d) At the time of registering each Bid, the members of the Syndicate shall enter the following details of the
investor in the online system:
• Name of the investor (Investors should ensure that the name given in the Bid cum Application form is
exactly the same as the Name in which the Depositary Account is held. In case, the Bid cum
Application Form is submitted in joint names, investors should ensure that the Depository Account is
134
(e)
(f)
(g)
(h)
(i)
also held in the same joint names and are in the same sequence in which they appear in the Bid cum
Application Form).
• Investor Category – Individual, Corporate or Mutual Fund, etc.
• Numbers of Equity Shares bid for
• Bid price
• Bid-cum-Application Form number
• Whether payment is made upon submission of Bid-cum-Application Form
• Depository Participant Identification No. and Client Identification No. of the Demat Account of the
Bidder
A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding
options. It is the Bidder’s responsibility to obtain the TRS from the members of the Syndicate. The
registration of the Bid by the member of the Syndicate does not guarantee that the Equity Shares shall be
allocated either by the members of the Syndicate or us.
Such TRS will be non-negotiable and by itself will not create any obligation of any kind.
The members of the Syndicate have the right to review the Bid. Consequently, the members of the
Syndicate also have the right to accept the Bid or reject it without assigning any reason. In case of NonInstitutional Bidders and Retail Individual Bidders, Bids shall not be rejected except on the technical
grounds listed in the Draft Red Herring Prospectus.
It is to be distinctly understood that the permission given by NSE and BSE to use their network and
software of the online IPO system should not in any way be deemed or construed to mean that the
compliance with various statutory and other requirements by us, and BRLM/JOINT BRLM are cleared or
approved by NSE and BSE; nor does it in any manner warrant, certify or endorse the correctness or
completeness of any of the compliance with the statutory and other requirements nor does it take any
responsibility for the financial or other soundness of the Company, promoters, management or any scheme
or project of the Company.
It is also to be distinctly understood that the approval given by NSE and BSE should not in any way be
deemed or construed that the Red Herring Prospectus has been cleared or approved by the NSE and BSE;
nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents
of the Draft Red Herring Prospectus; nor does it warrant that the equity shares will be listed or will continue
to be listed on the NSE and BSE.
Build Up of the Book and Revision of Bids
(a) Bids registered by various Bidders through the members of the Syndicate shall be electronically transmitted
to the NSE or BSE mainframe on an on-line basis. Data would be uploaded on a regular basis.
(b) The Price Band can be revised during the Bidding Period, in which case the Bidding Period shall be
extended further for a period of three days, subject to the total Bidding Period not exceeding thirteen days.
The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to
compliance with the immediately preceding sentence, the floor of Price Band can move up or down to the
extent of 20% of the floor of the Price Band disclosed in the Draft Red Herring Prospectus.
(c) Any revision in the Price Band will be widely disseminated by informing the stock exchanges, by issuing a
public notice in two national newspapers (one each in English and Hindi) and one regional newspaper and
also indicating the change on the relevant websites and the terminals of the members of the Syndicate.
(d) The book gets built up at various price levels. This information will be available with the BRLM and Joint
BRLM on a regular basis.
(e) During the Bidding Period, any Bidder who has registered his or her interest in the Equity Shares at a
particular price level is free to revise his or her Bid within the price band using the printed Revision Form,
which is a part of the Bidcum-Application Form.
(f) Revisions can be made in both the desired number of Equity Shares and the bid price by using the Revision
Form.
(a) The Bidder must complete his or her Bid cum Application Form, the details of all the options in his or her
Bid cum Application Form or earlier Revision Form and revisions for all the options as per his Bid cum
Application Form or earlier Revision Form.
(b) For example, if a Bidder has bid for three options in the Bid cum Application Form and he is changing only
one of the options in the Revision Form, he must still fill the details of the other two options in the Revision
Form unchanged. Incomplete or inaccurate Revision Forms will not be accepted by the members of the
Syndicate.
(g) The Bidder can make this revision any number of times during the Bidding Period. However, for any
revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate
through whom he or she had placed the original Bid. Bidders are advised to retain copies of the blank
Revision Form and the revised Bid must only be made on that Revision Form.
135
(h) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the
incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess amount, if
any, resulting from downward revision of the Bid would be returned to the Bidder at the time of refund in
accordance with the terms of the Red Herring Prospectus. In case of QIBs, the members of the Syndicate
may at their sole discretion waive the payment requirement at the time of one or more revisions by the QIB
Bidders.
(i) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS from
the members of the Syndicate. It is the responsibility of the Bidder to request for and obtain the revised
TRS, which will act as proof of his or her having revised the previous Bid.
(j) In case of discrepancy of data between NSE or BSE and the members of the Syndicate, the decision of the
BRLM and Joint BRLM based on the physical book shall be final and binding to all concerned.
Price
Price Discovery and Allocation
(a) After the Bid/Issue Closing Date, the BRLM and Joint BRLM will analyse the demand generated at various
price levels and discuss pricing strategy with us.
(b) The Company in consultation with the BRLM and Joint BRLM, shall finalise the “Issue Price”, the number
of Equity Shares to be allotted and the allocation to successful QIB Bidders. The allocation will be decided
based on the quality of the Bidder determined broadly by the size, price and time of the Bid.
(c) The allocation for QIBs would be upto 50% of the Issue Size on a discretionary basis. The allocation for
Non-Institutional Bidders would be upto 15% and Retail Individual Bidders of not less than 35% of the
Issue Size respectively would be on proportionate basis, subject to valid Bids being received at or above the
Issue Price.
(d) Under-subscription, if any, in the Non-Institutional Portion and / or Retail Portion, would be allowed to be
met with spill over of demand from any of the other categories, at the sole discretion of the Company,
BRLM and Joint BRLM.
(e) The BRLM and Joint BRLM, in consultation with the Company, shall notify the members of the Syndicate
of the Issue Price and allocations to their respective Bidders.
(f) The Company reserves the right to cancel the Issue any time after the Bid/Issue Opening Date, without
assigning any reason therefore.
Signing of Underwriting Agreement and RoC Filing
(a) We, the BRLM, Joint BRLM and the Syndicate Members shall enter into an underwriting agreement on
finalisation of the Issue Price and allocation(s) to the Bidders.
(b) After signing the Underwriting Agreement, we will file the Red Herring Prospectus with RoC, which then
would be termed ‘Prospectus’. The Prospectus would have details of the Issue Price, Issue Size,
underwriting arrangements and would be complete in all material respects.
Advertisement regarding Issue Price and Prospectus
A statutory advertisement will be issued by the Company after the filing of the Prospectus with the RoC. This
advertisement in addition to the information that has to be set out in the statutory advertisement shall indicate
the Issue Price along with a table showing the number of Equity Shares. Any material updates between the date
of Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement.
Issuance of Confirmation of Allocation Note
(a) The BRLM, or Registrar to the Issue shall send to the members of the Syndicate a list of their Bidders who
have been allocated Equity Shares in the Issue.
(b) The BRLM, or Syndicate Members would then send the CAN to their Bidders who have been allocated
Equity Shares in the Issue. The despatch of a CAN shall be deemed to be valid, binding and irrevocable
contract for the Bidder to pay the entire Issue Price for all the Equity Shares allocated to such Bidder. Those
Bidders who have not paid into the Escrow Account of the Company at the time of bidding shall pay in full
the amount payable into the Escrow Account of the Company by the Pay-in Date specified in the CAN.
(c) Bidders who have been allocated Equity Shares and who have already paid into the Escrow Account of the
Company at the time of bidding shall directly receive the CAN from the Registrar to the Issue subject,
however, to realisation of their cheque or demand draft paid into the Escrow Account of the Company. The
despatch of a CAN shall be deemed to be a valid, binding and irrevocable contract for the Bidder to pay the
entire Issue Price for all the Equity Shares to be allotted to such Bidder.
Designated Date and Allotment of Equity shares
shares
(a) All allottees will receive credit for the Equity Shares directly in their depository account. Equity Shares will
be offered only in the dematerialised form to the allottees. Allottees will have the option to re-materialise
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the Equity Shares so allotted, if they so desire, as per the provisions of the Companies Act and the
Depositories Act.
(b) Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be
allocated to them pursuant to this Issue.
(c) After the funds are transferred from the Escrow Account to the Public Issue Account on the Designated
Date, we would allot the equity shares to the allottees. We would ensure the allotment of Equity Shares
within 15 days of Bid / Issue Closing Date and give instructions to credit to the allottees’ depository
accounts within two working days from the date of allotment. In case we fail to make allotment within 15
days of the Bid/Issue Closing Date, interest would be paid to the investors at the rate of 15% per annum.
General Instr
Instructions
uctions
Do’s:
(a) Check if you are eligible to apply;
(b) Ensure that the Bid is only within the Price Band.
(c) Read all the instructions carefully and complete the Resident Bid-cum-Application Form (white in colour)
or Non- Resident Bid-cum-Application Form (blue in colour), as the case may be;
(d) Ensure that the details about Depository Participant and Beneficiary Account are correct as Equity Shares
will be transferred in the dematerialised form only;
(e) Investors must ensure that the name given in the bid cum application form is exactly the same as the Name
in which the Depository Account is held. In case, the Bid cum Application Form is submitted in joint
names, investors should ensure that the Depository Account is also held in the same joint names and are in
the same sequence in which they appear in the Bid cum Application Form;
(f) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a member of
the Syndicate;
(g) Ensure that you have been given a TRS for all your Bid options; and
(h) Submit Revised Bids to the same member of the Syndicate through whom the Original Bid was placed and
obtain a revised TRS.
Dont’s:
(a) Do not Bid for lower than the minimum Bid size;
(b) Do not Bid/ revise Bid to a price that is less than the Floor of the Price Band or higher than the Cap of the
Price Band;
(c) Do not Bid on another Bid-cum-Application Form after you have submitted a Bid to the members of the
Syndicate;
(d) Do not pay the Bid amount in cash or through Stockinvest;
(e) Do not send Bid cum Application Forms by post; instead hand them over to a member of the Syndicate
only;
(f) Do not bid at Cut-off price for Non-institutional and QIB Bidders;
(g) A Bid from any investor should not exceed the investment limit or maximum number of Equity Shares that
can be held by a Bidder under the applicable laws or regulations.
