North Eastern Carrying : Letter of offer (Final Offer Document filed with Stock Exchanges)

Letter of Offer

For Eligible Shareholders Only

Wednesday, May 24, 2023

NORTH EASTERN CARRYING CORPORATION LIMITED

Our Company was incorporated on December 05, 1984, as a private limited company, under the name and style 'Prakarima Leasing Private Limited' under the provisions of the Companies Act, 1956, with the Registrar of Companies, Delhi and Haryana. Our Company was thereafter converted into a public limited company vide shareholders resolution passed at an extra-ordinary general meeting of the Company held on December 17, 1984 and the name of our Company was changed to 'Prakarima Leasing Limited', and a fresh Certificate of Incorporation consequent upon conversion was issued by the Registrar of Companies, Delhi and Haryana on January 16, 1995. In the subsequent year of 1995, the name of our Company was changed from 'Prakarima Leasing Limited' to 'N.E.C.C. Finlease Limited' and a fresh certificate of incorporation consequent upon change of name was issued by the Registrar of Companies, Delhi and Haryana on January 03, 1995. Subsequently, the name of our Company was further changed to 'North Eastern Carrying Corporation Limited' and a fresh Certificate of Incorporation pursuant to change of name was issued by the Registrar of Companies, NCT of Delhi and Haryana on October 06, 1999. For further details, kindly refer to the section titled 'General Information' beginning on page 47 of this Letter of Offer.

Corporate Identification Number: L51909DL1984PLC019485.

Registered Office: 9062/47, NECC House, Ram Bagh Road, Azad Market, Delhi-110006, India;

Contact Details: [phone];Contact Person: Ms. Mamta Bisht, Company Secretary and Compliance Officer;

Email-ID:[e-mail];Website:www.neccgroup.com.

PROMOTERS OF OUR COMPANY ARE MR. SUNIL KUMAR JAIN, MR. UTKARSH JAIN, MRS. VANYA JAIN, M/S SUVI DEVELOPERS PRIVATE LIMITED, M/S NECC SECURITIES PRIVATE LIMITED, AND M/S NECC AUTOMOBILES PRIVATE LIMITED

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY

RIGHTS ISSUE OF UP TO 4,51,77,602 (FOUR CRORES FIFTY-ONE LAKHS SEVENTY-SEVEN THOUSAND SIX HUNDRED AND TWO) PARTLY PAID-UP EQUITY SHARES OF FACE VALUE OF RS.10.00/- (RUPEE TEN ONLY) ('EQUITY SHARES') EACH AT A PRICE OF RS.18.00/- (RUPEES EIGHTEEN ONLY)

PER RIGHTS SHARE (INCLUDING A PREMIUM OF RS.8.00/- (RUPEES EIGHT ONLY) PER RIGHTS SHARE) ('ISSUE PRICE') ('RIGHTS SHARES') FOR AN AMOUNT AGGREGATING UP TO RS. 8,131.97 LAKHS* ON A RIGHTS ISSUE BASIS TO THE ELIGIBLE SHAREHOLDERS OF NORTH EASTERN CARRYING CORPORATION LIMITED IN THE RATIO OF 9 (NINE) RIGHTS SHARES FOR EVERY 10 (TEN) EQUITY SHARES HELD BY SUCH ELIGIBLE SHAREHOLDERS AS ON THE RECORD DATE i.e., FRIDAY, JUNE 02, 2023, ('ISSUE'). THE ISSUE PRICE IS 1.8 TIMES THE FACE VALUE OF THE EQUITY SHARE. FOR FURTHER DETAILS, KINDLY REFER TO THE SECTION TITLED 'TERMS OF THE ISSUE' BEGINNING ON PAGE 153 OF THIS LETTER OF OFFER.

*Assuming full subscription and receipt of First and Final Call Money with respect to Rights Shares.

PAYMENT METHOD FOR THE ISSUE

AMOUNT PAYABLE PER RIGHTS EQUITY SHARE

FACE VALUE

PREMIUM

TOTAL

	On Application		Rs.5.00/-	Rs.4.00/-	Rs.9.00/-
	First and Final Call as determined by our Board/ Committee at its sole discretion, from time to time		Rs.5.00/-	Rs.4.00/-	Rs.9.00/-
	Total		Rs.10.00/-	Rs.8.00/-	Rs.18.00/-
	WILLFUL DEFAULTERS AND/OR FRAUDLENT BORROWERS

Neither our Company, nor our Promoters, or Directors are or have been categorized as willful defaulters 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 defaulters or fraudulent borrowers issued by the Reserve Bank of India.

