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Capital Advisors PDF

678 Pages·2014·6.06 MB·English
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Draft Letter of Offer March 27, 2014 For Equity Shareholders of our Company only IL&FS ENGINEERING AND CONSTRUCTION COMPANY LIMITED AND REDUCED IL&FS Engineering and Construction Company Limited and reduced (the “Company”) was originally incorporated as Satyam Constructions Private Limited on May 6, 1988 under the Companies Act. For further details of the change in name and registered office of our Company, please see chapter titled “History and Other Corporate Matters” beginning on page 153 of this Draft Letter of Offer. Registered Office: Door No 8-2-120/113/3/4F, Sanali Info Park, Cyber Towers, Road No. 2, Banjara Hills, Hyderabad 500 033 Tel: +91 40 40409333 Fax: +91 40 40409444/40409555 Contact Person: Mr G Venkateswar Reddy, Company Secretary and Compliance Officer E-mail:[email protected];Website: www.ilfsengg.com OUR PROMOTER : INFRASTRUCTURE LEASING & FINANCIAL SERVICES LIMITED FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THE COMPANY ONLY ISSUE OF [] EQUITY SHARES WITH A FACE VALUE OF ` 10 EACH FOR CASH AT A PRICE OF ` [] PER EQUITY SHARE INCLUDING A PREMIUM OF ` [] PER EQUITY SHARE (“RIGHTS ISSUE EQUITY SHARES”) FOR AN AMOUNT AGGREGATING UP TO `300 CRORE ON A RIGHTS BASIS TO THE EXISTING ELIGIBLE EQUITY SHAREHOLDERS OF IL&FS ENGINEERING AND CONSTRUCTION COMPANY LIMITED AND REDUCED (THE “COMPANY” OR THE “ISSUER”) IN THE RATIO OF [] EQUITY SHARES FOR EVERY [] FULLY PAID-UP EQUITY SHARES HELD BY THE EXISTING ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [] (THE “ISSUE”). THE ISSUE PRICE OF EACH RIGHTS ISSUE EQUITY SHARE IS [] TIMES THE FACE VALUE OF EQUITY SHARE. FOR FURTHER DETAILS, PLEASE SEE CHAPTER TITLED “TERMS OF THE ISSUE” BEGINNING ON PAGE 429 OF THIS DRAFT LETTER OF OFFER. GENERAL RISKS 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 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 the Company and the Issue including the risks involved. The Equity Shares being offered in the Issue have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Draft Letter of Offer. Specific attention of Investors is invited to the chapter titled “Risk Factors” beginning on page 14 of this Draft Letter of Offer before making an investment in the Issue. COMPANY’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft 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 Draft 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 Draft 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”) and the National Stock Exchange of India Limited (“NSE”) (together the “Stock Exchanges”). We have received “in-principle” approval from the BSE and the NSE for listing the Rights Issue Equity Shares arising from the Issue vide letters dated [] and [], respectively. For the purposes of the Issue, the designated stock exchange is []. LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE Capital Advisors Edelweiss Financial Services Limited IL&FS Capital Advisors Limited# Karvy Computershare Private Limited Edelweiss House Off. C.S.T. Road, Kalina The IL&FS Financial Centre, No. 17-24, Vittalrao Nagar, Madhapur Mumbai, 400 098 Plot C-22, G Block, Bandra Kurla Complex Hyderabad - 500 081 Tel:+91 22 4086 3535 Fax:+91 22 4086 3610 Bandra (East), Mumbai 400 051 Toll Free No: 1-800-3454001 Website:www.edelweissfin.com Tel: + 91 22 2659 3560 Fax: + 91 22 2659 2966 Tel: +91 40 23420818 E-mail:[email protected] Website:www.ilfscapital.com Fax: +91 40 23420814 Investor Grievance E-mail:customerservice. E-mail:[email protected] Website: www.karvycomputershare.com [email protected] Investor Grievance E-mail:investorgrievances.icap@ Email: [email protected] Contact Person: Ms. Neetu Ranka/ ilfsindia.com Investor Grievance Email: il&[email protected] Mr. Umang Poddar Contact Person: Mr. Bhavin Ranawat/ Mr. Saumya Shah Contact Person: Mr. M Murali Krishna SEBI Registration No.: INM0000010650 SEBI Registration No.: INM000011955 SEBI Registration No: INR000000221 LAST DATE FOR REQUEST FOR SPLIT ISSUE OPENS ON ISSUE CLOSES ON APPLICATION FORMS [] [] [] #IL&FS Capital Advisors Limited is an associate of the Company as per the SEBI Merchant Bankers Regulations. IL&FS Capital Advisors Limited has signed the due diligence certificate and accordingly has been disclosed as a Lead Manager. Further, in compliance with the proviso of Regulation 21A of SEBI Merchant Bankers Regulations and Regulation 5(3) of the SEBI ICDR Regulations, IL&FS Capital Advisors Limited would be involved only in the marketing of the Issue. TABLE OF CONTENTS SECTION I – GENERAL .................................................................................................................................. 1 DEFINITIONS AND ABBREVIATIONS ..................................................................................................................... 1 NOTICE TO OVERSEAS SHAREHOLDERS ............................................................................................................ 7 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ........................................ 9 FORWARD LOOKING STATEMENTS ................................................................................................................... 13 SECTION II - RISK FACTORS ..................................................................................................................... 