INFORMATION MEMORANDUM€¦ · [Type text] 2015 INFORMATION MEMORANDUM SRI NARAYAN RAJ KUMAR...

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2015

INFORMATION MEMORANDUM

SRI NARAYAN RAJ KUMAR MERCHANTS LTD

Regd. Office: Anand Jyoti Building, 41 Netaji Subhas Road, Room

No.107, 1st floor, Kolkata, West Bengal- 700001

Contact No.: 0129-4092008, 4092034


2 INFORMATION MEMORANDUM


A Private Limited Company in the name of Sri Narayan Rajkumar Merchants Private Limited incorporated in the year 1968 became Public Limited Company in the year 1994 and a fresh certificate thereto in the name of Sri Narayan Rajkumar Merchants Limited was issued to the company on 17.11.1994 by the Registrar of Companies West Bengal, Calcutta.

The Corporate Identification Number of the Company is L51109WB1968PLC027338

Registered Office : Anand Jyoti Building, 41 Netaji

SubhasRoad, Room No.107, 1stfloor,

Kolkatta, West Bengal- 700001.

Corporate Office : 602, Chiranjiv Tower, 43 Nehru Place

New Delhi -110019.

Phone No. : +91-11-41674116, 26414057

Website : www.snrmerchant.com

E-Mail : [email protected]

Company Secretary and

Compliance officer

:

Mr. Avinash Pratap

Registrar & Share Transfer Agent : M/s. Beetal Financial & Computer

Services (P). Ltd

Beetal House, 3rd Floor, 99 Madangir,

Behind Local Shopping Centre, Near

Dada HarsukhdasMandir,New Delhi,

Delhi,110062.

http://www.snrmerchant.com/

mailto:[email protected]



NO EQUITY SHARES ARE PROPOSED TO BE ISSUED OR OFFERED PURSUANT TO THIS


INFORMATION MEMORANDUM FOR PROPOSED LISTING AT METROPOLITAN STOCK

EXCHANGE OF INDIA LIMITED

GENERAL RISK

Investment in Equity and Equity related securities involve a degree of risk and

investors should not invest in the equity shares of SRI Narayan Raj Kumar

Merchants Ltd unless they can afford to take the risk of losing their investment.

Investors are advised to read the risk factors carefully before taking the

investment decision in the shares of SRI Narayan Raj Kumar Merchants Ltd. For

taking an investment decision, investors must rely on their own examination of

the Company including the risk involved.

ABSOLUTE RESPONSIBILITY OF SRI NARAYAN RAJ KUMAR MERCHANTS LTD

SRI Narayan Raj Kumar Merchants Ltd having made all the reasonable inquiries,

accepts responsibility for, and confirms that this Information Memorandum

contains all information with regard to SRI Narayan Raj Kumar Merchants Ltd

which is material, that the information contained in the Information

Memorandum is true and correct in all material aspects and is not misleading in

any material aspect, that the opinions and intentions expressed herein are

honestly held and that there are no other facts, the omission of which makes this

Information Memorandum as a whole or any of such information or the

expression of any such opinions or intentions misleading in any material aspect.

LISTING

The Equity shares of SRI Narayan Raj Kumar Merchants Ltd are listed on Calcutta

Stock Exchange and are further proposed to be listed on MSEIL Limited pursuant

to the Secondry listing norms of the exchange.



TABLE OF CONTENTS

S. No Title

I. Definitions and Abbreviations

II. Risk Factors 1. Certain Conventions – Use of Financial, Industry, Market

Data & Currency Information 2. Forward – Looking Statements 3. Risk Factors

III. Introduction 1. Industry Overview 2. Business Overview 3. Management Discussion and Analysis

4. General Information 5. Capital Structure 6. Share Capital History of the Company 7. Summary of Financial Information 8. Corporate Governance 9. Shareholding Structure 10. Statement Showing the Details of Dividends and Cash

bonuses paid during the last 10 years. 11. Details of commission, brokerage, discount or option for

the issue of any kind of security granted too any person IV. About SRI Narayan Raj Kumar Merchants Ltd

1. History 2. Management 3. Promoters and Key Management Personnel

V. Outstanding Litigations VI. Material Contracts and Agreements

VII. Details of group/Subsidiary Companies

VIII. Declaration



I. DEFINITION AND ABBREVIATIONS

Term Description

“The Company” or “Company” or “SNRML”

SRI Narayan Raj Kumar Merchants Ltd, a Company

incorporated under the provisions of the Companies Act,

1956 having its registered office at Anand Jyoti Building, 41

Netaji Subhas Road, Room No.107, 1st floor, Kolkata, West

Bengal- 700001.

Conventional / General Terms / Abbreviations

Term Description

Act or Companies

Act

The Companies Act, 1956 and the amendments made

thereto from time to time

Article or AOA. Articles of Association of SNRML

AGM Annual General Meeting

Auditors The Statutory Auditors of SNRML

Board of Directors /

Board

The Board of Directors of SNRML

MSEIL MSEIL Limited

CDSL Central Depository Services (India) Limited

CSE Calcutta Stock Exchange Limited

Depository A Depository registered with SEBI under the Securities

and Exchange Board of India (Depositories and

Participants) Regulations, 1996, as amended

Depository

Participant / DP

A Depository Participant as defined under the

Depositories Act



DIN Director Identification Number

Director(s) Director(s) of SNRML, unless otherwise specified

EGM / EoGM Extraordinary General Meeting of the Shareholders of the

Company

EPS Earnings Per Share i.e. profit after tax per share

Equity Shares Equity Shares of the Company of face value of Rs. 10/-

each, unless otherwise specified in the context thereof

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999, together with

rules and regulations there under

Financial Year /

Fiscal Year / FY

12 months period ending on March 31 of a particular year

HUF Hindu Undivided Family

IM Information Memorandum

IT Information Technology

I.T. Act The Income Tax Act, 1961

MD Managing Director

MOA. Memorandum of Association of SNRML

N.A. / N/A Not Applicable

NAV Net Asset Value

NCR National Capital Region

NCT National Capital Territory

NSDL National Securities Depository Limited

p.a. Per annum

PAN Permanent Account Number allotted under the Income



Tax Act, 1961 of India

RBI Reserve Bank of India

RoC Registrar of Companies, West Bengal

Rs. / Rupees / ` Indian Rupees

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI Securities and Exchange Board of India constituted under

the Securities and Exchange Board of India Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992

