1
Serial No.: 1
Private & Confidential – For Private Circulation Only
(This Information Memorandum is neither a Prospectus
nor a Statement in Lieu of Prospectus)
ACKRUTI CITY LIMITED
[Incorporated in Republic of India with limited liability under the Companies Act, 1956 with Registration No. 11-50688 and
Corporate Identification Number L45200MH1989PLC050688]
PRIVATE PLACEMENT OF PRINCIPAL PROTECTED FULLY REDEEMABLE NON CONVERTIBLE DEBENTURES
AGGREGATING RS.100,00,00 000 (RUPEES ONE HUNDRED CRORES ONLY)
BACKGROUND: This information memorandum ("Memorandum") relates to Debentures (defined herein below) issued by Ackruti City
Limited ("ACL" or "Issuer") and contains relevant information and disclosures required for the purposes of listing the Debentures. The
Debentures referred in this Memorandum are authorized by the Issuer through a Board (defined herein below) resolution dated October 30,
2010.
GENERAL RISKS: As the Offer/Issue are being made on private placement basis, this Memorandum has not been submitted to or cleared
by Securities and Exchange Board of India ("SEBI"). The Debentures have not been recommended or approved by SEBI nor does SEBI
guarantee the accuracy or adequacy of this Memorandum.
CREDIT RATING: As at the date of this Memorandum, Brickwork Ratings India Pvt. Ltd.has assigned BWR BBB- (Pronounced BWR
Triple B Minus) rating for the Debenture issue. The BWR BBB- (Pronounced BWR Triple B Minus) rating indicates the moderate degree of
credit quality in terms of timely servicing of debt obligations of ACL.
Credit rating issued by Brickwork Ratings India Pvt. Ltd is not a recommendation to buy, sell or hold Debentures or other securities and
investors should take their own decisions. The rating may be subject to revision or withdrawal at any time by the assigned rating agencies
and each rating should be evaluated independently of any other rating. The rating obtained is subject to revision at any point of time in the
future. The rating agencies have the right to and suspend, withdraw the rating at any time on the basis of new information etc.
CREDIT RATING RATIONALE: The crediting rating letter dated 25th July, 2011 issued by Brickwork Ratings India Pvt. Ltd. is
enclosed as an annexure to this Memorandum
GENERAL DISCLAIMER: This Memorandum is neither a prospectus nor a statement in lieu of prospectus and does not constitute an
offer to the public generally to subscribe for or otherwise acquire the Debentures to be issued by the Issuer. This Memorandum is for the
exclusive use of the institutions to whom it is delivered and it should not be circulated or distributed to third parties. It cannot be acted upon
by any person other than to whom it has been specifically addressed. Multiple copies hereof given to the same entity shall be deemed to be
offered to the same person. No document in relation to the Issuer or this issue of Debentures has been delivered for registration to any
authority.
ISSUER’S ABSOLUTE RESPONSIBILITY: The Issuer, having made all reasonable inquiries, confirms that the information contained
in this Memorandum is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions
expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such
information or the expression of any such opinions or intentions misleading in any material respect.
ISSUE SCHEDULE:
Issue Open Date February 24, 2011
Pay in Date March 1, 2011
Issue Close Date March 1, 2011
Deemed Date of Allotment March 1, 2011
LISTING: The Debentures are proposed to be listed on the wholesale debt market segment of Bombay Stock Exchange Limited ("BSE").
ISSUER / ACL DEBENTURE TRUSTEE REGISTRAR & TRANSFER AGENT
Ackruti City Limited
IL&FS Trust Company Limited Link Intime India Private Limited
Registered Office:
Ackruti Trade Centre, 6th Floor, Road
No. 7, MIDC, Andheri (E),
Mumbai – 400 093, India
Tel: +91 22 6703 7400 Fax: +91 22 2821 8230
IL&FS Financial Centre, Plot No. C-22,
G-Block, Bandra Kurla Complex, Bandra (East),
Mumbai 400051
C-13, Pannalal Silk Mills Compound
Lal Bahadur Shastri Marg
Bhandup (West), Mumbai 400 078
2
DISCLAIMER
This Memorandum is neither a prospectus nor a statement in lieu of a prospectus. The issue and
allotment of Debentures to be listed on the BSE has been made strictly on a private placement basis.
This Memorandum has been prepared for the purpose of listing of the NCDs (defined hereinafter)
issued by ACL. It does not constitute and shall not be deemed to constitute an offer or an invitation to
subscribe to the Debentures to the public in general. This Memorandum should not be construed to be
a prospectus or a statement in lieu of prospectus under the Act (defined hereinafter).
This Memorandum has been prepared in conformity with the Regulations (defined hereinafter).
Therefore, as per the applicable provisions, a copy of this Memorandum has not been filed or
submitted to the SEBI for its review and/or approval. Further, since the Issue has been made on a
private placement basis, the provisions of Section 60 of the Companies Act shall not be applicable and
accordingly, a copy of this Memorandum has not been filed with the RoC or the SEBI.
This Memorandum has been prepared for the purpose of listing of the NCDs issued and allotted by the
Issuer. This Memorandum has been prepared to provide general information about the Issuer. This
Memorandum does not purport to contain all the information that any potential investor may require.
Neither this Memorandum nor any other information supplied in connection with the Debentures is
intended to provide the basis of any credit or other evaluation and any recipient of this Memorandum
should not consider such receipt a recommendation to purchase any Debentures. Each investor
contemplating purchasing any Debentures should make its own independent investigation of the
financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the
Issuer.