14 RISK FACTORS ........................................................................................................................................................... 14 SECTION III - INTRODUCTION ................................................................................................................. 53 SUMMARY OF INDUSTRY ....................................................................................................................................... 53 SUMMARY OF BUSINESS ......................................................................................................................................... 58 SUMMARY OF FINANCIAL INFORMATION ....................................................................................................... 61 THE ISSUE .................................................................................................................................................................... 73 GENERAL INFORMATION ...................................................................................................................................... 74 CAPITAL STRUCTURE ............................................................................................................................................. 80 SECTION IV – PARTICULARS OF THE ISSUE ........................................................................................ 99 OBJECTS OF THE ISSUE ........................................................................................................................................... 99 BASIS OF ISSUE PRICE ........................................................................................................................................... 106 STATEMENT OF TAX BENEFITS .......................................................................................................................... 108 SECTION V – ABOUT US ............................................................................................................................ 117 INDUSTRY OVERVIEW .......................................................................................................................................... 117 OUR BUSINESS .......................................................................................................................................................... 130 REGULATIONS AND POLICIES ............................................................................................................................ 147 HISTORY AND OTHER CORPORATE MATTERS ............................................................................................. 153 MANAGEMENT ........................................................................................................................................................ 174 OUR PROMOTER ..................................................................................................................................................... 191 GROUP COMPANIES ............................................................................................................................................... 195 RELATED PARTY TRANSACTIONS .................................................................................................................... 288 DIVIDEND POLICY .................................................................................................................................................. 289 SECTION VI – FINANCIAL INFORMATION .......................................................................................... 290 FINANCIAL STATEMENTS .................................................................................................................................... 290 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............................................................................................................................................................ 291 MARKET PRICE INFORMATION ......................................................................................................................... 317 FINANCIAL INDEBTEDNESS ................................................................................................................................ 319 SECTION VII – LEGAL AND OTHER INFORMATION ........................................................................ 328 OUTSTANDING LITIGATION AND DEFAULTS ................................................................................................ 328 GOVERNMENT AND OTHER APPROVALS ....................................................................................................... 400 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................... 417 SECTION VIII – OFFERING INFORMATION ........................................................................................ 429 TERMS OF THE ISSUE............................................................................................................................................. 429 TERMS OF THE ARTICLES OF ASSOCIATION ................................................................................................. 462 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................................ 481 DECLARATION............................................................................................................................................ 