SEBI Insider Trading

Regulations

Securities and Exchange Board of India (Prohibition of

Insider Trading) Regulations, 1992

SEBI (SAST)

Regulations / SEBI

Takeover Code

Securities and Exchange Board of India (Substantial

Acquisition of Shares and Takeover) Regulations, 2011

USD / $ U.S. Dollar

WTD Whole-time Director(s)



II. RISK FACTORS

1. CERTAIN CONVENTIONS-USE OF FINANCIAL, INDUSTRY & MARKET

DATA AND CURRENCY OF PRESENTATION

Financial Data

Unless indicated otherwise, the financial data in this Information Memorandum

is derived from our financial statements prepared in accordance with the

Generally Accepted Accounting Principles in India (“Indian GAAP”) and the Companies Act, 1956, as amended (“Companies Act”) included elsewhere in this Information Memorandum. The financial year commences on April 1 and ends on

March 31, so all references to a particular financial year are to the twelve-month

period ended March 31 of that year. In this Information Memorandum, any

discrepancies in any table between the total and the sums of the amounts listed

are due to rounding off.

Industry and Market Data

Unless stated otherwise, industry data and the market data used throughout this

Information Memorandum have been obtained from industry publications,

websites and other authenticated published data. Industry publications generally

state that the information contained in those publications has been obtained from

sources believed to be reliable but that their accuracy and completeness are not

guaranteed and their reliability cannot be assured. Although, the Company

believes that industry data used in this Information Memorandum is reliable, it

has not been independently verified. Similarly, internal company reports, while

believed by us to be reliable, have not been verified by any independent sources.

The extent to which the market and industry data used in this Information

Memorandum is meaningful depends on the readers familiarity with the

understanding of the methodologies used in compiling such data. There are no

standard valuation methodologies or accounting policies in the said industry in

India and methodologies and assumptions may vary widely among different

industry sources.

Currency Information

All references to “Rupees” or “Rs.” or “INR” or “`” are to Indian Rupees, the

official currency of the Republic of India. All references to “$”, “US$”, “USD”,



“U.S.$”, “U.S. Dollar(s)” or “US Dollar(s)” are to United States Dollars, the official currency of the United States of America.

2. FORWARD LOOKING STATEMENTS

This Information Memorandum contains certain words or phrases, including,

“will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “would”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are forward-looking

statements. All forward-looking statements are subject to risks, uncertainties and

assumptions that could cause actual results to differ materially from those

contemplated by the relevant forward-looking statement.

Important factors that could cause actual results to differ materially from the

Company’s expectations include, among others:

Changes in law and regulations that apply to the industries in India,

wherein the Company is operating;

Increasing competition and the conditions of the customers of the

Company;

Changes in Government Policies;

The Company’s ability to successfully implement its strategy, growth and expansion plans;

General economic and business conditions in the markets in which the

Company operates and in the local, regional and national economies;

Changes in the value of the Rupee vis-à-vis other currencies;

Changes in political and socio-economic conditions in India;

The Company’s ability to meet its capital expenditure requirements; Fluctuations in operating costs;

Company’s ability to attract and retain qualified personnel; Changes in technology;

The performance of the financial markets in India and globally; and

Any adverse outcome in the legal proceedings in which the Company is

involved.



3. NBFC SECTOR: OVERVIEW & RISK FACTORS

For a large and diverse country like India, ensuring financial access to fuel growth

and entrepreneurship is a critical priority. Banking penetration continues to be

low, and even as the coverage is sought to be aggressively increased through

programs like the Pradhan Mantri Jan Dhan Yojana, the quality of coverage and

ability to access comprehensive financial services for households as well as small

businesses is still far from satisfactory. In this scenario, the Non-Banking Finance

Companies (NBFC) sector has scripted a story that is remarkable. It speaks to the

truly diverse and entrepreneurial spirit of India. From large infrastructure

financing to small microfinance, the sector has innovated over time and found

ways to address the debt requirements of every segment of the economy. To it’s

credit, the industry has also responded positively to regulatory efforts to better

understand risks and to address such risks through regulations. Over time, the

sector has evolved from being fragmented and informally governed to being well

regulated and in many instances, adopted best practices in technology,

innovation and risk management as well as governance. There has been greater

recognition of the role of NBFCs in financing India’s growth in the recent past,

even as global debates on systemic risks arising from non-banks have travelled to

Indian shores and led to somewhat fundamental shifts in the policy environment

governing NBFCs. Much public discussion and regulatory action later, clarity

regarding goals and signposts of public policy have emerged. Scepticism about

‘shadow banks’ has settled to a more healthy understanding of the risks and

rewards of a diverse financial system. For the industry, there are some costs

associated with greater regulations, but the opportunity of being a well regulated

participant in the financial system is likely to outweigh the costs in the long run.

We believe that some shadow zones persist in the regulatory landscape, but there

is enough clarity for NBFCs to define their way forward. We congratulate The

Associated Chambers of Commerce & Industry of India (ASSOCHAM) for taking



this dialogue forward when the country is looking forward to capitalizing on its

potential aggressively.