GENERAL RISK

Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their 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 this Issue including the risks involved. The Rights Shares have not been recommended or approved by Securities and Exchange Board of India ('SEBI') nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer 'Risk Factors' beginning on page 20 of this Letter of Offer before investing in the 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 makes 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 of our Company are listed and traded on BSE Limited and National Stock Exchange of India Limited. Our Company has received in-principle approvals from BSE Limited pursuant to its letter bearing reference number 'DCS/RIGHT/CP/FIP/2468/2022-23' dated Thursday, August 04, 2022, and NSE pursuant to its letter bearing reference number 'NSE/LIST/31838' dated Monday, July 25, 2022, for listing of the Rights Shares. Our Company will also make applications to the Stock Exchanges to obtain trading approvals for the Rights Entitlements as required under the SEBI circular bearing reference number 'SEBI/HO/CFD/DIL2/CIR/P/2020/13' dated January 22, 2020. For this Issue, BSE Limited is the Designated Stock Exchange.

MINIMUM SUBSCRIPTION

In the event of non-receipt of 90% minimum subscription of the offer as per Regulation 86(1) of SEBI (ICDR) Regulations, 2018 all application monies received shall be

refunded to the applicants within 4 (four) days from the closure of the issue.
LEAD MANAGER TO THE ISSUE	REGISTRAR TO THE ISSUE

CAPITALSQUARE ADVISORS PRIVATE LIMITED

205-209, 2nd Floor, AARPEE Center, MIDC Road No 11, CTS 70, Andheri (E), Mumbai - 400093, Maharashtra, India

Contact Details: [phone]

Website:www.capitalsquare.in

Email ID: [e-mail]

Investor Grievance ID: [e-mail]

Contact Person: Mr. Mihir Pandhi

SEBI Registration Number: INM000012219

Validity: Permanent

PURVA SHAREGISTRY (INDIA) PRIVATE LIMITED

Unit No. 9, Ground Floor, Shiv Shakti Industrial Estate, J. R. Boricha Marg, Lower Parel East, Mumbai- 400011, Maharashtra, India

Contact Details: + 91-22-2301 2518 / 6761

Website: www.purvashare.com

E-mailID:[e-mail]

Investor grievance e-mail:[e-mail]

Contact Person: Ms. Deepali Dhuri

SEBI Registration Number: INR000001112

Validity: Permanent

	ISSUE PROGRAMME
ISSUE OPENING DATE	LAST DATE FOR MARKET RENUNCIATION*	ISSUE CLOSING DATE**

WEDNESDAY, JUNE 14, 2023

THURSDAY, JUNE 22, 2023

TUESDAY, JUNE 27, 2023

*The 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, provided that this Issue will not remain open in excess of 30 (thirty) days from the Issue Opening Date. Further, no withdrawal of Application shall be permitted by any Applicant after the Issue Closing Date.

(THIS PAGE IS INTENTIONALLY LEFT BLANK)

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TABLE OF CONTENTS
SECTION I - GENERAL	4
DEFINITIONS AND ABBREVIATIONS	4
PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA	14
FORWARD LOOKING STATEMENTS	15
SECTION II - SUMMARY OF THE LETTER OF OFFER	17
SECTION III - RISK FACTORS	20
SECTION IV - INTRODUCTION	45
THE ISSUE	45
GENERAL INFORMATION	47
CAPITAL STRUCTURE	52
SECTION V - PARTICULARS OF THE ISSUE	55
OBJECTS OF THE ISSUE	55
STATEMENT OF TAX BENEFITS	59
SECTION VI - ABOUT THE COMPANY	63
INDUSTRY OVERVIEW	63
BUSINESS OVERVIEW	66
OUR MANAGEMENT	73
SECTION VII - FINANCIAL INFORMATION	77
ACCOUNTING RATIOS	120
STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY	122
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS	125
OTHER INFORMATION	137
OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS	137
GOVERNMENT AND OTHER APPROVALS	140
OTHER REGULATORY AND STATUTORY DISCLOSURES	144
SECTION IX - ISSUE INFORMATION	153
TERMS OF THE ISSUE	153
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES	183
SECTION X - OTHER INFORMATION	184
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION	185
DECLARATION	186

