sejal architectural glass limited - Securities and Exchange Board of ...

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SECTION IV – INTRODUCTION SUMMARY You should read the following summary together with the risk factors and the more detailed information about us and our financial data included in this Draft Red Herring Prospectus. Unless otherwise indicated, all financial and statistical data relating to the industry in the following discussion is derived from internal Company reports and data, industry publication and estimates. This data has been reclassified in certain respects for purposes of presentation. For more information, please refer to the section titled “Forward Looking Statements” beginning on page no. [●] of this Draft Red Herring Prospectus. Summary about the Industry The Indian Economy India's economy is on the fulcrum of an ever increasing growth curve. It is the fourth largest economy of the world on the basis of Purchasing Power Parity (PPP). With positive indicators such as a stable 8-9 per cent annual growth, rising foreign exchange reserves of over USD 222 billion, a booming capital market with the popular "Sensex" index topping the majestic mark, the Government estimating FDI flow of USD 15.5 billion in this fiscal, and a more than 20 per cent surge in exports it is one of the most attractive destinations for business and investment opportunities due to huge manpower base, diversified natural resources and strong macro-economic fundamentals. Thus it is easy to understand why India is a leading destination for foreign investment. Domestic Glass Industry For the last few years, the domestic demand for Indian flat (float/sheet) glass has been registering a noteworthy increase of 10 -12 per cent per annum and this increase is likely to be sustained in the coming years as well since the two main consuming sectors of Glass- Construction and Automotive which are both been maintaining a consistently high rate of growth. During the calendar year 2005, the aggregate demand for flat (float/sheet) glass in the Indian domestic glass market was 1976.54 tonnes per day on an average, whereas it was only 1668.10 tonnes per day on an average during the previous year 2004. During the year 2005, the total export of float and sheet (including Chinese float glass) was 142.37 (97.38+44.99) tonnes per day on an average whereas a few years ago it was 300 to 350 tonnes per day on an average. The main reason for the decline in exports of float glass in 2005 has been the consistent increase in domestic demand in Indian glass market. The fact is that glass manufacturers get a better price realization in domestic glass market as compared with exports and they resort to exports only when domestic demand falls short of supply so that a balance between domestic demand and supply can be restored to get better prices. (Source: Glassyug December, 2005) Despite this, market potential in India is still grossly under leveraged. For instance, the consumption of float glass in India is just 0.55 kg per person. It is one-seventh of China, one-tenth of Thailand and one-twenty eighth of the whole developed world. (Source: www.ibef.org ) Total float glass demand in India Float glass is one of the products of the glass Industry. Various other products are together commonly known as flat glass. They comprise of float glass, sheet glass, figured and wired glass and polished plate glass. Today, around 95% of the flat-glass produced in the world is of float type. The most significant distinction of float glass from other types of flat glass is its superior quality and distortion free nature. It is extremely clear with light transmission upto 90%. 24
The Indian Architectural float glass Market The architectural float glass market in India has been gaining momentum in the recent past. In the financial year 2004 - 2005 the architectural float glass market accounted for 4,97,531 tonnes. Region wise the demand is highest in South India accounting for 33% (1,60,568 Tonnes) followed by Northern India at 31% (1,54,067 Tonnes) and Western India at 27% (1,32,907 tonnes). The smallest market in India is the east region which accounts for only 9% of the total architectural float glass market. Demand Drivers (1) Real estate sector (2) SEZs (3) Automobile Industry (4) Quality and brand conscious consumer (5) Government policies (6) Changing tastes and preferences (7) Demographic changes Summary about our Business Sejal Architectural Glass Limited (SAGL), was incorporated as private limited in the year 1998 and its constitution was changed to a public limited company in March 08, 1999. Promoted by the members of the Gada family, our company is in the business of processing glass. We have processing facilities for Insulating, Toughened, laminated glasses and for Decorative Glass as well. Our Company’s existing plant is located at Plot No 259/10/1, Village Dadra, Union Territory of Dadra, Nagar Haveli, Dist. Silvassa. Our Company started its commercial operations in the year 2000-01 by setting up a processing facility for insulating glass . As a step forward, we started another process for toughened glass in the year 2001. Since then, our company has expanded its operations by adding an automated lamination line in January 2007. We have broadened our scope of business activities by processing various value added glass for exterior and interior applications, including decorative glass. Our Company has already acquired specific skills and knowledge on the processing and marketing of the glass and now as a step towards backward integration, we propose to set up a new manufacturing facility for float glass with a capacity of 2,00,750 MT per annum at