DRHP Npil
DRHP Npil
DRHP Npil
SECTION I – GENERAL 1
DEFINITIONS AND ABBREVIATIONS 1
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA 17
FORWARD-LOOKING STATEMENTS 20
SECTION II: RISK FACTORS 21
SECTION III – INTRODUCTION 52
SUMMARY OF INDUSTRY OVERVIEW 52
SUMMARY OF OUR BUSINESS 58
SUMMARY FINANCIAL INFORMATION 62
THE ISSUE 88
GENERAL INFORMATION 90
CAPITAL STRUCTURE 99
SECTION IV: PARTICULARS OF THE ISSUE 128
OBJECTS OF THE ISSUE 128
BASIS FOR ISSUE PRICE 138
STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND 143
ITS SHAREHOLDERS UNDER THE APPLICABLE LAWS IN INDIA
SECTION V – ABOUT THE COMPANY 146
INDUSTRY OVERVIEW 146
OUR BUSINESS 191
KEY REGULATIONS AND POLICIES 214
HISTORY AND CERTAIN CORPORATE MATTERS 222
OUR SUBSIDIARIES 230
OUR MANAGEMENT 235
OUR PROMOTERS AND PROMOTER GROUP 258
OUR GROUP ENTITIES 267
RELATED PARTY TRANSACTIONS 279
DIVIDEND POLICY 280
SECTION VI – FINANCIAL INFORMATION 281
FINANCIAL STATEMENTS 281
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS 505
AND RESULTS OF OPERATIONS
FINANCIAL INDEBTEDNESS 530
SECTION VII: LEGAL AND OTHER INFORMATION 535
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 535
GOVERNMENT AND OTHER STATUTORY APPROVALS 546
OTHER REGULATORY AND STATUTORY DISCLOSURES 559
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND 573
AS
SECTION VIII – ISSUE RELATED INFORMATION
TERMS OF THE ISSUE 579
ISSUE STRUCTURE 584
ISSUE PROCEDURE 590
SECTION IX– MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 645
SECTION X – OTHER INFORMATION 674
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 674
DECLARATION 677
1
SECTION I – GENERAL
This Draft Red Herring Prospectus uses certain definitions and abbreviations which, unless the context
otherwise indicates or implies, shall have the meaning as provided below. References to any legislation,
act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rules, guidelines
or policies, as amended or re-enacted from time to time. The words and expressions used in this Draft
Red Herring Prospectus but not defined herein, shall have, to the extent applicable, the meaning ascribed
to such terms under the Companies Act, the SEBI ICDR Regulations, the SCRA, the Listing
Regulations, the Depositories Act or the Rules and Regulations made thereunder. Notwithstanding the
foregoing, terms used in "Statement of Tax Benefits", "Financial Statements" and "Main Provisions of
the Articles of Association" beginning on pages 143, 281 and 645, of this Draft Red Herring Prospectus
respectively, shall have the meaning ascribed to such terms in such sections. In case of any
inconsistency between the definitions given below and the definitions contained in the General
Information Document (as defined below), the definitions given below shall prevail.
General Terms
Term Description
"the Issuer" or "Issuer Neccon Power & Infra Limited, a public limited company
Company" or "the incorporated under the Companies Act, 1956 and having its registered
Company” or "our Company office at Khetan Bhawan, Seuni Ali, A.T. Road, Jorhat – 785 001,
Assam
We / us / our Unless the context otherwise indicates or implies, refers to our
Company
Term Description
"Articles" / "Articles of The Articles of Association of our Company, as amended from time to
Association" / "AoA" time.
Audit Committee The audit committee of the Board constituted in accordance with
Section 177 of the Companies Act and Regulation 18 of the Listing
Regulations, and as described in the chapter titled "Our Management"
beginning on page of 235 of the Draft Red Herring Prospectus.
"Auditor" / "Statutory The statutory auditors of our Company, being Borkar & Muzumdar,
Auditor" Chartered Accountants and as mentioned in the chapter titled "General
Information" beginning on page 90 of the Draft Red Herring
Prospectus.
Banker to our Company The bankers to our Company as mentioned in the chapter titled
"General Information" beginning on page 90 of this Draft Red Herring
Prospectus.
"Board" / "Board of The Board of Directors of our Company, as duly constituted from time
Directors" / "our Board" to time, and includes any Committees thereof constituted in accordance
with the Companies Act and the Listing Regulations. For further
details, please refer to chapter titled "OurManagement" beginning on
page 235 of this Draft Red Herring Prospectus.
CFO The Chief Financial Officer of our Company as mentioned in the
chapter titled "General Information" beginning on page 90 of this Draft
Red Herring Prospectus.
Corporate Promoters (i) Topline Finvest Private Limited and (ii) VSG Trade Private Limited
1
Term Description
For further details, please refer chapter titled "Our Promoters and
Promoter Group" beginning on page 258 of this Draft Red Herring
Prospectus.
Committees The Audit Committee, the Nomination and Remuneration Committee,
the Stakeholders Relationship Committee, the Corporate Social
Responsibility Committee, the IPO Committee, and such other
committees as may be constituted by the Board in accordance with the
Companies Act and the Listing Regulations.
Company Secretary & The Company Secretary and Compliance Officer of our Company
Compliance Officer being Richeeta Somani, as mentioned in the chapter titled "General
Information" beginning on page 90 of this Draft Red Herring
Prospectus.
CSR Committee The corporate social responsibility committee of the Board as
described in the chapter titled "Our Management" beginning on page
235 of this Draft Red Herring Prospectus.
"Director(s)" / "our Unless the context requires otherwise, the director(s) of our Company.
Director(s)"
Equity Shares Equity Shares of our Company of face value of `10 each, fully paid up.
Executive Director(s) The Managing Director, Joint Managing Director(s) and Whole-time
Director(s) of our Company.
Group Entities The companies, firms, ventures etc. as identified as our group entities
and as detailed in the chapter titled "our Group Entities" beginning on
page 267 of this Draft Red Herring Prospectus.
Individual Promoters Individual promoters of our Company namely, (i) Dr. Murlidhar
Khetan, (ii) Jaiprakash Khetan, (iii) Basant Kumar Khetan and (iv)
Pradeep Kumar Khetan.
For further details, please refer chapter titled "Our Promoters and
Promoter Group" beginning on page 258 of this Draft Red Herring
Prospectus.
IPO Committee The IPO committee of our Board constituted to facilitate the process
of this Issue, the details of which are included in the chapter titled "Our
Management" on page 235 of this Draft Red Herring Prospectus.
ISIN International Securities Identification Number.
"Key Managerial Personnel" Key management personnel of our Company in terms of Regulation
/ "KMP" 2(1)(s) of the SEBI ICDR Regulations and Section 2(51) of the
Companies Act, 2013 and as disclosed in the chapter titled "Our
Management" beginning on page 235 of this Draft Red Herring
Prospectus.
"Memorandum" / The Memorandum of Association of our Company, as amended from
"Memorandum of time to time.
Association" / "MoA"
Nomination and The nomination and remuneration committee of our Board constituted
Remuneration Committee under Section 178 of the Companies Act read with Regulation 19 of
the Listing Regulations and as described in the chapter titled "Our
Management" beginning on page 235 of this Draft Red Herring
Prospectus.
Promoter(s) Our Corporate Promoters and Individual Promoters.
Promoter Group Persons and entities constituting the promoter group of our Company
in terms of Regulation 2(1) (zb) of the SEBI ICDR Regulations. For
further details, please refer to the chapter titled "Our Promoters and
2
Term Description
Promoter Group" beginning on page 258 of this Draft Red Herring
Prospectus.
Registered Office Registered office of our Company, situated at Khetan Bhawan, Seuni
Ali, A.T. Road, Jorhat – 785 001, Assam.
Registrar of Companies or Registrar of Companies, Shillong.
RoC
Restated Consolidated The audited and restated consolidated statement of assets and liabilities
Financial Statements as at March 31, 2018, 2017, 2016, 2015 and 2014 and audited and
restated consolidated statement of profit and loss (including other
comprehensive income, as applicable), restated consolidated
statement of changes in equity and restated consolidated statement
of cash flows for each of the financial years ended March 31, 2018,
2017, 2016, 2015 and 2014 of our Company and its Subsidiaries, read
along with all the notes thereto prepared in accordance with the
requirements of the Companies Act, Indian GAAP (for the Fiscals
2014 and 2015), Indian Accounting Standards 24 (for the Fiscals 2016,
2017 and 2018) and guidance note on "Reports in Company
Prospectus (Revised 2016)" issued by ICAI and relevant provisions of
the SEBI ICDR Regulation.
Restated Financial The Restated Standalone Financial Statements and Restated
Statements Consolidated Financial Statements of our Company for each of the
financial years ended March 31, 2018, 2017, 2016, 2015 and 2014,
which comprises the audited and restated balance sheet, the audited
and restated statement of profit and loss and the audited and restated
cash flow statement, together with the annexures and notes thereto and
the examination report thereon, as prepared and presented in
accordance with the requirements of the Companies Act, Indian GAAP
(for the Fiscals 2014 and 2015), Indian Accounting Standards 24 (for
the Fiscals 2016, 2017 and 2018) and guidance note on "Reports in
Company Prospectus (Revised 2016)" issued by ICAI and relevant
provisions of the SEBI ICDR Regulations.
Restated Standalone Restated standalone statement of assets and liabilities as at March 31,
Financial Statements 2018, 2017, 2016, 2015 and 2014 and restated standalone statement of
profit and loss (including other comprehensive income, as applicable),
restated standalone statement of changes in equity and restated
standalone statement of cash flows for each of the years ended March
31, 2018, 2017, 2016, 2015 and 2014 of our Company, read along with
all the notes thereto prepared in accordance with the requirements of
the Companies Act, Indian GAAP (for the Fiscals 2014 and 2015),
Indian Accounting Standards 24 (for the Fiscals 2016, 2017 and 2018)
and guidance note on "Reports in Company Prospectus (Revised
2016)" issued by ICAI and relevant provisions of the SEBI ICDR
Regulations.
Equity Shareholders Persons/entities holding Equity Shares of our Company.
Subsidiaries The wholly owned subsidiaries of our Company namely, (i)
Brahmaputra Infra Power Private Limited ("BIPPL") and (ii) Lower
Seijusa Hydel Power Company Private Limited ("LSHP")
Stakeholders Relationship The stakeholder’s relationship committee of our Board constituted
Committee under Section 178 of the Companies Act read with Regulation 20 of
the Listing Regulations and as described under the chapter titled "Our
Management" beginning on page 235 of this Draft Red Herring
3
Term Description
Prospectus.
You / your / yours Prospective investors in this Issue.
Term Description
Acknowledgment The slip or document issued by the Designated Intermediary(ies) to a Bidder
Slip as proof of registration of the Bid.
"Allot" / "Allotment" The allotment of Equity Shares pursuant to the Fresh Issue
/ "Allotted"
Allotment Advice The note or advice or intimation of Allotment of the Equity Shares sent to the
successful Bidders except Anchor Investors who have been or are to be
Allotted the Equity Shares after the Basis of Allotment has been approved by
the Designated Stock Exchange.
Allottee(s) A successful bidder(s) to whom Equity Shares are Allotted.
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion,
in accordance with SEBI ICDR Regulations and the Red Herring Prospectus
and who has Bid for an amount of at least `100 million.
Anchor Investor The price at which Equity Shares will be allocated to the Anchor Investors in
Allocation Price terms of the Red Herring Prospectus and the Prospectus, which will be
decided by our Company, in consultation with the BRLM.
Anchor Investor The form used by an Anchor Investor to make a Bid in the Anchor Investor
Application Form Portion and which will be considered as an application for Allotment in terms
of the Red Herring Prospectus and the Prospectus.
Anchor Investor Bid / The day, one (1) Working Day prior to the Bid/Issue Opening Date, on which
Issue Period Bids by Anchor Investors shall be submitted and allocation to Anchor
Investors shall be completed.
Anchor Investor The price at which Allotment will be made to Anchor Investors in terms of
Issue Price the Red Herring Prospectus and Prospectus, which will be a price equal to or
higher than the Issue Price but not higher than the Cap Price.
One third of the Anchor Investor Portion is reserved for domestic Mutual
Funds, subject to valid Bids being received from domestic Mutual Funds at or
above the Anchor Investor Issue Price.
"ASBA" / An application, whether physical or electronic, used compulsorily by all
"Application ASBA Bidders (except Anchor Investors) to make a Bid and authorizing the
Supported by SCSB, either directly or through the Syndicate ASBA Members, to block the
Blocked Amount" Bid Amount in their specified bank account maintained with the SCSB.
ASBA Account A bank account maintained with an SCSB which will be blocked by such
SCSB to the e xtent of the Bid Amount of the ASBA Bidder / Applicant.
ASBA Bidder A Bidder, other than Anchor Investors in this Issue, who Bids through ASBA
process.
Bankers to the Issue / Banks which are clearing members and registered with SEBI under Securities
Escrow Collection and Exchange Board of India (Bankers to an Issue) Regulations, 1994 as
4
Term Description
Bank(s) banker to an issue with whom the Escrow Account will be opened, in this case
being [●].
Basis of Allotment The basis on which the Equity Shares will be Allotted to successful Bidders
under the Issue and which is described in the chapter titled "Issue Procedure"
beginning on page 590 of this Draft Red Herring Prospectus.
Bid An indication to make an issue during the Bidding Period by a Bidder (other
than an Anchor Investor), or on the Anchor Investor Bid / Issue Period by an
Anchor Investor, to subscribe or purchase the Equity Shares of our Company
at a price within the Price Band, including all revisions and modifications
thereto.
Bidder / Applicant Any prospective investor who makes a Bid pursuant to the terms of the Red
Herring Prospectus and the Bid cum Application Form, including an Anchor
Investor unless stated or implied otherwise.
Bidding The process of making a Bid.
Bid Amount The highest value of optional Bids indicated in the Bid cum Application Form
and payable by the Bidder / blocked in the ASBA Account on submission of
a Bid in the Issue, which shall be net of Retail Discount, if any, for Retail
Individual Bidders.
Bid cum Application The form used by a Bidder, including an ASBA Bidder, to make a Bid and
Form which will be considered as an application for Allotment in terms of the Red
Herring Prospectus and the Prospectus.
Bid / Issue Closing Except in relation to any Bids received from the Anchor Investors, the date
Date after which the Designated Intermediaries will not accept any Bids being [●],
which shall be notified in all editions of [●], an English national daily
newspaper, all editions of [●], a Hindi national daily newspaper and the [●]
edition of [●], an Assamese newspaper ('Assamese' being the regional
language in the state where our Registered Office is located), each with wide
circulation and in case of any revision, the extended Bid / Issue Closing Date
also to be notified on the website and terminals of the Syndicate Members and
SCSBs, as required under the SEBI ICDR Regulations.
Our Company, in consultation with the BRLM, may consider closing the Bid
/ Issue Period for QIBs one day prior to the Issue Closing Date which shall
also be notified in an advertisement in the same newspapers in which the Issue
Opening Date was published.
Bid / Issue Opening Except in relation to any Bids received from the Anchor Investors, the date on
Date which the Designated Intermediaries shall start accepting Bids, which shall be
notified in all editions of [●], an English national daily newspaper all editions
of [●], a Hindi national daily newspaper and the [●] edition of [●], an
Assamese newspaper ('Assamese' being the regional language in the state
where our Registered Office is located), each with wide circulation.
Bid / Issue Period Except in relation to Anchor Investors, the period between the Bid/Issue
Opening Date and the Bid/Issue Closing Date (inclusive of the Bid / Issue
Opening Date and the Bid / Issue Closing Date) during which the prospective
Bidders, other than Anchor Investors, can submit their Bids, inclusive of any
revision thereof. Provided however that the Bidding shall be kept open for a
minimum of three (3) Working Days for all categories of Bidders, other than
Anchor Investors.
Our Company, in consultation with the BRLM, may decide to close Bidding
by QIBs one day prior to the Bid Closing Date which shall also be notified in
5
Term Description
an advertisement in same newspapers in which the Bid Opening Date was
published.
Bid Price The prices indicated against each optional Bid in the Bid cum Application
Form.
Bidding Centre The centres at which the Designated Intermediaries shall accept the Bid cum
Application Forms, i.e., Designated Branches for SCSBs, Specified Locations
for the Syndicate Members, Broker Centres for Registered Brokers,
Designated RTA Locations for RTAs and Designated CDP Locations for
CDPs.
Bid Lot [●] Equity Shares
"Book Building The book building route as provided under Schedule XI of the SEBI ICDR
Process" / Book Built Regulations.
Book Running Lead Book Running Lead Manager to this Issue, being PL Capital Markets Private
Manager / BRLM Limited.
Broker Centres The broker centres notified by the Stock Exchanges where Bidders can submit
the ASBA Forms to a Registered Broker.
The details of such Broker Centres, along with the names and the contact
details of the Registered Brokers are available on the websites of the Stock
Exchanges (www.bseindia.com and www.nseindia.com).
CAN / Confirmation A notice or intimation of allocation of the Equity Shares sent to Anchor
of Allocation Note Investors, who have been allocated Equity Shares, after the Anchor Investor
Bid / Issue Period.
Cap Price The higher end of the Price Band, in this case being ₹[●], and any revisions
thereof, above which the Issue Price will not be finalized and above which no
Bids will be accepted.
Client ID Client identification number of the Bidder’s beneficiary demat account.
Collecting A depository participant as defined under the Depositories Act, 1996,
Depository registered with SEBI and who is eligible to procure Bids at the Designated
Participant or CDP CDP Locations in terms of SEBI circular number
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI.
Controlling Branches Such branches of the SCSBs which co-ordinate Bids under this Issue by the
ASBA Bidders with the Registrar to the Issue and the Stock Exchanges, a list
of which is available on the website of SEBI at http://www.sebi.gov.in or at
such other website as may be prescribed by SEBI from time to time.
Cut-Off Price Issue Price, as finalised by our Company, in consultation with the BRLM.
Only Retail Individual Bidders are entitled to Bid at the Cut-off Price. QIBs
and Non-Institutional Bidders are not entitled to Bid at the Cut-off Price.
Demographic Details Details of the Bidders such as the Bidder’s address, PAN, name of the
Bidder’s father/husband, investor status, occupation and bank account details.
Depositories NSDL and CDSL or any other depository registered with the SEBI under
Securities and Exchange Board of India (Depositories and Participants)
Regulations, 1996 as amended from time to time read with the Depositories
Act, 1996.
Depositories Act The Depositories Act, 1996, as amended from time to time.
Depository A depository participant registered with SEBI under the Depositories Act.
Participant / DP
Designated Branches Such branches of the SCSBs which shall collect the ASBA Forms, a list of
which is available on the website of SEBI at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes,
or at such other website as may be prescribed by SEBI from time to time.
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Term Description
Designated Date The date on which funds are transferred by the Escrow Collection Bank(s)
from the Escrow Account, or the amounts blocked by the SCSBs are
transferred from the ASBA Accounts, as the case may be, to the Public Issue
Account or the Refund Account, as appropriate, following which the Board of
Directors shall Allot the Equity Shares to successful Applicants in the Issue
Designated CDP Such locations of the CDPs where Bidders can submit the ASBA Forms. The
Locations details of such Designated CDP Locations, along with names and contact
details of the CDPs eligible to accept ASBA Forms are available on the
websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com).
Designated The members of the Syndicate, sub-syndicate / agents, SCSBs, Registered
Intermediaries Brokers, CDPs and RTAs, who are authorized to collect Bid cum Application
Forms from the Bidders, in relation to the Issue.
Designated RTA Such locations of the RTAs where Bidders can submit the ASBA Forms to
Locations RTAs.
The details of such Designated RTA Locations, along with names and contact
details of the RTAs eligible to accept ASBA Forms are available on the
websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com).
Designated Stock [●].
Exchange
"Draft Red Herring This draft red herring prospectus dated September 27, 2018 filed with SEBI,
Prospectus" / prepared and issued by our Company in accordance with the SEBI ICDR
"DRHP" Regulations.
Eligible NRIs NRIs eligible to invest under Schedule 3 and Schedule 4 of the FEMA
Regulations, from such a jurisdiction outside India where it is not unlawful to
make an offer or invitation under this Issue and in relation to whom the Red
Herring Prospectus constitutes an invitation to subscribe to or purchase the
Equity Shares.
Eligible QFIs Qualified Foreign Investors from such jurisdictionts outside India where it is
not unlawful to make an invitation under the Issue and in relation to whom the
Red Herring Prospectus constitutes an invitation to subscribe to or purchase
the Equity Shares issued thereby, and who have opened dematerialized
accounts with SEBI registered qualified depositary participants and are
deemed as FPIs under the SEBI FPI Regulations.
Escrow Account(s) ‘No-lien’ and ‘non-interest bearing’ account opened with the Escrow
Collection Bank(s) and in whose favour the Bidders (excluding the ASBA
Bidders) will transfer money through direct credit/NEFT/RTGS/NACH in
respect of the Bid Amount when submitting a Bid.
Escrow Agreement An agreement to be entered among our Company, the Registrar to the Issue,
the Escrow Collection Bank(s), Refund Bank(s), the BRLM and the Syndicate
Members for the collection of Bid Amounts and where applicable, for
remitting refunds, if any, to the Anchor Investor Bidders on the terms and
conditions thereof.
First Bidder Bidder whose name appears first in the Bid cum Application Form in case of
a joint bid and whose name shall also appear as the first holder of the
beneficiary account held in joint names or any revisions thereof.
Floor Price The lower end of the Price Band, and any revisions thereof, below which the
Issue Price will not be finalized and below which no Bids will be accepted,
and which shall not be less than the face value of the Equity Shares
Fresh Issue The issue of 12,700,000 Equity Shares aggregating up to `[●] million offered
7
Term Description
by our Company for subscription pursuant to the terms of this Draft Red
Herring Prospectus.
General Information The General Information Document for investing in public issues, prepared
Document/GID and issued in accordance with the circular (CIR/CFD/DIL/12/2013) dated
October 23, 2013 notified by SEBI, suitably modified and updated pursuant
to, among others, the circular (CIR/CFD/POLICYCELL/11/2015) dated
November 10, 2015, the circular (CIR/CFD/DIL/1/2016) dated January 1,
2016, the circular (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21,
2016 and the circular (SEBI/HO/CFD/DIL2/CIR/P/2018/22) dated February
15, 2018 included in the chapter titled "Issue Procedure" beginning on page
590 of this Draft Red Herring Prospectus.
Issue The Fresh Issue is referred to as the Issue aggregating upto ₹[●] million.
Issue Agreement The agreement dated August 7, 2018 amongst our Company, and the BRLM,
pursuant to which certain arrangements are agreed to in relation to this Issue.
Issue Documents The Draft Red Herring Prospectus, the Red Herring Prospectus, the
Prospectus and any corrigendum and addendum filed in respect thereof.
Issue Expenses Expenses in connection with the Issue which (including the listing fees), will
be borne by our Company in the Fresh Issue.
Issue Price Final price at which Equity Shares will be Allotted in terms of the Red Herring
Prospectus.
8
Term Description
CIR/CFD/14/2012 dated October 4, 2012.
Price Band Price Band of a minimum price of ₹[●] per Equity Share (Floor Price) and the
maximum price of ₹[●] per Equity Share (Cap Price), including any revisions
thereof. The Price Band and the minimum Bid Lot for the Issue will be decided
by our Company in consultation with the BRLM and advertised, at least five
(5) Working Days prior to the Bid / Issue Opening Date, in all editions of [●],
an English national daily newspaper, all editions of [●], a Hindi national daily
newspaper and all editions of [●], an Assamese newspaper ('Assamese' being
the regional language in the state where our Registered Office is located) ,
each with wide circulation.
Pricing Date The date on which the Issue Price is finalised by our Company, in consultation
with the BRLM.
Prospectus The prospectus of our Company to be filed with the RoC for this Issue after
the Pricing Date, within the provisions of Section 26 of the Companies Act,
2013 and the SEBI ICDR Regulations containing, inter alia, the Issue Price
that is determined at the end of the Book Building Process, the size of the
Issue and certain other information.
Public Issue Account A ‘no-lien’ and ‘non-interest bearing’ account opened with the Bankers to the
Issue by our Companyunder Section 40(3) of the Companies Act, 2013 to
receive money from the Escrow Accounts on the Designated Date, and into
which the funds shall be transferred by the SCSBs from the ASBA Accounts.
Qualified Foreign A qualified foreign investor as defined in the SEBI FPI Regulations.
Investors / QFIs
QIBs / Qualified Qualified Institutional Buyers as defined under Regulation 2(1) (zd) of the
Institutional Buyers SEBI ICDR Regulations.
QIB Portion / QIB The portion being upto 30% of the Issue (including the Anchor Investor
Category Portion), being [●] Equity Shares which shall be available for allocation to
QIBs (including the Anchor Investor Portion).
Red Herring The red herring prospectus to be issued in accordance with Section 32 of the
Prospectus / RHP Companies Act, 2013 and the SEBI ICDR Regulations, which will not have
complete particulars of the price at which the Equity Shares shall be issued
and the size of the Issue. The Red Herring Prospectus will be filed with the
RoC at least three Working Days before the Bid/Issue Opening Date and will
become the Prospectus upon filing with the RoC after the Pricing Date.
Refund Account(s) 'No-lien' and 'non-interest bearing' account(s) opened by our Company, from
which refunds of the whole or part of the Bid Amount to the Anchor Investor
shall be made.
Refunds through Refunds through NECS, NEFT, direct credit, NACH or RTGS, as
electronic transfer of applicable.
funds
Refund Banks Escrow Collection Banks with whom Refund Accounts will be opened and
from which a refund of the whole or part of the Bid Amount, if any, shall be
made, in this case being, [●].
Registered Brokers Stock brokers registered with the stock exchanges having nationwide
terminals, other than the members of the Syndicate and eligible to procure
Bids in terms of SEBI circular number CIR/CFD/14/2012 dated October 4,
2012 issued by SEBI
Registrar / Registrar Link Intime India Private Limited.
to the Issue
Registrar Agreement The agreement dated July 17, 2018, entered between our Company and the
Registrar to the Issue, in relation to the responsibilities and obligations of the
9
Term Description
Registrar to the Issue pertaining to the Issue.
Retail Individual Bidders other than Eligible Employees bidding in the Employee Reservation
Bidders Portion, whose Bid Amount for Equity Shares in the Issue is not more than ₹
200,000 in any of the Bidding options in the Issue (including HUFs applying
through their karta, Eligible NRIs and Resident Retail Individual Bidders).
Retail Portion The portion of the Issue being not less than 40% of the Issue, consisting of [●]
Equity Shares, available for allocation on a proportionate basis to Retail
Individual Bidders.
Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the
Bid Amount in any of their Bid cum Application Forms or any previous
Revision Form(s).
QIB Bidders and Non-Institutional Bidders are not allowed to lower their Bids
(in terms of quantity of Equity Shares or the Bid Amount) at any stage. Retail
Individual Bidders can revise their Bids during the Bid/Issue Period and
withdraw their Bids until Bid/Issue Closing Date.
RTAs / Registrar and The registrar and share transfer agents registered with SEBI and eligible to
Share procure Bids at the Designated RTA Locations in terms of SEBI circular
Transfer Agents number CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued
by SEBI
SEBI (Alternative Securities and Exchange Board of India (Alternative Investment Funds)
Investment Funds) Regulations, 2012 as amended from time to time.
Regulations / SEBI
AIF Regulations
Self-Certified The banks which are registered with SEBI under the Securities and Exchange
Syndicate Banks or Board of India (Bankers to an Issue) Regulations, 1994 and issue services in
SCSBs relation to ASBA a list of which is available on website of SEBI
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=y
es&intmId=35 and updated from time to time
Specified Locations Bidding centres where the Syndicate shall accept Bid cum Application Forms
from ASBA Bidders, a list of which is available at the website of SEBI
(www.sebi.gov.in) and updated from time to time
Stock Exchanges BSE and NSE.
Syndicate Agreement The agreement dated [●] to be entered into amongst the members of the
Syndicate, our Company, and the Registrar to the Issue in relation to the
collection of Bids in the Issue (other than Bids directly submitted to the
SCSBs under the ASBA process or to Registered Brokers at the Broker
Centres).
Syndicate Members An Intermediary registered with SEBI to act as a syndicate member and who
are permitted to carry out activities as an underwriter, namely [●].
Syndicate / members The BRLM and the Syndicate Members.
of the Syndicate
Underwriters The BRLM and [●].
Underwriting The agreement to be entered into between the Underwriters, our Company,
Agreement and the Registrar to the Issue on or after the Pricing Date, but prior to filing
the Prospectus with the RoC.
Working Days All days other than second and fourth Saturday of the month, Sunday or a
public holiday, on which commercial banks in Mumbai are open for business;
provided however, with reference to
(a) announcement of Price Band; and Bid/Offer Period, "Working Days"
shall mean all days, excluding Saturdays, Sundays and public holidays,
10
Term Description
on which commercial banks in Mumbai are open for business; and
(b) the time period between the Bid/Offer Closing Date and the listing of the
Equity Shares on the Stock Exchanges, "Working Days" shall mean all
trading days of the Stock Exchanges, excluding Sundays and bank
holidays, as per the SEBI circular number
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016.
11
Abbreviation Full Form
CDSL Central Depository Services (India) Limited
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CIBIL Credit Information Bureau (India) Limited
CIN Corporate Identity Number
CIS Commonwealth of Independent States
cKm Circuit Kilometers
o
C Degree Celsius
Companies Act, 2013, to the extent notified and the provisions of the
Companies Act or Act
Companies Act, 1956 to the extent remaining in force
Competition Act Competition Act, 2002, as amended
CIF Cost, Insurance and Freight
CPI Consumer Price Index
CRR Cash Reserve Ratio
CST Central Sales Tax Act, 1956, as amended
CSR Corporate Social Responsibility
CSO Central Statistical Organization
CY Calender Year
DBO Defined Benefit Obligation
DC Direct Current
DDUGJY Deen Dayal Upadhyay Gram Jyoti Yojana
DIN Directors Identification Number.
DIPP Department of Industrial Policy and Promotion
DISCOM Distribution Company
DP ID Depository Participant's Identity
DPR Detailed Project Report
EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation
EPC Engineering, Procurement and Construction
EGM or EOGM Extraordinary General Meeting
EM Equitable mortgage
EPS Earnings per share
Electricity Act and Electricity Act, 2003 and Central Electricity Authority (Measures
Regulations relating to Safety and Electricity Supply) Regulations, 2010, as amended
Electricity Rules Electricity Rules, 2005, as amended
EPF Act Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, as
amended
ESI Act Employees State Insurance Corporation Act, 1948, as amended
Factory Unit – I Manufacturing facility of the Company situated at Industrial Estate,
Cinnamara, Jorhat, 785 008, Assam
Factory Unit - II Manufacturing facility of the Company situated at F – 44, Industrial
Area, Sikar – 332 001, Rajasthan
Factory Unit - III Manufacturing facility of the Company situated at 384/3, Industrial
Area, Bapi, Dausa – 303 303, Rajasthan
FDI Foreign Direct Investment
Foreign Exchange Management Act, 1999, together with rules and
FEMA
regulations framed there under
Foreign Exchange Management (Transfer or Issue of Security by a
FEMA Regulations
Person Resident Outside India) Regulations, 2017, as amended
Foreign Institutional Investors, as defined under the FII Regulations and
FII
registered with SEBI under applicable laws in India
12
Abbreviation Full Form
Securities and Exchange Board of India (Foreign Institutional Investors)
FII Regulations
Regulations, 1995, as amended
FIPB Foreign Investment Promotion Board
Fiscal or Financial Year Period of twelve months ended March 31 of that particular year, unless
or FY otherwise stated
Finance Act read with Finance Act, 1994 read with Service Tax Rules, 1994, as amended
Service Tax Rules
A foreign portfolio investor who has been registered pursuant to the
SEBI FPI Regulations, provided that any QFI or FII who holds a valid
certificate of registration shall be deemed to be an FPI until the expiry
FPIs
of the block of three years for which fees have been paid as per the
Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995
FPPCA Fuel and Power Purchase Cost Adjustment
FVCI Foreign Venture Capital Investor registered under the FVCI Regulations
Securities and Exchange Board of India (Foreign Venture Capital
FVCI Regulations
Investors) Regulations, 2000, as amended
GDP Gross Domestic Product
GEC Green Energy Corridor
GFCF Gross Fixed Capital Formation
GMP Good manufacturing practices
GST Goods and Services Tax
GoI or Government of
India or Central
The Government of India
Government or Union of
India
GVA Gross Value Added
GI Wires Ground wires and galvanized iron wires
HCPTCs High Capacity Power Transmission Corridors
HNI High Net worth Individual
HVDC High-voltage direct current
HRA House Rent Allowance
HUF Hindu Undivided Family
ICAI The Institute of Chartered Accountants of India
ICRA ICRA Limited
ICRA Report, September Research Report on the "Indian Transmission and Distribution Sector"
2018 issued in September 2018 by ICRA Limited as commissioned by our
Company
IEEMA Indian Electrical and Electronics Manufacturers Association
IFRS International Financial Reporting Standards
IMD India Meteorological Department
IMF International Monetary Fund
Indian Accounting Standards notified under the Companies (Indian
Ind AS
Accounting Standards) Rules, 2015
Indian GAAP Generally accepted accounting principles in India
IPO Initial Public Offering
IPDS Integrated Power Development Scheme
IRDA Insurance Regulatory and Development Authority
IT Information Technology
IT Act/ Income Tax Act Income Tax Act, 1961, as amended
13
Abbreviation Full Form
IT Department Income Tax Department, GoI
ISO International Organisation for Standardization
ISTS Inter-state transmission system
JV Joint Venture
KV Kilovolt
KVA / KW Kilo-volt-ampere / Kilo-watt
kWp Kilo Watt Peak
LAF Liquidity adjustment facility
LC Letter of credit
LDC Load dispatch centers
The Securities and Exchange Board of India (Listing Obligations and
Listing Regulations
Disclosure Requirements), Regulations, 2015
Ltd Limited
MCLR Marginal cost of funds based lending rate
Mm Millimeter
MMT Million Metric Tonne
MoP Ministry of Power
MoU Memorandum of Understanding
MPC Monetary Policy Committee
Mutual funds registered with SEBI under the Securities and Exchange
Mutual Funds
Board of India (Mutual Funds) Regulations, 1996
MSMED Act Micro, Small & Medium Enterprises Development Act, 2006, as
amended
MSF Marginal Standing Facility
MSP Minimum Support Price
MT Metric Tonnes
MVA Mega Volt Amps
MW Mega Watts
NAV Net Asset Value
NCLT National Company Law Tribunal
NECS National Electronic Clearing Services
NEFT National Electronic Funds Transfer
NERPSIP North-Eastern Region Power System Improvement Project
National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII
NIF
dated November 23, 2005 of the Government of India
No. Number
A person resident outside India, as defined under FEMA, including an
NR or Non Resident
Eligible NRI and FII
NRE Account Non-Resident External Account
A non-resident Indian being an individual resident outside India who is
NRI
a citizen of India
NRO Account Non-Resident Ordinary Account
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
OCC Open Cash Credit
OC Overhead conductors
p.a. Per annum
14
Abbreviation Full Form
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
PBT Profit Before Tax
PCB Pollution Control Board
Petroleum Act and Rules Petroleum Act, 1934 and Petroleum Rules, 2002, as amended
PGCIL Power Grid Corporation of India Limited
PLF Plant Load Factor
RBI Reserve Bank of India
REC Rural Electrification Corporation
REMC Renewable Energy Management Centers
RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana
RoW Right of Way
RTGS Real Time Gross Settlement
SARFAESI Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002, as amended
SCRA Securities Contracts (Regulation) Act, 1956, as amended
SCRR Securities Contracts (Regulation) Rules, 1957, as amended
The Securities and Exchange Board of India constituted under the SEBI
SEBI
Act
SEBI Act The Securities and Exchange Board of India Act, 1992, as amended
The Securities and Exchange Board of India (Issue of Capital and
SEBI ICDR Regulations
Disclosure Requirements) Regulations, 2009, as amended
Securities and Exchange Board of India (Alternative Investments Funds)
SEBI AIF Regulations
Regulations, 2012, as amended
SERC State Electricity Regulatory Commission
Securities Act U.S. Securities Act of 1933
SICA Sick Industrial Companies (Special Provisions) Act, 1985, as amended
SLR Statutory Liquidity Ratio
Sq. ft./ Sft/ sqft Square foot
Sq. mt. Square meter
Sub-accounts registered with SEBI under the Securities and Exchange
Sub-Account Board of India (Foreign Institutional Investor) Regulations, 1995, other
than sub-accounts which are foreign corporates or foreign individuals
Securities and Exchange Board of India (Substantial Acquisition of
Takeover Code
Shares and Takeovers) Regulations, 2011, as amended
Tax Deduction Account Number allotted under the Income Tax Act,
TAN
1961, as amended
TDS Tax Deducted at Source
TL Term loan
TP Term Premia
TPA Tons Per Annum
TPD Tons Per Day
TRIPS Trade-Related aspects of Intellectual Property Rights
T&D Transmission and Distribution
UDAY Ujjwal Discom Assurance Yojana
15
Abbreviation Full Form
UAE United Arab Emirates
UGC Act 1956 University Grants Commission Act, 1956
U.S. or US or U.S.A or The United States of America, together with its territories and
United States possessions
United States Dollar, the official currency of the United States of
US$ or USD
America
UT Union Territory
Venture Capital Funds as defined and registered with SEBI under the
VCFs Securities and Exchange Board of India (Venture Capital Fund)
Regulations, 1996
Water Act The Water (Prevention and Control of Pollution) Act, 1974, as amended
WPI Wholesale Price Index
WTO World Trade Organization
XLPE Cross-Linked Polyethylene
Y-O-Y Year-over-Year
16
PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA
Certain Conventions
All references to "India" contained in this Draft Red Herring Prospectus are to the Republic of India. In
this Draft Red Herring Prospectus, unless otherwise stated, our Company has presented numerical
information in "million" units. One million represents 1,000,000.
Financial Data
Unless stated otherwise the financial data in this Draft Red Herring Prospectus is derived from the
consolidated and standalone restated financial statements of our Company as at and for the Fiscal 2014
and 2015 prepared in accordance with Indian GAAP, the Companies Act, the SEBI ICDR Regulations
and the guidance notes issued by ICAI and Fiscals 2016, 2017 and 2018 prepared in accordance with
Ind-AS, the Companies Act, the SEBI ICDR Regulations and the guidance notes issued by ICAI, which
are included in this Draft Red Herring Prospectus, and as set out in the section titled "Financial
Information" beginning on page 281 of this Draft Red Herring Prospectus. Our Financial Year
commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, all references
to a particular Financial Year are to the 12-month period ended on March 31 of that year. Further, kindly
note that certain other financial information pertaining to our Group Entities is derived from their
respective financial statements.
There are significant differences between the Indian GAAP, Ind AS, the International Financial
Reporting Standards ("IFRS") and the Generally Accepted Accounting Principles in the United States
of America ("U.S. GAAP"). The reconciliation of the financial information to Ind AS, IFRS or US
GAAP has not been provided. Our Company has not attempted to explain those differences or quantify
their impact on the financial data included in this Draft Red Herring Prospectus and we urge investors
to consult their advisors regarding such differences and their impact on our Company’s financial data.
Further, for details of significant differences between Indian GAAP and Ind AS, see "Summary of
Significant Differences between Indian GAAP and Ind AS" beginning on page 573 of this Draft Red
Herring Prospectus. Accordingly, the degree to which the financial statements included in this Draft
Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level
of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian
accounting practices, Indian GAAP, Ind AS, the Companies Act and the SEBI ICDR Regulations on
the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited.
Certain figures contained in this Draft Red Herring Prospectus, including financial information, have
been subject to rounding adjustments. All decimals have been rounded off to two decimal points. In
certain instances, (i) the sum or percentage change of such numbers may not conform exactly to the
total figure given; and (ii) the sum of the numbers in a column or row in certain tables may not conform
exactly to the total figure given for that column or row. However, where any figures that may have been
sourced from third-party industry sources are rounded off to other than two decimal points in their
respective sources, such figures appear in this Draft Red Herring Prospectus as rounded-off to such
number of decimal points as provided in such respective sources.
Unless the context otherwise indicates, any percentage amounts, relating to the financial information of
our Company in the sections entitled "Risk Factors", "Our Business" and "Management’s Discussion
and Analysis of Financial Conditional and Results of Operations" beginning on pages 21, 191 and 505,
respectively, and elsewhere in this Draft Red Herring Prospectus have been calculated on the basis of
our restated financial statements.
17
Currency and Unit of presentation
All references to "Rupees" or "₹" are to Indian Rupees, the currency of the Republic of India. All
references to "US$" or "U.S. Dollars" are to United States Dollars, the currency of the United States of
America.
Our Company has presented certain numerical information in this Draft Red Herring Prospectus in
"Million". One million represents 1,000,000. All the numbers in the document have been presented in
million or in whole numbers where the numbers have been too small to present in million.
Exchange Rates
This Draft Red Herring Prospectus contains conversions of certain other currency amounts into Indian
Rupees that have been presented solely to comply with the SEBI ICDR Regulations. These conversions
should not be construed as a representation that these currency amounts could have been, or can be
converted into Indian Rupees, at any particular rate or at all.
The following table sets forth, for the periods indicated, information with respect to the exchange rate
between the Rupee and the US$ (in Rupees per US$):
(in ₹)
Currency As on March 31, As on March As on March As on March As on March
2018 31, 2017 31, 2016 31, 2015 31, 2014
US$ 65.04 64.84 66.33 62.59 60.10
Notes:
1. Period ended for Fiscal 2018 taken on March 28, 2018 as data is not available for March 29,
2018, March 30, 2018 and March 31, 2018 as these were non-trading days.2
2 Period ended for Fiscal 2014 taken on March 28, 2014 as data is not available for March 29,
2014, March 30, 2014 and March 31, 2014 as these were non-trading days
Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been
obtained and derived from the report titled "Indian Transmission and Distribution Sector" dated
September 2018, by ICRA.
Industry publications generally state that 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. Accordingly, no investment decision should be made on the basis of
such information. Although we believe that industry data used in this Draft Red Herring Prospectus is
reliable, it has not been independently verified by the BRLM or our Company or any of their affiliates
or advisors. Such data involves risks, uncertainties and numerous assumptions and is subject to change
based on various factors, including those discussed in the section titled "Risk Factors" beginning on
page 21 of this Draft Red Herring Prospectus. Accordingly, investment decisions should not be based
solely on such information.
Certain information in the chapters titled "Summary of Industry", "Summary of Business, Strengths and
Strategies", "Industry Overview" and "Our Business" beginning on pages 52, 58, 146 and 191,
respectively of this Draft Red Herring Prospectus has been obtained from ICRA Report, September
2018 which has issued the following disclaimer:
18
"All information contained herein has been obtained by ICRA from sources believed by it to be accurate
and reliable. Although reasonable care has been taken to ensure that the information herein is true,
such information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes
no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of
any such information. Also, ICRA or any of its group companies, while publishing or otherwise
disseminating other reports may have presented data, analyses and/or opinions that may be inconsistent
with the data, analyses and/or opinions presented in this publication. All information contained herein
must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred
by users from any use of this publication or its contents".
In accordance with the SEBI ICDR Regulations, the chapter titled "Basis for Issue Price" beginning on
page 138 of this Draft Red Herring Prospectus includes information relating to our peer group
companies. Such information has been derived from publicly available sources, and neither we, nor the
BRLM have independently verified such information.
Further, in accordance with Regulation 51A of the SEBI ICDR Regulations, our Company may be
required to undertake an annual updation of the disclosures made in this Draft Red Herring Prospectus
and make it publicly available in the manner specified by SEBI.
19
FORWARD-LOOKING STATEMENTS
This Draft Red Herring Prospectus contains certain "forward looking statements". All statements
regarding our expected financial condition and results of operations, business, plans and prospects are
forward-looking statements. These forward-looking statements include statements with respect to our
business strategy, our revenue and profitability, our projects and other matters discussed in this Draft
Red Herring Prospectus regarding matters that are not historical facts. These forward looking statements
can generally be identified by 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. Similarly, statements that describe our objectives, strategies, plans or goals are also
forward looking statements. All forward looking statements are subject to risks, uncertainties and
assumptions about us that could cause our actual results to differ materially from those contemplated
by the relevant forward looking statement. Similarly, statements that describe our strategies, objectives,
plans or goals are also forward-looking statements.
Important factors that could cause actual results to differ materially from our expectations include,
among others:
• Our ability to maintain our market position;
• Significant change in the Government’s economic liberalization and deregulation policies;
• General economic and business conditions in the markets in which we operate;
• Our ability to successfully implement our growth strategy and to successfully manufacture our
products in a timely and efficient manner;
• Fluctuation in prices of our raw materials and our reliance on third party suppliers for our raw
materials;
• Our ability to attract and retain qualified personnel
• The impact of climate change and other environmental factors;
• Occurrence of a natural disaster like floods etc.;
• Changes in the legal, regulatory and political environment in India;
• Our ability to bag and implement EPC projects in a timely and efficient manner;
• Our ability to bag orders for OCs and complete the same in a timely and efficient manner.
For a further discussion of factors that could cause our actual results to differ, refer chapters titled "Risk
Factors", "Our Business" and "Management’s Discussion and Analysis of Financial Condition and
Results of Operation" beginning on pages 21, 191 and 505 respectively. 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.
Forward looking statements reflects the current views of our Company only as of the date of this Draft
Red Herring Prospectus and are not a guarantee of future performance. Our Company shall update this
Draft Red Herring Prospectus on annual basis from the date of filing of the Red Herring Prospectus
with the RoC. Except for such annual update, our Company, our Directors, our officers, any
Underwriter, or any of their respective affiliates or associates has any obligation to update or otherwise
revise any statement reflecting circumstances arising after the date hereof or to reflect the occurrence
of underlying events, even if the underlying assumptions do not come to fruition. Our Company and the
BRLM will ensure that investors in India are informed of material developments until the
commencement of listing and trading of the Equity Shares pursuant to the Issue.
20
SECTION II: RISK FACTORS
An investment in Equity Shares involves a high degree of risk. You should carefully consider all the
information in this Draft Red Herring Prospectus, including the risks and uncertainties described
below, before making an investment in our Equity Shares. The risks described below are not the only
ones relevant to us or our Equity Shares, the industry and segments in which we currently operate or
propose to operate. Additional risks and uncertainties, not presently known to us or that we currently
deem immaterial may also impair our businesses, results of operations, financial condition and cash
flows. If any of the following risks, or other risks that are not currently known or are currently deemed
immaterial, actually occur, our businesses, results of operations, financial condition and cash flows
could suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your
investment.
To obtain a better understanding of our business, you should read this section in conjunction with other
chapters of this Draft Red Herring Prospectus, including the chapters titled "Our Business",
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" and
"Financial Information" beginning on pages 191, 281 and 505 respectively of this Draft Red Herring
Prospectus, together with all other financial information contained in this Draft Red Herring
Prospectus. In making an investment decision, prospective investors must rely on their own examination
of us and the terms of the Issue including the merits and risks involved.
You should consult your tax, financial and legal advisors about the particular consequences to you of
an investment in our Equity Shares. Prospective investors should pay particular attention to the fact
that our Company is incorporated under the laws of India and is subject to a legal and regulatory
environment, which may differ in certain respects from that of other countries. This Draft Red Herring
Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the considerations described below and elsewhere
in this Draft Red Herring Prospectus. For details, refer chapter titled "Forward-Looking Statements"
beginning on page 20 of the Draft Red Herring Prospectus.
Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the
financial or other implications of any of the risks described in this section. Unless the context requires
otherwise, the financial information of our Company has been derived from the Restated Financial
Statements.
1. Our Company, Promoters, Directors, Subsidiaries and Group Entities are involved in certain
legal proceedings. An adverse outcome in such proceedings may have a material adverse
effect on our business, results of operations and financial condition.
We are currently involved in a few legal proceedings. These proceedings are pending in various
courts and authorities at different levels of adjudication. The amounts claimed in these
proceedings have been disclosed to the extent ascertainable, excluding contingent liabilities but
including amounts claimed jointly and severally from us and other parties.
Mentioned below are the details of the total number of proceedings pending against and by our
Company, Promoters, Directors, Subsidiaries and Group Entities, as on the date of this Draft
Red Herring Prospectus along with the amounts involved, to the extent quantifiable:
21
A. Litigation against our Company, Promoters, Directors, Group Entities and Subsidiaries
(₹ in million approximately)
Type of proceedings Number of cases Amount to the extent ascertainable
Cases filed against our Company
Criminal cases NIL
Civil cases NIL
Cases filed against our Promoters and Directors
Criminal cases NIL
Civil cases NIL
Cases filed against our Group Entities
Criminal cases NIL
Civil cases NIL
Cases filed against our Subsidiaries
Criminal cases NIL
Civil cases NIL
(₹ in million approximately)
Type of proceedings Number of cases Amount to the extent ascertainable
Cases filed by our Company
Criminal cases 1 2.5
Civil cases 1 Not ascertainable
Total 2 Not ascertainable
Cases filed by our Promoters and Directors
Criminal cases NIL
Civil cases 1 Not ascertainable
Total 1 Not ascertainable
Cases filed by our Group Entities
Criminal cases 1 1.4
Civil cases NIL
Total 1 1.4
Cases filed by our Subsidiary
Criminal cases NIL
Civil cases 1 Not ascertainable
Total 1 Not ascertainable
C. Tax Litigation involving our Company, Promoters, Directors, Group Entities and Subsidiaries
22
Period Pending before Number Amount to the extent
of cases ascertainable
2012- Kolkata 4 Division
2013
Total 2 101.78
Our Group Entities
NIL
Our Subsidiary
NIL
In addition to the tax litigations mentioned above, one of our Group Entities namely, Toor
Finance Company Limited had preferred an appeal being Appeal No. 672 of 2016-17 against
the demand of `60.04 millions for the AY 2010-2011 and demand of `34.48 millions for the
AY 2015-16, before the Commissioner of Income Tax, Appeal – 9, Delhi ("CIT, Appeal – 9,
Delhi"). By an order dated August 31, 2018, the CIT, Appeal – 9, Delhi allowed the above
appeal in favour of our Group Entity. Our Group Entity and some of our Individual Promoters,
being directors of our Group Entity, may be involved in further litigation in the event the above
order of CIT, Appeal – 9, Delhi is challenged by the IT Department before the Income Tax
Appellate Tribunal.
There can be no assurance that these legal proceedings will be decided in our favour and
consequently it may divert the attention of our management and Promoters which may lead us
to incur significant expenses in such proceedings. Further, we may have to make provisions in
our financial statements, which could increase our expenses and liabilities and any adverse
judgment in some of these proceedings could have an adverse impact on our business, financial
23
condition and results of operations. For details in relation to certain material litigations, refer
chapter titled "Outstanding Litigation and Material Developments" beginning on page 535 of
this Draft Red Herring Prospectus.
2. One of our wholly owned subsidiaries, Brahmaputra Infra Power Private Limited and some
of our Promoters and two persons belonging to our Promoter Group, our Company and one
of our subsidiaries, being guarantors, have received notices under section 13(2) of the
SARFAESI Act, 2002.
One of our wholly owned Subsidiaries, Brahmaputra Infra Power Private Limited ("BIPPL")
and two of our Promoters namely Dr. Murlidhar Khetan and Basant Kumar Khetan alongwith
two persons belonging to our Promoter Group namely, Ranjana Khetan and Sneha Khetan, our
Company and one of our Subsidiaries, Lower Seijusa Hydel Power Company Private Limited,
being guarantors, ("Guarantors") have received a notice dated October 16, 2017, from its
lender namely State Bank of India ("SBI") for defaulting in repayment of loans granted by SBI.
The notice has been issued under section 13(2) of the SARFAESI Act, seeking repayment of
outstanding sums aggregating to ₹249.58 million together with future interest at the contractual
rate on the aforesaid amount and incidental expenses, costs, charges, etc. Pursuant to the said
notice, SBI has declared and classified the account held by BIPPL as non-performing assets
and have stated that unless the outstanding amount of ₹249.58 million is paid, SBI will exercise
all or any of the rights detailed under sub-section (4) of Section 13 and under other applicable
provisions of the SARFAESI Act. BIPPL has replied to the said notice, and vide its letters dated
October 25, 2017, November 13, 2017, December 22, 2017 and December 30, 2017 had agreed
to a compromise settlement offer of ₹ 180 million by payment of 15% of the approved
settlement amount upfront and payment of balance amount in 12 monthly instalments.
However, due to disagreement between SBI and BIPPL with the terms of settlement, the
compromise was cancelled. SBI vide its letters dated December 28, 2017 and January 1, 2018
threatened hard recovery action under Section 13(4) of the SARFAESI Act against BIPPL and
Guarantors. Our Company alongwith BIPPL has filed a Writ Petition bearing number 1515 of
2018 before the Gauhati High Court whereby our Company has inter alia sought a stay against
the hard recovery action proposed by SBI. The Hon’ble Gauhati High Court vide order dated
March 23, 2018 granted a stay against the recovery action proposed by SBI and by an order
dated June 21, 2018 further extended the stay upto July 20, 2018. Subsequently, the Hon’ble
Gauhati High Court vide order dated July 20, 2018 further extended the stay upto July 31, 2018.
Subsequently, the Writ Petition was heard on September 15, 2018 and the Hon’ble Gauhati
High Court has extended the stay till November 19, 2018. For more details on the facts of the
case, please refer to the section "Litigation by our Company" under the chapter titled
"Outstanding Litigations and Material Developments" beginning on page 535 of this Draft Red
Herring Prospectus.
There can be no assurance that the Writ Petition will be decided in our favour and consequently
the security provided by BIPPL and the personal guarantee issued by some of our Promoters
and two persons belonging to our Promoter Group and corporate guarantees issued by our
Company and one of our susbsidiaries, may be enforced in the event the Writ Petition is decided
otherwise. In such eventualities, our Company and our Promoters and management may be
required to divert their attention towards any legal proceedings or recovery proceedings
initiated in respect of loans availed by BIPPL. Further, our Company may also be required to
incur expenses towards cost of legal proceedings in respect of any recovery action initiated by
SBI. This may have an adverse impact on our business, financial condition and results of
operations of our Company.
24
3. Some of our Promoters have provided personal guarantees for a significant portion of
borrowings taken by Group Entities and one of our Subsidiaries to secure certain loans.
Further, our Company alongwith our Subsidiary namely, Lower Seijusa Hydel Power
Company Private Limited has provided corporate guarantee for significant portion of
borrowings taken by our Subsidiary i.e. Brahmaputra Infra Power Private Limited to secure
certain financial assistance.
Our Individual Promoters have provided personal guarantees as collateral for a significant
portion of borrowings made by our Group Entities i.e. North Eastern Cables Private Limited
("NECAB") and North Eastern Educare & Research Private Limited ("NEER"). Our Individual
Promoters have also provided personal guarantees as collateral for a significant portion of
borrowings made by one of our Subsidiaries i.e. Brahmaputra Infra Power Private Limtied
("BIPPL"). Further, our Company alongwith one of our Subsidiary i.e. Lower Seijusa Hydel
Power Private Limited ("LSHP") has provided corporate guarantees as collateral for the
borrowings made by BIPPL.
If any of our Group Entities default in their repayment obligations, the guarantees extended by
our Individual Promoters may be invoked and such lenders may require our Individial
Promoters to discharge the balance liability of such Group Entities, if any, and the lenders may
recover the dues from personal assets of our Individual Promoters, including shares held by
such Individual Promoters in our Company. Since some of our Individual Promoters are also
promoters and directors in our Group Entities, in the eventuality of a default in the repayment
of loans by our Group Entities, it may divert the attention of our management and Individual
Promoters towards any legal proceedings or recovery proceedings initiated in respect of such
defaults by our Group Entities.
Likewise, the guarantees extended by our Individual Promoters and LSHP may be invoked and
such lenders may require our Promoters and LSHP to discharge the balance liability of BIPPL,
if any, pursuant to default by BIPPL in repayment of its borrowings and the lenders may recover
the dues from personal assets of our Individual Promoters, including shares held by such
Individual Promoters in our Company. Since some of our Individual Promoters are also either
promoters or directors in BIPPL and LSHP, in the eventuality of a default in the repayment of
loans by BIPPL, it may divert the attention of our management and Promoters towards any
legal proceedings or recovery proceedings initiated in respect of such defaults by BIPPL.
Under such circumstances, there could be an adverse impact on our business, financial
condition and results of operations of our Company.
4. Our business requires us to obtain and renew certain registrations, licenses and permits from
government and regulatory authorities and the failure to obtain and renew them in a timely
manner may adversely affect our business operations.
Our business operations require us to obtain and renew from time to time, certain approvals,
licenses, registrations and permits, some of which may have expired and we may have either
made or are in the process of making an application to obtain such approval or its renewal.
Further, local laws in the state of Meghalaya and Arunachal Pradesh require us to obtain a no-
objection or consent from the local residents for setting up our offices in the said states and
obtaining a license from the local authorities under the relevant state shops and establishment
acts. We cannot assure you that we will be able to obtain a no-objection or consent from the
local residents of Meghalaya and Arunachal Pradesh. Further, we cannot assure that we will be
able to obtain the approvals for which applications have been made including renewals in a
timely manner or at all. Furthermore, the government approvals and licenses are subject to
25
various conditions. If our Company fails to comply with, or a regulator claims that our
Company has not complied with any of these conditions stipulated under the licenses, our
certificate of registration / licenses for carrying on a particular activity may be suspended and /
or cancelled and we will not be able to carry on such activity, which would adversely impact
our business and results of operations. For more information on the licenses obtained by our
Company and the licenses applied for by our Company, please refer chapter titled "Government
and Other Approvals" beginning on page 546 of the Draft Red Herring Prospectus.
5. In the past, certain survey operations were carried out by the Income Tax Department under
section 133A of the Income Tax Act against our Company. Any adverse action by the tax
authorities could increase our tax liability.
Survey operations were carried out by the Income Tax Department, at the Registered Office of
our Company, under section 133A of the Income Tax Act, 1962 in the month of August 2017.
During the course of survey operations, the income tax authorities impounded books of
accounts and documents and stock inventories and other items belonging to our Company.
Subsequently, the Income Tax Department observed that (i) `12.95 million on account of sale
of scrap material; and (ii) `37.13 million on account of cessation of liabilities on account of
sundry creditors adjustment, were not accounted for in the books of accounts. In lieu of the
same, the Income Tax Department directed our Company to file a revised return after
accounting for the above mentioned items. Subsequently, our Company has filed a revised
return for the assessment year 2017 – 18 under section 139(5) of the Income Tax Act, 1962
with an additional tax liability of ₹50.08 million. Our Company has discharged its entire
liability by paying the additional liability.
There can be no assurance that similar survey operations will not be carried out in the future by
the Income Tax Department at our Registered Office or at any other place at which our
Company has its operations. Any such adverse action by the income tax authorities and the
resultant proceedings therein may have a material adverse effect on our financial condition and
cash flows.
6. Some of our Group Entities have incurred losses in the last three financial years.
Some of our Group Entities have incurred losses in the last three financial years. The profit/
(loss) figures for the preceding three financial years of such Group Entities are as follows:
(₹ in million)
Name of loss making Group Profit/(Loss) after tax for the Fiscal
Entities 2017 2016 2015
Shri Mahaluxmi Aerated Aqua (Negligible) (Negligible) Profit of `808
Private Limited
Shajha Automations Private (Negligible) (Negligible) Profit of `324
Limited
North Eastern Educare & 3.44 (6.84) (14.65)
Research Private Limited
North Eastern Cables Private (1.27) (10.64) 2.44
Limited
Mahak Builders Private Limited (0.09) (0.05) (0.01)
Kreesna Industries India Private (0.03) (0.07) (0.19)
Limited
We cannot assure that our Group Entities will not incur losses in the future. For further details
of our Group Entities, please see chapter titled "Our Group Entities" beginning on page 267 of
26
this Draft Red Herring Prospectus.
7. We have secured and unsecured loans that may be recalled by the lenders at any time and
we may not have adequate fund flows to make timely payments or at all.
We have availed secured loans towards working capital facility from our consortium of banks
consisting of Indian Bank, Bank of Baroda, Canara Bank, Punjab National Bank and United
Bank of India. Further, we have also availed unsecured loans which may be recalled by the
lenders at any time. As of September 18, 2018, our Company has availed secured loans
amounting to ₹4830.10 million and one unsecured loan amounting to ₹3.74 million which is
repayable on demand. In the event any lender seeks a repayment of any such loan, we would
need to find alternative sources of financing, which may not be available on commercially
reasonable terms, or at all. As a result, any such demand may materially and adversely affect
our cash flows and results of operations. For further details of secured and unsecured loans,
please see the chapter titled "Financial Statements" beginning on page 281 of this Draft Red
Herring Prospectus.
8. We have certain contingent liabilities and our financial condition and profitability may be
adversely affected if any of these contingent liabilities materialize.
As of March 31, 2018, our contingent liabilities and commitments (to the extent not provided
for) as disclosed in the notes to our restated consolidated financial information is as follows:
(₹ in million)
Particulars Amount
Unexpired guarantees issued on behalf of our Company by Banks for which 3,505.97
the Company has provided counter guarantees
Corporate Guarantee provided on behalf of Subsidiary for term loan 255.00
Claims against the company not acknowledged as debts (statutory dues)
• Service Tax - CENVAT disallowance (FY 2006 – FY 2011) (including
interest on service tax) 25.00
For further details, please refer chapter titled "Financial Statements" beginning on page 281
of this Draft Red Herring Prospectus.
In the event that any of our contingent liabilities become actual liabilities, our business,
financial condition and results of operations may be adversely affected. Furthermore, there can
be no assurance that we will not incur similar or increased levels of contingent liabilities in the
current fiscal year or in the future.
9. Continued operations at our manufacturing facilities are critical to our business and any
disruption in our manufacturing facilities would have a material adverse effect on our
business, results of operations and financial condition. Further, our manufacturing facilities
are not operating at optimum capacity utilization and there can be no assurance that we will
be successful in achieving such utilization levels.
We presently operate three manufacturing facilities viz one at Jorhat (Assam), one at Sikar
(Rajasthan) and one at Bapi (Rajasthan). Our manufacturing facilities are subject to operating
risks, such as the breakdown or failure of equipment, power supply or processes, performance
below expected levels of efficiency, obsolescence of equipment or machinery, labour disputes,
industrial accidents and the need to comply with the directives of relevant government and
regulatory authorities. Our customers rely significantly on the timely delivery of our products
27
and our ability to provide an uninterrupted supply of our products is critical to our business.
Presently, our manufacturing facilities are not operating at optimum capacity utilization. While
we seek to increase the capacity utilisation levels, there can be no assurance that demand for
our products will grow at expected rates or that we will be successful in capturing this increase
in demand. If we are unable to garner adequate demand for our products, may have an adverse
impact on our business prospects, financial condition and results of operations. Further, we
cannot assure you that the capacity utilisation will not further decrease from current utilisation
levels, which may further increase the cost of production in the future, as maintenance costs
increase for our plant and machinery. If we are unable to pass on this additional cost to our
customers, our gross margins could decline and our revenue, results of operations and financial
condition would be adversely affected.
10. We may depend on outside parties for adequate and timely supply of materials and bought-
out items at commercially acceptable prices. Further, our top 5 suppliers contributed to
76.28%, 83.10% and 86.14% of our total purchases in the FY 2018, 2017 and 2016. Such
concentration of our purchases puts us in a disadvantageous position. Any disruptions, delay
or increase in prices of such material and bought-out items could have a material adverse
effect on our business.
Our ability to manufacture and make timely deliveries of our products is dependent on the
availability and cost of raw materials. Our consolidated raw materials consumed for FY 2018,
FY 2017 and FY 2016 was ₹2,951.74 million, ₹2,710.07 million and ₹2,987.06 million which,
constituted 68.72%, 69.64% and 78.35% of our revenue from operations for such periods. Our
primary raw materials comprise aluminum wires and we require the continued support of
manufacturers of aluminum wires to supply us at affordable costs. While we are not dependent
on any single raw material supplier, raw material supply and pricing can be volatile due to a
number of factors beyond our control, including global demand and supply, transportation and
labour costs, labour unrest, natural disasters, competition, import duties, tariffs and currency
exchange rates, and any unanticipated variation in any of these factors could have a material
adverse effect on our operations. Our ability to pass on this increased cost in production to our
customers may be restricted, with whom we typically have fixed price sales contracts. Further,
we generally do not enter into agreements with our suppliers and transact with them on an
order-by-order basis, and we cannot assure you that we will continue to enjoy undisrupted
relationships with our suppliers in the future. If we are unable to obtain adequate supplies of
raw material in a timely manner or on commercially acceptable terms, or if there are significant
increases in the prices of the raw materials, our business and results of operations may be
materially and adversely affected.
In relation to our EPC business, we may be significantly affected by the availability, cost and
quality of materials and bought-out items which are required to construct, develop and complete
our projects. The price and supply of materials, equipment and bought-out items depend on
factors not under our control, including domestic and international economic conditions,
competition, availability of quality suppliers, production levels, transportation costs and import,
value added and government duties and taxes. If for any reason, our primary suppliers of
materials, equipment and bought-out items curtail or discontinue their delivery of materials to
us in the quantities we seek or provide us with materials that do not meet our specifications, or
at prices that are not competitive or not anticipated by us, our project schedules could be
disrupted and our ability to meet our timelines for the completion of our projects could be
impaired and we may be in breach of certain EPC contracts. Any of such events could have a
material adverse effect on our business and results of operations.
28
11. We have a limited number of suppliers for our raw material and other key components.
Dependence on few suppliers for raw materials and key components may require us to
procure them from other suppliers at higher cost and cause operational interruptions and
affect our delivery capacity leading to loss of production and underutilization of capacity.
We have limited number of suppliers from whom we procure our raw materials and other key
components. The relationship with these key suppliers plays an important role in helping us
provide complete integrated solutions to our customers in an agreed time frame. If we are
unable to maintain a balanced relationship with our key suppliers, we may have to source our
purchases of raw materials from other suppliers at higher prices. Further, we cannot assure that
we will be able to obtain sufficient amounts of raw materials from our existing key suppliers at
acceptable prices, at all times or at all. While we believe that we could find additional suppliers
to supply these raw materials at competitive prices, any failure of our suppliers to deliver these
materials or to adhere to delivery schedules or specified quality standards and technical
specifications would result in operational interruptions or prolonged production process and
adversely affect our delivery capacity which may lead to under utilization of our production
capacity. As a result, we may incur contractual penalties or liabilities for failure to perform our
contracts, which could have a material adverse effect on our business, financial condition and
results of operations.
12. Our business is substantially dependent on our limited customers from whom we derive a
significant portion of our revenues. The loss of any significant customer may have a material
adverse effect on our business and results of operations.
We derive significant portion of our revenue from a limited number of customers who are
basically government entities. For the FY 2018, our top five (5) customers cumulatively
accounted for approximately 89.04% of our total revenue from operations (net of excise duty)
as per the Restated Standalone Financial Statements. In the event any one or more customers
cease to continue doing business with us, our business may be adversely affected. There may
be factors other than our performance, which may not be predictable, which could cause loss
of customers. Our EPC contracts relates to setting up of power distribution and transmission
sub-stations. These projects are undertaken by public sector undertakings such as state and
central government power utilities. Government projects are typically awarded through a
bidding process where the tender documents specify certain pre-qualification criteria which
may vary from project to project. Further, any significant reduction in demand for our projects
from our key customers, any requirement to lower the price offered by these customers, or any
loss or financial difficulties caused to these customers, change in relationship with the
customers could have a material adverse effect on our business, result of operations, financial
condition and cash flow. While we are constantly striving to increase our customer base and
reduce dependence on any particular customer, there is no assurance that we will be able to
broaden our customer base in any future periods, or that our business or results of operations
will not be adversely affected by a reduction in demand or cessation of our relationship with
any of our major customers.
13. Policy changes may result in projects being restructured, political or financial pressures
could cause our customers, being government entities, to force us to renegotiate our
agreements or delay their payment to us.
We earn significant portion of our revenue from sale of our products or rendering of services
to government entities, pursuant to contractual arrangements with them. Our sales to the
government entities are based on the submission of bids and grant of contracts, which may
require us to offer our products and services at competitive prices to them. However, there can
29
be no assurance that our bid will be successful. Moreover, even if our bid is successful, we may
not receive orders within the expected timelines or at all, which may negatively impact our
annual production and sales plans. Submission of bids to government entities also requires us
to provide bid guarantees to them, which are returned either upon receipt of an order or in case
our bid is unsuccessful. In case of a delay in closure of the bidding process or in receipt of an
order for our products from the government entities, our bid guarantees will be blocked, which
may affect our working capital requirements.
14. Certain factors affecting the geographical areas where our manufacturing facilities and our
EPC / turnkey projects are located may adversely affect our operations, business and
financial condition. Disruption to the development, execution or operation of any of our
projects or at our manufacturing facilities could adversely affect our business.
We manufacture and supply our products to our customers in different geographies within India
from our facilities located in north eastern and north western region of India, primarily in the
state of Assam and Rajasthan respectively. If our manufacturing facilities are harmed or
rendered inoperational by any natural or man-made disasters, including earthquakes, fire,
floods, acts of terrorism and power outages, it may be difficult or impossible for us to efficiently
operate our business for some period of time which may adversely affect our business, financial
condition, result of operations and cash flows.
The development, execution or operation of our EPC / turnkey projects may also be disrupted
for reasons that are beyond our control. These include, among other things, the occurrence of
explosions, fires, earthquakes and other natural disasters, prolonged spells of abnormal rainfall,
breakdown, failure or substandard performance of equipment, improper installation or
operation of equipment, accidents, operational problems, transportation interruptions, other
environmental risks and labour disputes.
There can be no assurance that the affected projects and / or manufacturing facilities will resume
operations in a timely manner or at all. Delays in resuming operations for the affected projects
and / or our manufacturing facilities may have a material adverse effect on our results of
operations. In addition, our projects in the north eastern region are undertaken in extremists
concentrated areas and thus are prone to civil disturbance. The occurrence of such events could
have a material adverse effect on our business, results of operations, financial condition and
prospects.
15. We are exposed to foreign currency exchange rate fluctuations, which may impact our results
of operations and cause our results to fluctuate. Our inability to manage our foreign currency
risk may harm our results of operations and cause our results to fluctuate and/or decline.
Our financial statements are presented in Indian Rupees. However, our expenses to some extent
is influenced by the currency of the country from where we procure some of our raw materials.
30
We are importing a substantial portion of our raw materials for our manufacturing business
from Malaysia and Bahrain. For Fiscal 2018, our total CIF value of imports of raw materials,
traded goods and capital goods constituted ₹725.56 million which was 16.73% of our total
revenues on a standalone basis. We face an exchange rate risk primarily arising from our foreign
currency payables. In the past we have had certain deemed exports as well, wherein, we have
received the payments in US dollars. Further, due to the time gap between the accounting of
purchases and actual payments, the foreign exchange rate at which the purchase is recorded in
the books of accounts may vary with the foreign exchange rate at which the payment is made,
thereby benefiting or affecting us, depending on the appreciation or depreciation of Rupee as
compared to the foreign currency. We may, therefore, be exposed to risks arising from exchange
rate fluctuations, suffer losses on account of foreign currency fluctuations for our raw material
procurement and/or any deemed exports and we may not be able to pass on all losses on account
of foreign currency fluctuations to our customers. As on date of this Draft Red Herring
Prospectus, we do not have any hedging policy to mitigate the losses on account of foreign
currency fluctuations. There is no guarantee that we may be able to manage our foreign currency
risk effectively or mitigate exchange exposures, at all times and our inability may harm our
results of operations and cause our results to fluctuate and/or decline.
16. Our Company has experienced negative cash flows in some prior periods and may do so in
the future, which could have a material adverse effect on our business, prospects, financial
condition, cash flows and results of operations.
Our Company has experienced negative net cash flows (on consolidated basis) in some previous
periods, the details of which are provided below:
(₹ in million)
Particulars For Fiscals
2018 2017 2016 2015 2014
For details on the cash flows on a restated consolidated basis for the last five Fiscals, please
refer chapter titled "Financial Statements" beginning on page 281 of this Draft Red Herring
Prospectus. We may incur negative cash flows in the future which may have a material adverse
effect on our business, prospects, results of operations and financial condition.
17. We rely on third party logistics providers for transportation of our products to the project site
or distribution to our customers. Any delay or disruption or refusal by our third party logistics
providers in timely delivery of our products may affect our business, results of operations
and cash flow adversely.
We do not own any trucks or commercial vehicles and typically use third-party logistics
providers for all of our product distribution and as a result incur considerable expenditure on
transportation of our products. Our customers rely significantly on timely deliveries of our
products and any delays in the delivery of a product can lead to our customers delaying or
refusing to pay the amount, in part or full, that we expect to be paid in respect of such product.
Such eventualities may adversely affect our business, financial condition, result of operations
and cash flows.
31
18. We have high working capital requirements. In case there is insufficient cash flow to meet
our requirement of working capital, there may be adverse effect on the results of our
operations. Further, if we are unable to secure financing for our working capital
requirements, there may be an adverse effect on our business, growth prospects and results
of operations.
Our manufacturing and EPC business requires significant amount of working capital including
for financing our raw material purchases and manufacturing of our products/execution of our
EPC / turnkey projects before we receive payments from our customers. Further, for our
manufacturing business, working capital requirements may increase if, contractual or sales
terms do not include advance payments or if under such contractual arrangements, payment is
stipulated at the time of delivery of the final product to our customers. Also, our EPC / turnkey
projects require substantial amount of working capital. Most of our EPC / turnkey project orders
provide for progressive payments from customers with reference to the value of work
completed upon reaching certain milestones. Generally, in our projects, the payments are based
on the progress certificates depending on completion of work in the preceding contract stage.
As a result, we are often required to commit resources to projects (prior to receiving payment
from our customers) in amounts sufficient to cover project expenditures. Moreover, our
working capital requirements may also increase in the event we undertake a larger number of
orders due to the growth of our business. In particular, our deliverables to customers require us
to incur significant amounts of working capital on account of contractual terms stipulating
payments to be made after delivery, which may further be delayed due to their weak financial
health. We are also customarily required to provide performance guarantees of 10% of contract
price by way of bank guarantees to our customers to secure obligations under contracts with
them. Long working capital cycles, particularly due to delay in payments from our customers
further lead to an increase in our working capital requirements.
Our working capital requirements may increase if, in certain agreements / work orders, payment
terms include, reduced or no advance payments or payment schedules that specify payment
towards the end of a project or are less favorable to us. Further, there can be no assurance that
the payments and the retention money will be remitted by our customers to us on a timely basis.
If we are unable to provide bank guarantees our ability to get new business could be limited.
Providing margins to obtain bank guarantees or performance bonds further increases our
working capital needs and limits our ability to provide bonds and guarantees.
Additionally, the object of this Issue is primarily to fund our working capital needs. Continued
increases in working capital requirements and insufficient cash flows from our operations to
meet any of the above requirements may have an adverse effect on our financial condition and
results of operations. Moreover, we may need to incur additional indebtedness in the future to
satisfy our working capital needs.
19. The structure and specific provisions of our financing arrangements could give rise to
certain additional risks.
As of September 18, 2018, we had ₹4,838.74 millions (including secured, unsecured and
vehicle loan) of outstanding financial indebtedness on a standalone basis. The agreements and
instruments governing our existing indebtedness and the agreements which we expect to enter
into in future in relation to future indebtedness, contain or are likely to contain restrictions and
limitations. Our loan agreements inter alia require us to obtain lender consents prior to effecting
any change in our capital structure, formulating any scheme of amalgamation or reconstruction,
32
implementing any scheme of expansion, diversification or modernization other than routine
capital expenditure, investment by way of share capital or debenture or lend or advance funds,
undertaking guarantee obligation on behalf of third party or any other company. Further, certain
financial covenants may also limit our ability to borrow additional money or to grant additional
security or issue guarantees. Failure to meet these conditions or obtain these consents could
lead to defaults, and as such, demand for repayments of outstanding indebtedness and
termination of such financing agreements may materialize.
In addition, the borrowings are generally secured against some or all of the assets of our
Subsidiaries and / or Group Entities and in particular the assets related to the relevant project.
Any event of default would result in the lenders enforcing their security and taking possession
of the underlying properties. A number of factors (including changes in interest rates, conditions
in the banking market and general economic conditions which are beyond our control) may
make it difficult for our Company to obtain additional finances on attractive terms or at all.
Our Company is also a guarantor for the payment and performance of the obligations of our
Subsidiary namely, Brahmaputra Infra Power Private Limited, under the loan agreements. Any
default by our Subsidiary would require our Company to fulfil its payment obligations under
such guarantees, which could have an adverse effect on our Company’s cash flows and results
of operations. Please refer risk factor No. 2 on page 24 of this Draft Red Herring Prospectus for
further details of the defaults by our Subsidiaries.
There can be no assurance that we will generate sufficient cash to enable us to service our
existing or proposed borrowings, comply with covenants or fund other liquidity needs.
Furthermore, adverse developments in the Indian credit markets or a reduced perception of our
creditworthiness in the credit markets could increase our debt service costs and the overall cost
of our funds. If we fail to meet our debt service obligations or financial covenants required
under the financing documents, our lenders could, enforce the security interest, take possession
of the project assets or substitute themselves or their nominees under any document in relation
to the project. There can be no assurance that, in the event of any such acceleration, we will
have sufficient resources to repay these borrowings. Failure to meet our obligations under the
debt financing arrangements could have an adverse effect on our cash flows, business and
results of operations.
20. Our operations are subject to various operational risks that could expose us to material
liabilities, loss in revenues and increase in expenses. We may also be subject to liability claims
arising from defects in services provided by us.
Our operations are subject to various operational risks such as risk related to equipment failure,
work accidents, fire or explosion, including hazards that may cause injury and loss of life,
severe damage to and destruction of property and equipment, and environmental damage. Our
project sites often put our employees and others in proximity with mechanized equipment,
moving vehicles, high platforms and inflammable materials thereby exposing them to risk of
physical injury. On all our project sites and manufacturing facilities, we are responsible for the
safety of our workforce and must implement safety procedures. If we fail to implement such
procedures or if the procedures we implement are ineffective, our employees and others may
be injured. Unsafe work sites also have the potential to increase employee turnover, increase
the cost of a project to our customers, and raise our operating costs. Any of the foregoing could
result in financial losses, which could have a material adverse effect on our business, results of
operations and financial condition. Although we endeavour to provide adequate insurance
coverage and a safe working environment to all our employees, we cannot rule out the
possibility of future accidents at our project sites.
33
We may also be subject to claims resulting from defects arising in the products / services
provided by us. Actual or claimed defects in the product / equipment and/or construction quality
could give rise to claims, liabilities, costs and expenses, relating to loss of life, personal injury,
damage to property, damage to equipment and facilities, pollution, inefficient operating
processes, loss of production or suspension of operations. Our policy of covering these risks
through contractual limitations of liability, indemnities and insurance may not always be
effective. In some of the jurisdictions in which we operate, environmental and workers’
compensation liability may be assigned to us as a matter of law. Customers and sub-contractors
may not have adequate financial resources to meet their indemnity obligations to us.
Our Company is also required to indemnify our customers from any and all claims as a part of
our contractual obligations, liabilities and damages which may occur to any person or to any
property, as the case may be, resulting from installation of the products supplied by our
Company. In the event of any defects in our products or any loss or damages caused to any
person or property from our products, we may be required to compensate such persons and
indemnify our customers against all such claims or damages sought by the affected persons.
Our Company operates in the the power transmission and distribution sector. We provide EPC
services, undertake turnkey projects mainly in North Eastern region of India and are also
manufacturers of OCs, ground wires and GI Wires which are majorly utilized in laying of power
transmission and distribution lines. Both these segments are affected during the rainy season
due to unfavourable conditions of the terrain in North Eastern region of India for construction
activities and/or laying of power transmission and distribution lines.
22. Our projects are subject to risks associated with the engagement of third party contractors.
The construction work at some of our projects is being, and will be, performed by third party
contractors. As per general contracts for EPC projects, we are required to appoint sub-
contractors as per the approved list provided by our customers which ultimately restrict us to
appoint sub-contractors at commercially viable terms. We do not have direct control over the
day-to-day activities of such contractors and are reliant on such contractors performing these
services in accordance with the relevant contracts. If our Company fails to enter into such
contracts or if the sub-contractors fail to perform their obligations in a manner consistent with
their contracts, our projects may not be completed as or when envisaged, if at all, thus leading
to unexpected cost escalation. The amount of such additional costs could adversely affect our
profit margins for our project. While we may seek to recover these amounts as claims from the
sub-contractor responsible for the delay or for providing non-conforming products or services,
we cannot assure you that we will recover all or any part of these costs in all circumstances or
that there will not be considerable delay in such recovery proceedings. Performance problems
for existing and future projects could cause our actual results of operations to differ materially
from those anticipated by us and could damage our reputation within the industry and our
customer base.
23. We are exposed to claims resulting from delays and defects that may affect our projects and
which may have an adverse effect on our business.
We may face delays in our EPC / turnkey projects due to the internal processes involving
periodical approval of project milestones, resulting in delay in project execution, which
34
adversely impacts us, especially if the contract is on a fixed-rate basis. Actual or claimed defects
in equipment procured and / or construction quality could give rise to claims, liabilities, costs
and expenses, relating to loss of life, personal injury, damage to property, damage to equipment
and facilities, pollution, inefficient operating processes, loss of production or suspension of
operations. Although in certain cases our suppliers are required to compensate us for certain
equipment failures and defects, such arrangements may not fully compensate us for the damage
that we suffer as a result of equipment failures and defects or the penalties under our agreements
with our customers, and they also do not generally cover indirect losses such as loss of profits
or business interruption. Any significant operational problems or the temporary unavailablilty
of the machines and equipment could result in delays or incomplete projects or services and
adversely affect our results of operations.
24. Any defect in our products or services may result in our orders being cancelled and we could
become liable to customers, suffer adverse publicity and incur substantial costs which in turn
could affect us adversely.
Any defect in our products or rendering of our services could result in cancellation of our orders
for manufacturing and selling the products. Our products are required to pass a series of tests
as provided by our customers awarding the contract. In case our products are found to be
defective or there are deficiencies in our services, the same could result in a claim against us
for damages. Although, we attempt to maintain quality standards, we cannot assure that all our
products would be of uniform quality. Any defect in our products and claims by our customers
against our products could adversely affect the value of our brand, and our sales could diminish.
Further, our business is dependent on the trust of our customers in the quality of our products
and delivery of services. Any negative publicity regarding our Company, brand, or products,
including those arising from a drop in quality of materials from our vendors, mishaps resulting
from the use of our products could affect our reputation and our results from operations. In the
event the products sold by us are defective or sub-standard for any reason, including due to
human errors at any stage of manufacturing, our customers may pursue claims or actions against
us within the warranty period, which could materially and adversely affect our business,
financial conditions and results of operations.
25. We may not always possess and maintain our bid capacity and pre-qualification capability.
Our business and growth are dependent on our ability to bid for orders for our products and for
procuring projects. Bidding is dependent on various criteria, including, bid capacity and pre-
qualification capability. In selecting contractors for projects, customers generally limit the
tender to contractors they have pre-qualified based on technical and financial criteria, such as
experience, technical ability, past performance, reputation for quality, safety record, financial
strength and the size of previous contracts executed in similar projects with them or otherwise.
In addition to meeting bid capacity requirements, we may also be required to pre-qualify for
the projects. It is imperative to enhance our bid capacity and pre-qualification capability.
However, we cannot assure that we shall always maintain our bid capacity and our pre-
qualification capabilities, or at all, and that we shall be able to continually secure projects so as
to enhance our financial performance and results of operations. Our inability to fulfil and
maintain the bid and pre-qualification capabilities may materially impact our operating revenue
and profitability.
26. Our Company has, in the past, delayed payments of statutory dues (tax deducted at source,
employees state insurance, provident fund, professional tax, value added tax and service tax).
Any concerned regulatory authority or department may take appropriate remedial action
against our Company for such delays.
35
Our Company has, in the past, delayed in the payments of statutory dues such as tax deducted
at source, employees state insurance, provident fund, professional tax, value added tax, and
service tax. Any concerned regulatory authority or department having jurisdiction over the
respective statutory dues may take appropriate remedial action against our Company pursuant
to such delays. There is no assurance that our Company will not make similar delay in the
payment of such statutory dues in future and such delays, if any, may be construed as a default
on the part of our Company and concerned regulatory authority or department may take
appropriate remedial action against our Company.
27. The capacity of all our manufacturing units is not fully utilized.
The capacity of Factory Unit – I, Factory Unit – II and Factory Unit - III located at Jorhat
(Assam), Sikar (Rajasthan) and Bapi (Rajasthan) respectively are not fully utilized.
Consecutively, if it continues so, it could affect our ability to fully absorb fixed costs and thus
may adversely impact our financial performance. For further details of capacity utilization of
our manufacturing facilities, please refer to section titled "Our Business" beginning on page
191 of this Draft Red Herring Prospectus.
28. We operate in a highly competitive business environment. Increased competition and our
inability to compete may adversely affect our results of operations.
We operate in a highly competitive business environment. Most of our contracts are entered
into through a competitive bidding process. Our competition varies depending on the size,
nature and complexity of the project and on the geographical region in which the project is to
be executed. We compete against various multinational and domestic companies as well as
regional organized and unorganized entities. Our ability to meet the qualification criteria in our
various business areas is critical to being considered for any project. Additionally, while these
are important considerations, price is a major factor in most tender awards and in negotiated
contracts and our business is subject to intense price competition. Our competitors may be
larger and may have better access to financial resources. Some of our competitors may be better
known in regional markets in which we compete. In such a scenario, we may find difficulties
in maintaining our position in the market. Increased competition may require us to lower prices
for award of the contract / for our products. Our inability to compete successfully in the
businesses in which we operate could materially and adversely affect our business prospects
and results of operations.
29. Our contracts in hand may be delayed which could have a material adverse effect on our
cash flow position, revenues and earnings.
Our contracts in hand do not necessarily indicate future earnings. We may also face problems
in executing the project as agreed under the contract. Moreover, factors beyond our control or
the control of our customers may delay a project or cause change of scope, including delays or
failures to obtain necessary permits, authorizations, permissions and other types of difficulties
or obstructions. We cannot predict with certainty when, if or to what extent a contract will be
performed. Delays in the completion of a project can lead to delayed payments from our
customers. Any delay, reduction in scope, execution, difficulty or delay in payment in respect
of our contract or any disputes with customers in respect of any of the foregoing could have a
material adverse effect on our cash flow position, revenues and earnings.
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30. We may be unable to sustain growth at historical levels. Our inability to manage growth may
have an adverse effect on our business and results of operations.
We expect that our growth strategy will place significant demands on our management,
financial and other resources. In particular, continued expansion through increased production
and procurement of EPC / turnkey contracts increases the challenges involved in financial and
technical management, recruitment, training and retaining sufficient skilled, technical and
managerial personnel, and developing and improving our internal administrative infrastructure.
Our inability to manage our business plan effectively and execute our growth strategy could
have an adverse effect on our operations, results, financial condition and cash flows.
In order to manage growth effectively, we must implement and improve operational systems,
procedures and internal controls on a timely basis. If we fail to implement these systems,
procedures and controls on a timely basis, or if there are weaknesses in our internal controls
that would result in inconsistent internal standard operating procedures, we may not be able to
meet our customers’ needs, hire and retain new employees, pursue new business, complete
future strategic agreements or operate our business effectively. There can be no assurance that
our existing or future management, operational and financial systems, procedures and controls
will be adequate to support future operations or establish or develop business relationships
beneficial to future operations.
31. If additional stringent labour laws or other industry standards in India become applicable to
us, our profitability may be adversely affected.
We are subject to a number of stringent labour laws. India has stringent labour legislation that
protects the interests of workers, including legislation that sets forth detailed procedures for
dispute resolution and employee removal and legislation that imposes financial obligations on
employers upon retrenchment. We are also subject to state and local laws and regulations, in
all jurisdictions where we have operations, governing our relationships with our employees,
including those relating to minimum wage, overtime, working conditions, hiring and firing,
non-discrimination, work permits and employee benefits.
Further, in order to retain flexibility and control costs, we appoint independent contractors who,
in turn, engage on-site contract labour to perform certain operations. Although we do not
engage these labourers directly, in the event of default by any independent contractor, we may
be held responsible for any wage payments that must be made to such labourers. If we are
required to pay the wages of the contracted employees, our results of operations and financial
condition could be adversely affected.
If labour laws become more stringent or are more strictly enforced, it may become difficult for
us to maintain flexible human resource policies, discharge employees or downsize, any of
which could have an adverse effect on our business, results of operations, financial condition
and cash flows.
Our Company has not created an approved gratuity fund nor taken an insurance policy for
payment of gratuity to the employees. According to the provisions of The Payment of Gratuity
Act, 1972, where an employer fails to make any payment by way of premium to the insurance
or by way of contribution to an approved gratuity fund, he shall be liable to pay the amount of
gratuity due including interest forthwith to the controlling authority. Due to this, our directors
may be faced with imprisonment, for a term of six months which may extend to two years
unless the Court trying the offence is of opinion that a lesser term of imprisonment or the
imposition of a fine would meet the ends of justice.
37
32. Our Promoters and the members of our Promoter Group will continue to retain significant
control in the Company after the Issue, which will enable them to influence the outcome of
matters submitted to shareholders for approval. Our Promoters and the members of our
Promoter Group may have interests that are adverse to the interests of our other shareholders
and may take positions with which our other shareholders do not agree.
As of date, our Promoters and the members of our Promoter Group hold approximately 76.06
% of the paid-up equity share capital of the Company. Post completion of the Issue, our
Promoters and the members of our Promoter Group will hold 57.06 % of the paid-up equity
share capital of our Company and continue to retain a significant control of the Company. As
a result, our Promoters and our Promoter Group will have the ability to control our business,
including matters relating to any sale of all or substantially all of our assets, the timing and
distribution of dividends and the election or termination of appointment of our officers and
directors. In addition, our Promoters and the members of our Promoter Group continue to
exercise significant control over the Company and they may influence the material policies of
the Company in a manner that could conflict with the interests of our other shareholders. Our
Promoters and the members of our Promoter Group may have interests that are adverse to the
interests of our other shareholders and may take positions with which our other shareholders
do not agree.
33. The ability of our Company to pay dividends in the future will depend upon its future
earnings, financial condition, cash flows, working capital requirements and capital
expenditures.
Our Company has not declared or paid any dividend in the preceding five (5) Financial Years.
The amount of the future dividend payments, if any, will depend upon the future earnings,
financial condition, cash flows, working capital requirements and capital expenditures of our
Company. There can be no assurance that the Company will be able to pay dividends.
34. The insurance coverage taken by our Company may not be adequate to protect against
certain business risks and this may have an adverse effect on the business operations.
Operations in our business carry inherent risks of personal injury and loss of life, damage to or
destruction of property, plant and equipment and damage to the environment, and are subject
to risks such as fire, theft, flood, earthquakes and terrorism. We maintain insurance coverage,
in amounts which we believe are commercially appropriate, including insurance against
damage, loss of profit and business interruption.
However, such insurance may not be adequate to cover all losses or liabilities that may arise
from our operations, including when the loss suffered is not easily quantifiable and in the event
of severe damage to our reputation. Even if we have made a claim under an existing insurance
policy, we may not be able to successfully assert our claim for any liability or loss under such
insurance policy. Additionally, there may be various other risks and losses for which we are not
insured, either because such risks are uninsurable or not insurable on commercially acceptable
terms. In addition, in the future, we may not be able to maintain insurance of all types which
we deem necessary or adequate or at rates which we consider reasonable. The occurrence of an
event for which we are not adequately or sufficiently insured or the successful assertion of one
or more large claims against us that exceed available insurance coverage, or changes in our
insurance policies (including premium increases or the imposition of large deductible or co-
insurance requirements), could have an adverse effect on our business, reputation, results of
operations, financial condition and cash flows.
38
Under our contracts entered with our customers, the government entities are generally co-
insured for all insurances taken for the projects. In case of any claim for insurance, the claim
amount may be required to be shared. Thus, Company’s insurance may not be enough to cover
all of company’s losses. Any occurrence of such an event could have an adverse effect on our
business, results of operations, financial condition and cash flows.
35. Changes in technology may affect our business by making our machines and equipments
obsolete.
Our future success will depend, in part, on our ability to respond to technological advances and
standards and practices on a cost-effective and timely basis. Changes in technology may make
newer generation machines and equipments more competitive and will require us to make
additional capital expenditure to upgrade our facilities. If we are unable to adapt in a timely
manner to customer requirements or technological changes, our business and financial
performance could be adversely affected.
36. Our Company is also dependent on contract labour at our manufacturing units. If we are
unable to continue to hire skilled contract labour, the quality of our products being
manufactured in our units can get affected.
Our operations are significantly dependent on access to contract labour for our manufacturing
units. The number of contract labourers employed by us varies from time to time based on the
nature and extent of work we are involved in. Our dependence on such contract labour may
result in significant risks for our operations, relating to the availability and skill of such contract
labourers, as well as contingencies affecting availability of such contract labour during peak
periods. There can be no assurance that we will have adequate access to skilled workmen at
reasonable rates. As a result, we may be required to incur additional costs to ensure execution
of order of our products in a timely manner.
Our Company appoints independent contractors who in turn engage on-site contract labourers
for carrying out the manufacturing process. Although our Company does not engage these
labourers directly, we may be held responsible for any wage payments to be made to such
labourers in the event of default by such independent contractors. Any requirement to fund their
wage requirements may have an adverse impact on our results of operations and financial
condition. In addition, under the Contract Labour (Regulation and Abolition) Act, 1970, as
amended, we may be required to absorb a number of such contract labourers as permanent
workmen. Thus, any such order from a regulatory body or court may have an adverse effect on
our business, results of operations and financial condition. In such an event, we may be required
to induct such labourers on our payroll, as employees which may result in increased expenses.
Further, while we are not required to obtain any licenses under the Contract Labour (Regulation
and Abolition) Act, 1970 as the number of contract labourers engaged by us never crossed the
prescribed threshold. However, we may be required to obtain such license in the event the
number of contract labourers engaged by us in future crosses the prescribed threshold. Any
failure to obtain such license or non-issuance or non-renewal of license may result in the
interruption of our operations and may have a material adverse effect on our business, financial
condition and future results of operations.
37. Our success depends on our senior management and our ability to retain and attract
technical personnel and various other professionals. If we are not able to retain them or
recruit additional qualified personnel, we may not be able to successfully develop our
39
business. Further, our results of operations could be adversely affected by strikes, work
stoppages or increased wage demands by our employees.
Our experienced Executive Directors and Key Managerial Personnel have had significant
contribution to the growth of our business, and our future success is dependent on the continued
service of our senior management team. We are assisted by various technical personnel and
experienced professionals skilled in several fields including management, product engineering,
sales, IT and finance, for all our functions. We benefit from their experience and the loss of
their association with us may significantly delay or prevent the development of our business.
Furthermore, as we expect to continue to increase our operations, we will need to continue to
attract and retain such professionals. In the event we are not able to attract and retain talented
employees, as required for conducting our business, or we experience high attrition levels which
are largely out of our control, or if we are unable to motivate and retain existing employees, our
business, financial condition and operations may be adversely affected.
38. We are dependent on our Promoter Directors and any inability on their part to contribute to
the business may affect our performance. Any loss of services of our individual Promoter
Directors may have a material adverse effect on our business, financial condition and results
of operations
We are dependent on the experience and the continued efforts of our Promoter Directors i.e.
Dr. Murlidhar Khetan, Jaiprakash Khetan, Basant Kumar Khetan and Pradeep Kumar Khetan
who have been associated with our Company since long. Our Promoter Directors have been
involved with the critical functions like strategy formulation, conceptualization, spearheading
the execution and overseeing the key functions of the Company. Our future performance will
depend upon the skills, efforts, expertise, and continued services of our Promoter Directors and
our ability to attract and retain qualified managers and employees. The loss of their services
could impair our ability to implement our strategy and may have a material adverse effect on
our business, financial condition and results of operations.
39. There may be possible conflicts of interest between us and our Promoters or one or more of
our Group Entities, or with entities in which our Directors are interested.
Our Promoters are actively involved in the management of both our business and the business
operations of our Group Entities. Any diversion of attention by our Promoter to any of our
Group Entities may distract or dilute management attention from our business, which could
adversely affect our business, financial condition and results of operations. Though none of our
Group Entities are having business objects similar to those of our Company, there can be no
assurance that our Promoters or Group Entities, in future, will not provide comparable services,
expand their presence or acquire interests in competing ventures in the locations in which we
operate. Further, we do not enjoy contractual protection by way of a non–compete or other
agreement or arrangement with such Group Entities. Such eventualities may lead to conflict of
interest between our Company and our Group Entities which have been promoted and / or
controlled by our Promoters.
For more details regarding our Promoters and Group Entities, please refer chapters titled "Our
Promoters and Promoter Group" and "Our Group Entities" beginning on page 258 and 267 of
this Draft Red Herring Prospectus respectively.
40. We have entered into related party transactions with our Promoters and we may continue to
do so in the future.
We have entered into transactions with our Promoters. Whilst we believe that all such
40
transactions have been conducted on an "arm’s length basis", there can be no assurance that we
could not have achieved more favourable terms had such transactions been entered into with
unrelated parties. Furthermore, it is likely that we may enter into related party transactions in
the future. There can be no assurance that such transactions individually or in the aggregate,
will not have an adverse effect on our business and results of operations. For details on related
party transactions refer chapter titled "Related Party Transactions" beginning on page 279 of
this Draft Red Herring Prospectus.
Our Company has its presence across North-Eastern and North Western region of India which
has potential for growth. We have executed several projects in North-Eastern region of India
thereby developing a strong foothold. However, our Company may need to diversify its
business activities in other parts of the country to replicate its success in the North-Eastern
region of India. If we do not diversify our business to other regions, we may become more of a
regional player. This may result in loss of opportunities for us from other parts of the country.
42. We may be subjected to penalties for time overrun in performance of our contracts.
Our Company executes contracts primarily in the power transmission and distribution sector.
We typically enter into high value contracts for the aforesaid activities, which provide for levy
of penalty normally for time-overrun cases. Although, our project management team is
experienced and employs its diligence right from choosing the project and monitoring it at every
step of implementation, time overruns may occur mostly due to site conditions and due to
delayed availability in certain cases from the suppliers’ front which may cause time overrun. In
case we are unable to meet the performance criteria as prescribed by the respective customers
and penalties are levied, the financial performance of our Company may be adversely affected.
43. Our inability to protect or use our intellectual property rights may adversely affect our
business, results of operation and financial condition.
We have made applications under class 9 for our trade name "NECCON" and under class 37
for our trade name "NECCON" and our logo " ", of the Trade Marks Rules, 2002 read
with the Trade Marks Act, 1999, to register our trademark in the jurisdictions we are currently
in operation. For details, please refer the chapter titled "Government and Other Statutory
Approvals" beginning on page 546 of this Draft Red Herring Prospectus. Our trade name and
logo are significant to our business and operations.
The use of our trade name or logo by third parties could adversely affect our reputation, which
could in turn adversely affect our business and results of operations. In the event our
applications are rejected by trademarks registry, our business, results of operation and financial
condition would be adversely affected.
Obtaining, protecting and defending intellectual property rights can be time consuming and
expensive, and may require us to incur substantial costs, including the diversion of the time and
resources of management and technical personnel. Notwithstanding the precautions we take to
protect our intellectual property rights, it is possible that third parties may copy or otherwise
infringe on our rights, which may have an adverse effect on our business, results of operations,
cash flows and financial condition.
Further, while we endeavour to ensure that we comply with the intellectual property rights of
others, there can be no assurance that we will not face any intellectual property infringement
41
claims brought by third parties that may require us to introduce changes to our operations. Any
claims of infringement, regardless of merit or resolution of such claims, could force us to incur
significant costs in responding to, defending and resolving such claims, and may divert the
efforts and attention of our management and technical personnel away from our business. We
could be required to pay third party infringement claims. In such cases, our financial conditions
and business operations may be adversely impacted.
44. Compliance with, and changes in, safety, health and environmental laws and various labour,
workplace and related laws and regulations including terms of approvals granted to us, may
increase our compliance costs and as such adversely affect our business, prospects, results
of operations and financial condition.
We are subject to a broad range of safety, health, environmental, labour, workplace and related
laws and regulations in the jurisdictions in which we operate, which impose controls on the
disposal and storage of raw materials, noise emissions, air and water discharges; on the storage,
handling, discharge of waste matter and other aspects of our operations. For example, laws in
India limit the amount of pollutant discharge that our manufacturing facilities may release into
the water. The discharge of substances into the soil or water beyond limits may cause us to be
liable to regulatory bodies and incur costs to remedy the damage caused by such discharges.
Any of the foregoing could subject us to litigation, which may increase our expenses in the
event we are found liable and could adversely affect our reputation.
Additionally, for any non-compliance, the government or the relevant regulatory bodies may
require us to shut down our manufacturing facility, which in turn could lead to product
shortages that may delay or prevent us from fulfilling our obligations to our customers. The
adoption of stricter health and safety laws and regulations, stricter interpretations of existing
laws, increased governmental enforcement of laws or other developments in the future may
require that we make additional capital expenditures, incur additional expenses or take other
actions in order to remain compliant and maintain our current operations. Complying with, and
changes in, these laws and regulations or terms of approval may increase our compliance costs
and adversely affect our business, prospects, results of operations and financial condition. We
are also subject to the laws and regulations governing relationships with employees in such
areas as minimum wage and maximum working hours, overtime, working conditions, hiring
and termination of employees, contract labour and work permits. Our business is also subject
to, among other things, the receipt of all required licenses, permits and authorizations including
manufacturing permits and environmental, health and safety permits. There is a risk that we
may inadvertently fail to comply with such regulations, which could lead to enforced shutdowns
and other sanctions imposed by the relevant authorities, as well as the withholding or delay in
receipt of regulatory approvals for our new products.
45. We do not own our Registered Office and other premises from which we operate.
We do not own our Registered Office premises situated at Khetan Bhawan, Seuni Ali, A.T.
Road, Jorhat – 785 001, Assam. Further, our administration offices at Guwahati (Assam), Sikar
(Rajasthan), Meghalaya and Arunachal Pradesh are also occupied by us on leasehold basis.
Also, our manufacturing facilities being Factory Unit – I located at Jorhat (Assam) and Factory
Unit – II located at Sikar (Rajasthan) are also occupied by us on leasehold basis. For further
details in relation to our Properties, please refer chapter titled "Our Business" beginning on
page 191 of this Draft Red Herring Prospectus. We cannot assure you that we will be able to
renew our leases on commercially acceptable terms or at all. In the event that we are required
to vacate the aforementioned premises, we would be required to make alternative arrangements
42
for new offices, manufacturing facilities and other infrastructure and we cannot assure that the
new arrangements will be on commercially acceptable terms. If we are required to relocate our
business operations during this period, we may suffer a disruption in our operations or have to
pay increased charges, which could have an adverse effect on our business, prospects, results
of operations and financial condition.
46. Our Company owns certain agricultural lands which are pending for conversion into non-
agricultural land.
Our Company has purchased certain agricultural lands i.e. lands on Survey Nos. 698, 698/1519,
1085, 1086, 1092/1468, 1093, 1094, 1103, Gram: Amloda Dudi, Tahsil: Virat Nagar Dist.
Jaipur, Rajasthan through registered sale deeds dated January 4, 2016 and June 13, 2016. As on
date of this Draft Red Herring Prospectus, our Company is not carrying out any activities on
the said parcels of land.
In the event our Company proposes to use the said land for industrial use, our Company may
be required to make applications to concerned authorities for conversion of agricultural land
into non-agricultural land. We cannot provide any assurance that the concerned authorities will
allow the said conversion.
47. In the past one of the credit rating agencies has downgraded our rating.
During the year 2015, our Company had approached and appointed SMERA Ratings Limited
("SMERA") to assign a credit rating to the Company in relation to our Company’s borrowings.
SMERA vide its letter dated March 24, 2015 had issued a credit rating of 'SMERA BBB' for
its cash credit facility and term loans availed and SMERA A3+ for the bank guarantee and letter
of credit availed. SMERA by its press release dated September 19, 2016 downgraded the ratings
issued to our Company to 'SMERA BBB-/Negative' for its cash credit facility and term loans
availed and 'SMERA A3' for the bank guarantee and letter of credit availed.
For the year 2017 the Company had approached Brickwork Ratings India Private Limited to
assign a credit rating to the Company, wherein, Brickwork vide its letter dated August 21, 2017
issued a credit rating of 'BWR BBB / stable' for our Company’s long-term bank facilities
borrowings and 'BWR A3' for our Company’s short-term bank facilities.
We cannot assure you that the credit ratings assigned to our Company’s borrowings by the
rating agency will not be downgraded or may not remain stable at all times in future. In case, if
the rating issued by the credit rating agency is downgraded, our Company’s ability to avail
further financial assistance from banks and financial institutions may be adversely affected
which may in turn adversely affect our Company’s operations, financials conditions and
revenues.
48. Some agreements entered into by our Company with various parties are not adequately
stamped. The said agreements may not be admissible as evidence in a court of law, until the
relevant stamp duties are paid and the relevant registration, if required, is done.
Some of the agreements entered into by our Company with various parties in respect of leave
and license / lease of properties used by our Company are not adequately stamped. The potential
consequence of this could be that the said agreements may not be admissible as evidence in a
court of law, until the relevant stamp duties are paid, if required, and the required registration
is done. As on the date of this Draft Red Herring Prospectus, our Company has not initiated /
been party to any litigations in this regard. Any claim or adverse order / finding in connection
43
with these agreements could adversely affect the operations of our Company. In case disputes
arise in respect of the same which require us to approach judicial or alternative dispute
resolution fora, the costs of dispute resolution could be extremely or prohibitively high.
49. Our Company has delayed in making the required filings under the Companies Act, 2013
and under the applicable provisions of the Companies Act, 1956.
Our Company is required to make filings under various rules and regulations as applicable
under the Companies Act, 2013 and under the applicable provisions of the Companies Act,
1956, few of which have not been done within the stipulated time periods at some instances.
Due to these delays in filings, our Company has on those occasions paid the requisite additional
fees and made the filings with the RoC in compliance with the Companies Act. Such past delays
and non-compliance may render us liable to statutory penalties and could have serious
consequences on our operations. While we will ensure to make the filings on time, we cannot
give any assurances that there may not be similar instances of delays in the future.
50. Our Corporate Promoters being VSG Trade Private Limited and Topline Finvest Private
Limited have delayed in making the required filings of auditors' certificate with the RBI
regarding continuance of non-banking finance business.
Our Corporate Promoters namely VSG Trade Private Limited and Topline Finvest Private
Limited are registered as non-deposit taking non-banking financial companies with the RBI.
Our Corporate Promoters are required to make filings of auditors’ certificate on an annual basis
pursuant to circular bearing No. DNBS (PD) C.C. No. 79/03.05.002/2006-07 dated September
21, 2006 issued by the RBI. As per the said circular, the last date for such filing is June 30 of
each year. However, there has been a delay by our Corporate Promoters in making the requisite
filings with the RBI within the stipulated timelines during the financial years 2011-2012, 2012-
13, 2013-14 and 2014-2015.
Although our Corporate Promoters have not received any show cause notice in respect of the
above, such delay, non-compliance may in the future render us liable to statutory penalties and
could have serious consequences on our operations. While this could be attributed to technical
lapses and human errors, our Corporate Promoters are in process of setting up a system to ensure
that the requisite filings are done appropriately and within the timelines.
51. Reliance has been placed on declarations and affidavits and register of transfers furnished
by our Company, our Subsidiaries and our Corporate Promoters for details pertaining to
certain transfers of their equity shares in the past profiles included in this Draft Red Herring
Prospectus.
In the recent past, there was a rodent infestation at our registered office when certain records of
the Company and its wholly owned subsidiaries were destroyed. Amongst the said records, one
file which consisted of share transfer forms executed in respect of shares of our Company by
certain past and present shareholders from January 30, 1999 to October 25, 2016 were also
destroyed. Also, amongst the said records, one file which consisted of all the share transfer
forms executed in respect of shares of our wholly owned subsidiary i.e., Brahmaputra Infra
Power Private Limited were also destroyed. Further, certain documents which inter-alia
included share transfer forms pertaining to shares of our Corporate Promoters, i.e., VSG Trade
Private Limited and Topline Finvest Private Limited were also inadvertently lost / misplaced
during transit from their erstwhile registered office located in Kolkata to its new registered
office at Jorhat (Assam). Accordingly, reliance has been placed on declarations and affidavits
and the register of share transfers furnished by our Company, our wholly owned subsidiary i.e.,
44
Brahmaputra Infra Power Private Limited and our Corporate Promoters for details of transfers
which have taken place in relation to the equity shares of such entities. Therefore, we cannot
assure you that all information relating to the shareholding of our Company, our Subsidiaries
and our corporate Promoters mentioned under the chapters titled "Capital Structure", "Our
Promoters and Promoter Group" and "Our Subsidiaries" beginning on pages 99, 258 and 230
of this Draft Red Herring Prospectus respectively, as may be applicable, is complete, true and
accurate.
52. Our Promoters and Directors may have interests in us other than reimbursement of expenses
incurred or normal remuneration or benefits. The total amount paid and/or payable to
promoters directly and/or indirectly under various heads amounted to `15.28 million, `14.63
million and `14.54 million in Fiscal 2018, 2017 and 2016 respectively.
Our Promoters are interested in our Company to the extent of any transactions entered into or
their shareholding and dividend entitlement in our Company or remuneration received from our
Company. Our Directors are also interested in our Company to the extent of their shareholding
and dividend entitlement, remuneration paid to them for services rendered as Directors of our
Company and reimbursement of expenses payable to them. Our Directors may also be
interested to the extent of any transaction entered into by our Company with any other company
or firm in which they are directors or partners. The total amount paid and/or payable to
Promoters directly and/or indirectly under various heads amounted to `15.27 million, `14.61
million and `14.53 million in Fiscal 2018, 2017 and 2016 respectively. For further information,
please refer the chapter titled "Our Management", "Our Promoters and Promoter Group" and
"Related Party Transactions" beginning on pages 235, 258 and 279, of this Draft Red Herring
Prospectus respectively.
53. Information relating to the historical utilized capacity of our facilities included in this DRHP
is based on various assumptions and estimates and future production and capacity may vary.
Information relating to the historical utilized capacity of our facilities included in this DRHP is
based on various assumptions and estimates of our management, including proposed operations,
assumptions relating to availability and quality of raw materials and assumptions relating to
potential utilisation levels and operational efficiencies. Actual manufacturing levels and rates
may differ significantly from the estimated production capacities or historical estimated
capacity information of our facilities. Undue reliance should therefore not be placed on our
historical capacity information for our existing facilities included in this Draft Red Herring
Prospectus.
54. The shortage or non-availability of power facilities may adversely affect our manufacturing
processes and have an adverse impact on our results of operations and financial condition.
45
electricity requirements. Any disruption / non-availability of power shall directly affect our
production which in turn shall have an impact on profitability and turnover of our Company.
External Risks
55. Economic or other factors that are beyond our control may have an adverse impact on our
business, financial condition, results of operations and prospects.
We are incorporated in India, and all of our assets and employees are located in India. As a
result, we are dependent on prevailing economic conditions in India and our results of
operations are significantly affected by factors influencing the Indian economy. A slowdown
in the Indian economy could adversely affect our business, including our ability to grow our
assets, the quality of our assets, and our ability to implement our strategy. Factors that may
adversely affect the Indian economy, and hence our results of operations, may include:
• any increase in interest rates may adversely impact our access to capital and increase
our borrowing costs;
• any downgrade of India’s sovereign rating by international credit rating agencies;
• seasonal and cyclical nature of the industry in which we operate and unfavourable
climatic conditions;
• political instability, resulting from a change in government or in economic and fiscal
policies;
• any natural calamities such as earthquakes, tsunamis, floods and droughts;
• any civil unrest, acts of violence, terrorist attacks, regional conflicts or situations; and
• other significant regulatory or economic developments in or affecting India
Any slowdown in the Indian economy or in the growth of the sectors we participate in or future
volatility in global commodity prices could adversely affect our borrowers and contractual
counterparties. This in turn could adversely affect our business and financial performance and
the price of our Equity Shares.
56. Significant differences exist between Indian GAAP and other accounting principles, such as
US GAAP and IFRS, which may be material to investors’ assessments of our financial
condition.
Our financial statements, including the Restated Financial Statements provided in this Draft
Red Herring Prospectus, are prepared in accordance with Ind AS and Indian GAAP. We have
not attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in
this Draft Red Herring Prospectus, nor do we provide a reconciliation of our financial
statements to those of U.S. GAAP or IFRS. U.S. GAAP and IFRS differ in significant respects
from Indian GAAP.
There are significant differences between Indian GAAP, Ind AS, US GAAP and IFRS.
Accordingly, the degree to which the financial statements included in this Draft Red Herring
Prospectus will provide meaningful information is entirely dependent on the reader’s level of
familiarity with Indian GAAP and Ind AS. Persons not familiar with Indian GAAP and Ind AS
should limit their reliance on the financial disclosures presented in this Draft Red Herring
Prospectus.
If our financial statements were to be prepared in accordance with such other accounting
principles, our results of operations, cash flows and financial position may be substantially
different. Prospective investors should review the accounting policies applied in the preparation
of our financial statements and consult their own professional advisers for an understanding of
46
the differences between these accounting principles and those with which they may be more
familiar. Any reliance by persons not familiar with Indian accounting practices on the financial
disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. In
making an investment decision, investors must rely upon their own examination of us, the terms
of this Offer and the financial information contained in this Draft Red Herring Prospectus.
57. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in
terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.
Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not
permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid
Amount) at any stage after submitting a Bid and are required to pay the Bid Amount upon
submission of the Bid. Events affecting the Bidders’ decision to invest in the Equity Shares,
including material adverse changes in international or national monetary policy, financial,
political or economic conditions, our business and results of operations or financial condition
may arise between the date of submission of the Bid and Allotment. However, our Company
may complete the Allotment of the Equity Shares even if such events occur, and QIBs and Non-
Institutional Investors would not be able to withdraw or lower their Bids at any stage after
submitting a Bid.
58. Our future fund requirements, in the form of further issue of capital or securities and/or
loans taken by us, may be prejudicial to the interest of the Shareholders depending upon the
terms on which they are eventually raised.
We may require additional capital from time to time depending on our business needs. Any
further issue of Equity Shares or convertible securities would dilute the shareholding of the
existing Shareholders and such issuance may be done on terms and conditions, which may not
be favourable to the then existing Shareholders. If such funds are raised in the form of loans or
debt or preference shares, then it may substantially increase our fixed interest/dividend burden
and decrease our cash flows, thus adversely affecting our business, results of operations and
financial condition.
59. Increases in interest rates may materially impact our results of operations.
Interest rates for borrowings have been volatile in India in recent periods. Our operations are
funded to a significant extent by debt and increases in interest expense may have an adverse
effect on our results of operations and financial condition. Although we may exercise any right
available to us under our financing arrangements to terminate the existing debt financing
arrangement on the respective reset dates and enter into new financing arrangements, there can
be no assurance that we will be able to do so on commercially reasonable terms, that our
counterparties will perform their obligations, or that these agreements, if entered into, will
protect us adequately against interest rate risks.
60. Political instability or a change in economic liberalization and deregulation policies could
seriously harm business and economic conditions in India generally and our business in
particular.
The Government of India has traditionally exercised and continues to exercise influence over
many aspects of the economy. Our business and the market price and liquidity of our Equity
Shares may be affected by interest rates, changes in Government policy, taxation, social and
civil unrest and other political, economic or other developments in or affecting India. The rate
of economic liberalization could change, and specific laws and policies affecting the
47
information technology sector, foreign investment and other matters affecting investment in our
securities could change as well. Any significant change in such liberalization and deregulation
policies could adversely affect business and economic conditions in India, generally, and our
business, prospects, financial condition and results of operations, in particular
61. There is no existing market for our Equity Shares, and we do not know if one will develop to
provide you with adequate liquidity. Further, an active trading market for the Equity Shares
may not develop and the price of the Equity Shares may be volatile.
An active public trading market for the Equity Shares may not develop or, if it develops, may
not be maintained after the Issue. Our Company, in consultation with the Book Running Lead
Manager, will determine the Issue Price. The Issue Price may be higher than the trading price
of our Equity Shares following this Issue. As a result, investors may not be able to sell their
Equity Shares at or above the Issue Price or at the time that they would like to sell. The trading
price of the Equity Shares after the Issue may be subject to significant fluctuations in response
to factors such as, variations in our results of operations, market conditions specific to the
sectors in which we operate, economic conditions of India and volatility of the BSE, NSE and
securities markets elsewhere in the world.
62. The price of the Equity Shares may be highly volatile after the Issue.
The price of the Equity Shares on the Indian stock exchanges may fluctuate after this Issue as
a result of several factors, including: volatility in the Indian and global securities market; our
operations and performance; performance of our competitors and the perception in the market
about investments in the our industry; adverse media reports on us or our industry; changes in
the estimates of our performance or recommendations by financial analysts; significant
developments in India's economic liberalization and deregulation policies; and significant
developments in India's fiscal and environmental regulations. There can be no assurance that
the prices at which the Equity Shares are initially traded will correspond to the prices at which
the Equity Shares will trade in the market subsequently.
63. There are restrictions on daily movements in the price of the Equity Shares, which may
adversely affect a shareholder's ability to sell, or the price at which it can sell, Equity Shares
at a particular point in time.
Subsequent to listing, our Company will be subject to a daily circuit breaker imposed on listed
companies by all stock exchanges in India which does not allow transactions beyond certain
volatility in the price of the Equity Shares. This circuit breaker operates independently of the
index-based market-wide circuit breakers generally imposed by SEBI on Indian stock
exchanges. The percentage limit on our Company’s circuit breaker is set by the stock exchanges
based on the historical volatility in the price and trading volume of the Equity Shares. The stock
exchanges are not required to inform our Company of the percentage limit of the circuit breaker
from time to time and may change it without its knowledge. This circuit breaker would
effectively limit the upward and downward movements in the price of the Equity Shares. As a
result of this circuit breaker, there can be no assurance regarding the ability of shareholders to
sell the Equity Shares or the price at which shareholders may be able to sell their Equity Shares.
64. Under Indian law, foreign investors are subject to investment restrictions that limit our ability
to attract foreign investors, which may adversely impact the trading price of the Equity
Shares.
48
Under the foreign exchange regulations currently in force in India, transfers of shares between
non-residents and residents are freely permitted (subject to certain exceptions) if they comply
with the valuation and reporting requirements specified by the RBI. If a transfer of shares is not
in compliance with such valuation and reporting requirements or falls under any of the specified
exceptions, then prior approval of the RBI will be required. In addition, shareholders who seek
to convert the Rupee proceeds from a sale of shares in India into foreign currency and repatriate
that foreign currency from India will require a no-objection or tax clearance certificate from the
Indian income tax authority. We cannot assure that any required approval from the RBI or any
other Government agency can be obtained on any particular terms or at all.
65. Rights of shareholders under Indian law may differ or may be more limited than under the
laws of other jurisdictions.
The Companies Act and rules made thereunder, the rules and regulations issued by SEBI and
other regulatory authorities, the Memorandum of Association, and the Articles of Association
govern the corporate affairs of the Company. Indian legal principles relating to these matters
and the validity of corporate procedures, directors’ fiduciary duties and liabilities, and
shareholders’ rights may differ from those that would apply to a company in another
jurisdiction. Shareholders’ rights under Indian law may not be as extensive as shareholders’
rights under the laws of other countries or jurisdictions. Investors may have more difficulty in
asserting their rights as a shareholder in India than as a shareholder of a corporation in another
jurisdiction.
66. Investors may be subject to Indian taxes arising out of capital gains on sale of Equity Shares.
Under current Indian tax laws and regulations, capital gains arising from the sale of shares in
an Indian company are generally taxable in India. Any gain realised on the sale of listed equity
shares on a stock exchange held for more than 12 months will not be subject to capital gains
tax in India if Securities Transaction Tax ("STT") has been paid on the transaction. STT will
be levied on and collected by a domestic stock exchange on which the Equity Shares are sold.
Any gain realised on the sale of equity shares held for more than 12 months to an Indian
resident, which are sold other than on a recognised stock exchange and on which no STT has
been paid, will be subject to long term capital gains tax in India. Further, any gain realised on
the sale of listed equity shares held for a period of 12 months or less will be subject to short
term capital gains tax in India. Capital gains arising from the sale of the Equity Shares will be
exempt from taxation in India in cases where the exemption from taxation in India is provided
under a treaty between India and the country of which the seller is resident. Generally, Indian
tax treaties do not limit India’s ability to impose tax on capital gains. As a result, residents of
other countries may be liable for tax in India as well as in their own jurisdiction on a gain upon
the sale of the Equity Shares.
Prominent Notes
1. Investors may contact the Book Running Lead Manager for any complaint, information or
clarification pertaining to the Issue. All grievances relating to ASBA may be addressed to the
Registrar to the Issue, with a copy to the relevant SCSBs, giving full details such as name,
address of the Bidder, number of Equity Shares for which the Bidder has applied, Bid Amounts
blocked, ASBA Account number and the Designated Branch of the SCSBs where the ASBA
Form has been submitted by the ASBA Bidder. All grievances relating to the non-ASBA
process must be addressed to the Registrar to the Issue quoting the full details of the sole or
First Bidder, Bid cum Application Form number, Bidders’ DP ID, Client ID, PAN, number of
49
Equity Shares applied for, date of Bid cum Application Form, name and address of the
Syndicate Member or the Designated Intermediary where the Bid was submitted and payment
details thereof. For contact details of the Book Running Lead Manager and the Company
Secretary and Compliance Officer of our Company, please refer chapter titled "General
Information" beginning on page 90 of this Draft Red Herring Prospectus.
2. Our Company’s net worth as at March 31, 2018, as per our restated financial information on
standalone and consolidated basis was ₹1,892.29 million and ₹1,938.10 million, respectively.
For further details, please refer section titled "Financial Information" beginning on page 281
of this Draft Red Herring Prospectus.
3. Public Issue of upto 12,700,000 Equity Shares for cash at a price of ₹[●] per Equity Share
including a share premium of ₹[●] per Equity Share, aggregating up to ₹[●] million ("the
Issue"). The Issue would constitute [●]% of our post–Issue paid–up Equity Share capital.
4. The average cost of acquisition per Equity Share by our Promoters is set forth in the table below:
(In ₹)
Sr. Name of Promoter Number of Average cost
No. Equity of
Shares acquisition*
held*
1. Dr. Murlidhar Khetan 1,476,332 2.04
2. Jaiprakash Khetan 1,556,620 2.01
3. Basant Kumar Khetan 1,416,480 2.48
4. Pradeep Kumar Khetan 1,190,280 83.25
5. VSG Trade Private Limited 9,076,990 134.97
6. Topline Finvest Private Limited 6,507,638 110.27
*the Equity Shares acquired upto March 18, 2011 has been adjusted for sub-division of face value of
Equity Shares of our Company.
For further details pertaining to the allotment of Equity Shares to our Promoters, please refer
chapter titled "Capital Structure" beginning on page 99 of this Draft Red Herring Prospectus.
5. Our Company was incorporated as North Eastern Cables and Conductors Private Limited on
December 27, 1984 as a private limited company under the Companies Act, 1956, with the
Registrar of Companies, Shillong. For further details pertaining to change in name of our
Company and changes in objects clause of the Memorandum of Association of our Company,
please refer chapter titled "History and Certain Corporate Matters" beginning on page 222 of
this Draft Red Herring Prospectus.
6. For details of related party transactions entered into by our Company with our Promoters, Group
Entities and Subsidiaries in the last Financial Year, including nature and cumulative value of
the transactions, fee "Related Party Transactions" on page 279 of this Draft Red Herring
Prospectus.
7. Except as disclosed in chapters titled "Related Party Transactions", "Capital Structuree", "Our
Promoters and Promoter Group" and "Group Entities" beginning on pages 279, 258 and 267
respectively of this Draft Red Herring Prospectus, none of our Promoters, Directors, Key
Managerial Personnel or Group Entities have any business or other interest, other than to the
extent of Equity Shares held by them and to the extent of the benefits arising out of such
shareholding.
50
8. The NAV/book value per Equity Share as per the restated standalone and consolidated financial
information as at March 31, 2018 is ₹49.68 and ₹51.51 respectively.
9. There has been no financing arrangement whereby the Promoters and persons belonging to our
Promoter Group, our Directors and their relatives have financed the purchase of Equity Shares
of our Company, by any other person, during the period of six months immediately preceding
the date of this Draft Red Herring Prospectus.
51
SECTION III – INTRODUCTION
India Macro
India remains one of the drivers of world growth, in an improving global economic environment.