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SECTION I - GENERAL

DEFINITIONS AND ABBREVIATIONS

DEFINITIONS

This Letter of Offer uses the definitions and abbreviations set forth below, which, unless the context otherwise indicates or implies, or unless otherwise specified, shall have the meaning as provided below. 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 following list of certain capitalized terms used in this Letter of Offer is intended for the convenience of the reader/prospective Applicant only and is not exhaustive.

In this Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to 'the/our Company', 'we', 'our', 'us' or similar terms are to North Eastern Carrying Corporation Limited as the context requires, and references to 'you' are to the Eligible Equity Shareholders and/ or prospective Investors in this Rights Issue of Equity Shares.

The words and expressions used in this Letter of Offer, but not defined herein, shall have the same meaning (to the extent applicable) ascribed to such terms under the SEBI (ICDR) Regulations, the Companies Act, 2013, the SCRA, the Depositories Act, and the rules and regulations made thereunder. Notwithstanding the foregoing, terms used in section titled 'Industry Overview', 'Statement of Tax Benefits', 'Financial Information', 'Outstanding Litigations, Defaults, and Material Developments' and 'Terms of the Issue' on page 63, 59, 77, 137, and 153 respectively, shall have the meaning given to such terms in such sections.

CONVENTIONAL/ GENERAL TERMS

			Term			Description
		North	Eastern	Carrying		North Eastern Carrying Corporation Limited, a public limited company incorporated
		Corporation Limited/ Company		under the provisions of the Companies Act, 1956, as amended from time to time
		We/ us/ our				Unless the context otherwise indicates or implies, refers to North Eastern Carrying
					Corporation Limited
		AoA/ Articles of Association		The Articles of Association of North Eastern Carrying Corporation Limited, as
			amended from time to time
						The committee of the Board of Directors constituted as our Company's audit committee
		Audit Committee			in accordance with the provisions of Section 177 of the Companies Act and Regulation
						18 of the SEBI (LODR) Regulations
						The audited financial statements of our Company prepared in accordance with Indian
		Audited Financial Statements		Accounting Standards for the Financial Years ending March 31, 2022, March 31, 2021
						and March 31, 2020.
		Restated Financial Statements		The restated financial statements of our Company prepared in accordance with Indian
			Accounting Standards for the Quarter and Nine Months ending December 31, 2022
		Auditors/ Statutory Auditors/ Peer		The current statutory auditors of our Company M/s. Nemani Garg Agarwal & Co.,
		Review Auditor			Chartered Accountants bearing Firm Registration Number '010192N'
		Board of Directors/ Board			Board of Directors of our Company
		Company	Secretary	and		The Company Secretary and Compliance Officer of our Company, being Ms. Mamta
		Compliance Officer			Bisht
		Chief Financial Officer/ CFO		The Chief Financial Officer of our Company, being Mr. Shyam Lal Yadav
		Corporate	Social Responsibility		The committee of the Board of Directors constituted as our Company's Corporate
			Social Responsibility Committee in accordance with the provisions of Section 135 of
		Committee
					the Companies Act
		Directors				The director(s) on the Board of our Company, unless otherwise specified
		Eligible Shareholder(s)			Eligible holder(s) of the Equity Shares of North Eastern Carrying Corporation Limited
				as on the Record Date
		Equity Shares			Equity shares of the Company having face value of Rs.10.00/- (Rupees Ten Only)
						Independent directors on the Board and eligible to be appointed as an Independent
						Director under the provisions of Sections 2(47) and 149(6) of the Companies Act and
		Independent Director			Regulation 16 (1) of the SEBI (LODR) Regulations. For details of the Independent
						Directors, please refer to section titled 'Our Management' beginning on page 73 of this
						Letter of Offer
						Page 4 of 193