Analysing the Revised Regulatory Framework for NBFCs

The roller coaster liquidity ride post the global financial crisis witnessed Indian

NBFCs facing a predicament. Many of them had a favorable business opportunity

to convert the available liquidity into short-term, profitable assets as the banking

system and infrastructure-focused NBFCs dealt with asset quality issues. On the

other hand, global regulatory attention on shadow banks brought the spotlight on

their operations, governance, liquidity management and most of all, linkages

with the banking system. Although the impact of the global financial crisis on

India was limited, it left its marks on the regulatory psyche. Prior to this, the

NBFC regulation had evolved in phases. Some phases were marked with great

benevolence, such as the registration of all entities with minimum capital and

priority sector benefits to portfolio origination for banks. In contrast, some were

marked with adverse business impact, such as restricting the flow of funds from

banks to NBFCs and expression of displeasure with ‘high growth’ and concerns

of systemic risks. The Working Group under the Chairmanship of Smt. Usha

Thorat (hereinafter referred to as the ‘Thorat Committee) and the Committee on

Comprehensive Financial Services for Small Businesses and Low Income

Households under the Chairmanship of Dr. Nachiket Mor (hereinafter referred to

as the ‘Mor Committee’) were landmarks in aggregating concerns and issues and

throwing up ideas and recommendations for discussions. In this context of high

anxiety levels, the final guidelines released in November 2014 by Reserve Bank of

India (RBI) came as a polite regulatory action. Few hoped for retaining the status

quo on classification of nonperforming assets (NPA). Even to them, the extended

implementation timelines and one-time restructuring exemption will lessen the

pain. Apart from being a milestone in the NBFC regulations, these guidelines also

mark an interesting shift in the regulatory approach-that of activity-based



regulation. The NBFC sector has created for itself the type of differentiation that

was not possible within the universal banking construct. The sector is thus,

marked by remarkable diversity of players and businesses that act as an effective

layer of financial intermediation between the informal sector of the economy and

the formal sector of finance. NBFCs can claim credit for converting many Indians

to first time users of formal, regulated financial system.

Evolution of the regulatory framework for NBFCs In 1964:

Chapter III B of the Reserve Bank of India Act, 1934 was introduced to regulate

NBFCs-D. Various expert committees – the most noteworthy being the

Narasimham Committee and the Working Group on Financial Companies

chaired by Dr. A. C. Shah – were formed to evaluate and provide their inputs on

the role of NBFCs in the financial sector, their growth potential, and the

regulatory changes that could be introduced to bridge the inefficiencies / gaps in

the sector. Many of the recommendations of these committees were gradually

interwoven into the fabric of the regulations for the NBFC sector.

NBFCs asset growth and composition of advances NBFCs have grown rapidly in

India and that is reflected from their asset growth pattern over the years. NBFCs,

over a period, have created product niches in sectors like infrastructure finance,

automobile finance, gold loans, personal finance and capital markets. Others

Unsecured retail Capital Market Consruction Equipment Cars Mortgage /

Housing Gold Loans Corporate Loans Commercial Vehicles Infrastructure

NBFCs-ND-SI were also witnessing a stress in the asset quality over the last 3-5

years due to economic slowdown and weak operating environment. The

increased positivity in the business environment can be evidenced by the

significant drop in the NPA levels in 2014. However, given the fact that asset

classification norms have been strengthened in the revised regulatory framework,

one could expect to see higher NPA levels in the upcoming yearsGross NPAs to

Gross Advances Net NPAs to Net Advances NBFC profitability and



Non-performing asset growth The NBFC sector has shown a consistent

year-on-year growth in net profits over the last few years. The effects of the

market recovery are evident especially in the year 2014. With the Government

and RBI’s increased focus on financial inclusion, one could expect a continued

growth run in the near future.

The growing reliance of NBFCs on bank funding could place a strain on the banks

if NBFCs were to deleverage under conditions of stress. NBFCs themselves could

also face difficulties if banks were to become reluctant to lend to them in case of a

liquidity crunch.” “ – Financial Stability Board (FSB)

Growing bank advances to NBFCs Banks have been a major funding source of

NBFCs and the rapid growth in bank advances reflects an increasing dependency

of NBFCs on leverage from banks. The graph below depicts the growth in bank

advances obtained by NBFCs over the last seven years. The increasing

inter-linkage between banks and NBFCs has spurred the RBI to introduce

additional safeguards to contain systemic risks.

JOURNEY SO FAR

The aftermath of the financial crisis highlighted the importance of increasing the

scope of NBFC regulations to account for the risks that arise from regulatory gaps,

arbitrage opportunities and from the linkages and inter-dependence of the NBFC

sector with the rest of the financial system. There was a need to harmonise the

entire framework so that the objectives of the RBI could be met in an efficient way,

while ensuring that the impact on business and at the same time, the impact on

business operations remained minimal or was phased over time. In light of this,

the RBI in March 2011, constituted the Thorat Committee to examine the risks in

the NBFC sector and recommend appropriate measures to address these risks

with the aim of creating a robust financial sector.