According to the data released by the International Monetary Fund (IMF) in April 2018, the world
economy grew by 3.2% and 3.8%, respectively, in 2016 and 2017 (refer Exhibit 1). Notwithstanding a
mild slowdown in the pace of growth, the Indian economy expanded by a sharper 7.1% and 6.7%,
respectively, in 2016 and 2017. This makes it one of the fastest growing large economy in the world,
along with China (+6.7% and +6.9%). The pace of growth of the Indian economy in 2016 and 2017 has
been significantly healthier than the performance of South Africa (+0.6% and +1.3%), Brazil (-3.5%
and +1.0%) and Russia (-0.2% and +1.5%). The advanced economies recorded an uptick in growth
from 1.7% in 2016 to 2.3% in 2017, led by acceleration in growth in the US, Euro Area and Japan. For
instance, economic growth improved between 2016 and 2017 in the US (from +1.5% to +2.3%), the
Euro Area (from +1.8% to +2.3%), and Japan (from +0.9% to +1.7%). The economy of the UK was an
exception to this trend, with growth easing from 1.9% in 2016 to 1.8% in 2017.
Looking ahead, the IMF expects global economic growth to pick up pace to 3.9% each in 2018 and
2019. India’s growth rate is expected to improve to 7.4% in 2018 and further to 7.8% in 2019, led by
strong private consumption, and fading temporary effects of the note ban and transition to the Goods
and Services Tax (GST). The IMF also said that India’s growth is expected to rise gradually over the
medium-term, with the continued implementation of structural reforms that boost productivity and
incentivise private sector investment. In contrast, the IMF expects the rate of expansion of economic
activity in China to decline to 6.6% in 2018 and further to 6.4% in 2019, on account of the ongoing
rebalancing away from investment towards private consumption and from industry to services.
52
Indian GDP growth in FY2016 and FY2017
Growth of Indian GDP and gross value added (GVA) at basic prices displayed an uptrend from FY2013
to FY2016. GDP and GVA growth rose from the subdued prints of 5.5% and 5.4%, respectively, in
FY2013, to the robust 8.2% and 8.1%, respectively, in FY2016. However, the GDP and GVA growth
witnessed a slowdown to 7.1% each in FY2017. Moreover, the second advance estimates released by
the Central Statistics Office (CSO) for FY2018, project a further slowdown in GDP and GVA growth
to four-year lows of 6.6% and 6.4%, respectively, partly driven by the disruption in economic activity
after the transition to GST. The estimated decline in GDP growth in FY2018 is broad-based, with
Private Final Consumption Expenditure (PFCE), Government Final Consumption Expenditure (GFCE),
Gross Fixed Capital Formation (GFCF) and exports likely to record a slowdown (to +6.1%, +10.9%,
+7.6% and +4.4%, respectively, from +7.3%, +12.2%, +10.1% and +5.0%, respectively), partly offset
by a contrasting trend in inventories and valuables (to +4.0% and +70.4%, respectively from -61.2%
and -13.9%, respectively). The dip in the GVA growth projected by the CSO in FY2018 relative to
FY2017 factors in a moderation in the growth of agriculture (to +3.0% from +6.3%) and industry (to
+4.8% from +6.8%), offset by a revival in the expansion of services (to +8.3% from +7.5%).
Exhibit 2: YoY Growth in GDP and GVA at basic prices (Constant 2011-12 Prices)
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 2nd AE
Growth of India’s GDP (at constant 2011-12 prices) improved to 7.2% in Q3 FY2018 in year-on-year
(YoY) terms from 6.8% in Q3 FY2017 (refer Exhibit 2 and Exhibit 3). In contrast, the growth in GVA
at basic prices eased to 6.7% in Q3 FY2018 from 6.9% in Q3 FY2017 (refer Exhibit 4). Encouragingly,
the pace of growth of both GDP and GVA charted a sequential recovery in Q3 FY2018 relative to the
prints of 6.5% and 6.2%, respectively, in Q2 FY2018.
The substantial improvement in GDP growth to 7.2% in Q3 FY2018 from 6.8% in Q3 FY2017 was led
by a pickup in growth of GFCF, which more than offset the slowdown in growth of PFCE, GFCE and
net exports. GFCF growth improved to 12.0% in Q3 FY2018 from 8.7% in Q3 FY2017; this was in line
with the double-digit growth in capital goods output (+11.1% in Q3 FY2018, -2.0% in Q3 FY2017),
while somewhat at odds with other trends related to investment activity, including project
announcement and completion. Moreover, inventories recorded a YoY growth of 7.0% in Q3 FY2018,
in contrast to the contraction of 61.1% in Q3 FY2017 as production schedules were adjusted after the
announcement of the note ban.
53
In contrast, PFCE growth eased sharply to a 10-quarter low 5.6% in Q3 FY2018 from 9.3% in Q3
FY2017, which is likely to reflect the unfavourable base effect as well as the change in the pattern of
consumption in FY2018, to take advantage of discounts that were offered prior to the introduction of
the GST. Moreover, the pace of expansion of GFCE slowed to 6.1% in Q3 FY2018 from 12.3% in Q3
FY2017, partly on account of the front-loading of spending by the Government of India (GoI) after the
early presentation of the FY2018 Budget. Moreover, a dip in import growth (to +8.7% from +10.1%),
coupled with a moderation in exports growth (to +2.5% from +6.7%), resulted in net imports exerting
a larger drag upon GDP expansion in Q3 FY2018 relative to Q3 FY2017.
On a YoY basis, the pace of expansion of GVA at basic prices moderated to 6.7% in Q3 FY2018 from
6.9% in Q3 FY2017, led by a slowdown in agriculture, forestry & fishing (to +4.1% from +7.5%), and
a mild downtick in industry (to +6.8% from +7.1%). However, this was marginally offset by
improvement in growth of services to 7.7% in Q3 FY2018 from 6.5% in Q3 FY2017.
In sequential terms, GVA growth increased to 6.7% in Q3 FY2018 from 6.2% in Q2 FY2018, led by a
broad-based uptick in the agricultural sector (to +4.1% from +2.7%), industry (to +6.8% from +5.9%)
and the services sector (to +7.7% from +7.1%; refer Exhibit 5). Notably, growth of GVA excluding
agriculture improved in sequential quarters to 7.3% in Q3 FY2018 from 6.7% in Q2 FY2018.
Exhibit 3: Growth of GDP and its Components (in %, Constant 2011-12 Prices, YoY)
The improvement in the GVA growth of manufacturing and construction led to the industrial recovery
in Q3 FY2018 relative to the previous quarter. As anticipated, manufacturing GVA growth improved
to 8.1% in Q3 FY2018 from 6.9% in the previous quarter, supported by restocking of inventories after
the festive season, a catch-up effect after the muted volume growth in H1 FY2018 and the healthy
expansion of corporate earnings in that quarter. Moreover, construction growth rose to a multi-quarter
high 6.8% in Q3 FY2018 from 2.8% in Q2 FY2018, in line with the trend in its inputs, such as cement
and steel. However, sentiment in the real estate sector remained weak after the introduction of the Real
Estate Regulation and Development (RER(A)D) Act and the Goods and Services Tax (GST), which is
likely to record a gradual improvement going forward. In contrast, the performance of electricity, gas,
water supply and other utility services deteriorated to 6.1% in Q3 FY2018 from 7.7% in Q2 FY2018,
in line with the subdued thermal electricity generation in Q3 FY2018. Moreover, mining and quarrying
was an outlier in Q3 FY2018, recording a mild contraction of 0.1% led by unfavourable base effect, in
54
contrast to the expansion of 7.1% in Q2 FY2018.
Exhibit 4: YoY Growth in GDP and GVA at Basic Prices (Constant 2011-12 Prices)
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
The service sector growth improved to 7.7% in Q3 FY2018 from 7.1% in Q2 FY2018, led by two of
the three sub-sectors, namely public administration, defence and other services (PADOS; to +7.2% from
+5.6%), and financial, real estate and professional services (FRP to +6.7% from +6.4%). However, the
growth of trade, hotels, transport, communication and services related to broadcasting (THTCS) eased
to 9.0% in Q3 FY2018 from 9.3% in Q2 FY2018.
Exhibit 5: YoY Growth in Agriculture, Industry and Services (Constant 2011-12 Prices)
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
In nominal terms, GDP and GVA growth increased considerably to 11.9% and 10.8%, respectively in
Q3 FY2018 from 10.0% and 9.2%, respectively in Q2 FY2018. The GDP deflator rose to 4.7% in Q3
FY2018 from 3.6% in Q2 FY2018, while the GVA deflator increased to 4.1% from 3.0%, respectively
(refer Exhibit 6), in line with the rise in the CPI and the WPI inflation.
With a 13.2% growth of taxes on products less subsidies on products, GDP expansion (7.2%) exceeded
55
the pace of GVA growth (6.7%) by 45 bps in Q3 FY2018. This was in contrast to the wedge in Q3
FY2017 (-13 bps), with taxes on products less subsidies on products having risen by a modest 5.1% in
that quarter.
The 2nd Advance Estimates of crop production indicate a healthy rise in rabi output of crops, such as
rice, coarse cereals and pulses, which would support GVA growth in Q4 FY2018. However, the
sustained deficits in rainfall since the post-monsoon season in 2017 and the YoY decline in reservoir
levels to 25% as on April 12, 2018 from 31% as on April 13, 2017, do not augur well for the interim
months prior to the next monsoon. Recently, the India Meteorological Department (IMD) released its
first stage forecast, which has predicted that the volume of rainfall in the upcoming southwest monsoon
season (June-September) would be 97% of the long period average (LPA), with an error range of +/-
5%.
Reflecting the base effect related to remonetisation, several domestically oriented indicators have
displayed an unsurprising moderation in YoY volume growth in the recent months, although the
underlying growth momentum appears to be reasonably healthy. Moreover, the growth of non-oil
merchandise exports has declined to 2.5% in Q4 FY2018 from 11.0% in Q3 FY2018. Additionally, the
rise in commodity prices may have an impact on margins. The mining sector has recorded a marginal
volume growth in January-February 2018.
However, the construction sector is likely to report a base effect-led improvement in GVA growth in
Q4 FY2018, given issues related to demonetisation including availability of labour. Additionally, the
pace of YoY growth of electricity generation has recorded some pickup in Q4 FY2018 relative to the
previous quarter.
Service sector growth is expected to improve in Q4 FY2018, benefitting from a favourable base effect,
back-ended spending by the state governments and a robust expansion of services exports in January-
February 2018. However, low headroom for capital spending by the GoI may curtail the improvement
in growth in the ongoing quarter.
Overall, a favourable base effect would support a pickup in GVA growth in most sectors except public
administration, defence and other services, and mining and quarrying in Q4 FY2018, offsetting the
impact of elevated commodity prices on margins.
Looking ahead, a rise in government spending at the central and state level is expected to boost
economic activity and infrastructure creation. Furthermore, a normally distributed monsoon, increase
in minimum support prices (MSPs) for various crops, improving sentiment and staggered pay revision
56
by some state governments would support consumption growth. This would bolster capacity utilisation
in various sectors, although a broad-based capacity addition by the private sector may not emerge until
H2 FY2019. Completion of the resolution process of cases admitted to the National Company Law
Tribunal (NCLT) would improve utilisation of existing capacity and promote consolidation in some
sectors. The adequate recapitalisation of public sector banks would be critical to support lending growth
and investment revival in the economy. However, the risk of trade wars has clouded the outlook for
FY2019 to an extent. On balance, GDP and GVA growth are expected to improve to 7.1% and 7.0%,
respectively, in FY2019, from 6.7% and 6.5%, respectively, in FY2018.
57
SUMMARY OF OUR BUSINESS
Business Overview
We are a company engaged in the power transmission and distribution sector. We provide engineering,
procurement and construction ("EPC") services, undertake turnkey projects and are also manufacturers
of overhead conductors ("OC"), ground wires and galvanized iron wires ("GI Wires") that are majorly
utilized in laying of power transmission and distribution lines.
We have over the years emerged as an integrated organization for construction of transmission and
distribution lines, sub-stations and gas-insulated sub-stations under EPC / turnkey projects, especially
in the north-eastern region of India. We have also setup a wind energy based power plant with an
electricity generation capacity of 1.50 MW at Akal, Jaisalmer (Rajasthan), with a view to further
entrench ourselves in the power sector. We manufacture Ocs such as: AAAC conductor, AAC
conductor, ACSR conductor and conductors for 765 KV / 800 KV HVDC, ground wires and GI Wires.
Our Company started its operations with a single manufacturing unit being Factory Unit – I in Jorhat
(Assam) in the year 1986. Subsequently, we expanded our capacities by setting up a second unit being
Factory Unit – II at Sikar (Rajasthan) in the year 1991 and subsequently setup our third manufacturing
unit being Factory Unit – III in Bapi (Rajasthan) in the year 2010, with an annual capacity of 15,900
MT. After setting up of the third unit, our Company’s total production capacity increased to 29,000 MT
per annum. Our Company strives to employ the latest machines, testing equipments and technology at
our various manufacturing facilities. Our Company’s product can be customized based on the
customers’ requirements. Further, we periodically review the sourcing of our raw materials to maintain
quality and to ensure timely delivery of our products.
With more than 30 years of experience, we believe we are one of the prominent integrated EPC / turnkey
contractors and OC and GI Wire manufacturers in the power transmission and distribution sector in
north-east India. We have over the years forayed into the EPC / turnkey project activities and have
supplied, erected, constructed and commissioned 400KV, 220KV, 132KV, 33KV, 11KV sub-stations,
transmission and distribution lines under various schemes undertaken by the Government for the
development of the power distribution sector, especially in the north-east region of India. Assam Power
Sector Investment Program (APSIP) funded by Asian Development Bank ("ADB"), Deen Dayal
Upadhyaya Gram Jyoti Yojana ("DDUGJY"), Integrated Power Development Scheme ("IPDS"), Rajiv
Gandhi Grameen Vidyutikaran Yojana ("RGGVY"), Trade Development Fund Scheme ("TDF"),
Assam Bikash Yojana ("ABY") and North Eastern Region Power System Improvement Project
("NERPSIP") are some such schemes to name a few under which we have implemented some of our
projects. We aim to continue to build our strengthss in the field of manufacturing Ocs, ground wires
and GI Wires; and execution of EPC / turnkey projects in the power distribution sector.
We have been a qualified supplier to Power Grid Corporation of India Limited ("PGCIL") for more
than eight years and have successfully completed orders for supplying of 765 KV / 800 KV HVDC
conductors to them. We have also been executing EPC / turnkey projects in the power transmission and
distribution sector in India for PGCIL and many state power utilities. PGCIL is the largest transmission
utility in the country (Source: ICRA Report, September 2018) and we are a qualified supplier to them
for all types of Ocs.
In the year 1986, we believe, we were one of the early ones to start the manufacturing of OC such as
AAAC conductor, AAC conductor, and ACSR conductor for upto 400 KV lines in the north-east region
of India. Further, we believe we have successfully expanded our business to the north western region
of India by setting up our second manufacturing unit being Factory Unit – II in Sikar (Rajasthan) in the
year 1991 to serve the increased need for OC in that region. Subsequently, we set up our third
58
manufacturing unit being Factory Unit – III in Bapi (Rajasthan) as part of our expansion plans. Later,
our Company forayed into EPC / turnkey projects implementation space and executed several land mark
projects such as execution of sub-stations and erecting / revamping of transmission and distribution
lines. Over the years, our Company has built a strong relationship with PGCIL and many state power
utilities in India. PGCIL is one of our biggest customers and in the year 2010, we received our first
large order of approximately ₹687 million from them for supply of OCs. We continue to grow our
business with them and other state power utilities in India.
We have constantly strived to grow and improve our business. From a modest set up when we started
our business in 1986 in Jorhat (Assam), we are presently operating out of three (3) manufacturing
facilities located in Assam and Rajasthan. We have grown in the power transmission and distribution
sector from just manufacturing of OCs to undertaking EPC / turnkey projects, as well as, setting up of
wind energy based power plant. Presently, our Company’s clientele includes PGCIL and many state
power utilities on a pan-India basis with a strong foothold in Assam. For details regarding our history
and major milestones, please refer chapter titled "History and Certain Corporate Matters" beginning
on page 222 of this Draft Red Herring Prospectus.
For Fiscals 2018, 2017 and 2016, our revenue from operations on restated consolidated basis was
₹4,295.25 million, ₹3,891.37 million and ₹3,812.55 million, respectively, representing a CAGR of
4.05% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our net profit on restated
consolidated basis was ₹182.71 million, ₹124.64 million and ₹91.03 million, respectively, representing
a CAGR of 26.14% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our EBITDA on
restated consolidated basis was ₹427.69 million, ₹333.21 million and ₹280.77 million, respectively,
representing a CAGR of 15.06% during the last three Fiscals. Our long-term bank facilities were rated
BWR BBB (outlook: Stable) and our short-term bank facilities were rated BWR A3 by Brickwork
Ratings India Private Limited, vide their letter dated August 21, 2017.
Our Strengths
• Track record of organic growth and established manufacturing facilities
• Vast experience in manufacturing of Ocs and execution of EPC / turnkey projects in the north-
east region of India.
• Strong customer relationship with many state power utilities of India.
• Experience in handling EPC / turnkey projects in the power sector on difficult terrain like north-
east India
• Broad portfolio of products and projects / services
• Experienced management team and skilled workforce
• Efficient infrastructure and resource management with strict quality control standards
Our Strategies
• Continue to enhance our core strengths - execution capability
• Grow in power sector and infrastructure business with focus on north-east region of India
• Focus on rationalizing our indebtedness
• Build upon our synergistic position in infrastructure development
Our business mainly comprises of (i) manufacturing of overhead conductors; and (ii) EPC / turnkey
projects for erection of sub-stations and construction of transmission and distribution lines. A detailed
description of our products and services is given below:
59
Products manufactured
Overhead conductors ("OC") are vital in the construction of power transmission and distribution lines
and various other areas of the power sector. We manufacture overhead conductors such as all aluminium
conductors ("AAC"), aluminium conductors steel reinforced ("ACSR"); and all aluminium alloy
conductors ("AAAC") in the range of 11 KV to 765 KV, including 800 KV HVDC conductors which
are used for the purpose of construction of power transmission and distribution lines. Following is a
brief on OCs.
Overhead conductors:
Overhead conductors are engineered from electrolytically refined aluminium, which contains 99.5% of
aluminium. Due to its various features including corrosion resistance, high tensile strength and being
shock proof, these overhead conductors are used in overhead transmission and distribution lines. They
also have diverse applications and hence are used commonly in the power transmission and distribution
sector. The entire assortments of OCs are extensively used in the urban and rural areas for construction
of power transmission and distribution lines. These conductors are made up of more than one (1) strand
and can go upto sixty one (61) strands of aluminium wires, as per the requirements of the end usage.
Given below are the various types of Ocs manufactured by our Company:
➢ All Aluminium Conductors ("AAC")
➢ Aluminium Conductors Steel Reinforced ("ACSR")
➢ All Aluminium Alloy Conductors ("AAAC")
Apart from the above, we also manufacture ground wires and GI wires which are also used in the laying
of transmission and distribution lines.
Services:
Our Company provides complete EPC / turnkey projects in the power transmission and distribution
sector including a spectrum of services for rural and urban electrification, i.e., transmission and
distribution of power from construction of sub-stations to laying the transmission lines and the laying
of distribution lines to the end users for electricity. Given below is a brief description of our services:
Our Company provides complete EPC / turnkey solution for designing, sourcing, erection, testing and
commissioning of transmission and distribution lines of up to 220 KV. Construction of transmission
and distribution lines involve route surveys, designing, foundation, erection and stringing services, that
is to say, conducting surveys over multiple terrains, including rivers and other water bodies, hills and
deserts, laying of concrete foundations for the towers, erecting towers on the foundations, fitting
insulator and other hardware, stringing of conductors, ground wire and cables, testing and
commissioning of lines etc. The customers from whom we receive the orders for construction and laying
of transmission and distribution lines rely on our wealth of experience to construct and maintain safe
and reliable electric utility infrastructure. With the support of the latest machinery, we have been able
to provide quality and cost effective services to our customers. Since our inception, our Company has
laid down 283 kms of transmission lines and 30,709 kms of distribution lines upto June 30, 2018.
Setting up of sub-stations
Our Company has proven expertise in the designing (electrical, civil and structural), sourcing and
supply, construction and project management of the sub-stations of various capacities. Our scope of
work in the sub-station project includes all activities from survey of the site, to designing, procurement
60
of requisite materials, inspection of the materials, civil works and foundation, erecting, testing and
commissioning of the sub-station.
Our Company has executed one gas insulated switchgear substation project for a state power utility of
220 KV/132 KV /33 KV. It was setup by using a range of products at all voltage levels, which is
efficient, safer and reduces transmission loss. Using our experience, we are able to design sub-stations
in a compact manner so as to reduce the overall cost of the projects, making erecting work easier and
faster.
Our Company has setup a wind energy based power plant under the "Policy for Promoting Generation
of Electricity through Non-Conventional Energy Sources – 2004" issued by the state Government of
Rajasthan with a capacity of 1.50 MW at Jaisalmer which became operational in FY 2010-11. We have
entered into a tripartite power purchase agreement with one of the leading companies (which provides
renewable energy solutions) and a state power utility on September 2, 2010 for supplying power for a
period of twenty years, from the wind power plant to the grid at Jaisalmer.
61
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary of our standalone restated financial information for and as
of Fiscals 2014, 2015, 2016, 2017 and 2018 and consolidated restated financial information for and as
of Fiscals 2014, 2015, 2016, 2017 and 2018. These financial statements have been prepared in
accordance with Indian GAAP (for Fiscals 2014 and 2015), Ind AS (for Fiscals 2016, 2017 and 2018)
and the Companies Act and restated in accordance with the SEBI ICDR Regulations and are presented
in the chapter titled "Financial Statements" on page 281 of this Draft Red Herring Prospectus. The
summary financial statements presented below should be read in conjunction with our Restated
Financial Statements, the notes and annexure thereto and the section titled "Management’s Discussion
and Analysis of Financial Condition and Results of Operations" on page 505 of this Draft Red Herring
Prospectus.
62
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31,
2018 2017 2016
(Proforma Ind AS) (Proforma Ind AS) (Proformcca Ind AS)
Equity and liabilities
Equity
Equity share capital 376.23 376.23 244.20
Other equity 1,562.77 1,381.06 1,143.22
Liabilities
Non current liabilities
Financial liabilities
Borrowings 236.35 378.83 457.65
Other financial liabilities 1.76 - -
Provisions 17.93 11.09 6.72
Deferred tax liabilities (net) 4.85 8.14 10.02
Other non current liabilities - - -
Current liabilities
Financial liabilities
Borrowings 804.09 899.89 679.31
Trade payables 1,428.66 1,256.42 1,119.71
Other financial liabilities 199.21 193.71 162.32
Other current liabilities 294.42 458.95 26.71
Provisions 1.15 0.16 0.10
Current tax liabilities (net) 13.46 4.97 1.64
Total equity and liabilities 4,940.87 4,969.45 3,851.60
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED CONSOLIDATED FINANCIAL INFORMATION APPEARING IN ANNEXURE 6
AND STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED FINANCIAL
STATEMENTS APPEARING IN ANNEXURE 7
63
RESTATED SUMMARY STATEMENT OF CONSOLIDATED PROFIT AND LOSS
( ` In Million)
PARTICULARS For the year ended For the year ended For the year ended
March 31, 2018 March 31, 2017 March 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Continuing operations
Revenue
Revenue from operations 4,295.25 3,891.37 3,812.55
Other income 37.37 32.03 18.95
Total income 4,332.62 3,923.41 3,831.50
Expenditure
Cost of material consumed 2,951.74 2,710.07 2,987.06
Purchase of stock-in-trade - - 21.28
Changes in inventories of FG, 32.06 (17.70) (12.05)
WIP & stock-in-trade
Excise duty 42.84 119.89 138.45
Employee benefits expenses 152.67 109.54 82.43
Finance costs 123.11 119.96 103.10
Depreciation and amortization 22.58 18.05 18.32
expenses
Other expenses 725.61 668.40 333.57
Total expenditure 4,050.62 3,728.21 3,672.15
Profit/(loss) before exceptional 282.00 195.20 159.34
items and tax
Exceptional items - - -
Profit/(loss) before tax 282.00 195.20 159.35
Tax expenses
- Current tax 101.84 71.55 59.05
- Deferred tax (net) (3.29) (1.87) 10.02
-Wealth tax provision - - (0.04)
-Earlier years income tax 0.75 0.88 (0.72)
Profit/(loss) for the year 182.71 124.63 91.03
Other comprehensive income
Items that will not be reclassified
subsequently to profit & loss
- Remeasurements of the DBO (1.00) (1.59) (0.09)
- Income tax on items that will not - - -
be reclassified subsequently to
statement of profit and loss
Items that will be reclassified - - -
subsequently to profit & loss
- Fair value of equity instruments - - -
through OCI
64
PARTICULARS For the year ended For the year ended For the year ended
March 31, 2018 March 31, 2017 March 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Income tax on items that will be - - -
reclassified to statement of profit
and loss
Total other comprehensive (1.00) (1.59) (0.09)
income (net of tax)
Total comprehensive income for 181.71 123.05 90.94
the year
Earning per share (equity share 4.86 3.92 2.87
of ₹ 10 each)
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED CONSOLIDATED FINANCIAL INFORMATION APPEARING IN ANNEXURE 6
AND STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED FINANCIAL
STATEMENTS APPEARING IN ANNEXURE 7.
65
RESTATED SUMMARY STATEMENT OF CONSOLIDATED CASH FLOWS
( ` In Million)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31,
2018 2017 2016
(Proforma Ind AS) (Proforma Ind AS) (Proforma Ind AS)
Cash flow from operating
activities
Net profit before tax 282.00 195.19 159.35
Adjustments for:
- Depreciation and amortization 22.58 18.05 18.32
- Interest received (25.94) (29.40) (23.62)
- Dividend received - - -
- Finance cost 123.11 119.96 103.10
Operating profit before 401.75 303.80 257.15
working capital changes
Adjustments for:
Increase (-) / decrease (+) in 228.79 (238.27) (357.13)
other current assets
Increase (-) / decrease (+) in (143.12) (602.98) (151.64)
trade receivables
Increase (-) / decrease (+) in 110.89 (127.90) (58.41)
inventories
Increase (-) / decrease (+) in 0.80 - 77.65
other non-current assets
Increase (-) / decrease (+) in 3.64 - (0.80)
other current financial assets
Increase (-) / decrease (+) in (0.02) 4.15 3.99
other non current financial assets
Increase (-) / decrease (+) in - - 1.89
current tax assets
Increase (+) / decrease (-) in 8.49 3.33 1.64
current tax liability
Increase (+) / decrease (-) in 1.76 - -
other non current financial
liabilities
Increase (+) / decrease (-) in non 6.84 4.37 2.22
current provisions
Increase (+) / decrease (-) in 172.25 136.71 484.04
trade payables
Increase (+) / decrease (-) in 5.50 31.39 152.62
other financial liabilities
Increase (+) / decrease (-) in (164.53) 432.24 18.06
other current liabilities
Increase (+) / decrease (-) in 1.00 0.05 (0.03)
current provisions
Outflow towards taxation (-) (102.59) (72.43) (58.29)
Net cash flow from operating 531.45 (125.53) 372.95
activities
66
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31,
2018 2017 2016
(Proforma Ind AS) (Proforma Ind AS) (Proforma Ind AS)
Cash flows from investing
activities
Increase (-) decrease (+) in (79.78) (37.04) (33.54)
property, plant and equipment
Increase (-) / decrease (+) in (39.65) (106.67) (288.03)
capital work-in-progress
Increase (-) / decrease (+) in - - -
intangibles
Increase (-) / decrease (+) in (35.00) (1.56) 0.01
investment
Increase (-) / decrease (+) in (4.84) (12.68) -
investment property
Increase (-) / decrease (+) in - - -
investment in subsidiary
Increase (-) / decrease (+) in (43.86) (93.86) (92.05)
bank deposits (having original
maturity of more than 3 months)
Dividend income - - -
Interest income 25.94 29.40 23.62
Net cash from investing (177.20) (222.41) (390.00)
activities
Cash flow from financing
activities
Increase (+) / decrease (-) in - 246.81 -
capital (including securities
premium and capital reserve)
Increase (+) / decrease (-) in (142.48) (78.82) 78.16
long term borrowings
Increase (+) / decrease (-) in (95.80) 220.58 53.19
short term borrowings
Dividend and tax thereon paid - - -
Interest expenditure (123.11) (119.96) (103.10)
Net cash from financing (361.39) 268.62 28.25
activities
Net decrease/(increase) in cash (7.15) (79.33) 11.20
and cash equivalent
Cash and cash equivalents at 109.87 189.20 178.00
the beginning of the year
Cash and cash equivalents at 102.72 109.87 189.20
the end of the year
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED CONSOLIDATED FINANCIAL INFORMATION APPEARING IN ANNEXURE 6
AND STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED FINANCIAL
STATEMENTS APPEARING IN ANNEXURE 7.
67
As per our report of even date attached
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W For and on behalf of the Board
68
RESTATED SUMMARY STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES
(` In millions)
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
I. EQUITY AND LIABILITIES
1 Shareholders Fund
a) Share Capital 7A 244.20 225.45
b) Reserve and Surplus 8A 1052.38 910.03
c) Money received against share - 0.00 0.00
warrants
3 Non-current Liabilities
a) Long-term borrowings 9A 379.49 343.92
b) Deffered tax liabilities (Net) 10A 0.00 0.00
c) Other long-term liabilities - 0.00 0.00
d) Long-term provisions - 4.50 2.43
4 Current Liabilities
(a) Short-term borrowings 11A 626.12 395.52
(b) Trade Payables 12A 637.09 365.93
(c ) Other current liabilities 13A 15.45 17.54
(d) Short-term provisions 14A 50.07 0.51
2 Current assets
a) Current investments - 0.00 0.00
b) Inventories 17A 322.31 240.34
c) Trade receivables 18A 1229.28 870.72
d) Cash and bank balances 19A 415.50 238.63
e) Short-term loans and advances 20A 180.55 133.91
f) Other current assets 21A 8.97 2.82
69
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 4A, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 5A
AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL
STATEMENTS APPEARING IN ANNEXURE 6A.
70
ANNEXURE 2A RESTATED SUMMARY STATEMENT OF CONSOLIDATED PROFIT AND
LOSS
(` In millions)
Sr. Particulars Annexure For the year For the year
No. No. ended ended
31.03.2015 31.03.2014
A. CONTINUING OPERATION
Revenue from operation 19A 3149.26 3351.63
Other income 20A 20.51 20.50
B Expenses:
Cost of material consumed 21A 2341.52 2382.48
Purchase of stock-in-trade 22A 83.14 322.75
Changes in inventories of FG, WIP & Stock-in-trade 23A 70.82 -43.67
Employee benefits expenses 24A 67.19 60.90
Finance costs 25A 80.51 79.85
Depreciation and amortization expenses 23.01 21.38
Other expenses 26A 378.50 388.71
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
71
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
72
RESTATED SUMMARY STATEMENT OF CONSOLIDATED CASH FLOWS
(` In millions)
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
1 Operating Activities
Net Profit before tax
Net profit before taxation & 124.97 159.70
extraordinary items
Adjustments for -
Depreciation & amortisation Expense 23.01 21.38
Interest received 18.69 (20.50)
Adjustment in retained earning - (1.30)
Finance Cost 80.51 79.85
Operating Profit before Working 247.18 239.13
Capital Changes
Adjustments for
Increase (-) / Decrease (+) in Other (6.16) 4.33
current Assets
Increase (-) / Decrease (+) in Debtors (358.57) (241.53)
Increase (-) / Decrease (+) in (81.97) 54.16
Inventories
Increase (-) / Decrease (+) in Loans (63.32) 142.41
and Advances
Increase (+) / Decrease (-) in Current 264.10 (224.50)
Liabilities & Provisions
Outflow towards Taxation (-) (51.42) (56.52)
Net Cash Flow from Operating (50.16) (82.52)
activities
2 Investing Activities
Increase (-) Decrease (+) in Fixed (8.47) (30.79)
Assets
Increase (-) / Decrease (+) in Capital (37.64) (101.27)
Work-in-Progress
Interest Income 20.14 20.50
Net Cash (Used in) Investing (25.96) (111.56)
Activities
3 Finance Activities
Increase (+) / Decrease (-) in Capital 87.50 28.03
Increase (+) / Decrease (-) in Long 52.07 97.85
Term Borrowings
Increase (+) / Decrease (-) in Short 230.60 40.70
Term Borrowings
Increase (-) / Decrease (+) in 0.40 (50.03)
Investment
Dividend and Tax thereon paid
Interest Expenditure (117.57) -79.85
Net Cash Flow from Financing 253.00 36.70
73
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
Activities
4 Net Increase (Decrease) in Cash and 176.88 (157.38)
cash equivalent
5 Cash and Cash equivalent at the 238.62 396.00
beginning.
6 Cash and Cash equivalent at the end 415.50 238.62
Note: The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in
Accounting Standard - 3 "Cash Flow Statements".
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
74
RESTATED SUMMARY STATEMENT OF STANDALONE ASSETS AND LIABILITIES
( ` In Millions)
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH
31, 2018 31, 2017 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Assets
Non current assets
Property, plant and
229.63 172.06 152.10
equipment
Capital work in progress 140.97 111.77 49.85
Investment property 22.34 17.50 4.82
Intangible assets - - -
Investment in subsidiaries 93.97 93.97 93.97
Financial assets
Investments 35.65 1.65 1.68
Trade receivables - - -
Loans - - -
Other financial assets 492.75 498.10 341.48
Deferred tax assets (net) - - -
Other non current assets 12.18 12.97 12.97
Current assets
Inventories 397.72 508.61 380.72
Financial assets
Investments- - - -
Trade receivables- 1,428.24 1,285.12 682.14
Cash and cash equivalents 102.68 105.78 189.15
Other bank balances 257.61 82.78 106.20
Loans - - -
Other financial assets- 1,151.76 1,334.06 1,109.18
Current tax assets (net) - - -
Other current assets 100.03 150.16 136.78
Total assets 4,465.53 4,374.54 3,261.02
Equity and liabilities
Equity
Equity share capital 380.91 380.91 247.80
Other equity 1,511.37 1,330.55 1,093.79
Liabilities
Non current liabilities
Financial liabilities
Borrowings 8.15 23.77 116.32
Other financial liabilities 1.76 - -
Provisions 17.93 11.09 6.72
75
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH
31, 2018 31, 2017 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Deferred tax liabilities (net) 5.74 8.14 10.02
Other non-current liabilities - - -
Current liabilities
Financial liabilities
Borrowings- 804.09 899.89 679.31
Trade payables 1,393.41 1,221.17 1,084.46
Other financial liabilities- 50.77 45.31 13.95
Other current liabilities 276.78 448.59 6.92
Provisions- 1.15 0.16 0.10
Current tax liabilities (net) 13.46 4.97 1.64
Total equity and liabilities 4,465.53 4,374.54 3,261.02
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
76
RESTATED SUMMARY STATEMENT OF STANDALONE PROFIT AND LOSS
( ` In Million)
PARTICULARS For the For the For the
Period Period Period
Ending Ending Ending
March 31, March 31, March 31,
2018 2017 2016
(Proforma (Proforma (Proforma
Ind As) Ind As) Ind As)
Continuing operations
Revenue
-Revenue from operations 4,295.25 3,891.37 3,812.55
-Other income 37.37 32.03 18.95
Total income 4,332.62 3,923.41 3,831.50
Expenditure
-Cost of material consumed 2,951.74 2,710.07 2,987.06
-Purchase of stock-in-trade - - 21.28
-Changes in inventories of FG, WIP & stock-in-trade 32.06 (17.70) (12.05)
- Excise duty 42.84 119.89 138.45
-Employee benefits expenses 152.67 109.54 82.43
-Finance costs 123.11 119.96 103.10
-Depreciation and amortization expenses 22.58 18.05 18.32
-Other expenses 725.61 668.40 333.57
Total expenditure 4,050.62 3,728.21 3,672.15
Profit/(loss) before exceptional items and tax 282.00 195.20 159.35
Exceptional items - - -
Profit/(loss) before tax 282.00 195.19 159.35
Tax expenses
- Current tax 101.84 71.55 59.05
- Deferred tax (net) (2.40) (1.87) 10.02
-Wealth tax provision - - (0.04)
-Earlier years income tax 0.75 0.88 (0.72)
Profit/(loss) for the year 181.81 124.63 91.04
Other comprehensive income
Items that will not be reclassified subsequently to
profit & loss
- Remeasurements of the DBO (1.00) (1.59) (0.09)
- Income tax on items that will not be reclassified - - -
subsequently to statement of profit and loss
Items that will be reclassified subsequently to profit - - -
& loss
- Fair value of equity instruments through OCI - - -
77
PARTICULARS For the For the For the
Period Period Period
Ending Ending Ending
March 31, March 31, March 31,
2018 2017 2016
(Proforma (Proforma (Proforma
Ind As) Ind As) Ind As)
Income tax on items that will be reclassified to - - -
statement of profit and loss
Total other comprehensive income (net of tax) (1.00) (1.59) (0.09)
Total comprehensive income for the year 180.82 123.05 90.95
Earning per share (equity share of ₹ 10 each) 4.77 3.87 2.83
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
78
RESTATED SUMMARY STATEMENT OF STANDALONE CASH FLOWS
( ` In Million)
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH
31, 2018 31, 2017 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Cash flow from operating
activities
Net profit before tax 282.00 195.19 159.35
Adjustments for:
- Depreciation and amortization 22.58 18.05 18.32
- Interest received (25.94) (29.40) (23.62)
- Dividend received - - -
- Finance cost 123.11 119.96 103.10
Operating profit before
401.75 303.80 257.15
working capital changes
Adjustments for:
Increase (-) / decrease (+) in
50.13 (13.39) 49.60
other current assets
Increase (-) / decrease (+) in
(143.12) (602.98) (151.64)
trade receivables
Increase (-) / decrease (+) in
110.89 (127.90) (58.41)
inventories
Increase (-) / decrease (+) in
0.80 - 62.85
other non-current assets
Increase (-) / decrease (+) in
182.30 (224.87) (407.56)
other current financial assets
Increase (-) / decrease (+) in
(125.62) (20.69) 52.07
other non current financial assets
Increase (-) / decrease (+) in
- - 1.89
current tax assets
Increase (+) / decrease (-) in
8.49 3.33 1.64
current tax liability
Increase (+) / decrease (-) in
other non current financial 1.76 - -
liabilities
Increase (+) / decrease (-) in
6.84 4.37 2.22
non current provisions
Increase (+) / decrease (-) in
172.24 136.71 450.17
trade payables
Increase (+) / decrease (-) in
5.46 31.36 5.49
other financial liabilities
Increase (+) / decrease (-) in
(171.81) 441.67 4.47
other current liabilities
Increase (+) / decrease (-) in
1.00 0.05 (0.03)
current provisions
Outflow towards taxation (-) (102.59) (72.43) (58.29)
Net cash flow from operating
398.53 (140.96) 211.61
activities
Cash flows from investing
79
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH
31, 2018 31, 2017 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
activities
Increase (-) decrease (+) in
(80.15) (38.02) (34.26)
property, plant and equipment
Increase (-) / decrease (+) in
(29.19) (61.93) (49.85)
capital work-in-progress
Increase (-) / decrease (+) in
- - -
intangibles
Increase (-) / decrease (+) in
(35.00) (1.56) (0.09)
investment
Increase (-) / decrease (+) in
(4.84) (12.68) -
investment property
Increase (-) / decrease (+) in
- - -
investment in subsidiary
Increase (-) / decrease (+) in
bank deposits (having original (43.86) (112.52) (91.48)
maturity of more than 3 months)
Dividend income - - -
Interest income 25.94 29.40 23.62
Net cash from investing
(167.10) (197.31) (152.06)
activities
Cash flow from financing
activities
Increase (+) / decrease (-) in
capital (including securities - 246.81 -
premium)
Increase (+) / decrease (-) in
(15.62) (92.54) 1.50
long term borrowings
Increase (+) / decrease (-) in
(95.80) 220.58 53.19
short term borrowings
Dividend and tax thereon paid - - -
Interest expenditure (123.11) (119.96) (103.10)
Net cash from financing
(234.53) 254.89 (48.41)
activities
Net decrease/(increase) in cash
(3.10) (83.38) 11.15
and cash equivalent
Cash and cash equivalents at
105.78 189.15 178.00
the beginning of the year
Cash and cash equivalents at
102.68 105.78 189.15
the end of the year
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
80
As per our report of even date attached
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W For and on behalf of the Board
81
RESTATED SUMMARY STATEMENT OF STANDALONE ASSETS AND LIABILITIES
(` In millions)
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
I. EQUITY AND LIABILITIES
1 Shareholders Fund
a) Share Capital 7A 247.80 229.45
b) Reserve and Surplus 8A 1002.95 862.03
c) Money received against share - 0.00 0.00
warrants
3 Non-current Liabilities
a) Long-term borrowings 9A 114.81 94.74
b) Deffered tax liabilities (Net) 10A 0.00 0.00
c) Other long-term liabilities - 0.00 0.00
d) Long-term provisions - 4.50 2.43
4 Current Liabilities
(a) Short-term borrowings 11A 626.12 395.52
(b) Trade Payables 12A 637.09 365.93
(c ) Other current liabilities 13A 7.07 11.03
(d) Short-term provisions 14A 49.66 57.01
2 Current assets
a) Current investments - 0.00 0.00
b) Inventories 17A 322.31 240.34
c) Trade receivables 18A 1229.28 870.72
d) Cash and bank balances 19A 397.32 221.16
82
Sr. Particulars Annexure AS AT 31.03.2015 AS AT 31.03.2014
No. No.
e) Short-term loans and advances 20A 180.24 138.56
f) Other current assets 21A 8.97 2.82
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 4A, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 5A
AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL
STATEMENTS APPEARING IN ANNEXURE 6A
83
RESTATED SUMMARY STATEMENT OF STANDALONE PROFIT AND LOSS
(` In millions)
S L No. Particulars Annexure For the year ended For the year ended
No. 31.03.2015 31.03.2014
A. CONTINUING OPERATION
Revenue from operation 22A 3149.26 3351.63
Other income 23A 18.73 20.50
B Expenses:
Cost of material consumed 24A 2341.52 2382.48
Purchase of stock-in-trade 25A 83.14 322.75
Changes in inventories of FG, WIP 26A 70.82 -43.67
& Stock-in-trade
Employee benefits expenses 27A 67.19 60.42
Finance costs 28A 80.39 79.77
Depreciation and amortization 32A 23.01 21.38
expenses
Other expenses 29A 378.62 389.27
84
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7.
85
RESTATED SUMMARY STATEMENT OF STANDALONE CASH FLOWS
(` In millions)
SL. AS AT AS AT
Particulars
No. 31.03.2015 31.03.2014
Operating Activities
1 Net Profit before tax
Net profit before taxation & extraordinary items 123.19 159.70
Adjustments for - -
Adjustment in retained earning - (1)
Depreciation & amortisation Expense 23.01 21.38
Interest received (18.69) (20.50)
Finance Cost 80.39 79.77
Operating Profit before Working Capital Changes 207.91 239.10
Adjustments for - -
Increase (-) / Decrease (+) in Other current Assets (6.16) 4.33
Increase (-) / Decrease (+) in Debtors (358.57) (241.53)
Increase (-) / Decrease (+) in Inventories (81.97) 54.16
Increase (-) / Decrease (+) in Loans and Advances (63.32) 134.77
Increase (+) / Decrease (-) in Current Liabilities &
Provisions 261.93 (211.67)
Outflow towards Taxation (-) (51.42) (56.52)
Net Cash Flow from Operating activities (91.60) (77.36)
2 Investing Activities - -
Increase (-) Decrease (+) in Fixed Assets (8.71) (30.75)
Increase (-) / Decrease (+) in Capital Work-in-
Progress - 2.32
Interest Income 18.69 20.50
Net Cash (Used in) Investing Activities 9.98 (7.93)
3 Finance Activities - -
Increase (+) / Decrease (-) in Capital
87.50 28.00
Increase (+) / Decrease (-) in Long Term Borrowings
20.08 (13.40)
Increase (+) / Decrease (-) in Short Term Borrowings
230.60 40.70
Increase (-) / Decrease (+) in Investment - (50.03)
Dividend and Tax thereon paid - -
Interest Expenditure (80.39) (79.77)
Net Cash Flow from Financing Activities 257.79 (74.50)
Net Decrease (increase) in Cash and cash equivalent
4 176.16 (159.79)
5 Cash and Cash equivalent at the beginning. 221.16 380.95
6 Cash and Cash equivalent at the end 397.32 221.16
Note: The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in
Accounting Standard - 3 "Cash Flow Statements".
86
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO
RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND
STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS
APPEARING IN ANNEXURE 7
87
THE ISSUE
Use of proceeds of this Issue See the chapter titled "Objects of the Issue"
beginning on page 128 of this Draft Red Herring
Prospectus.
1) The Issue has been authorised by a resolution of the Board of Directors, dated June 18, 2018
and approved by a resolution of the shareholders of our Company in the EGM held on July 10,
2018.
2) Our Company in consultation with the BRLM, may allocate up to 60% of the QIB Category to
Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. One-
third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to
valid Bids being received from domestic Mutual Funds at or above the price at which allocation
is being made to Anchor Investors. For further details, please refer chapter titled "Issue
Procedure" beginning on page 590 of this Draft Red Herring Prospectus. In the event of under-
subscription or non-Allotment in the Anchor Investor Portion, the balance Equity Shares in the
Anchor Investor Portion shall be added to the QIB Portion.
3) Retail Discount of ₹[●] to the Issue Price may be offered to the Retail Individual Bidders. The
Retail Discount, if any, will be determined by our Company in consultation with the BRLM,
and will be advertised in all the editions of [●], an English national daily newspaper, in all the
editions of [●], a Hindi national daily newspaper, and in [●] edition of [●], a Assamese
newspaper ('Assamese' being the regional language of Assam, where our Registered Office is
located), each with wide circulation, at least five (5) Working Days prior to the Bid/Issue
Opening Date and shall be made available to the Stock Exchanges for the purpose of uploading
88
on their respective websites. Retail Individual Bidders bidding at a price within the Price Band
can make payment at the Bid Amount (which will be less Retail Discount), at the time of making
a Bid. Retail Individual Bidders bidding at the Cut-Off Price have to ensure payment at the Cap
Price, less Retail Discount at the time of making a Bid. Retail Individual Bidders must ensure
that the Bid Amount (which will be less Retail Discount) does not exceed ₹200,000. Retail
Individual Bidders must mention the Bid Amount while filling the "SCSB/Payment Details"
block in the Bid cum Application Form.
Under-subscription, if any, in any category, except the QIB Category, would be met with spill-over
from any other category or a combination of categories of Bidders as applicable, at the discretion of our
Company in consultation with the BRLM and the Designated Stock Exchange, subject to applicable
law.
89
GENERAL INFORMATION
Our Company was incorporated as "North Eastern Cables and Conductors Private Limited" on
December 27, 1984 as a private limited company under the Companies Act, 1956, with the Registrar of
Companies, Shillong. On July 1, 1997, our Company became deemed public limited company by virtue
of Section 43A (1A) of the Companies Act, 1956 and the name of our Company was changed to "North
Eastern Cables & Conductors Limited" and the same was recorded in the certificate of incorporation
issued by the RoC. Our Company was again converted into a private limited company under Section
43A (2A) of the Companies Act, 1956 and the name of our Company was changed to "North Eastern
Cables & Conductors Private Limited" and the same was recorded in the certificate of incorporation by
the RoC on October 10, 2001. Thereafter, in order to align the name of our Company with the diversified
business activities of our Company and to reflect a young approach to our goals, the name of our
Company was changed to "Neccon Power & Infra Private Limited" pursuant to a resolution passed by
our shareholders dated March 30, 2011 under Section 21 of the Companies Act, 1956 and a fresh
certificate of incorporation was issued by the RoC on April 8, 2011. Our Company was then converted
to a public limited company pursuant to a resolution passed by our shareholders on April 15, 2011 and
the name of our Company was changed to "Neccon Power & Infra Limited" vide a fresh certificate of
incorporation issued by the RoC dated May 18, 2011. The corporate identity number of our Company
is U27109AS1984PLC002275.
The Registered Office of our Company was originally situated at Housing Colony Road, Rukminigoan,
Dispur, Guwahati, Assam. The Registered Office of our Company was shifted to A. T. Road, Jorhat –
785 001, Assam, pursuant to a shareholders’ resolution dated March 3, 1986.
Khetan Bhawan,
Seuni Ali, A. T. Road,
Jorhat – 785 001, Assam
Telephone: +91 376 235 1433 / +91 376 235 0894
Fax: +91 376 235 1318
Website: www.necconpower.com
E-mail: [email protected]
CIN: U27109AS1984PLC002275
Our Company is registered with the RoC located at the following address:
Registrar of Companies (covering the states of Assam, Meghalaya, Manipur, Tripura, Mizoram,
Nagaland & Arunachal Pradesh)
Morello Building,
Ground Floor
Shillong 793 001, India
Telephone: +91 364 250 4093
E-mail: [email protected]
Our Board comprises of the following directors as on the date of this Draft Red Herring Prospectus:
90
Name and Designation DIN Address
Dr. Murlidhar Khetan 00842354 Khetan Bhawan, A. T. Road, Near Shyam Steel
Building, Seuni Ali Jorhat – 785 001, Assam
Jaiprakash Khetan 00842692 H/No.-85, Nilayam Byelane-7, Sreenagar Path,
Dispur, Guwahati, Kamrup (Metropolitan),
Guwahati – 781 005, Assam
Basant Kumar Khetan 00842404 Seuni Ali, A. T. Road, Jorhat East, Jorhat -785 001,
Assam
Pradeep Kumar Khetan 01227632 160, Vishwa Mitra Marg, Opposite Sanskar School,
Hanuman Nagar Extension, Jaipur – 302 021,
Rajasthan
Jugal Kishore Agarwalla 07114060 Bhagwani Sadan, A.T. Road, Jorhat – 785 001,
Assam
Sharad Agarwalla 07105755 Chamber Road, OP Sani Mandir, Jorhat East, Jorhats
– 785 001, Assam
Shyamkanu Mahanta 00625277 House No. 33, J Borooah Road, Chenikuthi,
Silpukhuri, Guwahati – 781 003, Assam
Usha Agarwal 02232073 B-9, Govind Marg, Raja Park, Adarsh Nagar, Jaipur
– 302 004, Rajasthan
For detailed profile of our Chairman, Managing Director and other Directors, please refer chapters titled
"Our Management", "Our Promoters and Promoter Group" and "Our Group Entities" beginning on
pages 235, 258 and 267 respectively, of this Draft Red Herring Prospectus.
Richeeta Somani
Khetan Bhawan,
Seuni Ali, A. T. Road,
Jorhat – 785 001, Assam
Telephone: +91 376 235 1433 / + 91 376 235 0894
Fax: +91 376 235 1318
E-mail: [email protected]
Investors can contact the Company Secretary and Compliance Officer, BRLM or the Registrar
to the Issue in case of any pre-Issue or post Issue related problems, such as non-receipt of letters
of Allotment, non-credit of Allotted Equity Shares in the respective beneficiary account, non-
receipt of refund orders or non-receipt of funds by electronic mode.
All grievances may be addressed to the Registrar to the Issue with a copy to the relevant Designated
Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give full details
such as name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID,
PAN, date of the submission of Bid cum Application Form, address of the Bidder, number of the Equity
Shares applied for and the name and address of the Designated Intermediary where the Bid cum
Application Form was submitted by the Bidder. All grievances relating to Bids submitted with
Registered Brokers, may be addressed to the Stock Exchanges, with a copy to the Registrar to the Issue.
Further, the Bidder shall also enclose a copy of the Acknowledgment Slip received from the Designated
Intermediaries in addition to the information mentioned hereinabove.
91
Chief Financial Officer
Nanuram Prajapat
Khetan Bhawan,
Seuni Ali, A. T. Road,
Jorhat – 785 001, Assam
Telephone: +91 376 235 1433 / +91 376 235 0894
Fax: +91 376 235 1318
E-mail: [email protected]
92
Statutory & Peer Reviewed Auditors of our Company
Syndicate Members
[●]
Refund Bank(s)
[●]
93
Monitoring Agency
[●]
The Syndicate Members, Bankers to the Issue / Escrow Collection Banks, Refund Bank(s) and the
Monitoring Agency shall be appointed prior to the filing of the Red Herring Prospectus with the RoC.
Designated Intermediaries
The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process is available at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35 on SEBI’s
website, or at such other website as may be prescribed by SEBI from time to time. For details of the
Designated Branches which shall collect Bid cum Application Forms, please refer to the above-
mentioned link.
In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the Syndicate, the
list of branches of the SCSBs at the Specified Locations named by the respective SCSBs to receive
deposits of Bid cum Application Forms from the members of the Syndicate is available on the website
of SEBI https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35
and updated from time to time.
Registered Brokers
The list of the Registered Brokers, including details such as postal address, telephone number and e-
mail address, is provided on the websites of the BSE and the NSE at
http://www.bseindia.com/Markets/PublicIssues/brokercentres_new.aspx?expandable=3 and
http://www.nseindia.com/products/content/equities/ipos/ipo_mem_terminal.htm, respectively, as
updated from time to time.
The list of the RTAs eligible to accept ASBA Forms at the Designated RTA Locations, including details
such as address, telephone number and e-mail address, is provided on the websites of Stock Exchanges
at http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as
updated from time to time.
The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details
such as name and contact details, is provided on the websites of BSE at
http://www.bseindia.com/Static/Markets/PublicIssues/RtaDp.aspx?expandable=6 and on the website
of NSE at http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, as updated
from time to time.
IPO Grading
No credit agency registered with SEBI has been appointed for the purposes of obtaining a grading for
the Issue, as IPO grading is not mandatory.
94
Credit Rating
As this is an issue of Equity Shares, credit rating is not required for the Issue.
Experts
Except as stated below, our Company has not obtained any expert opinions:
Our Company has received written consent on September 21, 2018 from the Statutory Auditor, M/s.
Borkar & Muzumdar, Chartered Accountants to include their name as required under Section 26 of the
Companies Act, 2013 in this Draft Red Herring Prospectus and as an "expert" as defined under section
2(38) of the Companies Act, 2013 in respect of the reports on the consolidated and standalone restated
financial statements, each dated September 19, 2018, and the statement of tax benefits dated September
21, 2018 included in this Draft Red Herring Prospectus and such consent has not been withdrawn as on
the date of this Draft Red Herring Prospectus.
Trustees
Monitoring Agency
In terms of Regulation 16(2) of the SEBI ICDR Regulations, our Company shall appoint a monitoring
agency for the Issue prior to the filing of the Red Herring Prospectus. The requisite details shall be
accordingly incorporated in the RHP.
Appraising Entity
None of the objects for which the Net Proceeds will be utilised have been appraised by any agency.
The responsibilities of the Book Running Lead Manager for various activities in this issue are as follows:
S. No. Activity
1. Capital structuring with relative components and formalities such as type of instruments, etc.
2. Due diligence of Company’s operations/ management/ business plans/ legal etc. Drafting and
design of Red Herring Prospectus including memorandum containing salient features of the
Prospectus. The BRLM shall ensure compliance with stipulated requirements and completion
of prescribed formalities with the Stock Exchanges, RoC and SEBI including finalization of
Prospectus and RoC filing
3. Drafting and approval of all statutory advertisements
4. Drafting and approval of all publicity material other than statutory advertisements as
mentioned in 3 above, including corporate advertisement, brochures
5. Appointment of intermediaries and coordination of intermediary agreements
- Advertising agency and printers
- Escrow Collection Banks and Registrar
6. International institutional marketing strategy, including finalizing the list and allocation of
investors for one to one meetings, in consultation with the Company, finalizing the
international road show schedule & investor meeting schedules
7. Preparation of road show presentation and frequently asked questions
95
S. No. Activity
8. Marketing strategy for domestic institutions including banks, mutual funds, etc., finalizing
the list and division of investors for one to one meetings, in consultation with the Company,
and finalizing the investor meeting schedules
9. Non-institutional and retail marketing of the Issue, which will include inter alia, formulating
marketing strategies, preparation of publicity budget, finalizing media and PR strategy,
finalizing centres for holding conferences for press and brokers, deciding on the quantum of
issue material and following-up on distribution of publicity and issue material including
forms, prospectuses, etc.
10. Co-ordination with Stock Exchanges for Book Building software, bidding terminals and mock
trading
11. Finalization of pricing, in consultation with the Company and managing the book
12. The post bidding & post issue activities including management of escrow accounts, co-
ordination of institutional and non-institutional allocation, intimation of allocation and
dispatch of refunds to bidders etc. The post Issue activities for the Issue involving essential
follow up steps, which include the finalization of trading and dealing of instruments and
demat of delivery of Equity Shares, with the various agencies connected with the work such
as the Registrar to the Issue and Bankers to the Issue, SCSBs and the bank(s) handling refund
business. The merchant banker shall be responsible for ensuring that these agencies fulfil their
functions and enable it to discharge this responsibility through suitable agreements with the
Company
Book Building Process, with reference to the Issue, refers to the process of collection of Bids on the
basis of the Red Herring Prospectus and the Bid cum Application Form. The Price Band and the
minimum Bid Lot size will be decided by our Company in consultation with the BRLM and published
in [●] edition of English national daily newspaper with wide circulation, [●] edition of the Hindi
national daily newspaper with wide circulation and [●] edition of a Assamese newspaper [●]
('Assamese' being the regional language where our Registered Office is located), at least five (5)
Working Days prior to the Bid/Issue Opening Date and shall be made available to the Stock Exchanges
for the purpose of uploading on their website.
The Issue Price shall be determined by our Company in consultation with the BRLM after the Bid/Issue
Closing Date. The principal parties involved in the Book Building Process are:
• Our Company;
• Book Running Lead Manager;
• Syndicate Member(s) who are intermediaries registered with SEBI or registered as brokers with
any of the Stock Exchanges and eligible to act as Underwriters;
• SCSBs through whom ASBA Bidders would subscribe in this Issue;
• Designated Intermediaries;
• Registrar to the Issue; and
• Escrow Collection Banks
All Bidders, other than Anchor Investors, can participate in the Issue only through the ASBA process.
In accordance with the SEBI ICDR Regulations, QIBs and NIIs are not permitted to withdraw their
Bid(s) or lower the size of their Bid(s) (in terms of quantity of Equity Shares or the price) at any stage.
RIIs can revise their Bid(s) during the Bid/Issue Period and withdraw their Bid(s) until the Bid/ Issue
Closing Date. Anchor Investors are not allowed to withdraw their Bids after the Anchor Investor
Bidding Date. Except Allocation to RIIs and the Anchor Investors, Allocation in the Issue will be on a
proportionate basis.
96
For further details, refer chapters titled "Issue Structure" and "Issue Procedure" beginning on pages
584 and 590 respectively of this Draft Red Herring Prospectus. For an illustration of the Book Building
Process and the price discovery process, see "Issue Procedure – Part B – Basis of Allocation" beginning
on page 590 of this Draft Red Herring Prospectus.
For details in relation to refund on withdrawal of the Issue, see "Issue Structure – Withdrawal of the
Issue" beginning on page 584 of this Draft Red Herring Prospectus.
Underwriting Agreement
After the determination of the Issue Price and allocation of our Equity Shares but prior to filing of the
Prospectus with the RoC, our Company will enter into an Underwriting Agreement with the
Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant
to the terms of the Underwriting Agreement, the BRLM shall be responsible for bringing in the amount
devolved in the event that their respective Syndicate Member(s) do not fulfil their underwriting
obligations. The underwriting shall be to the extent of the Bids uploaded by the Underwriters including
through its Syndicate / sub-Syndicates. The Underwriting Agreement is dated [●] and has been
approved by our Board of Directors / committee thereof. Pursuant to the terms of the Underwriting
Agreement, the obligations of the Underwriters are several and are subject to certain conditions
specified therein.
The Underwriters have indicated their intention to underwrite the following number of Equity Shares:
(This portion has been intentionally left blank and will be finalized after the pricing and actual
allocation of the Equity Shares is determined)
The abovementioned underwriting commitments are indicative and will be finalized after the pricing of
the Issue and actual allocation and subject to provisions of Regulation 13(2) of the SEBI ICDR
Regulations.
In the opinion of our Board of Directors (based on a certificate given by the Underwriters), the resources
of all the above mentioned Underwriter(s) are sufficient to enable them to discharge their respective
underwriting obligations in full. The abovementioned Underwriters are registered with SEBI under
section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. Our Board of
Directors/Committee of Directors, at its meeting held on [●], has accepted and entered into the
Underwriting Agreement on behalf of our Company. Allocation among the Underwriters may not
necessarily be in proportion to their underwriting commitments set forth in the table above.
Notwithstanding the above table, the BRLM and the Syndicate Member(s) 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 Equity Shares to the extent of the
defaulted amount. If the Syndicate Member(s) fails to fulfill its underwriting obligations as set out in
the Underwriting Agreement, the BRLM shall fulfill the underwriting obligations in accordance with
97
the provisions of the Underwriting Agreement. The underwriting agreement shall list out the role and
obligations of each Syndicate Member. The Underwriting Agreement has not been executed as on the
date of this Draft Red Herring Prospectus and will be executed after the determination of the Issue Price
and allocation of Equity Shares, but prior to the filing of the Prospectus with the RoC.
98
CAPITAL STRUCTURE
The Equity Share capital of our Company, as on the date of this Draft Red Herring Prospectus and after
giving effect to the Issue is set forth below:
C. The Issue
Public Issue of upto 12,700,000 Equity Shares of face value 127.00 [●]
`10 each at a price of `[●] per Equity Shares
Which comprises:
Fresh Issue of up to 12,700,000 Equity Shares (1)
Of which
QIB Portion*: QIB Portion being upto 30% of the Issue [●] [●]
aggregating up to [●] Equity Shares
Non – Institutional Portion: Non – Institutional Portion of [●] [●]
not less than 30% of the Issue aggregating to not less than
[●] Equity Shares.
Retail Portion: Retail Portion of not less than 40% of the [●] [●]
Issue aggregating to not less than [●] Equity Shares.
D. Issued, Subscribed and Paid-up Share Capital after the
Issue
[●] Equity Shares of face value of ₹10 each [●] [●]
The present Issue has been authorised by the Board of Directors vide a resolution passed at its meeting
held on June 18, 2018 and approved by the shareholders of our Company vide a special resolution
passed pursuant to section 62 of the Companies Act, 2013 at the EGM held on July 10, 2018.
99
NOTES TO THE CAPITAL STRUCTURE
The initial authorised capital of our Company was `2.00 million consisting of 20,000 Equity Shares of
`100 each. Further, the authorised share capital of our Company has been altered in the manner set forth
below:
100
Date of Particulars of change
AGM /
Shareholders’ From To
EGM
Meeting
`10 each and 10,000,000 each and 10,000,000 0.5%
0.5% optionally redeemable optionally redeemable convertible
convertible preference preference shares of `10 each.
shares of `10 each.
# The authorized capital of our Company was reclassified by addition of 10,000,000 0.5% optionally
convertible redeemable preference shares of `10 each to the existing authorized capital pursuant to an
ordinary resolution passed at the EGM dated March 14, 2016.
101
History of Equity Share Capital of our Company
Date of No. of Face value Issue Price Nature of Nature of Cumulative Cumulative Cumulative
Allotment Equity per Equity (₹)per Equity consideration Allotment number of paid -up Equity security premium
of the Shares Share Share Equity Share Capital (₹ )
Equity allotted (₹) Shares (₹)
Shares
December 15 100 100.00 Cash Subscription to 15 1,500.00 NIL
27, 1984 Memorandum
of
Association(1)
March 24, 2,800 100 100.00 Cash Preferential 2,815 281,500.00 NIL
1986 Allotment(2)
August 28, 8,385 100 100.00 Cash Preferential 11,200 1,120,000.00 NIL
1987 Allotment(3)
March 2, 9,560 100 100.00 Cash Preferential 20,760 2,076,000.00 NIL
1988 Allotment (4)
March 25, 9,540 100 100.00 Cash Preferential 30,300 3,030,000.00 NIL
1989 Allotment (5)
March 6, 3,300 100 100.00 Cash Preferential 33,600 3,360,000.00 NIL
1990 Allotment (6)
March 31, 11,026 100 100.00 Cash Preferential 44,626 4,462,600.00 NIL
1992 Allotment (7)
August 3, 75 100 100.00 Cash Preferential 44,701 4,470,100.00 NIL
1992 Allotment (8)
March 15, 650 100 100.00 Cash Preferential 45,351 4,535,100.00 NIL
1994 Allotment (9)
March 31, 4,600 100 100.00 Cash Preferential 49,951 4,995,100.00 NIL
1997 Allotment (10)
March 31, 35,049 100 100.00 Cash Preferential 85,000 8,500,000.00 NIL
2001 Allotment (11)
March 30, 64,470 100 100.00 Cash Preferential 149,470 14,947,000.00 NIL
2002 Allotment (12)
February 37,600 100 100.00 Cash Preferential 187,070 18,707,000.00 NIL
24, 2003 Allotment (13)
March 31, 10,240 100 1000.00 Cash Preferential 197,310 19,731,000.00 9,216,000.00
2007 Allotment (14)
102
Date of No. of Face value Issue Price Nature of Nature of Cumulative Cumulative Cumulative
Allotment Equity per Equity (₹)per Equity consideration Allotment number of paid -up Equity security premium
of the Shares Share Share Equity Share Capital (₹ )
Equity allotted (₹) Shares (₹)
Shares
March 31, 15,000 100 1000.00 Cash Preferential 212,310 21,231,000.00 22,716,000.00
2008 Allotment (15)
March 31, 33,500 100 1000.00 Cash Preferential 245,810 24,581,000.00 52,866,000.00
2009 Allotment (16)
March 31, 95,000 100 1000.00 Cash Preferential 340,810 34,081,000.00 138,366,000.00
2010 Allotment (17)
March 31, 19,99,000 10 1000.00 Cash Preferential 5,407,100 54,071,000.00 2,117,376,000.00
2011** Allotment (18)
August 17, 16,221,300 10 - Other than cash Bonus issue in 21,628,400 216,284,000.00 -
2011 the ratio of
3:1(19)
March 31, 665,375 10 200.00 Cash Preferential 22,293,775 222,937,750.00 2,243,797,250.00
2012 Allotment (20)
March 31, 651,150 10 43.00 Cash Preferential 22,944,925 229,449,250.00 2,265,285,200.00
2014 Allotment (21)
March 30, 1,835,100 10 47.68 Cash Preferential 24,780,025 247,800,250.00 23,344,317,678.00
2015 Allotment (22)
March 25, 7,434,008 10 - Other than cash Bonus issue in 32,214,033 322,140,330.00 -
2017 the ratio of 3:10
(23)
103
Note: The details of allottees for the above table are as under:
2) Preferential allotment of 2,800 Equity Shares of face value of `100 each fully paid up at par as on
March 24, 1986 as per the details given below:
3) Preferential allotment of 8,385 Equity Shares of face value of `100 each fully paid up at par as on
August 28, 1987 as per the details given below:
4) Preferential allotment of 9,560 Equity Shares of face value of `100 each fully paid up at par as on
March 2, 1988 as per the details given below:
104
Sr. No Name of Allottee No. of shares Allotted
1. Pawan Kumar Jallan 800
2. Devendra Nahata 1,000
3. Bhawar Lal Jain 1,000
4. Haresh Choudhary 1,000
5. Ramesh Kumar Karnani & Lalita Devi Karnani 950
6. Chhabil Das Sharma 500
7. Parsan Kumar Pincha 400
8. Bimala Devi Agarwalla 450
9. Madhab Sharma 400
10. Prabhati Devi Agarwalla 500
11. Motilal Sharma 600
12. Puranmal Agarwala 50
13. Shanti Devi Jain 50
14. Mahesh Kumar Sharma 50
15. Gulab Chand Bhotra 50
16. Pappu Devi Prajapat 50
17. Meena Devi Prajapat 50
18. Mohan Lal Shaboo 50
19. Kamal Jain 50
20. Gopal Sarda 50
21. Durga Devi Toshniwal 50
22. Sundar Devi Pincha 50
23. Madan Lal Bucha 50
24. Murari Lal Agarwala 510
25. Mohan Lal Agarwalla 50
26. Mohini Devi Surana 800
Total 9,560
5) Preferential allotment of 9,540 Equity Shares of face value of `100 each fully paid up at par as on
March 25, 1989 as per the details given below:
105
Total 9,540
6) Preferential allotment of 3,300 Equity Shares of face value of `100 each fully paid up at par as on
March 6, 1990 as per the details given below:
7) Preferential allotment of 11,026 Equity Shares of face value of `100 each fully paid up at par as on
March 31, 1992 as per the details given below:
8) Preferential allotment of 75 Equity Shares of face value of `100 each fully paid up at par as on
August 3, 1992 as per the details given below:
9) Preferential allotment of 650 Equity Shares of face value of `100 each fully paid up at par as on
March 15, 1994 as per the details given below:
106
Sr. No Name of Allottee No. of shares Allotted
1. Ratan Lal Nai 50
2. Manoj Kumar Goyal 50
3. Mansingh Khushwah 50
4. Ram Gopal Agarwalla 50
5. V.T. Khuttapan 50
6. Satyanaranyan Goyal 50
7. Jagmal Singh Choyal 50
8. Bhanwar Lal Sain 50
9. Ram Niwas Agarwalla 50
10. Pradip Kumar Shah 50
11. Suresh Kumar Goyal 50
12. Gajanand Sharma 50
13. Kavita Khetan 50
Total 650
10) Preferential allotment of 4,600 Equity Shares of face value of `100 each fully paid up at par as on
March 31, 1997 as per the details given below:
11) Preferential allotment of 35,049 Equity Shares of face value of `100 each fully paid up at par as on
March 31, 2001 as per the details given below:
12) Preferential allotment of 64,470 Equity Shares of face value of `100 each fully paid up at par as on
March 30, 2002 as per the details given below:
107
Sr. No Name of Allottee No. of shares Allotted
8. Pradeep Kumar Khetan 12,450
9. Kavita Khetan 7,000
Total 64,470
13) Preferential allotment of 37,600 Equity Shares of face value of `100 each fully paid up at par as on
February 24, 2003 as per the details given below:
14) Preferential allotment of 10,240 Equity Shares of face value of `100 each fully paid up at premium
of `900 each as on March 31, 2007 as per the details given below:
15) Preferential allotment of 15,000 Equity Shares of face value of `100 each fully paid up at premium
108
of `900 each as on March 31, 2008 as per the details given below:
16) Preferential allotment of 33,500 Equity Shares of face value of `100 each fully paid up at premium
of `900 each as on March 31, 2009 as per the details given below:
17) Preferential allotment of 95,000 Equity Shares of face value of `100 each fully paid up at premium
of `900 each as on March 31, 2010 as per the details given below:
109
Sr. No Name of Allottee No. of shares Allotted
2. Artline Vinimay Private Limited 5,000
3. Sujala Trading & Holdings Limited 5,000
4. BGS Credit Private Limited 5,000
5. Madsan Agencies Private Limited 5,000
6. Shree Sudarshan Castings Private Limited. 5,000
7. Deesha Tie-Up Private Limited 5,000
8. Kathleen Vyapaar Private Limited 5,000
9. Allied Global Infrastructure Limited 5,000
10. Concord Infracon Private Limited 5,000
11. Gravity Barter Private Limited 5,000
12. Blueview Commotrade Private Limited 5,000
13. Handsome Sales Private Limited 5,000
14. Sati Estates Construction Private Limited 10,000
15. Pushpadant Infrastructure Limited 9,500
16. Abhilasha Exports Private Limited 10,500
Total 95,000
18) Preferential allotment of 1,999,000 Equity Shares of face value of `10 each fully paid up at
premium of `990 each as on March 31, 2011 as per the details given below:
19) Bonus Issue of 16,221,300 Equity Shares of face value of `10 each fully paid up in the ratio of 3
Equity Shares for every one Equity Share held on August 17, 2011 as per the details given below:
110
Sr. No Name of Allottee No. of shares Allotted
16. North Eastern Cables Private Limited 300,000
17. Brahmaputra Infra Power Private Limited 300,000
18. Mahak Builders Private Limited 315,000
19. VSG Trade Private Limited 5,177,100
Total 16,221,300
20) Preferential allotment of 665,375 Equity Shares of face value of `10 each fully paid up at premium
of `190 each as on March 31, 2012 as per the details given below:
21) Preferential allotment of 651,150 Equity Shares of face value of `10 each fully paid up at premium
of `33 each as on March 31, 2014 as per the details given below:
22) Preferential allotment of 1,835,100 Equity Shares of face value of `10 each fully paid up at
premium of `37.68 each as on March 31, 2015 as per the details given below:
23) Bonus Issue of 7,434,008 Equity Shares of face value of `10 each fully paid up in the ratio of 3
Equity Shares for every 10 Equity Shares held as on March 25, 2017 as per the details given below:
111
Sr. No Name of Allottee No. of shares Allotted
15. Topline Finvest Private Limited 1,501,763
16. North Eastern Cables Private Limited 120,000
17. Brahmaputra Infra Power Private Limited 108,000
18. Mahak Builders Private Limited 126,000
19. VSG Trade Private Limited 2,094,690
20. Toor Finance Company Limited 745,875
21. Sarwan Sain 30
22. Jagmal Singh Choyal 30
23. Ratan Dutta 30
24. Mukesh Prajapat 30
25. Shiv Prasad Sharma 30
26. Ramesh Sain 30
27. Anil Bansal 30
28. Ankush Saraf 30
29. Rainy Khetan 31,800
Total 7,434,008
24) Preferential allotment of 5,876,500 Equity Shares of face value of `10 each fully paid up at
premium of `32 each as on March 30, 2017 as per the details given below:
Issue of Equity Shares for consideration other than cash or out of revaluation reserves:
1. Except as set out below we have not issued Equity Shares for consideration other than cash:
112
Date of Number Face Nature of Reasons for allotment Benefit
allotment of Equity value consideration accrued to
Shares (₹) our
allotted Company
resolution passed at the EGM
held on March 25, 2014#
* For list of allottees see details of allottees of paragraph titled History of Equity Share Capital of our
Company mentioned above.
** For list of allottees see details of allottees of paragraph titled History of Equity Share Capital of our
Company mentioned above.
# Allotment of bonus issue to holders of Equity Shares undertaken through capitalisation of the securities
premium account and / or free reserves of our Company.
2. As on date of this Draft Red Herring Prospectus, our Company has not allotted any Equity Shares
pursuant to any scheme approved under Section 391-394 of the Companies Act, 1956 and / or
Sections 230-232 of the Companies Act, 2013.
3. Our Company has not revalued its assets since inception and has not issued any Equity Shares by
capitalizing any revaluation reserves.
4. Our Company has not issued any Equity Shares at a price lower than the Issue Price during a period
of one year preceding the date of this Draft Red Herring Prospectus.
5. Subject to the SEBI ICDR Regulations, there will be no further issue of Equity Shares whether by
way of preferential issue or bonus issue or rights issue or in any other manner during the period
commencing from the date of Draft Red Herring Prospectus with SEBI until the Equity Shares
offered through the Red Herring Prospectus have been listed on the Stock Exchanges.
6. Our Company presently does not have any intention, proposal, negotiation or consideration to alter
its capital structure for a period of six months from the date of Bid/Issue opening of the Issue, by
way of split/ consolidation of the denomination of Equity Shares or further issue of Equity Shares
(including issue of securities convertible into exchangeable, directly or indirectly, for our Equity
Shares) whether preferential or otherwise, except that if we acquire companies / business or enter
into joint venture(s), we may consider additional capital to fund such activities or to use Equity
Shares as a currency for acquisition or participation in such joint ventures. However, our Company
has not entered into any acquisitions, joint ventures or strategic alliances as on the date of this Draft
Red Herring Prospectus and has not identified any strategic investments or acquisition
opportunities.
i. Capital build-up of our Promoters as on date of filing of this Draft Red Herring Prospectus
As on the date of this Draft Red Herring Prospectus, the Promoters of our Company collectively
hold 21,224,340 Equity Shares, equivalent to 55.72% of the issued, subscribed and paid-up Equity
Share capital of our Company and none of the Equity Shares held by the Promoters are subject to
any pledge.
(a) Set forth below are the details of the build – up of our Promoters’ shareholding in our Company
113
since incorporation:
114
4, 1992 Shares
September Transfer of (50) 100 100 Cash 2,240 (0.00) (0.00)
20, 1992 Shares
March 31, Preferential 1,700 100 100 Cash 3,940 0.04 0.03
1997 Allotment
January 30, Transfer of 600 100 100 Cash 4,540 0.02 0.01
1999 Shares
March 27, Transfer of 3,600 100 100 Cash 8,140 0.09 0.07
2000 Shares
March 31, Preferential 5,780 100 100 Cash 13,920 0.15 0.11
2001 Allotment
October 10, Transfer of (50) 100 100 Cash 13,870 (0.00) (0.00)
2001 Shares
March 30, Preferential 19,150 100 100 Cash 33,020 0.50 0.38
2002 Allotment
February Preferential 4,575 100 100 Cash 37,595 0.12 0.09
24, 2003 Allotment
October 31, Transfer of (4,575) 100 100 Cash 33,020 (0.12) (0.09)
2007 Shares
April 30, Transfer of (5,780) 100 100 Cash 27,240 (0.15) (0.11)
2008 Shares
Equity Shares issued on March 18, 2011 due to division of shares of face value 272,400 0.72 0.54
of `100 each into shares of face value of `10 each. (I)
August 17, Bonus Issue 817,200 10 N.A Consideration 1,089,600 2.15 1.61
2011 in the ratio other than
of 3:1 cash
March 25, Bonus Issue 326,880 10 N.A Consideration 1,416,480 0.86 0.64
2017 in the ratio other than
of 3:10 cash
(II) 1,144,080 3.00 2.25
Total (I) + (II) 1,416,480 3.72 2.79
(C) Jaiprakash Khetan
March 24, Preferential 450 100 100 Cash 450 0.01 0.01
1986 Allotment
August 28, Preferential 1300 100 100 Cash 1,750 0.03 0.03
1987 Allotment
December Transfer of 15 100 100 Cash 1,765 0.00 0.00
1,1989 Shares
March 31, Preferential 235 100 100 Cash 2,000 0.01 0.00
1992 Allotment
September Transfer of 50 100 100 Cash 2,050 0.00 0.00
4, 1992 Shares
September Transfer of (1,750) 100 100 Cash 300 (0.05) (0.03)
20, 1992 Shares
March 31, Preferential 1900 100 100 Cash 2,200 0.05 0.04
1997 Allotment
January 30, Transfer of 500 100 100 Cash 2,700 0.01 0.01
1999 Shares
March 27, Transfer of 8,465 100 100 Cash 11,165 0.22 0.17
2000 Shares
115
March 30, Preferential 8,470 100 100 Cash 19,635 0.22 0.17
2002 Allotment
August 31, Transfer of 10,300 100 100 Cash 29,935 0.27 0.20
2009 Shares
Equity Shares issued on March 18, 2011 due to division of shares of face value 299,350 0.79 0.59
of `100 each into shares of face value of `10 each. (I)
August 17, Bonus Issue 898,050 10 N.A Consideration 1,197,400 2.36 1.77
2011 in the ratio other than
of 3:1 cash
March 25, Bonus Issue 359,220 10 N.A Consideration 1,556,620 0.94 0.71
2017 in the ratio other than
of 3:10 cash
(II) 1,257,270 3.30 2.48
Total (I) + (II) 1,556,620 4.09 3.06
(D) Pradeep Kumar Khetan
March 31, Preferential 2,000 100 100 Cash 2,000 0.01 0.04
1992 Allotment
March 31, Preferential 1,000 100 100 Cash 3,000 0.00 0.02
1997 Allotment
March 30, Preferential 12,450 100 100 Cash 15,450 0.03 0.25
2002 Allotment
March 31, Transfer of (3,000) 100 100 Cash 12,450 (0.01) (0.06)
2005 Shares
October 4, Transfer of 440 100 100 Cash 12,890 0.00 0.01
2010 Shares
Equity Shares issued on March 18, 2011 due to division of shares of face value 128,900 0.34 0.25
of `100 each into shares of face value of `10 each. (I)
March 31, Preferential 100,000 10 1000 Cash 228,900 0.26 0.20
2011 Allotment
August 17, Bonus Issue 686,700 10 N.A Consideration 915,600 1.80 1.35
2011 in the ratio other than
of 3:1 cash
March 25, Bonus Issue 274,680 10 N.A Consideration 1,190,280 0.72 0.54
2017 in the ratio other than
of 3:10 cash
(II) 1,061,380 2.79 2.09
Total (I) + (II) 1,190,280 3.12 2.34
(E) VSG Trade Private Limited
October 4, Transfer of 52,170 100 100 Cash 52,170 1.37 1.03
2010 Shares
Equity Shares issued on March 18, 2011 due to division of shares of face value 521,700 1.37 1.03
of `100 each into shares of face value of `10 each. (I)
March 31, Preferential 1,204,000 10 1000 Cash 1,725,700 3.16 2.37
2011 Allotment
August 17, Bonus Issue 5,177,100 10 N.A. Consideration 6,902,800 13.59 10.19
2011 in the ratio other than
of 3:1 cash
March 31, Preferential 79,500 10 200.00 Cash 6,982,300 0.21 0.16
2012 Allotment
March 25, Bonus Issue 2,094,690 10 N.A. Consideration 9,076,990 5.50 4.12
116
2017 in the ratio other than
of 3:10 cash
(II) 8,555,290 22.46 16.84
Total (I) + (II) 9,076,990 23.83 17.87
(F) Topline Finvest Private Limited
May 24, Transfer of 50,000 100 100 Cash 50,000 1.31 0.98
2010 Shares
Equity Shares issued on March 18, 2011 due to division of shares of face value 500,000 1.31 0.98
of `100 each into shares of face value of `10 each. (I)
March 31, Preferential 595,000 10 1000 Cash 1,095,000 1.56 1.17
2011 Allotment
August 17, Bonus Issue 3,285,000 10 N.A. Consideration 4,380,000 8.62 6.47
2011 in the ratio other than
of 3:1 cash
March 31, Preferential 585,875 10 200.00 Cash 4,965,875 1.54 1.15
2012 Allotment
October 15, Transfer of 40,000 10 10 Cash 5,005,875 0.11 0.08
2014 Shares
March 25, Bonus Issue 1,501,763 10 N.A. Consideration 6,507,638 3.94 2.96
2017 in the ratio other than
of 3:10 cash
(II) 6,007,638 15.77 11.83
Total (I) + (II) 6,507,638 17.08 12.81
Note 1: Percentage calculation for pre-issue and post issue capital has been adjusted for sub-division of face value
of Equity Shares uptil March 18, 2011.
* Assuming full subscription in the Issue.
(b) All the Equity Shares held by our Promoters were fully paid up as on the respective dates of
acquisition of such Equity Shares. Our Promoters have confirmed to our Company and the BRLM
that the Equity Shares held by our Promoters have been financed from their personal funds, and no
loans or financial assistance from any bank or financial institution has been availed by them for
such purpose.
(c) The table below presents the shareholding of our Promoter and Promoter Group, who hold Equity
Shares as on the date of filing of this Draft Red Herring Prospectus:
117
Sr. No. Name of the Shareholders Pre-Issue Post Issue
No. of Equity Percentage of No. of Percentage of
Shares issued Equity Equity issued Equity
Share capital Shares Share capital
(%) (%)*
Total (A) 21,224,340 55.72 21,224,340 41.79
Promoter Group
1. Sohani Devi Khetan 1,803,048 4.73 1,803,048 3.55
2. Ranjana Khetan 653,640 1.72 653,640 1.29
3. Sneha Khetan 1,440,400 3.78 1,440,400 2.84
4. Kavita Khetan 976,560 2.56 976,560 1.92
5. Nidhi Khetan 328,900 0.86 328,900 0.65
6. Deepjyoti Khetan 287,300 0.74 287,300 0.57
7. Payal Khetan 41,600 0.11 41,600 0.08
8. Rainy Khetan 137,800 0.36 137,800 0.27
9. Kreesna Industries India 234,000 0.61 234,000 0.46
Private Limited
10. North Eastern Cables Private 520,000 1.37 520,000 1.02
Limited
11. Mahak Builders Private 546,000 1.43 546,000 1.08
Limited
12. Brahmaputra Infra Power 468,000 1.23 468,000 0.92
Private Limited
13. Murlidhar Khetan & Sons 140,400 0.37 140,400 0.28
14. Pradip Kumar Khetan (HUF) 178,880 0.47 178,880 0.35
Total (B) 7,756,528 20.34 7,756,528 15.27
Total 28,980,868 76.06 28,980,868 57.06
*Assuming full subscription in the Issue.
Pursuant to Regulations 32 and 36 of the SEBI ICDR Regulations, an aggregate of 20% of the fully
diluted post-Issue Equity capital of our Company held by the Promoters shall be considered as
Promoter’s Contribution ("Promoters' Contribution") and locked in for a period of three years
from the date of Allotment.
The lock-in of the Minimum Promoters' Contribution would be created as per applicable laws and
procedures and details of the same shall also be provided to the Stock Exchanges before the listing
of the Equity Shares.
Our Promoters have given written consent to include such number of Equity Shares held by them
and subscribed by them as a part of Promoter’s Contribution constituting [●] % of the post Issue
Equity Shares of our Company and have agreed not to sell or transfer or pledge or otherwise dispose
off in any manner, the Equity shares forming part of the Promoter’s Contribution, from the date of
filing of this Draft Red Herring Prospectus with SEBI upto a period of three years from the date of
allotment in the Issue.
Following are the details of shares forming part of the minimum Promoters’ Contribution:
118
Name of the Number of Date of Allotment / Face Issue Price/ % of
Promoter Equity Transfer value Acquisition fully
Shares (in ₹) Price per diluted
locked-in equity share post-
(in ₹) Issue
paid-
up
capital
[●] [●] [●] [●] [●] [●]
The minimum Promoter's Contribution has been brought in to the extent of not less than the
specified minimum lot and from persons defined as 'promoter' under the SEBI ICDR Regulations.
The Equity Shares that are being locked-in are not, and will not be, ineligible for computation of
Promoters' Contribution under Regulation 33 of the SEBI ICDR Regulations. In this computation,
as per Regulation 33 of the SEBI ICDR Regulations, our Company confirms that the Equity Shares
which are being locked-in do not, and shall not, consist of:
(a) Equity Shares acquired three years preceding the date of filing of the Draft Red Herring Prospectus
with SEBI for consideration other than cash and revaluation of assets or capitalisation of intangible
assets nor resulting from a bonus issue by utilization of revaluation reserves or unrealised profits
of our Company or from bonus issue against Equity Shares which are ineligible for computation of
minimum Promoters’ Contribution;
(b) Equity Shares acquired by our Promoters during the preceding one year, at a price lower than the
price at which Equity Shares are being offered to the public in the Issue;
(c) Equity Shares for which specific written consent has not been obtained from the respective
shareholders for inclusion of their subscription in the minimum Promoter’s Contribution subject to
lock-in;
(d) Equity Shares held by our Promoters that are subject to any pledge
Our Company has not been formed by the conversion of a partnership firm into a company and
thus, no Equity Shares have been issued to our Promoters upon conversion of a partnership firm.
119
All the Equity Shares held by the Promoters and the members of the Promoter Group are held in
dematerialized form.
In terms of undertaking executed by our Promoters, Equity Shares forming part of Promoter’s
Contribution subject to lock in will not be disposed/ sold/ transferred by our Promoters during the
period starting from the date of filing of this Draft Red Herring Prospectus with RoC till the date
of commencement of lock in period as stated in this Draft Red Herring Prospectus.
Other than the Equity Shares locked-in as Promoter’s Contribution for a period of three years as
stated in the table above, the entire pre-Issue capital of our Company, including the excess of
minimum Promoters’ Contribution, as per Regulations 36 and 37 of the SEBI ICDR Regulations,
shall be locked in for a period of one year from the date of Allotment of Equity Shares in the Issue.
Such lock-in of the Equity Shares would be created as per the bye laws of the Depositories.
In terms of Regulation 40 of the SEBI ICDR Regulations, the Equity Shares held by persons other
than the Promoters prior to the Issue may be transferred to any other person holding the Equity
Shares which are locked-in as per Regulation 37 of the SEBI ICDR Regulations, subject to
continuation of the lock-in in the hands of the transferees for the remaining period and compliance
with the Takeover Code as applicable.
In terms of Regulation 40 of the SEBI ICDR Regulations, the Equity Shares held by our Promoters
which are locked in as per the provisions of Regulation 36 of the SEBI ICDR Regulations, may be
transferred to and amongst Promoters / members of the Promoter Group or to a new promoter or
persons in control of our Company, subject to continuation of lock-in in the hands of transferees
for the remaining period and compliance of Takeover Code, as applicable.
In terms of Regulation 39 of the SEBI ICDR Regulations, the locked-in Equity Shares held by our
Promoters can be pledged only with any scheduled commercial banks or public financial
institutions as collateral security for loans granted by such banks or financial institutions, subject
to the following:
An oversubscription to the extent of 10% of the Issue can be retained for the purposes of rounding
off to the nearer multiple of minimum allotment lot, while finalizing the Basis of Allotment.
Consequently, the actual allotment may go up by a maximum of 10% of the Issue as a result of
which, the post-issue paid up capital after the Issue would also increase by the excess amount of
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allotment so made. In such an event, the Equity 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
for 3 years.
Equity Shares Allotted to Anchor Investors, if any, in the Anchor Investor Portion, if any, shall be
locked-in for a period of 30 days from the date of Allotment.
The Equity Shares held by persons other than our Promoters and locked-in for a period of one year
from the date of Allotment may be transferred to any other person holding the Equity Shares which
are locked-in, subject to the continuation of the lock-in in the hands of transferees for the remaining
period and compliance with the SEBI Takeover Regulations.
(a) The table below represents the shareholding pattern of our Company as on the date of this Draft
Red Herring Prospectus:
121
Category Category of No. of No. of fully No. of No. of Total nos. Sharehol Number of Voting No. of Shareho Number of Number of ****Number
Shareholder shareh paid up Partly shares shares held ding as a Rights held in each Shares lding, as Locked in Shares of equity
olders equity paid- underl % of class of securities* Underl a% shares** pledged or shares held
shares held up ying total no. ying assumin otherwise in
equity Deposi of shares Outsta g full encumber dematerialize
shares tory (calculate nding conversi ed d form
held Receip d as per No of Total convert on of No. (a) As a No As a
ts SCRR, Voting as a % ible converti % of . %
1957) Rights of securiti ble total (a) of
(A+B+ es securitie Shar total
I II III IV V VI VII = IV + VIII IX C) (includ
X XIs (as a
= VII XII es (b) XIII Sha XIV
V + VI ing percent
+X res
Warra age of
A Promoter and 20 28,980,868 - - 28,980,868 76.08 28,980,868 76.08 - - - - - (b)- 28,980,868
nt) diluted
Promoter
share
Group
capital)
B Public 10 9,109,665 - - 9,109,665 23.92 9,109,665 23.92 - - - - - - 3,233,165
C Non - - - - - - - - - - - - - -
Promoter-
Non Public
(i) Shares - - - - - - - - - - - - - -
underlying
DRs
(ii) Shares held - - - - - - - - - - - - - -
by Employee
Trusts
122
Our Company has not issued any depository receipts and hence does not have any outstanding
depository receipts and locked-in Equity Shares.
(b) Aggregate shareholding of our Promoters & Promoter Group as on the date of this Draft
Red Herring Prospectus:
(c) Aggregate shareholding of the shareholders in the public category as on the date of this
Draft Red Herring Prospectus:
123
Sr. No. Name No. of Equity Percentage of
Shares shareholding (%)
5. Ratan Dutta 130 0.00
6. Mukesh Prajapat 130 0.00
7. Shiv Prasad Sharma 130 0.00
8. Ramesh Sian 130 0.00
9. Anil Bansal 130 0.00
10. Ankush Saraf 130 0.00
TOTAL 9,109,665 23.92
(a) Particulars of the top ten shareholders as on the date of filing of this Draft Red Herring
Prospectus.
(b) Particulars of top ten shareholders ten days prior to the date of filing of this Draft Red
Herring Prospectus
124
(c) Particulars of the top ten shareholders two years prior to the date of filing of this Draft
Red Herring Prospectus.
10. Except as disclosed below, there has been no sale, purchase or subscription of our Company’s
securities by our Promoter, Promoter Group and our Directors within three years immediately
preceding the date of this Draft Red Herring Prospectus, which in aggregate is equal to or
greater than 1.00% of the pre-Issue capital of our Company:
11. Our Company has not issued any Equity Shares under any employee stock option scheme or
employee stock purchase scheme.
12. The Equity Shares, which are subjected to lock-in, shall carry the inscription "non-transferable"
125
and the details of the lock-in shall be informed to the depository. The details of lock-in shall
also be provided to the Stock Exchanges before the listing of the Equity Shares.
13. During the six months preceding the date of filing this Draft Red Herring Prospectus with SEBI,
there are no transactions in our Equity Shares, which have been purchased/ (sold) by our
Promoters, persons belonging to the Promoter Group or by the directors of our Promoter
Company or by the Directors of our Company and their immediate relatives (as defined under
sub-clause (zb) sub-regulation (1) Regulation 2 of the SEBI ICDR Regulations)
14. None of the persons/entities comprising our Promoter Group, or our Directors or their relatives
have financed the purchase by any other person of securities of our Company other than in the
normal course of the business of any such entity/individual or otherwise during the period of
six months immediately preceding the date of filing this Draft Red Herring Prospectus.
15. All the existing Equity Shares are fully paid-up and as on the date of this Draft Red Herring
Prospectus, there are no partly paid-up Equity Shares.
16. Our Company, our Promoters, our Directors and the BRLM have not entered into any buy back
or standby or similar arrangements for the purchase of Equity Shares being offered through the
Issue from any person. There are no safety net arrangements for this public issue.
17. The Equity Shares offered through this public issue shall be made fully paid-up or maybe
forfeited within 12 months from the date of allotment of securities in the manner specified in
Regulation 17 of SEBI ICDR Regulations.
18. The Issue is being made through the Book Building Process wherein upto 30% of the Issue
shall be available for allocation to QIBs on a proportionate basis. For details, see chapter titled
"Issue Procedure" beginning on page 590 of this Draft Red Herring Prospectus. Further, 5% of
the Net QIB Portion shall be available for allocation on a proportionate basis to mutual funds
only. Further, not less than 30% of the Issue will be available for allocation on a proportionate
basis to Non-Institutional Bidders and not less than 40% of the Issue will be available for
allocation to Retail Individual Bidders, subject to valid Bids being received from them at or
above the Issue Price.
19. Subject to valid Bids being received at or above the Issue Price, under subscription, if any, in
any category, except the QIB portion, would be met with spill-over from the other categories
or a contribution of categories at the discretion of our Company in consultation with the BRLM
and the Designated Stock Exchange.
20. As on date of this Draft Red Herring Prospectus there are no outstanding warrants, options or
rights to convert debentures loans or other financial instruments into our Equity Shares.
21. There shall be only one denomination of Equity Shares of our Company at any given time,
unless otherwise permitted by law. Our Company shall comply with disclosure and accounting
norms as may be prescribed by SEBI from time to time.
22. A Bidder cannot make a Bid for more than the number of Equity Shares offered in this Issue,
subject to maximum limit of investment prescribed under relevant laws applicable to each
126
category of investors.
23. Any oversubscription to the extent of 10% of the Issue can be retained for the purposes of
rounding off to the nearer multiple of minimum allotment lot while finalising the Basis of
Allotment.
24. No person connected with the Issue, including, but not limited to, the BRLM, the members of
the Syndicate, our Company, the Directors, the Promoters, the Promoter Group and the Group
Entities, shall offer any incentive, whether direct or indirect, in any manner, whether in cash or
kind or services or otherwise to any Bidder for making a Bid.
25. Our Company has thirty (30) shareholders as on the date of this Draft Red Herring Prospectus.
26. Our Company has not made any public issue of any class or kinds of securities since its
incorporation.
27. Details of Equity Shares of our Company held by our Directors and Key Management
Personnel are as follows:
Sr. No. Name of the Directors/ Key Number of Equity % of pre-issue Equity
Managerial Personnel Shares Share capital
1. Dr. Murlidhar Khetan 1,476,332 3.88
2. Jaiprakash Khetan 1,556,620 4.09
3. Basant Kumar Khetan 1,416,480 3.72
4. Pradeep Kumar Khetan 1,190,280 3.12
5. Sneha Khetan 1,440,400 3.78
6. Ranjana Khetan 653,640 1.72
7. Kavita Khetan 976,560 2.56
28. Neither the BRLM nor any of their associates (determined as per the definition of 'associate
company' under section 2(6) of the Companies Act, 2013) hold any Equity Shares in our
Company.
29. Our Company has not raised any bridge loans which are proposed to be repaid from the
proceeds of the Issue.
30. Our Company shall ensure that transactions in the Equity Shares by the Promoters and the
members of the Promoter Group during the period between the date of registering the Red
Herring Prospectus with the RoC and the date of closure of the Issue shall be reported to the
Stock Exchanges within 24 hours of the transaction.
31. As per the applicable regulations, OCBs are not permitted to participate in the Issue.
32. For the details of related party transactions, please refer to the chapter titled "Related Party
Transactions" on page 279 of this Draft Red Herring Prospectus.
127
SECTION IV: PARTICULARS OF THE ISSUE
The Issue comprises of a Fresh Issue of upto 12,700,000 Equity Shares by our Company, aggregating
up to ₹[●] million ("Issue").
The funds which are being raised through the Issue, after deducting the Issue related expenses ("Net
Proceeds"), are estimated to be approximately ₹[●] million, details of which are as follows:
(₹ in million)
Particulars Amount*
Gross Proceeds from the Issue Upto [●]
(Less) Issue related expenses [●]
Net Proceeds of the Issue [●]
* To be finalised upon determination of the Issue Price.
Our Company intends to utilize the Net Proceeds for the following objects ("Objects of the Issue"):
(₹ in million)
Sr. Particulars Amount
No.
1. To meet additional working capital requirement of our Company 1,116.00
2. General corporate purposes* [●]
Total [●]
*To be finalized upon determination of Issue Price and the amount to be utilized for general corporate purposes
shall not exceed 25% of the gross proceeds of the Issue.
In addition to the aforementioned objects, our Company expects to receive the benefits of listing of its
Equity Shares on the Stock Exchanges, including, amongst other things, enhancing the visibility of our
brand.
The main objects clause of the Memorandum of Association enables our Company to undertake the
activities for which the funds are being raised pursuant to the Issue. The existing activities of our
Company are within the ambit of the main objects clause and the objects incidental or ancillary to the
main objects of the Memorandum of Association.
Schedule of Deployment
We propose to deploy the Net Proceeds for the aforesaid purposes in accordance with the estimated
schedule of implementation and deployment of funds set forth in the table below:
128
(₹ in million)
Sr. Particulars Total Amount Estimated Net Proceed
No. estimated deployed till Utilisation
amount September 21, Fiscal 2019 Fiscal
2018 2020
1. To meet additional working capital 1,116.00 – 1,116.00 –
requirement of our Company;
2. General corporate purposes* [●] – – –
Total [●] – 1,116.00 –
* The amount utilized for general corporate purposes shall not exceed 25% of the gross proceeds of the Issue.
Means of Finance
Our Company shall utilise the entire Net Proceeds for the objects as stated above. The funds
requirement described above are proposed to be entirely funded from the Net Proceeds. Accordingly,
we confirm that there is no requirement to make firm arrangements of finance under Regulation 4(2)(g)
of the SEBI ICDR Regulations through verifiable means towards at least 75% of the stated means of
finance, excluding the amount to be raised through the Issue.
In the event of a shortfall in raising the requisite capital from the Net Proceeds, towards meeting the
objects of the Issue, the extent of the shortfall will be met by internal accruals or debt. In case of any
surplus monies received in relation to the Issue, we may use such surplus towards general corporate
purposes.
Our assessment of funds requirement and deployment is based on internal management estimates and
has not been appraised by any bank or any financial institution. In case of any variations in the actual
utilization of funds earmarked for the above activities or increased fund deployment for a particular
activity, the shortfall, if any, may be met with surplus funds, if any, available in the other areas and/or
our Company’s internal accrual and/or the loans that may be availed from the banks/financial
institutions. For risks associated with the above, see section titled "Risk Factors" on page 21 of this
Draft Red Herring Prospectus.
Our business is working capital intensive and we fund the majority of our working capital requirements
in the ordinary course of our business from our internal accruals and financing from various banks. The
incremental long term working capital requirements are based on historical Company data and our
internal estimation of the future requirements in Fiscal 2019 and Fiscal 2020 considering the growth in
the activities of our Company.
As of March 31, 2018, our Company’s working capital facilities consisted of an aggregate fund based
limit of ₹938.40 million on a standalone basis.
129
Working capital requirement and basis of estimation of working capital
Our Company’s current assets and liabilities and net working capital on a standalone basis as of March
31, 2018, are as follows:
(₹ in Millions)
Particulars Fiscal 2018
Current Assets
Inventories
a. Raw materials including packing materials, stores and spares 290.49
b. Work in Progress 88.79
b. Finished goods and trading goods 18.44
Trade receivables 1,428.24
Cash and bank balances 360.29
Other current assets including Short term loans and advances 1,253.32
Total (A) 3,439.57
Current liabilities
Bank working capital assistance 804.09
Trade payables 1,393.41
Other current liabilities and provisions 367.19
Total (B) 2,564.69
Net working capital requirement (A - B)* 874.88
*The Company has through its aggregate fund based limits with various banks for working capital and
through its retained earning managed its working capital requirements. As on March 31, 2018, the
internal accruals of the Company on a restated standalone basis stood at ₹1,892.28 millions and the
working capital facilities consisted of an aggregate fund based limit of ₹938.40 millions.
The estimated working capital requirements for Fiscal 2019 and Fiscal 2020 have been provided below:
(₹ in Millions)
Particulars Fiscal 2019 Fiscal 2020
I. Current Assets
Inventories
a. Raw materials including packing materials, stores and
483.29 603.68
spares
b. Work in progress 147.72 184.52
c. Finished goods and trading goods 30.68 38.33
Trade receivables 1,750.00 2,190.00
Cash and bank balances 549.82 680.63
Other current assets including short term loans and
1,650.00 1,750.00
advances
Total (A) 4,611.51 5,447.16
II. Current liabilities
Trade payables 1,089.70 1,339.60
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Other current liabilities and provisions 250.00 260.00
Total (B) 1,339.70 1,599.60
III. Total working capital requirements (A - B)
3,271.81 3,847.56
Proposed funding pattern:
Working capital funding from banks* 938.40 938.40
Net Proceeds from the Issue 1,116.00 1,116.00**
Internal accruals 1,217.41 1,793.16
* As on March 31, 2018 we have sanctioned working capital facilities consisting of an aggregate fund
based limit of ₹938.40 million and an aggregate non-fund based limit of ₹4,453.00 million. For further
details regarding our working capital facilities, kindly refer chapter titled “Financial Indebtedness”
beginning on page 530 of this Draft Red Herring Prospectus.
**Available on a roll over basis for Fiscal 2020.
Reasons for raising additional working capital:
With the increase in scale of operations, we have made fresh assessment of our working capital
requirements. We are getting new work orders from various government departments & therefore to
meet our daily working capital requirements we will require additional money for working capital.
Further, due to availability of additional working capital, our ability to take on more projects also
increases significantly.
As seen from the table above, the total requirement of working capital for the FY 2019 is ₹3,271.81
million out of which we have bank finance to the extent of ₹938.40 million, Net Proceeds from the
Issue is ₹1,116.00 million, and ₹1,217.41 million through internal accruals; and for FY 2020
is₹3,847.56 million, out of which we have bank finance to the extent of ₹938.40 million, proposed Net
Proceeds of the Issue to the extent of ₹1,116.00 million (available on a roll over basis the following
fiscal) and the balance amount of ₹1,793.16 million is to be met through internal accruals.
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(E) - Estimated
Raw materials days Not applicable as all the raw materials issued to the site are treated as consumed.
Work in Progress For the Fiscal 2018, the Work in progress (WIP) days stood at 12 days. Going
Days forward, we estimate the level of WIP days to be at 16 days for both the Fiscal
2019 and Fiscal 2020.
Finished goods days Not applicable in the EPC/turnkey sector.
Trade receivable Trade receivables days is calculated on closing value of the receivables and
days revenues from operations. We provide EPC/turnkey services to our government
customers based on the terms and conditions as per the tender documents and
scope of work. We strive to have a disciplined debtor management and strong
management control policies in place. We expect our receivables cycle to stay
consistent, considering higher credit period for EPC/turnkey projects. The
holding level days of receivables is estimated to be 136 days for the Fiscals 2019
and Fiscal 2020 as compared to 139 days in Fiscal 2018.
Trade payable days Trade payables holding days is calculated on closing value of creditors and
Purchase cost. Trade payable holding days are estimated to decrease considering
early payments to the suppliers (i.e. on availing lower credit periods) to procure
raw material at competitive prices, which would result in a reduction in the raw
material cost as a percentage of sales thereby increasing the profitability of the
Company. Thus, the Company has estimated lower credit period, which may in
turn reduce cost of sales and subsequently improve the profitability margins. The
holding days of trade payable is estimated at 154 days for both the Fiscals 2019
and Fiscal 2020, as compared to 263 days in Fiscal 2018.
Retention Money Retention money constitutes a major part of the working capital mix of
(days) EPC/turnkey space. The retention money holding period For Fiscal 2018 was 99
days. Going forward, we estimate this period to remain in similar range at 103
days and 88 days for the Fiscal 2019 and Fiscal 2020, respectively. With
enhanced working capital, we can bid for new contracts and utilise the same
towards retention monies.
132
4. Trade Receivables 95 93 93
5. Trade Payables 25 14 14
(B) - Actual as per Standalone financials, as restated
(E) - Estimated
Raw materials days Raw material days have been calculated on closing value of raw material and
cost of materials purchased. We estimate that due to the additional availability
of working capital, we will be able to significantly increase our manufacturing.
Hence, we expect to hold additional raw materials to accommodate the same.
The inventory holding period for raw material is estimated to be 89 days in Fiscal
2019 and Fiscal 2020, as compared to 67 days in Fiscal 2018.
Work in progress Our Company does not account for work in progress due to the short
manufacturing process involved in manufacturing conductors.
Finished goods days Finished goods holding days is calculated on closing value of finished goods and
sales. The holding period of finished goods is estimated to increase marginally
in view of the estimated increase in manufacturing. The inventory holding period
for finished goods is estimated to be 6 days for both Fiscal 2019 and Fiscal 2020,
as compared to 4 days in Fiscal 2018. The goods are either deployed towards
EPC / turnkey projects and/or towards standing orders, hence, our Company has
a short finished goods days period.
Trade receivable Receivables holding days is calculated on closing value of receivables and sales.
days We provide credit to our customers based on trade relations and vintage of
association with us. We strive to have a disciplined debtor management and
strong management control policies in place. We estimate our receivables cycle
to increase considering us providing a higher credit period to our customers
which may be due to addition of new clients and/or from new market areas. The
holding level days of trade receivables is estimated to be 93 days for both the
Fiscal 2019 and Fiscal 2020, as compared to 95 days in Fiscal 2018.
Trade payable days Trade payable holding days is calculated on closing value of creditors and cost
of materials purchased. Trade payable holding days are estimated to decrease
considering early payments to the suppliers (i.e. on availing lower credit periods)
to procure raw material at competitive prices, which would result in a reduction
in the raw material cost as a percentage of sales, thereby increasing the
profitability of the Company. Thus, the Company has estimated a lower credit
period going forward, which may in turn reduce the cost of sales and
subsequently improve profitability margins. The holding days of trade payable
is estimated at 14 days for both the Fiscals 2019 and Fiscal 2020, as compared
to 25 days in Fiscal 2018.
M/s. Borkar & Muzumdar, Chartered Accountants, our Statutory Auditor has, pursuant to a certificate
dated September 21, 2018, verified and certified the working capital requirements of our Company for
the Fiscals 2019 and 2020.
133
In terms of Regulation 4(4) of the SEBI ICDR Regulations, the extent of the Net Proceeds proposed to
be used for general corporate purposes is not estimated to exceed 25% of the proceeds of the Issue.
Our management will have flexibility in applying ₹[●] million of the Net Proceeds towards general
corporate purposes, including (i) brand building and other marketing efforts; (ii) acquiring fixed assets;
(iii) meeting expenses incurred towards any strategic initiatives, partnerships, tie-ups, joint ventures,
acquisitions, etc.; and (iv) any other purpose as may be approved by our Board, subject to compliance
with the necessary provisions of the Companies Act.
Our management, in accordance with the policies of the Board, will have flexibility in utilizing any
amounts for general corporate purposes under the overall guidance and policies of our Board. The
quantum of utilization of funds towards any of the purposes will be determined by the Board, based on
the amount actually available under this head and the business requirements of our Company from time
to time.
The total estimated expenses are ₹[●] millions, which is [●]% of the Issue size. The expenses of this
Issue include, among others, underwriting and management fees, selling commissions, SCSBs
commissions/fees, printing and distribution expenses, legal fees, statutory advertisement expenses,
registrar and depository fees and listing fees.
134
Portion for NIIs [●]% ^^ (exclusive of Goods and Service Tax)
^^Percentage of the amounts received against the Equity Shares Allotted (i.e. the product of the number
of Equity Shares Allotted and the Offer Price)
^The Members of Syndicate, RTAs and CDPs will be entitled to bidding charges of ₹[●] (plus
applicable Goods and Service Tax) per valid ASBA Form. The terminal from which the Bid has been
uploaded will be taken into account in order to determine the total bidding charges payable to the
relevant RTA/CDP. No additional bidding charges shall be payable by the Company to the SCSBs on
the applications directly procured by them.
***Registered Brokers, will be entitled to a commission of ₹[●] (plus applicable Goods and Service
Tax) per Bid cum Application Form, on valid Bids, which are eligible for allotment, procured from
RIIs and NIIs and submitted to the SCSB for processing. The terminal from which the bid has been
uploaded will be taken into account in order to determine the total processing fees payable to the
relevant Registered Broker subject to total bidding charges payable being maximum of ₹[●] (exclusive
of Goods and Service Tax), on valid bids, which are eligible for allotment, procured from Retail
Individual Bidders and Non Institutional Bidders and submitted to the SCSB for processing. In case the
total bidding charges exceeds ₹[●] (exclusive of Goods and Service Tax), then the amount payable to
Registered Brokers, CDPs and RTAs would be proportionately distributed based on the number of valid
applications such that the total bidding charges payable does not exceed ₹[●] (exclusive of Goods and
Service Tax).
**** SCSBs would be entitled to a processing fee of ₹[●] (plus Goods and Service Tax) for processing
the Bid cum Application Forms procured by the members of the Syndicate, Registered Brokers, RTAs
or the CDPs and submitted to SCSBs subject to total bidding charges payable being maximum of ₹[●]
(exclusive of Goods and Service Tax), on valid bids for processing the Bid cum Application Form
procured by the member of the Syndicate or the Registered Brokers or the CDPs or RTAs and submitted
to them. In case the total bidding charges exceeds ₹[●] (exclusive of Goods and Service Tax), then the
amount payable to SCSBs would be proportionately distributed based on the number of valid
applications such that the total bidding charges payable does not exceed ₹[●] (exclusive of Goods and
Service Tax).
Deployment of Funds
The details of the amount spent by our Company as of September 21, 2018 towards the "Objects of the
Issue" and as certified by our Statutory Auditors, M/s. Borkar & Muzumdar, Chartered Accountants,
vide certificate dated September 21, 2018 are provided in the table below:
(₹ in million)
Deployment of funds Amount
Issue related expenses 2.26
Total 2.26
(₹ in million)
Sources of funds Amount
Internal Accruals 2.26
Total 2.26
135
Bridge financing facilities
Our Company has not raised any bridge loans from any bank or financial institution as on the date of
this Draft Red Herring Prospectus, which are proposed to be repaid from the Net Issue Proceeds.
Pending utilization of the Net Proceeds for the purposes described above, our Company will deposit
the Net Proceeds only with scheduled commercial banks included in second schedule of the Reserve
Bank of India Act, 1934 having credit rating of 'A' or above by an international credit rating agency.
Our Company confirms that it shall not use the Net Proceeds for buying, trading or otherwise dealing
in shares of any listed company or for any investment in the equity markets.
Our Company shall appoint a monitoring agency for monitoring the utilization of the Net Proceeds
prior to filing of the Red Herring Prospectus. The Monitoring Agency shall submit its report to our
Company in the format specified in Schedule IX of SEBI ICDR Regulations on a quarterly basis, till
at least 95% of the Net Proceeds, excluding the amount raised for general corporate purposes, have
been utilized. Our Board and our management shall provide their comments on such report of the
Monitoring Agency. Our Company shall thereafter, within 45 days from the end of each quarter,
publically disseminate the report of the Monitoring Agency by uploading the same on our website as
well as submitting the same to the Stock Exchanges.
Pursuant to the Listing Regulations, our Company shall disclose to the Audit Committee the uses and
application of the Net Proceeds, on a quarterly basis. The Audit Committee shall make
recommendations to our Board for further action, if appropriate. Our Company shall, on an annual
basis, prepare a statement of funds utilised for purposes other than those stated in this Draft Red Herring
Prospectus and place it before the Audit Committee. Such disclosure shall be made only till such time
that all the Net Proceeds have been utilised in full. The statement shall be certified by the statutory
auditors of our Company. Furthermore, in accordance with the Listing Regulations, our Company shall
furnish to the Stock Exchanges on a quarterly basis, a statement including deviations, if any, in the
utilization of the Net Proceeds from the objects of the Issue as stated above and details of category wise
variation in the actual utilization of the Net Proceeds from the objects of the Issue as stated above. The
information will also be published in newspapers simultaneously with the submission of such
information to the Stock Exchanges, after placing the same before the Audit Committee. We will
disclose the utilization of the Net Proceeds under a separate head along with details in our balance
sheet(s) until such time as the Net Proceeds remain unutilized clearly specifying the purpose for which
such Net Proceeds have been utilized.
Other Confirmations
We have not entered into any definitive agreements to utilize the net proceeds of the Issue.
136
No part of the Net Proceeds of the Issue will be utilized by our Company as consideration to our
Promoters, members of the Promoter Group, Directors, Group Entities or Key Managerial Employees.
Our Company has not entered into or is not planning to enter into any arrangement/ agreements with
Promoters, Directors, key management personnel, associates or Group Entities in relation to the
utilization of the Net Proceeds of the Issue.
Variation of Objects
In accordance with Section 27 of the Companies Act, 2013 and applicable rules, our Company shall
not vary the objects of the Issue without our Company being authorised to do so by the Shareholders
by way of a special resolution through postal ballot. In addition, the notice issued to the Shareholders
in relation to the passing of such special resolution ("Postal Ballot Notice") shall specify the prescribed
details as required under the Companies Act and applicable rules. The Postal Ballot Notice shall
simultaneously be published in the newspapers, one in English and one in Hindi, the vernacular
language of the jurisdiction where our Registered Office is situated. Our Promoters or controlling
Shareholders will be required to provide an exit opportunity to such shareholders who do not agree to
the proposal to vary the objects, at such price and in such manner, as may be prescribed by SEBI, in
this regard.
We further confirm that the amounts raised by our Company through the Issue shall not be used for
buying, trading or otherwise dealing in equity shares of any other listed company.
137
BASIS FOR ISSUE PRICE
The Issue Price of ₹[●] will be determined by our Company in consultation with the Book Running
Lead Manager, on the basis of assessment of market demand through the Book Building Process and
on the basis of qualitative and quantitative factors as described below The face value of the Equity
Shares is ₹10 and the Issue Price is [●] times the face value at the lower end of the Price Band and [●]
times the face value at the higher end of the Price Band.
Investors should also refer to the section titled "Risk Factors" beginning on page 21 and chapters titled
"Our Business", and "Financial Statements" beginning on pages 191 and 281, respectively, of this Draft
Red Herring Prospectus to have an informed view before making an investment decision.
Qualitative Factors
Some of the qualitative factors which form the basis for computing the Issue Price are:
For further details, see chapter titled "Our Business" beginning on page 191 of the Draft Red Herring
Prospectus.
Quantitative Factors
Information presented in this section is derived from the Restated Consolidated Summary Statements
and Restated Standalone Summary Statements prepared in accordance with the IND-AS, Companies
Act and the SEBI ICDR Regulations.
Some of the quantitative factors which may form the basis for computing the Issue Price are as follows:
138
1. Basic and Diluted Earnings Per Share ("EPS") as per Restated Consolidated and
Standalone Financial Information
2. Price / Earning (P/E) Ratio in relation to Issue Price of ₹[●] per Equity Share
*We feel due to the varying size, scale and diversified operations of our Company, compared to other
listed companies operating in the industry we operate in, no one particular company is directly
comparable to ours. However, there are players in the power transmission segment and / or in the
139
business of manufacturing conductors who have a business similar to ours in one or more segments,
albeit of a significantly larger size, whom we have included in the peer set. For further details please
refer the heading "Comparison with Listed Industry Peers" below. The Industry high and low has been
considered based on the standalone financials from the industry peer set consisting of KEC International
Limited, Techno Electric & Engineering Company Limited, Kalpataru Power Transmission Limited and
Apar Industries Limited. The Industry composite has been calculated as the arithmetic average
standalone P/E of the Industry peer set provided below.
Particulars At the Lower end of the Price At the Higher end of the Price
Band Band
Consolidated (%) Standalone Consolidated (%) Standalone
(%) (%)
Basic EPS [●] [●] [●] [●]
Diluted EPS [●] [●] [●] [●]
NAV per Equity Share for the years ended March 31, 2016, 2017 and 2018 is as follows:
Financial Period Net Asset Value per Net Asset Value per Weight
Equity Share based on Equity Share based on
Restated Standalone Restated Consolidated
Financial Statements (`) Financial Statements
(`)
March 31, 2016 41.65 43.70 1
March 31, 2017 53.07 55.30 2
March 31, 2018 49.68 51.51 3
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Financial Period Net Asset Value per Net Asset Value per Weight
Equity Share based on Equity Share based on
Restated Standalone Restated Consolidated
Financial Statements (`) Financial Statements
(`)
Weighted Average 49.47 51.47
At Cap Price [●] [●] [●]
At Floor Price [●] [●] [●]
Note: The NAV per share has been computed by dividing net worth, as restated, including share
application money and excluding revaluation reserve, if any, at the end of the year/period by weighted
average number of equity shares outstanding at the end of the year/period.
‘Net Worth’ is the sum of paid up equity share capital, share premium and all reserves and
surplus created out of the profit, as appearing in Restated Financial Statements for the respective
years.
We feel due to the varying size, scale and diversified operations of our Company, compared to
other listed companies operating in the industry we operate in, no one particular company is
directly comparable to ours. However, there are players in the power transmission segment and
/ or in the business of manufacturing conductors who have a business similar to ours in one or
more segments, albeit of a significantly larger size, whom we have included in the peer set.
Name of the Standalone/ Face EPS (₹)a RONWb NAV per P/E
company Consolidated Value Basic Diluted (%) Equity Ratioc (x)
(₹) Shareb (₹)
Neccon Standalone 10 4.77 4.77 9.61 49.68 [●]*
Power & Consolidated 10 4.83 4.83 9.38 51.51 [●]*
Infra Limited
Peer
Group**
KEC Standalone 2 16.73 16.73 21.09 79.30 18.36
International Consolidated 2 17.91 17.91 23.05 77.70 17.15
Limited
Techno Standalone 2 11.64 11.64 14.32 81.93 20.80
Electric & Consolidated 2 18.17 18.17 16.01 111.11 13.32
Engineering
Company
Limited
Kalpataru Standalone 2 20.98 20.98 11.62 180.51 15.73
Power Consolidated 2 18.29 18.29 9.87 183.75 18.05
Transmission
Limited
Apar Standalone 10 37.64 37.64 14.13 266.42 16.36
Industries Consolidated 10 37.82 37.82 13.06 289.60 16.29
Limited
141
**Source: Respective peer groups’ regulatory filings on BSE Limited.
a) The basic and diluted EPS for peer companies is based on the respective peer group’s
regulatory filings with the BSE Limited for the Fiscal ended March 31, 2018;
b) The RONW and NAV per share for the peers have been computed based on the
respective peer groups regulatory filings with the BSE Limited for the Fiscal ended
March 31, 2018 as follows:
(i) Return on Net Worth = Net Profit after Tax and Extraordinary items/ Net
Worth (i.e. Paid –up equity share capital including non-controlling interest
plus reserves and surplus excluding revaluation reserve)
(ii) Net Asset Value per share = Net Worth (i.e. Paid –up equity share capital
including non-controlling interest plus reserves and surplus excluding
revaluation reserve)/ number of Equity Shares outstanding as at year end
c) The P/E figures for the peers is computed based on the closing price on the BSE
(available at www.bseindia.com) as on September 19, 2018, divided by basic EPS
based on the respective peer groups regulatory filings with the BSE Limited for the
year ended March 31, 2018
The Issue Price of ₹[●] has been determined by our Company, in consultation with the Book Running
Lead Manager on the basis of the assessment of market demand from investors for the Equity Shares
determined through the Book Building Process and is justified based on the above qualitative and
quantitative parameters. Investor should read the above-mentioned information along with the section
titled "Risk Factors" beginning on page 21 of this Draft Red Herring Prospectus and the financials of
our Company including important profitability and return ratios, as set out in the chapter titled
"Financial Statements" beginning on page 281 of this Draft Red Herring Prospectus. The trading price
of the Equity Shares could decline due to the factors mentioned in section titled "Risk Factors"
beginning on page 21 of this Draft Red Herring Prospectus and an investor may lose all or part of his
investment.
142
STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS
SHAREHOLDERS UNDER THE APPLICABLE LAWS IN INDIA
To
The Board of Directors
Neccon Power & Infra Limited
Khetan Bhawan, Seuni Ali, A.T. Road,
Jorhat – 785 001, Assam
Dear Sirs,
Sub: Statement of possible special direct tax benefits available to Neccon Power & Infra Limited
and its shareholders prepared in accordance with the requirements under Schedule VIII –
Clause (VII) (L) of the Securities and Exchange Board of India (Issue of Capital and
Disclosure Requirements) Regulations, 2009 as amended (the 'Regulations')
We refer to the proposed initial public offer of equity shares of Neccon Power & Infra Limited ('the
Company') and enclose the statement showing the current position of special direct tax benefits
available to the Company, and to its shareholders as per the provisions of the Income-tax Act, 1961
('the Act') for inclusion in the Offer Document.
This statement is provided for general information purposes only and each investor is advised to consult
its own tax consultant with respect to specific income tax implications arising out of participation in
the issue.
Unless otherwise specified, sections referred below are sections of the Act. The benefits set out below
aresubject to conditions specified therein read with the Income Tax Rules, 1962, as amended from time
to time, presently in force.
The benefits outlined in the enclosed statement based on the information and particulars provided by
the Company are neither exhaustive nor conclusive.
a) the Company or its shareholders will continue to obtain the benefits, if any, in future;
b) the conditions prescribed for availing the benefits have been/would be met with; and
c) the revenue authorities/courts will concur with the views expressed herein.
143
We hereby give our consent to include the enclosed statement regarding special direct tax benefits
available to the Company and to its shareholders in the Offer Documents for the proposed initial public
offer of equity shares issued under the Securities and Exchange Board of India ("SEBI") (Issue of
Capital and Disclosure Requirements) Regulations, 2009, as amended.
Yours faithfully,
Date: 21/09/2018
Encl: a/a
144
ANNEXURE TO THE STATEMENT OF TAX BENEFITS
This statement is only intended to provide the Special tax benefits available to the Company and its
Equity Shareholders under the Income Tax Act, 1961 in a general and summarized manner and does
not purport to be exhaustive or comprehensive and is not intended to be a substitute for professional
advice. In view of the individual nature of tax consequence and the changing tax laws, each investor is
advised to consult their own tax advisor with respect to specific tax implications arising out of their
participation in the issue
There are no special tax benefits available to the shareholders of the Company.
Notes:
a. The above is position as per the current tax law as amended by the Finance Act, 2017.
b. We have not commented on the taxation aspect under any law for the time being in force, as
applicable, of any country other than India. Each investor is advised to consult its own tax
consultant for taxation in any country other than India.
c. 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, 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.
d. Our views expressed in this statement are based on the facts and assumptions as indicated in
thisstatement. No assurance is given that the revenue authorities/courts will concur with the
views expressed herein. Our views are based on the existing provisions of law and its
interpretation, which are subject to change from time to time. We do not assume responsibility
to update the views consequent to such changes.
145
SECTION V – ABOUT THE COMPANY
INDUSTRY OVERVIEW
The information in this section is derived from the report titled "Indian Transmission and Distribution
Sector, September 2018" (the "ICRA Report, September 2018"), prepared by ICRA Limited ("ICRA
Limited"). We commissioned the ICRA Report, September 2018 for the purpose of confirming our
understanding of the industry in connection with the Issue. Neither we, nor the BRLM, nor any other
person connected with the Issue has verified the information in the ICRA Report, September 2018.
Further, the ICRA Report, September 2018 was prepared based on publicly available information, data
and statistics as of specific dates and may no longer be current or reflect current trends.
The ICRA Report, September 2018 may also be based on sources that base their information on
estimates, projections, forecasts and assumptions that may prove to be incorrect. ICRA Limited, has
advised that while it has taken due care and caution in preparing the ICRA Report, September 2018
based on the information obtained by ICRA Limited from sources which it considers reliable, it does
not guarantee the accuracy, adequacy or completeness of the ICRA Report, September 2018 or the data
therein and is not responsible for any errors or omissions or for the results obtained from the use of
ICRA Report, September 2018 or the data therein. The ICRA Report, September 2018 is also subject to
the disclaimer set forth at the end of this section titled "Industry Overview" beginning on page 146 of
this Draft Red Herring Prospectus.