Potential investors should consult their own financial, legal, tax and other professional advisors as to
the risks and investment considerations arising from an investment in the Debentures and should
possess the appropriate resources to analyze such investment and the suitability of such investment to
such investor's particular circumstances.
The Issuer confirms that, as of the date hereof, this Memorandum (including the documents
incorporated by reference herein, if any) contains all information that is material in the context of the
Issue and sale of the Debentures, is accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state any material fact necessary to make the statements herein,
in the light of the circumstances under which they are made, not misleading. No person has been
authorized to give any information or to make any representation not contained or incorporated by
reference in this Memorandum or in any material made available by the Issuer to any potential
investor pursuant hereto and, if given or made, such information or representation must not be relied
upon as having been authorized by the Issuer.
This Memorandum and the contents hereof are restricted only for the listing of NCDs. All investors
are required to comply with the relevant regulations/guidelines applicable to them. The Issuer does
not undertake to update the Memorandum to reflect subsequent events after the date of the
Memorandum and thus it should not be relied upon with respect to such subsequent events without
first confirming its accuracy with the Issuer.
3
DIRECTORY
1. Name and address of the registered office of the Issuer:
Ackruti City Limited
Ackruti Trade Centre,
6th Floor, Road No. 7,
MIDC, Andheri (E),
Mumbai – 400 093, India
2. Name and addresses of the Directors of the Issuer as on 31st March 2011.
No. Name Position Address
1 Mr. Hemant
Mahipatray
Shah
Executive
Chairman
Akruti, 23-F, 6th Floor, Doongery Road,
Walkeshwar, Mumbai – 400006
2 Mr. Vyomesh
Mahipatray
Shah
Managing Director Akruti, 23-F, 6th Floor, Doongery Road,
Walkeshwar, Mumbai – 400006
3 Mr. Madhukar
Badrilal Chobe
Whole Time
Director
1092, Vanshree CHS, Plot No. 1&2, Sector
58A, Near NRI Complex, Nerul, Navi
Mumbai – 400706
4 Mr. Shailesh
Haridas
Bathiya
Independent
Director
A-5, Haridwar, 2nd
Floor, Mathuradas Road,
Kandivali (W), Mumbai – 400 067
5 Mr.
Devrayapuram
Ramaswamy
Kaarthikeyan
Independent
Director
102, Ground Floor LGF, Anand Lok, New
Delhi – 110049
6 Mr. Abhijit
Datta*
Independent
Director
Apartment 27, Tower 4 Sotuhcity Apartments, 375 Prince Anwar Shah Road, Kolkata- 700068
7 Mr. Arvind
Kumar Joshi*
Independent
Director
Flat-1201, 12th Floor, Satsang Tower, Upper Govind Nagar, Malad (E), Mumbai – 400097
* Appointed with effect from May 16,2011
3. Auditors
M/s. Haribhakti & Co.
Chartered Accountants
42, Free Press House
215 Free press Journal Marg
Nariman Point, Mumbai – 400021.
4
M/s. Doshi Doshi & Associates,
Chartered Accountants,
203, Sharda Chambers No. 1, 31,
Keshavji Naik Road (Narshi Natha Street),
Masjid Bunder,
Mumbai – 400009.
4. Compliance Officer & Contact Person
Mr. Chetan Mody
Company Secretary of ACL
Tel: +91-022-6703 7473
Fax: +91- 022-6703 7555
Email: [email protected]
Investors can contact the compliance officer in case of any post listing related problems.
5
TABLE OF CONTENTS
Sr. No. Particulars Page
No
1 Definitions/Abbreviations & Related Terms 6-7
2 Summary of the Business/Activities of the Issuer and its Line of
Business 8
3 Brief History of ACL 9
4 Borrowings 11
5 Details of Debt Securities sought to be listed 11
6 Utilization of the Issue Proceeds 12
7 Details of Other Borrowings 12
8 Particulars of Debt Securities Issued 12
9 Details of Top 10 shareholders of each kind of securities 12
10 Redemption Amount, Period of Maturity, Yield on Redemption 13
11 Discount and Effective Price 14
12 Debt Equity Ratio - prior to and after issue `14
13 Servicing behavior of existing debts 14
14 Permission/Consent - prior creditor for second charge 14
15 Debenture Trustee(s) for Appointment under Regulation 4 (4) 14
16 Rating Rationale 14
17 Summary Term Sheet 15-16
18 Terms and Conditions of the Debentures `16
19 Who Can Apply 18
20 Procedure and Time of Schedule for Allotment and Issue of
Certificates 18-19
21 Disclaimers Clauses of the Bombay Stock Exchange 20
6
I. Definitions/Abbreviations & Related Terms
Term Meaning/ Definition/ Complete Term
ACL/Issuer shall mean Ackruti City Limited, having its registered office at Ackruti
Trade Centre, 6th Floor, Road No. 7, Marol, MIDC, Andheri (E),
Mumbai 400093.
Act shall mean the Companies Act, 1956.
Andheri Plot shall mean the plot of land and buildings and structures thereon,
situated at C.T.S. No. 833(pt) Survey No. 141-A, Mudran Kamgar
Nagar, Ambivali, Andheri (West).
Articles shall mean Articles of Association of ACL.
Authority shall mean slum rehabilitation authority appointed by GoM vide.
Notification of Housing and Special Assistance Department, No.SRP-
1095/CR-37/Housing Cell, dated December 16, 1995 under the
provisions of section 3-A of the Maharashtra Slum Areas
(Improvement, Clearance and Redevelopment) Act, 1971.
Beneficial
Owner(s)
shall mean debenture holder(s) holding debenture(s) in dematerialized
form (beneficial owner of the Debenture(s) as defined in clause (a) of
sub-section of section 2 of the Depositories Act, 1996).