Instructions for Completing the BidBid-cumcum-Application Form
Bidders can obtain Bid-cum-Application Forms and / or Revision Forms from the BRLM, or Syndicate
Members.
Bids and Revisions of Bids
Bids and revisions to B
Bids
ids must be:
(a) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable.
(b) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained
herein, the Bid cum Application Form and Revision Form. Incomplete Bid cum Application Forms or Revision
Forms are liable to be rejected.
(c) For Retail Individual Bidders, the Bids must be for a minimum of [•] Equity Shares and in multiples of [•]
thereafter subject to a maximum Bid Amount of Rs.1,00,000.
(d) For Non Institutional and QIB Bidders, Bids must be for a minimum of such number of Equity Shares that
the Bid Amount exceeds Rs.1,00,000 and in multiples of [•] Equity Shares thereafter. Bids cannot be made for
more than the Issue size. Bidders are advised to ensure that a single Bid from them should not exceed the
investment limits or maximum number of shares that can be held by them under the applicable laws or
regulations.
(e) In single name or in joint names (not more than three).
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(f) Thumb impressions and signatures other than in the languages specified in the Eight Schedule in the
Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate
under his or her official seal.
Bidder’s Bank Details
Bidders should note that on the basis of name of the Bidders, Depository Participant’s name, Depository
Participant- Identification number and Beneficiary Account Number provided by them in the Bid cum
Application Form, the Registrar to the Issue will obtain from the Depository the Bidders bank account details.
These Bank Account details would be printed on the refund order, if any, to be sent to Bidders. Hence, Bidders
are advised to immediately update their Bank Account
details as appearing on the records of the depository participant. Please note that failure to do so could result in
delays in credit of refunds to Bidders at the Bidders sole risk.
Bidders Depository Account Details
It is mandatory for all the bidders to get their equity shares in dematerialised form. All bidders should mention
their depository participant’s name, depository participant-identification number and beneficiary account
number in the bid cum application form. Investors must ensure that the name given in the bid cum application
form is exactly the same as the name in which the depository account is held. In case the bid cum applicatison
form is submitted in joint names,
It should be ensured that the depository account is also held in the same joint names and are in the same
sequence in which they appear in the bid cum application form.
Bidders should note that on the basis of name of the Bidders, Depository Participant’s name, Depository
ParticipantParticipant-Identification number and Beneficiary Account Number provided by them in the Bid cum
Application
Application Form, the Registrar to the Issue will obtain from the Depository demographic details of the Bidders
such as address, bank account details for printing on refund orders and occupation (herein after referred to as
Demographic Details). Hence, Bidde
Bidders
rs should carefully fill in their Depository Account details in the BidBid-cumcumApplication Form. These Demographic Details would be used for all correspondence with the Bidders including
mailing of the refund orders/ CANs/Allocation Advice and printing of Bank
Bank particulars on the refund order and
the Demographic Details given by Bidders in the Bid -cum application Form would not be used for these
purposes by the Registrar.
Hence, Bidders are advised to update their Demographic Details as provided to their Depository
Depository Participants.
By signing the Bid-cum-Application Form, Bidder would have deemed to authorize the depositories to provide,
upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Refund
orders/Allocation Advice/CANs would be mailed at the address of the Bidder as per the Demographic Details
received from the Depositories. Bidders may note that delivery of refund orders/allocation advice/CANs may
get delayed if the same once sent to the address obtained from the depositories are returned undelivered. In such
an event, the address and other details given by the Bidder in the Bid cum Application Form would be used only
to ensure dispatch of refund orders. Please note that any such delay shall be at the Bidders sole risk.
In case no corresponding record is available with the Depositories that matches three parameters, namely, names
of the Bidders (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and
the beneficiary’s identity, then such Bids are liable to be rejected.
Bids under Power of Attorney
In case of Bids made pursuant to a Power of Attorney or by limited companies, corporate bodies, registered
societies, a certified copy of the Power of Attorney or the relevant resolution or authority, as the case may be,
along with a certified copy of the Memorandum and Articles of Association and/or Bye Laws must be lodged
along with the Bidcum-Application Form. Failing this, the Company reserves the right to accept or reject any
Bid in whole or in part, in either case, without assigning any reason.
In case of Bids made by Insurance Companies registered with the Insurance Regulatory and Development
Authority, a certified copy of certificate of registration issued by Insurance Regulatory and Development
Authority must be lodged along with the Bid-cum-Application Form. Failing this, the Company reserves the
right to accept or reject any Bid in whole or in part, in either case, without assigning any reason.
In case of Bids made by provident funds with minimum corpus of Rs.2500 Lacs and pension funds with
minimum corpus of Rs.2500 Lacs, a certified copy of certificate from a chartered accountant certifying the
corpus of the provident fund/pension fund must be lodged along with the Bid-cum-Application Form. Failing
this, the Company reserves the right to accept or reject any Bid in whole or in part, in either case, without
assigning any reason.
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In case of Bids made by mutual fund registered with SEBI, Venture Capital Fund registered with SEBI and
Foreign Venture Capital investor registered with SEBI, a certified copy of their SEBI registration certificate
must be submitted with the Bid cum Application Form. Failing this, the Company reserves the right to accept or
reject any Bid in whole or in part, in either case without assigning any reason.
The Company in its absolute discretion, reserve the right to relax the above condition of simultaneous lodging of
the Power of Attorney along with the Bid cum Application form, subject to such terms that we may deem fit.
Procedure for Application by Mutual Funds
In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered
with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple
bids provided that the Bids clearly indicate the name of scheme concerned for which the Bid has been made.
Payment Instructions
The Company shall open an Escrow Account(s) with the Escrow Collection Bank(s) for the collection of the Bid
Amounts payable upon submission of the Bid-cum-Application Form and for amounts payable pursuant to
allocation in the Issue. Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid
and/or on allocation as per the following terms:
Payment into Escrow Account to the Issue
i. The Bidders for whom the applicable margin is equal to 100% shall, with the submission of the Bid cum
Application Form draw a payment instrument for the Bid Amount in favour of the Escrow Account of the
Company and submit the same to the members of the Syndicate.
ii. In case no Margin Amount has been paid by the Bidders during the Bidding Period, on receipt of the CAN, an
amount equal to the Issue Price multiplied by the Equity Shares allocated to the Bidder or the balance amount,
in case the Margin Amount is less than the Issue Price multiplied by the Equity Shares allocated to the Bidder,
shall be paid by the Bidders into the Escrow Account within the period specified in the CAN which shall be
subject to a minimum period of two days from the date of communication of the allocation list to the members
of the Syndicate by the BRLM/Joint BRLM.
iii. The payment instruments for payment into the Escrow Account of the Company should be drawn in favour
of “Escrow Account – _________”
v. Where a Bidder has been allocated a lesser number of Equity Shares than the Bidder has Bid for, the excess
amount, if any, paid on bidding, after adjustment towards the balance amount payable on the Equity Shares
allocated, will be refunded to the Bidder from the Escrow Account of the Company.
vi. The monies deposited in the Escrow Account of the Company will be held for the benefit of the Bidders until
Designated Date.
vii. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account of
the Company as per the terms of the Escrow Agreement into the Issue Account with the Bankers to the Issue.
viii. On the Designated Date and no later than 15 days from the Bid/Issue Closing Date, the Escrow Collection
Bank shall also refund all amounts payable to unsuccessful bidders and also the excess amount paid on Bidding,
if any, after adjusting for allocation to the Bidders
Payments should be made by cheque or demand draft drawn on any Bank (including
(including a CoCo-Operative Bank),
which is situated at, and is a member of or subsub-member of the banker’s clearing house located at the centre
where the BidBid-cumcum-Application Form is submitted. Outstation cheques/bank drafts drawn on banks not
participating in the
the clearing process will not be accepted and applications accompanied by such cheques or bank
drafts are liable to be rejected.
Payment by Stockinvest
In terms of Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5,
2003, the Stockinvest Scheme has been withdrawn with immediate effect. Hence, payment through stockinvest
would not be accepted in this Issue.
Cash/Stockinvest/Money Orders/Postal Orders will not be accepted.
Submission of BidBid-cumcum-Application Form
All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques
or drafts shall be submitted to the BRLM, Joint BRLM or Syndicate Member at the time of submitting the Bid.
The BRLM/Joint BRLM/ members of the Syndicate may at its discretion waive the requirement of payment at
the time of submission of the Bid cum Application Form and Revision Form.
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No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or
Revision Form. However, the collection centre of the BRLM, Joint BRLM or Syndicate Member will
acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the
Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum
Application Form for the records of the Bidder.
Other Instructions
Joint Bids in the case of Individuals
Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be
made out in favour of the Bidder whose name appears first in the Bid-cum-Application Form or Revision Form
(“First Bidder”). All communications will be addressed to the First Bidder and will be dispatched to his or her
addres.
Multiple Bids
A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required.
Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same.
We reserve the right to reject, in our absolute discretion, all or any multiple Bids in any or all categories.
PAN or GIR Number
Where Bid(s) is/are for Rs.50,000 or more, the Bidder or in the case of a Bid in joint names, each of the Bidders,
should mention his/her Permanent Account Number (PAN) allotted under the I.T.Act. The copy of the PAN
card or PAN allotment letter is required to be submitted with the application form. Applications without this
information and documents will be considered incomplete and are liable to be rejected. It is to be specifically
noted that Bidders
Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on
this ground. In case the Sole/First Bidder and Joint Bidder(s) is/are not required to obtain PAN, each of the
Bidder(s) shall mention “Not Applicable” and in the event that the sole Bidder and/or the joint Bidder(s) have
applied for PAN which has not yet been allotted each of the Bidder(s) should mention “Applied for” in the Bid
cum Application Form. Further, where the Bidder(s) has mentioned “Applied for” or “Not Applicable”, the
Sole/First Bidder and each of the Joint Bidder(s), as the case may be, would be required to submit Form
60(Form of declaration to be filed by a person of declaration to be filed by a person who does not have a
permanent account number and who enters into any transaction specified in rule 114B), or, Form 61 (form of
declaration to be filed by a person who has agricultural income and is not in receipt of any other income
chargeable to income tax in respect of transactions specified in rule 114B), as may be applicable, duly filled
along with a copy of any one of the following documents in support of the address:
(a) Ration Card
(b) Passport
(c) Driving License
(d) Identity Card issued by any institution
(e) Copy of the electricity bill or telephone bill showing residential address
(f) Any document or communication issued by any authority of the Central Government, State Government or
local bodies showing residential address
(g)Any other documentary evidence in support of address given in the declaration.