Jhagadia, Dist. Bharuch, Gujarat. We have already acquired 6,08,540 sq. mts of land for this backward integration project and L&T has been awarded as the contractor for executing the construction and civil works. The turnover of our company in the year 2000-01 was Rs. 408.25 Lacs with the PAT of Rs. 48.24 Lacs. During the year 2006-2007 our turnover has increased to Rs. 3824.04 Lacs and PAT has increased to Rs.277.46 Lacs. Our key clients consists of Reliance, K. Raheja, SP Fabricators, L&T, to name a few. Our glass has been used in structures such as Inorbit Mall, Sun Pharma, Mumbai and Baroda, K. Raheja IT Park, Hyderabad, Bangalore International Airport, Mumbai Airport, Domestic terminal. Our Company also operates its trading division from its premises named ‘Sejal Encasa’, which is located at Kandivali, Mumbai. This division trades in various in-house brands as well as other manufacturers products. The products traded include tiles, sanitaryware, mirrors, glass, etc. for home and commercial interiors. Our Competitive Strengths We believe that the following are our competitive strengths: 1. Ability to devise glass solutions 2. High productive and reliable processing and manufacturing technology 3. Our quality policy 25
Page 1 and 2: Draft Red Herring Prospectus Decemb
Page 3 and 4: SECTION I DEFINITIONS AND ABBREVIAT
Page 5 and 6: Term Description Designated Date Th
Page 7 and 8: Term Description Bhandup ( West), M
Page 9 and 10: IPO Initial Public Offer ISO Intern
Page 11 and 12: FORWARD-LOOKING STATEMENTS This Dra
Page 13 and 14: the tax on the additional income of
Page 15 and 16: Risk relating to the project 6. The
Page 17 and 18: amount(s) due to our lender(s), not
Page 19 and 20: utilized portion of the licence. Ad
Page 21 and 22: protect us from entire liability fo
Page 23 and 24: 6. Terrorist attacks and other acts
Page 25: 12. Investors are advised to go thr
Page 29 and 30: BRIEF DETAILS OF THE ISSUE Equity S
Page 31 and 32: Share Application Money 2563.61 296
Page 33 and 34: D Net Profit after Tax but before E
Page 35 and 36: Issue Management Team Book Running
Page 37 and 38: Bank of India Banking Branch M.D.I.
Page 39 and 40: Pursuant to recent amendments to th
Page 41 and 42: Name and Address of the Underwriter
Page 43 and 44: 5 Subdivision of Equity shares of R
Page 45 and 46: Mr. Mitesh K. Gada* Mr. Shantilal S
Page 47 and 48: Capital would be locked-in for a pe
Page 49 and 50: Friends, Relatives and Others 36,74
Page 51 and 52: 3. August 30, 2007 Mr. Nilesh S. Bh
Page 53 and 54: Vinod Velji Shah HUF jointly with M
Page 55 and 56: 9. November 22, 2007 Ms. Diwaliben
Page 57 and 58: 5 Mr. Kanji V. Gada 6,16,250 3.37 6
Page 59 and 60: SECTION V- OBJECTS OF THE ISSUE OBJ
Page 61 and 62: a. Plant & Machinery - Imported i.
Page 63 and 64: Work-in-progress 0.43 months 430.00
Page 65 and 66: We propose to raise Rs. [•] Lacs
Page 67 and 68: Authority for the issue The Issue h
Page 69 and 70: BASIS FOR ISSUE PRICE The issue pri
Page 71 and 72: ii. Lowest - Haldyn Glass Gujarat 5
Page 73 and 74: Benefits available to the Company u
Page 75 and 76: 8. In case of a shareholder being a
Page 77 and 78:
Benefits available to other Non-Res
Page 79 and 80:
Benefits available to Mutual Funds
Page 81 and 82:
Source: Central Statistical Organis
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� Fused silica glass - Fused sili
Page 85 and 86:
The Total Float Glass Manufactured
Page 87 and 88:
increasing demand for hotels/resort
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• Hygenic - Glass is a non-porous
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2. High productive and reliable pro
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We view geographical expansion of o
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Features 93 Toughened Glass is appr
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The excellent dampening property of
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Brief description of the Processes
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c) Lamination Process Process First
Page 103 and 104:
101
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As the batch materials melt into so
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Apollo Hospital Dhaka, Bangladesh B
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Availability of Nitrogen and Hydrog
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With the knowledge and experience o
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Further our company proposes to imp
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Sr. No Name of the trademark regist
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7. Sale deed dated July 14, 2004 be
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3. Standard fire and Special perils
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May 21, 2007. Premium Amount Rs. 6,
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KEY INDUSTRY REGULATIONS AND POLICI
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Changes in the Registered Office of
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2. Non-Compete Agreement between ou
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Sr. No. Name, Age, Designation, Fat
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Sr. No. Name, Age, Designation, Fat
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Compensation to Managing Director/W
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Mr. Mitesh K. Gada, Whole-Time Dire
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Leave travel concession for self an
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emuneration payable to the said Dir