Board shall mean Board of Directors of ACL as constituted from time to
time.
BSE shall mean Bombay Stock Exchange Limited.
Business Day shall mean any day of the year, other than Saturdays and Sundays and
days when the banks located in Mumbai, India are closed for business.
CDSL shall mean Central Depository Services (India) Limited.
Company
Allocation
shall mean the entitlement to development rights for construction,
development and sale of a residential-cum-commercial complex on
part of the Andheri Plot admeasuring 14,270 square meters.
Company
Allocation
Saleable Area
shall mean entitlement of ACL to grant sub-lease (by whatever name
called) of the built-up area constructed on the Company Allocation,
upon such construction and development of the Company Allocation
which shall be atleast 24,259 square meters.
Completion Date shall mean 1st March 2011.
Chunnabhatti
Plot
shall mean the plot of land and buildings and structures thereon,
situated at Plot No. 627 at Sion Trombay Road, Chunabhatti, Mumbai.
Brickwork shall mean Brickwork Ratings India Pvt. Ltd. or such other rating
agency, appointed from time to time.
Debenture(s) shall mean 10,000 (ten thousand only) NCDs.
Debenture
Holder(s)
shall mean the holder(s) of the Debenture(s) in dematerialised form.
DP shall mean Depository Participant.
Debenture
Trustee
shall mean Trustee for the Debenture holders being IL&FS Trust
Company Limited
FSI shall mean Floor Space Index
7
GOM shall mean Government of Maharashtra
Government
Component
shall mean to construct and develop on a build, operate and transfer
basis for the GoM: (a) 240 quarters on the Chunnabhati Plot, having
built up area of 15,034 square meters; and (b) Udyog Bhavan building
on part of Andheri Plot with a built up area of 15,040 square meters
and 6,188 square meters double storeyed underground parking.
Information
Memorandum
shall mean this Memorandum dated August 23, 2011.
IRR shall mean the Investor's pre-tax internal rate of return calculated on
the Face Value of the Debentures using the "XIRR" function in
Microsoft Excel and using the contributions and advances, including
the Debenture Subscription Amount made on such respective dates
credited as the investment "out-flows", with interest income,
redemption value, and liquidation proceeds of ACL distributed to the
Investor taken into account as "inflows"].
INR/Rs. shall mean the lawful currency of the Republic of India.
Investor ILMS Homepark Private Limited
Issue/ Offer/
Offering
shall mean the Private Placement of principal protected fully
redeemable non convertible debentures aggregating to
[Rs.100,00,00,000 (Rupees one hundred crore only)]
MIDC shall mean Maharashtra Industrial Development Corporation
MMRDA shall mean Mumbai Metropolitan Regional Development Authority
NCDs shall mean secured non-convertible, fully redeemable debentures of
ACL of the face value of Rs.1,00,000 (Rupees one lakh only) each
bearing a coupon rate of 12% (twelve percent) per annum on the terms
and conditions contained in this Memorandum.
NSDL shall mean National Securities Depository Limited
PPP shall mean public private partnership.
Programme shall mean Private Placement of NCDs aggregating to
[Rs.100,00,00,000 (Rupees one hundred crores only)].
Project shall mean the construction, development and transfer to the GoM, of
the Government Component and the construction and development on
the Company Allocation.
Registrar and
Transfer Agent
shall mean Link Intime India Private Limited
RoC/ROC shall mean Registrar of Companies, Maharashtra
Scheme shall mean Slum Rehabilitation Scheme
SEBI shall mean Securities and Exchange Board of India.
SEBI Regulations shall mean The Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008 as amended from time to
time.
Stock Exchange(s) shall mean BSE
URS shall mean urban re-development scheme.
TDR Rights Shall mean transfer of development rights.
8
I. Information Relating to ACL
2.1 Summary of the Business/Activities of the Issuer and its Line of Business
ACL is a leading real estate development company based in Mumbai, India. ACL’s business
is heavily concentrated in the western part of India, the major cities being Mumbai, Thane,
Pune, Surat, Vadodara and Ahmedabad. ACL’s presence in Mumbai is well distributed
among the western & eastern suburbs. At present, its primary business is in the development
of commercial and residential properties. ACL’s operations include the identification and
acquisition of land, land development rights and the planning, execution and marketing of its
projects. ACL’s commercial business operations, inter alia, involve developing, selling and
leasing of commercial office space, including office towers and information technology parks,
with the focal point being development of properties that cater to the IT, ITES & BPO
enterprises. ACL’s residential business operations involve developing multi-unit residential
apartment buildings with residences ranging from one (1) bedroom flats to higher end five (5)
bedroom flats.
ACL’s key focus area of business has been the development of slum lands i.e., slum
rehabilitation projects. In 1992, the GoM initiated the Scheme and since then ACL has
undertaken numerous slum rehabilitation projects. As per the scheme, ACL has to develop
new residential buildings for slum dwellers in the area occupied by slums for which the
Government either grants a right to develop a portion of the slum area for its own purposes or
the TDR Rights which permit ACL to develop land in certain parts of Mumbai which are
located outside the slum area..
Since undertaking the first real estate development project in 1989, ACL has come a long way
and has developed approximately 13 million square feet of developed area, of which
approximately 4.9 million square feet, has been developed through non-slum projects and
approximately 8.1 million square feet has been developed on land made available to it for
development through its participation in slum rehabilitation projects. Currently the areas
under development are approximately 17.08 million square feet out of which 22% is
commercial and 78% residential.