All NBFCs - Achieve the Principal Business criteria (PBC) within 2 years with

prescribed milestones (March 2014 - 65% and March 2015 - 75%)

NBFC-ND - If applicable, approach RBI with plan to achieve INR 25 crore in

assets within 2 years

NBFC-D - Achieve 75% PBC threshold by March 2015 else banned from raising

deposits / repayment of deposits

Asset classification and provisioning norms

• To be made similar to that as applicable to banks

• Implementation in phases

• Standard assets provisioning raised from 0.25% to 0.40%

Recovery norms & liquidity requirements

• Maintenance of high liquid assets; no liquidity gap in 1-30 day bucket

• Extension of SARFAESI framework Corporate Governance of NBFC

• Prior RBI approval for: – Any change in control or increase in shareholding

greater than 25% of equity – Mergers and acquisitions – Appointment of CEO

• Fit & proper criteria for directors

• Remuneration committee for compensation to executives

• Enhanced disclosure requirements

Tier 1 capital adequacy & Risk Weights

• NBFCs having exposure to sensitive sectors namely, capital market,

commodities and real estate to maintain Tier 1 capital at 10%

• Captive NBFCs – minimum 12% of Tier I Capital



• Higher risk weights of 150% for capital market exposures and 125 % for

commercial real estate exposures

Multiple NBFCs in a Group

• Assets to be aggregated for registration and regulation The Thorat Committee

report proposed a revised classification scheme concomitant with stringent

capital adequacy, liquidity, provisioning and corporate governance norms.

Minimum net owned funds of Rs. 2 Crores for all NBFCs Under the extant law, all

NBFCs registered after April 21, 1999 are required to have minimum net owned

funds (NOF) of Rs.2 crore. However, a large number of NBFCs which were

registered prior to that date were permitted to continue to maintain minimum

NOF of Rs.25 lakh. It is apparent that NBFCs with a minimum capital below Rs.2

crore are likely to be carrying out very limited business activities, if any.

Considering that a higher NOF would be required for the adoption of advanced

technology and to ensure a sufficient capital base for the diverse activities

conducted by NBFCs, the minimum NOF of Rs.2 crore is now being made

mandatory for all NBFCs, whether registered prior to or post April 21, 1999 . All

NBFCs are required to attain a minimum NOF level of Rs.1 crore by the end of

March 2016 and Rs.2 crore by the end of March 2017.

Conclusion The extension of the corporate governance compliance procedures to

NBFC-ND is certainly a step in the right direction as this will help ensure that the

management of NBFCs is of “fit and proper” character and help build investor/

customer confidence. However, the RBI will still need to provide clarity on a

number of aspects for the effective implementation and compliance with the

regulations. Furthermore, adequate guidance is still awaited on the details of the

application process, application format, supporting documentation required, etc.

that have been specifically prescribed with respect to fresh NBFC applications, to

ensure simplicity and transparency in the process, resulting in awareness both



amongst the applicants and the RBI officials reviewing the application, thereby

ensuring the efficient disposal of applications.

Management Perception

We require substantial amounts of working capital for our business

operations, and the failure to obtain needed working capital on attractive

terms or at all, may materially and adversely affect our growth prospects and

future profitability. We require substantial capital to maintain and operate.

Our ability to obtain additional financing on favorable commercial terms or at

all will depend on a number of factors, including:

our future financial condition, results of operations and cash flows;

covenants and restrictions in existing debt;

general market conditions for financing activities; and

economic, political and other conditions in the markets where we

operate.

Any new borrowings could include terms that restrict our financial flexibility,

including the debt we may incur in the future, or may restrict our ability to

manage our business as we had intended. If we are unable to renew existing

funding or obtain additional funding in a timely manner or on acceptable

terms, our growth prospects, competitive position and future profitability

could be materially and adversely affected.

Any unfavorable outcome in legal proceedings initiated by or against us may

adversely affect our operations and profitability.


A number of judicial, arbitral, administrative and other proceedings have

been initiated by and/or against our Company and are pending adjudication

before various authorities, which have arisen in the ordinary course of

business of our Company. In the event that a substantial portion of these

proceedings or one or more of the proceedings involving a substantial amount

are decided against us, our operations and profitability could be adversely

affected. For further details, please refer to the section titled “Legal Proceedings.”



A. EXTERNAL FACTORS

1. A slowdown in economic growth in India could cause business to suffer.


The performance and growth of the company and the industry are dependent

on the health of the Indian economy as well the secondary industries. The

economy could be adversely affected by various factors such as political or

regulatory action, including adverse changes in liberalization policies, social

disturbances, terrorist attacks and other acts of violence or war, natural

calamities, interest rates, commodity and energy prices and various other

factors.

Any slowdown in the Indian economy may adversely impact business

andfinancial performance and the price of Equity Shares.

2. Political instability or changes in the government could delay the

liberalization of the Indian economy and adversely affect economic

conditions in India generally, which could impact financial results and

prospects.

Since 1991, successive Indian governments have pursued policies of economic

liberalization, including significantly relaxing restrictions on the private

sector. Nevertheless, the role of the Indian central and state governments in

the Indian economy as producers, consumers and regulators has remained

significant. The leadership of India has changed many times since

1996.Although the current government has announced policies and taken

initiatives that support the economic liberalization policies that have been

pursued by previous governments, the rate of economic liberalization could

change, and specific laws and policies affecting industry, foreign investment

and other matters affecting investment in securities could change as well.

3. Any downgrading of India’s debt rating by an independent agency may harm ability to raise debt financing.

Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely affect ability to raise

additional financing and the interest rates and other commercial terms at

which such additional financing is available. This could have a material

adverse effect on capital expenditure plans, business and financial



performance.

4. Terrorist attacks, civil unrest and other acts of violence or war involving

India and other countries could adversely affect the financial markets and our

business.

Terrorist attacks and other acts of violence or war may negatively affect the

Indian financial markets and also adversely affect the worldwide financial

markets. In addition, any deterioration in relations between India and its

neighboring countries might result in investor concern about stability in the

region, which could adversely affect the business. India has witnessed civil

disturbances in the past and it is possible that future civil unrest as well as

other adverse social, economic and political events in India could have a

negative impact. Such incidents could also create perception in the minds of

investors that, investment in Indian Companies involve a higher degree of

risk.

5. Natural calamities could have a negative impact on the Indian economy and

cause our business to suffer.

India has experienced natural calamities such as earthquake, tsunami, floods

and drought in the past. The extent and severity of these natural disasters

determines their impact on the Indian economy, which have a adverse impact

on our business.