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• To look into the reasons for su
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extent of remuneration and/or reimb
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ORGANISATION CHART OF OUR COMPANY 1
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Sr. No Name, Age and Designatio n S
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OUR PROMOTER AND THEIR BACKGROUND T
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MR. SHANTILAL S. GADA Identificatio
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CURRENCY OF PRESENTATION All refere
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1 st December, 2007 The Board of Di
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STATEMENT OF ASSETS AND LIABILITIES
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NOTES TO RESTATED PROFIT AND LOSS A
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the provision for deferred tax, tim
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ANNEXURE - V Accounting Ratios (Rec
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LOANS AND ADVANCES (UNSECURED, CONS
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Annexure XII (Rs. in lacs) Details
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f Bank of India g Axis Bank 4 Vehic
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ANNEXURE - XIV RELATED PARTY TRANSA
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Travelling Expenses Insurance Premi
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Unsecured Loan received/refund Unse
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FDR refunded 2.50 Interest paid on
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17 Kanji Gada FDR received FDR refu
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26 Shantilal Gada Interest paid on
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CAPITALIZATION STATEMENT ANNEXURE X
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1. The company has generally been r
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FINANCIAL INFORMATION OF GROUP COMP
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2. Sejal International Limited Seja
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Shareholding Pattern: The Sharehold
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27 Mr. Hasmukh B. Shah 5000 0.09 28
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5. Sejal Finance Limited. Sejal Fin
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2. Mitesh Textiles Mitesh Textiles
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Companies with which the Promoters
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FACTORS AFFECTING OUR RESULTS OF OP
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% to Turnover 65.72% 69.06% 63.03%
Page 205 and 206:
Fiscal 2005 Vs 2006 Income Income f
Page 207 and 208:
Related Party Transactions For deta
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SECTION VIII - LEGAL AND REGULATORY
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A complaint bearing Complaint No. 6
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Sejal Glass House has not filed any
Page 215 and 216:
STATUTORY APPROVALS AND LICENSES Ex
Page 217 and 218:
6. Occupancy Certificate bearing no
Page 219 and 220:
Sr. No. Details License No. 1. EPCG
Page 221 and 222:
4. Application bearing no. 1371940
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OR (b)(ii) There shall be compulsor
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FROM ALL THE STOCK EXCHANGES MENTIO
Page 227 and 228:
Further, each Bidder where required
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Expert Opinion Except as stated oth
Page 231 and 232:
This being an initial public offeri
Page 233 and 234:
Principal Terms and Conditions of t
Page 235 and 236:
� to register himself or herself
Page 237 and 238:
ISSUE STRUCTURE This Issue is being
Page 239 and 240:
In case the Bid-Cum-Application For
Page 241 and 242:
2. Hindu Undivided Families or HUFs
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please refer the section titled “
Page 245 and 246:
published in two national newspaper
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Escrow Collection Banks shall trans
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Build Up of the Book and Revision o
Page 251 and 252:
(j) In terms of SEBI Guidelines, QI
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c) Ensure that the details about De
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IT IS MANDATORY FOR ALL THE BIDDERS
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1. On the Bid-cum-Application Form
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Submission of Bid-cum-Application F
Page 261 and 262:
Grounds for Technical Rejections Bi
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) The Bidder must necessarily fill
Page 265 and 266:
Save and except refunds effected th
Page 267 and 268:
(iii) Under-subscription below 5% o
Page 269 and 270:
if any, for encashing such cheques,
Page 271 and 272:
RESTRICTIONS ON FOREIGN OWNERSHIP O
Page 273 and 274:
SECTION X- DESCRIPTION OF EQUITY SH
Page 275 and 276:
MODIFICATION OF RIGHTS Title of Art
Page 277 and 278:
Title of Article Article Number and
Page 279 and 280:
Page 281 and 282:
Page 283 and 284:
Page 285 and 286:
TRANSFER AND TRANSMISSION OF SHARES
Page 287 and 288:
Page 289 and 290:
Page 291 and 292:
Page 293 and 294:
Page 295 and 296:
Page 297 and 298:
Page 299 and 300:
Page 301 and 302:
Page 303 and 304:
Page 305 and 306:
SECTION XI -OTHER INFORMATION MATER
Page 307:
23. SEBI observation letter no. [
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