Historically, ACL has predominantly focused its business of real estate development to
Mumbai only. However, as part of its growth strategy, ACL has expanded to cities like Pune,
Thane, Gujarat, and Bengaluru and intends to expand its business to other cities as well. ACL
also intends to further diversify its business by exploring new concepts for large scale
development projects, such as townships, serviced apartments and hotels.
ACL’s total sales, on a consolidated basis, have grown at a CAGR of 37.49% from
Rs. 1894.76 million for the year ended March 31, 2007 to 6767.61 million for the year ended
March 31, 2011. Its profit after tax, on a consolidated basis, has grown at a CAGR of 22.79%
from Rs.775.96 million for the year ended March 31, 2007 to Rs.1761.85 million for the year
ended March 31, 2011.
9
2.2 Brief History of ACL
2.2.1 Business History - Since Incorporation
In 1989, ACL was incorporated, commenced real estate development work and undertook its
first residential development project. Since the introduction of the Scheme in 1992 by GoM,
ACL has undertaken numerous slum rehabilitation projects in Mumbai, the capital of
Maharashtra. In 1992, ACL began its participation in slum rehabilitation projects authorized
by the then competent authority, a government entity that was later converted by statute in
1995 into the Authority. ACL received its first rehabilitation engagement from the Authority
in September 1996 wherein it had to deliver its first new unit for former slum dwellers in
October 1997. In November 2000 ACL completed development of Ackruti Softech Park, a
private software technology park in Mumbai. Subsequently, ACL further expanded its slum
rehabilitation initiative and commenced MIDC and MMRDA projects involving rehabilitation
of housing for more than6,000 families. In 2004, it commenced a large scale residential
project in south Mumbai under the URS. ACL also concluded the process of developing a 20-
storey fully mechanized car park, with capacity for 240 cars, in Breach Candy, Mumbai as a
PPP project.
ACL’s management standards and systems have been recognized by international
certifications. ACL was initially awarded with the ISO 9001-2000 certification in November
2001. Recently, ACL was awarded ISO 9001-2000 in January 2008 for "the design,
construction and maintenance of buildings - residential, commercial, IT and multi-storey
underground mechanized and robotic car parks"
2.2.2 History Since Incorporation - Reorganization, Reconstruction or Amalgamation, Changes in
its Capital Structure and Borrowings
2.2.2.1 Reorganization, Reconstruction or Amalgamation
Not applicable for the issuer company as on Information Memorandum date.
2.2.2.2 Changes in its Capital Structure
Changes in Authorized Share Capital since Incorporation:
Changes in the authorised share capital
Sr.
No.
Date of
Shareholders Meeting Particulars
1 February 16, 1989 Incorporated with Rs. 0.1 million comprising of 1,000 equity shares of
Rs.100 each.
2 June 24, 1993 Increase in authorised share capital from Rs. 0.1 mm to Rs.1 mm
comprising of 10,000 equity shares of Rs.100 each.
3 July 25, 1994 Increase in authorised share capital from Rs.1 mm to Rs.2.50 mm
comprising of 25,000 equity shares of Rs.100 each.
4 January 21, 1997 Increase in authorised share capital from Rs.2.50 mm to Rs.5 mm
comprising of 50,000 equity shares of Rs.100 each.
5 October 8, 1998 Increase in authorised share capital from Rs.5 mm to Rs.20 mm comprising
of 200,000 equity shares of Rs.100 each.
10
Changes in the authorised share capital
Sr.
No.
Date of
Shareholders Meeting Particulars
6 February 13, 2002
Sub-division of one equity share of Rs.100 each into 10 equity shares of
Rs.10 each.
7 May 7, 2004 Increase in authorised share capital from Rs.20 mm to Rs.50 mm
comprising of 5,000,000 Equity Shares of Rs.10 each.
8 April 13, 2005 Increase in authorised share capital from Rs.50 mm to Rs.200 mm
comprising of 20,000,000 Equity Shares of Rs.10 each.
9 January 27, 2006 Increase in authorised share capital from Rs.200 mm to Rs.1,250 mm
comprising of 125,000,000 Equity Shares of Rs.10 each.
Changes in Capital Structure since Incorporation:
Date of
Allotment
No. of Equity
Shares Issued
Face
value of
Equity
Share
Issue
price per
Equity
Share Particulars of Issue
Cumulative
Share
Capital (No.
of shares)
Cumulative
Share
premium, (Rs.)
Cumulative
Share capital
(Rs.)