6. Factors affecting Indian economy in general

Like any other entity, our financial results are also affected by the macro

economic factors determining the growth of the Indian economy in general

and continued growth of the securities market. The Growth of our business

and ability to maintain the growth is influenced by the growth rate of the

securities market indicators. Any slowdown in Indian economy or slowdown

in securities market or any changes in government regulation could have an

impact on our financial performance.



III. INTRODUCTION

1. Overview:

A Private Limited Company in the name of Sri Narayan Rajkumar Merchants

Private Limited incorporated in the year 1968 became Public Limited Company in the year 1994 and a fresh certificate thereto in the name of Sri Narayan Rajkumar Merchants Limited was issued to the company on 17.11.1994 by the Registrar of Companies West Bengal, Calcutta.

The company went for a Public Issue on 06.02.1995 by launching 22,50,000 Equity Shares of Rs.10/- each at par which were fully subscribed and the total paid up capital of the company after the said Public Issue stood at Rs.3,00,00,000/- since shares worth Rs.75,00,000/- were held by the promoters.

The company in the initial years took up trading of steel pipes and tubes and in the year 1998 got itself registered with the Reserve Bank of India under the regulations of Non-Banking Financial Companies since the company apart from carrying on the trading business also opted for making investment in securities of other public limited companies The company is listed on Calcutta Stock Exchange with a paid up capital of Rs.4,97,89,000/- having 681 as its shareholders as on date.

The company is a cash rich company and has earned substantial profits during the last year. The recent growth in capital markets is expected to substantially enhance the value of the company’s investment activity and its bottomline/projects.

At Sri Narayan Rajkumar Merchants Limited, all key functions and divisions are

independently responsible to monitor risk associated within their respective areas

of operation such as financing and dealing in the sale/purchase of securities of

other bodies corporate. Since the trading of securities is governed by the

fluctuating trend of the market of securities listed on Stock Exchange not only of

the country but also of abroad as well as the Government policies from time to

time, profitability of the company is very much volatile.

A. ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Banks, Employees as well as

Customers for their timely help in smooth functioning of your Company. Your

Directors also extend their thanks to all the Shareholders of the Company for their

trust and confidence in the Board of Directors of the Company.



4. GENERAL INFORMATION

A Private Limited Company in the name of Sri Narayan Rajkumar Merchants Private Limited incorporated in the year 1968 became Public Limited Company in the year 1994 and a fresh certificate thereto in the name of Sri Narayan Rajkumar Merchants Limited was issued to the company on 17.11.1994 by the Registrar of Companies West Bengal, Calcutta.

The Corporate Identification Number of the Company is

L51109WB1968PLC027338.

a) Eligibility Criterion

The Company is submitting its Information Memorandum, containing

information about itself, making disclosures in line with the disclosure

requirement for public issues, as applicable, to MSEIL for making the said

Information Memorandum available to public through their website viz.

www.MSEILindia.com

b) Prohibition by SEBI

The Company, its directors, its promoters, other companies promoted by the

promoters and companies with which the company’s directors are associated as

directors have not been prohibited from accessing the capital markets under any

order or direction passed by SEBI.

c) Caution

The Company accepts no responsibility for statements made otherwise than in the

Information Memorandum or any other material issued by or at the instance of

the Company and anyone placing reliance on any other source of information

would be doing so at his or her own risk. All information shall be made available

by the company 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.

d) Disclaimer Clause of MSEIL

As required, a copy of this Information Memorandum is being submitted to

MSEIL.

The MSEIL does not in any manner:

Warrant, certify or endorse the correctness or completeness of any of the

contents of this Information Memorandum; or

http://www.bseindia.com/



Warrant that this Company’s securities will be traded or will continue to be traded on the MSEIL; or

Take any responsibility for the financial or other soundness of this Company,

its promoters, its management or any scheme or project of this Company;

And it should not for any reason be deemed or construed to mean that this

Information Memorandum has been cleared or approved by the MSEIL. Every

person who desires to acquire any securities of this company may do so pursuant

to independent inquiry, investigation and analysis and shall not have any claim

against the MSEIL whatsoever by reason of any loss which may be suffered by

such person consequent to or in connection with such subscription / acquisition

whether by reason of anything stated or omitted to be stated herein or for any

other reason whatsoever.

e) Filing

Copies of Information Memorandum have been filed with MSEIL in due

compliance.

f) Listing

Application has been made to MSEIL for permission to deal in and for an official

quotation of the Equity Shares of the Company. The Company has already taken

steps for the completion of necessary formalities for commencement of trading at

the Stock Exchanges mentioned above.

g) DEMAT Credit

The Company has executed Agreements with NSDL and CDSL for its securities in

DEMAT form as per the following details:

(i) Dematerialization of Shares

Tripartite agreements have been signed between the Company, the Registrar

and CDSL and NSDL. The ISIN No. allotted to the Company is INE063F01019.

(ii) Registrar & Share Transfer Agent

M/s. Beetal Financial & Computer Services (P) Ltd Beetal House, 3rd Floor, 99 Madangir, Behind Local Shopping Centre, Near Dada HarsukhdasMandir,



New Delhi – 110062.

h) Auditors

M/s Salarpuria& Partners, Chartered Accountants 1008, Chiranjiv Tower, 43 Nehru Place,New Delhi-110 019

i) Bankers to the Company

HDFC Bank Limited

ICICI Bank

j) Company Secretary cum Compliance Officer

Mr. Avinash Pratap

k) Investor’s Correspondence may be addressed to:

The shareholders desiring to communicate with the Company on any matter relating to their shares of the Company may either visit in person or write quoting their Folio Number at the following address:

l) SEBI Complaints Redress System (SCORES)

SCORES, i.e., SEBI Complaints Redress Systemis a centralized web based

complaints redress portal that processes all the Complaints received thereby

mandating Companies to upload Action Taken Reports (ATRs) and resolve

the complaint within the prescribed time frame. The company is in regular

compliance with all the provisions of SCORES.