It may be noted that Form 60 and Form 61 have been amended vide a notification issued on December 1, 2004
by the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes. All Bidders are requested to
furnish, where applicable, the revised Form 60 or 61 as the case may be.
The Company’s Right to Reject Bids
We, the BRLM, and the members of the Syndicate reserve the right to reject any Bid without assigning any
reason therefore in case of QIBs. In case of Non-Institutional Bidders and Retail Individual Bidders, we, BRLM
have a right to reject bids based on technical grounds. Consequent refunds shall be made by cheque or pay order
or draft and will be sent to the bidder’s address at the Bidder’s risk.
Grounds for Technical
Technical Rejections
Bidders are advised to note that Bids are liable to be rejected on among others on the following technical
grounds:
1. Amount paid doesn’t tally with the highest number of Equity Shares bid for;
2. Bank account details (for refund) are not given;
3. Age of First Bidder not given;
4. Bid by minor;
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5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
PAN or GIR Number not given if Bid is for Rs. 50,000 or more;
Bids for lower number of Equity Shares than specified for that category of investors;
Bids at a price less than lower end of the Price Band;
Bids at a price more than the higher end of the Price Band;
Bids at cut-off price by Non-Institutional and QIB Bidders;
Bids for number of Equity Shares which are not in multiples of 100;
Category not ticked;
Multiple bids;
In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents
are not submitted;
Bid-cum-Application Form does not have the stamp of the BRLM, Joint BRLM or Syndicate Members;
Bid-cum-Application Form does not have Bidder’s depository account details;
Bid-cum-Application Forms are not delivered by the Bidders within the time prescribed as per the Bid-cumApplication Form, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and as per the
instructions in the Red Herring Prospectus and the Bid cum-Application Form
Bids for amounts greater than the maximum permissible amounts prescribed by the regulations. See the
details regarding the same at page no. 127 of the Draft Red Herring Prospectus;
Bids accompanied by Stockinvest;
Signature of sole and / or joint bidders missing;
In case no corresponding record is available with the Depositories that matches three parameters namely,
names of the Bidders (including the sequence of names of joint holders), the depositary participant’s
identity (DP ID).
Equity Shares in Dematerialised Form with NSDL or CDSL
As per the provisions of Section 68B of the Companies Act, the Equity Shares in this Issue shall be allotted only
in a dematerialised form, (i.e. not in the form of physical certificates but be fungible and be represented by the
statement issued through the electronic mode). In this context, two tripartite agreements have been signed
between the Company and the Depositories:
a) an agreement dated [•] with NSDL, the Company and Karvy Computershare Private Limited
b) an agreement dated [•] with CDSL, the Company and Karvy Computershare Private Limited
Bids from any investor without relevant details of his or her depository account are liable to be rejected.
(d) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the
Depository Participants of either NSDL or CDSL prior to making the Bid.
(e) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and Depository
Participant’s Identification number) appearing in the Bid-cum-Application Form or Revision Form.
(f) Equity shares allotted to a successful Bidder will be credited in electronic form directly to the beneficiary
account (with the Depository Participant) of the Bidder.
(g) Names in the Bid-cum-Application Form or Revision Form should be identical to those appearing in the
account details in the Depository. In case of joint holders, the names should necessarily be in the same
sequence as they appear in the account details in the Depository.
(h) Non-transferable allotment advice or refund orders will be directly sent to the Bidder by the Registrar to
this Issue.
(i) If incomplete or incorrect details are given under the heading ‘Request for Equity Shares in electronic form’
in the Bidcum-Application Form or Revision Form, it is liable to be rejected.
(j) The Bidder is responsible for the correctness of his or her demographic details given in the Bid-cumApplication Form vis-à-vis those with his or her Depository Participant.
(k) It may be noted that Equity Shares in electronic form can be traded only on the stock exchanges having
electronic connectivity with NSDL and CDSL. All the Stock Exchanges where the Equity Shares are
proposed to be listed have electronic connectivity with CDSL and NSDL.
(l) The trading of the Equity Shares of the Company would be in dematerialised form only for all investors.
As this Issue comprises of Fresh Issue, investors are advised to instruct their Depository Participants to accept
the Equity Shares that may be allocated to them pursuant to this Issue.
Communications
All future communications in connection with Bids made in this Issue should be addressed to the Registrar to
the Issue quoting the full name of the sole or First Bidder, Bid-cum-Application Form number, number of
Equity Shares applied for, date, bank and branch where the Bid was submitted and cheque, draft number and
issuing bank thereof.
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Procedure and Time Schedule for Allotment of Equity Shares and Disposal of Applications and Application
Money
The Company reserves at its absolute and uncontrolled discretion and without assigning any reason therefore,
the right to accept or reject any Bid in whole or in part. In case a Bid is rejected in full, the whole of the Bid
Amount will be refunded to the Bidder within 15 days of the Bid/Issue Closing Date. In case a Bid is rejected in
part, the excess Bid Amount will be refunded to the Bidder within 15 days of the Bid/Issue Closing Date. We
will ensure the allotment of the Equity Shares within 15 days from the Bid/Issue Closing Date. We shall pay
interest at the rate of 15% per annum (for any delay beyond the periods as mentioned above), if allotment is not
made, refund orders are not dispatched and/ or dematerialised credits are not made to investors within two
working days from the date of allotment.
Disposal of Applications and Application Money
The Company shall ensure despatch of allotment advice or refund orders and giving of benefit to the Beneficiary
Account with Depository Participants and submission of the allotment and listing documents to the Stock
Exchanges within two working days of finalisation of the basis of allotment of Equity Shares. We shall ensure
the dispatch of refund orders, if any, of value up to Rs.1,500/-, “Under Certificate of Posting”, and dispatch of
refund orders above Rs.1,500/-, if any, by Registered Post or Speed Post at the sole or First Bidder’s sole risk.
The Company shall make best efforts to ensure that all steps for completion of the necessary formalities for
listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be
listed are taken within seven working days of finalisation of the basis of allotment.
In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines, we,
further undertake that:
• Allotment of Equity Shares shall be made only in dematerialised form within 15 days of the Bid/Issue
Closing Date;
• We would ensure despatch of refund orders within 15 days of the Bid/Issue Closing Date; and
• We shall pay interest at 15% per annum (for any delay beyond the 15 days time period as mentioned
above), if allotment/ transfer is not made, refund orders are not dispatched and/or demat credits are not
made to investors within the 15 days time prescribed above.
• We will provide adequate funds required to the Registrar to the Issue for dispatch of refund orders or
allotment advice. Refunds will be made by cheque, pay orders or demand drafts drawn on a bank appointed
by the Company as a refund banker and payable at par at places where Bids are received. Bank charges, if
any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.
Impersonation
Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the
Companies Act, 1956, which is reproduced below:
“Any person who:
(a) Makes in a fictitious name, an application to a Company for acquiring or subscribing for, any shares
therein, or
(b) Otherwise induces a Company to allot, or register any transfer of
of shares therein to him, or any other person
in a fictitious name,
shall be punishable with imprisonment for a term which may extend to five years.”
Interest on Refund of excess Bid Amount
The Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if refund
orders are not dispatched within 15 days from the Bid/Issue Closing Date as per the Guidelines issued by the
Government of India, Ministry of Finance pursuant to their letter No.F/8/S/79 dated July 31, 1983, as amended
by their letter No. F/14/SE/85 dated September 27, 1985, addressed to the stock exchanges, and as further
modified by SEBI’s Clarification XXI dated October 27, 1997, with respect to the SEBI Guidelines.
Basis of Allotment
A. For Employee Reservation Portion
Only Eligible Employees are eligible to apply under the Employee Reservation Portion.
Bids received from the Eligible Employees at or above the Issue Price shall be grouped together to
determine the total demand under this category. The allocation to all the successful Eligible Employees will
be made at the Issue Price.
If the aggregate demand in this category is less than or equal to 22,85,720 Equity Shares at or above the
Issue Price, full allocation shall be made to the Eligible Employees to the extent of their demand.
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If the aggregate demand in this category is greater than 22,85,720 Equity Shares at or above the Issue Price,
the allocation shall be made on a proportionate basis up to a minimum of [•] Equity Shares. For the method
of proportionate Basis of Allotment, refer below.
The unsubscribed portion, if any, out of the Equity Shares in the Employee Reservation Portion will be
added to the categories of Non Institutional Bidders and Retail Bidders, in a proportion to be determined by
the Company in consultation with the BRLM and Joint BRLM.
B. For Retail Bidders
Bids received from the Retail Bidders at or above the Issue Price shall be grouped together to determine the
total demand under this category. The allotment to all the successful Retail Bidders will be made at the
Issue Price.
The Issue size less allotment to Non-Institutional and QIB Bidders shall be available for allotment to Retail
Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price.
If the aggregate demand in this category is less than or equal to [•] Equity Shares at or above the Issue Price, full
allotment shall be made to the Retail Bidders to the extent of their demand.
If the aggregate demand in this category is greater than [•] Equity Shares at or above the Issue Price, the
allotment shall be made on a proportionate basis up to a minimum of [•] Equity Shares. For the method of
proportionate basis of allotment, refer below.
C. For Non-Institutional Bidders
Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this category. The allotment to all successful Non-Institutional Bidders
will be made at the Issue Price.
The Issue size less allotment to QIBs and Retail Portion shall be available for allotment to Non-Institutional
Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price.
If the aggregate demand in this category is less than or equal to [•] Equity Shares at or above the Issue
Price, full allotment shall be made to Non-Institutional Bidders to the extent of their demand.
In case the aggregate demand in this category is greater than [•] Equity Shares at or above the Issue Price,
allotment shall be made on a proportionate basis up to a minimum of [•] Equity Shares. For the method of
proportionate basis of allotment refer below.