Feb 16, 1989 20 100 100 Allotment to
Subscriber to
Memorandum
20 0 2,000
Feb 2, 1990 900 100 100 Further issue of
shares
920 0 92,000
Mar 30, 1994 8,120 100 100 Further issue of
shares
9,040 0 9,04,000
Mar 27, 1995 1,960 100 100 Further issue of
shares
11,000 0 11,00,000
Aug 7, 1995 3,000 100 100 Further issue of
shares
14,000 0 14,00,000
Sep 30, 1996 11,000 100 100 Further issue of
shares
25,000 0 25,00,000
Feb 21, 1997 25,000 100 100 Further issue of
shares
50,000 0 50,00,000
Feb 13, 2002 - - - Sub-division of
shares from
5,00,000 0 50,00,000
Rs.100 per share to
Rs.10 per share
Sep 27, 2002 15,00,000 10 - Issue of bonus
shares 3 : 1
20,00,000 0 2,00,00,000
Jan 6, 2006 10,00,000 10 10 Issue of shares on
right basis 1 : 2
30,00,000 0 3,00,00,000
Jan 31, 2006 4,50,00,000 10 10 Issue of bonus
shares 15 : 1
4,80,00,000 0 48,00,00,000
May 12, 2006 1,20,00,000 10 10 Issue of bonus
shares 1 : 4
6,00,00,000 0 60,00,00,000
Feb 5, 2007 67,00,000 10 540 Initial Public Issue
of 67,00,000 Equity
Shares at a premium
of Rs.530 per share
6,67,00,000 355,10,00,000 66,67,00,000
Sep 10, 2009 60,35,871 10 501 QIP of 60,35,871
Equity Shares at a
premium of Rs.491
per share
7,27,35,871 651,46,12,661 72,73,58,710
11
2.2.2.3 Borrowings
Debt details are as at 31st March, 2011 as on Standalone basis is as follows
Secured Loans Rs. Mn
a) Debentures
1,000 Secured Redeemable Non-convertible
Debentures of the face value of Rs. 1,000,000
each , 825
10,000 Secured Redeemable Debentures of a
face value of Rs. 1,00,000 each 1,000
b) Loans from Banks 9,830
c) Loans from Financial Institutions 979
d) Others Loans 473
e) Short Term and Working Capital Loan from
Banks 149
Sub-Total-(A) 13,256
Unsecured Loans
Short Term Loan From Other companies
2,325
Others 161
Sub-Total-(B) 2,485
Grand Total-(A+B) 15,741
2.3 Details of Debt Securities sought to be listed
The Company has issued 10,000 (ten thousand) Debentures on private placement basis to the
Investor. Each of the Debentures having a face value of Rs.1,00,000 (Rupees one lakh only)
aggregate to Rs.100,00,00,000 (Rupees one hundred crores only). For further details of the
Debentures, please refer to the terms and conditions of the Debentures to this Memorandum.
The Debentures are secured, non-convertible, fully redeemable debentures of the face value of
Rs.1,00,000 (Rupees one lakh only) each bearing a coupon rate of 12% (twelve percent) per
annum.
2.4 Mode of Issue
The Debentures have been issued to the Investor on a private placement basis.
12
2.5 Issue Size
The Company has issued 10,000 (ten thousand) Debentures having a face value of
Rs.1,00,000 (Rupees one lakhs only) aggregating to Rs.100,00,00,000 (Rupees one hundred
crores only) on private placement basis.
2.6 Utilization of the Issue Proceeds
The proceeds from the private placement of Debentures is proposed to be utilized for the
purpose of construction and development of the Project.
2.7 Material Contracts, Agreements Involving Financial Obligations of the Issuer
The Issuer has no material contracts and agreements involving financial obligations other than
those in the normal course of the business
2.8 Details of Other Borrowings
There are no other borrowings other than as per details given in Clause 2.2.2.3 under the
heading “Borrowings”
2.9 Material event/ development which may affect the Investor’s Decision
In the opinion of ACL, except the general market risks, there have been no circumstances that
materially and adversely affect or are likely to affect the business of the Issuer or the value of
its assets or its ability to pay its liabilities, within the next twelve months.
2.10 Particulars of Debt Securities Issued
Particulars of the Debt Securities issued (i) for consideration other than cash, whether in
whole or part, (ii) at a premium or discount and (iii) in pursuance of an option
The Issuer has not issued any debt securities for consideration other than cash, at premium, or
at discount or in pursuance of an option
2.11 Details of Top 10 shareholders of each kind of securities
Top 10 shareholders as on 31st March,2011 are as follows
S. No Name of Sharheolder No of shares % Shareholding
1. Mahipatray V Shah HUF 96,00,000 13.20
2. Vyomesh M. Shah 75,40,000 10.37
3. Hemant M. Shah HUF 68,92,000 9.48
4. Falguni V. Shah 63,60,000 8.74
5. Hemant M. Shah 58,00,000 7.97
6. Kunjal H. Shah 53,08,000 7.30
7. Vyomesh M. Shah HUF 4,100,000 5.64
8. Rushank V Shah 3,600,000 4.95
9. Khilen V Shah 3,600,000 4.95
10. Kushal H. Shah 36,00,000 4.95
Total 5,64,00,000 77.54
13
2.12 An undertaking that the issuer shall use a common form of transfer
The Issuer undertakes that there shall be a common form of transfer for the Debentures under
the provisions of the Act and all applicable laws shall be duly complied with in respect of all
transfer of debentures and registration thereof.
2.13 Redemption Amount, Period of Maturity, Yield on Redemption
Tenor 2 years (24 months) 731 days (actual/actual)
Redemption 100% at the end of the Tenor including Optional Redemption period
Redemption
Amount
Redemable at premium so as to entitle the Debenture holder to
receive a pre-tax IRR of 24% on subscription amount, computed
from the date of allotment/issue till redemption
Optional
Redemption
Period
The Issuer shall, at its option, during the period commencing from
the first day of the nineteenth (19th) month from the Completion
Date and ending on the day being one (1) day prior to the Debenture
Redemption Date (the "Optional Redemption Period") redeem the
Investor Debentures. The redemption by the issuer of the Investor
Debentures during the Optional Redemption Period shall be subject
to the following conditions: (i) the number of tranches in which, the
issuer may redeem the Investor Debentures shall be no more than
three (3) tranches; (ii) the minimum amount of the face value of the
Investor Debentures which will be redeemed in each tranche (the
"Tranche Amount") shall be Rs.15,00,00,000 (Rupees fifteen crores
only);(iii) the Company will, at time of making the payment of the
Tranche Amount in each tranche, on the Tranche Redemption Date,
pay the applicable premium together with all outstanding interest
payable on the face value of the Investor Debentures being redeemed
in such tranche (the "Tranche Redemption Amount")
Coupon Rate 12% p.a. payable half yearly.