Further, the ICRA Report, September 2018 is not a recommendation to invest / disinvest in any company
covered in the report. ICRA Limited especially states that it (including all divisions) has no financial
liability whatsoever to the user of this product. Prospective investors are advised not to unduly rely on
the ICRA Report, September 2018 when making their investment decision.
India Macro
India remains one of the drivers of world growth, in an improving global economic
environment. According to the data released by the International Monetary Fund (IMF) in April
2018, the world economy grew by 3.2% and 3.8%, respectively, in 2016 and 2017 (refer Exhibit
1). Notwithstanding a mild slowdown in the pace of growth, the Indian economy expanded by
a sharper 7.1% and 6.7%, respectively, in 2016 and 2017. This makes it one of the fastest
growing large economy in the world, along with China (+6.7% and +6.9%). The pace of growth
of the Indian economy in 2016 and 2017 has been significantly healthier than the performance
of South Africa (+0.6% and +1.3%), Brazil (-3.5% and +1.0%) and Russia (-0.2% and +1.5%).
The advanced economies recorded an uptick in growth from 1.7% in 2016 to 2.3% in 2017, led
by acceleration in growth in the US, Euro Area and Japan. For instance, economic growth
improved between 2016 and 2017 in the US (from +1.5% to +2.3%), the Euro Area (from
+1.8% to +2.3%), and Japan (from +0.9% to +1.7%). The economy of the UK was an exception
to this trend, with growth easing from 1.9% in 2016 to 1.8% in 2017.
146
Exhibit 1: Global GDP growth and forecasts (as per IMF)
Looking ahead, the IMF expects global economic growth to pick up pace to 3.9% each in 2018
and 2019. India’s growth rate is expected to improve to 7.4% in 2018 and further to 7.8% in
2019, led by strong private consumption, and fading temporary effects of the note ban and
transition to the Goods and Services Tax (GST). The IMF also said that India’s growth is
expected to rise gradually over the medium-term, with the continued implementation of
structural reforms that boost productivity and incentivise private sector investment. In contrast,
the IMF expects the rate of expansion of economic activity in China to decline to 6.6% in 2018
and further to 6.4% in 2019, on account of the ongoing rebalancing away from investment
towards private consumption and from industry to services.
Growth of Indian GDP and gross value added (GVA) at basic prices displayed an uptrend from
FY2013 to FY2016. GDP and GVA growth rose from the subdued prints of 5.5% and 5.4%,
respectively, in FY2013, to the robust 8.2% and 8.1%, respectively, in FY2016. However, the
GDP and GVA growth witnessed a slowdown to 7.1% each in FY2017. Moreover, the second
advance estimates released by the Central Statistics Office (CSO) for FY2018, project a further
slowdown in GDP and GVA growth to four-year lows of 6.6% and 6.4%, respectively, partly
driven by the disruption in economic activity after the transition to GST. The estimated decline
in GDP growth in FY2018 is broad-based, with Private Final Consumption Expenditure
(PFCE), Government Final Consumption Expenditure (GFCE), Gross Fixed Capital Formation
(GFCF) and exports likely to record a slowdown (to +6.1%, +10.9%, +7.6% and +4.4%,
respectively, from +7.3%, +12.2%, +10.1% and +5.0%, respectively), partly offset by a
contrasting trend in inventories and valuables (to +4.0% and +70.4%, respectively from -61.2%
and -13.9%, respectively). The dip in the GVA growth projected by the CSO in FY2018 relative
to FY2017 factors in a moderation in the growth of agriculture (to +3.0% from +6.3%) and
industry (to +4.8% from +6.8%), offset by a revival in the expansion of services (to +8.3%
from +7.5%).
147
Exhibit 2: YoY Growth in GDP and GVA at basic prices (Constant 2011-12 Prices)
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 2nd AE
Growth of India’s GDP (at constant 2011-12 prices) improved to 7.2% in Q3 FY2018 in year-
on-year (YoY) terms from 6.8% in Q3 FY2017 (refer Exhibit 2 and Exhibit 3). In contrast, the
growth in GVA at basic prices eased to 6.7% in Q3 FY2018 from 6.9% in Q3 FY2017 (refer
Exhibit 4). Encouragingly, the pace of growth of both GDP and GVA charted a sequential
recovery in Q3 FY2018 relative to the prints of 6.5% and 6.2%, respectively, in Q2 FY2018.
The substantial improvement in GDP growth to 7.2% in Q3 FY2018 from 6.8% in Q3 FY2017
was led by a pickup in growth of GFCF, which more than offset the slowdown in growth of
PFCE, GFCE and net exports. GFCF growth improved to 12.0% in Q3 FY2018 from 8.7% in
Q3 FY2017; this was in line with the double-digit growth in capital goods output (+11.1% in
Q3 FY2018, -2.0% in Q3 FY2017), while somewhat at odds with other trends related to
investment activity, including project announcement and completion. Moreover, inventories
recorded a YoY growth of 7.0% in Q3 FY2018, in contrast to the contraction of 61.1% in Q3
FY2017 as production schedules were adjusted after the announcement of the note ban.
In contrast, PFCE growth eased sharply to a 10-quarter low 5.6% in Q3 FY2018 from 9.3% in
Q3 FY2017, which is likely to reflect the unfavourable base effect as well as the change in the
pattern of consumption in FY2018, to take advantage of discounts that were offered prior to
the introduction of the GST. Moreover, the pace of expansion of GFCE slowed to 6.1% in Q3
FY2018 from 12.3% in Q3 FY2017, partly on account of the front-loading of spending by the
Government of India (GoI) after the early presentation of the FY2018 Budget. Moreover, a dip
in import growth (to +8.7% from +10.1%), coupled with a moderation in exports growth (to
+2.5% from +6.7%), resulted in net imports exerting a larger drag upon GDP expansion in Q3
FY2018 relative to Q3 FY2017.
On a YoY basis, the pace of expansion of GVA at basic prices moderated to 6.7% in Q3
FY2018 from 6.9% in Q3 FY2017, led by a slowdown in agriculture, forestry & fishing (to
+4.1% from +7.5%), and a mild downtick in industry (to +6.8% from +7.1%). However, this
was marginally offset by improvement in growth of services to 7.7% in Q3 FY2018 from 6.5%
148
in Q3 FY2017.
In sequential terms, GVA growth increased to 6.7% in Q3 FY2018 from 6.2% in Q2 FY2018,
led by a broad-based uptick in the agricultural sector (to +4.1% from +2.7%), industry (to
+6.8% from +5.9%) and the services sector (to +7.7% from +7.1%; refer Exhibit 5). Notably,
growth of GVA excluding agriculture improved in sequential quarters to 7.3% in Q3 FY2018
from 6.7% in Q2 FY2018.
Exhibit 3: Growth of GDP and its Components (in %, Constant 2011-12 Prices, YoY)
Q3FY Q4 FY Q1 FY Q2 FY Q3 FY
2017 2017 2018 2018 2018
Private Final Consumption 9.3% 4.2% 6.6% 6.6% 5.6%
Expenditure
Government Final 12.3% 22.5% 17.1% 2.9% 6.1%
Consumption Exp.
Exports 6.7% 7.0% 5.9% 6.5% 2.5%
less Imports 10.1% 6.6% 16.0% 5.4% 8.7%
Gross Fixed Capital Formation 8.7% 6.0% 1.6% 6.9% 12.0%
GDP 6.8% 6.1% 5.7% 6.5% 7.2%
Q3 FY Q4 FY Q1 FY Q2 FY Q3 FY
2017 2017 2018 2018 2018
Agriculture, Forestry and 7.5% 7.1% 2.7% 2.7% 4.1%
Fishing
Industry* 7.1% 5.0% 0.1% 5.9% 6.8%
Services 6.5% 6.3% 9.6% 7.1% 7.7%
GVA at Basic Prices 6.9% 6.0% 5.6% 6.2% 6.7%
GVA ex-Agriculture 6.7% 5.8% 6.0% 6.7% 7.3%
*Industry is the sum of mining and quarrying; manufacturing; electricity, gas, water supply
and other utilities; and construction
Source: CSO; ICRA research
The improvement in the GVA growth of manufacturing and construction led to the industrial
recovery in Q3 FY2018 relative to the previous quarter. As anticipated, manufacturing GVA
growth improved to 8.1% in Q3 FY2018 from 6.9% in the previous quarter, supported by
restocking of inventories after the festive season, a catch-up effect after the muted volume
growth in H1 FY2018 and the healthy expansion of corporate earnings in that quarter.
Moreover, construction growth rose to a multi-quarter high 6.8% in Q3 FY2018 from 2.8% in
Q2 FY2018, in line with the trend in its inputs, such as cement and steel. However, sentiment
in the real estate sector remained weak after the introduction of the Real Estate Regulation and
Development (RER(A)D) Act and the Goods and Services Tax (GST), which is likely to record
a gradual improvement going forward. In contrast, the performance of electricity, gas, water
supply and other utility services deteriorated to 6.1% in Q3 FY2018 from 7.7% in Q2 FY2018,
in line with the subdued thermal electricity generation in Q3 FY2018. Moreover, mining and
quarrying was an outlier in Q3 FY2018, recording a mild contraction of 0.1% led by
unfavourable base effect, in contrast to the expansion of 7.1% in Q2 FY2018.
149
Exhibit 4: YoY Growth in GDP and GVA at Basic Prices (Constant 2011-12 Prices)
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
The service sector growth improved to 7.7% in Q3 FY2018 from 7.1% in Q2 FY2018, led by
two of the three sub-sectors, namely public administration, defence and other services
(PADOS; to +7.2% from +5.6%), and financial, real estate and professional services (FRP to
+6.7% from +6.4%). However, the growth of trade, hotels, transport, communication and
services related to broadcasting (THTCS) eased to 9.0% in Q3 FY2018 from 9.3% in Q2
FY2018.
Exhibit 5: YoY Growth in Agriculture, Industry and Services (Constant 2011-12 Prices)
14%
12%
10%
8%
6%
4%
2%
0%
-2%
-4%
150
Source: CSO; ICRA Research
In nominal terms, GDP and GVA growth increased considerably to 11.9% and 10.8%,
respectively in Q3 FY2018 from 10.0% and 9.2%, respectively in Q2 FY2018. The GDP
deflator rose to 4.7% in Q3 FY2018 from 3.6% in Q2 FY2018, while the GVA deflator
increased to 4.1% from 3.0%, respectively (refer Exhibit 6), in line with the rise in the CPI and
the WPI inflation.
With a 13.2% growth of taxes on products less subsidies on products, GDP expansion (7.2%)
exceeded the pace of GVA growth (6.7%) by 45 bps in Q3 FY2018. This was in contrast to the
wedge in Q3 FY2017 (-13 bps), with taxes on products less subsidies on products having risen
by a modest 5.1% in that quarter.
The 2nd Advance Estimates of crop production indicate a healthy rise in rabi output of crops,
such as rice, coarse cereals and pulses, which would support GVA growth in Q4 FY2018.
However, the sustained deficits in rainfall since the post-monsoon season in 2017 and the YoY
decline in reservoir levels to 25% as on April 12, 2018 from 31% as on April 13, 2017, do not
augur well for the interim months prior to the next monsoon. Recently, the India Meteorological
Department (IMD) released its first stage forecast, which has predicted that the volume of
rainfall in the upcoming southwest monsoon season (June-September) would be 97% of the
long period average (LPA), with an error range of +/-5%.
Reflecting the base effect related to remonetisation, several domestically oriented indicators
have displayed an unsurprising moderation in YoY volume growth in the recent months,
although the underlying growth momentum appears to be reasonably healthy. Moreover, the
growth of non-oil merchandise exports has declined to 2.5% in Q4 FY2018 from 11.0% in Q3
FY2018. Additionally, the rise in commodity prices may have an impact on margins. The
mining sector has recorded a marginal volume growth in January-February 2018.
However, the construction sector is likely to report a base effect-led improvement in GVA
growth in Q4 FY2018, given issues related to demonetisation including availability of labour.
Additionally, the pace of YoY growth of electricity generation has recorded some pickup in
Q4 FY2018 relative to the previous quarter.
151
Service sector growth is expected to improve in Q4 FY2018, benefitting from a favourable
base effect, back-ended spending by the state governments and a robust expansion of services
exports in January-February 2018. However, low headroom for capital spending by the GoI
may curtail the improvement in growth in the ongoing quarter.
Overall, a favourable base effect would support a pickup in GVA growth in most sectors except
public administration, defence and other services, and mining and quarrying in Q4 FY2018,
offsetting the impact of elevated commodity prices on margins.
Looking ahead, a rise in government spending at the central and state level is expected to boost
economic activity and infrastructure creation. Furthermore, a normally distributed monsoon,
increase in minimum support prices (MSPs) for various crops, improving sentiment and
staggered pay revision by some state governments would support consumption growth. This
would bolster capacity utilisation in various sectors, although a broad-based capacity addition
by the private sector may not emerge until H2 FY2019. Completion of the resolution process
of cases admitted to the National Company Law Tribunal (NCLT) would improve utilisation
of existing capacity and promote consolidation in some sectors. The adequate recapitalisation
of public sector banks would be critical to support lending growth and investment revival in
the economy. However, the risk of trade wars has clouded the outlook for FY2019 to an extent.
On balance, GDP and GVA growth are expected to improve to 7.1% and 7.0%, respectively,
in FY2019, from 6.7% and 6.5%, respectively, in FY2018.
The CPI inflation in India eased dramatically from 9.9% and 9.4%, respectively, in FY2013
and FY2014, to 5.9% in FY2015, led primarily by food inflation. Subsequent improvements
were relatively modest, with the average CPI inflation moderating to 4.9% in FY2016 and 4.5%
in FY2017. In FY2018, the CPI inflation averaged 3.6%, lower than the Reserve Bank of India
(RBI’s) medium-term inflation target of 4%, while recording substantial volatility on a monthly
basis.
In the recent months, the CPI inflation has moderated to a five-month low 4.3% in March 2018
(refer Exhibit 7), from a 17-month high 5.2% in December 2017. The urban CPI inflation eased
to 4.1% in March 2018 from 5.1% in December 2017, while the rural CPI inflation declined to
4.4% from 5.3%. Inflation for food and beverages eased to a five-month low 3.0% in March
2018 from 4.9% in December 2017, primarily reflecting the decline in inflation for vegetables
(to +11.7% from +29.1%) and fruits (to +5.8% from +6.6%). Moreover, the inflation for fuel
and light eased to 5.7% in March 2018 from 7.9% in December 2017.
However, the core-CPI inflation (excluding food and beverages and fuel and light) displayed a
broad-based rise to a 43-month high of 5.4% in March 2018 from 5.1% in December 2017.
Inflation for miscellaneous items increased to 4.2% in March 2018, from 3.8% in December
2017, led by transport and communication (to +2.9% from +2.0%), education (to +4.6% from
+4.1%), recreation and amusement (to +4.4% from +3.9%), health care (to +5.2% from +4.9%)
and personal care and effects (to +4.6% from +4.5%). Inflation for household goods and
services remained steady at +4.3% in March 2018, in line with the print for December 2017.
152
After recording a sustained uptrend from July 2017-December 2017 reflecting the impact of
the revision in house rent allowance (HRA) for central government employees, the housing
inflation has remained steady at a high 8.3% in January 2018-March 2018.
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
Food and beverages Pan, tobacco and intoxicants Clothing and footwear
The Indian WPI inflation declined from 6.9% in FY2013 to 5.2% in FY2014, and further to a
low 1.3% in FY2015. Subsequently, there was a YoY disinflation of 3.7% in FY2016,
reflecting the collapse in global commodity prices. This was followed by a modest inflation of
1.7% in FY2017 and 2.9% in FY2018.
In recent months, the wholesale inflation has tracked a volatile trend, increasing from a muted
0.9% in June 2017 to 4.0% in November 2017, before easing to 2.5% in March 2018 (refer
Exhibit 8). The inflation for primary food articles eased to (-) 0.3% in March 2018 from +6.4%
in November 2017. Moreover, the inflation for fuel and power declined sharply to 4.7% in
March 2018 from +8.4% in November 2017. Additionally, the YoY inflation in minerals eased
to 4.3% in March 2018 from 10.0% in November 2017. However, the inflation for non-food
manufactured products hardened from 3.2% in November 2017 to 3.9% in February 2018,
before easing somewhat to 3.6% in March 2018.
153
Exhibit 8: Composition of WPI Inflation (YoY)
10%
5%
0%
-5%
-10%
9.5% 23.5%
23.0%
8.5%
22.5%
7.5% 22.0%
21.5%
6.5%
21.0%
5.5% 20.5%
20.0%
4.5%
19.5%
3.5% 19.0%
Reflecting the easing in the CPI inflation, the policy Repo Rate was reduced by 200 basis points
(bps) in various tranches to 6.0% in August 2017 from 8.0% in January 2015. The corridor of
rates for the liquidity adjustment facility (LAF) was reduced from +/- 100 bps around the Repo
Rate, to +/-50 bps around the Repo Rate in April 2016, and further to +/- 25 bps in April 2017.
As a result, the Reverse Repo Rate has declined by 125 bps to 5.75% in August 2017 from
7.0% in January 2015, whereas the Marginal Standing Facility (MSF) rate has declined by 275
154
bps to 6.25% from 9.0%, respectively.
A new era in monetary policy setting was ushered in from October 2016 onwards, with a six-
member Monetary Policy Committee (MPC) determining the policy rate required to achieve
the inflation target. The MPC recently left the Repo Rate unchanged at 6.0% (refer Exhibit 9)
and retained the neutral stance of Monetary Policy in the First Policy Review for FY2019 (April
2018). Notably, the decision to keep the Repo Rate unchanged was not unanimous, with one
member voting for an increase of 25 bps.
While maintaining a status quo on the policy rate, the MPC reiterated its focus on achieving
the medium-term inflation target of 4%. The MPC expected the CPI inflation, including the
impact of the revision in HRA by the Central Government, to range between 4.7-5.1% in H1
FY2019 and moderate to 4.4% in H2 FY2019, with risks tilted to the upside. In addition, it
warned that volatility in crude oil prices, pass through of higher input costs to final prices and
improvement in aggregate demand could pose some upside risks. Other sources of uncertainty
regarding the inflation trajectory include the revised MSPs for various crops, monsoon
dynamics, the staggered impact of HRA revisions by the state governments and fiscal slippage
at the central or state government level.
The Statutory Liquidity Ratio (SLR) was retained at 19.5%. Additionally, the Cash Reserve
Ratio (CRR) was kept unchanged at 4.0%.
The power sector is one of the most important constituents of the infrastructure sectors and
plays a key role in the overall development of the economy affecting its growth and prosperity.
The Indian Power Sector can be classified into three separate functions namely – generation,
transmission and distribution. While the transmission and distribution segments are primarily
owned by the central and state sector, the ownership share in the generation segment is
distributed across the central, state and private sectors. The power transmission sector in India
is led by Power Grid Corporation of India Limited (PGCIL), a Government of India enterprise,
which is responsible for developing and managing inter-state and inter regional transmission
network, while the intra-state transmission network is developed and managed by state owned
transmission utilities. PGCIL is the largest transmission utility in the country with installed
transmission network of 148,838 (circuit kilo meters) and inter regional transmission capacity
of 86,450 MW, as on March 31, 2018.
The 12th five-year (2012-2017) plan witnessed a generation capacity addition of 99209 MW
comprising of 91730 MW thermal capacities, 5479 MW hydro power capacities and 2000 MW
Nuclear Power capacity. Given that thermal capacities are located closer to fuel source in case
of domestic fuel-based projects and closer to coast for imported fuel-based projects, while
hydro power projects being located in remote areas in the north and north-eastern regions, large
investments were required for transmitting the power from these generating stations to the
power deficit regions. In line with this, a total of about 110,370 ckm of transmission lines
(101% of targeted) and 331,214 MVA of AC transformation capacity (higher than the targeted
capacity of 270,000 MVA) have been added in the 12th plan period. In addition, 6124 ckm of
155
transmission lines and 6000 MVA of AC transformation capacity have been added in the 800
kV HVDC segment. As on March 31, 2018, a total of 390,370 ckm of transmission lines and
826,958 MVA of AC transformation capacity is operational.
The growth trend in the transmission lines and sub-station is given in the exhibit below:
156
PGCIL incurred capital expenditure of Rs. 112,644 crores during the 12th plan (FY2012 –
FY2017) period mainly towards development of transmission infrastructure for
implementation of various inter-State transmission systems including High Capacity Power
Transmission Corridors (HCPTCs), inter-regional links for grid strengthening, system
strengthening schemes etc. In 9M FY2018, the company incurred a capex of Rs. 17,906 crores
as against planned capital expenditure of Rs. 25,000 crores during FY2018. The target capital
expenditure plan for the next 3-3.5 years is outlined at Rs. 81,000 crores.
The Indian transmission sector is pre-dominantly led by PGCIL in the inter-state and regional
transmission network and state-owned transmission utilities in the intra-state transmission
network. Further, the tariff for the projects by the central and state utilities is cost plus-based,
thereby providing stable cash flows. The National Tariff Policy 2006 introduced mandatory
tariff based competitive bidding for transmission projects awarded from January 2011 with the
objective of promoting competition and to encourage investments from private sector, although
there is provision of exemption for certain inter-state transmission projects as decided by
Government of India (GoI). While there is significant progress in attracting private investments
in the inter-state transmission segment, the progress in attracting private investment in intra-
state transmission sector has not been significant. In January 2016, GoI approved amendments
to the National Tariff Policy including that the state governments shall develop intra-state
transmission projects through competition bidding for projects costing above a threshold limit,
which will be decided by the state regulator. It remains to be seen if this amendment would
increase the number of projects awarded through competitive bidding in the intra-state
transmission sector.
The raw material requirement for the transmission utilities is towards developing and
maintaining the transmission lines and sub-station network, making them primarily dependent
on commodities such as steel, copper and cement. With increase in commodity prices, the
utilities also witness increase in the project costs depending on the nature of contract awarded
to the contractors. PGCIL allows escalation clause in the contracts awarded based on Indian
Electrical and Electronics Manufacturers Association (IEEMA) indices. For cost-plus tariff-
based projects, project cost escalation is a pass-through in tariffs provided the costs are
approved by CERC. However, for projects based on competitive bidding, any cost-overruns in
the project will not be a pass through in tariffs, thereby exposing the utilities to variation in
commodity prices. The segment remains exposed to execution related challenges arising out of
long delays pertaining to completing land acquisition and statutory approval process. Further,
transmission utilities do remain exposed to the credit risk profile of the distribution utilities,
given that financial position of state owned distribution utilities across most of the states
157
remains still weak.
The financial position of state owned distribution utilities on all India basis has deteriorated
over the period as evident from a sharp increase in the annual book losses, with estimated
aggregate book losses of Rs. 4.7 trillion as on March 2016, increasing from the level of Rs.
0.27 trillion as on March 2007. The median cost coverage ratio for distribution segment remains
below 0.9 times for FY2016. This has been mainly due to a) inadequacy of tariff in relation to
cost of supply, b) inadequate subsidy receipts from state governments and c) limited progress
in improvement in the operating efficiency level i.e. distribution loss as compared with the
regulatory targets set by the State Electricity Regulatory Commissions (SERCs) in respective
states. Further, utilities in some of the states have high unrecovered revenue gap position
because of lack of tariff revision for a prolonged period in the past and large delays in true-up
of the cost variations based on actual. Inconsistency in implementation of fuel & power
purchase cost adjustment (FPPCA) framework by distribution utilities in many states has also
adversely affected the credit profile of the distribution utilities. The financial losses of
distribution companies were financed largely through bank borrowings (mainly short-to-
medium term in nature) and stretched payments to power generating companies.
158
Source: Tariff Orders issued by SERCs, ICRA Research
As seen from the above exhibits, the gap between the average cost of supply per unit sold and
average tariff realization per unit sold has remained high, although declining from the level of
Rs. 1.16 per unit in FY2012 to Rs. 0.80 per unit in FY2016.
The trend in retail electricity tariff revisions across different states for the period from FY2013
to FY2019 (tariff orders issued till March 2018) is depicted in Exhibit 14. There has been an
upward revision in tariffs by SERCs for state-owned distribution utilities in majority of the
states during FY2013, FY2014 and FY2015 as the tariff determination process has been more
timely, subsequent to the regulatory directive issued by the Appellate Tribunal of Electricity in
November 2011 so as to ensure a cost-reflective tariff determination process, coupled with a
strict approach taken by financial institutions for lending to the distribution sector since
FY2012. The average tariff hike was at 14% for the distribution sector as a whole in FY2013.
However, the average tariff hike moderated to 7% for FY2014. Moderate tariff hikes in several
states also accompanied an increased subsidy burden so as to insulate the burden of tariff hike
for subsidised categories as well as a high level of unrecovered revenue gap (also termed as
‘regulatory assets’) in many states. The tariff revision remained moderate during FY2015 with
an average tariff hike of 8%. The tariff revision was relatively lower for the next three years of
FY2016, FY2017 and FY2018 at 4%. SERCs in 25 states (out of overall 29 states) had issued
tariff orders for FY2018. The issuance of tariff orders for FY2018 witnessed delays in several
states such as Punjab, Haryana, Rajasthan, Tamil Nadu, Telangana and Uttar Pradesh. The
tariff orders for FY2019 have been issued in 12 states so far, namely Andhra Pradesh, Assam,
Bihar, Chhattisgarh, Goa, Gujarat, Odisha, Uttarakhand, Sikkim, Telangana, Manipur and
Mizoram, with a median tariff revision of 2%.
159
Exhibit 14: Trends in Retail Electricity Tariff Revisions across States
60%
40%
20%
0%
Andhra…
Madhya…
Arunachal…
Himachal…
Assam
Odisha
Bihar
J&K
Jharkhand
Maharashtra
Uttar Pradesh
Mizoram
Nagaland
Sikkim
Uttarakhand
West Bengal
Meghalaya
Gujarat
Haryana
Chhattisgarh
Telangana
Karnataka
Kerala
Manipur
Tripura
Punjab
Rajasthan
Tamil Nadu
Goa
-20%
In November 2015, the GoI has approved Ujwal DISCOM Assurance Yojana (UDAY) with an
objective of a financial turnaround of state-owned discoms. Apart from the improvement in
operational efficiencies of discoms and reduction in cost of power purchase, the scheme
envisages a significant State Government support, mainly in the form of taking over of 75% of
discom debt (50% in H2 FY2016 & 25% in FY2017) by the respective state governments. The
Union Cabinet in its meeting held on June 22, 2016 accorded an extension of timeline by a
year, for taking over 50% of the outstanding debt on the books of discoms as on September 30,
2015 by the respective State Governments under UDAY. The earlier stipulated deadline for
takeover of 50% of the debt was March 31, 2016.
So far State governments in 27 states and 5 Union Territories (UTs) namely Andhra Pradesh,
Andaman and Nicobar, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Daman and Diu,
Dadra and Nagar Haveli, Goa, Gujarat, Himachal Pradesh, Haryana, Jharkhand, Jammu &
Kashmir, Karnataka, Kerala, Manipur, Meghalaya, Mizoram, Madhya Pradesh, Maharashtra,
Nagaland, Lakshadweep, Pondicherry, Punjab, Rajasthan, Sikkim, Telangana, Tamil Nadu,
Tripura, Uttar Pradesh and Uttarakhand have signed MoUs with the Ministry of Power for
implementation of the scheme. The combined debt of the distribution utilities (including dues
to Central PSUs) of these states accounts for 97% of the overall debt on the books of
distribution utilities as on September 30, 2015. In case of Andaman and Nicobar Islands,
Arunachal Pradesh, Daman and Diu, Dadra and Nagar Haveli, Gujarat, Goa, Karnataka, Kerala,
Lakshadweep, Manipur, Mizoram, Nagaland, Sikkim, Pondicherry, Tripura and Uttarakhand,
while there is no debt takeover by the State Governments, the discoms are proposing to improve
the operational efficiencies and lower the cost of procurement.
As per information available on the UDAY website on April 30, 2018, bonds worth Rs 2.32
lakh crores have been issued by states towards refinancing the debt on the books of the discoms
under the UDAY scheme, representing 86.3% of the total bonds to be issued as per MoUs
signed. This is turn has improved the liquidity profile of the discoms to some extent. The
takeover of debt on the books of the discoms by the respective state governments is expected
to happen in a gradual manner in the larger states, with part of the refinanced debt being
retained as state government loans to the discoms, which will be subsequently converted to
equity or grant over the period from FY2018 to FY2021. But in some states, the debt takeover
160
as per MoUs has not materialized fully. As a result, while there has been a reduction in interest
costs to discoms, it is not likely to be the extent as anticipated earlier.
The financial turnaround of the discoms under the UDAY scheme is linked to an improvement
in AT&C losses as per the stipulated loss trajectory, timely filing of tariff petitions by discoms,
timely issuance of tariff orders by SERCs and adequacy of tariff hikes by the SERCs. The
average tariff hike stipulated for the period FY2016-FY2019 as per UDAY MoUs remains in
the range of 5% to 10% across a majority of the states. However, the actual tariff hike approved
by the SERCs for FY2017 and FY2018 has remained lower than the hike proposed under the
UDAY in states like Andhra Pradesh, Punjab, Maharashtra, Telangana and Uttar Pradesh.
Moreover, tariff orders have not been issued for FY2018 in some of the states who have joined
UDAY. This is especially significant given that one of the key conditions under UDAY is
timely filing of tariff petitions by the discoms and timely issuance of tariff orders by the SERCs.
Exhibit 15: Current AT&C losses of discoms (as per UDAY website) as against AT&C loss
trajectory in UDAY MoU
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
AT&C Loss Level in FY2015 AT&C Loss Target for FY2018 Latest AT&C loss level as per UDAY website
In terms of progress with respect to reduction of AT&C loss levels as per the stipulated
trajectory in the UDAY MoU, the current loss levels continue to remain significantly high in
several key states such as Bihar, Haryana, Jammu & Kashmir, Madhya Pradesh, Punjab,
Rajasthan and Uttar Pradesh as compared to the target fixed for FY2018. Furthermore, the loss
levels of these states remain largely the same or even higher as against the loss reported in
FY2015. On the other hand, the loss levels in the states such as Andhra Pradesh, Gujarat,
Karnataka, Maharashtra, Tamil Nadu and Telangana have witnessed an improvement over the
loss levels reported in FY2015. Nonetheless, the loss levels in these states also remain slightly
higher than the targeted loss level for FY2018.
The subsidy dependence for the state distribution utilities at the all India level is in the range
of Rs. 810 billion for FY2018, which is higher by 7-8% as compared to the subsidy estimated
for FY2017. This is mainly due to the increase in subsidy support for the discoms in Punjab,
Madhya Pradesh and Karnataka. There is a steep hike in the subsidy support required for the
Punjab and Madhya Pradesh discoms, given the increase in electricity consumption by the
subsidised consumers and higher subsidy approved by the state governments. The subsidy
support for discoms in Karnataka is estimated to increase by 14% owing to the upward revision
161
of the tariff for the subsidised category consumers such as IP sets, which in turn is funded by
additional Government subsidy. The subsidy support to discoms in Bihar continues to remain
high owing to the relatively high subsidy assistance towards power supplied to subsidised
category customers. Further, given the continuation of the subsidised / free power supply
scheme to agriculture consumers and to some sections of domestic consumers in states such as
Andhra Pradesh, Gujarat, Haryana, Maharashtra, Madhya Pradesh, Rajasthan, Tamil Nadu and
Telangana, the subsidy dependence continues to remain significant. Hence the timeliness and
adequacy of subsidy support to utilities from their respective state governments remains
extremely crucial for the financial health of the discoms, given the delays observed in quite a
few states in the past
Under the UDAY scheme, the takeover of debt on the books of the discoms by the respective
state governments would provide relief in interest costs. In the large states, the takeover is
happening in a gradual manner with part of the refinanced debt being retained as state
government loans to the discoms, which will be subsequently converted to equity or grant over
the period from FY2018 to FY2021. This along with the operational improvement measures
would enable a reduction in the book losses for the discoms. ICRA estimates the aggregate
book losses for the discoms at all India level to decline from Rs.630 billion in FY2016 to about
Rs. 340 billion in FY2018 and Rs. 300 billion in FY2019. Serious focus by the discoms on
improving their efficiency levels in line with the stipulated targets as well as timeliness and
adequacy of tariff hikes in relation to the cost of power supply (including periodic pass-through
of fuel and power purchase cost) remains critical in the long run for sustained improvement in
the financial position of the discoms.
The Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) is one of the flagship programs of
the Ministry of Power with focus on improving the distribution infrastructure in the rural areas
and providing 24 x 7 supply to non-agriculture consumers in rural areas. The earlier central
scheme for rural electrification viz. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
has been subsumed in the new scheme as its rural electrification component.
The approval has been accorded for the first two above components having scheme cost of Rs.
43,033 crore including a budgetary support of Rs. 33,453 crore from Government of India
during the entire implementation period (FY2015-FY2022). The existing program of RGGVY
as approved by CCEA for continuation in 12th and 13th Plans has been subsumed in this scheme
162
as a separate rural electrification component for which CCEA has already approved the scheme
cost of Rs. 39,275 crore including a budgetary support of Rs. 35,447 crore. Rural Electrification
Corporation Limited (REC) is the Nodal Agency for operationalization and implementation of
the scheme under the overall guidance of Ministry of Power (MoP).
The government of India, on April 28, 2018 has announced that India has completed
electrification of all the villages in the country. However, as per government, the definition of
electrification has the following: (i) Provision of basic infrastructure such as distribution
transformers and lines in the inhabited locality (ii) Provision of electricity in public places like
schools, panchayat office, health centers, dispensaries, and community centers, and (iii) At
least 10% of the total number of households in the village are electrified.
In the first stage for project formulation, the utilities identify the need for feeder separation and
critical gaps in sub-transmission and distribution network considering all relevant parameters
such as consumer mix, consumption pattern, AT&C loss level, optimum loading of
transformers & feeders / lines, power factor improvement etc. and ongoing works under other
schemes for efficient management of distribution system. Based on the assessment, utilities
will prioritize scope of work to ensure:
• 24x7 power supply for non-agricultural consumers and adequate power supply
for agricultural consumers
• Reduction of AT&C losses as per trajectory (discom-wise) finalized by the
Ministry of Power in consultation with States
• Providing access to all rural households
In the second stage of the project formulation, depending on the scope of work validated by
nodal agency at first Stage, the utilities formulate district/circle/zone wise bankable Detailed
Project Reports (DPRs) based on detailed field survey and latest approved schedule of rates for
various items of work. The nodal agency will separately provide comparable costs sourced
from CPSUs for major equipment for reference of the utility. These reference rates shall be
used as ceiling rates for sanctioning of the projects. Grant shall be extended on the sanctioned
cost or award cost of the project, whichever is lower.
Scope of Work
The projects under the scheme shall be formulated for rural areas only and will cover works relating to:
• Separation of agriculture and non-agriculture feeders facilitating judicious fostering of supply
to agricultural & non- agricultural consumers in the rural areas
• Strengthening and augmentation of sub-transmission & distribution (ST&D) infrastructure in
rural areas, including metering at distribution transformers, feeders and consumers end
The details of the works covered under the scheme are as per below:
o Physical separation of HT feeders for Agricultural and non-Agricultural consumer
▪ Erection of HT lines for drawing new feeders and reorientation/re-alignment of
existing lines
▪ Installation of new distribution transformers and augmentation of existing distribution
transformers
163
▪ Re-location of distribution transformers and associated LT lines for regrouping of
consumers (Agricultural and Non-Agricultural)
o Metering: Metering of all feeders and distribution transformers including metering at all input
points to the utility shall be ensured under this scheme.
The metering component under the scheme shall cover the following:
▪ Installation of suitable static meters for feeders, distribution transformers and all
categories of consumers for un-metered connections, replacement of faulty meters &
electro-mechanical meters
▪ Installation of Pillar Box for relocation of meters outside the premises of consumers
including associated service cables and accessories
o Eligible entities: All discoms including private sector discoms and State power departments
(referred to as utilities) are eligible for financial assistance under the scheme. In case of private
sector discoms where the distribution of power supply in rural areas is with them, projects
under the scheme will be implemented through a concerned State Government agency and the
assets to be created under the scheme will be owned by the State Government / State owned
companies
o Mode of Implementation: The projects shall be implemented on a turn-key basis. The turnkey
contract shall be awarded by the concerned utilities through e-tendering in accordance with the
prescribed Procurement Policy, Standard Bidding Document and Technical Specifications
being circulated separately by the nodal agency. The projects have to be awarded within six
months of date of communication of the approval by the Monitoring committee.
164
Funding Mechanism
• As on January 31, 2018, with respect to the electrification of the un-electrified villages,
12 states out of the 27 states have achieved 100% of their targets. Around 7 states do
not have any targets in the electrification of the villages considering 100%
electrification. The progress in the remaining 8 states is satisfactory with majority of
the states reporting an achievement of more than 96%.
Of the total Rs. 27,176 crore sanctioned for the states excluding seven North East states and
Sikkim (Exhibit 17), around Rs. 25,207 crore pertaining to 92.75% has been released by the
government. The state of Bihar leads in terms of the projects sanctioned and funds released
followed by Uttar Pradesh, Odisha, Jharkhand, West Bengal and Madhya Pradesh. This is in
line with the large number of the unelectrified villages in these states compared to the more
developed states in the Western and Southern region.
165
Exhibit 17: Sanctioned Project cost Vs Released - DDUGJY
5000
Revised Project Cost Sanctioned (In Rs. Cr) Total Amount Released (In Rs. Cr)
As on April 12, 2018, the government has sanctioned a total of Rs. 5,496 crore as a part of
DDUGJY scheme for the North Eastern states. Of the sanctioned amount, around Rs. 5,311
crore has been released by the government for the implementation of the DDUGJY scheme.
The sanctioned amount for the individual states is as below. The state of Assam leads in terms
of projects sanctioned and funds released followed by Arunachal Pradesh, Manipur and
Meghalaya.
3000
Exhibit 18: DDUGJY Sanctioned Amount - North Eastern States
2500
2000
1500
1000
500
0
Arunachal Assam Manipur Meghalaya Mizoram Nagaland Sikkim Tripura
Pradesh
Sanctioned (In Rs. Cr) Released (In Rs. Cr)
Source: DDUGJY Website, ICRA Research
The Integrated Power Development Scheme was initiated on September 18, 2015 by the
Government of India (GoI). The GoI will provide financial support of Rs. 45,800 crore over
the entire implementation period of IPDS. The scheme covers strengthening of sub-
transmission network, metering, IT application, customer care services and provisioning of
solar panels.
166
• Proper metering will help in identifying high loss pockets to initiate remedial measures
towards reduction of losses
• Roof-top solar panel will be installed in government buildings
As of April 12, 2018, Rs. 28,671 crore has been sanctioned under the scheme. This includes
government grant of Rs. 17,777 crore (of which Rs. 5,139 crore has been released). Of the total
sanctioned amount, Rs 26,769 crore is for system strengthening of the sub-T&D network across
546 circles (in 3,600+ towns), Rs 966 crore is for information technology (IT) enablement of
discoms, and Rs 601 crore is for enterprise resource planning. The current progress as on April
12, 2018 is as below:
As on April 12, 2018, projects worth Rs 25,173 crore have been awarded for the system
strengthening, which constitutes to around 94 per cent of the project work. Also, around 30 per
cent of physical infrastructure which includes 11,568 kWp of solar capacity, 2,909 smart
meters, 14,556 ckt. km of aerial bundle cable, 1,924,156 consumer meters, 2,909 MVA of
transformer capacity, 7,378 km of distribution lines and 236 new substations sanctioned under
the scheme has been erected. The states such as Andhra Pradesh, Gujarat, Tripura and Uttar
Pradesh have set up over 40 per cent of the sanctioned infrastructure. While Telangana and
Kerala have set up around 31-40 per cent of the sanctioned infrastructure; Bihar, Karnataka,
Maharashtra, Manipur, Mizoram, Nagaland and Odisha have completed around 21-30 per cent
of the sanctioned infrastructure.
167
Source: IPDS Website, ICRA Research
6000 Exhibit 20: IPDS Sanctioned Amount Vs Released (In Cr.)
5000
4000
3000
2000
1000
0
Sanctioned Released
Source: IPDS Website, ICRA Research
As per the data available on IPDS website as on April 18, 2018, the states with sanctioned
amount greater than Rs. 500 crore (excluding North-East states) have been mentioned in the
Exhibit 20. Of these states, Uttar Pradesh has been sanctioned the highest amount of Rs. 4,960
crore and around Rs. 1,352 crore pertaining to 26.8% of the sanctioned amount has been
disbursed for UP. Further, the total disbursed amount for the above states constitute around
19.5% (Rs. 4615 crore) out of the total Rs. 23,715 crore sanctioned for the states in Exhibit 20.
168
Exhibit 21: IPDS North Eastern States Sancitoned Vs Released Amount (In Rs. Cr)
700
600
500
400
300
200
100
0
Assam Arunachal Manipur Meghalaya Mizoram Nagaland Tripura
PradeshSanctioned (In Rs. Cr) Released (In Rs. Cr)
As per the data available on IPDS website as on April 18, 2018, for the North-Eastern States,
the government has sanctioned a total amount of Rs. 1,165 crore. Out of the total sanctioned
amount of Rs. 1.165 crore, around Rs. 209 crore pertaining to 17.9% has been released by the
government as per the public data available on IPDS website as on April 18, 2018. Among the
North-East states, Assam has been sanctioned the highest amount under IPDS scheme at Rs.
641 crore. Out of the Rs. 641 crore sanctioned, Rs. 129 crore (20.1%) has been released by the
government. However, among all the states under IPDS scheme, the funds released to states
such as Meghalaya and Nagaland are yet to see significant improvement considering 8.5% of
the sanctioned amount being released by the government.
C) Saubhagya Scheme
In September 2017, the Government of India launched the Saubhagya Scheme with an
objective of providing household electrification, especially in rural areas. The scheme aims to
provide last mile connectivity and electricity connections to all rural and urban un-electrified
households, estimated to be above 40 million, by December 2018. Under this scheme, the poor
households shall be provided electricity connection free of cost, while the other households
shall be provided connection on payment of Rs. 500, which shall be recovered through 10
instalments along with electricity bills. The implementation of this scheme will positively
impact the power sector as its execution is likely to improve energy demand. Even assuming
the consumption of 50 units per family per month for 40 million households, which are
currently without access to power, incremental demand rise is estimated to about 24 billion
units, which after adjusting for distribution losses, correspond to about 2.5-3% increase in the
all India energy requirement. In addition, the capital goods industry, especially players in the
distribution segment will benefit from implementation of this scheme.
The thrust of the scheme is on the rural sector and from a socio-economic perspective it will
lead to better energy demand and improve the quality of life for rural households. Apart from
providing electricity connection, the scheme should also emphasize the need to ensure reliable
and quality power supply to these consumers for sustainable growth in energy demand and
improvement in their quality of life. This in turn depends on the improvement in financial
profile of the distribution utilities as envisaged under the UDAY scheme. The Saubhagya
169
Scheme has a planned outlay of Rs. 16,000 crores, of which around Rs. 12,000 crores will be
provided as budgetary support by the Central Government, as contribution towards electricity
for all rural and urban households currently without any access to power. The scheme outlay is
estimated to be funded by a 60% grant from the Central Government, 10% from respective
states and 30% through loans (for special category states it is 85%, 5% and 10% respectively).
The Rural Electrification Corporation Limited (REC) is the nodal agency for implementation
of the scheme throughout the country. However, the timely implementation of the Saubhagya
Scheme could face challenges, given the stiff timeline and capability of the state power utilities
to execute the scheme at the local level. Moreover, as most of these un-electrified consumers
fall under the highly subsidized consumer category, this would increase the cross-subsidization
requirement for the utilities and may also increase the subsidy burden for the state governments.
As on April 15, 2018, out of the total 18.01 crore rural households, 14.75 crore households
have been electrified as per the data on Saubhagya website. The progress of the scheme from
October 2017 has seen an electrification of 44.28 lakh households out of the targeted 3.69 crore
representing around 12.0%. Out of the households yet to be electrified, Uttar Pradesh has the
highest number of households yet to be electrified at 1.36 crore which accounts to around
41.9% of the unelectrified households followed by Bihar and Odisha with 10.2% and 9.9%
respectively.
The exhibit below shows the total number of households present versus the total number of
households yet to be electrified as on April 15, 2018.
Mizor…
Harya…
Jamm…
Mani…
Nagal…
Jhark…
Tamil…
Andhr…
Puduc…
Chhat…
Madh…
Rajast…
Megh…
Himac…
Maha…
Telan…
Karna…
Uttar…
Uttar…
Aruna…
Kerala
Gujarat
Goa
Tripura
Sikkim
Odisha
Assam
Punjab
Bihar
% Electrification
As seen from the Exhibit 22 above, Jharkhand has the highest percentage of households yet to
be electrified followed by Uttar Pradesh and Assam. However, states such as Andhra Pradesh,
Puducherry, Madhya Pradesh, Maharashtra, West Bengal, Telangana, Karnataka, Chhattisgarh
and Mizoram have reported over 90% electrification of the overall households. Further, states
such as Tamil Nadu, Kerala, Gujarat, Punjab and Goa have reported 100% electrification of
households. In the north-eastern states, around 43.37 Lakh households are yet to be electrified.
Out of the seven states in North-East India, Assam has the highest number of unelectrified
households at 19.66 Lakh followed by Meghalaya at 16.81 Lakh.
The PGCIL has a large number of projects under execution in the east and north eastern region
170
towards strengthening the transmission and distribution network. The details of the major
projects under execution along with the estimated investment is provided below. The
cumulative investment for these projects is about Rs. 13000 crore, providing sizeable
opportunity for EPC players in this segment.
Exhibit 23: Projects being executed by PGCIL in North Eastern and Eastern Region
In addition to the projects under execution as highlighted above, the Empowered Committee
on Transmission in its last meeting in October 2017 has approved the following transmission
project in the north eastern region to be executed by PGCIL.
171
Strengthening Scheme along with 2 no. 132kV line bays at North
(NESS) – IX Lakhimpur end
Baharampur – Baharampur (POWERGRID) – Bheramara -
Bheramara 400kV 2nd (Bangladesh) 2nd 400kV D/c line with Twin
D/c line Moose conductor (Indian Portion)
Source: CEA
In addition to the projects being executed by PGCIL, the following projects are being executed
/ proposed to be executed under the tariff-based competitive bidding route for strengthening
the transmission system.
PGCIL drives the investments in the inter-state transmission network, while the respective state
utilities are responsible for investments to augment the intra-state transmission network. The
following table highlights the capital investments incurred by the state transmission utilities
during the period from FY2015-FY2016 and the projected capex for FY2017-FY2019.
172
Exhibit 26: Transmission Capex undertaken by States:
Based on the details available in the public domain, the states mentioned above have an
aggregate capex outlay of Rs. 38,978 crore in FY2018 and Rs. 41,551 crore in FY2019. For
FY2019, Tamil Nadu has the highest planned capital expenditure of Rs. 9,640 crore followed
by Uttar Pradesh at Rs. 6,390 crore. For FY2018, the highest planned transmission capital
expenditure is by Uttar Pradesh at Rs. 7,313 crore. During the period from FY2015 to FY2016,
the transmission utilities incurred an aggregate capex of Rs. 27,809 crore.
The aggregate capex incurred by the transmission utilities in the north-eastern states (Arunachal
Pradesh, Assam, Manipur, Meghalaya, Nagaland and Tripura) stood at Rs. 595 crore during
the period from FY2015 to FY2016. Further, the aggregate transmission capital expenditure
planned by these states mentioned above amounts to Rs. 2,962 crore in FY2018 and Rs. 3,256
173
crore in FY2019. The total planned capital expenditure by above mentioned North-Eastern
states pertains to 7.6% and 7.8% of the total planned intra-state transmission capex for FY2018
and FY2019 respectively. Further, Mizoram has a total planned transmission capital
expenditure of Rs. 634 crore for the period from FY2015 to FY2019.
The improvement in operational performance and to enable uninterrupted and reliable supply
of power to the consumers has been the key driver behind capital investments by the
distribution utilities. The exhibit above shows the total capital expenditure incurred during
FY2013 to FY2016 and the proposed capex over FY2017 and FY2019 by the state discoms.
According to the details available in the public domain, the states mentioned above have a total
planned outlay of Rs. 72,440 crore in FY2018 and Rs. 51,785 crore in FY2019. For FY2018,
the highest planned capital expenditure is by Uttar Pradesh at Rs. 15,698 crore followed by
Maharashtra at Rs. 8917 crore. For FY2019, Uttar Pradesh has the highest planned capital
expenditure of Rs. 10,095 crore followed by Maharashtra at Rs. 7031 crore. The states of Uttar
174
Pradesh, Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh and Tamil Nadu together constitute
to around 70% of total planned capital expenditure of FY2018 and FY2019. In the North-
Eastern part of the country, the total capital expenditure planned by the discoms of Assam,
Meghalaya and Nagaland amounts to Rs. 1,434 crore, Rs. 37.8 crore and Rs. 693 crore
respectively in FY2018.
Annual Integrated Rating Exercise for State Distribution Utilities by Ministry of Power,
GoI
In May 2017, the Ministry of Power, GoI released the fifth annual integrated ratings of state
distribution utilities covering rating year FY2016. This rating is on a six-point scale (A+ to C)
to indicate the operational and financial performance capability of discoms. The ratings are a
mechanism to incentivize the utilities to improve their operational and financial performance
and also to enable realistic assessment of the utilities by banks and financial institutions.
Earlier, the first set of ratings was released in March 2013 followed by the third annual
integrated exercise in August 2015. This was followed by fourth annual integrated exercise in
June 2016.
In terms of rating mix for 41 state owned utilities covered in the fifth annual integrated rating
report, 30 utilities are rated "B+ & below" (moderate to very low operational and financial
performance capability), while 5 utilities (four from Gujarat and Uttarakhand Power
Corporation) are rated "A+" (very high performance capability) and 6 utilities (one from
Andhra Pradesh, three from Karnataka, one from Maharashtra and one from Himachal Pradesh)
are rated "A" (high performance capability). This reflects that most of the distribution utilities
have moderate to very low performance capability and the same is seen from a median cost
coverage ratio which remained low (0.87 vs 0.85 in fourth annual integrated ratings),
essentially due to non-cost reflective tariffs, high distribution loss levels and substantial
increase in cost of supply. Cost coverage ratio is defined as ratio of cash collections from the
consumers including subsidy receipt from the State Government and total expenditure incurred
by the utility for supply of power. Rating of distribution utilities of key states is detailed as
below.
In terms of transition of ratings from 2016 to 2017, the cumulative number of upgrades stands
at 11, while the ratings for 8 utilities were downgraded. The key reasons for downgrades
include, [a] weakening of cost coverage ratio, [b] deterioration in AT&C loss levels, [c] non-
availability of audited accounts for utilities in few states and [d] delays in issuance of tariff
orders and filing of tariff petitions in few states. The key reasons for upgrades include, [a]
reduction in AT&C loss levels – 26 out of 41 utilities have reported improvement in AT&C
loss levels, with the median AT&C loss declining from 24.82% in FY2015 to 22.92% in
FY2016 and [b] improvement in cost coverage – 25 out of 41 utilities improved on this
parameter with the median cost coverage ratio improving to 0.87 in FY2016 as against 0.85 in
FY2015. Further, timely availability of audited financials for FY2015, increased adherence to
regulatory framework and implementation of reforms to aid improvement in overall
performance were also considered as the key factors for consideration of upgrade of ratings.
175
Exhibit 28: Trend in rating of Distribution Utilities
released by MoP
Distribution Utility State Third Fourth Annual Fifth Annual
Annual Integrated Integrated
Integrated Exercise Exercise
Exercise
Eastern Power Distribution Andhra
B+ B+ A
Company of Andhra Pradesh Pradesh
Southern Power Distribution Andhra
B+ B B+
Company of Andhra Pradesh Pradesh
Dakshin Gujarat Vij
Gujarat A+ A+ A+
Company Limited
Madhya Gujarat Vij
Gujarat A+ A+ A+
Company Limited
Paschim Gujarat Vij
Gujarat A+ A A+
Company Limited
Uttar Gujarat Vij Company
Gujarat A+ A+ A+
Limited
Bangalore Electricity Supply
Karnataka B+ A A
Company Limited
Chamundeshwari Electricity
Karnataka B A A
Supply Company Limited
Gulbarga Electricity Supply
Karnataka B B B
Company Limited
Hubli Electricity Supply
Karnataka C+ B+ B+
Company Limited
Mangalore Electricity
Karnataka B+ A A
Supply Company Limited
Madhya Pradesh Poorv
Madhya
Kshetra Vidyut Vitaran B B B
Pradesh
Nigam Limited
Madhya Pradesh Paschim
Madhya
Kshetra Vidyut Vitaran B+ B B+
Pradesh
Nigam Limited
Madhya Pradesh Madhya
Madhya
Kshetra Vidyut Vitaran B B C+
Pradesh
Nigam Limited
Maharashtra State Electricity
Distribution Company Maharashtra A B+ A
Limited
Ajmer Vidyut Vitran Nigam
Rajasthan C+ C+ C+
Limited
Jaipur Vidyut Vitran Nigam
Rajasthan C+ C+ C+
Limited
Jodhpur Vidyut Vitran
Rajasthan B C+ B
Nigam Limited
Punjab State Power
Punjab A+ B+ B+
Corporation Limited
176
Exhibit 28: Trend in rating of Distribution Utilities
released by MoP
Distribution Utility State Third Fourth Annual Fifth Annual
Annual Integrated Integrated
Integrated Exercise Exercise
Exercise
Tamil Nadu Generation and
Tamil Nadu B C+ B
Distribution Corporation
Northern Power Distribution
Company of Telangana Telangana B B+ B+
Limited
Southern Power Distribution
Company of Telangana Telangana B+ A B+
Limited
Source: Reports on Annual Integrated Rating Exercises released by Power Finance Corporation
for Ministry of Power
The key drivers for the capital investment in the transmission and distribution segments of
power sector are as follows:
• Growing demand for electricity given the low per-capita energy consumption in India
and growing nature of the economy
• Investments towards lowering transmission and distribution losses
• Augmentation of transmission and distribution infrastructure to improve quality and
reliability of supply
• Grid modernisation to integrate the growing share of renewable power
As per CEA’s National Electricity Plan 2016, a transmission line length addition of 105,580
circuit kilometer and substation capacity addition of 292,000 MVA is expected during the 13th
plan period (2017 – 2022). These investments are expected at an outlay of Rs. 2.6 trillion.
Power sector plays a key role in the development of the economy with electricity being one of
the key inputs. As a result, the demand for power sector is linked to the performance of the
overall economy, as also observed from the historical growth in electricity demand (electricity
requirement in million units as reported by central electricity authority or CEA), which co-
relates with GDP growth (Exhibit 29). The all India electricity demand has grown at a CAGR
of 7% between FY2005 and FY2013. However, the demand growth in FY2014 slowed down
to 0.7%, owing to subdued economic environment in the country which in turn affected the
demand from the industrial/commercial segments. These two segments are the key demand
drivers for electricity. While the electricity demand growth has shown an improvement during
FY2015, with y-o-y growth of 6.7%, the growth moderated to 4.3% during FY2016 owing to
constraints in the paying capacity of state distribution utilities, besides subdued energy demand
growth from industrial consumer segment. The electricity demand growth further moderated
in FY2017 to 2.6% majorly due to the muted demand growth from the industrial segment which
177
constitutes around 30% of the overall electricity demand growth. However, the electricity
demand growth during FY2018 increased to 6.1% majorly led by electricity demand growth in
states such as Uttar Pradesh, Maharashtra, Telangana and Andhra Pradesh
Exhibit 29: Trends in All India Electricity Demand Growth
5.1% 6%
800
4.3%
3.7%
600 4%
2.6%
400
0.7% 2%
200
0 0%
FY2009FY2010FY2011FY2012FY2013FY2014FY2015FY2016FY2017FY2018
All India Energy Demand (LHS) % Demand Growth (RHS)
The overall installed power generation capacity in the country has increased from 159,398 MW
as on March 31, 2010 to 326,833 MW as on March 31, 2017 (CAGR of 10.8%) and further to
340,527 MW as per the provisional numbers by CEA on March 31, 2018. This was aided by
large investments during the 11th plan period (2007-2012) and 12th plan period (2012-2017),
especially from the private sector. This is subsequent to the enactment of Electricity Act, 2003
which encouraged large scale investments in the power sector. As a result, the share of private
power generating companies in the overall installed power generation capacity has increased
from 27.2% as on March 31, 2012 to 44.7% as on March 31, 2018. Thus, this sector now
accounts for the highest share in the ownership mix of installed generation capacity. Share of
central power generating companies and state power generating companies has declined to
24.8% and 30.5% respectively as on March 31, 2018 (as against 29.9% and 43.0% respectively
as on March 31, 2012).
In terms of fuel mix, the overall installed capacity constitutes 65.5% thermal based capacity as
on March 31, 2018 which increased marginally from 64.9% as on March 31, 2007 while the
share of hydro (26.2% as on Mar’2007 Vs 13.3% as on March 31, 2018) has come down during
this period. However, the share of renewable energy capacity has increased from 5.9% as on
March 31, 2007 to 19.2% as on March 31, 2018 led by large investments in the renewable
energy segment.
178
Exhibit 30: Trend in fuel mix of generation capacity
100% 5.90%
2.90% 12.3% 17.5% 19.2%
2.4%
80% 2.1% 2.0%
26.20% 19.5% 13.6% 13.3%
60%
40%
64.90% 65.8% 66.8% 65.5%
20%
0%
Mar-07 Mar-12 Mar-17 Mar-18
Thermal Hydro Nuclear Renewable
The long-term energy demand outlook for power generation remains strong given the low per
capita electricity consumption in India at 860 kWh during 2015. This is much lower than the
average per capita electricity consumption in developed countries as well as compared to the
other BRICS nations (Brazil, Russia, China and South Africa) (as shown in Exhibit 31 below).
Further the latent demand potential is significant in India given that a large section of
population is without access to electricity. As per India Energy Outlook published by
International Energy Agency, 237 million people representing 19% of total population in India
did not have access to electricity in 2013; with 221 million residing in rural area and remaining
in the urban areas. The percentage of population without access to electricity is high at 26% in
rural areas as against 4% in urban areas in 2013. The constrained supply to rural / urban parts
of the country by several state-owned discoms due to their own limited paying capacity,
testifies to latent demand of electricity. This provides for significant growth potential for
electricity consumption in India and in turn for large capital investments across generation,
transmission and distribution functions of power sector.
Exhibit 31: Comparison of Per Capita Electricity Consumption (Units/per
person/annum) in 2015
Australia 9890
2520
China 4050
7040
Germany 7010
6590
South Africa 4150
12830
India 860
0 2000 4000 6000 8000 10000 12000 14000
B) Investments towards lowering distribution losses and improving quality and reliability of
supply.
The distribution loss levels continue to remain relatively high across majority of the states due
to both, high technical and commercial losses. One of the programs initiated by the discoms to
179
lower the loss levels is the separation of agriculture and non-agriculture feeders in rural areas.
The primary objective of the feeder separation program is to ensure uninterrupted power supply
to the non-agricultural categories and regulated power supply to the agricultural category, thus
ensuring effective demand side management and reduction in distribution losses. This also
allows the discom to more accurately estimate the agriculture consumption. In the past, the
incorrect estimation of power consumption by agriculture consumers led to inaccurate
distribution loss levels. States such as Gujarat, Andhra Pradesh, Punjab, Rajasthan, Haryana
and Madhya Pradesh have successfully implemented feeder separation programs in their
respective states. The discoms also benefit from reducing the peak power purchase cost through
better distribution of agricultural load, post the feeder separation.
40%
20%
0%
Karnat…
Mahar…
Puduc…
Telang…
Andhra…
Jharkh…
Madhy…
Tamil…
Jammu…
Megha…
Rajast…
Chhatti…
Himac…
Uttar…
Uttara…
Kerala
Manipur
Mizoram
Gujarat
Tripura
Assam
Goa
Haryana
Sikkim
Bihar
Punjab
Source: UDAY Website, ICRA Research
The discoms also pursuing smart grid-based system to manage electricity demand in a
sustainable, reliable and economical manner. The smart grid system facilitates the integration
of demand and supply using information technology to make the power system more efficient,
reliable and resilient. Further, the smart grid systems are programmed to provide consumers
with real-time information on their energy use, support pricing that reflects changes in supply
and demand, and enable consumers exercise choices in terms of usage of energy. Also, the
smart grid network can reduce the pilferage by employing smart meters, thereby reducing the
overall loss levels in the system. The government, in line with the benefits expected from smart
grid systems has launched a program called "National Smart Grid Mission" for planning,
monitoring and implementation of policies and programs related to smart grid activities.
With respect to the transmission system, the utilities are using the High Voltage Direct Current
(HVDC) transmission systems for the supply of power over large distances. HVDC systems
offer an opportunity to support and improve the supply of power from sustainable, efficient
and reliable future grids. Further, HVDC systems also allow renewable energy generators to
access the grid directly.
The central government in November 2014 has approved the North-Eastern Region Power
System Improvement project (NERPSIP) for the six states (Assam, Manipur, Meghalaya,
Mizoram, Tripura and Nagaland) of the region to strengthen their intra-state transmission and
distribution system. The project has been estimated at a cost of Rs. 5111.53 crore which is
expected to be funded on a 50:50 basis by the central government and the World Bank. In
February 2015, Power Grid Corporation of India Limited (PGCIL) along with Government of
Arunachal Pradesh have signed a MoU for the Comprehensive Scheme for Strengthening of
Transmission & Distribution Systems (CSST&DS). The scheme has been started with an
estimated outlay of Rs. 4754.42 crore which also includes the improvement in T&D systems
180
in Sikkim. As per the scheme, 29 transmission lines (1917 kms) and 70 distribution lines (1923
kms) are being laid covering the entire state. Also, around 94 sub-stations are to be established
under this scheme. Prior to 2014, only 5 districts out of 20 districts have been connected to 132
KV/220 KV grid in Arunachal Pradesh and currently all the districts are being brought under
132 KV/220 KV.
As on April 18, 2018, the AT&C loss levels of various states as per UDAY website have been
mentioned in exhibit 29. The AT&C loss levels in Jammu and Kashmir is the highest at 57.4%
followed by Sikkim at 43%. The AT&C loss levels of states such as West Bengal, Odisha and
Nagaland were not available. The states such as Himachal Pradesh, Andhra Pradesh, Kerala
and Gujarat have recorded the lowest AT&C loss levels at 6.1%, 9.7%, 11.6% and 11.9%
respectively. AT&C loss levels of West Bengal, Odisha and Nagaland are yet to be published
in UDAY website.
The share of renewable energy generation out of the overall energy generation has been on an
increasing trend over the past ten years. With the government’s target to install 175 GW of
renewable energy by 2022, the share of the renewable energy generation is expected to further
increase. To accommodate power from the increasing renewable energy capacity, the
government has started developing Green Energy Corridor (GEC), a transmission network to
connect renewable energy rich states to states that lack renewable energy generation potential.
The project is under implementation in eight states – Andhra Pradesh, Gujarat, Himachal
Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan and Tamil Nadu. Under the
GEC project, renewable energy management centers (REMC) would be set up to forecast the
renewable power generation and demand. These centers are also interconnected with load
dispatch centers (LDC) to gather real time information and monitor & control capacity addition.
Under the green energy corridor, the eight renewable rich States are implementing the corridor
with total project cost of Rs. 10,141 crores. The funding mechanism consisting of 20% State
Equity, 40% Government of India Grant (total 4,056.67 crores) and 40% KfW loan (500
million EUR). The purpose of the project is to evacuate approx. 20,000 MW of large scale
renewable power and improvement of the grid in the implementing States. Projects worth Rs.
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6,766 crore have been awarded and approx. Rs. 1,400 crores have been disbursed to the States
from the Government of India share.
Strengths
• Large investments underway in the sub-transmission and distribution segment of
the power sector: The Government’s focus on strengthening of the sub-transmission
and distribution infrastructure in urban and rural areas under the IPDS and DDUGJY
schemes respectively provides strong growth potential for EPC and capital goods
players in the power sector. Moreover, the Saubhagya scheme announced by
Government of India in September 2017 to provide electrification to all households
provides further impetus for investments in the sector.
• Strong capex program by PGCIL in the transmission segment: PGCIL incurred
investments of Rs. 1.13 trillion during the 12th plan period mainly towards
development of transmission infrastructure. The capex is estimated to be about Rs. 25
billion for FY18 and another Rs. 810 billion over the next three to four years, providing
strong growth potential for EPC and capital goods players
• Reforms under UDAY is expected to have positive impact on India's power
sector: The various reforms undertaken as part of UDAY scheme such as takeover of
discom debt by state governments, reduction in T&D losses and adequate tariff
revisions is expected to lead to an improvement in financial health of discoms. This
would enable the discoms to increase their investments in the distribution segment.
Weaknesses
• Operating margins remain vulnerable to price volatility of the key raw materials:
Given the fact that order execution period takes about 18-24 months, operating
profitability of companies is vulnerable to price volatility in key raw materials i.e. steel
and zinc, particularly in case of international contracts which are normally fixed-price
based. Nonetheless, this is mitigated to an extent given the presence of price escalation
clause in the domestic contracts (e.g. price index and formula for calculation any price
variation) for raw material components like towers, wires, conductors etc).
• High working capital intensity, inherent in the EPC business: The receivable
position is generally high due to the longer payment cycle for the projects with state
utilities as counterparties, as well as the retention money component (10% to 20% of
order value) held back by the project customers.
Opportunities
• Long-term demand growth for electricity remains strong given the low per capita
power consumption in India: The long-term demand outlook for power consumption
remains strong given the low per capita consumption in India as compared to other
developing and developed countries and given that a large portion of the population is
still not connected to the grid for power supply. This in turn provides for strong growth
opportunities for players in the transmission and distribution segment of the power
sector.
• Augmenting the inter-regional power transmission capacity: The growth in the
transmission infrastructure has not kept pace with the growth in power generation
182
capacity of the country which has more than doubled in the last 10 years. Therefore,
there is a need to augment the transmission capacity to transmit power from power
surplus region to deficit regions. This provides scope for continuation of large scale
investments in the power transmission sector.
• Green Energy Corridor (GEC) for renewable energy capacity: The development
of GEC will enhance inter-state transmission of renewable energy for the states which
lack potential to generate renewable energy. This is in line with the Government’s
focus on increasing the share of renewable energy in the overall energy mix. This is
further supported by the waiver provided on inter-state transmission charges for wind
and solar power projects.
Threats
• High competitive pressures for the transmission & distribution business: The
competition has increased significantly over the last five years on account of relaxation
in pre-qualification requirements and vendor-development programmes by PGCIL.
The escalation in competition can be gauged by the fact that there are over 15-20
different vendors (companies/JVs), which have secured orders for PGCIL’s
transmission tower packages in each of last three years.
• Challenges to project execution arising from right-of-way (RoW) and geopolitical
issues: The key challenge in timely execution of projects in the transmission and
distribution segment is on account of delays in obtaining the RoW and various other
required statutory clearances. Given the land-centric nature of power transmission and
distribution projects and since the RoW is typically not obtained prior to award of the
project, but rather in conjunction with progress of the project, these issues often lead
to execution slippages.
• Weak financial performance of DISCOMs; possible delays in realising benefits
under UDAY: The financial health of the discoms has been affected by higher than
approved AT&C losses and inadequate tariffs in relation to the cost of supply. This has
in turn affected their ability to undertake investments for augmentation of distribution
infrastructure and making timely payments to power generator companies and EPC
contractors / suppliers. Further, the progress in improving operating efficiency under
the UDAY scheme remains slow, which would lead to delays in realising the benefits
expected from this scheme.
The critical success factors for a company operating in manufacturing and EPC space for the
power sector utilities would depend on their ability to manage key risks associated with project
execution, commodity prices and counter-party credit risks. Further, companies with strong
competitive position and diversification across customers, geographies and products/services
would have an advantage over other players in the market. Given the relatively high working
capital cycle, it is also critical for the companies to have adequate liquidity profile. Moreover,
the experience and track record of the management plays an important role in the success of
companies in this sector.
A) Execution risk
Delays in obtaining the Right of Way (RoW) from the affected parties as well as the various
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other required statutory clearances are the key challenges in timely execution of transmission
and distribution projects. Given the land-centric nature of these projects and since the RoW is
typically not obtained prior to award of the project, but rather in conjunction with progress of
the project, these issues often lead to execution slippages. Also, due to the inherent long-term
nature of the projects, companies face a variety of implementation risks such as locational
challenges, interruption in supply of raw materials, construction delays, shortage of skilled
manpower which can lead to cost escalation. Liquidated damage claims in the form of bank
guarantee invocation by the counterparties can also hurt economies of the project. Having a
robust IT infrastructure combined with strict internal controls and standard operating
procedures can help mitigate such risks to a certain extent. Also, political risks such as
government instability, terrorism, civil unrest etc. would impact the project execution.
Delay or non-payment of dues from the counterparty can have adverse impact on the financials
of any EPC player due to capital intensive nature of the projects. In domestic market, currently
PGCIL accounts for more than 50% of the orders which due to its strategic position in the
Indian power sector, low business risks sovereign ownership and strong operational efficiency
limits the counterparty risk to a large extent. Apart from PGCIL, orders from State Electricity
Boards (SEBs) also form a major chunk of domestic market. Orders from SEBs in general are
less competitive as compared to orders from PGCIL but need high working capital requirement
due to delays in payments. In case of overseas ventures, projects funded by multilateral
agencies such as Asian Development Bank (ADB), African Development Bank (AfDB) etc.
generally have a strong payment security mechanism (such as Letter of Credit) in place and
carry less counterparty credit risk
The typical cost break-up for EPC order comprises of three components viz. 1) design
engineering & manufacture of tower, 2) purchases of bought-out components, and 3) civil
construction/erection cost, which account for about 40%, 30% and 30% respectively of total
project cost. Given the fact that order execution period takes about 18-24 months, operating
profitability is vulnerable to price volatility in key raw materials i.e. steel and zinc, particularly
in case of international contracts which are normally fixed-price based. Domestic contracts
include price escalation clause (e.g. price index and formula for calculation any price variation)
for raw material components like towers, wires, conductors etc. Whereas, for international
projects which are mostly fixed price in nature companies hedge prices through price discovery
or have back to back fixed price contracts with their suppliers/contractors.
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Raw Material Outlook Price History
185
Raw Material Outlook Price History
manufacturing aluminium.
Copper Global copper production growth $8,000.00 600.00
was marginal at ~0.4% in CY2017. $6,000.00 400.00
$4,000.00
However, unlike consumption $2,000.00 200.00
witnessing a turnaround in the $0.00 -
186
Raw Material Outlook Price History
notes that lower demand for Zinc realisation in domestic market (in
Rs./kg)
Chinese galvanized steel
components in the global market
led to the fall in zinc consumption
in China. In the last one year,
international zinc prices have
registered a sharp upturn. The
increase in prices has been
witnessed despite an increase in
both refined zinc as well as mine
production globally in the last few
months. Notwithstanding this
increase, we believe the shortage in
supply of zinc in the global market
is likely to persist, which in turn
would keep zinc prices elevated
internationally. On the domestic
front, the annual growth in
apparent zinc consumption was a
healthy ~7% during 9m FY18 after
posting muted growths of ~0.6% in
FY17 and FY16. Overall
consumption growth for FY18 is
likely to remain at ~6-7% as a
result of an improvement in
automobile production, which is a
key demand driver for zinc in the
domestic market.
(Source: ICRA Report, September 2018)
The working capital intensity is generally high in the EPC business driven by the long
execution period for the transmission projects, long credit period offered to customers and the
retention money component held back by the project customers which is released at the
completion of orders. Therefore, it is crucial for companies to have enough liquidity and
financial flexibility to support their working capital position. Unutilized bank / credit limits,
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liquid investments and company’s relationship with banks, financial institutions and other
intermediaries can form a vital source of cash flows in case of any weakness in operational
cash flows from the projects. Also, collecting upfront advances from customers and having
back to back payment terms with its suppliers/subcontractors can provide liquidity over short
to medium term.
E) Competitive position
In the domestic market, the competition has increased significantly in the transmission business
in recent years on account of relaxation in pre-qualification requirements and vendor-
development programmes by Power Grid Corporation of India Limited (PGCIL), who is the
primary source of domestic transmission orders. Given the significant tendering in the last few
years, the segment has seen the entry of both large and small domestic EPC participants, as
well as overseas competitors. However, having a long track record of executing large-sized
transmission projects and a comfortable liquidity profile combined with a team equipped with
strong project management skills will place a company in a better position against its
competitors and will provide future growth opportunities.
A diversified product mix, while allowing a company to address a wider customer market, also
reduces its reliance on a single segment. Some of the biggest players in the sector have
diversified into other segments has reduced their dependence on PGCIL and SEBs for orders
to some extent and has diversified their customer base. Also, company’s presence across
multiple geographies helps it in mitigating the risks to its portfolio from exposure to a single
region, while also enabling it to leverage on growth opportunities in other regions.
Diversification reduces the company’s exposure to demand volatility and competition in any
particular segment/ location. Given that there is usually significant cash flow fungibility across
projects, operational cash flows / leveraging in projects that are performing well can be a source
of cash flows to support relatively weak ongoing projects. However, such diversification should
be in line with the company’s execution capability, management bandwidth and feasibility for
such diversification.
Company’s management quality and governance practices are also very crucial for successful
execution of projects given their sensitivity to factors that can cause significant cost over-run.
Formalized policies and procedures - mandatory bid evaluation by a bid assessment committee,
third-party project appraisal, and consistent bidding policies, among others are critical for
sustainability of company’s revenues. The project-monitoring systems implemented by the
company, the policies put in place to mitigate credit risk, and other control mechanisms
instituted for functions like management of supplier and / or subcontractor relationships and
review of their execution strength, are also critical for efficient execution of EPC projects.
Power sector is one of the most regulated sectors in the country, given its strong linkages
with the economic prospects of the country. The power sector In India is governed by the
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Electricity Act of 2003, which specifies the key regulations for the sector. The sector is thus
governed by State Electricity Regulatory Commissions (SERCs) at each state level and one
central regulatory commission namely, Central Electricity Regulatory Commission (CERC).
Further, as per the provisions of the Electricity Act 2003, Appellate Tribunal for Electricity
has been constituted as an independent authority to hear appeals against the orders issued by
CERC/SERCs. Also, the regulatory framework is in place for determination of tariff for
power generating & transmission entities and also determining tariff for supply to consumers
by distribution utilities.
Transmission in India is a licensed activity and transmission systems are classified into inter-
state and intra-state transmission systems. The inter-state transmission system is majorly
owned and operated by Power Grid Corporation of India Limited, a GoI-owned enterprise,
which transfers the electricity from one state to another. The intra-state transmission systems
are majorly owned and maintained by the state transmission utilities which carry the
electricity generated from the generating point to the distribution point in the same state.
Further, the electricity distribution activities (barring distribution of electricity in rural areas
notified by the relevant state government and distribution by notified exempted entities such
as local authorities and non-governmental organisations) require a licence from the relevant
SERC. Like the generation projects, the transmission projects can be implemented under two
ways, namely the negotiated route (where the transmission tariff is determined by the
respective electricity regulatory commission) and the competitive bidding route (where the
transmission tariff is discovered through competitive bidding). For inter-state transmission
projects, the National Tariff Policy states that though all future inter-state transmission
projects should ordinarily be developed through competitive bidding, the central government
may give an exemption for certain projects that are strategically important or technical
upgradation is being done and If works are required to be done to cater to an urgent situation
on a case-to-case basis. For intra-state transmission projects involving a project cost beyond
a certain threshold, which will be determined by the respective SERC, such projects are to be
developed only through the competitive bidding route. Tariff for central sector utilities is
determined based on the tariff regulations approved by CERC on a regular basis. CERC vide
its order dated February 21, 2014 approved regulations for ‘cost-plus’ based tariff
determination for the control period commencing in April 2014 up to March 2019 (FY 2015-
19). For inter-state transmission projects, the tariff is determined based on the regulations
approved by respective SERCs on a regular basis.
The tariff charged by electricity distribution utilities for the consumers is determined by the
SERCs as per the tariff regulations approved. Under the tariff regulatory framework, state
distribution utilities are required to submit a tariff petition inclusive of the operating and
capital costs proposed to be incurred along with true-up petition for the previous period,
against which SERC needs to issue a tariff order. Such tariff petition filing for a particular
financial year by the utility should be done by end of November of the preceding FY and
subsequently, tariff order should be passed by SERC by end of March of the preceding FY.
True-up process involves comparison of the actual / provisional cost estimates against the
values allowed in the tariff orders to assess the gains or losses due to such variation in cost
items and the sharing of such losses / gains between the distribution licensee and the
consumers. While the tariff regulations are in place by SERCs in accordance with Electricity
Act 2003 in most of the states, issue in the past has been with respect to implementation of
these regulations for tariff determination process, given that there have been significant
189
delays in tariff petition filing process by the utilities which in turn has led to either absence
or delays in tariff order issuance by SERCs. So as to address the concerns related to delays
in tariff determination process, Appellate Tribunal of Electricity (ATE) in November 2011
directed SERCs to initiate suo-moto tariff determination process and issue such tariff order
in case of any delays in tariff petition filings by utility and to ensure cost reflective tariffs
while approving the tariff order. Thereafter, the issuance of tariff orders has improved since
FY2013. However, there have been instances of long delays in issuance of tariff orders in
few states. Moreover, the tariffs across majority of the states continue to remain inadequate
in relation to the cost of supply.
Disclaimer
All information contained herein has been obtained by ICRA from sources believed by it to be
accurate and reliable. Although reasonable care has been taken to ensure that the information
herein is true, such information is provided 'as is' without any warranty of any kind, and ICRA
in particular, makes no representation or warranty, express or implied, as to the accuracy,
timeliness or completeness of any such information. Also, ICRA or any of its group companies,
while publishing or otherwise disseminating other reports may have presented data, analyses
and/or opinions that may be inconsistent with the data, analyses and/or opinions presented in
this publication. All information contained herein must be construed solely as statements of
opinion, and ICRA shall not be liable for any losses incurred by users from any use of this
publication or its contents.
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OUR BUSINESS
Some of the information in the following section, especially information with respect to our plans and
strategies, contain certain forward-looking statements that involve risks and uncertainties. You should
read the section entitled "Forward Looking Statements" beginning on page 20 of this Draft Red Herring
Prospectus for a discussion of the risks and uncertainties related to those statements and the section
entitled "Risk Factors" beginning on page 21 of this Draft Red Herring Prospectus for a discussion of
certain risks that may affect our business, financial condition, or results of operations. Our actual
results may differ materially from those expressed in or implied by these forward-looking statements.
Unless otherwise stated, or the context otherwise requires, the financial information used in this section
is derived from our Restated Financial Statements included in this Draft Red Herring Prospectus on
page 281 of this Draft Red Herring Prospectus.
Business Overview
We are a company engaged in power transmission and distribution sector. We provide engineering,
procurement and construction ("EPC") services, undertake turnkey projects and are also manufacturers
of overhead conductors ("OC"), ground wires and galvanized iron wires ("GI Wires") that are majorly
utilized in laying of power transmission and distribution lines.
We have over the years emerged as an integrated organization for construction of transmission and
distribution lines, sub-stations and gas-insulated sub-stations under EPC / turnkey projects, especially
in the north-eastern region of India. We have also setup a wind energy based power plant with an
electricity generation capacity of 1.50 MW at Akal, Jaisalmer (Rajasthan), with a view to further
entrench ourselves in the power sector. We manufacture OCs such as: AAAC conductor, AAC
conductor, ACSR conductor and conductors for 765 KV / 800 KV HVDC, ground wires and GI Wires.
Our Company started its operations with a single manufacturing unit being Factory Unit – I in Jorhat
(Assam) in the year 1986. Subsequently, we expanded our capacities by setting up a second unit being
Factory Unit – II at Sikar (Rajasthan) in the year 1991 and subsequently setup our third manufacturing
unit being Factory Unit – III in Bapi (Rajasthan) in the year 2010, with an annual capacity of 15,900
MT. After setting up of the third unit, our Company’s total production capacity increased to 29,000 MT
per annum. Our Company strives to employ the latest machines, testing equipments and technology at
our various manufacturing facilities. Our Company’s product can be customized based on the
customers’ requirements. Further, we periodically review the sourcing of our raw materials to maintain
quality and to ensure timely delivery of our products.
With more than 30 years of experience, we believe we are one of the prominent integrated EPC / turnkey
contractors and OC and GI Wire manufacturers in the power transmission and distribution sector in
north-east India. We have over the years forayed into the EPC / turnkey project activities and have
supplied, erected, constructed and commissioned 400KV, 220KV, 132KV, 33KV, 11KV sub-stations,
transmission and distribution lines under various schemes undertaken by the Government for the
development of the power distribution sector, especially in the north-east region of India. Assam Power
Sector Investment Program ("APSIP") funded by Asian Development Bank ("ADB"), Deen Dayal
Upadhyaya Gram Jyoti Yojana ("DDUGJY"), Integrated Power Development Scheme ("IPDS"), Rajiv
Gandhi Grameen Vidyutikaran Yojana ("RGGVY"), Trade Development Fund Scheme
("TDF"), Assam Bikash Yojana ("ABY") and North Eastern Region Power System Improvement
191
Project ("NERPSIP") are some such schemes to name a few under which we have implemented some
of our projects. We aim to continue to build our strength in the field of manufacturing OCs, ground
wires and GI Wires; and execution of EPC / turnkey projects in the power distribution sector.
We have been a qualified supplier to Power Grid Corporation of India Limited ("PGCIL") for more
than eight years and have successfully completed orders for supplying of 765 KV / 800 KV HVDC
conductors to them. We have also been executing EPC / turnkey projects in the power transmission and
distribution sector in India for PGCIL and many state power utilities. PGCIL is the largest transmission
utility in the country (Source: ICRA Report, September 2018) and we are a qualified supplier to them
for all types of OCs.
In the year 1986, we believe, we were one of the early ones to start the manufacturing of OC such as
AAAC conductor, AAC conductor, and ACSR conductor for upto 400 KV lines in the north-east region
of India. Further, we believe we have successfully expanded our business to the north western region
of India by setting up our second manufacturing unit being Factory Unit - II in Sikar, Rajasthan in the
year 1991 to serve the increased need for OC in that region. Subsequently, we set up our third
manufacturing unit being Factory Unit – III in Bapi (Rajasthan) as part of our expansion plans. Later,
our Company forayed into EPC / turnkey projects implementation space and executed several land
mark projects such as execution of sub-stations and erection / revamping of transmission and
distribution lines. Over the years, our Company has built a strong relationship with PGCIL and many
state power utilities in India. PGCIL is one of our biggest customers and in the year 2010, we received
our first large order of approximately ₹687 million from them for supply of OCs. We continue to grow
our business with them and other state power utilities in India.
We have constantly strived to grow and improve our business. From a modest set up when we started
our business in 1986 in Jorhat (Assam), we are presently operating out of three (3) manufacturing
facilities located in Assam and Rajasthan. We have grown in the power transmission and distribution
sector from just manufacturing of OCs to undertaking EPC / turnkey projects, as well as, setting up of
wind energy based power plant. Presently, our Company’s clientele includes PGCIL and many state
power utilities on a pan-India basis with a strong foothold in Assam. For details regarding our history
and major milestones, please refer chapter titled "History and Certain Corporate Matters" beginning
on 222 of this Draft Red Herring Prospectus.
For Fiscals 2018, 2017 and 2016, our revenue from operations on restated consolidated basis was
₹4,295.25 million, ₹3,891.37 million and ₹3,812.55 million, respectively, representing a CAGR of
4.05% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our net profit on restated
consolidated basis was ₹182.71 million, ₹124.64 million and ₹91.03 million, respectively, representing
a CAGR of 26.14% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our EBITDA on
restated consolidated basis was ₹427.69 million, ₹333.21 million and ₹280.77 million, respectively,
representing a CAGR of 15.06% during the last three Fiscals. Our long-term bank facilities were rated
BWR BBB (outlook: Stable) and our short-term bank facilities were rated BWR A3 by Brickwork
Ratings India Private Limited, vide their letter dated August 21, 2017.
Our Strengths
192
Track record of organic growth and established manufacturing facilities
We have operated in the power transmission and distribution sector in India for over three decades now
and we have grown from one (1) manufacturing facility in Jorhat, Assam to now operating three (3)
manufacturing facilities including a unit each in Sikar and Bapi, Rajasthan. After setting up of Factory
Unit - III, our Company’s total production capacity increased to 29,000 MT per annum. Our Company
strives to employ the latest machines, testing equipments and technology at its various manufacturing
facilities. Further, we have also expanded our operations from manufacturing of OCs to execution of
EPC / turnkey projects in the power transmission and distribution space. We are constantly trying to
expand our products and services and have executed one gas-insulated switchgear sub-station and also
set up a wind energy based power plant over the last decade.
Over the past three years, our record of growth can also be demonstrated by the improvement in our
total revenues and profitability, which were achieved by way of successful expansion of our business
operations and our focus on quality.
From FY 2016 to FY 2018, our revenues from operations on a restated consolidated basis grew at a
CAGR of 4.05%. Not only have we grown our revenues in each of the last three years, but we have
also succeeded in increasing our PAT margins. Our PAT margins on a consolidated restated basis
increased from 2.38% in FY 2016 to 3.18% in FY 2017 and to 4.22% in FY 2018. While we have
grown rapidly in recent years, we have managed to maintain a moderately deleveraged balance sheet.
Our debt to equity ratio for FY 2018 and FY 2017 on a consolidated restated basis was 0.54 and 0.73,
respectively.
Our average return on equity on consolidated restated basis in FY 2018, FY 2017 and FY 2016 was
9.79%, 7.83% and 6.78% respectively.
Vast experience in manufacturing of OCs and execution of EPC / turnkey projects in the north-east
region of India.
Our Company has a vast experience in manufacturing of different types of OCs, GI Wires etc. and are
able to cater to the tailored requirements of our customers, especially in the north-east region of India
and are able to make timely delivery of our products in this region. Further, we have over the years
forayed into the EPC / turnkey project activities in the power transmission space and have supplied,
erected, constructed and commissioned 400KV, 220KV, 132KV, 33KV, 11KV sub-stations,
transmission and distribution lines under various schemes undertaken by the Government for the
development of the power transmission and distribution sector, especially in the north-east region of
India. We believe our Company is one of the most established local players in this region with on-
ground presence of more than three decades, strong relationships and local acceptance and because of
this, we feel we have a competitive advantage in the north-east region of India.
We enjoy long term business relations with most of our customers. Our customers include many state
power utilities of India. In the past, we have executed projects in states like Assam, Arunachal Pradesh,
Meghalaya, Gujarat, Madhya Pradesh, Rajasthan, Maharashtra, Haryana, Punjab, Uttar Pradesh,
Jharkhand, Tripura, West Bengal and others.
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Further, we believe that we have an established relationship with PGCIL. PGCIL, the largest
transmission utility in the country (Source: ICRA Report, September 2018) has been our customer for
almost eight (8) years now. The power transmission sector in India is led by PGCIL, a Government of
India enterprise, which is responsible for developing and managing inter-state and inter regional
transmission network, while the intra-state transmission network is developed and managed by state
owned transmission utilities (Source: ICRA Report, September 2018). Our Company is a qualified
supplier of all OCs along with 765KV/ 800 KV HVDC conductors to PGCIL. Over the past eight (8)
years, our Company has built a strong platform by serving PGCIL and many state power utilities and
are gradually growing our business with them.
We have successfully executed various EPC / turnkey projects in the last few years including
completion of one gas-insulated switchgear sub-station for 220/132/33 KV. We have also set up and
commissioned a wind energy based power plant at Akal, Jaisalmer (Rajasthan) which became
operational in FY 2010-11. Further, we have entered into a tripartite power purchase agreement with
one of the leading companies (which provides renewable energy solutions) and a state power utility on
September 2, 2010 for supplying power to the grid for Jaisalmer, for a period of twenty (20) years.
The key focus of our business is on quality and we aim to provide our customers with quality products.
By doing so, we believe that we are able to deepen our relationship with our customers to become their
preferred suppliers.
Further, we also seek to maintain strong relationship with our suppliers in order to derive better insights
into the markets for our raw materials, which helps us to manage our raw material supply chain and
inventory, resulting in greater predictability of supply and, consequently, a greater ability to meet
production schedules and achieve timely delivery of our products and service for our customers.
As a result of our customer centric approach, our track record, expertise, range of products and our
timely turnaround of projects, we have succeeded in expanding our business operations over the years.
Experience in handling EPC / turnkey projects in the power sector on difficult terrain like north-
east India
North-east India has some of the most difficult terrains to work on, especially in the power sector. We
believe due to our experience of more than three decades of working in these areas, we have been able
to develop a specific skill set for execution of projects in such difficult terrains. Additionally, these
regions have a presence of some militant/radical groups which makes our work harder. We feel, due to
our experience and our base being in Assam, we have been able to successfully overcome such hurdles
to deliver our projects in a timely manner.
Our Company has a broad portfolio of products and projects / services from manufacturing of OCs, GI
Wires to execution of EPC / turnkey projects for supply, construction, erection / revamping and
commissioning of new and existing sub-stations and construction of transmission and distribution lines
on EPC / turnkey basis across various locations. We also provide services of designing and erection of
gas insulated switchgear sub-stations. We have also set up and commissioned a wind energy based
power plant in Jaisalmer which marked our entry into non-conventional power generation space. We
regularly undertake projects based on customer specifications and aim to fulfil their varied needs.
194
Experienced management team and skilled workforce
Our Company believes that it has been successful in building a team of talented professionals and
encourages its employees to be enterprising. We constantly strive to provide training to our workforce
so that they grow within our organization.
Efficient infrastructure and resource management with strict quality control standards
We feel we have been successful in managing our growth over the last three decades. By expanding
our business activities in the power transmission and distribution sector and having invested in
additional manufacturing facilities over a period of time, we have been able to establish ourselves as a
prominent player in the power transmission sector in the north-east region of India. Apart from this, we
have actively focussed on our human resources, infrastructure, machinery and various testing
equipments and over time strived to deliver a quality product. Our manufacturing facilities at Jorhat
(Assam) and Sikar (Rajasthan) are ISO and BIS certified.
Our Strategies
We believe that we have developed a reputation for successfully executing projects in the power
transmission and distribution sector. Our ability to effectively manage projects in multiple geographical
regions specifically in north-east India is crucial to our continued success as a recognized power and
infrastructure company at a national level. We have in place an experienced and well-qualified
execution team, with skills in various fields, including civil, structural, and electrical. By further adding
to our existing pool of engineers, attracting skilled talent, and facilitating continuous learning and
training opportunities, we intend to continuously strengthen our execution capabilities and enhancing
our delivery capabilities to maximize client satisfaction. Alongwith the same, we also strive to optimize
our operating costs to maximize our operating margins.
Grow in power sector and infrastructure business with focus on north-east region of India
195
2017 to provide electrification to all households provides further impetus for investments in the sector
(Source: ICRA Report, September 2018). We believe we are well positioned to be part of the
Government initiatives that offer such opportunities for accelerated and sustainable growth for our
Company, especially in the north-east region. We intend to continue to focus on pursuing more EPC /
turnkey projects in the power transmission and distribution space as they enable us to: (i) move up the
value chain to become the principal contractors; (ii) provide us with the opportunity to participate in
large projects; and (iii) spread our resources widely and efficiently over various projects and thus
improving our operating margins. We believe that our experience and strong track record in industry
and the geographies in which we operate, will provide us with a significant advantage in pursuing these
opportunities. We have an excellent relationship with our customers (including PGCIL and many state
power utilities) which will help us in securing additional work from them going forward.
Due to the highly competitive nature of the industry in which we operate, it is critical for us to
rationalize our cost of borrowing to improve our margins. Working capital is a significant requirement
for us, resulting primarily from lengthy working capital cycles and elongated credit periods extended
to our customers.
Our aggregate consolidated borrowings outstanding as on March 31, 2018 was ₹5,224.88 million on a
consolidated restated basis and our debt to equity ratio as on March 31, 2018 was 0.54 on a consolidated
restated basis. We intend to rationalize our cost of borrowings with the objective of reducing our overall
finance costs and improving our debt to equity ratio. We propose funding our working capital
requirement through Net proceeds of the Issue as opposed to raising additional debt. Going forward,
this will help in rationalizing our finance cost. For further details on the proposed use of the Net
Proceeds of the Issue, please refer chapter titled "Objects of the Issue" beginning on page 128 of this
Draft Red Herring Prospectus.
We believe we are an established player in the power transmission and distribution sector and are trying
to strengthen our grip in the infrastructure sector as well. We intend to pursue our goal of capitalizing
on the synergy between our established presence in the power transmission and distribution sector by
continuing to manufacture OCs, GI Wires etc. and undertake EPC / turnkey projects. Going forward,
we will also identify and participate in new opportunities in the infrastructure space and execute those
projects where we can derive the necessary synergistic strengths from our existing core competencies
in terms of technical expertise, execution skills and varied geographical terrain.
Our business mainly comprises of (i) manufacturing of overhead conductors and (ii) EPC / turnkey
projects for erection of sub-stations and construction of transmission and distribution lines. A detailed
description of our products and services is given below:
Products manufactured
Overhead conductors ("OC") are vital in the construction of power transmission and distribution lines
and various other areas of the power sector. We manufacture overhead conductors such as all
196
aluminium conductors ("AAC"), aluminium conductors steel reinforced ("ACSR"); and all aluminium
alloy conductors ("AAAC") in the range of 11 KV to 765 KV, including 800 KV HVDC conductors
which are used for the purpose of construction of power transmission and distribution lines. Following
is a brief on OCs.
Overhead conductors:
Overhead conductors are engineered from electrolytically refined aluminium, which contains 99.5% of
aluminium. Due to its various features including corrosion resistance, high tensile strength and being
shock proof, these overhead conductors are used in overhead transmission and distribution lines. They
also have diverse applications and hence are used commonly in the power transmission and distribution
sector. The entire assortments of OCs are extensively used in the urban and rural areas for construction
of power transmission and distribution lines. These conductors are made up of more than one (1) strand
and can go upto sixty one (61) strands of aluminium wires, as per the requirements of the end usage.
Given below are the various types of OCs manufactured by our Company:
Apart from the above, we also manufacture ground wires and GI wires which are also used in the laying
of transmission and distribution lines.
Services:
Our Company provides complete EPC / turnkey projects in the power transmission and distribution
sector including a spectrum of services for rural and urban electrification, i.e., transmission and
distribution of power from construction of sub-stations to laying the transmission lines and the laying
of distribution lines to the end users for electricity. Given below is a brief description of our services:
Our Company provides complete EPC / turnkey solution for designing, sourcing, erection, testing and
commissioning of transmission and distribution lines of up to 220 KV. Construction of transmission
and distribution lines involve route surveys, designing, foundation, erection and stringing services, that
is to say, conducting surveys over multiple terrains, including rivers and other water bodies, hills and
deserts, laying of concrete foundations for the towers, erecting towers on the foundations, fitting
insulator and other hardware, stringing of conductors, ground wire and cables, testing and
commissioning of lines etc. The customers from whom we receive the orders for construction and
laying of transmission and distribution lines rely on our wealth of experience to construct and maintain
safe and reliable electric utility infrastructure. With the support of the latest machinery, we have been
able to provide quality and cost effective services to our customers. Since our inception, our Company
has laid down 283 kms of transmission lines and 30,709 kms of distribution lines upto June 30, 2018.
Setting up of sub-stations
Our Company has proven expertise in the designing (electrical, civil and structural), sourcing and
supply, construction and project management of the sub-stations of various capacities. Our scope of
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work in the sub-station project includes all activities from survey of the site, to designing, procurement
of requisite materials, inspection of the materials, civil works and foundation, erecting, testing and
commissioning of the sub-station.
Our Company has executed one gas insulated switchgear substation project for a state power utility of
220 KV/132 KV/33 KV. It was setup by using a range of products at all voltage levels, which is
efficient, safer and reduces transmission loss. Using our experience, we are able to design sub-stations
in a compact manner so as to reduce the overall cost of the projects, making erecting work easier and
faster.
Our Company has setup a wind energy based power plant under the "Policy for Promoting Generation
of Electricity through Non-Conventional Energy Sources – 2004" issued by the state Government of
Rajasthan with a capacity of 1.50 MW at Jaisalmer which became operational in FY 2010-11. We have
entered into a tripartite power purchase agreement with one of the leading companies (which provides
renewable energy solutions) and a state power utility on September 2, 2010 for supplying power for a
period of twenty years, from the wind power plant to the grid at Jaisalmer.
Some of the major EPC / turnkey projects undertaken and completed by our Company in the past, based
on the total contract value, are set out below.
Our order book for EPC / turnkey projects as on July 31, 2018 consists of 51 ongoing projects for a
total contract value of ₹16,883.00 million. Out of these, we have executed work aggregating an amount
upto ₹8,162.70 million (calculated based on the total contract value of such ongoing projects as reduced
by the value of construction work billed until such date) and the balance outstanding amount for the
same is ₹8,720.30 million, which is contracted to be completed by March 2021.
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Our order book for supply of OCs as on July 31, 2018 consists of 16 contracts for a total value of
₹4,526.11 million. Out of these, we have executed work aggregating an amount of ₹3,705.25 million
(calculated based on the total contract value as reduced by the value of the OCs supplied and billed
until such date) and the balance outstanding amount for the same is ₹820.86 million, which is contracted
to be completed by March 2020.
Presently, our Company operates out of three (3) manufacturing facilities: (a) Factory Unit – I is located
at Industrial Estate, Cinnamara, Jorhat – 785 008, Assam; (b) Factory Unit – II is located at F – 44,
Industrial Area, Sikar – 332 001, Rajasthan and c) Factory Unit – III is located at 384/3, Industrial Area,
Bapi, Dausa – 303 303, Rajasthan. Our manufacturing facilities are well maintained with regular
maintenance checks. Each facility is equipped with an independent quality control department that
ensures production to the highest standard.
The land and building for Factory Unit - I and Factory Unit – II has been taken on lease hold basis and
the land and building for Factory Unit - III is owned by our Company.
Our manufacturing facilities are equipped with various machines for rod breakdown, heat treatment,
stranding; and other ancillary machines for varied needs.
Following are the details of the main machines that are available in our manufacturing facilities:
Rod breakdown machine: In this machine, the wet wire drawing process is used to reduce the wire to
the required specification size by passing it through dies of various sizes, depending on the required
wire size. Our wire drawing machines are equipped with high carbonated, high chromium capstans to
ensure the smooth surface of the drawn wire, which in turn improves the properties of the drawn wire,
which results in reduced losses of power.
Tubular machine: This machine is in the form of a tube, set up horizontally. On starting the machine,
the tube rotates and all the wires get twisted together to make a single conductor of various sizes,
depending on diameter and specification. Two capstans are set up in front of the tube to pull the
conductor which rolls it onto the drum, which is then put through to 'take-up' stand. Our machine is
equipped with pre-forming and post-forming system to ensure proper twisting of the conductor.
Multilayer stranding machine: This machine consists of three cages. When the machine starts, 12, 18
& 24 bobbins in the three cages are rotated, individually or combined together, depending on the need,
which makes the conductor. Based on the various combinations of this machine, our Company can
make 19 / 37 / 52 / 61 stranded conductors. Two capstans are set up in front of the machine to pull the
finished stranded conductor and it is rolled onto the drum, which is on the 'take-up' stand.
Apart from the above, we have various lab equipments for the purpose of testing our products for the
required quality.
We regularly undertake maintenance and inspection of our machines. All our machines in our
manufacturing facilities are in good working condition.
For consolidated details of the capacity utilization of the Company for manufacturing conductors,
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please refer the table below:
For manufacturing unit-wise details of the capacity utilization of the Company for manufacturing
conductors, please refer the table below:
FACTORY UNIT- I
FACTORY UNIT – II
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FACTORY UNIT – III
Our business mainly comprises of (i) manufacturing of overhead conductors and (ii) EPC / turnkey
projects for erection of sub-stations and construction of transmission and distribution lines etc. The
detailed process involved in the same is given below:
The process of manufacturing of overhead aluminium conductors involves the following steps:
• Our Company procures aluminium/ alloy wire rod with diameter of 9.50 mm from various
suppliers. The aluminium/ alloy wire rod is drawn into the wet wire drawing machine, which
reduces the size of the rod, to attain the required size of the wire, with the help of various dies
and capstans used in the machine. Oil is used as a lubricant in the machine to counter frictional
heat and to obtain better finishing of the wire.
• After the process of wire drawing, we obtain the wire of the required size. For manufacturing
aluminium alloy conductors, the aluminium alloy wire is then put in a furnace for heat treatment
at a constant temperature of 535 °C for 45 minutes to 60 minutes. This period will increase or
decrease, based on the diameter of the aluminium alloy rod, which differs based on various
specifications.
• Immediately after the heat treatment, the aluminium alloy wire is submerged into a tank of cold
water, for cooling the aluminium alloy wire.
• The aluminium alloy wire is then taken out of the tank and dried for a period of 24 hours to 72
hours and again drawn into different sizes using the wire drawing process in the machine.
• After the aluminium alloy wire has been drawn to its specific size, it is then subjected to ageing
at a temperature of 140 °C for almost one hour in the heat furnace and further kept inside the
furnace at 145 °C to 165 °C to ensure that the material has attained the proper properties, as
required for aluminium alloy conductors.
• After the above processes, aluminium/ aluminium alloy wires are stranded together in the
tubular machine, for seven strand conductor, as per the product specification and then wound
in wooden / steel drums. For ACSR conductor, high tensile galvanized steel wire is used as a
core wire for strengthening the said conductor.
• Further, for high voltage multi-strand conductors where the product specification requirement
has more than seven strands of wire, multilayer stranding machine is used for stranding of
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multiple wires together to produce various sizes of conductors of upto 61 strands, depending
on the product specification and then wound up in wooden / steel drums. For ACSR conductor,
seven stranded high tensile galvanised steel wire is used as a core wire for strengthening the
said conductor.
• The ready overhead conductor is then type tested and routine tested for its various properties
such as resistance, elongation, galvanising properties and breaking load etc. and finally
dispatched to the customer.
Our Company is engaged in the execution of EPC / turnkey projects mainly through the open bidding
process of various state / government power utilities and other state/ government owned enterprises.
Open tenders are floated by various authorities by way of publication in a newspaper and/or by inviting
notice to its vendors. After the tender is floated, our Company submits its bid to participate in the
bidding process. Our Company receives an order after we have won the bid and the same is approved
by the relevant state / government power utilities and other state/ government owned enterprises. The
detailed flow-chart describing the process of execution of EPC / turnkey projects is given below:
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Notice inviting tender
Bidding process
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Handing over of the site to the client
Further, our Company on an ongoing basis, during the course of the project, sub-contracts certain work
/ job, forming part of the project being undertaken.
The power transmission sector in India is led by PGCIL, a Government of India enterprise, which is
responsible for developing and managing inter-state and inter regional transmission network, while the
intra-state transmission network is developed and managed by state owned transmission utilities
(Source: ICRA Report, September 2018). Thus, the major portion of the work in the power sector is
awarded by PGCIL and/or the state owned power utilities. As such, the normal course for awarding
these contracts by the Government or through its agencies is through the process of tendering. In view
of the nature of this market, the major sources of information of tenders for construction contracts are
newspapers and government gazettes. In order to ensure that we can effectively bid for these contracts
we have a team which keeps a track of these tender notifications and/or advertisements and prepares
the tender document accordingly for submission. Further, bidding capacity of a party / bidder is a very
important criterion for pre-qualification in a contract.
Our sales and marketing team includes a team for sale of OCs as well as a team for tendering for EPC/
turnkey projects. Teams are further divided into sales of sub-station structures, transmission / telecom
towers and OCs etc. The tendering team is headed by our Technical Director - EPC / turnkey projects
who looks after the tender process for EPC / turnkey projects. We have a sales and marketing team and
process in place that is overall headed by our Managing Director.
Our customers
Our Company supplies overhead aluminium conductors majorly to PGCIL and state power utilities
operating in the power sector. We have also been executing EPC / turnkey projects in the power
transmission and distribution sector in India for PGCIL and many state power utilities. We have a long-
standing relationship with all our major customers.
For the products we manufacture, we rely on purchase orders from our customers, which we receive
after being awarded the tender, based on the bidding process. We do not enter into firm-commitment
or long term supply agreements. The purchase orders specify prices, quantities, technical specifications
for the products and delivery schedule. These purchase orders are subject to conditions such as,
ensuring that all the products delivered to the customer are as per the approved specifications and pass
the necessary qualification tests.
For the projects we undertake in EPC / turnkey space in the power sector, we are awarded tenders based
on the bidding process. After being awarded the tender, we enter into specific contract agreements that
layout the project / job description alongwith delivery and payment schedule in detail.
The revenue break-up of our Company for manufacturing of OCs, EPC / turnkey projects and from
power generation division for FY 2018, FY 2017 and FY 2016 was:
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(in ₹ million)
Particular Manufactu % of EPC / % of Power % of Total
s ring Total Turnkey Total Generatio Total Revenue
Revenues Revenues n Division Revenues from
from from from Operation
Operation Operation Operation s
s s s
FY 2018 1,560.75 36.33 2,726.97 63.49 7.52 0.18 4,295.24
FY 2017 1,231.85 31.65 2,651.13 68.13 8.39 0.22 3,891.37
FY 2016 1,083.66 28.42 2,722.04 71.40 6.86 0.18 3,812.55
For details of our major customers’ contribution to our total revenues, please refer the table below:
For FY2018
For FY2017
For FY2016
Note: All figures are excluding taxes and total revenues are considered as the total revenue for the
respective year.
The Registered Office of our Company is located at Khetan Bhawan, Seuni Ali, A.T. Road, Jorhat –
785 001, Assam. The Registered Office of our Company is not owned by us and we have entered into
a deed of agreement dated July 16, 2018 with Dr. Murlidhar Khetan (one of our Promoters) for taking
the Registered Office on lease. The agreement is valid for eleven months from July 16, 2018 and
consideration paid by our Company for occupying the said premise is Rs. 35,000 per month.
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Details of other properties
Our Company has set up three (3) manufacturing facilities, located at Jorhat (Assam), Sikar and Bapi,
both in Rajasthan. The manufacturing facility at Jorhat (Assam) has been taken on leasehold basis from
Assam Industrial Infrastructure Development Corporation pursuant to a lease agreement dated
December 22, 2015 for a period of ten (10) years. The manufacturing facility at Sikar (Rajasthan) has
been taken on leasehold basis from Rajasthan State Industrial Development & Investment Corporation
Limited pursuant to a lease deed dated December 28, 1990 for a period upto August 2, 2077. The
manufacturing facility at Bapi is owned by our Company.
In addition to the same, we have taken land on a leasehold basis at Kundli (Haryana), and Jorhat
(Assam) and land alongwith building at Guwahati (Assam). We also own two (2) plots of industrial
lands at Jorhat (Assam), eight (8) plots of industrial lands at Bapi (Rajasthan) and plots of agro-
industrial lands in Jaipur (Rajasthan) aggregating to 7,106 sq.mtrs for any future use.
Further, we also have one (1) administrative office in Jaipur (Rajasthan) which is owned by us and have
one (1) administrative office each in Guwahati (Assam), Sikar (Rajasthan), Arunachal Pradesh and
Meghalaya, which have been taken on lease from some of our Promoters and third parties.
Our Company has taken on lease one (1) residential flat in Guwahati (Assam) from some of the
individuals forming part of our Promoter and Promoter Group for the purpose of accommodation of
our staff and we also own six (6) residential flats in Jaipur (Rajasthan).
The aggregate rent paid by our Company for the Fiscal 2018 for all short-term and long-term leases is
₹10.97 million.
Raw materials
Manufacturing of OCs
The principal raw materials that we use in our manufacturing process are aluminium wire rod, steel
wire and aluminium alloy rod.
The details of sources of raw materials for our Company for manufacturing OCs are as under:
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standalone basis.
For FY 2018, FY 2017 and for FY 2016, our total raw materials costs for manufacturing OCs accounted
for 84.57%, 90.88% and 86.27% respectively, of our revenues from manufacturing business, on
consolidated, restated basis, for the said periods.
The details of the raw materials used in the manufacturing process are given below:
Aluminium: It is an important raw material for manufacturing AAC & ACSR conductors. Normally
high conductivity electrolytic grade 9.5 mm diameter aluminium wire rod is used for conductors. The
properties of aluminium makes it a better and lighter conductor of electricity which is useful for the
electrical grade aluminum conductors. We accept/obtain aluminium after reviewing the raw material
test report of the supplier.
Galvanised steel wire: It is an important raw material for the manufacturing of ACSR conductors.
Galvanised steel wire (high carbon steel) is only used in ACSR Conductor to provide reinforcement.
We accept/obtain galvanised steel wire after reviewing the ISI marked raw material test report of the
supplier.
Aluminium alloy rod: It is an important raw material in 9.5 mm wire rod and is only used for
manufacturing AAAC conductor. We accept/obtain aluminium alloy rod after reviewing the raw
material test report of the supplier.
All our equipments and components for our EPC/ turnkey projects are sourced domestically.
For the FY 2018, FY 2017 and FY 2016, the cost of equipments and components for our EPC/ turnkey
projects as a percentage of revenues from EPC/turnkey projects was 60.20%, 72.01% and 75.40%
respectively.
Some of the equipments and components used in the EPC/turnkey projects are:
1. Transformer (Power & Distribution);
2. Pre-stressed concrete poles;
3. Steel tubular poles (transmission towers);
4. Conductor (AAAC and ACSR);
5. Cable (XLPE- Cross-Linked Polyethylene) and
6. Panel (Control and Relay Panel).
Suppliers
Details of our major suppliers' contribution to our total purchase of raw materials (for manufacturing
of OCs) are:
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For FY 2018
For FY2017
For FY2016
Utilities
Energy
Our Company purchases electricity from the state electricity board. We are constantly undertaking
energy conservation measures, such as control over idle running of machines and systematic
maintenance of machineries, as a result of which we are able to save on electricity costs.
Water
We source water from ground water bodies. We undertake water conservation measures for reducing
water usage and leakage. In our Factory Units II and III, we have water harvesting system installed for
collection of rain water.
Transportation
We use several modes of transportation including roadways to supply our products to our customers.
The transportation of goods and raw materials is usually by road depending on the terrain, size and
quantity of the order.
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Whilst locally sourced goods and raw materials are generally transported by road, certain imports of
raw materials require waterways as the mode of transportation.
Technology & system processes are essential not only to improve our internal operations and financial
performance, but also to provide our customers with effective, timely and reliable services. Technology
plays an important part in developing our process for manufacturing OCs, improving the quality of the
goods and helps in meeting the unique demands of the customers. Further, although no specific
technology is involved in the EPC / turnkey segment of our business, however, we have developed our
own in house system processes and expertise for undertaking such projects.
Intellectual Property
Our portfolio of intellectual property includes our trademarks. We have taken some measures to protect
our intellectual property to mitigate the emergence of counterfeit products. For example, we proactively
made an application to register our logo and name in the jurisdictions we are present in.
We view our trade name "NECCON" and logo " ", as material assets. We have made applications
under class 9 for our trade name "NECCON" and under class 37 for our trade name "NECCON" and
our logo " ", of the Trade Marks Rules, 2002 read with the Trade Marks Act, 1999, to register
our trademark in the jurisdictions we are currently in.
Quality
With an aim to be equipped with updated technology and strict quality control, we strive to deliver the
best in the category. We are committed to implement measures to comply with the applicable health
and safety laws and regulations. We have been mindful to be equipped with the updated technology &
strict quality control, so that we ensure consistent quality at most competitive prices for our products
and competitive bidding for our projects. To maintain quality standards, utmost care is being taken at
each stage of the production and execution of our projects. Our manufacturing facilities at Jorhat
(Assam) and Sikar (Rajasthan) are ISO / BIS certified. We regularly undertake quality checks from
production to pre-delivery.
We are committed to implementing measures to ensure that adequate health and safety standards are in
place for our employees and staff. We have a 'Health, Safety and Environment Policy' in place which
ensures implementation of Health and Safety Management System to achieve our goal of reducing
impact of health and safety hazards in operations. This system enables us to maintain a safe and healthy
workplace environment and reduce health hazards, accidents, and injuries.
Employee health and safety is of high importance to us. Any mishaps or accidents at our facilities or
any emission or leakage from our factory could lead to property damage, production loss, adverse
publicity and accident claims. We aim to become a zero-accident organisation and continually take
initiatives to reduce the risk of accidents and prevent environmental pollution at our facilities including:
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1. Ensuring our operations with proper and adequate safeguards for process safety.
2. Carrying out process and operations through well-defined systems and strict adherence to the
same.
3. Following effective use of safe working procedures and practices for operation, maintenance,
inspection and emergency situations.
5. Training and validating employees and workmen on health and safety practices.
6. Conducting all work in a safe manner and to ensure integrity of the assets, by providing
personal protective equipment, tools and tackles.
8. Investigating all incidents relating to health safety and environment, including minor ones and
near misses, followed by implementation of corrective measures.
9. Identifying and evaluating health risks related to operations and carrying out pre-employments
and periodic medical check-up of our employees and workmen.
10. Continuously monitoring work environments and plant effluents (gas, liquid and solid) and
taking measures to achieve better environmental performance.
11. Interacting with local communities on operations, likely hazards and emergency response
systems.
12. Keeping abreast of latest international codes, standards and practices and adopting the same
applicable.
Our employees have not suffered any major injuries in the last three (3) years.
We take the issue of workplace health and safety extremely seriously, as we view protecting the health
and safety of our workers as one of our most fundamental responsibilities. Senior management
periodically reviews the health and safety measures.
Environmental regulations imposed by our government will continue to have an effect on our operations
and us. We have obtained/ are in the process of obtaining / applied for, all material environmental
consents and licenses from the relevant governmental agencies that are necessary for us to carry on our
business. Our activities are subject to the environmental laws and regulations of India, which govern,
among other things, air emissions, waste water discharges, the handling, storage and disposal of wastes,
the remediation of contaminated sites, natural resource damages, and employee health and employee
safety. For a list of all government approvals and licenses obtained by us / pending applications, please
refer chapter titled "Government and Other Statutory Approvals" beginning on page 546 of this Draft
Red Herring Prospectus.
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Human Resources
We have developed a pool of skilled and experienced personnel. We also hire personnel on contract
basis,
part-time basis and temporary workers to meet our specific project needs. As of March 31, 2018 and
2017, we had 486 and 477 full-time employees, respectively, across all functional areas.
For functional area-wise employee details please refer the table below:
As on July 31, 2018, our Company had 498 full time employees and 36 contract labourers.
We gear our training efforts toward developing our personnel to allow for advancement and success
within our organization.
The management of our Company believes that our social responsibility should go beyond donations
and sponsoring charity events and instead comprise of initiatives which should meet the needs of the
society at large including education, welfare and aspiration of the community. With this view in mind,
some of our Individual Promoters have established a university namely, 'The Assam Kaziranga
University', in the year 2012 which was promoted by North Eastern Knowledge Foundation, a trust
registered under the Indian Trust Act, 1882. 'The Assam Kaziranga University' is established under the
Assam Private University Act No. XII of 2007 under section 2(f) of UGC Act 1956, with the sole idea
of imparting quality education to students and aiming to achieve the status of a world class university
that can offer state-of-the-art education and research avenues relevant to the contemporary world.
Through our donations to North Eastern Knowledge Foundation, we aim to help it to impart
professional education in the field of business, engineering and technology, sciences & social sciences
etc. We are of the opinion that, 'The Assam Kaziranga University' is one of the first universities in the
north-east region of India that offers engineering and management courses. The university is well
equipped with hostels for girls and boys, library, etc. We are working with North Eastern Knowledge
Foundation for carrying out expansion of the university to include more fields of education for the
benefit of students.
For a proper implementation of our CSR initiatives, our Company has adopted a CSR policy and the
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key philosophy of our Company’s CSR policy is guided by three core commitments i.e., scale, impact
and sustainability. Further, our Company has set up a CSR Committee, consisting of: (i) Dr. Murlidhar
Khetan (Chairman), (ii) Sharad Agarwalla (member), (iii) Jugal Kishore Agarwalla (member) and (iv)
Basant Kumar Khetan (member). The major areas identified by our Company for CSR initiatives are:
(i) education; (ii) health; (iii) rural transformation; (iv) environment; (v) protection and promotion of
national heritage, arts and culture; and (vi) disaster response.
In FY2017 and FY2018, we spent ₹3.10 million and ₹4.10 million, respectively, towards our CSR
initiatives.
Insurance
Our Company and operations are subjected to various hazards inherent in the manufacturing industry,
such as risk of equipment failure, work accidents, fire, earthquakes, flood and other force majeure event,
acts of terrorism and other hazards that may cause personal injury, loss of life, damage to property and
equipment and environmental damage. Our Company maintains insurance policies in respect of our
business, stocks, machinery, building and equipment. We maintain fire and special perils policy with
add on cover for earthquakes and in certain cases, terrorism, for our manufacturing facilities, machinery
and other equipment and for the electric equipment that we manufacture. We also maintain insurance
against theft and burglary for our stocks in trade and goods. Additionally, we have a workmen’s
compensation policy for our workmen employed in the manufacturing facilities and keyman’s
insurance policy for some of our senior management. Further, as per many of our contracts with our
clients for EPC / turnkey projects, we are required to obtain necessary insurances for the projects
undertaken by us. For the same, we regularly purchase marine cum erection policies. The policies that
are taken by us for the projects are jointly in the name of our Company and the client for which we are
executing the project.
We believe that our insurance coverage is in accordance with industry custom, including the terms of
and the coverage provided by such insurance. Our policies are subject to standard limitations and our
insurance coverage might not necessarily cover all losses incurred by us and we cannot provide any
assurance that we will not incur losses or suffer claims beyond the limits of, or outside the relevant
coverage of, our insurance policies. For risk related to our insurances, please refer "Risk Factors – The
insurance coverage taken by our Company may not be adequate to protect against certain business
risks and this may have an adverse effect on the business operations", on page 21 of this Draft Red
Herring Prospectus.
Competition
Our Company faces competition all over India from other entities engaged in the power transmission
and infrastructure business, many of which undertake projects similar to that of our Company.
However, we feel that we are best suited to handle projects on difficult terrains including north-east
region of India where the projects of our Company are mostly located. Typically, our competition varies
depending upon customers for OCs and / or nature of our EPC / turnkey projects and its geographical
location. We feel due to the varying size, scale and diversified operations of our Company, compared
to other listed companies operating in the industry we operate in, no one particular company is directly
comparable to ours. However, there are players in the power transmission segment and / or in the
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business of manufacturing conductors who have a business similar to ours in one or more segments,
albeit of a significantly larger size, whom we have included in the peer set such as, KEC International
Ltd, Techno Electric & Engineering Company Limited, Kalpataru Power Transmission Limited and
Apar Industries Limited which are listed companies. For details on the financial
performance/parameters of these companies please refer chapter titled "Basis of Issue Price" beginning
on page 138 of this Draft Red Herring Prospectus.
Legal Proceedings
For details on the outstanding litigation against our Company, our Group Entities, our Directors and
our Promoter, please see chapter titled "Outstanding Litigation and Material Developments" beginning
on page 535 of this Draft Red Herring Prospectus.
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KEY REGULATIONS AND POLICIES
The following is an overview of the important laws, regulations and policies which are relevant to our
business. The description of law, regulations and policies set out below are not exhaustive, and are only
intended to provide general information to Bidders and is neither designed nor intended to be a
substitute for professional legal advice.
Except as otherwise specified in this Draft Red Herring Prospectus, taxation statutes such as the Income
Tax Act, 1961 and Goods and Services Tax, various labour laws and other miscellaneous laws apply
to us as they do to any other Indian company. The statements below are based on the current provisions
of Indian law, and the judicial and administrative interpretations thereof, which are subject to change
or modification by subsequent legislative, regulatory, administrative or judicial decisions.
The Electricity Act, 2003 (the "Electricity Act") is the central legislation which covers, amongst
others, generation, transmission, distribution, trading and use of electricity. The Electricity Act lays
down the measures for the development of the electricity industry and power system. These include
promoting competition, protecting interests of consumers and the supply of electricity to all areas,
rationalization of electricity tariffs, ensuring transparent policies regarding subsidies, promotion of
efficient and environmentally friendly policies, the constitution of the Central Electricity Authority and
regulatory commissions and the establishment of an appellate tribunal. The Central Electricity
Authority’s functions include, inter alia, (a) specifying technical standards for construction of electrical
plants, electric lines and connectivity to the grid; (b) specifying grid standards for operation and
maintenance of transmission lines; (c) advising the Central Government on matters relating to the
National Electricity Policy; and (d) advising the appropriate government and commission on all
technical matters relating to the generation, transmission and distribution of electricity. The Electricity
Act also provides for a Central Electricity Regulatory Commission ("CERC") and a State Electricity
Regulatory Commission ("SERC") for each state. Among other functions, the CERC is responsible
for: (a) regulating of interstate transmission of electricity; (b) determining of tariff for inter-state
transmission of electricity; (c) issuing of licenses to function as a transmission licensee with respect to
inter-state operations; and (d) specifying and enforcing standards with respect to the quality, continuity
and reliability of service by a licensee. SERCs perform similar such functions at the state level.
Under the Electricity Act, the appropriate commission also oversees promotion of co-generation and
generation of electricity from renewable sources of energy. The SERCs under the Electricity Act are
also required to promote co-generation and generation of electricity from renewable sources of energy
by providing suitable measures for connectivity with the grid and sale of electricity to any person, and
also specify, for purchase of electricity from such sources, a percentage of the total consumption of
electricity in the area of a distribution license. Pursuant to the powers granted under the Electricity Act,
various regulations and guidelines have been framed by the CERC for determination of tariff, which
include, among others, the Central Electricity Regulatory Commission (Terms and Conditions for Tariff
Determination from Renewable Energy Sources) Regulations, 2017 for determination of tariff for
renewable power producers.
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Electricity Rules, 2005
The Electricity Rules, 2005 (the "ER 2005"), as amended, were framed under the Electricity Act and
provide the requirements in respect of captive generating plants and generating stations. The authorities
constituted under the ER 2005 may give appropriate directions for maintaining the availability of the
transmission system of a transmission licensee.
National Tariff Policy ("NTP") was notified and became effective from January 28, 2016. Among
others, NTP seeks to ensure availability of electricity to consumers at reasonable and competitive rates,
financial viability of the sector and attract investments and promote generation of electricity from
renewable sources. NTP mandates that SERCs must reserve a minimum percentage for purchase of
solar and wind energy. Further, NTP also provides exemption of inter-state transmission charges and
losses for electricity generated from solar and wind energy sources.
The Bureau of Indian Standards Act, 1986 and Bureau of Indian Standards Act, 2016
The Bureau of Indian Standards Act, 1986 ("BIS Act 1986") provides for the establishment of the
Bureau of Indian Standards ("BIS") for the development of activities of standardization, conformity
assessment and quality certification of goods, articles, processes, systems and services. The BIS Act
1986 provides for the functions of the BIS which includes, among others (a) publish, establish and
promote Indian standards; (b) specify as Indian standard, any standard, established by any other
institution in India or elsewhere, in relation to article or process; (c) undertake research for formulation
of Indian standards. The BIS Act 1986 empowers the Central Government to order compulsory use of
standard mark for any goods or article if it finds it expedient to do so in public interest. The BIS Act
1986 also provides the penalties in case there is a contravention of the provisions of the BIS Act 1986.
The Parliament of India has recently notified the Bureau of Indian Standards Act, 2016, to come into
force on such date as the Central Government may, by notification in the Official Gazette, appoint,
under which the functions and powers of BIS have been expanded and the categories that can be
standardized have been increased to include services.
Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2010
Central Electricity Authority (Measures relating to Safety and Electric Supply) Regulations, 2010 (the
"Safety and Electric Supply Regulations") lays down the regulations for safety requirements for
electric supply lines and accessories. It requires all relevant specifications prescribed by the BIS or the
International Electro-Technical Commission to be adhered to. These include all electric supply lines
and accessories to: (a) have adequate power ratings and proper insulation; (b) be of adequate mechanical
strength for the duty cycle; (c) have a switchgear installation in each conductor of every service line
within a consumer’s premises; and (d) be encased in a fireproof receptacle.
ENVIRONMENTAL LAWS
The Environment Protection Act, 1986 (the "EPA") is an umbrella legislation in respect of the various
environmental protection laws in India. The EPA vests the GoI with the power to take any measure it
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deems necessary or expedient for protecting and improving the quality of the environment and
preventing and controlling environmental pollution. This includes rules for inter alia, laying down the
quality of environment, standards for emission of discharge of environment pollutants from various
sources, inspection of any premises, plant, equipment, machinery, examination of manufacturing
processes and materials likely to cause pollution. Penalties for violation of the EPA include fines up to
Rs.100,000 or imprisonment of up to five years, or both. There are provisions with respect to certain
compliances by persons handling hazardous substances, furnishing of information to the authorities in
certain cases, establishment of environment laboratories and appointment of Government analysts.
