Strictly Confidential - Not for Circulation

Placement Document

Serial Number: ____

Date: September 26, 2014

JYOTI STRUCTURES LIMITED

Our Company was originally incorporated as Jyoti Structurers Limited on May 27, 1974 under the Companies Act, 1956. Pursuant to a change of name to

Jyoti Structures Private Limited, we were issued a fresh certificate of incorporation on October 21, 1974. We further changed our name on October 21,

1974, to Jyoti Structures Limited on being converted into a public limited company. Our Company’s corporate identification number (CIN) is

L45200MH1974PLC017494.

Registered and Corporate Office: Valecha Chambers, 6thFloor, New Link Road, Andheri (West), Mumbai 400 053, Maharashtra, India. Tel: +91 22 4091

5000 Fax: +91 22 4091 5014/15 Website : www.jsl.in; Email : investor@jsl.in

Jyoti Structures Limited (Company or Issuer) is issuing upto 2,33,87,018 equity shares of face value of ₹ 2 each (each an Equity Share) at a price of ₹

42.85 , including a premium of ₹ 40.85 per Equity Share aggregating ₹ 10,021.34 lakhs (Issue).

ISSUE IN RELIANCE ON CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AS AMENDED AND SECTION 42 OF THE COMPANIES ACT, 2013 READ

WITH RULE 14 OF THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014

THIS ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING MADE IN RELIANCE UPON CHAPTER VIII OF

THE SEBI REGULATIONS AND SECTION 42 OF THE COMPANIES ACT, 2013, READ WITH RULE 14 OF THE COMPANIES

(PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014. THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH

PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO THE

PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA OTHER THAN QUALIFIED

INSTITUTIONAL BUYERS (QIB) AS DEFINED UNDER THE SEBI REGULATIONS. THIS PLACEMENT DOCUMENT WILL BE

CIRCULATED ONLY TO SUCH QIBS WHOSE NAMES ARE RECORDED BY OUR COMPANY PRIOR TO MAKING AN INVITATION TO

SUBSCRIBE TO EQUITY SHARES.

Invitations, offers and sales of Equity Shares shall only be made pursuant to the Preliminary Placement Document, this Placement Document, the

Application Form and the Confirmation of Allocation Note. For further details, please see section titled ‘Issue Procedure’ on page 135 of this Placement

Document. The distribution of this Placement Document or the disclosure of its contents to any person, other than Qualified Institutional Buyers, as defined

in the SEBI Regulations and persons retained by QIBs to advise them with respect to their purchase of Equity Shares, is unauthorised and prohibited. Each

prospective investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Placement

Document or any documents referred to in this Placement Document.

All of our Company’s outstanding Equity Shares are listed on the National Stock Exchange of India Limited (NSE) and the BSE Limited (BSE, and together

with the NSE, the Stock Exchanges). The closing price of the outstanding Equity Shares on the BSE and the NSE on September 23, 2014 was ₹ 41.55 and ₹

41.50 per Equity Share, respectively. In-principle approvals under Clause 24(a) of the Listing Agreement) for listing of the Equity Shares have been received

on September 23, 2014 from the BSE and NSE. Applications shall be made for the listing of the Equity Shares offered through this Placement Document to

the Stock Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained

herein. Admission of the Equity Shares to trading on the Stock Exchanges should not be taken as an indication of the merits of our Company or the Equity

Shares.

A copy of the Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4) has been delivered to the Stock Exchanges. A

copy of this Placement Document (which will include disclosures prescribed under Form PAS-4) will also be delivered to the Stock Exchanges. Our

Company shall also make the requisite filings with the Registrar of Companies, Maharashtra at Mumbai (RoC) and the Securities and Exchange Board of

India (SEBI) within the stipulated period as required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules,

2014 and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. This Placement Document has not been reviewed by SEBI, the

Reserve Bank of India (RBI), the Stock Exchanges or any other regulatory or listing authority and is intended only for use by QIBs. This Placement

Document has not been and will not be registered as a prospectus with the Registrar of Companies in India, and will not be circulated or distributed to the

public in India or any other jurisdiction and will not constitute a public offer in India or any other jurisdiction.

INVESTMENTS IN THE EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT

INVEST ANY FUNDS IN THIS ISSUE UNLESS THEY ARE PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR

INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO READ THE SECTION TITLED ‘RISK FACTORS’ ON PAGE 45 OF THIS

PLACEMENT DOCUMENT CAREFULLY BEFORE TAKING AN INVESTMENT DECISION IN THIS ISSUE. EACH PROSPECTIVE

INVESTOR IS ADVISED TO CONSULT ITS ADVISORS ABOUT THE PARTICULAR CONSEQUENCES TO IT OF AN INVESTMENT IN

THE EQUITY SHARES BEING ISSUED PURSUANT TO THIS PLACEMENT DOCUMENT. PROSPECTIVE INVESTORS OF THE EQUITY

SHARES OFFERED SHOULD CONDUCT THEIR OWN DUE DILIGENCE ON THE EQUITY SHARES. IF YOU DO NOT UNDERSTAND

THE CONTENTS OF THIS PLACEMENT DOCUMENT YOU SHOULD CONSULT AN AUTHORISED FINANCIAL ADVISOR.

YOU MAY NOT BE. AND ARE, NOT AUTHORIZED TO (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; (2)

REPRODUCE THIS PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENTS

OR UTILISE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT

THE ISSUE. ANY DISTRIBUTION OR REPRODUCTION OF THIS PLACEMENT DOCUMENT IN WHOLE OR IN PART IS

UNAUTHORIZED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE SEBI REGULATIONS

OR OTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS.

THIS PLACEMENT DOCUMENT HAS BEEN PREPARED BY OUR COMPANY SOLELY FOR PROVIDING INFORMATION IN

CONNECTION WITH THE PROPOSED ISSUE OF THE EQUITY SHARES DESCRIBED IN THIS PLACEMENT DOCUMENT.

The information on our Company’s website or any website directly or indirectly linked to our Company’s website does not form part of this Placement

Document and prospective investors should not rely on such information contained in, or available through, such websites.

The Equity Shares being offered and sold in this Issue have not been and will not be registered under the U.S. Securities Act of 1933, as amended

(Securities Act), and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the

registration requirements of the Securities Act and applicable state securities laws. The Equity Shares are only being offered and sold outside the United

States in reliance on Regulation S under the Securities Act (Regulation S).For further details, please see sections titled ‘Distribution and Solicitation

Restrictions’ and ‘Transfer Restrictions’ on pages 148 and 153, respectively of this Placement Document.

This Placement Document is dated September 26, 2014.

BOOK RUNNING LEAD MANAGER

Edelweiss Financial Services Limited

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TABLE OF CONTENTS

NOTICE TO INVESTORS .......................................................................................................................... 3

REPRESENTATIONS BY INVESTORS ................................................................................................... 5

PRESENTATION OF FINANCIAL AND OTHER INFORMATION .................................................. 12

EXCHANGE RATES ................................................................................................................................. 14

INDUSTRY AND MARKET DATA ......................................................................................................... 15

FORWARD LOOKING STATEMENTS ................................................................................................. 16

ENFORCEMENT OF CIVIL LIABILITIES ........................................................................................... 18

DEFINITIONS AND ABBREVIATIONS ................................................................................................ 19

DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE

COMPANIES ACT, 2013 ........................................................................................................................... 26

SUMMARY OF THE ISSUE ..................................................................................................................... 30

SUMMARY OF BUSINESS ....................................................................................................................... 32

SUMMARY FINANCIAL INFORMATION ........................................................................................... 37

RISK FACTORS ......................................................................................................................................... 45

MARKET PRICE INFORMATION ......................................................................................................... 63

USE OF PROCEEDS .................................................................................................................................. 66

CAPITALISATION STATEMENT .......................................................................................................... 67

CAPITAL STRUCTURE ........................................................................................................................... 69

DIVIDENDS ................................................................................................................................................ 73

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATION ..................................................................................................................... 74

INDUSTRY OVERVIEW ........................................................................................................................ 100

OUR BUSINESS ........................................................................................................................................ 107

BOARD OF DIRECTORS AND SENIOR MANAGEMENT .............................................................. 119

PRINCIPAL SHAREHOLDERS AND OTHER INFORMATION ..................................................... 132

ISSUE PROCEDURE ............................................................................................................................... 135

PLACEMENT ........................................................................................................................................... 146

DISTRIBUTION AND SOLICITATION RESTRICTIONS ................................................................ 148

TRANSFER RESTRICTIONS ................................................................................................................ 153

THE SECURITIES MARKET OF INDIA ............................................................................................. 154

DESCRIPTION OF EQUITY SHARES ................................................................................................. 157

TAXATION ............................................................................................................................................... 160

LEGAL PROCEEDINGS ......................................................................................................................... 173

INDEPENDENT ACCOUNTANTS ........................................................................................................ 180

GENERAL INFORMATION .................................................................................................................. 181

FINANCIAL STATEMENTS .................................................................................................................. 182

DECLARATION ....................................................................................................................................... 183

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NOTICE TO INVESTORS

Our Company has furnished and accepts full responsibility for the information contained in this Placement

Document and to the best of its knowledge and belief, having made all reasonable enquiries, confirms that this

Placement Document contains all information with respect to our Company, its Subsidiaries, its Joint Ventures

and its associate companies (together the Group) and the Equity Shares which are material in the context of

this Issue. The statements contained in this Placement Document relating to our Company, the Group and the

Equity Shares are, in all material respects, true and accurate and not misleading; the opinions and intentions

expressed in this Placement Document with regard to our Company, the Group and the Equity Shares are

honestly held, have been reached after considering all relevant circumstances, are based on information

presently available to our Company and are based on reasonable assumptions. There are no other facts in

relation to our Company, the Group and the Equity Shares, the omission of which would, in the context of the

Issue, make any statement in this Placement Document misleading in any material respect. Further, all

reasonable enquiries have been made by our Company to ascertain such facts and to verify the accuracy of all

such information and statements.

The Book Running Lead Manager has not separately verified the information contained in this Placement

Document (financial, legal or otherwise). Neither the Book Running Lead Manager nor any of its respective

members, employees, counsel, officers, directors, representatives, agents or affiliates makes any express or

implied representation, warranty or undertaking, and no responsibility or liability is accepted, by the Book

Running Lead Manager, as to the accuracy or completeness of the information contained in this Placement

Document or any other information supplied in connection with the Equity Shares. Each person receiving this

Placement Document acknowledges that such person has neither relied on the Book Running Lead Manager

nor on any person affiliated with the Book Running Lead Manager in connection with its investigation of the

accuracy of such information or its investment decision, and each such person must rely on its own

examination of our Company and the Group and the merits and risks involved in investing in the Equity Shares

issued pursuant to the Issue.

No person is authorised to give any information or to make any representation not contained in this Placement

Document and any information or representation not so contained must not be relied upon as having been

authorised by or on behalf of our Company or the Book Running Lead Manager. The delivery of this

Placement Document at any time does not imply that the information contained in it is correct as at any time

subsequent to its date.

The distribution of this Placement Document or the disclosure of its contents without the prior consent of our

Company to any person, other than QIBs whose names are recorded by our Company prior to the invitation to

subscribe to this Issue (in consultation with the Book Running Lead Manager or their representatives) and

those retained by QIBs to advise them with respect to their purchase of the Equity Shares is unauthorised and

prohibited. Each prospective investor, by accepting delivery of this Placement Document, agrees to observe

the foregoing restrictions and to make no copies of this Placement Document or any documents referred to in

this Placement Document.

The distribution of this Placement Document and the Issue may be restricted by law in certain countries or

jurisdictions. As such, this Placement Document does not constitute, and may not be used for or in connection

with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised

or to any person to whom it is unlawful to make such offer or solicitation. Accordingly, the Equity Shares may

not be offered or sold, directly or indirectly, and neither this Placement Document nor any other offering

materials in connection with the Equity Shares issued pursuant to this Issue may be distributed or published in

or from any country or jurisdiction, except under circumstances that will result in compliance with any

applicable rules and regulations of any such country or jurisdiction.

The Equity Shares have not been approved, disapproved or recommended by any regulatory authority.

No regulatory authority has passed on or endorsed the merits of this Issue or the accuracy or adequacy

of this Placement Document. Any representation to the contrary is a criminal offence in certain

jurisdictions.

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The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other

jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any

jurisdiction, except in compliance with the applicable laws of such jurisdiction.

The Equity Shares have not been and will not be registered under the Securities Act, as amended (the

Securities Act) and may not be offered or sold within the United States except pursuant to an exemption

from, or in a transaction not subject to, the registration requirements of the Securities Act and

applicable state securities laws. The Equity Shares are only being offered and sold outside the United

States in reliance on Regulation S.

In making an investment decision, prospective investors must rely on their own examination of our Company,

the Group and the terms of this Issue, including the merits and risks involved. Investors should not construe

the contents of this Placement Document as legal, tax, accounting or investment advice. Investors should

consult their own counsel and advisors as to business, legal, tax, accounting and related matters concerning

this Issue. In addition, neither our Company nor the Book Running Lead Manager makes 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 applicable legal, investment or similar laws or regulations.

Each subscriber of the Equity Shares in this Issue is deemed to have acknowledged, represented and agreed

that it is eligible to invest in India and in our Company under Indian laws, including Section 42 of the

Companies Act, 2013, read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules,

2014, and Chapter VIII of the SEBI Regulations and is not prohibited by the SEBI or any other statutory

authority from buying, selling or dealing in securities including the Equity Shares. Each subscriber of the

Equity Shares in the Issue also acknowledges that it has been afforded an opportunity to request from our

Company and review information relating to our Company and the Equity Shares.

This Placement Document contains summaries of certain terms of certain documents, which summaries are

qualified in their entirety by the terms and conditions of such documents.

The information on our Company's website www.jsl.in or any website directly or indirectly linked to our

Company's website or the website of the Book Running Lead Manager or their affiliates does not constitute or

form part of this Placement Document. Prospective investors should not rely on such information contained in,

or available through, such websites.

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REPRESENTATIONS BY INVESTORS

References herein to 'you’ and ‘your’ are to prospective investors in the Issue.

By Bidding for and/or subscribing to any Equity Shares under the Issue, you are deemed to have represented,

warranted, acknowledged and agreed with our Company and the Book Running Lead Manager as follows:

1. You are a ‘Qualified Institutional Buyer’ as defined in Regulation 2(1)(zd) of the SEBI Regulations and

not excluded pursuant to Regulation 86(1)(b) of the SEBI Regulations, having a valid and existing

registration under applicable laws and regulations of India, and undertake to acquire, hold, manage or

dispose of any Equity Shares that are Allocated to you in accordance with Chapter VIII of the SEBI

Regulations and undertake to comply with the SEBI Regulations, the Companies Act and all other

applicable laws, including any reporting obligations;

2. If you are not a resident of India, you are an FII (including a sub-account other than a sub-account

which is a foreign corporate or a foreign individual) or an Eligible FPI or an FVCI, and have a valid and

existing registration with the SEBI under the applicable laws in India and you are eligible to invest in

India under applicable law, including the Foreign Exchange Management (Transfer or Issue of Security

by a Person Resident Outside India) Regulations, 2000 (FEMA 20) and any notifications, circulars or

clarifications issued thereunder, and have not been prohibited by the SEBI or any other regulatory

authority, from buying, selling or dealing in securities;

3. If you are Allotted Equity Shares pursuant to the Issue, you shall not, for a period of one year from the

date of Allotment, sell the Equity Shares so acquired except on the Stock Exchanges;

4. You are aware that (i) the Equity Shares have not been and will not be registered under the Companies

Act, the SEBI Regulations or under any other law in force in India; and (ii) this Placement Document

has not been reviewed by the SEBI, the RBI, the Stock Exchanges or any other regulatory or listing

authority and is intended only for use by QIBs. Further, this Placement Document has not been verified

or affirmed by the SEBI or the Stock Exchanges;

5. You are entitled to subscribe for and acquire the Equity Shares under the laws of all relevant

jurisdictions that apply to you and you have: (i) fully observed such laws; (ii) necessary capacity; (iii)

obtained all necessary consents, governmental or otherwise, and authorities and complied with all

necessary formalities, to enable you to commit to participation in the Issue and to perform your

obligations in relation thereto (including, without limitation, in the case of any person on whose behalf

you are acting, all necessary consents and authorizations to agree to the terms set out or referred to in

this Placement Document), and will honour such obligations;

6. You confirm that, either: (i) you have not participated in or attended any investor meetings or

presentations by our Company or our agents (Company Presentations) with regard to our Company or

the Issue; or (ii) if you have participated in or attended any Company Presentations: (a) you understand

and acknowledge that the Book Running Lead Manager may not have knowledge of the statements that

our Company or its agents may have made at such Company Presentations and are therefore unable to

determine whether the information provided to you at such Company Presentations may have included

any material misstatements or omissions, and, accordingly you acknowledge that the Book Running

Lead Manager has advised you not to rely in any way on any information that was provided to you at

such Company Presentations, and (b) you confirm that, to the best of your knowledge, you have not

been provided any material information relating to our Company and the Issue that was not publicly

available;

7. You agree that none of our Company, the Book Running Lead Manager and any of their respective

directors, officers, employees, counsel, representatives, agents or affiliates are making any

recommendations to you or advising you regarding the suitability of purchasing the Equity Shares and

that you are not a client of the Book Running Lead Manager. You agree that the Book Running Lead

Manager and its directors, officers, employees, counsel, representatives, agents or affiliates do not have

duties or responsibilities to you for providing the protection afforded to its clients or for providing

advice in relation to the Issue and are not in any way acting in any fiduciary capacity;

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8. You understand that all statements other than statements of historical facts included in this Placement

Document, including those regarding our Company’s future financial position, business strategy, plans

and objectives of management for future operations (including development plans and objectives

relating to our Company’s business), are forward-looking statements. Such forward-looking statements

involve known and unknown risks, uncertainties and other important factors that could cause actual

results to be materially different from future results, performance or achievements expressed or implied

by such forward-looking statements. Such forward-looking statements are based on numerous

assumptions regarding our Company’s present and future business strategies and environment in which

our Company will operate in the future. You should not place undue reliance on forward-looking

statements, which speak only as on the date of this Placement Document. Our Company assumes no

responsibility to update any forward-looking statements contained in this Placement Document;

9. You are aware of and understand that the Equity Shares are being offered only to QIBs and are not

being offered to the general public. Further, you are aware and understand that the Allotment shall be

on a discretionary basis at the discretion of our Company and the Book Running Lead Manager;

10. You have been provided a serially numbered copy of this Placement Document, and you have read it in

its entirety, including in particular, the section titled ‘Risk Factors’ on page 45 of this Placement

Document;

11. In making your investment decision, you have (i) relied on your own examination of the Group and the

terms of the Issue, including the merits and risks involved, (ii) made and will continue to make your

own assessment of the Group, the Equity Shares and the terms of the Issue based solely on the

information contained in this Placement Document and no other disclosure or representation by our

Company or any other party, (iii) consulted your own independent counsel and advisors or otherwise

have satisfied yourself concerning the effects of local laws, (iv) received all information that you

believe is necessary or appropriate in order to make an investment decision in respect of our Company

and the Equity Shares, and (v) relied upon your own investigation and resources in deciding to invest in

the Issue;

12. You understand that neither the Book Running Lead Manager nor any of its directors, officers,

employees, counsel, representatives, agents or affiliates, have provided you with any tax advice or

otherwise made any representations regarding the tax consequences of purchase, ownership and

disposal of the Equity Shares. You will obtain your own independent tax advice from a reputable

service provider and will not rely on the Book Running Lead Manager or any of its directors, officers,

employees, counsel, representatives, agents or affiliates, when evaluating the tax consequences in

relation to the Equity Shares. You waive, and agree not to assert any claim against, any of our Company

or the Book Running Lead Manager or any of their respective directors, officers, employees, counsel,

representatives, agents or affiliates, with respect to the tax aspects of the Equity Shares or as a result of

any tax audits by tax authorities, wherever situated;

13. You are a sophisticated investor and have such knowledge and experience in financial, business and

investments as to be capable of evaluating the merits and risks of the investment in the Equity

Shares. You are experienced in investing in private placement transactions of equity shares of

companies in a similar stage of development and in similar jurisdictions. You and any accounts for

which you are subscribing to the Equity Shares (i) are each able to bear the economic risk of the

investment in the Equity Shares, (ii) will not look to our Company and / or the Book Running Lead

Manager or any of their respective directors, officers, employees, counsel, representatives, agents or

affiliates for all or part of any such loss or losses that may be suffered, (iii) are able to sustain a

complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the

investment in the Equity Shares, and (v) have no reason to anticipate any change in your or their

circumstances, financial or otherwise, which may cause or require any sale or distribution by you or

them of all or any part of the Equity Shares. You acknowledge that an investment in the Equity Shares

involves a high degree of risk and that the Equity Shares are, therefore, a speculative investment. You

are seeking to subscribe to the Equity Shares in this Issue for your own investment and not with a view

to distribution;

14. Where you are acquiring the Equity Shares pursuant to the Issue, for one or more managed accounts,

you represent and warrant that you are authorized in writing, by each such managed account to acquire

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the Equity Shares for each managed account and make the representations, warranties,

acknowledgements and agreements herein for and on behalf of each such account, reading the reference

to ‘you’ to include such accounts;

15. You are not a ‘Promoter’ (as defined under the SEBI Regulations) of our Company or any of its

affiliates and are not a person related to the Promoter, either directly or indirectly and your Application

does not directly or indirectly represent the ‘Promoter’ or ‘Promoter Group’ (as defined under the SEBI

Regulations) or person related to the Promoters of our Company;

16. You represent and warrant that you have no rights under a shareholders’ agreement, or voting

agreement with the Promoters or persons related to the Promoters, no veto rights or right to appoint any

nominee director on the Board of Directors of our Company, other than the rights, if any, acquired in

the capacity of a lender not holding any Equity Shares which shall not be deemed to be a person related

to the Promoter;

17. You understand that you have no right to withdraw your Application after the Bid/Issue Closing Date;

18. You understand that the Equity Shares will, when issued, be credited as fully paid and will rank pari

passu in all respects with the existing Equity Shares including the right to receive all dividends and

other distributions declared, made or paid in respect of the Equity Shares after the date of issue of the

Equity Shares;

19. You represent and warrant that you are eligible to apply and hold Equity Shares so Allotted together

with any Equity Shares held by you prior to the Issue. You confirm that your aggregate holding after

the Allotment of the Equity Shares shall not exceed the level permissible as per any applicable law or

regulation;

20. You represent and warrant that the Application made by you would not result in triggering a tender

offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended

(Takeover Code);

21. You represent and warrant that to the best of your knowledge and belief, your aggregate holding,

together with other QIBs in the Issue that belong to the same group or are under common control as

you, pursuant to the Allotment under the Issue shall not exceed 50% of the Equity Shares Allotted. For

the purposes of this representation:

a. The expression ‘belong to the same group’ shall derive meaning from the concept of ‘companies

under the same group’ as provided in sub-section (11) of Section 372 of the Companies Act,

1956.

b. ‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the Takeover

Code.

