Gautam Gems : Letter of offer of Gautam Gems Limited (Final Offer Document filed with Stock Exchanges)

Letter of Offer

Dated 20th August, 2022

For Eligible Equity Shareholders only

GAUTAM GEMS LIMITED

Corporate Identification Number: L36911GJ2014PLC078802

Our Company was originally incorporated as "Gautam Gems Private Limited" on February 18, 2014 under the Companies Act, 1956 vide certificate of incorporation issued by the Registrar of Companies, Gujarat, Dadra and Nagar Havelli. Subsequently, Our Company was converted in to a public company and consequently name was changed to "Gautam Gems Limited" (GGL) vide fresh certificate of incorporation dated August 16, 2017 issued by Registrar of Companies, Gujarat, Dadra and Nagar Havelli.

Registered Office: 3rd Floor, Office - 301, Sumukh, Super Compound, Vasta Devadi Road, Katargam, Surat 395004, Gujarat, India;

Tel. No.: [phone]; Email: [e-mail]; Website: www.gautamgems.com;

Contact Person: Mr. Anilbhai Keshubhai Modhavadiya, Company Secretary & Compliance Officer

OUR PROMOTERS ARE: MR. GAUTAM P. SHETH AND MRS. NIDHI G. SHETH

FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF GAUTAM GEMS LIMITED (THE "COMPANY" OR THE "ISSUER") ONLY

ISSUE OF UP TO 4,02,68,236 (FOUR CRORES TWO LAKHS SIXTY EIGHT THOUSAND TWO HUNDRED AND THIRTY-SIX) EQUITY SHARES WITH A FACE VALUE OF ₹10 EACH ("RIGHTS EQUITY SHARES") OF OUR COMPANY FOR CASH AT A PRICE OF ₹11/- (RUPEES ELEVEN ONLY) EACH INCLUDING A SHARE PREMIUM OF ₹1/- (RUPEE ONE ONLY) PER RIGHTS EQUITY SHARE ("ISSUE PRICE") FOR AN AGGREGATE AMOUNT UP TO ₹44,29,50,596 (FORTY FOUR CRORES TWENTY NINE LAKHS FIFTY THOUSAND FIVE HUNDRED AND NINETY SIX ONLY) ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 4 (FOUR) RIGHTS EQUITY SHARES FOR EVERY 1 (ONE) FULLY PAID-UP EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON THURSDAY 01ST SEPTEMBER, 2022 (THE "ISSUE"). THE ISSUE PRICE FOR THE RIGHTS EQUITY SHARES IS 1.1 TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, SEE "TERMS OF THE ISSUE" ON PAGE 159.

PAYMENT METHOD FOR THE ISSUE

AMOUNT PAYABLE PER RIGHT SHARE	FACE VALUE	PREMIUM	TOTAL
On Application	2.5	0.25	2.75
One or more subsequent call(s) as determined by our Board at its sole discretion, from time to time	7.50	0.75	8.25
Total	10	1	11
For further details on Payment Schedule, see "Terms of the Issue" on page 159

WILFUL DEFAULTER OR FRAUDULENT BORROWER

Neither our Company nor any of our Promoters or Directors has been categorized as a Willful Defaulter or Fraudulent Borrowers by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on Willful Defaulter(s) issued by the Reserve Bank of India.

GENERAL RISK

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk with such investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Rights Equity Shares have not been recommended or approved by the Securities and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of the contents of this Document. Specific attention of investors is invited to the statement of "Risk Factors" on page 21 before making an investment in this Issue.

ISSUER'S ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to our Company and the Issue which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects 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 make this Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The existing Equity Shares are listed on the BSE Limited ("BSE") (the "Stock Exchange"). Our Company has received 'in-principle' approval from the BSE for listing the Rights Equity Shares to be allotted pursuant to this Issue vide their letters dated September 9, 2022 respectively. Our Company will also make an application to the Stock Exchanges to obtain the trading approval for the Rights Entitlements as required under the SEBI circular (SEBI/HO/CFD/DIL2/CIR/P/2020/13) dated January 22, 2020. For the purpose of this Issue, the Designated Stock Exchange is BSE.

	KFIN Technologies Limited
REGISTRAR TO THE ISSUE	Karvy Selenium	Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda,
Serilingampally, Hyderabad, Rangareddi -500 032, Telangana, India
	Tel No [phone],
	Toll Free No. 1800 309 4001
	E-mail: [e-mail]
	Investor Grievance Email: [e-mail]
	Website: www.kfintech.com
	Contact Person: Mr. M Murali Krishna
	SEBI Registration No.: INR000000221
	ISSUE PROGRAMME
ISSUE OPENS ON: 15TH SEPTEMBER, 2022	LAST DATE FOR ON MARKET	RENUNCIATION*: ISSUE CLOSES ON#: 30TH SEPTEMBER, 2022
(THURSDAY)	26TH SEPTEMBER, 2022 (MONDAY)	(FRIDAY)

• Eligible Equity Shareholders are requested to ensure that renunciation through off-market transfer is completed in such a manner that the Rights Entitlements are credited to the demat account of the Renouncees on or prior to the Issue Closing Date.
  # Our Board or a duly authorized committee thereof will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date (inclusive of the Issue Opening Date). Further, no withdrawal of Application shall be permitted by any Applicant after the Issue Closing Date.