483 SECTION I – GENERAL DEFINITIONS AND ABBREVIATIONS In this Draft Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this chapter. In this Draft Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to the “Company”, are references to IL&FS Engineering and Construction Company Limited and reduced. References to “we”, “us” and “our” are references to IL&FS Engineering and Construction Company Limited and reduced along with its Subsidiaries, Joint Ventures and associates on a consolidated basis. References to “you” are to the prospective investors in the Issue. Conventional / General Terms Term Description AIF A fund in terms of section 2(1)(b) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 Act/ Companies Act Companies Act, 1956 , as amended (without reference to the sections thereof that have ceased to have effect upon notification of sections of the Companies Act, 2013) (the “Companies Act, 1956”) read with the applicable provisions of the Companies Act, 2013, to the extent notified and in effect (the “Companies Act, 2013”), and together with the Companies Act, 1956, the “Companies Act”) Depositories Act The Depositories Act, 1996 and amendments thereto Depository A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended Depository Participant/ A depository participant as defined under the Depositories Act DP IT Act The Income Tax Act, 1961 and amendments thereto Mutual Fund/ MF A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996 SEBI Act Securities and Exchange Board of India Act, 1992 and amendments thereto SEBI ICDR Regulations The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and amendments thereto Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended Takeover Regulations The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 as amended Issue related terms Term Description Abridged Letter of Offer The abridged letter of offer to be sent to the Eligible Equity Shareholders with respect to this Issue in accordance with SEBI ICDR Regulations Allot/ Allotted/ Unless the context requires, the allotment of Rights Issue Equity Shares pursuant to Allotment the Issue Allottees Persons to whom Rights Issue Equity Shares are issued pursuant to the Issue Application Unless the context otherwise requires, refers to an application for Allotment of Rights Issue Equity Shares in this Issue Application Supported The application (whether physical or electronic) used by an ASBA investor to make by Blocked Amount/ an application authorizing the SCSB to block the amount payable on application in ASBA their specified bank account ASBA Account Account maintained by an ASBA Investor with a SCSB which will be blocked by such SCSB to the extent of the appropriate amount in relation to an application by an ASBA Investor ASBA Investor Eligible Equity Shareholders proposing to subscribe to the Issue through ASBA process and: a. Who are holding our Equity Shares in dematerialized form as on the Record Date and have applied for their Rights Entitlements and/ or additional Equity 1 Term Description Shares in dematerialized form; b. Who have not renounced their Rights Entitlements in full or in part; c. Who are not Renouncees; and d. Who are applying through blocking of funds in a bank account maintained with SCSBs All (i) QIBs, (ii) Non-Insitutional Investors, and (iii) other investors whose application value exceeds ` 200,000, complying with the above conditions, must mandatorily invest through the ASBA process Bankers to the Issue [(cid:1)] Composite Application The form used by an Investor to make an application for the Allotment of Rights Form / CAF Issue Equity Shares in the Issue Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that we would issue for the Rights Issue Equity Shares Allotted to one folio Controlling Branches/ Such branches of the SCSBs which coordinate with the Lead Managers, the Controlling Branches of Registrar to the Issue and the Stock Exchanges, a list of which is available on the SCSBs http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time Designated Stock [(cid:1)] Exchange Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA Investors and a list of which is available on http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time Draft Letter of Offer This Draft Letter of Offer dated March 27, 2014 filed with SEBI and issued by our Company in accordance with the SEBI ICDR Regulations Equity Share(s) Equity shares of our Company having a face value of `10 each unless otherwise specified in the context thereof Equity Shareholder(s) The holders of Equity Shares of our Company Eligible Equity The holders of Equity Shares as on the Record Date i.e. [(cid:1)], 2014 Shareholder(s) Group Companies Includes those companies, firms and ventures that are promoted by our Promoters, irrespective of whether these entities are covered under Section 370(1)(B) of the Companies Act Investor(s) Eligible Equity Shareholders and/or Renouncees applying in the Issue Issue/ Rights Issue Issue of [(cid:1)] Equity Shares with a face value of `10 each for cash at a price of ` [(cid:1)] per Equity Share including a premium of ` [(cid:1)] per Equity Share for an amount aggregating up to ` 300 crore on a rights basis to the Eligible Equity Shareholders in the ratio of [(cid:1)] Equity Share(s) for every [(cid:1)] fully paid-up Equity Share(s) held by the existing Equity Shareholders on the Record Date. The issue price is [(cid:1)] times the face value of the Equity Shares. The Issue includes a right exercisable by the Eligible Equity Shareholders to renounce the Rights Issue Equity Shares offered to them, either in full or in part, in favour of any other person or persons Issue Closing Date [(cid:1)] Issue Opening Date [(cid:1)] Issue Price ` [(cid:1)] per