22. You undertake not to trade in the Equity Shares credited to your Depository Participant account until

such time that the final listing and trading approvals for the Equity Shares are issued by the Stock

Exchanges;

23. You are aware that (i) applications for in-principle approval, in terms of Clause 24(a) of the Listing

Agreement, for listing and admission of the Equity Shares and for trading on the Stock Exchanges,

were made and approval has been received from each of the Stock Exchanges; and (ii) the application

for the final listing and trading approval will be made only after Allotment of the Equity Shares in the

Issue. You understand that there can be no assurance that the final approvals for listing of the Equity

Shares will be obtained in time or at all. You agree that our Company shall not be responsible for any

delay or non-receipt of such final approvals or any loss arising from such delay or non-receipt;

24. You are aware that if you are Allotted any Equity Shares, our Company is required to disclose details

such as your name, address and the number of Equity Shares Allotted to the RoC and the SEBI and you

consent to such disclosures;

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25. You are aware that if you are Allotted more than 5% of the Equity Shares in this Issue, our Company is

required to disclose your name and the number of Equity Shares Allotted to the Stock Exchanges and

the Stock Exchanges will make the same available on their website and you consent to such disclosures.

Further, if you are one of the top 10 Shareholders, our Company will be required to make a filing with

the RoC within 15 days of the change in shareholding as per Section 93 of the Companies Act, 2013;

26. You are aware and understand that the Book Running Lead Manager has entered into a placement

agreement with our Company, whereby the Book Running Lead Manager has, subject to the

satisfaction of certain conditions set out therein, severally and not jointly, undertaken to use its

reasonable efforts as placement agent of our Company to seek, to procure subscription for the Equity

Shares;

27. You understand that the contents of this Placement Document are exclusively the responsibility of our

Company and that neither the Book Running Lead Manager nor any person acting on its behalf has or

shall have any liability for any information, representation or statement contained in this Placement

Document or any information previously published by or on behalf of our Company and will not be

liable for your decision to participate in the Issue based on any information, representation or statement

contained in this Placement Document or otherwise. By accepting participation in the Issue, you agree

to the same and confirm that the only information you are entitled to rely on, and on which you have

relied in committing yourself to acquire the Equity Shares is contained in this Placement Document,

such information being all that you deem necessary to make an investment decision in respect of the

Equity Shares, you have neither received nor relied on any other information, representation, warranty

or statement made by, or on behalf of, the Book Running Lead Manager or our Company or any of our

respective affiliates or any other person and neither the Book Running Lead Manager nor our Company

nor any other person will be liable for your decision to participate in the Issue based on any other

information, representation, warranty or statement that you may have obtained or received;

28. You understand that the Book Running Lead Manager does not have any obligation to purchase or

acquire all or any part of the Equity Shares purchased by you in the Issue or to support any losses

directly or indirectly sustained or incurred by you for any reason whatsoever in connection with the

Issue, including non-performance by our Company of any of its obligations or any breach of any

representations and warranties by our Company, whether to you or otherwise;

29. You are eligible to invest in India under applicable law, including the FEMA 20, as amended, and any

notifications, circulars or clarifications issued thereunder, and have not been prohibited by the SEBI or

any other regulatory authority, from buying, selling or dealing in securities;

30. You agree that any dispute arising in connection with the Issue will be governed by and construed in

accordance with the laws of India, and the courts in Mumbai, India shall have exclusive jurisdiction to

settle any disputes which may arise out of or in connection with the Preliminary Placement Document

and this Placement Document;

31. Each of the representations, warranties, acknowledgements and agreements set out above shall continue

to be true and accurate at all times up to and including the Allotment, listing and trading of the Equity

Shares in the Issue;

32. You agree to indemnify and hold our Company and the Book Running Lead Manager and their

respective officers, directors, affiliates, associates and representatives harmless from any and all costs,

claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with

any breach of the foregoing representations, warranties, acknowledgements and undertakings made by

you in this Placement Document. You agree that the indemnity set forth in this paragraph shall survive

the resale of the Equity Shares by, or on behalf of, the managed accounts;

33. You acknowledge that our Company, the Book Running Lead Manager, our respective affiliates and

others will rely on the truth and accuracy of the foregoing representations, warranties,

acknowledgements and undertakings; and

9

34. You agree that each of the representations, warranties, acknowledgements and agreements set out above

shall continue to be true and accurate at all times up to and including the Allotment, listing and trading

of the Equity Shares.

10

OFFSHORE DERIVATIVE INSTRUMENTS (P-NOTES)

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of

Regulation 22 of the SEBI (Foreign Portfolio Investors) Regulations, 2014, as amended, (FPI Regulations)

FPIs (other than Category III FPIs and those unregulated broad based funds which are classified as Category II

FPIs (as defined in the FPI Regulations) by virtue of their investment manager being appropriately regulated

unless such FPIs have entered into an offshore derivative instrument with an FII prior to January 7, 2014 or

were registered as clients of an FII prior to January 7, 2014), including the affiliates of the Lead Manager, may

issue or otherwise deal in offshore derivative instruments such as participatory notes, equity-linked notes or

any other similar instruments (all such offshore derivative instruments are referred to herein as P-Notes)

against underlying securities, listed or proposed to be listed on any stock exchange in India, such as the Equity

Shares in the Issue, for which they may receive compensation from the purchasers of such instruments. P-

Notes may be issued only in favour of those entities which are regulated by any appropriate foreign regulatory

authorities in the countries of their incorporation or establishment subject to compliance of ‘know your client’

requirements. An FPI shall also ensure that no further issue or transfer of any instrument referred to above is

made to any person other than such entities regulated by an appropriate foreign regulatory authority. P-Notes

have not been and are not being offered or sold pursuant to this Placement Document. This Placement

Document does not contain any information concerning P-Notes or the issuer(s) of any P-notes, including any

information regarding any risk factors relating thereto.

Any P-Notes that may be issued are not securities of our Company and do not constitute any obligation of,

claims on or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in

the establishment of the terms of any P-Notes, or in the preparation of any disclosure related to the P-Notes.

Any P-Notes that may be offered are issued by, and are the sole obligations of, third parties that are unrelated

to our Company. Our Company and the Book Running Lead Manager do not make any recommendation as to

any investment in P-Notes and do not accept any responsibility whatsoever in connection with the P-Notes.

Any P-Notes that may be issued are not securities of the Book Running Lead Manager and do not constitute

any obligations of or claims on the Book Running Lead Manager. Affiliates of the Book Running Lead

Manager that are registered as FPIs or FIIs may purchase, to the extent permissible under law, Equity Shares in

the Issue, and may issue P-Notes in respect thereof.

Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate

disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes from the

issuer(s) of such P-Notes. Neither the SEBI nor any other regulatory authority has reviewed or

approved any P-Notes or any disclosure related thereto. Prospective investors are urged to consult their

own financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes,

including whether P-Notes are issued in compliance with applicable laws and regulations.

11

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

As required, a copy of the Preliminary Placement Document, this Placement Document has been submitted to

the Stock Exchanges. The Stock Exchanges do not in any manner:

1. warrant, certify or endorse the correctness or completeness of any of the contents of this Placement

Document; or

2. warrant that our Company’s Equity Shares will be listed or will continue to be listed on the Stock

Exchanges; or

3. take any responsibility for the financial or other soundness of our Company, its Promoters, its

management or any scheme or project of our Company

and it should not for any reason be deemed or construed to mean that this Placement Document has been

cleared or approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire any

Equity Shares of our Company may do so pursuant to an independent inquiry, investigation and analysis and

shall not have any claim against the Stock Exchanges 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.

12

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

This Placement Document includes, (i) our audited consolidated financial statements as of and for the

Financial Year 2014, Financial Year 2013 and Financial Year 2012; and (ii) unaudited standalone financial

results for the quarter ended June 30, 2014 (collectively, the Financial Statements).

The Financial Statements have been prepared in accordance with accounting principles generally accepted in

India (Indian GAAP) and the Companies Act, 1956, and have been audited by the Auditors in accordance

with the applicable generally accepted auditing standards in India prescribed by the ICAI. Indian GAAP

differs in certain significant respects from International Financial Reporting Standards and U.S. GAAP. Our

Company does not provide a reconciliation of its financial statements to IFRS or U.S. GAAP. Our Company

has not attempted to quantify the impact of U.S. GAAP on the financial data included in this Placement

Document, nor do we provide a reconciliation of our Financial Statements to those of U.S. GAAP.

Accordingly, the degree to which the Financial Statements included in this Placement Document will provide

meaningful information is entirely dependent on the reader’s level of familiarity with the respective accounting

policies. Any reliance by persons not familiar with Indian accounting policies and practices on the financial

disclosures presented in this Placement Document should, accordingly, be limited. For details in connection

with the risks involved in the differences between the Indian GAAP and IFRS, please the risk factor titled

‘Significant differences exist between Indian GAAP and U.S. GAAP and IFRS, with which investors may be

more familiar’ under the section titled ‘Risk Factors’ on page 45 of this Placement Document.

Our Company publishes its Financial Statements in Rupees. References to “lakhs” and “crores” in this

Placement Document are to the following:

1. one lakh represents 100,000 (one hundred thousand);

2. ten lakhs represents 1,000,000 (one million);

3. one crore represents 10,000,000 (ten million);

4. ten crores represents 100,000,000 (one hundred million); and

5. one hundred crores represents 1,000,000,000 (one thousand million or one billion).

In this Placement Document, certain monetary amounts have been subject to rounding adjustments;

accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of figures which

precede them.

Unless stated otherwise, the financial data in this Placement Document is derived from the Financial

Statements. Our Financial Year commences on April 1 of each year and ends on March 31 of the succeeding

year, therefore all references to a particular financial year of our Company are to the twelve-month period

ended on March 31 of that year, unless stated otherwise. The audited financial statements of our Company for

the Financial Year 2014, Financial Year 2013 and Financial Year 2012 are prepared in accordance with Indian

GAAP, are included in this Placement Document and are referred to herein as the Financial Statements.

All references to “you” are to prospective investors in the Equity Shares. References in this Placement

Document to “India” are to the Republic of India and the “Government” are to the governments in India,

central or state, as applicable.

Currency and Units of Presentation

In this Placement Document all references to,

1. “Rupees” or “₹” or “INR” or “Rs.” are to Indian Rupee, the currency of the Republic of India;

2. “Euro” or “€” are to the Euro are to the single currency of the participating member states introduced in

the Third Stage of European Economic and Monetary Union of the Treaty establishing the European

Community;

3. USD” or “$” are to the United States Dollar, the currency of the United States;

4. “NAD” are to the Namibian Dollar, the currency of Namibia;

13

5. “DH” or “DHS” are to the United Arab Emirates Dirhams, the currency of United Arab Emirates;

6. “PHP” are to the Philippine Peso, the currency of Philippines;

7. “ZAR” or “R” are to South African Rand, the official currency of South Africa; and

8. “KES” or “KSh” are to the Kenyan Shilling, the official currency of Kenya.

14

EXCHANGE RATES

Fluctuations in the exchange rate between the Rupee and the foreign currency will affect the foreign currency

equivalent of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect

the conversion into foreign currency of any cash dividends paid in Rupees on the Equity Shares.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between

the Rupee and the U.S. dollar (in Rupees per U.S. dollar) for the periods indicated rates are based on the

reference rates released by the RBI. No representation is made that the Rupee amounts actually represent such

amounts in U.S. dollar or could have been or could be converted into U.S. dollars at the rates indicated, any

other rates, or at all.

(₹ per U.S.$ 1.00)

Financial Year Period End Average High Low

2014 60.100 60.496 68.361 53.736

2013 54.389 54.451 57.217 50.565

2012 51.157 47.946 54.236 43.949

Quarter Ended Period End Average High Low

June 2014 60.093 59.767 61.116 58.426

March 2014 60.100 61.788 62.990 60.100

December 2013 61.897 62.034 63.655 61.157

September 2013 62.777 62.128 68.361 58.913

June 2013 59.700 55.949 60.588 53.736

Month Ended Period End Average High Low

February 2014 62.072 62.254 62.689 61.938

March 2014 60.100 61.014 61.905 60.100

April 2014 60.338 60.357 61.116 59.646

May 2014 59.034 59.305 60.225 58.426

June 2014 60.093 59.731 60.368 59.061

July 2014 60.246 60.059 60.330 59.723

August 2014 60.475 60.895 61.558 60.427

*Represents the average of the reference rates released by the Reserve Bank of India on the last day of each

month during the period of each year and quarter presented

(Source: www.rbi.org.in)

Although our Company has converted selected Rupee amounts in this Placement Document into U.S. dollars

for convenience, such conversions should not be considered as a representation that such U.S. dollar amounts

have been, could have been or could be converted into Rupee amounts at any particular rate, the rate stated

above or at all. There are certain restrictions on the conversion of Rupees into U.S. dollars.

Such conversions should not be construed as a representation that the Rupee amounts represent such U.S.

Dollar amounts or could have been or could be converted into U.S. Dollars at the rates indicated, any other

rates or at all.

15

INDUSTRY AND MARKET DATA

Information regarding the market position, growth rates, other industry data and certain industry forecasts

pertaining to the businesses of our Company contained in this Placement Document consists of estimates based

on data reports compiled by government bodies, professional organisations and analysts, data from other

external sources, and on our knowledge of the markets in which our Company competes. Unless stated

otherwise, the statistical information included in this Placement Document relating to the industry in which we

operate has been reproduced from various trade, industry and government publications and websites.

This information is subject to change and cannot be verified with complete certainty due to limits on the

availability and reliability of the raw data and other limitations and uncertainties inherent in any statistical

survey. We confirm that such information and data has been accurately reproduced, and that as far as we are

aware and are able to ascertain from information published by third parties, no facts have been deliberately

omitted that would render the reproduced information inaccurate or misleading. Industry publications

generally state that the information that they contain has been obtained from sources believed to be reliable but

that the accuracy and completeness of that information is not guaranteed. In some cases, there is no readily

available external information (whether from trade associations, government bodies or other organisations) to

validate market-related analyses and estimates, requiring our Company to rely on internally developed

estimates. Similarly, internal estimates and surveys, industry forecasts and market research, while believed to

be reliable, have not been independently verified and neither our Company nor the Book Running Lead

Manager make any representation as to the accuracy and completeness of information based on trade, industry

and government publications and websites, data reports compiled by government bodies, professional

organisations and analysts, or from other external sources.

The extent to which the market and industry data used in this Placement Document is meaningful depends on

the reader’s familiarity with and understanding of the methodologies used in compiling such data.

16

FORWARD LOOKING STATEMENTS

All statements contained in this Placement Document that are not statements of historical fact constitute

“forward-looking statements”. These statements express views of the management of our Company and

expectations based upon certain assumptions regarding trends in the Indian and international financial markets

and regional economies, the political climate in which our Company operates and other factors. Prospective

investors can generally identify forward-looking statements by terminology such as “aim”, “anticipate”,

“believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “can”, “could”, “may”, “objective”, “plan”,

“potential”, “project”, “pursue”, “shall”, “should”, “will”, “would”, “will likely result”, “is likely”, “are

likely”, “believe”, “expect”, “expected to”, “will continue”, “will achieve”, or other words or phrases of

similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-

looking statements.

All statements regarding our Company’s or the Group’s expected financial condition and results of operations

and business plans and prospects are forward-looking statements. Similarly statements as to our

Company’s/Group’s business strategy, revenue and profitability (including, without limitation, any financial or

operating projections or forecasts), new business and other matters discussed in this Placement Document that

are not historical facts are forward-looking statements. They appear in a number of places throughout this

Placement Document and include statements regarding the intentions, beliefs or current expectations of our

Company concerning, among other things, the results of operations, financial condition, liquidity, prospects,

growth, strategies and dividend policy of our Company and the industry in which we operate. In addition, even

if the results of operations, financial condition, liquidity and dividend policy of our Company and the

development of the industry in which we operate are consistent with the forward-looking statements contained

in this Placement Document, those results or developments may not be indicative of results or developments in

subsequent periods. By their nature, forward-looking statements and any other projections contained in this

Placement Document (whether made by us or any third party) are predictions and involve known and unknown

risks, uncertainties because they relate to events, and depend on circumstances, and, assumptions and other

factors that may cause our Company’s or the Group’s actual results, performance or achievements to be

materially different from any future results, performance or achievements expressed or implied by such

forward-looking statements or other projections. All forward-looking statements are not guarantees of future

performance they are subject to risks, uncertainties and assumptions about us that could cause actual results to

differ materially from those contemplated by the relevant forward-looking statement.

The forward-looking statements contained in this Placement Document are based on the beliefs of the

management, as well as the assumptions made by and information currently available to the management.

Although we believe that the expectations reflected in such forward-looking statements are reasonable at this

time, we cannot assure investors that such expectations will prove to be correct. Given these uncertainties,

investors are cautioned not to place undue reliance on such forward-looking statements. If any of these risks

and uncertainties materialize, or if any of our Company’s underlying assumptions prove to be incorrect, our

actual results of operations or financial condition could differ materially from that described herein as

anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to our

Company are expressly qualified in their entirety by reference to these cautionary statements.

These forward-looking statements and any other projections contained in this Placement Document (whether

made by our Company or any third party) are predictions and involve known and unknown risks, uncertainties

associated with the management’s expectations with respect to, but not limited to:

1. General economic and business conditions in the markets in which we operate and in the local, regional

and national economies;

2. Variation in our operating results;

3. Our ability to effectively implement our business and growth strategies;

4. Enforcement of securities provided by us for our loan facilities;

5. Our ability to effectively respond to competition;

6. Reduction in, or termination of, our tax incentives;

7. Cash flow projections;

8. Adequacy of our provisions for losses;

9. Changes in laws and regulations relating to the sector in which we operate; and

10. Changes in political and social conditions in India or in other countries in which we have operations,

the monetary policies of India or of such other countries, inflation, deflation, unanticipated turbulence

in interest rates, equity prices or other rates or prices.

17

For a further discussion of factors that could cause actual results to differ, please see sections titled ‘Risk

Factors’ and ‘Our Business’ on pages 45 and 107, respectively of this Placement Document.

18

ENFORCEMENT OF CIVIL LIABILITIES

Our Company is a company incorporated with limited liability under the laws of India. Some of our

Subsidiaries are also incorporated in India. Our Company’s directors and executive officers are residents of

India and all or a substantial portion of the assets of our Company and such persons are located in India. As a

result, it may not be possible for investors to effect service of process upon our Company or such persons in

India, or to enforce against them judgments obtained in courts outside India.

India is not a party to any international treaty in relation to the recognition or enforcement of foreign

judgments. Recognition and enforcement of foreign judgments is provided for under section 13 and section

44A of the Code of Civil Procedure, 1908, as amended (Civil Code). Section 44A of the Civil Code provides

that where a foreign judgment has been rendered by a superior court (within the meaning of that section) in

any country or territory outside India which the Government has by notification declared to be a reciprocating

territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the

relevant court in India. Under the Civil Code, a court in India will, upon the production of any document

purporting to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court

of competent jurisdiction, unless the contrary appears on record. However, section 44A of the Civil Code is

applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other

charges of a like nature or in respect of a fine or other penalty and is not applicable to arbitration awards.

Section 13 of the Civil Code provides that a foreign judgment shall be conclusive as to any matter thereby

directly adjudicated upon except:

1. where it has not been pronounced by a court of competent jurisdiction;

2. where it has not been given on the merits of the case;

3. where it appears on the face of the proceedings to be founded on an incorrect view of international law

or a refusal to recognise the law of India in cases where such law is applicable;

4. where the proceedings in which the judgment was obtained were opposed to natural justice;

5. where it has been obtained by fraud; or

6. where it sustains a claim founded on a breach of any law then in force in India.

The suit must be brought in India within three years from the date of the judgment in the same manner as any

other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on

the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court

would enforce a foreign judgment if it viewed the amount of damages awarded as excessive or inconsistent

with Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain approval from

the RBI to repatriate outside India any amount recovered pursuant to execution, and any such amount may be

subject to income tax in accordance with applicable laws. Any judgment in a foreign currency would be

converted into Rupees on the date of the judgment and not on the date of the payment. We cannot predict

whether a suit brought in an Indian court will be disposed of in a timely manner or be subject to considerable

delays.

The United States has not been declared by the Government to be a reciprocating territory for the purposes of

section 44A of the Civil Code. However, the United Kingdom, Singapore and Hong Kong have been declared

by the Indian Government to be reciprocating territories. A judgment of a court in a jurisdiction which is not a

reciprocating territory may be enforced only by a new suit upon the judgement and not by proceedings in

execution. Accordingly, a judgment of a court in the United States may be enforced only by a fresh suit upon

the judgment and not by proceedings in execution.