5. CAPITAL STRUCTURE

Particulars Amount (in Rs.)

(A) Authorized Share Capital

5,250,000Equity Shares of Rs.10/- Each 52,500,000

(B) Issued, Subscribed and Paid-up Equity Capital

5,200,000 Equity Shares ofRs.10/- Each 52,000,000



6. Share Capital History of the Company

YEAR OF

ALLOTMENT

TYPE OF

ISSUE

NO. OF

SHARES

DISTINCTIVE

NOS.

LISTED

OR

NOT

1994-95 1ST Public

Issue

26,46,980 3,53,021—30,00,000 Yes

2000-2001 Preferential

Issue

22,00,000 30,00,001—52,00,000 Yes

TOTAL 01- 52,00,000 Yes

Note:- 1. No Shares have been issued for consideration other than cash. 2. No Shares have been issued on discount. 3. The Company has not issued any security which is pending for conversion. 4. 221100 Shares have been Forfeited.



7. SUMMARY OF FINANCIAL INFORMATION

8. CORPORATE GOVERNANCE–

In compliance with the Corporate Governance reporting requirements as per the

format prescribed by the Securities and Exchange Board of India and

incorporated in Clause 49 of the Listing Agreement with the Stock Exchanges, the

Company’s policies on Corporate Governance and compliance thereof, upto

March 31, 2015 is enumerated below for information of the shareholders and

investors of the company:

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:

The Board of Directors and Management believe in adopting and practicing

principles of good Corporate Governance with a view to:-

- Safeguard shareholders’ interest through sound business decisions, prudent financial management and high standard of business ethics: and

- Achieve transparency, accountability and integrity in the dealings and

transactions of the Company.

2. BOARD OF DIRECTORS

(i) Composition of Board of Directors:-

The Board of Directors has an optimum combination of executive and

non-executive directors with more than fifty percent of non-executive

directors.

The Board of Directors comprises of Four Directors with the details as under:-

Background of the Promoters/ Directors

Promoter Group

Name of Director Brief Particulars Category

1.Shri V.K.Sureka He is a graduate and an Industrialist

Having 42 years’ experience in the steel Industry. He joined the Board as promoter

director w.e.f. 30th

January, 2004 and was

appointed as an honorary Managing

Director w.e.f. 1st

August, 2005.

Executive



2. Smt. Veena

Agarwal

She is in business having 32 years’ experience in the area of general finance and investment. She joined the

Board as promoter director w.e.f. 13th June, 2014.

Non-Executive

Independent

3. Shri Madhav Sureka He is an Industrialist having 10 years’ experience of Steel Industry. He joined

the Board as an independent director

w.e.f. 13th June, 2014.

Non-executive

4. Shri Archit Kataruka He is in service having 10 years’ experience of Pipe Industry. He joined the Board as an independent

director w.e.f. 13th June, 2014.

Non-executive

Compliances relating to Independent Director

(ii) Familiarization Programme for Independent Directors

The Company has developed a familiarization programme for independent

directors and the details pertaining thereto are disclosed on the website of the

Company.

(iii) Code of Conduct

The Board has laid down the code of conduct for the Board members and

senior management of the Company and same is posted on the website of the

company.

(iv) Vigil Mechanism

The Company has established vigil mechanism for directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of company’s code of conduct or ethics policy.

(v) Audit Committee:-

The Board constituted an Audit Committee in accordance with the norms of

The terms of reference of Audit Committee has been framed in accordance

with the clause 49 of Listing Agreement.

(vi) Nomination and Remuneration Committee



In order to meet the requirement of amended Claude 49 of the Listing

Agreement, the nomenclature of ‘Remuneration Committee’ has been changed to ‘Nomination and Remuneration Committee’

The Board has re-constituted the nomination and remuneration committee in

accordance with the provisions of agreement. The term of reference of

committee has been framed in accordance with the amended clause 49 of the

listing agreement.

(vii) Stakeholder Relationship Committee:

This Committee was renamed as Stakeholder Relationship Committee and

was re-constituted in accordance with the amended clause 49 of the listing

agreement. The terms of reference of committee includes to redress

shareholders’/ investors’ complaints etc. relating to delay in transfer of shares, demat, non-receipt of annual accounts, delays in balance sheet, split,

duplicate, transmission, etc. of the shares issued by the Company.

(viii) Risk Management Committee:

The Board of company has constituted Risk Management committee. The

terms of reference of the committee includes assisting the Board in fulfilling its

corporate governance duties by overseeing the responsibilities with regard to

identification, evaluation and mitigation of operation, strategic environmental

risks. It has overall responsibility of monitoring and approving the risk

policies of the company. The committee is also responsible for reviewing and

approving risk disclosure statements in any public document/disclosures.

(ix) Code of Conduct for the Director & Senior Managerial Personnel

In compliance to the provisions of Clause 49 of the Listing Agreement, the Board

has laid down a code of Conduct for all the Board Members and Senior

Managerial Personnel and all Board Members and Senior Managerial Personnel

have affirmed compliance of code of conduct as on 31st March, 2015 and a

declaration to that effect duly signed by the Managing Director has been attached

to the Annual Report.

Compliance Officer: Ms. Avinash Pratap has been nominated as the Company

Secretary cum Compliance officer.



(ix)Details of non-compliance by the company, penalties, strictures imposed

on the Company by Stock Exchange or SEBI or any statutory authority, on

any matter related to capital markets, during the last three years.