Rights Issue Equity Share Issue Proceeds The proceeds of the Issue that are available to us Issue Size The issue of [(cid:1)] Equity Shares aggregating up to ` 300 crore Lead Managers Edelweiss Financial Services Limited and IL&FS Capital Advisors Limited Letter of Offer The final letter of offer to be filed with the Stock Exchanges after incorporating the observations received from the SEBI on this Draft Letter of Offer Listing Agreement The listing agreement entered into between the Company and the Stock Exchanges Master Restructuring The Master Restructuring Agreement dated September 27, 2010 with ICICI Bank, Agreement / MRA Allahabad Bank, Bank of Maharashtra, Bank of India, IDBI Bank, Indian Overseas Bank, Punjab National Bank, State Bank of Hyderabad, State Bank of India and Vijaya Bank 2 Term Description Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please see chapter titled “Objects of the Issue” beginning on page 99 of this Draft Letter of Offer Non-Institutional All Investors, whether resident in India or otherwise, including sub-accounts of FIIs Investors registered with SEBI, FPIs, which are foreign corporate or foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Rights Issue Equity Shares for a cumulative amount of more than ` 200,000 Qualified Foreign Qualified Foreign Investor as defined under the Securities and Exchange Board Investors / QFIs of India (Foreign Portfolio Investors) Regulations, 2014 (as amended), registered with SEBI under applicable laws in India. A Qualified Foreign Investor may buy, sell or otherwise continue to deal in securities without registration as Foreign Portfolio Investors subject to compliance with conditions specified in the SEBI (Foreign Portfolio Investors) Regulations, 2014. QIBs or Qualified Public financial institutions as specified in section 4A of the Companies Act, Institutional Buyers scheduled commercial banks, mutual fund registered with SEBI, foreign portfolio investor other than Category III foreign portfolio investor, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institution, AIF registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with the Insurance Regulatory Development Authority, provident fund with minimum corpus of ` 250 million, pension fund with minimum corpus of ` 250 million, National Investment Fund set up by the Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India Record Date [(cid:1)] Refund through Refunds through NECS, Direct Credit or NEFT, as applicable electronic transfer of funds Registrar of Companies/ The Registrar of Companies, Hyderabad RoC Registrar to the Karvy Computershare Private Limited Issue/Registrar and Transfer Agent Renouncees Any persons who has / have acquired Rights Entitlements from the Eligible Equity Shareholders Restated Consolidated Restated Consolidated Summary Statement of Assets and Liabilities as at Summary Statements September 30, 2013, September 30, 2012, March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 and Statement of Profit and Loss and Statement of Cash Flows for interim twelve months period ended September 30, 2013, eighteen months financial year ended September 30, 2012 and for each of the financial years ended March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 for our Company, its subsidiaries, joint ventures and associates Restated Summary Collectively, the Restated Consolidated Summary Statements and Restated Statements Unconsolidated Summary Statements Restated Unconsolidated Restated Unconsolidated Summary Statement of Assets and Liabilities as at Summary Statements September 30, 2013, September 30, 2012, March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 and Statement of Profit and Loss and Statement of Cash Flows for interim twelve months period ended September 30, 2013, eighteen months financial year ended September 30, 2012 and for each of the financial years ended March 31, 2011, March 31, 2010, March 31, 2009 and March 31, 2008 for our Company Retail Individual Individual Investors who have applied for Equity Shares for an amount not more Investors than ` 200,000 (including HUFs applying through their Karta) Rights Entitlement The number of Equity Shares that an Eligible Equity Shareholder is entitled to in proportion to the number of Equity Shares held by the Eligible Equity Shareholder on the Record Date 3 Term Description Rights Issue Equity The Equity Share(s) offered in this Issue Share(s) SAF(s) Split Application Form(s) SCSB(s) A Self Certified Syndicate Bank, registered with SEBI, which acts as a banker to the Issue and which offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time Share Certificate The certificate in respect of the Rights Issue Equity Shares allotted to a folio Stock Exchanges BSE and NSE, where the Equity Shares are presently listed and traded Company related and industry related terms Term Description Articles/ Articles of The articles of association of our Company, as amended Association Auditor S.R. BATLIBOI & ASSOCIATES LLP, our statutory auditor Board/ Board of Board of Directors of our Company including any committees thereof Directors Company IL&FS Engineering and Construction Company Limited and reduced ESOS 2007 Employee Stock Option Scheme 2007 for our employees as approved by the shareholders on March 30, 2007 ESOS 2009 Employee Stock Option Scheme 2009 for our employees as approved by the shareholders on November 9, 2009 Financial Year/ Fiscal/ Any period of twelve months ended March 31 of that particular year, unless Fiscal Year/ FY