19

DEFINITIONS AND ABBREVIATIONS

Definitions of certain capitalised terms used in this Placement Document are set forth below. Unless stated

otherwise in a particular section, the terms have the following meanings:

Term Description

Company or our Company or

Issuer

Jyoti Structures Limited, a public limited company incorporated under the

Companies Act, 1956 and having its registered and corporate office at

Valecha Chambers, 6th

Floor, New Link Road, Andheri (West), Mumbai –

400 053, Maharashtra on an unconsolidated basis. It is clarified that

references to “us”, “we” or “our” are to our Company, together with its

Subsidiaries, Joint Ventures and associate companies on a consolidated

basis

U.S. dollar or USD or $ The legal currency of the United States

AGM Annual general meeting

AIF An alternative investment fund (as defined under the Securities and

Exchange Board of India (Alternative Investment Fund) Regulations, 2012)

registered with the SEBI under applicable laws in India

Articles The articles of association of our Company

AS Accounting standards issued by the Institute of Chartered Accountants of

India

Auditors The statutory auditors of our Company being R. M. Ajgaonkar &

Associates, Chartered Accountants

Board of Directors or Board or

Directors

The board of directors of our Company, or a duly constituted committee

thereof

BSE BSE Limited

Category III FPI An FPI not eligible for registration as Category I and II FPI (as defined

under the FPI Regulations) such as endowments, charitable societies,

charitable trusts, foundations, corporate bodies, trusts, individuals and

family offices

CDSL Central Depository Services (India) Limited

CENVAT Central Value Added Tax

Civil Code The Code of Civil Procedure, 1908

Companies Act The Companies Act, 1956 and the Notified Provisions of the Companies Act,

2013 and the rules and regulations framed thereunder

Companies Act, 1956 The Companies Act, 1956 (without reference to the provisions thereof that

have ceased to have effect upon the notification of the Notified Provisions of

the Companies Act, 2013 including as set out in the Ministry of Corporate

Affairs’ circular dated April 1, 2014) and the rules and regulations framed

thereunder as are currently in force

Companies Act, 2013 The Companies Act, 2013 to the extent in force pursuant to the notification

of the Notified Provisions of the Companies Act, 2013 and the rules and

20

Term Description

regulations framed thereunder as are currently in force

Competition Act The Competition Act, 2002

CrPC The Code of Criminal Procedure, 1973

Delisting Regulations SEBI (Delisting of Equity Shares) Regulations, 2009

Depositories Act The Depositories Act, 1996

Depository A body corporate registered under Securities and Exchange Board of India

(Depositories and Participants) Regulations, 1996

Depository Participant A depository participant as defined under the Depositories Act

ESOP Guidelines SEBI (Employee Stock Option Scheme and Employee Stock Purchase

Scheme) Guidelines, 1999

ESOS Employee Stock Option Scheme – 2011 and Employee Stock Option

Scheme - 2005

Equity Shares Equity shares of our Company

Exim Bank Export Import Bank of India

FDI Foreign direct investment

FEMA The Foreign Exchange Management Act, 1999 and the rules, regulations,

notifications and circulars issued thereunder

FEMA 20 The Foreign Exchange Management (Transfer or Issue of Security by a

Person Resident outside India) Regulations, 2000

FII A foreign institutional investor (as defined under FEMA 20) and registered

with the SEBI under applicable laws in India

Financial Statements Our Company’s audited consolidated financial statements for the Financial

Year 2014, Financial Year 2013 and Financial Year 2012

Form PAS-4 The Form PAS-4 prescribed under the Companies (Prospectus and

Allotment of Securities) Rules, 2014

Financial Year A period of twelve months ending March 31 of that particular year, unless

otherwise stated

FPI A foreign portfolio investor as defined under the FPI Regulations and

registered with the SEBI under applicable laws in India and includes an FII

or a sub-account who holds a valid certificate of registration until the

expiry of the block of three years for which fees have been paid as per the

Securities and Exchange Board of India (Foreign Institutional Investors)

Regulations, 1995 as well as a QFI till January 6, 2015 or till it obtains a

certificate of registration as an FPI, whichever is earlier

FPI Regulations The Securities and Exchange Board of India (Foreign Portfolio Investor)

Regulations, 2014

FVCI A foreign venture capital investor (as defined under the Securities and

Exchange Board of India (Foreign Venture Capital Investor) Regulations,

21

Term Description

2000) registered with the SEBI under applicable laws in India

GDP Gross domestic product

Government The Government of India

Group Our Company, its Subsidiaries, Joint Ventures and associate companies

ICAI The Institute of Chartered Accountants of India

IndAs Indian Accounting Standards

IFRS International Financial Reporting Standards of the International

Accounting Standards Board

Insider Trading Regulations The Securities and Exchange Board of India (Prohibition of Insider

Trading) Regulations, 1992

IT Act The Income Tax Act, 1961

India The Republic of India

Indian GAAP Generally accepted accounting principles followed in India

IPC The Indian Penal Code, 1860

JV or Joint Ventures Joint ventures of our Company viz.

1. Gulf Jyoti International LLC; and

2. Lauren Jyoti Pvt Ltd.

JLF Framework Debt restructuring framework for revitalizing distressed assets notified by

circular RBI/2013-14/503 dated February 26, 2014

MCA Ministry of Corporate Affairs, India

Memorandum The memorandum of association of our Company

Mutual Fund A mutual fund registered with the SEBI under the Securities and Exchange

Board of India (Mutual Funds) Regulations, 1996

Notified Provisions of the

Companies Act, 2013

The notified provisions of the Companies Act, 2013 that have been notified

by the Government

NRI A person resident outside India, who is a citizen of India or a person of

Indian origin and shall have the same meaning as ascribed to such term in

the Foreign Exchange Management (Deposit) Regulations, 2000

NSDL The National Securities Depository Limited

NSE The National Stock Exchange of India Limited

OCB or Overseas Corporate

Bodies

A company, partnership, society or other corporate body owned directly or

indirectly to the extent of at least 60% by NRIs, including overseas trusts,

in which not less than 60% of beneficial interest is irrevocably held by

NRIs, directly or indirectly, as defined under the Foreign Exchange

Management (Deposit) Regulations, 2000

P-Notes Offshore derivative instruments such as participatory notes, equity-linked

22

Term Description

notes or any other similar instruments

PAT Profit after tax

PAN Permanent Account Number

Promoters and Promoter Group The Promoter and Promoter Group of our Company as set out on page 133

of this Placement Document

QFI A qualified foreign investor as defined under the FPI Regulations

QIB A qualified institutional buyer as defined under Regulation 2(1)(zd) of the

SEBI Regulations

QIP A qualified institutions placement under Chapter VIII of the SEBI

Regulations

RBI The Reserve Bank of India

Redeemable Preference Shares Redeemable preference shares issued by our Company

Regulation S or Reg S Regulation S under the Securities Act

Registered Office The registered office of our Company being Valecha Chambers, 6th

Floor,

New Link Road, Andheri (West), Mumbai 400 053, Maharashtra, India

RoC The Registrar of Companies, Maharashtra at Mumbai

₹ or Rupees The official currency of India

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SCR (SECC) Rules Securities Contracts (Regulation) (Stock Exchanges and Clearing

Corporations) Regulations, 2012

SEBI The Securities and Exchange Board of India constituted under the SEBI

Act

SEBI Act The Securities and Exchange Board of India Act, 1992

SEBI Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations 2009, including instructions and clarifications

issued by the SEBI from time to time

Securities Act U.S. Securities Act, 1933 as amended from time to time

Shareholders The registered holders of Equity Shares

Stock Exchanges The BSE and the NSE

STT Securities transaction tax

Subsidiaries The subsidiaries of our Company as listed below:

1. Jyoti Energy Ltd.

2. JSL Corporate Services Ltd.

3. Jyoti Structures Africa (Pty) Ltd.

4. Jyoti International Inc.

23

Term Description

5. Jyoti Americas LLC

6. Jyoti Structures Canada Ltd.

7. Jyoti Structures FZE

8. Jyoti Structures Namibia (Pty) Ltd.

9. Jyoti Structures Nigeria Ltd.

10. Jyoti Structures Kenya Ltd.

Takeover Code The Securities and Exchange Board of India (Substantial Acquisition of

Shares and Takeovers) Regulations, 2011

UAE United Arab Emirates

United Kingdom The United Kingdom of Great Britain and Northern Ireland

United States or U.S. or USA The United States of America

U.S. GAAP Generally accepted accounting principles followed in the United States

VCF A venture capital fund (as defined under the Securities and Exchange

Board of India (Venture Capital Fund) Regulations, 1996) registered with

the SEBI under applicable laws in India

ISSUE RELATED TERMS

Terms Description

Allocated or

Allocation

The allocation of Equity Shares following the determination of the Issue

Price to QIBs on the basis of the Application Form submitted by them, by

our Company in consultation with the Book Running Lead Manager and in

compliance with Chapter VIII of the SEBI Regulations

Allot or Allotment Unless the context otherwise requires, the allotment of Equity Shares to

successful QIBs pursuant to this Issue

Allottees Persons to whom Equity Shares are issued and Allotted pursuant to the

Issue

Application Form The form (including any revisions thereof) pursuant to which a QIB shall

submit a Bid

Bidder Any prospective investor, being a QIB, who makes a Bid pursuant to the

terms of the Preliminary Placement Document and the Application Form

Bid(s) Indication of interest of a Bidder, including all revisions and modifications

thereto, as provided in the Application Form, to subscribe for the Equity

Shares pursuant to this Issue

Bid/Issue Closing Date September 26, 2014, which is the last date up to which Application Forms

will be accepted

Bid/Issue Opening Date September 24, 2014, i.e. the date on which our Company (or the Book

Running Lead Manager on behalf of our Company) shall commence the

acceptance of duly completed Application Forms for the Issue

Bidding/Issue Period The period between the Bid/Issue Opening Date and the Bid/Issue Closing

Date, inclusive of both days, and during which prospective Bidders can

24

Terms Description

submit their Bids, including any revisions thereof

CAN or Confirmation of

Allocation Note

Note or advice or intimation sent only to Bidders confirming Allocation to

such Bidders after discovery of the Issue Price and requesting payment for

the entire applicable Issue Price for all Equity Shares Allocated to such

Bidders

Closing Date The date on which Allotment shall be made, i.e. on or about September 29,

2014

Cut-off Price The Issue Price of the Equity Shares to be issued pursuant to the Issue

which shall be finalised by our Company in consultation with the Book

Running Lead Manager

CSR Corporate social responsibility

Eligible FPIs FPIs that are eligible to participate in this Issue and does not include

Category III FPIs who are not allowed to participate in the Issue

Escrow Account The account titled “Jyoti Structures Limited - QIP Escrow Account” with

regard to any money received towards the subscription of the Equity

Shares, opened with the Escrow Agent, subject to the terms of the escrow

agreement dated September 18, 2014 amongst our Company, the Book

Running Lead Manager and the Escrow Agent

Escrow Agent State Bank of India

Floor Price The floor price of ₹ 44.99 for the Allotment, which has been calculated in

accordance with Chapter VIII of the SEBI Regulations. In terms of the

SEBI Regulations, the Issue Price cannot be lower than the Floor Price,

subject to discount of not more than 5% on the Floor Price which may be

considered by our Company

Book Running Lead Manager Edelweiss Financial Services Limited

Issue Issue of upto 2,33,87,018 Equity Shares of face value of ₹ 2 each at a

price of ₹ 42.85, including a premium of ₹ 40.85 per Equity Share

aggregating ₹ 10,021.34 lakhs

Issue Price ₹ 42.85 per Equity Share

Issue Size The Issue of 2,33,87,018 Equity Shares aggregating to ₹ 10,021.34 lakhs

Listing Agreement The equity listing agreement entered into by our Company with each of the

Stock Exchanges

Net Proceeds The total proceeds of the Issue after deduction the Issue expenses

including fees, commissions and expenses

Pay-in Date The last date specified in the CAN sent to the QIBs for payment of

application money by the successful Bidders

Placement Agreement The placement agreement dated September 18, 2014 entered into between

the Book Running Lead Manager and our Company

Placement Document This placement document dated September 26, 2014 issued by our

25

Terms Description

Company in accordance with the provisions of Section 42 of the

Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and

Allotment of Securities) Rules, 2014 and Chapter VIII of the SEBI

Regulations

Preliminary Placement

Document

The preliminary placement document dated September 24, 2014 issued by

our Company in accordance with Section 42 of the Companies Act, 2013,

read with Rule 14 of the Companies (Prospectus and Allotment of

Securities) Rules, 2014, and Chapter VIII of the SEBI Regulations

Relevant Date September 24, 2014 (i.e., the date of the meeting in which the Board or the

committee thereof decides to open the Issue)

GLOSSARY OF TECHNICAL TERMS

Term Description

Ckm Circuit kilometres

CAGR Compounded Annual Growth Rate

CNC Computerized Numeric Control

DTC Direct Tax Code

EHV Extra High Voltage

EOT Cranes Electric Overhead Travelling Cranes

EPC Engineering Procurement Construction

HVAC High Voltage Alternating Current

HVDC High Voltage Direct Current

GW Gigawatts

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

Kms. Kilometres

kV Kilo Volts

LD Liquidated Damages

LPG Liquefied Petroleum Gas

MSEDCL Maharashtra State Electricity Distribution Company Limited

MT Metric Tonnes

NLDC National Long Dispatch Centre

PLC Programmable Logic Controller

RCC Reinforced Cement Concrete

R&D Centre Research and Development Centre

RGGVY Rajiv Gandhi Grameen Vidyutikaran Yojana

RLDC Regional Load Dispatch Centre

SAP System Application Programming

TLT Transmission Line Towers

TWh Terrawatt-hours

PGCIL Power Grid Corporation of India Limited

UPPCL The Uttar Pradesh Power Corporation Limited

26

DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES

ACT, 2013

The table below sets out the disclosure requirements as provided in Form PAS-4 and the relevant pages in this

Placement Document where these disclosures, to the extent applicable, have been provided.

Sr.

No. Particulars

Relevant Page of

this Placement

Document

1. GENERAL INFORMATION

a. Name, address, website and other contact details of the company indicating both

registered office and corporate office;

Cover Page

b. Date of incorporation of the company; Cover Page

c. Business carried on by the company and its subsidiaries with the details of

branches or units, if any;

107 and 115

d. Brief particulars of the management of the company; 119

e. Names, addresses, DIN and occupations of the directors; 119

f. Management’s perception of risk factors; 45

g. Details of default, if any, including therein the amount involved, duration of

default and present status, in repayment of –

(i) statutory dues; 94

(ii) debentures and interest thereon; N.A

(iii) deposits and interest thereon; N.A

(iv) loan from any bank or financial institution and interest thereon. 90

h. Names, designation, address and phone number, email ID of the nodal/

compliance officer of the company, if any, for the private placement offer

process;

185

2. PARTICULARS OF THE OFFER

a. Date of passing of board resolution; 30

b. Date of passing of resolution in the general meeting, authorizing the offer of

securities;

30

c. Kinds of securities offered (i.e. whether share or debenture) and class of

security;

30

d. Price at which the security is being offered including the premium, if any,

alongwith justification of the price;

30

e. Name and address of the valuer who performed valuation of the security offered; N.A

f. Amount which the company intends to raise by way of securities; 30

g. Terms of raising of securities:

27

Sr.

No. Particulars

Relevant Page of

this Placement

Document

(a) duration; N.A

(b) rate of dividend; 73

(c) rate of interest; N.A

(d) mode of payment; N.A

(e) repayment; N.A

h. Proposed time schedule for which the offer letter is valid; 140

i. Purposes and objects of the offer; 66

j. Contribution being made by the promoters or directors either as part of the offer

or separately in furtherance of such objects;

N.A

k. Principle terms of assets charged as security, if applicable; N.A

3. DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS,

LITIGATION ETC.

a. Any financial or other material interest of the directors, promoters or key

managerial personnel in the offer and the effect of such interest in so far as it is

different from the interests of other persons;

131

b. details of any litigation or legal action pending or taken by any Ministry or

Department of the Government or a statutory authority against any promoter of

the offeree company during the last three years immediately preceding the year

of the circulation of the offer letter and any direction issued by such Ministry or

Department or statutory authority upon conclusion of such litigation or legal

action shall be disclosed;

179

c. Remuneration of directors (during the current year and last three financial

years);

128

d. Related party transactions entered during the last three financial years

immediately preceding the year of circulation of offer letter including with

regard to loans made or, guarantees given or securities provided;

182

e. Summary of reservations or qualifications or adverse remarks of auditors in the

last five financial years immediately preceding the year of circulation of offer

letter and of their impact on the financial statements and financial position of the

company and the corrective steps taken and proposed to be taken by the

company for each of the said reservations or qualifications or adverse remark;

42

f. Details of any inquiry, inspections or investigations initiated or conducted under

the Companies Act or any previous company law in the last three years

immediately preceding the year of circulation of offer letter in the case of

company and all of its subsidiaries. Also if there were any prosecutions filed

(whether pending or not) fines imposed, compounding of offences in the last

three years immediately preceding the year of the offer letter and if so, section-

wise details thereof for the company and all of its subsidiaries;

179

g. Details of acts of material frauds committed against the company in the last 179

28

Sr.

No. Particulars

Relevant Page of

this Placement

Document

three years, if any, and if so, the action taken by the company.

4. FINANCIAL POSITION OF THE COMPANY

a. The capital structure of the company in the following manner in a tabular form -

(i)(a) the authorised, issued, subscribed and paid up capital (number of securities,

description and aggregate nominal value);

69

(b) size of the present offer; 69

(c) paid up capital

(A) after the offer; 69

(B) after conversion of convertible instruments (if applicable); N.A

(d) share premium account (before and after the offer); 69

(ii) the details of the existing share capital of the issuer company in a tabular form,

indicating therein with regard to each allotment, the date of allotment, the

number of shares allotted, the face value of the shares allotted, the price and the

form of consideration;

Provided that the issuer company shall also disclose the number and price at

which each of the allotments were made in the last 1 year preceding the date of

the offer letter separately indicating the allotments made for considerations other

than cash and the details of the consideration in each case;

71

b. Profits of the company, before and after making provision for tax, for the three

financial years immediately preceding the date of circulation of offer letter;

39

c. Dividends declared by the company in respect of the said three financial years;

interest coverage ratio for last three years (Cash profit after tax plus interest

paid/interest paid)

73 and 87

d. A summary of the financial position of the company as in the three audited

balance sheets immediately preceding the date of circulation of offer letter;

38

e. Audited Cash Flow Statement for the three years immediately preceding the date

of circulation of offer letter;

40

f. Any change in accounting policies during the last three years and their effect on

the profits and the reserves of the company.

182

5. A DECLARATION BY THE DIRECTORS

a. the company has complied with the provisions of the Companies Act

and the rules made thereunder;

b. the compliance with the Companies Act and the rules does not imply

that payment of dividend or interest or repayment of debentures, if

applicable, is guaranteed by the Central Government;

c. the monies received under the offer shall be used only for the purposes

184

29

Sr.

No. Particulars

Relevant Page of

this Placement

Document

and objects indicated in the Offer letter;

30

SUMMARY OF THE ISSUE

The following is a general summary of the terms of the Issue. This summary should be read in conjunction

with, and is qualified in its entirety by, more detailed terms appearing elsewhere in this Placement Document,

including under ‘Risk Factors’, ‘Placement’, ‘Issue Procedure’ and ‘Description of the Equity Shares’.

Issuer/Company Jyoti Structures Limited

Issue Our Company is issuing up to 2,33,87,018 Equity Shares of face value of ₹ 2

each.

Floor Price The Floor Price for the Issue on the basis of Chapter VIII of the SEBI Regulations

is ₹ 44.99 per Equity Share. In terms of the SEBI Regulations, the Issue Price

cannot be lower than the Floor Price, subject to a discount of not more than 5% on

the Floor Price which may be considered by our Company.

Issue Price ₹ 42.85 per Equity Share

Issue Size 2,33,87,018 Equity Shares aggregating ₹ 10,021.34 lakhs

Date of Board

Resolution

June 30, 2014

Date of Shareholders’

Resolution

August 12, 2014

Eligible Investors QIBs as defined in Regulation 2(1)(zd) of the SEBI Regulations and not excluded

pursuant to Regulation 86 of the SEBI Regulations.

Equity Shares

outstanding

immediately prior to

the Issue

8,22,88,922 Equity Shares

Equity Shares issued

and outstanding

immediately after the

Issue

10,56,75,940 Equity Shares

Issue Procedure The Issue is being made only to QIBs in reliance on Section 42 of the Companies

Act, 2013, read with Rule 14 of the Companies (Prospectus and Allotment of

Securities) Rules, 2014, and Chapter VIII of the SEBI Regulations. For further

details, please see section titled ‘Issue Procedure’ on page 135 of this Placement

Document.

Listing Our Company has made applications to each of the Stock Exchanges and has

obtained an in-principle approvals on September 23, 2014 for listing of the Equity

Shares issued pursuant to the Issue from each of such Stock Exchanges.

Transferability

Restrictions

The Equity Shares being Allotted pursuant to this Issue shall not be sold for a

period of 1 (one) year from the date of Allotment, except on the floor of the Stock

Exchanges. For further details, please see section titled ‘Transfer Restrictions’ on

page 153 of this Placement Document for other transfer restrictions relating to

offers and sales of the Equity Shares.

Pay-in Date The last date specified in the CAN sent to the QIBs for payment of application

money for the Equity Shares pursuant to this Issue.

Closing The Allotment of the Equity Shares offered pursuant to this Issue shall be made

on or about September 29, 2014 (Closing Date).

31

Ranking The Equity Shares being issued shall be subject to the provisions of the

Memorandum and Articles and shall rank pari passu in all respects with the

existing Equity Shares including rights in respect of dividends. The Shareholders

will be entitled to participate in dividends and other corporate benefits, if any,

declared by our Company after the Closing Date, in compliance with the

Companies Act. The Shareholders may attend and vote in Shareholders’ meetings

on the basis of 1 (one) vote for every Equity Share held. For further details, please

see section titled ‘Description of Equity Shares’ on page 157 of this Placement

Document.

Use of Proceeds The total proceeds from the Issue are ₹ 10,021.34 lakhs. The Net Proceeds of the

Issue (after deduction of fees, commissions and expenses) are expected to be

approximately ₹ 9,749.09 lakhs. For further details, please see section titled ‘Use

of Proceeds’ on page 66 of this Placement Document.

Lock-up Please see section titled ‘Placement’ on page 146 of this Placement Document.

Risk Factors Prior to making an investment decision, prospective investors should carefully

consider the matters discussed under section titled ‘Risk Factors’ on page 45 of

this Placement Document.

Security Codes ISIN INE197A01024

BSE Code 513250

NSE Code JYOTISTRUC- EQ

32

SUMMARY OF BUSINESS

The following is a summary of our business. This summary should be read in conjunction with, and is qualified

in its entirety by, more detailed information elsewhere in this Placement Document, including the sections

titled ‘Financial Statements’ and ‘Our Business’ on pages 182 and 107, respectively of this Placement

Document. You should carefully consider, among other things, the matters discussed in “Risk Factors” for an

understanding of the risks associated with the purchase of Equity Shares. Unless otherwise expressly stated,

the terms ‘we’, ‘our’, ‘our company’, ‘us’ etc. used in this section refer to our Company, its Subsidiaries and

Joint Ventures.

Overview

Our Company is an EPC contracting Company in the power transmission and distribution networks across the

home country and global markets with a key presence in Asia, Africa and North America. We undertake

turnkey projects offering a complete range of services in design, engineering, procurement, tower testing,

manufacturing, instruction and project management. Over a period of time, our Company has developed global

business in over 30 countries. We count major power transmission and distribution utilities across the globe

amongst our customers. Our main lines of operation are:

Transmission Lines;

Substation; and

Distribution.

In each of the above spheres of operation, we undertake turnkey projects offering a complete range of services

from design, engineering and tower testing to manufacturing, construction and project management. As of

June 30, 2014, we operate through 5 (five) manufacturing units at Nashik (India), Raipur (India), Dubai (UAE)

and Houston (Texas, USA) with a combined annual manufacturing capacity of 216,160 MT of transmission

line towers. We also have an in-house tower testing facility at Ghoti near Nashik (India). In addition, we also

supply transmission towers worldwide including Canada, Myanmar, Philippines and the United States.

We focus on projects which require industry and technological expertise, co-ordination of substantial resources

and project management skills. We believe that our comprehensive offering of high quality equipment, civil,

mechanical and electrical construction experience, project management expertise and our fabrication facilities

enables us to compete effectively. As on June 30, 2014, our Company employed a total 2,645 employees.