Water (Prevention and Control of Pollution) Act, 1974 (the "Water Act") aims to prevent and control
water pollution. The Water Act provides for the constitution of a central pollution control board
("CPCB") and state pollution control boards ("SPCBs").
The CPCB, constituted by the Central Government, performs scores of functions which comprise
advising the central government in matters relating to prevention and management of water pollution,
coordinating the activities of the SPCBs and resolving disputes among them, if any, taking care of the
water pollution by organizing programmes through mass media, collecting data relating to water
pollution and the stipulation of measures for the prevention and control of water pollution. The streams
and wells are required to be maintained according to the standards prescribed by the CPCB. The SPCBs
are in turn responsible for the planning of programs for the prevention and management of pollution of
streams and wells, collecting and disseminating information relating to water pollution and its
prevention and control, inspection of sewage or trade effluents, works and plants for their treatment
and to review the specifications and data relating to plants set up for treatment and purification of water
and laying down or annulling standards for treatment of trade effluents to be discharged. This legislation
prohibits any person from establishing any industry, operation or process or any treatment and disposal
system, which is likely to discharge trade effluents into a stream, well or sewer without the prior consent
of the relevant SPCB.
Water (Prevention and Control of Pollution) Cess Act, 1977 ("Water Cess Act"), as amended states
that every person carrying on any industry is required to pay cess for the purpose specified in the Water
Cess Act. The cess shall be calculated on the basis of water consumed by those persons at such rate as
specified in the Water Cess Act. However, these persons shall be entitled to a rebate of 25% if they
install any plant for the treatment of sewage or trade effluent, provided they do not consume water in
excess of the maximum quantity prescribed for that category of industries and also comply with the
provisions relating to restrictions on new outlets and discharges under the Water Act or any standards
laid down under the Environment Act. For recording the amount of water consumption, every industry
is required to install meters as prescribed. Non-payment of cess within the specified time may lead to
imposition of penalty. In case if any person, liable to pay cess under the Water Cess Act, wilfully or
intentionally evades or attempts to evade the payment of such cess, shall be punishable with
imprisonment which may extend to six months or a fine which may extend to ₹1,000/- or both.
Air (Prevention and Control of Pollution) Act, 1981 ("Air Act") envisages the prevention, control and
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abatement of air pollution, by the establishment of boards for conferring on and assigning to such boards
powers and functions as prescribed under the Air Act. Pursuant to the provisions of the Air Act, as
amended, no person shall establish or operate any industrial plant in an air pollution control area without
the prior consent of the state board. No person operating any industrial plant in any air pollution control
area is permitted to discharge the emission of any air pollutant in excess of the standards laid down by
the SPCBs. Any contravention to the provisions of the Air Act may lead to imprisonment of up to six
years and a fine as may be deemed appropriate.
The CPCB and the SPCBs constituted under the Water Act are to perform functions under the Air Act
for the prevention and control of air pollution. The Air Act aims to prevent and control air pollution. It
is mandated under the Air Act that no person may, without the prior consent of the relevant SPCB,
establish or operate any industrial plant in an air pollution control area.
The Environment Impact Assessment Notification S.O. 1533(E), 2006 ("EIA Notification") issued
under the EPA and the Environment (Protection) Rules, 1986, as amended, provides that the prior
approval of the GoI, or State Environment Impact Assessment Authority, as the case may be, is required
for the establishment of any new project and for the expansion or modernization of existing projects
specified in the EIA Notification. The EIA Notification states that obtaining of prior environmental
clearance includes a maximum of four stages, i.e., screening, scoping, public consultation and appraisal.
An application for environmental clearance is made after the identification of prospective site(s) for the
project and/or activities to which the application relates but before commencing any construction
activity at the site by the applicant. Certain projects which require approval from the State Environment
Impact Assessment Authority may not require an Environment Impact Assessment Report. For projects
that require preparation of an Environment Impact Assessment Report public consultation involving
both public hearing and written response is conducted by the State Pollution Control Board. The
appropriate authority makes an appraisal of the project only after a Final EIA Report is submitted
addressing the questions raised in the public consultation process.
Factories Act, 1948 ("Factories Act") regulates the provisions relating to labour in factories. The
Factories Act defines a factory as any premises on which ten or more workers are employed or were
employed on any day of the preceding twelve months and on which an electronic manufacturing process
is carried on. Further, it also includes any premises on which twenty or more workers are employed or
were employed on any day of the preceding twelve months and on which a manufacturing process is
ordinarily carried on without the use of electricity. The applicant needs to submit the prior plans and
obtain the approval of the respective state government for the establishment, registration and licensing
of factories. The provisions for the same are contained in the rules made by the respective state
governments.
The Factories Act defines occupier of a factory as the person who has ultimate control over the factory.
In case of a company, any one of the directors shall be deemed to be the occupier. Fifteen days before
the occupier begins to use the factory premises, he shall send a notice to the chief inspector in writing
containing details of the factory (name and situation) and the occupier (name and address). The occupier
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is responsible for varied functions including the health, safety and welfare of the workers, maintenance
of the plant and systems operating in the factory, safety and risk-free environment in relation to the use,
handling, storage and transport of substances, monitoring the work environment. The Factories Act
provides for provisions relating to health and safety, cleanliness and safe working conditions.
Employment of women and children in the factories is prohibited under the Factories Act. Violations
to any of the provisions of the Factories Act or the rules framed there under may lead to the
imprisonment of the occupier or the manager of the factory for a term not exceeding two years and/or
with a fine of ₹1,00,000 or both. If any continuing violation after conviction is observed, a fine of up
to ₹ 1,000 per day of violation may be levied.
The following is an indicative list of labour laws applicable to the business and operations of Indian
companies engaged in manufacturing activities:
• The Industrial Disputes Act, 1947
• Payment of Gratuity Act, 1972;
• Workmen’s Compensation Act, 1923;
• The Contract Labour (Regulation and Abolition) Act, 1970 and the Rules thereunder;
• The Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the schemes
formulated thereunder;
• Employees State Insurance Act, 1948;
• The Maternity Benefits Act, 1961;
• The Industrial Employment (Standing Orders) Act, 1946;
• The Minimum Wages Act, 1948;
• The Payment of Bonus Act, 1965;
• Payment of Wages Act, 1936;
• Child Labour (Prohibition and Regulation) Act, 1986;
• The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013;
• Equal Remuneration Act, 1976;
• Employees Compensation Act, 1923;
Intellectual property rights in India enjoy protection under both statutory and under common law. The
key legislations governing intellectual property in India are the Copyright Act, 1957 and the Trade
Marks Act, 1999. India is also a party to several international agreements for the protection of
intellectual property rights.
The Trademarks Act, 1999 ("TM Act") provides for the application and registration of trademarks in
India. The purpose of the TM Act is to grant exclusive rights to marks such as a brand, label and heading
and to obtain relief in case of infringement for commercial purposes as a trade description. The
registration of a trademark is valid for a period of 10 years and can be renewed in accordance with the
specified procedure.
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Application for trademark registry has to be made to Controller-General of Patents, Designs and TM
Act who is the Registrar of Trademarks for the purposes of the TM Act. The TM Act prohibits any
registration of deceptively similar trademarks among others. It also provides for penalties for
infringement, falsifying and falsely applying trademarks.
The Copyright Act, 1957 ("Copyright Act") governs copyright protection in India. Under the
Copyright Act, copyright may subsist in original literary, dramatic, musical or artistic works,
cinematograph films, and sound recordings. Following the issuance of the International Copyright
Order, 1999, subject to certain exceptions, the provisions of the Copyright Act applies to nationals of
all member states of the World Trade Organization.
While copyright registration is not a prerequisite for acquiring or enforcing a copyright, registration
creates a presumption favouring ownership of the copyright by the registered owner. Copyright
registration may expedite infringement proceedings and reduce delay caused due to evidentiary
considerations. Once registered, the copyright protection of a work lasts for 60 years. The remedies
available in the event of infringement of a copyright under the Copyright Act include civil proceedings
for damages, account of profits, injunction and the delivery of the infringing copies to the copyright
owner.
TAXATION LAWS
The Finance Act, 2017 (the "Finance Act") received the assent of the President on March 31,
2017 and came into force on April 1, 2017 to give effect to the financial proposals of the Central
Government for the financial year 2017-2018. The Finance Act contains necessary
amendments in the direct taxes (e.g. income tax and wealth tax) and indirect taxes (e.g. excise
duties, custom duties and service tax) signifying the policy decisions of the Union Government
for the year 2017-2018.
The Constitution (One Hundred and First Amendment) Act, 2016 which received presidential
assent on September 8, 2016 paved the way for introduction of goods and services tax ("GST")
by making provisions with respect to goods and services tax. Accordingly, the following GST
acts have been enacted:
• Central Goods and Services Tax Act, 2017
• Integrated Goods and Services Tax Act, 2017
• Union Territory Goods and Services Tax Act, 2017, and
• Goods and Services Tax (Compensation to States) Act, 2017.
Every person engaged in any profession, trade, callings and employment is liable to pay tax at
the rate prescribed by the respective state government. It is considered necessary to levy tax on
profession, trade callings and employment in order to augment state revenues. Every state is
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empowered by the Constitution of India to make laws relating to levy of taxes on professions,
trades, callings and employments that shall serve as the governing provisions in that state.
OTHER LAWS
The Consumer Protection Act, 1986 (the "Consumer Protection Act") provides better protection to
the interests of consumers. This is enabled with the establishment of consumer councils and other
authorities for the settlement of consumers’ disputes and matters connected therewith. The Consumer
Protection Act protects the consumers against any unfair/restrictive trade practice that has been adopted
by any trader or service provider or if the goods purchased by him suffer from any defect or deficiency.
In case of consumer disputes, the same can be referred to the redressal forums set up by the government
such as the national commission, the state commission and the district forums. Such redressal forums
have the authority to grant the following reliefs, that is, removal of defects, replacement of goods,
compensation to the consumer, etc.
The Foreign Trade (Regulation and Development) Act, 1992 (the "Foreign Trade Act") was enacted
to provide for the development and regulation of foreign trade by facilitating imports into and
augmenting exports from India. The Foreign Trade Act prohibits anybody from undertaking any import
or export except under an importer-exporter code number granted by the director general of foreign
trade pursuant to section 7. Hence, every entity in India engaged in any activity involving import/export
is required to obtain an importer exporter code ("IEC") unless specifically exempted from doing so.
The IEC shall be valid until it is cancelled by the issuing authority.
The Legal Metrology Act, 2009 ("Legal Metrology Act") governs the standards/ units/denominations
used for weights and measures as well as for goods which are sold or distributed by weights, measure
or number. It also states that any transaction/ contract relating to goods/ class of goods shall be as per
the weight/ measurements/numbers prescribed by the Legal Metrology Act. Every unit of weight or
measure shall be in accordance with the metric system based on the international system of units. Using
or keeping any weight or measure otherwise than in accordance with the provisions of the Legal
Metrology Act is an offence, as is tampering or altering any reference standard, secondary standard or
working standard. Moreover, the Legal Metrology Act prohibits any person from quoting any price,
issuing a price list, cash memo or other document, in relation to goods or things, otherwise than in
accordance with the provisions of the Legal Metrology Act.
Shops and Establishments Acts are state enactments being different for every state of India. The Act is
intended for the regulation of conditions of work, number of days of leave and employment in shops,
commercial establishments and other establishments. Every establishment not regulated/being under
the purview of Factories Act, 1948 has to be registered under the respective state Shops and
Establishments Act.
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Regulation of Foreign Investment in India
Foreign investment in India is governed primarily by the provisions of the FEMA, and the rules,
regulations and notifications thereunder, as issued by the RBI from time to time. The RBI, in exercise
of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2017 by Notification No. FEMA 20(R)/
2017-RB dated November 7, 2017 ("FEMA Regulations") to prohibit, restrict or regulate, transfer by
or issue security to a person resident outside Isndia. As laid down by the FEMA Regulations, no prior
consents and approvals is required from the RBI, for Foreign Direct Investment ("FDI") under the
'automatic route' within the specified sectoral caps. In respect of all industries not specified as FDI
under the automatic route, and in respect of investment in excess of the specified sectoral limits under
the automatic route, approval may be required from the RBI.
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HISTORY AND CERTAIN CORPORATE MATTERS
Our Company was incorporated as "North Eastern Cables and Conductors Private Limited" on
December 27, 1984 as a private limited company under the Companies Act, 1956, with the Registrar
of Companies, Shillong. On July 1, 1997, our Company became deemed public limited company by
virtue of Section 43A (1A) of the Companies Act, 1956 and the name of our Company was changed to
"North Eastern Cables & Conductors Limited" and the same was recorded in the certificate of
incorporation issued by the RoC. Our Company was again converted into a private limited company
under Section 43A (2A) of the Companies Act, 1956 and the name of our Company was changed to
"North Eastern Cables & Conductors Private Limited" and the same was recorded in the certificate of
incorporation by the RoC on October 10, 2001. Thereafter, in order to align the name of our Company
with the diversified business activities of our Company and to reflect a young approach to our goals,
the name of our Company was changed to "Neccon Power & Infra Private Limited" pursuant to a
resolution passed by our shareholders dated March 30, 2011 under Section 21 of the Companies Act,
1956 and a fresh certificate of incorporation was issued by the RoC on April 8, 2011. Our Company
was then converted to a public limited company pursuant to a resolution passed by our shareholders on
April 15, 2011 and the name of our Company was changed to "Neccon Power & Infra Limited" vide a
fresh certificate of incorporation issued by the RoC on May 18, 2011. The corporate identity number
of our Company is U27109AS1984PLC002275.
For details of our activities, services, technology, market segments, the growth of our Company, the
standing of our Company with reference to prominent competitors in connection with our management,
major suppliers, environmental issues, regional geographical segment etc., see "Our Business",
"Industry Overview" and "Management’s Discussion and Analysis of Financial Condition and Results
of Operations" beginning on pages 191, 146 and 505 of this Draft Red Herring Prospectus, respectively.
For details of the management of our Company and its managerial competence, see "Our Management"
beginning on page 235 of this Draft Red Herring Prospectus.
The registered office of our Company was originally situated at Housing Colony Road, Rukminigoan,
Dispur, Guwahati, Assam. Pursuant to the approval of the shareholders vide resolution dated March 3,
1986, our registered office was shifted to Khetan Bhawan, Seuni Ali, A. T. Road, Jorhat – 785 001,
Assam.
The Registered Office was changed for administrative and operational convenience.
The main objects of our Company, as contained in our Memorandum of Association, are as follows:
1. To reprocess, recall, melt, cast, forge, fabricate, sell purchase, import and generally deal in
all kinds of ferrous and nonferrous materials and scraps, specially in Iron and Steel, Aluminum
and Copper.
2. To manufacture, process, reprocess, recoil, fabricate, draw, twist, purchase, sell, import,
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export and generally deal in all kinds of Wires and Bare Conductors and Cables including 'All
Aluminum Conductors (AAC)', and 'Aluminum Conductors Steel Rain forced (ACSR)', and 'All
Aluminum Alloy Conductors (AAAC).
3. To manufacture, process, reprocess, mould, extrude, purchase, sell, import, export and
generally deal in all sorts and sizes of insulated cables.
4. To carry on the business of Trading in all types of machineries, equipments, plant, accessories,
cables, bulbs, farms equipment, fitting tools, tackles, electrical equipment and accessories,
insulators, switches, plug, cockers, meters and all other items related to electrical installation
and appliances.
5. To carry on in India or elsewhere the business to generate, receive, produce, improve, buy,
sell, resell, acquire, use, transmit, accumulate, employ, distribute, develop, handle; protect,
supply, and to act as agent, broker, representative, consultants, collaborator, or otherwise to
deal in electric power in all its branches of such place or places as may be permitted by
appropriate authorities by establishment of thermal power plants, hydraulic power plants,
wind power plants and other power plants based on any source of energy as may be developed
or invented in future.
The main objects of our Company enable us to carry on the current business and the activities proposed
to be undertaken pursuant to the Objects of the Issue. For further details, please refer to the chapter
titled "Objects of the Issue" beginning on page 128 of this Draft Red Herring Prospectus.
Since incorporation, the following amendments have been made to the Memorandum of Association of
our Company:
223
Date of shareholder’s Nature of amendments
resolution
[Pursuant to Board company under the provision of Section 43A (2A) of the Companies Act,
resolution dated 1956 and subsequent change of name from North Eastern Cables &
August 18, 2001] Conductors Limited to North Eastern Cables & Conductors Private
Limited.##
September 19, 2001 Change in Clause V
The Authorised Share Capital of our Company was increased from `10
million divided into 100,000 Equity Shares of `100 each to `15 million
divided into 150,000 million Equity Shares of `100 each.
November 23, 2002 Change in Clause V
The Authorised Share Capital of our Company was increased from `15
million divided into 150,000 Equity Shares of `100 each to `25 million
divided into 250,000 Equity Shares of `100 each.
December 31, 2009 Change in Clause V
The Authorised Share Capital of our Company was increased from `25
million divided into 250,000 Equity Shares of `100 each to `50 million
divided into 500,000 Equity Shares of `100 each.
September 1, 2010 Change in Clause III
Clause III (B) 36, 37 and 38 were inserted under "Objects incidental or
ancillary to the attainment of main object" as follows:
224
Date of shareholder’s Nature of amendments
resolution
incidental acts and things necessary for the attainment of forgoing objects.
225
Date of shareholder’s Nature of amendments
resolution
`750 million divided into 65,000,000 Equity Shares of `10 each and
10,000,000 0.5% optionally convertible preference shares of `10 each.
# Since the change in name of the Company was due to operation of law and not voluntarily by the
Company, no shareholders resolution was required under the Companies Act, 1956. The change
to the name and the alteration of MoA was pursuant to the powers granted to the RoC under Section
43A(2) of the Companies Act, 1956.
##Since the change in name of the Company was due to operation of law and not voluntarily by the
Company, no shareholders resolution was required under the Companies Act, 1956. The change to
the Name and the alteration of MoA was pursuant to the powers granted to the RoC under Section
43A(2) of the Companies Act, 1956.
The table below sets forth some of the key events, milestones, achievements and awards in our history
since its incorporation.
226
Total Number of Shareholders of our Company
As on the date of this Draft Red Herring Prospectus, there are thirty (30) shareholders in our Company.
For further details on our shareholding pattern, please refer the chapter titled "Capital Structure"
beginning on page 99 of this Draft Red Herring Prospectus.
The details of the business/undertakings acquired by our Company since incorporation are as detailed
below:
Except as mentioned above, our Company has neither acquired any entity, business or undertakings nor
has undertaken any mergers or amalgamation.
Other than as disclosed under the chapter titled "Capital Structure" beginning on page 99 of this Draft
Red Herring Prospectus, our Company has not raised any capital in the form of equity. For details on
the debt facilities of our Company, please refer the chapter titled "Financial Indebtedness" beginning
on page 530 of this Draft Red Herring Prospectus.
Revaluation of assets
Our Company has not revalued its assets since incorporation and has not issued any Equity Shares
(including bonus shares) by capitalizing any revaluation reserves.
Our Company has not experienced any significant time and cost overrun in relation to the setting up of
our manufacturing facilities.
Changes in the activities of our Company during the last five years
There has been no change in the activities of our Company during the last five years which may have
had a material effect on the profit or loss account of our Company including discontinuance of line of
business, loss of markets and similar factors.
There are no defaults or rescheduling of borrowings from financial institutions or banks or conversion
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of loans into equity in relation to our Company.
For details of defaults pertaining to one of our Subsidiaries, namely, Brahmaputra Infra Power Private
Limited ("BIPPL"), please refer section titled "Litigations by our Company" under the chapter titled
"Outstanding Litigations and Material Developments" appearing on page 535 and the risk factor
namely, "One of our wholly owned subsidiaries, Brahmaputra Infra Power Private Limited and some
of our Promoters and two persons belonging to our Promoter Group, our Company and one of our
subsidiaries, being guarantors, have received notices under section 13(2) of the SARFAESI Act, 2002."
appearing in section titled "Risk Factor" on page 21 of this Draft Red Herring Prospectus.
Lock-out or Strikes
There have been no lock-outs or strikes at any of the manufacturing units of our Company since
inception.
Our Company has not entered into any shareholders’ or other agreements, apart from those entered into
in the ordinary course of business carried on or intended to be carried on by us.
Material Agreements
Our Company has not entered into any material contract other than in the ordinary course of business
carried on or intended to be carried on by our Company in the last two (2) years preceding this Draft
Red Herring Prospectus.
Except as mentioned in this Draft Red Herring Prospectus, our Promoters have not given any guarantees
to third parties in respect of our Company and the Equity Shares that are outstanding as of the date of
filing of this Draft Red Herring Prospectus. For further information, see the section titled "Financial
Indebtedness" beginning on page 530 of this Draft Red Herring Prospectus.
Holding Company
As on the date of this Draft Red Herring Prospectus, our Company does not have a holding company.
Subsidiaries
As of the date of this Draft Red Herring Prospectus, we have two (2) Subsidiaries. For details regarding
our Subsidiaries, please refer the chapter titled "Our Subsidiaries" beginning on page 230 of this Draft
Red Herring Prospectus.
As of the date of this Draft Red Herring Prospectus, our Company does not have any associate company
or joint ventures.
228
Strategic and Financial Partners
As on date of this Draft Red Herring Prospectus, our Company does not have any strategic and financial
partners.
229
OUR SUBSIDIARIES
As of the date of this Draft Red Herring Prospectus, our Company has two (2) subsidiaries, the details
of which are as follows:
Corporate Information
BIPPL was incorporated as "Shyaam Tobacco Private Limited" under the Companies Act, 1956
as a private limited company vide Certificate of Incorporation dated May 10, 2000 issued by
RoC. Pursuant to a resolution passed by our shareholders dated February 11, 2009 under
Section 21 of the Companies Act, 1956, the name of BIPPL was changed to "Brahamputra
Infra Power Private Limited" and a fresh certificate of incorporation was issued by the RoC on
February 25, 2009. Pursuant to a resolution passed by our shareholders dated June 30, 2010
under Section 21 of the Companies Act, 1956, the name of BIPPL was changed to
"Brahmaputra Infra Power Private Limited" and a fresh certificate of incorporation was issued
by the RoC on July 9, 2010. The corporate identity number of BIPPL is
U40102AS2000PTC006157. The registered office of BIPPL is located at Khetan Bhawan,
Seuni Ali, A.T. Road, Jorhat - 785 001, Assam. Our Company acquired 100% shareholding in
BIPPL on May 10, 2010.
Nature of business
The main objects of BIPPL include, inter alia, to generate, receive, produce, improve, buy,
sell, resell, acquire, use, transmit, accumulate, employ, distribute, develop, handle, protect,
supply and to act as agent, broker, representative, consultant, collaborators, or otherwise to deal
in electric power in all its branches of such place or places as may be permitted by appropriate
authorities by establishment of thermal power plant, hydraulic power plants and other power
plants based on any source of energy as may be developed or invented in future. BIPPL was
acquired by our Company as a special purpose vehicle for implementing a hydro power project
on behalf of Government of Assam on built-operate-transfer basis at Bordikorai Sonitpur,
Assam. Presently, BIPPL is not carrying out any commercial operations.
Capital Structure
The authorized share capital of BIPPL is ₹100 million divided into 100,000 equity shares of
₹1,000 each. The issued, subscribed and paid- up share capital of BIPPL is ₹1.40 million
divided into 14,365 equity shares of ₹ 1,000 each.
Shareholding pattern
The shareholding pattern of BIPPL as on the date of this Draft Red Herring Prospectus is as
follows:
230
Name of Shareholder Number of shares held % of holding
Basant Kumar Khetan* 20 Negligible
Total 14,365 100
# including beneficial interest
* Neccon Power & Infra Limited holds the beneficial interest in such shares.
Certain details of the audited financials of BIPPL for Fiscals 2018, 2017, 2016, 2015 and 2014
are set forth below:
(₹ in million, except per share data)
Particulars Fiscal Fiscal Fiscal Fiscal Fiscal
2018 2017 2016 2015 2014
Equity share capital (face 14.36 14.36 14.36 14.36 14.36
value of ₹ 1000 per share)
Reserves and surplus 125.93 125.93 125.93 125.93 124.50
Total revenue NIL NIL NIL 1.78 NIL
Profit/(Loss) after tax NIL NIL NIL 1.43 NIL
Earnings per share (basic 0.00 0 0 99.47 0
and diluted) (₹)
Net asset value per share 9,764.01 9,764.01 9,764.01 9,764.01 9,694.40
(₹)
Except as stated under, there exists no significant observations of the auditors in relation to the
aforementioned financial statements:
"BIPPL has defaulted in repayment of dues to financial institutions and banks as follows:
Further, BIPPL has received notice under section 13(2) of the SARFAESI from State Bank of
India (lender) for defaulting in repayment of loans granted to it. For further details, please refer
to the risk factor no. 2 in the chapter titled "Risk Factors" on page 21 and the chapter titled
"Outstanding Litigations and Material Developments" beginning on page 535 of this Draft Red
Herring Prospectus.
Corporate Information
LSHP was incorporated under the Companies Act, 1956 as a private limited company vide
Certificate of Incorporation dated July, 25 2008 issued by RoC. The corporate identity number
of LSHP is U40101AS2008PTC008756. The registered office of LSHP is located at Khetan
Bhawan, Seuni Ali, A.T. Road, Jorhat - 785 001, Assam. Our Company acquired 100%
shareholding in LSHP on March 31, 2010.
231
Nature of business
The main objects of LSHP include, inter alia, identify, develop, consult, generate, distribute
hydel power projects through surveys and investigation, preparation of feasibility and detailed
project reports, environmental and resettlement and rehabilitation report or such other report as
may be required, arranging equity and debt funds to finance the projects, market the projects
so developed investors in various infrastructure sectors; to set up special purpose vehicle in
respect of the above stated projects. LSHP was incorporated by the state of Assam as a special
purpose vehicle and was transferred to our Company pursuant to a share transfer agreement
dated March 31, 2010 entered into between Assam Power Project Development Company
Private Limited and our Company for the purpose of implementating a hydro power project on
behalf of Government of Assam on built-operate-transfer basis at Bordikorai Sonitpur, Assam.
Presently, LSHP is not carrying out any commercial operations.
Capital Structure
The authorized share capital of LSHP is ₹1 million divided into 100,000 equity shares of ₹10
each. The issued, subscribed and paid- up share capital of LSHP is ₹100,000 divided into
10,000 equity shares of ₹10 each.
Our Promoter(s) are interested in LSHP to the extent of their direct shareholding and
directorship in LSHP and through their shareholding in Neccon Power & Infra Limited and in
any dividend distribution and corporate benefits which may be made by LSHP in the future.
Shareholding pattern
The shareholding pattern of LSHP as on the date of this Draft Red Herring Prospectus is as
follows:
Certain details of the audited financials of LSHP for Fiscals 2018, 2017, 2016, 2015 and 2014
are set forth below:
232
Particulars Fiscal Fiscal Fiscal Fiscal Fiscal
2018 2017 2016 2015 2014
value of ₹ 10 per share)
Reserves and surplus NIL NIL NIL NIL NIL
Total revenue NIL NIL NIL NIL NIL
Profit/(Loss) after tax NIL NIL NIL NIL NIL
Earnings per share (basic NIL NIL NIL NIL NIL
and diluted) (₹)
Net asset value per share 10.00 10.00 10.00 10.00 10.00
(₹)
There are no observations of the auditors in relation to the aforementioned financial statements.
Our Subsidiaries do not have any interest in our Company’s business or any other interests in
our Company other than as stated in the chapters titled "Our Business" and "Related Party
Transactions", beginning on pages 191 and 279, respectively of this Draft Red Herring
Prospectus.
There are no accumulated profits or losses of our Subsidiaries that are not accounted for by our
Company in its restated consolidated financial statements.
Except as disclosed in chapter titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, our Subsidiaries are not involved in any sales or purchases with our
Company where such sales or purchases exceed, in the aggregate of 10% of the total sales or
purchases of our Company.
Our Subsidiaries do not have interest in any property acquired by our Company in the two years
preceding the filing of this Draft Red Herring Prospectus or proposed to be acquired by the
Company as of the date of this Draft Red Herring Prospectus.
Common Pursuits
Our Subsidiaries are engaged in the line of business that is similar and/or synergistic to our
Company. Further, currently we do not have any non-compete agreement/arrangement with
any of our Subsidiaries. Such a conflict of interest may have adverse effect on our business and
growth. We shall adopt the necessary procedures and practices as permitted by law to address
any conflict situations, as and when they may arise.
233
Business interest between our Company and the Subsidiaries
Except as stated in the chapter titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, there are no related business transactions of our Company with our
Subsidiaries. For details on the significance of related party transactions on the financial
performance of the Company, please see chapter titled "Our Business" and "Management’s
Discussion and Analysis of Financial Condition and Results of Operations" on pages 191 and
505 of this Draft Red Herring Prospectus, respectively.
Sale or purchase of shares of our Subsidiaries during the last six months
None of our Promoters, the members of our Promoter Group, or our Directors or their relatives
(as defined under the Companies Act, 2013) have sold or purchased any equity shares or other
specified securities of our Subsidiaries during the six months immediately preceding the date
of this Draft Red Herring Prospectus.
Other confirmations
As on date of this Draft Red Herring Prospectus, our Subsidiaries (i) are not listed nor has been
refused listing on any stock exchange in India or abroad or (ii) have not made any public or
rights issue of equity shares in the last three years (iii) have not become sick company as
specified under SICA or are adjudicated as insolvent under the Insolvency and
Bankruptcy Code, 2016; or (iv) are not under winding up proceedings, or (v) have not become
defunct; or (vi) have not made an application to the RoC, in the five years preceding the date
of filing this Draft Red Herring Prospectus with SEBI, for striking off its name nor (vii) have
received any significant notes on the financial statements from the auditors.
Our Subsidiaries have not been prohibited or debarred from accessing the capital markets for
any reason by SEBI or any other regulatory or governmental authority. Further, our
Subsidiaries have not been identified as wilful defaulters by any bank or financial institution
or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the RBI.
234
OUR MANAGEMENT
Our Articles of Association require us to have not less than three (3) and not more than fifteen (15)
Directors. As on the date of this Draft Red Herring Prospectus, we have eight (8) Directors on our
Board, which includes four (4) Executive Directors and four (4) Non-Executive Independent Directors
(including one (1) woman Independent Director).
Set forth below are details regarding our Board as on the date of this Draft Red Herring Prospectus
DIN:00842354
Nationality: Indian
Jaiprakash Khetan 64 H/No.-85, Nilayam 1. North Eastern Cables
Byelane-7, Sreenagar Path, Private Limited;
Designation: Managing Dispur, Guwahati, Kamrup 2. Kreesna Industries India
Director (Metropolitan), Guwahati Private Limited;
– 781 005, Assam 3. Toor Finance Company
Occupation: Business Limited;
4. Topline Finvest Private
DIN: 00842692 Limited;
5. North Eastern Educare &
Term: For a term of five Research Private Limited;
years with effect from April 6. Shri Mahaluxmi Aerated
10, 2018 (liable to retire by Aqua Private Limited;
rotation) 7. Shajha Automations
Private Limited.
Nationality: Indian
235
Name, designation, Age (years) Address Other directorships
occupation, DIN, term
and nationality
Term: For a term of five 4. VSG Trade Private
years with effect from April Limited;
10, 2018 (liable to retire by 5. Topline Finvest Private
rotation) Limited;
6. Lower Seijusa Hydel
Nationality: Indian Power Company Private
Limited.
Pradeep Kumar Khetan 49 160, Vishwa Mitra Marg, 1. North Eastern Cables
Opposite Sanskar School, Private Limited;
Designation: Joint Hanuman Nagar 2. Toor Finance Company
Managing Director Extension, Jaipur – 302 Limited;
021, Rajasthan 3. Mahak Builders Private
Occupation: Business Limited;
4. Topline Finvest Private
DIN: 01227602 Limited;
5. North Eastern Educare &
Term: For a term of five Research Private Limited;
years with effect from April 6. Shri Mahaluxmi Aerated
10, 2018 (liable to retire by Aqua Private Limited;
rotation) 7. Shajha Automations
Private Limited;
Nationality: Indian 8. Greentech Mega Food
Park Limited;
Jugal Kishore Agarwalla 76 Bhagwani Sadan, A.T. NIL
Designation: Non- Road, Jorhat – 785 001,
Executive and Independent Assam
Director
Occupation: Professional
DIN: 07114060
Nationality: Indian
Sharad Agarwalla 51 Chamber Road, OP Sani NIL
Mandir, Jorhat East, Jorhat
Designation: Non- – 785 001, Assam
Executive and Independent
Director
Occupation: Professional
DIN: 07105755
236
Name, designation, Age (years) Address Other directorships
occupation, DIN, term
and nationality
to retire by rotation)
Nationality: Indian
Shyamkanu Mahanta 46 House No. 33, J Barooah MMS Advisory Private
Road, Chenikuthi, Limited.
Designation: Non- Silpukhuri, Guwahati –
Executive and Independent 781 003, Assam
Director
Occupation: Professional
DIN: 00625277
Nationality: Indian
Usha Agarwal 55 B-9, Ganganagar Niwas, 1. Ganganagar Motors
Govind Marg, Adarsh Limited
Designation: Non- Nagar, Janta Colony. 2. Usha Infralogistic Private
Executive and Independent Jaipur – 302 004 Limited
Director
Occupation: Professional
DIN: 02232073
Term: Upto the ensuing
annual general meeting
with effect from July 2,
2018 (not liable to retire by
rotation)
Nationality: Indian
None of our Directors are related to each other except the following:
237
Name Related to Relationship
Jaiprakash Khetan Brother
Pradeep Kumar Khetan Brother
Pradeep Kumar Khetan Dr. Murlidhar Khetan Son
Jaiprakash Khetan Brother
Basant Kumar Khetan Brother
Dr. Murlidhar Khetan, aged 85 years, is the Chairman and Whole-time Director and the founding
Promoter of our Company. He holds a doctor's degree in philosophy (Honors) awarded by Desh Bhagat
University on September 16, 2016. He has been on our Board since 1986 and was designated as a
Managing Director of our Company with effect from May 17, 2016. He was last re-designated as the
Chairman and Whole-time Director of our Company on April 10, 2018. He has an experience of over
three decades in the manufacturing of overhead aluminium conductors and over eight years of
experience in handling and executing EPC / turnkey projects in the power sector. He has been conferred
with International Business Excellence Award by the International Business Council and a National
Award-2007 for 'Outstanding Entrepreneurship Effort' by the Ministry of Micro, Small & Medium
Enterprises, and Government of India. He is also awarded with North East Excellence Award-2009 by
Indian Chamber of Commerce. He is instrumental in promoting the overall strategy and growth of our
Company and has been responsible for strategizing the management and expansion of the business.
Jaiprakash Khetan, aged 64 years, is the Managing Director and one of the Promoters of our
Company. He holds bachelor's degree in commerce – Part II from Chandra Kamal Bezbaruah
Commerce College, Jorhat, Assam which is affiliated with Dibrugarh University. He has been on our
Board from the year 1986 to year 2000 and from the year 2008 till date. During the year 2000 to 2008,
he was associated with one of our Group Entities namely, Kreesna Industries India Private Limited, as
a director and was responsible for looking after the affairs of the same. He was last re-appointed as a
Director on May 17, 2016 and designated as the Managing Director with effect from April 10, 2018.
He has experience of over three decades in the manufacturing of overhead aluminium conductors and
over eight years of experience in handling and executing EPC / turnkey projects in the power sector.
He is responsible for the sustained growth of our Company and managing the overall business affairs
of the Company. His experience and exposure helps the Board to take appropriate strategic decision in
the current competitive business era.
Basant Kumar Khetan, aged 51 years, is a Joint Managing Director and one of the Promoters of our
Company. He holds a bachelor's degree in commerce from Jagannath Barooah College, Jorhat, Assam
which is affliated with the Dibrugarh University. He has been on our Board since 1986. He was last re-
appointed on May 17, 2016 as a Director and designated as a Joint Managing Director with effect from
April 10, 2018. He has an experience of over two decades in sales, marketing, corporate strategy,
business development and manufacturing of overhead aluminium conductors and over eight years of
experience in handling and executing EPC / turnkey projects in the power sector. He presently
supervises the overall management and operations of the Company at Jorhat and Guwahati.
Pradeep Kumar Khetan, aged 49 years, is a Joint Managing Director and one of the Promoters of our
Company. He holds a bachelor's degree in engineering in the stream of Electrical and Electronics from
Mangalore University, Karnataka. He has been on our Board since 2002. He was last re-appointed as a
238
Director on May 17, 2016 and designated as a Joint Managing Director with effect from April 10, 2018.
He has an experience of over a decade in the power and electrical sector which inter alia includes
generation of wind power and manufacturing of overhead aluminum conductors and execution of EPC
/ turnkey projects. He presently supervises the overall management and business operations of the
Company in Rajasthan.
Jugal Kishore Agarwalla, aged 75 years, is a Non-Executive and Independent Director of our
Company. He holds a bachelor's degree in law from Dibrugarh University. He is a practicing advocate
and a member of the Bar Council of Assam since 1968. He was appointed as an Independent Director
of our Company on March 14, 2015.
Sharad Agarwalla, aged 51 years, is a Non-Executive and Independent Director of our Company. He
is a fellow member of the Institute of Chartered Accountants of India. He is the proprietor of Sharad
Bajaj & Associates, Chartered Accountants having firm registration number 322423E. He was
appointed as an Independent Director of our Company on March 14, 2015.
Shyamkanu Mahanta aged 46 years, is a Non-Executive and Independent Director of our Company.
He holds a master's degree in Business Administration from University of Guwahati. He is also a
promoter and director of MMS Advisory Private Limited. He was appointed as an Independent Director
on April 10, 2018.
Usha Agarwal, aged 55 years, is a Non-Executive and Independent Director of our Company. She
holds a bachelor's degree in Arts from S. B. Women’s College, Cuttack, affiliated to Utkal University.
She was appointed as an additional director by our Board on July 2, 2018. She is also a promoter and
director of Usha Infralogistic Private Limited and an independent director on the board of another
unlisted public company.
Confirmations
None of our Directors is or was a director of any listed company during the five years period
immediately preceding the date of filing of this Draft Red Herring Prospectus, whose shares have been
or were suspended from being traded on any stock exchange during the term of their directorship in
such companies.
None of our Directors is or was a director of any listed company which has been or was delisted from
any stock exchange during the term of their directorship in such companies.
None of our Directors have been appointed pursuant to any arrangement or understanding with major
shareholders, customers, suppliers or others.
None of our Directors have been declared as Wilful Defaulters as defined under the SEBI ICDR
Regulations.
In accordance with the provisions of the Companies Act, 2013, our Board is authorised to borrow from
time to time any sum or sums of money, where the money to be borrowed, together with the money
already borrowed by our Company does not exceeds aggregate of our paid-up share capital, free
239
reserves and securities premium, apart from temporary loans obtained from our Company’s bankers in
the ordinary course of business.
The compensation payable to our Managing Director, Joint Managing Directors and Whole-time
Directors will be governed as per the terms of their appointment and shall be subject to the provisions
of Sections 2 (54), 2(94), 188, 196, 197, 198 and 203 and any other applicable provisions of the
Companies Act, 2013 read with Schedule V to the Companies Act, 2013 and the rules made there under
(including any statutory modification(s) or re-enactment thereof, for the time being in force). Our
Company has one Managing Director, two Joint Managing Directors and one Whole-time Director.
The terms of the appointment of our Managing Director, Joint Managing Directors and Whole-time
Director are set out below:
Particulars Remuneration
Remuneration `500,000 per month
Designation Chairman and Whole-time Director
Re-designated as Chairman cum Whole- With effect from April 10, 2018
time Director
Remuneration paid for F.Y. 2017-2018 `4,200,000 per annum.
Perquisites Nil
Jaiprakash Khetan
Particulars Remuneration
Remuneration `350,000 per month
Designation Managing Director
Re-designated as Managing Director With effect from April 10, 2018
Remuneration paid for F.Y. 2017-2018 `3,000,000 per annum.
Perquisites Nil
Particulars Remuneration
Remuneration `350,000 per month
Designation Joint Managing Director
Re-designated as Joint Managing With effect from April 10, 2018
Director
Remuneration paid for F.Y. 2017-2018 `3,000,000 per annum.
Perquisites Nil
240
Pradeep Kumar Khetan
Particulars Remuneration
Remuneration `350,000 per month
Designation Joint Managing Director
Re-designated as Joint Managing With effect from April 10, 2018
Director
Remuneration paid for F.Y. 2017-2018 `3,000,000 per annum.
Perquisites Nil
Sitting Fees
Our Non-Executive Directors do not receive any fees for attending meeting of our Board and/ or
Committee of our Board except the reimbursement of expenses incurred towards attending the meeting.
Except as disclosed in this Draft Red Herring Prospectus, no amount or benefit has been paid or given
within the two preceding years or is intended to be paid or given to any of the Executive Directors
except the normal remuneration for services rendered as a Director of our Company.
No remuneration was paid, or is payable, to the Directors of our Company by our Subsidiaries in the
Fiscal 2018.
Our Company has not entered into any service contracts, pursuant to which, the Directors are entitled
to benefits upon termination of employment.
Loans to Directors
There are no loans that have been availed by the Directors from our Company that are outstanding as
of the date of this Draft Red Herring Prospectus.
Other than as disclosed in the section "Financial Statements" beginning on page 281 of this Draft Red
Herring Prospectus, none of the beneficiaries of loans and advances and sundry debtors are related to
the key management personnel.
Corporate Governance
The provisions of the SEBI Listing Regulations and the Companies Act with respect to corporate
governance will be applicable to us immediately upon the listing of our Equity Shares on the Stock
Exchanges.
We are in compliance with the requirements of the applicable regulations, including the SEBI Listing
Regulations, Companies Act and the SEBI ICDR Regulations, in respect of corporate governance
241
including constitution of our Board and Committees thereof. Our corporate governance framework is
based on an effective independent Board, separation of the Board’s supervisory role from the executive
management team and constitution of the Committees, as required under law.
Our Board is constituted in compliance with the provisions of the Companies Act and the SEBI Listing
Regulations and our Company undertakes to take all steps necessary to continue to comply with all the
requirements of the SEBI Listing Regulations and the Companies Act, as may be applicable. Our Board
functions either directly, or through various committees constituted to oversee specific operational
areas.
Our Board has constituted following committees in accordance with the requirements of the Companies
Act and SEBI Listing Regulations:
a) Audit committee;
b) Stakeholders’ relationship committee;
c) Nomination and remuneration committee; and
d) Corporate social responsibility.
In addition to the above, our Company has also constituted an IPO committee.
a) Audit Committee
Our Audit Committee was constituted pursuant to resolution passed by our Board dated March
14, 2015. Thereafter, our Audit Committee was reconstituted pursuant to a resolution passed
by our Board on June 18, 2018. The Audit Committee comprises of the following members:
The Company Secretary & Compliance Officer shall act as the secretary to the Audit
Committee.
The scope, functions and the terms of reference of our Audit Committee, is in accordance with
Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI Listing Regulations
and approved by our Board pursuant to its resolution dated June 18, 2018. The scope and
function of the Audit Committee and its terms of reference shall include the following:
A. Tenure: The Audit Committee shall remain in force and continue to carry out its functions
until otherwise resolved by the Board.
B. Meetings of the Committee: The Audit Committee shall meet at least four times in a year and
242
not more than one hundred and twenty days shall elapse between any two meetings. The
quorum for the meeting shall be either two members or one third of the members of the Audit
Committee, whichever is higher but there shall be presence of minimum two Independent
members at each meeting. Meeting of the Audit Committee shall be called by at least seven
day’s notice in advance. The Audit Committee may at its discretion also invite the Chief
Financial Officer of the Company, the representatives of the internal auditors of the Company
and the representatives of the statutory auditors to be present at the meetings of the Audit
Committee.
C. Powers of the Audit Committee: The powers of the Audit Committee include the following:
a) to investigate any activity within its terms of reference;
b) to seek information from any employee of our Company;
c) to obtain outside legal or other professional advice; and
d) to secure attendance of outsiders with relevant expertise, if it considers necessary.
D. Role of the Audit Committee: The role of the Audit Committee together with its powers shall
be as under:
a) Overseeing the company’s financial reporting process and the disclosure of its
financial information to ensure that the financial statements are correct, sufficient and
credible;
b) Recommending to the Board, the appointment, remuneration and terms of appointment
of auditors of the Company;
c) Approving payment to statutory auditors for any other services rendered by the
statutory auditors;
d) Approving or any subsequent modification of transactions of the company with related
parties;
e) Scrutinizing inter-corporate loans and investments;
f) Valuation of undertakings or assets of the company, wherever it is necessary;
g) Reviewing, with the management, the annual financial statements and auditor’s report
thereon before submission to the Board for approval, with particular reference to;
➢ matters required to be included in the directors’ responsibility statement to be
included in the Board’s report in terms of clause (c) of sub-section 134 of the
Companies Act, 2013;
➢ changes, if any, in accounting policies and practices along with reasons for the
same;
➢ major accounting entries involving estimates based on the exercise of
judgment by management;
➢ significant adjustments made in the financial statements arising out of audit
findings;
➢ compliance with listing and other legal requirements relating to financial
statements;
➢ disclosure of any related party transactions; and
➢ modified opinion in the draft audit report.
h) Reviewing, with the management, the quarterly financial statements before submission
to the board for approval;
i) Reviewing, with the management, the statement of uses / application of funds raised
through an issue (public issue, rights issue, preferential issue, etc.), the statement of
funds utilized for purposes other than those stated in the offer document / prospectus /
243
notice and the report submitted by the monitoring agency monitoring the utilization of
proceeds of a public or rights issue, and making appropriate recommendations to the
Board to take up steps in this matter;
j) Reviewing and monitoring the auditor’s independence and performance and
effectiveness of the audit process;
k) Evaluation of internal financial controls and risk management systems;
l) Reviewing the management, performance of statutory and internal auditors, adequacy
of internal control systems;
m) Reviewing the adequacy of internal audit function, if any, including the structure of
the internal audit department, staffing and seniority of the official heading the
department, reporting structure coverage and frequency of internal audit;
n) Discussing with the internal auditors any significant findings and follow up there on;
o) Reviewing the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal control
systems of a material nature and reporting the matter to the Board;
p) Discussing with the statutory auditors before the audit commences, about the nature
and scope of audit as well as post-audit discussion to ascertain any area of concern;
q) Looking into the reasons for substantial defaults in the payment to the depositors,
debenture holders, shareholders (in case of nonpayment of declared dividends) and
creditors;
r) Reviewing the functioning of the Whistle Blower mechanism;
s) Approving the appointment of the Chief Financial Officer (i.e. the whole time finance
director or any other person heading the finance function) after assessing the
qualifications, experience and background, etc., of the candidate; and
t) Carrying out any other function as is mentioned in the terms of reference of the Audit
Committee or contained in the equity listing agreements as and when amended from
time to time.
Our Stakeholders’ Relationship Committee was constituted pursuant to resolution of our Board
dated June 18, 2018. The Stakeholders’ Relationship Committee comprises of the following:
244
Sr. No. Name of Member Designation Nature of Directorship
1. Jugal Kishore Agarwalla Chairman Non-Executive and Independent
Director
2. Pradeep Kumar Khetan Member Joint Managing Director
3. Jaiprakash Khetan Member Managing Director
The Company Secretary & Compliance Officer shall act as the secretary to the Stakeholders’
Relationship Committee.
The scope and functions of the Stakeholders’ Relationship Committee are in accordance with
Section 178 of the Companies Act, 2013 and the SEBI Listing Regulations and approved by
our Board pursuant to its resolution dated June 18, 2018. The terms of reference, powers and
scope of the Stakeholders’ Relationship Committee of our Company include:
A. Tenure: The Stakeholder Relationship Committee shall remain in force and continue to carry
out its functions until otherwise resolved by the Board.
B. Meetings: The Stakeholder Relationship Committee shall meet at least four times a year with
maximum interval of one hundred and twenty days between two meetings and shall report to
the Board on a quarterly basis regarding the status of redressal of complaints received from the
shareholders of the Company. The quorum shall be two members present. Meeting of the
Stakeholder Relationship Committee shall be called by at least seven day’s notice in advance.
245
amended from time to time.
Our Nomination and Remuneration Committee was constituted pursuant to resolution of our
Board dated March 14, 2015. Thereafter, our Nomination and Remuneration Committee was
reconstituted pursuant to a resolution passed by our Board on June 18, 2018. The Nomination
and Remuneration Committee comprises of the following:
The Company Secretary & Compliance Officer shall act as the secretary to the Nomination and
Remuneration Committee.
The scope and function of the Nomination and Remuneration Committee is in accordance with
Section 178 of the Companies Act, 2013 and SEBI Listing Regulations and approved by our
Board pursuant to its resolution dated June 18, 2018. Set forth below are the terms of reference,
powers and role of our Nomination and Remuneration Committee:
A. Tenure:
The Nomination and Remuneration Committee shall remain in force and continue to carry out
its functions until otherwise resolved by the Board.
B. Meetings:
The committee shall meet as and when the need arise for review of Managerial Remuneration
or for any appointment or re-appointment of managerial and senior personnel. The quorum for
the meeting shall be one third of the total strength of the Nomination and Remuneration
Committee or two members, whichever is higher. Meeting of the Nomination and
Remuneration Committee shall be called by at least seven day’s notice in advance.
The terms of reference of the Nomination and Remuneration Committee are set forth below:
A. Formulation of the criteria for determining qualifications, positive attributes and independence
of a director and recommend to the Board a policy relating to the remuneration of the directors,
key managerial personnel and other employees;
The Nomination and Remuneration Committee, while formulating the above policy, should
ensure that:
(i) the level and composition of remuneration be reasonable and sufficient to attract, retain
and motivate directors of the quality required to run the Company successfully;
(ii) relationship of remuneration to performance is clear and meets appropriate
246
performance benchmarks; and
(iii) remuneration to directors, key managerial personnel and senior management involves
a balance between fixed and incentive pay reflecting short and long term performance
objectives appropriate to the working of the Company and its goals.
a) Ensure that the policy mentioned in point (a) and (b) above, are disclosed in
the Board report;
b) Formulation of criteria for evaluation of performance of independent directors
and the Board;
c) Devising a policy on Board diversity;
d) Identifying persons who are qualified to become directors and who may be
appointed in senior management in accordance with the criteria laid down, and
recommend to the Board their appointment and removal;
e) Whether to extend or continue the term of appointment of the independent
director, on the basis of the report of performance evaluation of directors;
Our Corporate Social Responsibility Committee was constituted pursuant to resolution of our
Board dated March 14, 2015. Thereafter, our Corporate Social Responsibility Committee was
reconstituted pursuant to a resolution passed by our Board on June 18, 2018. The Corporate
Social Responsibility Committee comprises of the following:
The terms of reference, powers and scope of the Corporate Social Responsibility Committee
of our Company is in accordance with Section 135 of the Companies Act, 2013.
The terms of reference of the Corporate Social Responsibility Committee include the
following:
247
e) IPO Committee
The IPO Committee was constituted pursuant to resolution of our Board dated June 18, 2018
passed by the Directors of our Company. The IPO Committee comprises of the following:
The Company Secretary & Compliance Officer shall act as the secretary to the IPO committee.
The terms of reference, powers and role of the IPO Committee include the following:
1. To decide on the actual size of the initial public offer ("IPO"), including offer for sale,
if any, by the promoters/shareholders, and/or reservation for employees, timing
(including bid closing date for QIBs and the issue period), pricing (including discount,
if any, to employee / retail category) and all the terms and conditions of the issue of
shares, including the price in consultation with the book running lead manager, and to
accept any amendments, modifications, variations or alternations thereto;
2. To appoint and enter into arrangements with the book running lead manager/lead
manager to the issue, underwriters to the issue, syndicate members to the issue, brokers
to the issue, escrow collection bankers to the issue, registrar, legal advisor, monitoring
agency and any other agencies or persons;
3. To finalize and settle and to execute and deliver or arrange the delivery of the draft
offering document (the draft red herring prospectus or draft prospectus), red herring
prospectus, final prospectus, syndicate agreement, underwriting agreement, escrow
agreement and all other documents, deeds, agreements and instruments as may be
required or desirable in connection with the issue of shares or the IPO by the Company;
4. To open bank account(s) for the purposes of the IPO, with a scheduled commercial
bank and to receive applications along with application monies in respect of the issue
of shares of the Company and handle refunds for the issue;
5. To make applications before the statutory authorities, as may be required, for the
purpose of issue of shares by the Company to resident and non-resident investors such
as Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs);
6. To make applications for listing of equity shares of the Company in one or more stock
exchange(s) and to execute and to deliver or arrange the delivery of the listing
agreement(s) or equivalent documentation to the concerned stock exchange(s);
7. To settle all questions, difficulties or doubts that may arise in regard to such issues or
248
allotment as it may, in its absolute discretion deem fit; and
8. To do all such acts, deeds, matters and things as it may, in its absolute discretion deem
necessary or desirable for the purpose of the initial public offer, including without
limitation, allocation and allotment of the shares as permissible in law, issue of share
certificates in accordance with the relevant laws, regulations, rules etc.
As on date of filing of this Draft Red Herring Prospectus, except as stated below, none of our other
Directors hold any Equity Shares of our Company:
As on date of this Draft Red Herring Prospectus, our Directors hold the following number of equity
shares of BIPL, one of our Subsidiaries:
As on date of this Draft Red Herring Prospectus, our Directors hold the following number of equity
shares of LSHP, one of our Subsidiaries:
Our Executive Directors may be deemed to be interested to the extent of remuneration paid to them for
services rendered as a Director of our Company and reimbursement of expenses, if any, payable to
them. For details of remuneration paid to our Directors, see "Terms of appointment and remuneration
of our Executive Directors" above.
Our Directors have no interest in the promotion of our Company other than in the ordinary course of
business. Our Directors may also be regarded as interested to the extent of Equity Shares held by them
in our Company, if any, details of which have been disclosed above under the heading "Shareholding
of Directors in our Company". All of our Directors may also be deemed to be interested to the extent
of any dividend payable to them and other distributions in respect of the Equity Shares. Our Directors,
other than the Executive Directors, may also be deemed to be interested to the extent of sitting fee
payable to them.
249
Our Directors may also be interested to the extent of Equity Shares, if any, held by the entities in which
they are associated as promoters, directors, partners, proprietors or trustees or held by their relatives or
that may be subscribed by or allotted to the companies, firms, ventures, trusts in which they are
interested as promoters, directors, partners, proprietors, members or trustees, pursuant to this Issue.
Except as stated above and in the "Related Party Transactions" on page 279 of this Draft Red Herring
Prospectus, our Directors do not have any other interest in the business of our Company.
Interest as to Property
Our Directors confirm that, except as stated below, they have no interest in any property acquired by
our Company during the last two years from the date of filing of this Draft Red Herring Prospectus or
any property proposed to be purchased by our Company.
None of our Directors are a party to any bonus or profit sharing plan.
Except as disclosed below, there have been no changes in our Board during the last three years.
250
Name of Director Date of Date of Reason
Appointment Cessation
April 10, 2018 - Designated as Joint Managing Director
Kavita Khetan May 17, 2016 - Change in designation from Director to
Whole-time Director
- June 18,2018 Resigned from directorship due to
personal commitments.
Rainy Khetan May 17, 2016 - Appointed as an additional Director
September 30, - Regularised as a Director of the Company
2016
- April 10, 2018 Resigned from directorship due to pre-
occupancy.
Sneha Khetan May 17, 2016 - Designated as Whole-time Director
- April 10, 2018 Resigned from directorship due to pre-
occupancy.
Ranjana Khetan May 17, 2016 - Designated as Whole-time Director
- April 10, 2018 Resigned from directorship due to pre-
occupancy.
Arun Kumar Bajaj April 10, 2018 - Appointed as Non-Executive Independent
Director
- June 18, 2018 Resigned from directorship due to
personal and business commitments
Shyamkanu Mahanta April 10, 2018 - Appointed as Non-Executive Independent
Director
Swapna Sarmah April 10, 2018 - Appointed as Non-Executive Independent
Director
- June 18,2018 Resigned from directorship due to
personal commitments
Usha Agarwal July 2, 2018 - Appointed as additional Director
July 24, 2018 - Regularised as Non-Executive
Independent Director
251
Management Organization Structure
252
Our Key Managerial Personnel
Set forth below are the details of our Key Managerial Personnel in addition to our Executive Directors
as on the date of filing of this Draft Red Herring Prospectus.
Nanuram Prajapat, aged 54 years, is the Chief Financial Officer of our Company. He has completed
second year of bachelor’s degree in Commerce from Gujarat Univeristy. He has over 26 years of
experience in finance, accounts & business operations. He joined our Company as an accounts' manager
in the year 1991. He was appointed as the Chief Financial Officer of our Company with effect from
March 14, 2015. He is responsible for the management of the financial aspects & business operations
of our Company. He received a gross remuneration of `12,60,000 in financial year 2017-2018.
Richeeta Somani, aged 27 years, is the Company Secretary and Compliance Officer of our Company.
She holds a bachelor’s degree in Law from University of Guwahati and Bachelor’s degree in Business
Administration from University Maharani’s College, Jaipur. She is a member of the Institute of
Company Secretaries of India. She has over a year experience in legal and secretarial compliance work.
She was appointed as a legal advisor of our Company with effect from May 1, 2017 and later appointed
as the Company Secretary of our Company with effect from February 15, 2018. She was appointed as
the Compliance Officer of our Company pursuant to resolution passed by our Board on June 18, 2018.
She is currently responsible for handling secretarial compliance of our Company. She has received a
gross remuneration of `134,000 in financial year 2017-2018.
Tika Ram Sharma, aged 60, is the Technical Director for EPC / Turnkey projects of our Company.
He holds a diploma in Electrical Engineering with specialization in Advanced Electrical Measurements
from P.M.V. Polytechnic, Mathura. He has been granted a certificate of studentship by the Institution
of Engineers (India). He was appointed as the Chief General Manager, EPC Projects of our Company
with effect from December 1, 2012. He was then promoted and appointed as the Technical Director for
EPC/ Turnkey projects of our Company with effect from April 1, 2018. He has received a gross
remuneration of `3,900,000 in the financial year 2017-2018.
Ranjana Khetan, aged 61, is the head of Human Resource and Administration – EPC / Turnkey
projects of our Company. She has not received any formal education. She was a director of our
Company from July 17, 1986 till April 10, 2018. She was previously designated as the Whole-time
director of our Company with effect from May 20, 2011 until her resignation as a director of our
Company. She was appointed as the head of Human Resource and Administration – EPC / Turnkey
projects of our Company with effect from April 1, 2016. She is responsible for handling development
and administration of plans and procedures in relation to human resources of our Company and
planning, organizing, controlling and oversight of the overall activities and actions of human resource
department of our Company across India. She has received a gross remuneration of `3,000,000 in the
financial year 2017-2018.
Sneha Khetan, aged 50, is the head of Human Resource and Administration for Assam operations of
our Company. She has completed a bachelor’s degree in Arts (B.A.) from Women's College, Tinsukia
which is affiliated to Dibrugarh University. She was a director of our Company from November 25,
1997 till April 10, 2018. She was previously designated as the Whole-time director of our Company
with effect from May 20, 2011 until her resignation as a director of our Company. She was appointed
as the head of Human Resource and Administration – Assam operations of our Company with effect
from April 10, 2015. She is responsible for handling development and administration of plans and
procedures in relation to human resources of our Company and planning, organizing, controlling and
oversight of the overall activities and actions of human resource department of our Company for its
operations at Assam. She has received a gross remuneration of `3,000,000 in the financial year 2017-
2018.
253
Kavita Khetan, aged 46, is the head of Human Resource and Administration for Rajasthan operations
of our Company. She holds a bachelor’s degree in arts from Handique Girls College, Guwahati. She
was a director of our Company from March 14, 2015 till June 11, 2018. She was previously designated
as the Whole-time director of our Company with effect from May 17, 2016 until her resignation as a
director of our Company. She was appointed as the head of Human Resource and Administration –
Assam operations of our Company with effect from April 10, 2015. She is responsible for handling
development and administration of plans and procedures in relation to human resources of our Company
and planning, organizing, controlling and oversight of the overall activities and actions of human
resource department of our Company for its operations at Rajasthan. She has received a gross
remuneration of `3,000,000 in the financial year 2017-2018.
Shreshta Khetan, aged 22, is the Technical Director for Rajasthan operations of our Company. He
holds a bachelor’s degree in arts from New York University. He was appointed as the Technical
Director for Rajasthan operations of our Company with effect from July 1, 2018. He is responsible for
technical oversight over the operations of the Company at Rajasthan. Since he was recently appointed
by our Company, he has not received any remuneration during the financial year 2017-2018.
All our Key Managerial Personnel are permanent employees of our Company.
Relationship of Key Managerial Personnel with our Directors, Promoters and / or other Key
Managerial Personnel
Except as stated below, none of our Key Managerial Personnel are related to each other or to our
Promoters or to any of our Directors.
254
Name Related to Relationship
Basant Kumar Khetan Brother
Ranjana Khetan Brother-in-law
Sneha Khetan Brother-in-law
Kavita Khetan Husband
Shrestha Khetan Father
Ranjana Khetan Dr. Murlidhar Khetan Daughter-in-law
Jaiprakash Khetan Wife
Basant Kumar Khetan Sister-in-law
Pradeep Kumar Khetan Sister-in-law
Sneha Khetan Sister-in-law
Kavita Khetan Sister-in-law
Shrestha Khetan Aunt
Sneha Khetan Dr. Murlidhar Khetan Daughter-in-law
Jaiprakash Khetan Sister-in-law
Basant Kumar Khetan Wife
Pradeep Kumar Khetan Sister-in-law
Ranjana Khetan Sister-in-law
Kavita Khetan Sister-in-law
Shrestha Khetan Aunt
Kavita Khetan Dr. Murlidhar Khetan Daughter-in-law
Jaiprakash Khetan Sister-in-law
Basant Kumar Khetan Sister-in-law
Pradeep Kumar Khetan Wife
Ranjana Khetan Sister-in-law
Kavita Khetan Sister-in-law
Shrestha Khetan Mother
Shrestha Khetan Dr. Murlidhar Khetan Grandson
Jaiprakash Khetan Nephew
Basant Kumar Khetan Nephew
Pradeep Kumar Khetan Son
Ranjana Khetan Nephew
Sneha Khetan Nephew
Kavita Khetan Son
For details of Equity Shares held by our Key Managerial Personnel as on date of this Draft Red Herring
Prospectus, please refer to the chapter titled "Capital Structure" beginning on page 99 of this Draft Red
Herring Prospectus.
None of our Key Managerial Personnel are a party to any bonus or profit sharing plan.
Our Key Managerial Personnel do not have any interest in our Company or Subsidiaries other than to
the extent of the remuneration or benefits to which they are entitled to from our Company and
reimbursement of expenses incurred by them during the ordinary course of business, as per their terms
of appointment and Equity Shares held by them, or held by the entities in which they are associated as
255
promoters, directors, partners, proprietors or trustees or held by their relatives or that may be subscribed
by or allotted to the companies, firms, ventures, trusts in which they are interested as promoters,
directors, partners, proprietors, members or trustees, pursuant to the Issue, if any. Our Key Managerial
Personnel may also be deemed to be interested to the extent of any dividend payable to them and other
distributions in respect of such Equity Shares, if any.
In addition, some of our Key Managerial Personnel have entered into lease agreements with our
Company or Subsidiaries in respect of certain properties used by our Company or Subsidiaries and are
therefore interested to the extent of the rent receivable from our Company or Subsidiaries.
Set forth below are the changes in our Key Managerial Personnel in the last three years immediately
preceding the date of filing of this Draft Red Herring Prospectus:
256
Name Designation Date of change Reason
Shrestha Khetan Technical July 1, 2018 Appointment
Director –
Rajasthan
Operations
Vishnu Prakash Agarwal Company February 15, Resignation
Secretary 2018
Richeeta Somani Company February 15, Appointment
Secretary 2018
Compliance June 18, 2018 Appointment
Officer
As on date of this Draft Red Herring Prospectus, our Company does not have any employee stock option
plan or purchase schemes for our employees.
Except as stated otherwise in this Draft Red Herring Prospectus and any statutory payments made by
our Company, no non-salary amount or benefit has been paid, in two preceding years, or given or is
intended to be paid or given to any of our Company’s officers except remuneration of services rendered
as Directors, officers or employees of our Company.
Except statutory benefits upon termination of their employment in our Company or superannuation, no
officer of our Company is entitled to any benefit upon termination of such officer’s employment in our
Company or superannuation. Contributions are made regularly by our Company towards provident fund
and employee state insurance.
Our Company has not granted any loans to the Directors and/or Key Management Personnel as on the
date of this Draft Red Herring Prospectus.
None of our Key Managerial Personnel or Directors have been appointed pursuant to any arrangement
or understanding with our major shareholders, customers, suppliers or others.
257
OUR PROMOTERS AND PROMOTER GROUP
A. OUR PROMOTERS
Our Promoters are Dr. Murlidhar Khetan, Jaiprakash Khetan, Basant Kumar Khetan and
Pradeep Kumar Khetan, Topline Finvest Private Limited and VSG Trade Private Limited.
Presently, our Promoters collectively hold 21,224,340 Equity Shares, constituting 55.72% of
our pre-Issue issued, subscribed and paid-up equity share capital of our Company.
JAIPRAKASH KHETAN
258
Address: Seuni Ali, A.T. Road, Jorhat - 785 001, Assam.
Our Company confirms that the permanent account number, bank account number and passport
number of our Individual Promoters and permanent account number and bank account number
for our Corporate Promoters shall be submitted to the Stock Exchanges at the time of filing this
Draft Red Herring Prospectus.
Name Relationship
Dr. Murlidhar Khetan Father of Jaiprakash Khetan, Basant Kumar Khetan and
Pradeep Kumar Khetan.
Jaiprakash Khetan Son of Dr. Murlidhar Khetan and brother of Basant Kumar
Khetan and Pradeep Kumar Khetan.
Basant Kumar Khetan Son of Dr. Murlidhar Khetan and brother of Jaiprakash Khetan
and Pradeep Kumar Khetan.
Pradeep Kumar Khetan Son of Dr. Murlidhar Khetan and brother of Jaiprakash Khetan
and Basant Kumar Khetan.
Topline Finvest Private Limited ("Topline Finvest") was incorporated as private company
limited by shares under the Companies Act, 1956, with the name of ‘Topline Finvest Private
Limited’ vide a certificate of incorporation dated February 4, 1992 issued by the Registrar of
Companies, West Bengal at Kolkata. The CIN of Topline Finvest is
U65929AS1992PTC012349.
The registered office of Topline Finvest was originally situated at 107C, Todi Chamber, 1st
259
Floor, 2 Lal Bazar, Kolkata 700001. Subsequently, the registered office of Topline Finvest was
shifted to 9/12, Lal Bazar Street, Block-E, 4th Floor, Kolkata 700001 pursuant to a resolution
passed at the meeting of the board of directors of Topline Finvest held on June 22, 2009.
Further, the registered office of Topline Finvest was again shifted to 1A, Grant Lane, 2nd Floor,
Kolkata, 700 012, West Bengal, India pursuant to a resolution passed at the meeting of the
board of directors of Topline Finvest held on June 7, 2010. Further, the registered office of
Topline Finvest was again shifted to Flat No. 11B, 11th Floor, P. S. Srijan Heights, 35, Pandiya
Road, Kolkata, 700 029, West Bengal, India pursuant to a resolution passed at the meeting of
the board of directors of Topline Finvest held on September 1, 2012. Further, the registered
office of Topline Finvest was again shifted to Hightension Electricals, Block No. 1, Mouza,
A.T. Road, Near Toklai Bridge, Jorhat – 785 001, Assam, India pursuant to approval granted
by the shareholders of Topline Finvest vide a special resolution passed at the extra-ordinary
general meeting held on May 11, 2015 and the same was confirmed by the Regional Director,
Ministry of Corporate Affairs, Kolkata by its order dated January 27, 2016.
Topline Finvest was issued the certificate of registration bearing the no. B-05.05145 dated
January 30, 2003 by Reserve Bank of India, Kolkata as a non-deposit taking non-banking
financial institution under Section 45-IA of the Reserve Bank of India Act, 1934.Subsequently,
pursuant to a change in the registered office of Topline Finvest from the State of West Bengal
to the State of Assam, it was issued a certificate of registration bearing no. B-08.00203 dated
June 21, 2016 as a non-deposit taking non-banking financial institution under Section 45-IA of
the Reserve Bank of India Act, 1934 issued by the Reserve Bank of India, Guwahati in lieu of
the earlier issued certificate of registration no. B-05.05145 dated January 30, 2003.
Topline Finvest is involved in activities such as financing, investment and trading and mainly
deals in the business of buying, holding, selling and transfer of shares, bonds, stocks, securities,
debentures issued or guaranteed by any company constituted and carrying on business in India.
Topline Finvest is also engaged in the business of lending and advancing money, either with or
without security and also in activities such as hire purchase, leasing etc.
Our Promoters i.e. (i) Jaiprakash Khetan, (ii) Basant Kumar Khetan and (iii) Pradeep Kumar
Khetan are also the promoters of Topline.
Details of shareholders of Topline Finvest as on the date of filing this DRHP are as follows:
260
Sr. No. Name of the Shareholders No of Shares held Percentage of total
share capital (%)
Total 2,348,100 100
# Percentage of shares (held directly by Basant Kumar Khetan, Pradeep Kumar Khetan and
Jaiprakash Khetan) are negligible.
Board of directors
Jaiprakash Khetan, Basant Kumar Khetan and Pradeep Kumar Khetan are the directors of
Topline Finvest.
Key financial parameters for the last five financial years are as follows:
(` in Millions)
Particulars For the year For the year For the For the year For the year
ended ended year ended ended March ended March
March 31, March 31, March 31, 31, 2014 31, 2013
2017 2016 2015
Share capital 23.48 23.48 23.48 23.48 23.48
Reserves and 284.24 284.14 283.96 283.74
surplus 284.38
Total income 7.53 7.10 6.02 6.52 5.39
Profit/ loss 0.15 0.10 0.18 0.22 0.13
after tax
Earnings per 0.06 0.04 0.08 0.09 -0.06
share (basic
and diluted) (`
per share)
Net asset 131.11 131.05 131.01 130.93 130.84
value per
share (` per
share)
VSG Trade Private Limited ("VSG Trade") was incorporated as private company limited by
shares under the Companies Act, 1956, with the name of ‘VSG Trade Private Limited’ vide a
certificate of incorporation dated December 16, 1987 issued by the Registrar of Companies,
West Bengal at Calcutta. The CIN of VSG Trade is U51109AS1987PTC012282.
The registered office of VSG Trade was situated at 72/2, Shree Ram Dhang Road, Howrah
711106. Subsequently, the registered office of VSG Trade was shifted to 1, Mahendra Nath
Roy Bye Lane, Howrah 711101 pursuant to a resolution passed at the meeting of the board of
directors of VSG Trade held on January 6, 1992. Further, the registered office of the Company
was again shifted to 1A, Grant Lane, 2nd Floor, Kolkata 700012, West Bengal pursuant to
approval granted by the shareholders of VSG Trade by way of a special resolution passed by
the extra-ordinary general meeting of VSG Trade dated September 15, 2010. Further, the
registered office of VSG was again shifted to Flat No. 11B, 11th Floor, P. S. Srijan Heights, 35,
Panditya Road, Kolkata, 700 029, West Bengal, India pursuant to resolution passed by the
board of directors dated September 1, 2012. Subsequently, the registered office of VSG Trade
was shifted to Hightension Electricals, Block No. 1, Mouza, A.T. Road, Near Toklai Bridge,
Jorhat - 785 001, Assam, India pursuant to approval granted by the shareholders of VSG Trade
vide a special resolution passed at the extra-ordinary general meeting held on April 16, 2015
261
and the same was confirmed by the Regional Director, Ministry of Corporate Affairs, Kolkata
by its order dated September 24, 2015.
VSG Trade was issued the certificate of registration bearing the no. B.05.04105 dated March
21, 2001 by Reserve Bank of India, Kolkata as a non-deposit taking non-banking financial
institution under Section 45-IA of the Reserve Bank of India Act, 1934. Subsequently, pursuant
to a change in the registered office of VSG Trade from the State of West Bengal to the State of
Assam, it was issued a certificate of registration bearing the no. B.08.00201 dated May 27,
2016 as a non-deposit taking non-banking financial institution under Section 45-IA of the
Reserve Bank of India Act, 1934 issued by the Reserve Bank of India, Guwahati in lieu of the
earlier issued certificate of registration no. B-05.05145 dated January 30, 2003.
VSG Trade mainly deals in business of buying, holding, selling, hypothecation and transfer of
shares, bonds, stocks, securities, debentures issued or guaranteed by any company constituted
and carrying on business in India.VSG Trade is also engaged in the business of lending and
advancing money, either with or without security.
One of our Promoters, Topline Finvest Private Limited, is also the promoter of VSG Trade.
Consequently, some of our individual Promoters i.e. Jaiprakash Khetan, Basant Kumar Khetan
and Pradeep Kumar Khetan hold the ultimate control of VSG Trade and are the beneficiaries
in respect of shares held by Topline Finvest Private Limited in VSG Trade.
Details of shareholders of VSG Trade as on the date of filing this DRHP are as follows:
Board of directors
Basant Kumar Khetan, Babulal Goyal and Tansukh Lal Sharma are the directors of VSG.
Key financial parameters for the last five financial years are as follows:
(` in Millions)
Particulars For the year For the year For the For the year For the year
ended ended March year ended ended March ended March
March 31, 31, 2016 March 31, 31, 2014 31, 2013
2017 2015
Share capital 12.60 12.60 12.60 12.60 12.60
Reserves 187.21 187.28 187.20 187.13 187.02
and surplus
Total 1.28 1.56 1.45 1.45 2.01
income
Profit/ loss (0.07) 0.07 0.07 0.11 (0.02)
after tax
262
Earnings per (0.06) 0.06 0.06 0.09 (0.02)
share (basic
and diluted)
(` per share)
Net asset
value per
share (` per
share) 158.53 158.59 158.53 158.47 158.38
There has been no change in the control or management of Topline Finvest or VSG Trade in
the three years preceding this Draft Red Herring Prospectus.
As on date of this Draft Red Herring Prospectus, VSG Trade holds 9,076,990 Equity Shares
constituting 23.83% of the paid-up equity capital in our Company and Topline Finvest holds
6,507,638 Equity Shares constituting 17.08% of the paid up capital in our Company.
Our Company confirms that the permanent account number, bank account number, the
registration number of Topline Finvest and VSG Trade and the address of the Registrar of
Companies where Topline Finvest and VSG Trade are registered shall be submitted to the Stock
Exchanges at the time of filing of this Draft Red Herring Prospectus.
Our Company is promoted by Dr. Murlidhar Khetan, Jaiprakash Khetan, Basant Kumar Khetan,
Pradeep Kumar Khetan, Topline Finvest Private Limited and VSG Trade Private Limited, who
hold 1,476,332 Equity Shares, 1,556,620 Equity Shares, 1,416,480 Equity Shares, 1,190,280
Equity Shares, 6,507,638 Equity Shares and 9,076,990 Equity Shares, respectively as on the
date of this Draft Red Herring Prospectus.
Our Promoters are interested in our Company to the extent that they have promoted our
Company and to the extent of their shareholdings and directorships in our Company and the
shareholding of their relatives in our Company and the dividend declared and due, if any, and
employment related benefits paid by our Company. For further details, please see the chapters
titled "Capital Structure" and "Our Management" beginning on pages 99 and 235, respectively
of this Draft Red Herring Prospectus. Our Promoters may also be interested to the extent of
providing personal guarantees for some of the loans taken by our Company. For further details,
please see "Capital Structure - Shareholding of our Promoters and Promoter Group" on page
99, 258 and the chapter titled "Related Party Transactions" on page 279 of this Draft Red
Herring Prospectus.
Our Promoters are also interested in our Company to the extent of their being Executive
Directors of our Company and the remuneration and reimbursement of expenses payable to
them in such capacities. For further details in this regard, please see the chapter titled "Our
Management" beginning on page 235 of this Draft Red Herring Prospectus.
Except as disclosed in the paragraph titled "Our Properties" under the chapter titled "Our
Business" beginning on page 191 of this Draft Red Herring Prospectus, our Promoters do not
have any interest in any property acquired by or proposed to be acquired by our Company two
years prior to filing of the Draft Red Herring Prospectus. Details in connection with properties
263
acquired by our Company from our Promoters in the last two Fiscals, if any, are disclosed in
the chapter titled "Related Party Transactions" on page 279 of this Draft Red Herring
Prospectus.
Our Promoters are interested to the extent of their shareholding, the dividend declared in
relation to such shareholding, if any, by our Company. For further details in this regard, see the
chapter titled "Capital Structure" beginning on page 99 of this Draft Red Herring Prospectus.
Other Interest
Some of our individual Promoters being Jaiprakash Khetan, Basant Kumar Khetan and Pradeep
Kumar Khetan are also the promoters of our Corporate Promoters, Topline Finvest Private
Limited and VSG Trade Private Limited. Further, Jaiprakash Khetan, Basant Kumar Khetan
and Pradeep Kumar Khetan are also the directors of Topline Finvest Private Limited and Basant
Kumar Khetan is also a director of VSG Trade Private Limited. Our individual Promoters may
be interested to the extent of their shareholdings and directorships in our Corporate Promoters
and the dividend declared and due, if any, and salary and other employment related benefits
paid by our Corporate Promoters.
Except as stated under the chapter titled "Our Business" beginning on page 191 and the chapter
titled "Related Party Transactions" on page 279 of this Draft Red Herring Prospectus,
respectively, our Promoters are not interested in any transaction in acquisition of land or
property, construction of building and supply of machinery, or any other contract, agreement
or arrangement entered into by the Company and no payments have been made or are proposed
to be made in respect of these contracts, agreements or arrangements.
Further, some of our Individual Promoters i.e., Jaiprakash Khetan, Basant Kumar Khetan and
Pradeep Kumar Khetan are also directors on the board and members of certain Promoter Group
entities and may be deemed to be interested to the extent of the payments made by our
Company, if any, to these Promoter Group entities.
Payment of benefits to our Promoters and Promoter Group during the last two years
Other than the benefits mentioned in the related party transactions as per Ind AS 24 there has
been no payment of any amount of benefits to our Promoters or the members of our Promoter
Group during the last two years from the date of this Draft Red Herring Prospectus nor is there
any intention to pay or give any benefit to our Promoters or Promoter group as on the date of
this Draft Red Herring Prospectus. For further details, please refer to chapter titled "Related
Party Transactions" on page 279 of this Draft Red Herring Prospectus.
There has been no change in management and control of our Promoter Companies in the last
five years preceding the date of filing of this Draft Red Herring Prospectus.
264
Litigation involving our Promoters
For details of legal and regulatory proceedings involving our Promoters, please see the chapter
titled "Outstanding Litigation and Material Developments" beginning on page 535 of this Draft
Red Herring Prospectus.
Guarantees
Except as stated in the chapter titled "Financial Indebtedness" and chapter titled "Related Party
Transactions" on pages 530 and 279, respectively, our Promoters have not given any guarantee
to a third party as on the date of this Draft Red Herring Prospectus.
None of our Promoters have disassociated themselves from any of the companies or firms
during the last three years preceding the date of this Draft Red Herring Prospectus.
Except as stated in the section titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, our Company has not entered into any related party transactions with
our Promoters, during the last five Fiscal Years. Our individual Promoters are also directors on
the boards, or are members, or are partners, of certain Promoter Group entities and may be
deemed to be interested to the extent of the payments made by our Company, if any, to these
Promoter Group entities.
Further, none of our sundry debtors are related to our Promoters in any manner.
In addition to our Promoters, the following individuals, companies and HUFs form part of our
Promoter Group in terms of Regulation 2(1)(zb) of the SEBI ICDR Regulations:
265
Sr. No. Name of the individuals
18. Tribeni Devi Agarwal
19. Kaushalya Devi Bajaj
20. Ajay Kumar Garodia
21. Sanjay Kumar Garodia
22. Manak Chand Bazari
23. Manoj Kumar Bazari
24. Sushil Kumar Bazari Agarwala
25. Vishal Kumar Bajaj
26. Vikash Bajaj
For details in relation to the shareholding of our Promoters and Promoter Group as on the date
of this Draft Red Herring Prospectus, please see the chapter titled "Capital Structure" beginning
on page 99 of this Draft Red Herring Prospectus.
Other Confirmations
Our Promoters and members of our Promoter Group have not been prohibited from accessing
or operating in capital markets or restrained from buying, selling or dealing in securities under
any order or direction passed by SEBI or any other regulatory or governmental authority.
Further, there have been no violations of securities laws committed by any of them in the past
or are currently pending against them.
None of our Promoters and persons belonging to our Promoter Group have been declared as a
wilful defaulter as defined under the SEBI ICDR Regulations.
Our Promoters are not and have never been a promoter, director or person in control of any
other company which is prohibited from accessing or operating in capital markets under any
order or direction passed by SEBI or any other regulatory or governmental authority.
266
OUR GROUP ENTITIES
In accordance with the provisions of the SEBI ICDR Regulations, for the purpose of identification of
"group companies", our Company has considered companies included in the list of related parties as
per the applicable accounting standards, i.e. the Indian Accounting Standard 24 issued by the Institute
of Chartered Accountants of India ("Ind AS 24") as identified in the latest audited financial statements,
on a consolidated basis, such companies as considered material by our Board as per the policy on
materiality of group entities adopted by our Board through its resolution dated June 18, 2018, and such
other entities in which our Promoters holds individually or jointly, more than twenty percent of issued,
subscribed and paid up share capital or voting rights of such entities for the purpose of disclosure in the
Issue Documents
Pursuant to a resolution dated June 18, 2018, our Board vide a policy on materiality of group entities
has resolved that, a company shall be considered as material if it:
(i) is a member of the Promoter Group and has entered into one or more transactions such that,
individually or in aggregate such transaction exceeds 10% of the net worth or 5% of the gross
turnover (whichever is higher) of the Company as per the restated Financial Statements for the
Fiscal 2018, 2017, 2016, 2015 and 2014; and
(ii) companies which, subsequent to the date of the last audited financial statements of our
Company, would require disclosure in the financial statements of our Company for subsequent
periods as entities covered under Ind AS 24 in addition to/other than those companies covered
under Ind AS 24, in the financial statements of our Company included in this Draft Red Herring
Prospectus.
For avoidance of doubt, companies forming part of our Promoters and our Subsidiaries are not included
as group entities in this section.
The companies, firms and other ventures which form part of our Group Entities are as follows:
Corporate Information
267
Toor Finance Company Limited ("TFCL") was originally incorporated as private company
limited by shares under the Companies Act, 1956 with the name Toor Finance Company Private
Limited on April 24, 1978 vide a Certificate of Incorporation issued by the Registrar of
Companies, Punjab, Himachal Pradesh and Chandigarh. The name of TFCL was changed to
Toor Finance Company Limited pursuant to approval granted by a special resolution passed by
the shareholders of TFCL at the extra-ordinary general meeting of TFCL held on April 20, 2002
and approval of the Central Government in writing by its order dated May 8, 2002 under Section
21 read with Section 31 of the Companies Act, 1956.The Corporate Identity Number of TFCL
is U65921AS1978PLC018335.
The registered office of TFCL was originally located at Ladowali Road, Jalandhar, Punjab,
India. The registered office of TFCL was shifted to 340/1 Than Singh Nagar, Anand Parvat,
New Delhi - 110005 pursuant to approval granted by the shareholders of TFCL vide a special
resolution passed at the extra-ordinary general meeting held on May 16, 2008 and the same was
confirmed by the Company Law Board, New Delhi bench by its order dated March 13, 2009.
The registered office of TFCL was once again shifted to 325, Vardhaman Grand Plaza,
Mangalam Place, Sector 3, Rohini, New Delhi pursuant to a resolution passed by the board of
directors of TFCL on June 20, 2009. The registered office of TFCL was again shifted to
IX/5882, Indra Gali, Subhas Mohalla, Gandhi Nagar, New Delhi – 110 031 pursuant to a
resolution passed by the board of directors of TFCL on June 14, 2016. The registered office of
TFCL was again shifted to Shop No. 2 & 3, 354/A, Som Bazar Road, Jain Nagar, New Delhi -
110081 pursuant to a resolution passed by the board of directors of TFCL on August 19, 2016.
Further, the registered office of TFCL was again shifted to Khetan Bhawan, Seuni Ali, A T
Road, Jorhat – 785 001, Assam, pursuant to an approval granted by the shareholders of TFCL
vide a special resolution passed at its extra-ordinary general meeting held on February 20, 2017
and the same was confirmed by the Regional Director, Ministry of Corporate Affairs, Shillong
by its order dated January 12, 2018.
TFCL was issued a certificate of registration bearing no. B-14.03227 dated August 31,2010 by
Reserve Bank of India, New Delhi as a non-deposit taking non-banking financial institution
under Section 45-IA of the Reserve Bank of India Act, 1934. Subsequently, pursuant to a
change in the registered office of TFCL from New Delhi to the State of Assam, it was issued a
certificate of registration bearing no. B-08.00214 dated July 18, 2018 as a non-deposit taking
non-banking financial institution under Section 45-IA of the Reserve Bank of India Act, 1934
issued by the Reserve Bank of India, Guwahati.
TFCL is engaged in the business of buying, holding, selling and transfer of any shares, bonds,
stocks, securities, debentures issued or guaranteed by any Company constituted and carrying
on business in India.
1) Jaiprakash Khetan holds 1 equity share constituting 0.00% (i.e., negligible equity share
holding) of the paid-up equity share capital in TFCL. Further, Jaiprakash Khetan holds
34% of the paid-up equity share capital in Shajha Automations Private Limited and
60% of the paid up equity share capital in Shri Mahaluxmi Aerated Aqua Private
Limited (both companies being promoters of TFCL) and thus collectively holds
46.49% percent of the paid up equity share capital in TFCL indirectly through these
two entities.
2) Basant Kumar Khetan holds 1 equity share constituting 0.00% (i.e., negligible equity
share holding) of the paid-up equity share capital in TFCL. Further, Basant Kumar
268
Khetan holds 66% of the paid-up equity share capital in Shajha Automations Private
Limited and thus holds 32.62% of the paid-up equity share capital in TFCL indirectly
through this entity.
3) Pradeep Kumar Khetan holds 1 equity share constituting 0.00% (i.e. negligible equity
share holding) of the paid-up equity share capital in TFCL. Further, Pradeep Kumar
Khetan holds 40% of the paid-up equity share capital in Sri Mahaluxmi Aerated Aqua
Private Limited and thus holds 19.80% of the paid-up equity share capital in TFCL
indirectly through this entity.
Financial Information
(in ` millions except per share data)
For the Financial Year
Particulars
2017 2016 2015
Equity share capital 18.79 18.79 18.79
Reserves (excluding 363.43
revaluation reserves) and 367.38 364.81
surplus
Revenue from operations and 24.54
16.28 18.85
other income
Profit/(Loss) after tax 2.58 1.37 5.32
Basic EPS (in ₹) 1.37 0.73 2.83
Diluted EPS (in ₹) 1.37 0.73 2.83
Net asset value per share (in ₹) 205.53 204.16 203.43
Corporate Information
North Eastern Educare & Research Private Limited ("NEER") was incorporated as a private
company limited by shares under the Companies Act, 1956 vide a Certificate of Incorporation
dated May 19, 2009 issued by the Registrar of Companies, Shillong. The Corporate Identity
Number of NEER is U80301AS2009PTC009047.
The registered office of NEER is situated at Seuni Ali, A T Road, Jorhat – 785 001, Assam.
NEER is engaged in the business of providing education services which includes providing
infrastructure for educational institutions, schools, colleges, universities, technical institutes
and also for healthcare institutions, hospitals, nursing homes, diagnostic clinics etc. NEER is
also engaged in the business of providing books, magazines, periodicals, e-learning materials,
information technology related infrastructure, computers, software and other such services to
education and healthcare service providers.
(i) Jaiprakash Khetan holds 800 equity shares constituting 0.13% and Pradeep Kumar
Khetan holds 200 equity shares constituting 0.03% respectively of paid up equity share
capital of NEER.
(ii) Our Corporate Promoter being Topline Finvest Private Limited holds 139,000 equity
shares constituting 22.74% of the paid-up equity share capital of NEER and also holds
180,100 0% redeemable convertible preference shares constituting 24.86% of the paid-
269
up preference share capital of NEER. Some of our individual Promoters namely,
Jaiprakash Khetan, Basant Kumar Khetan and Pradeep Kumar Khetan directly and
indirectly hold shares in Topline Finvest Private Limited and therefore may be deemed
to be having an indirect interest in the paid- up equity and preference share capital of
NEER to the extent of the shareholding of Topline Finvest Private Limited in NEER.
(iii) Our Company holds 500 equity shares constituting 0.08% of the paid-up equity share
capital of NEER. Our Promoters being shareholders of our Company may be deemed
to be having an indirect interest in the paid- up equity share capital of NEER to the
extent of the shareholding of our Company in NEER.
(iv) Our Corporate Promoter being VSG Trade Private Limited holds 112,000 equity shares
constituting 18.33% of the paid-up equity share capital of NEER and also holds
194,500 0% redeemable convertible preference shares constituting 26.84% of the paid-
up preference share capital of NEER. Our Promoters may be deemed to be having an
indirect interest in the paid- up equity and preference share capital of NEER to the
extent of the shareholding of VSG Trade Private Limited in NEER.
(v) Toor Finance Company Limited holds 300,000 equity shares constituting 49.09% of
the paid-up equity share capital of NEER and also holds 350,000 0% redeemable
convertible preference shares constituting 48.30% of the paid-up preference share
capital of NEER. Some of our individual Promoters namely, Jaiprakash Khetan, Basant
Kumar Khetan and Pradeep Kumar Khetan directly and indirectly hold shares in Toor
Finance Company Limited and therefore may be deemed to be having an indirect
interest in the paid- up equity and preference share capital of NEER to the extent of
shareholding of Toor Finance Company Limited in NEER.
(vi) NEER has borrowed an interest free unsecured loan from some of our individual
Promoters namely, Jaiprakash Khetan and Pradeep Kumar Khetan. The outstanding
loan amount from Jaiprakash Khetan and Pradeep Kumar Khetan, as on the date of
filing this DRHP, are `27.49 million and `4.65 million respectively.
(vii) NEER has also borrowed from our Corporate Promoters namely, Topline Finvest
Private Limited and VSG Trade Private Limited. The outstanding loan amount
(including interest) from Topline Finvest Private Limited and VSG Trade Private
Limited, as on the date of filing this DRHP, are `12.47 million and `11.00 million
respectively.
Financial Information
(in ` millions except per share data)
For the Financial Year
Particulars
2017 2016 2015
Equity share capital 61.12 61.12 61.12
Reserves (excluding
revaluation reserves) and (29.97) (33.42) (26.58)
Surplus
Revenue from operations and
81.26 58.79 46.98
other income
Profit/(Loss) after tax 3.44 6.84 (14.65)
Basic EPS (in ₹) 5.63 11.19 (46.84)
Diluted EPS (in ₹) 5.63 11.19 (46.84)
Net asset value per share (in ₹) 169.52 163.89 175.08
270
3. North Eastern Cables Private Limited
Corporate Information
North Eastern Cables Private Limited ("NECAB") was incorporated as a private company
limited by shares under the Companies Act, 1956 vide a Certificate of Incorporation dated
December 20, 1988 issued by the Registrar of Companies, Shillong. The CIN of NECAB is
U25191AS1988PTC003159.
The registered office of NECAB is situated at A T Road Jorhat – 785 001, Assam.
(i) Dr. Murlidhar Khetan, holds 900 equity shares constituting 9.52%, Jaiprakash Khetan
holds 377 equity share constituting 3.99% and Pradeep Kumar Khetan holds 3,345
equity shares constituting 35.40% respectively of the paid-up equity share capital of
NECAB.
(ii) Mahak Builders Private Limited holds 300 equity shares constituting 3.17% of the
paid-up equity share capital of NECAB. Our individual Promoter, namely Pradeep
Kumar Khetan directly holds 50% of the total paid-up equity capital in Mahak Builders
Private Limited and therefore may be deemed to be having an indirect interest in the
paid-up equity share capital of NECAB to the extent of shareholding of Mahak Builders
Private Limited in NECAB.
(iii) Our Corporate Promoter VSG Trade Private Limited holds 2,000 equity shares
constituting 21.16% of the paid-up equity share capital of NECAB. Our Promoters
directly and indirectly hold shares in VSG Trade Private Limited and therefore may be
deemed to be having an indirect interest in the paid-up equity share capital of NECAB
to the extent of shareholding of VSG Trade Private Limited in NECAB.
(iv) Our Corporate Promoter Topline Finvest Private Limited holds 250 equity shares
constituting 2.65% of the paid-up equity share capital of NECAB. Our Promoters
directly and indirectly hold shares in Topline Finvest Private Limited and therefore
may be deemed to be having an indirect interest in the paid-up equity share capital of
NECAB to the extent of shareholding of Topline Finvest Private Limited in NECAB.
(v) Our wholly owned subsidiary Brahmaputra Infra Power Private Limited holds 200
equity shares constituting 2.12% of the paid-up equity share capital of NECAB. Our
Promoters being shareholders of our Company may be deemed to be having an indirect
interest in the paid-up equity share capital of NECAB to the extent of shareholding of
Brahmaputra Infra Power Private Limited in NECAB.
(vi) Further, except as stated in this chapter and in the chapter titled "Related Party
Transactions" on page 279 of this Draft Red Herring Prospectus, our Promoters do not
have any other interest in NECAB.
(vii) NECAB has borrowed an interest free unsecured loan from one of our Promoters
271
namely, Jaiprakash Khetan. The outstanding loan amount, as on the date of filing this
DRHP, is `3.50 million.
Financial Information
(in ` millions except per share data)
For the Financial Year
Particulars
2017 2016 2015
Equity share capital 9.45 9.45 9.45
Reserves (excluding
revaluation reserves) and 50.14 51.41 62.06
Surplus
Revenue from operations and
23.78 11.20 132.11
other income
Profit/(Loss) after tax (1.27) (10.64) 2.44
Basic EPS (in ₹) (134.33) (1126.28) 258.44
Diluted EPS (in ₹) (134.33) (1126.28) 258.44
Net asset value per share (in
6,306.32 6,440.64 7,566.92
₹)
Corporate Information
Mahak Builders Private Limited ("MBPL") was incorporated as a private company limited by
shares under the Companies Act, 1956 vide a Certificate of Incorporation dated June 20, 1997
issued by the Registrar of Companies, Rajasthan, Jaipur. The Corporate Identity Number of
MBPL is U45201RJ1997PTC013929.
The registered office of MBPL was originally located at Delhi Walon ki Haveli, Gopal ji ka
Rasta, Johari Bazar, Jaipur. Subsequently, the registered office of MBPL was shifted to C-82,
Star Mansion, Shyam Marg, Shastri Nagar, Jaipur - 302012 pursuant to a resolution passed by
the board of directors of MBPL on September 20, 2001. The registered office was once again
shifted to 416, City Plaza, Space Cinema Complex, Bani Park, Jaipur, Rajasthan – 302 016
pursuant to a resolution passed by the board of directors of MBPL on May 03, 2010.
Financial Information
(in ` millions except per share data)
For the Financial Year
Particulars
2017 2016 2015
Equity share capital 0.10 0.10 0.10
Reserves (excluding
(0.04) 0.05 0.10
revaluation reserves) and
272
For the Financial Year
Particulars
2017 2016 2015
Surplus
Revenue from operations and
0.25 NIL NIL
other income
Profit/(Loss) after tax (0.09) (0.06) (0.01)
Basic EPS (in ₹) NIL NIL NIL
Diluted EPS (in ₹) NIL NIL NIL
Net asset value per share (in
5.70 14.67 20.17
₹)
Corporate Information
Kreesna Industries India Private Limited ("KIIPL") was incorporated as a private company
limited by shares under the Companies Act, 1956 vide a Certificate of Incorporation dated
March 28, 2000 issued by the Registrar of Companies, Shillong. The Corporate Identity
Number of KIIPL is U16003AS2000PTC006103.
The registered office of KIIPL is situated at A T Road, Jorhat – 785 001, Assam.
Financial Information
(in ` millions except per share data)
For the Financial Year
Particulars
2017 2016 2015
Equity share capital 4.80 4.80 4.80
Reserves (excluding
revaluation reserves) and 0.11 0.14 0.22
Surplus
Revenue from operations and
NIL NIL NIL
other income
Profit/(Loss) after tax (0.03) (0.07) (0.19)
Basic EPS (in ₹) (6.50) (14.97) (39.00)
Diluted EPS (in ₹) (6.50) (14.97) (39.00)
Net asset value per share (in
1023.44 1029.94 1044.91
₹)
273
B. Details of other Group Entities
Corporate Information
Shri Mahaluxmi Aerated Aqua Private Limited ("SMAAPL") was incorporated as a private
company limited by shares under the Companies Act, 1956 vide a Certificate of Incorporation
dated February 4, 2010 issued by the Assistant Registrar of Companies, NCT of Delhi and
Haryana at Delhi. The CIN of SMAAPL is U41000DL2010PTC198703.
The registered office of SMAAPL was originally located at WZ-17 GF, Punjab Garden, East
Punjabi Bagh, New Delhi –110026. Subsequently, the registered office of SMAAPL was
shifted to G-10/66, Ground Floor, Sector-15, Rohini, New Delhi, North West Delhi-110085
pursuant to a resolution passed by the board of directors dated January 25, 2014.
Jaiprakash Khetan holds 6,000 equity shares constituting 60% and Pradeep Kumar Khetan
holds 4,000 equity share constituting 40% respectively of the paid up equity share capital in
SMAAPL.
Corporate Information
Shajha Automations Private Limited ("SAPL") was incorporated as a private company limited
by shares under the Companies Act, 1956 vide a Certificate of Incorporation dated April 21,
2010 issued by the Deputy Registrar of Companies, NCT of Delhi and Haryana at Delhi. The
CIN of SAPL is U74999DL2010PTC201825.
The registered office of SAPL was originally located at H.No. -190A, Devli Road, Near Sona
Modern Public School, Khanpur, South Delhi, New Delhi - 110062, India. Subsequently, the
registered office of SAPL was shifted to H. No. - B-173/174 Block-B, Jawahar Park, Khanpur,
South Delhi, New Delhi-110062 pursuant to a resolution passed by the board of directors dated
April 27, 2010.
SAPL is engaged in the business of buying, selling, trading etc. in all kinds of
telecommunication equipments, networking software, air conditioning etc.
Jaiprakash Khetan holds 3400 equity shares constituting 34.00% and Basant Kumar Khetan
holds 6,600 equity share constituting 66.00% respectively of the paid up equity share capital in
SAPL.
274
3. M/s Shyam Associate
Corporate Information
M/s Shyam Associate was constituted vide partnership deed dated November 01, 2002 under
the Indian Partnership Act, 1932. M/s Shyam Associate is engaged in the business of
manufacturing, purchase and sale of safety matches. The office of M/s Shyam Associate is
situated at Seuni Ali, A.T Road, Jorhat.
The profit and/or loss sharing ratio of our Promoters i.e. Dr. Murlidhar Khetan and Pradeep
Kumar Khetan is 70% and 30% respectively.
Corporate Information
Murlidhar Khetan & Sons was formed on December 5, 1955. The PAN of Murlidhar Khetan &
Sons is AAFHM7381H.
Corporate Information
Basant Kumar Khetan & Sons was formed on April 11, 1998. The PAN of Basant Kumar
Khetan & Sons is AAEHB2064B.
Basant Kumar Khetan is the Karta of Basant Kumar Khetan & Sons.
Corporate Information
Pradip Kumar Khetan (HUF) was formed on March 31, 1995. The PAN of Pradip Kumar
Khetan (HUF) is AAGHP7032K.
Corporate Information
Jaiprakash Khetan & Sons was formed on April 11, 1998. The PAN of Jaiprakash Khetan &
275
Sons is AADHJ0518D.
Common Pursuits/Conflict of Interests amongst the Group Entities and our Company
There are no common pursuits and or any conflict of interests amongst our Group Entities and
our Company.
Other Confirmations
None of the securities of our Group Entities are listed on any stock exchange and our Group
Entities have not made any public or rights issue (as defined under SEBI ICDR Regulations)
of securities in the preceding three years.
Our Group Entities have not been declared as wilful defaulters by RBI or any other
governmental authority and there are no violations of securities laws committed by it in the past
and no proceedings pertaining to such penalties are pending against it.
Our Group Entities have not been declared a sick company under the Sick Industrial Companies
(Special Provisions) Act, 1985 and are not under winding up.
Additionally, our Group Entities have not been restrained from accessing the capital markets
for any reasons by SEBI or any other governmental authorities. There are no winding up or
insolvency proceedings against our Group Entities.
Litigation
For details related o litigations and regulatory proceedings involving our Group Entities and
defaults made by it, please refer to the chapter titled "Outstanding Litigations and Material
Developments" beginning on page 535 of this Draft Red Herring Prospectus.
Our Promoters have not disassociated themselves from our Group Entities during the last three
years preceding the date of this Draft Red Herring Prospectus.
Negative net-worth
Our Group Entities do not have negative net worth as on the date of its last audited financial
statements.
Our Group Entities have incurred losses in the preceding three financial years. The details of
the same are as below:
(in ` millions)
Name of loss making Group Entities Profit/(Loss) after tax for the Fiscal
2017 2016 2015
Shri Mahaluxmi Aerated Aqua Private (Negligible) (Negligible) Profit of
276
Limited `808
Shajha Automations Private Limited (Negligible) (Negligible) Profit of
`324
North Eastern Educare & Research 3.44 (6.84) (14.65)
Private Limited
North Eastern Cables Private Limited (1.27) (10.64) 2.44
Mahak Builders Private Limited (0.09) (0.05) (0.01)
Kreesna Industries India Private (0.03) (0.07) (0.19)
Limited
One of our Group Entities, namely North Eastern Skill Ventures Private Limited has been
struck-off on June 15, 2016 pursuant to our application dated February 29, 2016 made to
Registrar of Companies, Shillong vide service request number G02074094 for voluntary
striking-off.
Except as mentioned above, none of our Group Entities have become defunct or struck – off in
the five years preceding the filing of Draft Red Herring Prospectus. Further, except as stated
above, no application has been made to the relevant registrar of companies for striking off the
name of any of our Group Entities during the five years preceding the date of this Draft Red
Herring Prospectus.
Other than as disclosed in the chapter titled "Related Party Transactions" on page 279 of this
Draft Red Herring Prospectus, there are no sales/purchases between our Company and the
Group Entities where such sales or purchases exceed in value in the aggregate 10% of the total
sales or purchases of our Company.
Except as disclosed in the chapter titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, there are no related party transactions with our Group Entities.
Except as stated in the chapter titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, there has been no payment of benefits to our Group Entities during
the financial years ended March 31, 2018, March 31, 2017, March 31, 2016, March 31, 2015,
and March 31, 2014 nor is any benefit proposed to be paid to them.
Except as stated in the chapter titled "Related Party Transactions" on page 279 of this Draft
Red Herring Prospectus, our Group Entities do not have any business interest in our Company.
277
8.49 % of the paid up equity share capital of our Company. Further, five shareholders
of TFCL i.e.(i) Madson Agencies Private Limited, (ii) Basant Kumar Khetan, (iii)
Jaiprakash Khetan, (iv) Pradeep Kumar Khetan, and (v) Rainy Khetan are also
shareholders in our Company.
KIPL is a shareholder of our Company holding 234,000 equity shares constituting 0.61
% of the paid up equity share capital of our Company. Further, six shareholders of
KIPL i.e. (i) Dr. Murlidhar Khetan, (ii) Jaiprakash Khetan, (iii) Basant Kumar Khetan,
(iv) Pradeep Kumar Khetan, (v) Sohani Devi Khetan, (vi) Ranjana Khetan are also
shareholder of our Company.
For more details on the shareholding of the above mentioned companies in our
Company, please refer chapter titled "Capital Structure" beginning on page 99 of this
Draft Red Herring Prospectus.
Except as stated above and as disclosed in the chapter titled "Capital Structure",
"Financial Statements" and "Related Party Transactions" beginning on pages 99, 281
and 279 respectively, of this Draft Red Herring Prospectus, and to the extent of
shareholding of our Group Entities in our Company, our Group Entities are not
interested in the Promotion of our Company.
c) In the properties acquired or proposed to be acquired by our Company in the past two
years before filing this Draft Red Herring Prospectus with SEBI
Our Group Entities are not interested in the properties acquired or proposed to be
acquired by our Company in the two years preceding the filing of this Draft Red
Herring Prospectus.
Our Group Entities are not interested in any transactions for the acquisition of land,
construction of building or supply of machinery of our Company.
278
RELATED PARTY TRANSACTIONS
For details of related party transactions during the last five financials years, as per the requirements
under Indian AS 24 "Related Party Disclosures" issued by the Institute of Chartered Accountants of
India, see "Financial Statements – Annexure: 45 and 35A - Restated Consolidated Statement of Related
Party Transactions" and "Financial Statements – Annexure: 46 and 35A - Restated Standalone
Statement of Transactions with Related Party" under the chapter titled "Financial Statements" on page
281 of this Draft Red Herring Prospectus.
279
DIVIDEND POLICY
The declaration and payment of dividends will be recommended by the Board of Directors and approved
by the Shareholders of our Company, at their discretion, subject to the provisions of the Articles of
Association and applicable law, including the Companies Act. The dividend, if any, will depend on a
number of factors, including but not limited to our Company’s earnings, general financial condition,
capital requirements, results of operations, contractual obligations and overall financial position,
business prospects, surplus funds, applicable legal restrictions, Articles of Association, and other factors
considered relevant by the Board of Directors. In addition, our Company’s ability to pay dividends may
be impacted by a number of factors, including restrictive covenants under the loan or financing
arrangements our Company may enter into to finance fund requirements for its business activities.
The Board may also from time to time, at its discretion and subject to the financial position of our
Company and the surplus funds available, pay interim dividends. All dividend payments will be made
in cash to the shareholders of our Company. Our Board, in its meeting held on June 18, 2018, has
adopted a dividend distribution policy.
The dividend distribution policy is subject to periodical review by our Board keeping in mind the
business environment and requirements of our Company. For details of risks in relation to our capability
to pay dividend, please refer Chapter titled "Risk Factors" beginning on page 21 of this Draft Red
Herring Prospectus.
Our Company has not declared any dividend in the last five fiscals.
The fact that our Company has not paid any dividends in the past is not indicative of our dividend policy
in the future.
280
SECTION VI – FINANCIAL INFORMATION
FINANCIAL STATEMENTS
1. Report of the Auditors on the restated standalone financial information of our Company as at
and for each of the years ended March 31, 2018, March 31, 2017, March 31, 2016, March 31,
2015 and March 31, 2014; and
2. Report of the Auditors on the restated consolidated financial information of our Company as at
and for each of the years ended March 31, 2018, March 31, 2017, March 31, 2016, March 31,
2015 and March 31, 2014.
281
FINANCIAL INFORMATION
To,
The Board of Directors
Neccon Power and Infra Limited,
Khetan Bhawan,
Seuni Ali, A T Road
Jorhat, 785001 -Assam
Dear Sirs,
282
Regulations, 2009 as amended to date (“ICDR Regulations”) issued by SEBI on August 26, 2009
in connection with the Proposed Initial Public Offering of Equity Shares of the Company (the
Issue) and has been approved by the Board of Directors and initialed by us for identification
purpose only.
2) We have examined such Restated Consolidated Financial Information taking into consideration
the terms of reference and terms of engagement agreed upon with you in accordance with our
engagement letter dated April 26, 2018 in connection with the proposed issue of equity shares of
the Company: and the guidance note on reports in company prospectuses (revised 2016) issued by
ICAI (“The Guidance Report”).
3) These Restated Consolidated Financial Information have been compiled by the Management for
the year ended March 31, 2018, March 31, 2017, March 31, 2016 as per Proforma Ind AS, by
making Ind AS adjustments to the Audited Consolidated Financial Statements of the Company
prepared under generally accepted accounting principles (Indian GAAP), adjusted in conformity
with Ind AS and SEBI Circular dated March 31, 2016 (on IND-AS applicability).
4) The Restated Consolidated Financial Information have been compiled by the
Management for the years ended March 31, 2015 from the audited consolidated financial
statements of the Company as at and for the year ended March 31, 2015 and are prepared in
accordance with the accounting standards notified under the section 133 of the Companies Act,
2013, ("Indian GAAP") which have been approved by the Board of directors. However, in the
absence of audited consolidated financial statement for the year ended March 31, 2014, restated
financial information for Fiscal 2014 has been compiled on the basis of audited Consolidated
financial statements of the Company and its Subsidiaries. The Restated Consolidated Financial
Information:
283
a) have been made after incorporating adjustments for the changes in accounting policies
retrospectively in respective financial years to reflect the same accounting treatment as per
changed accounting policy for all the reporting periods;
b) have been made after incorporating adjustments for the material amounts in the respective
financial years to which they relate; and
c) do not contain any extra-ordinary items that need to be disclosed separately.
5) Audit of the financial statements for the fiscal year 2017, 2016 and 2015 was conducted by
previous statutory auditor’s M/s Roy Atal & Atal Chartered Accountants. For the purpose of
restated Standalone financial statements, we have relied upon the financial statements audited by
Roy Atal & Atal, Chartered Accountants for the fiscals 2017, 2016 and 2015.
6) Based on our Examination, in accordance with the requirements of Section 26 of Part I of Chapter
III of the Act read with, Rules 4 to 6 of Companies (Prospectus and Allotment of Securities)
Rules, 2014, the ICDR Regulations and the Guidance Note, we report that:
a) The Restated Consolidated Statement of Assets and Liabilities of the Company, as at March
31, 2018, March 31, 2017, and March 31, 2016 examined by us, as set out in Annexure 1 to
this report, have been arrived at after making adjustments and regrouping/ reclassifications as
in our opinion were appropriate and more fully described in Annexure 7.
b) The Restated Consolidated Statement of Profit and Loss of the Company, as at March 31,
2018, March 31, 2017, and March 31, 2016, examined by us, as set out in Annexure 2 to this
report, have been arrived at after making adjustments and regrouping/reclassifications as in
our opinion were appropriate and more fully described in Annexure 8.
c) The Restated Consolidated Statement of Cash Flows of the Company, as at March 31, 2018,
March 31, 2017 and March 31, 2016, examined by us, as set out in Annexure 3 to this report,
have been arrived at after making adjustments and regrouping/reclassifications as in our
opinion were appropriate and more fully described in Annexure 10.
d) The Restated Consolidated Statement of Changes in Equity of the Company, as at March 31,
2018, March 31, 2017, and March 31, 2016 examined by us, as set out in Annexure 4 to this
284
report, have been arrived at after making adjustments and regrouping/reclassifications as in
our opinion were appropriate and more fully described in Annexure 4.
e) Based on the above, and according to the information and explanations given to us, we
further report that the Restated Consolidated Financial Information:
i) Have been made after incorporating adjustments for the changes in accounting policies
retrospectively in respective financial years to reflect the same accounting treatment as
per changed accounting policy for all the reporting periods
ii) have been made after incorporating adjustments for the material amounts in the
respective financial years to which they relate; and
iii) do not contain any extra-ordinary items that need to be disclosed separately.
7) We have also examined the following Restated Consolidated financial information of the
Company set out in the following Annexure prepared by the management for each of the years
ended March 31, 2018, March 31, 2017 and March 31, 2016:
a. Restated Summary Statement Of Consolidated Assets And Liabilities Included In Annexure 1
b. Restated Summary Statement Of Consolidated Profit And Loss Included In Annexure 2
c. Restated Summary Statement Of Consolidated Cash Flows Included In Annexure 3
d. Restated Summary Statement Of Consolidated Change In Equity Included In Annexure 4
e. Restated Summary Statement Of Consolidated Significant Accounting Policies Included In Annexure 5
f. Restated Summary Statement Of Consolidated notes To Restated Consolidated Financial Information
Included In Annexure 6
g. Restated Summary Statement Of Reconciliation Of Consolidated Assets & Liabilities Included In
Annexure 7
h. Restated Summary Statement Of Reconciliation Of Consolidated Profit And Loss Included In Annexure 8
i. Restated Summary Statement Of Reconciliation Of Consolidated Other Comprehensive Income Included In
Annexure 9
j. Restated Summary Statement Of Reconciliation Of Consolidated Cash Flows Included In Annexure 10
k. Restated Summary Of Consolidated Of Property, Plant And Equipment Included In Annexure 11
l. Restated Summary Of Consolidated Of Capital Work In Progress Included In Annexure 12
m. Restated Summary Of Consolidated Of Investment Property Included In Annexure 13
n. Restated Summary Of Consolidated Of Other Intangible Assets Included In Annexure 14
o. Restated Summary Of Consolidated Of Investment Included In Annexure 15
p. Restated Summary Of Consolidated Of Loans (Assets) Included In Annexure 16
q. Restated Summary Of Consolidated Of Other Financial Assets Included In Annexure 17
r. Restated Summary Of Consolidated Of Other Non-Current Assets Included In Annexure 18
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s. Restated Summary Of Consolidated Of Inventories Included In Annexure 19
t. Restated Summary Of Consolidated Of Trade Receivables Included In Annexure 20
u. Restated Summary Of Consolidated Of Cash And Bank Balances Included In Annexure 21
v. Restated Summary Of Consolidated Of Other Bank Balances Included In Annexure 22
w. Restated Summary Of Consolidated Of Other Current Assets Included In Annexure 23
x. Restated Summary Of Consolidated Of Equity Share Capital Included In Annexure 24
y. Restated Summary Of Consolidated Of Other Equity Included In Annexure 25
z. Restated Summary Of Consolidated Of Borrowings Included In Annexure 26
aa. Restated Summary Of Consolidated Of Other Financial Liabilities Included In Annexure 27
bb. Restated Summary Of Consolidated Of Provisions Included In Annexure 28
cc. Restated Summary Of Consolidated Of Deferred Tax Liabilities (Net) Included In Annexure 29
dd. Restated Summary Of Consolidated Of Trade Payables Included In Annexure 30
ee. Restated Summary Of Consolidated Of Other Current Liabilities Included In Annexure 31
ff. Restated Summary Of Consolidated Of Revenue From Operations Included In Annexure 32
gg. Restated Summary Of Consolidated Of Other Income Included In Annexure 33
hh. Restated Summary Of Consolidated Of Cost Of Material Consumed Included In Annexure 34
ii. Restated Summary Of Consolidated Of Purchase Of Stock-In-Trade Included In Annexure 35
jj. Restated Summary Of Consolidated Of Changes In Inventories Of Fg, Wip & Stock-In-Trade Included In
Annexure 36
kk. Restated Summary Of Consolidated Of Employee Benefits Expenses Included In Annexure 37
ll. Restated Summary Of Consolidated Of Finance Costs Included In Annexure 38
mm. Restated Summary Of Consolidated Of Depreciation And Amortization Expenses Included In
Annexure 39
nn. Restated Summary Of Consolidated Of Other Expenses Included In Annexure 40
oo. Restated Summary Of Consolidated Of Exceptional Items Included In Annexure 41
pp. Restated Summary Of Consolidated Of Tax Expenses Included In Annexure 42
qq. Restated Summary Of Consolidated Of Earning Per Equity Share Basic And Diluted Included In Annexure
43
rr. Restated Summary Of Consolidated Of Capitalization Statement Included In Annexure 44
ss. Restated Summary Of Consolidated Of Significant Transactions With Related Parties Included In
Annexure 45
tt. Restated Summary Of Consolidated Of Contingent Liabilities. Included In Annexure 46
uu. Restated Summary Of Consolidated Of Accounting Ratios. Included In Annexure 47
vv. Restated Summary Of Consolidated Of Segment Report. Included In Annexure 48
ww. Restated Summary Of Consolidated Finance Lease. Included In Annexure 49
xx. Restated Summary Of Consolidated Of Details Of Discontinued Operations. Included In Annexure 50
yy. Restated Summary Of Consolidated Of Unhedged Foreign Currency Exposure. Included In Annexure 51
zz. Restated Summary Of Consolidated Additional Information Pursuant To The Part II Of Schedule III Of
The Companies Act, 2013. Included In Annexure 52
aaa. Restated Summary Of Consolidated Tax Shelter Included In Annexure 53
According to the information and explanations given to us, in our opinion, the Restated
Consolidated Financial Information accompanying this report ,read with Significant Accounting
Policies disclosed in Annexure 5, are prepared after making adjustments and regroupings as
286
considered appropriate and have been prepared in accordance with Section 26 of Part I of Chapter
III of the Companies Act, 2013 read with Rules 4 to 6 of Companies (Prospectus and Allotment
of Securities) Rules, 2014, ICDR Regulations and the Guidance Note.
8) We have also examined the following Annexure 1A to 35A of Restated Financial information of
the Company set out in the Annexure prepared by the management for the year ended March 31,
2015 and for the year ended March 31, 2014.
a. Restated Summary Statement Of Consolidated Assets And Liabilities Included In Annexure 1A
b. Restated Summary Statement Of Consolidated Profit And Loss Included In Annexure 2A
c. Restated Summary Statement Of Consolidated Cash Flows Included In Annexure 3A
d. Restated Summary Statement Of Significant Accounting Policies Included In Annexure 4A
e. Restated Summary Statement Of Adjustments To Audited Consolidated Financial Statements
Included In Annexure 5A
f. Restated Summary Statement Of Notes To Financial Statements Included In Annexure 6A
g. Restated Summary Statement Of Share Capital Included In Annexure 7A
h. Restated Summary Statement Of Reserves And Surplus Included In Annexure 8A
i. Restated Summary Statement Of Long Term Borrowings Included In Annexure 9A
j. Restated Summary Statement Of Deferred Tax Liability (Net) Included In Annexure 10A
k. Restated Summary Statement Of Short Term Borrowing Included In Annexure 11A
l. Restated Summary Statement Of Trade Payable Included In Annexure 12A
m. Restated Summary Statement Of Other Current Liabilities Included In Annexure 13A
n. Restated Summary Statement Of Short Term Provision Included In Annexure 14A
o. Restated Summary Statement Of Non Current Investment Included In Annexure 15A
p. Restated Summary Statement Of Long Term Loans And Advances Included In Annexure 16A
q. Restated Summary Statement Of Inventories Included In Annexure 17A
r. Restated Summary Statement Of Trade Receivable Included In Annexure 18A
s. Restated Summary Statement Of Cash & Bank Balance Included In Annexure 19A
t. Restated Summary Statement Of Short Term Loans & Advances Included In Annexure 20A
u. Restated Summary Statement Of Other Current Assets Included In Annexure 21A
v. Restated Summary Statement Of Revenue From Operation Included In Annexure 22A
w. Restated Summary Statement Of Other Income Included In Annexure 23A
x. Restated Summary Statement Of Cost Of Material Consumed Included In Annexure 24A
y. Restated Summary Statement Of Purchase Of Stock-In-Trade Included In Annexure 25A
z. Restated Summary Statement Of Changes In Inventories Of Finished Goods, Work-In-Progress
And Stock In Trade Included In Annexure 26A
aa. Restated Summary Statement Of Employees Benefits Expenses Included In Annexure 27A
bb. Restated Summary Statement Of Finance Costs Included In Annexure 28A
cc. Restated Summary Statement Of Other Expenses Included In Annexure 29A
dd. Restated Summary Statement Of Exceptional Items Included In Annexure 30A
ee. Restated Summary Statement Of Earning Per Share Included In Annexure 31A
ff. Restated Summary Statement Of Fixed Assets Included In Annexure 32A
287
gg. Restated Summary Statement Of Business Segment Included In Annexure 33A
hh. Restated Summary Statement Of Contingent Liability Included In Annexure 34A
ii. Restated Summary Statement Of Related Party Disclosers Included In Annexure 35A
jj. Restated Summary Statement of Accounting Ratio Included In Annexure 36A
kk. Restated Summary Statement of Tax shelter Included In Annexure 37A
According to the information and explanations given to us, in our opinion, the Restated Financial
information and the above restated financial information contained in Annexure 1 A to 35A
accompanying this report read with Summary of Significant Accounting Policies as disclosed in
Annexure 4A prepared after making adjustments and regroupings/reclassifications as considered
appropriate in Annexure 5A.
9) This report should not in any way be construed as a reissuance or re-dating of any of the previous
audit reports issued by us, nor should this report be construed as a new opinion on any of the
financial statements referred to herein.
10) We have no responsibility to update our report for events and circumstances occurring after the
date of the report.
Restriction on Use
11) Our report is intended solely for use of the management for inclusion in the Offer Document to be
filed with Securities and Exchange Board of India, Registrar of Companies, Mumbai and
concerned stock exchanges in connection with the proposed issue of equity shares of the
Company. Our report should not be used, referred to or distributed for any other purpose except
with our prior consent in writing.
288
CA. Vivek Kumar Jain
Partner
Membership No. 119700
Place: - Mumbai
Dated: 19.09.2018
289
ANNEXURE-1 RESTATED SUMMARY STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES
( Rs. In Million)
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH 31,
31, 2018 31, 2017 2016 (Proforma Ind
(Proforma Ind As) (Proforma Ind As)
As)
ASSETS
NON CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT 230.81 173.61 154.62
CAPITAL WORK IN PROGRESS 981.71 942.06 835.39
INVESTMENT PROPERTY 22.34 17.50 4.82
INTANGIBLE ASSETS - - -
INVESTMENT IN SUBSIDIARIES - - -
FINANCIAL ASSETS
INVESTMENTS 37.52 3.52 3.54
TRADE RECEIVABLES - - -
LOANS - - -
OTHER FINANCIAL ASSETS 214.75 345.70 213.92
DEFERRED TAX ASSETS (NET) - - -
OTHER NON CURRENT ASSETS 15.37 16.16 16.16
CURRENT ASSETS
INVENTORIES 397.72 508.61 380.72
FINANCIAL ASSETS
INVESTMENTS - - -
TRADE RECEIVABLES 1,428.24 1,285.12 682.14
CASH AND CASH EQUIVALENTS 102.72 109.87 189.20
OTHER BANK BALANCES 257.61 82.78 124.85
LOANS- - - -
OTHER FINANCIAL ASSETS - 3.64 3.64
CURRENT TAX ASSETS (NET) - - -
OTHER CURRENT ASSETS 1,252.08 1,480.87 1,242.60
TOTAL ASSETS 4,940.87 4,969.44 3,851.60
EQUITY ANDLIABILITIES
EQUITY
EQUITY SHARE CAPITAL 376.23 376.23 244.20
OTHER EQUITY 1,562.77 1,381.06 1,143.22
LIABILITIES
NON CURRENT LIABILITIES
FINANCIAL LIABILITIES
BORROWINGS 236.35 378.83 457.65
OTHER FINANCIAL LIABILITIES 1.76 - -
PROVISIONS 17.93 11.09 6.72
DEFERRED TAX LIABILITIES (NET) 4.85 8.14 10.02
OTHER NON CURRENT LIABILITIES - - -
CURRENT LIABILITIES
FINANCIAL LIABILITIES
BORROWINGS- 804.09 899.89 679.31
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED CONSOLIDATED FINANCIAL
INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED
CONSOLIDATED FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
290
ANNEXURE-2 RESTATED SUMMARY STATEMENT OF CONSOLIDATED PROFIT AND LOSS
( Rs. In Million)
PARTICULARS For the year ended For the year For the year ended
MARCH 31, 2018 ended MARCH MARCH 31, 2016
(Proforma Ind As) 31, 2017 (Proforma Ind As)
(Proforma Ind
As)
CONTINUING OPERATIONS
REVENUE
REVENUE FROM OPERATIONS 4,295.25 3,891.37 3,812.55
OTHER INCOME 37.37 32.03 18.95
TOTAL INCOME 4,332.62 3,923.41 3,831.50
EXPENDITURE
Cost of material consumed 2,951.74 2,710.07 2,987.06
Purchase of stock-in-trade - - 21.28
Changes in inventories of FG, WIP & Stock-in-trade 32.06 (17.70) (12.05)
Excise duty 42.84 119.89 138.45
Employee benefits expenses 152.67 109.54 82.43
Finance costs 123.11 119.96 103.10
Depreciation and amortization expenses 22.58 18.05 18.32
Other expenses 725.61 668.40 333.57
TOTAL EXPENDITURE 4,050.62 3,728.21 3,672.15
PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS
AND TAX 282.00 195.20 159.34
EXCEPTIONAL ITEMS - - -
TAX EXPENSES
- CURRENT TAX 101.84 71.55 59.05
- DEFERRED TAX (NET) (3.29) (1.87) 10.02
-WEALTH TAX PROVISION - - (0.04)
-EARLIER YEARS INCOME TAX 0.75 0.88 (0.72)
PROFIT/(LOSS) FOR THE YEAR 182.71 124.63 91.03
OTHER COMPREHENSIVE INCOME
ITEMS THAT WILL NOT BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT & LOSS
- REMEASUREMENTS OF THE DBO (1.00) (1.59) (0.09)
- INCOME TAX ON ITEMS THAT WILL NOT BE
RECLASSIFIED SUBSEQUENTLY TO STATEMENT
OF PROFIT AND LOSS - - -
ITEMS THAT WILL BE RECLASSIFIED
SUBSEQUENTLY TO PROFIT & LOSS - - -
- FAIR VALUE OF EQUITY INSTRUMENTS
THROUGH OCI - - -
INCOME TAX ON ITEMS THAT WILL BE
RECLASSIFIED TO STATEMENT OF PROFIT AND
LOSS - - -
TOTAL OTHER COMPREHENSIVE INCOME
(NET OF TAX) (1.00) (1.59) (0.09)
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR 181.71 123.05 90.94
EARNING PER SHARE (EQUITY SHARE OF ₹ 10
each) 4.86 3.92 2.87
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED CONSOLIDATED FINANCIAL
INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED
CONSOLIDATED FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
291
ANNEXURE-3 RESTATED SUMMARY STATEMENT OF CONSOLIDATED CASH FLOWS
( Rs. In Million)
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH
31, 2018 31, 2017 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 109.87 189.20 178.00
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 102.72 109.87 189.20
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
APPEARING IN ANNEXURE 5, NOTES TO RESTATED CONSOLIDATED FINANCIAL INFORMATION APPEARING IN ANNEXURE
6 AND STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS APPEARING IN ANNEXURE
7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
292
ANNEXURE-4 RESTATED SUMMARY STATEMENT OF CONSOLIDATED CHANGE IN EQUITY
( Rs. In Million)
Particulars Equity Share Other Equity Items of Total -
Capital Reserves and Surplus Other Equity
Capital Security Premium General reserve Retained Compreh attributabl
Redemption earnings ensive e to Equity
reserve Income Shareholde
Balance at March 31, 2016 (Proforma Ind As) 244.20 48.00 376.88 15.61 702.82 (0.09) 1,387.42
Profit for the year - - - - 124.63 - 124.63
Remeasurement of DBO - - - - - (1.59) (1.59)
Fair value of equity instruments through OCI - - - - - - -
Adjustment on sale of equity shares in listed companies - - - - - - -
Issue of shares 58.77 - - - - - 58.77
Issued for consideration of bonus issue - - - - 74.34 - 74.34
Security premium on issue of shares - - 188.05 - - - 188.05
Security premium utilisation through bonus shares issue - - (74.34) - - - (74.34)
Balance at March 31, 2017 (Proforma Ind As) 302.97 48.00 490.59 15.61 901.80 (1.68) 1,757.28
Profit for the year - - - - 182.71 - 182.71
Remeasurement of DBO - - - - - (1.00) (1.00)
Fair value of equity instruments through OCI - - - - - - -
Balance at March 31, 2018 (Proforma Ind As) 302.97 48.00 490.59 15.61 1,084.51 (2.67) 1,938.99
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES
TO RESTATED CONSOLIDATED FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED
FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
293
ANNEXURE 5- RESTATED SUMMARY STATEMENT OF CONSOLIDATED SIGNIFICANT
ACCOUNTING POLICIES
Company Overview
NECCON Power and Infra Limited formerly known as North Eastern Cables & Conductors Private
Limited (“the company”) is a company domiciled in India, incorporated under the company Act, 1956
with the Registrar of Companies - Assam Meghalaya, Manipur, Tripura, Mizoram, Nagaland &
Arunachal Pradesh - Shillong. The Company is carrying on business for Manufacturing of Electrical
Conductor, Generation of Power and Commissioning /Installation & Renovation of Power Sub-Station for
all types of EPC/Trunkey Project Works.