				Term				Description
								The committee of the Board of directors reconstituted as our Company's Internal
				Internal Compliant Committee			Compliant Committee in accordance with the provisions Sexual Harassment of Women
								at Workplace (Prevention, Prohibition and Redressal) Act, 2013
				ISIN of our Company		International Securities Identification Number being INE553C01016
								Key management personnel of our Company in terms of Regulation 2(1) (bb) of the
				Key Management Personnel /KMP			SEBI (ICDR) Regulations and Section 2(51) of the Companies Act. For details, please
								refer to section titled 'Our Management' beginning on page 73 of this Letter of Offer
								A policy adopted by our Company, in the Board meeting held on November 10, 2015,
				Materiality Policy			for identification of material litigation(s) for the purpose of disclosure of litigations
								which was subsequently amended on Saturday, January 22, 2022
				MoA/ Memorandum of Association			The Memorandum of Association of North Eastern Carrying Corporation Limited, as
						amended from time to time
				Nomination and Remuneration			The committee of the Board of directors reconstituted as our Company's Nomination
						and Remuneration Committee in accordance with the provisions of Section 178 of the
				Committee
						Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations
								The promoters of our Company are Sunil Kumar Jain, Utkarsh Jain, Vanya Jain, Suvi
				Promoters			Developers Private Limited, NECC Securities Private Limited, and NECC Automobiles
								Private Limited
								Persons and entities forming part of the promoter group of our Company as determined
				Promoter Group			in terms of Regulation 2(1)(pp) of the SEBI (ICDR) Regulations and as disclosed by
						our Company in the filings made with Stock Exchanges under the SEBI (LODR)
								Regulations
				Registered Office			The registered office of our Company is situated at 9062/47, NECC House, Ram Bagh
						Road, Azad Market, Delhi - 110006, India
				Registrar of Companies			Registrar of Companies, Delhi and Haryana situated at 4th Floor, IFCI Tower, 61, Nehru
						Place, New Delhi - 110019, India
								The committee of the Board of Directors constituted as our Company's Risk
				Risk Management Committee			Management Committee in accordance with the provisions of Regulation 21 of the
								SEBI (LODR) Regulations. It was dissolved w.e.f September 04, 2021due to its Non-
								applicability.
				Stakeholders' Relationship			The committee of the Board of Directors constituted as our Company's Stakeholders'
						Relationship Committee in accordance with Section 178 of the Companies Act, 2013
				Committee
						and Regulation 20 of the SEBI (LODR) Regulations
				Stock Exchanges			The stock exchanges where the Equity Shares are presently listed, being BSE Limited
						and National Stock Exchange of India Limited
	ISSUE RELATED TERMS
				Term				Description
								Abridged Letter of Offer to be sent to the Eligible Equity Shareholders with respect to
			Abridged Letter of Offer				the Issue in accordance with the provisions of the SEBI (ICDR) Regulations and the
								Companies Act.
			Additional Rights Shares				The Rights Shares applied or allotted under this Issue in addition to the Rights
						Entitlement.
			Allot/ Allotment/ Allotted				Unless the context requires, the allotment of Rights Shares pursuant to this Issue.
								The account opened with the Bankers to the Issue, into which the Application amounts
			Allotment Account				by ASBA blocked in the ASBA Account, with respect to successful Investors will be
								transferred on the Transfer Date in accordance with Section 40 (3) of the Companies Act.
								The bank which is a clearing member and registered with SEBI as bankers to an issue
			Allotment Account Bank				and with whom the Allotment Account will be opened, in this case being, Kotak
								Mahindra Bank Limited.
								Note, advice, or intimation of Allotment sent to each successful Investors who have been
			Allotment Advice				or is to be Allotted the Rights Shares pursuant to this Issue after the Basis of Allotment
								has been approved by the Designated Stock Exchange.
			Allotment Date				The date on which the Allotment is made pursuant to this Issue.
			Allottees				Person(s) who are Allotted Rights Shares pursuant to the Allotment.
			Applicant(s)/ Investor(s)				Eligible Shareholder(s) and/or Renouncee(s) who make are entitled to make an
						application for the Rights Shares pursuant to this Issue in terms of the Letter of Offer.
			Application				Application made through submission of the Application Form or plain paper
						Application to the Designated Branch(es) of the SCSBs or online/ electronic application
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