Our total consolidated revenues and profit / (loss) after tax for Financial Year 2014 was ₹ 366,550.77 lakhs

and ₹ (936.49) lakhs, respectively. Approximately 65.34% of the consolidated gross revenues in Financial

Year 2014 are from domestic business. Our standalone revenues and profit after tax, for Financial Year 2014

was ₹ 336,992.99 lakhs and ₹ 3,232.45 lakhs, respectively.

As on June 30, 2014, the Company and its Subsidiaries has a consolidated order book of approximately ₹

4,34,904 lakhs. As on June 30, 2014, our consolidated order book, by value, comprised 55% from our

domestic operations and 45% from our overseas operations.

Our market capitalisation as of June 30, 2014 was ₹ 50,113.95 lakhs on the NSE and ₹ 50,031.66 lakhs on the

BSE.

Our Competitive Strengths

We believe that we are well positioned to capitalize on growth opportunities in the power sector, in India and

overseas.

33

Proven capabilities and demonstrated operating track record

We are a well established company in the power transmission sector and have been in the business since 1979.

We have over three decades of experience in the engineering, construction and manufacturing business and

have successfully completed and commissioned several projects. We have also tested transmission towers upto

a capacity of 1,200 kV HVAC. We believe that our rich experience, combined with the years spent on research

and development gives us an edge over our competitors.

Manufacturing Experience

We commenced operations as a pure manufacturer of transmission towers with a single factory in Nashik,

Maharashtra. As on June 30, 2014, our Company operated 5 (five) manufacturing units with a cumulative

manufacturing capacity of 216,160 MT. Our manufacturing units are located at Nashik (India), Raipur (India),

Dubai (UAE) and Houston (Texas, USA) and have a manufacturing and fabrication capacity of 73,930 MT,

42,240 MT, 50,000 MT and 50,000 MT, respectively. Our Indian manufacturing units have a combined

capacity of 116,160 MT making us one of the largest manufacturers of lattice steel towers in India.

Our manufacturing units are capable of manufacturing transmission line towers, microwave towers, wind mill

towers, substation structures, solar structures and cater to railway electrification. All our manufacturing units

adhere to, and satisfy, stringent environmental safety norms.

Our manufacturing units comprise CNC machines i.e., microprocessor controlled machines that are capable of

catering to angle plates and channels of various sizes and achieving accuracy. In addition to the CNC

machines, our manufacturing units located at Dubai and in the United States have fully automated environment

friendly galvanising plants. These automated galvanising plants are operated through programmable logic

controller systems enabling us to streamline our manufacturing process and improve operational efficiency.

Further our manufacturing units possess modern material handling equipment including goliath cranes and

EOT cranes.

Experienced Management and Qualified Project Execution Team

Our senior management including our Board has experience in the power transmission and distribution

industry and have been instrumental in our consistent growth. In addition, the Board includes a combination of

management executives and independent members who have significant experience in the power transmission

and distribution industry. We believe that the combination of our experienced Board and our dynamic and

forward-looking management team puts us in a position to capitalize on future growth opportunities. We have

recently appointed, and are in the process of appointing, senior management personnel across various business

divisions to further bolster our project execution capabilities.

In addition to a strong senior management, we believe that a qualified and technically competent employee

base is critical to our business. As of June 30, 2014, we employed approximately 2,645 full-time employees of

which 12% were engineers, 21% were diploma engineers and holding other technical qualifications. In

addition, 7% of the total employees hold professional and post graduate qualifications. The diverse skill sets of

our employees provide us the flexibility in adapting to the challenging and evolving needs of our business. The

experience gained during our initial years, as a pure manufacturing entity, has given us an in-depth

understanding of operational requirements and has helped us to establish systems which minimise execution

time without compromising on quality.

Diversified Operations

We have operations in three business segments i.e. transmission lines, sub-stations and distribution. Our

diversified operations enable us to reduce our dependence on a particular business area. While in Financial

Year 2009, construction of transmission lines constituted 16% of our total revenues, in Financial Year 2014,

construction of transmission lines constituted only 32% of our total revenues. Accordingly, although the

construction of transmission lines business area has grown at a CAGR of 196%, diversification has reduced

our dependence on this line of our operation. During the Financial Year 2014, our consolidated revenues from

domestic operations and overseas operations were ₹ 236,557.59 lakhs and ₹ 127,046.95 lakhs, respectively.

Further, our consolidated revenues from our overseas operations increased from ₹ 64,152.70 lakhs in Financial

Year 2009 to ₹ 127,046.95 lakhs in Financial Year 2014 at a CAGR of 14.6%.

34

In addition, we provide the full suite of EPC services either as a composite contract or on a stand-alone basis.

Further, even within the EPC segment, we provide the entire gamut of services including engineering,

manufacturing and construction. Our vast experience, built over 3 (three) decades enables us to plan each

project and execute it to exacting time and quality standards.

Design, Engineering and Tower Testing

We believe that strong design and engineering capabilities is the foundation for successful execution of EPC

contracts. We have designed and tested different types of towers such as self-supporting towers, guyed towers

and cross rope towers. Further, we have developed different types of foundation design such as open

excavation pad-chimney RCC foundation, undercut foundation, pile foundation and grillage foundation. Our

focus on maintaining quality is well recognised and our R&D Facility has been confirmed to the Quality

Management System Standard ISO 9001:2008 by DNV Certification B.V.

We are one of the few companies capable of testing transmission line towers in India. We operate a state of the

art tower testing facility at our R&D Facility in Ghoti, near Nashik (India). Our R&D Facility offers automatic

load applications with the ability to test towers of up to 1200 kV, with a maximum height of 85 metres, a

square or rectangle base width up to 26 metres and maximum uplift per leg 500 MTs. As on June 30, 2014, we

have successfully tested over 380 towers of varying sizes and capacities for both domestic and international

utilities.

Technical Competence and Pre-qualified Status

Design, engineering and project execution capabilities vary across geographies, tensile strengths, terrain and

other factors. Our technical capabilities have been proven across geographies, tensile strengths and over

different terrains. For instance, we have successfully executed various projects with river crossing

requirements, which are necessarily difficult and have specific design and engineering requirements, to

withstand the vagaries of nature such as storms, whirlwinds, flood, change in the course of the river, etc.

Additionally, a majority of the projects in the transmission line and sub-station segments are awarded on the

basis of tenders. Most tenders have in-built technical and financial pre-qualification criteria. Some of the more

usual pre-qualification criteria relate to the technical competence of the bidders such as the ability to construct

HVAC and HVDC transmission lines. The award is based on various criteria including the reputation of

bidder, technical competence, experience in implementing similar projects, quality of executed projects and

financial bid.

Since our Company has experience in construction of transmission line upto 800 kV, substations upto 765 kV

and power distribution, we are eligible to bid for majority of the tenders relating to projects in the power

transmission and distribution business. We believe that our ability to bid for any project of our choice gives us

greater flexibility in bidding for tenders and also gives us an opportunity to garner bigger projects.

Our Strategy

Focus on our service quality

We believe that the strident focus on the quality of our service is a key factor in our success. We will

endeavour to meet our customer’s expectations and ensure complete satisfaction. To that end, we will strive to

provide better service, through enhanced efficiency in completion of our projects with a greater focus on

meeting our timelines. We intend to develop relations with prospective customers and also strengthen our

relationship with our existing customers through superior management skills and a favourable customer

interface. We would also endeavour to maintain high levels of quality in our business and products and utilise

our skills and expertise to reach greater levels.

Rural Electrification

In March 2005, the Ministry of Power, Government introduced the RGGVY, with the aim of providing

electricity to over 1,00,000 un-electrified villages and providing free electricity connections to over 230 lakhs

rural below the poverty line (BPL) households. Under RGGVY, the Ministry of Power has sanctioned 921

projects to electrify 1,24,469 unelectrified villages, intensive electrification of 604,983 partially electrified

villages and to provide free electricity connections to 408.80 lakhs BPL rural households (Source:

35

http://powermin.nic.in/bharatnirman/bharatnirman.asp). As on June 30, 2014, work in 108,408 un-electrified

villages and intensive electrification of 308,404 partially electrified villages have been completed and 218.30

lakhs free electricity connections have been released to BPL households. (Source:

http://powermin.nic.in/bharatnirman/bharatnirman.asp)

The contribution of rural electrification to our total revenues increased from ₹ 23,767 lakhs in Financial Year

2009 to ₹ 28,735 lakhs in Financial Year 2014 at a CAGR of 121% .We will continue to engage in providing

services and products associated with the process of rural electrification.

Focus on operation and process standardisation

Operation and process standardization is a critical element of our continued success, particularly where there

are a significant number of projects. The quality management systems of our design, testing, manufacture,

supply and construction of 11 kV to 800 kV power transmission lines, substations, power distribution and

similar turnkey projects have all been approved by DNV Certification B.V to ISO 9001:2008. The

environmental management system of our design, testing, manufacture, supply and construction of 11 kV to

800 kV power transmission lines, substations, power distribution and similar turnkey projects have all been

approved by DNV Certification B.V to ISO 14001:2004. The occupational health and safety management

system standard of our design, testing, manufacture, supply and construction of 11 kV to 800 kV power

transmission lines, substations, power distribution and similar turnkey projects have all been approved by

DNV Certification AS to ISO 18001:2007.

Focus on large turnkey projects

We have built up the strength to successfully execute large scale turnkey projects. For instance, we

successfully charged and commissioned a turnkey project worth approximately ₹ 40,823 lakhs, for

construction of transmission line of 500 kV HVDC, with a route length of 989 Kms. from Mundra to

Mohindergarh. Further, in Namibia, we commissioned a turnkey project worth approximately a total of USD

38,861,935 and NAD 244,771,837, for construction of transmission line of 350 kV HVDC, with a route length

of approximately 672 Kms. We intend to continue to focus on such large scale projects so as to achieve

benefits of economies of scale in our business operations.

Maintain a sustainable and diversified business model

Our objective has been to create a sustainable and diversified business model in order to increase shareholder

value and grow our revenues. We continue to follow a diversified strategy for growth focused on EPC

contracting in the power transmission sector, which we believe have high potential for growth and where we

believe we enjoy the following competitive advantages:

1. Diversification of projects within the sector in which we operate; 2. Maintain a diverse customer base between the public and private sectors;

3. Maintain an appropriate mix of domestic and international orders to mitigate against geographical

exposures; and

4. Maintain an appropriate range of contract durations, for instance 18 - 24 month contracts.

We believe this strategy will mitigate our reliance on the growth of any one particular country or region from

one or few customers and will complement our business and provide us with growth opportunities.

Focus on international expansion

Presently, we have worked, through our Subsidiaries and Joint Ventures, with customers from over 30

countries directly. Our revenues from our international operations grew from ₹ 61,033 lakhs during the

Financial Year 2013 to ₹ 103,485 lakhs during the Financial Year 2014 i.e. a 69.56% growth, year on year.

While in Financial Year 2009, we had only one joint venture company catering to the Middle East and as of

June 30, 2014, we have executed, or are executing, EPC turnkey contracts across Middle East, the United

States and Africa through our Subsidiaries and Joint Ventures.

Africa, in particular, is a key focus area of our international operations. In Africa, we have executed, or are

executing EPC turnkey power transmission contracts in South Africa, Kenya, Ethiopia, Uganda, Rwanda,

Nigeria, Tanzania and Namibia. Further, we are presently undertaking business development initiatives in

other African countries. We intend to pursue a significant role in power transmission and distribution sector in

36

Africa. In order to accomplish this initiative, we have incorporated subsidiaries in South Africa, Kenya,

Namibia and Nigeria, where we perceive opportunities for future growth and development.

We intend to further expand our global presence and will evaluate potential opportunities to grow our business

and expand our capabilities and/or geographical reach.

37

SUMMARY FINANCIAL INFORMATION

The following summary financial information as at and for the Financial Year 2014, Financial Year 2013 and

Financial Year 2012 has been derived from our audited consolidated Financial Statements included elsewhere

in this Placement Document. For a summary of our significant accounting policies and the basis of the

presentation of our financial statements, please refer to the notes to the financial statements included in this

Placement Document.

You should read the following summary financial information in conjunction with our financial statements and

the related notes and section titled ‘Management‘s Discussion and Analysis of Financial Condition and

Results of Operation’ on page 74 in this Placement Document.

38

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2014, 2013 AND 2012

(₹ in lakhs)

Particulars As at

March 31, 2014 March 31, 2013 March 31, 2012

I EQUITY AND LIABILITIES

1) Shareholders' Funds

a) Share Capital 10,649.28 4,145.20 1,644.28

b) Reserves and Surplus 66,508.31 66,727.41 63,521.74

77,157.59 70,872.61 65,166.02

2) Share Application Money Pending Allotment 3.00 0.92 0.39

3) Minority Interest 62.92 61.95 119.17

4) Non Current Liabilities

a) Long Term Borrowings 36,843.02 30,503.87 34,622.15

b) Deferred Tax Liabilities (Net) 13.84 1,091.65 1,278.55

c) Other Long Term Liabilities 16,129.36 11,991.48 18,901.97

d) Long Term Provisions 964.97 758.83 541.02

53,951.19 44,345.83 55,343.69

5) Current Liabilities

a) Short Term Borrowings 89,769.34 63,502.63 41,602.68

b) Trade Payables 1,75,147.74 65,668.93 59,188.94

c) Other Current Liabilities 53,818.22 54,813.73 46,031.73

d) Short Term Provisions 2,759.72 2,374.52 5,527.80

3,21,495.02 1,86,359.81 1,52,351.15

TOTAL 4,52,669.72 3,01,641.12 2,72,980.42

II ASSETS

1) Non Current Assets

a) Fixed Assets

i) Tangible Assets 45,177.68 44,415.05 25,707.55

ii) Intangible Assets 1,675.86 1,247.21 377.12

iii) Capital Work-in-Progress 62.11 213.17 16,883.48

iv) Intangible Assets Under Development 112.02 675.71 908.55

47,027.67 46,551.14 43,876.70

b) Non Current Investments 525.57 525.35 522.85

c) ) Deferred Tax Assets (Net) 5,254.91 1,902.85 6.73

d) Long Term Loans and Advances 715.52 698.90 710.19

e) Other Non Current Assets 4,524.14 4,209.41 5,645.22

2) Current Assets

a) Inventories 52,654.92 28,704.48 31,878.70

b) Trade Receivables 2,92,594.61 1,84,713.50 1,59,982.86

c) Cash and Bank Balances 9,919.31 5,353.87 6,111.05

d) Short Term Loans and Advances 39,306.71 28,979.93 23,855.01

e) Other Current Assets 146.36 1.69 391.11

3,94,621.91 2,47,753.47 2,22,218.73

TOTAL 4,52,669.72 3,01,641.12 2,72,980.42

39

CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE FINANCIAL YEAR 2014,

FINANCIAL YEAR 2013 AND FINANCIAL YEAR 2012

(₹ in lakhs)

Particulars Financial Year

2014 2013 2012

I INCOME

Revenue from Operations (Gross) 3,69,297.03 3,05,301.77 2,82,142.94

Less: Excise duty 5,692.49 4,032.47 5,535.87

Revenue from Operations (Net) 3,63,604.54 3,01,269.30 2,76,607.07

Other Income 2,946.23 499.49 818.87

Total Revenue 3,66,550.77 3,01,768.79 2,77,425.94

II EXPENSES

Cost of Materials Consumed 2,51,327.97 1,77,474.04 1,48,481.36

Erection and Sub-contracting Expense 55,951.85 49,205.82 63,643.19

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade (23,724.96) (90.19) (7,469.44)

Employee Benefits Expense 17,972.79 15,532.03 10,722.10

Finance Costs 24,612.36 18,213.33 14,779.03

Depreciation and Amortization Expense (Net) 4,026.96 3,556.52 2,490.16

Other Expenses 38,339.47 32,352.30 30,720.84

Total Expenses 3,68,506.44 2,96,243.85 2,63,367.24

III Profit Before Tax (I-II) (1,955.67) 5,524.94 14,058.70

IV Tax Expense

Current Tax 3,034.17 3,492.00 4,819.99

Deferred Tax (Net) (4,102.87) (1,750.98) (522.20)

(Excess)/Short Provision of Taxes for earlier year 49.52 4.43

(1,019.18) 1,745.45 4,297.79

V Profit for the year (III-IV) (936.49) 3,779.49 9,760.91

40

CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEAR 2014, FINANCIAL

YEAR 2013 AND FINANCIAL YEAR 2012

(₹ in lakhs)

Particulars Financial Year

2014 2013 2012

I CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Taxes and Extraordinary Items

[A] (1,955.67) 5,524.94 14,058.70

ADJUSTMENTS FOR

i) Depreciation and Amortisation 4,278.46 3,570.55 2,492.59

ii) Transferred from Revaluation Reserve (2.42) (2.42) (2.42)

iii) Finance Cost 24,612.36 18,213.33 14,779.03

iv) (Gain)/Loss on Sale of Fixed Assets (Net) 98.21 15.93 (0.54)

v) Interest Received (864.83) (220.41) (642.57)

vi) Employee Compensation Expense - ESOS 56.15 (83.99) 96.22

vii) Effect of Exchange Rate Change 691.50 (428.52) 2,077.17

[B] 28,869.43 21,064.47 18,799.48

Operating Profit before Working Capital changes

[A+B] = [C] 26,913.76 26,589.41 32,858.18

ADJUSTMENTS FOR

i) Inventories (23,950.45) 3,774.78 (7,198.38)

ii) Trade Receivable & Other Receivable, Loans &

Advances, Other Current Assets (1,18,310.10) (32,729.83) (58,072.32)

iii) Current Liabilities and Provisions 1,09,894.18 13,804.04 31,217.32

[D] (32,366.37) (15,151.01) (34,053.38)

Cash Generated from Operations

[C+D] = [E] (5,452.61) 11,438.40 (1,195.20)

i) Direct Taxes Paid (Net) (1,876.74) (6,354.83) (4,399.04)

[F] (1,876.74) (6,354.83) (4,399.04)

[I] Net Cash (used in) / from Operating Activities

[E+F] = [G] (7,329.35) 5,083.57 (5,594.24)

II CASH FLOW FROM INVESTING ACTIVITIES

i) Proceeds from Sale of Fixed Assets 190.85 126.69 1,488.97

ii) Purchase of Fixed Assets [After adjustment of

(Increase)/Decrease in Capital Work-in-Progress] (5,044.05) (6,386.26) (23,236.37)

iii) Investments in Other than Subsidiary company - (4.92)

(500.00)

iv) Proceeds from Redemption of Investments (0.22) -

v) Interest Received 864.83 220.41 642.57

vi) Net Advances to Companies other than Subsidiaries 36.89 (1,989.15) (2,206.40)

[II] Net Cash (used in) / from Investing Activities (3,951.70) (8,033.23) (23,811.23)

III CASH FLOW FROM FINANCING ACTIVITIES

i) Proceeds from Issue of Equity Share

(inclusive of Share Premium and after considering ESOS

allotted to employees) 4.78 8.40

14.46

ii) Proceeds from Issue of Preference Share 6,503.80 2,500.00

iii) Proceeds from issue of Non Convertible Debentures 3,304.00 1,670.00

41

iv) Repayment of Non convertible Debentures - (12,086.41)

v) Proceeds from Long Term Borrowings 13,625.79 13,066.96 25,926.74

vi) Repayment of Long Term Borrowings (8,654.75) (8,266.40) (3,609.79)

vii) Net Increase/(Decrease) in Interest Free Sales Tax

Defferal Loan (27.74) (14.90)

(54.41)

viii) Proceeds from Short Term Borrowings from banks 27,605.12 23,145.67 21,730.04

ix) Repayment of Short Term Borrowings (1,338.41) -

x) Proceeds from Asset Finance from Banks - 150.12

xi) Repayment of Asset Finance from Banks (77.61) (83.71) (4.87)

xii) Proceeds from Asset Finance from Financiers 613.98 -

xiii) Repayment of Asset Finance from Financiers (32.97) (7.74) (12.37)

xiv) Dividends Paid (655.19) (899.55) (1,225.11)

xv) Dividends on Pref Share Capital (1.23) -

xvi) Dividend and Dividend Distribution Tax for earlier

year (0.04) (0.13) (0.50)

xvii) Net Corporate Dividend Tax Paid - (146.71) (199.84)

xviii) Finance Cost (24,612.36) (18,213.33) (14,779.03)

[III] Net Cash (used in) / from Financing Activities 16,257.17 822.27 27,785.32

Net Increase/(Decrease) in Cash and Cash Equivalents

[I + II + III] 4,976.12 (2,127.39) (1,620.15)

Cash and Cash Equivalents at the beginning of the year 3,966.58 6,093.97 7,555.39

Cash and Cash Equivalents at the end of the year 8,942.70 3,966.58 5,935.24

42

Summary of reservations or qualifications or adverse remarks in the auditors’ report in the last 5 (five)

Financial Years immediately preceding the year of filing this Placement Document

Financial

Year

Remarks Our Comments

2014 a) “The trade receivables of the Company include

amount of ₹ 7,045.80 Lakhs outstanding from

Joint Venture Company namely, Lauren Jyoti

Private Limited. As informed to us, the

accounts of the Joint Venture are not available

for financial year ended 31st March, 2013 as

well as for the financial year ended 31st

March, 2014. Considering the facts that the

accounts of that company are not available and

considering the fact that the joint venture

company is not regular in the payment of the

above outstanding, we are not able to comment

on the recovery of the debt and impact of the

same on the Balance Sheet and Statement of

Profit and Loss of the Company for the year.

b) The Company has invested ₹ 500 Lakhs in 50

Lakhs equity shares of Lauren Jyoti Private

Limited. In absence of availability of annual

accounts of the company for the financial year

ended on 31st March 2013 and for the

financial year ended on 31st March, 2014, we

are not able to comment, if there is other than

temporary diminution in the value of the said

investment and impact of the same on the

Balance Sheet and Statement of Profit and

Loss of the Company for the year.

c) Due to non availability of audited financial

statements of the Joint Venture Company

namely Lauren Jyoti Pvt. Ltd. as on 31st March

2014, the company has not consolidated the

financial statements of the said joint venture

company with its financial statements. In this

connection, we draw attention of the members

to note no 31(7) of the Notes to consolidated

financial statements. In absence of such

consolidation and the audited accounts for the

year of the said joint venture company, we are

not able to comment as regards the effects of

the same on the consolidated financial

statements of the company for the year ended

31.03.2014.

d) The company has reported that it has provided

for deferred tax asset of US $ 52.87 Lakhs (₹

3,025.06 Lakhs) for the year in the consolidated

Statement of Profit and Loss and it has

considered the deferred tax asset of US $ 87.68

Lakhs (₹ 5,254.91 Lakhs) in the consolidated

Balance Sheet. In light of AS-22 paragraph 17,

deferred tax asset should be recognized only to

the extent that there is a virtual / reasonable

certainty, as applicable, supported by

convincing evidence that sufficient future

taxable income will be available against which

such deferred tax asset will be realised. In the

absence of convincing evidence of virtual /

reasonable certainty, as applicable, as required

by AS–22, we are of the opinion that the

Please see note 31(6) on page F24 under the

section titled ‘Financial Statements’ of this

Placement Document.

