Saurashtra Cement Limited — M&A Activity 2022

Feb 5, 2022

Saurashtra Cement Limited Niches Itersatonal House, 2nd Foor

178 Backbay Reclamation, Mumbai 400 020 T +91 22 6636 5444 F +91 22 6636 5445 E scl-mum@mehtagroup.com GIN : L26941GJ1956PLC000840

Ref: B/SCL/SE/SS/75/2021-22 February 05, 2022

Corporate Relationship Manager, BSE Limited, 1* Floor, New Trading Ring, Rotunda Bldg, P.J. Tower, Dalal Street, Mumbai 400001

Stock Code No: 502175

Dear Sir / Madam,

• SUB: _Intimation of the outcome of the meeting of the Board of Directors of Saurashtra Cement Limited ("Company") held on 5 February 2022 and disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended ("Listing Regulations") read with sub para 1.5 of Para A.1. of Annexure I of Circular bearing number CIR/CFD/CMD/4/2015 dated 9 September 2015 issued by Securities and Exchange Board of India
• REF: Scheme of Amalgamation of Gujarat Sidhee Cement Limited with Saurashtra Cement Limited and their respective members under Sections 230 to 232 of the Companies Act, 2013

This is to inform that the Board of Directors of Saurashtra Cement Limited ("the Company") at its meeting held today, i.e. February 05, 2022, based on the recommendation of Audit Committee and Independent Directors Committee and subject to necessary regulatory and statutory approvals has approved a Scheme of Amalgamation of Gujarat Sidhee Cement Limited ("Transferor Company") with the Company ("Transferee Company") their respective Shareholders in compliance with sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("the Act") which inter alia, provides for amalgamation of the Transferor Company with the Company, in the manner set out in the said Scheme.

Upon effecting the scheme of Amalgamation, the entire undertaking of the Transferor Company together with all property, rights, powers and all debts, liabilities, duties and obligations relating thereto is proposed to be transferred to and vested in the Transferee Company on the terms and conditions fully stated in the said Scheme of Amalgamation.

On the Scheme becoming effective, the Transferor Company shall stand dissolved without winding up and the Board and any committees thereof of the Transferor Company shall without any further act, instrument or deed be and stand discharged.

Subject to necessary regulatory and statutory approvals, the equity shares issued pursuant to the Scheme of the Company shall be listed on BSE Limited, post effectiveness of the Scheme.

Regd. Office & Works Near Railway Station, Ranavav 360 560 Gujarat, India

The Scheme as approved by the Board would be available on the website of the Company at www.saurashtracementlimited.com post filing the same with the stock exchanges.

The detailed disclosure as required under Regulation 30 of the SEBI Listing Regulations, read with Circular CIR/CFD/CMD/4/2015 dated September 9, 2015, as amended from time to time, is enclosed as Annexure-1 to this outcome.

You are requested to take the information on record. Thanking you, Yours faithfully

For Saurashtra Cement Limited

Sonali Sanas President (CS, Legal & Strategy)

ANNEXURE-1

Regulation 30 read with Schedule Ill to the Listing Regulations and SEBI Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015, as amended from time to time.

		HATHI CEMENT
Regulation	Schedule with read 30 Ill CIR/CFD/CMD/4/2015	ANNEXURE-1 Regulations and SEBI Circular the Listing No. to dated September 9, 2015, as amended from time to time.
Sr. No.	Particulars	Details
1.	Name of the forming entity(ies) part of the amalgamation, details in brief such as, size, turnover etc.	Cement Company" Saurashtra ("Transferee limited or 1. "Company") Total assets — INR [806.45] crore Net worth ~ INR [531.07] crore Turnover — INR [534.79] crore as on [31 December,2021] Gujarat Sidhee Cement Limited ("Transferor Company") 2. Total assets — INR [750.65] crore Net worth — INR [483.62] crore Turnover—-INR [500.45] crore as on [31% December 2021]
'2.	Whether would In transaction the related —_ party issued within. fall transactions? If yes, whether the transactions same is done at "arm's length"	30/2014 dated July 17, 2014 terms of General Circular No. ("MCA of Corporate Ministry Affairs Circular"), the by compromises, arrangements and arising out of amalgamations under the Companies Act, 2013 ("Act"), will not attract the requirements of Section 188 of the Act. However, considered the transaction 'related party shall be a transaction' under the Listing Regulations. The consideration for the Scheme will be discharged on an "arm's amalgamation consideration length" The of the basis. of the Transferor Company to shareholders of the Transferor Company, has been arrived based on joint share entitlement report issued by SSPA Chartered Accountants, IBBI/RV (Registration No. & Co, E/06/2020/126) and Ernst & Young Merchant Banking Services Accountants, Chartered (Registration No. IBBI/RV- LLP, E/05/2021/155), both Registered Valuers.
3.	Area of business of the entity(ies);	Company engaged Transferee business The the of in is manufacture and sale of cement and clinker and markets cement renowned name under Transferee brand "HATHI". The the Company acquired "Snowcem" Paint business through slump sale with effect from 1 May 2021 and the said business is now part of the Paint Division of t eree Company.