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2. Basis of Preparation
The Restated Consolidated financial statements have been prepared on accrual basis at historical
cost, except for the certain assets and liabilities which have been measured at fair value/
amortized cost.
3. Revenue Recognition
Revenue is primarily derived from sale of Conductor, Power and related Service from EPC
Turnkey Project.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured.
Revenue from sale of manufactured and traded goods is recognised when the goods are delivered,
and titles have been passed, provided all the following conditions are satisfied:
significant risks and rewards of ownership of the goods are transferred to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the good sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the company;
and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
B. Rendering of services:
Revenue from erection services is recognised when the outcome of a transaction can be estimated
reliably by reference to the stage of completion of the transaction. The outcome of a transaction
can be estimated reliably when all the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the
Company;
the stage of completion of the transaction at the end of the reporting period can be measured
reliably; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The costs incurred on erection activities till such time the outcome of the projects can be
estimated reliably and all the aforesaid conditions are fulfilled, are shown as “Inventories” and are
carried as “Erection WIP”.
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or
minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as
due from customers. For contracts where progress billing exceeds the aggregate of contract costs
295
incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the
surplus is shown as the amount due to customers.
Amounts received before the related work is performed are disclosed in the Balance Sheet as a
liability towards advance received. Amounts billed for work performed but yet to be paid by the
customer are disclosed in the Balance Sheet as trade receivables. The amount of retention money
held by the customers is disclosed as part of other-current-assets and is reclassified as trade
receivables when it becomes due for payment.
4. Other income:
Dividend income is recognized when the right to receive dividends is unconditionally established.
Other items of income are accounted as and when the right to receive such income arises and it is
probable that the economic benefits will flow to the Company and the amount of income can be
measured reliably.
Gains or losses arising on retirement or disposal of Property, Plant and Equipment are recognised
in the Statement of Profit and Loss.
Property, Plant and Equipment which are not ready for intended use as on the date of Balance
Sheet are disclosed as “Capital work-in-progress”. Assets which are not ready for the intended
use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Depreciation on property, plant and equipment are provided on WDV method over their
estimated useful life determined by management. Depreciation method, useful lives and residual
values are reviewed at the end of each financial year. The useful lives of assets are as prescribed
in part C of schedule II of the Companies Act, 2013. In respect of additions to/deductions from
the assets during the reporting period, depreciation is charged on pro rata basis.
The residual values, useful lives and method of depreciation of of Property, plant and equipment
is reviewed at each financial year end and adjusted prospectively, if appropriate.
In respect of buildings on lease hold land, depreciation is charged over the period of lease of land
or the useful life stated above for buildings on freehold land, whichever is lower.
296
The Company has elected to use the exemption available under Ind AS 101 to continue the
carrying value for all of its Property, Plant and Equipment as recognised in the financial
statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that
as its deemed cost as at the date of transition (1st April 2015).
6. Intangible Assets
Intangible assets acquired/ developed are measured on recognition at cost less accumulated
amortisation and impairment losses, if any. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the statement of profit or loss when the asset is
derecognised.
The Company has elected to use the exemption available under Ind AS 101 to continue the
carrying value for all of Intangible assets as recognised in the financial statements as at the date
of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at
the date of transition (1st April 2015).
7. Borrowing Cost
Borrowing cost includes interest, amortisation of ancillary cost incurred in connection with the
arrangement of borrowings and exchange difference arising from foreign currency borrowings to
the extent they are regarded as on adjustment to the interest cost. Borrowing cost that are
attributable to the acquisition or construction of qualifying assets are capitalised as part of the
cost of such assets. Any income earned on the temporary investment of those borrowings are is
deducted from the borrowing costs incurred. A qualifying asset is one that takes necessarily
substantial period of time to get ready for its intended use. All other borrowing costs are charged
to Statement of Profit & Loss Account.
8. Investment
All equity investments within the scope of Ind-AS 109 are required to be measured at fair value.
9. Investment in Property
Investment property is property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, use in production or supply of goods or
services or for administrative purposes. Investment properties are stated at cost net of
accumulated depreciation and accumulated impairment losses, if any.
Any gain or loss on disposal of investment property calculated as the difference between the net
proceeds from disposal and the carrying amount of the Investment Property is recognised in
Statement of Profit and Loss.
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10. Non-currents assets held for sale
The Company classifies non-current assets as held for sale if their carrying amounts will be
recovered principally through a sale rather than through continuing use. Actions required to
complete the sale should indicate that it is unlikely that significant changes to the sale will be
made or that the decision to sell will be withdrawn. Management must be committed to the sale
expected within one year from the date of classification. Non-current assets classified as held for
sale is recognized at lower of its carrying amount and fair value less cost to sell. Property, Plant
and Equipment and intangible assets classified as held for sale are not depreciated or amortized.
b. Non-monetary Items
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions.
14. Lease
Lease Agreements are classified as finance leases, if substantially all the risks and rewards
incidental to ownership of the leased asset is transferred to the lessee. Lease Agreements which
are not classified as finance leases are considered as operating lease.
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15. Inventories
Items of inventories comprising of
a. un-processed are measured at lower of cost or net realisable value after providing for
obsolescence, if any.
b. Processed are measured at net realisable value after reducing normal gross profit margin
in ordinary course of business.
Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in
bringing them to their respective present location and condition netted to discount received. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated
cost of completion and estimated cost necessary to make sale.
b. Post-employment benefits
Defined Contribution plan:
Post- employment benefits are recognised as an expense in the Statement of Profit and
Loss as the related service is provided
The calculation of defined benefit obligation is performed at each reporting period end by
a qualified actuary using the Projected Unit Credit Method. When the calculation results
in a potential asset for the Company, the recognised asset is limited to the present value
of the economic benefits available in the form of any future refunds from the plan or
reductions in future contributions to the plan.
The current service cost of the defined benefit plan recognized in the Statement of Profit
and Loss as part of ‘Employee Benefit Expense’, reflects the increase in the defined
benefit obligation resulting employee service in the current year, benefit changes,
curtailments and settlements. Past service costs are recognized immediately in the
Statement of Profit and Loss. The net interest is calculated by applying the discount rate
to the net balance of the defined benefit obligation and the fair value of plan assets. This
net interest is included in ‘Finance cost’ in the Statement of Profit and Loss. The
classification of the company’s net obligation into current and non- current is as per the
actuarial valuation report
Re-measurements which comprise of actuarial gains and losses, the return on plan assets
(excluding amounts included in the net interest on the net defined benefit liability (asset))
and the effect of the asset ceiling (if any, excluding amounts included in the net interest
on the net defined benefit liability (asset)), are recognised in other comprehensive
income.
299
17. Taxes on Income
a. Income Tax:
Income taxes are accrued in the same period that the related revenue and expenses arise.
A provision is made for income tax based on the tax liability computed after considering
tax allowances and exemptions. Provision are recorded when it estimated that a liability
due to disallowances or other matters is probable.
Minimum alternate tax (MAT) paid in accordance with the tax laws which gives arises in
the Balance sheet if there is convincing evidence that the Company will pay normal tax
after the tax holiday period and the resultant assets can be measured reliable. The
company offsets on a year on year basis the current tax assets and liability, where it has a
legally enforceable right and where it intends to settle such assets and liability on net
basis.
Current tax items are recognised in correlation to the underlying transaction either in the
Statement of Profit and Loss, other comprehensive income or directly in equity.
b. Deferred Tax:
Deferred tax is provided using the Balance Sheet method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax liabilities are recognised for all
taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in the
Statement of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.
300
18. Earnings per share
Basic earnings per share is calculated by dividing the profit or loss for the period after deducting
attributable taxes by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the profit or loss for the period after tax
and the weighted average number of shares outstanding during the period are adjusted for the
effect of all dilutive potential equity shares.
All assets other than inventories, investments, and deferred tax assets, are reviewed for
impairment, wherever events or changes in circumstance indicate that the carrying amount may
not be recoverable. Assets whose carrying value exceeds their recoverable amount are written
down to the recoverable amount
Contingent Liabilities are disclosed when there is a possible obligation a possible obligation
arising from past events, the existence of which will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent liabilities are not provided for in the accounts but disclosed by way of notes, if any.
Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
a. Initial Recognition
Company recognizes financial assets and financial liabilities when it becomes a party to
the contractual provisions of the instrument. All financial assets and financial liabilities
are recognized at fair value on initial recognition except for trade receivables/ trade
payables which are initially measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities
that are not at fair value through profit and loss are added or deducted to/from the fair
value on initial recognition.
b. Subsequent Measurement
Subsequent measurement is determined with reference to the classification of the
respective financial assets. Based on the business model for managing the financial assets
and the contractual cash flow characteristics of the financial asset, the Company classifies
financial assets as subsequently measured at amortized cost, fair value through other
comprehensive income or fair value through profit and loss.
301
Financial Assets:
Financial assets are subsequently measured at amortised cost if these are held within a
business model whose objective is to hold the assets in order to collect contractual cash
flows and the contractual terms of the financial assets give rise on specific dates to cash
flows that are solely payments of principal and interest (SPPI) on the principal amount
outstanding using the Effective Interest Rate (EIR) method. The EIR amortisation is
included in finance income in the Statement of Profit and Loss. The losses arising from
impairment are recognised in the Statement of Profit and Loss.
Financial assets are subsequently measured at fair value through Other Comprehensive
Income if these are held within a business model whose objective is to hold the assets in
order to collect contractual cash flows and selling financial assets and the contractual
terms of the financial assets give rise on specific dates to cash flows that are SPPI on the
principal amount outstanding. After initial measurement, these assets are subsequently
measured at fair value. Interest income under EIR method, foreign exchange gains and
losses and impairment losses are recognised in the Statement of Profit and Loss. Other
net gains and losses are recognised in other comprehensive Income
All other financial assets are measured at fair value through profit or loss.
Financial liabilities:
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
All other financial liabilities are subsequently measured at amortised cost using EIR
method. Gains and losses are recognised in Statement of Profit and Loss when the
liabilities are derecognised as well as through the EIR amortisation process.
c. De-Recognition
A financial asset is de-recognised when:
the rights to receive cash flows from the asset have expired, or
the Company has transferred substantially all the risks and rewards of the asset,
or the Company has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.
A financial liability or a part of financial liability is de-recognised from the Balance Sheet
when the obligation specified in the contract is discharged, cancelled or expired. When an
existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of the original liability and the
recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit
or loss.
302
22. Cash and cash equivalents
Cash and cash equivalents comprises cash and deposit with banks. Bank balances also
include fixed deposits, margin money deposits, earmarked balances with banks and
other bank balances which have restrictions on repatriation. Further fixed deposit, held
as margin money against bank guarantee, which has remaining maturity more than 12
months are considered as non- current–assets.
303
ANNEXURE 6- RESTATED SUMMARY STATEMENT OF CONSOLIDATEDNOTES
TO RESTATED CONSOLIDATED FINANCIAL INFORMATIO
To comply with the SEBI listing requirements Company has to put restated financial statements for at least
3 years as per Ind AS. For the same company has carry out the transition date as on 1st, April 2015 for the
restated financial statements.
The transition as at April 1, 2015 to Ind-AS was carried out from Previous GAAP. The Proforma Restated
Consolidated Financial Information has been prepared by following the same accounting policy choices
(both mandatory exceptions and optional exemptions availed as per Ind AS 101) years ended March
31, 2018, 2017 and 2016 and accordingly, suitable restatement adjustments in the accounting heads
are made to the financial statements as of and for the years ended March 31, 2018, 2017 and 2016.
Previous periods figure has been regrouped/rearranged, wherever considered necessary to conform
with the restated financial statements. Further the restated financial statements are prepared in million,
unless otherwise specified, due to this there can be rounding differences.
304
ANNEXURE-7 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED ASSETS & LIABILITIES
(Rs. in millions)
AS AT 31.03.2018 (Proforma Ind As) AS AT 31.03.2017 (Proforma Ind As) AS AT 31.03.2016 (Proforma Ind As)
NOTE Amount Amount Amount Amount Amount Amount
PARTICULARS as per Adjustment Regroupe as per Ind as per Adjustme Regrouped as per Ind as per Adjustme Regrouped as per Ind
NO.
IGAAP as per Ind d as per AS IGAAP nt as per as per Ind AS IGAAP nt as per as per Ind AS
AS Ind AS Ind AS AS Ind AS AS
ASSETS
Non-Current Assets
Current Assets
Inventories 397.72 - - 397.72 508.61 - - 508.61 380.72 - - 380.72
Financial Assets - - - - - - - - - - - -
Investments G - - - - - - - - - - - -
Trade receivables 1,428.24 - - 1,428.24 2,615.54 - (1,330.42) 1,285.12 1,787.69 - (1,105.55) 682.14
Cash and cash equivalents H 360.34 - (257.61) 102.72 533.19 - (423.32) 109.87 518.65 - (329.45) 189.20
Other bank balances I - - 257.61 257.61 - - 82.78 82.78 - - 124.85 124.85
Loans J 88.66 - (88.66) - 107.29 - (107.29) - 119.97 - (119.97) -
Other financial assets K - - - - - - 3.64 3.64 - - 3.64 3.64
Current Tax Assets (Net) - - - - - - - - - - - -
Other current assets L 1,164.66 - 87.42 1,252.08 33.32 - 1,447.55 1,480.87 20.72 - 1,221.88 1,242.60
Equity
Equity Share capital 376.23 - - 376.23 376.23 - - 376.23 244.20 - - 244.20
Other Equity M 1,563.17 - (0.41) 1562.77 1,392.30 (11.24) - 1,381.06 1,150.15 (6.82) (0.11) 1,143.22
Liabilities
Non-current liabilities
Financial Liabilities
Borrowings 236.35 - - 236.35 378.83 - - 378.83 585.16 - (127.51) 457.65
Other financial liabilities - - 1.76 1.76 - - - - - - - -
Provisions N 17.52 17.52 17.93 17.93 - 11.09 - 11.09 - 6.72 - 6.72
Deferred tax liabilities (Net) 4.85 - - 4.85 8.14 - - 8.14 10.02 - - 10.02
Other non-current liabilities 1.76 - (1.76) - - - - - - - - -
Current liabilities
Financial Liabilities
Borrowings 804.09 - - 804.09 899.89 - - 899.89 679.31 - - 679.31
Trade payables O 1,393.41 - 35.25 1,428.66 1,221.17 - 35.25 1,256.42 1,088.78 - 30.93 1,119.71
Other financial liabilities P - - 199.21 199.21 - - 193.71 193.71 - - 162.32 162.32
Other current liabilities Q 528.00 - (233.58) 294.42 660.60 - (201.65) 458.95 91.06 - (64.34) 26.71
Provisions R 15.21 - (14.05) 1.15 71.68 0.03 (71.55) 0.16 60.44 0.10 (60.44) 0.10
Current tax liabilities (net) S - - 13.46 13.46 - - 4.97 4.97 - - 1.64 1.64
Total Liabilities 4,940.59 4,940.87 5,036.02 4,969.44 3,909.12 - 3,851.60
305
ANNEXURE-7 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED ASSETS & LIABILITIES
EXPLANATIONS FOR RECONCILIATION OF BALANCE SHEET AS PREVIOUS YEAR REPORTED UNDER IGAAP TO IND AS
B. INVESTMENTS
Investment in subsidiaries is regrouped. Also IND AS transition effect has been made.
C. LOANS
Other financial assets and other current assets earlier included in loans is now regrouped
I. LOANS
Loan-current assets is regrouped to other current assets.
L. OTHER EQUITY
Provision for gratuity effect till time.
M. PROVISIONS
Provision for gratuity is made.
N. TRADE PAYABLES
Salary payable is regrouped to respective accounts
Q. Provisions
Provision for gratuity is made. Regrouping is done for Income Tax, Wealth Tax and liabilities for unpaid expenses.
306
ANNEXURE-8 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED PROFIT AND LOSS
( Rs. In Million)
PARTICULARS For the Year Ended 31.03.2018 (Proforma Ind As) For the Year Ended 31.03.2017 (Proforma Ind As) For the Year Ended 31.03.2016 (Proforma Ind As)
NOTE Adjustme Regroupe Ind AS Regroupe Adjustme Regroupe
Amount as per Amount as per Amount as per
NO. IGAAP nt as per d as per IGAAP Adjustme d as per IGAAP nt as per d as per
Ind AS Ind AS Ind AS
Ind AS Ind AS nts Ind AS Ind AS Ind AS
REVENUE
Revenue from Operation A 4,252.40 - 42.84 4,295.25 3,771.48 - 119.89 3,891.37 3,674.10 - 138.45 3,812.55
Other income B 37.37 - - 37.37 29.96 - 2.07 32.03 23.62 - 4.67 18.95
TOTAL REVENUE 4,289.78 - - 4,332.62 3,801.44 - - 3,923.41 3,697.72 - - 3,831.50
EXPENDITURE
Cost of material consumed C 2,951.74 - - 2,951.74 2,707.99 - 2.07 2,710.07 2,991.89 - 4.83 2,987.06
Purchase of stock-in-trade - - - - - - - - 21.28 - - 21.28
Changes in inventories of FG, WIP &
Stock-in-trade 32.06 - - 32.06 (17.70) - - (17.70) 12.05 - - 12.05
Excise duty D - - 42.84 42.84 - - 119.89 119.89 - - 138.45 138.45
Employee benefits expenses E 154.06 0.41 (1.80) 152.67 107.23 2.31 - 109.54 80.68 1.74 - 82.43
Finance costs F 122.31 0.80 - 123.11 119.66 - 0.29 119.96 102.83 0.36 0.09 103.10
Depreciation and amortization
expenses 22.58 - - 22.58 18.05 - - 18.05 18.32 - - 18.32
Other expenses G 724.97 - 0.65 725.61 668.17 - 0.23 668.40 333.48 - 0.09 333.57
Exceptional items H (0.65) 0.65 - - 0.11 (0.11) - - 0.16 - 0.16 -
TOTAL EXPENDITURE 4,007.08 - - 4,050.62 3,603.30 - - 3,728.21 3,536.27 - - 3,672.15
PROFIT BEFORE TAX 282.70 - - 282.00 198.14 - - 195.20 161.45 - - 159.35
307
ANNEXURE-8 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED PROFIT AND LOSS
EXPLANATIONS FOR RECONCILIATION OF STATEMENT OF PROFIT & LOSS AS PREVIOUS YEAR REPORTED UNDER IGAAP TO IND AS
1. IND AS ADJUSTMENTS:
B. OTHER INCOME
i. Exchange gain/loss and profit/ loss on sale of fixed assets is regrouped.
D. EXCISE DUTY
i. Revenue is shown on gross value and excise duty is separately charged in statement of profit and loss account.
F. FINANCE COST
i. Interest on statutory dues are
ii. Interest cost on DBO is included in finance cost as per Ind AS requirements
G. OTHER EXPENSES
i. Regrouping is done for excise duty and bank charges.
ii. Interest on statutory dues are considered as other expenses.
H. EXCEPTIONAL ITEMS
308
ANNEXURE-9 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED OTHER COMPREHENSIVE INCOME
( Rs. In Millions)
Particulars For the Year Ended 31.03.2018 (Proforma Ind As) For the Year Ended 31.03.2017 (Proforma Ind As) For the Year Ended 31.03.2016 (Proforma Ind As)
309
ANNEXURE-10 RESTATED SUMMARY STATEMENT OF RECONCILIATION OF CONSOLIDATED CASH FLOWS
(Rs. in millions)
Particulars For the Year Ended 31.03.2018 For the Year Ended 31.03.2017 For the Year Ended 31.03.2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
IGAAP Adjustments Ind AS IGAAP Adjustments Ind AS IGAAP Adjustments Ind AS
NET CASH FLOW FROM OPERATING ACTIVITIES 650.61 (119.16) 531.44 (340.77) 215.24 (125.53) 211.25 161.70 372.95
NET CASH FLOW FROM INVESTING ACTIVITIES (122.33) (54.87) (177.20) (126.86) (95.56) (222.41) (60.48) (329.52) (390.00)
NET CASH FLOW FROM FINANCING ACTIVITIES (360.60) (0.80) (361.39) 141.63 126.99 268.62 (48.14) 76.39 28.25
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 167.68 (174.83) (7.15) (326.00) 246.67 (79.33) 102.63 (91.43) 11.20
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 192.66 (82.78) 109.87 518.65 (329.45) 189.20 397.32 (219.32) 178.00
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 360.34 (257.61) 102.72 192.66 (82.78) 109.87 499.95 (310.75) 189.20
NOTE: IGAAP FIGURES HAVE BEEN RECLASSIFIED AND RESTATED BY ADJUSTING CORRESPONDING LIABILITIES & ASSETS AND NON CASH ITEMS TO CONFORM TO IND AS
PRESENTATION.
310
ANNEXURE-11 RESTATED SUMMARY OF CONSOLIDATED OF PROPERTY, PLANT AND EQUIPMENT
The Change in carrying value as on 31-March-2018 (Proforma Ind As) (Rs. In Millions)
Gross Block Depreciation/Amortisation NET BLOCK
SL. As at As at As at As at As at As at
Assets Disposal For the
No. March Additions March March Disposal / March March March
/Sales Year
31, 2017 31, 2018 31, 2017 31, 2018 31, 2018 31, 2017
A TANGIBLE ASSETS (Own Assets)
1 Land & Development
1) Factory Land Development 14.17 - - 14.17 - - - - 14.17 14.17
2) Land at Seuni Ali Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC Kundli 33.91 1.17 - 35.08 - - - - 35.08 33.91
5) Land at Manoharpur Ind. 2.73 - - 2.73 - - - - 2.73 2.73
6) land – BIPL 0.20 - 0.20 - - - - 0.20 0.20
7) Land at Greentech Mega Food Park 2.70 1.01 - 3.71 - 0.04 - 0.04 3.68 2.70
2 Building
1) Building (Factory,Stores,& Office) 24.13 52.37 - 76.50 4.22 2.61 - 6.83 69.67 19.91
2) Jaipur Ress. House 0.31 - - 0.31 0.03 0.01 - 0.04 0.27 0.28
3) Jaipur Office Purch. 0.31 - - 0.31 0.03 0.01 - 0.04 0.27 0.28
4) Staff Quarter Neemati 0.08 - - 0.08 - - - - 0.07 0.07
5) MD House Renovation 7.32 - - 7.32 0.57 0.33 - 0.90 6.42 6.75
6) Ghy.Office Building 7.82 - - 7.82 0.11 - - 0.11 7.71 7.71
3 Air Condition 1.15 0.28 - 1.43 0.24 0.30 - 0.54 0.88 0.91
4 Invertor & Battery 0.15 0.08 - 0.23 0.03 0.03 - 0.06 0.17 0.11
5 CC TV & Cemera 0.12 0.13 - 0.25 0.05 0.04 - 0.09 0.16 0.07
11 Plant & Machinery (Mfg.& Cont.Div) 28.92 11.69 5.88 34.73 18.64 4.63 2.62 20.65 13.08 10.28
12 Plant & Machinery (WP ) 45.76 - - 45.76 - 4.38 - 4.38 41.37 45.76
13 P&M Generator Set 1.19 0.02 - 1.21 0.21 0.18 - 0.39 0.82 0.98
14 Office Equipment 1.36 0.91 - 2.27 0.26 0.67 - 0.93 1.34 1.10
15 Computer & Accessories 2.95 1.21 - 4.16 0.86 1.78 - 2.63 1.52 2.09
16 Electrical & Installation 0.58 1.15 - 1.73 0.26 0.13 - 0.40 1.33 0.31
17 Tools & Implements 4.60 0.64 - 5.24 1.07 0.73 - 1.80 3.44 3.53
18 JCB- JS81 0.79 - - 0.79 - - - - 0.20 0.79
18 Furniture & Fixture 7.16 0.61 - 7.77 1.02 1.67 - 2.70 5.07 6.14
19 Fire Equipment 0.07 - - 0.07 0.05 0.01 - 0.06 0.01 0.02
20 Vehicles- Motor Car 19.40 10.46 0.14 29.72 7.27 3.62 0.10 10.79 18.51 12.13
21 Vehicles- Two Wheelers 2.82 0.89 - 3.71 0.88 0.57 - 1.45 2.23 1.94
Total 211.11 82.62 6.02 287.71 35.79 21.75 2.72 54.82 230.81 175.31
311
ANNEXURE-11 RESTATED SUMMARY OF CONSOLIDATED OF PROPERTY, PLANT AND EQUIPMENT
The Change in carrying value as on 31-March-2017 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Depreciation Net Block
SL. As at As at As at As at As at As at
Assets Disposal For the Elimination
No. Additions
March /Sales March March Year on disposal March March March
31, 2016 31, 2017 31, 2016 31, 2017 31, 2017 31, 2016
Freehold Assets
1 Land & Development
1) Factory Land Development 14.17 - - 14.17 - - - - 14.17 14.17
2) Land at Seuni Ali Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC Kundli 31.33 2.59 - 33.91 - - - - 33.91 31.33
5) Land at Manoharpur Ind. 0.80 1.93 - 2.73 - - - - 2.73 0.80
6) Land - BIPL 0.20 - - 0.20 - - - - 0.20 0.20
7) Land at Greentech Mega Food Park - 2.70 - 2.70 - - - - 2.70 -
2 Building
1) Factory Building 24.13 - - 24.13 2.15 2.07 - 4.22 19.91 21.98
2) Jaipur Ress. House 0.31 - - 0.31 0.01 0.01 - 0.03 0.28 0.30
3) Jaipur Office Purch. 0.31 - - 0.31 0.01 0.01 - 0.03 0.28 0.30
4) Staff Quarter Neemati 0.08 - - 0.08 - - - - 0.07 0.08
5) MD House Renovation 7.32 - - 7.32 0.23 0.35 - 0.57 6.75 7.10
6) Ghy. Office Building - 7.82 - 7.82 - 0.11 - 0.11 7.71 -
3 Air Condition 0.52 0.63 - 1.15 0.11 0.13 - 0.24 0.89 0.41
4 Invertor & Battery 0.06 0.09 - 0.15 0.01 0.02 - 0.03 0.11 0.05
5 CC TV & Cemera 0.12 - - 0.12 0.02 0.03 - 0.05 0.07 0.10
6 Plant & Machinery 24.13 4.81 0.02 28.92 9.95 8.69 - 18.64 9.58 14.18
7 Plant & Machinery (WP ) 45.76 - - 45.76 - - - - 45.76 45.76
8 P&M Generator Set 0.57 0.62 - 1.19 0.11 0.10 - 0.21 0.98 0.46
9 Office Equipment 0.36 1.00 - 1.36 0.10 0.16 - 0.26 1.10 0.26
10 Computer & Accessories 0.84 2.13 0.02 2.95 0.29 0.57 - 0.86 2.08 0.54
11 Electrical & Installation 0.58 - - 0.58 0.16 0.10 - 0.26 0.31 0.42
12 Tools & Implements 3.16 1.44 - 4.60 0.54 0.53 - 1.07 3.53 2.63
13 JCB- JS81 0.79 - - 0.79 - - - - 0.26 0.79
14 Furniture & Fixture 1.87 5.31 0.02 7.16 0.46 0.57 - 1.02 6.13 1.41
15 Fire Equipment 0.07 - - 0.07 0.03 0.02 - 0.05 0.02 0.04
16 Vehicles- Motor Car 13.59 7.02 1.21 19.40 3.71 4.07 0.51 7.27 11.72 9.88
17 Vehicles- Two Wheelers 2.13 0.70 - 2.82 0.36 0.52 - 0.88 1.92 1.76
Total 173.60 38.78 1.27 211.11 18.25 18.05 0.51 35.79 173.61 155.35
312
ANNEXURE-11 RESTATED SUMMARY OF CONSOLIDATED OF PROPERTY, PLANT AND EQUIPMENT
The Change in carrying value as on 31-March-2016 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Depreciation Net Block
SL.
Assets Deemed Deemed
No.
cost as at As at as at As at As at As at
April 01, Disposal March April 01, For the Elimination March March March
2015 Additions /Sales 31, 2016 2015 Year on disposal 31, 2016 31, 2016 31, 2015
Freehold Assets
1 Land & Development
1) Factory Land Development 2.34 11.83 - 14.17 - - - - 14.17 2.34
2) Land at Seuni Ali Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC Kundli 25.99 5.34 - 31.33 - - - - 31.33 25.99
5) Land at Manoharpur Ind. - 0.80 - 0.80 - - - - 0.80 -
6) Land - BIPL 0.20 - - 0.20 - - - - 0.20 0.20
2 Building
1) Factory Building 19.13 5.00 - 24.13 - 2.15 - 2.15 21.98 19.13
2) Jaipur Ress. House 0.31 - - 0.31 - 0.01 - 0.01 0.30 0.31
3) Jaipur Office Purch. 0.31 - - 0.31 - 0.01 - 0.01 0.30 0.31
4) Staff Quarter Neemati 0.08 - - 0.08 - - - - 0.08 0.08
5) MD House Renovation 2.90 4.42 - 7.32 - 0.23 - 0.23 7.10 2.90
6) Kumarghat Stores 0.07 - 0.07 - - - - - - 0.07
3 Air Condition 0.34 0.18 - 0.52 - 0.11 - 0.11 0.40 0.34
4 Invertor & Battery 0.06 - - 0.06 - 0.01 - 0.01 0.05 0.06
5 CC TV & Cemera 0.03 0.09 - 0.12 - 0.02 - 0.02 0.10 0.03
6 Plant & Machinery 22.22 2.00 0.09 24.13 - 9.95 - 9.95 13.86 22.22
7 Plant & Machinery (Wind Power ) 45.76 - - 45.76 - - - - 45.76 45.76
8 P&M Generator Set 0.57 - - 0.57 - 0.11 - 0.11 0.46 0.57
9 Office Equipment 0.24 0.15 0.03 0.36 - 0.10 - 0.10 0.26 0.24
10 Computer & Accessories 0.34 0.54 0.04 0.84 - 0.29 - 0.29 0.54 0.34
11 Electrical & Installation 0.58 - - 0.58 - 0.16 - 0.16 0.42 0.58
12 Tools & Implements 2.78 0.38 - 3.16 - 0.54 - 0.54 2.63 2.78
13 JCB- JS81 0.79 - - 0.79 - - - - 0.57 0.79
14 Furniture & Fixture 1.59 0.35 0.07 1.87 - 0.46 - 0.46 1.40 1.59
15 Fire Equipment 0.07 - - 0.07 - 0.03 - 0.03 0.04 0.07
16 Vehicles- Motor Car 11.11 2.71 0.23 13.59 - 3.77 0.06 3.71 9.73 11.11
17 Vehicles- Two Wheelers 1.20 0.97 0.04 2.13 - 0.37 - 0.36 1.75 1.20
Total 139.41 34.77 0.58 173.60 - 18.32 0.07 18.25 154.62 139.41
313
ANNEXURE-12 RESTATED SUMMARY OF CONSOLIDATED OF CAPITAL WORK IN PROGRESS
The Change in carrying value as on 31-March-2018 (Proforma Ind As) ( Rs. In Million)
Gross Carrying Amount Depreciation Net Block
As at As at As at As at As at As at
SL. No. Assets Elimination on
March 31, Additions Disposal March 31, March 31, For the Year March 31, March 31, March 31,
disposal
2017 2018 2017 2018 2018 2017
Capital work-in-progress
1 Factory Building at Kundly 66.16 16.89 - 83.05 - - - - 83.05 66.16
2 Office at NDLS DLF Capital 41.32 8.16 - 49.48 - - - - 49.48 41.32
3 Jaipur New Office - - - - - - - - - -
4 Bapi Factory Building Extension 4.29 47.99 52.28 - - - - - - 4.29
5 Plant & Machinery (WIP) - 8.44 - 8.44 - - - - 8.44 -
6 Civil Construction & Material Purchase 291.35 - - 291.35 - - - - 291.35 291.35
7 Electro Mechanical Machine 235.53 - - 235.53 - - - - 235.53 235.53
8 Hydro Mechanical Equipment’s 56.12 - - 56.12 - - - - 56.12 56.12
9 Pre-Operative Expenses(pending Capitalisation) 243.76 10.46 - 254.22 - - - - 254.22 243.76
10 Sub Station 3.51 - - 3.51 - - - - 3.51 3.51
The Change in carrying value as on 31-March-2017 (Proforma Ind As) ( Rs. In Million)
Gross Carrying Amount Depreciation Net Block
As at As at As at As at As at As at
SL. No. Assets Elimination on
March 31, Additions Disposal March 31, March 31, For the Year March 31, March 31, March 31,
disposal
2016 2017 2016 2017 2017 2016
Capital work-in-progress
1 Factory Building at Kundly 11.76 54.40 - 66.16 - - - - 66.16 11.76
2 Office at NDLS DLF Capital 38.08 3.24 - 41.32 - - - - 41.32 38.08
3 Jaipur New Office - - - - - - - - - -
4 Bapi Factory Building Extension - 4.29 - 4.29 - - - - 4.29 -
5 Civil Construction & Material Purchase 291.35 - - 291.35 - - - - 291.35 291.35
6 Electro Mechanical Machine 235.53 - - 235.53 - - - - 235.53 235.53
7 Hydro Mechanical Equipment’s 56.12 - - 56.12 - - - - 56.12 56.12
8 Pre-Operative Expenses(pending Capitalisation) 199.02 44.74 - 243.76 - - - - 243.76 199.02
9 Sub Station 3.51 - - 3.51 - - - - 3.51 3.51
The Change in carrying value as on 31-March-2016 (Proforma Ind As) ( Rs. In Million)
Gross Carrying Amount Depreciation Net Block
Deemed cost as
As at Deemed as at As at As at As at
at
SL. No. Assets Elimination on
April 01, 2015 Additions Disposal April 01, For the Year
March 31, disposal March 31, March 31, March 31,
2015
2016 2016 2016 2015
Capital work-in-progress
1 Factory Building at Kundly - 11.76 - 11.76 - - - - 11.76 -
2 Office at NDLS DLF Capital - 38.08 - 38.08 - - - - 38.08 -
3 Jaipur New Office - - - - - - - - - -
4 Civil Construction & Material Purchase 228.43 62.93 - 291.35 - - - - 291.35 228.43
5 Electro Mechanical Machine 141.91 93.63 - 235.53 - - - - 235.53 141.91
6 Hydro Mechanical Equipment’s 16.50 39.62 - 56.12 - - - - 56.12 16.50
7 Pre-Operative Expenses(pending Capitalisation) 156.74 42.28 - 199.02 - - - - 199.02 156.74
8 Sub Station 3.51 - - 3.51 - - - - 3.51 3.51
314
ANNEXURE-13 RESTATED SUMMARY OF CONSOLIDATED OF INVESTMENT PROPERTY
The Change in carrying value as on 31-March-2018 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Depreciation/Amortisation NET BLOCK
As at As at As at As at As at As at
Assets
March 31, Additions Disposal /Sales March 31, March 31, For the year Elimination on disposal March 31, March 31, March 31,
2017 2018 2017 2018 2018 2017
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
2) Flat at Vaishalinagar Jaipur 12.68 - - 12.68 - 0.62 - 0.62 12.06 12.68
3) Flat at Verdhman Residency - 5.67 - 5.67 - 0.21 - 0.21 5.46 -
Total 17.50 5.67 - 23.17 - 0.83 - 0.83 22.34 17.50
The Change in carrying value as on 31-March-2017 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Depreciation/Amortisation Net Block
As at As at As at As at As at As at
Assets
March 31, Additions Disposal /Sales March 31, March 31, For the Year Elimination on disposal March 31, March 31, March 31,
2016 2017 2016 2017 2017 2016
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
2) Flat at Vaishali nagar Jaipur - 12.68 - 12.68 - - - - 12.68 -
Total 4.82 12.68 - 17.50 - - - - 17.50 4.82
The Change in carrying value as on 31-March-2016 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Depreciation/Amortisation Net Block
Deemed cost as
As at Deemed as at As at As at As at
Assets at
Additions Disposal /Sales For the Year Elimination on disposal
March 31, April 01, March 31, March 31, March 31,
April 01, 2015
2016 2015 2016 2016 2015
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
Total 4.82 - - 4.82 - - - - 4.82 4.82
315
ANNEXURE-14 RESTATED SUMMARY OF CONSOLIDATED OF OTHER INTANGIBLE ASSETS
The Change in carrying value as on 31-March-2018 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Amortisation Net Block
As at As at As at As at As at As at
Assets For the Elimination
March 31, Additions Disposal /Sales March 31, March 31, March 31, March 31, March 31,
Year on disposal
2017 2018 2017 2018 2018 2017
Computer Software 0.01 - - 0.01 - - - - - -
Total 0.01 - - 0.01 - - - - - -
The Change in carrying value as on 31-March-2017 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Amortisation Net Block
As at As at As at As at As at As at
Assets For the Elimination
March 31, Additions Disposal /Sales March 31, March 31, March 31, March 31, March 31,
Year on disposal
2,016.00 2,017.00 2,016.00 2,017.00 2,017.00 2,016.00
Computer Software 0.01 - - 0.01 - - - - - -
Total 0.01 - - 0.01 - - - - - -
The Change in carrying value as on 31-March-2016 (Proforma Ind As) (Rs. In Millions)
Gross Carrying Amount Amortisation Net Block
Deemed cost as
As at As at As at As at As at
at
Assets For the Elimination
Additions Disposal /Sales April 01,
April 01, 2015 March 31, Year on disposal March 31, March 31, March 31,
2015
2,016.00 2,016.00 2,016.00 2,015.00
Computer Software 0.01 - - 0.01 - - - - - 0.01
Total 0.01 - - 0.01 - - - - - 0.01
316
ANNEXURE-15 RESTATED SUMMARY OF CONSOLIDATED OF INVESTMENT
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Non-Current
Equity investment in associates carried at cost (unquoted and fully paid
up)
Topline Finvest (P) Ltd.
4,46,300 (31 March 2017, 2016, 2015, 2014 - 2,19,900) equity shares of face 2.23 2.23 2.23
value of rs. 10 each fully paid.
VSG Trade Pvt Ltd
2,06,700 (31 March 2017, 2016, 2015, 2014 - 99,950) equity shares of face 1.03 1.03 1.03
value of rs. 10 each fully paid
North Eastern Educare & Research Pvt Ltd
700 (31 March 2017, 2016, 2015, 2014 - 500) equity shares of face value of rs. 0.25 0.25 0.25
100 each fully paid.
Equity Investment carried at fair value through other comprehensive
income
Reliance Power Ltd.
451 (31 March 2016, 2015, 2014 - 451 equity shares of face value of rs.10 - - 0.02
each fully paid)
NHPC Ltd.
192 (31 March 2016, 2015, 2014 - 192) equity shares of face value of rs. 10 - - -
each fully paid
Other Investment
In Greentech food park pvt. ltd.
34.00 - -
(As on 31 March 2018 : 34,00,000 Equity Shares of Rs. 10/- each)
Total 37.52 3.52 3.54
Current - - -
Total - - -
Note :-1 The 3,000 (30% of holding) Share of Lower Sejuisa Hydel Power Co Pvt Ltd has been pledged to SBI Jorhat for sanction of loan to subsidiary
Brahmaputra Infra Power Pvt Ltd. of Rs 255.00 million.
Note :-2 Equity investments in subsidiaries are carried at cost.
317
ANNEXURE-16 RESTATED SUMMARY OF CONSOLIDATED OF LOANS (ASSETS)
(Rs. In million)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Non- current - - -
Total - - -
Current - - -
Total - - -
318
ANNEXURE-17 RESTATED SUMMARY OF CONSOLIDATED OF OTHER FINANCIAL ASSETS
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH AS AT MARCH
(Proforma Ind As) 31, 2017 31, 2016
(Proforma Ind (Proforma Ind As)
As)
Non-current
Carried at amortised cost
Security deposits 3.66 3.65 5.42
Advance to related parties - - -
Income Tax Refund Due 1.53 1.52 3.9
Bank deposit with maturity of more
than 12 months (refer not below) 209.57 340.53 204.6
Total 214.75 345.7 213.92
Current
Insurance Claim - 3.64 3.64
Total - 3.64 3.64
319
ANNEXURE-18 RESTATED SUMMARY OF CONSOLIDATED OF OTHER NON-CURRENT ASSETS
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH AS AT MARCH
2018 (Proforma Ind 31, 2017 (Proforma 31, 2016
As) Ind As) (Proforma Ind As)
320
ANNEXURE-19 RESTATED SUMMARY OF CONSOLIDATED OF INVENTORIES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH AS AT MARCH 31,
2018 (Proforma Ind 31, 2017 (Proforma 2016 (Proforma Ind
As) Ind As) As)
(At lower of cost and net realizable value, unless stated otherwise)
Raw materials 286.27 100.75 103.85
Packing materials 3.24 4.45 3.90
Work Contract Materials 88.79 326.87 125.37
Erection WIP - 25.05 98.60
Finished goods 18.44 50.41 32.90
RM-in -Transit - - 15.21
Trading Goods - - -
RM Scrap 0.98 1.08 0.88
Total 397.72 508.61 380.72
321
ANNEXURE‐20 RESTATED SUMMARY OF CONSOLIDATED OF TRADE RECEIVABLES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, AS AT MARCH 31, 2016
(Proforma Ind As) 2017 (Proforma Ind As) (Proforma Ind As)
322
ANNEXURE-21 RESTATED SUMMARY OF CONSOLIDATED OF CASH AND BANK BALANCES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
2018 (Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
323
ANNEXURE-22 RESTATED SUMMARY OF CONSOLIDATED OF OTHER BANK BALANCES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
324
ANNEXURE-23 RESTATED SUMMARY OF CONSOLIDATED OF OTHER CURRENT ASSETS
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
325
ANNEXURE-24 RESTATED SUMMARY OF CONSOLIDATED OF EQUITY SHARE CAPITAL
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all
preferential amounts in proportion to the number of equity shares held by the share holders.
Details of shareholders holding more than 5% shares in the company (Rs. In millions)
As at 31st March, 2018 (Proforma Ind As) As at 31st March, 2017 (Proforma Ind As) As at 31st March, 2016 (Proforma Ind As)
Particulars
No.of Share % held No.of Share % held No.of Share % held
As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial
ownership of shares.
No. of Shares Amount (Rs.) No. of Shares Amount (Rs.) No. of Shares Amount (Rs.)
Shares outstanding at the beginning of the year 38.09 380.91 24.78 247.80 24.78 247.80
(I) Issued on exercise of employees stock options - - - - - -
(II) Issued for consideration of Bonus Issue - - 7.43 74.34 - -
(iii) Issued for cash - - 5.88 58.77 - -
(iv) Share issue on account of business combination - - - - - -
less :- Shares bought back - - - - - -
less :- Cross Holding by Subsidiary Company (0.47) (4.68) (0.47) (4.68) (0.36) (3.60)
Out standing at the end of the reporting period 37.62 376.23 37.62 376.23 24.42 244.20
The company does not have any holding / ultimate holding company.
Capital Management
Equity share capital and other equity are considered for the purpose of company's capital management
The company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the company is based on management's judgement of its strategic and
day to day needs with a focus on total equity so as to maintain investor, creditors and market confidence.
326
ANNEXURE-25 RESTATED SUMMARY OF CONSOLIDATED OF OTHER EQUITY
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, 2017 AS AT MARCH 31,
2018 (Proforma Ind (Proforma Ind As) 2016 (Proforma Ind
As) As)
Summary of other equity balance:
(a) Securities Premium Reserve 490.59 490.59 376.88
(b) General reserve 15.61 15.61 15.61
(c) Retained Earnings 1,010.17 827.46 702.82
(d) Items of Other Comprehensive Income (2.67) (1.68) (0.09)
(e) Capital Reserve 49.08 49.08 48.00
Total 1,562.78 1,381.06 1,143.22
327
ANNEXURE-26 RESTATED SUMMARY OF CONSOLIDATED OF BORROWINGS
Rs. In millions
PARTICULARS AS AT MARCH 31, 2018 (Proforma AS AT MARCH 31, AS AT MARCH 31,
Ind As) 2017 (Proforma Ind 2016 (Proforma Ind
As) As)
Non-Current
Secured Loan
from State Bank of Bikaner and Jaipur
Term Loan for Wind Mill Machinery - 10.39 18.71
from State Bank of India
RASMACCC JORHAT 222.41 222.41 222.41
from Daimler Finance Service Pvt.Ltd
Loan for Vehicle 4.90 - -
Unsecured Loan from Others
From Share Holders
From Director 0.31 16.90 18.81
From Corporate 9.22 137.45 206.01
Total 236.84 387.16 465.94
Less : Current maturities of long-term debt 0.49 8.33 8.29
328
ANNEXURE-27 RESTATED SUMMARY OF CONSOLIDATED OF OTHER FINANCIAL LIABILITIES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31, 2016
2018 (Proforma Ind As) 2017 (Proforma Ind As) (Proforma Ind As)
Non-current
Security Refundable 1.76 - -
Total 1.76 - -
Current
Carried at amortised cost
Current maturities of long-term debt 0.49 8.33 8.29
Employee benefits payable 1.04 8.72 4.58
Retention Money 47.51 27.18
Share Application Money due for refund - 0.01 -
Others
Creditors for expenses 1.92 1.23 1.19
Creditors for Capital Goods 148.26 148.26 148.26
Total 199.21 193.71 162.32
329
ANNEXURE-28 RESTATED SUMMARY OF CONSOLIDATED OF PROVISIONS
Rs. In millions
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Non-current
Provision for employee benefits
Provision for gratuity 17.93 11.09 6.72
17.93 11.09 6.72
Current
Provision for employee benefits
Provision for gratuity 1.15 0.16 0.10
1.15 0.16 0.10
330
ANNEXURE-29 RESTATED SUMMARY OF CONSOLIDATED OF DEFERRED TAX LIABILITIES (NET)
(Rs. In millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
331
ANNEXURE-30 RESTATED SUMMARY OF CONSOLIDATED OF TRADE PAYABLES
( Rs. In Million)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Note: (a) In the absense of information about nature of trade payable all payable amount are considered as other than MSME.
332
ANNEXURE-31 RESTATED SUMMARY OF CONSOLIDATED OF OTHER CURRENT LIABILITIES
(Rs. In millions)
PARTICULARS AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Note: (a) In the absence of information about nature of trade payable all payable amount are considered as other than MSME.
333
ANNEXURE-32 RESTATED SUMMARY OF CONSOLIDATED OF REVENUE FROM OPERATIONS
(Rs. In Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Note 2. Contract domestic sales includes deemed export sales of Rs. 2.49 million for FY 2017-18 ( FY 16-17: Nil, 15-16: 501.32)
334
ANNEXURE-33 RESTATED SUMMARY OF CONSOLIDATED OF OTHER INCOME
(Rs. In Millions)
PARTICULARS For the year ended For the year ended For the year ended MARCH 31,
MARCH 31, 2018 MARCH 31, 2017 2016 (Proforma Ind As)
(Proforma Ind As) (Proforma Ind As)
Misc. Income - - -
Interest on I.T Refund - - -
335
ANNEXURE-34 RESTATED SUMMARY OF CONSOLIDATED OF COST OF MATERIAL CONSUMED
(Rs. In Millions)
PARTICULARS For the year ended MARCH For the year ended MARCH For the year ended MARCH 31,
31, 2018 (Proforma Ind As) 31, 2017 (Proforma Ind As) 2016 (Proforma Ind As)
A) Raw Material
Opening stock 427.62 229.22 255.48
Add: Purchases 2,873.25 2,880.75 2,929.89
3,300.87 3,109.97 3,185.37
Less: Closing stock 375.06 427.62 229.22
Cost of Raw material
2,925.80 2,682.35 2,956.15
consumed
Less :-
Insurance Claim - 0.80 0.28
Transational Input claim under
15.38 - -
GST on Stock
336
ANNEXURE-35 RESTATED SUMMARY OF CONSOLIDATED OF PURCHASE OF STOCK-IN-
TRADE
(Rs. In Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Trading Goods
Trading Goods Purchase - - 21.28
Total - - 21.28
337
ANNEXURE-36 RESTATED SUMMARY OF CONSOLIDATED OF CHANGES IN INVENTORIES OF FG, WIP &
STOCK-IN-TRADE
(Rs. In Millions)
PARTICULARS For the year ended MARCH For the year ended MARCH 31, For the year ended MARCH 31,
31, 2018 (Proforma Ind As) 2017 (Proforma Ind As) 2016 (Proforma Ind As)
A) Opening Stock
Finished Goods 50.41 32.90 21.40
Trading Goods - - -
RM Scraps 1.08 0.88 0.33
Sub Total 51.49 33.78 21.73
B) Closing Stock
Finished Goods 18.44 50.41 32.90
Trading Goods - - -
RM Scraps 0.98 1.08 0.88
Sub Total 19.42 51.49 33.78
338
ANNEXURE-37 RESTATED SUMMARY OF CONSOLIDATED OF EMPLOYEE BENEFITS EXPENSES
(Rs. In Millions)
PARTICULARS For the year ended For the year ended For the year ended MARCH
MARCH 31, 2018 MARCH 31, 2017 31, 2016 (Proforma Ind As)
(Proforma Ind As) (Proforma Ind As)
The following table sets out the status of the gratuity plan:
Profit & Loss (P&L) (Rs. In Millions)
Particulars For the Year Ended
31/03/2018 31/03/2017 31/03/2016
Service cost 6.04 2.31 1.74
Net interest 0.80 0.53 0.36
Acquisition/disposal cost/(credit) - - -
Expense/(Income) recognised in P&L 6.84 2.83 2.1
339
ANNEXURE-37 RESTATED SUMMARY OF CONSOLIDATED OF EMPLOYEE BENEFITS EXPENSES
The principal assumptions used in determining gratutity for the company's plans are as follows-
The estimates of future salary increases, considered in the acturial valuation, take account of inflation, seniority, promotion and other relevant
Discount rate and future salary escalation rate are the key acturial assumptions to which the Defined Benefit Obligations are particulary sensitive.
DBO sensitives (Rs. In Millions)
Particulars 31/03/2018 31/03/2017 31/03/2016
DBO - Base assumptions 19.08 11.24 6.82
Discount rate: +1% 16.80 9.91 6.00
Discount rate: -1% 21.91 12.87 7.82
Salary escalation rate: +1% 21.32 12.32 7.53
Salary escalation rate: -1% 17.06 10.23 6.16
Attrition rate: 25% increase 17.78 10.56 6.35
Attrition rate: 25% decrease 20.70 12.05 7.38
The sensitivity analysis included in this report is based on the same computational methods used for arriving at the present value of Defined
340
ANNEXURE-38 RESTATED SUMMARY OF CONSOLIDATED OF FINANCE COSTS
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended MARCH
MARCH 31, 2018 MARCH 31, 2017 31, 2016 (Proforma Ind As)
(Proforma Ind As) (Proforma Ind As)
Interest
- On loans from banks 0.25 1.68 2.62
- Others 2.80 20.55 10.69
Interest on DBO 0.80 0.53 0.36
Interest to Suppliers & Others 14.95 3.70 3.60
Interest on cash credit 104.32 93.51 85.83
341
ANNEXURE-39 RESTATED SUMMARY OF CONSOLIDATED OF DEPRECIATION AND AMORTIZATION EXPENSES
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended MARCH
MARCH 31, 2018 MARCH 31, 2017 31, 2016 (Proforma Ind As)
(Proforma Ind As) (Proforma Ind As)
342
ANNEXURE-40 RESTATED SUMMARY OF CONSOLIDATED OF OTHER EXPENSES
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Power & Fuel expenses 8.99 6.83 6.16
Consumption of stores and spares 3.62 1.64 1.24
Bank Charges 64.91 76.54 38.36
Commission on Purchase 3.94 1.68 3.57
Repairs and maintenance
-Plant and machinery 31.01 17.69 18.14
-Buildings 8.64 6.08 1.12
-Others 4.48 4.85 1.80
Sub-Contractor Charge 399.95 348.13 117.39
Advertisement & Promotions 1.41 2.07 1.12
Audit Fee 0.55 0.05 0.07
Travel and conveyance 20.14 12.08 9.74
Donation & charity 6.79 4.30 4.68
Electricity & Water Charges 2.79 2.35 2.30
Freight and carriage 14.54 66.84 78.52
Insurance Premium 26.35 16.17 7.09
Legal, Licence & professional charg 18.60 10.95 4.86
Telephone and communication charg 2.89 2.35 1.81
Printing & Stationery 2.47 3.08 1.72
Rates and taxes 30.59 35.05 8.51
Rental charges 10.97 9.18 5.79
Exchange Gain/Loss - - 1.33
Miscellaneous expenses 61.97 40.47 18.26
Total 725.61 668.40 333.57
343
ANNEXURE-41 RESTATED SUMMARY OF CONSOLIDATED OF EXCEPTIONAL ITEMS
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
344
ANNEXURE-42 RESTATED SUMMARY OF CONSOLIDATED OF TAX EXPENSES
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Tax Expenses
Current Year Income Tax 101.84 71.55 59.05
Deferred tax (3.29) (1.87) 10.02
Wealth tax Provision - - (0.04)
Earlier years Income Tax 0.75 0.88 (0.72)
Total 99.29 70.56 68.31
345
ANNEXURE-43 RESTATED SUMMARY OF CONSOLIDATED OF EARNING PER EQUITY SHARE BASIC AND
DILUTED
(Rs. in Millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
346
ANNEXURE‐44 RESTATED SUMMARY OF CONSOLIDATED OF CAPITALIZATION
(Rs. in millions)
Particulars Pre-Issue as at As adjusted for Issue*
31/03/2018 (Proforma Ind As)
Debts
Long term debt (A) 236.35 []
Short term debt (B) 804.09 []
Total debt (C) 1,040.44 []
Total capitalization
Long term debt/equity ratio 0.12
[]
(A/D)
Total debt/equity ratio (C/D) 0.54 []
347
ANNEXURE-45 RESTATED SUMMARY OF CONSOLIDATED OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
1) Subsidiary Companies
2) Enterprises over which key management personal and their relatives have significant influence
7) Sri Mahaluxmi Aerated Aqua Pvt.Ltd 15) Jai Prakash Khetan & Sons
8) Shyam Associates
348
ANNEXURE-45 RESTATED SUMMARY OF CONSOLIDATED OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
b) Managerial Remuneration
c) Salary Paid
349
ANNEXURE-45 RESTATED SUMMARY OF CONSOLIDATED OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
d) Interest Paid- to Director & Other
Enterprises
350
ANNEXURE-45 RESTATED SUMMARY OF CONSOLIDATED OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
A. Company has following amount due from/ to related parties
(Rs. in millions)
AS AT MARCH 31, 2018 AS AT MARCH 31, 2017 AS AT MARCH 31, 2016
Outstanding Balances
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Advance salary:
Nanuram Prajapat - 0.26 -
Investment Balance in enterprises:
Topline Finvest (P) Ltd. 1.10 1.10 1.10
VSG Trade Pvt Ltd 0.50 0.50 0.50
North Eastern Educare & Research Pvt Ltd 0.05 0.05 0.05
351
ANNEXURE-46 RESTATED SUMMARY OF CONSOLIDATED OF CONTINGENT LIABILITIES.
1) Contingent liability not provided for counter guarantee given for guarantee issued by bank
(Rs. in millions)
SL No. Name of Bank As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
2) Contingent liability not provided for corporate guarantee given on behalf of subsidiary Company M/s Brahmaputra Infra Power Pvt Ltd to State
Bank of India Jorhat for sanction of Term Loan Rs 255.00 million.
3) Contingent liability not provided for dues of Service Tax & Excise duty which have not been deposited for all the years on account of disputes are
given below:-
352
ANNEXURE-47 RESTATED SUMMARY OF CONSOLIDATED OF ACCOUNTING RATIOS.
(Rs. in millions)
For the Year Ended
S. no. Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
a) Basic earnings per share (In Rs.) (2)/ (3) 4.86 3.92 2.87
b) Diluted earnings per share (In Rs.) (2)/ (4) 4.86 3.92 2.87
Return on Net worth for Equity shareholders
c) 9.43% 7.09% 6.56%
(2)/ (6) (%)
d) Net Asset value (in Rs.) (6)/ (3) 51.51 55.30 43.70
353
ANNEXURE‐48 RESTATED SUMMARY OF CONSOLIDATED OF SEGMENT REPORT.
As at 31st March 2018 (Rs. In millions)
Particulars Works Power Total
Manufact Contract Generatio Unallocat
uring Division n Division ed
Division
Segment Revenue
Revenue from operation 1,560.75 2,726.97 7.52 4,295.24
Segment Operating Expenditure
Operating Expenditure 1,457.88 2,309.94 6.72 3,774.54
Segment Result
Profit before Unallocaed Expenses/ Income 102.87 417.03 0.80 520.70
Unallocated expenses net of Unallocated Income 238.70
Profit before Exceptional items 282.00
Less: Exceptional items -
Profit before tax 281.00
Less: Tax expenses 99.29
Profit from Continuing operations 181.71
Add: Profit from Discontinuing Operations -
Profit for the year 181.71
Other Information -
354
ANNEXURE‐48 RESTATED SUMMARY OF CONSOLIDATED OF SEGMENT REPORT.
355
ANNEXURE‐48 RESTATED SUMMARY OF CONSOLIDATED OF SEGMENT REPORT.
356
ANNEXURE-49 RESTATED SUMMARY OF CONSOLIDATED FINANCE LEASE.
(Rs. in millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
357
ANNEXURE-50 RESTATED SUMMARY OF CONSOLIDATED OF DETAILS OF DISCONTINUED OPERATIONS.
(Rs. in millions)
PARTICULARS For the year ended For the year ended For the year ended
MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Revenue - - -
Total - - -
Expenses - - -
Total - - -
358
ANNEXURE‐51 RESTATED SUMMARY OF CONSOLIDATED OF UNHEDGED FOREIGN CURRENCY EXPOSURE.
NIL
359
ANNEXURE-52 RESTATED SUMMARY OF CONSOLIDATED OF ADDITIONAL INFORMATION
PURSUANT TO THE PART II OF SCHEDULE III OF THE COMPANIES ACT, 2013.
360
ANNEXURE-53 RESTATED SUMMARY CONSOLIDATED OF TAX SHELTER
Rs. in million
Particulars 31.3.2018 31.3.2017 31.3.2016
Adjustment
Tax impact of permanent diff. due to:
* Income tax return for the assessment year 2018-19 is yet to file. So we assumed adjusted tax liability as
tax as per return of income
361
ANNEXURE 1A RESTATED SUMMARY STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES
(Rs. In millions)
Sr. Annexure
Particulars AS AT 31.03.2015 AS AT 31.03.2014
No. No.
I. EQUITY AND LIABILITIES
1 Shareholders Fund
a) Share Capital 7A 244.20 225.45
b) Reserve and Surplus 8A 1052.38 910.03
c) Money received against share warrants - .00 .00
3 Non-current Liabilities
a) Long-term borrowings 9A 379.49 343.92
b) Deffered tax liabilities (Net) 10A .00 .00
c) Other long-term liabilities - .00 .00
d) Long-term provisions - 4.50 2.43
4 Current Liabilities
(a) Short-term borrowings 11A 626.12 395.52
(b) Trade Payables 12A 637.09 365.93
(c ) Other current liabilities 13A 15.45 17.54
(d) Short-term provisions 14A 50.07 .51
2 Current assets
a) Current investments - .00 .00
b) Inventories 17A 322.31 240.34
c) Trade receivables 18A 1229.28 870.72
d) Cash and bank balances 19A 415.50 238.63
e) Short-term loans and advances 20A 180.55 133.91
f) Other current assets 21A 8.97 2.82
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES APPEARING IN ANNEXURE 4A, NOTES TO RESTATED STANDALONE FINANCIAL
INFORMATION APPEARING IN ANNEXURE 5A AND STATEMENT OF ADJUSTMENTS TO AUDITED
STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE 6A.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
(Rs. In millions)
For the year For the year ended
Annexure
Sr. No. Particulars ended 31.03.2015 31.03.2014
No.
A. CONTINUING OPERATION
Revenue from operation 19A 3149.26 3351.63
Other income 20A 20.51 20.50
B Expenses:
Cost of material consumed 21A 2341.52 2382.48
Purchase of stock-in-trade 22A 83.14 322.75
Changes in inventories of FG, WIP & Stock-in-trad 23A 70.82 -43.67
Employee benefits expenses 24A 67.19 60.90
Finance costs 25A 80.51 79.85
Depreciation and amortization expenses 23.01 21.38
Other expenses 26A 378.50 388.71
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED
STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF
ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE
7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
363
ANNEXURE 3A RESTATED SUMMARY STATEMENT OF CONSOLIDATED CASH FLOWS
(Rs. In millions)
Sr. Annexure
Particulars AS AT 31.03.2015 AS AT 31.03.2014
No. No.
1 Operating Activities Net Profit before tax
Net profit before taxation & extraordinary items 124.97 159.70
Adjustments for -
Depreciation & amortisation Expense 23.01 21.38
Interest received 18.69 (20.50)
Adjustment in retained earning - (1.30)
Finance Cost 80.51 79.85
Operating Profit before Working Capital Changes 247.18 239.13
Adjustments for
Increase (-) / Decrease (+) in Other current Assets (6.16) 4.33
Increase (-) / Decrease (+) in Debtors (358.57) (241.53)
Increase (-) / Decrease (+) in Inventories (81.97) 54.16
Increase (-) / Decrease (+) in Loans and Advances
142.41
(63.32)
Increase (+) / Decrease (-) in Current Liabilities &
(224.50)
Provisions 264.10
Outflow towards Taxation (-) (51.42) (56.52)
Net Cash Flow from Operating activities (50.16) (82.52)
2 Investing Activities
Increase (-) Decrease (+) in Fixed Assets (8.47) (30.79)
Increase (-) / Decrease (+) in Capital Work-in-
(101.27)
Progress (37.64)
Interest Income 20.14 20.50
Net Cash (Used in) Investing Activities (25.96) (111.56)
3 Finance Activities
Increase (+) / Decrease (-) in Capital 87.50 28.03
Increase (+) / Decrease (-) in Long Term Borrowings
97.85
52.07
Increase (+) / Decrease (-) in Short Term Borrowings
40.70
230.60
Increase (-) / Decrease (+) in Investment 0.40 (50.03)
Dividend and Tax thereon paid
Interest Expenditure (117.57) -79.85
Net Cash Flow from Financing Activities 253.00 36.70
Net Increase (Decrease) in Cash and cash
176.88 (157.38)
4 equivalent
5 Cash and Cash equivalent at the beginning. 238.62 396.00
6 Cash and Cash equivalent at the end 415.50 238.62
Note: The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in
Accounting Standard - 3 "Cash Flow Statements".
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED
STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF
ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN
ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
Company Overview:
NECCON Power and Infra Limited formerly known as North Eastern Cables & Conductors
Private Limited (“the company”) is a company domiciled in India, incorporated under the company
Act, 1956 with the Registrar of Companies - Assam Meghalaya, Manipur, Tripura, Mizoram, Nagaland
& Arunachal Pradesh - Shillong. The Company include carrying on business for Manufacturing of
Electrical Conductor, Generation of Power and Commissioning /Installation & Renovation of Power
Sub-Station for all types of EPC/Trunkey Project Works.
2. Use of Estimates:
The preparation of restated consolidated financial statements in conformity with Indian GAAP requires
the management to make judgments, estimates and assumptions that affect the reported amount of assets
and liabilities on the date of consolidated Financial Statements and the reported amount of revenues and
expenses during the reporting period. Although these estimates are based on the management's best
knowledge of current events and actions, uncertainty about these assumptions and estimates could result
in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future
periods.
3. Revenue:
Revenue is primarily derived from sale of Conductor, Power and related Service from EPC Trunkey
Project.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured. Sales comprises sale of goods and services, net
365
of trade discounts. Interest income is recognized on accrual basis. Dividend income is recognized
when the right to receive dividends is unconditionally established.
The company presents revenues net of indirect taxes in its restated consolidated statements of profit
and loss.
Contingent liabilities: Contingent liabilities are disclosed when there is a possible obligation arising
from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the control of the Company. Contingent Liabilities
are not provided for in the accounts and disclosed by way of notes, if any.
Provisions, Contingent Liabilities and Contingent assets are reviewed at each Balance Sheet date.
5. Tangible assets:
Tangible assets are stated at cost, less accumulated depreciation and impairment if any, direct costs are
capitalized until such assets are ready for use.
6. Intangible assets:
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at
cost less accumulated amortization and impairment.
7. Depreciation:
(a) Depreciation on tangible assets is provided on the WDV method over the useful lives of assets
estimated by the company act, 2013 and Accounting Standard -10, Depreciation of assets
purchase/sold during a period is proportionately charged. Intangible assets are amortized over their
respective individual estimate useful lives basis.
(b) Depreciation and amortization method, useful lives and residual value are reviewed periodically,
including at each financial year.
8 Employee Benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and
loss account of the year in which the related service is rendered.
366
Post-employment and other long term employee benefits are recognized as an expense in the Profit and
Loss account for the year in which the employee has rendered services.
ii. Monetary items denominated in foreign currencies, if any at the yearend are restated at year end
rates.
iv. Any income or expense on account of exchange difference either on settlement or on translation is
recognized in the Profit and Loss Account.
367
(c) Earnings per share:
Basic earnings per share are computed by dividing the net profit after tax by weighted average
number of equity share outstanding during the period. Diluted earnings per share are computed by
dividing the profit after tax by the weighted average number of equity share.
(e) Investment:
Investments are Long Term Investment and are stated at Cost, provision is made to recognize a
decline, other than temporary, in the value of Long Term Investment.
Current Investments are carried at cost or market rate whichever is less, on individual investment
basis.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds
is charged or credited to the statement of profit and loss.
(h) Inventories:
Item of inventories comprising of un-processed are measured at lower of cost or net realizable value
after providing for obsolescence, if any. Item of inventories comprising of processed are measured
at net realizable value after reducing normal gross profit margin in ordinary course of business. Cost
of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing
them to their respective present location and condition netted to discount received. Net realizable
value is the estimated selling price in the ordinary course of business, less estimated cost of
completion and estimated cost necessary to make sale.
368
financial statements of amounting to Rs.1.27 million. The company has no policy for leave
encashment benefits.
369
ANNEXURE 5A RESTATED SUMMARY STATEMENT OF ADJUSTMENTS TO AUDITED CONSOLIDATED
FINANCIAL STATEMENTS
For the restated consolidated financials for the year ending 2014 and 2015, we completely relied on the audited financial
statements for the same. For the year ending 2014 and 2015 in restated Consolidated financials there is only adjustment
regarding gratuity provision based on actuarial valuer report which was not done earlier in audited financial statements. The
i b l f i h b dj di h i d i
370
ANNEXURE -6A-RESTATED SUMMARY STATEMENT OF NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
3.Turnover in Value
( Rs. In Million)
Particulars
AT 2014-15 AT 2013-14
ACSR Conductor 794.32 459.30
AAAC Conductor 225.92 281.83
Aluminum Wire 58.77 254.54
Earth/Ground Wire 3.61 2.83
Steel Wire .36 -
371
RM Scraps 2.78 2.36
Trading Goods 148.46 448.53
Wind Power 8.44 4.22
Works Contract 2021.49 1997.10
Total 3264.16 3450.71
5. No employee of the Company was in receipt of remuneration during the restatement period in
excess of the sum prescribed under section 197(12) of the Companies act,2013 read with Rule
5(2) of the Companies (Appointment and Remuneration of Managerial Personal) Rule, 2014
7. Balance of the sundry creditors, sundry debtors, unsecured loan and advance are subject
to confirmation and reconciliation.
8. Company has made provision for gratuity as per valuer report in restated financial statements
from 1st April 2014 and onwards. Opening liability of gratuity is adjusted in retained earnings
in restated financial statements of amounting to Rs. 1.275 million. The company has no policy
for leave encashment benefits.
9. The Company has sought details from suppliers who had permanent registration certificate
372
as Small Scale Industrial Undertaking issued by the Directorate of Industries of a State or
Union Territory, in the absence of such information, the amount (also bifurcation for 30
days and more than 30 days) and interest due as per the “Interest on delayed payment to
small scale & ancillary industries undertaking Act, 1993” is not ascertainable as on
Balance Sheet date.
10. The company has specified domestic transaction with parties as provided for in the Income
Tax Act, 1961. In the opinion of the management, the Company maintains documents as
prescribed by the Income Tax Act to provide that these specified domestic transactions are
at arm’s length and the aforesaid legislation will not have any material impact on the
financial statement, particularly on the amount of tax expenses and that of provision for
taxation.
11. The Company has taken into consideration the Provision of Accounting Standard 28
Impairment of Assets. The Company does not have any asset which would require
impairment and provisions.
373
ANNEXURE 7A RESTATED SUMMARY STATEMENT OF SHARE CAPITAL
(Rs. In millions)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Authorised Share Capital
30.00 million Equity Shares of Rs 10/- each 300.00 300.00
Reconciliation of number and amount of equity share out standing at the beginning and at the end of the reporting period
(Rs. In million)
As at 31st March, 2015 As at 31st March, 2014
Particulars No. of
Amount (Rs.) No. of Shares Amount (Rs.)
Shares
Shares outstanding at the beginning of the year 22.94 229.45 22.29 222.94
(I) Issued on exercise of employees stock options .00 .00 .00 .00
(II) Issued for consideration of Bonus Issue .00 .00 .00 .00
(iii) Issued for cash 1.84 18.35 .65 6.51
less :- Shares bought back .00 .00 .00 .00
Less: Cross Holding by Subsidiary Company .36 3.60 .40 4.00
Out standing at the end of the reporting period 24.42 244.20 22.54 225.45
374
ANNEXURE 8A RESTATED SUMMARY STATEMENT OF RESERVES AND SURPLUS
Reserves and surplus (Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
As per last Balance Sheet 307.73 286.24
Add: On issue of equity shares 69.15 21.49
Closing balance 376.88 307.73
375
ANNEXURE 9A RESTATED SUMMARY STATEMENT OF LONG TERM BORROWINGS
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Secured Loan
from State Bank of Bikaner and Jaipur
Term Loan for Wind Mill Machinery 23.49 34.97
Less :- Current Maturity of Long Term Debt 4.74 18.74 7.90 27.07
3) Repayment of Loan
1) WTG Term Loan:- Payable in 28 Quarterly installment of Rs 20.82 lacs, first installment is start from the 2nd quarter of FY.
2011-12
376
ANNEXURE 10A RESTATED SUMMARY STATEMENT OF DEFERRED TAX LIABILITY (NET)
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Deferred Tax Liability
Related to fixed Assets-Lower(Higher) Depreciation as per IT.Act 0.00 0.00
Working Capital loans are secured by hypothecation of present & future machinery stock of raw materials, stock in
process, stores& spares, book debts outstanding receivables, and secured by way of first Paripassu mortgage on
immovable property
377
ANNEXURE 12A RESTATED SUMMARY STATEMENT OF TRADE PAYABLE
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Total outstanding dues 637.09 365.93
Payable to Micro,Small & Medium Enterprises .00 .00
Note: 1) In the absense of information about nature of trade payable all payable amount are considered as other than MSME.
2) Trade payable including LC Bills worth Rs. 67,79,89,862/-(Previous year was Rs. 27,45,46,891/-
3) Trade payable including Director Remuneration worth Rs 29,90,369.99 (Previous year was Rs Nil)
4) Trade payable including Associate Business worth Rs 1,26,47,713.00 (Previous year was Rs Nil)
5) Trade payable including relatives worth Rs 1,35,784.00 (Previous year was Rs 1,58,407.00).
378
ANNEXURE 13A RESTATED SUMMARY STATEMENT OF OTHER CURRENT LIBILITIES
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Current Maturity of Long Term Debt
Term loan of WTG - 4.74 7.90
Advance from Customers .10 .10
Tax Deducted at Source 1.85 1.80
Government Statutory Dues .73 1.16
Share Application Money Payable .00 .00
Interest on Term Loan 5.44 .00
Payable to Creditors of Job Work 1.38 1.81
Payable to supplier of capital goods .99 3.57
Salaries .19 .06
Creditors for Expenses 1.15
Dhiraj Jain & Associates .02 .00
Total 15.45 17.54
379
ANNEXURE 15A RESTATED SUMMARY STATEMENT OF NON CURRENT INVESTMENT
(Rs. In million)
Provision for diminution in value of quoted shares not provided for as detailed below (Rs. In million)
380
ANNEXURE 16A RESTATED SUMMARY STATEMENT OF LONG TERM LOANS AND ADVANCES
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
381
ANNEXURE 18A RESTATED SUMMARY STATEMENT OF TRADE RECEIVABLE
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
382
Total 415.50 238.63
ANNEXURE 20A RESTATED SUMMARY STATEMENT OF SHORT TERM LOANS & ADVANCES
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Unsecured, considered good
Advances to suppliers and others 135.18 69.17
VAT Input Credit not Utilized 15.42 30.06
Excise Cenvat Unutilized 24.50 26.49
Service Tax Cenvat Unutilized 5.15 7.84
Tds on Fixed Deposit .28 .34
Prepaid Insurance of Vehicles .03 .00
383
ANNEXURE 22A RESTATED SUMMARY STATEMENT OF REVENUE FROM OPERATION
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Sales of Goods (Gross)
A) Manufactured Goods
1) Electricity Power 8.44 4.22
2) Transmission Line Wire & Conductor
Domestic Sale 1081.75 826.62
Export (Deemed-Export) Sale 4.01 1085.76 165.49 992.10
B) Trading Sale
Domestic Sale .00 .00
Export (Deemed-Export) Sale 148.46 148.46 448.53 448.53
3264.16 3450.71
Less: Excise duty 119.00 93.33
Net sale of goods 3145.15 3357.38
384
ANNEXURE 23A RESTATED SUMMARY STATEMENT OF OTHER INCOME
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Dividend Received .00 .00
Interest on FDR & others 18.69 20.50
Job Work Charges .04 .00
Profit on Sale of Shares 1.60 .00
Misc. Income .16 .00
Interest on I.T. Refund .02 .00
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
A) Raw Material
Opening stock 95.56
Add: Purchases 824.28
919.84
Less: Closing stock 120.61
Cost of Raw material consumed 799.23
B) Work Contract Material
Opening stock 8.75 186.95
Add: purchases 1649.11 2282.71
1657.86 2469.66
Less :- Closing Stock 3306.97 104.31
Material Consumed in Works Ecxecution 1522.99 2365.35
Packing materials 19.31 17.26
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Trading Goods
Trading Goods Purchase 83.14 322.75
385
ANNEXURE 27A RESTATED SUMMARY STATEMENT OF EMPLOYEES BENEFITS EXPENSES
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Salaries and wages, & Labour Charge 48.19 42.98
Staff welfare,Fooding & Training expenses 1.31 3.24
Directors Remuneration 13.20 13.20
Director Sitting Fee .01 .00
House Rent to Staff 2.03
Uniform expenses .03
Gratuity 2.08 1.29
E S I Contribution .11 .10
P.F. Contribution .23 .10
386
ANNEXURE 29A RESTATED SUMMARY STATEMENT OF OTHER EXPENSES
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Manufacturing Expenses
Power & Fuel expenses 4.67 4.45
Stores & Spares .89 1.47
Commission on Purchase .31 1.15
Sub-Contractor Charge 187.08 222.94
Machinery Hire Charges 8.42 4.19
Maintenance of Machinery 5.69 2.21
Administrative, Selling & Distribution expenses
Advertisement & Publicity .94 1.18
Audit Fee .03 .03
Bank Charges 33.96 35.09
Commission & Liasion Charges 2.46 .98
Capital expenses .08 .06
Conveyance Exp. 1.47 1.50
Discount & Roundoff 13.58 6.31
Donation & charity 2.30 .16
Earlier Year expenses .33 .01
Electricity & Water Charges 1.56 1.34
Entry tax .02 .00
Freight,Caratge, & Handling Charge 61.11 45.07
Festival expenses .03 .05
Forest Royalty Charges .01 .00
General Expense .19 .52
Inaugural Function expenses .53 .00
Insurance Premium 4.59 7.07
Keyman Insurance Premium .06 .06
Late Delivery Charges .13 21.03
Labour Cess .37 .09
Legal & License & Filling fees .22 .33
Loss on Theft .35 .07
Maintenance & Running of Vehicles 8.74 7.02
Maintenance of Building .44 .58
Maintenance of others 2.35 1.26
Membership Fees .15 .20
Paper & Periodicals .13 .07
Penalty on VAT/ST .04 .04
Professional Tax .01 .01
Professional Consultancy Fee 2.55 2.80
Postage & Telegram .30 .33
Printing & Stationery 1.72 1.31
Rent for Office & Godwon 6.05 4.27
Scholarship & Social exp. .00 .03
Sales tax demand .00 .04
Security expenses 1.23 .93
Security written off .52 .16
Service tax 10.59 2.45
Site Development exp. .78 .02
Telephone expenses 1.39 1.34
Tender fees 1.41 .36
Testing & Lab exp. .58 .62
Travelling exp. 7.93 7.55
VAT Written off .23 .00
Total 378.50 388.72
387
ANNEXURE 30A RESTATED SUMMARY STATEMENT OF EXCEPTIONAL ITEMS
(Rs. In million)
Particulars For the year ended 31.03.2015 For the year ended 31.03.2014
Loss on Sale of Fixed Assts .11 .02
Total .11 .02
388
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
389
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
6 Plant & Machinery .00 .00
A. In Neccon Infra &
Power Ltd. 55.28 .51 55.78 30.14 5.14 35.28 20.50 25.13
B. In Brahmaputra Infra
Pvt. Ltd. 2.99 2.99 .87 .40 1.27 1.72 2.12
Plant & Machinery
7 (WP ) 88.32 .00 .00 88.32 36.02 6.55 .00 42.56 45.76 52.30
8 P&M Generator Set 1.06 .15 .00 1.21 .51 .12 .00 .63 .57 .55
9 Office Equipment .00 .00
A. In Neccon Infra &
Power Ltd. 1.39 .03 1.42 .76 .43 1.18 .24 .63
B. In Brahmaputra Infra
Pvt. Ltd. .03 .03 .01 .01 .02 .00 .02
Computer &
10 Accessories
A. In Neccon Infra &
Power Ltd. 3.44 .13 .11 3.46 2.69 .53 .10 3.13 .33 .74
B. In Brahmaputra Infra
Pvt. Ltd. .10 .10 .05 .03 .08 .01 .04
11 Electrical & Installation 3.02 .00 .00 3.02 2.09 .35 .00 2.44 .58 .92
12 Tools & Implements 3.49 .49 .00 3.97 .61 .59 .00 1.20 2.78 2.88
13 Furniture & Fixture .00
A. In Neccon Infra &
Power Ltd. 5.73 .21 5.52 3.35 .69 .10 3.94 1.58 2.37
B. In Brahmaputra Infra
Pvt. Ltd. .02 .02 .01 .00 .01 .01 .01
14 Fire Equipment .00 .09 .00 .09 .00 .02 .00 .02 .07 .00
15 Vehicles- Motor Car
A. In Neccon Infra &
Power Ltd. 26.68 2.42 3.50 25.60 11.92 5.08 2.04 14.96 10.64 14.76
B. In Brahmaputra Infra
Pvt. Ltd.
AS-12G-8385 Bolero .64 .00 .64 .00 .40 .00 .40 .00 .00 .00
AS-12H-1380 Scorpio 1.09 .00 .00 1.09 .66 .15 .00 .81 .28 .43
AS-12H-2548/9781
Splender .11 .00 .00 .11 .06 .01 .00 .07 .04 .05
Truck(AS-03AC-3285
Tata 709 .78 .00 .00 .78 .51 .08 .00 .60 .18 .27
JCB- JS81 2.47 .00 .00 2.47 1.38 .30 .00 1.68 .79 1.09
Vehicles- Two
16 Wheelers 2.70 .30 .26 2.74 1.43 .35 .20 1.58 1.16 1.28
Sub-Total of A- 268.71 10.36 4.72 274.35 108.96 24.00 2.83 130.12 144.22 159.51
a) Neccon Infra &
Power Ltd. 260.25 10.36 4.08 266.53 104.99 22.99 2.43 125.56 140.97 155.26
b) Brahmaputra Infra
power Ltd. 8.46 .00 .64 7.81 3.97 1.00 .40 4.56 3.25 4.25
390
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
B INTANGIBLE ASSETS
1 Computer Software .05 .00 .00 .05 .03 .02 .00 .04 .01 .02
Sub-Total of B- .05 .00 .00 .05 .03 .02 .00 .04 .01 .02
a) Neccon Infra &
Power Ltd. .05 .00 .00 .05 .03 .02 .00 .04 .01 .02
b) Brahmaputra Infra
power Ltd. .00 .00 .00 .00 .00 .00 .00 .00 .00 .00
C CAPITAL WORK IN PROGRESS
A.. In Brahmaputra
Infra Pvt. Ltd.
Civil Construction &
1 Material Purchase 228.65 .00 .22 228.43 228.43 .00 .00 .00 228.43 228.65
Electro Mechanical
2 Machine 141.91 .00 .00 141.91 141.91 .00 .00 .00 141.91 141.91
Hydro Mechnical
3 Equipments 16.50 .00 .00 16.50 16.50 .00 .00 .00 16.50 16.50
Pre-Operative Expenses
(Pending
4 Capitalisation) 118.95 37.86 .00 156.81 156.81 .00 .00 .00 156.81 118.95
5 Sub Station 3.51 .00 .00 3.51 3.51 .00 .00 .00 3.51 3.51
B. Lower Seijusa Hydel
Power Company Pvt.
Ltd. .18 .02 .00 .20 .00 .00 .00 .00 .20 .20
Sub-Total of C- 509.70 37.88 .22 547.36 547.16 .00 .00 .00 547.36 509.72
a) Neccon Infra &
Power Ltd. .00 .00 .00 .00 .00 .00 .00 .00 .00 .00
b) Brahmaputra Infra
power Ltd. 509.52 37.86 .22 547.16 547.16 .00 .00 .00 547.16 509.52
c) Lower Seijusa
Hydel Power
Company Pvt. Ltd. .18 .02 .00 .20 .00 .00 .00 .00 .20 .20
Grand Total of (A+B+C) 778.46 48.23 4.94 821.75 105.02 23.01 2.43 125.60 691.58 669.25
Previous Year 644.42 134.72 .86 778.28 86.92 22.59 .52 108.99 669.29 557.50
391
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
392
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
Sub-Total of B- .04 .01 .00 .05 .02 .01 .00 .03 .02 .02
C Capital Work in Progress
1 Factory Building at Kundly .00 .00 .00 .00 .00 .00 .00
2 Office at NDLS DLF Capital .00 .00 .00 .00 .00 .00 .00
3 Jaipur New Office 2.32 2.32 .00 .00 .00 .00 .00 .00 2.32
4 Bapi Factory Building .00 .00 .00 .00 .00 .00 .00
5 Plant & Machinery (WIP) .00 .00 .00 .00 .00 .00 .00
6 Civil Construction 188.01 40.64 228.65 228.65 188.01
7 Electro Mechanical Mac 120.05 21.86 141.91 141.91 120.05
8 Hydro Mechnical Equipm 12.35 4.16 16.50 16.50 12.35
9 Pre-Operative Expenses 83.65 35.31 118.95 -1.21 118.95 83.65
10 Sub Station 1.87 1.64 3.51 3.51 1.87
12 Pre-Operative Expenses- .17 .02 .00 .18 .18 .17
Sub-Total of C- 408.41 103.61 2.32 509.70 .00 -1.21 .00 .00 509.70 408.41
Grand Total of (A+B+C) 646.90 134.74 3.18 778.46 86.92 21.38 .52 108.99 669.47 559.98
393
ANNEXURE 33A RESTATED SUMMARY STATEMENT OF BUSINESS SEGMENT
(Rs. In millions)
The Group’s operations predominantly relate to provide development of transmission line of power in three primary segment viz.
manufacturing of transmission line conductors, established of transmission Power Substations on turnkey basis and Manufacturing
of Electricity Energy through Wind Power Unit. The Group considers the business segment as the primary segment and
geographical Segment based on the location of the customers as secondary segment.
As at 31st March 2015
Particulars Manufacturin Works Contract Power Unallocated Total
g Division Division Generation
Division
Segment Revenue
External sales 1,172.62 2,087.21 8.44 3,268.27
Segment Operating Expenditure
Operating Expenditure 1,067.47 1,889.34 10.33 2,967.15
Segment Result
Profit before Unallocaed Expenses/ Income 105.15 197.87 (1.89) 301.12
Unallocated expenses net of Unallocated Income 176.50
Profit before Exceptional items 124.62
Less: Exceptional items -
Profit before tax 124.62
Less: Tax expenses 51.42
Profit from Continuing operations 73.20
Add: Profit from Discontinuing Operations -
Profit for the year 73.20
Other Information -
2. Geographical Segment:-
The company business activity falls within a single geographical, hence it has no other reportable segments
394
ANNEXURE 34A RESTATED SUMMARY STATEMENT OF CONTINGENT LIABILITY
1) Contingent liability not provided for counter guarantee given for guarantee issued by bank
(Rs. in millions)
S L No. Name of Bank As at 31st March, 2015 As at 31st March,
2014
1 Indian Bank Jorhat Branch 1234.81 905.53
2
Bank of Baroda Jorhat Branch 223.14 286.22
3 Canara Bank Jorhat Branch 327.74 401.79
4
United Bank of India Guwahati 0.00 0.00
5 Punjab National Bank
Guwahati 0.00 0.00
2) Contingent liability not provided for corporate guarantee given on behalf of subsidiary Company Brahmaputra
Infra Power Pvt Ltd to State Bank of India Jorhat for sanction of Term Loan Rs 255.00 million.
3) Contingent liability not provided for dues of Service Tax & Excise duty which have not been deposited for all
the years on account of disputes are given below:-
S L No. Nature of Statute Amount not paid/Involved in Period to Which it Forum Where
dispute relates dispute is
pending
395
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
1) Subsidiary Companies
2) Enterprises over which key management personal and their relatives have significant influence
2) North Eastern Educare & Research Pvt Ltd 10) Shajha Automations Pvt.Ltd
7) Sri Mahaluxmi Aerated Aqua Pvt.Ltd 15) Jai Prakash Khetan & Sons
8) Shyam Associates
Particulars ₹ in millions
M/s LOWER SEIJUSA HYDEL POWER COMPANY PVT LTD
As at 31st March, 2015 As at 31st March, 2014
Advances Given 0.01 0.01
Advances Return back 0.00 0.00
396
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
Balances with subsidiaries Companies:
Particulars ₹ in millions
M/s BRAHMPUTRA INFRA POWER PVT LTD
As at 31st March, 2015 As at 31st March, 2014
Advance 175.64 159.14
Investment 93.87 93.87
₹ in million
Particulars M/s LOWER SEJUISA HYDEL POWER COMPANY PVT LTD
As at 31st March, 2015 As at 31st March, 2014
Advance 0.04 0.03
Investment 0.10 0.10
b) Managerial Remuneration
c) Salary Paid
Nidhi Shah (Khetan) 0.00 0.00
Payal Khaeria (Khetan) 0.00 0.00
Deepjyoti Khetan 0.45 0.35
397
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
398
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
Advance salary:
Nanuram Prajapat 0.00 0.00
Investment Balance in enterprises:
Topline Finvest (P) Ltd. 1.10 1.10
VSG Trade Pvt Ltd 0.50 0.50
North Eastern Educare & Research Pvt Ltd 0.05 0.05
399
ANNEXURE 36A RESTATED SUMMARY CONSOLIDATED OF ACCOUNTING
RATIO
Rs in Million
S. no. Particulars
IGAAP
March 31, 2015 March 31, 2014
400
ANNEXURE 37A RESTATED SUMMARY CONSOLIDATED OF TAX SHELTER
Rs. In million
Particulars 31.3.2015 31.3.2014
Adjustment
Tax impact of permanent diff. due to:
401
FINANCIAL INFORMATION
To,
The Board of Directors
Neccon Power and Infra Limited,
Khetan Bhawan,
Seuni Ali, A T Road
Jorhat, 785001 -Assam
Dear Sirs,
402
Proposed Initial Public Offering of Equity Shares of the Company (the Issue) and has been
approved by the Board of Directors and initialed by us for identification purpose only.
3) We have examined such Restated Standalone Financial Information taking into consideration the
terms of reference and terms of engagement agreed upon with you in accordance with our
engagement letter dated April 26, 2018 in connection with the proposed issue of equity shares of
the Company: and the guidance note on reports in company prospectuses (revised 2016) issued by
ICAI (“The Guidance Report”).
4) These Restated Standalone Financial Information have been compiled by the Management for the
years ended March 31, 2018, March 31, 2017, and March 31, 2016 as Proforma Ind AS, by
making Ind AS adjustments to the Audited Standalone Financial Statements of the Company
prepared under generally accepted accounting principles (Indian GAAP), adjusted in conformity
with Ind AS.
5) The Restated Standalone Financial Information have been compiled by the Management for the
years ended March 31, 2015, March 31, 2014 from the audited financial statements of the
Company as at and for the years ended March 31, 2015 and 2014, prepared in accordance with
the accounting standards notified under the section 133 of theCompanies Act, 2013, ("Indian
GAAP") which have been approved by the Board of directors attheir meetings held on August 3,
2015 and May 27, 2014 respectively.
6) Audit of the financial statements for the fiscal year 2017, 2016, 2015 and 2014 was conducted by
previous statutory auditors, M/s Roy Atal & Atal Chartered Accountants. For the purpose of
restated Standalone financial statements, we have relied upon the financial statements audited by
M/s Roy Atal & Atal Chartered Accountants for the fiscals 2017, 2016, 2015 and 2014.
403
7) Based on our Examination in accordance with the requirements of Section 26 of Part I of Chapter
III of the Act read with, Rules 4 to 6 of Companies (Prospectus and Allotment of Securities)
Rules, 2014, the ICDR Regulations and the Guidance Note, we report that:
a) The Restated Standalone Statement of Assets and Liabilities of the Company, as at March 31,
2018, March 31, 2017and March 31, 2016 examined by us, as set out in Annexure 1 to this
report, have been arrived at after making adjustments and regrouping/ reclassifications as in
our opinion were appropriate and more fully described in Annexure 7.
b) The Restated Standalone Statement of Profit and Loss of the Company, as at March 31, 2018,
March 31, 2017and March 31, 2016 examined by us, as set out in Annexure 2 to this report,
have been arrived at after making adjustments and regrouping/reclassifications as in our
opinion were appropriate and more fully described in Annexure 8.
c) The Restated Standalone Statement of Cash Flows of the Company, as at March 31, 2018,
March 31, 2017, and March 31, 2016, examined by us, as set out in Annexure 3 to this report,
have been arrived at after making adjustments and regrouping/reclassifications as in our
opinion were appropriate and more fully described in Annexure 10.
d) The Restated Standalone Statement of Changes in Equity of the Company, as at March 31,
2018, March 31, 2017and March 31, 2016 examined by us, as set out in Annexure 4 to this
report, have been arrived at after making adjustments and regrouping/reclassifications as in
our opinion were appropriate and more fully described in Annexure 4.
e) Based on the above, and according to the information and explanations given to us, we further
report that the Restated Standalone Financial Information:
i) Have been made after incorporating adjustments for the changes in accounting
policies retrospectively in respective financial years to reflect the same accounting
treatment as per changed accounting policy for all the reporting periods
ii) have been made after incorporating adjustments for the material amounts in the
respective financial years to which they relate; and
404
iii) do not contain any extra-ordinary items that need to be disclosed separately.
8) We have also examined the Following Restated Standalone financial information of the Company
set out in the following Annexure prepared by the management for each of the years ended March
31, 2018, March 31, 2017, and March 31, 2016.:
a. Restated Summary Statement Of Standalone Assets And Liabilities Included In Annexure 1
b. Restated Summary Statement Of Standalone Profit And Loss Included In Annexure 2
c. Restated Summary Statement Of Standalone Cash Flows Included In Annexure 3
d. Restated Summary Statement Of Standalone Of Change In Equity Included In Annexure 4
e. Restated Summary Statement Of Standalone Significant Accounting Policies Included In Annexure 5
f. Restated Summary Statement Of Standalone Notes To Financial Information Included In Annexure 6
g. Restated Summary Statement Of Standalone Of Reconciliation Of Assets & Liabilities Included In Annexure 7
h. Restated Summary Statement Of Standalone Of Reconciliation Of Profit And Loss Included In Annexure 8
i. Restated Summary Statement Of Standalone Of Reconciliation Of Other Comprehensive Income Included In Annexure
9
j. Restated Summary Statement Of Standalone Of Reconciliation Of Cash Flows Included In Annexure 10
k. Restated Summary Of Standalone Of Property, Plant And Equipment Included In Annexure 11
l. Restated Summary Of Standalone Of Capital Work In Progress Included In Annexure 12
m. Restated Summary Of Standalone Of Investment Property Included In Annexure 13
n. Restated Summary Of Standalone Of Other Intangible Assets Included In Annexure 14
o. Restated Summary Of Standalone Of Investment In Subsidiaries Included In Annexure 15
p. Restated Summary Of Standalone Of Investment Included In Annexure 16
q. Restated Summary Of Standalone Of Loans Included In Annexure 17
r. Restated Summary Of Standalone Of Other Financial Assets Included In Annexure 18
s. Restated Summary Of Standalone Of Other Non-Current Assets Included In Annexure 19
t. Restated Summary Of Standalone Of Inventories Included In Annexure 20
u. Restated Summary Of Standalone Of Trade Receivables Included In Annexure 21
v. Restated Summary Of Standalone Of Cash And Bank Balances Included In Annexure 22
w. Restated Summary Of Standalone Of Other Bank Balances Included In Annexure 23
x. Restated Summary Of Standalone Of Other Current Assets Included In Annexure 24
y. Restated Summary Of Standalone Of Equity Share Capital Included In Annexure 25
z. Restated Summary Of Standalone Of Other Equity Included In Annexure 26
aa. Restated Summary Of Standalone Of Borrowings Included In Annexure 27
bb. Restated Summary Of Standalone Of Other Financial Liabilities Included In Annexure 28
cc. Restated Summary Of Standalone Of Provisions Included In Annexure 29
dd. Restated Summary Of Standalone Of Deferred Tax Liabilities (Net) Included In Annexure 30
ee. Restated Summary Of Standalone Of Trade Payables Included In Annexure 31
ff. Restated Summary Of Standalone Of Other Current Liabilities Included In Annexure 32
gg. Restated Summary Of Standalone Of Revenue From Operations Included In Annexure 33
hh. Restated Summary Of Standalone Of Other Income Included In Annexure 34
ii. Restated Summary Of Standalone Of Cost Of Material Consumed Included In Annexure 35
jj. Restated Summary Of Standalone Of Purchase Of Stock-In-Trade Included In Annexure 36
405
kk. Restated Summary Of Standalone Of Changes In Inventories Of Fg, Wip & Stock-In-Trade Included In Annexure 37
ll. Restated Summary Of Standalone Of Employee Benefits Expenses Included In Annexure 38
mm. Restated Summary Of Standalone Of Finance Costs Included In Annexure 39
nn. Restated Summary Of Standalone Of Depreciation And Amortization Expenses Included In Annexure 40
oo. Restated Summary Of Standalone Of Other Expenses Included In Annexure 41
pp. Restated Summary Of Standalone Of Exceptional Items Included In Annexure 42
qq. Restated Summary Of Standalone Of Tax Expenses Included In Annexure 43
rr. Restated Summary Of Standalone Of Earning Per Equity Share Basic And Diluted Included In Annexure 44
ss. Restated Summary Of Standalone Of Capitalization Statement Included In Annexure 45
tt. Restated Summary Of Standalone Of Significant Transactions With Related Parties Included In Annexure 46
uu. Restated Summary Of Standalone Of Contingent Liabilities. Included In Annexure 47
vv. Restated Summary Of Standalone Of Accounting Ratios. Included In Annexure 48
ww. Restated Summary Of Standalone Of Segment Report. Included In Annexure 49
xx. Restated Summary Of Standalone Of Finance Lease. Included In Annexure 50
yy. Restated Summary Of Standalone Of Details Of Discontinued Operations. Included In Annexure 51
zz. Restated Summary Of Standalone Additional Information Pursuant To The Part II Of Schedule III Of The Companies
Act, 2013. Included In Annexure 52
aaa. Restated Summary Of Standalone Tax Shelter Included In Annexure 53
According to the information and explanations given to us, in our opinion, the Restated
Standalone Financial Information above accompanying this report, read with Significant
Accounting Policies disclosed in Annexure 5, are prepared after making adjustments and
regroupings as considered appropriate and have been prepared in accordance with Section 26 of
Part I of Chapter III of the Companies Act, 2013 read with Rules 4 to 6 of Companies (Prospectus
and Allotment of Securities) Rules, 2014, ICDR Regulations and the Guidance Note.
9) We have also examined following the annexure of Restated Financial information of the
Company set out in the annexure prepared by the management for the years ended March 31,
2015 and 2014.
a. Restated Summary Statement Of Standalone Assets And Liabilities Included In Annexure 1A
b. Restated Summary Statement Of Standalone Profit And Loss Included In Annexure 2A
c. Restated Summary Statement Of Standalone Cash Flows Included In Annexure 3A
d. Restated Summary Statement Of Significant Accounting Policies Included In Annexure 4A
e. Restated Summary Statement Of Adjustments To Audited Standalone Financial Statements
Included In Annexure 5A
f. Restated Summary Statement Of Notes To Financial Statements Included In Annexure 6A
g. Restated Summary Statement Of Share Capital Included In Annexure 7A
h. Restated Summary Statement Of Reserves And Surplus Included In Annexure 8A
i. Restated Summary Statement Of Long Term Borrowings Included In Annexure 9A
j. Restated Summary Statement Of Deferred Tax Liability (Net) Included In Annexure 10A
k. Restated Summary Statement Of Short Term Borrowing Included In Annexure 11A
406
l. Restated Summary Statement Of Trade Payable Included In Annexure 12A
m. Restated Summary Statement Of Other Current Liabilities Included In Annexure 13A
n. Restated Summary Statement Of Short Term Provision Included In Annexure 14A
o. Restated Summary Statement Of Non Current Investment Included In Annexure 15A
p. Restated Summary Statement Of Long Term Loans And Advances Included In Annexure 16A
q. Restated Summary Statement Of Inventories Included In Annexure 17A
r. Restated Summary Statement Of Trade Receivable Included In Annexure 18A
s. Restated Summary Statement Of Cash & Bank Balance Included In Annexure 19A
t. Restated Summary Statement Of Short Term Loans & Advances Included In Annexure 20A
u. Restated Summary Statement Of Other Current Assets Included In Annexure 21A
v. Restated Summary Statement Of Revenue From Operation Included In Annexure 22A
w. Restated Summary Statement Of Other Income Included In Annexure 23A
x. Restated Summary Statement Of Cost Of Material Consumed Included In Annexure 24A
y. Restated Summary Statement Of Purchase Of Stock-In-Trade Included In Annexure 25A
z. Restated Summary Statement Of Changes In Inventories Of Finished Goods, Work-In-Progress
And Stock In Trade Included In Annexure 26A
aa. Restated Summary Statement Of Employees Benefits Expenses Included In Annexure 27A
bb. Restated Summary Statement Of Finance Costs Included In Annexure 28A
cc. Restated Summary Statement Of Other Expenses Included In Annexure 29A
dd. Restated Summary Statement Of Exceptional Items Included In Annexure 30A
ee. Restated Summary Statement Of Earning Per Share Included In Annexure 31A
ff. Restated Summary Statement Of Fixed Assets Included In Annexure 32A
gg. Restated Summary Statement Of Business Segment Included In Annexure 33A
hh. Restated Summary Statement Of Contingent Liability Included In Annexure 34A
ii. Restated Summary Statement Of Related Party Disclosers Included In Annexure 35A
jj. Restated Summary Statement of Accounting Ratio Included In Annexure 36A
kk. Restated Summary Statement of Tax shelter Included In Annexure 37A
According to the information and explanations given to us, in our opinion, the Restated Financial
information and the above restated financial information contained in Annexure 1A to 35A
accompanying this report read with Summary of Significant Accounting Policies as disclosed in
Annexure 4A are prepared after making adjustments and regroupings/reclassifications as
considered appropriate.
10) This report should not in any way be construed as a reissuance or re-dating of any of the previous
audit reports issued by us, nor should this report be construed as a new opinion on any of the
financial statements referred to herein.
11) We have no responsibility to update our report for events and circumstances occurring after the
date of the report.
407
Restriction on Use
12) Our report is intended solely for use of the management for inclusion in the offer document to be
filed with Securities and Exchange Board of India, Registrar of Companies, Mumbai and
concerned stock exchanges in connection with the proposed issue of equity shares of the
Company. Our report should not be used, referred to or distributed for any other purpose except
with our prior consent in writing.
Place: - Mumbai
Dated: 19th September 2018
408
ANNEXURE-1 RESTATED SUMMARY STATEMENT OF STANDALONE ASSETS AND LIABILITIES
( Rs. In Millions)
PARTICULARS AS AT MARCH 31, AS AT MARCH 31, AS AT MARCH 31, 2016
2018 (Proforma Ind 2017 (Proforma Ind As) (Proforma Ind As)
As)
ASSETS
NON CURRENT ASSETS
EQUITY ANDLIABILITIES
EQUITY
EQUITY SHARE CAPITAL 380.91 380.91 247.80
OTHER EQUITY 1,511.37 1,330.55 1,093.79
LIABILITIES
NON CURRENT LIABILITIES
FINANCIAL LIABILITIES
BORROWINGS 8.15 23.77 116.32
OTHER FINANCIAL LIABILITIES 1.76 - -
PROVISIONS 17.93 11.09 6.72
DEFERRED TAX LIABILITIES (NET) 5.74 8.14 10.02
OTHER NON-CURRENT LIABILITIES - - -
CURRENT LIABILITIES
FINANCIAL LIABILITIES
BORROWINGS- 804.09 899.89 679.31
TRADE PAYABLES 1,393.41 1,221.17 1,084.46
OTHER FINANCIAL LIABILITIES- 50.77 45.31 13.95
OTHER CURRENT LIABILITIES 276.78 448.59 6.92
PROVISIONS- 1.15 0.16 0.10
CURRENT TAX LIABILITIES (NET) 13.46 4.97 1.64
TOTAL EQUITY AND LIABILITIES 4,465.53 4,374.54 3,261.02
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING
POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN
ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN
ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
409
ANNEXURE-2 RESTATED SUMMARY STATEMENT OF STANDALONE PROFIT AND LOSS
( Rs. In Million)
PARTICULARS For the Period For the Period For the Period
Ending March Ending March Ending March 31,
31, 2018 31, 2017 2016 (Proforma Ind
(Proforma Ind (Proforma Ind As)
As) As)
CONTINUING OPERATIONS
REVENUE
-REVENUE FROM OPERATIONS 4,295.25 3,891.37 3,812.55
-OTHER INCOME 37.37 32.03 18.95
TOTAL INCOME 4,332.62 3,923.41 3,831.50
EXPENDITURE
-Cost of material consumed 2,951.74 2,710.07 2,987.06
-Purchase of stock-in-trade - - 21.28
-Changes in inventories of FG, WIP & Stock-in-trade 32.06 (17.70) (12.05)
- Excise duty 42.84 119.89 138.45
-Employee benefits expenses 152.67 109.54 82.43
-Finance costs 123.11 119.96 103.10
-Depreciation and amortization expenses 22.58 18.05 18.32
-Other expenses 725.61 668.40 333.57
TOTAL EXPENDITURE 4,050.62 3,728.21 3,672.15
PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS
282.00 195.20 159.35
AND TAX
EXCEPTIONAL ITEMS - - -
TAX EXPENSES
- CURRENT TAX 101.84 71.55 59.05
- DEFERRED TAX (NET) (2.40) (1.87) 10.02
-WEALTH TAX PROVISION - - (0.04)
-EARLIER YEARS INCOME TAX 0.75 0.88 (0.72)
PROFIT/(LOSS) FOR THE YEAR 181.81 124.63 91.04
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED STANDALONE
FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO
AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
410
ANNEXURE-3 RESTATED SUMMARY STATEMENT OF STANDALONE CASH FLOWS
( Rs. In Million)
PARTICULARS AS AT MARCH AS AT MARCH AS AT MARCH 31,
31, 2018 (Proforma 31, 2017 2016 (Proforma Ind
Ind As) (Proforma Ind As) As)
Increase (-) Decrease (+) in Property, Plant and Equipment (80.15) (38.02) (34.26)
Increase (+) / Decrease (-) in Long Term Borrowings (15.62) (92.54) 1.50
Increase (+) / Decrease (-) in Short Term Borrowings (95.80) 220.58 53.19
Dividend and Tax thereon paid - - -
Interest Expenditure (123.11) (119.96) (103.10)
NET CASH FROM FINANCING ACTIVITIES (234.53) 254.89 (48.41)
NET DECREASE/(INCREASE) IN CASH AND CASH
(3.10) (83.38) 11.15
EQUIVALENT
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
105.78 189.15 178.00
YEAR
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 102.68 105.78 189.15
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
APPEARING IN ANNEXURE 5, NOTES TO RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6
AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
411
ANNEXURE-4 RESTATED SUMMARY STATEMENT OF STANDALONE OF CHANGE IN EQUITY
( Rs. In Million)
Total -Equity
Equity Share Other Equity
Particulars Items of
Capital attributable
Other
Reserves and Surplus Comprehensiv to Equity
e Income
Capital
Security General Retained Shareholder
Redemption
Premium
reserve reserve earnings
Balance at March 31, 2016 (Proforma Ind As) 247.80 - 376.88 15.61 701.39 (0.09) 1,341.59
Balance at March 31, 2017 (Proforma Ind As) 380.91 - 490.59 15.61 826.02 (1.68) 1,711.46
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE
5, NOTES TO RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED
STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
412
ANNEXURE 5- RESTATED SUMMARY STATEMENT OF STANDALONE SIGNIFICANT
ACCOUNTING POLICIES
Company Overview
NECCON Power and Infra Limited formerly known as North Eastern Cables & Conductors Private
Limited(“the company”) is a company domiciled in India, incorporated under the company Act, 1956
with the Registrar of Companies - Assam Meghalaya, Manipur, Tripura, Mizoram, Nagaland &
Arunachal Pradesh - Shillong. The Company include carrying on business for Manufacturing of Electrical
Conductor, Generation of Power and Commissioning /Installation & Renovation of Power Sub-Station for
all types of EPC/Trunkey Project Works.
The Company has adopted all applicable Ind AS and the adoption was carried out in accordance
with Ind AS 101 First time adoption of Indian Accounting Standards. The transition was carried
out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was
the “Previous GAAP”.
In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company
has presented a reconciliation from the presentation of Restated Financial Information under
Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006
(“Indian GAAP”) to Ind AS of Restated Shareholders’ equity as at March 31, 2016, 2017, 2018.
The Restated Financial Information have been prepared by the management in connection with
the proposed listing of equity shares of the Company by way of a fresh issue of equity shares by
the company through the offer document, to be filed by the Company with the Securities and
Exchange Board of India, Registrar of Companies, Mumbai and the concerned Stock Exchange in
accordance with the requirements of:
Section 26 read with applicable provisions within Rules 4 to 6 of the Companies
(Prospectus and Allotment of Securities) Rules, 2014 to the Companies Act, 2013; and
The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by
the Securities and Exchange Board of India ("SEBI") on August 26, 2009, as amended to
date in pursuance of provisions of Securities and Exchange Board of India Act, 1992 read
along with SEBI circular No. SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016
(together referred to as the “SEBI regulations”).
Guidance note on reports in Company prospectuses issued by the Institute of Chartered
Accountants of India.
413
2. Basis of Preparation
The Restated Standalone financial statements have been prepared on accrual basis at historical
cost, except for the certain assets and liabilities which have been measured at fair value/
amortized cost:
3. Revenue Recognition
Revenue is primarily derived from sale of Conductor, Power and related Service from EPC
Turnkey Project.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured.
Revenue from sale of manufactured and traded goods is recognised when the goods
are delivered and titles have been passed, provided all the following conditions are
satisfied:
significant risks and rewards of ownership of the goods are transferred to the buyer;
the Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the good sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the
company; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
B. Rendering of services:
Revenue from erection services is recognised when the outcome of a transaction can
be estimated reliably by reference to the stage of completion of the transaction. The
outcome of a transaction can be estimated reliably when all the following conditions
are satisfied:
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the
Company;
the stage of completion of the transaction at the end of the reporting period can be measured
reliably; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
414
The costs incurred on erection activities till such time the outcome of the projects can be
estimated reliably and all the aforesaid conditions are fulfilled are shown as “Inventories” and are
carried as “Erection WIP”.
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or
minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as
due from customers. For contracts where progress billing exceeds the aggregate of contract costs
incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the
surplus is shown as the amount due to customers.
Amounts received before the related work is performed are disclosed in the Balance Sheet as a
liability towards advance received. Amounts billed for work performed but yet to be paid by the
customer are disclosed in the Balance Sheet as trade receivables. The amount of retention money
held by the customers is disclosed as part of other-current-assets and is reclassified as trade
receivables when it becomes due for payment.
3.2 Other income:
Interest income is recognized on accrual basis.
Other items of income are accounted as and when the right to receive such income arises and
it is probable that the economic benefits will flow to the Company and the amount of income
can be measured reliably.
4. Property, Plant and Equipment.
Property, Plant and Equipment are stated at cost of acquisition i.e., cost of purchase, inclusive of
freight, erection and duties and taxes and other incidental expenditure, net of accumulated
depreciation and accumulated impairment losses, if any. Expenditure incurred subsequently
relating to property, plant & equipment is capitalised only when it is probable that future
economic benefits associated with these will flow to the company and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the Statement of Profit and
Loss during the period in which they are incurred.
Gains or losses arising on retirement or disposal of Property, Plant and Equipment are recognised
in the Statement of Profit and Loss.
Property, Plant and Equipment which are not ready for intended use as on the date of Balance
Sheet are disclosed as “Capital work-in-progress”. Assets which are not ready for the intended
use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Depreciation on property, plant and equipment are provided on WDV method over their
estimated useful life determined by management. Depreciation method, useful lives and residual
values are reviewed at the end of each financial year. The useful lives of assets are as prescribed
in part C of schedule II of the Companies Act, 2013. In respect of additions to/deductions from
the assets during the reporting period, depreciation is charged on pro rata basis.
415
Freehold land is not depreciated.
The residual values, useful lives and method of depreciation of of Property, plant and equipment
is reviewed at each financial year end and adjusted prospectively, if appropriate.
In respect of buildings on lease hold land, depreciation is charged over the period of lease of land
or the useful life stated above for buildings on freehold land, whichever is lower.
The Company has elected to use the exemption available under Ind AS 101 to continue the
carrying value for all of its Property, Plant and Equipment as recognised in the financial
statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that
as its deemed cost as at the date of transition (1st April 2015).
5. Intangible Assets
Intangible assets acquired/ developed are measured on recognition at cost less accumulated
amortisation and impairment losses, if any. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the statement of profit or loss when the asset is
derecognised.
The Company has elected to use the exemption available under Ind AS 101 to continue the
carrying value for all of Intangible assets as recognised in the financial statements as at the date
of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at
the date of transition (1st April 2015).
6. Borrowing Cost
Borrowing cost includes interest, amortisation of ancillary cost incurred in connection with the
arrangement of borrowings and exchange difference arising from foreign currency borrowings to
the extent they are regarded as on adjustment to the interest cost. Borrowing cost that are
attributable to the acquisition or construction of qualifying assets are capitalised as part of the
cost of such assets. Any income earned on the temporary investment of those borrowings are is
deducted from the borrowing costs incurred. A qualifying asset is one that takes necessarily
substantial period of time to get ready for its intended use. All other borrowing costs are charged
to Statement of Profit & Loss Account.
7. Investment
All equity investments within the scope of Ind-AS 109 are required to be measured at fair value.
416
8. Investment in Property
Investment property is property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, use in production or supply of goods or
services or for administrative purposes. Investment properties are stated at cost net of
accumulated depreciation and accumulated impairment losses, if any.
Any gain or loss on disposal of investment property calculated as the difference between the net
proceeds from disposal and the carrying amount of the Investment Property is recognised in
Statement of Profit and Loss.
b. Non-monetary Items
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions.
417
12. Investment in Subsidiaries, Joint Ventures and Associates
Investments in equity shares of Subsidiaries, Joint Ventures and Associates are recorded at cost
and reviewed for impairment at each reporting date.
13. Lease
Lease Agreements are classified as finance leases, if substantially all the risks and rewards
incidental to ownership of the leased asset is transferred to the lessee. Lease Agreements which
are not classified as finance leases are considered as operating lease.
14. Inventories
Items of inventories comprising of
a. un-processed are measured at lower of cost or net realisable value after providing for
obsolescence, if any.
b. Processed are measured at net realisable value after reducing normal gross profit margin
in ordinary course of business.
Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in
bringing them to their respective present location and condition netted to discount received. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated
cost of completion and estimated cost necessary to make sale.
b. Post-employment benefits
Defined Contribution plan:
Post- employment benefits are recognised as an expense in the Statement of Profit and
Loss as the related service is provided
The calculation of defined benefit obligation is performed at each reporting period end by
a qualified actuary using the Projected Unit Credit Method. When the calculation results
in a potential asset for the Company, the recognised asset is limited to the present value
of the economic benefits available in the form of any future refunds from the plan or
reductions in future contributions to the plan.
The current service cost of the defined benefit plan recognized in the Statement of Profit
and Loss as part of ‘Employee Benefit Expense’, reflects the increase in the defined
benefit obligation resulting employee service in the current year, benefit changes,
curtailments and settlements. Past service costs are recognized immediately in the
418
Statement of Profit and Loss. The net interest is calculated by applying the discount rate
to the net balance of the defined benefit obligation and the fair value of plan assets. This
net interest is included in ‘Finance cost’ in the Statement of Profit and Loss. The
classification of the company’s net obligation into current and non- current is as per the
actuarial valuation report
Re-measurements which comprise of actuarial gains and losses, the return on plan assets
(excluding amounts included in the net interest on the net defined benefit liability (asset))
and the effect of the asset ceiling (if any, excluding amounts included in the net interest
on the net defined benefit liability (asset)), are recognised in other comprehensive
income.
Minimum alternate tax (MAT) paid in accordance with the tax laws which gives arises in
the Balance sheet if there is convincing evidence that the Company will pay normal tax
after the tax holiday period and the resultant assets can be measured reliable. The
company offsets on a year on year basis the current tax assets and liability, where it has a
legally enforceable right and where it intends to settle such assets and liability on net
basis.
Current tax items are recognised in correlation to the underlying transaction either in the
Statement of Profit and Loss, other comprehensive income or directly in equity.
b. Deferred Tax:
Deferred tax is provided using the Balance Sheet method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax liabilities are recognised for all
taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
419
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates and tax
laws that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in the
Statement of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.
All assets other than inventories, investments, and deferred tax assets, are reviewed for
impairment, wherever events or changes in circumstance indicate that the carrying amount may
not be recoverable. Assets whose carrying value exceeds their recoverable amount are written
down to the recoverable amount
Contingent Liabilities are disclosed when there is a possible obligation a possible obligation
arising from past events, the existence of which will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent liabilities are not provided for in the accounts but disclosed by way of notes, if any.
Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
420
payables which are initially measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities
that are not at fair value through profit and loss are added or deducted to/from the fair
value on initial recognition.
b. Subsequent Measurement
Subsequent measurement is determined with reference to the classification of the
respective financial assets. Based on the business model for managing the financial assets
and the contractual cash flow characteristics of the financial asset, the Company classifies
financial assets as subsequently measured at amortized cost, fair value through other
comprehensive income or fair value through profit and loss.
Financial Assets:
Financial assets are subsequently measured at amortised cost if these are held within a
business model whose objective is to hold the assets in order to collect contractual cash
flows and the contractual terms of the financial assets give rise on specific dates to cash
flows that are solely payments of principal and interest (SPPI) on the principal amount
outstanding using the Effective Interest Rate (EIR) method. The EIR amortisation is
included in finance income in the Statement of Profit and Loss. The losses arising from
impairment are recognised in the Statement of Profit and Loss.
Financial assets are subsequently measured at fair value through Other Comprehensive
Income if these are held within a business model whose objective is to hold the assets in
order to collect contractual cash flows and selling financial assets and the contractual
terms of the financial assets give rise on specific dates to cash flows that are SPPI on the
principal amount outstanding. After initial measurement, these assets are subsequently
measured at fair value. Interest income under EIR method, foreign exchange gains and
losses and impairment losses are recognised in the Statement of Profit and Loss. Other
net gains and losses are recognised in other comprehensive Income
All other financial assets are measured at fair value through profit or loss.
Financial liabilities:
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
All other financial liabilities are subsequently measured at amortised cost using EIR
method. Gains and losses are recognised in Statement of Profit and Loss when the
liabilities are derecognised as well as through the EIR amortisation process.
c. De-Recognition
A financial asset is de-recognised when:
the rights to receive cash flows from the asset have expired, or
the Company has transferred substantially all the risks and rewards of the asset,
or the Company has neither transferred nor retained substantially all the risks and
rewards of the assets, but has transferred control of the asset.
421
A financial liability or a part of financial liability is de-recognised from the Balance Sheet
when the obligation specified in the contract is discharged, cancelled or expired. When an
existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of the original liability and the
recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit
or loss.
422
ANNEXURE 6- RESTATED SUMMARY STATEMENT OF STANDALONE NOTES TO
FINANCIAL INFORMATION
423
ANNEXURE-7 RESTATED SUMMARY STATEMENT OF STANDALONE OF RECONCILIATION OF ASSETS & LIABILITIES
( Rs. In Million)
AS AT 31.03.2018 (Proforma Ind As) AS AT 31.03.2017 (Proforma Ind As) AS AT 31.03.2016 (Proforma Ind As)
ASSETS
Non-Current Assets
Property, Plant And Equipment A 229.63 - - 229.63 189.56 - (17.50) 172.06 156.91 - (4.82) 152.10
Capital Work In Progress 140.97 - - 140.97 121.78 - (10.01) 111.77 59.85 - (10.01) 49.85
Investment property - - 22.34 22.34 - - 17.50 17.50 - - 4.82 4.82
Other Intangible Assets - - - - - - - - - - - -
Investments in subsidiaries - - 93.97 93.97 - - 93.97 93.97 - - 93.97 93.97
Financial Assets - - - - - - - - - - - -
Investments B 151.96 - (116.31) 35.65 113.12 - (111.47) 1.65 95.75 (0.11) (93.97) 1.68
Trade Receivables C - - - - - - - - - - - -
Loans D 293.83 - (293.83) - 227.11 - (227.11) - 197.25 - (197.25) -
Other financial assets E - - 492.75 492.75 - - 498.10 498.10 - - 341.48 341.48
Deferred tax assets (Net) - - - - - - - - - - - -
Other non-current assets F 209.57 - (197.39) 12.18 - - 12.97 12.97 - - 12.97 12.97
- - - - - - - - - - -
Current Assets
Inventories 397.72 - - 397.72 508.61 - - 508.61 380.72 - - 380.72
Financial Assets - - - - - - - - - - - -
Investments G - - - - - - - - - - - -
Trade receivables 1,428.24 - - 1,428.24 2,615.54 - (1,330.42) 1,285.12 1,787.69 - (1,105.55) 682.14
Cash and cash equivalents H 569.86 - (467.18) 102.68 529.09 - (423.32) 105.78 499.95 - (310.80) 189.15
Other bank balances I - - 257.61 257.61 - - 82.78 82.78 - - 106.20 106.20
Loans J 177.04 - (177.04) - 107.01 - (107.01) - 119.69 - (119.69) -
Other financial assets K - - 1,151.76 1,151.76 - - 1,334.06 1,334.06 - - 1,109.18 1,109.18
Current Tax Assets (Net) - - - - - - - - - - - -
Other current assets L 1,164.66 - (1,064.63) 100.03 33.32 - 116.84 150.16 20.72 - 116.06 136.78
Equity
Equity Share capital 380.91 - - 380.91 380.91 - - 380.91 247.80 - - 247.80
Other Equity M 1,511.78 (0.41) - 1,511.37 1,341.79 (11.24) - 1,330.55 1,100.72 (6.82) (0.11) 1,093.79
Liabilities
Non-current liabilities
Financial Liabilities
Borrowings 8.15 - - 8.15 23.77 - - 23.77 116.32 - - 116.32
Other financial liabilities - - 1.76 1.76 - - - - - - - -
Provisions N 17.52 0.41 - 17.93 - 11.09 - 11.09 - 6.72 - 6.72
Deferred tax liabilities (Net) 5.74 - - 5.74 8.14 - - 8.14 10.02 - - 10.02
Other non-current liabilities - - - - - - - - - - - -
Current liabilities
Financial Liabilities
Borrowings 804.09 - - 804.09 899.89 - - 899.89 679.31 - - 679.31
Trade payables O 1,393.41 - - 1,393.41 1,248.35 - (27.18) 1,221.17 1,088.78 - (4.32) 1,084.46
Other financial liabilities P - - 50.77 50.77 - - 45.31 45.31 - - 13.95 13.95
Other current liabilities Q 326.79 - (50.01) 276.78 466.67 - (18.08) 448.59 15.21 - (8.29) 6.92
Provisions R 15.37 - (14.22) 1.15 71.60 0.16 (71.60) 0.16 60.39 0.10 (60.39) 0.10
Current tax liabilities (net) S - - 13.46 13.46 - - 4.97 4.97 - - 1.64 1.64
Total Liabilities 4,463.76 4,465.52 4,441.12 4,374.55 3,318.54 - 3,261.02
424
ANNEXURE-7 RESTATED SUMMARY STATEMENT OF STANDALONE OF RECONCILIATION OF ASSETS & LIABILITIES
EXPLANATIONS FOR RECONCILIATION OF BALANCE SHEET AS PREVIOUS YEAR REPORTED UNDER IGAAP TO IND AS
IND AS ADJUSTMENTS REFER TO EXPLANATIONS FOR RECONCILIATION OF BALANCE SHEET AS PREVIOUS YEAR REPORTED UNDER IGAAP TO IND AS:
B. INVESTMENTS
Investment in subsidiaries is regrouped. Also Ind AS transition effect has made.
C. LOANS
Regrouping is done for other financial assets and other non current assets.
I. LOANS
Loan-current assets is regrouped to other current assets
L. OTHER EQUITY
Provision for gratuity effect till time.
M. PROVISIONS
Provision for gratuity is made.