Please see note 31(6) on page F24 under the

section titled ‘Financial Statements’ of this

Placement Document.

Please see note 31(7) on page F24 under the

section titled ‘Financial Statements’ of this

Placement Document.

Please see note 31(5) on page F24 under the

section titled ‘Financial Statements’ of this

Placement Document.

43

consolidated loss for the year is understated by

an amount of ₹ 3,025.06/- Lakhs (P.Y. ₹

1,564.08 Lakhs) and the consolidated reserves

& surplus for the year ended 31.03.2013 are

overstated by ₹ 5,254.91 Lakhs (P.Y. ₹

1,896.96 Lakhs).”

2013 a) “The company has reported that it has provided

deferred tax asset of US$ 29.46 Lakhs (₹

1,546.08 Lakhs) for the year in the Consolidates

statement of Profit and Loss and it has

considered deferred tax asset of US$ 34.80

Lakhs (₹ 1,896.96 Lakhs) in the consolidated

Balance Sheet. In the light of AS 22 paragraph

17, deferred tax assets should be recognized to

the extent that there virtual certainty supported

by convincing evidence that sufficient future

taxable income will be available against which

such deferred tax asset will be realised. In the

absence of convincing evidence of virtual

certainty as required by AS-22, we are of the

opinion that the consolidated profits for the year

are overstated by an amount of ₹ 1,564.08

Lakhs ( P.Y Nil ) and the consolidated reserves

and surplus for the year ended 31.03.2013 is

overstated by ₹ 1,896.96 Lakhs ( P.Y Nil )

b) In the absence of audited financial statements of

Joint Venture Company namely Lauren Jyoti

Private Limited as on 31.03.2013, the company

has not consolidated the financial statements of

the said Joint Venture Company with its

financial statements. In this connection, we draw

attention of the members to No. no 31(7) of the

Notes to consolidated statements. In absence of

such consolidation and in absence of audited

accounts for the year for the said subsidiary

company, we are not able to comment as regards

the effects of the same on the consolidated

financial statements of the company for the year

ended 31.03.2013.”

Please see note 31(9) on page F51 under the

section titled ‘Financial Statements’ of this

Placement Document.

Please see note 31(7) on page F50 under the

section titled ‘Financial Statements’ of this

Placement Document.

2012 “As referred to Note no. 30 (5&6) to the

Consolidated Financial Statements, the Company has

not included its share in assets, liabilities, incomes

and expenditures of its 30% Joint Venture ‘Gulf Jyoti

International LLC’ and 50% Joint Venture “Lauren

Jyoti Private Limited” while preparing the

Consolidated Financial Statements as required by AS

27 “Financial Reporting of Interest in Joint

Ventures”. The respective shares in assets, liabilities

and profits of the company in these Joint Ventures

are ₹ 16,741.39 Lakhs, ₹ 15,335.28 Lakhs and ₹

494.46 Lakhs respectively.”

Please see notes 30(5) and 30 (6) on page

F77 under the section titled ‘Financial

Statements’ of this Placement Document.

2011 “As referred to in Note no 7 of Schedule ‘22’ to the

Consolidated Financial Statements, the Company has

not included its share in assets, liabilities, incomes

and expenditures of its joint venture ‘Gulf Jyoti

International LLC’ while preparing the Consolidated

Financial Statements as required by AS 27 “Financial

Reporting of Interests in Joint Ventures”. If the 30%

share in assets, liabilities, incomes and expenditures

of the Joint Venture would have been consolidated,

then the consolidated assets would have increased by

Our Company’s investment in the joint

venture being less than 50%, the

management is of the view not to consider

its share of assets, liabilities, income, and

expenditure while preparing its

consolidated financial statements. Had this

been considered, the consolidated assets

would have increased by ₹ 11,124 lakhs

and consolidated liability would have

increased by ₹. 10,779.9 lakhs, profit for

44

₹ 11,124 lakhs and consolidated liabilities would

have increased by ₹ 10,779.9 lakhs, consolidated

profit for the year would have been increased by ₹

216.2 lakhs and the consolidated reserves would

have been lower by ₹ 1,250.6 lakhs.”

the year would have increased by ₹ 216.2

lakhs and reserves would have been lower

by ₹ 1,250.6 lakhs.

2010 a) “As referred to in Note no 7 of Schedule ‘23’ to

the Consolidated Financial Statements, the

Company has not included its share in assets,

liabilities, incomes and expenditures of its joint

venture ‘Gulf Jyoti International LLC’ while

preparing the Consolidated Financial Statements

as required by AS 27 “Financial Reporting of

Interests in Joint Ventures”. If the 30% share in

assets, liabilities, incomes and expenditures of

the Joint Venture would have been consolidated,

then the consolidated assets would have

increased by ₹ 7,699.6 lakhs and consolidated

liabilities would have increased by ₹ 7,564.3

lakhs, consolidated profit for the year would

have been lower by ₹ 196.6 lakhs and the

consolidated reserves would have been lower by

₹ 1,513.1 lakhs.

b) Attention is invited to Note no. 8 of Schedule

‘23’ regarding non provision of diminution in the

value of investment in Gulf Jyoti International

LLC.”

c) “In response to relevant notices issued by the

Assessing Officer, the company has filed its

returns of income in respect of earlier years. The

tax liability of ₹ 1,324.98 lakhs arising from the

same being related to an earlier year is reduced

from the credit balance of Statement of Profit

and Loss under the head Reserves and Surplus in

the balance sheet of the company and effect of

the same is not given in the Statement of Profit

and Loss. Due to this, the profit after tax for the

year is higher by the same amount and the basic

and diluted earnings per share for the year is

higher by ₹ 1.62 respectively.”

The Company’s investment in the Joint

Venture being less than 50%, the

management is of the view not to consider

its share of assets, liabilities, income, and

expenditure while preparing its

consolidated financial statements. Had this

been considered, the consolidated asset

would have been increased by ₹ 7,699.6

lakhs and consolidated liability would have

increased by ₹ 7,564.3 lakhs, profit for the

year would have been lower by ₹ 196.6

lakhs and reserves would have been lower

by ₹ 1,513.1 lakhs. The Company has

invested an amount of AED 12.93 Million

equivalent to ₹ 1,642.8 lakhs in its Joint

Venture Company namely, Gulf Jyoti

International LLC. That Company

maintains its accounts on calendar year

basis. The total paid up capital of the

Company as on December 31, 2009 was

AED 43.10 Million (P.Y.AED 43.10

Million). As against this capital, the total

losses incurred during the year were AED

5.00 Million (P.Y. AED 24.37 Million) and

total accumulated losses as on December

31, 2009 were AED 39.56 Million (P.Y.

AED 34.57 Million). However, based on

the orders in hand and the business outlook

of the joint venture Company, the

management is of the opinion that these

accumulated losses are temporary in nature

and will be recovered in the next couple of

years. Due to this, the management believes

that there is no diminution in value of the

investment and therefore no provision for

the same is made during the year.

Since the tax liability related to an earlier

year, the same was reduced from the credit

balance of Statement of Profit and Loss

under the head Reserves and Surplus in the

balance sheet of our Company and effect of

the same was not given in the Statement of

Profit and Loss of our Company. There has

been no effect on the Statement of Profit

and Loss in the subsequent years and no

such adverse remark exists in the Auditor’s

report of the subsequent years.

45

RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all the

information in this Placement Document, including the risks and uncertainties described below, before

making an investment in respect of the Equity Shares. If any of the following risks, or other risks that

are not currently known or are now deemed immaterial, actually occur, our business, results of

operations and financial condition could suffer, the price of the Equity Shares could decline, and you

may lose all or part of your investment. The financial and other related implications of risks wherever

quantifiable, have been disclosed in the risk factors mentioned below. However, there are risk factors

where the impact is not financially quantifiable and hence is not disclosed in such risk factors. Unless

otherwise stated, the financial information used in this section is derived from our audited consolidated

financial statements prepared under Indian GAAP. Prior to making an investment decision, prospective

investors and purchasers should carefully consider all of the information contained in this Placement

Document (including the financial statements incorporated in this Placement Document).

1. We have experienced certain adverse developments including having to enter into debt restructuring

scheme owing to defaults by our Company of various loans. Such events may result in loss of our

Company’s reputation and adversely affect our operations, financial condition and cash flows, and

may also result in additional equity capital funding from our Promoters thereby diluting your equity

stake in our Company.

The overall recession in trade and industry coupled with delays in the commissioning of certain projects

being executed by us has put considerable financial pressure on the Company and, in particular, on our

cash flows. Consequently, there have been irregularities in the repayment of banking facilities such as

delay in principal / interest payment on the outstanding term loans and working capital loans. The

lenders of our Company entered into a Master Joint Lenders Forum Agreement on July 2, 2014 amongst

themselves pursuant to which the lenders formed a Joint Lenders’ Forum (JLF). The objective of the

JLF is to restructure our Company’s debt under RBI’s framework for revitalizing distressed assets

notified by RBI vide its circular RBI/2013-14/503 dated February 26, 2014. In the JLF meeting on

August 6, 2014 the JLF has, in-principle, agreed and accepted, a debt restructuring scheme for the

Company (Restructuring Scheme). The impact of the Restructuring Scheme is difficult to predict and

there can be no assurance that we will be able to turn around our financial performance. Further, the

Restructuring Scheme may also result in additional equity capital funding from our Promoters and,

consequently, your equity stake in our Company may be diluted to such extent.

2. We have incurred substantial indebtedness which exposes us to various risks which may have an

adverse effect on our business, results of operations and financial condition.

As of June 30, 2014, our total secured and unsecured indebtedness was ₹ 1,74,182 lakhs and ₹ 11,594

lakhs, respectively. The level of our indebtedness could have several important consequences, including

but not limited to the following:

(i) a substantial portion of our cash flow will be used towards repayment of our existing debt, which

will reduce the available cash flow to fund our capital expenditures, acquisitions and other

general corporate requirements;

(ii) current and future defaults of payment and other obligations under our financing arrangements

may result in an event of default, acceleration of our repayment obligations and enforcement of

related security interests over our assets;

(iii) a substantial portion of our indebtedness is subject to floating rates of interest. Fluctuations in

market interest rates may require us to pay higher rates of interest and will also affect the cost of

our borrowings; and

(iv) our ability to obtain additional financing in the future or renegotiate or refinance our existing

indebtedness on terms favourable to us may be limited.

For further details regarding our indebtedness, please see section titled ‘Management’s Discussion and

Analysis of Financial Condition and Results of Operation’ on page 74 of this Placement Document.

3. A select group of our customers contribute significantly to our revenues and failure to retain one or

more of them will have an adverse effect on our financial performance and results of operations.

46

Our power transmission business is concentrated on projects undertaken by large Indian power

companies, such as state transmission utilities, foreign power utilities and international EPC

contractors.

Our business, therefore, requires that we continue to maintain pre-qualified status with key customers

so that we are not disqualified from future projects that these customers may award. Our major

customers vary from period to period depending on the demand and the completion schedule of

projects. In Financial Year 2014, Financial Year 2013 and Financial Year 2012, revenue from one of

our biggest customer, was ₹ 89,070 lakhs, ₹ 76,570 lakhs and ₹69,740 lakhs constituting 26.14%,

26.82% and 26.23% of our total revenues, respectively. In addition, revenues generated from our top 10

(ten) customers constituted 49.77%, 52.26% and 70.27%, of our Company’s total revenues in Financial

Year 2014, Financial Year 2013 and Financial Year 2012, respectively.

The loss of a significant customer or a number of significant customers or projects from such customers

for any reason, whatsoever, including as a result of disqualification or dispute, may have an adverse

effect on our results of operations.

4. Our Company has extended corporate guarantees in relation to debt facilities availed by our

Subsidiaries and Joint Ventures, which if invoked, may adversely affect our cash flows, results of

operations and financial conditions.

As on March 31, 2014, our Company had extended corporate guarantees aggregating ₹ 68,918.04 lakhs,

in relation to debt facilities availed of by our Subsidiaries and Joint Ventures. In the event any of our

Subsidiaries and Joint Ventures defaults in their payment obligations, the relevant lenders may enforce

the guarantee obligations against our Company. If our Company is required to pay the guaranteed

amount, our cash flows, results of operations and financial conditions may be adversely affected.

Additionally, in the event the guarantees are revoked, the relevant Subsidiaries and Joint Ventures may

be required to substitute such guarantees, failing which our creditors may revoke the debt facilities, in

part or full, which may in-turn adversely affect the results of operations and financial conditions of the

Subsidiaries and Joint Ventures.

Further, as on March 31, 2014, certain Subsidiaries and Joint Ventures of our Company had availed of

unsecured loans, from our Company, aggregating ₹ 23,479.49 lakhs for their business operations. In

case, any such subsidiaries or joint venture companies are unable to repay the loan availed we may have

to write-off such loans which may have an adverse effect on our financial condition and results of

operations.

5. Project delays or cancellations may result in additional costs to us, reductions in revenues or the

payment of liquidated damages.

We generally work towards pre-determined project completion/scheduled acceptance dates. In addition,

we also may be contractually required to achieve certain acceptance and performance testing levels.

Failure to meet completion schedules or performance requirements could result in additional costs or

penalties, including liquidated damages. Many projects involve challenging engineering, procurement

and construction phases that may occur over extended time periods spread over several years. We may

encounter difficulties in engineering, delays in designs or delay in the procurement of materials, long-

lead or otherwise, provided by the customer or a third party equipment and material supplier. Further,

the projects we undertake may be affected by schedule changes, delays due to our customer’s failure to

timely obtain rights-of-way including from railway authorities, forest / environment clearance, weather-

related delays and other factors including delay or non-performance of obligations by suppliers or sub-

contractors, if any, which are beyond our control. Any one or a combination of these events may

adversely impact our ability to complete the project in accordance with the original delivery schedule.

Delays in some cases may lead to imposition of stipulated liquidated damages, consequent additional

costs and/or litigation. In extreme cases, the above-mentioned factors could result in project

cancellations, and we may not be able to garner similar projects. Such delays or cancellations may

impact our reputation and/or relationships with customers, adversely affecting our ability to secure new

contracts. Further, we are generally required to furnish performance guarantees between 5% and 15%

of the contract values to ensure performance of the contracts by our Company. The actual or claimed

defects in procured equipment or construction quality could give rise to claims, liabilities, costs and

expenses, relating to loss of life, personal injury, damage to property, damage to equipment and

47

facilities, pollution, inefficient operating processes, loss of production or suspension of operations.

These performance guarantees may be enforced, which could adversely affect our financial condition

and results of operations. Illustratively, the execution of the Tangla-Kokrajhar-Barabisa transmission

line contract in Assam was affected by ethnic strife and local agitation. While generally, such delays are

condoned, PGCIL terminated the contract on April 10, 2014 and encashed the bank guarantee including

the performance guarantee of approximately ₹ 3,303 lakhs.

Further, project contracts may require customers or other parties to provide the design, engineering

information, equipment or materials to be used in a project. In some cases, the design or engineering

information may be delivered late or equipment or materials may be deficient or our customers may

change or delay various elements of the project after its commencement, resulting in additional direct or

indirect costs. While, generally, under these circumstances, we negotiate with the customer with respect

to the amount of additional time required to complete the project and/or the compensation to be paid to

us, there can be no assurance that such negotiations will succeed or that we will be able to secure terms

satisfactory to us, which will adversely impact our profitability. Further, the dispute resolution process

in India is generally lengthy and costly, and it is often difficult to predict when and for how much the

claims will be resolved. A failure to obtain adequate compensation for these matters could require us to

record a reduction to amounts of revenue and gross profit recognized in prior periods under the

percentage-of-completion accounting method. Any such adjustment could be substantial. We may also

be required to invest significant working capital to fund cost overruns while the resolution of claims is

pending, which could adversely affect our liquidity and financial condition.

6. The contracts included in our order book may be delayed, modified or cancelled, which could

adversely affect our cash flows position, revenues and results of operations.

Our order book may not necessarily indicate future income due to factors, including unanticipated

variations of scope and schedule adjustments. There can be no assurance that the revenues anticipated

in our order book will be realized, or, if realized, will be realized on time or result in profits. In

addition, it is possible that contracting parties may default on the amounts owed to us. Any delay,

cancellation or payment default could adversely affect our cash flows, revenues and results of

operations.

For some of the contracts in our order book, our customers are required to perform or take certain

actions towards the project such as securing of the right of way, clearance of forest, timely supply of

owner supplied material, securing of required licenses or permits, timely payments of advances or

opening of letters of credit, timely approval of designs and supply chain vendors. If a customer does not

perform any or all such actions in a timely manner or at all and if the remedy for such failure is not

provided for in the contract or if the customer reneges on the contract, our results of operations and our

financial condition may be adversely affected.

7. There are various litigations pending against our Company, which, if determined adversely, could

affect our business, results of operations and financial condition.

There are various litigations pending against our Company at different levels of adjudication before

various fora including arbitration tribunals. We cannot assure you that these legal proceedings will be

decided in our favor. If we fail to successfully defend these claims and any future claims or if the

provision made in our accounts for litigations proves to be inadequate to meet the legal claims, our

business, results of operations and financial condition could be adversely affected.

For further information relating to material legal proceedings that we are involved in, please see section

titled ‘Legal Proceedings’ on page 173 of this Placement Document.

8. There are certain contingent liabilities in our consolidated financial statements.

In our audited consolidated financial statements for the Financial Year 2014, the following are the

contingent liabilities not provided for.

(₹ in lakhs)

Sr. No. Nature of the Claim Amount

1. Sales Tax 32.68

2. Commercial Tax 403.93

48

3. The I-T Act 347.04

4. Entry Tax 18.86

5. Civil Suits 107.87

6. Corporate Guarantees 68,918.04

Total 69,828.42

Further, there is a letter of comfort for general banking facilities provided by National Bank of Abu

Dhabi to Gulf Jyoti International LLC. As on March 31, 2014, the total loan outstanding from the

National Bank of Abu Dhabi to the said company is Nil.

If any of aforementioned contingent liabilities materialize, our profitability and cash flows may be

adversely affected.

9. Our Company has experienced negative cash flows in recent Financial Years and may experience the

same in future.

We have had negative cash flows from investing activities and operating activities as per our audited

financial statements. The details of cash flows of our Company for the Financial Year 2014, Financial

Year 2013 and Financial Year 2012 are given below:

(₹ in lakhs) Particulars Financial Year

2014 2013 2012

Net cash generated from / (used in) operating activities (7,329.35) 5,083.57 (5,594.24)

Net cash generated used in investing activities (3,951.70) (8,033.23) (23,811.23)

Net cash generated from / (used in) financing activities 1,6257.17 822.27 27,785.32

Net increase in cash and cash equivalents 4,976.12 (2,127.39) (1,620.15)

Further, our Company is required to provide performance guarantees for the various contracts awarded

to us. In case of any delay or default in executing the contract, the performance guarantees may be

invoked, which could adversely affect the cash flows of the Company. The growth of our business and

our cash flows mainly depends on our ability to obtain new contracts. Our future results of operations

and cash flows can fluctuate materially from period to period depending on our ability to obtain new

contracts and the time lag between raising the invoice and receiving payments.

There can be no assurance that we will not have negative cash flows in the future. Negative cash flows

over extended periods, or significant negative cash flows in the short term, could materially impact our

ability to operate our business and implement our business strategies and growth plans. As a result, our

business, financial condition and results of operations could be materially and adversely affected. For

further details please see section titled ‘Summary Financial Information’ on page 37 of this Placement

Document.

10. Our business and financial condition would be materially and adversely affected if we fail to obtain

new contracts, which are in most cases, awarded following competitive bidding process.

A vast majority of the contracts entered into by our Company are either with government companies or

entities controlled by the government. Contracts are awarded following competitive bidding processes

and satisfaction of prescribed pre-qualification criteria. While various factors including technical

capability, health and safety records, availability of qualified personnel, reputation and experience, are

important considerations in the assessment of a bid, price is the major factor in most tender awards. In

most of the contracts that we bid for, once the qualified bidders clear the technical requirements of a

tender, the bid price generally plays a significant part in determining the award of the contract.

Consequently, we face intense margin pressure, which could have an adverse effect on our financial

condition and prospects. Further, if we are consistently unable to offer competitive rates or if we cannot

offer competitive rates on major contracts, our business and our financial condition will be adversely

affected.

11. We face significant competition.

49

We operate in an intensely competitive environment in India and internationally. We face significant

competition across segments in the transmission and distribution industry in our domestic and

international operations. The nature of the competition and the entities we compete against will depend

amongst others, on the segment of operations, the size of the project and the geography in which we

operate.

We compete with domestic and international EPC contractors, within in India and overseas. Our

international competitors, in addition to some of the companies based in India, operate on a global scale

and may have greater resources than the resources available to us including in terms of human

resources and financial means. They may also benefit from greater economies of scale and operating

efficiencies. As a result, our competitors may be able to operate at lower margins and present lower

bids for contracts than we do, causing us to win fewer tenders. There can be no assurance that we can

continue to compete effectively with our competitors in the future.

12. Conditions and restrictions imposed on us by the agreements governing our indebtedness could

adversely affect our ability to operate our business.

Our financing agreements include conditions and restrictive covenants that require us to obtain consents

from respective lenders prior to carrying out specified activities and entering into certain transactions.

Our lenders have certain rights to determine how we operate our businesses, which, amongst other

things, restricts our ability to borrow additional debt, declare dividends or incur capital expenditures

beyond prescribed thresholds, change the shareholding pattern/management of our Company, issue any

guarantee, use other bank’s facilities, enter into any derivative transactions, enter into any profit sharing

agreements, make investments other than in the ordinary course of business, sell/transfer/lease/dispose

substantial part of assets, and form or acquire any subsidiaries. We cannot assure you that we will be

able to obtain approvals in time to undertake any of these activities as and when required or comply

with such covenants or other covenants in the future.

Further, these debt obligations are typically secured by a combination of security interests over our

assets and hypothecation of movables and future receivables. The security allows our lenders to sell the

relevant assets in the event of a default by our Company, convert outstanding debt into equity, nominate

directors to the Board or exercise other such related rights. Under such financing agreements, we are

also required to comply with certain financial covenants, such as maintaining prescribed financial ratios

at all times. Further, if we incur additional debt or if there is an increase in the applicable interest rates

for our existing debt, our interest payment obligations will increase and we may become subject to

additional conditions from lenders, including incremental restrictions on the operation of our business.

The financing agreements that we are party to, or which we may enter into in the future, may be

unilaterally terminated by our lenders or the lenders could decline to lend to us under such agreements.