Coupon Payment Coupon shall be payable every six (6) months by ACL, However,
Coupon shall be paid after expiry of 12 months from the Completion
Date together with coupon for 1st half year.
Computation of
Interest
The holders of the Investor Debentures shall be entitled to receive a
cumulative interest at the rate of 12% (twelve percent), computed on
an annual compounded basis (the "Interest") on subscription
monies. The Interest shall be computed on and from Completion
Date. The first payment of such Interest shall be due on the expiry of
twelve (12) months from the Completion Date.
Trading The debentures will be traded in dematerialized form only.
Security NCDs are secured against (i) Second Charge on the Project.
Settlement Payment of interest and principle will be made by way of cheque(s) /
interest warrant(s) / demand draft(s) / credit through RTGS system
2.14 Discount and Effective Price
The Debentures are being issued at face value and not at discount to offer price.
14
2.15 Debt Equity Ratio - prior to and after issue
Data on a standalone basis as at 31st March, 2011 post debenture issue
2.16 Servicing behavior of existing debts
The Issuer is discharging all its liabilities in time and would continue doing so in future as
well. The Issuer has been regular making payments of interest and other required payments to
the bank and/or financial institutions.
2.17 Permission/Consent - prior creditor for second charge
The Issuer has obtained consent for creating second charge on the Project in favour of
Debenture Trustees
2.18 Debenture Trustee(s) for Appointment under Regulation 4 (4)
IL&FS Trust Company Limited has given consent to the Issuer by its letter dated January 03,
2011 to act as Trustee for the Debenture holders in relation to the Programme. However, as
the Debentures are being issued on a private placement basis, a separate undertaking under
Regulations 4 (4) has not been obtained.
2.19 Rating Rationale
The crediting rating letter dated 25th July 2011 issued by Brickwork Ratings India Pvt. Ltd. is
enclosed as an annexure to this Memorandum
2.20 Stock Exchanges where the Debentures are proposed to be listed
The Debentures are proposed to be listed on the Bombay Stock Exchange Limited. The
designated stock exchange is the Bombay Stock Exchange Limited.
Particulars As on 31 st March 2011 Pre issue ( Excuding issue amount ) Rs Mn
Current
Issue –Rs
Mn
Pro-forma (Post
Debenture Issue) –
Rs Mn
Share Capital 727.36 727.36
Reserve &
Surplus
15,308.06 15,308.06
Net Worth 16,035.42 0.00 16,035.42
Secured Loans 12,255.67 1,000 13,255.67
Unsecured
Loans
2,485.13 2,485.13
Debt 14,740.80 1,000.00 15,740.80
Debt / Equity
Ratio
0.92 0.98
15
2.21 Summary Term Sheet
Issuer Ackruti City Limited
Calculation Agent IL&FS Trust Company Limited
Security Trustee for
Debenture holders
IL&FS Trust Company Limited
Registrar and
Transfer Agent
Link Intime India Private Limited
Depository Central Depositories Services (India) Limited/ National Securities
Depository Limited.
Title/Type Protected Fully Redeemable Non- Convertible Debentures.
Currency INR
Aggregate Principal
Amount
Rupees equivalent of upto Rs.100,00,00,000 (Rupees one hundred
crores only)
Face Value and
Number
Face value of the Debentures is INR.1,00,000 and the number of
Debentures issued are 10,000.
Term Two (2) years – 24 months – 731 days (actual/actual)
Issue Date March 01,2011
Issue Price Rs.1,00,000 (Rupees one lakhs only)
Mode of Placement Private Placement
Stock Exchange BSE
Credit Ratings BWR BBB- (Pronounced BWR Triple B Minus).
Issuance Format In Dematerialised form only
Fixed Cash Coupon The Debentures shall bear a coupon of 12% (twelve percent) per
annum, which shall be accrued and paid half yearly by the Issuer.
Such interest shall accrue from the date on which the subscription
monies are remitted by the Investor. The Interest shall be computed
on and from Completion Date. The first payment of such Interest
shall be due on the expiry of twelve (12) months from Completion
date. Thereafter, the Interest shall be payable every six (6) months
after expiry of 12 Months from Completion Date
Coupon Days First Coupon payment – March 1, 2011 to February 29, 2012 (366 days) (due date March 1, 2012). (actual/actual) Second Coupon payment – March 1, 2012 to August 31, 2012 (184 days) (due date September 1, 2012). (actual/actual) Third Coupon payment - September 1, 2012 to February 28, 2013) (181 days) (due date March 1, 2013). (actual/actual)
Trading In demat mode only
Redemption Amount Redeemable at a premium so as to entitle the holder to receive pre-tax IRR of 24 % on Issue Amount from the date of allotment /issue on its total consideration of Rs.100,00,00,000 (Rupees One Hundred Crores only).
16
Optional
Redemption Period
In the Optional Redemption Period redeem the Investor
Debentures. The redemption by the issuer of the Investor
Debentures during the Optional Redemption Period shall be subject
to the following conditions: (i) the number of tranches in which,
the issuer may redeem the Investor Debentures shall be no more
than three (3) tranches; (ii) the tranche Amount shall be
Rs.15,00,00,000 (Rupees fifteen crores). The Company will, at
time of making the payment of the Tranche Amount in each
tranche, on the Tranche Redemption Date, pay the Tranche
Redemption Amount.
Security The Debentures are secured against (i) Second ranking Charge on
the Project property.