The aggregate allotment to Retail and Non-Institutional Bidders shall not exceed [•] Equity Shares.
D. For QIBs
Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine the
total demand under this category. The allotment to all the QIBs will be made at the Issue Price.
The Issue size less allotment to Non-Institutional Portion and Retail Portion shall be available for allotment
to QIBs who have bid in the Issue at a price that is equal to or greater than the Issue Price.
The allotment would be decided by our Company in consultation with the BRLM and Joint BRLM and
would be at their sole discretion, based on various factors, such as quality of the Bidder, size, price and date
of the Bid.
The aggregate allotment to QIB Bidders shall not be less than [•] Equity Shares.
Undersubscription, if any in the Non Institutional and Retail Bidders categories would be allowed to be met
with spill over from any other category at the sole discretion of our Company, the BRLM and Joint BRLM.
Method of Proportionate Basis of Allotment
In the event of the Issue being over-subscribed, we shall finalize the basis of allotment to Retail and NonInstitutional Bidders in consultation with the Designated Stock Exchange. The Executive Director or Managing
Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the
BRLM, Joint BRLM and the Registrar to the Issue shall be responsible for ensuring that the basis of allotment is
finalised in a fair and proper manner. The allotment shall be made in marketable lots, on a proportionate basis as
explained below:
a) Bidders will be categorised according to the number of Equity Shares applied for.
b) The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a
proportionate basis, which is the total number of Equity Shares applied for in that category (number of
Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of
the over-subscription ratio.
c) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis,
which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse
of the over-subscription ratio.
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d) In all Bids where the proportionate allotment is less than [•] Equity Shares per Bidder, the allotment shall
be made as follows:
Each successful Bidder shall be allotted a minimum of [•] Equity Shares; and
The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a
manner such that the total number of Equity Shares allotted in that category is equal to the number of
Equity Shares calculated in accordance with (b) above.
e) If the proportionate allotment to a Bidder is a number that is more than [•] but is not a multiple of 1 (which
is the marketable lot), the number in excess of the multiple of 1 would be rounded off to the higher multiple
of 1 if that number is 0.5 or higher.
If that number is lower than 0.5, it would be rounded off to the lower multiple of 1. All Bidders in such
categories would be allotted Equity Shares arrived at after such rounding off.
f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares
allotted to the Bidders in that category, the remaining Equity Shares available for allotment shall be first
adjusted against any other category, where the allotted shares are not sufficient for proportionate allotment
to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such
adjustment will be added to the category comprising Bidders applying for minimum number of Equity
Shares.
Letters of Allotment or Refund Orders
The Company shall dispatch allotment advice and refund orders and give credit to the Beneficiary Account with
Depository Participants and submit the allotment and listing documents to the Stock Exchanges within two
working days of finalisation of the basis of allotment of Equity Shares. The Company shall dispatch refund
orders, if any, of value up to Rs.1,500, by “Under Certificate of Posting”, and will dispatch refund orders above
Rs.1,500, if any, by registered post or speed post at the sole or first bidder’s sole risk.
In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Guidelines, the
Company further undertakes that:
(a) Allocation and allotment of Equity Shares will be made only in dematerialised form within 15 days from the
Bid/ Issue Closing Date;
(b) Dispatch of refund orders will be done within 15 days from the Bid/Issue Closing Date; and
(c) The Company shall pay interest at 15% per annum (for any delay beyond the 15 day time period as
mentioned above), if transfer is not made, refund orders are not dispatched and/or demat credits are not made to
investors within the 15 day time prescribed above.
The Company will provide adequate funds required for dispatch of refund orders or allotment advice to the
Registrar to the Issue. Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank
appointed by the Company, as an escrow collection bank(s) and payable at par at places where Bids are
received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centers will be
payable by the bidders.
Interest in case of delay in Despatch of Allotment Letters/Refund Orders in case of Public Issues
The Company agrees that allotment of securities offered to the public shall be made not later than 15 days of the
closure of the public issue. The Company further agrees that it shall pay interest @ 15% per annum if the
allotment letters/refund orders have not been dispatched to the applicants within 15 days from the date of
closure of the Issue.
Interest on Refund of excess Bid Amount
The Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if refund
orders are not dispatched within 15 days from the Bid/Issue Closing Date as per the Guidelines issued by the
Government of India, Ministry of Finance pursuant to their letter No.F/8/S/79 dated July 31, 1983, as amended
by their letter No. F/14/SE/85 dated September 27, 1985, addressed to the stock exchanges, and as further
modified by SEBI’s Clarification XXI dated October 27, 1997, with respect to the SEBI Guidelines.
Undertaking by the Company
The Company undertakes as follows:
• that the complaints received in respect of this Issue shall be attended to expeditiously;
• that all steps will be taken for the completion of the necessary formalities for listing and commencement of
trading at all the stock exchanges where the Equity Shares are proposed to be listed within seven working
days of finalisation of the basis of allotment;
• that the funds required for despatch of refund orders or allotment advice by registered post or speed post
shall be made available to the Registrar to the Issue;
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•
•
that the promoters’ contribution in full, wherever required, shall be brought n advance before the Issue
opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls
aremade on public.
that no further issue of Equity Shares shall be made till the Equity Shares issued through the Red Herring
Prospectus are listed or until the bid monies are refunded on account of non-listing, under-subscription etc.
Utilization of Issue proceeds
The Board of Directors of the Company Certify that:
• all monies received out of the Fresh Issue shall be transferred to a separate bank account other than the bank
accountreferred to in sub-section (3) of Section 73 of the Companies Act;
• details of all monies utilised out of Fresh Issue referred above shall be disclosed under an appropriate
separate head in the balance sheet of the Company indicating the purpose for which such monies have been
utilised; and
• details of all unutilised monies out of the Fresh Issue, if any shall be disclosed under the appropriate
separate head in the balance sheet of the Company indicating the form in which such unutilised monies
have been invested.
• the utilisation of monies received under promoters’ contribution and from irm allotments and reservations
shall be disclosed under an appropriate head in the balance sheet of the issuer company, indicating the
purpose for which such monies have been utilised.
The Company shall not have recourse to the Issue proceeds until approval for trading of Equity Shares from all
the stock exchanges where listing is sought is received.
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DESCRIPTION OF EQUITY SHARES AND TERMS OF ARTICLES OF ASSOCIATION
Main provisions of the Articles of Association of SRS Entertainment Limited
The Articles of Association of the Company, inter alia, includes following clauses:
Shares
Share-Capital
3. The Authorised Share Capital of the Company shall be such Amount and be divided into such shares as may,
from time to time, be provided in clause V of the Memorandum of Association, with power to increase or reduce
the capital in accordance with company's regulations and the provisions of the Companies Act, 1956 for the time
being inforce in that behalf with power to sub-divide consolidate and increase and with power, from time to
time, to issue any shares of the original capital with and subject to any preferential, qualified or special rights,
privileges or conditions as may be thought fit, and upon the sub-division of shares to apportion the right to
participate in profits, in any manner as between the shares resulting from subdivision.
Redeemable Preference Shares
4. The Company shall have power to issue Preference Shares carrying right of redemption out of profits which
would otherwise be available for dividend, or out of the proceeds of a fresh issue of shares made for the purpose
of such redemption, or liable to be redeemed at the option of the Company, and the Board of Directors may,
subject to the provisions of Section 80 of the Act, exercise such power in such manner as it thinks fit.
Allotment of Shares
5. Subject to the provisions of these Articles, the shares shall be under the control of the Directors who may allot
or otherwise dispose off the same on such terms and conditions, and at such time as the Directors think fit and
with power to issue any shares as fully paid up in consideration of services rendered to the Company in its
formation or otherwise, provided that where the Directors decides to increase the issued capital of the Company
by the issue of further shares, the
provisions of Section 81 of the Act will be complied with, provided further that the option or right to call of
shares shall not be given to any person except with the sanction of the Company in general meeting.
Issue of Shares at a discount
6. Subject to the provisions of the Act, it shall be lawful for the Company to issue at a discount shares of a class
already issued.
Issue of Shares at premium
6A. Subject to the provisions of the Act, the Company may issue shares at premium as may be decided by the
Board from time to time.
Commission for placing shares
7. The Company may, subject to compliance with the provisions of Section 76 of the Act, exercise the powers of
paying commission on the issue of shares, debentures. The commission may be paid or satisfied in cash or
shares, debentures or debenture stock of the Company.
Brokerage
8. The Company may pay a reasonable sum of brokerage, subject to the ceiling prescribed under the Act.
Buy back of Shares
9A. Notwithstanding anything contained in these Articles, in the event it is permitted by law for a company to
purchase its own shares or securities, the Board of Director may, when and if thought fit, buy back such of the
Company's own shares of securities as it may think necessary, subject to such limits, upon such terms and
conditions, and subject to such approvals as may be permitted by law.
Further Issue of Shares
9C I. Where at the time after the expiry of two years from the formation of the company or at any time after the
expiry of one year, from the allotment of shares in the company made for the first time after the formation,
whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further
shares either out of the unissued capital or out of the increased share capital then:
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(a) Such further shares shall be offered to the persons who, at the date of the offer, are holders of the equity
shares of the company, in proportion, as near as circumstances admit, to the capital paid up on those shares at
the date.
(b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less
than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined.
(c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the
shares offered to them in favour of any other person and the notice referred to in sub clause (b) thereof shall
contain a statement of this right.
PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in
whose favour any member may renounce the shares offered to him.
(d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to
whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose off
them in such manner and to such person (s) as they may think, in their sole discretion, fit.
II. Notwithstanding anything contained in sub-clause (I) thereof, the further shares may be offered to any
persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (I) hereof) in
any manner whatsoever.
a. If a special resolution to that effect is passed by the company in General Meeting, or
b. Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the
case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the
casting vote, if any, of the Chairman) by the members who, being
entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes. If any, cast against
the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made
by the Board of Directors in this behalf that the proposal is most beneficial to the company.
III. Nothing in sub-clause (c) of (I) hereof shall be deemed :
a. To extend the time within the offer should be accepted, or
b. To authorize any person to exercise the right of renunciation for a second time on the ground that the person
in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.