Further, we cannot assure you that we will be able to raise additional financing on favourable terms, or

at all. Any failure in the future to obtain sufficient financing could result in lack of cash flows to meet

our operating requirements and could have an adverse effect on our business, financial condition and

results of operations.

Certain of our financing agreements enable the lenders under these agreements to cancel any

outstanding commitments, accelerate the facilities, exercise cross default provisions, convert their loans

into equity and enforce their security interests on the occurrence of events of default such as a breach of

financial covenants, failure to obtain the proper consents, failure to perfect security as specified and

other breaches of covenants that are not cured. It is possible that we may not have sufficient funds upon

such an acceleration of our financial obligations to pay the principal and interest. If we are forced to

issue equity to the lenders, your ownership interest in our Company will be diluted. It is also possible

that future financing arrangements may contain similar or more onerous covenants.

Almost all our financing agreements contain cross default or cross acceleration provisions, with or

without thresholds in case of non-compliance by us with the provisions of other financing agreements.

As a result, any default under a financing agreement may cause the acceleration of repayment of not

only such debt but also other debt, or result in a default under our other financing agreements.

13. Our inability to collect our receivables on a timely basis, or at all, could adversely affect our financial

condition, liquidity and results of operations.

50

As of March 31, 2014, our outstanding trade receivables were ₹ 292,594.61 lakhs and during the

Financial Year 2014, our Company had written off outstanding trade receivable of ₹ 712.52 lakhs. In

addition, our Company also had short-term loans and trade payables of ₹ 89,769.34 lakhs and ₹

175,147.74 lakhs, respectively, as of March 31, 2014. Our outstanding receivables from third parties

include receivables from vendors including a vendor who we had engaged in the past for certain

defeasement services by discounting of cash flows in respect of our equipment supply contracts,

infrastructure providers, customers and other telecommunication operators. Our inability to collect our

receivables and advances, due to macroeconomic conditions, or otherwise, on a timely basis, or at all,

could adversely affect our financial condition, liquidity and results of operations.

14. There are audit qualifications in our Company’s Financial Statements for the Financial Year 2014.

Our Company’s auditors qualified their auditors’ report on our Company’s consolidated financial

statement for Financial Year 2014 as follows:

“The trade receivables of the Company include amount of Rs.7,045.80 Lacs outstanding from

Joint Venture Company namely, Lauren Jyoti Private Limited. As informed to us, the accounts of

the Joint Venture are not available for financial year ended 31st March, 2013 as well as for the

financial year ended 31st March, 2014. Considering the facts that the accounts of that company

are not available and considering the fact that the joint venture company is not regular in the

payment of the above outstanding, we are not able to comment on the recovery of the debt and

impact of the same on the Balance Sheet and Statement of Profit and Loss of the Company for the

year.”

“The Company has invested Rs.500 Lacs in 50 Lacs equity shares of Lauren Jyoti Private

Limited. In absence of availability of annual accounts of the company for the financial year ended

on 31st March 2013 and for the financial year ended on 31st March, 2014, we are not able to

comment, if there is other than temporary diminution in the value of the said investment and

impact of the same on the Balance Sheet and Statement of Profit and Loss of the Company for the

year.”

“Due to non availability of audited financial statements of the Joint Venture Company namely

Lauren Jyoti Pvt. Ltd. as on 31st March 2014, the company has not consolidated the financial

statements of the said joint venture company with its financial statements. In this connection, we

draw attention of the members to note no 31(7) of the Notes to consolidated financial statements.

In absence of such consolidation and the audited accounts for the year of the said joint venture

company, we are not able to comment as regards the effects of the same on the consolidated

financial statements of the company for the year ended 31.03.2014.”

“The company has reported that it has provided for deferred tax asset of US $ 52.87 Lacs (Rs.

3,025.06 Lacs) for the year in the consolidated Statement of Profit and Loss and it has considered

the deferred tax asset of US $ 87.68 Lacs (Rs. 5,254.91 Lacs) in the consolidated Balance Sheet. In

light of AS-22 paragraph 17, deferred tax asset should be recognized only to the extent that there is

a virtual / reasonable certainty, as applicable, supported by convincing evidence that sufficient

future taxable income will be available against which such deferred tax asset will be realised. In

the absence of convincing evidence of virtual / reasonable certainty, as applicable, as required by

AS–22, we are of the opinion that the consolidated loss for the year is understated by an amount of

Rs. 3,025.06/- Lacs (P.Y. Rs. 1,564.08 Lacs) and the consolidated reserves & surplus for the year

ended 31.03.2013 are overstated by Rs. 5,254.91 Lacs (P.Y. Rs.1,896.96 Lacs).”

For further information, please see the section titled ‘Financial Statements’ on page 182 of this

Placement Document.

15. If we are unable to effectively implement our business and growth strategies, our results of

operations may be adversely affected.

We believe that we have a proven business plan and strategy which is critical to our future growth.

Accordingly, we have streamlined our operations to adapt to our current business strategy. Our success

will depend, in large part, on our ability to effectively implement our business and growth strategies.

We cannot assure you that we will be able to execute our strategies in a timely manner or within budget

51

estimates or that we will meet the expectations of our customers and other stakeholders. We believe that

our business and growth strategies will place significant demands on our senior management and other

resources and will require us to develop and improve operational, financial and other internal controls.

Further, our business and growth strategies may require us to incur further indebtedness. Our inability

to manage our business, maintain our growth or the failure to successfully implement our growth

strategies could have an adverse impact on the results of our operations, our financial condition and our

business prospects.

16. Our Promoters and entities belonging to the Promoter Group may pledge or dispose of the Equity

Shares held by them

Except for the lockup on the certain of our Promoters and Promoter Group entities ability to transfer or

dispose the Equity Shares as discussed in the section titled ‘Placement’ at page 146 of this Placement

Document there is no restriction on our ability to issue Equity Shares or our promoter and Promoter

Group entities ability to dispose, transfer or pledge their Equity Shares, and our Promoters and / or

entities forming part of the Promoter Group may at any time pledge or dispose of the Equity Shares

held by them including immediately after listing of Equity Shares pursuant this Issue. Further, as on

June 30, 2014, some of our Promoters and certain entities forming part of our Promoter Group have

pledged Equity Shares constituting 79.76% of their equity shareholding in our Company as security in

certain transactions. The pledgee may exercise the right of acquiring, selling or otherwise disposing of

these Equity Shares if these entities fail to abide by the terms and conditions of the pledge. Any transfer

/ sale of Equity Shares by our Promoter and / or entities forming part of the Promoter Group will lead to

a dilution of the Promoter holding in our Company which may adversely impact the trading price of our

Equity Shares.

17. Our Company’s manufacturing facilities are located on leased land. If the lease(s) are terminated,

prior to its tenure or if it is not renewed or if we are required to cease our operations at a property, for

any reason whatsoever, our business, financial condition and results of operation may be adversely

affected.

Our Company’s manufacturing facilities and the research and development facility located at Nashik

are situated on land taken on lease from the respective state industrial development corporations. While

our Company has taken these properties on long lease with tenures ranging from 30 years to 99 years,

from the date of such lease, our Company may be required to vacate the lease and relocate our

manufacturing facilities and our research and development facility (a) with notice or (b) if we do not

adhere to stipulated terms and conditions in the lease agreements. In addition, the terms of the lease

agreements, inter alia, prohibit our Company from assigning the lease without prior approval of the

concerned authorities and usage of the leased premises other than the purpose of manufacturing or

research and development, as the case may be.

In the event that we are required to vacate the lease and relocate our manufacturing and / or research

and development facilities, we will be required to expend time and financial resources to locate suitable

land to set up a manufacturing unit, which may adversely affect our financial condition. Also, we may

be unable to relocate to an appropriate location in a timely manner, or at all.

If the lease(s) is terminated, prior to its tenure or if it is not renewed or if we are required to cease our

operations at a property, for any reason whatsoever, our business, financial condition and results of

operations may be adversely affected. In addition, any adverse impact on the title and ownership rights

of the owners from whose premises we operate or any breach of the contractual terms of such lease or

leave and license agreements may adversely impact us.

18. Our fixed price contracts may lead to significant pricing risks that could cause us to incur losses.

We undertake some of our projects on a fixed-price contract basis. Revenues generated from projects

with fixed price contracts aggregated ₹ 58,535 lakhs, ₹ 44,106 lakhs and ₹ 72,735 lakhs constituting

17.08%, 15.45% and 27.36% of our total revenue in Financial Year 2014, Financial Year 2013 and

Financial Year 2012, respectively. Under these contracts, we generally agree to provide EPC services

for the project on a fixed-price basis, subject to limited variations, such as to reflect changes in the

customer’s project requirements. As a result, we are exposed to risks including price fluctuation of raw

52

material, bought out items and fuel. Any increase in the price of these items will increase our costs and

adversely impact our profitability.

While in the past we generally have entered into forward contracts to hedge our exposure to price

fluctuation of raw materials, such as aluminum and zinc, or enter into back-to-back supplier contracts,

we were still exposed to significant pricing risks from the time a bid was made until the time the

contract was fully performed.

Even though in some of our fixed-price contracts for projects, we may provide for limited price

contingencies based on, amongst others, anticipated change in prices of certain raw materials,

particularly steel, based on general market trends, we continue to be exposed to price variation risk and

time lag in application.

19. Exchange rate fluctuations may adversely affect our financial performance.

In Financial Year 2014, Financial Year 2013 and Financial Year 2012 our revenues denominated in

foreign currencies aggregated ₹ 103,485 lakhs, ₹ 61,033 lakhs and ₹ 46,548 lakhs constituting

approximately 30%, 21% and 17% of our total revenue, respectively. In Financial Year 2014, Financial

Year 2013 and Financial Year 2012 our expenditures denominated in foreign currencies aggregated ₹

9,131 lakhs, ₹ 5,631 lakhs and ₹ 6,606 lakhs constituting approximately 2.75%, 2.33% and 2.67% of

our total expenditures, respectively. We generate revenue and incur expenditure in a number of

currencies, including the U.S. Dollar and the Euro. Any adverse change in foreign currency exchange

rates will influence our results of operations and our financial condition.

Although we closely follow our exposure to foreign currencies, including on a contract-by-contract

basis, and in the past we have selectively entered into hedging transactions to mitigate the risks of

exchange rate fluctuations, these activities have not always been sufficient to protect us from incurring

potentially large losses if exchange rates fluctuate significantly. Moreover, our ability to hedge during

the period between our bid submission and the award of the contract is limited and may not be effective

in reducing our risks.

Further as of June 30, 2014, our Company had foreign currency borrowings aggregating ₹ 6,295 lakhs.

Further, our future capital expenditures, including any imported equipment and machinery, may be

denominated in currencies other than Rupees. Therefore, a decline in the value of the Rupee against

such other currencies could increase the Rupee cost of servicing our debt or making such capital

expenditures. The exchange rate between the Rupee and the US dollar and the Euro has varied

substantially in recent years and may continue to fluctuate significantly in the future.

20. Our results of operations could be adversely affected by strikes, work stoppages or increased wage

demands by our employees or any other kind of disputes with our employees.

We employ a significant number of employees. As on June 30, 2014 we had 2,645 full time employees

on our rolls. Historically, we have not experienced any significant strikes or other labour disputes.

However, there can be no assurance that we will not experience disruptions to our operations due to

disputes or other problems with our work force, which may adversely affect our business and results of

operations.

We have 2 (two) recognised labour unions operating in our Company and we have, in the past,

successfully negotiated agreements with these unions. However, there can be no assurance that we will

be able to successfully negotiate acceptable collective bargaining agreements with those who have

chosen to be represented by unions, which could lead to union-initiated work stoppages, including

strikes, thereby adversely affecting our business and results of operations.

We may enter into contracts with independent contractors to complete specified assignments and these

contractors are required to source the labour necessary to complete such assignments. Although we do

not engage these labourers directly, it is possible under Indian law that we may be held responsible for

wage payments to labourers engaged by contractors should the contractors default on wage payments.

Any requirement to fund such payments may adversely affect our business, financial condition and

results of operations. Furthermore, pursuant to the provisions of the Contract Labour (Regulation and

Abolition) Act, 1970, we may be required to absorb a portion of such contract labourers as our

53

employees if specified conditions are satisfied. Any such order from a court or any other regulatory

authority may adversely affect our business and results of our operations.

21. Increased cost of raw materials and their non availability on time may affect our operations.

Our business is significantly affected by the availability, supply, cost and quality of raw materials,

which exposes us to market demand and supply fluctuations. The price and the supply of the raw

materials depend on factors beyond our control, which include economic conditions, consumer demand,

production levels, transportation costs and import duties. The price of steel, aluminium and zinc, our

primary raw materials are subject to significant volatility. Illustratively, between March 31, 2013 and

March 31, 2014, the price of zinc, aluminium and steel varied from USD 1,870 to USD 1,981 per kg,

from USD 1,881 to USD 1,730 and from ₹ 36,834 to ₹34,290 per metric ton, respectively. (Source:

London Middle Exchange & Steel Authority of India Limited & Rastriya Ispat Nigam Limited). Such variations in

the cost structure affect our operations. Moreover, if we are unable to increase the cost of our products/

services commensurate with the increase in the cost of our raw materials, our profitability may be

adversely affected. Further, in the event that our primary suppliers curtail or discontinue the supply of

such materials to us in required quantities or at prices that are competitive, our operations and financial

condition may be adversely affected.

22. We may raise additional equity capital which may dilute your existing shareholding.

Our growth and business strategies may require us to raise additional capital in future including

immediately after listing of Equity Shares pursuant to this Issue. We may raise such additional capital

including through the issue of debt or through the issue of further Equity Shares. Further, we may

obtain a funding from our Promoters through an equity infusion. Our Board of Directors on August 18,

2014, approved the issue 77,00,000 equity shares of face value of ₹ 2 each and / or warrants at an issue

price of ₹ 52 per equity share, to Surya India Fingrowth Private Limited, a promoter group company,

on preferential basis, within the overall limit of ₹ 12,000 lakhs including this Issue, subject to the

approval of the shareholders. Any such issue of Equity Shares to persons other than the Equity

Shareholders will dilute your existing equity shareholding.

23. Our operations in foreign countries are subject to political, economic, regulatory and other risks of

doing business in those countries.

We are currently executing projects in 8 countries outside India including Namibia, Kenya and Nigeria.

In Financial Year 2014, Financial Year 2013 and Financial Year 2012 our operations outside India

generated revenues of ₹ 1,27,047 lakhs constituting 34.66%,₹ 80,384 lakhs constituting 26.64% and ₹ 52,212 lakhs constituting 18.88% of our total consolidated revenues respectively. There can be no

assurance that we will continue to receive offers outside India to this extent or at all.

Further, some of our international customers are governmental entities. Consequently, we are subject to

risks, including risks associated with uncertain political and economic environment and government

instability. Further, laws and regulations are different from the legal systems, laws and regulations that

we are familiar with in India, and may be less established or predictable than those in more developed

countries. Any downturn in our performance outside India may have an adverse impact on our business,

financial conditions and results of operations.

24. If we are unable to retain or recruit key personnel or maintain uninterrupted relationships with our

subcontractors of labour, our business could suffer.

Our senior management and key managerial personnel, many of whom have decades of experience with

us and in the industries in which we operate, are difficult to replace. Any loss or interruption of the

services of such key personnel, or our inability to recruit qualified additional or replacement personnel,

could adversely affect our business. In addition, certain aspects of our production processes depend

upon highly skilled employees. As a result of economic growth and increased activity in the businesses

in which we operate in India and overseas, we may be unable to find or retain skilled personnel in

sufficient numbers to satisfy our requirements. This risk may be exacerbated by governmental policies

and mandates to hire a local labour force, which may not be as skilled or available at rates

commensurate with our operations in other geographical areas.

54

We also regularly contract with subcontractors and third parties for the provision of labour for our

projects, including international projects. We are dependent on these subcontractors and third parties,

and if they experience disruptions related to their work force, including strikes and work stoppages,

those disruptions may have an adverse effect on our business and results of operations. We cannot

assure you that skilled labour, whether hired directly, through subcontractors or third parties, will

continue to be available at reasonable rates and in the areas in which we execute our projects. As a

result, we may be required to mobilize additional resources at a greater cost to us to ensure the adequate

performance and delivery of contracted services.

25. If we are unable to expand or optimally utilize our tower manufacturing capacity or become

unsuccessful in outsourcing the fabrication of towers when required, our results of operations could

be adversely affected.

Demand for the manufacture of transmission line towers has been steady and increasing in recent years.

For the three years ended March 31, 2014, we have had a capacity utilization rate of 78.33%. To

operate efficiently and profitably and meet tight completion schedules demanded by customers, and

execute additional contracts to sustain growth of our business, we may need to expand our

manufacturing capacity through a combination of new plants or expansion of existing plants, or

otherwise increase the supply of towers for our projects through outsourcing the fabrication of towers

from third parties. If we are unable to do so or if are unable to operate our tower manufacturing

facilities at optimum levels, our business operations could be hampered and our growth could be

adversely affected.

26. Any failure in our information technology systems could adversely impact our business.

Our day to day operations depend on information technology. Further, we rely heavily on our

information technology systems including for tracking the progress of our projects and to monitor

fluctuations in the price of raw materials. We also use information technology systems for routine

corporate activities such as processing of financial information or managing creditors/ debtors and

engaging in normal business activities. Although we believe that we have effective backup systems in

place, any disruption of an information technology related component or the system will impact our

business and the result of our operations.

27. Accidents on our sites will impact our image and could lead to litigation.

Our primary source of revenue is from construction of transmission line towers and substations. We

believe that each of our sites has adequate equipment and meet the necessary safety standards.

However, certain accidents / mishaps may be unavoidable or may occur on account of negligence in

complying with the safety standards. Therefore, although we take all possible steps to ensure the safety

of our sites, accidents including human fatalities may occur, and there can be no assurance that such

precautions will be completely effective or sufficient. Any accident on site will also harm our

reputation. Such accidents, irrespective of the monetary liability, may have an adverse impact on our

business, financial condition and results of operations.

28. Our existing insurance may not be sufficient to cover our losses.

We maintain a general insurance for each of our properties including cover for fire, flood and

earthquake. Certain types of losses, however, may be either uninsurable or not economically insurable,

such as losses due to acts of terrorism or war. Should an uninsured loss occur, we could lose our

investment in, as well as anticipated profits and cash flow from, a project. In addition, even if any such

loss is insured, we may be required to pay a significant deductible on any claim for recovery of such a

loss prior to our insurer being obligated to reimburse us for the loss, or the amount of the loss may

exceed our coverage for the loss. The necessary insurance cover may be insufficient and any loss in

excess of the insurance cover could have an adverse effect on our business, financial condition and

results of operation. Further, an insurance claim once made could lead to an increase in our insurance

premium.

Further, we do not maintain any key-man insurance except for one of our Directors.

29. We may not be able to maintain the rate of dividend payment in the future.

55

While we have paid dividends in the past, there can be no assurance that we will pay dividends in the

future or that we will pay dividends at rates declared in the past. The declaration, payment and amount

of future dividends is subject to the discretion of the Board, and will depend, among other factors, on

our earnings, financial position, cash requirements and availability of profits, as well as laws in India.

Further, our ability to pay dividends in the future will depend on our Subsidiaries’ capital requirements,

financing arrangements and financial condition. The ability of our Subsidiaries to make dividend

distributions is constrained by corporate laws, regulations, our dividend policy and restrictive terms of

loan agreements entered into by these subsidiaries.

In addition, in the event of a bankruptcy, liquidation or reorganization of any of our Subsidiaries, our

claim against such Subsidiary’s assets will be subordinate to the claims of lenders and other creditors.

Our reliance on dividend distributions from our Subsidiaries could thus adversely affect our ability to

pay dividends in the future.

30. Grant of stock options under ESOS will result in a charge to our profit and loss account.

We have employee stock option schemes in place, under which our eligible employees and Directors

can participate. As of the date of this Placement Document, we have granted 5,00,000 options to

eligible employees pursuant to the Employee Stock Option Scheme 2005 of which 3,86,720 are vested,

40,250 have lapsed and the balance is yet to be vested. Our Company is yet to grant any option under

the Employee Stock Option Scheme 2011. Under Indian GAAP, the grant of stock options will result in

a charge to the profit and loss account based on the difference between the fair value of shares

determined on the date of grant and the exercise price. For details on the ESOS scheme, please see

section titled ‘Capital Structure’ on page 69 of this Placement Document.

31. We are dependent on third-party transportation providers for the supply and delivery of our raw

material, bought out items and fuel, and an interruption or delay in deliveries, or an unexpected

increase in costs, could adversely affect us.

We typically use third-party transportation providers for the supply of most of our raw materials and for

deliveries of our products to our customers. With the steady increase in fuel prices, transportation costs

have been steadily increasing. Continued increases in transportation costs may have an adverse effect

on our business and results of operations. In addition, transportation strikes by members of truckers'

unions and shipping delays have had in the past, and could have in the future, an adverse effect on our

receipt of supplies and our ability to deliver our products and services. Any disruptions or other

problems related to transportation and deliveries of products to our projects may adversely affect our

results of operations.

32. Increase in interest rates may adversely affect our results of operations.

We are exposed to interest rate risk and have not currently entered into any swap or interest rate

hedging transactions in connection with our financing agreements. We may enter into interest hedging

contracts or other financial arrangements in the future to minimize our exposure to interest rate

fluctuations. However, there can be no assurance that we will be able to do so on commercially

reasonable terms or that such arrangements will protect us fully against our interest rate risk. Any

increase in interest expense may have an adverse effect on our business prospects, financial condition

and results of operations.

33. A breakdown or non-availability of machines and equipment may adversely affect our results of

operations.

In our businesses, we are required to procure various machines and equipment, such as Computerized

Numerically Controlled fabrication machines, tension stringing equipment, pipe layers, welding

machines and earth moving equipment. We have a limited ability to pass on increases in machine and

equipment maintenance and running costs, including those resulting from a breakdown or temporary

non-availability of machines and equipment. Unanticipated increases in equipment costs may also

adversely affect our results of operations.

56

Further, any significant operational problems or the loss of our machines and equipment for an

extended period of time could also adversely affect our results of operations.

34. We may be required to write off certain of our investments in Subsidiaries or Joint Ventures.

We have made, and may continue to make, capital investments, loans, advances and other commitments

to support certain of our Subsidiaries and Joint Ventures. These investments and commitments have

included capital contributions to bolster the financial condition or liquidity position of our Subsidiaries

and Joint Ventures. If the business and operations of these Subsidiaries and Joint Ventures deteriorate

or if such Subsidiaries and Joint Ventures are not able to achieve the kind of commercial success

expected, our investments may be required to be written down or written off. Further, we may need to

inject additional capital into such companies to keep them operational. Additionally, certain loans or

advances may not be repaid or may need to be restructured, or we may be required to outlay capital

under our commitments to support such companies which could have an adverse impact on our cash

flows and the results of our operations.