otherwise stated. With respect to our Company: The Company had extended its financial year 2011-12 by six months and accordingly, had prepared its financial statements for financial year for a period of eighteen months from April 1, 2011 and ending on September 30, 2012. Thus, Fiscal 2012 for the Company refers to an 18 month period. Further, the next financial year of the Company i.e. Fiscal 2013 has been extended by a period of six months i.e. up to March 31, 2014 Memorandum/ The memorandum of association of our Company, as amended Memorandum of Association Promoter Our Promoter, being Infrastructure Leasing & Financial Services Limited Promoter Group Such persons and entities constituting our promoter group pursuant to Regulation 2(1)(zb) of the SEBI ICDR Regulations. Registered Office/ Our registered office located at Door No 8-2-120/113/3/4F,Sanali Info Park, Cyber Corporate Office Towers, Road No. 2, Banjara Hills, Hyderabad 500 033 and corporate office located at 4th Floor, Paras Down Town Centre, Golf Course Road, Sector – 53, Gurgaon – 122 002 Subsidiaries Maytas Infra Assets Limited, Maytas Metro Limited, Maytas Vasishta Varadhi Limited, Angeerasa Greenfields Private Limited, Ekadanta Greenfields Private Limited, Saptaswara Agro-farms Private Limited and Maytas Infra Saudi Arabia Co Joint Ventures NCC – Maytas (JV) Pocharam, NEC – NCC – Maytas (JV), Maytas – NCC (JV), NCC – Maytas (JV) U1, Maytas – CTR (JV), NCC – Maytas - ZVS (JV), Maytas KBL (JV), Maytas KCCPL Flow more (JV), Maytas MEIL KBL (JV), Maytas MEIL ABB AAG (JV), MEIL Maytas ABB AAG (JV), MEIL Maytas KBL (JV), MEIL Maytas WPIL (JV), MEIL Maytas AAG (JV), MEIL – SEW – Maytas – BHEL (JV), L&T KBL Maytas (JV), Maytas – Rithwik (JV), Maytas Sushee (JV), Maytas Gayatri (JV), IL&FS Engg – Kalindee (JV), DIPL – IL&FS Engg (JV) Abbreviations 4 Term Description AGM Annual General Meeting AS Accounting Standards issued by the Institute of Chartered Accountants of India BOQ Bill of quantities BOT Build, operate and transfer BSE BSE Limited CAGR Compounded Annual Growth Rate CARO Companies (Auditor’s Report) Order 2003 (as amended) CDSL Central Depository Services (India) Limited DIN Director Identification Number DP ID Depository Participant Identity EGM Extraordinary General Meeting EPC Engineering Procurement and Construction ERP Enterprise Resource Planning EPS Earnings Per Share ERP Enterprise resource FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999, including the regulations framed thereunder FII(s) Foreign Institutional Investor as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 (as amended), registered with SEBI under applicable laws in India and as repealed by Foreign Portfolio Investors defined under the SEBI (Foreign Portfolio Investors) Regulations, 2014. A Foreign Institutional Investor or a sub account and may buy, sell or otherwise continue to deal in securities without registration as Foreign Portfolio Investors subject to compliance with conditions specified in the SEBI (Foreign Portfolio Investors) Regulations, 2014. FPI(s) Foreign Portfolio Investor as defined under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 (as amended), registered with SEBI under applicable laws in India FIPB Foreign Investment Promotion Board FVCI Foreign Venture Capital Investors as defined under the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000 registered with SEBI under applicable laws in India GDP Gross Domestic Product GOI Government of India HUF Hindu Undivided Family ICAI Institute of Chartered Accountants of India IFRS International Financial Reporting Standards IFSC Indian Financial System Code Indian GAAP Generally accepted accounting principles followed in India ISIN International Securities Identification Number IT Information Technology JV Joint Venture MICR Magnetic Ink Character Recognition MIDC Maharashtra Industrial Development Corporation (A Government of Maharashtra Undertaking) MMT Million Metric Tonnes NAV Net Asset Value NECS National Electronic Clearing Services NEFT National Electronic Funds Transfer NHAI National Highways Authority of India NR Non Resident NRI(s) Non Resident Indian(s) NRE Non Resident External Account NRO Non Resident Ordinary Account NSDL National Securities Depository Limited 5 Term Description NSE National Stock Exchange of India Limited OCB Overseas Corporate Body p.a. Per Annum PAN Permanent Account Number PAT Profit After Tax PPP Public private partnership RBI Reserve Bank of India Regulation S Regulation S of the Securities Act RoC Registrar of Companies, Hyderabad Rs. /`/Rupees/INR Indian Rupees RTGS Real Time Gross Settlement SEZ Special Economic Zone SEBI Securities and Exchange Board of India Securities Act U.S. Securities Act of 1933, as amended SKUs Stock Keeping Units U.S. / US / USA Unites States of America The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms under the Companies Act, 1956, the Companies Act, 2013 to the extent notified, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder. Notwithstanding the foregoing, terms in chapters titled “Terms of the Articles of Association”, “Statement of Tax Benefits”, “Regulations and Policies” and “Financial Statements” on pages 462, 108, 147 and 290, respectively of this Draft Letter of Offer, shall have the meanings given to such terms in these respective chapters. 