There was no instance of penalties, strictures imposed on the company by

Stock Exchange or SEBI or any statutory authority as well as non-compliance

of any matter related to the capital markets during the last three years.

(x) Means of Communication

The quarterly and yearly results are published in English in widely circulating

“The Financial Express“ and in Bengali in “Duranto Batra” from Kolkata.



9. Shareholding Pattern of the Company as on 30th June, 2015

Category Nos. of Shares Percentage

Promoters Persons acting in concert Mutual Funds and UTI Banks, Financial Institution & Insurance Companies FII’s Private Corporate Bodies Indian Public NRIs/ OCBs

2,706,890 - - - - -

2272010

54.37 - - - - -

45.63 -

Total 4,978,900 100.00

Distribution of Shareholding & shareholding pattern

Distribution of Shareholding as on 30th June, 2015

No. of Shares Range

No. of Share holders

% of Share holders

No. of Shares

Value of Shares Held

% of Share holding

1 to 5,000 532 78.12 150690 1506900 3.0266 5001 to 10,000

15 2.20 10615 106150 0.2132

10,001 to 20,000 12 1.76 17870 178700 0.3589

20,001 to 30,000 4 0.59 10900 109000 0.2189 30,001 to 40,000 15 2.20 56700 567000 1.1388

40,001 to 50,000 8 1.17 39200 392000 0.7873 50,001 to 100,000

32 4.70 244941 2449410 4.9196

100,001 &Above 63 9.25 4447984 44479840 89.3367 Total 681 100 4978900 49789000 100

SCRIP CODE: SCRIP NAME: SRI NARAYAN RAJ KUMAR MERCHANTS LTD. SCRIP TYPE :- EQUITY



Shareholding Pattern as on 30.06.2015

(1)(a) Statement showing Shareholding Pattern as on 30.06.2015

Partly paid-up shares:- No. of partly

paid-up shares As a % of total no. of partly paid-up shares

As a % of total no. of shares of the company

Held by promoter/promoter group

-

-

-

Held by public - -

-

Total - D -

-

-

Outstanding convertible preference shares:-

No. of outstanding preference shares

As a % of total no. of outstanding convertible preference shares

As a % of total no. of shares of the company, assuming full conversion of the convertible preference shares


-

-

-

Held by public -

-

-

Total - E -

-

-

Warrants:- No. of warrants

As a % of total no. of warrants

As a % of total no. of shares of the company, assuming full conversion of warrants


-

-

-

Held by public -

-

-

Total - F -

-

-

Total paid-up capital of the company, assuming full conversion of warrants and convertible securities (Grand Total (A+B+C)+ D+E+F )

4978900



Category Code

Category of Shareholder

Number of Shareholders

Total number of shares

Number of shares held in dematerialized form

Total shareholding as a percentage of total number of shares

Shares Pledged or otherwise encumbered

As a percentage of(A+B)1

As a percentage of (A+B+C)

Number of shares

As a percentage

(A) Shareholding of Promoter and Promoter Group2

1 Indian

(a) Individuals/ Hindu Undivided Family

0 0 0 0 0 0 0

(b) Central Government/ State Government(s)

0 0 0 0 0 0 0

(c) Bodies Corporate

11 824960 824960 16.57 16.57 0 0

(d) Financial Institutions/ Banks

0 0 0 0 0 0 0

(e) Any Others(Directors & Their relatives)

8 1881930 1881930 37.80 37.80 0 0

Sub Total(A)(1) 19 2706890 2706890 54.37 54.37 0 0

2 Foreign

A Individuals (Non-Residents Individuals/ Foreign Individuals)

0 0 0 0 0 0 0

B Bodies Corporate

0 0 0 0 0 0 0

C Institutions 0 0 0 0 0 0 0

D Any Others(Specify)

0 0 0 0 0 0 0

Sub Total(A)(2) 0 0 0 0.0 0.0 0 0



Total Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

19 2706890 2706890 54.37 54.37 0 0

(B) Public shareholding

1 Institutions

(a) Mutual Funds/ UTI

0 0 0 0 0 0 0

(b) Financial Institutions /

Banks

0 0 0 0 0 0 0

(c) Central Government/ State Government(s)

0 0 0 0 0 0 0

(d) Venture Capital Funds

0 0 0 0 0 0 0

(e) Insurance Companies

0 0 0 0 0 0 0

(f) Foreign Institutional Investors

0 0 0 0 0 0 0

(g) Foreign Venture Capital Investors

0 0 0 0 0 0 0

(h) Any Other (specify)

0 0 0 0 0 0 0

Sub-Total (B)(1)

0 0 0 0 0 0 0

B 2 Non-institutions

(a) Bodies Corporate

37 1380185 1380185 27.72 27.72 0 0

(b) Individuals

I Individuals -i. Individual shareholders holding nominal share capital up to Rs 1 lakh

598 421700 192900 8.47 8.47 0 0



II ii. Individual shareholders holding nominal share capital in excess of Rs. 1 Lakh.

21 439120 180900 8.82 8.82 0 0

(c) Any Other (HUF)

6 31005 26000 0.62 0.62 0 0

Sub-Total (B)(2)

662 2272010 1779985 45.63 45.63 0 0

(B) Total Public Shareholding (B)= (B)(1)+(B)(2)

662 2272010 1779985 45.63 45.63 0 0

TOTAL (A)+(B)

681 4978900 4486875 100 100 0 0

(C) Shares held by Custodians and against which Depository Receipts have been issued

0 0 0 0 0 0 0

GRAND TOTAL (A)+(B)+(C)

681 4978900 4486875 100 100 0 0

(I)(b) Statement showing holding of Securities (Including Shares, Warrants,

Convertible Securities) of Persons belonging to the Category "Promoter and

Promoter Group"

Sr. No.