IV. Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the
exercise of an option attached to the debenture issued or loans raised by the company:
a. to convert such debentures or loans into shares in the company, or
b. to subscribe for shares in the company (whether such option is conferred in these Articles or otherwise).
PROVIDED THAT the terms of issue of such debentures or the terms or such loans includes a term providing
for such option and such terms:
i. Either has been approved by the Central Government before the issue of the debentures or the raising of the
loans or is in conformity with Rules, if any, made by that Government in this behalf, and
ii. In the case of debentures or loans of other than debentures issued to or loans obtained from Government or
any institution specified by the Central Government in this behalf, has also been approved by a special
resolution passed by the company in General Meeting before the issue of the debentures or raising of the loans.
Shares at the disposal of the Directors
9D Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of the company
for the time being shall be under the control of the Directors who may issue, allot or otherwise dispose of the
same or any of them to such persons, in such proportion and on such terms and conditions and either at a
premium or at par or (subject to the compliance with the provision of Section 79 of the Act) at a discount and at
such time as they may from time to time think fit and with the sanction of the company in the General Meeting
to give to any person or persons the option or right to call for any shares either at par or premium during such
time and for such consideration as the Directors think fit, and may issue and allot shares in the capital of the
company on payment in full or part of any property sold and transferred or for any services rendered to the
company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up
shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares
shall not be given to any person or persons except with the sanction of the Company in the General Meeting.
JointJoint-Holders of Shares
Fee on sub-division of shares, Issue of new certificates etc.
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13. Where two or more persons are registered as the holders of any share they shall be deemed to hold the same
as joint-tenants with benefit of survivorship subject to the following provisions and to the other provisions of
these Articles relating to joint holders:Maximum number
a) The Company shall not be bound to register more than three persons as the joint-holders of any share.
Liability several as well as joint
b) The joint holders of a share shall be liable severally as well as jointly in respect of all payments which ought
to be made in respect of such shares.
Survivors of jointholders only recognised
c) On the death of any one of such joint holders the survivor or survivors shall be the only person recognised by
the Company as having any title to or interest in such share but the Board may require such evidence of death as
it may deem fit.
Delivery of certificates
d) Only the person whose name stands first in the Register as one of the joint-holders of any share shall be
entitled to delivery of the certificate relating to such shares.
Vote of Joint Members
e) If there are Joint Registered Holders of any shares, any one of such persons may vote at any meeting either
personally or by proxy in repect of such shares, as if he were solely entitled to, provided that if more than one of
the such joint holders be present at any meeting either personally or by proxy, then one of the said persons so
present whose name stands on the register of members shall alone be entitled to vote in respect of such shares.
Calls
Calls
14. The Directors may, from time to time, subject to the terms on which any shares, may have been issued, make
such calls as they think fit, upon the members in respect of all moneys unpaid on the shares held by them
respectively, and not by the conditions of allotment there to made payable at fixed times and each member shall
pay the amount of every call so made on him to the persons and at the times and places appointed by the
Directors. A call may be made payable by installments.
When calls deemed to have been made
15. A call shall be deemed to have been made at the time when the resolution of the Directors authorising such
call was passed.
Notice of call
16. Not less than 30 (Thirty) days notice of any calls shall be given specifying the time and place of payment
and to whom such call shall be paid.
Amount payable
17. If by the terms of issue of any share or otherwise, the whole or part of the amount of issue price thereof is
made payable at any fixed time or by installments at fixed times, every such amount of issue price of instalment
thereof shall be payable as if it was a call duly made by the Directors and of which due notice had been given
and all the provisions herein contained in respect of calls shall apply to such amount or issue price or
installments accordingly.
Interest to be charged on nonpayment of calls
18. If the sum payable in respect of any call or instalment be not paid on or before the day appointed for the
payment thereof, the holder for the time being of the share in respect of which the call shall have been made or
the instalment shall be due, shall pay interest for the same at the rate of 12 (Twelve) percent per annum, from
the day appointed for the payment thereof the actual payment or at such other rate as the Directors may
determine but they shall have power to waive the payment thereof wholly or in part.
Evidence in actions by company against share holders
19. On the trial or hearing of any action or suit brought by the Company against any member or his
representative to recover any debt or money claimed to be due to the Company in respect of his shares, it shall
148
be sufficient to prove that the name of the defendant is, or was when the claim arose, on the register of the
Company as a holder, or one of the holders of the number of shares in respect of which such claim is made, that
the resolution making the call is duly recorded in the minute book and that the amount claimed is not entered as
paid in the books of the Company, and it shall not be necessary to prove the appointment of the Directors who
made any call nor that a quorum of Directors was present at the meeting at which any call was made nor that
such meeting was duly convened or constituted, nor any other matter but the proof of the matters aforesaid shall
be conclusive evidence of the debt.
Payment in anticipation of call may carry interest
20.a.The Directors may, if they think fit, subject to the provisions of Section 92 of the Act, agree to and receive
from any member willing to advance the same whole or any part of the moneys, due upon the shares held by
him beyond the sums actually called for and upon the amount so paid or satisfied in advance, or such sum
thereof as from time to time exceeds the amount of the calls than made upon the shares in respect of which such
advance has been made, the company may pay interest at such rate, as the member paying such sum in advance
and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate
in profits or dividend. The Directors may at any time repay the amount so advanced.
b. The members shall not be entitled to any voting rights in respect of the moneys so paid by him until the same
would, but for such payment, become presently payable.
c. The provisions of these Articles shall mutatis mutandis apply to the calls on debentures of the Company.
Forfeiture and Lien
Notice may be given for calls or instalment not paid
21. If any member fails to pay any call or instalment on or before the day appointed for the payment of the
same, the Directors may at any time thereafter, during such time as the call or instalment remains unpaid, serve
notice on such member requiring him to pay the same together with any interest that may have accrued and
expenses, they may have been incurred by the Company by reasons of such non-payment.
Form of notice
22. The notice shall name a day (not being less than 30 (thirty) days from the date of the notice) and a place or
places on and at which such call or instalment and such interest and expenses as aforesaid are to be paid. The
notice shall also state that in the event of nonpayment on or before the time and at the place or places appointed,
the shares in respect of which such call was made or instalment is payable will be liable to be forfeited.
If notice not complied with shares may be forfeited
23. If the requirement of any such notice as aforesaid be not complied with, any shares in respect of which such
notice has been given may, at any time thereafter before repayment of all calls or
installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that
effect. Such forfeiture shall include all dividends declared in respect of the forfeited share not actually paid
before the forfeiture subject to Section 205 A of the Act. Neither the receipt by the Company of a portion of any
money which shall, from time to time, be due from any member of the Company in respect of his shares, either
by way of principal or interest, nor any indulgency granted by the Company in respect of the payment of any
such money shall preclude the Company from thereafter proceeding to enforce a forfeiture of such share as
herein provided.
Notice after forfeiture
24. When any shares shall have been so forfeited, notice of the forfeiture shall be given to the member in whose
name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof, shall
forthwith be made in the Register but no forfeiture shall be in any manner invalidated by any omission or
neglect to give such notice or to make such entry as aforesaid.
Forfeited share to become property of the Company
25. Any share so forfeited shall be deemed to be the property of the Company, and the Directors may sell, reallot or otherwise dispose off the same in such manner as they think fit.
Power to annual forfeiture
26. The Directors may, at any time, before any share so forfeited are not sold, re-allotted or otherwise disposed
off, annual the forfeiture thereof upon such conditions as they think fit.
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Arrears to be paid notwithstanding forfeiture
27. Any member whose shares have been forfeited shall not withstanding such forfeiture, be liable to pay and
shall forthwith pay to the Company all calls, installments, interest and the expenses owing upon or in respect of
such shares at the time of all installments, interest and the forfeited together with interest thereupon, from the
time of the forfeiture until payment at 12 (Twelve) percent per annum or such other rate as the Director may
determine and the Directors may enforce the payment thereof without any deduction of allowances for the value
of shares at the time of forfeiture but shall not be under any obligation to do so.
Effect of forfeiture
28. The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demands
against the Company in respect of the share, and all their rights incidental to the share except only such of those
rights as by these Articles are expressly saved.
Evidence of forfeiture
29. A duly verified declaration in writing that the declarant is a Director of the company and that certain shares
in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the
facts therein stated as against all persons claiming to be entitled to the shares and the receipt of the Company for
the consideration, if any given for the shares on the sale or disposition thereof, shall constitute a written title to
such shares.
Company's lien on shares/debentures
30 The Company shall have a first and paramount lien upon all the shares / debentures (Other than fully paid-up
shares/ debentures) registered in the name of each member (whether solely or jointly with others) and upon the
proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in
respect of such shares/ debentures and no equitable interest in any shares shall be created except upon the
footing and condition that this Article will have full effect. And such lien shall extend to all dividends and
bonuses from time to time declared in respect of such shares/ debentures. Unless otherwise agreed the
registration of a transfer of shares / debentures shall operate as a waiver of the Company's lien, if any, on such
shares/ debentures. The Directors may at any time declare any shares/ debentures wholly or in part to be exempt
from the provisions of this clause.
That the fully paid shares shall be free from all lien and that in the case of partly paid shares the Company's lien
shall be restricted to moneys called or payable at a fixed time in respect of such shares.
Intention as to enforcing lien/ Application of proceed of sale
31. For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as
they think fit, but no sale shall be made until such period as aforesaid shall have elapsed and until notice in
writing of the intention to sell shall have been served on such member, his committee, curator bonis or other
person recognised by the company as entitled to represent such member and default shall have been made by
him or them in the payment of the sum payable as aforesaid for thirty days after such notice. The net proceeds of
any such sale shall
be applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently
payable by such member, and the residue (if any) paid to such member, his executors, administrators, or other
representatives or persons so recognised as aforesaid.
Validity of Shares
32. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers by these presents
given, the Director may appoint some person to execute an instrument of transfer of the shares sold and cause
the purchaser's name to be entered in the register in respect of the shares sold and aft er his name has been
entered in the Register in respect of such shares his title to such shares shall not be affected by any irregularity
or invalidity in the proceedings in reference to such forfeiture, sale or disposition, nor impeached by any person
and the remedy of any person aggrieved by the sale shall be in damages only and against the Company
exclusively.