N. TRADE PAYABLES
Salary payable is regrouped to respective accounts
Q. Provisions
Provision for gratuity is made. Regrouping is done for Income Tax, Wealth Tax and liabilities for unpaid expenses.
425
ANNEXURE-8 RESTATED SUMMARY STATEMENT OF STANDALONE OF RECONCILIATION OF PROFIT AND LOSS
(₹ in millions)
For the Period Ending 31.03.2018 (Proforma Ind As) For the Period Ending 31.03.2017 (Proforma Ind As) For the Period Ending 31.03.2016 (Proforma Ind As)
NOTE
PARTICULARS
NO. Adjustment Adjustme Regrouped
Regrouped as Amount as Adjustment Regrouped as Amount as Amount as per Ind
IGAAP as per Ind IGAAP IGAAP nt as per as per Ind
per Ind AS per Ind AS as per Ind AS per Ind AS per Ind AS AS
AS Ind AS AS
REVENUE
Revenue from Operation A 4,252.40 - 42.84 4,295.25 3,771.48 - 119.89 3,891.37 3,674.10 - 138.45 3,812.55
Other income B 37.37 - - 37.37 29.96 - 2.07 32.03 23.62 - (4.67) 18.95
TOTAL REVENUE 4,289.77 4,332.62 3,801.44 - 3,923.40 3,697.72 - - 3,831.50
Cost of material consumed C 2,951.74 - - 2,951.74 2,951.74 - 2.07 2,951.74 2,991.89 - (4.83) 2,987.06
Purchase of stock-in-trade - - - - - - - - 21.28 - - 21.28
Changes in inventories of FG, WIP &
32.06 - - 32.06 (17.70) - - (17.70) (12.05) - - (12.05)
Stock-in-trade
Excise duty D - - 42.84 42.84 - - 119.89 119.89 - - 138.45 138.45
Employee benefits expenses E 154.06 (1.39) - 152.67 107.23 2.31 - 109.54 80.68 1.74 - 82.43
Finance costs F 122.31 0.80 - 123.11 119.66 0.53 (0.23) 119.96 102.83 0.36 (0.09) 103.10
Depreciation and amortization expenses 22.58 - - 22.58 18.05 - - 18.05 18.32 - - 18.32
Other expenses G 724.97 - 0.65 725.61 668.17 - 0.23 668.40 333.48 - 0.09 333.57
Exceptional items H 0.65 - (0.65) - (0.11) 0.11 - - 0.16 - (0.16) -
TOTAL EXPENDITURE 4,008.37 4,050.61 3,847.04 3,969.88 3,536.59 3,672.15
PROFIT BEFORE TAX 281.40 282.01 (45.60) (46.48) 161.13 159.35
426
EXPLANATIONS FOR RECONCILIATION OF STATEMENT OF PROFIT & LOSS AS PREVIOUS YEAR REPORTED UNDER IGAAP TO IND AS
1. IND AS ADJUSTMENTS:
A. REVENUE FROM OPERATIONS
i. Revenue is shown on gross value.
B. OTHER INCOME
i. Exchange gain/loss and profit/ loss on sale of fixed assets is regrouped.
C. COST OF MATERIAL CONSUMED
i. Exchange gain/loss is regrouped.
D. EXCISE DUTY
i. Revenue is shown on gross value and excise duty is separately charged in statement of profit and loss account.
E. EMPLOYEE BENEFIT EXPENSES
i. Gratuity provisioning is made, For rest only Intra grouping is done.
ii. Interest cost on DBO is included in finance cost and remeasurement of DBO is included in other comprehensive income as per Ind
AS requirement. Also past service cost which arise because of increase in gratuity celling limit from 10 lakhs to 20 lakhs is also charged as
F. FINANCE COST
i. Interest on statutory dues are considered as other expenses. Also interest cost on DBO is included in finance cost.
ii. Interest cost on DBO is included in finance cost as per Ind AS requirements
G. OTHER EXPENSES
i. Regrouping is done for excise duty and bank charges.
ii. Interest on statutory dues are considered as other expenses.
H. EXCEPTIONAL ITEMS
i. Regrouping is done for profit/ loss on sale of fixed assets.
ii. Profit/ loss on sale of fixed assets are treated in other income
iii. Ind as adjustment is done on transition phase effect on sale.
iv. Regrouping is done for profit on sale of fixed assets and OCI adjustment is done on sale of fixed assets
427
ANNEXURE-9 RESTATED SUMMARY STATEMENT OF STANDALONE OF RECONCILIATION OF OTHER COMPREHENSIVE INCOME
(₹ in millions)
For the Year Ended 31.03.2018 (Proforma Ind As) For the Year Ended 31.03.2017 (Proforma Ind As) For the Year Ended 31.03.2016 (Proforma Ind As)
Particulars Amount as Adjustment as Regrouped as per Amount as per Amount as Adjustment as Regrouped as Amount as Amount as Adjustment as Regrouped as Amount as per
per IGAAP per Ind AS Ind AS Ind AS per IGAAP per Ind AS per Ind AS per Ind AS per IGAAP per Ind AS per Ind AS Ind AS
428
ANNEXURE-10 RESTATED SUMMARY STATEMENT OF STANDALONE OF RECONCILIATION OF CASH FLOWS
(Rs. In millions)
Particulars For The Year Ended 31.03.2018 (Proforma Ind As) AS AT 31.03.2017 (Proforma Ind As) AS AT 31.03.2016 (Proforma Ind As)
NOTE: IGAAP FIGURES HAVE BEEN RECLASSIFIED AND RESTATED BY ADJUSTING ITS CORRESPONDING LIABILITIES AND NON CASH ITEMS TO CONFORM TO IND AS
PRESENTATION.
429
ANNEXURE-11 RESTATED SUMMARY OF STANDALONE OF PROPERTY, PLANT AND EQUIPMENT
(Rs. in millions)
Following are the Change in carrying value of Property, plant and equipment for the year ended 31-March-2018 (Proforma Ind As)
SL. No. Assets Gross Block Depreciation/Amortisation Net Block
As at Additions Disposal /Sales As at As at For the Elimination on As at As at As at
March 31, March 31, March 31, Year disposal March 31, March 31, 2018 March 31,
2017 2018 2017 2018 2017
A TANGIBLE ASSETS
(Own Assets)
1) Factory Land
Development 14.17 - - 14.17 - - - - 14.17 14.17
2) Land at Seuni Ali
Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali
Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC
Kundli 33.91 1.17 - 35.08 - - - - 35.08 33.91
5) Land at Manoharpur
Ind. 2.73 - - 2.73 - - - - 2.73 2.73
6) Land at Greentech
Mega Food Park 2.70 1.01 - 3.71 - 0.04 - 0.04 3.67 2.70
2 Building
1) Building
(Factory,Stores,&
Office) 24.13 52.37 - 76.50 4.22 2.61 - 6.83 69.67 19.91
2) Jaipur Ress. House 0.31 - - 0.31 0.03 0.01 - 0.04 0.27 0.28
3) Jaipur Office Purch.
0.31 - - 0.31 0.03 0.01 - 0.04 0.27 0.28
4) Staff Quarter Neemati
0.08 - - 0.08 - - - - 0.07 0.07
5) MD House
Renovation 7.32 - - 7.32 0.57 0.33 - 0.90 6.42 6.75
6) Ghy.Office Building 7.82 - - 7.82 0.11 - - 0.11 7.71 7.71
3 Air Condition 1.13 0.28 - 1.41 0.24 0.30 - 0.54 0.88 0.89
4 Invertor & Battery 0.15 0.08 - 0.23 0.03 0.03 - 0.06 0.17 0.11
5 CC TV & Cemera 0.12 0.13 - 0.25 0.05 0.04 - 0.09 0.16 0.07
11 Plant & Machinery
(Mfg.& Cont.Div) 27.20 11.69 5.88 33.01 18.64 4.63 2.62 20.65 12.36 8.56
12 Plant & Machinery (WP
) 45.76 - - 45.76 - 4.38 - 4.38 41.37 45.76
13 P&M Generator Set 1.19 0.02 - 1.21 0.21 0.18 - 0.39 0.82 0.98
14 Office Equipment 1.36 0.91 - 2.27 0.26 0.67 - 0.93 1.34 1.10
15 Computer &
Accessories 2.93 1.21 - 4.14 0.86 1.78 - 2.63 1.51 2.08
16 Electrical & Installation
0.58 1.15 - 1.73 0.26 0.13 - 0.40 1.33 0.31
17 Tools & Implements
430
ANNEXURE-11 RESTATED SUMMARY OF STANDALONE OF PROPERTY, PLANT AND EQUIPMENT
(Rs. in millions)
Following are the Change in carrying value of Property, plant and equipment for the year ended 31-March-2017 (Proforma Ind As)
SL. No. Assets Gross Carrying Amount Depreciation/Amortisation Net Block
As at Additions Disposal /Sales As at As at For the Elimination on As at As at As at
March 31, March 31, March 31, Year disposal March 31, March 31, 2017 March 31,
2016 2017 2016 2017 2016
Freehold Assets
1 Land & Development
1) Factory Land
Development 14.17 - - 14.17 - - - - 14.17 14.17
2) Land at Seuni Ali
Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali
Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC
Kundli 31.33 2.59 - 33.92 - - - - 33.91 31.33
5) Land at Manoharpur
Ind. 0.80 1.93 - 2.73 - - - - 2.73 0.80
6) Land at Greentech
Mega Food Park - 2.70 - 2.70 - - - - 2.70 -
2 Building
1) Factory Building 24.13 - - 24.13 2.15 2.07 - 4.22 19.91 21.98
2) Jaipur Ress. House 0.31 - - 0.31 0.01 0.01 - 0.02 0.29 0.30
3) Jaipur Office Purch.
0.31 - - 0.31 0.01 0.01 - 0.02 0.29 0.30
4) Staff Quarter Neemati
0.08 - - 0.08 - - - - 0.08 0.08
5) MD House
Renovation 7.32 - - 7.32 0.23 0.35 - 0.58 6.74 7.10
6) Ghy.Office Building - 7.82 - 7.82 - 0.11 - 0.11 7.71 -
3 Air Condition 0.50 0.63 - 1.13 0.11 0.13 - 0.24 0.89 0.39
4 Invertor & Battery 0.06 0.09 - 0.15 0.01 0.02 - 0.03 0.12 0.05
5 CC TV & Cemera 0.12 - - 0.12 0.02 0.03 - 0.05 0.07 0.10
6 Plant & Machinery 22.41 4.81 0.02 27.20 9.95 8.69 - 18.64 8.56 12.46
7 Plant & Machinery
(WP ) 45.76 - - 45.76 - - - - 45.76 45.76
8 P&M Generator Set 0.57 0.62 - 1.19 0.11 0.10 - 0.21 0.98 0.46
9 Office Equipment 0.36 1.00 - 1.36 0.10 0.16 - 0.26 1.10 0.26
10 Computer &
Accessories 0.82 2.13 0.02 2.93 0.29 0.57 - 0.86 2.07 0.53
11 Electrical &
Installation 0.58 - - 0.58 0.16 0.10 - 0.26 0.32 0.42
12 Tools & Implements
3.16 1.44 - 4.60 0.54 0.53 - 1.07 3.53 2.63
13 Furniture & Fixture 1.86 5.31 0.02 7.15 0.46 0.57 - 1.03 6.12 1.40
14 Fire Equipment 0.07 - - 0.07 0.03 0.02 - 0.05 0.02 0.04
15 Vehicles- Motor Car
13.13 7.02 1.21 18.94 3.71 4.07 0.51 7.27 11.67 9.42
16 Vehicles- Two
Wheelers 2.09 0.70 - 2.79 0.36 0.52 - 0.88 1.91 1.73
Total 170.35 38.79 1.27 207.87 18.25 18.06 0.51 35.80 172.06 152.12
431
ANNEXURE-11 RESTATED SUMMARY OF STANDALONE OF PROPERTY, PLANT AND EQUIPMENT
(Rs. in millions)
Following are the Change in carrying value of Property, plant and equipment for the year ended 31-March-2016 (Proforma Ind As)
SL. No. Assets Gross Carrying Amount Depreciation/Amortisation Net Block
Deemed cost Additions Disposal /Sales As at March Deemed as at For the Elimination on As at March As at March As at March
as at April 01, 31, 2016 April 01, 2015 Year disposal 31, 2016 31, 2016 31, 2015
2015
Freehold Assets
1 Land & Development
1) Factory Land
Development 2.34 11.83 - 14.17 - - - - 14.17 2.34
2) Land at Seuni Ali
Jorhat-I 0.35 - - 0.35 - - - - 0.35 0.35
3) Land at Seuni Ali
Jorhat-II 0.06 - - 0.06 - - - - 0.06 0.06
4) Land at HSIIDC
Kundli 25.99 5.34 - 31.33 - - - - 31.33 25.99
5) Land at Manoharpur
Ind. - 0.80 - 0.80 - - - - 0.80 -
2 Building
1) Factory Building 19.13 5.00 - 24.13 - 2.15 - 2.15 21.98 19.13
2) Jaipur Ress. House 0.31 - - 0.31 - 0.01 - 0.01 0.30 0.31
3) Jaipur Office Purch.
0.31 - - 0.31 - 0.01 - 0.01 0.30 0.31
4) Staff Quarter Neemati
0.08 - - 0.08 - - - - 0.08 0.08
5) MD House
Renovation 2.90 4.42 - 7.32 - 0.23 - 0.23 7.09 2.90
6) Kumarghat Stores 0.07 - 0.07 - - - - - - 0.07
3 Air Condition 0.32 0.18 - 0.50 - 0.11 - 0.11 0.39 0.32
4 Invertor & Battery 0.06 - - 0.06 - 0.01 - 0.01 0.05 0.06
5 CC TV & Cemera 0.03 0.09 - 0.12 - 0.02 - 0.02 0.10 0.03
6 Plant & Machinery 20.50 2.00 0.09 22.41 - 9.95 - 9.95 12.46 20.50
7 Plant & Machinery
(Wind Power ) 45.76 - - 45.76 - - - - 45.76 45.76
8 P&M Generator Set 0.57 - - 0.57 - 0.11 - 0.11 0.46 0.57
9 Office Equipment 0.24 0.15 0.03 0.36 - 0.10 - 0.10 0.26 0.24
10 Computer &
Accessories 0.33 0.54 0.04 0.83 - 0.29 - 0.29 0.54 0.33
11 Electrical &
Installation 0.58 - - 0.58 - 0.16 - 0.16 0.42 0.58
12 Tools & Implements
2.78 0.38 - 3.16 - 0.54 - 0.54 2.62 2.78
13 Furniture & Fixture 1.58 0.35 0.07 1.86 - 0.46 - 0.46 1.40 1.58
14 Fire Equipment 0.07 - - 0.07 - 0.03 - 0.03 0.04 0.07
15 Vehicles- Motor Car
10.64 2.71 0.23 13.12 - 3.77 0.06 3.71 9.41 10.64
16 Vehicles- Two
Wheelers 1.16 0.97 0.04 2.09 - 0.37 - 0.37 1.72 1.16
Total 136.16 34.76 0.57 170.35 - 18.32 0.06 18.26 152.09 136.16
432
ANNEXURE-12 RESTATED SUMMARY OF STANDALONE OF CAPITAL WORK IN PROGRESS
(Rs. In millions)
Description Gross Carrying Amount Depreciation Net Block
Opening Balance Additions Disposal Total Opening Balance For the Elimination on Total Closing Opening
Year disposal Balance Balance
As on March 2018 (Proforma Ind As) 111.77 81.48 52.28 140.97 - - - - 140.97 111.77
As on March 2017 (Proforma Ind As) 49.85 61.93 - 111.77 - - - - 111.77 49.85
433
ANNEXURE-13 RESTATED SUMMARY OF STANDALONE OF INVESTMENT PROPERTY
(Rs. In Millions)
The Change in carrying value as on 31-March-2018 (Proforma Ind As)
Assets Gross Carrying Amount Depreciation/Amortisation NET BLOCK
As at Additions Disposal As at As at For the Disposal As at As at As at
March 31, /Sales March 31, March March March March
2017 2018 31, 2017 31, 2018 31, 2018 31, 2017
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
(Rs. In Millions)
The Change in carrying value as on 31-March-2017 (Proforma Ind As)
Assets Gross Carrying Amount Depreciation/Amortisation Net Block
As at Additions Disposal As at As at For the Elimination As at As at As at
March 31, /Sales March 31, March Year on disposal March March March
2016 2017 31, 2016 31, 2017 31, 2017 31, 2016
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
(Rs. In Millions)
The Change in carrying value as on 31-March-2016 (Proforma Ind As)
Assets Gross Carrying Amount Depreciation/Amortisation Net Block
Deemed Additions Disposal Deemed For the Elimination
cost as at /Sales As at as at Year on disposal As at As at As at
April 01, March 31, April 01, March March March
2015 2016 2015 31, 2016 31, 2016 31, 2015
1) Land at Jaipur C-19 House 4.82 - - 4.82 - - - - 4.82 4.82
434
ANNEXURE-14 RESTATED SUMMARY OF STANDALONE OF OTHER INTANGIBLE ASSETS
(Rs. in millions)
Assets Gross Carrying Amount Amortisation Net Block
Opening Additions Disposal Total Opening For the Elimination on Total Closing Opening
Balance /Sales Balance Year disposal Balance Balance
435
ANNEXURE-15 RESTATED SUMMARY OF STANDALONE OF INVESTMENT IN SUBSIDIARIES
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Non-Current
Equity Investment in subsidiary companies carried at cost (unquoted and fully paid up)
Lower Sejuisa Hydel Power Co Pvt Ltd
0.001 million (31 March 2017, 2016 - 0.001)
equity shares of face value of Rs.10 each fully 0.10 0.10 0.10
paid.
Brahmaputra Infra Power Pvt Ltd
0.014365 million (31 March 2017, 2016 -
0.014365) equity shares of face value of 93.87 93.87 93.87
Rs.1000 each fully paid
Total 93.97 93.97 93.97
Current
- - -
Total - - -
436
ANNEXURE-16 RESTATED SUMMARY OF STANDALONE OF INVESTMENT
(Rs. in millions)
Particulars As at 31st March, As at 31st March, As at 31st March,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
Non-Current
Equity investment in associates carried at cost (unquoted and fully paid up)
Topline Finvest (P) Ltd.
0.2199 million (31 March 2017, 2016 -
0.2199) equity shares of face value of rs. 1.10 1.10 1.10
10 each fully paid.
VSG Trade Pvt Ltd
0.9995 million (31 March 2017, 2016 -
0.9995) equity shares of face value of rs. 0.50 0.50 0.50
10 each fully paid
North Eastern Educare & Research Pvt
Ltd
0.0005 million (31 March 2017, 2016 - 0.05 0.05 0.05
0.0005) equity shares of face value of rs.
100 each fully paid.
Total 1.65 1.65 1.65
Note:-1 The 3,000 (30% of holding) Share of Lower Seijusa Hydel Power Co Pvt Ltd has been pledged
to SBI Jorhat for sanction of loan to subsidiary M /s Brahmaputra Infra Power Pvt Ltd. of Rs 255.00
million.
Note:-2 Equity investments in subsidiaries are carried at cost.
437
ANNEXURE-17 RESTATED STANDALONE SUMMARY STATEMENT OF LOANS
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, As at 31st March, 2016
(Proforma Ind As) 2017 (Proforma Ind (Proforma Ind As)
As)
Non- current
- - -
Total - - -
Current
- - -
Total - - -
438
ANNEXURE-18 RESTATED STANDALONE SUMMARY STATEMENT OF OTHER FINANCIAL ASSETS
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016 (Proforma
(Proforma Ind As) (Proforma Ind As) Ind As)
Non-current
Carried at amortized cost
Security deposits 3.61 3.61 5.38
Advance to related parties 278.04 152.44 127.6
Income Tax Refund Due 1.53 1.52 3.9
Bank deposit with maturity of
more than 12 months (refer not 209.57 340.53 204.6
below)
Total 492.75 498.1 341.48
Current
Insurance Claim - 3.64 3.64
Retension Money deducted on
1151.76 1330.42 1105.55
bills
Total 1151.76 1334.06 1109.19
Note:- Bank deposit (FDR) are pledge with banks as security for guarantees.
439
ANNEXURE-19 RESTATED STANDALONE SUMMARY STATEMENT OF OTHER NON-CURRENT ASSETS
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
440
ANNEXURE-20 RESTATED STANDALONE SUMMARY STATEMENT OF INVENTORIES
(Rs. In millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
(At lower of cost and net realizable value, unless stated otherwise)
Raw materials 286.27 100.75 103.85
Packing materials 3.24 4.45 3.90
Work Contract Materials 88.79 326.87 125.37
Erection WIP - 25.05 98.60
Finished goods 18.44 50.41 32.90
RM-in -Transit - - 15.21
Trading Goods - - -
RM Scrap 0.98 1.08 0.88
Total 397.72 508.61 380.72
441
ANNEXURE-21 RESTATED SUMMARY OF STANDALONE OF TRADE RECEIVABLES
(Rs. in millions)
Particulars As at 31st March, As at 31st March, As at 31st March, 2016
2018 (Proforma Ind 2017 (Proforma Ind (Proforma Ind As)
As) As)
442
ANNEXURE-22 RESTATED STANDALONE SUMMARY STATEMENT OF CASH AND BANK BALANCES
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
443
ANNEXURE-23 RESTATED SUMMARY OF STANDALONE OF OTHER BANK BALANCES
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, As at 31st March,
(Proforma Ind As) 2017 (Proforma 2016 (Proforma
Ind As) Ind As)
Bank deposit with maturity of 257.61 82.78 106.20
more than 3 months but upto 12
months
Total 257.61 82.78 106.20
444
ANNEXURE-24 RESTATED SUMMARY OF STANDALONE OF OTHER CURRENT ASSETS
(Rs. in Millions)
Particulars As at 31st March, As at 31st March, As at 31st March,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
445
ANNEXURE-25 RESTATED SUMMARY OF STANDALONE OF EQUITY SHARE CAPITAL
(Rs. in millions)
Particulars As at 31st As at 31st As at 31st March,
March, 2018 March, 2017 2016 (Proforma
(Proforma Ind (Proforma Ind As)
As) Ind As)
Authorised
400 million (31-03-2017- 400; 2016 - 300) equity shares of
Rs 10/- each 400.00 400.00 300.00
100 million Redeemable Preference Shares of Rs 10/- each
100.00 100.00 100.00
Total 500.00 500.00 400.00
Issued, Subscribed and Fully Paid up:-
380.91 million (31-03-2017- 380.91; 2016 - 247.80) equity
shares of Rs 10/- each fully paid up 380.91 380.91 247.80
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all
preferential amounts in proportion to the number of equity shares held by the share holders.
Details of shareholders holding more than 5% shares in the company (Figures. in Millions)
Name of the Shareholders As at 31st March, 2018 As at 31st March, 2017 (Proforma Ind As at 31st March, 2016 (Proforma Ind As)
(Proforma Ind As) As)
No. of Shares (Rs. In No. of Shares (Rs. In Million) No. of Shares (Rs. In Million)
Million)
Shares outstanding at the beginning of the year 38.09 380.91 24.78 247.80 24.78 247.80
(I) Issued on exercise of employees stock options - - - - - -
(II) Issued for consideration of Bonus Issue - - 7.43 74.34 - -
(iii) Issued for cash - - 5.88 58.77 - -
(iv) Share issue on account of business combination - - - - - -
less :- Shares bought back - - - - - -
Out standing at the end of the reporting period 38.09 380.91 38.09 380.91 24.78 247.80
The company does not have any holding / ultimate holding company.
Capital Management
Equity share capital and other equity are considered for the purpose of company's capital management
The company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the company is based on
management's judgement of its strategic and day to day needs with a focus on total equity so as to maintain investor, creditors and market confidence.
446
ANNEXURE‐26 RESTATED SUMMARY OF STANDALONE OF OTHER EQUITY
(Rs. in millions)
Particulars As at 31st As at 31st As at 31st
March, 2018 March, 2017 March, 2016
(Proforma Ind (Proforma (Proforma
As) Ind As) Ind As)
(Rs. in millions)
(b) General reserve
Particulars As at 31st As at 31st As at 31st
March, 2018 March, 2017 March, 2016
(Proforma Ind (Proforma (Proforma
As) Ind As) Ind As)
(Rs. in millions)
(c) Retained Earnings
Particulars As at 31st As at 31st As at 31st
March, 2018 March, 2017 March, 2016
(Proforma Ind (Proforma (Proforma
As) Ind As) Ind As)
447
ANNEXURE-27 RESTATED SUMMARY OF STANDALONE OF BORROWINGS
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, As at 31st
(Proforma Ind As) 2017 (Proforma March, 2016
Ind As) (Proforma Ind
As)
Secured Loan
from State Bank of Bikaner and Jaipur
Term Loan for Wind Mill Machinery (Refer note below)
- 10.39 18.71
from Daimler Finance Service Pvt. Ltd
Loan for Vehicle 4.90 - -
Unsecured Loan from Others
From Share Holders
From Director - 16.59 18.50
From Corporate 3.74 5.11 87.40
Total 8.64 32.10 124.61
Less : Current maturities of long-term debt 0.49 8.33 8.29
Total 8.15 23.77 116.32
Current
Bank Open Cash Credit 804.09 899.89 679.31
Total 804.09 899.89 679.31
448
ANNEXURE-28 RESTATED STANDALONE SUMMARY STATEMENT OF OTHER FINANCIAL LIABILITIES
(Rs. in millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Non-current
Security Refundable 1.76 - -
Total 1.76 - -
Current
Carried at amortised cost
Current maturities of long-term debt 0.49 8.33 8.29
Employee benefits payable 0.98 8.66 4.52
Share Application Money due for refund
- 0.01 -
Retention Money 47.51 27.18 -
Others
Creditors for expenses 1.80 1.14 1.14
Total 50.77 45.31 13.95
449
ANNEXURE-29 RESTATED SUMMARY OF STANDALONE OF PROVISIONS
(Rs. in Millions)
Particulars As at 31st March, As at 31st March, As at 31st March,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
Non-current
450
ANNEXURE-30 RESTATED SUMMARY OF STANDALONE OF DEFERRED TAX LIABILITIES (NET)
(Rs. In milliions)
Particulars As at 31st March, As at 31st March, As at 31st March, 2016
2018 (Proforma Ind 2017 (Proforma Ind (Proforma Ind As)
As) As)
Deductible temporary difference
Related to fixed Assets-Lower(Higher) Depreciation as per IT.Act 5.74 8.14 10.02
Net Defferef tax Liability 5.74 8.14 10.02
451
ANNEXURE-31 RESTATED SUMMARY OF STANDALONE OF TRADE PAYABLES
(Rs. In milliions)
Particulars As at 31st March, As at 31st March, As at 31st March,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
Note:- (a) Trade payable including LC bill of worth Rs 677.99 (31-03-2017 Rs. 274.55, 31-03-2016 Rs.
217.82).
Note: (b) In the absense of information about nature of trade payable all payable amount are considered as
other than MSME.
452
ANNEXURE-32 RESTATED SUMMARY OF STANDALONE OF OTHER CURRENT LIABILITIES
(Rs. In milliions)
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016 (Proforma
(Proforma Ind As) (Proforma Ind As) Ind As)
453
ANNEXURE-33 RESTATED SUMMARY OF STANDALONE OF REVENUE FROM OPERATIONS
(Rs. In millions)
Particulars For the Year Ended 31st For the Year Ended For the Year Ended 31st
March, 2018 (Proforma 31st March, 2017 March, 2016 (Proforma Ind
Ind As) (Proforma Ind As) As)
B) Trading Sale
Domestic Sale - - 67.77
Total - - 67.77
454
ANNEXURE-34 RESTATED SUMMARY OF STANDALONE OF OTHER INCOME
(Rs. In millions)
Particulars For the Year For the Year For the Year
Ended 31st Ended 31st Ended 31st
March, 2018 March, 2017 March, 2016
(Proforma Ind (Proforma Ind (Proforma Ind
As) As) As)
At Fair value through OCI
Dividend Received - - -
At Amortised Cost
Interest Income from financial assets 25.94 29.40 23.62
Others
Job Work Charges - - -
Exchange Gain/loss 12.56 2.07 (4.83)
Rent received 0.29 0.15 -
Awards Money Receipt 0.10 - -
Profit/(Loss) on Sale of Fixed Assets (1.51) 0.41 0.16
455
ANNEXURE-35 RESTATED SUMMARY OF STANDALONE OF COST OF MATERIAL CONSUMED
(Rs. In millions)
Particulars For the Year Ended 31st For the Year Ended 31st For the Year Ended 31st
March, 2018 (Proforma March, 2017 (Proforma March, 2016 (Proforma Ind As)
Ind As) Ind As)
Raw Material
Opening stock 427.62 229.22 255.48
Add: Purchases 2,873.25 2,880.75 2,929.89
Less: Closing stock (375.06) (427.62) (229.22)
Cost of Raw material consumed 2,925.80 2,682.35 2,956.15
456
ANNEXURE-36 RESTATED SUMMARY OF STANDALONE OF PURCHASE OF STOCK-IN-TRADE
(Rs. In millions)
Particulars For the Year Ended For the Year Ended 31st For the Year Ended 31st March,
31st March, 2018 March, 2017 (Proforma 2016 (Proforma Ind As)
(Proforma Ind As) Ind As)
Trading Goods
Trading Goods Purchase - - 21.28
Total - - 21.28
457
ANNEXURE-37 RESTATED SUMMARY OF STANDALONE OF CHANGES IN INVENTORIES OF FG, WIP & STOCK-IN-TRADE
(Rs. In millions)
Particulars For the Year Ended 31st March, For the Year Ended 31st March, For the Year Ended 31st March,
2018 (Proforma Ind As) 2017 (Proforma Ind As) 2016 (Proforma Ind As)
A) Opening Stock
Finished Goods 50.41 32.9 21.4
Trading Goods - - -
RM Scraps 1.08 0.88 0.33
Total (A) 51.49 33.78 21.73
B) Closing Stock
Finished Goods 18.44 50.41 32.9
Trading Goods - - -
RM Scraps 0.98 1.08 0.88
Total (B) 19.42 51.49 33.78
Total (A-B) 32.07 (17.71) (12.05)
458
ANNEXURE-38 RESTATED SUMMARY OF STANDALONE OF EMPLOYEE BENEFITS EXPENSES
(Rs. In millions)
Particulars For the Year Ended 31st March, For the Year Ended 31st March, 2017 For the Year Ended 31st March, 2016
2018 (Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
Salaries and wages 96.06 82.15 58.97
Directors Remuneration 22.20 19.25 18.95
Contribution to provident and other funds 6.96 1.75 0.24
Gartuity Benefits 6.04 2.31 1.74
Staff welfare expenses 21.41 4.08 2.52
Director Sitting Fee - - -
Total 152.67 109.54 82.42
459
ANNEXURE-39 RESTATED SUMMARY OF STANDALONE OF FINANCE COSTS
(Rs. In millions)
Particulars For the Year Ended 31st March, For the Year Ended 31st For the Year Ended 31st
2018 (Proforma Ind As) March, 2017 (Proforma Ind March, 2016 (Proforma Ind
As) As)
Interest
- On loans from banks 0.25 1.68 2.62
- Others 2.8 20.55 10.69
Interest on DBO 0.8 0.53 0.36
Interest to Suppliers & Others 14.95 3.7 3.6
Interest on cash credit 104.32 93.51 85.83
Total 123.12 119.97 103.10
460
ANNEXURE-40 RESTATED SUMMARY OF STANDALONE OF DEPRECIATION AND AMORTIZATION EXPENSES
(Rs. In millions)
Particulars For the Year Ended 31st March, 2018 For the Year Ended 31st March, 2017 For the Year Ended 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
461
ANNEXURE-41 RESTATED SUMMARY OF STANDALONE OF OTHER EXPENSES
(Rs. In millions)
Particulars For the Year Ended For the Year Ended For the Year Ended 31st
31st March, 2018 31st March, 2017 March, 2016 (Proforma
(Proforma Ind As) (Proforma Ind As) Ind As)
Power & Fuel expenses 8.99 6.83 6.16
Consumption of stores and spares 3.62 1.64 1.24
Bank Charges 64.91 76.54 38.36
Commission on Purchase 3.94 1.68 3.57
Repairs and maintenance - - -
-Plant and machinery 31.01 17.69 18.14
-Buildings 8.64 6.08 1.12
-Others 4.48 4.85 1.80
Sub-Contractor Charge 399.95 348.13 117.39
Advertisement & Promotions 1.41 2.07 1.12
Audit Fee 0.55 0.05 0.07
Travel and conveyance 20.14 12.08 9.74
Donation & charity 6.79 4.30 4.68
Electricity & Water Charges 2.79 2.35 2.30
Freight and carriage 14.54 66.84 78.52
Insurance Premium 26.35 16.17 7.09
Legal, Licence & professional charges 18.60 10.95 4.86
Telephone and communication charges 2.89 2.35 1.81
Printing & Stationery 2.47 3.08 1.72
Rates and taxes 30.59 35.05 8.51
Rental charges 10.97 9.18 5.79
Exchange Gain/Loss - - 1.33
Miscellaneous expenses 61.97 40.47 18.26
Total 725.60 668.38 333.58
462
ANNEXURE-42 RESTATED SUMMARY OF STANDALONE OF EXCEPTIONAL ITEMS
(Rs. In millions)
Particulars For the Year Ended 31st For the Year Ended 31st For the Year Ended 31st
March, 2018 (Proforma March, 2017 (Proforma March, 2016 (Proforma
Ind As) Ind As) Ind As)
Profit on sale of shares - (0.01) -
Total - (0.01) -
463
ANNEXURE-43 RESTATED SUMMARY OF STANDALONE OF TAX EXPENSES
(Rs. In millions)
Particulars For the Year Ended 31st For the Year Ended 31st For the Year Ended 31st
March, 2018 (Proforma Ind March, 2017 (Proforma March, 2016 (Proforma Ind
As) Ind As) As)
Profit / (loss) before tax 282.00 195.19 159.35
Current Year Income Tax 101.84 71.55 59.05
Deferred tax (2.40) (1.87) 10.02
Wealth tax Provision - - (0.04)
Earlier years Income Tax 0.75 0.88 (0.72)
Profit / (loss) for the year
382.19 265.75 227.66
464
ANNEXURE-44 RESTATED SUMMARY OF STANDALONE OF EARNING PER EQUITY SHARE BASIC AND DILUTED
(Rs. In millions)
Particulars As at 31st March, 2018 As at 31st March, 2017 (Proforma As at 31st March, 2016 (Proforma
(Proforma Ind As) Ind As) Ind As)
i) Net Profit after tax as per Statement of Profit & Loss 181.81 124.63 91.04
ii) Weighted average number of Equity Shares 38.09 32.25 32.21
iii) Basic and Diluted Earning per Share 4.77 3.87 2.83
iv) Face Value per Equity Share 10 10 10
465
ANNEXURE-44 RESTATED SUMMARY OF STANDALONE OF
EARNING PER EQUITY SHARE BASIC AND DILUTED
(Rs. in millions)
Particulars Pre-Issue as at
As at 31st March, As adjusted for
2018 (Proforma Ind Issue*
As)
Debts
Long term debt (A) 8.15 []
Short term debt (B) 804.09 []
Total debt (C) 812.24 []
Total capitalization
Long term debt/equity ratio
0.00 []
(A/D)
Total debt/equity ratio (C/D)
0.43 []
466
ANNEXURE-46 RESTATED SUMMARY OF STANDALONE OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
1) Subsidiary Companies
2) Enterprises over which key management personal and their relatives have significant influence
467
ANNEXURE-46 RESTATED SUMMARY OF STANDALONE OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
₹ in millions
M/s LOWER SEJUISA HYDEL POWER COMPANY PVT LTD
Particulars As at 31st March, 2018 As at 31st March, 2017 (Proforma Ind As at 31st March,
(Proforma Ind As) As) 2016 (Proforma Ind
As)
Advances Given - 0.02 0.05
Advances Return back - - -
₹ in million
M/s LOWER SEJUISA HYDEL POWER COMPANY PVT LTD
Particulars As at 31st March, 2018 As at 31st March, 2017 (Proforma Ind As at 31st March,
(Proforma Ind As) As) 2016 (Proforma Ind
As)
Advance 0.10 0.10 0.09
Investment 0.10 0.10 0.10
468
ANNEXURE-46 RESTATED SUMMARY OF STANDALONE OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
b) Managerial Remuneration
c) Salary Paid
469
ANNEXURE-46 RESTATED SUMMARY OF STANDALONE OF SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Advance salary:
Nanuram Prajapat - 0.26 0.00
Investment Balance in enterprises:
Topline Finvest (P) Ltd. 1.10 1.10 1.10
VSG Trade Pvt Ltd 0.50 0.50 0.50
North Eastern Educare & Research Pvt Ltd 0.05 0.05 0.05
470
ANNEXURE-47 RESTATED SUMMARY OF STANDALONE OF CONTINGENT LIABILITIES.
1) Contingent liability not provided for counter guarantee given for guarantee issued by bank
(Rs. in millions)
S L No. Name of Bank As at 31st March, 2018 As at 31st March, As at 31st March, 2016
(Proforma Ind As) 2017 (Proforma Ind (Proforma Ind As)
As)
2) Contingent liability not provided for corporate guarantee given on behalf of subsidiary Company M/s Brahmaputra Infra Power
Pvt Ltd to State Bank of India Jorhat for sanction of Term Loan Rs 255.00 million.
3) Contingent liability not provided for dues of Service Tax & Excise duty which have not been deposited for all the years on
account of disputes are given below:-
471
ANNEXURE-48 RESTATED SUMMARY OF STANDALONE OF ACCOUNTING RATIOS.
( Rs. In Million)
S. no. Particulars For the year ended
As at 31st March, As at 31st March, As at 31st March,
2018 (Proforma Ind 2017 (Proforma Ind 2016 (Proforma Ind
As) As) As)
472
ANNEXURE‐49 RESTATED SUMMARY OF STANDALONE OF SEGMENT REPORT.
Segment Revenue
473
ANNEXURE‐49 RESTATED SUMMARY OF STANDALONE OF SEGMENT REPORT.
474
ANNEXURE-50 RESTATED SUMMARY OF STANDALONE OF FINANCE LEASE.
(Rs. In millions)
Particulars As at 31st March, 2018 (Proforma As at 31st March, 2017 As at 31st March, 2016
Ind As) (Proforma Ind As) (Proforma Ind As)
Amount of Finance lease 25.25 25.25
Less: Cummulative lease amount paid during the 3.71 2.70
period -
Amount outstanding at the end of the period 18.84 22.55
Amount payable not later than one year 18.84 1.01
Amount payable later than one year but not later than 18.84
five years - -
475
ANNEXURE-51 RESTATED SUMMARY OF STANDALONE OF DETAILS OF DISCONTINUED OPERATIONS.
Particulars As at 31st March, 2018 As at 31st March, 2017 As at 31st March, 2016
(Proforma Ind As) (Proforma Ind As) (Proforma Ind As)
NIL
476
ANNEXURE-52 RESTATED SUMMARY OF STANDALONE ADDITIONAL
INFORMATION PURSUANT TO THE PART II OF SCHEDULE III OF THE
COMPANIES ACT, 2013.
477
ANNEXURE-53 RESTATED SUMMARY OF STANDALONE TAX SHELTER
Rs. in million
Particulars 31.3.2018 31.3.2017 31.3.2016
Profit before Tax- As Restated (A) 281.00 193.61 159.26
Add/ (Less): Restatement adjustment 4.31 2.19
Profit before tax as per return of income 281.00 197.92 161.44
Adjustment
Tax impact of permanent diff. due to:
* Income tax return for the assessment year 2018-19 is yet to file. So we assumed adjusted tax liability as tax as per
return of income.
478
ANNEXURE 1A RESTATED SUMMARY STATEMENT OF STANDALONE ASSETS AND LIABILITIES
(Rs. In millions)
Sr.
Particulars Annexure No. AS AT 31.03.2015 AS AT 31.03.2014
No.
I. EQUITY AND LIABILITIES
1 Shareholders Fund
a) Share Capital 7A 247.80 229.45
b) Reserve and Surplus 8A 1002.95 862.03
c) Money received against share warrants - .00 .00
3 Non-current Liabilities
a) Long-term borrowings 9A 114.81 94.74
b) Deffered tax liabilities (Net) 10A .00 .00
c) Other long-term liabilities - .00 .00
d) Long-term provisions - 4.50 2.43
4 Current Liabilities
(a) Short-term borrowings 11A 626.12 395.52
(b) Trade Payables 12A 637.09 365.93
(c ) Other current liabilities 13A 7.07 11.03
(d) Short-term provisions 14A 49.66 57.01
2 Current assets
a) Current investments - .00 .00
b) Inventories 17A 322.31 240.34
c) Trade receivables 18A 1229.28 870.72
d) Cash and bank balances 19A 397.32 221.16
e) Short-term loans and advances 20A 180.24 138.56
f) Other current assets 21A 8.97 2.82
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
APPEARING IN ANNEXURE 4A, NOTES TO RESTATED STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 5A
AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN ANNEXURE 6A.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
(Rs. In millions)
For the year For the year ended
SL
Particulars Annexure No. ended 31.03.2015 31.03.2014
No.
A. CONTINUING OPERATION
Revenue from operation 22A 3149.26 3351.63
Other income 23A 18.73 20.50
B Expenses:
Cost of material consumed 24A 2341.52 2382.48
Purchase of stock-in-trade 25A 83.14 322.75
Changes in inventories of FG, WIP & Stock-in-trade 26A 70.82 -43.67
Employee benefits expenses 27A 67.19 60.42
Finance costs 28A 80.39 79.77
Depreciation and amortization expenses 32A 23.01 21.38
Other expenses 29A 378.62 389.27
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND SIGNIFICANT
ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED STANDALONE FINANCIAL
INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE
FINANCIAL STATEMENTS APPEARING IN ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
480
ANNEXURE 3A RESTATED SUMMARY STATEMENT OF STANDALONE CASH FLOWS
(Rs. In millions)
SL. AS AT
Particulars AS AT 31.03.2014
No. 31.03.2015
1 Operating Activities Net Profit before tax
Net profit before taxation & extraordinary items 123.19 159.70
Adjustments for - -
Adjustment in retained earning - (1)
Depreciation & amortisation Expense 23.01 21.38
Interest received (18.69) (20.50)
Finance Cost 80.39 79.77
Operating Profit before Working Capital Changes 207.91 239.10
Adjustments for - -
Increase (-) / Decrease (+) in Other current Assets (6.16) 4.33
Increase (-) / Decrease (+) in Debtors (358.57) (241.53)
Increase (-) / Decrease (+) in Inventories (81.97) 54.16
Increase (-) / Decrease (+) in Loans and Advances (63.32) 134.77
Increase (+) / Decrease (-) in Current Liabilities &
Provisions 261.93 (211.67)
Outflow towards Taxation (-) (51.42) (56.52)
Net Cash Flow from Operating activities (91.60) (77.36)
2 Investing Activities - -
Increase (-) Decrease (+) in Fixed Assets (8.71) (30.75)
Increase (-) / Decrease (+) in Capital Work-in-Progress
- 2.32
Interest Income 18.69 20.50
Net Cash (Used in) Investing Activities 9.98 (7.93)
3 Finance Activities - -
Increase (+) / Decrease (-) in Capital
87.50 28.00
Increase (+) / Decrease (-) in Long Term Borrowings 20.08 (13.40)
Increase (+) / Decrease (-) in Short Term Borrowings
230.60 40.70
Increase (-) / Decrease (+) in Investment - (50.03)
Dividend and Tax thereon paid - -
Interest Expenditure (80.39) (79.77)
Net Cash Flow from Financing Activities 257.79 (74.50)
Net Decrease (increase) in Cash and cash equivalent
4 176.16 (159.79)
5 Cash and Cash equivalent at the beginning. 221.16 380.95
6 Cash and Cash equivalent at the end 397.32 221.16
Note: The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting
Standard - 3 "Cash Flow Statements".
THE ABOVE STATEMENT SHOULD BE READ WITH THE BASIS OF PREPARATION AND
SIGNIFICANT ACCOUNTING POLICIES APPEARING IN ANNEXURE 5, NOTES TO RESTATED
STANDALONE FINANCIAL INFORMATION APPEARING IN ANNEXURE 6 AND STATEMENT OF
ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL STATEMENTS APPEARING IN
ANNEXURE 7.
As per our report of even date attached For and on behalf of the Board
For Borkar & Muzumdar
Chartered Accountants
Firm Registration No. 101569W
Company Overview:
NECCON Power and Infra Limited formerly known as North Eastern Cables & Conductors Private Limited
(“the company”) is a company domiciled in India, incorporated under the company Act, 1956 with the Registrar
of Companies - Assam Meghalaya, Manipur, Tripura, Mizoram, Nagaland & Arunachal Pradesh - Shillong. The
Company include carrying on business for Manufacturing of Electrical Conductor, Generation of Power and
Commissioning /Installation & Renovation of Power Sub-Station for all types of EPC/Trunkey Project Works.
2. Use of Estimates:
The preparation of restated standalone financial statements in conformity with Indian GAAP requires the
management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities
on the date of Financial Statements and the reported amount of revenues and expenses during the reporting period.
Although these estimates are based on the management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying
amounts of assets or liabilities in future periods.
3. Revenue:
Revenue is primarily derived from sale of Conductor, Power and related Service from EPC Trunkey Project.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and
the revenue can be reliably measured. Sales comprises sale of goods and services, net of trade discounts.
Interest income is recognized on accrual basis. Dividend income is recognized when the right to receive
dividends is unconditionally established.
The company presents revenues net of indirect taxes in its restated statements of profit and loss.
482
Contingent liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company. Contingent Liabilities are not provided for
in the accounts and disclosed by way of notes, if any.
Provisions, Contingent Liabilities and Contingent assets are reviewed at each Balance Sheet date.
5. Tangible assets:
Tangible assets are stated at cost, less accumulated depreciation and impairment if any, direct costs are capitalized
until such assets are ready for use.
6. Intangible assets:
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less
accumulated amortization and impairment.
7. Depreciation:
(a) Depreciation on tangible assets is provided on the WDV method over the useful lives of assets estimated by
the company act, 2013 and Accounting Standard -10, Depreciation of assets purchase/sold during a period
is proportionately charged. Intangible assets are amortized over their respective individual estimate useful
lives basis.
(b) Depreciation and amortization method, useful lives and residual value are reviewed periodically, including
at each financial year.
8 Employee Benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss
account of the year in which the related service is rendered.
Post-employment and other long term employee benefits are recognized as an expense in the Profit and Loss
account for the year in which the employee has rendered services.
ii. Monetary items denominated in foreign currencies, if any at the yearend are restated at year end rates.
iv. Any income or expense on account of exchange difference either on settlement or on translation is
recognized in the Profit and Loss Account.
483
Income taxes are accrued in the same period that the related revenue and expenses arise. A provision is made
for income tax based on the tax liability computed, after considering tax allowance and exemptions. Provision
are recorded when it estimated that a liability due to disallowance or other matter is probable. Minimum
alternate tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the
form tax credit against future income tax liability, is recognized as an asset in the Balance Sheet if there is
convincing evidence that the company will pay normal tax after the tax holiday period and the resultant assets
can be measured reliably. The company offsets, on a year on year basis, the current tax assets and liability,
where it has a legally enforceable right and where it intends to settle such assets and liabilities on net basis
(e) Investment:
Investments are Long Term Investment and are stated at Cost, provision is made to recognize a decline, other
than temporary, in the value of Long Term Investment.
Current Investments are carried at cost or market rate whichever is less, on individual investment basis.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged
or credited to the statement of profit and loss.
(h) Inventories:
484
Item of inventories comprising of un-processed are measured at lower of cost or net realizable value after
providing for obsolescence, if any. Item of inventories comprising of processed are measured at net realizable
value after reducing normal gross profit margin in ordinary course of business. Cost of inventories comprises
of cost of purchase, cost of conversion and other cost incurred in bringing them to their respective present
location and condition netted to discount received. Net realizable value is the estimated selling price in the
ordinary course of business, less estimated cost of completion and estimated cost necessary to make sale.
485
ANNEXURE -6A-RESTATED SUMMARY STATEMENT OF NOTES TO STANDALONE FINANCIAL
STATEMENTS
( Rs. In Million)
Particulars
AT 2014-15 AT 2013-14
ACSR Conductor 794.32 459.30
AAAC Conductor 225.92 281.83
Aluminum Wire 58.77 254.54
Earth/Ground Wire 3.61 2.83
Steel Wire .36 -
RM Scraps 2.78 2.36
Trading Goods 148.46 448.53
Wind Power 8.44 4.22
Works Contract 2021.49 1997.10
Total 3264.16 3450.71
486
ANNEXURE 5A RESTATED SUMMARY STATEMENT OF ADJUSTMENTS TO AUDITED STANDALONE FINANCIAL
STATEMENTS
For the restated standalone financials for the year ending 2014 and 2015, we completely relied on the audited financial statements for the
same. For the year ending 2014 and 2015 in restated standalone financials there is only adjustment regarding gratuity provision based on
actuarial valuer report which was not done earlier in audited financial statements. The Opening balance of Gratuity have been adjusted in
the Retained earnings.
487
4. Foreign currency receipt and expenditure
5. No employee of the Company was in receipt of remuneration during the restatement period in excess of
the sum prescribed under section 197(12) of the Companies act,2013 read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personal) Rule, 2014
6. Previous periods figure have been regrouped/rearranged, wherever considered neces sary to
confirm with the restated standalone financial statements. Further the restated standalone financial
statements are prepared into million, unless otherwise specified, due to this there can be rounding
difference.
7. Balance of the sundry creditors, sundry debtors, unsecured loan and advance are subject to
confirmation and reconciliation.
8. Company has made provision for gratuity as per valuer report in restated standalone financial statements
from 1st April 2014 and onwards. Opening liability of gratuity is adjusted in retained earnings in restated
standalone financial statements of amounting to Rs. 1.27 million. The company has no policy for leave
encashment benefits.
9. The Company has sought details from suppliers who had permanent registration certificate as Small
Scale Industrial Undertaking issued by the Directorate of Industries of a State or Union Territory,
in the absence of such information, the amount (also bifurcation for 30 days and more than 30 days)
and interest due as per the “Interest on delayed payment to small scale & ancillary industries
undertaking Act, 1993” is not ascertainable as on Balance Sheet date.
10 Transfer Pricing
The company has specified domestic transaction with parties as provided for in the Income Tax Act,
1961. In the opinion of the management, the Company maintains documents as prescribed by the
Income Tax Act to provide that these specified domestic transactions are at arm’s length and the
aforesaid legislation will not have any material impact on the financial statement, particularly on the
488
amount of tax expenses and that of provision for taxation.
11. The Company has taken into consideration the Provision of Accounting Standard 28 Impairment of
Assets. The Company does not have any asset which would require impairment and provisions.
489
ANNEXURE 7A RESTATED SUMMARY STATEMENT OF SHARE CAPITAL
(Rs. In millions)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Authorised Share Capital
30.00 million Equity Shares of Rs 10/- each 300.00 300.00
Reconciliation of number and amount of equity share out standing at the beginning and at the end of the reporting period :
Shares outstanding at the beginning of the year 22.94 229.45 22.29 222.94
(I) Issued on exercise of employees stock options .00 .00 .00 .00
(II) Issued for consideration of Bonus Issue .00 .00 .00 .00
(iii) Issued for cash 1.84 18.35 .65 6.51
less :- Shares bought back .00 .00 .00 .00
Out standing at the end of the reporting period 24.78 247.80 22.94 229.45
490
ANNEXURE 9A RESTATED SUMMARY STATEMENT OF LONG TERM BORROWINGS
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Secured Loan
from State Bank of Bikaner and Jaipur
Term Loan for Wind Mill Machinery 23.49 34.97
Less :- Current Maturity of Long Term Dedt 4.74 18.74 7.90 27.07
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Deferred Tax Liability
Related to fixed Assets-Lower(Higher) Depreciation as .00 .00
per IT.Act
Deferred Tax Assets
Related to fixed Assets-Lower (Higher) Depreciation .00 .00
as per IT.Act
Net Deferef tax Liability .00 .00
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Secured Loan
Working Capital Loan
From Indian Bank Jorhat 183.56 191.36
From Punjab National Bank Guwahati 148.84
From Punjab National Bank Jorhat 56.27
From Canar Bank Jorhat 231.97 196.01
From Bank of Baroda Jorhat 5.49 626.12 8.15 395.52
Working Capital loans are secured by hypothecation of present & future machinery stock of raw materials, stock in
process, stores& spares, book debts outstanding receivables, and secured by way of first Paripassu mortgage on
491
ANNEXURE 12A RESTATED SUMMARY STATEMENT OF TRADE PAYABLE
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Note:- 6.1 (a) Trade payable including LC bill of worth Rs .179.67 million (Previous year was Rs 160.09 million)
(b) Trade payable including Director Remuneration worth Rs 2.54 million(Previous year was Rs 2.99 million)
(c) Trade payable including group companies worth Rs Nil (Previous year was Rs. 12.65 million)
492
ANNEXURE 15A RESTATED SUMMARY STATEMENT OF NON CURRENT INVESTMENT
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
A) Trade investments (Unquoted-at Cost)
(1) In Equity Shares of Associate Companies
Topline Finvest (P) Ltd. 1.10 1.10
(0.2199 million Equity Shares of Rs.5/-each fully paid
)
North Eastern Educare & Research Pvt LtdCables Pvt. .05 .05
(0.0005 million Equity Shares of Rs 100/-each fully
paid ) 1.65 1.65
Note : (a) The 3,000 (30% of holding) Share of Lower Sejuisa Hydel Power Co Pvt Ltd has been pladged to SBI Jorhat
for sanction of loan to subsidiary M /s Brahmaputra Infra Power Pvt Ltd. Of Rs 25.50Crore
(b) Provision for diminution in value of quoted shares not provided for as detailed below
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Mkt Price -NSE Mkt Price -NSE
Relince Power Ltd.-451 Equity Shares .03 .03
NHPC Ltd -192 Equity Share .00 .00
Market value of investment .03 .04
Book value of investment .13 .13
Diminution in value of investment .10 .10
493
ANNEXURE 16A RESTATED SUMMARY STATEMENT OFLONG TERM LOANS AND ADVANCES
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
Details of Long term Loan & Advance to company /firm in which director is a director, member, or a partner
AT 31.03.2015 AT 31.03.2014
494
ANNEXURE 20A RESTATED SUMMARY STATEMENT OFSHORT TERM LOANS & ADVANCES
(Rs. In million)
Particulars AS AT 31.03.2015 AS AT 31.03.2014
(Unsecured, considered good)
Advances to suppliers and others 135.18 74.17
VAT Input Credit not Utilised 15.42 30.06
Excise Cenvat Unutilised 24.50 26.49
Service Tax Cenvat Unutilised 5.15 7.84
495
ANNEXURE 32A RESTATED SUMMARY STATEMENT OF FIXED ASSETS
(Rs. in millions)
Gross Block Depreciation/Amortisation NET BLOCK
SL.
Assets As at Disposal As at
No. Additions As at 31.03.2014 For the Disposal / As at 31.03.2015 As at 31.03.2015 As at 31.03.2014
31.03.2014 /Sales 31.03.2015
A TANGIBLE ASSETS (Own Assets)
1 Land & Development
1) Factory Land Development 2.34 .00 .00 2.34 .00 .00 .00 .00 2.34 2.34
2) Land at Seuni Ali Jorhat-I .35 .00 .00 .35 .00 .00 .00 .00 .35 .35
3) Land at Seuni Ali Jorhat-II .06 .00 .00 .06 .00 .00 .00 .00 .06 .06
4) Lant at Jaipur C-19 House 4.82 .00 .00 4.82 .00 .00 .00 .00 4.82 4.82
5) Land at HSIIDC Kundli 20.10 5.89 .00 25.99 .00 .00 .00 .00 25.99 20.10
2 Building .00 .00 .00 .00 .00 .00 .00 .00 .00 .00
1) Factory Building 33.84 .00 .00 33.84 12.66 2.04 .00 14.70 19.13 21.17
2) Jaipur Ress. House 1.21 .00 .00 1.21 .89 .01 .00 .90 .31 .32
3) Jaipur Office Purch. .73 .00 .00 .73 .40 .01 .00 .42 .31 .32
4) Staff Quarter Neemati .26 .00 .00 .26 .18 .00 .00 .18 .08 .08
5) MD House Renovation 3.94 .00 .00 3.94 .90 .14 .00 1.04 2.90 3.04
6) Kumarghat Stores 1.38 .00 .00 1.38 .43 .88 .00 1.31 .07 .95
3 Air Condition .09 .28 .00 .37 .00 .05 .00 .05 .32 .08
4 Invertor & Battery .05 .03 .00 .08 .00 .01 .00 .02 .06 .04
5 CC TV & Cemera .00 .04 .00 .04 .00 .01 .00 .01 .03 .00
11 Plant & Machinery 55.28 .51 .00 55.78 30.14 5.14 .00 35.28 20.50 25.13
12 Plant & Machinery (WP ) 88.32 .00 .00 88.32 36.02 6.55 .00 42.56 45.76 52.30
13 P&M Generator Set 1.06 .15 .00 1.21 .51 .12 .00 .63 .57 .55
14 Office Equipment 1.39 .03 .00 1.42 .76 .43 .00 1.18 .24 .63
15 Computer & Accessories 3.44 .13 .11 3.46 2.69 .53 .10 3.13 .33 .74
16 Electrical & Installation 3.02 .00 .00 3.02 2.09 .35 .00 2.44 .58 .92
17 Tools & Implements 3.49 .49 .00 3.97 .61 .59 .00 1.20 2.78 2.88
18 Furniture & Fixture 5.73 .00 .21 5.52 3.35 .69 .10 3.94 1.58 2.37
Fire Equipment .00 .09 .00 .09 .00 .02 .00 .02 .07 .00
19 Vehicles- Motor Car 26.68 2.42 3.50 25.60 11.92 5.08 2.04 14.96 10.64 14.76
20 Vehicles- Two Wheelers 2.70 .30 .26 2.74 1.43 .35 .20 1.58 1.16 1.28
Sub-Total of A- 260.25 10.36 4.08 266.53 104.99 22.99 2.43 125.56 140.97 155.26
B INTANGIBLE ASSETS
1 Computer Software .05 .00 .00 .05 .03 .02 .00 .04 .01 .02
Sub-Total of B- .05 .00 .00 .05 .03 .02 .00 .04 .01 .02
C Capital Work in Progress
.00 .00 .00 .00 .00 .00 .00 .00 .00 .00
Sub-Total of C- .00 .00 .00 .00 .00 .00 .00 .00 .00 .00
Grand Total of (A+B+C) 260.30 10.36 4.08 266.58 105.02 23.01 2.43 125.60 140.98 155.28
Previous Year 230.07 31.09 .86 260.30 84.16 21.38 .52 105.02 155.28 145.91
496
ANNEXURE 33A RESTATED SUMMARY STATEMENT OF BUSINESS SEGMENT
(Rs. In millions)
The Compnay operations predominantly relate to provide development of transmission line of power in three primary segment viz.
manufacturing of transmission line conductors, established of transmission Power Substations on turnkey basis and Manufacturing of
Electricity Energy through Wind Power Unit. The Group considers the business segment as the primary segment and geographical Segment
based on the location of the customers as secondary segment.
2. Geographical Segment:-
The company business activity falls within a single geographical, hence it has no other reportable segments
497
ANNEXURE 34A RESTATED SUMMARY STATEMENT OFCONTINGENT LIABILITY
1) Contingent liability not provided for counter guarantee given for guarantee issued by bank
(Rs. in millions)
S L No. Name of Bank As at 31st March, 2015 As at 31st March,
2014
1 Indian Bank Jorhat Branch 1234.81 905.53
2 Bank of Baroda Jorhat Branch 223.14 286.22
3 Canara Bank Jorhat Branch 327.74 401.79
4
United Bank of India Guwahati 0.00 0.00
5
Punjab National Bank Guwahati 0.00 0.00
2) Contingent liability not provided for corporate guarantee given on behalf of subsidiary Company M/s Brahmaputra Infra Power Pvt Ltd to
State Bank of India Jorhat for sanction of Term Loan Rs 255.00 million.
3) Contingent liability not provided for dues of Service Tax & Excise duty which have not been deposited for all the years on account of
disputes are given below:-
498
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
2) Enterprises over which key management personal and their relatives have significant influence
2) North Eastern Educare & Research Pvt Ltd 10) Shajha Automations Pvt.Ltd
5) Murlidhar Khetan & Sons 13) Basant Kumar Khetan & Sons
7) Sri Mahaluxmi Aerated Aqua Pvt.Ltd 15) Jai Prakash Khetan & Sons
8) Shyam Associates
Particulars ₹ in millions
M/s LOWER SEIJUSA HYDEL POWER COMPANY PVT LTD
As at 31st March, 2015 As at 31st March, 2014
Advances Given 0.01 0.01
Advances Return back 0.00 0.00
499
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
₹ in million
Particulars M/s LOWER SEJUISA HYDEL POWER COMPANY PVT LTD
As at 31st March, 2015 As at 31st March, 2014
Advance 0.04 0.03
Investment 0.10 0.10
b) Managerial Remuneration
c) Salary Paid
500
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
501
ANNEXURE 35A RESTATED SUMMARY STATEMENT OF RELATED PARTY DISCLOSERS
Advance salary:
Nanuram Prajapat 0.00 0.00
Investment Balance in enterprises:
Topline Finvest (P) Ltd. 1.10 1.10
VSG Trade Pvt Ltd 0.50 0.50
North Eastern Educare & Research Pvt Ltd 0.05 0.05
502
ANNEXURE 36A RESTATED SUMMARY STANDALONE OF ACCOUNTING RATIO
Rs in Million
S. no. Particulars
IGAAP
March 31, 2015 March 31, 2014
Restated Profit / (loss) after tax (Rs. in millions)
1 71.77 103.18
Net profit /(loss) available to equity shareholders
excluding exceptional items (Rs. in millions)
2 71.77 103.18
Weighted average number of basic equity shares
3 outstanding during the year. 22.95 22.30
Weighted average number of diluted equity
4 shares outstanding during the year. 22.95 22.30
Number of equity shares outstanding at the end of
5 the year. 24.78 22.94
Net worth for equity shareholders (Rs. is
6 millions) 1,250.75 1,091.47
7 Accounting Ratios:
503
ANNEXURE 37A RESTATED SUMMARY STANDALONE OF TAX SHELTER
Rs. in million
Particulars 31.3.2015 31.3.2014
Adjustment
Tax impact of permanent diff. due to:
Difference between book balance and tax balance of property plant and 4.19 3.15
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
The following discussion is intended to convey management’s perspective on our financial condition
and results of operations for Fiscals 2018, 2017 and 2016. You should read the following discussion of
our financial condition and results of operations together with our restated consolidated financial
information for Fiscal 2018 2017 and 2016, including the notes thereon and the report thereon, in the
chapter titled "Financial Statements" beginning on page 281 of this Draft Red Herring Prospectus. Also
refer chapter titled "Risk Factors" on page 21 of this Draft Red Herring Prospectus, which discusses a
number of factors and contingencies that could impact our financial condition and results of operations.
The following discussion relates to our Company, unless otherwise stated is based on Restated
Consolidated Financial Statements. The financial statement for the Fiscals 2018, 2017 and 2016 have
been prepared on the basis of Audited Consolidated Financial Statements of the Company prepared
previously under generally accepted accounting principles (Indian GAAP), adjusted in conformity with
Indian Accounting Standards ("Ind AS"), the Companies Act and the SEBI ICDR Regulations and
restated as described in the report of our Auditors dated September 19, 2018, which is included in this
Draft Red Herring Prospectus under chapter titled "Financial Statements" beginning on page 281 of this
Draft Red Herring Prospectus. Our Fiscal ends on March 31 of each year; therefore, all references to a
particular fiscal are to the twelve-month period ended March 31 of that year. Also refer the section titled
"Presentation of Financial, Industry and Market Data" on page 17 of this Draft Red Herring Prospectus.
Ind AS differs in certain respects from Indian GAAP, IFRS and U.S. GAAP and other accounting
principles with which prospective investors may be familiar. As a result, the restated financial
statements represented under Ind AS for Fiscals 2018, 2017 and 2016 may not be comparable to our
historical financial statements. For a reconciliation of Indian GAAP to Ind AS, please refer Annexure
7, 8 and 9 to our Restated Financial Statements. Please also see "Risk Factor No. 55 — Significant
differences exist between Indian GAAP and other accounting principles, such as US GAAP and IFRS,
which may be material to investors’ assessments of our financial condition." under the chapter titled
Risk Factor beginning on page 21 of this Draft Red Herring Prospectus.
This discussion may contain forward-looking statements and reflect our current future plans and
expectations. Actual results may differ materially from those anticipated in the forward-looking
statements. 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. Given these uncertainties, prospective investors
are cautioned not to place undue reliance on such forward-looking statements. Factors that could cause
or contribute to such differences include, but are not limited to, those discussed in the section titled
"Risk Factors" and chapter titled "Forward-Looking Statements" and "Our Business" on pages
beginning on 21, 20 and 191, respectively of this Draft Red Herring Prospectus. In this section "we",
"us", "our" refers to our Company.
Business Overview
We are a company engaged in the power transmission and distribution sector. We provide engineering,
procurement and construction ("EPC") services, undertake turnkey projects and are also manufacturers
of overhead conductors ("OC"), ground wires and galvanized iron wires ("GI Wires") that are majorly
utilized in laying of power transmission and distribution lines.
We have over the years emerged as an integrated organization for construction of transmission and
distribution lines, sub-stations and gas-insulated sub-stations under EPC / turnkey projects, especially
in the north-eastern region of India. We have also setup a wind energy based power plant with an
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electricity generation capacity of 1.50 MW at Akal, Jaisalmer (Rajasthan), with a view to further
entrench ourselves in the power sector. We manufacture OCs such as: AAAC conductor, AAC
conductor, ACSR conductor and conductors for 765 KV / 800 KV HVDC, ground wires and GI Wires.
Our Company started operations with a single manufacturing unit being Factory Unit – I in Jorhat
(Assam) in the year 1986. Subsequently, we expanded our capacities by setting up a second unit being
Factory Unit – II at Sikar (Rajasthan) in the year 1991 and subsequently setup our third manufacturing
unit being Factory Unit – III in Bapi (Rajasthan) in the year 2010, with an annual capacity of 15,900
MT. After setting up of the third unit, our Company’s total production capacity increased to 29,000 MT
per annum. Our Company strives to employ the latest machines, testing equipments and technology at
our various manufacturing facilities. Our Company’s product can be customized based on the
customers’ requirements. Further, we periodically review the sourcing of our raw materials to maintain
quality and to ensure timely delivery of our products.
With more than 30 years of experience, we believe we are one of the prominent integrated EPC / turnkey
contractors and OC and GI Wire manufacturers in the power transmission and distribution sector in
north-east India. We have over the years forayed into the EPC / turnkey project activities and have
supplied, erected, constructed and commissioned 400KV, 220KV, 132KV, 33KV, 11KV sub-stations,
transmission and distribution lines under various schemes undertaken by the Government for the
development of the power distribution sector, especially in the north-east region of India. Assam Power
Sector Investment Program (APSIP) funded by Asian Development Bank ("ADB"), Deen Dayal
Upadhyaya Gram Jyoti Yojana ("DDUGJY"), Integrated Power Development Scheme ("IPDS"), Rajiv
Gandhi Grameen Vidyutikaran Yojana ("RGGVY"), Trade Development Fund Scheme ("TDF"),
Assam Bikash Yojana ("ABY") and North Eastern Region Power System Improvement Project
("NERPSIP") are some such schemes to name a few under which we have implemented some of our
projects. We aim to continue to build our strengthss in the field of manufacturing Ocs, ground wires
and GI Wires; and execution of EPC / turnkey projects in the power distribution sector.
We have been a qualified supplier to Power Grid Corporation of India Limited ("PGCIL") for more
than eight years and have successfully completed orders for supplying of 765 KV / 800 KV HVDC
conductors to them. We have also been executing EPC / turnkey projects in the power transmission and
distribution sector in India for PGCIL and many state power utilities. PGCIL is the largest transmission
utility in the country (Source: ICRA Report, September 2018) and we are a qualified supplier to them
for all types of Ocs.
In the year 1986, we believe, we were one of the earlys ones to start the manufacturing of OC such as
AAAC conductor, AAC conductor, and ACSR conductor for upto 400 KV lines in the north-east region
of India. Further, we believe we have successfully expanded our business to the north western region
of India by setting up our second manufacturing unit being Factory Unit – II in Sikar (Rajasthan) in the
year 1991 to serve the increased need for OC in that region. Subsequently, we set up our third
manufacturing unit being Factory Unit – III in Bapi (Rajasthan) as part of our expansion plans. Later,
our Company forayed into EPC / turnkey projects implementation space and executed several land mark
projects such as execution of sub-stations and erecting / revamping of transmission and distribution
lines. Over the years, our Company has built a strong relationship with PGCIL and many state power
utilities in India. PGCIL is one of our biggest customers and in the year 2010, we received our first
large order of approximately ₹687 million from them for supply of OCs. We continue to grow our
business with them and other state power utilities in India.
We have constantly strived to grow and improve our business. From a modest set up when we started
our business in 1986 in Jorhat (Assam), we are presently operating out of three (3) manufacturing
facilities located in Assam and Rajasthan. We have grown in the power transmission and distribution
sector from just manufacturing of OCs to undertaking EPC / turnkey projects, as well as, setting up of
506
wind energy based power plant. Presently, our Company’s clientele includes PGCIL and many state
power utilities on a pan-India basis with a strong foothold in Assam. For details regarding our history
and major milestones, please refer chapter titled "History and Certain Corporate Matters" beginning on
page 222 of this Draft Red Herring Prospectus.
For Fiscals 2018, 2017 and 2016, our revenue from operations on restated consolidated basis was
₹4,295.25 million, ₹3,891.37 million and ₹3,812.55 million, respectively, representing a CAGR of
4.05% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our net profit on restated
consolidated basis was ₹182.71 million, ₹124.64 million and ₹91.03 million, respectively, representing
a CAGR of 26.14% during the last three Fiscals. For Fiscals 2018, 2017 and 2016, our EBITDA on
restated consolidated basis was ₹427.69 million, ₹333.21 million and ₹280.77 million, respectively,
representing a CAGR of 15.06% during the last three Fiscals. Our long-term bank facilities were rated
BWR BBB (outlook: Stable) and our short-term bank facilities were rated BWR A3 by Brickwork
Ratings India Private Limited, vide their letter dated August 21, 2017.
Our business, results of operations and financial condition are affected by a number of factors,
including:
• Our ability to maintain our market position;
• Significant change in the Government’s economic liberalization and deregulation policies;
• General economic and business conditions in the markets in which we operate;
• Our ability to successfully implement our growth strategy and to successfully manufacture our
products in a timely and efficient manner;
• Fluctuation in prices of our raw materials and our reliance on third party suppliers for our raw
materials;
• Our ability to attract and retain qualified personnel
• The impact of climate change and other environmental factors;
• Occurrence of a natural disaster like floods etc.;
• Changes in the legal, regulatory and political environment in India;
• Our ability to bag and implement EPC projects in a timely and efficient manner;
• Our ability to bag orders for OCs and complete the same in a timely and efficient manner.
The Restated Summary Statement of Consolidated Assets and Liabilities of Neccon Power &
Infra Limited as at March 31, 2018, 2017 and 2016, the Restated Summary Statement of
Consolidated Profit and Loss, the Restated Summary Statement of Consolidated Cash flows the
Restated Consolidated Statement of Change in Equity for the years ended March 31, 2018, 2017
and 2016 and Notes to Restated Consolidated Financial Information (together referred as
‘Restated Consolidated Financial Information’) have been prepared in accordance with Indian
Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("Act")
read with Companies (Indian Accounting Standards) Rules, 2015; and the other relevant provisions
of the Act and Rules thereunder. The Financial Statements have been prepared under historical cost
convention basis, except for certain assets and liabilities measured at fair value.
The Restated Consolidated Financial Information have been compiled by the Company for the
for the year ended March 31, 2018, 2017 & 2016 based on the audited consolidated financial
statements prepared under previous generally accepted accounting principles ("Indian GAAP")
adjusted in conformity with Ind AS.
507
In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company
has presented a reconciliation between the presentation of Restated Consolidated Financial
Information under Indian GAAP to Ind AS at March 31, 2016, 2017, 2018.
The Restated Financial Information have been prepared by the management in connection with the
proposed listing of equity shares of the Company by way of a fresh issue of equity shares by the
company through the offer document to be filed by the Company with the Securities and Exchange
Board of India, Registrar of Companies, Mumbai and the concerned Stock Exchanges in accordance
with the requirements of:
Section 26 read with applicable provisions within Rules 4 to 6 of the Companies (Prospectus and
Allotment of Securities) Rules, 2014 to the Companies Act, 2013; and
The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by the
Securities and Exchange Board of India ("SEBI") on August 26, 2009, as amended to date in
pursuance of provisions of Securities and Exchange Board of India Act, 1992 read along with SEBI
circular No. SEBI/HO/CFD/DIL/CIR/P/2016/47 dated March 31, 2016 (together referred to as the
"SEBI regulations").
Guidance note on reports in Company prospectuses issued by the Institute of Chartered Accountants
of India.
2. Basis of Preparation
The Restated Consolidated financial statements have been prepared on accrual basis at historical
cost, except for the certain assets and liabilities which have been measured at fair value/ amortized
cost.
3. Revenue Recognition
Revenue is primarily derived from sale of Conductor, Power and related Service from EPC Turnkey
Project.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured.
The company presents revenues on Gross basis of indirect taxes in its statement of profit and loss.
Revenue also includes adjustments made towards liquidated damages and other variation wherever
applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers
are not taken into account. Sales comprises sale of goods and services, net of trade discounts.
A. Sale of goods:
Revenue from sale of manufactured and traded goods is recognised when the goods are delivered,
and titles have been passed, provided all the following conditions are satisfied:
• significant risks and rewards of ownership of the goods are transferred to the buyer;
• the Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the good sold;
508
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the
company; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
B. Rendering of services:
Revenue from erection services is recognised when the outcome of a transaction can be estimated
reliably by reference to the stage of completion of the transaction. The outcome of a transaction can
be estimated reliably when all the following conditions are satisfied:
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the
Company;
• the stage of completion of the transaction at the end of the reporting period can be measured
reliably; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The costs incurred on erection activities till such time the outcome of the projects can be estimated
reliably and all the aforesaid conditions are fulfilled, are shown as "Inventories" and are carried as
"Erection WIP".
For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus
recognised losses as the case may be) exceeds the progress billing, the surplus is shown as due from
customers. For contracts where progress billing exceeds the aggregate of contract costs incurred to-
date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown
as the amount due to customers.
Amounts received before the related work is performed are disclosed in the Balance Sheet as a
liability towards advance received. Amounts billed for work performed but yet to be paid by the
customer are disclosed in the Balance Sheet as trade receivables. The amount of retention money
held by the customers is disclosed as part of other-current-assets and is reclassified as trade
receivables when it becomes due for payment.
4. Other income:
• Interest income is recognized on accrual basis.
• Dividend income is recognized when the right to receive dividends is unconditionally
established.
Other items of income are accounted as and when the right to receive such income arises and it is
probable that the economic benefits will flow to the Company and the amount of income can be
measured reliably.
Property, Plant and Equipment are stated at cost of acquisition i.e., cost of purchase, inclusive of
freight, erection and duties and taxes and other incidental expenditure, net of accumulated
depreciation and accumulated impairment losses, if any. Expenditure incurred subsequently relating
to property, plant & equipment is capitalised only when it is probable that future economic benefits
associated with these will flow to the company and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the Statement of Profit and Loss during the period
in which they are incurred.
509
Gains or losses arising on retirement or disposal of Property, Plant and Equipment are recognised
in the Statement of Profit and Loss.
Property, Plant and Equipment which are not ready for intended use as on the date of Balance Sheet
are disclosed as "Capital work-in-progress". Assets which are not ready for the intended use are
carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Depreciation on property, plant and equipment are provided on WDV method over their estimated
useful life determined by management. Depreciation method, useful lives and residual values are
reviewed at the end of each financial year. The useful lives of assets are as prescribed in part C of
schedule II of the Companies Act, 2013. In respect of additions to/deductions from the assets during
the reporting period, depreciation is charged on pro rata basis.
The residual values, useful lives and method of depreciation of of Property, plant and equipment is
reviewed at each financial year end and adjusted prospectively, if appropriate.
In respect of buildings on lease hold land, depreciation is charged over the period of lease of land
or the useful life stated above for buildings on freehold land, whichever is lower.
The Company has elected to use the exemption available under Ind AS 101 to continue the carrying
value for all of its Property, Plant and Equipment as recognised in the financial statements as at the
date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as
at the date of transition (1st April 2015).
6. Intangible Assets
Intangible assets acquired/ developed are measured on recognition at cost less accumulated
amortisation and impairment losses, if any. Gains or losses arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognised in the statement of profit or loss when the asset is
derecognised.
The Company has elected to use the exemption available under Ind AS 101 to continue the carrying
value for all of Intangible assets as recognised in the financial statements as at the date of transition
to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of
transition (1st April 2015).
7. Borrowing Cost
Borrowing cost includes interest, amortisation of ancillary cost incurred in connection with the
arrangement of borrowings and exchange difference arising from foreign currency borrowings to
the extent they are regarded as on adjustment to the interest cost. Borrowing cost that are attributable
to the acquisition or construction of qualifying assets are capitalised as part of the cost of such
assets. Any income earned on the temporary investment of those borrowings are is deducted from
the borrowing costs incurred. A qualifying asset is one that takes necessarily substantial period of
time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit
& Loss Account.
510
8. Investment
All equity investments within the scope of Ind AS 109 are required to be measured at fair value.
Investment in subsidiaries are carried at cost. On disposal of investments in subsidiaries, associates
and joint venture, the difference between net disposal proceeds and the carrying amounts are
recognized in the Statement of Profit and Loss.
Upon first-time adoption of Ind AS, the company has elected to measure its investments in
subsidiaries and associates at the Previous GAAP carrying amount as its deemed cost on the date
of transition to Ind AS i.e. 1st April, 2015
9. Investment in Property
Investment property is property held either to earn rental income or for capital appreciation or for
both, but not for sale in the ordinary course of business, use in production or supply of goods or
services or for administrative purposes. Investment properties are stated at cost net of accumulated
depreciation and accumulated impairment losses, if any.
Any gain or loss on disposal of investment property calculated as the difference between the net
proceeds from disposal and the carrying amount of the Investment Property is recognised in
Statement of Profit and Loss.
The Company classifies non-current assets as held for sale if their carrying amounts will be
recovered principally through a sale rather than through continuing use. Actions required to
complete the sale should indicate that it is unlikely that significant changes to the sale will be made
or that the decision to sell will be withdrawn. Management must be committed to the sale expected
within one year from the date of classification. Non-current assets classified as held for sale is
recognized at lower of its carrying amount and fair value less cost to sell. Property, Plant and
Equipment and intangible assets classified as held for sale are not depreciated or amortized.
a. Monetary Items
Transactions in foreign currencies are initially recorded at their respective exchange rates at the
date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates
prevailing on the reporting date.
511
Exchange differences arising on settlement or translation of monetary items are recognised in
Statement of Profit and Loss Account either as profit or loss on foreign currency transaction and
translation or as borrowing costs to the extent regarded as an adjustment to borrowing costs.
b. Non-monetary Items
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions.
13. Lease
Lease Agreements are classified as finance leases, if substantially all the risks and rewards
incidental to ownership of the leased asset is transferred to the lessee. Lease Agreements which
are not classified as finance leases are considered as operating lease.
14. Inventories
Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in
bringing them to their respective present location and condition netted to discount received. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated cost
of completion and estimated cost necessary to make sale.
b. Post-employment benefits
Post- employment benefits are recognised as an expense in the Statement of Profit and Loss as the
related service is provided
The Company’s net obligation in respect of defined benefit plans such as gratuity is calculated
separately for each plan by estimating the amount of future benefit that the employees have earned
in the current and prior periods, discounting that amount and deducting the fair value of any plan
assets.
The calculation of defined benefit obligation is performed at each reporting period end by a
qualified actuary using the Projected Unit Credit Method. When the calculation results in a
512
potential asset for the Company, the recognised asset is limited to the present value of the
economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan.
The current service cost of the defined benefit plan recognized in the Statement of Profit and Loss
as part of 'Employee Benefit Expense', reflects the increase in the defined benefit obligation
resulting employee service in the current year, benefit changes, curtailments and settlements. Past
service costs are recognized immediately in the Statement of Profit and Loss. The net interest is
calculated by applying the discount rate to the net balance of the defined benefit obligation and
the fair value of plan assets. This net interest is included in ‘Finance cost’ in the Statement of Profit
and Loss. The classification of the company’s net obligation into current and non- current is as per
the actuarial valuation report
Re-measurements which comprise of actuarial gains and losses, the return on plan assets
(excluding amounts included in the net interest on the net defined benefit liability (asset)) and the
effect of the asset ceiling (if any, excluding amounts included in the net interest on the net defined
benefit liability (asset)), are recognised in other comprehensive income.
a. Income Tax:
Income taxes are accrued in the same period that the related revenue and expenses arise. A provision
is made for income tax based on the tax liability computed after considering tax allowances and
exemptions. Provision are recorded when it estimated that a liability due to disallowances or other
matters is probable.
Minimum alternate tax (MAT) paid in accordance with the tax laws which gives arises in the
Balance sheet if there is convincing evidence that the Company will pay normal tax after the tax
holiday period and the resultant assets can be measured reliable. The company offsets on a year on
year basis the current tax assets and liability, where it has a legally enforceable right and where it
intends to settle such assets and liability on net basis.
Current tax items are recognised in correlation to the underlying transaction either in the Statement
of Profit and Loss, other comprehensive income or directly in equity.
b. Deferred Tax:
Deferred tax is provided using the Balance Sheet method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date. Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
513
reporting date and are recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in the Statement
of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.
Basic earnings per share is calculated by dividing the profit or loss for the period after deducting
attributable taxes by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the profit or loss for the period after tax
and the weighted average number of shares outstanding during the period are adjusted for the effect
of all dilutive potential equity shares.
In accordance with Ind AS 109, the Company applies Expected Credit Loss ("ECL") model for
measurement and recognition of impairment loss on the financial assets measured at amortized cost
and debt instruments measured at Fair Value through other comprehensive income (FVOCI).
All assets other than inventories, investments, and deferred tax assets, are reviewed for
impairment, wherever events or changes in circumstance indicate that the carrying amount may
not be recoverable. Assets whose carrying value exceeds their recoverable amount are written
down to the recoverable amount.
Provision are recognised when the Company has a present legal obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will be required to settle the obligation
and a reliable estimate can be made for the amount of the obligations.
Contingent Liabilities are disclosed when there is a possible obligation a possible obligation arising
from past events, the existence of which will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent liabilities are not provided for in the accounts but disclosed by way of notes, if any.
Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
a. Initial Recognition
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Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial assets and financial liabilities are recognized
at fair value on initial recognition except for trade receivables/ trade payables which are initially
measured at transaction price. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities that are not at fair value through profit and loss are
added or deducted to/from the fair value on initial recognition.
b. Subsequent Measurement
Financial Assets:
Financial assets are subsequently measured at amortised cost if these are held within a business
model whose objective is to hold the assets in order to collect contractual cash flows and the
contractual terms of the financial assets give rise on specific dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding using the Effective
Interest Rate (EIR) method. The EIR amortisation is included in finance income in the Statement
of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit
and Loss.
Financial assets are subsequently measured at fair value through Other Comprehensive Income if
these are held within a business model whose objective is to hold the assets in order to collect
contractual cash flows and selling financial assets and the contractual terms of the financial assets
give rise on specific dates to cash flows that are SPPI on the principal amount outstanding. After
initial measurement, these assets are subsequently measured at fair value. Interest income under
EIR method, foreign exchange gains and losses and impairment losses are recognised in the
Statement of Profit and Loss. Other net gains and losses are recognised in other comprehensive
Income
All other financial assets are measured at fair value through profit or loss.
Financial liabilities:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using EIR method. Gains
and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as
well as through the EIR amortisation process.
c. De-Recognition
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A financial liability or a part of financial liability is de-recognised from the Balance Sheet when the
obligation specified in the contract is discharged, cancelled or expired. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as the de-
recognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Cash and cash equivalents comprise cash and cash deposits with the Bank. The Company considered
all highly liquid investments with remaining maturity at the date of purchase of three months or less
and are readily convertible to known amounts of cash to be cash equivalents.
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with investing or financing cash
flows. The cash flows from operating, investing and financing activities are segregated.
The following table sets forth certain information with respect to our revenues, expenses and profits,
also expressed as a percentage of our total revenue, for Fiscals 2018, 2017 and 2016 as derived from
our Restated Consolidated Financial Statements:
Revenue
Revenue – Total revenue consists of revenue from operations and other income.
Revenue from Operations – Revenue from operations comprises of revenues from the sale of goods and
other income. Sale of products majorly consists of sale of manufactured goods and contract sale
(material supply and erection works).
Other Income – Other income majorly consists of interest income from financial assets and foreign
exchange gain.
Our revenues from the sale of manufactured goods and other income were as follows:
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Expenses
Our total expenses consists of cost of materials consumed, purchase of stock in trade, changes in
inventories of finished goods, work-in-progress and stock in trade, excise duty, employee benefit
expenses, finance cost, depreciation and amortization expenses and other expenses.
Cost of materials consumed – Cost of materials consumed comprises cost incurred towards the purchase
of raw materials, packing material reduced by any insurance claim and transitional input claim under
GST on stock.
Purchase of stock in trade – Purchase of stock in trade primarily comprises of expenses towards
purchase of traded goods.
Changes in inventories of finished goods, work-in-progress and stock in trade -We include net of our
closing and opening stocks of finished goods, work in progress and RM Scraps as an expense.
Employee benefit expense – Employee benefit expense primarily includes expenses towards salaries
and wages, directors’ remuneration, contribution to provident and other funds, gratuity benefits, staff
welfare expenses and director sitting fees.
Finance Cost – Finance cost primarily consists of interest on loans from banks and other finance
charges, interest on DBO, Interest to suppliers and others and interest on cash credit.
Depreciation and amortization expenses – Depreciation and amortization expenses primarily consist of
depreciation of tangible and intangible fixed assets.
Other expenses – Other expenses primarily include costs incurred towards sub-contractor charges, bank
charges, repairs and maintenance, rates and taxes, insurance premium, legal, license and professional
charges, travel and conveyance and miscellaneous expenses.
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Tax Expense
Current tax expense – Our current income tax expenses are calculated in accordance with tax
regulations relevant to our business.
Deferred tax charge/ (credit) - Our deferred tax expense and benefit reflects the tax effects of timing
differences between accounting and taxable income for the period.
Profit/ (loss) for the period, represents the summation of all revenue less expenses and tax.
Total income
Our total income has increased from ₹3,923.41 million for the Fiscal 2017 to ₹4,332.62 million for the
Fiscal 2018. This was primarily on account of increase in revenue from sale of transmission line, wire
and conductor, increase in contract erection works and increase in other income.
Our revenue from operations comprises of revenue from sale of goods and other operating revenue
amounting to ₹4,295.25 million & nil respectively for Fiscal 2018 and ₹3,882.10 million & ₹9.27
million respectively for Fiscal 2017. The increase in revenue from operations can majorly be attributed
to increase in revenue from sale of transmission line, wire and conductor and electricity power which
increased to ₹1,606.58 million and ₹7.52 million, respectively in Fiscal 2018 as compared to ₹1,235.53
million and ₹8.39 million, respectively in Fiscal 2017 and contract sale which increased to ₹505.59
million in Fiscal 2018 as compared to ₹410.05 million in Fiscal 2017.
519
Other income
Our other income has increased by 16.67% from ₹32.03 million for the Fiscal 2017 to ₹37.37 million
for the Fiscal 2018, primarily on account of gain on foreign currency transactions.
Total Expenses
Our total expenses have increased by 8.65% from ₹3,728.21 million for the Fiscal 2017 to ₹4,050.62
million for the Fiscal 2018. This was mainly due to increase in cost of materials consumed, employee
benefit expenses, depreciation and amortization expenses, other expenses and finance costs.
Our cost of material consumed has increased by 8.92% from ₹2,710.07 million for the Fiscal 2017 to
₹2,951.74 million for the Fiscal 2018, primarily on account of increased manufacturing of transmission
line, wire and conductor and higher contract sale of erection works. However, the cost of materials
consumed as a percentage of the total income went down from 69.07% in Fiscal 2017 to 68.13% in
Fiscal 2018.
Purchase of stock-in-trade
There was no purchase of stock in trade in the Fiscals 2018 and 2017.
In Fiscal 2018, the changes in inventories of finished goods, work-in-progress and stock-in-trade stood
at ₹32.06 million as compared to (₹17.70 million) in Fiscal 2017. Our finished goods inventories have
decreased by ₹31.97 million in Fiscal 2018 primarily on account of higher sales and dispatch of finished
goods during Fiscal 2018.
Excise Duty
The Excise duty fell from ₹119.89 million in Fiscal 2017 to ₹42.84 million in Fiscal 2018 because with
effect from July 1, 2017, excise duty was replaced by GST.
Our employee benefit expenses have increased by 39.37% from ₹109.54 million for the Fiscal 2017 to
₹152.67 million for the Fiscal 2018, on account of higher number of employees thereby resulting in
higher salary and wages, increase in contribution to PF and gratuity, increased staff welfare expenses
and increased directors’ remuneration. The number of employees has gone up to 486 in Fiscal 2018 as
compared to 477 in Fiscal 2017. Further, the employee benefit expenses as a percentage of total income
has increased from 2.79% in Fiscal 2017 to 3.52% in Fiscal 2018.
Finance cost
Our finance cost has increased by 2.63% from ₹119.96 million for the Fiscal 2017 to ₹123.11 million
for the Fiscal 2018, primarily on account of interest to suppliers and others, interest on cash credit and
interest on DBO which increased from ₹3.70 million, ₹93.51 million and ₹0.53 million, respectively in
Fiscal 2017 to Rs. 14.95 million, ₹104.32 million and ₹0.80 million, respectively in Fiscal 2018.
However, the finance cost as a percentage of total income has decreased from 3.06% in Fiscal 2017 to
2.84% in Fiscal 2018.
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Depreciation and amortisation expenses
The depreciation and amortisation expenses have increased by 25.10% from ₹18.05 million for the
Fiscal 2017 to ₹22.58 million for the Fiscal 2018, mainly due to purchase of fixed assets during Fiscal
2018.
Other expenses
Our other expenses have increased by 8.56% from ₹668.40 million in Fiscal 2017 to ₹725.61 million
in Fiscal 2018, primarily due to sub contractor charges which increased to ₹399.95 million in Fiscal
2018 from ₹348.13 million in Fiscal 2017; increase in repairs and maintenance expenses from ₹28.62
million in Fiscal 2017 to ₹44.14 million in Fiscal 2018; increase in travel and conveyance from ₹12.08
million in Fiscal 2017 to ₹20.14 million in Fiscal 2018; increase in insurance premium from ₹16.17
million in Fiscal 2017 to ₹26.35 million in Fiscal 2018 and increase in miscellaneous expenses from ₹
40.47 million in Fiscal 2017 to ₹61.97 million in Fiscal 2018. However, our other expenses as a
percentage of total revenue have decreased from 17.04% in Fiscal 2017 to 16.75% in Fiscal 2018.
Our profit before tax increased by 44.47% from ₹195.20 million in Fiscal 2017 to ₹282.00 million in
Fiscal 2018 primarily on account of increase in revenue from operations and increase in other income.
As a percentage of total income, our profit before tax has increased from 4.98% in Fiscal 2017 to 6.51%
in Fiscal 2018.
Tax expense
Our tax expense has increased by 40.16% from ₹70.56 million in Fiscal 2017 to ₹98.90 million in Fiscal
2018 primarily on account of tax on higher profits.
Our profits have increased by 46.59% from ₹124.64 million in Fiscal 2017 to ₹182.71 million in Fiscal
2018 due to increase in revenue from sale of transmission line, wires and conductor by 30.03%, increase
in contract sale of erection works by 23.30% and increase in other income by 16.67% during the Fiscal
2018 as compared to Fiscal 2017. Further, profit for the period as a percentage of total revenue has
increased from 3.18% in Fiscal 2017 to 4.20% in Fiscal 2018.
Total revenue
Our total income has increased from ₹3,831.50 million for the Fiscal 2016 to ₹3,923.41 million for the
Fiscal 2017. This was primarily on account of increase in revenue from other income and higher revenue
from contract sale of erection works.
Our revenue from operations comprises of revenue from sale of goods and other operating revenue
amounting to ₹3,882.10 million & ₹9.27 million respectively in Fiscal 2017 and ₹3,814.04 million &
(₹1.48 million) respectively in Fiscal 2016. The increase in revenue from operations can majorly be
attributed to contract sale from erection works which increased to ₹410.05 million in Fiscal 2017 as
521
compared to ₹127.72 million in Fiscal 2016.
Other income
Our other income has increased by 69.02% from ₹18.95 million for the Fiscal 2016 to ₹32.03 million
for the Fiscal 2017, primarily on account of higher gain on foreign currency transactions, higher profit
on sale of fixed assets and higher interest from financial assets.
Total Expenses
Our total expenses have increased by 1.53% from ₹3,672.16 million for the Fiscal 2016 to ₹3,728.21
million for the Fiscal 2017. This was mainly due to increase in employee benefit expenses, other
expenses and finance costs.
Our cost of material consumed has decreased by 9.27% from ₹2,987.06 million for the Fiscal 2016 to
₹2,710.07 million for the Fiscal 2017, primarily on account of fluctuation in the cost of primary raw
materials like aluminium, steel, iron and other EPC / turnkey components.
Purchase of stock-in-trade
The purchase of stock in trade amounted to ₹ 21.28 million in Fiscal 2016 however, there was no
purchase of stock in trade in the Fiscal 2017, since the relevant projects had been completed.
In Fiscal 2017, the changes in inventories of finished goods, work-in-progress and stock-in-trade stood
at (₹17.07 million) as compared to (₹12.05 million) in Fiscal 2016. Our finished goods inventories have
increased by ₹17.51 million in Fiscal 2017 since we were awaiting completion of process leading to
invoicing the customers.
Excise Duty
The Excise duty fell from ₹138.45 million in Fiscal 2016 to ₹118.89 million for Fiscal 2017 on account
of exemption on excise duty granted on certain orders with the Company.
Our employee benefit expenses have increased by 32.89% from ₹82.43 million for the Fiscal 2016 to
₹109.54 million for the Fiscal 2017, on account of higher salary and wages, increase in contribution to
PF and gratuity, increased staff welfare expenses and increased directors’ remuneration. Further, the
employee benefit expenses as a percentage of total income has increased from 2.15% in Fiscal 2016 to
2.79% in Fiscal 2017.
Finance cost
Our finance cost has increased by 16.35% from ₹103.10 million for the Fiscal 2016 to ₹119.96 million
for the Fiscal 2017, primarily on account of interest expenses and higher interest on cash credit which
increased from ₹10.69 million and ₹85.83 million, respectively in Fiscal 2016 to Rs. 20.55 million and
₹93.51 million, respectively in Fiscal 2017. Further, the finance cost as a percentage of total income
has increased from 2.69% in Fiscal 2016 to 3.06% in Fiscal 2017.
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Depreciation and amortisation expenses
The depreciation and amortisation expenses have fallen by 1.47% from ₹18.32 million for the Fiscal
2016 to ₹18.05 million for the Fiscal 2017, because the WDV method is used for depreciation thereby
resulting in lower depreciation amount in succeeding years.
Other expenses
Our other expenses have increased by 100.38% from ₹333.57 million in Fiscal 2016 to ₹668.40 million
in Fiscal 2017, primarily due to bank charges which increased to ₹76.54 million in Fiscal 2017 from
₹38.36 million in Fiscal 2016; increase in sub contractor charges from ₹117.39 million in Fiscal 2016
to ₹348.13 million in Fiscal 2017; increase in travel and conveyance from ₹9.74 million in Fiscal 2016
to ₹12.08 million in Fiscal 2017; increase in insurance premium from ₹7.09 million in Fiscal 2016 to
₹16.17 million in Fiscal 2017, increase in legal, license and professional charges from ₹ 4.86 million in
Fiscal 2016 to ₹10.95 million in Fiscal 2017, increase in rates and taxes from ₹8.51 million in Fiscal
2016 to ₹35.05 million in Fiscal 2017 and increase in miscellaneous expenses from ₹18.26 million in
Fiscal 2016 to ₹40.47 million in Fiscal 2017. Further, our other expenses as a percentage of total revenue
has increased from 8.71% in Fiscal 2016 to 17.04% in Fiscal 2017.
Our profit before tax increased by 22.51% from ₹159.34 million in Fiscal 2016 to ₹195.20 million in
Fiscal 2017 primarily on account of increase in revenue from operations increase in other income, fall
in cost of materials consumed and lower depreciation and amortization expenses. As a percentage of
total income, our profit before tax has marginally increased from 4.16% in Fiscal 2016 to 4.98% in
Fiscal 2017.
Tax expense
Our tax expense has increased by 3.29% from ₹68.31 million in Fiscal 2016 to ₹70.56 million in Fiscal
2017 primarily on account of tax on higher profits.
Our profits have increased by 36.92% from ₹91.03 million in Fiscal 2016 to ₹124.64 million in Fiscal
2017 due to increase in revenue from increase in contract sale of erection works by 221.05%, increase
in other income by 69.02%, and fall in cost of raw materials consumed by 9.27%. Further, profit for the
period as a percentage of total revenue has increased from 2.38% in Fiscal 2016 to 3.18% in Fiscal
2017.
As of March 31, 2018, we had cash and cash equivalents of ₹ 102.72 million. Cash and cash equivalents
consist of cash on hand, bank balances and cheque in hand. Our primary liquidity needs have been to
finance our operations, working capital needs and capital expenditures. We have historically met our
liquidity needs primarily through a combination of borrowings and internally generated cash flows.
Further, we expect to meet our working capital requirements primarily from the cash flows from our
business operations and working capital borrowings from banks as may be required.
523
Our short-term liquidity requirements relate to servicing our debt and funding working capital
requirements. Sources of short-term liquidity include cash balances, receipts from our operations and
short term borrowings.
Our long-term liquidity requirements are for repayment of debt under our bank borrowings. Sources of
funding our long-term liquidity requirements include new loans, equity issues.
Cash flows
Set forth below is a table of selected information from our Company’s restated cash flow statements for
the periods indicated.
(in ₹ million)
Particulars Fiscal 2018 Fiscal 2017 Fiscal 2016
Net cash from/ (used in) operating 531.45 (125.53) 372.95
activities
Net cash from/ (used in) investing (177.19) (267.69) (628.18)
activities
Net cash from/ (used in) financing (361.39) 267.54 28.25
activities
Net increase/ (decrease) in cash and (7.15) (79.33) 11.20
cash equivalents
Opening cash and cash equivalents 109.87 189.20 178.00
Closing cash and cash equivalents 102.72 109.87 189.20
Net cash from operating activities in Fiscal 2018 was ₹531.45 million and our operating profit before
working capital adjustment for that period was ₹401.75 million. The difference was primarily
attributable to decrease in other current assets by ₹228.79 million, decrease in inventories by ₹110.89
million and increase in trade payables by ₹172.25 million, which were adjusted against increase in trade
receivables by ₹143.12 million, decrease in other current liabilities by ₹164.53 million and outflow
towards taxation amounting to ₹102.59 million.
Net cash used in operating activities in Fiscal 2017 was ₹123.53 million and our operating profit before
working capital adjustment for that period was ₹303.80 million. The difference was primarily
attributable to increase in other current assets by ₹238.27 million, increase in trade receivables by
₹602.98 million, increase in inventories by ₹58.41 million and outflow towards taxation amounting to
₹72.43 million which were adjusted against increase in trade payables by ₹136.71 million, increase in
other financial liabilities by ₹31.39 million and increase in other current liabilities by ₹432.24 million.
Net cash from operating activities in Fiscal 2016 was ₹372.95 million and our operating profit before
working capital changes for that period was ₹257.15 million. The difference was primarily attributable
to increase in other current assets by ₹357.13 million, increase in trade receivables by ₹151.64 million,
increase in inventories by ₹58.41 million and outflow towards tax amounting to ₹58.29 million which
were adjusted against decrease in other non current assets by ₹77.65 million, increase in trade payables
by ₹484.04 million and increase in other financial liabilities by ₹152.62 million.
In Fiscal 2018, our net cash used in investing activities was ₹177.19 million. This primarily consisted
of payments towards purchase of property, plant and equipment amounting to ₹79.78 million, additional
524
investment in capital work in progress amounting to ₹39.65 million, increase in investment amounting
to ₹35.00 million, payment towards investment in property amounting to ₹4.84 million, increase in
bank deposits having more than 3 months original maturity by ₹43.86 million which were adjusted
against interest income of ₹25.94 million.
In Fiscal 2017, our net cash used in investing activities was ₹267.69 million. This primarily consisted
of payments towards purchase of property, plant and equipment amounting to ₹37.57 million, additional
investment in capital work in progress amounting to ₹151.41 million, increase in investment amounting
to ₹1.56 million, payment towards investment in property amounting to ₹12.68 million and increase in
bank deposits having more than 3 months original maturity by ₹93.86 million which were adjusted
against interest income of ₹29.40 million.
In Fiscal 2016, our net cash used in investing activities was ₹628.18 million. This primarily consisted
of payments towards purchase of property, plant and equipment amounting to ₹33.54 million, additional
investment in capital work in progress amounting to ₹526.22 million and increase in bank deposits
having more than 3 months original maturity by ₹92.05 million which were adjusted against interest
income of ₹23.62 million.
In Fiscal 2018, our net cash used in financing activities was ₹361.39 million. This primarily reflected
repayment of long term borrowings amounting to ₹142.48 million, repayment of short term borrowing
amounting to ₹95.80 million and interest expenditure of ₹123.11 million.
In Fiscal 2017, our net cash from financing activities was ₹267.54 million. This primarily reflected cash
flow from preferential allotment amounting to ₹254.73 million and short term borrowing availed
amounting to ₹220.58 million which were adjusted against repayment of long term borrowings
amounting to ₹78.82 million and interest expenditure of ₹119.96 million.
In Fiscal 2016, our net cash from financing activities was ₹28.25 million. This primarily reflected fresh
long term and short term borrowings availed amounting to ₹78.16 million and ₹53.19 million,
respectively, which were adjusted against interest expenditure of ₹103.10 million.
Financial indebtedness
The following table sets forth our consolidated secured and unsecured debt position as at March 31,
2018:
(₹in million)
Particulars March 31, 2018
Secured loans
Fund based
Term loans from bank * 222.41
Cash credit; overdraft from bank 804.09
Sub-total (A) 1,026.50
Non – Fund based
Bank Guarantee and LC 4,183.96
Sub-total (B) 4,183.96
Vehicle loans 4.90
Sub-Total (C) 4.90
Unsecured loans (payable on demand)** 9.52
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Sub-total (D) 9.52
Total (A+B+C+D) 5,224.88
*The term loan from bank pertains to loan availed by our Subsidiary.
** Our Subsidiary has availed an unsecured loan from our Company amounting to ₹277.93 million
outstanding as at March 31, 2018, which upon consolidation has been eliminated.
For details of our financial indebtedness, please refer chapter titled "Financial Indebtedness" beginning
on page 530 of this Draft Red Herring Prospectus.
Contingent liabilities not provided for and commitments as on March 31, 2018
(in ₹ million)
Particulars Amount
Unexpired guarantees issued on behalf of our Company by Banks for which the 3,505.97
Company has provided counter guarantees
Corporate Guarantee provided on behalf of Subsidiary for term loan 255.00
Claims against the company not acknowledged as debts (statutory dues)
• Service Tax - CENVAT disallowance (FY 2006 – FY 2011) (including
interest on service tax) 25.00
For further details, please refer chapter titled "Financial Statements" beginning on page 281 of this
Draft Red Herring Prospectus.
We do not have any off-balance sheet arrangements or derivative instruments, which are reasonably
likely to have a current or future material effect on our results of operations or financials condition.
Market risk is the risk of loss related to adverse changes in market prices, including interest rate and
foreign exchange fluctuation risk. We are exposed to various types of market risks in the normal course
of business like interest rate risk, foreign exchange fluctuation risk, inflation risk and commodity price
risk amongst others.
Our exposure to interest rate risks primarily relates to our debt. Fluctuations in interest rates could
negatively affect the amount of interest payable by us under our debt obligations and could make it
more difficult for us to procure new debt on attractive terms.
Changes in currency exchange rates influence our results of operations. We import some of our raw
materials which are denominated in foreign currencies, primarily USD. During Fiscal 2018, our
Company imported 45.68% of its total raw material requirement for manufacturing of OCs.
Additionally, we also have certain deemed exports / green corridor projects which are transacted in
USD. Because of such foreign currency exposures, exchange rate fluctuations between the Indian Rupee
and USD can have a material impact on our results of operations, cash flows and financial condition.
The exchange rate between the Indian Rupee and USD has been volatile in recent times.
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Impact of inflation
In recent years, India has experienced relatively high rates of inflation. While we believe inflation has
not had any material impact on our business and results of operations, inflation generally impacts the
overall economy and business environment and hence could affect us.
We are exposed to the price fluctuation risk of our primary raw materials (aluminium) which is used
for the manufacturing of OCs. The cost of raw material consumed represented 68.72% and 69.64% of
our revenue from operations in Fiscal 2018 and Fiscal 2017, respectively. These materials are global
commodities and their prices are cyclical in nature and fluctuate in accordance with global market
conditions. Further, the prices of our commodities are also dependent on the demand which may vary
from time to time.
To the best of our knowledge, there have been no subsequent developments after the date of our
financial statements contained in this Draft Red Herring Prospectus which materially affects, or is likely
to affect, our operations or profitability, or the value of our assets, or our ability to pay our material
liabilities within the next 12 months.
To the best of our knowledge, except as disclosed in this Draft Red Herring Prospectus, there have been
no transactions or events which, in our judgment, would be considered unusual or infrequent.
Except as described in "Risk Factors" and "Key Regulations and Policies" on pages 21 and 214,
respectively, of this Draft Red Herring Prospectus, to the best of our knowledge, there have been no
significant economic or regulatory changes that we expect could have a material adverse effect on our
results of operations.
Other than as described in the sections "Risk Factors" and this "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 21 and 505, respectively of this Draft Red
Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or had or are
expected to have a material adverse impact on our revenues or income from continuing operations.
Other than as described in the section "Risk Factors" and this "Management’s Discussion and Analysis
of Financial Condition and Results of Operations" on pages 21 and 505, respectively of this Draft Red
Herring Prospectus, there are no known factors that might affect the future relationship between cost
and revenue.
The revenue break-up of our Company for manufacturing of OCs and EPC / turnkey projects for FY
2018, FY 2017 and FY 2016 was:
527
(in ₹ million)
Particular Manufactu % of EPC / % of Power % of Total
s ring Total Turnkey Total Generatio Total Revenue
Revenues Revenues n Division Revenues from
from from from Operation
Operation Operation Operation s
s s s
FY 2018 1,560.75 36.33 2,726.97 63.49 7.52 0.18 4,295.24
FY 2017 1,231.85 31.65 2,651.13 68.13 8.39 0.22 3,891.37
FY 2016 1,083.66 28.42 2,722.04 71.40 6.86 0.18 3,812.55
Other than as described in the section titled "Our Business" beginning on page 191 of this Draft Red
Herring Prospectus, to our knowledge, there are no new products or business segments.
Seasonality
Both our manufacturing and EPC/turnkey projects segments are affected during the rainy season due to
unfavourable conditions of the terrain in North East India for construction activities and/or laying of
power transmission and distribution lines.
We are substantially dependent on a few customers and suppliers who form part of the top 5 customers
and suppliers. Please find below our major customers’ contribution to our total revenues:
Details of our major suppliers' contribution to our total purchase of raw materials (for manufacturing of
OCs) are:
Competitive conditions
For further details, please refer to the discussions of our competition in the sections and "Our Business"
on page 191 of this Draft Red Herring Prospectus.
528
Certain matters noted by auditors
Statutory auditors of our Company have not specified any qualifications/ observations/matters of
emphasis in their respective audit reports of our Company.
529
FINANCIAL INDEBTEDNESS
Set forth below is a brief summary of all borrowings of our Company and our Subsidiaries together
with a brief description of certain significant terms of such financing arrangements. As on March 31,
2018, our Company’s outstanding borrowing (on consolidated basis) is ₹ 5,224.88 million comprising
of fund based borrowing of ₹1,026.50 million, non-fund based borrowing of ₹4,183.96 million, vehicle
loans of ₹4.90 million and unsecured loan of ₹9.52 million.
A. SECURED LOANS (FUND & NON FUND BASED) AVAILED BY THE COMPANY
Our Company has entered into a working capital consortium agreement dated August 19, 2017 with
Indian Bank, Bank of Baroda, Canara Bank, Punjab National Bank, United Bank of India and Union
Bank of India. Indian Bank is the lead bank of the consortium. Further, in the consortium meeting held
on December 2, 2017, Union Bank of India had expressed their desire to leave the consortium which
was accepted by our Company and other banks (as per minutes of meeting held on December 2, 2017)
since there was no utilization by our Company of the amount sanctioned by Union Bank of India .
The details of the facilities sanctioned by the consortium of banks and availed by our Company are
given below:
Some banks have allowed full interchangeability of BG and LC limits while other banks have allowed
interchangeability from LC to BG limits. Hence the limits sanctioned for BG and LC and the utilisation of BG
and LC limits have been combined for above representation
As per paragraph 7 of Article V of the working capital consortium agreement dated August 19, 2017
our Company has agreed that working capital advance may be continued subject to review/ renewal
every year up to the satisfaction of the consortium of banks. As per paragraph 11 of Article V of the
working capital consortium agreement dated August 19, 2017 the agreement shall be current and valid
until revoked in writing by our Company by one month’s notice in advance served on the said banks
by our Company or until all the moneys due under the agreement or all moneys due in respect of any
funded or non funded facility availed by our Company from the banks or any of them are paid in full to
the said banks, whichever is later.
1. Interest Rate:
The interest rates for our borrowings under the working capital consortium agreement dated
August 19, 2017 are linked to the base rates of the bank or such rate as may be mutually agreed
between the lender and our Company from time to time.
2. Security:
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(i) mortgage of certain immovable properties of our Company;
(ii) charge on all moveable fixed assets of our Company including plant and
machinery;
(iii) charge on present and future stocks and book debts of our Company;
(iv) hypothecation of entire current assets of the Company, and
(v) personal guarantees of our Individual Promoters and their respective spouse.
3. Events of Default:
Our borrowing arrangements contain standard events of default, including the following events
which will attract penal interest over and above the normal rate of interest:
4. Restrictive covenants:
During the currency of the sanctioned facilities our Company requires the lead bank’s prior
written permission for carrying out certain actions, including:
Notwithstanding anything contained in the working capital consortium agreement dated August
19, 2017, the banks reserve the absolute right to cancel the limits unconditionally without prior
notice to our Company in the following circumstances:
(i) In case the limits/ part of the limits are not utilised by our Company;
(ii) In case of deterioration in the working capital accounts of our Company in any
manner whatsoever; and/ or
(iii) In case of non-compliance by our Company of any of the terms and conditions of
sanction letters of the said banks
531
VEHICLE LOANS
Our Company has availed a vehicle loans from a non-banking financial company, the details of which
are given below:
Our Subsidiary, Brahmaputra Infra Power Private Limited has availed secured loan from State Bank of
India, details of which as on August 31, 2018 are set out below:
Security details in respect of the above term loan availed by our Subsidiary are given below:
Primary Security:
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Details of Security by way of hypothecation for term loan
4. First charge on book debts, operating cash flows, receivables, commissions, revenue of
whatsoever nature and wherever arising including but not limited to CERs revenues, present
and future, intangibles, goodwill, present and future of the Project;
5. First charge on all the current assets including book debts & receivables of the Project.
Collateral Security:
Details of Security
(a) Equitable Mortgage of land covered by Dag No. 2044/2674 Patta No. 209/702 located at
Chengaligaon, Jorhat (Assam) owned by Basant Kumar Khetan and Sneha Khetan
(b) Equitable Mortgage of land covered by Dag No. 2044 Patta No. 2091 located at Chengaligaon,
Jorhat (Assam) owned by Basant Kumar Khetan and Sneha Khetan
(c) Equitable mortgage of land covered by Dag No. 2043 Patta No 294 located at Chengaligaon,
Jorhat (Assam) owned by Basant Kumar Khetan and Sneha Khetan
(d) Equitable Mortgage of Land covered by Dag No. 46 Patta No. 163/115 located at
Charingiagaon, Jorhat (Assam) owned by Basant Kumar Khetan
(e) Lien on short term deposit receipt of `.1.37 crores
(f) Pledge of 30% of the equity shares held by our Company in Lower Seijjusa Hydel Power
Company Private Limited
Personal Guarantee:
Corporate Guarantee:
Name of Guarantor
Neccon Power & Infra Limited
a) Our Company
Our Company has availed one unsecured loan as on March 31, 2018, the details of which are set out
below:
(₹ in million)
Name of the lender Amount outstanding
DRP Trading and Investment Private Limited 3.74
TOTAL 3.74
DRP Trading and Investment Private Limited is not an entity related to our Company, Promoter and Promoter
Group. The unsecured loan availed by our Company from DRP Trading and Investment Private Limited is
repayable on demand.
b) Our Subsidiaries
Our Subsidiary, Brahmaputra Infra Power Private Limited has availed three unsecured loans as on
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March 31, 2018, the details of which are set out below:
(₹ in million)
Name of the lender Amount outstanding
Neccon Power & Infra Limited 277.93
Topline Finvest Private Limited 1.09
Madsan Agencies Private Limited 4.38
Dr. Murlidhar Khetan 0.31
TOTAL 283.71
Neccon Power & Infra Limited is the holding company of Brahmaputra Infra Power Private Limited. Topline
Finvest Private Limited is one of the Corporate Promoters of our Company. Madsan Agencies Private Limited is
a shareholder of our Company.
Note: Upon consolidation of accounts, the unsecured loan of ₹277.93 million, given by our Company to our
Subsidiary, Brahmaputra Infra Power Private Limited gets eliminated.
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SECTION VII: LEGAL AND OTHER INFORMATION
The details of outstanding litigations or proceedings relating to our Company, our Subsidiaries, our
Group Entities, our Directors and our Promoters are described in this section in the manner as detailed
below.
Except as stated in this section, there are no outstanding: (i) criminal proceedings; (ii) actions by
statutory/ regulatory authorities; (iii) indirect and direct tax proceedings; (iv) other material
litigations; or (v) any other litigations; in each case, involving our Company, our Subsidiaries, our
Group Entities, our Directors and our Promoters whose outcome may have a material adverse effect
on our Company. Our Board, in its meeting held on June 18, 2018, adopted a policy on identification
of material litigations and material creditors ("Materiality Policy").
As per the Materiality Policy, for the purposes of (iv) above, in relation to material litigations, all
outstanding litigations involving our Company shall be considered material if: (i) the aggregate amount
involved in such litigation individually exceeds 5% of the profit after tax of the Company, as per the
last audited consolidated restated financial statements (5% of the profit after tax for Financial Year
ended March 31, 2018 being₹9.09 million), or (ii) where the decision in one litigation is likely to affect
the decision in similar litigations, even though the amount involved in such single litigation individually
may not exceed 5% of profit after tax of the Company, as per the last audited consolidated restated
financial statements, if similar litigations put together collectively exceed 5% of the profit after tax of
the Company as per the last audited consolidated restated financial statements, or (iii) litigations whose
outcome could have a material impact on the business, operations, prospects or reputation of the
Company and the Board or any of its committees shall have the power and authority to determine the
suitable materiality thresholds for the subsequent financial years on the aforesaid basis or any other
basis as may be determined by the Board or any of its committees.
Further, except as stated in this section, with regard to our Company, our Subsidiaries, our Group
Entities and our Promoters, there are no: (i) pending proceedings initiated for economic offences; (ii)
defaults and non - payment of statutory dues; (iii) inquiries, inspections or investigations initiated or
conducted under the Companies Act or any previous companies law in the last five years from the date
of this Draft Red Herring Prospectus; (iv) material frauds committed in the last five years; (v) overdues
to banks or financial institutions; (vi) defaults against banks or financial institutions by our Company,
our Subsidiaries, our Group Entities and our Promoters; (vii) fines imposed or compounding offences
by or against our Company, our Subsidiaries, our Group Entites and our Promoters under the
Companies Act in the last five years immediately preceding this Draft Red Herring Prospectus; (viii)
surveys, inquiries, inspections or investigations initiated or conducted under the IT Act; (x) matters
involving our Company pertaining to violation of securities law, (xi) any other matters filed which are
in the nature of winding up petitions or insolvency proceedings, and (xi) outstanding dues to material
creditors and material small scale undertakings.
It is clarified that for the purposes of the above, pre – litigation notices (other than notices involving
action by statutory or regulatory authorities in the last five years or which are pending) received by
our Company, our Subsidiaries, our Group Entities, our Promoters and the Directors shall, unless
otherwise decided by the Board, not be considered as material litigations until such time that litigations
proceedings are initiated before any judicial forum.
Further, dues owed by our Company to small scale undertakings and other creditors, which exceeds
5% per annum of the Company’s total trade payables as per last audited consolidated restated financial
statements, i.e., as at March 31, 2018 being ₹69.67 million ("Material Creditors") have been
535
considered as material dues for the purposes of disclosure in this Draft Red Herring Prospectus.
CONTINGENT LIABILITIES
As of March 31, 2018, contingent liabilities disclosed in our Restated Consolidated Financial
Statements aggregated to ₹3780.55 million. Set forth below are our contingent liabilities that had not
been provided for as of March 31, 2018:
(₹ in million)
Particulars Amount
Unexpired guarantees issued on behalf of our Company by Banks for 3,505.97
which the Company has provided counter guarantees
Corporate Guarantee provided on behalf of Subsidiary for term loan 255.00
Claims against the company not acknowledged as debts (statutory dues)
• Service Tax - CENVAT disallowance (FY 2006 – FY 2011)
(including interest on service tax) 25.00
For further details, please refer chapter titled "Financial Statements" beginning on page 281 of this
Draft Red Herring Prospectus.
1. Neccon Power & Infra Limited vs. Mridul Das – Complaint Case No.2876/2017
Our Company had booked a flat in an apartment building proposed to be constructed by one
Mridul Das ("Accused") over a piece of land situated at dag no. 1296 of patta no. 643 of lat no.
3, Ulubari Sahar, Kamrup (M). NECAB paid an amount of `12,00,000 and `12,00,000 vide
two cheques bearing nos. 185420 dated February 12, 2013 and 420272 dated May 7, 2013
respectively, which was duly acknowledged by the Accused and the said amounts were credited
to the bank account of the Accused. Our Company further paid an amount of `100,000 to the
Accused in cash. Thereafter, our Company enquired with the Accused about the delivery of the
flat and requested to execute a formal written agreement between the parties. However, the
Accused failed to provide a proper reply and did not come forward to execute a proper
agreement. As no progress was visible in respect of the construction of the building by the
Accused, our Company under apprehension of misappropriation of amounts paid by it to the
Accused, issued a legal notice through its advocate dated April 28, 2017 demanding refund of
the entire amount alongwith interest at the rate of 24%. Since, there was no response from the
Accused, our Company filed a complaint case against the Accused before the court of Chief
Judicial Magistrate, Kamrup(M) at Guwahati under Section 406 and 420 of the Indian Penal
536
Code, 1860.
1. Neccon Power and Infra Limited & Anr V/s. State of Assam and 5 Others - Writ Petition I
No. 1515 of 2018
Our Company alongwith one of our wholly owned Subsidiaries namely, Brahmaputra Infra
Power Private Limited ("Petitioners") had entered into an implementation agreement dated
May 18, 2010 with (i) Department of Power, the State of Assam ("Respondent No. 1") and
Assam Power Project Development Company Private Limited ("Respondent No. 3") for
designing, developing, operating and maintaining 4.7 MW Small Hydro Power Project under
the Bordikarai Irrigation Scheme of the Government of Assam ("Project") on built-operate-
transfer basis. The Project was implemented under the public private partnership ("PPP") mode.
In order to execute the Project, the Petitioners had borrowed an amount of ₹ 224.20 million
from State Bank of India, SME Jorhat Branch, Assam, ("Respondent No. 5") and thereafter
completed almost 90% of the work in respect of the Project till May 2013. Thereafter, due to
differences between the Forest Department and the Respondent Nos. 1 to 4 including Joint
Secretary of Respondent No. 1 ("Respondent No. 2") and Chief Executive Officer of
Respondent No. 3 ("Respondent No. 4") with respect to the forest clearances for the land on
which the Project was implemented, the Forest Department issued a stop work notice on May
25, 2013 and thereafter the Petitioners discontinued the Project pursuant to a termination notice
dated March 1, 2015 issued by the Petitioners to the Respondent Nos. 1 to 4. Pursuant to several
request of the Petitioners, the Respondent Nos. 1 to 4 appointed a valuer for conducting an
assessment of the work completed by the Petitioners under the Project. During the pendency of
the assessment by the valuer appointed by the Respondent Nos. 1 to 4, the Respondent No. 5
issued a demand notice dated October 16, 2017 under Section 13(2) of the SARFAESI Act
calling upon the Petitioners to pay a sum of ₹ 249.58 million. The Petitioners offered to settle
the loan amount by offering to pay a sum of ₹ 180 million as a one-time settlement which was
accepted by the Respondent No. 5, subject to the condition that the Petitioners create a charge
on the amount receivable by the Petitioners from the Respondent Nos. 1 to 4 towards the
completed portion of the work in respect of the Project. Since the same was not acceptable by
the Petitioners, they offered a revised settlement offer to the Respondent No. 5 which was
declined. The Respondent No. 5 indicated to the Petitioners vide letter dated January 1, 2018
proposing to initiate hard recovery action against the Petitioners under Section 13(4) of the
SARFAESI Act. Being aggrieved by the delay on the part of the Respondent Nos. 1 to 4 in
completion of the assessment and releasing the payment towards the work completed by the
Petitioners and also the arbitrary action proposed by the Respondent No. 5, the Petitioners filed
the above writ petition against the Respondents before the Hon’ble Gauhati High Court seeking
a writ in the nature of mandamus for directing the Respondent Nos. 1 to 4 to finalise and pay
the Petitioners the buyout price for successful completion of almost 90% of the work executed
by the Petitioners. The Petitioners also sought a restraint order against the coercive action
proposed by Respondent No. 5 for recovery of the loan during the pendency of the writ petition.
The Hon’ble Gauhati High Court vide order dated March 23, 2018 granted a stay to the
Petitioners against the recovery action proposed by the Respondent No. 5 and by an order dated
June 21, 2018 further extended the stay upto July 20, 2018. Subsequently, the Hon’ble Gauhati
High Court vide order dated July 20, 2018 further extended the stay upto July 31, 2018. The
writ petition is pending hearing and final disposal before the Hon’ble Gauhati High Court.
537
d) Other Material Pending Litigations: NIL
e) Potential Litigations:
1. Our Company alongwith our wholly owned subsidiary namely, Brahmaputra Infra Power
Private Limited ("BIPPL"), has received a notice dated October 16, 2017 under Section 13(2)
of the SARFAESI Act pursuant to BIPPL defaulting in the re-payment of loan due to the State
Bank of India, SME Jorhat Branch, Assam ("SBI"). Consequently, our Company alongwith
BIPPL has preferred a writ petition bearing no. 1515 of 2018 under which we sought a stay
against any coercive action that may be taken by SBI. The Hon’ble Gauhati High Court had
granted a stay against the said notice vide its order dated March 23, 2018 which was valid upto
May 3, 2018.The Hon’ble Gauhati High Court has further extended the stay by an order dated
June 21, 2018 against the coercive action by SBI upto July 20, 2018. Subsequently, the Writ
Petition was heard on September 15, 2018 and the Hon’ble Gauhati High Court has extended
the stay till November 19, 2018. However, in the event we are not able to succeed in the writ
petition or the stay granted under the order dated March 23, 2018 is vacated by the Hon’ble
Gauhati High Court, SBI may initiate proceedings under Section 13(4) of the SARFAESI Act
for recovery of the loan due from us to SBI. In such a case, we may be constrained to file
appropriate proceedings including, but not limited to, proceedings under Section 17 of the
SARFAESI Act. For further details in relation to the said matter, please refer paragraph
"Litigations by our Company" in this chapter.
1. Sri Marwari Thakurwari & 11 others v. Sri Chattormal Pincha and Anr – Title Appeal No.
12 of 2016
Sri Chattormal Pincha and Sri Dulichand Agarwalla had filed a title suit bearing no. 22 of 2014
against Sri Marwari Tharkurwari, a society registered under the Society Registration Act, 1860
and 11 others who were the committee members of the said society. Jugal Kishore Agarwalla,
our non-executive and independent director, who was the president of the said society was also
impleaded as one of the parties to the said suit. Under the said suit, Sri Chattormal Pincha and
Sri Dulichand Agarwalla had challenged certain decisions taken by the said society at its AGM
held on October 20, 2013 which inter-alia included enhancement of annual membership fees.