	Company engaged business of Transferor The the in is manufacture and sale of cement and clinker and markets cement under the brand name "Sidhee".
Rationale for Amalgamation	The Transferor Company and the Transferee Company cement businesses have and and similar clinker of operating under their respective brand names in the State of Gujarat. Further, the Transferee Company has recently ventured into the paint business including cement paints complements which business existing the the of Company. Transferee businesses such the the As of Transferor Company and the Transferee Company can be combined conveniently conjunction and carried on in more advantageously purpose and being useful no is continuing two separate served with entities. legal in Amalgamation companies proposed two the of is accordingly.
	optimum circumstances, such running, for the cost In optimising, growth and development of the restructured businesses and undertakings of the Transferor Company Company combined Transferee and with the their resources and and larger capital asset base, a is it considered desirable and expedient to amalgamate the Transferor Company with the Transferee Company in the manner terms conditions and and stated the this in Scheme of Amalgamation.
	The proposed amalgamation will help pooling of resources of the Transferor Company and the Transferee Company, streamlining the corporate structure and consolidation of investments within the Transferee Company and act as a gateway for growth and expansion of business operations and presence in India and abroad.
	Companies resources The infrastructure the of complement proposed each other such and the as amalgamation will enable appropriate consolidation and integration of operations and activities of the Transferor Company and the Transferee Company thereby ensuring better management and enable the merged entity to offer a comprehensive package of solutions from one entity as opposed to multiple entities.
	' The business of the amalgamated entity will be carried on more efficiently and economically as a result, inter alia, of pooling and usage of common resources in manufacturing, manpower engineering, other and infrastructure, thus optimum elimination leading and utilisation to of duplication of administrative expenses and responsibilities which will be facilitated by and follow the amalgamation.

		CEMENT
		amalgamation proposed The create better will vi. opportunities and improvement in competitive position of Company combined Transferee and the entity as a achieving economies of scale including enhanced access to marketing resources/networks/ customers. The amalgamated Company will Transferee increased have capability for offering products and services by virtue of its enhanced resource base and deeper client relationship, resulting in better and greater realisation of the potential of the business and prospects of the Transferor Company and the Transferee Company in the merged entity.
		The consolidation of business would lead to development vii. of long term internal and core competencies, augment the manufacturing footprint and capabilities the of amalgamated increasing entity scale by the of manufacturing operations, thereby helping in rationalising number of vendors, aggregating the purchases and the managing more supply and chain effectively the efficiently.
		The proposed amalgamation will enable the merged entity viii. to compete and bid for new projects more competitively and effectively with the combined credentials, experience and track record of both the Companies.
		As such the amalgamation of the Transferor Company with the Transferee Company will also enhance the financial expansion growth, margin higher and with profile increased cash flows which will provide further headroom growth opportunities inorganic and result the for in formation of a larger and more profitable and broad based company having greater capacity to raise and access funds for growth and expansion of its business.
		Additionally, the amalgamated entity will provide greater impetus to the paint business which has been recently Company acquired Transferee and the by result in shareholders unlocking greater value the the to of Transferor Company with access to the paint business.
		The Scheme shall not in any manner be prejudicial to the interests of the concerned shareholders, creditors or general public at large
5.	cash case of In amount otherwise or exchange ratio;	consideration The proposed Scheme involves amalgamation of the Transferor share Company with the Transferee Company. Scheme, consideration enshrined terms of the the the In in

fi

						a f
						wil)
						HATHI
						CEMENT
						Transferor Company, as on the Effective Date, in proportion of
		their shareholding in the Transferor Company, as follows:
		(Sixty Two) fully paid up equity shares of INR 10 (Rupees Ten "62 only) each of the Transferee Company, credited as fully paid up, for
		every 100 (One Hundred) equity shares fully paid up of INR 10
		(Rupees Ten only) each of the Transferor Company held by such
		shareholder"
		No shares shall be issued by the Transferee Company in respect of
		the shares held by the Transferor Company and the Transferee
		Company inter-se, and all such shares shall stand cancelled.
	change Brief details of in shareholding pattern Listed of	Saurashtra	Cement Limited (Equity Shares)
	Entity	Particulars	Pre-amalgamation		Post-amalgamation
			No of shares	%	No of shares	%
			Promoters 37,424,254	53.28	69,349,606	62.81
		GIIC Gujarat	NIL 13,658,267	0.00 19.45	5,116,672 NIL	4.63 0.00
		Sidhee
		Cement _ Limited
		Public TOTAL	19,149,072	27.27	35,948,716 100.00 110,414,995	32.56
			70,231,593		*	100°
			the provision made in the draft scheme.		*rounded off in total shares in accordance with the swap ratio and