35. We may incur liabilities as a result of non-performance of our consortium or joint venture partners.

We selectively enter into joint ventures to further our business interests or to venture into new

geographic locations. While undertaking a contract as a joint venture, we are generally jointly and

severally liable with our joint venture partner for, among other things, breaches or non-performance of

contract. The inability of a partner to continue with a project, due to financial or legal difficulties or

otherwise, could result in us being required to bear increased and, at times, sole responsibility for the

completion of a project(s) and bear a greater share of the financial risk of the project. In the event that a

claim, arbitration award or judgment is awarded against the Joint Ventures, and our joint venture

partner reneges on the joint venture arrangement, we may face significant liability. Further with joint

ventures involving foreign entities, there is a risk that we may not be able to obtain compensation or

indemnification from such partners.

36. Our business is subject to central and state tax levies and any adverse change in the taxation norms

will have an adverse impact on our financial conditions.

The central and state tax levies in India are extensive and subject to change from time to time. Any

adverse changes in any of the taxes levied by the central or state governments may affect our business,

financial condition and results of operations and adversely affect our competitive position and

profitability. There can be no assurance that the current levels of taxes, tariffs and duties will not

increase in the future, or that state governments will not introduce additional levies, each of which may

result in increased operating costs and lower income.

In addition, the Finance Minister in his Union budget speech has stated that the revision of the Direct

Tax Code, 2010 (DTC) which has lapsed, will be considered. The DTC once introduced, could

significantly alter the taxation regime, including the incentives and benefits applicable to our Company.

If the laws or regulations regarding tax incentives and benefits applicable to us were to change, our

taxable income and tax liability may increase, which would adversely affect our financial results.

37. Import and export under the Advance Authorisation Scheme

Our Company has availed of the advance authorization scheme pursuant to which we are allowed duty

free imports if we physically incorporate the imported goods into our exported products. To avail of the

benefit of the Advance Authorization Scheme, the entire import and export cycle must be completed

within a specified time period. At the time of import, we must furnish a bond which comprises of the

actual import duty payable plus the interest payable on failure to export the goods within the licence

period.

If we fail to export the goods within the specified time period, the Government has the right to encash

such bonds and, consequently, the benefit will be nullified and we will have to pay the duty with

interest. This could have an adverse impact on our cash flows and our profitability.

38. The Companies Act, 2013 has effected significant changes to the existing Indian company law

framework and SEBI has introduced changes to the Listing Agreement, which are effective from

57

October 1, 2014, which may subject us to higher compliance requirements and increase our

compliance costs.

A majority of the provisions and rules under the Companies Act, 2013 have recently been notified and

have come into effect from the date of their respective notification, resulting in the corresponding

provisions of the Companies Act, 1956 ceasing to have effect. The Companies Act, 2013 has brought

into effect significant changes to the Indian company law framework, such as in the provisions related

to issue of capital (including provisions in relation to issue of securities on a private placement basis),

disclosures in offer document, corporate governance norms, accounting policies and audit matters,

related party transactions, introduction of a provision allowing the initiation of class action suits in

India against companies by shareholders or depositors, a restriction on investment by an Indian

company through more than two layers of subsidiary investment companies (subject to certain

permitted exceptions), prohibitions on loans to directors, insider trading and restrictions on directors

and key managerial personnel from engaging in forward dealing and restriction in granting stock

option to independent directors. Further, the Companies Act, 2013 imposes greater monetary and

other liability on our Company and Directors for any non-compliance. To ensure compliance with the

requirements of the Companies Act, 2013, we may need to allocate additional resources, which may

increase our regulatory compliance costs and divert management attention. The Companies Act, 2013

has introduced certain additional requirements which do not have corresponding equivalents under the

Companies Act, 1956. Accordingly, we may face challenges in interpreting and complying with such

provisions due to limited jurisprudence on them. In the event, our interpretation of such provisions of

the Companies Act, 2013 differs from, or contradicts with, any judicial pronouncements or

clarifications issued by the Government in the future, we may face regulatory actions or we may be

required to undertake remedial steps. Additionally, some of the provisions of the Companies Act,

2013 overlap with other existing laws and regulations (such as the corporate governance norms and

insider trading regulations issued by SEBI). Recently, SEBI issued revised corporate governance

guidelines which are effective from April 1, 2015. Illustratively, pursuant to the revised guidelines, we

will be required to, inter alia, appoint at least 1 (one) woman director on our Board. We may face

difficulties in complying with any such overlapping requirements. Further, we cannot currently

determine the impact of provisions of the Companies Act, 2013 or the revised SEBI corporate

governance norms, which are yet to come in force. Any increase in our compliance requirements or in

our compliance costs may have an adverse effect on our business and results of operations.

39. Some of the forms filed by us with the Registrar of Companies and our records in that respect are not

traceable.

We have been unable to locate corporate records of our Company pertaining to certain period. We

cannot assure you that these records will be available in the future or that we will not be subject to any

penalty imposed by the competent regulatory authority in this respect.

EXTERNAL RISKS

40. Political instability or changes in the Indian central government could adversely affect economic

conditions in India and consequently, our business.

Our Company is incorporated in India and currently derives all of its revenues from operations in India

and all of its assets are located in India. Consequently, our performance and the market price of the

Equity Shares may be affected by interest rates, government policies, taxation, social and ethnic

instability and other political and economic developments affecting India.

The Government has traditionally exercised, and continues to exercise, a significant influence over

many aspects of the economy. The new Government has announced that its general intention is to kick

start India’s current economic and financial sector liberalisation and deregulation policies. However,

there can be no assurance that such policies will actually be implemented in a satisfactory manner. A

significant change in the Government’s policies could affect business and economic conditions in India,

and could also adversely affect our financial condition and results of operations.

Any political instability in India may adversely affect the Indian securities markets in general, which

could also adversely affect the trading price of our Equity Shares. Any political instability could delay

the reform of the Indian economy and could have a material adverse effect on the market for our Equity

58

Shares. Protests against privatization could slow down the pace of liberalization and deregulation. The

rate of economic liberalization could change, and specific laws and policies affecting companies in the

power generation and power generation equipment manufacturing sectors, foreign investment, currency

exchange rates and other matters affecting investment in our securities could change as well. A

significant change in India’s economic liberalization and deregulation policies could disrupt business

and economic conditions in India and thereby affect our business.

41. Hostilities, terrorist attacks, civil unrest, breaches of law and order and other acts of violence may

adversely affect our business and the trading price of the Equity Shares.

Terrorist attacks, civil unrest and other acts of violence or war within India and the surrounding region

may adversely affect worldwide financial markets and may result in a loss of consumer confidence,

which in turn may adversely affect our business, prospects, results of operations, cash flows and

financial condition. India has also witnessed civil unrest including communal disturbances in recent

years and it is possible that future civil unrest as well as other adverse social, economic and political

events in India may have a negative impact on us. Such incidents may also create a greater perception

that investment in Indian companies involves a higher degree of risk and may have an adverse impact

on our business and the price of our Equity Shares.

42. Significant differences exist between Indian GAAP and U.S. GAAP and IFRS, with which investors

may be more familiar.

We have not attempted to explain in a qualitative manner the impact of the IFRS or U.S. GAAP on the

financial information included in this Placement Document, nor do we provide a reconciliation of our

financial information to those of U.S. GAAP or IFRS. U.S. GAAP and IFRS differ in significant

respects from Indian GAAP. Indian GAAP differs from accounting principles with which prospective

investors may be familiar in other countries. Accordingly, the degree to which the financial information

included in this Placement Document will provide meaningful information is entirely dependent on the

reader’s level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the

SEBI Regulations. Any reliance by persons not familiar with Indian accounting practices, Indian

GAAP, the Companies Act and the SEBI Regulations, on the financial disclosures presented in this

Placement Document should accordingly be limited.

43. Public companies in India, including our Company, may be required to prepare financial statements

under IFRS or a variation thereof, IndAS. The transition to IndAS in India is still unclear and we

may be negatively affected by such transition.

Our Company currently prepares its annual and interim financial statements under Indian GAAP. Public

companies in India, including our Company, may be required to prepare annual and interim financial

statements under Indian Accounting Standard 101 “First-time adoption of Indian Accounting

Standards” (IndAs). Recently, the ICAI has released a near-final version of the IndAS. The MCA, on

February 25, 2011, has announced that IndAS will be implemented in a phased manner and the date of

such implementation will be notified at a later date. As at the date of this Placement Document, the

MCA has not yet notified the date of implementation of IndAS. Additionally, IndAS has fundamental

differences with IFRS and therefore financial statements prepared under IndAS may be substantially

different from financial statements prepared under IFRS. There can be no assurance that our financial

condition, results of operations, cash flow or changes in shareholders’ equity will not appear materially

different under IndAS than under Indian GAAP or IFRS. As we adopt IndAS reporting, we may

encounter difficulties in the on-going process of implementing and enhancing our management

information systems. There can be no assurance that our adoption of IndAS will not adversely affect

our reported results of operations or financial condition and any failure to successfully adopt IndAS in

accordance with the prescribed timelines may have a material adverse effect on our financial position

and results of operations.

44. Our business and activities may be regulated by the Competition Act, 2002 and proceedings may be

enforced against our Company consequently affecting our business, cash flows and financial

condition.

The Competition Act seeks to prevent business practices that have a material adverse effect on

competition in India. Under the Competition Act, any arrangement, understanding or action in concert

59

between enterprises, whether formal or informal, which causes or is likely to cause a material adverse

effect on competition in India is void and attracts substantial monetary penalties. Any agreement that

directly or indirectly determines purchase or sale prices, limits or controls production, shares the market

by way of geographical area, market, or number of customers in the market is presumed to have a

material adverse effect on competition. Provisions of the Competition Act relating to the regulation of

certain acquisitions, mergers or amalgamations which have a material adverse effect on competition and

regulations with respect to notification requirements for such combinations came into force on June 1,

2011. The effect of the Competition Act on the business environment in India is unclear. If we are

affected, directly or indirectly, by the application or interpretation of any provision of the Competition

Act, or any enforcement proceedings initiated by the Competition Commission of India, or any adverse

publicity that may be generated due to scrutiny or prosecution by the Competition Commission of

India, it may have a material adverse effect on our business, prospects, results of operations, cash flows

and financial condition.

45. Investors may be adversely affected due to retrospective tax law changes by the Government affecting

our Company.

Certain recent changes to the IT Act provide that income arising directly or indirectly through the sale

of a capital asset of an offshore company, including shares, will be subject to tax in India, if such shares

derive indirectly or directly their value substantially from assets located in India. The term

“substantially” has not been defined under the IT Act and therefore, the applicability and implications

of these changes are largely unclear. Due to these recent changes, investors may be subject to Indian

income taxes on the income arising directly or indirectly through the sale of the Equity Shares. In the

past, there have been instances where changes in the IT Act have been made retrospectively, there

cannot be an assurance that such retrospective changes will not happen again.

46. Our Company’s ability to raise foreign capital may be constrained by Indian law.

Companies incorporated in India are subject to regulatory restrictions in relation to borrowing in

foreign currencies, including restrictions in relation to eligibility, the amount of borrowings which may

be incurred, end-use and creation of security and may require the prior approval of Indian regulatory

authorities. Such restrictions could limit our ability to raise finance on competitive terms and refinance

existing indebtedness. Additionally, our ability to borrow money outside India against the security of

our immovable assets in India is subject to the FEMA and exchange control regulations in India and

may require the prior approval of the Indian regulatory authorities. We cannot assure you that any

approval required to raise borrowings will be granted without onerous conditions, or at all. Such

limitations on debt may have an adverse impact on our business, results of operations, financial

condition and cash flows.

47. Any downgrading of India’s debt rating by a domestic or international rating agency could have a

negative impact on our business.

India’s sovereign debt rating could be downgraded due to various factors, including changes in tax or

fiscal policy or a decline in India’s foreign exchange reserves, which are outside our control. Any

adverse revisions to India’s credit ratings for domestic and international debt by domestic or

international rating agencies may adversely impact our 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 our business and financial performance, ability to obtain financing for

capital expenditures and the price of our Equity Shares.

48. Rights of shareholders under Indian law may be more limited than under the laws of other

jurisdictions.

The Articles and Indian law govern the corporate affairs of our Company. Legal principles relating to

these matters and the validity of corporate procedures, directors’ fiduciary duties and liabilities, and

shareholders’ rights may differ from those applicable to a company in another jurisdiction.

Shareholders’ rights under Indian law may not be as extensive as shareholders’ rights under the laws of

other countries or jurisdictions. Investors may have more difficulty in asserting their rights as

shareholders of our Company than as shareholders of a company in another jurisdiction.

60

49. We may require further equity issuances to satisfy our capital needs, which we may not be able to

procure.

We may need to raise additional capital from time to time, dependent on business requirements. Some

of the factors that may require us to raise additional capital include (i) business growth beyond what the

current balance sheet can sustain, (ii) additional capital requirements imposed due to changes in

regulatory regime or new guidelines, and (iii) significant depletion in our existing capital base due to

unusual operating losses. We may not be able to raise such additional capital at the time it is needed or

on terms and conditions favourable to us or to the existing shareholders.

50. A third party could be prevented from acquiring control of us because of the Takeover Code under

Indian law.

There are provisions in Indian law that may discourage a third party from attempting to take control of

our Company, even if a change in control would result in the purchase of the Equity Shares at a

premium to the market price or would otherwise be beneficial to investors. The Takeover Code requires

that if an acquirer (together with any persons acting in concert with him): (a) acquires shares or voting

rights entitling them to exercise 25% or more of the voting rights in a listed company; or (b) already

holds shares or voting rights entitling them to exercise 25% or more of the voting rights in a listed

company, and acquires shares or voting rights entitling them to exercise more than 5% of the voting

rights in the listed company during any financial year; or (c) acquires control directly or indirectly over

a listed company, such acquirer will have to make an open offer for at least 26% of the total shares of

the listed company. These provisions may discourage or prevent certain types of transactions involving

an actual or threatened acquisition.

51. Changing laws, rules and regulations and legal uncertainties may adversely affect our business and

financial performance.

Our business and operations are governed by various laws and regulations. Our business and financial

performance could be adversely affected by any change in laws or interpretations of existing, or the

promulgation of new laws, rules and regulations applicable to us and our business.

There can be no assurance that the relevant governmental authorities will not implement new

regulations and policies which will require us to obtain additional approvals and licenses from the

Government and other regulatory bodies or impose onerous requirements and conditions on our

operations. Any such changes and the related uncertainties with respect to the implementation of the

new regulations may have a material adverse effect on our business, financial condition and results of

operations.

For instance, certain sections of the Companies Act, 2013, have been notified and the corresponding

sections of the Companies Act, 1956 have ceased to have effect from the date of notification of such

sections of the Companies Act, 2013. Whilst the Companies Act, 2013 is not yet fully operational, it

envisages significant changes to the Indian company law framework, including the issue of capital by

companies, corporate governance, audit matters and corporate social responsibility, introduction of a

provision allowing the initiation of class action suits in India against companies by shareholders or

depositors, a restriction on investment by an Indian company through more than two layers of

subsidiary investment companies (subject to certain permitted exceptions), prohibitions on loans to

directors and insider trading and restrictions on directors and key managerial personnel from engaging

in forward dealing. Various provisions of the Companies Act, 2013, are subject to further directions to

be issued by the Government. In particular, we will be required to amend our Memorandum and

Articles in order to comply with the Companies Act 2013. We have not yet determined any other

significant impact of this legislation on our business.

52. Inflation in India may adversely affect our business.

India has experienced in the past and is currently experiencing high rates of inflation. We can provide

no assurance that high rates of inflation will not continue or even increase in the future, which could

have an effect on the demand for natural gas and our ability to sell those products. In addition, from

time to time, the Government has taken measures to control inflation, which have included tightening

monetary policy by raising interest rates, restricting the availability of credit and inhibiting economic

61

growth. Inflation, measures to combat inflation and public speculation about possible governmental

actions to combat inflation have also contributed significantly to economic uncertainty in India and

heightened volatility in the Indian capital markets. Periods of higher inflation may also slow the growth

rate of the Indian economy which could also lead to a reduction in demand for natural gas. Moreover,

the reporting currency of our financial statements is the Rupee, and fluctuations in the value of the

Rupee that result from inflation, could affect our results of operations and financial condition.

Further, inflation could cause a rise in the price of transportation, wages or any other of our expenses. If

this trend continues and we are unable to reduce our costs or pass our increased costs along to our

customers, our results of operations and financial condition may be materially and adversely affected.

Also, a rise in interest rates will impact interest payable on any future debt, thus increasing the cost of

new financing, increasing our interest expense and hindering our ability to implement our growth

strategies. Such a rise in interest rates could materially and adversely affect our results of operations

and financial condition.

53. After the Issue, the price of our Equity Shares may become highly volatile, or an active trading

market for our Equity Shares may not develop.

The trading price of the Equity Shares may fluctuate after this Issue due to a variety of factors,

including our results of operations and the performance of our business, competitive conditions, general

economic, political and social factors, the performance of the Indian and global economy and

significant developments in India‘s fiscal regime, volatility in the Indian and global securities market,

performance of our competitors, the Indian telecommunications industry and the perception in the

market about investments in the telecommunications industry, changes in the estimates of our

performance or recommendations by financial analysts and announcements by us or others regarding

contracts, acquisitions, strategic partnerships, joint ventures, or capital commitments. In addition, if the

stock markets in general experience a loss of investor confidence, the trading price of the Equity Shares

could decline for reasons unrelated to our business, financial condition or operating results. The trading

price of the Equity Shares might also decline in reaction to events that affect other companies in our

industry even if these events do not directly affect us. Each of these factors, among others, could

adversely affect the price of the Equity Shares.

54. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an

Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a

stock exchange held for more than 12 months as a capital asset will not be subject to capital gains tax in

India if STT has been paid on the transaction. STT will be levied on and collected by a domestic stock

exchange on which the equity shares are sold. Any gain realised on the sale of equity shares held for

more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange

and on which no STT has been paid, will be subject to long-term capital gains tax in India. Further, any

gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to

short term capital gains tax in India. Capital gains arising from the sale of the equity shares will be

exempt from taxation in India in cases where the exemption from taxation in India is provided for under

a treaty between India and the country of which the seller is resident. Generally, Indian tax treaties do

not limit India’s ability to impose tax on capital gains. As a result, residents of other countries may be

liable for tax in India as well as in their own jurisdiction on a gain upon the sale of the equity shares.

55. Our ability to raise foreign capital or make overseas equity investments may be constrained by Indian

law.

We require regulatory approvals to raise more than USD 500 million of foreign currency-denominated

indebtedness outside India in a single transaction and within a single year. The need to obtain such

regulatory approvals could constrain our ability to raise the most cost-effective funding for refinancing

existing indebtedness, or financing acquisitions and other strategic transactions, which may adversely

affect our future growth. We cannot assure prospective investors that any required approvals will be

given when needed, or at all, or that such approvals if given will not have onerous conditions.

Under foreign investment regulations, Indian companies are permitted to invest up to 100% of their net

worth in wholly-owned subsidiaries or joint ventures outside India. In the event we desire to acquire

62

entities or enter into joint ventures whose value is greater than the above amount, we will need approval

from regulators in India. Any delay or failure in receiving such regulatory approval may adversely

impact our ability to undertake such investment and complete such transaction, which could have a

material adverse effect on our results of operations and financial condition.

56. There can be no assurance that the Equity Shares will be listed on the BSE and the NSE in a timely

manner or at all, and any trading closures at the BSE or the NSE may adversely affect the trading

price of our Equity Shares or a shareholder’s ability to transfer the Equity Shares.

In accordance with Indian law and practice, permission for listing of the Equity Shares will not be

granted until after the Equity Shares offered in this Issue have been issued and allotted. Approval will

require all other relevant documents authorizing the issuance of the Equity Shares. There could be a

failure or delay in listing the Equity Shares on the BSE or the NSE. Any such failure or delay in

obtaining the approval would restrict your ability to dispose of your Equity Shares.

The regulation and monitoring of Indian securities markets and the activities of investors, brokers and

other participants differ, in some cases significantly, from those in Europe and the U.S. The BSE and

the NSE have in the past experienced problems, including temporary exchange closures, broker

defaults, settlements delays and strikes by brokerage firm employees, which, if continuing or recurring,

could affect the market price and liquidity of the securities of Indian companies, including the Equity

Shares, in both domestic and international markets. A closure of, or trading stoppage on, either the BSE

or the NSE could adversely affect the trading price of the Equity Shares or a Shareholder’s ability to

transfer the Equity Shares.

57. An investor will not be able to sell any of the Equity Shares subscribed to in this Issue other than on

a recognized Indian stock exchange for a period of 12 months from the date of this Issue of the

Equity Shares

Pursuant to the SEBI Regulations, for a period of twelve months from the date of this Issue, investors

subscribing to the Equity Shares in this Issue may only sell their Equity Shares on the NSE or the BSE

and may not enter into any off-market trading in respect of these Equity Shares. For further details,

please see section titled ‘Distribution and Solicitation Restrictions’ and ‘Transfer Restrictions’ on page

148 and 153, respectively of this Placement Document for other restrictions in connection with the

transfer of Equity Shares. There can be no assurance that these restrictions will not have an impact on

the price or liquidity of the Equity Shares.

63

MARKET PRICE INFORMATION

The Equity Shares have been listed and traded on the NSE and BSE since 1989 and 1995, respectively. As of

the date of this Placement Document, 8,22,88,922 Equity Shares of our Company were issued and paid up.

As the Equity Shares are actively traded on the Stock Exchanges, the stock market data has been given

separately for each of these Stock Exchanges.

1. The following tables set forth the reported high and low closing prices of the Equity Shares on the

Stock Exchanges and the number of Equity Shares traded on the days such high and low prices were

recorded, for the Financial Year 2014, Financial Year 2013 and Financial Year 2012.

NSE

Financial

Year

High

( ₹)

Date of

high

Volume

on date of

high

(No. of

Equity

Shares)

Volume

traded on

the date of

the high ( ₹

lakhs)

Low

( ₹)

Date of

low

Volume

on date of

low

(No. of

Equity

Shares)

Volume

traded on

the date of

the low ( ₹

lakhs)

Volume

traded in the

year ( ₹

lakhs)

Average

price for

the year

( ₹)*

2014 33.55 01.01.14 2,090,706 686.30 15.35 02.08.13 155,720 24.15 22,289.70 25.14

2013 51.10 04.10.12 1,782,663 925.81 27.20 28.03.13 72,096 19.40 28,625.15 41.28

2012 95.25 19.04.11 573351 549.60 35.85 22.12.11 161623 58.08 30,443.30 64.93

*Average of the daily closing price (Source: www.nseindia.com)

BSE

Financial

Year

High

( ₹)

Date of

high

Volume on

date of high

(No. of

Equity

Shares)

Volume

traded

on the

date of

the high

( ₹

lakhs)

Low

( ₹)

Date of

low

Volume on

date of low

(No. of

Equity

Shares)

Volume

traded on

the date of

the low ( ₹

lakhs)

Volume

traded in

the year ( ₹

lakhs)

Average

price for

the year

( ₹)*

2014 33.45 01.01.14 935,407 306.71 15.35 02.08.13 414,379 64.19 8,679.15 25.15

2013 51.05 04.10.12 575,713 297.93 27.00 28.03.13 29,344 7.86 10,612.36 41.28

2012 95.55 19.04.11 239,579 229.98 35.85 22.12.11 62,099 22.33 11,736.48 64.98

* Average of the daily closing prices

(Source: www.bseindia.com)

Notes:

(i) High, low and average prices are based on the daily closing prices.