II. Terms and Conditions of the Debentures
3.1 Notices. All notices to the Debenture holder(s) required to be given by the Issuer or the
Trustees will be sent by registered post or by courier to the sole/ first allottee or sole/ first
Beneficial Owner of the Debentures, delivered by hand to the Debenture holder(s), by way of
facsimile or by way of electronic communication, as the case may be from time to time. All
notice(s) to be given by the Debenture holder(s) shall be sent by registered post or delivered
by hand to the Issuer its corporate office, by way of facsimile or by way of electronic
communication.
3.2 Sharing of Information. The Issuer may, at its option, use on its own, as well as exchange,
share or part with any financial or other information about the Debenture holders with the
Issuer, with its subsidiaries and affiliates and other banks, financial institutions, credit
bureaus, agencies, statutory bodies, as may be required and neither the Issuer or its
subsidiaries and affiliates nor their agents to be liable for use of the aforesaid information
3.3 Debenture / Debenture Redemption Reserve. In terms of Section 117C of the Companies Act
every company issuing debentures required to create a reserve for the redemption, to which
adequate amounts are required to be credited, from out of its profits every year until such
debentures are redeemed. Pursuant to a circular dated April 18, 2002 issued by the
Department of Company Affairs, it has been clarified that since the Section requires that the
amount to be credited to the debenture redemption reserve will be carved out of the profits of
ACL only, there is no Obligation on the part of ACL to create redemption reserve if there is
no profit for that particular year.
3.4 Nature & Status of the Debentures. Please refer to Annex 1 to this Memorandum for detailed
terms and conditions of the Debentures.
3.5 Security. Debentures to be issued by the Issuer shall be considered as "secured debentures ".
The security to be provided in relation to the issuance of the Debentures would constitute the
following: (i) Second charge in favour of IL&FS the Debenture Trustee (on behalf of the
Investor), on the (a) Company Allocation Saleable Area; (b) on the all receivables and
advances emanating from, in connection or relating to the Project, including, not limited to,
pre-sales amounts, received (or receivable) as advances from sale, lease, sub-lease or license
of the Company Allocation Saleable Area or otherwise howsoever as security for redemption
of the Investor Debentures; and (ii) personal guarantee by Mr. Vyomesh Shah and Mr. Hemant
Shah.
17
3.6 Tax Deduction at Source (TDS). Tax as applicable under the Income Tax Act, 1961, or any
other statutory modification or re-enactment thereof will be deducted at source. For seeking
TDS exemption/ lower rate of TDS, relevant certificate(s)/ document(s) must be lodged at
least thirty (30) days before the interest becoming due with the Company or to such other
person(s) at such other address(es) as the Issuer may specify from time to time through
suitable communication. Tax exemption certificate/ declaration of non-deduction of tax at
source on interest on application money, should be submitted along with the Application
Form. Where any deduction of Income Tax is made at source, the Issuer shall send to the
Debenture holder certificate of Tax Deduction at Source
3.7 Tax Benefits. Tax benefits available to Debenture holders would depend on the nature of
Debenture being issued under this Memorandum. Debenture holders are advised to consult
their own tax advisers on the tax implications of the acquisition, ownership and sale of
Debentures, and income arising thereon.
3.8 Debentures held in Dematerialized Form. As the Debentures will be held in dematerialised
form, no action is required on the part of the Debenture holder(s) at the time of redemption of
the debentures and on the Redemption date, the redemption proceeds would be paid to those
Debenture holder(s) whose name(s) appear on the list of beneficial owners given by the
Depositories to the Issuer through the Debenture Trustee. The name(s) would be as per the
Depositories' records on the Record Date fixed for the purpose of redemption. All such
Debentures will be simultaneously redeemed through appropriate debit corporate action.
The Issuer’s liability to redeem the Debentures on the date of redemption shall stand
extinguished upon payment of all amounts due on redemption to the Debenture holders and
the Issuer will be liable to pay any interest, income or compensation of any kind from the date
of redemption of the Debenture(s), upon payment of such amounts due to the Debenture
holders.
3.9 Depository Arrangements. The Issuer has appointed Link Intime India Private Limited as
Registrar and Transfer Agent for the present Debenture issue. The Issuer shall make necessary
depository arrangements with National Securities Depository Limited (NSDL) for holding of
Debentures in dematerialised form.
3.10 The Company shall pay an interest on the Redemption Amount at the rate of thirty six percent
(36%) per annum if the Company delays or defaults in redeeming the Investor Debentures or
the outstanding Investor Debentures to the extent not redeemed which shall be computed from
the due date of redemption till the date of the actual payment of the Redemption Amount. On
the date of actual redemption of the Investor Debentures, the Company shall pay to the holder
of the Investor Debentures, an amount equivalent to the Redemption amount together with the
default interest (the "Revised Redemption Price"). If the default in the redemption of the
Investor Debentures continues for more than ninety (90) days from the due date, the
Company shall pay on the Revised Redemption Price, interest at the rate of forty two percent
(42%) per annum which shall be computed from the due date till the date of the actual
payment; along with the costs incurred by the Investor in connection with the legal and
advisory fees, other costs and expenses incurred by it in this regard, (collectively referred to
as the "Default Compensation") and on the date of actual redemption of the Investor
Debentures, the Company shall pay to the holder of the Investor Debentures, an amount
equivalent to the Default Compensation.
18
III. Who Can Apply
Nothing in this Memorandum shall constitute and/or deem to constitute an offer or an
invitation to an offer, to be made to the Indian public or any section thereof through this
Memorandum and this Memorandum and its contents should not be construed to be a
prospectus under the Companies Act.
Only investors, who have been addressed through a communication directly, are eligible to
apply. No other investor can apply. The categories of the investors, who whom the
communication has been directed, are financial institutions, banks, mutual funds, insurance
companies, companies and body corporate, and any other investor authorized to invest in the
debentures. Furthermore, NRIs and other persons resident outside India are not eligible to
apply for or hold the Debentures.