(I)

Name of the PROMOTER shareholder

(II)

Total shares held

Shares pledged or otherwise

encumbered Number

(III)

As a % of grand total (A)+(B)+(C)

(IV)

Number

(V)

As a percentage (VI)=(V)/(III)*100

As a % of grand total (A)+(B)+(C)

of sub-clause (I)(a) (VII)

1. Vishnu Kumar Sureka 259836 5.219 NIL 2. PremLataSureka 263577 5.294 NIL

3. Vishnu Kumar Sureka 40000 0.803 NIL

4. DeepanshuSureka 462240 9.284 NIL



5. DeepaSureka 256010 5.142 NIL

6. Navneet Kumar Sureka 99000 1.988 NIL

7. Akhil Kumar Sureka 249230 5.006 NIL

8. Navneet Kumar Sureka 252037 5.062 NIL

Total 1881930 37.798 NIL

CORPORATE BODIES PROMOTER GROUP

1. BIHARI JI FANCY FIBRES & FABRICS LTD

355000 7.130 NIL

2. BIHARI JI ISPAT UDYOG LIMITED

265000 5.322 NIL

3. V K FLATS PRIVATE LIMITED

45610 0.916 NIL

4. S S K S ESTATES PVT LTD 30000 0.603 NIL

5. MAURIA UGYOG LTD 28530 0.573 NIL

6. QUALITY SYNTHETIC INDUSTRIES LTD

25220 0.507 NIL

7. DEEPAK HOTELS PVT LTD

20000 0.402

8. ACHAL ESTATES PVT LTD

18000 0.362 NIL

9. SUREKA TUBES INDUSTRIES PVT LTD

13900 0.279 NIL

10. BIHARI JI INFOTECH PVT LTD

12700 0.255 NIL

11. VDAYACHAL LEASING & EXPORTS LTD

11000 0.221 NIL

TOTAL 824960 16.569

GRAND TOTAL 2706890 54.367

(I)(c)(i)

Statement showing Shareholding of persons (Individuals) belonging to the category “Public” and holding more than 1% of the total number of shares

Sr. No.

Name of the shareholder

Number of shares

Shares as a percentage of total number of shares {i.e., Grand Total (A)+(B)+(C) indicated in Statement at para (I)(a) above}

Details of Warrants

Details of convertible securities held

Total shares (including underlying shares assuming full conver

Number of warrants

As a % of total no. of warrants of same class

Number of convertible securities held

As a % of total no. of securities of same class



sion of warrants and convertible securities) as a % of diluted share capital

TOTAL Nil Nil Nil Nil Nil Nil Nil

(I)(c)(ii)

Statement showing holding of securities (including shares, warrants & convertible securities) of persons (Individuals) (together with PAC) belonging to the category “Public” and holding more than 5% of the total number of shares

Sr. No.


Number of shares

Shares as a percentage of total number of shares {i.e., Grand Total (A)+(B)+(C) indicated in Statement at para (I)(a) above}

Details of Warrants

Details of convertible securities held

Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital

Number of warrants

As a % of total no. of warrants of same class

Number of convertible securities held

As a % of total no. of securities of same class

TOTAL Nil Nil Nil Nil Nil Nil Nil

(I)(d) Statement showing details of locked-in shares

Sr. No.


Number of locked-in shares

Locked-in shares as a percentage of total number of shares {i.e. Grand Total (A)+(B)+(C) indicated in



Statement at para (I)(a) above}

Nil Nil Nil

TOTAL Nil Nil

The company has not given any commission, brokerage, discount or option for

the issue of any kind of security granted too any person.

Details of group/Subsidiary Companies The Group/ Subsidiary Companies of SRI Narayan Raj Kumar Merchants Ltd as on June 30, 2015.

1. Name of the Company –Mauria Udyog Limited

Date of Incorporation 24/09/1980

Authorised Capital of the Company (in Rs.) 150,000,000.00

Paid-up Capital of the Company (in Rs.) 133,200,000.00

Nature of Business NBFC

Listed at Bombay Stock Exchange & Delhi Stock Exchange

2. Name of the Company –Bihariji Ispat Udyog Limited

Date of Incorporation 19/01/1974 Authorised Capital of the Company (in Rs.)

60,000,000.00

Paid-up Capital of the Company (in Rs.) 60,000,000.00 Nature of Business NBFC Listed at Metropolitan Stock Exchange of India

Ltd, Delhi Stock Exchange

3. Name of the Company - Jotindra Steel & Tubes Ltd. Date of Incorporation 16/03/1970 Authorised Capital of the Company (in Rs.)

100,000,000.00

Paid-up Capital of the Company (in Rs.)

53,519,160.00

Nature of Business Manufacturing



Listed at Metropolitan Stock Exchange of India Ltd, Delhi Stock Exchange

4. Name of the Company - Quality Synthetic Industries Ltd. Date of Incorporation 05/04/1975 Authorised Capital of the Company (in Rs.)

55,500,000.00

Paid-up Capital of the Company (in Rs.)

55,000,000.00

Nature of Business NBFC Listed at Calcutta Stock Exchange, Delhi Stock Exchange Ltd.

IV. DECLARATION

All relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of India or the regulations issued by Securities and Exchange Board of India, applicable, as the case may be, have been complied with and no statement made in this Information Memorandum is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the rules made or guidelines or regulations issued there under, as the case may be, and that all approvals and permissions required to carry on the business of our Company have been obtained, are currently valid and have been complied with. We further certify that all the statements in this Information Memorandum are true and correct.

For SRI Narayan Raj Kumar Merchants Ltd

V.K.Sureka (Managing Director) DIN No.: 00060160 Address: 8 Bougan Villa Avenue Westend,

Green Farms Behind Shiv Murti Rajoukari, New Delhi - 110038

Place: New Delhi

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