538
Sri Chattormal Pincha and Sri Dulichand Agarwalla had sought a declaration from the Munsiff
Court to the effect that the decision to increase the annual membership fees as taken by the said
society was illegal and inoperative. The Hon’ble Munsiff Court by its judgement and decree
dated August 9, 2016 held that the decision taken by the said society at its AGM dated October
20, 2013 to increase the annual membership fees was illegal and inoperative and also directed
the said society, Mr. Jugal Kishore Agarwalla and the other 10 committee members to restrain
themselves from giving effect to the said decisions until the constitution of the said society was
amended. Being aggrieved by the said judgement and decree dated August 9, 2016, the said
society and Mr. Jugal Kishore Agarwalla alongwith 10 others against whom the judgement and
decree was passed filed an appeal bearing No. 12 of 2016 before the Court of Civil Judge at
Jorhat, Assam against the said judgment and decree. The matter is pending for hearing and final
disposal before Court of Civil Judge at Jorhat, Assam.
e) Potential Litigations:
Our Company alongwith our wholly owned subsidiary namely, Brahmaputra Infra Power
Private Limited ("BIPPL"), has received a notice dated October 16, 2017 under Section 13(2)
of the SARFAESI Act pursuant to BIPPL defaulting in the payment of loan due to State Bank
of India, SME Jorhat Branch, Assam ("SBI"). A copy of the said notice was also forwarded to
our Whole-time Director Dr. Murlidhar Khetan and our Joint Managing Director Basant Kumar
Khetan in view of the personal guarantees provided by them to SBI as collateral for the loan
availed by BIPPL. In the event the personal guarantees provided by the above mentioned
Directors are enforced by SBI, they may be constrained to file appropriate proceedings
challenging the recovery action of SBI against the said Directors.
e) Potential Litigations:
539
Our Company alongwith our wholly owned subsidiary namely, Brahmaputra Infra Power
Private Limited ("BIPPL"), has received a notice dated October 16, 2017 under Section 13(2)
of the SARFAESI Act pursuant to BIPPL defaulting in the payment of loan due to State Bank
of India, SME Jorhat Branch, Assam ("SBI"). A copy of the said notice was also forwarded to
our Individual Promoters Dr. Murlidhar Khetan and Basant Kumar Khetan in view of the
personal guarantees provided by them to SBI as collateral for the loan availed by BIPPL. In the
event the personal guarantees provided by the above mentioned Individual Promoters are
enforced by SBI, they may be constrained to file appropriate proceedings challenging the
recovery action of SBI against the said Individual Promoters.
1. Neccon Power and Infra Limited & Anr V/s. State of Assam and 5 Others - Writ Petition I
No. 1515 of 2018
Our wholly owned subsidiary namely Brahmaputra Infra Power Private Limited along with our
Company has filed a Writ Petition bearing No. 1515 of 2018 before the Hon’ble Gauhati High
Court against (i) Department of Power, the State of Assam and its Joint Secretary ("Respondent
Nos. 1 and 2"), (ii) Assam Power Project Development Company Private Limited and its Chief
Executive Officer ("Respondent Nos. 3 and 4") and (iii) State Bank of India, SME Jorhat
Branch, Assam, and its Manager ("Respondent Nos. 5 and 6") seeking a writ in the nature of
mandamus against the Respondent Nos. 1 to 6. For further details in relation to the said matter,
please refer to the section "Litigations by our Company" in this chapter.
e) Potential Litigations:
Our Company alongwith our wholly owned subsidiary namely, Brahmaputra Infra Power
Private Limited ("BIPPL"), has received a notice dated October 16, 2017 under Section 13(2)
of the SARFAESI Act pursuant to BIPPL defaulting in the payment of loan due to State Bank
of India, SME Jorhat Branch, Assam ("SBI"). A copy of the said notice was also forwarded to
one of our Subsidiaries namely, Lower Seijusa Hydel Power Private Limited ("LSHP") in view
540
of the corporate guarantee provided by it to SBI as collateral for the loan availed by BIPPL.
Consequently, our Company alongwith BIPPL has preferred a writ petition bearing no. 1515
of 2018 under which our Company had sought a stay against any coercive action that may be
taken by SBI. The Hon’ble Gauhati High Court had granted a stay against the said notice vide
its order dated March 23, 2018 which was valid upto May 3, 2018. The Hon’ble Gauhati High
Court has further extended the stay by an order dated June 21, 2018 against the coercive action
by SBI upto July 20, 2018. However, in the event we are not able to succeed in the writ petition
or the stay granted under the order dated March 23, 2018 is vacated by the Hon’ble Gauhati
High Court, SBI may initiate proceedings under Section 13(4) of the SARFAESI Act for
recovery of the loan due from us to SBI. In such a case, we may be constrained to file
appropriate proceedings including, but not limited to, proceedings under Section 17 of the
SARFAESI Act. Likewise, in the event the corporate guarantee provided by LSHP is enforced
by SBI, LSHP may be constrained to file appropriate proceedings challenging the recovery
action of SBI against it. For further details in relation to the said matter, please refer to the
section "Litigations by our Company" in this chapter.
1. North Eastern Cables Private Limited vs. Mridul Das – Complaint Case No.2887/2017
One of our Group Entities i.e. North Eastern Cables Private Limited ("NECAB"), had booked
a flat in an apartment building proposed to be constructed by one Mridul Das ("Accused") over
a piece of land situated at dag no. 1296 of patta no. 643 of lat no. 3, Ulubari Sahar, Kamrup
(M). NECAB paid an amount of `8,00,000 and `6,50,000 vide two cheques bearing nos.
135437 dated February 12, 2013 and 135455 dated May 7, 2013 respectively, which was duly
acknowledged by the Accused and the said amounts were credited to the bank account of the
Accused. Thereafter, NECAB enquired with the Accused about the delivery of the flat and
requested to execute a formal written agreement between the parties. However, the Accused
failed to provide a proper reply and did not come forward to execute a proper agreement. As
no progress was visible in respect of the construction of the building by the Accused, NECAB
under apprehension of misappropriation of amounts paid by it to the Accused, issued a legal
notice through its advocate dated April 28, 2017 demanding refund of the entire amount
alongwith interest at the rate of 24%. Since, there was no response from the Accused, NECAB
filed a complaint case against the Accused before the court of Chief Judicial Magistrate,
Kamrup(M) at Guwahati under Section 406 and 420 of the Indian Penal Code, 1860.
541
c) Litigation Involving Actions by Statutory/Regulatory Authorities: NIL
F. TAX MATTERS
The details of the amount of the outstanding tax matters payable by our Company, our
Subsidiaries, our Group Entities, our Directors and our Promoters as on the date of filing of this
Draft Red Herring Prospectus are summarized as below:
I) DIRECT TAX
There are no litigations or legal actions pending or taken by any ministry or department of the
Government or a statutory authority against the Promoters of our Company during the last five
years immediately preceding the year of the issue of this Draft Red Herring Prospectus and any
direction issued by such Ministry or Department or statutory authority upon conclusion of such
litigations or legal actions.
As on March 31, 2018, our Company has 324 creditors to whom a total amount of ₹1,393.41
million is outstanding. Based on the Materiality Policy adopted by our Board, the threshold for
material dues is 5% of total trade payables, as per last audited consolidated restated financial
statements, i.e., as at March 31, 2018, i.e. 5% of ₹1,393.41 million which is ₹69.67 million.
Based on the same, there are no creditors to whom the total amount due from our Company is
in excess of ₹69.67 million.
Further, based on available information regarding status of the creditor as defined under section
2 of the Micro, Small and Medium Enterprises Development Act, 2006, as of March 31, 2018,
our Company does not owe any outstanding dues to small scale undertakings. With respect to
other creditors, as of March 31, 2018, our Company owes outstanding dues of ₹1393.41 million
to a total of 324 creditors.
Complete details of outstanding dues to our creditors as on March 31, 2018 [GJ1]are available
on the website of our Company at www.necconpower.com. Information provided on the
website of our Company is not a part of this Draft Red Herring Prospectus and should not be
deemed to be incorporated by reference. Anyone placing reliance on any other source of
information, including our Company’s website, www.necconpower.com, would be doing so at
their own risk.
543
Except as stated below, there have been no inquiries, inspections or investigations initiated or
conducted under the Companies Act 2013 or any previous company law in the last five years
immediately preceding the year of issue of the Draft Red Herring Prospectus in the case of
Company, its Promoters, Directors and its Subsidiaries.
1. Our Company received a show cause notice bearing number 52/16/CAB2017 dated March 27,
2017 from Assistant Director, Ministry of Corporate Affairs (Cost Audit Branch), Government
of India under Section 148(8) of Companies Act for delay in filing the cost audit report for the
financial year 2014-15. Subsequently, our Company has vide its letter dated April 3, 2017
replied to the said show cause notice stating that our Company has filed the cost audit report
for the year financial year 2014-15 on March 21, 2016 with additional fee of `7,200.
J. COMPOUNDING APPLICATIONS
There are no applications for compounding of any non-compliances made by our Company as
on the date of this Draft Red Herring Prospectus.
The Income Tax Department at Jorhat (Assam) had carried out a survey on August 10, 2017,
at the Registered Office of our Company, under section 133A of the Income Tax Act, 1962 in
the month of August 2017. During the course of the survey operations, the income tax
authorities impounded the books of accounts and documents and stock inventories and other
items. Subsequently, the Income Tax Department at Jorhat (Assam) observed that (i) `12.95
million on account of sale of scrap material; and (ii) `37.13 million on account of cessation of
liabilities on account of sundry creditors adjustment, were not accounted for in the books of
accounts. In lieu of the same, the Income Tax Department at Jorhat (Assam) directed our
Company to file a revised return after accounting for the above mentioned items. Subsequently,
our Company has filed a revised return for the assessment year 2017 – 18 under section 139(5)
of the IT Act, with the additional tax liability of ₹50.08 million. Our Company has discharged
its entire liability by paying the additional liability.
There have been no material frauds committed against our Company in the five years preceding
the date of this Draft Red Herring Prospectus.
Our Company, Promoters, Subsidiaries, Directors and Group Entities have not been involved
in any matters pertaining to violation of securities law.
Except as disclosed in the chapter titled "Management’s Discussion and Analysis of Financial
Condition and Results of Operations" beginning on page 505 of this Draft Red Herring
Prospectus, in the opinion of our Board, there have not arisen, since March 31, 2018, any
circumstances that materially or adversely affect or are likely to affect our profitability or the
value of our consolidated assets or our ability to pay material liabilities within the next 12
months.
544
545
GOVERNMENT AND OTHER STATUTORY APPROVALS
In the normal course, our business requires various approvals, licenses, registrations and permits issued
by relevant Central and State regulatory authorities under various rules and regulations. We have set
out below an indicative list of material approvals obtained by our Company, as applicable, for the
purpose of undertaking its business. In view of these approvals and licenses, our Company can
undertake the Issue and its current business activities. Additionally, unless otherwise stated, these
approvals are valid as on the date of this Draft Red Herring Prospectus. Some of the approvals may
expire periodically in the ordinary course and applications for renewal of such expired approvals will
be made in accordance with applicable requirements and procedures.
The objects clause of Memorandum of Association enables our Company to undertake its present
business activities.
The details of licenses, permissions and approvals obtained by the Company under various Central and
State Laws for carrying out its business are set out below:
1. The Board of Directors have, pursuant to Section 62(1)(c) read with Section 26 and 28 and
other applicable provisions of the Companies Act, 2013, by a resolution passed at its meeting
held on June 18, 2018, authorized the Issue, subject to the approval of the shareholders and
other authorities as may be necessary.
2. The shareholders of the Company have, pursuant to Section 62(1)(c) read with Section 26 and
28 and other applicable provisions of the Companies Act, 2013, by a special resolution passed
in the Extra-ordinary General Meeting held on July 10, 2018 authorized the Issue.
3. We have received in-principle approval from BSE Limited for the listing of our Equity Shares
pursuant to letter dated [●] bearing reference no. [●].
4. We have received in-principle approval from the National Stock Exchange of India Limited for
the listing of our Equity Shares pursuant to letter dated [●] bearing reference no.
5. The Company has entered into a tripartite agreement dated July 12, 2018 with the Central
Depository Services (India) Limited ("CDSL") and the Registrar and Share Transfer Agent,
Link Intime India Private Limited for the dematerialization of its shares.
6. Similarly, the Company has also entered into a tripartite agreement dated September 5, 2018
with the National Securities Depository Limited ("NSDL") and the Registrar and Share
Transfer Agent, Link Intime India Private Limited for the dematerialisation of its shares.
546
IV. Material Approvals in Relation to the Business of our Company
1. Certificate of Incorporation dated December 27, 1984 issued by the Registrar of Companies,
Shillong in the name of 'North Eastern Cables and Conductors Private Limited'.
4. Fresh Certificate of Incorporation dated April 8, 2011 issued by the Registrar of Companies,
Shillong pursuant to change in name of our Company from 'North Eastern Cables & Conductors
Private Limited' to 'Neccon Power & Infra Private Limited'.
(a) For Registered Office situated at Khetan Bhawan, Seuni Ali, A.T. Road, Jorhat - 785 001,
Assam
547
Sr. Nature of License / Applicable Issuing Issue/Renewa Validity
No License / Registration No. Statute Authority l date
. Approval
Granted
under the Trades, r of Taxes, or
Assam Callings and Jorhat surrendere
Professions, Employment d
Trades, s Taxation
Callings and Act, 1947
Employment
s Taxation
Act, 1947 -
(for contract
division)
6. Certificate of 18249011362 The Assam Assistant May 18, 2018 Until
Enrollment Professions, Commissione cancelled
under the Trades, r of Taxes, or
Assam Callings and Jorhat surrendere
Professions, Employment d
Trades, s Taxation
Callings and Act, 1947
Employment
s Taxation
Act, 1947
(for contract
division)
7. Certificate of 1497000629 The Foreign Office of Joint August 28, Until
Importer – Trade (Devel Director 1997 cancelled
Exporter opment & General of or
Code (IEC) Reg Foreign surrendere
ulation) Trade, d
Act, 1992 Guwahati,
Assam
8. Trade 6994 Assam Jorhat Renewed on March 31,
License Municipal Municipal April 1, 2018 2019
Act, 1956 Board
(b) For administrative office situated at Demseimong, Opposite NEEPCO, Shillong 793011,
Meghalaya
(c) For administrative office situated at Arunachal Pradesh situated at Tigra Mirbuk Village,
Pasighat East Siang District, Arunachal Pradesh - 791102
548
Sr. Nature of License / Applicable Issuing Issue/Renewal Validity
No. License / Registration No. Statute Authority date
Approval
Granted
1. Registration 12AABCN1603J1Z1 The Central Government September 24, Until
Certificate, Goods & of India 2017 cancelled or
Goods and Service Tax surrendered
Service Tax Act, 2017
(Arunachal
Pradesh)
(d) For Jaipur Office situated at Office No. 416, Fourth Floor, City Plaza, Nirvan Marg,
Banipark, Jaipur
(e) For Factory Unit - I situated at Industrial Estate, Cinnamara, Jorhat – 785 008, Assam
549
Sr. Nature of License / Registration Applicable Issuing Issue/Renewal Validity
No. License / No. Statute Authority date
Approval
Granted
210 KVA Rules, 1956 Electricity
Board, Jorhat
4. Certificate of 18918914922 The Assam Assistant June 15, 2018 Until
Registration Professions, Commissione cancelle
under the Trades, r of Taxes, d or
Assam Callings and Jorhat surrende
Professions, Employments red
Trades, Taxation Act,
Callings and 1947
Employments
Taxation Act,
1947 (for
manufacturing
division)
5. Certificate of 18949011365 The Assam Assistant May 18, 2018 Until
Enrollment Professions, Commissione cancelle
under the Trades, r of Taxes, d or
Assam Callings and Jorhat surrende
Professions, Employments red
Trades, Taxation Act,
Callings and 1947
Employments
Taxation Act,
1947
(for
manufacturing
division)
(f) For Factory Unit - II situated at F – 44, Industrial Area, Sikar - 332001, Rajasthan
550
(g) For Factory Unit - III situated at 384/3, Industrial Area, Bapi, Dausa – 303 303, Rajasthan
(a) For Registered Office situated at A.T. Road, Jorhat – 785 001, Assam
551
(b) For Factory Unit - I situated at Industrial Estate, Cinnamara, Jorhat - 785 001, Assam
(c) For Factory Unit - II situated at F – 44, Industrial Area, Sikar - 332001, Rajasthan
(d) For Factory Unit - III situated at 384/3, Industrial Area, Bapi, Dausa - 303303, Rajasthan
D. Quality Certifications:
(a) For Factory Unit - I situated at Industrial Estate, Cinnamara, Jorhat - 785 001, Assam
553
Sr. Nature of License / Registration Applicable Issuing Issue/Renewal Validity
No License / No. Statute Authority date
. Approval
Granted
2 Aluminum
conductors,
galvanized
steel
reinforced
2. Certificate of BN17719/17426 BSCIC BSCIC August 20, 2018 August
Registration Certification Certification 19, 2021
for ISO 9001 s s Private
[For Limited
manufacture
and supply of
AAC
(Aluminum
alloy
conductor),
AAC (All
aluminum
conductor),
ACSR
(Aluminum
conductor
steel
reinforced),
Ground wires
and G.I. Stay
wires]
(b) For Factory Unit - II situated at F – 44, Industrial Area, Sikar - 332001, Rajasthan
554
Sr. Nature of License / Registration Applicable Issuing Issue/Renewal Validity
No. License / No. Statute Authority date
Approval
Granted
2. Certificate of CM/L No. 8590996 Bureau of Scientist – D March 1, 2018 Februar
Marks License Indian & Head, y 28,
[For Product: Standards Bureau of 2019
Aluminum Act, Indian
conductors for 2016 (earlier Standards,
overhead Bureau of Jaipur
transmission Indian
purposes: Part Standards
2 Aluminum Act, 1986)
conductors,
galvanized
steel
reinforced
1. For Factory Unit - II situated at F – 44, Industrial Area, Sikar - 332001, Rajasthan
2. For Factory Unit - III situated at 384/3, Industrial Area, Bapi, Dausa - 303303, Rajasthan
555
Sr. Nature of License / Registration Applicable Issuing Issue/Renewal Validity
No. License / No. Statute Authority date
Approval
Granted
Operate under 2016/Jaipur/5509 (Prevention State 2015 ber 30,
Section 25 of & Control of Pollution 2020
the Water Act. Pollution) Control
Act, 1974 Board, Jaipur
Fire NOC NOC No. 2 Rajasthan Office of Fire June 22, 2018 June 21,
Municipalitie Department, 2019
s Act, 2009 Dausa
F. Electricity Act
G. Licenses / Approvals which have been applied for, pending for approvals
556
Sr. Nature of License / Applicable Issuing Authority Date of Status
No. License / Registrati Statute Application
Approval on No.
Granted
transmission Indian
purposes: Part 4 Standards
Aluminum alloy Act, 1986)
stranded
conductors
(aluminum
magnesium
silicon type)
3. Our Company has filed an application for grant of consent to establish with the Pollution
Control Board, Assam vide its application bearing number PCB/F49/KM/000050/06/2018
dated June 22, 2018 under Section 25 of the Water (Prevention and Control of Pollution) Act,
1974 for its manufacturing facility at Jorhat, Assam.
4. Our Company has filed an application for grant of consent to operate with the Pollution Control
Board, Assam vide its application bearing number PCB/CTO/KM/000350/07/2018 dated July
16, 2018 under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and
Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 for its manufacturing
facility at Jorhat, Assam.
5. Our Company has filed an application for grant of no objection certificate with the Director of
Fire & Emergency Services, Assam, Guwahati. Our Company has been granted a temporary no
objection certificate by the Senior Station Officer from the Office of Fire & Emergency
Services, Jorhat, Assam,
Our Subsidiaries are not carrying out any operations as on the date of filing this Draft Red
Herring Prospectus. As such, our Subsidiaries have only obtained the preliminary licenses and
approvals, as may be necessary for setting up a Company. Our Subsidiaries will obtain any
additional required licenses depending upon the project as and when undertaken. For further
details on our Subsidiaries, please refer to the chapter titled "Our Subsidiaries" beginning on
page 230 of this Draft Red Herring Prospectus.
1. Certificate of Incorporation dated May 10, 2000 issued by the Registrar of Companies, Shillong
in the name of 'Shyaam Tobacco Private Limited'.
2. Fresh Certificate of Incorporation consequent upon change of name of the Company dated
February 25, 2009 issued by the Registrar of Companies, Shillong in the name of 'Brahamputra
Infra Power Private Limited'.
3. Fresh Certificate of Incorporation consequent upon change of name of the Company dated July
9, 2010 issued by the Registrar of Companies, Shillong in the name of 'Brahmaputra Infra
Power Private Limited'.
557
B. Business and Tax related approvals of Brahmaputra Infra Power Private Limited
1. Certificate of Incorporation dated July 25, 2008 issued by the Registrar of Companies, Shillong
in the name of "Lower Seijusa Hydel Power Company Private Limited".
D. Business and Tax related approvals of Lower Seijusa Hydel Power Company Private
Limited
558
OTHER REGULATORY AND STATUTORY DISCLOSURES
The Issue of Equity Shares has been authorised by a resolution of our Board of Directors at its meeting
held on June 18, 2018 and by a special resolution of the Shareholders at their meeting held on July 10,
2018 under Section 62 (1)(c) of the Companies Act.
Our Company has received in-principle approvals from BSE and NSE for listing of the Equity Shares
pursuant to letters dated [●], 2018 and [●], 2018, respectively.
Our Company, our Promoters, our Directors, the members of the Promoter Group, our Group Entities,
our Subsidiary, the persons in control of our Company have not been debarred from accessing or
operating in capital markets or restrained from buying or selling or dealing in securities under any order
or direction passed by SEBI or any other regulatory or government authority.
The companies, with which our Promoters, Directors or persons in control of our Company are or were
associated as promoter, directors or persons in control have not been debarred from accessing capital
markets under any order or direction passed by SEBI or any other regulatory or government authority.
None of our Directors or the entities that our Directors are associated with are engaged in securities
market related business and are registered with SEBI.
Prohibition by RBI
Our Company, Subsidiaries, Directors, CFO, Promoters and the relatives of the promoters (as defined
under the Companies Act) and Group Entities have confirmed that they have not been identified as
wilful defaulters by the RBI or any other government authority and there are no violations of securities
laws committed by them in the past and no prosecution or other proceedings for any such alleged
violation is pending against them.
Our Company is eligible for the Issue in accordance with the eligibility criteria provided in Regulation
26(1) of the SEBI ICDR Regulations, and as calculated from the restated consolidated financial
information prepared in accordance with the Companies Act and restated in accordance with the SEBI
ICDR Regulations:
• our Company has net tangible assets of at least ₹30 million in each of the preceding three full
years i.e. Fiscal 2018, 2017 and 2016 (of 12 months each) of which not more than 50% are held
in monetary assets;
• our Company has a minimum average pre-tax operating profit of ₹150 million, during the three
most profitable years out of the immediately preceding five years i.e. Fiscal 2018, 2017, 2016,
2015 and 2014;
• our Company has a pre-Issue net worth of at least ₹10 million in each of the three preceding
full years (i.e. Fiscal 2018, 2017 and 2016);
• the aggregate of the proposed Issue size and all previous issues in the same financial year does
not exceed five times the pre-Issue net worth of our Company as per the audited balance sheet
559
of the preceding Fiscal (i.e. FY 2017-2018); and
• Our Company has not changed its name within the last one year in a manner suggesting change
in activities.
Our Company’s pre-tax operating profit, net worth, net tangible assets and monetary assets derived
from the Restated Financial Statements included in this Draft Red Herring Prospectus as at and for the
Fiscal 2018, 2017, 2016, 2015 and 2014 are set forth below:
Standalone basis
(₹ in million except percentage values)
Particulars Fiscal 2018 Fiscal 2017 Fiscal 2016 Fiscal 2015 Fiscal 2014
Pre-Tax Operating
282.00 195.19 159.35 123.19 159.70
Profit (1)
Net Worth (2) 1,892.29 1,711.46 1,341.59 1,250.72 1,091.48
Net Tangible 1,263.22 1,108.89 905.83 914.03 752.98
(3)
assets
Monetary assets (4) 360.29 188.56 295.35 380.96 187.90
Monetary assets as 29 17 33 42 25
a percentage of the
net tangible assets
(%) (3) (4)
Consolidated basis
(₹ in million except percentage values)
Particulars Fiscal 2018 Fiscal 2017 Fiscal 2016 Fiscal 2015 Fiscals 2014
Pre-Tax Operating Profit 282.00 195.19 159.35 124.97 159.70
(1)
Notes:
(1) Pre-tax operating profits comprise of profit from operations before finance expenses, other
income and exceptional items.
(2) 'Net worth' has been cdalculated by taking the aggregate sum of the paid up equity share
capital, reserves and surplus (excluding revaluation reserve) as reduced by the aggregate of
the miscellaneous expenditure (to the extent not adjusted or written-off) and the debit balance
of the profit and loss account.
(3) ‘Net tangible assets’ has been defined as the aggregate of tangible fixed assets, capital work-
in progress, non-current investments, long-term and short-term loans and advances, trade
receivables, inventories, cash and bank balances, other current and non-current assets
(excluding deferred tax assets), long-term and short-term borrowings, trade payables
(excluding deferred tax liabilities), long term and short- term provisions and other long-term
and current liabilities. It excludes intangible assets as defined in Accounting Standard 26 (AS
26) issued by the Institute of Chartered Accountants of India
(4) Monetary assets comprise of cash on hand, bank balances (including the deposit accounts and
interest accrued thereon) and quoted investments.
In accordance with Regulation 26(4) of the SEBI ICDR Regulations, our Company shall ensure that the
560
number of Allottees under the Issue shall be not less than 1,000, otherwise, the entire application money
will be refunded forthwith.
Pursuant to Rule 19(2)(b)(i) of the SCRR, the Issue is being made for at least 25% of the post-Issue
paid-up Equity Share capital of our Company. The Issue is being made through a Book Building Process
in accordance with the provisions of Regulation 26(1) of the SEBI ICDR Regulations, wherein upto
50% of the Issue shall be allotted on a proportionate basis to QIBs. Our Company in consultation with
the BRLM may allocate up to 60% of the QIB Portion to Anchor Investors at the Anchor Investor Issue
Price, on a discretionary basis, out of which at least one-third will be available for allocation to domestic
Mutual Funds subject to valid bids being received at or above the Anchor Investor Issue Price. Such
number of Equity Shares representing 5% of the QIB Portion (excluding Anchor Investor Portion) shall
be available for allocation on a proportionate basis to Mutual Funds only, and the remaining QIB
Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds,
subject to valid Bids being received at or above Issue Price. Further, not less than 15% of the Issue shall
be available for allocation on a proportionate basis to Non Institutional Investors and not less than 35%
of the Issue shall be available for allocation to Retail Individual Bidders, subject to valid Bids being
received from them at or above the Issue Price, subject to availability of Equity Shares, each Retail
Individual Bidders shall be Allotted not less than the minimum Bid Lot, and the remaining Equity
Shares, if available, shall be allotted to all Retail Individual Bidders on a proportionate basis. For further
details, please refer to the chapter "Issue Procedure" on page 590 of this Draft Red Herring Prospectus.
Our Company is in compliance with conditions specified in Regulation 4(2) of the SEBI ICDR
Regulations to the extent applicable.
561
WE, THE UNDER NOTED BOOK RUNNING LEAD MANAGER TO THE ABOVE
MENTIONED FORTHCOMING ISSUE STATE AS FOLLOWS:
562
BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO THE
COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE
DRHP.
10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRHP THAT THE
INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR
PHYSICAL MODE. – NOT APPLICABLE. UNDER SECTION 29 OF THE
COMPANIES ACT, 2013, EQUITY SHARES IN THE ISSUE HAVE TO BE ISSUED IN
DEMATERIALISED FORM ONLY;
563
A. AN UNDERTAKING FROM THE COMPANY THAT AT ANY GIVEN TIME
THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY
SHARES OF THE COMPANY; AND
B. AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY
WITH SUCH DISCLOSURE AND ACCOUNTING NORMS AS SPECIFIED BY
SEBI FROM TIME TO TIME.
18. WE CERTIFY THAT THE ENTITY IS ELIGIBLE UNDER 106Y(1) (A) OR (B) (AS
THE CASE MAY BE) TO LIST ON THE INSTITUTIONAL TRADING PLATFORM,
UNDER CHAPTER XC OF THESE REGULATIONS. (IF APPLICABLE). - NOT
APPLICABLE.
The filing of this Draft Red Herring Prospectus does not, however, absolve our Company from any
liabilities under Section 34 or Section 36 of the Companies Act, 2013 or from the requirement of
obtaining such statutory or other clearances as may be required for the purpose of the Issue. SEBI
further reserves the right to take up, at any point of time, with the BRLM any irregularities or lapses in
this Draft Red Herring Prospectus.
All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red
Herring Prospectus with the RoC in terms of Section 32 of the Companies Act, 2013. All legal
requirements pertaining to the Issue will be complied with at the time of registration of the Prospectus
with the RoC in terms of Sections 26 and 30 of the Companies Act, 2013.
564
Price Information of past issues handled by the BRLM
Summary statement of price information of past issues handled by PL Capital Markets Private
Limited
*The relevant company’s shares have received listing and trading approval with effect from September 24, 2018.
Hence, this information will be updated in the Red Herring Prospectus.
For details regarding the track record of the BRLM to the Issue as specified in Circular reference
CIR/MIRSD/1/ 2012 dated January 10, 2012 issued by SEBI, please refer to the website of the BRLM
at www.plindia.com.
Financial Total Total Nos. of IPOs Nos. of IPOs Nos. of IPOs Nos. of IPOs
Year No. Funds trading at discount trading at premium trading at discount trading at premium
of Raised as on 30th calendar as on 30th calendar as on 180th as on 180th
IPOs (₹Crs.) day from listing day from listing calendar day from calendar day from
date date listing date listing date
Over Between Less Over Between Less Over Between Less Over Between Less
50% 25-50% than 50% 25-50% than 50% 25-50% than 50% 25-50% than
25% 25% 25% 25%
2015 – 16 - - - - - - - - - - - - - -
2016 – 17 - - - - - - - - - - - - - -
2017 – 18 - - - - - - - - - - - - - -
April 1, 1 35.52 * * * * * * - - - - - -
2018 –
September
27, 2018
*The relevant company’s shares have received listing and trading approval with effect from September 24, 2018.
Hence, this information will be updated in the Red Herring Prospectus.
Disclaimer from our Company, our Directors and the Book Running Lead Manager
Our Company, our Directors and the Book Running Lead Manager accept no responsibility for
statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any
other material issued by or at instance of the abovementioned entities and anyone placing reliance on
any other source of information, including our website, www.necconpower.com would be doing so at
his or her own risk.
Investors/Bidders that apply in the Issue will be required to confirm and will be deemed to have
represented to our Company, the Underwriters and the Book Running Lead Manager and their
respective directors, officers, agents, affiliates and representatives that they are eligible under all
565
applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares and will not offer,
sell, pledge or transfer the Equity Shares to any person who is not eligible under applicable laws, rules,
regulations, guidelines and approvals to acquire Equity Shares. Our Company, the Underwriters and
the Book Running Lead Manager and their respective directors, officers, agents, affiliates and
representatives accept no responsibility or liability for advising any investor on whether such investor
is eligible to acquire Equity Shares.
The Book Running Lead Manager accept no responsibility, save to the limited extent as provided in the
Issue Agreement entered into between the Book Running Lead Manager and our Company and the
Underwriting Agreement to be entered into between the Underwriters and our Company.
Our Company and the Book Running Lead Manager shall make all information available to the public
and investors at large and no selective or additional information would be available for a section of the
investors in any manner whatsoever including at road show presentations, in research or sales reports
or at bidding centres or elsewhere.
Caution
None among our Company or any members of the Syndicate is liable for any failure in downloading
the Bids due to faults in any software/hardware system or otherwise.
The Book Running Lead Manager and their associates and affiliates may engage in transactions with,
and perform services for, our Company and their respective group companies, affiliates or associates or
third parties in the ordinary course of business and have engaged, or may in the future engage, in
commercial banking and investment banking transactions with our Company and their respective group
companies, affiliates or associates or third parties, for which they have received, and may in the future
receive, compensation.
This Issue is being made in India to persons resident in India (including Indian nationals resident in
India who are competent to contract under the Indian Contract Act, 1872, HUFs, companies, corporate
bodies and societies registered under the applicable laws in India and authorised to invest in shares,
Indian Mutual Funds registered with SEBI, VCFs, AIFs, FVCIs, Indian financial institutions,
commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under
applicable trust law and who are authorised under their constitution to hold and invest in shares,
insurance companies registered with the IRDAI, permitted provident funds and pension funds,
insurance funds set up and managed by the army, navy or air force of the Union of India and insurance
funds set up and managed by the Department of Posts, India) and to FIIs, Eligible NRIs, FPIs and other
eligible foreign investors (viz. bilateral and multilateral development financial institution). This Draft
Red Herring Prospectus does not, however, constitute an invitation to subscribe to shares offered hereby
in any jurisdiction other than India to any person to whom it is unlawful to make an offer or invitation
in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is
required to inform himself or herself about, and to observe, any such restrictions. Any dispute arising
out of the Issue will be subject to the jurisdiction of appropriate court(s) in Guwahati only.
No action has been or will be taken to permit a public offering in any jurisdiction where action would
be required for that purpose, except that the Draft Red Herring Prospectus has been filed with SEBI for
its observations and Stock Exchanges. Accordingly, the Equity Shares, offered in the Issue may not be
offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in
any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction.
566
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any
other jurisdiction outside India and may not be offered or sold, and Bids may not be made by
persons in any such jurisdiction, except in compliance with the applicable laws of such
jurisdiction.
The Equity Shares offered in the Issue have not been and will not be registered under the U.S.
Securities Act, 1933 ("U.S. Securities Act") or any state securities laws in the United States, and
unless so registered may not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S.
Securities Act and applicable state securities laws. Accordingly, such Equity Shares are being
offered and sold only outside of the United States in reliance on Regulation S under the U.S.
Securities Act and the applicable laws of the jurisdiction where those offers and sales occur.
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 applicable law.
Neither the delivery of this Draft Red Herring Prospectus nor any sale hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of our Company from
the date hereof or that the information contained herein is correct as of any time subsequent to this date.
As required, a copy of this Draft Red Herring Prospectus shall be submitted to the BSE. The disclaimer
clause as intimated by the BSE to us, shall be included in the Red Herring Prospectus prior to filing
with the RoC.
As required, a copy of this Draft Red Herring Prospectus shall be submitted to the NSE. The disclaimer
clause as intimated by the NSE to us, shall be included in the Red Herring Prospectus prior to filing
with the RoC.
Filing
A copy of this Draft Red Herring Prospectus shall be filed online through SEBI Intermediary Portal at
https://siportal.sebi.gov.in and if required, simultaneously also be filed with SEBI at Eastern Regional
Office, L&T Chambers, 3rd Floor, 16 Camac Street, Kolkata - 700017, West Bengal, India.
A copy of the Red Herring Prospectus, along with the documents required to be filed, will be delivered
for registration to the RoC in accordance with Section 32 of the Companies Act, 2013, and a copy of
the Prospectus required to be filed under Section 26 of the Companies Act, 2013 will be delivered for
registration to the RoC at Office of the Registrar of Companies, Morello Building, Ground Floor,
Shillong – 793001, India.
Listing
The Equity Shares issued through the Red Herring Prospectus are proposed to be listed on BSE and
NSE. Applications will be made to the BSE and the NSE for permission to list the Equity Shares and
for an official quotation of the Equity Shares of our Company, [●] shall be the Designated Stock
Exchange.
If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of
567
the Stock Exchanges mentioned above, our Company shall forthwith repay, without interest, all moneys
received from the Bidders / Applicants in pursuance of the Red Herring Prospectus. Our Company shall
ensure that all steps for the completion of the necessary formalities for listing and commencement of
trading at all Stock Exchanges mentioned above are taken within 6 Working Days of the Bid/Issue
Closing Date.
Impersonation
Attention of the Bidders is specifically drawn to the provisions of sub-section (1) of Section 38 of the
Companies Act, 2013 which is reproduced below:
The liability prescribed under Section 447 of the Companies Act, 2013 includes imprisonment for a
term of not less than six months extending up to 10 years (provided that where the fraud involves public
interest, such term shall not be less than three years) and fine of an amount not less than the amount
involved in the fraud, extending up to three times of such amount.
Consents
Consents in writing of: (a) Promoters; our Directors; our Company Secretary and Compliance Officer;
our CFO; the Legal Counsel to the Issue, bankers/ lenders to our Company; the Statutory & Peer
Reviewed Auditors of our Company; (b) ICRA Limited , in relation to their report "Indian Transmission
and Distribution Sector" issued in September, 2018; (c) Brickwork Ratings India Private Limited in
relation to their ratings given to our long-term and short-term bank facilities and (d) BRLM; Escrow
Collection Bank(s)*; Refund Bank(s)*; Syndicate Members*; Monitoring Agency*; the Registrar to
the Issue; the Underwriters to act in their respective capacities, have been obtained and will be filed
along with a copy of the Red Herring Prospectus with the RoC and such consents have not been
withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC.
*The aforesaid will be appointed prior to filing of the Red Herring Prospectus with RoC and their
consents as above would be obtained prior to the filing of the Red Herring Prospectus with RoC.
We have received written consent dated September 21, 2018 from our Statutory Auditor, M/s Borkar
& Muzumdar, Chartered Accountants, to include their name as required under section 26(1)(a)(v) of
the Companies Act in this Draft Red Herring Prospectus and as "expert" as defined under section 2(38)
and section 26 (5) of the Companies Act, in respect of the report on restated standalone and consolidated
financial information dated September 19, 2018 and the statement of tax benefits dated September 21,
2018, respectively included in this Draft Red Herring Prospectus and such consent have not been
withdrawn as on the date of this Draft Red Herring Prospectus.
Except as stated below, our Company has not obtained any expert opinions:
568
Our Company has received written consent on September 21, 2018 from the Statutory Auditor namely,
M/s. Borkar & Muzumdar, Chartered Accountants to include their name as required under Section 26
of the Companies Act, 2013 in this Draft Red Herring Prospectus and as "expert" as defined under
section 2(38) of the Companies Act, 2013 in respect of the reports on restated standalone and
consolidated financial information dated September 19, 2018 and the statement of tax benefits dated
September 21, 2018, respectively included in this Draft Red Herring Prospectus and such consent has
not been withdrawn as on the date of this Draft Red Herring Prospectus. However, the term "expert"
shall not be construed to mean an "expert" as defined under the U.S. Securities Act.
Issue Expenses
The total expenses of the Issue are estimated to be approximately ₹[●] million. The expenses of this
Issue include, among others, underwriting and management fees, selling commissions, printing and
distribution expenses, legal fees, processing fee to the SCSBs for processing ASBA Bid cum
Application Forms procured by the Syndicate Members and submitted to the SCSBs and Registrar to
the Issue, statutory advertisement expenses, registrar and depository fees and listing fees. For further
details of Issue expenses, please refer to the chapter titled "Objects of the Issue" on page 128 of this
Draft Red Herring Prospectus.
The total fees payable to the Syndicate (including underwriting commission and selling commission
and reimbursement of their out-of-pocket expense) will be as per the Issue Agreement dated August 7,
2018, Syndicate agreement and the Underwriting Agreement, copies of which shall be available for
inspection at our Registered Office, from 10.00 am to 5.00 p.m. on Working Days from the date of
filing the Red Herring Prospectus until the Bid/Issue Closing Date. For details, see "Objects of the
Issue" on page 128 of this Draft Red Herring Prospectus.
For details of the commission payable to the SCSBs and Registered Brokers, please refer to the chapter
titled "Objects of the Issue" on page 128 of this Draft Red Herring Prospectus.
The fees payable to the Registrar to the Issue, including fees for processing of Bid cum Application
Forms, data entry, printing of Allotment Advice, refund order, preparation of refund data on magnetic
tape and printing of bulk mailing register, will be as per the agreement dated July 17, 2018 signed
among our Company and the Registrar to the Issue, a copy of which shall be made available for
inspection at our Registered Office on Working Days.
Previous Rights and Public Issues during the Last Five Years
There have been no public issues undertaken by our Company during the five years preceding the date
of this Draft Red Herring Prospectus. Further, other than as disclosed in the chapter titled "Capital
Structure" beginning on page 99 of this Draft Red Herring Prospectus, our Company has not undertaken
any previous rights issue.
Except as disclosed in the chapter titled "Capital Structure" beginning on page 99 of this Draft Red
Herring Prospectus, our Company has not issued any securities for consideration other than cash.
569
Underwriting commission, brokerage and selling commission on previous issues
Since this is the initial public offering of the Equity Shares, no sum has been paid or is payable for
pevious issues as commission or brokerage for subscribing to or procuring for or agreeing to procure
subscription for any of the Equity Shares of our Company since inception.
Previous capital issue in the preceding three years by listed group companies, subsidiaries and
associates of our Company
Our Subsidiaries are not listed on any Stock Exchange. Further, none of our Group Entities are listed
on any stock exchange in India or overseas as on the date of this Draft Red Herring Prospectus.
Our Company has not undertaken any public issue in the 10 years immediately preceding the date of
this Draft Red Herring Prospectus.
Performance vis- à-vis Objects: last Issue of group companies/subsidiaries / associate companies
None of our Group Entities/ Subsidiary have made any public issue in the 10 years immediately
preceding the date of this Draft Red Herring Prospectus.
Our Company has no outstanding debentures or bonds or redeemable preference shares as of the date
of this Draft Red Herring Prospectus.
As on the date of this Draft Red Herring Prospectus, there are no partly paid up Equity Shares of our
Company.
This being an initial public offering of our Company, the Equity Shares of our Company are not listed
on any stock exchange as on the date of this Draft Red Herring Prospectus, and accordingly, no stock
market data is available for the Equity Shares.
The agreement dated July 17, 2018 between the Registrar to the Issue and our Company provides for
retention of records with the Registrar to the Issue for a period of at least eight year from the last date
of dispatch of the letters of Allotment, demat credit and refund orders to enable the investors to approach
the Registrar to the Issue for redressal of their grievances.
All grievances may be addressed to the Registrar to the Issue with a copy to the relevant Designated
Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give full details
such as name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID,
PAN, date of the submission of Bid cum Application Form, address of the Bidder, number of the Equity
Shares applied for and the name and address of the Designated Intermediary where the Bid cum
Application Form was submitted by the Bidder. All grievances relating to Bids submitted with
570
Registered Brokers, may be addressed to the Stock Exchanges, with a copy to the Registrar to the Issue.
Further, the Bidder shall also enclose a copy of the Acknowledgment Slip received from the Designated
Intermediaries in addition to the information mentioned hereinabove.
Anchor Investors are required to address all grievances in relation to the Issue to the BRLM.
The Registrar to the Issue shall obtain the required information from the SCSBs for addressing any
clarifications or grievances of ASBA Bidders. Our Company, the BRLM and the Registrar to the Issue
accept no responsibility for errors, omissions, commission or any acts of SCSBs including any defaults
in complying with its obligations under applicable SEBI ICDR Regulations. Investors can contact the
Compliance Officer or the Registrar to the Issue in case of any pre-Offer or post-issue related problems
such as non-receipt of letters of Allotment, non-credit of Allotted Equity Shares in the respective
beneficiary account, non-receipt of refund intimations and non-receipt of funds by electronic mode.
We estimate that the average time required by our Company or the Registrar to the Issue or the relevant
designated intermediary, for the redressal of routine investor grievances shall be 10 Working Days from
the date of receipt of the complaint. In case of non-routine complaints and complaints where external
agencies are involved, our Company will seek to redress these complaints as expeditiously as possible.
Our Company has appointed a Stakeholders’ Relationship Committee comprising of Jugal Kishore
Agarwalla, Pradeep Kumar Khetan and Jaiprakash Khetan as members. For details, please refer to the
chapter titled "Our Management – Committees of the Board- Stakeholder Relationship Committee" on
page 235 of this Draft Red Herring Prospectus.
Our Company has appointed Richeeta Somani, Company Secretary of our Company as Compliance
Officer for the Issue and she may be contacted in case of any pre- Issue or post- Issue related problems
at the following address:
Disposal of investor grievances by listed companies under same management as our Company
Changes in Auditors during the last three financial years and reasons thereof
Pursuant to the resolution passed at the extra-ordinary general meeting of our Company held on May
4, 2018, M/s. Borkar & Muzumdar, Chartered Accountants was appointed as the Statutory Auditors of
our Company having peer review certification issued by the ICAI. Prior to that, M/s. Khetan Amit &
Associates, Chartered Accountants were the auditors of our Company from September 30, 2017 to April
2, 2018 and M/s. Roy Atal & Atal, Chartered Accountants were the auditors of our Company prior to
the appointment of M/s. Khetan Amit & Associates, Chartered Accountants as the auditors of our
Company.
571
Capitalisation of Reserves or Profits
Our Company has not revalued its assets since inception and has not issued any Equity Shares by
capitalizing any revaluation reserves.
Revaluation of Assets
572
SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IND AS
Our Restated Financial Statements included in this Draft Red Herring Prospectus are prepared in
accordance with Ind GAAP for the financial years ended March 31, 2014 and March 31, 2015 and in
accordance with Ind AS for the financial years ended March 31, 2016, March 31, 2017 and March 31,
2018. Indian GAAP differs in certain material respects from Ind AS.
The following table summarizes certain of the areas in which differences between Indian GAAP and
Ind AS could be significant to our financial position and results of operations. This summary should
not be taken as an exhaustive list of all the differences between Indian GAAP and Ind AS. No attempt
has been made to identify all recognition and measurement, disclosures, presentation or classification
differences that would affect the manner in which transactions or events are presented in our financial
statements (or notes thereto). Certain principal differences between Indian GAAP and Ind AS that may
have a material effect on our financial statements are summarized below.
Potential investors should consult their own professional advisors for an understanding of the
differences between Indian GAAP and Ind AS and how those differences might affect the financial
information disclosed in this Draft Red Herring Prospectus.
573
IND- PARTICULARS TREATMENT AS PER TREATMENT AS PER IND-AS
AS INDIAN GAAP
NO.
amounts of dividends recognized as
distributions to owners during the
period, and the related amount of
dividends per share, shall be disclosed.
Extraordinary items: Extraordinary items :
Extraordinary items are Presentation of any items of income or
disclosed separately in the expense as extraordinary is not allowed.
statement of profit and loss and
are included in the
determination of net profit or
loss for the period. Items of
income or expense to be
disclosed as extraordinary
should be distinct from the
ordinary activities and are
determined by the nature of the
event or transaction in relation
to the business ordinarily
carried out by an entity.
Change in accounting Change in accounting policies:
policies: Changes in accounting policies made on
Under Indian GAAP, changes adoption of a new standard are accounted for
in accounting policies should in accordance with the transition provisions
be made only if it is required by (if any) within that standard. If specific
statute, for compliance with an transition provisions do not exist, a change in
accounting standard or for policy (whether required or voluntary) is
more appropriate presentation accounted for retrospectively (that is, by
of the financial statements on a restating all comparative figures presented)
prospective basis together with unless this is impracticable.
a disclosure of the impact of the
same. If a change in the
accounting policy has no
material effect on the financial
statements for the current
period, but is expected to have
a material effect in the later
periods, the same should be
appropriately disclosed.
Errors : Errors:
Prior period items are included Material prior period errors are corrected
in determination of net profit or retrospectively by restating the comparative
loss of the period in which the amounts for prior periods presented in which
error pertaining to a prior the error occurred or if the error occurred
period is discovered and are before the earliest period presented , by
separately disclosed in the restating the opening balance sheet .
statement of profit and loss in a
manner that the impact on
current profit or loss can be
perceived.
Presentation of profit and Presentation of profit or loss attributable
loss attributable to non- to non-controlling interests (minority
controlling interests ( interests):
minority interests ) : Profit or loss attributable to non-controlling
Profit and loss attributable to interests and equity holders of the parent are
574
IND- PARTICULARS TREATMENT AS PER TREATMENT AS PER IND-AS
AS INDIAN GAAP
NO.
minority interests is disclosed disclosed in the statement of profit or loss
as deduction from the profit or and other comprehensive income as
loss for the period as an item of allocations of profit or loss and total
income or expense. comprehensive income for the period.
Reclassification Reclassification
Under Indian GAAP, a Ind-AS requires, when comparative amounts
disclosure is made in financial are reclassified, the nature, amount and
statements that comparative reason for reclassification to be disclosed.
amounts have been reclassified
to conform to the presentation
in the current period without
additional disclosures for the
nature, amount and reason for
reclassification.
IND Events after the Dividends : Dividends:
AS 10 Reporting Period Schedule III requires disclosure Liability for dividends declared to holders of
of proposed dividends in the equity instruments are recognized in the
notes to accounts. However ,as period when declared.
per the requirements of AS 4 , It is a non-adjusting event, which is an event
which override the provisions after the reporting period that is indicative of
of schedule III, dividends a condition that arose after the end of the
stated to be in respect of the reporting period.
period covered by the financial As per Ind AS 10 , dividends proposed or
statements ,which are proposed declared after the balance sheet date but
or declared after the balance before the financial statements have been
sheet date but before the approved for issue are not recognized as a
approval of the financial liability at the balance sheet date. Details of
statements will have to be these dividends are, however, disclosed.
recorded as a provision .
Further ,as per recent
amendment in Accounting
Standards 4 ,dividends declared
subsequent to the balance sheet
are to be considered as a non –
adjusting event, which is
similar to the Ind AS
requirement .
IND- Income taxes Deferred taxes are computed Deferred taxes are computed for all
AS 12 for timing differences in temporary differences between the
respect of recognition of items accounting base and the tax base of assets
of profit or loss. and liabilities and their carrying amounts.
IND- Property, Plant & Property, plant and equipment Property, plant and equipment are
AS 16 Equipments & are not required to be componentised and are depreciated
Depreciation componentized as per AS-10. separately. There is no concept of minimum
However, companies act statutory depreciation under Ind AS.
requires the company to adopt
component accounting. The
Companies Act 2013 sets out
the estimated useful lives of
assets based on the nature of the
asset and the useful life used for
depreciation ordinarily should
not differ from the useful useful
life specified in the Companies
575
IND- PARTICULARS TREATMENT AS PER TREATMENT AS PER IND-AS
AS INDIAN GAAP
NO.
Act, 2013. However a different
useful life maybe used based on
technical analysis and requires
disclosures in financial
statements. Further, as per
recent amendment in
Accounting Standards 10, the
standard is made in line with
the requirements of IND AS.
IND- Leases : Interests in leasehold land are Interests in leasehold land are recorded and
AS 17 Interest in recorded and classified as a classified as operating leases or finance
leasehold land fixed asset. leases as per set definition and classification
criteria. An important consideration is that
the land has an indefinite economic life.
IND- Revenues- Revenue is recognised at the Revenue is recognised at fair value of the
AS 18 Measurement nominal amount of consideration receivable. Fair value of
consideration receivable. revenue from sale of goods and services
when the inflow of cash and cash equivalents
is deferred is determined by discounting all
future receipts using an imputed rate of
interest. The difference between the fair
value and the nominal amount of
consideration is recognised as interest
revenue using the effective interest method.
IND- Employee All actuarial gains and losses Actuarial gains and losses representing
AS 19 Benefits are recognized immediately in changes in the present value of the defined
Actuarial gains the statement of profit and loss benefit obligation resulting from experience
and losses . adjustment and effects of changes in actuarial
assumptions are recognized in other
comprehensive income and not reclassified
to profit or loss in a subsequent period.
IND- Effects of Foreign currency is a currency Functional currency is the currency of the
AS 21 changes on other than the reporting primary economic environment in which the
Foreign currency, which is the currency entity operates .Foreign currency Is a
Exchange Rates : in which the financial currency other than the functional currency.
Functional and statements are presented. There Presentation currency is the currency in
presentation is no concept of functional which the financial statements are presented.
currency currency.
IND- Classification of Under Indian GAAP, financial Under Ind-AS, financial instruments are
AS 32 Equity and instruments are classified As a classified as a liability or equity according to
Financial liability or equity based on the substance of the contractual arrangement
Liabilities legal form. Redeemable (and not its legal form ) and the definitions of
preference shares will be financial liabilities and equity instruments.
classified as Shareholders Dividends on financial instruments classified
Funds. Preference dividends as financial liability are recognized as an
are always recognized similar interest expense in the statement of profit or
to equity dividends and are not loss and other comprehensive income.
treated as interest expense. Hence, if preference shares meet the
definition of financial liability, the dividend
is treated as an interest expense.
IND- Provisions, Provisions are not recognised A provision is recognised only when a past
AS 37 Contingent based on constructive event has created a legal or constructive
Liabilities and obligations though some obligation, an outflow of resources is
576
IND- PARTICULARS TREATMENT AS PER TREATMENT AS PER IND-AS
AS INDIAN GAAP
NO.
Contingent assets provisions may be needed in probable, and the amount of the obligation
respect of obligations arising can be estimated reliably.
from normal practice, custom A constructive obligation is an obligation
and a desire to maintain good that derives from an entity’s actions where,
business relations or to act in an by an established pattern of past practice,
equitable manner. published policies or a sufficiently specific
current statement, the entity has indicated to
other parties that it will accept certain
responsibilities , and as a result , the entity
has created a valid expectation on the part of
those other parties that It will discharge those
responsibilities.
IND- Accounting of As per Indian GAAP, Under IND-AS, business combinations,
AS 103 acquisitions: amalgamations in the nature of other than those between entities under
Business purchase are accounted for by common control, are accounted for using the
combinations recording the identifiable assets purchase method, wherein fair values of
and liabilities of the acquirer identifiable assets and liabilities of the
either at the fair value or at acquiree are recognised (with very limited
book values. exceptions).
Amalgamations in the nature of Business combinations between entities
merger are accounted under the under common control should be accounted
pooling of interests method. for using the ‘pooling of interests ‘method.
Identifiable assets and
liabilities of subsidiaries
acquired by purchase of shares
which are not amalgamations
are recorded in the consolidated
financial statements at the
carrying amounts stated in the
acquired subsidiary’s financial
statements on the date of
acquisition.
IND- Determination of Under Indian GAAP, Under Ind AS, operating segments are
AS 108 Segments companies are to identify two identified based on the financial information
sets of segments (business and that is regularly reviewed by the chief
geographical), using a risks and operating decision maker (CODM) in
rewards approach, with the deciding how to allocate resources and in
company’s system of internal assessing performance.
financial reporting to key
management personnel serving
only as the starting point for the
identification of such segments.
IND- Financial Assets Under Indian GAAP, the All financial assets are classified as measured
AS 109 company classifies its financial at amortised cost or measured at fair value
assets and liabilities as short through profit and loss or fair value through
term or long term. Long term other comprehensive income.
investments are carried at cost
less any permanent diminution
in the value of such investments
determined on a specific
identification basis. Current
investments are carried at lower
of cost and fair value.
Financial Financial liabilities are carried Financial liabilities held for trading are
577
IND- PARTICULARS TREATMENT AS PER TREATMENT AS PER IND-AS
AS INDIAN GAAP
NO.
Liabilities at their transaction values. subsequently measured at fair value through
profit and loss and all other financial
liabilities are measured at amortised cost
using effective interest method.
578
SECTION VIII – ISSUE RELATED INFORMATION
The Equity Shares being issued pursuant to this Issue are subject to the provisions of the Companies
Act, the SEBI ICDR Regulations, SCRA, SCRR, the SEBI Listing Regulations, the Memorandum of
Association and Articles of Association of our Company, the abridged prospectus, the terms of the Red
Herring Prospectus, the Prospectus, Bid-cum-Application Form, the Revision Form, the CAN, the
Allotment Advice 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 as applicable, guidelines, notifications and regulations relating to the issue of capital
and listing and trading of securities issued from time to time by SEBI, Government of India, Stock
Exchanges, ROC, RBI and / or other authorities, as in force on the date of the Issue and to the extent
applicable.
The Equity Shares being issued shall be subject to the provisions of the Companies Act, Memorandum
and Articles of Association, and shall rank pari passu in all respects with the other existing shares of
our Company including in respect of the rights to receive dividends, if any. The Allottees of the Equity
Shares in the Issue shall be entitled to dividends and other corporate benefits, if any, declared by our
Company after the date of Allotment. For further details, see the section titled "Main Provisions of the
Articles of Association" beginning on page 645 of this Draft Red Herring Prospectus.
Our Company shall pay dividends, if declared, to the shareholders of our Company in accordance with
the provisions of the Companies Act, the Memorandum of Association and Articles of Association and
the SEBI Listing Regulations. 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. For
further details, see the chapter/section titled "Dividend Policy" and "Main provisions of the Articles of
Association" beginning on pages 280 and 645 respectively, of this Draft Red Herring Prospectus.
The face value of each Equity Share is ₹10. The Issue Price of Equity Shares is ₹[●] per Equity Share.
The Anchor Investor Issue Price is ₹[●] per Equity Share. The Issue Price shall be determined by our
Company in consultation with the BRLM.
At any given point of time there shall be only one denomination of Equity Shares, subject to applicable
law.
The Price Band, the minimum bid lot and the discount, if any, to the Retail Individual Bidders will be
decided by our Company in consultation with the BRLM. The Price Band, the minimum bid lot and
discount, if any, to the Retail Individual Bidders, will be published by our Company at least five
Working Days prior to the Bid/Issue Opening Date, in [●] edition of [●] (a widely circulated English
national daily newspaper), in [●] edition of [●] (a widely circulated Hindi national daily newspaper)
and [●] edition of [●] (a widely circulated Assamese newspaper, Assamese being the regional language
in the place where our Registered Office is located), and shall be made available to the Stock Exchanges
for the purpose of uploading on their websites. The Price Band, along with the relevant financial ratios
calculated at the floor Price and at the Cap Price shall be pre-filled in the Bid-cum-Application Form
579
available at the website of the Stock Exchanges.
Our Company shall comply with the applicable disclosure and accounting norms as specified by SEBI
from time to time.
Subject to the applicable laws, rules, regulations and guidelines and the Articles of Association, the
equity shareholders of our Company shall have the following rights:
➢ the right to receive dividend, if declared;
➢ the right to attend general meetings and exercise voting powers, unless prohibited by law;
➢ the right to vote on a poll either in person or by proxy;
➢ the right to receive offers for rights shares and be allotted bonus shares, if announced;
➢ the right to receive surplus on liquidation subject to any statutory and other preferential claims
being satisfied;
➢ the right of free transferability of Equity Shares, subject to applicable law, including RBI rules
and regulations, if any; and
➢ such other rights, as may be available to a shareholder of a listed public company under the
Companies Act, the terms of the SEBI Listing Regulations, and the Memorandum of
Association and Articles of Association of our Company.
For a detailed description of the main provisions of the Articles of Association of our Company, such
as those dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and / or
consolidation / splitting, please refer to the section titled "Main Provisions of the Articles of
Association" beginning on page 645 of this Draft Red Herring Prospectus.
Pursuant to Section 29 of the Companies Act, 2013, the Equity Shares shall be Allotted only in
dematerialised form. As per the SEBI ICDR Regulations, the trading of the Equity Shares shall only be
in dematerialised form. In this context, two agreements have been signed amongst our Company, the
respective Depositories and the Registrar to the Issue:
➢ Agreement dated July 12, 2018 among CDSL, our Company and the Registrar to the Issue; and
➢ Agreement dated September 5, 2018 among NSDL, our Company and the Registrar to the Issue
Since trading of the Equity Shares is in dematerialized mode, the tradable lot is one Equity Share.
Allocation and allotment of Equity Shares through the Issue will be done only in electronic form, in
multiple of one (1) Equity Share, subject to a minimum allotment of [●] Equity Shares. For details of
allocation and allotment, please refer chapter titled "Issue Procedure" beginning on page 590 of this
Draft Red Herring Prospectus.
Joint Holders
Subject to our Articles, where two or more persons are registered as the holders of any Equity Shares,
they shall be deemed to hold the same as joint-tenants with benefits of survivorship.
Jurisdiction
Exclusive jurisdiction for the purpose of the Issue is with the competent courts/authorities at Guwahati,
Assam India.
580
The Equity Shares have not been and will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any state securities laws in the United States, and unless
so registered, and may not be offered or sold within the United States, except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in
accordance with any applicable U.S. state securities laws. The Equity Shares are being offered and sold
outside the United States in offshore transactions in reliance on Regulation S and the applicable laws
of each jurisdiction where such offers and sales are made.
In accordance with Section 72 of the Companies Act, 2013 read with Companies (Share Capital and
Debentures) Rules, 2014, the sole or First Bidder, along with other joint Bidder, 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 allotted, 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 72 of the Companies Act, be entitled 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. A buyer will be
entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on
the prescribed form available on request at our Company’s Registered Office or to the registrar and
transfer agent of our Company.
Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act,
2013 shall upon the production of such evidence as may be required by the Board, elect either:
(i) to register himself or herself as the holder of the Equity Shares; or
(ii) 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, if any, until the requirements of the notice have been complied
with.
Since the allotment of Equity Shares in the Issue will be made only in dematerialized mode, there is no
need to register a separate nomination with our Company. 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.
Bidding Period
Bidders may submit their Bids only during the Bidding Period. The Bid/Issue Opening Date is [●] and
the Bid/Issue Closing Date is [●]. Our Company in consultation with the BRLM, may consider closing
the Bid/Issue Period for QIBs one Working Day prior to the Bid/Issue Closing Date in accordance with
SEBI ICDR Regulations.
Minimum Subscription
In the event our Company does not receive (i) a minimum subscription of 90% of the Issue, and (ii) a
subscription in the Issue equivalent to minimum number of securities as specified in Rule 19(2)(b)(i)
581
of the SCRR, including through devolvement of the Underwriters, as applicable, our Company shall
forthwith refund the entire subscription amount received no later than 15 days from the Bid/Issue
Closing Date, failing which, the directors of our Company who would be officers in default, shall jointly
and severally be liable to repay that money with interest at the rate of 15% per annum.
Our Company in consultation with the BRLM, reserve the right to not proceed with the Issue, for any
reason, at any time, after the Bid/Issue Opening Date, but before the Allotment of the Equity Shares.
Since our Equity Shares will be traded in dematerialised form only and the market lot for our Equity
Shares will be one Equity Share, no arrangements for disposal of odd lots are required.
Retail Discount
The Retail Discount, if any, will be offered to Retail Individual Bidders at the time of making a Bid.
Retail Individual Bidders bidding at a price within the Price Band can make the payment at the Bid
Amount (which will be less Retail Discount) at the time of making a Bid. Retail Individual Bidders
bidding at the Cut-Off Price have to ensure payment at the Cap Price, less Retail Discount, at the time
of making a Bid. Retail Individual Bidders must ensure that the Bid Amount does not exceed ₹ 2,00,000.
Retail Individual Bidders must mention the Bid Amount while filling the Bid cum Application Form.
Except for lock-in of pre-Issue equity shareholding, Promoters’ minimum contribution, as detailed in
the chapter "Capital Structure" on page 99 of this Draft Red Herring Prospectus, and lock-in of Equity
Shares Allotted to Anchor Investor for a period of 30 days from the date of Allotment and except as
provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. Further,
there are no restrictions on transmission of Equity Shares and on their consolidation/splitting except as
provided in the Articles of Association. Please refer section "Main Provisions of the Articles of
Association" beginning on page 645 of this Draft Red Herring Prospectus.
In accordance with the SEBI ICDR Regulations and Section 29 of the Companies Act, 2013, Equity
Shares will be issued and Allotment shall be made only in the dematerialized form to the Allottees.
Allottees will have the option to re-materialize the Equity Shares, if they so desire, as per the provisions
of the Companies Act and the Depositories Act. However pursuant to Regulation 40 of the Listing
Regulations as amended by SEBI notification bearing No. SEBI/LAD-NRO/GN/2018/24. dated June
8, 2018, except in case of transmission or transposition of securities, requests for effecting transfer of
securities shall not be processed unless the securities are held in the dematerialized form.
As on the date of this Draft Red Herring Prospectus, there are no outstanding warrants, new financial
instruments or any rights, which would entitle the shareholders of our Company, including our
582
Promoters, to acquire or receive any Equity Shares after the Issue.
Our Company in consultation with the BRLM, reserves the right not to proceed with the Issue anytime
after the Bid/Issue Opening Date but before the Allotment. In such an event, our Company would issue
a public notice in the same newspapers, in which the pre-Issue advertisements were published, within
two days of the Bid/Issue Closing Date, providing reasons for not proceeding with the Issue and the
Stock Exchanges shall be informed promptly in this regard. The BRLM, through the Registrar to the
Issue, shall notify the SCSBs to unblock the Bank Accounts of the ASBA Bidders within one Working
Day from the date of receipt of such notification.
If our Company withdraws the Issue after the Bid/Issue Closing Date and thereafter determine that they
will proceed with an initial public offering of the Company’s Equity Shares, the Company shall file a
fresh draft red herring prospectus with SEBI. Notwithstanding the foregoing, the Issue is also subject
to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which the Company shall
apply for after the Allotment, and (ii) the final RoC approval of the Prospectus after it is filed with the
RoC.
In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22 dated February 15, 2018, any ASBA
Applicant/Bidder who is a Retail Individual Investor, whose Bid cum Application Form has not been
considered for Allotment due to the following factors:
(a) Failure on part of the SCSBs to make bids in the concerned Exchange system even after the
amount has been blocked in the investors’ bank account with such SCSB.
(b) Failure on part of the SCSB to process the ASBA applications even when they have been
submitted within time.
(c) Any other failures on part of an SCSB which has resulted in the rejection of the application
form.
shall be entitled to compensation by the SCSBs. Also, the said Applicants/Bidders have the option to
seek redressal of the same within three (3) months of the date of listing of the Equity Shares of the
Issuer, with the concerned SCSB. On receipt of such applications, the SCSB would be required to
resolve the same within fifteen (15) days, failing which it would have to pay interest at the rate of 15
percent per anum for any delay beyond the said period of fifteen (15) days.
In the cases of the issues which are subscribed between 90-100%, i.e. non over-subscribed issues, the
applicants would be compensated for all the shares which they would have been allotted.
Note: No compensation would be payable to the Applicants/Bidders who are Retail Individual Investors
in case the listing price is below the issue price.
583
ISSUE STRUCTURE
Public Issue is of 12,700,000 Equity Shares of ₹10 each for cash at a price of ₹[●] per Equity Share
(including a share premium of ₹[●] per Equity Share) aggregating up to ₹[●] million (the "Issue"). The
Issue will constitute [●] %, of the post-Issue paid-up Equity Share capital of our Company.
584
Particulars QIBs(1) Non-Institutional Retail Individual
Bidders Bidders
shall be allotted on a Procedure" on page 590
proportionate basis to of this Draft Red
all QIBs including Herring Prospectus
Mutual Funds
receiving allocation
as per (a) above.
[●] Equity Shares
may be allocated on a
discretionary basis to
Anchor Investors
Minimum Bid Such number of Such number of Equity [●] Equity Shares and in
Equity Shares that Shares that the Bid multiples of [●] Equity
the Bid Amount Amount exceeds ₹ Shares
exceeds ₹ 2,00,000 2,00,000 and in thereafter
and in multiples multiples of [●] Equity
of [●] Equity Shares Shares thereafter.
thereafter
Maximum Bid Such number of Such number of Equity Such number of Equity
Equity Shares in Shares in multiples of Shares in multiples of
multiples of [●] [●] Equity Shares so that [●] so as to ensure that
Equity Shares so that the Bid does not exceed the payment amount
the Bid does not the Issue size, subject to does not exceed ₹
exceed the Issue size, applicable limits. 200,000. (5)
subject to applicable
limits.
Mode of Bidding Through ASBA Through ASBA process Through ASBA process
process
Mode of Allotment Compulsorily in Compulsorily in Compulsorily in
dematerialized form dematerialized form dematerialized form
Bid Lot [●] Equity Shares [●] Equity Shares and in [●] Equity Shares and in
and in multiples of multiples of [●] Equity multiples of [●] Equity
[●] Equity Shares Shares thereafter Shares thereafter
thereafter
Allotment Lot [●] Equity Shares [●] Equity Shares and in [●] Equity Shares and in
and in multiples of multiples of one multiples of one
one thereafter thereafter(4) thereafter(4)
Trading Lot/ Market One Equity Share One Equity Share One Equity Share
Lot
Who can Bid(2) A mutual fund, Resident Indian Resident Indian
venture capital fund individuals, HUFs (in individuals (including
and foreign venture the name of Karta), HUF, applying through
capital investor companies, corporate their Karta, minors
registered with SEBI; bodies, Eligible NRIs, applying through their
a foreign institutional Eligible QFIs, scientific natural guardian) and
investor and sub- institutions societies and Eligible NRIs applying
account (other than a trusts and any Category for Equity Shares such
sub- account which is III FPIs registered with that the Bid Amount
a foreign corporate or SEBI, which is a foreign does not exceed ₹
foreign individual), corporate or foreign 2,00,000 in value
registered with SEBI; individual for Equity
585
Particulars QIBs(1) Non-Institutional Retail Individual
Bidders Bidders
FPIs other than Shares such that the Bid
Category III FPIs, Amount exceeds ₹
FVCIs, AIFs, a 200,000 in value
public financial
institution as defined
in Section 2 (72) of
the Companies Act,
2013; a scheduled
commercial bank; a
multilateral and
bilateral
development
financial institution;
a state industrial
development
corporation; an
insurance company
registered with the
Insurance Regulatory
and Development
Authority (IRDA);
provident funds with
minimum corpus of ₹
250 million; and
pension funds with
minimum corpus of ₹
250 million; and
National Investment
Fund set up by
resolution no. F.No.
2/3/2005-DDII dated
November 23, 2005
of the Government of
India published in the
Gazette of India,
Insurance funds set
up and managed by
army ,navy or air
force of the Union of
India and Insurance
funds set up and
managed by the
Department of Posts,
India and
systemically
important non –
banking financial
companies.
Terms of Payment# Full Bid Amount shall be blocked by the SCSBs in the bank account of the
ASBA Bidder that is specified in the ASBA Form at the time of submission
586
Particulars QIBs(1) Non-Institutional Retail Individual
Bidders Bidders
of the ASBA Form.(3)
1. The Company in consultation with the BRLM, may allocate up to 60% of the QIB Category to
Anchor Investors at the Anchor Investor Issue Price, on a discretionary basis. One-third of the
Anchor Investor Portion will be reserved for domestic Mutual Funds, subject to valid Bids
being received at or above Anchor Investor Issue Price. For details, please refer to the chapter
titled "Issue Procedure" on page 590 of this Draft Red Herring Prospectus.
2. This Issue is being made through the Book Building Process wherein upto 30% of the Issue will
be available for allocation to QIBs on a proportionate basis, provided that the Anchor Investor
Portion may be allocated on a discretionary basis. Further, not less than 30% of the Issue will
be available for allocation on a proportionate basis to Non-Institutional Investors subject to
valid Bids being received at or above the Issue Price. Further, not less than 40% of the Issue
will be available for allocation to Retail Individual Bidders in accordance with SEBI ICDR
Regulations, subject to valid Bids being received at or above the Issue Price.
3. Full Bid Amount shall be payable by the Anchor Investors at the time of submission of the Bid
cum Application Form. Any balance amount payable by the Anchor Investors, due to a
difference between the Anchor Investor Issue Price and the Bid Amount paid by the Anchor
Investors, shall be payable by the Anchor Investors within two Working Days of the Bid/Issue
Closing Date.
4. Subject to valid Bids being received at or above the Issue Price, under-subscription (if any) in
the Non-Institutional Portion or the Retail Portion would be allowed to be met with spill-over
from other categories or a combination of categories at the discretion of our Company, in
consultation with the BRLM and the Designated Stock Exchange, on a proportionate basis.
5. The Company in consultation with the BRLM, may, offer a discount to Retail Individual
Bidders.
# The SCSB shall be authorized to block such funds in the ASBA Account of the Bidder that are
specified in the Bid cum Application Form.
Under- subscription, if any, in any category, except QIB Portion, would be met with spill-over from the
other categories or a contribution of categories at the discretion of our Company in consultation with
the BRLM and the Designated Stock Exchange. Our Company may in consultation with the BRLM
offer a discount to Retail Individual Bidders ("Retail Discount") in accordance with the SEBI ICDR
Regulations.
Our Company in consultation with the BRLM, reserve the right not to proceed with the Issue at any
time after the Bid/Issue Opening Date but before Allotment. If our Company withdraws the Issue, our
Company will issue a public notice within two days from the Bid/ Issue Closing Date or such time as
may be prescribed by SEBI, providing reasons for not proceeding with the Issue. The BRLM, through
the Registrar to the Issue, will instruct the SCSBs to unblock the ASBA Accounts within one Working
Day from the day of receipt of such instruction. The notice of withdrawal will be issued in the same
newspapers where the pre-Issue advertisements have appeared and the Stock Exchanges will also be
informed promptly.
587
If our Company withdraws the Issue after the Bid/ Issue Closing Date and thereafter determine that they
will proceed with a public offering of Equity Shares, they will file a fresh draft red herring prospectus
with SEBI and the Stock Exchanges.
Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading
approvals of the Stock Exchanges, which our Company will apply for only after Allotment and within
six Working Days of the Bid Closing Date or such time period in accordance with SEBI ICDR
Regulations; and (ii) the final RoC approval of the Prospectus.
Bid/Issue Period
This timetable, other than Bid/Issue Opening and Closing Dates, is indicative in nature and does not
constitute any obligation or liability on our Company or the members of the Syndicate. While we will
use best efforts to ensure that listing and trading of our Equity Shares on the Stock Exchanges
commences within six Working Days of the Bid/ Issue Closing Date, the timetable may be subject to
change for various reasons, including extension of the Bid/ Issue Period by our Company in consultation
with the BRLM, due to the revision of the Price Band or any delays in receipt of final listing and trading
approvals from the Stock Exchanges. The commencement of trading of the Equity Shares will be
entirely at the discretion of the Stock Exchanges in accordance with applicable laws.
Except in relation to the Bids received from the Anchor Investors, Bids and any revision in Bids shall
be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time ("IST")) during the Bid/
Issue Period (except the Bid/ Issue Closing Date) at the bidding centres and the Designated Branches
mentioned on the Bid cum Application Form or by members of the Syndicate at the specified location
or by the Designated Intermediaries at the Broker Centre.
On the Bid/ Issue Closing Date, the Bids and any revision in the Bids shall be accepted only between
10.00 a.m. (IST) and 3.00 p.m. (IST) or such extended time as permitted by the Stock Exchanges, and
as reported by the BRLM to the Stock Exchanges. On the Bid/ Issue Closing Date, extension of time
may be granted by the Stock Exchanges only for uploading Bids received from Retail Individual
Investors after taking into account the total number of Bids received up to closure of timings for
acceptance of Bid cum Application Forms as stated herein and reported by the BRLM to the Stock
Exchanges. Due to the limitation of time available for uploading the Bids on the Bid/ Issue Closing
Date, the Bidders are advised to submit the Bids one day prior to the Bid/ Issue Closing Date and, no
later than 1.00 p.m. (Indian Standard Time) on the Bid/ Issue Closing Date. If a large number of Bids
are received on the Bid/ Issue Closing Date, as is typically experienced in public issues, which may
lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot be
uploaded on the electronic bidding system will not be considered for allocation in the Issue. Our
Company, the members of the Syndicate, the SCSBs and the Designated Intermediaries will not be
588
responsible for any failure in uploading Bids due to faults in any hardware/software system or
otherwise. Bids will be accepted only on the Working Days of the Bid/Issue Period.
Our Company in consultation with the BRLM, reserve the right to revise the Price Band during the
Bid/Issue Period, in accordance with the SEBI ICDR Regulations, provided that the Cap Price will be
less than or equal to 120% of the Floor Price and the Floor Price will not be less than the face value of
the Equity Shares. The revision in Price Band shall not exceed 20.00% on the either side, i.e., the floor
price can move up or down to the extent of 20.00% of the Floor Price and the Cap Price will be revised
accordingly.
In case of revision in the Price Band, the Bid/Issue Period will be extended for at least three
additional Working Days after revision of Price Band subject to the Bid/Issue Period not
exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if
applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press
release and by indicating the change on the website of the members of the Syndicate and by
intimation to SCSBs and the Designated Intermediaries.
In case of discrepancy in data entered in the electronic book vis-à-vis data contained in the Bid cum
Application Form for a particular Bidder, the details as per the Bid file received from the Stock
Exchanges shall be taken as the final data for the purpose of Allotment.
589
ISSUE PROCEDURE
All Bidders should review the General Information Document for Investing in public issues prepared
and issued in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified by
SEBI (the "General Information Document") included below under section "- Part B – General
Information Document", which highlights the key rules, processes and procedures applicable to public
issues in general in accordance with the provisions of the Companies Act, the Securities Contracts
(Regulation) Act, 1956, the Securities Contracts (Regulation) Rules, 1957 and the SEBI ICDR
Regulations. The General Information Document has been updated to include reference to the Securities
and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 and certain notified
provisions of the Companies Act, 2013, to the extent applicable to a public issue. The General
Information Document is also available on the websites of the Stock Exchanges and the BRLM. Please
refer to the relevant portions of the General Information Document which are applicable to the Issue.
All Designated Intermediaries in relation to the Issue should ensure compliance with the SEBI circular
(CIR/CFD/POLICYCELL/11/2015) dated November 10, 2015, as amended and modified by the SEBI
circular (SEBI/HO/CFD/DIL/CIR/P/2016/26) dated January 21, 2016, in relation to clarifications on
streamlining the process of public issue of equity shares and convertibles.
Please note that the information stated/covered in this section may not be complete and/or accurate and
as such would be subject to modification/change. Our Company and the Syndicate would not be liable
for any amendment, modification or change in applicable law, which may occur after the date of this
Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure
that their Bids do not exceed the investment limits or maximum number of Equity Shares that can be
held by them under applicable law or as specified in the Red Herring Prospectus and the Prospectus.
Part – A
Pursuant to Rule 19(2)(b)(i) of the Securities Contracts (Regulation) Rules, 1957, as amended (the
"SCRR"), the Issue is being made for at least 25% of the post-Issue paid-up Equity Share capital of our
Company. This Issue is being made through the Book Building Process, wherein upto 30% of the Issue
shall be allocated to QIBs on a proportionate basis, provided that our Company in consultation with the
BRLM, may allocate upto 60% of the QIB portion to Anchor Investors at the Anchor Investor Issue
Price, on a discretionary basis, of which at least one third will be available for allocation to domestic
Mutual Funds. Further, 5% of the QIB Portion (excluding the Anchor Investor Portion) will be available
for allocation on a proportionate basis to Mutual Funds only. The remainder will be available for
allocation on a proportionate basis to all QIBs including Mutual Funds, subject to valid Bids being
received at or above the Issue Price.
Further, not less than 30% of the Issue will be available for allocation on a proportionate basis to Non-
Institutional Investors and not less than 40% of the Issue will be available for allocation on a
proportionate basis to Retail Individual Bidders, in accordance with SEBI ICDR Regulations, subject
to valid Bids being received at or above the Issue Price such that, subject to availability of Equity
Shares, each Retail Individual Bidder shall be Allotted not less than the minimum Bid Lot, and the
remaining Equity Shares, if available, shall be allotted to all Retail Individual Bidders on a proportionate
basis.
Under subscription if any, in any category, except QIB Portion, would be allowed to be met with spill
over from any other category or a combination of categories at the discretion of our Company in
consultation with the BRLM and the Designated Stock Exchange.
590
The Equity Shares, on Allotment, shall be traded only in the dematerialized segment of the Stock
Exchanges.
Bid–cum–Application Form
All Bidders (other than Anchor Investors) are required to mandatorily participate in the Issue
only through the ASBA process. Anchor Investors are not permitted to participate in the Issue
through the ASBA process.
Copies of the ASBA Forms and the Abridged Prospectus will be available with the Designated
Intermediaries at the Bidding Centres and the Registered Office of our Company. An electronic copy
of the Bid-cum-Application Form will also be available on the websites of the SCSBs, the NSE
(www.nseindia.com) and the BSE (www.bseindia.com) at least one day prior to the Bid/Issue Opening
Date. Anchor Investor Application Forms shall be available at the office of the BRLM at least one day
prior to the Anchor Investor Bid/Issue Period.
All Bidders (other than Anchor Investors) shall ensure that their Bids are made on ASBA Forms bearing
the stamp of a Designated Intermediary and submitted at the Bidding Centres only (except in case of
electronic ASBA Forms) and the ASBA Forms not bearing such specified stamp are liable to be
rejected. Additionally, ASBA Bidders must provide bank account details and authorization to block
funds in the relevant space provided in the ASBA Form and ASBA Forms that do not contain such
details are liable to be rejected. ASBA Bidders are also required to ensure that the ASBA Account has
sufficient credit balance as an amount equivalent to the full Bid Amount can be blocked by the SCSB
at the time of submitting the Bid.
The prescribed colour of the Bid-cum-Application Form for the various categories is as follows:
In addition to the category of Bidders set forth under "Part B - General Information Document for
Investing in Public Issues – Category of Investors Eligible to Participate in an Issue", the following
persons are also eligible to invest in the Equity Shares under all applicable laws, regulations and
guidelines, including:
➢ FPIs other than Category III foreign portfolio investor;
➢ Category III foreign portfolio investors, which are foreign corporates or foreign individuals
only under the Non Institutional Investors (NIIs) category; and
➢ Scientific and/or industrial research organisations authorised in India to invest in the Equity
Shares.
Any other person eligible to Bid in this Issue, under the laws, rules, regulations, guidelines and polices
591
applicable to them.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933,
as amended (the "U.S. 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) except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the U.S. Securities Act and applicable state securities laws in
the United States. Accordingly, the Equity Shares are being offered and sold outside the United
States in offshore transactions in compliance with Regulation S under the U.S. Securities Act and
the applicable laws of the jurisdiction where those offers and sales occur.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any
other jurisdiction outside India and may not be offered or sold, and Bids may not be made by
persons in any such jurisdiction, except in compliance with the applicable laws of such
jurisdiction.
Participation by associates/ affiliates of Book Running Lead Manager and Syndicate Members
The BRLM and the Syndicate Members shall not be allowed to participate by subscription in this Issue
in any manner, except towards fulfilling their underwriting obligations. However, the associates and
affiliates of the BRLM and the Syndicate Members may subscribe to or purchase the Equity Shares in
the Issue, including in the QIB Portion or in the Non-Institutional Category as may be applicable to
such Bidders, where the allocation is on a proportionate basis and such subscription may be on their
own account or on behalf of their clients. All categories of investors, including associates or affiliates
of the BRLM and Syndicate Members, shall be treated equally for the purpose of allocation to be made
on a proportionate basis.
The BRLM and any persons related to the BRLM (other than the Mutual Fund sponsored by entities
related to BRLM), or the Promoters and the Promoter Group cannot apply in the Issue under the Anchor
Investor Portion.
Eligible NRIs may obtain copies of Bid cum Application Form from the Designated Intermediaries.
Eligible NRI Bidders bidding on a repatriation basis by using the Non-Resident Forms should authorize
their SCSB to block their Non-Resident External ("NRE") accounts, or Foreign Currency Non-Resident
("FCNR") ASBA Accounts, and eligible NRI Bidders bidding on a non-repatriation basis by using
Resident Forms should authorize their SCSB to block their Non-Resident Ordinary ("NRO") accounts
for the full Bid Amount, at the time of the submission of the Bid cum Application Form.
Eligible NRIs Bidding on a repatriation basis are advised to use the Bid cum Application Form meant
for Non-Residents (blue in colour).
Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form for
residents. (white in colour).
Pursuant to the provisions of the FEMA regulations, investments by NRIs under the Portfolio
Investment Scheme ("PIS") is subject to certain limits, i.e., 10.00% of the paid-up equity share capital
of the company. Such limit for NRI investment under the PIS route can be increased by passing a board
resolution, followed by passing a special resolution by the shareholders, subject to prior intimation to
the RBI. Our Company has not passed any such resolution to increase this limit.
592
Bids by FPIs and FIIs
In terms of the SEBI FPI Regulations, an FII which holds a valid certificate of registration from SEBI
shall be deemed to be a registered FPI until the expiry of the block of three years for which fees have
been paid as per the SEBI FII Regulations. Accordingly, such FIIs can participate in this Issue in
accordance with Schedule 2 of the FEMA Regulations. An FII shall not be eligible to invest as an FII
after registering as an FPI under the SEBI FPI Regulations. However, existing FIIs and their sub
accounts may continue to buy, sell or deal in securities till the expiry of their existing SEBI registration.
Further, a QFI who had not obtained a certificate of registration as an FPI could only continue to buy,
sell or otherwise deal in securities until January 6, 2015. Hence, such QFIs who have not registered as
FPIs under the SEBI FPI Regulations shall not be eligible to participate in this Issue.
In terms of the SEBI FPI Regulations, the purchase of Equity Shares and total holding by a single FPI
or an investor group (which means the same set of ultimate beneficial owner(s) investing through
multiple entities) must be below 10% of our post-Issue Equity Share capital. Further, in terms of the
FEMA Regulations, the total holding by each FPI shall be below 10% of the total paid-up Equity Share
capital of our Company and the total holdings of all FPIs put together shall not exceed 24% of the paid-
up Equity Share capital of our Company. The aggregate limit of 24% may be increased up to the sectoral
cap by way of a resolution passed by the Board of Directors followed by a special resolution passed by
the Shareholders of our Company and subject to prior intimation to RBI. In terms of the FEMA
Regulations, for calculating the aggregate holding of FPIs in a company, holding of all registered FPIs
as well as holding of FIIs (being deemed FPIs) shall be included. The existing individual and aggregate
investment limits an FII or sub account in our Company is 10% and 24% of the total paid-up Equity
Share capital of our Company, respectively.
As per the circular issued by SEBI on November 24, 2014, these investment restrictions shall also apply
to subscribers of offshore derivative instruments ("ODIs"). Two or more subscribers of ODIs having a
common beneficial owner shall be considered together as a single subscriber of the ODI. In the event
an investor has investments as a FPI and as a subscriber of ODIs, these investment restrictions shall
apply on the aggregate of the FPI and ODI investments held in the underlying company.
As per the circular issued by SEBI on July 13, 2018, the Registrar to the Issue shall use the Permanent
Account Number (PAN) issued by Income Tax Department of India for checking compliance for a
single foreign portfolio investor; and obtain validation from Depositories for the FPIs to ensure there is
no breach of investment limit by such FPIs.
FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions
which may be specified by the Government from time to time. FPIs who wish to participate in the Issue
are advised to use the Bid cum Application Form for non-residents. FPIs are required to Bid through
the ASBA process to participate in the Issue.
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in
terms of Regulation 22 of the SEBI FPI Regulations, an FPI, other than Category III Foreign Portfolio
Investors and unregulated broad based funds, which are classified as Category II Foreign Portfolio
Investors by virtue of their investment manager being appropriately regulated, may issue or otherwise
deal in offshore derivative instruments (as defined under the SEBI FPI Regulations as any instrument,
by whatever name called, which is issued overseas by a FPI against securities held by it that are listed
or proposed to be listed on any recognised stock exchange in India, as its underlying security) directly
or indirectly, only if (i) such offshore derivative instruments are issued only to persons who are
regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued
after compliance with ‘know your client’ norms. An FPI is also required to ensure that no further issue
or transfer of any offshore derivative instrument is made by or on behalf of it to any persons that are
593
not regulated by an appropriate foreign regulatory authority. Further, pursuant to a circular dated
November 24, 2014 issued by the SEBI, FPIs are permitted to issue offshore derivative instruments
only to subscribers that (i) meet the eligibility conditions setforth in regulation 4 of the SEBI FPI
Regulations; and (ii) do not have "opaque structures", as defined under the SEBI FPI Regulations.
In case of bids made by FPIs, a verified true copy of the certificate of registration issued under the FPI
Regulations is required to be attached along with the Bid cum Application form.
The SEBI VCF Regulations and the SEBI FVCI Regulations inter alia prescribe the investment
restrictions on the VCFs and FVCIs registered with SEBI. Further, the SEBI AIF Regulations prescribe,
among others, the investment restrictions on AIFs.
Accordingly, the holding by any individual VCF registered with SEBI in one venture capital
undertaking should not exceed 25% of the corpus of the VCF. Further, VCFs and FVCIs can invest
only up to 33.33% of the investible funds by way of subscription to an initial public offering.
Category I and II AIFs cannot invest more than 25% of the corpus in one investee company. A category
III AIF cannot invest more than 10% of the investible funds in one investee company. A venture capital
fund registered as a category I AIF, as defined in the SEBI AIF Regulations, cannot invest more than
1/3rd of its corpus by way of subscription to an initial public offering of a venture capital undertaking.
Additionally, the VCFs which have not re-registered as an AIF under the SEBI AIF Regulations shall
continue to be regulated by the SEBI VCF Regulations until the existing fund or scheme managed by
the fund is wound up and such funds shall not launch any new scheme after the notification of the SEBI
AIF Regulations.
All non-resident investors should note that refunds (in case of Anchor Investors), dividends and other
distributions, if any, will be payable in Indian Rupees only and net of bank charges and commission, if
any.
In case of Bids made by provident funds/pension funds, subject to applicable laws, with minimum
corpus of ₹ 250 million, a certified copy of certificate from a chartered accountant certifying the corpus
of the provident fund/ pension fund must be attached to the Bid cum Application Form. Failing this,
our Company reserves the right to reject any Bid, without assigning any reason thereof.
In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership
Act, 2008, a certified copy of certificate of registration issued under the Limited Liability Partnership
Act, 2008, must be attached to the Bid cum Application Form. Failing this, our Company reserves the
right to reject any Bid without assigning any reason thereof.
Bids by Systemically Important Non-Banking Financial Companies
In case of Bids made by systemically important non-banking financial companies, a certified copy of
the certificate of registration issued by the RBI, a certified copy of its last audited financial statements
on a standalone basis and a net worth certificate from its statutory auditor(s), must be attached to the
Bid-cum Application Form. Failing this, our Company reserves the right to reject any Bid, without
assigning any reason thereof. Systemically important non-banking financial companies participating in
the Issue shall comply with all applicable regulations, guidelines and circulars issued by RBI from time
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to time.
In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies,
registered societies, FIIs, FPIs, Mutual Funds, Eligible QFIs, insurance companies, insurance funds set
up by the army, navy or air force of the Union of India, insurance funds set up by the Department of
Posts, India or the National Investment Fund, provident funds with a minimum corpus of ₹ 250 million
and pension funds with a minimum corpus of ₹ 250 million (in each case, subject to applicable laws
and in accordance with their respective constitutional documents), 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 of association and articles of association and/or bye laws, as applicable must be lodged
along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or
reject any Bid in whole or in part, in either case, without assigning any reasons thereof.
Bids by SCSBs
SCSBs participating in the Issue are required to comply with the terms of the SEBI circulars dated
September 13, 2012 and January 2, 2013. Such SCSBs are required to ensure that for making
applications on their own account using ASBA, they should have a separate account in their own name
with any other SEBI registered SCSBs. Further, such account shall be used solely for the purpose of
making application in public issues and clear demarcated funds should be available in such account for
ASBA applications.
In case of Bids made by banking companies registered with the RBI, certified copies of: (i) the
certificate of registration issued by the RBI, and (ii) the approval of such banking company’s investment
committee are required to be attached to the Bid cum Application Form, failing which our Company
reserves the right to reject any Bid by a banking company, without assigning any reason thereof.
The investment limit for banking companies in non-financial services companies as per the Banking
Regulation Act, 1949, as amended (the "Banking Regulation Act"), and the Master Direction – Reserve
Bank of India (Financial Services provided by Banks) Directions, 2016, is 10% of the paid-up share
capital of the investee company or 10% of the banks’ own paid-up share capital and reserves, whichever
is less. Further, the aggregate investment by a banking company in subsidiaries and other entities
engaged in financial and non-financial services company cannot exceed 20.00% of the bank’s paid-up
share capital and reserves. A banking company may hold up to 30% of the paid-up share capital of the
investee company with the prior approval of the RBI provided that the investee company is engaged in
non-financial activities in which banking companies are permitted to engage under the Banking
Regulation Act.
In case of Bids made by insurance companies registered with the IRDA, a certified copy of certificate
of registration issued by IRDA must be attached to the Bid cum Application Form. Failing this, our
Company reserves the right to reject any Bid without assigning any reason thereof.
Insurance companies participating in this Issue, shall comply with all applicable regulations, guidelines
and circulars issued by IRDA from time to time including the Insurance Regulatory and Development
Authority (Investment) Regulations, 2016 ("IRDA Investment Regulations").
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Bids by OCBs
Bids made by asset management companies or custodians of Mutual Funds shall specifically state
names of the concerned schemes for which such Bids are made. 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 scheme concerned for which the Bid has been made.
With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be
lodged with the Bid cum Application Form. Failing this, our Company reserves the right to reject any
Bid in whole or in part, in either case, without assigning any reason thereof.
No Mutual Fund scheme shall invest more than 10.00% of its net asset value in the equity shares or
equity related instruments of any single company provided that the limit of 10.00% shall not be
applicable for investments in index funds or sector or industry specific funds. No Mutual Fund under
all its schemes should own more than 10.00% of any company’s paid-up share capital carrying voting
rights.
In accordance with the SEBI ICDR Regulations, the key terms for participation by Anchor Investors
are provided below.
(i) Anchor Investor Application Forms will be made available for the Anchor Investor Portion at
the office of the BRLM.
(ii) The Bid must be for a minimum of such number of Equity Shares so that the Bid Amount
exceeds ₹ 100 million. A Bid cannot be submitted for over 60.00% of the QIB Portion. In case
of a Mutual Fund, separate Bids by individual schemes of a Mutual Fund will be aggregated to
determine the minimum application size of ₹ 100 million.
(iii) One-third of the Anchor Investor Portion will be reserved for allocation to domestic Mutual
Funds, subject to valid Bids being received from domestic Mutual Funds at or above the Anchor
Investor Allocation Price.
(iv) Bidding for Anchor Investors will open one (1) Working Day before the Bid/Issue Opening
Date, i.e., the Anchor Investor Bid/Issue Period, and will be completed on the same day.
(v) Our Company in consultation with the BRLM, will finalize the allocation to the Anchor
Investors on a discretionary basis, provided that the minimum number of Allottees in the
Anchor Investor Portion will not be less than:
a) maximum of two Anchor Investors, where allocation under the Anchor Investor
Portion is up to ₹100 million;
b) minimum of two and maximum of 15 Anchor Investors, where the allocation under the
Anchor Investor Portion is more than ₹ 100 million but up to ₹ 2,500.00 million,
subject to a minimum Allotment of ₹ 50.00 million per Anchor Investor; and
c) in case of allocation above ₹ 2,500.00 million under the Anchor Investor Portion, a
minimum of five such investors and a maximum of 15 Anchor Investors for allocation
up to ₹ 2,500.00 million, and an additional 10 Anchor Investors for every additional ₹
250.00 million, subject to minimum allotment of ₹ 50.00 million per Anchor Investor.
(vi) Allocation to Anchor Investors will be completed within the Anchor Investor Bid/Issue Period.
The number of Equity Shares allocated to Anchor Investors and the price at which the allocation
is made will be made available in the public domain by the BRLM before the Bid/Issue Opening
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Date, through intimation to the Stock Exchanges.
(vii) Anchor Investors cannot withdraw or lower the size of their Bids at any stage after submission
of the Bid.
(viii) If the Issue Price is greater than the Anchor Investor Allocation Price, the additional amount
being the difference between the Issue Price and the Anchor Investor Allocation Price will be
payable by the Anchor Investors on the Anchor Investor Pay-in Date specified in the CAN. If
the Issue Price is lower than the Anchor Investor Allocation Price, Allotment to successful
Anchor Investors will be at the higher price, i.e., the Anchor Investor Issue Price.
(ix) Equity Shares Allotted in the Anchor Investor Portion will be locked in for a period of 30 days
from the date of Allotment.
(x) The BRLM, our Promoter, members of the Promoter Group or any person related to them
(except for Mutual Funds sponsored by entities related to the BRLM) will not participate in the
Anchor Investor Portion. The parameters for selection of Anchor Investors will be clearly
identified by the BRLM, and made available as part of the records of the BRLM for inspection
by SEBI.
(xi) Bids made by QIBs under both the Anchor Investor Portion and the Net QIB Portion will not
be considered multiple Bids.
(xii) For more information, please refer "Issue Procedure - Part B: General Information Document
for Investing in Public Issues - Section 7: Allotment Procedure and Basis of Allotment –
Allotment to Anchor Investor" on page 590 of this Draft Red Herring Prospectus.
Anchor Investors are not permitted to Bid in the Issue through the ASBA process. Instead, Anchor
Investors should transfer their Bid Amount (through direct credit, RTGS or NEFT) in the Escrow
Account in favour of:
a) In case of resident Anchor Investors: " [●]"
b) In case of Non-Resident Anchor Investors: " [●]"
Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as
an arrangement between our Company, the Syndicate, the Escrow Collection Banks and the Registrar
to the Issue to facilitate collections from the Bidders.
The above information is given for the benefit of Bidders. Our Company, our Directors, the officers of
our Company and the members of the Syndicate are not liable for any amendments or modification or
changes in applicable laws or regulations, which may occur after the date of this 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 number of Equity Shares that can be held by them under
applicable limits under laws or regulations.
The Company shall on the day of, or the day following the date of, filing this Draft Red Herring
Prospectus with SEBI, make a public announcement in [●] edition of English national newspaper [●],
[●] edition of Hindi national newspaper [●], and [●] edition of a Assamese newspaper, each with wide
circulation, disclosing that the DRHP has been filed with SEBI and inviting the public to give their
comments to SEBI in respect of disclosures made in this Draft Red Herring Prospectus.
Subject to Section 30 of the Companies Act, 2013, our Company shall, after registering the Red Herring
Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI ICDR
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Regulations, in [●] edition of English national daily newspaper [●], [●] edition of Hindi national daily
newspaper [●], and [●] edition of the Assamese newspaper, each with wide circulation. In the pre-Issue
advertisement, we shall state the Bid Issue Opening Date, the Bid/Issue Closing Date and the QIB
Bid/Issue Closing Date. This advertisement, subject to the provisions of Section 30 of the Companies
Act, shall be in the format prescribed in Part A of Schedule XIII of the SEBI ICDR Regulations.
In addition to the instructions provided to Bidders set forth in the sub-section "Issue Procedure – Part
B – General Information Document for Investing in Public Issues" on page 590 of this Draft Red
Herring Prospectus, Bidders are requested to note the following additional information in relation to
the Issue.
1. The relevant Designated Intermediary will enter each Bid option into the electronic Bidding
system as a separate Bid and generate an acknowledgement slip ("Acknowledgement Slip"),
for each price and demand option and give the same to the Bidder. Therefore, a Bidder can
receive up to three Acknowledgement Slips for each Bid cum Application Form. It is the
Bidder’s responsibility to obtain the Acknowledgment Slip from the relevant Designated
Intermediary. The registration of the Bid by the Designated Intermediary does not guarantee
that the Equity Shares shall be allocated/Allotted. Such Acknowledgement will be non-
negotiable and by itself will not create any obligation of any kind. When a Bidder revises his
or her Bid, he /she shall surrender the earlier Acknowledgement Slip and may request for a
revised Acknowledgment Slip from the relevant Designated Intermediary as proof of his or her
having revised the previous Bid.
2. In relation to electronic registration of Bids, the permission given by the Stock Exchanges to
use their network and software of the electronic bidding system should not in any way be
deemed or construed to mean that the compliance with various statutory and other requirements
by our Company and/or the BRLM are cleared or approved by the Stock Exchanges; nor does
it in any manner warrant, certify or endorse the correctness or completeness of compliance with
the statutory and other requirements, nor does it take any responsibility for the financial or other
soundness of our Company, the management or any scheme or project of our Company; 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 or the Red Herring Prospectus; nor does it warrant
that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges.
3. In the event of an upward revision in the Price Band, Retail Individual Bidders who had Bid at
Cut-off Price could either (i) revise their Bid or (ii) shall make additional payment based on the
cap of the revised Price Band (such that the total amount i.e., original Bid Amount plus
additional payment does not exceed ₹ 200,000 if the Bidder wants to continue to Bid at Cut-
off Price). The revised Bids must be submitted to the same Designated Intermediary to whom
the original Bid was submitted. If the total amount (i.e., the original Bid Amount plus additional
payment) exceeds ₹ 200,000, the Bid will be considered for allocation under the Non-
Institutional Portion. If, however, the Retail Individual Bidder does not either revise the Bid or
make additional payment and the Issue Price is higher than the cap of the Price Band prior to
revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of
allocation, such that no additional payment would be required from the Retail Individual Bidder
and the Retail Individual Bidder is deemed to have approved such revised Bid at Cut-off Price.
4. In the event of a downward revision in the Price Band, Retail Individual Bidders who have bid
at Cutoff Price may revise their Bid; otherwise, the excess amount paid at the time of Bidding
would be unblocked after Allotment is finalised.
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5. Any revision of the Bid shall be accompanied by instructions to block the incremental amount,
if any, to be paid on account of the upward revision of the Bid.
General Instructions
In addition to the general instructions provided in the sub-section titled "Part B – General Information
Document for Investing in Public Issues" on page 590 of this Draft Red Herring Prospectus, Bidders
are requested to note the additional instructions provided below.
Do’s:
1. Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under
applicable law;
2. Ensure that you have Bid within the Price Band;
3. Read all the instructions carefully and complete the Bid cum Application Form in the prescribed
form;
4. Ensure that the details about the PAN, DP ID and Client ID are correct and the Bidders
depository account is active, as Allotment of the Equity Shares will be in the dematerialised
form only;
5. Ensure that your Bid cum Application Form, bearing the stamp of a Designated Intermediary
is submitted to the Designated Intermediary at the Bidding Centre within the prescribed time,
except in case of electronic forms.;
6. With respect to the ASBA Bids, ensure that the Bid cum Application Form is signed by the
account holder in case the applicant is not the account holder. Ensure that you have mentioned
the correct ASBA Account number in the ASBA Form;
7. All Bidders (other than Anchor Investors) should Bid through the ASBA process only;
8. With respect to Bids by SCSBs, ensure that you have a separate account in your own name with
any other SCSB having clear demarcated funds for applying under the ASBA process and that
such separate account (with any other SCSB) is used as the ASBA Account with respect to your
Bid;
9. Ensure that you request for and receive a stamped Acknowledgement Slip of the Bid cum
Application Form for all your Bid options from the concerned Designated Intermediary as proof
of registration of the Bid cum Application Form;
10. Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with
the SCSB before submitting the ASBA Form to any of the Designated Intermediaries;
11. With respect to non-ASBA Bids, ensure that the full Bid Amount is paid for the Bids and with
respect to ASBA Bids, ensure funds equivalent to the Bid Amount are blocked;
12. Instruct your respective banks to not release the funds blocked in the ASBA Account under the
ASBA process;
13. Submit revised Bids to the same Designated Intermediary, as applicable, through whom the
original Bid was placed and obtain a revised Acknowledgement Slip;
14. Except for Bids (i) on behalf of the Central or State Governments and the officials appointed
by the courts, who, in terms of the SEBI circular dated June 30, 2008, may be exempt from
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specifying their PAN for transacting in the securities market and (ii) Bids by persons resident
in the state of Sikkim, who, in terms of the SEBI circular dated July 20, 2006, may be exempted
from specifying their PAN for transacting in the securities market, all Bidders should mention
their PAN allotted under the Income Tax Act, 1961. The exemption for the Central or the State
Government and officials appointed by the courts and for Bidders residing in the State of
Sikkim is subject to (a) the demographic details received from the respective depositories
confirming the exemption granted to the beneficiary owner by a suitable description in the PAN
field and the beneficiary account remaining in "active status"; and (b) in the case of residents
of Sikkim, the address as per the demographic details evidencing the same;
15. Ensure that the Demographic Details (as defined herein below) are updated, true and correct in
all respects;
16. Ensure that thumb impressions and signatures other than in the languages specified in the
Eighth Schedule to the Constitution of India are attested by a Magistrate or a Notary Public or
a Special Executive Magistrate under official seal;
17. Ensure that the signature of the First Bidder in case of joint Bids, is included in the Bid cum
Application Forms;
18. Ensure that the name(s) given in the Bid cum Application Form is/are exactly the same as the
name(s) in which the beneficiary account is held with the Depository Participant. In case of
joint Bids, the Bid cum Application Form should contain only the name of the First Bidder
whose name should also appear as the first holder of the beneficiary account held in joint names;
19. Ensure that the category and sub-category under which the Bid is being submitted is clearly
specified in the Bid cum Application Form;
20. Ensure that in case of Bids under power of attorney or by limited companies, corporate, trust
etc., relevant documents are submitted;
21. If you are residing outside India, ensure that Bids by you are in compliance with applicable
foreign and Indian laws;
22. Ensure that the DP ID, the Client ID and the PAN mentioned in the Bid cum Application Form
and entered into the electronic bidding of the Stock Exchanges by the relevant Designated
Intermediary, match with the DP ID, Client ID and PAN available in the Depository database;
23. Bidders should note that in case the DP ID, Client ID and the PAN mentioned in their Bid cum
Application Form and entered into the online system of the Stock Exchanges by the relevant
Designated Intermediary, do not match with the DP ID, Client ID and PAN available in the
Depository database, then such Bids are liable to be rejected. Where the Bid cum Application
Form is submitted in joint names, ensure that the beneficiary account is also held in the same
joint names and such names are in the same sequence in which they appear in the Bid cum
Application Form.
24. In relation to the ASBA Bids, ensure that you use the ASBA Form bearing the stamp of the
relevant Designated Intermediary (in the Specified Locations) (except in case of electronic
forms);
25. Ensure that you tick the correct Bidder category, as applicable, in the Bid cum Application
Form to ensure proper upload of your Bid in the online IPO system of the Stock Exchanges;
26. Ensure that the Bid cum Application Forms are delivered by the Bidders within the time
prescribed as per the Bid cum Application Form and the Red Herring Prospectus;
27. Ensure that while Bidding through a Designated Intermediary, the ASBA Form is submitted to
a Designated Intermediary in a Bidding Centre and that the SCSB where the ASBA Account,
as specified in the ASBA Form, is maintained has named at least one branch at that location for
the Designated Intermediary to deposit ASBA Forms (a list of such branches is available on
the website of SEBI at http://www.sebi.gov.in). Ensure that you have mentioned the correct
ASBA Account number in the Bid cum Application Form;
28. Ensure that the entire Bid Amount is paid at the time of submission of the Bid or in relation to
the ASBA Bids, ensure that you have correctly signed the authorisation/undertaking box in the
Bid cum Application Form, or have otherwise provided an authorisation to the SCSB via the
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electronic mode, for blocking funds in the ASBA Account equivalent to the Bid Amount
mentioned in the Bid cum Application Form; and
29. In relation to the ASBA Bids, ensure that you receive an acknowledgement from the Designated
Branch of the Designated Intermediary, for the submission of your ASBA Form.
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not
complied with.
Don’ts:
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23. Do not submit ASBA Bids to a Designated Intermediary at a Bidding Centre unless the SCSB
where the ASBA Account is maintained, as specified in the ASBA Form, has named at least
one branch in the relevant Bidding Centre, for the Designated Intermediary to deposit ASBA
Forms (a list of such branches is available on the website of SEBI at http://www.sebi.gov.in).
The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not
complied with.
In addition to the instructions for completing the Bid cum Application Form provided in the sub-section
"Part B – General Information Document for Investing in Public Issues – Applying in the Issue –
Instructions for filing the Bid cum Application Form/ Application Form" on page 590 of this Draft Red
Herring Prospectus, Bidders are requested to note the additional instructions provided below:
1. Thumb impressions and signatures other than in the languages specified in the Eighth Schedule
in the Constitution of India must be attested by a Magistrate or a Notary Public or a Special
Executive Magistrate under official seal. Bids must be in single name or in joint names (not
more than three, and in the same order as their Depository Participant details).
2. ASBA Bids must be made in a single name or in joint names (not more than three, and in the
same order as their details appear with the Depository Participant), and completed in full, in
BLOCK LETTERS in ENGLISH and in accordance with the instructions contained in the Red
Herring Prospectus and in the ASBA Form.
3. Bids on a repatriation basis shall be in the names of FIIs or FPIs but not in the names of minors,
OCBs, firms or partnerships and foreign nationals.
(a) Our Company will ensure that the Allotment and credit to the successful Bidder’s depositary
account will be completed within six Working Days, of the Bid/Issue Closing Date, or such
period as may be prescribed by SEBI.
(b) Equity Shares will be issued and Allotment shall be made only in the dematerialised form to
the Allottees.
(c) Allottees will have the option to re-materialise the Equity Shares so Allotted as per the
provisions of the Companies Act, 2013 and the Depositories Act. Howerver, pursuant to
Regulation 40 of the Listing Regulations as amended by SEBI notification bearing No.
SEBI/LAD-NRO/GN/2018/24. dated June 8, 2018, except in case of transmission or
transposition of securities, requests for effecting transfer of securities shall not beprocessed
unless the securities are held in the dematerialized form.
In addition to the grounds for rejection of Bids on technical grounds as provided in the sub-section "Part
B – General Information Document for Investing in Public Issues – Issue Procedure in Book Built Issue
– Rejection and Responsibility for Upload of Bids – Grounds for Technical Rejections" on page 590 of
this Draft Red Herring Prospectus, Bidders are requested to note that Bids may be rejected on the
following additional technical grounds:
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4. Bids by HUFs not mentioned correctly as given in the sub-section " – Who can Bid? " under
the chapter titled "Issue Procedure" beginning on page 590 of this Draft Red Herring
Prospectus;
5. ASBA Form submitted to a Designated Intermediary does not bear the stamp of the Designated
Intermediary;
6. Bids submitted without the signature of the First Bidder or sole Bidder;
7. With respect to ASBA Bids, the ASBA Form not being signed by the account holders, if the
account holder is different from the Bidder;
8. Bids by persons for whom PAN details have not been verified and whose beneficiary accounts
are ‘suspended for credit’ in terms of SEBI circular (reference number: CIR/MRD/DP/ 22
/2010) dated July 29, 2010;
9. GIR number furnished instead of PAN;
10. Bids by Retail Individual Bidders with Bid Amount for a value of more than ₹ 200,000/-;
11. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws,
rules, regulations, guidelines and approvals;
12. Bids by Bidders (who are not Anchor Investors) accompanied by cheques or demand drafts;
13. Bids accompanied by stockinvest, money order, postal order or cash;
14. Bids uploaded by QIBs after 4.00 pm on the QIB Bid/Issue Closing Date and by Non-
Institutional Bidders uploaded after 4.00 p.m. on the Bid/Issue Closing Date, and Bids by Retail
Individual Bidders uploaded after 5.00 p.m. on the Bid/Issue Closing Date, unless extended by
the Stock Exchanges.
Depository Arrangements
The Allotment of the Equity Shares in the Issue shall be only in a de-materialised form, (i.e., not in the
form of physical certificates but be fungible and be represented by the statement issued through the
electronic mode).
Further, pursuant to Regulation 40 of the Listing Regulations as amended by SEBI notification bearing
No. SEBI/LAD-NRO/GN/2018/24. dated June 8, 2018, except in case of transmission or transposition
of securities, requests for effecting transfer of securities shall not be processed unless the securities are
held in the dematerialized form.
In this context, two agreements had been signed amongst our Company, the respective Depositories
and the Registrar to the Issue:
1. Agreement dated September 5, 2018 among NSDL, our Company and the Registrar to the Issue.
2. Agreement dated July 12, 2018 among CDSL, our Company and Registrar to the Issue.
We undertake as follows:
1. That if our Company does not proceed with the Issue after the Bid/Issue Closing Date, the
reason thereof shall be given as a public notice to be issued by our Company within two days
of the Bid/Issue Closing Date. The public notice shall be issued in the same newspapers where
the pre-Issue advertisements were published. The Stock Exchanges on which the Equity Shares
are proposed to be listed shall also be informed promptly;
2. That if our Company withdraws the Issue after the Bid/Issue Closing Date, our Company shall
be required to file a fresh offer document with the RoC/ SEBI, in the event our Company
subsequently decides to proceed with the Issue;
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3. 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
six Working Days of the Bid/Issue Closing Date will be taken;
4. The Equity Shares proposed to be issued by it in the Issue shall be allotted to the successful
bidders within the specified time in accordance with the instruction of the Registrar to the Issue;
5. That the complaints received in respect of the Issue shall be attended to by our Company
expeditiously and satisfactorily;
6. If the Allotment is not made, application monies will be refunded/unblocked in the ASBA
Accounts within 15 days from the Bid/Issue Closing Date or such lesser time as specified by
SEBI, failing which interest will be due to be paid to the Bidders at the rate of 15.00% per
annum for the delayed period;
7. That where refunds (wherever applicable) are made through electronic transfer of funds, a
suitable communication shall be sent to the Bidders within 15 days from the Bid/Issue Closing
Date or at such lesser time as may be specified by SEBI, giving details of the bank where
refunds shall be credited along with the amount and expected date of electronic credit of refund;
8. That the allotment of Equity Shares/ unblocking confirmation to the Eligible NRIs shall be
despatched within specified time;
9. That funds required for making refunds to unsuccessful Bidders as per the mode(s) disclosed
shall be made available to the Registrar to the Issue by our Company;
10. That our Company shall not have recourse to the Issue Proceeds until the final approval for
listing and trading of the Equity Shares from all the Stock Exchanges where listing is sought
has been received.
11. That no further issue of Equity Shares shall be made until the Equity Shares offered through
the Red Herring Prospectus are listed or until the Bid monies are refunded / unblocked on
account of non-listing, under-subscription etc.
12. That, adequate arrangements shall be made to collect all Applications Supported by Blocked
Amount and to consider them similar to non-ASBA applications while finalizing the Basis of
Allotment; and
13. That it shall comply with such disclosure and accounting norms as specified by SEBI from time
to time.
14. No further issue of the Equity Shares shall be made till the Equity Shares offered through the
Red Herring Prospectus are listed or until the Bid monies are unblocked in ASBA
Account/refunded on account of non-listing, under-subscription, etc.
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an appropriate head in the balance sheet of our Company indicating the purpose for which such
monies have been utilised;
3. details of all unutilised monies out of the Issue referred in sub-item 1, if any shall be disclosed
under an appropriate separate head in the balance sheet indicating the form in which such
unutilised monies have been invested
PART B
All Bidders should review the General Information Document for Investing in Public Issues prepared
and issued in accordance with the circular (CIR/CFD/DIL/12/2013) dated October 23, 2013 notified
by SEBI (the "General Information Document") included below under "Part B – General Information
Document", which highlights the key rules, processes and procedures applicable to public issues in
general in accordance with the provisions of the Companies Act, the SCRA, the SCRR and the SEBI
ICDR Regulations. The General Information Document has been updated to reflect amendments to the
SEBI ICDR Regulations including reference to the SEBI FPI Regulations and certain notified
provisions of the Companies Act, 2013, to the extent applicable to a public issue. The General
Information Document is also available on the websites of the Stock Exchanges and the BRLM. Please
refer to the relevant provisions of the General Information Document, which are applicable to the Issue.
Our Company and the BRLM does not accept any responsibility for the completeness and accuracy of
the information stated in this section and are not liable for any amendment, modification or change in
the applicable law which may occur after the date of the Red Herring Prospectus. Bidders are advised
to make their independent investigations and ensure that their Bids are submitted in accordance with
applicable laws and do not exceed the investment limits or maximum number of the Equity Shares that
can be held by them under applicable law or as specified in the Red Herring Prospectus.
This document is applicable to the public issues undertaken through the Book-Building Process as well
as to the Fixed Price Offers. The purpose of the "General Information Document for Investing in Public
Issues" is to provide general guidance to potential Bidders/Applicants in IPOs and FPOs, on the
processes and procedures governing IPOs and FPOs, undertaken in accordance with the provisions of
the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 ("SEBI ICDR Regulations") Bidders/Applicants should note that investment in
equity and equity related securities involves risk and Bidder/Applicant should not invest any funds in
the Issue unless they can afford to take the risk of losing their investment. The specific terms relating
to securities and/or for subscribing to securities in an Issue and the relevant information about the Issuer
undertaking the Issue will be set out in the Red Herring Prospectus ("RHP")/Prospectus that will be
filed by the Issuer with the Registrar of Companies ("RoC").
Bidders/Applicants should carefully read the entire RHP/Prospectus and the Bid cum Application Form/
Application Form and the Abridged Prospectus of the Issuer in which they are proposing to invest
through the Issue. In case of any difference in interpretation or conflict and/or overlap between the
disclosure included in this document and the RHP/Prospectus, the disclosures in the RHP/Prospectus
shall prevail. The RHP/Prospectus of the Issuer is available on the websites of stock exchanges, on the
website(s) of the BRLM(s) to the Issue and on the website of Securities and Exchange Board of India
("SEBI") at www.sebi.gov.in.
For the definitions of capitalized terms and abbreviations used herein Bidders/Applicants may see
"Glossary and Abbreviations".
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SECTION 2: BRIEF INTRODUCTION TO IPOs/ FPOs
An IPO means an offer of specified securities by an unlisted Issuer to the public for subscription
and may include an Offer for Sale of specified securities to the public by any existing holder of
such securities in an unlisted Issuer.
For undertaking an IPO, an Issuer is inter-alia required to comply with the eligibility
requirements of either Regulation 26(1) or Regulation 26(2) of the SEBI ICDR Regulations.
For details of compliance with the eligibility requirements by the Issuer, Bidders/Applicants
may refer to the RHP/Prospectus.
An FPO means an offer of specified securities by a listed Issuer to the public for subscription
and may include Offer for Sale of specified securities to the public by any existing holder of
such securities in a listed Issuer.
For undertaking an FPO, the Issuer is inter-alia required to comply with the eligibility
requirements in terms of Regulation 26/ Regulation 27 of the SEBI ICDR Regulations. For
details of compliance with the eligibility requirements by the Issuer, Bidders/Applicants may
refer to the RHP/Prospectus.
In addition to the eligibility requirements specified in paragraphs 2.1 and 2.2, an Issuer
proposing to undertake an IPO or an FPO is required to comply with various other requirements
as specified in the SEBI ICDR Regulations, the Companies Act, 2013, the Companies Act,
1956 (to the extent applicable), the Securities Contracts (Regulation) Rules, 1957 (the
"SCRR"), industry-specific regulations, if any, and other applicable laws for the time being in
force.
For details in relation to the above Bidders/ Applicants may refer to the RHP/Prospectus.
2.4. Types of Public Issues – Fixed Price Issues and Book Built Issues
In accordance with the provisions of the SEBI ICDR Regulations, an Issuer can either
determine the Issue Price through the Book Building Process ("Book Built Issue") or undertake
a Fixed Price Issue ("Fixed Price Issue"). An Issuer may mention Floor Price or Price Band in
the RHP (in case of a Book Built Issue) and a Price or Price Band in the Draft Prospectus (in
case of a fixed price Issue) and determine the price at a later date before registering the
Prospectus with the Registrar of Companies.
The cap on the Price Band should be less than or equal to 120% of the Floor Price. The Issuer
shall announce the Price or the Floor Price or the Price Band through advertisement in all
newspapers in which the pre-issue advertisement was given at least five Working Days before
the Bid/ Issue Opening Date, in case of an IPO and at least one Working Day before the
Bid/Issue Opening Date, in case of an FPO.
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The Floor Price or the Issue price cannot be lesser than the face value of the securities.
Bidders/Applicants should refer to the RHP/ Prospectus or Issue advertisements to check
whether the Issue is a Book Built Issue or a Fixed Price Issue.
The Issue may be kept open for a minimum of three Working Days (for all category of Bidders/
Applicants) and not more than ten Working Days. Bidders/Applicants are advised to refer to
the Bid cum Application Form and Abridged Prospectus or RHP/Prospectus for details of the
Bid/ Issue Period. Details of Bid/ Issue Period are also available on the website of the Stock
Exchange(s).
In case of a Book Built Issue, the Issuer may close the Bid/ Issue Period for QIBs one Working
Day prior to the Bid/ Issue Closing Date if disclosures to that effect are made in the RHP. In
case of revision of the Floor Price or Price Band in Book Built Issues the Bid/Issue Period may
be extended by at least three Working Days, subject to the total Bid/ Issue Period not exceeding
10 Working Days. For details of any revision of the Floor Price or Price Band,
Bidders/Applicants may check the announcements made by the Issuer on the websites of the
Stock Exchanges, and the advertisement in the newspaper(s) issued in this regard.
A flow chart of process flow in Fixed Price and Book Built Issues is as follows. Bidders/
Applicants may note that this is not applicable for Fast Track FPOs
➢ In case of Issue other than Book Build Issue (Fixed Price Issue) the process at the
following of the below mentioned steps shall be read as
(i) Step 7: Determination of Issue Date and Price
(ii) Step 10: Applicant submits ASBA Form with any of the Designated Intermediaries
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SECTION 3: CATEGORY OF INVESTORS ELIGIBLE TO PARTICIPATE IN AN ISSUE
Each Bidder/Applicant should check whether it is eligible to apply under applicable law. Furthermore,
certain categories of Bidders/Applicants, such as NRIs, FIIs, FPIs and FVCIs may not be allowed to
Bid/Apply in the Issue or to hold Equity Shares, in excess of certain limits specified under applicable
law. Bidders/ Applicants are requested to refer to the RHP/Prospectus for more details.
Subject to the above, an illustrative list of Bidders/ Applicants is as follows:
➢ Indian nationals residen in India who are competent to contract under the Indian Contract Act,
1872, in single or joint names (not more than three);
➢ Bids/Applications belonging to an account for the benefit of a minor (under guardianship);
➢ Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder/
Applicant should specify that the Bid is being made in the name of the HUF in the Bid cum
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Application Form/Application Form as follows: "Name of sole or first Bidder/Applicant: XYZ
Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta".
Bids/Applications by HUFs may be considered at par with Bids/Applications from individuals;
➢ Companies, corporate bodies and societies registered under applicable law in India and
authorised to invest in equity shares;
➢ QIBs;
➢ NRIs on a repatriation basis or on a non-repatriation basis subject to applicable law;
➢ Indian Financial Institutions, regional rural banks, co-operative banks (subject to RBI
regulations and the SEBI ICDR Regulations and other laws, as applicable);
➢ FIIs and sub-accounts registered with SEBI, other than a sub-account which is a foreign
corporate or foreign individual, bidding under the QIBs category;
➢ Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals
only under the Non Institutional Bidder ("NIBs") category;
➢ FPIs other than Category III foreign portfolio investors Bidding under the QIBs category;
➢ FPIs which are Category III foreign portfolio investors, Bidding under the NIBs category;
➢ Scientific and/or industrial research organisations authorised in India to invest in the Equity
Shares;
➢ Trusts/societies registered under the Societies Registration Act, 1860, or under any other law
relating to trusts/societies and who are authorised under their respective constitutions to hold
and invest in equity shares;
➢ Limited liability partnerships registered under the Limited Liability Partnership Act, 2008;
➢ Any other person eligible to Bid/Apply in the Issue, under the laws, rules, regulations,
guidelines and policies applicable to them and under Indian laws; and
➢ As per the existing regulations, OCBs are not allowed to participate in an Offer.
Book Built Issue: Bidders should only use the specified ASBA Form (or in case of Anchor Investors,
the Anchor Investor Application Form) bearing the stamp of a Designated Intermediary, as available or
downloaded from the websites of the Stock Exchanges. Bid cum Application Forms are available with
the book running lead managers, the Designated Intermediaries at the Bidding Centres and at the
registered office of the Issuer. Electronic Bid cum Application Forms will be available on the websites
of the Stock Exchanges at least one day prior to the Bid/ Issue Opening Date. For further details,
regarding availability of Bid cum Application Forms, Bidders may refer to the RHP/Prospectus.
Fixed Price Issue (Not applicable): Applicants should only use the specified Bid cum Application
Form bearing the stamp of the relevant Designated Intermediaries, as available or downloaded from the
websites of the Stock Exchanges. Application Forms are available with the Designated Branches of the
SCSBs and at the Registered and Corporate Office of the Issuer. For further details, regarding
availability of Application Forms, Applicants may refer to the Prospectus.
Bidders/Applicants should ensure that they apply in the appropriate category. The prescribed colour of
the Bid cum Application Form for various categories of Bidders/Applicants is as follows:
Category Colour of the Bid cum Application
Form
Resident Indian, Eligible NRIs applying on a non
White
repatriation basis
NRIs, FVCIs, FIIs, their sub-accounts other than sub-
accounts which are foreign corporate(s) or foreign
Blue
individuals bidding under the QIB), FPIs, on a repatriation
basis
Anchor Investors (where applicable) & Bidders As specified by the Issuer
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Category Colour of the Bid cum Application
Form
Bidding/applying in the reserved category
Securities issued in an IPO can only be in dematerialized form in compliance with Section 29 of the
Companies Act, 2013. Bidders/ Applicants will not have the option of getting the Allotment of specified
securities in physical form. However, they may get the specified securities rematerialized subsequent
to Allotment.
Bidders/Applicants may note that forms not filled completely or correctly as per instructions
provided in this GID, the RHP and the Bid cum Application Form/Application Form are liable
to be rejected.
Instructions to fill each field of the Bid cum Application Form can be found on the reverse side
of the Bid cum Application Form. Specific instructions for filling various fields of the Resident
Bid cum Application Form and Non- Resident Bid cum Application Form and samples are
provided below.