Power to issue new certificate
33. Where any shares under the powers in that behalf herein contained are sold by the Directors and the
certificate thereof has not been delivered
Transfer and Transmission of Shares
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Execution of transfer etc.
34. Subject to the provisions of the Act, no transfer of shares shall be registered unless a proper instrument of
transfer duly stamped and executed by or on behalf of the transferor or transferee has been delivered to the
Company together with the certificate or certificates of the shares, or if no such certificate is in existence along
with the letter of allotment of shares. The instrument of transfer of any shares shall be signed both by or on
behalf of the transferor and by or on behalf of transferee and the transferor shall be deemed to remain the holder
of such share until the name of the transferee is entered in the Registered in respect thereof.
34A. The instrument of transfer of any shares in the Company shall be executed by or on behalf of the transferor
and the transferee and a common form of transfer shall be used.
Application for transfer
35. Application for the registration of the transfer of a share may be made either by the transferor or the
transferee provided that, where such application is made by the transferor, no registration shall in the case of
partly paid shares be effected unless the Company gives notice of the application to the transferee in the
manners prescribed by the Act, and, subject to the provision of Articles hereof, the company shall, unless
objection is made by the transferee within two weeks from the date of receipt of the notice, enter in the Register,
the name of the transferee in the same manner and subject to the same conditions as if the application for
registration was made by the transferee.
Notice of transfer to registered holder
36. Before registering any transfer tendered for registration, the Company may, if it so thinks fit, give notice by
letter posted in the ordinary course to the registered holder that such transfer deed has been lodged an that,
unless objection is taken, the transfer will be registered and if such registered holder fails to lodge an objection
in writing at the office of the Company within two weeks from the posting of such notice to him he shall be
deemed to have admitted the validity of the said transfer.
Register of transfer
37. The Company shall keep a "Register of Transfers" and therein shall be fairly and distinctly entered particular
of every transfer of any share.
Directors may refuse to register
38. Subject to the provisions of Section 111 of the Act and, Section 22A of the Securities Contracts (Regulation)
Act, 1956, the Directors may, at their own absolute and uncontrolled discretion and by giving reasons, decline to
register or, acknowledge any and by giving reasons, decline to register or acknowledge any transfer of shares
whether fully paid or not and the right of refusal, shall not be affected by the circumstances that the proposed
transferee is already a member of the Company but in such cases, the Directors shall within one month from the
date on which the instrument of transfer was lodged with the Company, send to the transferee and transferor
notice of the refusal to register such transfer provided that registration of transfer shall not be refused on the
ground of the transferor being either alone or jointly with any other person or persons indebted to the company
on any account whatsoever except when the company has a lien on the shares. Transfer of shares/ debentures in
whatever lot shall not be refused.
No transfer to person of unsound mind
39. (1) No transfer shall be made to a minor or a person of unsound mind.
No fee for registration for transfer etc.
(2) No fee shall be charged for registration of transfer, transmission probate, succession certificate, letter of
administration, marriage, Power of Attorney or Certificate of death or similar other instruments/documents.
When instrument of transfer to be retained
40. All instruments of transfer duly approved shall be retained by the Company and in case of refusal,
instruments of transfer shall be returned to the person who lodges the transfer deeds.
Notice of refusal to register transfer
41. If the Directors refuse to register the transfer of any shares the Company shall, within one month from the
date on which the instrument of transfer was lodged with the Company or intimation given, send to the
transferor and the transferee or the person giving intimation of such transfer notice of such refusal.
Power to close Transfer books and Register
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42. On giving seven days' notice by advertisement in a newspaper circulating in the District in which the Office
of the company is situated, the Register of Members may be closed during such time as the Directors think fit
not exceeding in the whole forty five days in each year but not exceeding thirty days at a time.
Transmission of Registered shares
43. The executors or administrators or the holder of a succession certificate in respect of shares of a deceased
member (not being one of several joint holders) shall be the only person whom the Company shall recognise as
having any title to the shares registered in the name of such member
and, in case of the death of any one or more of the joint holders of any registered shares the survivors shall be
only person recognised by the Company as having any title to or interest in such share but nothing herein
contained shall be taken to release the estate of a deceased joint-holder from any liability on shares held by him
jointly with any other person. Before recognising any legal representative or heir or a person otherwise claiming
title to the shares the Company may require him to obtain a grant of probate or letters of administration or
succession certificate, or other legal representation as the case may be from a competent Court, provided
nevertheless that in any case where the Board in its absolute discretion think fit it shall be lawful for the Board
to dispense with production of probate or letters of administration or a succession certificate or such other legal
representation upon such terms as to indemnity or otherwise as the Board may consider desirable.
As to transfer of shares of deceased or insolvent members / Transmission Article/ Notice of election to be
registered/ All rights of executors and trustees
44. Any person becoming entitled to or to transfer of shares in consequence of that death or insolvency of any
member, upon producing such evidence that he sustains the character in respect of which he propose to act
under this article, or of his title as the Directors think sufficient, may with the consent of the Directors (which
they shall not be under any obligation to give), be registered as a member in respect of such shares or may,
subject to the regulations as to transfer hereinbefore contained, transfer such shares. This article is hereinafter
referred to as "The transmission Article". Subject to any other provisions of these Articles if the persons so
becoming entitled to shares under this or the last proceeding Article shall elect to be registered as a member in
respect of the share himself he shall deliver or send to the company a notice in writing signed by him stating that
he so elects. If he shall elect to transfer to some other person he shall execute in instrument of transfer in
accordance with the provision of these articles relating to transfer of shares. All the limitations, restrictions and
provisions of these Articles relating to the rights to transfer and the registration of transfer of shares shall be
applicable to any such notice of transfer as aforesaid.
45. Subject to any other provisions of these articles if the Directors in their sole discretion are satisfied in regard
thereof, a person becoming entitled to a share in consequences of the death or insolvency of a member may
receive and give a discharge for any dividends or other money payable in respect of the share.
Provision of articles relating to transfer applicable
46. The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act,
1956 and of any statutory modification thereof for the time being shall be duly complied with in respect of all
transfers of shares and the registration thereof.
Nomination
46A. Notwithstanding anything contained in the Articles of Association or in any other law for the time being in
force, where a nomination has been made in the manner prescribed in Section 109A of the Act, purporting to
confer on any person the right to vest the shares in, or debentures of the Company, the nominee shall, on the
death of the shareholder or holder of debentures of the Company or, as the case may be, on the death of the joint
holders, become entitled to all the rights in the shares or debentures of the company or, as the case may be, all
the joint holders, in relation to such shares in or debentures of the Company to the exclusion of all other persons,
unless the nomination is varied or cancelled in the prescribed manner and the provisions contained in Sections
109A and 109B of the Act, shall be applicable to such cases.
Share Warrants
Power to issue share warrants
47. Subject to the provisions of Sections 114 and 115 of the Act, and subject to any directions which may be
given by the Company in General Meeting, the Board may issue share-warrants in such manner and on such
terms and conditions as the Board may deem fit. In case of such issue, Regulations 40 to 43 of table "A" in
Schedule 1 to the Act, shall apply.
Demat of Securities
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47A. (1) For the purpose of these Articles, the expressions "beneficial owner", "depository", registered owner"
and "security" shall have the meaning as defined in the Depositories Act, 1996 or any other reenactments or
modifications thereof.
(2) Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialised/
rematerialize its securities and to offer securities in dematerialised form pursuant to the Depositories Act, 1996.
(3) All the securities held by a Depository shall be dematerialised and be in a fungible form.
(4) Notwithstanding anything to the contrary contained in these Articles, a Depository shall be deemed to be
registered owner for the purpose of effecting transfer of ownership of security on behalf of the beneficial owner.
The Depository shall not have any voting rights in respect of the securities held by it.
(5) Nothing contained in these Articles relating to transfer of securities in physical form shall apply to transfer
of securities held in a Depository
(6) The register and index of beneficial owners maintained by a Depository shall be deemed to register and
index of members and register and index of debenture holders of the Company.
(7) Notwithstanding anything contained in these Articles where the securities are dealt in a Depository, the
Company shall intimate the details of allotment of securities to the Depository immediately on allotment of such
securities.
Stocks
Stocks
48. The company may exercise the power of conversion of its shares into stock and in that case regulations 37 to
39 to Table "A" in Schedule 1 to the Act, shall apply.
Alteration
Alteration of Capital
Power to sub-divide and consolidate
49. The Company may, by ordinary resolution, from time to time, alter the condition of the Memorandum of
Association as follows :a) Increase the share Capital by such amount to be divided into shares of such amount as may be specified in the
resolution.
b) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares.
c) Sub-divide its existing shares or any of them into shares of smaller amount than is fixed by the Memorandum
of Association, however that in the sub-division the proportion between the amount paid and the amount, if any
unpaid on each reduced share shall be the same as it was in the share from which the reduced share is derived,
and
d) Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be
taken by any person and diminish the amount of its share capital by the amount of the share so cancelled.
Surrender
50. Subject to the provisions of Section 100 to 104 of the Act, the Board may accept from any member the
surrender of all or any of his shares on such terms and conditions as shall be agreed.
Modification of Rights
Power to modify rights
51. If at any time the share capital is divided into different classes of share the rights attached to any class
(unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is
being wound up, be carried with consent in writing of the holders of three-fourths of the issued shares of that
class, or with the sanction of a Special Resolution passed at a Separate Meeting of the holders of the shares of
that class. To every such Separate Meeting the provisions of these Articles relating to general meeting shall
apply, but so that the necessary quorum shall be two persons atleast holding or representing by proxy one-tenth
of the issued shares of the class but so that if at any adjourned meeting of such holder a quorum as above
defined is not present, those members who are present shall be a quorum and that any holder of shares of the
class present in person or by proxy may demand a poll and, on a poll shall have one vote for each shares of the
class of which he is the holder. The Company shall comply with the provisions of Section 192 of the Act as
forwarding a copy of any such agreement or resolution to the Registrar of Companies.
Borrowing Powers
Power to borrow
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52. The Board may from time to time and at its description, subject to the provisions of Sections 58A, 292 and
293 of the Act, and Regulations made thereunder and directions issued by the RBI raise or borrow either from
the Directors or from elsewhere and secure the payment of any sum or sums of money for the purpose of the
Company.