6 NOTICE TO OVERSEAS SHAREHOLDERS The distribution of the Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession the Draft Letter of Offer, Letter of Offer, Abridged Letter of Offer or CAF may come are required to inform themselves about and observe such restrictions. We are making this Issue of Equity Shares on a rights basis to the Eligible Equity Shareholders and will dispatch the Letter of Offer/ Abridged Letter of Offer and CAFs to such shareholders who have provided an Indian address. Those overseas shareholders who do not update our records with their Indian address or the address of their duly authorized representative in India, prior to the date on which we propose to dispatch the Letter of Offer / Abridged Letter of Offer and CAFs, shall not be sent the Letter of Offer / Abridged Letter of Offer and CAFs. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI. Accordingly, the rights or Equity Shares may not be offered or sold, directly or indirectly, and the Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of the Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, under those circumstances, the Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of the Letter of Offer should not, in connection with the issue of the rights or Equity Shares, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If the Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the rights or Equity Shares referred to in the Letter of Offer. Envelopes containing a CAF should not be dispatched from any jurisdiction where it would be illegal to make an offer, and all persons subscribing for the Equity Shares in this Issue must provide an Indian address. Any person who makes an application to acquire rights and the Equity Shares offered in this Issue will be deemed to have declared, represented, warranted and agreed that he is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations prevailing in his jurisdiction. We, the Registrar, the Lead Managers or any other person acting on behalf of us reserve the right to treat any CAF as invalid where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements and we shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF. Neither the delivery of the Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company’s affairs from the date hereof or that the information contained herein is correct as at any time subsequent to the date of the Letter of Offer. The contents of the Letter of Offer should not be construed as legal, tax or investment advice. Prospective investors may be subject to adverse foreign, state or local tax or legal consequences as a result of the offer of Equity Shares. As a result, each investor should consult its own counsel, business advisor and tax advisor as to the legal, business, tax and related matters concerning the offer of Equity Shares. In addition, neither our Company nor the Lead Managers are making any representation to any offeree or purchaser of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or purchaser under any applicable laws or regulations. NO OFFER IN THE UNITED STATES The rights and the Equity Shares have not been and will not be registered under the United States Securities Act, 1933, as amended (“Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (“United States” or “U.S.”) or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act (“Regulation S”)), except in a transaction exempt from the registration requirements of the Securities Act. The rights referred to in this Draft Letter of Offer are being offered in India, but not in the United States. The offering to which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any securities or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said securities or rights. Accordingly, the Draft Letter of Offer / Letter of Offer / Abridged Letter of Offer and the enclosed CAF should not be forwarded to or transmitted in or into the United States at any time. Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or who our Company or any person acting on 7 behalf of our Company has reason to believe is, either a “U.S. Person” (as defined in Regulation S) or otherwise in the United States when the buy order is made. Envelopes containing CAF should not be postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer under the Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares in registered form must provide an address for registration of the Equity Shares in India. Our Company is making this issue of Equity Shares on a rights basis to the Eligible Equity Shareholders of our Company and the Letter of Offer / Abridged Letter of Offer and CAF will be dispatched to Eligible Equity Shareholders who have an Indian address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and agreed, (i) that it is not and that, at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it is not a “U.S. Person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations. Our Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the CAF to the effect that the subscriber is not a “U.S. Person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States and is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations; (ii) appears to our Company or its agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or (iv) where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; and our Company shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF. Our Company is informed that there is no objection to a United States shareholder selling its rights in India. Rights Entitlement may not be transferred or sold to any U.S. Person. 8

Description:
The existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) (together the “Stock.
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