All investors to comply with relevant regulations/guidelines applicable to them for investing
in issue of Debentures.
IV. Procedure and Time of Schedule for Allotment and Issue of Certificates
The Debentures under this Offer have already been allotted by the Committee of Directors at
its meeting held on 1st March, 2011. The Company had issued the relevant debenture
certificate in physical form which the investor has subsequently dematerialized.
Market Lot
The market lot will be one Debenture ("Market Lot"). Since the Debentures are being issued
only in dematerialized form, the odd lots will not arise either at the time of issuance or at the
time of transfer of Debentures.
Letter(s) of Allotment/ Debenture Certificate(s)/ Refund Order(s)
Issue of Debenture Certificate(s)
The Debentures once issued in electronic (dematerialized) form, will be governed as per the
provisions of The Depository Act, 1996, SEBI (Depositories and Participants) regulations,
1996, rules notified by NSDL/CSDL/ depository participant from time to time and other
applicable laws and rules notified in respect thereof..
Mode of Transfer of Debentures
(a).Transfer: Debentures shall be transferred subject to and in accordance with the rules/
procedures as prescribed by the [NSDL/CDSL/DP] of the transferor/ transferee and to other
applicable laws and rules notified in respect thereof. The normal procedure followed for
transfer of Securities held in dematerialized form shall be follow for transfer of these
Debentures held in electronic form. The seller should give delivery instructions containing
details of the buyer’s details and DP account to his DP.
19
(b).Succession. In the event of demise of a Debenture holder or the first holder in the case of
joint holders, ACL will recognize the executor or administrator of the demised Debenture
holder or the holder of succession certificate or other legal representative of the demised
Debenture holder as the Debenture holder of such Debentures, if such a person obtains
probate or letter of administration or is the holder of succession certificate or other legal
representation, as the case may be, from a court in India having jurisdiction over the matter
and delivers a copy of the same to ACL. ACL may in its absolute discretion, where it thinks
fit, dispense with the production of the probate or letter of administration or succession
certificate or other legal representation, in order to recognize such holder as being entitled to
the Debentures standing in the name of the demised Debenture Holder(s) on production of
sufficient documentary proof or indemnity. In case a person other than individual holds the
Debentures, the rights in the Debentures shall vest with the successor acquiring interest
therein, including liquidator or such any person appointed as per the applicable law.
Governing Laws and Jurisdiction
The Debentures are governed by and will be construed in accordance with the Indian laws.
ACL, the Debentures and ACL’s obligations under the Debentures shall, at all times, be
subject to the directions of the RBI and the SEBI. The Debenture Holders, by purchasing the
Debentures, agree that the Mumbai High Court shall have exclusive jurisdiction with respect
to matters relating to the Debentures.
List of Beneficial Owners
The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end of
the Record date for payment of interest or redemption and other amounts due in respect of the
Debentures as the case may be.
Trustees for the Debenture holder
The Issuer has appointed IL&FS Trust Company Limited, to act as Trustees for the Debenture
holders. A letter received from IL&FS Trust Company Limited, dated January 3, 2011
conveying their consent to act as Trustees for the Debenture holders has been obtained by the
Issuer.
The Issuer and the Trustees have entered into a Debenture Trust Deed on February 24th, 2011,
interalia, recording the powers, authorities and obligations of the Trustees and the Issuer. The
Debenture holder(s) will, without further act, is deemed to have irrevocably given their
consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds,
matters and things in respect and or relating to the Debentures as the Trustees may in their
absolute discretion deem necessary or require to be done in the interest of the Debenture
holder(s). All payments made by the Issuer to the Trustees on behalf of the Debenture
holder(s) shall discharge the Issuer pro rata to the Debenture holder(s) to the extent of such
payments. The Trustees will protect the interest of the Debenture holders in the event of
defaults by the Issuer with regard to timely payment of interest, redemption and other
amounts due with respect of the Debentures and they will take necessary actions at the cost of
the Issuer. No Debenture holder shall be entitled to proceed directly against the Issuer unless
the Trustees, having become so bound to proceed, fail to do so.
20
Filing of Information Memorandum
As per extant SEBI guidelines/ regulations, filling of this Memorandum is required either with
SEBI, RoC or any other regulatory authority(ies).
Disclaimers Clauses of the Bombay Stock Exchange
As required, a copy of this Memorandum will be submitted to the BSE for hosting the same
on its website. It is to be understand that such submission of the Memorandum to BSE or
hosting the same on its website should not in any way / or any manner be deemed or
construed that the Memorandum has been cleared or approved / or passed by BSE; nor does it
in any manner whatsoever warrant, certify or endorse the correctness or completeness of any
of the contents of this Memorandum; nor does it warrant that the Issuer’s securities will be
listed or continue to be listed on the BSE; nor does it take responsibility for the financial or
other soundness of this Issuer, its promoters, its management or any scheme or project of this
Issuer.
All persons who desires to apply for or otherwise acquires any/and Debentures or other
securities of this Issuer may do so and to the pursuant to independently inquire, investigate
and analysis and will not have any claims against the BSE whatsoever by reason of any loss
which may be suffered by such person consequent to or in connection with such subscription/
acquisition/purchase whether by reason of and anything stated or omitted to be started herein
or any other reason whatsoever in the manner anyone wants.
Signed by Mr. Chetan Mody pursuant to the authorities granted by the Board of Directors
of the Issuer at their meeting held on October 30, 2010.
For Ackruti City Limited
Chetan S. Mody
Company Secretary
Dated: August 23, 2011
Place: Mumbai