Condition on which money may be borrowed
53. The Board may raise or secure the repayment of such sum or sums in such manner and upon such terms and
conditions in all respects as it thinks fit, and in particular, by the issue of bonds, perpetual or redeemable
debenture or debenture-stock, or any mortgage, or other securities on the undertaking of the whole or part of the
property of the Company (both present and future), including its uncalled capital for the time being, provided
that debentures with the rights to allotment of or conversion into shares shall not be issued except with the
sanction of the Company in general meeting and subject to the provisions of the Act.
Terms of issue of debenture
54. Any debentures, debenture-stocks, bonds or other securities may be issued at a discount, premium or
otherwise and with any special privileges, as to redemption, surrender, drawings, allotment of shares,
appointment of Directors and otherwise debentures, debenture-stocks, bonds and other securities may be made
assignable free from any equities between the Company and the person to whom the same may be issued.
Instrument of transfer
55. Save as provided in Section 108 of the Act, no transfer of debenture shall be registered unless a proper
instrument of transfer duly stamped and executed by the transferor and transferee has been delivered to the
Company together with the certificate or certificates of debentures.
56. If the Board refuses to register the transfer of any debentures the Company shall within two months from
due date on which the instrument of transfer was lodged with the Company, send to the transferee and to
transfer of notice of the refusal.
Reserves
Reserves
57. Subject to the provisions of the Act, the Board shall in accordance with Section 205 (2A) of the Act, before
recommending any dividend, set aside out of the profits of the Company such sums as it thinks proper as
reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the
Company may be properly applied and pending such application may at the description, either be employed in
the business of the Company or be invested in such investments (other than shares of the Company as the Board
may, from time to time, think). The Board may also carry forward any profit which it may think prudent not to
divide without setting them aside as a reserve.
Capitalisation
58. Any General Meeting may resolve that the whole or any part of the undivided profits of the Company
(which expression shall include any premiums received on the issue of shares and any profits or other sums
which have been set aside as a reserve or reserves or have been carried forward without being divide) be
capitalised and distributed amongst such of the members as would be entitled to receive the same if distributed
by way of dividend and on the same proportions on the footing that they become entitled thereto as capita and
that all or any part of each capitalised amount be applied on behalf of such members in paying up in full any
unissued shares of the Company which shall be distributed accordingly in or towards payment of the uncalled
liability on any issued shares, and that such distribution or payment shall be accepted by such member in full
satisfaction of their interest in the said capitalised amount. Provided that any sum standing to the credit of a
share premium account or a capital redemption reserve account may for the purpose of this Article only be
applied in the paying up of unissued shares to be issued to members of the Company as fully-paid bonus shares.
Fractional Certificates
59. For the purpose of giving effect to any resolution under two last preceding Articles, the Directors may settle
any difficulty which may arise in regard to the distribution as they think expedient and the particular may issue
fractional certificate.
General Meetings
Extra ordinary General Meeting and Annual General Meeting
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60. The Directors may, whenever they think fit, call an extra ordinary General Meeting provided however if at
any time they are not in India, Directors capable of acting who are sufficient in number to form a quorum any
Director present in India may call an extra ordinary General Meeting as in the same manner as nearly as possible
as that in which such a meeting may be called by the Board.
Calling of Extra ordinary General Meeting on requisition
61. The Board of Directors of the Company shall on the requisition of such member or members of the
Company as is specified in Sub-section (4) of Section 169 of the Act, forthwith proceed to call an extra ordinary
general meeting of the Company and in respect of any such requisition and of any meeting to be called pursuant
thereto, all the other provisions of Section 169 of the Act and of any statutory modification thereof for the time
being shall apply.
Notice of meeting
61A Twenty-one days, notice At least of every General Meeting, Annual or Extraordinary and by whomsoever
called, specifying the day, place and hour of meeting and the general nature of the business to be transacted
thereat shall be given in the manner hereinafter provided to such persons as are under these Articles or the Act
entitled to receive notice from the Company provided that in the case of an annual meeting with consent in
writing of all the members entitled to vote thereat and in case of any other meeting with consent of the members
holding not less than 95% (Ninety five percent) of such part of the paid-up capital of the Company as give right
to vote at the meeting. A meeting may be convened by shorter notice.
As to omission to give notice
61B The accidental omission to give any such notice to or the non-receipt of notice by any of the members or
persons entitle to receive the same shall not invalidate the proceedings at any such meeting.
Quorum
62. The quorum for a General Meeting shall be atleast five members present in person.
Chairman
63. At every General Meeting, the Chair shall be taken by the Chairman of the Board of Directors. If at any
meeting, the Chairman of the Board of Directors is not present within fifteen minutes after the time appointed
for holding the meeting or, though present but unwilling to Act as Chairman, the members present shall choose
one of the Directors present to be Chairman or if no Director shall be present or though present shall be
unwilling to take the chair than the members present shall choose one of their members being a member entitled
to vote to be the Chairman.
Sufficiency of ordinary resolutions
64. Any act or resolution which under the provision of this article or of the Act, is permitted shall be sufficiently
so done or passed if effected by an ordinary resolution unless either the Act or the articles specifically require
such Act to be done or resolution passed as a special resolution.
When if quorum not present, meeting to be dissolved and when adjourned
65. If within half an hour from the time appointed for the meeting a quorum be not present, the meeting, if
convened upon a requisition of share holders shall be dissolved but in any other case it shall stand adjourned to
the same day in the next week at same time and place, unless the same shall be public holiday when the meeting
shall stands adjourned to the next day not being a public holiday at the same time and place and if at such
adjourned meeting a quorum be not present within half an hour from the time appointed for the meeting, those
members who are present and not being less than two persons shall be a quorum and may transact the business
for which the meeting was called.
How question of resolution to be decided
66. In the case of an equality of votes the Chairman shall both on a show of hands and a poll have a casting vote
in addition to the vote or votes to which he may be entitled as a member.
Power of adjourn General Meeting
67. The Chairman of a General Meeting may adjourn the same, from time to time and from place to place, but
no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting
from which the adjournment took place. It shall not be necessary to give notice to the members of such
adjournment or of the time, date and place appointed for the holding
of the adjourned meeting.
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Poll to be taken if demanded
68. If poll is demanded the same shall be taken at such time (not later than forty-eight hours from the time when
the demand was made) and place and either by open voting or by ballot as the Chairman shall direct and either
at once or after an interval or adjournment or otherwise and the result of the poll shall be deemed to be the
resolution of the meeting at which the poll was demanded. The demand for poll may be withdraw at any time by
the persons who made the demand of a poll shall not prevent the continuance of a meeting for the transaction of
any business other than the question on which a poll has been demanded.
Scrutineers at the Poll
68A Where a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers to scrutinize the
votes given on the poll and to report thereon to him. One of the scrutineers so appointed shall always be a
member (not being an officer or employee of the Company) present at the meeting, provided such a member is
available and willing to be appointed. The Chairman shall have power at any time before the result of the poll is
declared to remove a scrutineer from the office and fill vacancies in the office of scrutineer arising from such
removal or from any other cause.
In what case poll taken without adjournment
68B Any poll duly demanded on the election of a Chairman of a meeting or on any question of adjournment
shall be taken at the meeting forthwith.
Vote of Members
Vote of members
69. (1) On a show of hands every member present in person and being a holder of Equity Shares shall have one
vote and every person present either as a proxy on behalf of a holder of equity Shares or as a duly authorised
representative of a body corporate being a holder of Equity Shares, if he is not entitled to vote in his own rights,
shall have one vote.
(2) On a poll the voting rights of a holder of Equity Shares shall be as specified in Section 87 of the Act.
(3) The voting rights of the holders of the Preference Shares including the Redeemable Cumulative Preference
Shares shall be in accordance with the provision of Section 87 of the Act.
(4) No Company or body corporate shall vote by proxy so long as a resolution of its Board of Director sunder
Section 187 of the Act is in force and the representative named in such resolution is present at the General
Meeting at which the vote by proxy is tendered.
Vote in respect of deceased, involvent and insane members
70. A person becoming entitled to a share shall not before being registered as member in respect of the share,
entitled to exercise in respect to thereof any right conferred by membership in relation to the meeting of the
Company. If any member be a lunatic or idiot, he may vote whether on a show of hands or at poll by his
committee or other legal curator and such last mentioned persons may give their votes by proxy provided that
twenty four hours atleast before the time of holding the meeting or adjourned meeting as the case may be, at
which any such person purposes to vote he shall satisfy the Board of his rights under this Article unless the
Board shall have previously admitted his right to vote at such meeting in respect thereof.
Joint holder
71. Where there are joint holders of any shares any one of such persons may vote at any meeting either
personally or by proxy in respect of such shares as if he were solely entitled thereto and if more than one of such
joint-holders be present at any meeting either personally or by proxy than that one of the said persons so present
whose name stands prior in order on the register in respect of such share shall alone be entitled to vote in respect
thereof. Several executor or administrators of deceased member in whose name any share stands shall for the
purpose of this Article be deemed joint holders thereof.
Instrument appointing proxy be made to in writing
72. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his Attorney duly
authorised in writing or is such appointer is a corporation under its common seal or the hand of its Attorney.
Instrument appointing proxy to be deposited at the office
73. The instrument appointing a proxy and the Power of Attorney or other authority (if any) under which it is
signed or a notarally certified copy of that power of authority shall be deposited at the office not less than forty
156
eight hours before the time for holding the meeting at which the person named in the instrument proposes to
vote in default the instrument of proxy shall not be treated as valid.
When vote by proxy valid through authority revoked
74. A vote given in accordance with the terms of an instrument appointing a proxy shall be valid
notwithstanding the previous death or insanity of the principal or revocation of the instrument of transfer of the
share in respect of which the vote is given. Provided no intimation in writing of the death, insanity, revocation
or transfer of the share shall have been received at the office or by the Chairman of the Meeting before the vote
is given. Provided nevertheless that the Chairman of the meeting shall be entitled to require such evidence as he
may in his discretion think fit of the due execution of an instrument of proxy and that the same has not been
revoked.