The samples of the Bid cum Application Form for resident Bidders and the Bid cum Application
Form for non-resident Bidders are reproduced below:
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4.1.1. FIELD NUMBER 1: NAME AND CONTACT DETAILS OF THE SOLE/FIRST BIDDER/
APPLICANT
a) Bidders/Applicants should ensure that the name provided in this field is exactly the
same as the name in which the Depository Account is held.
b) Mandatory Fields: Bidders/Applicants should note that the name and address fields
are compulsory and e-mail and/or telephone number/mobile number fields are optional.
Bidders/Applicants should note that the contact details mentioned in the Bid cum
Application Form/Application Form may be used to dispatch communications in case
the communication sent to the address available with the Depositories are returned
undelivered or are not available. The contact details provided in the Bid cum
Application Form may be used by the Issuer, the Designated Intermediaries and the
Registrar to the Issue only for correspondence(s) related to an Issue and for no other
purposes.
The liability prescribed under Section 447 of the Companies Act, 2013 includes
imprisonment for a term which shall not be less than six months extending up to 10
years (provided that where the fraud involves public interest, such term shall not be
less than three years) and fine of an amount not less than the amount involved in the
fraud, extending up to three times of such amount.
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Form/Application Form should be exactly the same as the PAN of the person in whose
sole or first name the relevant beneficiary account is held as per the Depositories’
records.
b) PAN is the sole identification number for participants transacting in the securities
market irrespective of the amount of transaction except for Bids/Applications on behalf
of the Central or State Government, Bids/Applications by officials appointed by the
courts and Bids/Applications by Bidders/Applicants residing in Sikkim ("PAN
Exempted Bidders/Applicants"). Consequently, all Bidders/Applicants, other than the
PAN Exempted Bidders/Applicants, are required to disclose their PAN in the Bid cum
Application Form/Application Form, irrespective of the Bid/ Application Amount.
Bids/Applications by the Bidders/Applicants whose PAN is not available as per the
Demographic Details available in their Depository records, are liable to be rejected.
c) The exemption for the PAN Exempted Bidders/ Applicants is subject to (a) the
Demographic Details received from the respective Depositories confirming the
exemption granted to the beneficiary owner by a suitable description in the PAN field
and the beneficiary account remaining in "active status"; and (b) in the case of residents
of Sikkim, the address as per the Demographic Details evidencing the same.
d) Bid cum Application Forms which provide the GIR Number instead of PAN may be
rejected.
a) Bidders/Applicants should ensure that DP ID and the Client ID are correctly filled in
the Bid cum Application Form/Application Form. The DP ID and Client ID provided
in the Bid cum Application Form/Application Form should match with the DP ID and
Client ID available in the Depository database, otherwise, the Bid cum Application
Form is liable to be rejected.
b) Bidders/Applicants should ensure that the beneficiary account provided in the Bid cum
Application Form/Application Form is active.
c) Bidders/Applicants should note that on the basis of the DP ID and Client ID as provided
in the Bid cum Application Form/Application Form, the Bidder/Applicant may be
deemed to have authorized the Depositories to provide to the Registrar to the Issue, any
requested Demographic Details of the Bidder/Applicant as available on the records of
the depositories. These Demographic Details may be used, among other things, for
other correspondence(s) related to an Offer.
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4.1.4. FIELD NUMBER 4: BID OPTIONS
a) Price or Floor Price or Price Band, minimum Bid Lot and Discount (if applicable) may
be disclosed in the Prospectus/RHP by the Issuer. The Issuer is required to announce
the Floor Price or Price Band, minimum Bid Lot and Discount (if applicable) by way
of an advertisement in at least one English, one Hindi and one regional newspaper, with
wide circulation, at least five Working Days before Bid/ Issue Opening Date in case of
an IPO, and at least one Working Day before Bid/ Issue Opening Date in case of an
FPO.
b) The Bidders may Bid at or above Floor Price or within the Price Band for IPOs/FPOs
undertaken through the Book Building Process. In the case of Alternate Book Building
Process for an FPO, the Bidders may Bid at Floor Price or any price above the Floor
Price (for further details Bidders may refer to Section 5.6 (e)).
c) Cut-Off Price: Retail Individual Bidders or Retail Individual Shareholders can Bid at
the Cut-off Price indicating their agreement to Bid for and purchase the Equity Shares
at the Issue Price as determined at the end of the Book Building Process. Bidding at the
Cut-off Price is prohibited for QIBs and NIBs and such Bids from QIBs and NIBs may
be rejected.
d) Minimum Application Value and Bid Lot: The Issuer in consultation with the BRLM
may decide the minimum number of Equity Shares for each Bid to ensure that the
minimum application value is within the range of ₹10,000 to ₹15,000. The minimum
Bid Lot is accordingly determined by an Issuer on basis of such minimum application
value.
e) Allotment: The Allotment of specified securities to each RIB shall not be less than the
minimum Bid Lot, subject to availability of shares in the RIB category, and the
remaining available shares, if any, shall be Allotted on a proportionate basis. For details
of the Bid Lot, Bidders may refer to the RHP/Prospectus or the advertisement regarding
the Price Band published by the Issuer.
a) The Bidder may Bid for the desired number of Equity Shares at a specific price. Bids
by Retail Individual Bidders, and Retail Individual Shareholders must be for such
number of shares so as to ensure that the Bid Amount less Discount (as applicable),
payable by the Bidder does not exceed ₹ 200,000.
b) In case the Bid Amount exceeds ₹ 200,000 due to revision of the Bid or any other
reason, the Bid may be considered for allocation under the Non-Institutional Category,
with it not being eligible for Discount then such Bid may be rejected if it is at the Cut-
off Price.
c) For NRIs, a Bid Amount of up to ₹ 200,000 may be considered under the Retail
Category for the purposes of allocation and a Bid Amount exceeding ₹ 200,000 may
be considered under the Non- Institutional Category for the purposes of allocation.
d) Bids by QIBs and NIBs must be for such minimum number of shares such that the Bid
Amount exceeds ₹ 200,000 and in multiples of such number of Equity Shares
thereafter, as may be disclosed in the Bid cum Application Form and the
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RHP/Prospectus, or as advertised by the Issuer, as the case may be. NIBs and QIBs are
not allowed to Bid at Cut-off Price.
e) RIBs may revise their Bids or withdraw their bids until the Bid/Issue Closing Date.
QIBs and NIBs cannot withdraw or lower their Bids (in terms of quantity of Equity
Share or the Bid Amount) at any stage after Bidding.
f) In case the Bid Amount reduces to ₹ 200,000 or less due to a revision of the Price Band,
Bids by the NIBs who are eligible for allocation in the Retail Category would be
considered for allocation under the Retail Category.
g) For Anchor Investors, if applicable, the Bid Amount shall be least ₹ 10 crores. One-
third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the price
at which allocation is being done to other Anchor Investors. Bids by various schemes
of a Mutual Fund shall be aggregated to determine the Bid Amount. A Bid cannot be
submitted for more than 60% of the QIB Category under the Anchor Investor Portion.
Anchor Investors cannot withdraw their Bids or lower the size of their Bids (in terms
of quantity of Equity Shares or the Bid Amount) at any stage after the Anchor Investor
Bid/ Issue Period and are required to pay the Bid Amount at the time of submission of
the Bid. In case the Anchor Investor Issue Price is lower than the Issue Price, the
balance amount shall be payable as per the pay-in-date mentioned in the revised CAN.
In case the Issue Price is lower than the Anchor Investor Issue Price, the amount in
excess of the Issue Price paid by the Anchor Investors shall not be refunded to them.
i) The maximum Bid by any Bidder including QIB Bidder should not exceed the
investment limits prescribed for them under the applicable laws.
j) The price and quantity options submitted by the Bidder in the Bid cum Application
Form may be treated as optional bids from the Bidder and may not be cumulated. After
determination of the Issue Price, the highest number of Equity Shares Bid for by a
Bidder at or above the Issue Price may be considered for Allotment and the rest of the
Bid(s), irrespective of the Bid Amount may automatically become invalid. This is not
applicable in case of FPOs undertaken through Alternate Book Building Process (For
details of Bidders may refer to (Section 5.6 (e)).
a) Bidder should submit only one Bid cum Application Form. Bidder shall have the option
to make a maximum of three Bids at different price levels in the Bid cum Application
Form and such options are not considered as multiple Bids.
b) Submission of a second Bid cum Application Form to either the same or to another
Designated Intermediary and duplicate copies of Bid cum Application Forms bearing
the same application number shall be treated as multiple Bids and are liable to be
rejected.
c) Bidders are requested to note the following procedures may be followed by the
Registrar to the Issue to detect multiple Bids:
(i) All Bids may be checked for common PAN as per the records of the
Depository. For Bidders other than Mutual Funds and FII sub-accounts, Bids
bearing the same PAN may be treated as multiple Bids by a Bidder and may
be rejected.
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(ii) For Bids from Mutual Funds and FII sub-accounts, submitted under the same
PAN, as well as Bids on behalf of the PAN Exempted Bidders, the Bid cum
Application Forms may be checked for common DP ID and Client ID. Such
Bids which have the same DP ID and Client ID may be treated as multiple Bids
and are liable to be rejected.
a) The categories of Bidders identified as per the SEBI ICDR Regulations, 2009 for the
purpose of Bidding, allocation and Allotment in the Issue are RIBs, NIBs and QIBs.
b) Up to 60% of the QIB Category can be allocated by the Issuer, on a discretionary basis
subject to the criteria of minimum and maximum number of Anchor Investors based
on allocation size, to the Anchor Investors, in accordance with SEBI ICDR
Regulations, 2009, with one-third of the Anchor Investor Portion reserved for domestic
Mutual Funds subject to valid Bids being received at or above the Issue Price. For
details regarding allocation to Anchor Investors, Bidders may refer to the
RHP/Prospectus.
c) An Issuer can make reservation for certain categories of Bidders/Applicants as
permitted under the SEBI ICDR Regulations, 2009. For details of any reservations
made in the Issue, Bidders/Applicants may refer to the RHP/ Prospectus.
d) The SEBI ICDR Regulations, 2009, specify the allocation or Allotment that may be
made to various categories of Bidders in an Issue depending upon compliance with the
eligibility conditions. Details pertaining to allocation are disclosed on reverse side of
the Revision Form.
For Issue specific details in relation to allocation Bidder/Applicant may refer to the
RHP/ Prospectus.
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Non-Resident Bid cum Application Form.
d) Bidders/Applicants should ensure that their investor status is updated in the Depository
records.
a) The full Bid Amount (net of any Discount, as applicable) shall be blocked in the ASBA
Account based on the authorisation provided in the ASBA Form. If Discount is
applicable in the Issue, RIBs should indicate the full Bid Amount in the Bid cum
Application Form and funds shall be blocked for the Bid Amount net of Discount. Only
in cases where the RHP/Prospectus indicates that part payment may be made, such an
option can be exercised by the Bidder. In case of Bidders specifying more than one Bid
Option in the Bid cum Application Form, the total Bid Amount may be calculated for
the highest of three options at net price, i.e. Bid price less Discount offered, if any.
b) RIBs who Bid at Cut-off Price shall arrange to block the Bid Amount based on the Cap
Price.
c) All Bidders (except Anchor Investors) have to participate in the Issue only through the
ASBA mechanism.
d) Bid Amount cannot be paid in cash, cheque, demand drafts, through money order or
through postal order.
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Intermediary, to deposit ASBA Forms.
h) Bidders bidding directly through the SCSBs should ensure that the ASBA Form is
submitted to a Designated Branch of a SCSB where the ASBA Account is maintained.
i) Upon receipt of the ASBA Form, the Designated Branch of the SCSB may verify if
sufficient funds equal to the Bid Amount are available in the ASBA Account, as
mentioned in the Bid cum Application Form.
j) If sufficient funds are available in the ASBA Account, the SCSB may block an amount
equivalent to the Bid Amount mentioned in the ASBA Form and for application
directly submitted to SCSB by investor, may enter each Bid option into the electronic
bidding system as a separate Bid.
k) If sufficient funds are not available in the ASBA Account, the Designated Branch of
the SCSB may not accept such Bids and such bids are liable to be rejected.
l) Upon submission of a completed ASBA Form each Bidder may be deemed to have
agreed to block the entire Bid Amount and authorized the Designated Branch of the
SCSB to block the Bid Amount specified in the ASBA Form in the ASBA Account
maintained with the SCSBs.
m) The Bid Amount may remain blocked in the aforesaid ASBA Account until finalisation
of the Basis of Allotment and consequent transfer of the Bid Amount against the
Allotted Equity Shares to the Public Issue Account, or until withdrawal or failure of
the Issue, or until withdrawal or rejection of the Bid, as the case may be.
n) SCSBs bidding in the Issue must apply through an Account maintained with any other
SCSB; else their Bids are liable to be rejected.
Bidder may note that in case the net amount blocked (post Discount) is more than two lakh
Rupees, the Bidding system automatically considers such applications for allocation under
Non-Institutional Category. These applications are neither eligible for Discount nor fall under
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RIB category.
However, for any revision(s) in the Bid, the Bidders/Applicants will have to use the services
of the same Designated Intermediary through which such Bidder/Applicant had placed the
original Bid. Bidders/Applicants are advised to retain copies of the blank Revision Form and
the Bid(s) must be made only in such Revision Form or copies thereof.
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A sample revision form is reproduced below:
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Instructions to fill each field of the Revision Form can be found on the reverse side of the
Revision Form. Other than instructions already highlighted at paragraph 4.1 above, point wise
instructions regarding filling up various fields of the Revision Form are provided below:
Bidders/Applicants should refer to instructions contained in paragraphs 4.1.1, 4.1.2 and 4.1.3.
Bidders/Applicants may refer to instructions contained at paragraphs 4.1.8 and 4.1.9 for this
purpose.
4.3 INSTRUCTIONS FOR FILING APPLICATION FORM IN ISSUES MADE OTHER THAN
THROUGH THE BOOK BUILDING PROCESS (FIXED PRICE ISSUE)
Applicants should refer to instructions contained in paragraphs 4.1.1, 4.1.2 and 4.1.3.
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Applicants should refer to instructions contained in paragraphs 4.1.7.3.
4.4.1 Bidders/Applicants may submit completed Bid cum application form/Revision Form in the
following manner: -
a) Bidders/Applicants should submit the Revision Form to the same Designated Intermediary
through which such Bidder/Applicant had placed the original Bid.
b) Upon submission of the Bid cum Application Form, the Bidder/Applicant will be deemed to
have authorized the Issuer to make the necessary changes in the RHP and the Bid cum
Application Form as would be required for filing Prospectus with the RoC and as would be
required by the RoC after such filing, without prior or subsequent notice of such changes to the
relevant Bidder/ Applicant.
c) Upon determination of the Issue Price and filing of the Prospectus with the RoC, the Bid cum
Application Form will be considered as the application form.
Book Building, in the context of the Issue, refers to the process of collection of Bids within the Price
Band or above the Floor Price and determining the Issue Price based on the Bids received as detailed in
Schedule XI of SEBI ICDR Regulations, 2009. The Issue Price is finalised after the Bid/ Issue Closing
Date. Valid Bids received at or above the Issue Price are considered for allocation in the Issue, subject
to applicable regulations and other terms and conditions.
a) During the Bid/ Issue Period, Bidders/ Applicants may approach any of the Designated
Intermediaries to register their Bids. Anchor Investors who are interested in subscribing
for the Equity Shares should approach the Book Running Lead Manager, to register
their Bid.
b) In case of Bidders/Applicants (excluding NIBs and QIBs) Bidding at Cut-off Price, the
Bidders/ Applicants may instruct the SCSBs to block Bid Amount based on the Cap
Price less discount (if applicable).
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c) For details of the timing on acceptance and upload of Bids in the Stock Exchanges
Platform Bidders/ Applicants are requested to refer to the RHP.
a) The Designated Intermediaries are individually responsible for the acts, mistakes or
errors or omission in relation to:
(i) the Bids accepted by the Designated Intermediary,
(ii) the Bids uploaded by the Designated Intermediary, and
(iii) the Bid cum application forms accepted but not uploaded by the Designated
Intermediary.
b) The BRLM and their affiliate Syndicate Members, as the case may be, may reject Bids
if all information required is not provided and the Bid cum Application Form is
incomplete in any respect.
c) The SCSBs shall have no right to reject Bids, except in case of unavailability of
adequate funds in the ASBA account or on technical grounds.
d) In case of QIB Bidders, only the (i) SCSBs (for Bids other than the Bids by Anchor
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Investors); and (ii) BRLM and their affiliate Syndicate Members (only in the Specified
Locations) have the right to reject bids. However, such rejection shall be made at the
time of receiving the Bid and only after assigning a reason for such rejection in writing.
e) All bids by QIBs, NIBs & RIBs Bidders can be rejected on technical grounds listed
herein.
f) The BRLM and their affiliate Syndicate Members, as the case may be, may reject Bids
if all information required is not provided and the Bid cum Application Form is
incomplete in any respect.
Bid cum Application Forms/Application Forms can be rejected on the below mentioned
technical grounds either at the time of their submission to any of the Designated Intermediaries,
or at the time of finalisation of the Basis of Allotment. Bidders/Applicants are advised to note
that the Bids/Applications are liable to be rejected, which have been detailed at various placed
in this GID:-
a) Bid/Application by persons not competent to contract under the Indian Contract Act,
1872, as amended, (other than minors having valid Depository Account as per
Demographic Details provided by Depositories);
b) Bids/Applications by OCBs;
c) In case of partnership firms, Bid/Application for Equity Shares made in the name of
the firm. However, a limited liability partnership can apply in its own name;
d) In case of Bids/Applications under power of attorney or by limited companies,
corporate, trust, etc., relevant documents are not being submitted along with the Bid
cum application form;
e) Bids/Applications by persons prohibited from buying, selling or dealing in the shares
directly or indirectly by SEBI or any other regulatory authority;
f) Bids/Applications by any person outside India if not in compliance with applicable
foreign and Indian laws;
g) PAN not mentioned in the Bid cum Application Form/Application Forms except for
Bids/ Applications by or on behalf of the Central or State Government and officials
appointed by the court and by the investors residing in the State of Sikkim, provided
such claims have been verified by the Depository Participant;
h) In case no corresponding record is available with the Depositories that matches the DP
ID, the Client ID and the PAN;
i) Bids/Applications for lower number of Equity Shares than the minimum specified for
that category of investors;
j) Bids/Applications at a price less than the Floor Price & Bids/Applications at a price
more than the Cap Price;
k) Bids/Applications at Cut-off Price by NIBs and QIBs;
l) The amounts mentioned in the Bid cum Application Form/Application Forms do not
tally with the amount payable for the value of the Equity Shares Bid/Applied for;
m) Bids/Applications for amounts greater than the maximum permissible amounts
prescribed by the regulations;
n) Bids/Applications for shares more than the prescribed limit by each Stock Exchange
for each category.
o) Submission of more than five ASBA Forms/ Application Forms per ASBA Account;
p) Bids/Applications for number of Equity Shares which are not in multiples Equity
Shares as specified in the RHP;
q) Multiple Bids/Applications as defined in this GID and the RHP/Prospectus;
r) Bids not uploaded in the Stock Exchanges bidding system.
s) Inadequate funds in the bank account to block the Bid/Application Amount specified
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in the ASBA Form/Application Form at the time of blocking such Bid/Application
Amount in the bank account;
t) Where no confirmation is received from SCSB for blocking of funds;
u) Bids/Applications by Bidders (other than Anchor Investors) not submitted through
ASBA process;
v) Bids/Applications submitted to Designated Intermediaries at locations other than the
Bidding Centers or to the Escrow Collecting Banks (assuming that such bank is not a
SCSB where the ASBA Account is maintained), to the Issuer or the Registrar to the
Issue;
w) Bids/Applications not uploaded on the terminals of the Stock Exchanges;
x) Bids/Applications by SCSBs wherein a separate account in its own name held with any
other SCSB is not mentioned as the ASBA Account in the Bid cum Application
Form/Application Form.
Bidders can bid at any price within the price band. For instance, assume a price band
of ₹ 20 to ₹ 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. The illustrative book given
below shows the demand for the equity shares of the issuer company at various prices
and is collated from bids received from various investors.
The price discovery is a function of demand at various prices. The highest price at
which the issuer is able to issue the desired number of equity shares is the price at which
the book cuts off, i.e., ₹ 22.00 in the above example. The issuer, in consultation with
the book running lead managers, will finalise the issue price at or below such cut-off
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price, i.e., at or below ₹ 22.00. All bids at or above this issue price and cut-off bids are
valid bids and are considered for allocation in the respective categories.
In case of FPOs, Issuers may opt for an alternate method of Book Building in which
only the Floor Price is specified for the purposes of Bidding ("Alternate Book Building
Process").
The Issuer may specify the Floor Price in the RHP or advertise the Floor Price at least
one Working Day prior to the Bid/ Issue Opening Date. QIBs may Bid at a price higher
than the Floor Price and the Allotment to the QIBs is made on a price priority basis.
The Bidder with the highest Bid Amount is allotted the number of Equity Shares Bid
for and then the second highest Bidder is Allotted Equity Shares and this process
continues until all the Equity Shares have been allotted. RIBs and NIBs are Allotted
Equity Shares at the Floor Price and Allotment to these categories of Bidders is made
proportionately. If the number of Equity Shares Bid for at a price is more than available
quantity then the Allotment may be done on a proportionate basis. Further, the Issuer
may place a cap either in terms of number of specified securities or percentage of issued
capital of the Issuer that may be Allotted to a single Bidder, decide whether a Bidder
be allowed to revise the bid upwards or downwards in terms of price and/or quantity
and also decide whether a Bidder be allowed single or multiple bids.
Applicants may note that there is no Bid cum Application Form in a Fixed Price Offer. As the Issue
Price is mentioned in the Fixed Price Issue therefore on filing of the Prospectus with the RoC, the
Application so submitted is considered as the application form.
Applicants may only use the specified Application Form for the purpose of making an Application in
terms of the Prospectus which may be submitted through the Designated Intermediary.
Applicants may submit an Application Form either in physical form to the any of the Designated
Intermediaries or in the electronic form to the SCSB or the Designated Branches of the SCSBs
authorising blocking of funds that are available in the bank account specified in the Application Form
only ("ASBA Account"). The Application Form is also made available on the websites of the Stock
Exchanges at least one day prior to the Bid/ Issue Opening Date.
In a fixed price Offer, allocation in the net offer to the public category is made as follows: minimum
fifty per cent to Retail Individual Bidders; and remaining to (i) individual investors other than Retail
Individual Bidders; and (ii) other Applicants including corporate bodies or institutions, irrespective of
the number of specified securities applied for. The unsubscribed portion in either of the categories
specified above may be allocated to the Applicants in the other category. For details of instructions in
relation to the Application Form, Bidders/Applicants may refer to the relevant section of the GID.
The Allotment of Equity Shares to Bidders/Applicants other than Retail Individual Bidders and Anchor
Investors may be on proportionate basis. For Basis of Allotment to Anchor Investors,
Bidders/Applicants may refer to RHP/Prospectus. No Retail Individual Bidder will be allotted less than
the minimum Bid Lot subject to availability of shares in Retail Individual Bidder Category and the
remaining available shares, if any will be Allotted on a proportionate basis. The Issuer is required to
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receive a minimum subscription of 90% of the Net Issue (excluding any Offer for Sale of specified
securities). However, in case the Issue is in the nature of Offer for Sale only, then minimum subscription
may not be applicable.
Bids received from the RIBs at or above the Issue Price may be grouped together to determine
the total demand under this category. If the aggregate demand in this category is less than or
equal to the Retail Category at or above the Issue Price, full Allotment may be made to the
RIBs to the extent of the valid Bids. If the aggregate demand in this category is greater than the
allocation to in the Retail Category at or above the Issue Price, then the maximum number of
RIBs who can be Allotted the minimum Bid Lot will be computed by dividing the total number
of Equity Shares available for Allotment to RIBs by the minimum Bid Lot ("Maximum RIB
Allottees"). The Allotment to the RIBs will then be made in the following manner:
a) In the event the number of RIBs who have submitted valid Bids in the Issue is equal to
or less than Maximum RIB Allottees, (i) all such RIBs shall be Allotted the minimum
Bid Lot; and (ii) the balance available Equity Shares, if any, remaining in the Retail
Category shall be Allotted on a proportionate basis to the RIBs who have received
Allotment as per (i) above for the balance demand of the Equity Shares Bid by them
(i.e. who have Bid for more than the minimum Bid Lot).
b) In the event the number of RIBs who have submitted valid Bids in the Issue is more
than Maximum RIB Allottees, the RIBs (in that category) who will then be Allotted
minimum Bid Lot shall be determined on the basis of draw of lots.
Bids received from NIBs at or above the Issue Price may be grouped together to determine the
total demand under this category. The Allotment to all successful NIBs may be made at or
above the Issue Price. If the aggregate demand in this category is less than or equal to the Non-
Institutional Category at or above the Issue Price, full Allotment may be made to NIBs to the
extent of their demand. In case the aggregate demand in this category is greater than the Non-
Institutional Category at or above the Issue Price, Allotment may be made on a proportionate
basis up to a minimum of the Non-Institutional Category.
For the Basis of Allotment to Anchor Investors, Bidders/Applicants may refer to the SEBI
ICDR Regulations, 2009 or RHP/Prospectus. Bids received from QIBs Bidding in the QIB
Category (net of Anchor Portion) at or above the Issue Price may be grouped together to
determine the total demand under this category. The QIB Category may be available for
Allotment to QIBs who have Bid at a price that is equal to or greater than the Issue Price.
Allotment may be undertaken in the following manner:
a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Category may
be determined as follows: (i) In the event that Bids by Mutual Fund exceeds 5% of the
QIB Category, allocation to Mutual Funds may be done on a proportionate basis for up
to 5% of the QIB Category; (ii) In the event that the aggregate demand from Mutual
Funds is less than 5% of the QIB Category then all Mutual Funds may get full
Allotment to the extent of valid Bids received above the Issue Price; and Equity Shares
remaining unsubscribed, if any and not allocated to Mutual Funds may be available for
Allotment to all QIBs as set out at paragraph 7.4(b) below;
b) In the second instance, Allotment to all QIBs may be determined as follows: (i) In the
event of oversubscription in the QIB Category, all QIBs who have submitted Bids
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above the Issue Price may be Allotted Equity Shares on a proportionate basis for up to
95% of the QIB Category; (ii) Mutual Funds, who have received allocation as per (a)
above, for less than the number of Equity Shares Bid for by them, are eligible to receive
Equity Shares on a proportionate basis along with other QIBs; and (iii) Under-
subscription below 5% of the QIB Category, if any, from Mutual Funds, may be
included for allocation to the remaining QIBs on a proportionate basis.
a) Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will
be at the discretion of the issuer in consultation with the BRLM, subject to compliance
with the following requirements:
(i) not more than 60% of the QIB Category will be allocated to Anchor Investors;
(ii) one-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds,
subject to valid Bids being received from domestic Mutual Funds at or above the price
at which allocation is being done to other Anchor Investors; and
(iii) allocation to Anchor Investors shall be on a discretionary basis and subject to:
➢ a maximum number of two Anchor Investors for allocation up to ₹100 million;
➢ a minimum number of two Anchor Investors and maximum number of 15
Anchor Investors for allocation of more than ₹100 million and up to ₹2,500
million subject to minimum Allotment of ₹50 million per such Anchor
Investor; and
➢ a minimum number of five Anchor Investors and maximum number of 15
Anchor Investors for allocation of more than ₹2,500 million, and an additional
10 Anchor Investors for every additional ₹2,500 million or part thereof, subject
to minimum Allotment of ₹50 million per such Anchor Investor.
b) An Anchor Investor shall make an application of a value of at least ₹100 million in the
Issue.
c) A physical book is prepared by the Registrar on the basis of the Anchor Investor
Application Forms received from Anchor Investors. Based on the physical book and at
the discretion of the Issuer in consultation with the BRLM, selected Anchor Investors
will be sent a CAN and if required, a revised CAN.
d) In the event that the Issue Price is higher than the Anchor Investor Issue Price: Anchor
Investors will be sent a revised CAN within one day of the Pricing Date indicating the
number of Equity Shares allocated to such Anchor Investor and the pay-in date for
payment of the balance amount. Anchor Investors are then required to pay any
additional amounts, being the difference between the Issue Price and the Anchor
Investor Issue Price, as indicated in the revised CAN within the pay-in date referred to
in the revised CAN. Thereafter, the Allotment Advice will be issued to such Anchor
Investors.
e) In the event the Issue Price is lower than the Anchor Investor Issue Price: Anchor
Investors who have been Allotted Equity Shares will directly receive Allotment
Advice.
7.5 BASIS OF ALLOTMENT FOR QIBs (OTHER THAN ANCHOR INVESTORS), NIBs AND
RESERVED CATEGORY IN CASE OF OVER-SUBSCRIBED ISSUE
In the event of the Issue being over-subscribed, the Issuer may finalise the Basis of Allotment
in consultation with the Designated Stock Exchange in accordance with the SEBI ICDR
631
Regulations, 2009.
The allocation may be made in marketable lots, on a proportionate basis as explained below:
a) Bidders may be categorized 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 may 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) The number of Equity Shares to be Allotted to the successful Bidders may 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;
d) In all Bids where the proportionate Allotment is less than the minimum Bid Lot decided
per Bidder, the Allotment may be made as follows: the successful Bidders out of the
total Bidders for a category may be determined by a 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; and each successful Bidder may
be Allotted a minimum of such Equity Shares equal to the minimum Bid Lot finalised
by the Issuer;
e) If the proportionate Allotment to a Bidder is a number that is more than the minimum
Bid lot but is not a multiple of one (which is the marketable lot), the decimal may be
rounded off to the higher whole number if that decimal is 0.5 or higher. If that number
is lower than 0.5 it may be rounded off to the lower whole number. Allotment to all
Bidders in such categories may be arrived at after such rounding off; and
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 may be first adjusted against any other category, where the
Allotted Equity Shares are not sufficient for proportionate Allotment to the successful
Bidders in that category. The balance Equity Shares, if any, remaining after such
adjustment may be added to the category comprising Bidders applying for minimum
number of Equity Shares.
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e) Issuer will ensure that: (i) the Allotment of Equity Shares; and (ii) credit of shares to
the successful Bidders/Applicants Depository Account will be completed within six
Working Days of the Bid/ Issue Closing Date.
The Issuer shall ensure that all steps for the completion of the necessary formalities for listing
and commencement of trading at all the Stock Exchanges are taken within six Working Days
of the Bid/ Issue Closing Date. The Registrar to the Issue may initiate corporate action for credit
to Equity Shares the beneficiary account with Depositories within six Working Days of the Bid/
Issue Closing Date.
An Issuer makes an application to the Stock Exchange(s) for permission to deal in/list and for
an official quotation of the Equity Shares. All the Stock Exchanges from where such permission
is sought are disclosed in RHP/Prospectus. The Designated Stock Exchange may be as
disclosed in the RHP/Prospectus with which the Basis of Allotment may be finalised.
If the Issuer fails to make application to the Stock Exchange(s) or obtain permission for listing
of the Equity Shares, in accordance with the provisions of Section 40 of the Companies Act,
2013, the Issuer shall be punishable with a fine which shall not be less than ₹ 0.50 million but
which may extend to ₹ 5.00 million and every officer of the Issuer who is in default shall be
punishable with imprisonment for a term which may extend to one year or with fine which shall
not be less than ₹ 50,000 but which may extend to ₹ 0.30 million, or with both.
If the permissions to deal in and an official quotation of the Equity Shares are not granted by
any of the Stock Exchange(s), the Issuer may forthwith take steps to refund, without interest,
all moneys received from Bidders/Applicants.
If such money is not refunded to the Bidders/ Applicants within the prescribed time after the
Issuer becomes liable to repay it, then the Issuer and every director of the Issuer who is an
officer in default may, on and from such expiry of such period, be liable to repay the money,
with interest at such rate, as disclosed in the RHP/Prospectus.
If the Issuer does not receive a minimum subscription of 90% of the Net Issue (excluding any
offer for sale of specified securities), including devolvement to the Underwriters, the Issuer
may forthwith, take steps to unblock the entire subscription amount received within six
Working Days of the Bid/ Issue Closing Date and repay, without interest, all moneys received
from Anchor Investors. In case the Issue is in the nature of Offer for Sale only, then minimum
subscription may not be applicable. In case of undersubscription in the Issue involving a Fresh
Issue and an Offer for Sale, the Equity Shares in the Fresh Issue will be issued prior to the sale
of Equity Shares in the Offer for Sale.
If there is a delay beyond the prescribed time after the Issuer becomes liable to pay the amount
received from Bidders, then the Issuer and every director of the Issuer who is an officer in
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default may on and from expiry of 15 Working Days, be jointly and severally liable to repay
the money, with interest at the rate of 15% per annum in accordance with the Companies
(Prospectus and Allotment of Securities) Rules, 2014, as amended.
The Issuer may ensure that the number of prospective Allottees to whom Equity Shares may be
Allotted may not be less than 1,000 failing which the entire application monies may be refunded
forthwith.
In case an Issuer not eligible under Regulation 26(1) of the SEBI ICDR Regulations, 2009
comes for an Issue under Regulation 26(2) of SEBI (ICDR) Regulations, 2009 but fails to Allot
at least 75% of the Net Issue to QIBs, in such case full subscription money is to be refunded.
a) In case of ASBA Bids: Within six Working Days of the Bid/ Issue Closing Date, the
Registrar to the Issue may give instructions to SCSBs for unblocking the amount in
ASBA Accounts for unsuccessful Bids or for any excess amount blocked on Bidding.
b) In case of Anchor Investors: Within six Working Days of the Bid/ Issue Closing Date,
the Registrar to the Issue may dispatch the refund orders for all amounts payable to
unsuccessful Anchor Investors.
c) In case of Anchor Investors, the Registrar to the Issue may obtain from the depositories
the Bidders’ bank account details, including the MICR code, on the basis of the DP ID,
Client ID and PAN provided by the Anchor Investors in their Anchor Investor
Application Forms for refunds.
Accordingly, Anchor Investors are advised to immediately update their details as appearing on
the records of their depositories. Failure to do so may result in delays in dispatch of refund
orders or refunds through electronic transfer of funds, as applicable, and any such delay may
be at the Anchor Investors’ sole risk and neither the Issuer, the Registrar to the Issue, the Escrow
Collection Banks, or the Syndicate, may be liable to compensate the Anchor Investors for any
losses caused to them due to any such delay, or liable to pay any interest for such delay. Please
note that refunds shall be credited only to the bank account from which the Bid Amount was
remitted to the Escrow Bank.
The payment of refund, if any, may be done through various electronic modes as mentioned
below:
8.3.1.1 NECS—Payment of refund may be done through NECS for Bidders/Applicants having an
account at any of the centers specified by the RBI. This mode of payment of refunds may be
subject to availability of complete bank account details including the nine-digit MICR code of
the Bidder/ Applicant as obtained from the Depository;
8.3.1.2 NEFT—Payment of refund may be undertaken through NEFT wherever the branch of the
Anchor Investors’ bank is NEFT enabled and has been assigned the Indian Financial System
Code ("IFSC"), which can be linked to the MICR of that particular branch. The IFSC Code may
be obtained from the website of RBI as at a date prior to the date of payment of refund, duly
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mapped with MICR numbers. Wherever the Anchor Investors have registered their nine-digit
MICR number and their bank account number while opening and operating the demat account,
the same may be duly mapped with the IFSC Code of that particular bank branch and the
payment of refund may be made to the Anchor Investors through this method. In the event
NEFT is not operationally feasible, the payment of refunds may be made through any one of
the other modes as discussed in this section;
8.3.1.3 RTGS—Anchor Investors having a bank account at any of the centers notified by SEBI where
clearing houses are managed by the RBI, may have the option to receive refunds, if any, through
RTGS.
8.3.1.4 Direct Credit—Anchor Investors having their bank account with the Refund Banker may be
eligible to receive refunds, if any, through direct credit to such bank account;
Please note that refunds through the abovementioned modes shall be credited only to the bank
account from which the Bid Amount was remitted to the Escrow Bank.
For details of levy of charges, if any, for any of the above methods, Anchor Investors may refer
to RHP/Prospectus.
The Issuer may pay interest at the rate of 15% per annum if Allotment is not made and refund
instructions have not been given to the clearing system in the disclosed manner/instructions for
unblocking of funds in the ASBA Account are not dispatched within the 15 days of the Bid/
Issue Closing Date.
The Issuer may pay interest at 15% per annum for any delay beyond 15 days from the Bid/
Issue Closing Date, if Allotment is not made.
Unless the context otherwise indicates or implies, certain definitions and abbreviations used in this
document may have the meaning as provided below. References to any legislation, act or regulation
may be to such legislation, act or regulation as amended from time to time.
Term Description
Allotment/Allot/ The allotment of Equity Shares pursuant to the Issue to successful
Allotted Bidders/Applicants
Allotment Advice Note or advice or intimation of Allotment sent to the Bidders/Applicants who
have been Allotted Equity Shares after the Basis of Allotment has been
approved by the Designated Stock Exchange
Allottee An Bidder/Applicant to whom the Equity Shares are Allotted
Anchor The form used by an Anchor Investor to make a Bid in the anchor Investor
InvestorApplication Portion and which will be considered as an application for Allotment in terms
Form of the Red Herring Prospectus and Prospectus
Anchor Investor Portion Up to 60% of the QIB Category which may be allocated by the Issuer in
consultation with the BRLM, to Anchor Investors on a discretionary basis.
One third of the Anchor Investor Portion is reserved for domestic Mutual
Funds, subject to valid Bids being received from domestic Mutual Funds at
or above the price at which allocation is being done to Anchor Investors.
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Term Description
Application SupportedAn application, whether physical or electronic, used by ASBA
by Bidders/Applicants, to make a Bid and authorising an SCSB to block the Bid
Blocked Amount / Amount in the specified bank account maintained with such SCSB
ASBA
Application SupportedAn application form, whether physical or electronic, used by ASBA
by Bidders/Applicants, which will be considered as the application for
Blocked Amount FormAllotment in terms of the Red Herring Prospectus and the Prospectus
/ASBA Form
ASBA Account Account maintained with an SCSB which may be blocked by such SCSB to
the extent of the Bid Amount of the ASBA Bidder
ASBA Bidder All Bidders/Applicants except Anchor Investors
Banker(s) to theThe banks which are clearing members and registered with SEBI as Banker to
Issue/Escrow Collection the Issue with whom the Escrow Account(s) for Anchor Investors may be
Bank(s)/Collecting opened, and as disclosed in the RHP/Prospectus and Bid cum Application
Banker Form of the Issuer
Basis of Allotment The basis on which the Equity Shares may be Allotted to successful
Bidders/Applicants under the Issue fixed price process, all references to a Bid
should be construed to mean an Application.
Bid An indication to make an offer during the Bid/ Issue Period by a prospective
Bidder pursuant to submission of Bid cum Application Form or during the
Anchor Investor Bid/ Issue Period by the Anchor Investors, to subscribe for or
purchase the Equity Shares of the Issuer at a price within the Price Band,
including all revisions and modifications thereto. In case of issues undertaken
through the fixed price process, all references to a Bid should be construed to
mean an Application
Bid Amount The highest value of the optional Bids indicated in the Bid cum Application
Form and payable by the Bidder upon submission of the Bid (except for
Anchor Investors), less discounts (if applicable). In case of issues
undertaken through the fixed price process, all references to the Bid Amount
should be construed to mean the Application Amount
Bid cum The Anchor Investor Application Form or the ASBA Form, as the context
Application Form requires
Bid/ Issue Closing Except in the case of Anchor Investors (if applicable), the date after which the
Date Designated Intermediaries may not accept any Bids for the Issue, which may
be notified in an English national daily, a Hindi national daily and a regional
language newspaper at the place where the registered office of the Issuer is
situated, each with wide circulation. Bidders/Applicants may refer to the
RHP/Prospectus for the Bid/ Issue Closing Date
Bid/ Issue Opening Date The date on which the Designated Intermediaries may start accepting
Bids for the Issue, which may be the date notified in an English national daily,
a Hindi national daily and a regional language newspaper at the place where
the registered office of the Issuer is situated, each with wide circulation.
Bidders/Applicants may refer to the RHP/Prospectus for the Bid/ Issue
Opening Date
Bid/ Issue Period Except in the case of Anchor Investors (if applicable), the period between the
Bid/ Issue Opening Date and the Bid/Issue Closing Date inclusive of both
days and during which prospective ASBA Bidders/Applicants can submit
their Bids, inclusive of any revisions thereof. The Issuer may consider closing
the Bid/ Issue Period for QIBs one working day prior to the Bid/ Issue Closing
Date in accordance with the SEBI ICDR Regulations, 2009. Bidders /
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Term Description
Applicants may refer to the RHP/Prospectus for the Bid/Issue Period
Bidder/Applicant Any Prospective investor who makes a Bid/Application pursuant to the terms
of the RHP/Prospectus and the Bid cum Application Form. In case of issues
undertaken through the fixed price process, all references to a
Bidder/Applicants should be construed to mean an Applicant
Book Built Process The book building process as provided under SEBI ICDR Regulations, 2009,
/Book Building in terms of which the Issue is being made
Process/Book
Building Method
Broker Centres Broker Centres notified by the Stock Exchanges, where Bidders /Applicants
can submit the ASBA Forms to a Registered Broker. The details of such
broker centres, alongwith the names and contact details of the Registered
Brokers are available on the website of the Stock Exchanges.
BRLM(s)/Book RunningThe Book Running Lead Manager to the Issue as disclosed in the
Lead Manager(s)/ RHP/Prospectus and the Bid cum Application Form of the Issuer. In case of
Lead Manager/LM issues undertaken through the fixed price process, all references to the Book
Running Lead Manager should be construed to mean the Lead Manager or
LM.
Business Day Monday to Saturday (except 2nd and 4th Saturday of a month and public
holidays)
CAN/Confirmation Notice or intimation of allocation of the Equity Shares sent to Anchor
of Allocation Note Investors, who have been allocated the Equity Shares, after the Anchor
Investor Bid/Issue Period
Cap Price The higher end of the Price Band, above which the Issue Price and the Anchor
Investor Issue Price may not be finalised and above which no Bids may be
accepted
Client ID Client Identification Number maintained with one of the Depositories in
relation to demat Account
Collecting A depository participant as defined under the Depositories Act, 1996,
Depository Participant orregistered with SEBI and who is eligible to procure Bids at the Designated
CDPs CDP Locations in terms of circular no. CIR/CFD/POLICYCELL/11/2015
dated November 10, 2015 issued by SEBI
Cut-off Price Issue Price, finalised by the Issuer in consultation with the Book Running
Lead Manager(s), which can be any price within the Price Band. Only RIBs
and Retail Individual Shareholders are entitled to Bid at the Cut-off Price. No
other category of Bidders/Applicants are entitled to Bid at the Cut-off Price
DP Depository Participant
DP ID Depository Participant’s Identification Number
Depositories National Securities Depository Limited and Central Depository Services
(India) Limited
Demographic Details of the Bidders/Applicants including the Bidder/Applicant’s address,
Details name of the Applicant’s father/husband, investor status, occupation and bank
account details
Designated Such branches of the SCSBs which may collect the Bid cum Application
Branches Forms used by Bidders/Applicants (excluding Anchor Investors) and a list of
which is available on
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1316087201341.html
Designated CDP Such locations of the CDPs where Bidders can submit the ASBA Forms to
Locations Collecting Depository Participants.
The details of such Designated CDP Locations, along with names and
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Term Description
contact details of the Collecting Depository Participants eligible to accept
ASBA Forms are available on the respective websites of the Stock Exchanges
(www.bseindia.comand www.nseindia.com)
Designated Date The date on which funds are transferred by the Escrow Collection Bank(s)
from the Escrow Account and the amounts blocked by the SCSBs are
transferred from the ASBA Accounts, as the case may be, to the Public Issue
Account or the Refund Account, as appropriate, after the Prospectus is filed
with the RoC, following which the board of directors may Allot Equity
Shares to successful Bidders/Applicants in the Fresh Issue may give delivery
instructions for the transfer of the Equity Shares constituting the Offer for
Sale.
Designated Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers, CDPs and
Intermediaries RTAs, who are authorized to collect ASBA Forms from the ASBA Bidders,
in relation to the Issue
Designated RTA Such locations of the RTAs where Bidders can submit the ASBA Forms to
Locations RTAs.
The details of such Designated RTA Locations, along with names and contact
details of the RTAs eligible to accept ASBA Forms are available on the
respective websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)
Designated Stock The designated stock exchange as disclosed in the RHP/Prospectus of the
Exchange Issuer
Discount Discount to the Issue Price that may be provided to Bidders/Applicants in
accordance with the SEBI ICDR Regulations, 2009.
Draft Prospectus The draft prospectus filed with SEBI in case of Fixed Price Issues and which
may mention a price or a Price Band
Equity Shares Equity Shares of the Issuer
Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the
Anchor Investors may transfer money through NEFT/RTGS/direct credit in
respect of the Bid Amount when submitting a Bid
Escrow Agreement Agreement to be entered into among the Issuer, the Registrar to the Issue, the
Book Running Lead Manager(s), the Escrow Collection Bank(s) and the
Refund Bank(s) for collection of the Bid Amounts from Anchor Investors and
where applicable, remitting refunds of the amounts collected to the Anchor
Investors on the terms and conditions thereof
Escrow Collection Refer to definition of Banker(s) to the Issue FCNR Account Foreign
Bank(s) Currency Non-Resident Account
First Bidder/ The Bidder/Applicant whose name appears first in the Bid cum Application
Applicant Form or Revision Form
FII(s) Foreign Institutional Investors as defined under the SEBI (Foreign
Institutional Investors) Regulations, 1995 and registered with SEBI under
applicable laws in India
Fixed Price Issue/ The Fixed Price process as provided under SEBI ICDR Regulations, 2009,
Fixed Price Process in terms of which the Issue is being made
/Fixed Price Method
Floor Price The lower end of the Price Band, at or above which the Issue Price and the
Anchor Investor Issue Price may be finalised and below which no Bids may
be accepted, subject to any revision thereto
FPIs Foreign Portfolio Investors as defined under the Securities and Exchange
Board of India (Foreign Portfolio Investors) Regulations, 2014
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Term Description
FPO Further public offering
Foreign Venture CapitalForeign Venture Capital Investors as defined and registered with SEBI under
Investors or FVCIs the SEBI (Foreign Venture Capital Investors) Regulations, 2000
IPO Initial public offering
Issuer/Company The Issuer proposing the initial public offering/further public offering as
applicable
Maximum RIB Allottees The maximum number of RIBs who can be Allotted the minimum Bid Lot.
This is computed by dividing the total number of Equity Shares available for
Allotment to RIBs by the minimum Bid Lot.
MICR Magnetic Ink Character Recognition - nine-digit code as appearing on a
cheque leaf
Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds)
Regulations, 1996
Mutual Funds 5% of the QIB Category (excluding the Anchor Investor Portion) available
Portion for allocation to Mutual Funds only, being such number of equity shares as
disclosed in the RHP/ Prospectus and Bid cum Application Form
NECS National Electronic Clearing Service
NEFT National Electronic Fund Transfer
NRE Account Non-Resident External Account
NRI NRIs from such jurisdictions outside India where it is not unlawful to make
an offer or invitation under the Issue and in relation to whom the
RHP/Prospectus constitutes an invitation to subscribe to or purchase the
Equity Shares
NRO Account Non-Resident Ordinary Account
Net Offer The Issue less reservation portion
Non Institutional All Bidders/Applicants, including sub accounts of FIIs registered with SEBI
Bidders or NIBs which are foreign Corporates or foreign individuals and FPIs which are
Category III foreign portfolio investors, that are not QIBs or RIBs and who
have Bid for Equity Shares for an amount of more than ₹200,000 (but not
including NRIs other than eligible NRIs)
Non-Institutional The portion of the Issue being such number of Equity Shares available for
Category allocation to NIBs on a proportionate basis and as disclosed in the
RHP/Prospectus and the Bid cum Application Form
Non-Resident A person resident outside India, as defined under FEMA and includes Eligible
NRIs, FPIs and FVCIs registered with SEBI
OCB/Overseas A company, partnership, society or other corporate body owned directly or
Corporate Body indirectly to the extent of at least 60% by NRIs including overseas trusts, in
which not less than 60% of beneficial interest is irrevocably held by NRIs
directly or indirectly and which was in existence on October 3, 2003 and
immediately before such date had taken benefits under the general
permission granted to OCBs under FEMA
Offer Public issue of Equity Shares of the Issuer including the Offer for Sale if
applicable
Other Investors Investors other than Retail Individual Bidders in a Fixed Price Issue. These
include individual applicants other than Retail Individual Bidders and other
investors including corporate bodies or institutions irrespective of the number
of specified securities applied for
Issue Price The final price, less discount (if applicable) at which the Equity Shares may
be Allotted to Bidders other than Anchor Investors, in terms of the Prospectus.
Equity Shares will be Allotted to Anchor Investors at the Anchor Investor
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Term Description
Issue Price. The Issue Price may be decided by the Issuer in consultation with
the Book Running Lead Manager(s)
PAN Permanent Account Number allotted under the Income Tax Act, 1961
Price Band Price Band with a minimum price, being the Floor Price and the maximum
price, being the Cap Price and includes revisions thereof. The Price Band and
the minimum Bid lot size for the Issue may be decided by the Issuer in
consultation with the Book Running Lead Manager(s) and advertised, at least
five working days in case of an IPO and one working day in case of FPO,
prior to the Bid/ Issue Opening Date, in English national daily, Hindi national
daily and regional language at the place where the registered office of the
Issuer is situated, newspaper each with wide circulation
Pricing Date The date on which the Issuer in consultation with the Book Running Lead
Manager(s), finalise the Issue Price
Prospectus The prospectus to be filed with the RoC in accordance with Section 26 of the
Companies Act, 2013 after the Pricing Date, containing the Issue Price, the
size of the Issue and certain other information
Public Issue Account A Bank account opened with the Banker to the Issue to receive monies from
the Escrow Account and from the ASBA Accounts on the Designated Date
QIB Category The portion of the Issue being such number of Equity Shares to be Allotted to
QIBs on a proportionate basis
Qualified Institutional As defined under SEBI ICDR Regulations, 2009
Buyers or QIBs
RTGS Real Time Gross Settlement
Red Herring The red herring prospectus issued in accordance with Section 32 of the
Prospectus/RHP Companies Act, 2013, which does not have complete particulars of the price
at which the Equity Shares are offered and the size of the Issue. The RHP may
be filed with the RoC at least three days before the Bid/ Issue Opening Date
and may become a Prospectus upon filing with the RoC after the Pricing Date.
In case of issues undertaken through the fixed price process, all references
to the RHP should be construed to mean the Prospectus
Refund Account(s) The account opened with Refund Bank(s), from which refunds to Anchor
Investors, if any, of the whole or part of the Bid Amount may be made
Refund Bank(s) Refund bank(s) as disclosed in the RHP/Prospectus and Bid cum Application
Form of the Issuer
Registrar and ShareRegistrar and share transfer agents registered with SEBI and eligible to
Transfer Agents or RTAsprocure Bids at the Designated RTA Locations in terms of circular
no.CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by
SEBI
Registered Broker Stock Brokers registered with the Stock Exchanges having nationwide
terminals, other than the members of the Syndicate
Registrar to the The Registrar to the Issue as disclosed in the RHP/Prospectus and Bid cum
Issue/RTO Application Form
Reserved Category/Categories of persons eligible for making application/Bidding under
Categories reservation portion
Reservation Portion The portion of the Issue reserved for such category of eligible
Bidders/Applicants as provided under the SEBI ICDR Regulations, 2009
Retail IndividualInvestors who applies or bids for a value of not more than ₹200,000.
Bidders/ RIBs
Retail IndividualShareholders of a listed Issuer who applies or bids for a value of not more
Shareholders than ₹200,000.
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Term Description
Retail Category The portion of the Issue being such number of Equity Shares available for
allocation to RIBs which shall not be less than the minimum Bid Lot, subject
to availability in RIB category and the remaining shares to be Allotted on
proportionate basis.
Revision Form The form used by the Bidders in an issue through Book Building Process to
modify the quantity of Equity Shares and/or bid price indicated therein in any
of their Bid cum Application Forms or any previous Revision Form(s)
RoC The Registrar of Companies
SEBI The Securities and Exchange Board of India constituted under the Securities
and Exchange Board of India Act, 1992
SEBI ICDR The Securities and Exchange Board of India (Issue of Capital and Disclosure
Regulations, 2009 Requirements) Regulations, 2009
Self Certified Syndicate A bank registered with SEBI, which offers the facility of ASBA and a list of
Bank(s) or SCSB(s) which is available on
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1316087201341.html
Specified Locations Refer to definition of Broker Centers
Stock Exchanges The stock exchanges as disclosed in the RHP/Prospectus of the Issuer where
/ SE the Equity Shares Allotted pursuant to the Issue are proposed to be listed
Syndicate The Book Running Lead Manager(s) and the Syndicate Member
Syndicate Agreement The agreement to be entered into among the Issuer, and the Syndicate in
relation to collection of ASBA Forms by Syndicate Members
Syndicate Member(s) The Syndicate Member(s) as disclosed in the RHP/Prospectus the Book
/SM Running Lead Manager(s) and the Syndicate Member(s)
Underwriters
Underwriting AgreementThe agreement amongst the Issuer, and the Underwriters to be entered into on
or after the Pricing Date
Working Day All trading days of Stock Exchanges, excluding Sundays and holidays for
commercial banks in Mumbai.
In terms of SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/22 dated February 15, 2018, any ASBA
Applicant/Bidder who is a Retail Individual Investor, whose Bid cum Application Form has not been
considered for Allotment due to the following factors:
a) Failure on part of the SCSBs to make bids in the concerned Exchange system even after the
amount has been blocked in the investors’ bank account with such SCSB.
b) Failure on part of the SCSB to process the ASBA applications even when they have been
submitted within time.
c) Any other failures on part of an SCSB which has resulted in the rejection of the application
form.
shall be entitled to compensation by the SCSBs. Also, the said Applicants/Bidders have the option to
seek redressal of the same within three (3) months of the date of listing of the Equity Shares of the
Issuer, with the concerned SCSB. On receipt of such applications, the SCSB would be required to
resolve the same within fifteen (15) days, failing which it would have to pay interest at the rate of fifteen
percentage (15%) p.a. for any delay beyond the said period of fifteen (15) days.
In the cases of the issues which are subscribed between 90-100%, i.e. non-oversubscribed issues, the
applicants would be compensated for all the shares which they would have ben allotted.
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Note: No compensation would be payable to the Applicants/Bidders who are Retail Individual Investors
in case the listing price is below the issue price.
Example - Security A
Issue Price: 300
Listing Price: 325
Minimum Bid lot: 20 shares
The basis of allotment is determined by Lead Managers in consultation with the Stock Exchanges as
under:
No. No. of No. of Total No. No. of investors who Allotment No. of
of Shares retail of Shares shall receive minimum Ratio shares
Lots at each Investors applied for bid-lot (to be selected Determined
allotted
lot applying at each lot on lottery) per
at each allottee
lot (minimum
lot size)
A B C D = (B*C) E F=E:C G
20 10,000 2,00,000 8,750 = 7:8 20
(175000/200000)*10000
40 10,000 4,00,000 8,750 7:8 20
60 10,000 6,00,000 8,750 7:8 20
80 10,000 8,00,000 8,750 7:8 20
100 20,000 20,00,000 17,500 7:8 20
120 20,000 24,00,000 17,500 7:8 20
140 15,000 21,00,000 13,125 7:8 20
160 20,000 32,00,000 17,500 7:8 20
180 10,000 18,00,000 8,750 7:8 20
200 15,000 30,00,000 13,125 7:8 20
220 10,000 22,00,000 8,750 7:8 20
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No. No. of No. of Total No. No. of investors who Allotment No. of
of Shares retail of Shares shall receive minimum Ratio shares
Lots at each Investors applied for bid-lot (to be selected Determined allotted
lot applying at each lot on lottery) per
at each allottee
lot (minimum
lot size)
A B C D = (B*C) E F=E:C G
240 10,000 24,00,000 8,750 7:8 20
260 10,000 26,00,000 8,750 7:8 20
280 5,000 14,00,000 4,375 7:8 20
300 15,000 45,00,000 13,125 7:8 20
320 10,000 32,00,000 8,750 7:8 20
Total 2,00,000 3,28,00,000 1,75,000
In this case if the number of shares applied by an applicant whose bid was unsuccessful due to
failure/error on part of SCSB is 20 shares or multiples thereof, then the minimum compensation is
calculated as under:
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RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Foreign investment in Indian securities is regulated through the Consolidated FDI Policy and FEMA.
The government bodies responsible for granting foreign investment approvals are the concerned
ministries/departments of the Government of India and the RBI. The Union Cabinet has recently
approved phasing out the FIPB, as provided in the press release dated May 24, 2017. The DIPP issued
the Standard Operating Procedure (SOP) for Processing FDI Proposals on June 29, 2017 (the "SOP").
The SOP provides a list of the competent authorities for granting approval for foreign investment for
sectors/activities requiring Government approval. For sectors or activities that are currently under
automatic route but which required Government approval earlier as per the extant policy during the
relevant period, the concerned Administrative Ministry/Department shall act as the competent authority
(the "Competent Authority") for the grant of postfacto approval for foreign investment. In
circumstances where there is a doubt as to which department shall act as the Competent Authority, DIPP
shall identify the Competent Authority.
The Government has from time to time made policy pronouncements on FDI through press notes and
press releases. The Consolidated FDI Policy superseded all previous press notes, press releases and
clarifications on FDI issued by the DIPP that were in force and effect as on June 7, 2016. The
Government proposes to update the consolidated circular on FDI policy once every year and therefore,
FDI Circular 2016 will be valid until the DIPP issues an updated circular.
The transfer of shares between an Indian resident and a non-resident does not require the prior approval
of the RBI, provided that (i) the activities of the investee company are under the automatic route under
the foreign direct investment policy and transfer does not attract the provisions of the SEBI Takeover
Regulations; (ii) the nonresident shareholding is within the sectoral limits under the FDI policy; and
(iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI.
As per the existing policy of the Government of India, OCBs cannot participate in this Offer.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any
such jurisdiction, except in compliance with the applicable laws of such jurisdiction.
The above information is given for the benefit of the Bidders. Our Company and the BRLM are not
liable for any amendments or modification or changes in applicable laws or regulations, which may
occur after the date of this 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.
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SECTION IX– MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION
Pursuant to the Companies Act and the SEBI ICDR Regulations the main provisions of our Articles of
Association relating to, among others, voting rights, dividend, lien, forfeiture, restrictions on transfer
and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed
below. Please note that each provision herein below is numbered as per the corresponding article
number in our Articles of Association and capitalised or defined terms herein have the same meaning
given to them in our Articles of Association. Subject to our Articles of Association, any words or
expression defined in the Companies Act, 2013 shall, except so where the subject or context forbids;
bear the same meaning in these Articles of Association.
Article Particulars
Provided that where the Company does not have a Seal, the share certificates shall
be signed by two Directors, of which one shall be a non-executive director or by a
Director and the Secretary.
13. In respect of any Share or Shares held jointly by several Persons, the Company shall
not be bound to issue more than one certificate, and delivery of a certificate for a
Share to one of several joint holders shall be sufficient delivery to all such holders.
14. A Person subscribing to Shares offered by the Company shall have the option either
to receive certificates for such Shares or hold the Shares in a dematerialized state
with a Depository. Where a Person opts to hold any Share with the Depository, the
Company shall intimate such Depository the details of allotment of the Shares to
enable the Depository to enter in its records the name of such Person as the
beneficial owner of those Shares.
15. If any Share certificate has been worn out, defaced, mutilated or torn or if there be
no further space on the back for endorsement of transfer or in the event of
consolidation or split of Share Capital of the Company, then upon production and
surrender thereof to the Company, a new certificate may be issued in lieu thereof,
and if any certificate is lost or destroyed then upon proof thereof to the satisfaction
of the Company and on execution of such indemnity as the Board deems adequate,
a new certificate in lieu thereof shall be given. Every certificate under this Article
shall be issued on payment of fees for each certificate as may be fixed by the Board.
16. When a new or duplicate Share certificate has been issued in pursuance of the
preceding clause of this Article, it shall state on the face of it and against the stub or
counterfoil to the effect that it is "Issued in lieu of Share Certificate No. pursuant
to consolidation or split of Share Capital of the Company" or "DUPLICATE Issued
in lieu of Share Certificate No. " as the case may be. The word "DUPLICATE" shall
be stamped or punched in bold letters across the face of the Share Certificate.
17. Subject to provisions of the Act and the Companies (Share Capital and Debentures)
Rules, 2014, a new certificate issued in lieu of an old or worn out or lost certificate
shall be issued without payment of fees if the Directors so decide, or on payment of
such fees (not exceeding `50/- (Fifty) for each certificate) as the Directors shall
prescribe.
18. Provided that no fee shall be charged for issue of new certificates in replacement of
those in which there is no further space on the back thereof for endorsement of
transfer or which are issued pursuant to consolidation or split of Share Capital by
the Company. Provided that notwithstanding what is stated above, the Directors
shall comply with such rules or regulation or requirements of any Stock Exchange
or the rules made under the Act or the rules made under Securities Contracts
(Regulation) Act, 1956 or any other Act, or rules applicable in this behalf.
19. Where a new Share certificate has been issued in pursuance of above Articles,
particulars of every such Share certificate shall be entered in a Register of Renewed
and Duplicate Share Certificates, indicating against the names of the Person or
Persons to whom the certificate is issued, the number and date of issue of the Share
certificate, in lieu of which the new certificate is issued, and the necessary changes
indicated in the Register of Members by suitable cross reference in the "Remarks"
column.
20. All blank forms to be issued for issue of Share certificates shall be printed and the
printing shall be done only on the authority of a resolution of the Board. The blank
forms shall be consecutively numbered, whether by machine, hand or otherwise, and
the forms and the blocks, engravings, facsimiles and hues relating to the printing of
647
such forms shall be kept in the custody of the Secretary, where there is no Secretary,
the Managing Director or Whole-time Director, and where there is no such director,
the Chairman of the Board, for the time being, or otherwise of such other Person, as
the Board may appoint for the purpose, and the Secretary, such Director, Chairman
or such other Person shall be responsible for rendering an account of these forms to
the Board.
21. The provisions of the foregoing Articles relating to issue of certificates in relation
to Shares shall mutatis mutandis apply to issue of certificates for any other Securities
including debentures (except where the Act otherwise requires) of the Company.
VARIATION OF MEMBERS’ RIGHTS
22. Whenever the Capital, by reason of the issue of Preference Shares or otherwise, is
divided into different classes of Shares, all or any of the rights and privileges
attached to each class may, subject to the applicable provisions of the Act, be
modified, commuted, affected or abrogated, or dealt with by an agreement between
the Company and any Person purporting to contract on behalf of that class, provided
such agreement is ratified, in writing, by holders of at least three-fourths in nominal
value of the issued Shares of the class or is confirmed by a special resolution passed
at a separate general meeting of the holders of Shares of that class and all the
provisions hereinafter contained as to Meetings, shall, mutatis mutandis, apply to
every such meeting.
FURTHER ISSUE OF SHARES
23. (1) Subject to the provisions of the Act and the rules framed thereunder and the
regulations framed by SEBI for raising of Capital and issuance of Securities
so long as the Company’s Shares are listed on any stock exchanges, where at
any time, it is proposed to increase the subscribed Capital of the Company
by allotment of further Shares either out of the unissued or out of the
increased Share Capital then such Shares shall be offered –
a) 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 Paid-
Up Share Capital on those Shares by sending a letter of offer subject to the
following conditions, namely:
(i) the offer shall be made by a notice specifying the number of Shares
offered and limiting a time not less than fifteen (15) days and not
exceeding thirty (30) days from the date of the offer within which the
offer, if not accepted, will be deemed to have been declined;
(ii) the offer aforesaid shall be deemed to include a right exercisable by the
Person concerned to renounce the Shares offered to him or any of them
in favour of other Person; and the notice referred to in clause (i) hereof
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.
(iii) After the expiry of the time specified in the notice aforesaid, 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 may dispose of them
in such manner which is not disadvantageous to the Shareholders and the
Company.
648
c) to any Persons, if such issue is authorized by a special resolution, whether or
not those Persons include the Persons referred to in clause (a) or clause (b)
above, either for cash or for a consideration other than cash, if the price of
such Shares is determined by the valuation report of a registered valuer
subject to such conditions prescribed in the Act and the rules thereunder.
(2) The notice referred to in sub-clause i. of clause (a) of sub-article (1) shall be
dispatched through registered post or speed post or through electronic mode
to all the existing Shareholders at least 3 (three) days before the opening of
the issue.
(3) Nothing in this Article shall apply to the increase of the subscribed Capital of
a Company caused by the exercise of an option attached to the debentures
issued or loan raised by the Company to convert such debentures or loans
into 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 of such loans
containing such option have been approved before the issue of such
debentures or the raising of loan by a special resolution passed by the
Company in Meeting.
Provided that where the terms and conditions of such conversion are not
acceptable to the Company, it may, within sixty days from the date of
communication of such order, appeal to the Tribunal which shall after
hearing the company and the Government pass such order as it deems fit.
(5) In determining the terms and conditions of conversion under sub-clause (4),
the government shall have due regard to the financial position of the
Company, the terms of issue of debentures or loans, as the case may be, the
rate of interest payable on such debentures or loans and such other matters as
it may consider necessary.
(6) Where the government has, by an order made under sub-clause (4), directed
that any debenture or loan or any part thereof shall be converted into Shares
in the Company and where no appeal has been preferred to the Tribunal under
sub-clause (4) or where such appeal has been dismissed, the Memorandum
of the Company shall, where such order the effect of increasing the
authorized share capital of the Company, be altered and the authorized share
capital of the Company shall stand increased by an amount equal to the
amount of the value of Shares which such debentures or loans or part thereof
has been converted into.
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ALLOTMENT OF SWEAT EQUITY SHARES
24. Subject to the provisions of the Act and any rules or guidelines made there under
and subject to these Articles, the Directors may allot and issue Shares in the Capital
of the Company as sweat equity towards payment or part payment for any property
or assets of any kind whatsoever sold or to be sold or transferred or to be transferred
or for goods or machinery supplied or to be supplied or for services rendered or to
be rendered or for technical assistance or know-how made or to be made available
to the Company either in the formation or promotion of the Company or conduct of
its Business and any Shares which may be so allotted may be issued as fully paid up
or partly paid for consideration other than cash and if so issued shall be deemed to
be fully paid up or partly paid up Shares as aforesaid.
(b) No member paying any such sum in advance shall be entitled to 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 this Article shall apply mutatis mutandis apply to call on
debenture of the Company.
LIEN
50. 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
monies (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 all
653
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
Fully paid-up Share shall be free from all lien and in the case of partly paid-up
Shares the Company's lien shall be restricted to moneys called or payable at a fix
time in respect of such Shares.
51. For the purpose of enforcing such lien, the Board may sell the Shares, subject
thereto, in such manner, as it shall think fit, and, for that purpose, may cause to be
issued a duplicate certificate in respect of such Shares, and may authorise one of
their Members to execute a transfer thereof, on behalf of and in the name of such
manner. No sale shall be made until such period, as aforesaid, hall have arrived and
until notice, in writing, of the intention to sell, shall have been served on such
member or his representatives and the default, whether express or implied, shall
have been made by him or them in payment, fulfilment or discharge of such debts,
liabilities or engagements, for such further days allowed, after the service of such
notice, and stated therein.
52. The net proceeds of any such sale shall be received by the Company and applied in
or towards payment of such part of the amount, in respect of which the lien exists,
as is presently payable, and the residue, if any, shall, subject to a like lien for sums
not presently payable as existed upon the Shares before the sale, be paid to the
Persons entitled to the Shares at the date of the sale.
FORFEITURE OF SHARES
53. If any Member fails to pay any call or installment of a call on or before the day
appointed for the payment of the same or any such extension thereof as aforesaid,
the Board may, at any time thereafter, during such time as the call or installment
remains unpaid, give notice to him requiring him to pay the same together with any
interest that may have accrued and all expenses that may have been incurred by the
Company by reason of such non-payment.
54. The notice shall name a day, not being less than 14 (Fourteen) days from the date of
the notice, and a place or places on and at which such call or installment and such
interest and expenses as aforesaid are to be paid. The notice shall also state, that, in
the event of the non-payment at or before the time and at the place appointed, the
Shares, in respect of which the call was made or instalment is payable, will be liable
to be forfeited.
55. If the requirements of any such notice, as aforesaid, shall not be complied with,
every or any Share, in respect of which such notice has been given, may, at any time
thereafter, before payment of all calls or instalments, interest and expenses, as may
be due in respect thereof, be forfeited by a resolution of the Board to that effect.
Subject to the provisions of the Act, such forfeiture shall include all dividends
declared or any other moneys payable in respect of the forfeited Shares and not
actually paid before the forfeiture.
56. When any Share 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
of Members. But no forfeiture shall be, in any manner, invalidated by any omission
or neglect to give such notice or to make any such entry as aforesaid.
57. Any Share, so forfeited, shall be deemed to be the property, of the Company, and
may be sold, re-allotted or otherwise disposed off, either to the original holder
thereof or to any other Person, upon such terms and in such manner as the Board
shall think fit.
58. Any member, whose Shares have been forfeited, shall, notwithstanding the
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forfeiture, be liable to pay and shall forthwith pay to the Company, on demand, all
calls, installments, interest and expenses owing upon or in respect of such Shares at
the time of the forfeiture together with interest thereof, until payment, at such rate,
as the Board may determine, and the Board may enforce the payment thereof, if it
thinks fit.
59. The forfeiture of a Share shall involve extinction, at the time of the forfeiture, of all
interests in and all claims and demands against the Company, in respect of such
Share and all other rights, incidental to the Share, except only such of those rights
as by these presents are expressly saved.
60. A declaration, in writing, that the declarant is a director or Secretary of the Company
and that a Share in the Company has duly been forfeited in accordance with these
Articles, 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.
61. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the
powers hereinbefore given, the Board 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 the purchaser shall not be
bound to see to the regularity of the proceedings or to the application of the purchase
money, and, after his name has been entered in the Register, in respect of such
Shares, the validity of the sale shall not be impeached by any Person, and the remedy
of any Person aggrieved by the sale shall be in damages only and exclusively against
the Company and no one else.
62. Upon any sale, re-allotment or other disposal under the provisions of the preceding
Article, the certificate or certificates originally issued, in respect of the relative
Shares, shall, unless the same shall, on demand by the Company, have been
previously surrendered to it by the defaulting member, stand cancelled and become
null and void and of no effect, and the Directors shall be entitled to issue a duplicate
certificate or certificates, in respect of the said Shares, to the Person or Persons
entitled thereto.
TRANSFER AND TRANSMISSION OF SHARES
63. The Company shall keep the "Register of Transfers" and therein shall fairly and
distinctly enter particulars of every transfer or transmission of any Share.
64. A common form of transfer shall be used. No transfer shall be registered, unless a
proper instrument of transfer has been delivered to the Company. Every instrument
of transfer shall be duly stamped, under the relevant provisions of the Law, for the
time being, in force, and shall be signed by or on behalf of the transferor and the
transferee, and in the case of a Share held by two or more holders or to be transferred
to the joint names of two or more transferees by all such joint holders or by all such
joint transferees, as the case may be, and the transferor or the transferors, as the case
may be, shall be deemed to remain the holder or holders of such Share, until the
name or names of the transferee or the transferees, as the case may be, is or are
entered in the Register of Members in respect thereof. Several executors or
administrators of a deceased member, proposing to transfer the Share registered in
the name of such deceased member, or the nominee or nominees earlier appointed
by the said deceased holder of Shares, in pursuance of the Article , shall also sign
the instrument of transfer in respect of the Share, as if they were the joint holders of
the Share.
65. Shares in the Company may be transferred by an instrument, in writing, in the form,
as shall, from time to time, be approved by the Directors provided that, if so required
by the provisions of the Act, such instrument of Transfer shall be in the form
prescribed thereunder, and shall be duly stamped and delivered to the Company
within the prescribed period. All the provisions of Section 56 of the Act and the
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rules framed thereunder shall be duly complied with in respect of all transfers of
Shares and registration thereof.
66. The Board shall have power, on giving 7 (Seven) days' previous notice, by
advertisement in some newspaper circulating in the district in which the Registered
Office of the Company is, for the time being, situated, to close the transfer books,
the Register of Members of Register of Debenture holders, at such time or times and
for such periods, not exceeding thirty days at a time and not exceeding in the
aggregate forty-five days in each year, as it may seem expedient.
67. Subject to the provisions of Section 58 and 59 of the Act, these Articles, Section
22A of the Securities Contract (Regulation) Act, 1956 and any other applicable
provisions of the Act or any other law for the time being in force, the Board may,
refuse, whether in pursuance of any power of the Company under these Articles or
otherwise, to register the transfer of, or the transmission by operation of law of the
right to, any Shares or interest of a member in, or Debentures of the Company. The
Company shall within one month from the date on which the instrument of transfer,
or the intimation of such transmission as the case may be, was delivered to the
Company, send to the transferee and transferor or to the Person giving intimation of
such transmission, as the case may be, notice of the refusal to register such transfer,
giving reasons for such refusal 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.
68. An application for the registration of a transfer of Shares in the Company may be
made either by the transferor or the transferee. Where such application is made by a
transferor and relates to partly paid Shares, the Company shall give notice of the
application to the transferee. The transferee may, within two weeks from the date of
the receipt of the notice and not later, object to the proposed transfer. The notice to
the transferee shall be deemed to have been duly given, if dispatched by prepaid
registered post to the transferee at the address given in the instrument of transfer and
shall be deemed to have been delivered at the time when it would have been
delivered in the ordinary course of post.
69. In the case of the death of any one or more of the Persons named in the Register of
Members as the joint holders of any Share, the survivor or survivors shall be the
only Persons recognized 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.
70. Subject to the provisions of Article 87 hereunder, the executors or administrators or
holders of a such Succession Certificate or the legal representative of a deceased
member, not being one of two or more joint holders, shall be the only Persons
recognized by the Company as having any title to the Shares registered in the name
of such member, and the Company shall not be bound to recognize such executors
or administrators or holders of a Succession Certificate or the legal representatives,
unless such executors or administrators or legal representatives shall have first
obtained Probate or Letters of Administration or Succession Certificate, as the case
may be, from a duly constituted Court in the Union of India, provided that, in cases,
the Board may dispense with production of probate or letters of Administration or
Succession Certificate upon such terms as to indemnify or otherwise, as the Board,
in its absolute discretion, may think necessary, in the circumstances thereof, and, in
pursuance of the Article 73 hereunder, register the name of any Person, who claims
to be absolutely entitled to the Shares standing in the name of a deceased member,
as a member.
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71. No Share shall, in any circumstances, be transferred to any infant, insolvent or
Person of unsound mind, and that no Share, partly paid up, be issued, allotted or
transferred to any minor, whether alone or along with other transferees or allottees,
as the case may be.
72. So long as the director having unlimited liability has not discharged all liabilities,
whether present or future, in respect of the period for which he is and continues to
be, so long, liable, he shall not be entitled to transfer the Shares held by him or cease
to be a member of the Stock Exchange(s) to the end and intent that he shall continue
to hold such minimum number of Shares as were held by him prior to his becoming
a director with unlimited liability.
73. Subject to the provisions of Articles 69, 70 and 87 hereof, any Person becoming
entitled to Shares in consequences of the death, lunacy, bankruptcy or insolvency or
any member, or the marriage of any female member or by any lawful means other
than by a transfer in accordance with these presents, may, with the consent of the
Board, which it shall not be under any obligation to give, upon producing such
evidence that he sustains the character in respect of which he proposes to act under
the Article or of his title, as the Board thinks sufficient, either be registered himself
as the holder of the Share or elect to have some Person, nominated by him and
approved by the Board, registered as such Person, provided, nevertheless, that if
such Person shall elect to have his nominee registered, he shall testify the election
by executing in favour of his nominee an instrument of transfer in accordance with
the provisions herein to in these Articles as "The Transmission Article".
74. Subject to the provisions of the Act, a Person entitled to a Share by transmission
shall, subject to the right of the Directors to retain such dividend or money as
hereinafter provided, be entitled to receive and may be given a discharge for, any
dividends or other moneys payable in respect of the Share.
75. No fees shall be charged for registration of transfer, transmission, probate,
succession certificate and letters of administration, certificate of death or marriage,
power of attorney or similar document.
76. The Company shall incur no liability or responsibility whatever in consequence of
its registering or giving effect to any transfer of Shares made or purporting to be
made by any apparent legal owner thereof, as shown or appearing in the Register of
Members, to the prejudice of Persons having or claiming any equitable right, title or
interest to or in the said Shares, notwithstanding that the Company may have had
notice of such equitable right, title or interest or notice prohibiting of such transfer,
and may have entered such notice, referred thereto, in any book of the Company,
and the Company shall not be bound or required to regard or attend or give effect
any notice which may be given to it of any equitable right, title or interest, or be
under any liability whatsoever refusing or neglecting so to do, though it may have
been entered or referred to in some book of the Company, but the Company shall
nevertheless be at liberty to regard and attend to any such notice, and give effect
thereto if the Board shall so think fit.
DEMATERIALISATION OF SECURITIES
77. Notwithstanding anything contained in these Articles, the Company shall be entitled
to dematerialize or rematerialize its Securities (both present and future) and to offer
Securities in a dematerialized form pursuant to the Depositories Act, 1996 and the
rules framed thereunder, if any.
78. Every holder of or subscriber to Securities of the Company shall have the option to
receive Security certificates or to hold the securities with a depository. Such a
Person who is the beneficial owner of the Securities can at any time opt out of a
Depository, if permitted by law, in respect of any Security in the manner provided
by the Depositories Act, 1996 and the Company shall in the manner and within the
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time prescribed, issued to the beneficial owner the required Certificates for the
Securities. If a Person opts to hold its Security with a Depository, the Company shall
intimate such Depository the details of allotment of the Security.
79. The provisions of Depositories Act shall apply in respect of issue, transfer and
transmission, and other relevant / incidental matters relating to securities held with
a Depository.
80. All Securities of the Company held by the Depository shall be dematerialized and
be in fungible form. Nothing contained in Sections 89 and 186 of the Act 2013 shall
apply to a Depository in respect of the Securities of the Company held by it on behalf
of the beneficial owners.
(i) Notwithstanding anything to the contrary contained in the Act, a Depository
shall be deemed to be the registered owner for the purpose of effecting
transfer of ownership of Security of the Company on behalf of the beneficial
owner.
(ii) Save as otherwise provided in (i) above, the Depository as the registered
owner of the Securities shall not have any voting rights or any other rights in
respect of the Securities held by it.
(iii) Every Person holding Securities of the Company and whose name is •entered
as the beneficial owner in the record of the Depository shall be deemed to be
a member of the Company. The beneficial owner of Securities shall be
entitled to all the rights and benefits and be subject to all the liabilities in
respect of his Securities which are held by a Depository.
CONVERSION OF SHARES INTO STOCK AND RECONVERSION
81. The Company, by a resolution in Meeting, may convert any paid up Shares into
stock, or may, at any time, reconvert any stock into paid up Shares of any
denomination. When any Shares shall have been converted into stock, the several
holders of such stock may thenceforth transfer their respective interests therein, or
any part of such interest, in the same manner and, subject to the same regulations as
to which Shares in the Company may be transferred or as near thereto as
circumstances will admit. But the Directors may, from time to time, if they think fit,
fix the minimum amount of stock transferable, and restrict or forbid the transfer of
fractions of that minimum, but with full power nevertheless, at their discretion, to
waive such rules in any particular case. The notice of such conversion of Shares into
stock or reconversion of stock into Shares shall be filed with the Registrar of
Companies as provided in the Act.
82. The Stock shall confer on the holders thereof respectively the same privileges and
advantages, as regards participation in profits and voting at meetings of the
Company and, for other purposes, as would have been conferred by Shares of equal
amount in the capital of the Company of the same class as the Shares from which
such stock was converted but no such privilege or advantage, except the
participation in profits of the Company, or in the assets of the Company on a winding
up, shall be conferred by any such aliquot part or, consolidated stock as would not,
if existing in Shares, have conferred such privileges or advantages. No such
conversion shall affect or prejudice any preference or other special privilege
attached to the Shares so converted. Save as aforesaid, all the provisions herein
contained shall, so far as circumstances will admit, apply to stock as well as to
Shares and the words "Share" and "Shareholder" in these presents shall include
"stock" and "stockholder".
83. The Company may issue Share warrants in the manner provided by the said Act and
accordingly the Directors may, in their discretion, with respect to any fully paid up
Share or stock, on application, in writing, signed by the Person or all Persons
registered as holder or holders of the Share or stock, and authenticated by such
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evidence, if any, as the Directors may, from time to time, require as to the identity
of the Person or Persons signing the application, and on receiving the certificate, if
any, of the Share or stock and the amount of the stamp duty on the warrant and such
fee as the Directors may, from time to time, prescribe, issue, under the Seal of the
Company, a warrant, duly stamped, stating that the bearer of the warrant is entitled
to the Shares or stock therein specified, and may provide by coupons or otherwise
for the payment of future dividends, or other moneys, on the Shares or stock
included in the warrant. On the issue of a Share warrant the names of the Persons
then entered in the Register of Members as the holder of the Shares or stock
specified in the warrant shall be struck off the Register of Members and the
following particulars shall be entered therein.
(i) fact of the issue of the warrant.
(ii) a statement of the Shares or stock included in the warrant distinguishing each
Share by its number, and
(iii) the date of the issue of the warrant.
84. A Share warrant shall entitle the bearer to the Shares or stock included in it, and,
notwithstanding anything contained in these articles, the Shares or stock shall be
transferred by the delivery of the Share-warrant, and the provisions of the
regulations of the Company with respect to transfer and transmission of Shares shall
not apply thereto.
85. The bearer of a Share-warrant shall, on surrender of the warrant to the Company for
cancellation, and on payment of such fees, as the Directors may, from time to time,
prescribe, be entitled, subject to the discretion of the Directors, to have his name
entered as a member in the Register of Members in respect of the Shares or stock
included in the warrant.
86. The bearer of a Share-warrant shall not be considered to be a Member of the
Company and accordingly save as herein otherwise expressly provided, no Person
shall, as the bearer of Share warrant, sign a requisition for calling a Meeting of the
Company, or attend or vote or exercise any other privileges of a member at a
Meeting of the Company, or be entitled to receive any notice from the Company of
Meetings or otherwise, or qualified in respect of the Shares or stock specified in the
warrant for being a director of the Company, or have or exercise any other rights of
a Member of the Company.
87. The Directors may, from time to time, make rules as to the terms on which, if they
shall think fit, a new Share warrant or coupon may be issued by way of renewal in
case of defacement, loss, or destruction.
NOMINATION BY SECURITY HOLDER
88. (1) Every holder of Securities in the Company may, at any time, nominate, in the
prescribed manner, a Person to whom his Securities in the Company, shall
vest in the event of his death.
(2) Where the Securities in the Company are held by more than one Person jointly,
the joint holders may together nominate, in the prescribed manner, a Person
to whom all the rights in the Securities in the Company shall vest in the event
of death of all joint holders.
(3) Notwithstanding anything contained in these Articles or any other law, for the
time being, in force, or in any disposition, whether testamentary or 'otherwise,
in respect of such Securities in the Company, where a nomination made in the
prescribed manner purports to confer on any Person the right to vest the
Securities in the Company, the nominee shall, on the death of the Shareholders
of the Company or, as the case may be, on the death of the joint holders,
659
become entitled to all the rights in the Securities of the Company or, as the
case may be, all the joint holders, in relation to such securities in the Company,
to the exclusion of all other Persons, unless the nomination is varied or
cancelled in the prescribed manner.
(4) In the case of fully paid up Securities in the Company, where the nominee is
a minor, it shall be lawful for the holder of the Securities, to make the
nomination to appoint in the prescribed manner any Person, being a guardian,
tri become entitled to Securities in the Company, in the event of his death,
during the minority.
89. (1) Any Person who becomes a nominee by virtue of the provisions of the
preceding Article, upon the production of such evidence as may be required
by the Board and sub' hereinafter provided, elect, either –
a) to be registered himself as holder of the Share(s); or
b) to make such transfer of the Share(s) as the deceased Shareholder could
have made.
(3) All the limitations, restrictions and provisions of the Act relating to the right
to transfer and the registration of transfers of Securities shall be applicable to
any such notice or transfer as aforesaid as if the death of the member had not
occurred and the notice or transfer has been signed by that Shareholder.
90. A Person, being a nominee, becoming entitled to a Share by reason of the death of
the holder, shall be entitled to the same dividends and other advantages which he
would be entitled if he were the registered holder of the Share except that he shall
not, before being registered a member in respect of his Share be entitled in respect
of it to exercise any right conferred by Membership in relation to meetings of the
Company:
Provided that the Board may, at any time, give notice requiring any such Person to
elect either to be registered himself or to transfer the Share(s) and if the notice is not
complied with within ninety days, the Board may thereafter withhold payment of all
dividends, bonuses or other moneys payable in respect of the Share(s) or until the
requirements of the notice have been complied with.
MEETING OF MEMBERS
91. The Company shall, in each year, hold a general meeting as its Annual General
Meeting. Any meeting, other than Annual General Meeting, shall be called Extra-
ordinary General Meeting.
Not more than 15 (Fifteen) months or such other period, as may be prescribed, from
time to time, under the Act, shall lapse between the date of one Annual General
Meeting and that of the next. Nothing contained in the foregoing provisions shall be
taken as affecting the right conferred upon the Registrar under the provisions of the
Act to extend time within which any Annual General Meeting may be held.
Every Annual General Meeting shall be called for a time during business hours i.e.
between 9 a.m. and 6 p.m., on a day that is not a National Holiday, and shall be held
at the Office of the Company or at such other place within the city, in which the
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Office of the Company is situated, as the Board may think fit and determine and the
notices calling the Meeting shall specify it as the Annual General Meeting.
At every Annual General Meeting of the Company, there shall be laid, on the table,
the Directors' Report and Audited Statements of Account, Auditors' Report, the
proxy register with forms of proxies, as received by the Company, and the Register
of Directors' Share holdings, which shall remain open and accessible during the
continuance of the meeting. The Annual General Meeting shall be held within six
months after the expiry of such financial year. The Board of Directors shall prepare
the annual list of Members, summary of the Share Capital, balance sheet and profit
and loss account and forward the same to the Registrar in accordance with the
applicable provisions of the Act.
92. The Board may, whenever it thinks fit, call an Extra-ordinary General Meeting and
it shall do so upon a requisition, in writing, by any Member or Members holding, in
aggregate not less than one tenth or such other proportion or value, as may be
prescribed, from time to time, under the Act, of such of the paid-up capital as at that
date carries the right of voting in regard to the matter, in respect of which the
requisition has been made.
93. Any valid requisition so made by the Members must state the object or objects of
the meeting proposed to be called, and must be signed by the requisitionists and be
deposited at the Office, provided that such requisition may consist of several
documents, in like form, each of which has been signed by one or more
requisitionists.
94. Upon receipt of any such requisition, the Board shall forthwith call an Extra-
ordinary General Meeting and if they do not proceed within 21 (Twenty-one) days
or such other lessor period, as may be prescribed, from time to time, under the Act,
from the date of the requisition, being deposited at the Office, to cause a Meeting to
be called on a day not later than 45 (Forty-five) days or such other lessor period, as
may be prescribed, from time to time, under the Act, from the date of deposit of the
requisition, the requisitionists or such of their number as represent either a majority
in value of the paid up Share capital held by all of them or not less than one-tenth of
such of the paid up Share Capital of the Company as is referred to in Section 100
(4) of the Act, whichever is less, may themselves call the Meeting, but, in either
case, any Meeting so called shall be held within 3 (Three) months or such other
period, as may be prescribed, from time to time, under the Act, from the date of the
delivery of the requisition as aforesaid.
95. Any Meeting called under the foregoing Articles by the requisitionists shall be
called in the same manner, as nearly as possible as that in which such meetings are
to be called by the Board.
96. At least 21 (Twenty-one) days' notice, of every Meeting, Annual or Extra-ordinary,
and by whomsoever called, specifying the day, date, place and hour of meeting, and
the general nature of the business to be transacted there at, shall be given in the
manner hereinafter provided, to such Persons as are under these Articles entitled to
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receive notice from the Company, provided that in the case of a General Meeting,
with the consent of Members holding not less than 95 per cent of such part of the
Paid Up Share Capital of the Company, a Meeting may be convened by a shorter
notice. In the case of an Annual General Meeting of the Shareholders of the
Company, if any business other than (i) the consideration of the accounts, balance
sheet and reports of the Board and the auditors thereon, (ii) the declaration of
dividend, (iii) appointment of Directors in place of those retiring, (iv) the
appointment of and fixing the remuneration of the Auditors, is to be transacted, and
in the case of any other Meeting, in respect of any item of business, a statement
setting out all material facts concerning each such item of business, including, in
particular, the nature and extent of the interest, if any, therein of every director and
manager, if any, where any such item of special business relates to, or affects any
other company, the extent of shareholding interest in that other company or every
director and manager, if any, of the Company shall also be set out in the statement
if the extent of such Share-holding interest is not less than such percent, as may be
prescribed, from time to time, under the Act, of the paid-up Share Capital of that
other Company.
Where any item of business consists of the according of approval of the Members
to any document at the meeting, the time and place, where such document can be
inspected, shall be specified in the statement aforesaid.
97. The accidental omission to give any such notice as aforesaid to any of the Members
receipt thereof shall not invalidate any resolution passed at any such meeting.
98. No General Meeting, whether Annual or Extra-ordinary, shall be competent to enter
upon, discuss or transact any business which has not been mentioned in the notice
or notices upon which it was convened.
99. Subject to the provisions of the Act and these Articles, five (5) shareholders shall
constitute quorum in Shareholder's Meetings of the Company if number of
shareholders as on date of meeting is not more than One Thousand; Fifteen (15)
shareholders shall constitute quorum in Shareholder's Meetings of the Company if
number of shareholders as on date of meeting is more than One Thousand but not
more than Five Thousand; Thirty (30) shareholders shall constitute quorum in
Shareholders' Meetings of the Company if number of shareholders as on date of
meeting exceeds five thousand.
100. A body corporate, being a Member, shall be deemed to be Personally present, if it
is represented in accordance with and in the manner as may be prescribed by, the
applicable provisions of the Act.
101. If, at the expiration of half an hour from the time appointed for holding a meeting
of the Company, a quorum shall not be present, then the meeting, if convened by or
upon the requisition of Members, shall stand dissolved, but in any other case, it shall
stand adjourned to such time on the following day or such other day and to such
place, as the Board may determine, and, if no such time and place be determined, to
the same day in the next week, at the same time and place in the city or town in
which the office of the Company is, for the time being, situate, as the Board may
determine, and, if at such adjourned meeting also, a quorum is not present, at the
expiration of half an hour from the time appointed for holding the meeting, the
Members present shall be a quorum, and may transact the business for which the
meeting was called.
102. The Chairman of the Board of Directors shall be entitled to take the chair at every
general meeting, whether Annual or Extra-ordinary. If there be no such Chairman,
or, if, at any meeting, he shall not be present within 15 (Fifteen) minutes of the time
appointed for holding such meeting, then the Members present shall elect another
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director as the Chairman of that meeting, and, if no director be present, or if all the
Directors present decline to take the Chair, then the Members present shall elect one
among them to be the Chairman.
103. No business shall be discussed at any general meeting, except the election of a
Chairman, whilst the Chair is vacant.
104. The Chairman, with the consent of the meeting, may adjourn any meeting, from time
to time, and from place to place, in the city or town, in which the office of the
Company is, for the time being, situate, 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.
105. At any general meeting, a resolution put to the vote of the meeting shall be decided
on a show of hands, unless a poll is demanded, before or on the declaration of the
result of the show of hands, by any Member or Members present in Person or by
proxy and holding Shares in the Company, which confer a power to vote on the
resolution not being less than one-tenth or such other proportion as may statutorily
be prescribed, from time to time, under the Act, of the total voting power, in respect
of the resolution or on which an aggregate sum of not less than `500,000/- or such
other sum as may statutorily be prescribed, from time to time, under the Act, has
been paid up, and unless a poll is demanded, a declaration by the Chairman that a
resolution has, on a show of hands, been carried unanimously or by a particular
majority, or has been lost and an entry to that effect in the minutes book of the
Company shall be conclusive evidence of the fact, without proof of the number or
proportion of the votes recorded in favour of or against that resolution.
106. In the case of an equality of votes, the Chairman shall, both on a show of hands and
at a poll, if any, have a casting vote in addition to the vote of votes, if any, to which
he may be entitled as a member, if he is.
107. If a poll is demanded as aforesaid, the same shall, subject to Article 108 hereinunder,
be taken at the place where the Office is situated or, if not desired, then at such other
place as may be decided by the Board, at such time not later than 48 (Fourty-eight)
hours from the time when the demand was made and place in the city or town in
which the office of the Company is, for the time being, situate, 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 resolution of the meeting at which the poll was demanded. The demand for a poll
may be withdrawn at any time by the Persons, who made the demand.
108. Where a poll is to be taken, the Chairman of the meeting shall appoint one or, at his
discretion, two scrutinizers, who may or may not be Members of the Company to
scrutinize the votes given on the poll and to report thereon to him, subject to that
one of the scrutinizers so appointed shall always be a member, not being an officer
or employee of the Company, present at the meeting, provided that 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 scrutinizer from office and
fill the vacancy so caused in the office of a scrutinizer arising from such removal or
from any other cause.
109. Any poll duly demanded on the election of a Chairman of a meeting or on any
question of adjournment of the meeting shall be taken forthwith at the same meeting.
110. The demand for a poll, except on questions of the election of the Chairman and of
an adjournment thereof, shall not prevent the continuance of a meeting for the
transaction of any business other than the question on which the poll has been
demanded.
VOTES OF MEMBERS
111. No member shall be entitled to vote either Personally or by proxy at any general
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meeting or meeting of a class of Shareholders either upon a show of hands or upon
a poll 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, or has exercised, any right of lien.
112. Subject to the provisions of these Articles and without prejudice to any special
privileges or restrictions so to voting, for the time being, attached to any class of
Shares, for the time being, forming part of the capital of the Company, every
member, not disqualified by the last preceding Article shall be entitled to be present,
speak and vote at such meeting, and, on a show of hands, every member, present in
Person, shall have one vote and, upon a poll, the voting right of every member
present in Person or by proxy shall be in proportion to his Share of the paid-up
Equity Share Capital of the Company. Provided, however, if any preference
Shareholder be present at any meeting of the Company, subject to the provision of
Section 47, he shall have a right to vote only on resolutions, placed before the
meeting, which directly affect the rights attached to his Preference Shares.
113. On a poll taken at a meeting of the Company, a member entitled to more than one
vote, or his proxy or other Person entitled to vote for him, as the case may be, need
not, if he votes, use all his votes or cast in the same way all the votes, he uses.
114. A member of unsound mind or in respect of whom an order has been made by a
court having jurisdiction in lunacy, may vote, whether on a show of hands or on a
poll, by his committee or other legal guardian; and any such committee or guardian
may, on a poll, vote by proxy. If any member be a minor, the vote, in respect of his
Share or Shares, be used by his guardian, or any one of his guardians, if more than
one, to be selected, in the case of dispute, by the Chairman of the meeting.
115. If there be joint registered holders of any Shares, any one of such Persons may vote
at any meeting or may appoint another Person, whether a member or not, as his
proxy, in respect of such Shares, as if he were solely entitled thereto, but the proxy
so appointed shall not have any right to speak at the meeting and, if more than one
of such joint holders be present at any meeting, then one of the said Persons so
present, whose name stands higher on the Register, shall alone be entitled to speak
and to vote in respect of such Shares, but the other of the joint holders shall be
entitled to be present at the meeting. Several executors or administrators of a
deceased member in whose name Shares stand shall, for the purpose of these
Articles, be deemed joint holders thereof.
116. Subject to the provisions of these Articles, votes may be given either personally or
by proxy. A body corporate, being a member, may vote either by a proxy or by a
representative, duly authorised, in accordance with the applicable provisions, if any,
of the Act, and such representative shall be entitled to exercise the same rights and
powers, including the right to vote by proxy, on behalf of the body corporate, which
he represents, as that body corporate could exercise, if it were an individual member.
117. Any Person entitled, under the Article 73 hereinabove, to transfer any Share, may
vote, at any General Meeting, in respect thereof, in the same manner, as if he were
the registered holder of such Shares provided that forty-eight hours at least before
the time of holding the meeting or adjourned meeting, as the case may be, at which
he proposes to vote the shall satisfy the Directors of his right to transfer such Shares
and give such indemnity, if any, as the Directors may require or the Directors shall
have provisionally admitted his right to vote at such meeting in respect thereof.
118. Every proxy, whether a member or not, shall be appointed, in writing, under the
hand of the appointer or his attorney, or if such appointer is a body corporate under
the common seal of such corporate, or be signed by an officer or officers or any
attorney duly authorised by it or them, and, for a member of unsound mind or in
respect of whom an order has been made by a court having jurisdiction in lunacy,
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any committee or guardian may appoint such proxy. The proxy so appointed shall
not have a right to speak on any matter at the meeting.
119. An instrument of Proxy may state the appointment of a proxy either for the purpose
of a particular meeting specified in the instrument and any adjournment thereof or
it may appoint for the purpose of every meeting of the Company or of every meeting
to be held before a date specified in the instrument and every adjournment of any
such meeting.
120. A member, present by proxy, shall be entitled to vote only on a poll.
121. The instrument appointing a proxy and a Power of Attorney' or other authority, if
any, under which it is signed or a notarially certified copy of that power of authority,
shall be deposited at the Office not later than 48 (Forty-eight) hours before the time
for holding the meeting at which the Person named in the Instrument proposes to
vote, and, in default, the Instrument of Proxy shall not be treated as valid. No
instrument appointing a proxy shall be a valid after the expiration of 12 (Twelve)
months or such other period as may be prescribed under the Laws, for the time being,
in force, or if there shall be no law, then as may be decided by the Directors, from
the date of its execution.
122. Every Instrument of proxy, whether for a specified meeting or otherwise, shall, as
nearly as circumstances thereto will admit, be in any of the forms as May be
prescribed from time to time.
123. A vote, given in accordance with the terms of an instrument of proxy, shall be valid
notwithstanding the previous death of insanity of the principal, or revocation of the
proxy or of any power of Attorney under which such proxy was signed or the
transfer of the Share in respect of which the vote is given, provided that no
intimation, in writing, of the death or insanity, revocation or transfer shall have been
received at the Office before the Meeting.
124. No objections shall be made to the validity of any vote, except at any meeting or
poll at which such vote shall be tendered, and every vote, whether given personally
or by proxy, or not disallowed at such meeting or on a poll, shall be deemed as valid
for all purposes of such meeting or a poll whatsoever.
125. Chairman, present at the time of taking of a poll, shall be the sole judge of the
validity of every vote tendered at such poll.
126. (a) The Company shall cause minutes of all proceeding of every General
Meeting to be kept by making, within 30 (Thirty) days of the conclusion of
every such meeting concerned, entries thereof in books kept, whether
manually in the registers or by way of loose leaves bound together, as may
be decided by the Board of Directors, for that purpose with their pages
consecutively numbered.
(b) Each page of every such book shall be initialled or signed and the last page
of the record of proceedings of each meeting in such book shall be dated and
signed by the Chairman of the same meeting within the aforesaid period of
thirty days or in the event of the death or inability of that Chairman within
that period, by a director duly authorised by the Board for that purpose.
(d) The minutes of each meeting shall contain a fair and correct summary of the
proceedings there at
(e) All appointments made at any meeting aforesaid shall be included in the
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minutes of the meeting.
(g) Any such minutes shall be conclusive evidence of the proceedings recorded
therein.
(h) The book containing the minutes of proceedings of general meetings shall be
kept at the Office of the Company and shall be open, during business hours,
for such periods not being less in the aggregate than 2 (Two) hours, in each
day, as the Directors determine, to the inspection of any member without
charge.
DIRECTORS
127. Until otherwise determined by a General Meeting of the Company and, subject to
the applicable provisions of the Act, the number of Directors shall not be less than
three and shall not be more than fifteen. Subject to the provisions of the Act and
these Articles, the Company may from time to time increase within the maximum
limit permissible the number of Directors provided that any increase in the number
of Directors exceeding the limit in that behalf provided by the Act shall not have
any effect unless necessary approvals have been taken as may be prescribed under
the Act.
128. At least one of the director shall be the resident of India, i.e. atleast one director who
has stayed for minimum 182 days in India in a previous calendar year.
129. The Company shall appoint such number of woman director as may be required
under the provisions of the Act and rules thereunder.
142. (a) At every Annual General Meeting of the Company, one-third of such of the
Directors, for the time being, as are liable to retire by rotation or if their
number is not three or a multiple of three, the number nearest to one-third
shall retire from office. The Independent, Nominee, and Debenture Directors,
if any, shall not be subject to retirement under this clause and shall not be
taken into account in determining the rotation of retirement or the number of
directors to retire, subject to Section 152 and other applicable provisions, if
any, of the Act.
(b) Subject to Section 152 of the Act, the Directors, liable to retire by rotation, at
every annual general meeting, shall be those, who have been longest in office
since their last appointment, but as between the Persons, who became
Directors on the same day, and those who are liable to retire by rotation, shall,
in default of and subject to any agreement among themselves, be determined
by lot.
143. A retiring director shall be eligible for re-election and shall act as a director
throughout the meeting at which he retires.
144. Subject to Section 152 of the Act, the Company, at the general meeting at which a
director retires in manner aforesaid, may fill up the vacated Office by electing a
Person thereto.
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145. (a)
If the place of retiring director is not so filled up and further the meeting has
not expressly resolved not to fill the vacancy, the meeting shall stand
adjourned till the same day in the next week, at the same time and place or if
that day is a public holiday, till the next succeeding day, which is not a public
holiday, at the same time and place.
(b) If at the adjourned meeting also, the place of the retiring director is not filled
up and that meeting also has not expressly resolved not to fill the vacancy, the
retiring director shall be deemed to have been re-appointed at the adjourned
meetings, unless:-
(i) at that meeting or at the previous meeting, resolution for the re-
appointment of such director has been put to the meeting and lost;
(ii) the retiring director has, by a notice, in writing, addressed to the
Company or its Board, expressed his unwillingness to be so re-
appointed;
(iii) he is not qualified, or is disqualified, for appointment.
(iv) a resolution, whether special or ordinary, is required for the
appointment or reappointment by virtue of any provisions of the Act;
or
(v) Section 162 of the Act is applicable to the case.
146. Subject to the provisions of Section 149 of the Act, the Company may, by special
resolution, from time to time, increase or reduce the number of directors, and may
alter their qualifications and the Company may, subject to the provisions of Section
169 of the Act, remove any director before the expiration of his period of Office and
appoint another qualified Person in his stead. The Person so appointed shall hold
Office during such time as the director, in whose place he is appointed, would have
held, had he not been removed.
COPIES OF MEMORANDUM AND ARTICLES TO BE SENT TO MEMBERS
171. Copies of the Memorandum and Articles of Association of the Company and other
documents, referred to in Section 17 of the Act, shall be sent by the Company to
every member, at his request, within 7 (Seven) days of the request, on payment, if
required by the Board, of the sum of Re.1/- (Rupee One Only) or such other higher
sum, as may be prescribed, from time to time, under the Act and further decided,
from time to time, by the Board, for each such copy.
SEAL
172 (a) The Board may provide a Common Seal for the purposes of the Company, and
shall have power, from time to time, to destroy the same and substitute a new
Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal,
for the time being, and that the Seal shall never be used except by the authority
of the Board or a Committee of the Board previously given. The Common Seal
of the Company shall be kept at its office or at such other place, in India, as the
Board thinks fit.
(b) The Common Seal of the Company shall be used by or under the authority of
the Directors or by a Committee of the Board of Directors authorised by it in
that behalf in the presence of at least one director, or Secretary or any other
responsible officer of the Company as may be expressly authorised by the Board
by way of a resolution passed at their duly constituted meeting, who shall sign
every instrument to which the seal is affixed. Such instruments may also be
counter-signed by other officer or officers, if any, appointed for the purpose.
However, the certificates, relating to Shares or Debentures in or of the
Company, shall be signed in such manner as may be prescribed in the Act and/or
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any Rules thereunder.
DIVIDEND
173. The profits of the Company, subject to any special rights relating thereto created or
authorised to be created by these Articles, and further subject to the provisions of
these Articles, shall be divisible among the Members in proportion to the amount of
capital paid up or credited as paid up to the Shares held by them respectively.
174. The Company, in general meeting, may declare that dividends be paid to the
Members according to their respective rights, but no dividends shall exceed the
amount recommended by the Board the Company may, in general meeting, declare
a. smaller dividend , than was recommended by the Board.
175. Subject to the applicable provisions of the Act, no dividend shall be declared or paid
otherwise than out of profits of the financial year arrived at after providing for
depreciation in accordance with the provisions of the Act or out of the profits of the
Company for any previous financial year or years arrived at after providing for
depreciation in accordance with these provisions and remaining undistributed or out
of both provided that:-\
a) if the Company has not provided for any previous financial year or years it
shall, before declaring or paying a dividend for any financial year, provide for
such depreciation out of the profits of the financial year or out of the profits
of any other previous financial year or years;
b) if the Company has incurred any loss in any previous financial year or years
the amount of loss or an amount which is equal to the amount provided for
depreciation for that year or those years whichever is less, shall be set off
against the profits of the Company for the year for which the dividend is
proposed to be declared or paid as against the profits of the Company for any
financial year or years arrived at in both cases after providing for depreciation
in accordance with the provisions of schedule II of the Act.
b)
176. The Board may, from time to time, pay to the Members such interim dividend, as in
their judgement, the position of the Company justifies.
177. Where capital is paid in advance of calls, such capital may carry interest as may be
decided, from time to time, by the Board, but shall not, in respect thereof, confer a
right to dividend or to participate in profits.
178. All dividends shall be apportioned and paid proportionately to the amounts paid up
on the Shares during which any portion or portions of the period in respect of which
the dividend is paid up; but if any Share is issued on the terms providing that it shall
rank for dividend as from a particular date or on such preferred rights, such Share
shall rank for dividend accordingly.
179. The Board may retain the dividends payable upon Shares in respect of which any
Person is, under these Articles, is entitled to become a Member, or which any Person
under these Articles is entitled to transfer until such Person shall become a Member
in respect of such Shares, or shall duly transfer the same and until such transfer of
Shares has been registered by the Company, notwithstanding anything contained in
any other provision of the Act or these Articles.
180. Any one of several Persons, who are registered as joint holders of any Share, may
give effectual receipts for all dividends or bonus and payments on account of
668
dividends or bonus or other moneys payable in respect of such Shares.
181. No member shall be entitled to receive payment of any interest or dividend in respect
of his Share or Shares, whilst any money may be due or owing from him to the
Company in respect of such Share or Shares or otherwise howsoever, either alone
or jointly with any other Person or Persons, and the Board may deduct, from the
interest or dividend payable to any member, all sums of money so due from him to
the Company.
182. Subject to the applicable provisions, if any, of the Act, a transfer of Shares shall not
pass the right to any dividend declared thereon and made effective from the date
prior to the registration of the transfer.
183. Unless otherwise directed, any dividend may be paid up by cheque, or warrant or by
a pay-slip sent through the post to the registered address of the member or Person
entitled, or, in the case of joint holders, to that one of them first named in the Register
in respect of the joint holdings. Every such cheque or warrant shall be made payable
to the order of the Person to whom it is sent. The Company shall not be liable or
responsible for any cheque or warrant or pay-slip lost in transmission or for any
dividend lost to the member or Person entitled thereto due to or by the forged
endorsement of any cheque or warrant or the fraudulent recovery of the dividend by
any other means.
184. (a) If the Company has declared a dividend but which has not been paid or
claimed within 30 (Thirty) days from the date of declaration, the Company
shall transfer the total amount of dividend which remains unpaid or
unclaimed within 7 (seven) days from the date of expiry of the said period
of 30 (Thirty) days to a special account to be opened by the Company in that
behalf in any scheduled Bank called "the Unpaid Dividend Account of
Neccon Power and Infra Limited". The Company shall within a period of
ninety days of making any transfer of an amount to the Unpaid Dividend
Account, prepare a statement containing the names, their last known
addresses and the unpaid dividend to be paid to each Person and place it on
the website of the Company and also on any other website approved by the
Central Government, for this purpose in such form, manner and other
particulars as may be prescribed. No unclaimed or unpaid dividend shall be
forfeited by the Board before the claim becomes barred by law.
(b) Any money so transferred to the unpaid Dividend account of the Company
which remains unpaid or unclaimed for a period of 7 (seven) years from the
date of such transfer, shall be transferred by the Company to the Fund
established under sub-section (1) of Section 125 of the Companies Act,
2013, viz. "Investors Education and Protection Fund".
185. Subject to the provisions of the Act, no unpaid dividend shall bear interest as against
the Company.
186. Any general meeting declaring a dividend may, on the recommendation of the
Directors, make a call on the Members of such amount as the meeting decides, 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 Members, be set off against the calls.
669
CAPITALISATION
187. (a) The Company, in General Meeting, may resolve that any moneys,
investments or other assets forming part of the undivided profits of the
Company standing to the credit of the Reserve Fund, or any Capital
Redemption Reserve Account or in the hands of the Company and available
for dividend, or representing premium received on the issue of Shares and
standing to the credit of the Share Premium Account, be capitalised and
distributed amongst such of the Shareholders as would be entitled to receive
the same, if distributed by way of dividend, and in the same proportion on
the footing that they become entitled thereto as capital, and that all or any
part of such capitalised fund be applied, on behalf of such Shareholders, in
paying up in full either at par or at such premium, as the resolution may
provide, any unissued Shares or Debentures or Debenture stock of the
Company which shall be distributed accordingly on in or towards payment
of the uncalled liability on any issued Shares or Debentures, stock and that
such distribution or payment shall be accepted by such Shareholders in full
satisfaction of their interest in the said capitalised sum, provided that a Share
Premium Account and a Capital Redemption Reserve Account may, for the
purposes of this Article, only be applied for the paying of any unissued
Shares to be issued to Members of the Company as, fully paid up, bonus
Shares.
(b) general meeting may resolve that any surplus moneys arising from the
realisation of any capital assets of the Company, or any investments
representing the same, or any other undistributed profits of the Company, not
subject to charge for income tax, be distributed among the Members on the
footing that they receive the same as capital.
(c) For the purpose of giving effect to any resolution under the preceding
paragraphs of this Article, the Board may settle any difficulty, which may
arise, in regard to the distribution, as it thinks expedient, and, in particular,
may issue fractional certificates and may fix the value for distribution of any
specific assets, and may determine that such cash payments shall be made to
any Members upon the footing of the value so fixed or that fraction of value
less than Rs.I0/- (Rupees Ten Only) may be disregarded in order to adjust the
rights of all parties, and may vest any such cash or specific assets in trustees
upon such trusts for the Person entitled to the dividend or capitalised funds
as may seem expedient to the Board. Where requisite, a proper contract shall
be delivered to the Registrar for registration in accordance with Section 75
of the Act and the Board may appoint any Person to sign such contract, on
behalf of the Persons entitled to the 'dividend or capitalised fund, and such
appointment shall be effective.
ACCOUNTS
188. The Company shall keep at the Office or at such other place in India, as the Board
thinks fit and proper, books of account, in accordance with the provisions of the Act
with respect to :-
a) all sums of money received and expended by the Company and the matters in
respect of which the receipt and expenditure take place;
b) all sales and purchases of goods by the Company;
c) the assets and liabilities of the Company;
d) such particulars, if applicable to this Company, relating to utilisation of material
670
and/or labour or to other items of cost, as may be prescribed by the Central
Government.
Where the Board decides to keep all or any of the books of account at any place,
other than the Office of the Company, the Company shall, within 7 (Seven) days, or
such other period, as may be fixed, from time to time, by the Act, of the decision,
file with the Registrar, a notice, in writing, giving the full address of that other place.
The Company shall preserve, in good order, the books of account, relating to the
period of not less than 8 (Eight) years or such other period, as may be prescribed,
from time to time, under the Act, preceding the current year, together with the
vouchers relevant to any entry in such books.
Where the Company has a branch office, whether in or outside India, the Company
shall be deemed to have complied with this Article, if proper books of account,
relating to the transaction effected at the branch office, are kept at the branch office,
and the proper summarised returns, made up to day at intervals .of not more than 3
(Three) months or such other period, as may be prescribed, from time to time, by
the Act, are sent by the branch office to the Company at its Office or other place in
India, at which the books of account of the Company are kept as aforesaid.
The books of account shall give a true and fair view of the state of affairs of the
Company or branch office, as the case may be, and explain the transactions
represented by it. The books of account and other books and papers shall be open to
inspection by any director, during business hours, on a working day, after a prior
notice, in writing, is given to the Accounts or Finance department of the Company.
189. The Board shall, from time to time, determine, whether, and to what extent, and at
what times and places, and under what conditions or regulations, the accounts and
books of the Company or any of them shall be open to the inspection of Members,
not being the directors, and no member, not being a director, shall have any right of
inspecting any account or books or document of the Company, except as conferred
by law or authorised by the Board.
190. The Directors shall, from time to time, in accordance with sections 129 and 134 of
the Act, cause to be prepared and to be laid before the Company in Annual General
Meeting of the Shareholders of the Company, such Balance Sheets, Profit and Loss
Accounts, if any, and the Reports as are required by those Sections of the Act.
191. A copy of every such Profit & Loss Accounts and Balance Sheets, including the
Directors' Report, the Auditors' Report and every other document(s) required by law
to be annexed or attached to the Balance Sheet, shall at least 21 (Twenty-one) days,
before the meeting, at which the same are to be laid before the Members, be sent to
the Members of the Company, to every trustee for the holders of any Debentures
issued by the Company, whether such member or trustee is or is not entitled to have
notices of general meetings of the Company sent to him, and to all Persons other
than such member or trustees being Persons so entitled.
DOCUMENTS AND NOTICES
193. (a) A document or notice may be served or given by the Company on any member
either Personally or by sending it, by post or by such other means such as fax, e-
mail, if permitted under the Act, to him at his registered address or, if he has no
registered address in India, to the address, if any, in India, supplied by him to the
Company for serving documents or notices on him.
(b) Where a document or notice is sent by post, service of the document or notice
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shall be deemed to be effected by properly addressing, pre-paying, wherever
required, and posting a letter containing the document or notice, provided that
where a member has intimated to the Company, in advance, that documents or
notices should be sent to him under a certificate of posting or by registered post,
with or without the acknowledgement due, and has deposited with the Company
a sum sufficient to defray the expenses of doing so, service of the document or
notice shall not be deemed to be effected unless it is sent in the manner and, such
service shall be deemed to have been effected, in the case of a notice of a meeting,
at the expiration of forty-eight hours after the letter containing the document or
notice is posted, and in any other case, at the time at which the letter would be
delivered in the ordinary course of post.
194. A document or notice, whether in brief or otherwise, advertised, if thought fit by the
Board, in a newspaper circulating in the neighborhood of the Office shall be deemed
to be duly served or sent on the day, on which the advertisement appears, on or to
every member who has no registered address in India and has not supplied to the
Company an address within India for the serving of documents on or the sending of
notices to him.
195. A document or notice may be served or given by the Company on or to the joint
holders of a Share by serving or giving the document or notice on or to the joint
holder named first in the Register of Members in respect of the Share.
196. A document or notice may be served or given by the Company on or to the Person
entitled to a consequence of the death or insolvency of a member by sending it
through the post as a prepaid letter addressed to the by name or by the titler or
representatives of the deceased, or assigned of the insolvent or by any like
description, at the address, if any, in India, supplied for the purpose by the Persons
claiming to be entitled, or, until such an address has been so supplied, by serving
the document or notice, in any manner in which the same might have been given, if
the death or insolvency had not occurred.
197. Documents or notices of every general meeting shall be served or given in some
manner hereinafter authorised on or to (a) every member, (b) every Person entitled
to a Share in consequence of the death or insolvency of member, (c) the Auditor or
Auditors of the Company, and (d) the directors of the Company.
198. Every Person who, by operation of law, transfer or by other means whatsoever, shall
become entitled to any Share, shall be bound by every document or notice in respect
of such Share, which, previously to his name and address being entered on the
Register of Members, shall have duly served on or given to the Person from whom
he derives his title to such Shares.
199. Any document or notice to be served or given by the Company may be signed by a
director or some Person duly authorised by the Board for such purpose and the
signature thereto may be written, printed or lithographed.
200. All documents or notices to be served or given by Members on or to the Company
or any Officer thereof shall be served or given by sending it to the Company or
Officer at the Office by post, under a certificate of posting or by registered post, or
by leaving it at the Office, or by such other means such as fax, e-mail, if permitted
under the Act.
VARIATION IN TERMS OF CONTRACT OR OBJECTS IN PROSPECTUS
201. The Company shall not, at any time, vary the terms of a contract referred to in
prospectus or objects for which the prospectus was issued, except subject to the
approval of, or except subject to an authority given by the Company in general
meeting by way of special resolution, and in accordance with the provisions of the
Companies Act, 2013. Provided that the dissenting Shareholders, being the
Shareholders who have not agreed to the proposal to vary the terms of the contracts
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or the objects referred to in the prospectus, shall be given an exit offer by the
promoters or controlling Shareholders of the company, at the fair market value of
the equity Shares as on the date of the resolution of the Board of Directors
recommending such variation in the terms of the contracts or the objects referred to
in the prospectus, in accordance with such terms and conditions as may be specified
on this behalf by the Securities and Exchange Board of India.
WINDING UP
202. The Liquidator, on any winding up, whether voluntary or under supervision or
compulsory, may, with the sanction of a special resolution, but subject to the rights
attached to any Preference Share Capital, divide among the contributories, in specie,
any part of the assets of the Company and may, with the like sanction, vest any part
of the assets of the Company in trustees upon such trusts for the benefit of the
contributories, as the liquidators, with the like sanction, shall think fit.
INDEMNITY AND RESPONSIBILITY
203. Every officer of the company shall be indemnified out of the assets of the company
against any liability incurred by him in defending any proceedings, whether civil or
criminal, in which judgment is given in his favour or in which he is acquitted or in
which relief is granted to him by the court or the Tribunal.
SECRECY
204. (a) Every director, manager, auditor, treasurer, trustee, member of a committee,
officer, servant, agent, accountant or other Person employed in the business
of the Company shall, if so required by the Directors, before entering upon his
duties, sign a declaration pledging himself to observe strict secrecy respecting
all transactions and affairs of the Company with the customers and the state
of the accounts with the individuals and in matters relating thereto, and shall,
by such declaration, pledge himself not to reveal any of the matters which may
come to his knowledge in the discharge of his duties except when required so
to do by the Directors or by Law or by the Person to whom such matters relate
and except so far as may be necessary in order to comply with any of the
provisions contained in these presents or the Memorandum of Association of
the Company.
(b) No member shall be entitled to visit or inspect any works of the Company,
without the permission of the Directors, or to require discovery of or any
information respecting any details of the Company's trading or business or any
matter which is or may be in the nature of a trade secret, mystery of trade,
secret or patented process or any other matter, which may relate to the conduct
of the business of the Company and, which in the opinion of the Directors, it
would be inexpedient in the interests of the Company to disclose.
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SECTION X – OTHER INFORMATION
The following contracts (not being contracts entered into in the ordinary course of business carried on
by our Company or entered into more than two years before the date of this Draft Red Herring
Prospectus) which are or may be deemed material have been entered or to be entered into by our
Company. These contracts, copies of which will be attached to the copy of the Red Herring Prospectus,
and the Prospectus, delivered to the RoC for registration and also the documents for inspection referred
to hereunder, may be inspected at our Registered Office from 10.00 am to 5.00 pm on all Working Days
from the date of filing the Red Herring Prospectus until the Bid/Issue Closing Date.
1. Issue Agreement dated August 7, 2018 entered amongst our Company and the BRLM.
2. Registrar Agreement dated July 17, 2018 entered amongst our Company and the Registrar to
the Issue.
3. Tripartite Agreement dated September 5, 2018 entered amongst NSDL, our Company and the
Registrar to the Issue.
4. Tripartite Agreement dated July 12, 2018 entered amongst CDSL, our Company and the
Registrar to the Issue.
5. Escrow Agreement dated [●] entered amongst our Company, the BRLM, the Syndicate
Members, the Escrow Collection Bank(s), Refund Bank(s) and the Registrar to the Issue.
6. Syndicate Agreement dated [●] entered amongst our Company, the BRLM and the Syndicate
Members.
7. Underwriting Agreement dated [●] entered amongst our Company, the BRLM and the
Syndicate Members.
8. Monitoring Agency Agreement dated [●] entered between our Company and [●].
Material Documents
1. Certified true copies of the Memorandum and Articles of Association of our Company, as
amended till date.
3. Certificate of incorporation reflecting the name "North Eastern Cables & Conductors Limited"
pursuant to conversion of our Company into a deemed public company on July 1, 1997.
4. Certificate of incorporation reflecting the name "North Eastern Cables & Conductors Private
Limited" pursuant to conversion of our Company into a private company on October 10, 2001.
5. Fresh certificate of incorporation dated April 8, 2011 consequent upon change of name to
"Neccon Power & Infra Private Limited".
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6. Fresh certificate of incorporation dated May 18, 2011 consequent upon conversion of our
Company into a public company.
8. Resolution of the Shareholders dated July 10, 2018, under section 62(1)(c) of the Companies
Act, 2013 authorizing the Issue.
9. Resolution of the shareholders dated April 10, 2018 for re-designation of Dr. Murlidhar Khetan
as Chairman and Whole-time Director, Jaiprakash Khetan as Managing Director and Basant
Kumar Khetan and Pradeep Kumar Khetan as Joint Managing Directors of our Company.
10. Copies of annual reports of our Company for financial years 2014, 2015, 2016, 2017 and 2018
on a standalone basis and for the financial years 2014, 2015, 2016, 2017 and 2018 on a
consolidated basis.
11. Examination reports of our Statutory Auditor dated September 19, 2018 regarding the Restated
Financial Statements (consolidated and standalone) included in this Draft Red Herring
Prospectus.
12. Statement of Tax Benefits dated September 21, 2018 issued by our Statutory Auditor included
in this Draft Red Herring Prospectus.
13. Consent from the Statutory Auditors namely, Borkar & Muzumdar, Chartered Accountants, to
include their name as required under Section 26(1) of the Companies Act, 2013 read with SEBI
ICDR Regulations and as "expert" as defined under Section 2(38) of the Companies Act, 2013
to the extent and in their capacity as an auditor and in respect of their examination reports dated
September 19, 2018 on our Restated Ind AS Summary Statements and their report dated
September 21, 2018 on the Statement of Tax Benefits included in this Draft Red Herring
Prospectus.
14. Consents of the Bankers to our Company, BRLM, Syndicate Members*, Registrar to the Issue,
Directors of our Company, Company Secretary and Compliance Officer, Chief Financial
Officer, Legal Counsel to the Issue, Escrow Collection Bank(s)*, Refund Bank(s)* and
Monitoring Agency*, as referred to in their respective capacities.
15. Consent from ICRA dated September 24, 2018 to include their name in relation to their report
titled "Indian Transmission and Distribution Sector" issued in September 2018, in the form and
context in which it appears in this Draft Red Herring Prospectus.
16. In-principle listing approvals dated [●] and [●] received from BSE and NSE, respectively.
17. Due diligence certificate dated September 27, 2018 addressed to SEBI from the BRLM.
18. Letter dated September 19, 2018 from State Bank of India, SME Branch, Jorhat, lender to
Brahmaputra Infra Power Private Limited, one of our Subsidiary companies, conveying its no
objection to the proposed Issue of our Company.
Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or
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modified at any time, if so required in the interest of our Company, or if required by other parties,
without notification to the shareholders, subject to compliance of the provisions contained in the
Companies Act and other relevant statutes.
*The aforesaid will be appointed prior to filing of the Red Herring Prospectus with RoC and their
consents would be obtained prior to the filing of the Red Herring Prospectus with RoC.
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DECLARATION
We, hereby certify and declare that, all the relevant provisions of the Companies Act and the rules,
regulations and guidelines issued by the Government of India or the rules, regulations and guidelines
issued by the Securities and Exchange Board of India established under Section 3 of the Securities and
Exchange Board of India Act, 1992 as the case may be, have been complied with and no statement
made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, the
Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992,
each as amended or rules made there under or guidelines and regulations issued, as the case may be.
We further certify that all the disclosures and statements made in this Draft Red Herring Prospectus are
true and correct.
Sd/- Sd/-
Dr. Murlidhar Khetan Jugal Kishore Agarwalla
Chairman and Whole time Director Non-Executive and Independent Director
Sd/- Sd/-
Jaiprakash Khetan Sharad Agarwalla
Managing Director Non-Executive and Independent Director
Sd/- Sd/-
Basant Kumar Khetan Shyamkanu Mahanta
Joint Managing Director Non-Executive and Independent Director
Sd/- Sd/-
Pradeep Kumar Khetan Usha Agarwal
Joint Managing Director Non-Executive and Independent Director
Sd/-
Nanuram Prajapat
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