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TABLE OF CONTENTS

TITLE	PAGE NO.
SECTION I - GENERAL
Definitions And Abbreviations	5
Notice To Investors	13
Certain Conventions, Use Of Financial Information, Market Data And Currency Of Presentation	15
Forward Looking Statements	17
Summary Of This Letter of Offer	18
SECTION II - RISK FACTORS	21
SECTION III - INTRODUCTION
The Issue	34
Summary of Financial Information	35
General Information	39
Capital Structure	45
Notes to the Capital Structure	45
Objects Of The Issue	50
Statement Of Special Tax Benefits	56
SECTION IV - ABOUT OUR COMPANY
Industry Overview	60
Our Business	70
Our Management	78
Our Promoters	87
Dividend Policy	88
SECTION V - FINANCIAL INFORMATION
Financial Statements	89
Restated Financial Statement	90
Other Financial Information	111
Statement Of Financial Indebtedness	113
Management's Discussion And Analysis Of Financial Condition And Results Of Operations	137
SECTION VI - LEGAL AND OTHER INFORMATION
Outstanding Litigation And Defaults	146
Government And Other Statutory Approvals	149
Material Developments	150
Other Regulatory And Statutory Disclosures	151
SECTION VII - ISSUE RELATED INFORMATION
Terms Of The Issue	159
Restrictions On Foreign Ownership Of Indian Securities	187
SECTION VIII - OTHER INFORMATION
Material Contracts And Documents For Inspection	188
Declarations	189

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SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

This Letter of Offer uses certain definitions and abbreviations which, unless the context otherwise indicates or implies or unless otherwise specified, shall have the meaning as provided below, which you should consider when reading the information contained herein.

References to any legislation, act, regulation, rules, guidelines or policies shall be to such legislation, act, regulation, rules, guidelines or policies as amended, supplemented, or re-enacted from time to time and any reference to a statutory provision shall include any subordinate legislation made from time to time under that provision.

The words and expressions used in this Letter of Offer, but not defined herein shall have, to the extent applicable, the meaning ascribed to such terms under the SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act, and the rules and regulations made thereunder. Notwithstanding the foregoing, terms used in "Statement of Special Tax Benefits" and "Financial Statements" beginning on pages 56 and 89, respectively, shall have the meaning given to such terms in such sections.

1. GENERAL TERMS

Gautam Gems Limited/ GAUTAM GEMS / GGL / The Company/ Company/ We/ Us/ Our/ our Company/ the Issuer Company

Unless the context otherwise indicates or implies refers to Gautam Gems Limited, a public limited company incorporated under the provisions of the Companies Act, 1956 with its registered office at 3rd Floor, Office - 301, Sumukh, Super Compound, Vasta Devadi Road, Katargam, Surat 395004, Gujarat, India.

II. COMPANY RELATED TERMS

TERM	DESCRIPTION
Act/ Companies Act	The Companies Act, 2013 and Companies Act, 1956 to the extent applicable.
Articles / Articles of Association /	The Articles of Association of our Company, as amended from time to time
AoA
Auditor / Statutory Auditor	The statutory auditor of our Company, being M/s. Bhagat & Co., Chartered
Accountants
Board/ Board of Directors	Board of Directors of our Company, including any committees thereof
Chairman & Managing Director	Chairman & Managing Director of our Company, being	Mr. Gautam
Pravinchandra Sheth
Chief Financial Officer	Chief financial officer of our Company, being Mr. Samir Lalitbhai Shah
Company Secretary & Compliance	Company Secretary & Compliance Officer of our Company in this case
Officer	being, Mr. Anilbhai Keshubhai Modhavadiya
Corporate Promoters	The Company does not have any Corporate Promoters
Director(S)	The Director(s) on the Board of our Company, unless otherwise specified
Equity Shareholder	A holder of Equity Shares
Equity Shares	The equity shares of our Company of a face value of ₹ 10 each, unless
otherwise specified in the context thereof.
ESOS	Gautam Gems Limited does not have any Stock Option Scheme with its
employees
Group Companies	Gautam Gems (Proprietorship), is the only Promoter Group Company of
our Company, as determined in terms of the SEBI ICDR Regulations.
	The Independent Director(s) of our Company, in terms of Section 2(47) and
Independent Director(s)	Section 149(6) of the Companies Act and Regulation 16(1)(b) of the SEBI
	Listing Regulations.
Key Management Personnel / KMP	Key management/ managerial personnel of our Company in accordance with
Regulation 2(1)(bb) of the SEBI ICDR Regulations and as	described in
	"Our Management - Key Managerial Personnel" on page no. 78
Memorandum / Memorandum of	Memorandum of association of our Company, as amended from time to time
Association / MoA
Promoter(s)	The Promoters of our Company, Viz., Mr. Gautam Pravinchandra Sheth And
Mrs. Nidhi Gautam Sheth

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