Form of Instrument Appointing proxy
75. Every instrument appointing a proxy shall, as nearly as circumstance will admit be in the form set out in
Schedule IX to the Act.
Restriction on voting
76. No objection shall be taken to the validity of any vote except at the meeting or poll at which such vote shall
be tendered and every vote not disallowed at such meeting or poll and whether given personally or by proxy or
otherwise shall be deemed valid for all purposes.
Validity of vote
77. No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the
company in respect of any shares registered in his name on which any calls or other sums presently payable by
him have not been paid or in regard to which the Company has exercised any right or lien.
Dividends
How profits shall be divisible
114. Subject to Rights of members entitled to shares (if any) with preferential or special rights attached to them
the profits of the Company, from time to time, determined to be distributed as dividend in respect of any year of
other period shall be applied for payment of dividend on the shares in proportion to the amount of capital paid
up on the Shares provided that unless the Board otherwise determines all dividends shall be apportioned and
paid proportionately to the amounts paid or credited as paid up on the shares during any portion or portions of
the period in respect of which dividend is paid. Provided always that subject as aforesaid any capital paid up on
a share during the period in respect of which a dividend is declared shall (unless the Board otherwise determines
or the terms of issue otherwise provide, as the case may be), only entitled the holder of such share to an
apportioned amount of such dividend as from the date of payment but so that where capital is paid up in advance
of calls such capital shall not confer a right to participate in profits.
Declaration of dividends
115. The Company in General Meeting may declare a dividend to be paid to the members according to their
rights and interest in the profits and may subject to the provisions of Section 205 of the Act, fix the time for
payment.
Restriction on Amount of dividends
116. No larger dividend shall be declared than is recommended by the Directors, but the Company in General
Meeting may declare a smaller dividend.
Dividend out of profit only
117. No dividend shall be payable exceed out of the profits of the Company of the year or any other
undistributed profits and no dividend shall carry interest as against the Company
What to be deemed net profits
118. The declaration of the Directors as to the amount of the net profits in the audited annual accounts of the
Company for any year shall be conclusive.
Interim dividends
119. The Directors may, from time to time, pay to the members such interim dividends as in their judgement the
position of the Company justifies.
157
Debts may be deducted
120. Subject to Section 205 A of the Act, the Director may retain any dividends on which the Company has a
lien and may apply the same in or towards satisfaction of debts, liabilities or engagements in respect of which
the lien exists.
Dividend and call together
121. Subject to Section 205A of the Act any General Meeting declarating a dividend may make a call on the
members of such amount as the meeting fixes but so that the call on each member shall not exceed the dividend
payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so
arranged between the Company and the member, be set off against the call.
122. A transferor of shares shall not pass the rights of any dividends declared thereon before the registration of
the transfer.
Retention in certain cases
123. Subject to Section 205 A of the Act, the Directors may retain the dividends payable upon shares in respect
of which any person is under the etransmission Article entitled to become a member or which any person under
the Article is entitled to transfer until such persons hall duly become a member in respect thereof or shall
transfer the same.
Dividend to jointholders
124. Any one of the several persons who are registered as joint-holders of any share may give effectual receipts
of all dividends and payment on account of dividends in respect of such shares.
Payment by post
125. A. Unless otherwise directed, any dividend may be paid by cheque or warrant sent through the post to the
registered address of the member or person entitled thereto, or in the case of jointholders to the registered
address of that one whose name stands first on the Register in respect of the joint holding or to such person and
such address and the member or person entitled or such joint-holders as the case may be, may direct and every
cheque or warrant shall be made payable at par to the person or to the order of such the person to whom it is
sent or to the order of such other person as the member or person entitled or such joint-holders, as the case may
be, may direct.
When payment good discharge
125. B. The payment of every cheque or warrant sent under the provisions of the last preceding Article shall, if
such cheque or warrant purports to be duly endorsed be a good discharge to the Company in respect thereof,
provided nevertheless that the Company shall not be responsible for the loss of any cheque, dividend, warrant or
postal money order which shall be sent by post to any member or by his order to any other person in respect of
any dividend.
Unpaid or unclaimed Dividend
126. a. Where the Company has declared a dividend but which has not been paid or the dividend warrant in
repect thereof has not been posted within 30 days from the date of declaration to any shareholder entitled to the
payment of the dividend, the Company shall within 7 days from the date of expiry of the said period of 30 days,
open a special account in that behalf in any scheduled bank called "Unpaid dividend of --Co. NAME--" and
transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no
dividend warrant has been posted.
b. Any money transferred to the unpaid dividend account of the company which remains unpaid or unclaimed
for a period of Seven years from the date of such transfer, shall be transferred by the company to the Investor
Education and Protection Fund. A claim to any money so transferred to the Investor Education and Protection
Fund may be preferred to the Central Government by the shareholders to whom the money is due.
c. No unclaimed or unpaid dividend shall be forfeited by the Board before the claim becomes barred by law.
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OTHER INFORMATION
Material Contracts And Documents For Inspection
The following contracts which are or may be deemed material, have been entered or are to be entered into by the
Company. These Contracts and also the documents for inspection referred to hereunder, may be inspected at the
Registered Office of the Company situated at C-4/1, 100 Ft. Road, Shahdara, Delhi - 110094. The same will be
available from the date of the Draft Red Herring Prospectus until the date of closure of the Issue between 10.00
am to 1.00 p.m. on any working day.
1.
MoU dated September 06, 2005 with UTI Bank Limited, Book Running Lead Manager to the Issue and
Allianz Securities Limited, Joint Book Running Lead Manager to the Issue
2. Engagement Letter dated July 23, 2005 received from the Company appointing UTI Bank Limited to act as
Book Running Lead Manager to the Issue and Allianz Securities Limited to act as Joint Book Running Lead
Manager to the Issue.
3. MoU dated September 12, 2005 signed with Karvy Computershare Private Limited, Registrar to the Issue
4. Tripartite Agreement dated [•] between the Company, NSDL and Karvy Computershare Private Limited,
Registrar to the Company
5. Tripartite Agreement dated [•] between the Company, CDSL and Karvy Computershare Private Limited,
Registrar to the Company
6. Copy of MoU with M/s Richi Look Marketing (P) Limited dated August 22, 2005
7. Copy of MoU with M/s Seven Dayz Restaurants (P) Limited dated August 22, 2005
8. Copies of agreements entered into with Omaxe Construction Limited
For Mall dated August 22, 2005
For Wedding Mall dated August 22, 2005
9. Copies of MoUs for leased properties entered into with:
• Tulip Info Services (P) Limited dated July 08, 2005
• P R Infrastructure Limited dated July 17, 2005
10. Agreement with Gautam & Gautam Associates, Architect and Interior Designers dated August 17, 2005
Documents for Inspection
1. Memorandum and Articles of Association of SRS Entertainment Limited, as amended from time to time
2. Initial certificate of Incorporation of dated August 29, 2000 and subsequent Certificate of Incorporation
dated January 25, 2005 consequent to change of name of the Company
3. Annual Reports of the Company for F.Ys 2001, 2002, 2003, 2004 and 2005 (last five FYs)
4. Certified copy of the Board resolution dated June 01, 2005 authorising the proposed Public Issue
5. Resolution passed under 81(1A) of the Act, at the Extra Ordinary General Meeting of the Member of the
Company held on June 30, 2005 authorising the proposed Public Issue.
6. Consent from the directors, compliance officer, Auditor, Book Running Lead Manager, Joint Book
Running Lead Manager, Registrar to the Issue, Bankers to the Issue, Bankers to the Company and Legal
Advisor to the Issue to include their names in the Draft Red Herring Prospectus to act in their respective
capacities
7. Resolution of the meeting of the Board of Directors of the Company held on for the constitution of Audit
committee, Investor Grievance Committee and Remuneration Committee.
8. Resolution of the IPO Committee, authorised by the Board of Directors, approving the Draft Red Herring
Prospectus dated September 12, 2005
9. Sanction Letter No.CP:ADV:2005:642 dated June 13, 2005 from Union Banlk Of India, Bankers to the
Company
10. In-principle approval by UTI Bank Limited dated September 08, 2005 for secured term loan facility of
Rs.2000 lacs extended to the Company for he purpose of the Project
11. Documents received form the Auditors' of the Company:
i. Auditor’s report dated August 29, 2005 included in the offer document and copies of the balance sheet
referred in the said report
ii. Tax Benefit certificate dated August 29, 2005
iii. Eligibility Certificate dated August 25, 2005
iv. Schedule of Funds Deployed dated August 30, 2005
12. Due diligence Certificate dated August 31, 2005 from Vaish Associates, Legal Advisor to the Issue
13. Copy of Agreement with PVR Limited dated July 28, 2004
14. Copies of Initial listing agreements entered into with BSE and NSE
15. Copy of in-principal approvals from NSE and BSE
16. Due diligence certificate dated September 12, 2005 to SEBI from UTI Bank Limited
159
17. SEBI observation letter dated [•]
Any of the contracts or documents mentioned in the Draft Red Herring Prospectus may be amended or modified
at any time if so required in the interest of the Company or if required by the other parties, without reference to
the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant
statutes.
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DECLARATION
No statement made in the Draft Red Herring Prospectus shall contravene any of the provisions of the Companies
Act, 1956 and the rules made thereunder. All the legal requirements connected with the said Issue as also the
guidelines, instructions etc. issued by SEBI, Government and any other competent authority in this behalf have
been duly complied with and no statement made in the Draft Red Herring Prospectus is contrary to the
provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules made
there under or guidelines issued, as the case may be.
We further certify that all the disclosures made in the Draft Red Herring Prospectus are true and correct.
Signed by the Directors of the Company
1.
2.
3.
4.
5.
6.
7.
8.
Dr. Raj Kumar Aggarwal
Mr. Sunil Jindal, Managing Director
Mr. Raju Bansal
Mr. Pavan Kumar Vijay
Mr. Vinod Kumar
Mr. R. S. Gupta
Mr. K. M. Mehta
Mr. Devendra Singh
Signed by the Chief Executive Officer
Mr. Ashok Bansal
Signed by the Chief Financial Officer and Compliance Offier
Mr. Arun Kumar Gupta
Place: Delhi
Date: September 12, 2005
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