(ii) In case of (two) days with the same closing price, the date with the higher volume has been

chosen.

(iii) In the case of a year, represents the average of the closing prices on the last day of each month of

each year presented.

2. The following tables set forth the reported high and low closing prices of the Equity Shares on the

Stock Exchanges, the number of Equity Shares traded on the days such high and low prices were

recorded and the volume of Equity Shares traded on those dates during the last 6 (six) months.

64

NSE

Month High

( ₹)

Date of

high

Volume on

date of

high

(No. of

Equity

Shares)

Volume

Traded

on the

date of

the high

( ₹

lakhs)

Low

( ₹)

Date of

low

Volume on

date of low

(No. of

Equity

Shares)

Volume

traded on

the date of

the low ( ₹

lakhs )

Volume

traded in the

month

( ₹lakhs)

Average

price for

the month

( ₹)*

August

2014

46.4 20.08.14 11,25,966 524.58 39.9 13.08.14 4,48,820 181.56 7,073.46 43.46

July

2014

67.90 07.07.14 41,79,634 2,808.6 48.90 31.07.14 11,46,092 568.69 18,070.50 58.80

June

2014

60.90 30.06.14 1,937,922 1,177.3 49.80 13.06.14 530,841 256.99 11,585.09 54.39

May

2014

63.70 23.05.14 1,029,059 656.5 34.80 07.05.14 131,456 45.99 9,219.81 48.86

April

2014

39.20 09.04.14 1,333,760 518.8 33.30 01.04.14 380,856 125.85 4,154.6 36.90

March

2014

31.95 31.03.14 1,93,776 62.3 27.90 03.03.14 409,395 116.75 1,719.99 30.13

(Source: www.nseindia.com)

BSE

Month High

( ₹)

Date of

high

Volume on

date of high

(No. of

Equity

Shares)

Volume

Traded

on the

date of

the high

( ₹

lakhs)

Low

( ₹)

Date of

low

Volume on

date of low

(No. of

Equity

Shares)

Volume

traded on

the date of

the low ( ₹

lakhs)

Volume

traded in

the month

( ₹ lakhs)

Average

price for

the month

( ₹)*

August

2014

46.45 2-.08.14 335,413 156.35 39.9 13.08.14 169,205 68.29 2,401.05 43.43

July 2014 67.95 07.07.14 10,62,271 715.41 48.90 31.07.14 3,24,943 161.21 4,640.00 58.76

June 2014 60.80 30.06.14 602,429 365.67 49.50 13.06.14 159,225 81.96 3,916.06 54.30

May 2014 63.30 22.05.14 497,523 309.89 34.80 07.05.14 89,281 31.24 3,499.56 48.83

April 2014 39.15 10.04.14 241,800 95.03 33.25 01.04.14 154,232 50.93 1,478.31 36.87

March 2014 32.20 31.03.14 79,393 25.57 27.90 03.03.14 97,913 27.92 631.77 30.13

(Source: www.bseindia.com)

3. The following table set forth the details of the number of Equity Shares traded and the turnover during

Financial Year 2014, Financial Year 2013 and Financial Year 2012 on the Stock Exchanges.

Financial Year NSE BSE

Number of Equity

Shares Traded

Turnover

( ₹ lakhs)

Number of

Equity Shares

Traded

Turnover

( ₹ lakhs)

2014 8,45,27,272 22,289.71 3,28,05,296 8,679.15

2013 6,58,33,435 28,625.15 2,43,51,258 10,612.36

65

2012 4,83,08,270 30,443.33 1,82,21,691 11,736.48

(Source: www.nseindia.com and www.bseindia.com)

4. The following table set forth the details of the number of Equity Shares traded and the turnover during

the last 6 (six) months on the Stock Exchanges.

Period NSE BSE

Number of Equity

Shares Traded

Turnover

( ₹ lakhs)

Number of

Equity Shares

Traded

Turnover

( ₹ lakhs)

August 2014 16,012,717 7,073.46 5,462,673 2,401.05

July 2014 2,93,95,760 18,070.50 76,20,567 4,640.00

June 2014 2,08,14,327 11,585.09 70,57,605 3,916.06

May 2014 1,76,49,911 9,219.81 67,42,988 3,499.56

April 2014 1,12,06,330 4,154.66 40,19,031 1,478.31

March 2014 56,82,471 1,719.99 20,77,572 631.77

(Source: www.nseindia.com and www.bseindia.com)

5. The following table set forth the market price of the Equity Shares on July 1, 2014, the first working

day following the approval of the Board of Directors for the Issue.

Date NSE BSE

Open High Low Close

No. of

Equity

Shares

traded

Volume

trade

( ₹ lakhs)

Open High Low Close

No. of

Equity

Shares

traded

Volume

trade

( ₹ lakhs)

July 1,

2014

61.70 63.20 61.50 61.85 19,33,046 1,204.84 62.00 63.10 61.55 61.80 4,57,723 285.15

(Source: www.nseindia.com and www.bseindia.com)

66

USE OF PROCEEDS

The total proceeds of the Issue will be ₹ 10,021.34 lakhs. After deducting the Issue expenses of approximately

₹ 272.25 lakhs, the net proceeds of the Issue will be approximately ₹ 9,749.09 lakhs.

As per the Restructuring Scheme, the Company is required infuse funds into the Company, through issue of

Equity Shares. Subject to compliance with applicable laws and regulations, our Company intends to use the

Net Proceeds of the Issue for capital expenditure, working capital, repayment of debt and general corporate

purposes, including but not restricted to strategic initiatives, partnerships, joint ventures, investments,

acquisitions and meeting exigencies, which we in the ordinary course of business may face, or any other

purposes as approved by the Board of Directors.

In accordance with the policies approved by the Board of Directors and as permissible under applicable laws

and government policies, the management will have flexibility in deploying the proceeds received by us from

the Issue. Pending utilisation for the purposes described above, we intend to temporarily invest funds in

instruments such as money market mutual funds and deposits with banks and corporates. Such investments

would be in accordance with the investment policies as approved by the Board of Directors from time to time.

67

CAPITALISATION STATEMENT

This capitalisation table derived from the audited consolidated financial statements, should be read in

conjunction with the section titled ‘Management’s Discussion and Analysis of Financial Condition and Results

of Operations’ and the financial statements and related schedules and notes included in the section titled

‘Summary Financial Information’ on pages 74 and 37, respectively in this Placement Document.

As on the date of this Placement Document, the authorised share capital of our Company was ₹ 8,500 lakhs

consisting of 17,50,00,000 Equity Shares of ₹ 2 each and 50,00,000 Redeemable Preference Shares of ₹ 100

each.

As of the date of this Placement Document, the outstanding paid-up equity share capital and redeemable

preference share capital of our Company is ₹ 1,645.78 lakhs and ₹ 2,500.00 lakhs, respectively.

The following table sets forth the consolidated capitalisation of our Company as at March 31, 2014 on:

1. An actual basis; and

2. As adjusted basis to give effect to the Issue.

(₹ in lakhs)

Particulars As at March 31, 2014

Actual As adjusted for the

Issue

Indebtedness

- Secured Borrowings 1,36,366.98 1,36,366.98

- Unsecured Borrowings 10,974.11 10,974.11

Total Indebtedness 1,47,341.09 1,47,341.09

Shareholders' Funds

- Share Capital 10,649.28 11,117.02

- Equity Share Capital*

- Redeemable Preference Share Capital

- Cumulative Redeemable Preference Share

Capital issued by wholly owned subsidiary

namely, Jyoti International Inc.

1,645.48

2,500.00

6,503.80

2,113.22

2,500.00

6,503.80

- Reserves and Surplus** 66,508.31 75,789.66***

Total Shareholders' Funds 77,157.59 86,906.68

Total Capitalisation 2,24,498.68 2,34,247.77

* The share capital of our Company does not include allotments of Equity Shares pursuant to the Company’s

ESOS subsequent to March 31, 2014. On April 9, 2014, our Company has issued and allotted 15,100 Equity

Shares pursuant to exercise of options under the ESOS.

** The figures of Reserves and Surplus are subject to following qualifications of the auditors in their report to

the members of the company.

a. The trade receivables of the Company include amount of ₹ 7,045.80 Lacs outstanding from Joint Venture

Company namely, Lauren Jyoti Private Limited. As informed to us, the accounts of the Joint Venture are

not available for financial year ended 31st March, 2013 as well as for the financial year ended 31st

March, 2014. Considering the facts that the accounts of that company are not available and considering

the fact that the joint venture company is not regular in the payment of the above outstanding, we are not

able to comment on the recovery of the debt and impact of the same on the Balance Sheet and Statement

of Profit and Loss of the Company for the year.

68

b. The Company has invested ₹ 500 Lacs in 50 Lacs equity shares of Lauren Jyoti Private Limited. In

absence of availability of annual accounts of the company for the financial year ended on 31st March

2013 and for the financial year ended on 31st March, 2014, we are not able to comment, if there is other

than temporary diminution in the value of the said investment and impact of the same on the Balance

Sheet and Statement of Profit and Loss of the Company for the year.

c. Due to non-availability of audited financial statements of the Joint Venture Company namely Lauren Jyoti

Pvt. Ltd. as on 31st March 2014, the company has not consolidated the financial statements of the said

joint venture company with its financial statements. In this connection, we draw attention of the members

to note no 31(7) of the Notes to consolidated financial statements. In absence of such consolidation and

the audited accounts for the year of the said joint venture company, we are not able to comment as regards

the effects of the same on the consolidated financial statements of the company for the year ended March

31, 2014.

d. The company has reported that it has provided for deferred tax asset of US $ 52.87 Lacs (₹ 3,025.06

Lacs) for the year in the consolidated Statement of Profit and Loss and it has considered the deferred tax

asset of US $ 87.68 Lacs (₹ 5,254.91 Lacs) in the consolidated Balance Sheet. In light of AS-22

paragraph 17, deferred tax asset should be recognized only to the extent that there is a virtual /

reasonable certainty, as applicable, supported by convincing evidence that sufficient future taxable

income will be available against which such deferred tax asset will be realised. In the absence of

convincing evidence of virtual / reasonable certainty, as applicable, as required by AS–22, we are of the

opinion that the consolidated loss for the year is understated by an amount of ₹ 3,025.06/- Lacs (P.Y. ₹

1,564.08 Lacs) and the consolidated reserves &surplus for the year ended March 31, 2013 are overstated

by ₹ 5,254.91 Lacs (P.Y. ₹ 1,896.96 Lacs).

*** Reserves and surplus is net of adjustments for the estimated Issue expenses of approximately ₹ 272.25 lakhs.

69

CAPITAL STRUCTURE

The Equity Share capital of our Company as at the date of this Placement Document is set forth below. (in ₹ lakhs)

Sr.

No.

Particulars Aggregate Value at nominal value

A) AUTHORISED SHARE CAPITAL

17,50,00,000 Equity Shares of ₹ 2/- each 3,500.00

50,00,000 Redeemable Preference Shares of ₹ 100/- each 5,000.00

B) ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

ISSUED CAPITAL

8,23,04,182 Equity Shares of ₹ 2/- each* 1,646.08

25,00,000 Redeemable Preference Shares of ₹ 100/- each 2,500.00

SUBSCRIBED AND PAID UP CAPITAL

8,22,88,922 Equity Shares of ₹ 2/- each* 1,645.78

25,00,000 Redeemable Preference Shares of ₹ 100/- each 2,500.00

C) PRESENT ISSUE IN TERMS OF THIS PLACEMENT DOCUMENT

2,33,87,018 Equity Shares of ₹ 2/- each 467.74

D) PAID UP EQUITY CAPITAL AFTER THE ISSUE

10,56,75,940 Equity Shares of ₹ 2/- each 2,113.52

25,00,000 Redeemable Preference Shares of ₹ 100/- each 2,500.00

E) SECURITIES PREMIUM ACCOUNT

Before this Issue 16,158.22

After this Issue 25,711.82

* The difference in the issued capital and the subscribed and paid up capital of the Company is due to the non-receipt of

subscription amount for 15,260 Equity Shares of ₹ 2/- each (3,052 Equity Shares of ₹ 10/- each) in the rights issue of the

Company during the Financial Year 2001.

Terms/ rights attached to Equity Shares

Our Company has only one class of Equity Shares having a face value of ₹ 2.00 per equity share. Each holder

of Equity Shares is entitled to 1 (one) vote per Equity Share. Our Company declares and pays dividend in

Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting.

Employees Stock Option Scheme

The SEBI issued the ESOP Guidelines, applicable to stock option schemes on or after June 19, 1999. Under

these guidelines, the excess of the market price of the underlying Equity Shares as of the date of the grant over

the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting

period.

In order to share the growth in value and reward employees for having participated in the success of our

Company, we introduced the Employee Stock Option Scheme - 2005 (ESOS 2005) and Employee Stock

Option Scheme - 2011 (ESOS 2005) which covers eligible employees of our Company and its Subsidiaries.

Our ESOS are prepared in due compliance with the ESOP Guidelines and other applicable laws. Under ESOS

70

2005, on grant of an option eligible employees will be eligible to apply for 5 (five) Equity Shares at an

exercise price of ₹ 17 per Equity Share for each option. Under ESOS 2011, on grant of an option eligible

employees will be eligible to apply for 1(one) Equity Shares at an exercise price of ₹ 25 per Equity Share for

each option. As of June 30, 2014, no option has been granted under ESOS 2011.

The ESOS is administered by the Compensation Committee, which determines the terms and conditions of the

options vested/granted. The Compensation Committee may adjust the exercise price and number of options

granted to our employees in the event of a bonus / rights issue of Equity Shares during the vesting period. The

significant terms and conditions of the vesting of options and the Shares under the ESOS are given in the table

below.

Vesting of Rights

The vesting period for options granted to an employee will commence on the date of grant of such options and

shall end in the following manner:

1. 30% of the total number of such options granted to the employee (rounded off to nearest 50) shall vest

at the end of 1 (one) year from the date of grant of options;

2. 30% of the total number of such options granted to the employee (rounded off to nearest 50) shall vest

at the end of 2 (two) years from the date of grant of options; and

3. The remaining options granted to the employee shall vest at the end of 3 (three) years from the date of

grant of options.

Terms and Conditions of the Equity Shares

1. The vested options may be exercised by the option grantees, in one or more instances before the expiry

of 12 months from the respective date(s) of vesting of the options. At each instance of exercise of the

options, the option grantee has to apply for a minimum of 100 shares or any higher number, such

number not exceeding the whole of the shares entitled to under the vested options held by the option

grantee on such date.

2. The options granted to the employees are not transferable by the employees to any other person. No

other person can be entitled to exercise the option in lieu of or on behalf of or in trust for the employees

except in case of death of an employee. Also, the options granted to the employees cannot be

hypothecated, mortgaged or otherwise alienated in any other manner.

3. All shares allotted on exercise of options will rank pari passu will all other Equity Shares of our

Company for the time being in issued.

4. Until the shares are issued (as evidenced by the appropriate entry in the register of members of our

Company) no right to vote or receive dividends or any other rights as a shareholder shall exist with

respect to the shares, notwithstanding the exercise of the option;

5. Once shares allotted on exercise of option, the purchaser shall have all the rights equivalent to those of

a common shareholder; and

6. The shares issued on exercise of the options shall be listed on the stock exchanges where our Company

is listed, subject to the terms and conditions of the Listing Agreement.

The details of options granted under ESOS 2005 are given in the table below:

71

Sr.

No. Particulars

Financial

Year 2007

Financial

Year 2008

Financial

Year 2009

Financial

Year 2010

Financial

Year 2011

Financial

Year 2012

Financial

Year 2013

Financial

Year 2014

For the

Financial

Year 2015

upto June

30, 2014

1. Options Granted 111,650 42,650 26,250 27,800 23,300 13,150 60,650 - -

2. Exercise Price per

Equity Share (in ₹) 17/- 17/- 17/- 17/- 17/- 17/- 17/- 17/- 17/-

3. Options Vested 68,250 100,210 132,545 62,470 20,535 25,830 22,055 31,460 2,980

4. Options Exercised 68,250 97,390 97,800 66,515 17,105 17,420 9,250 2,735 3,020

5. Options lapsed or cancelled

7,300 9,800 - - -

- - - -

6. Variation in terms of

options - - - -

- - - - -

7.

Money realised by

exercise of options (in

₹)

58,01,250 82,78,150 83,13,000 56,53,775 14,53,925 14,80,700 786,250 232,475 256,700

8. Total no. of Options in force

270,900 206,360 134,810 96,095 102,290 90,785 119,035 116,300 113,280

9.

Diluted Earnings per Share pursuant to issue

of shares on exercise of

options (in ₹)

7.07 8.85 9.74 11.18 6.21 10.37 7.86 3.88 (1.94)

10. Lock-in - - - - - - - - -

Equity Share Capital History of our Company

The history of the equity share capital of our Company is provided in the following table:

Date of Allotment Number of Equity

Shares allotted Face Value (₹) Issue price per

Equity Share (₹)

Consideration

April 9, 2014 15,100 2 17.00 Cash

November 6, 2013 9,300 2 17.00 Cash

April 4, 2013 4,375 2 17.00 Cash

January 30, 2013 23,950 2 17.00 Cash

October 30, 2012 12,400 2 17.00 Cash

July 4, 2012 9,900 2 17.00 Cash

February 24, 2012 28,875 2 17.00 Cash

December 2, 2011 31,525 2 17.00 Cash

September 27, 2011 682 2 120.00 Cash

July 5, 2011 19,275 2 17.00 Cash

April 23, 2011 7,425 2 17.00 Cash

March 4, 2011 36,175 2 17.00 Cash

October 26, 2010 36,000 2 17.00 Cash

August 27, 2010 23,175 2 17.00 Cash

June 11, 2010 26,350 2 17.00 Cash

February 25, 2010 32,175 2 17.00 Cash

December 14, 2009 16,025 2 17.00 Cash

November 17, 2009 1,36,900 2 17.00 Cash

October 9, 2009 28,900 2 17.00 Cash

July 27, 2009 46,525 2 17.00 Cash

May 15, 2009 55,325 2 17.00 Cash

April 8, 2009 16,725 2 17.00 Cash

February 14, 2009 25,500 2 17.00 Cash

January 17, 2009 16,900 2 17.00 Cash

December 2, 2008 65,550 2 17.00 Cash

October 8, 2008 3,63,725 2 17.00 Cash

July 28, 2008 17,325 2 17.00 Cash

March 31, 2008 10,750 2 17.00 Cash

February 15, 2008 13,950 2 17.00 Cash

January 1, 2008 30,375 2 17.00 Cash

72

November 14, 2007 1,34,275 2 17.00 Cash

October 8, 2007 2,97,600 2 17.00 Cash

March 3, 2007 5,250 2 17.00 Cash

February 21, 2007 13,00,000 2 40.50 Cash

February 21, 2007 34,650 2 17.00 Cash

January 11, 2007 22,00,000 2 40.50 Cash

December 15, 2006 45,750 2 17.00 Cash

November 14, 2006 18,450 2 17.00 Cash

October 9, 2006 237,150 2 17.00 Cash

August 4, 2006 7,68,54,640 2* N.A N.A

May 18, 2006 15,50,000 10 572.00 Cash

December 16, 2004 20,00,000 10 111.00 Cash

November 19, 2003 3,57,000 10 47.00 Cash

September 29, 2003 16,43,000 10 47.00 Cash

January 15, 2000 49,08,938 10 35.00 Cash

December 19, 1994 16,37,330 10 Bonus shares N.A

November 30, 1992 16,51,330 10 35 Cash

April 10, 1989 9,20,000 10 15 Cash

November 7, 1988 7,03,330 10** NA NA

June 17, 1988 3,355 100 100 Cash

May 6, 1988 21,333 100 100 Cash

December 26, 1986 25,387 100 100 Cash

June 30, 1986 6,753 100 Bonus shares N.A

May 2, 1983 3,068 100 100 Cash

February 25, 1981 19 100 100 Cash

January 16, 1981 532 100 100 Cash

September 12, 1980 1,713 100 100 Cash

July 18, 1980 1,660 100 100 Cash

April 11, 1980 455 100 100 Cash

March 5, 1980 478 100 100 Cash

February 8, 1980 558 100 100 Cash

February 6, 1980 22 100 100 Cash

March 20, 1978 4,945 100 100 Cash

June, 1 1974 55 100 100 Subscription to the

Memorandum

* Face value split from ₹ 10 to ₹ 2 per Equity Share

** Face value split from ₹ 100 to ₹ 10 per Equity Share

Preference Share Capital History of our Company

The history of the preference share capital of our Company is provided in the following table:

Date of Allotment Number of

Preference Shares

Allotted

Face Value

( ₹)

Issue price per

Preference Share ( ₹)

Consideration

March 14, 2013 25,00,000 100 100 Cash

73

DIVIDENDS

Under the Companies Act, an Indian company pays dividend upon a recommendation by its board of directors

and subject to approval by a majority of the members, who have the right to decrease but not to increase the

amount of the dividend recommended by the board of directors. However, the board of directors is not

obligated to recommend a dividend. The decision of the board of directors and shareholders of the company

may depend on a number of factors, including but not limited to, the company‘s profits, capital requirements

and overall financial condition. The declaration of the Board as to the amount of the net profits shall be

conclusive.

The following table details the dividend declared by the Company on the Equity Shares for the Financial Year

2014, Financial Year 2013 and Financial Year 2012.

Financial Year Dividend per Equity Share

(in ₹)

Total amount of dividend paid

(in ₹ lakhs)

Equity Share Redeemable

Preference Share

Equity Share Redeemable

Preference Share

2014 Nil 1.00 Nil 25.00

2013 0.80 1.00 658.08 1.00

2012 1.10 N.A 904.35 N.A

The form, frequency and amount of future dividends on the Equity Shares will depend upon our Company's

earnings, cash flow, financial condition and other factors and shall be at the discretion of its Board of Directors

and subject to approval of the shareholders of our Company.

Future Dividends

There is no assurance that any future dividends will be declared or paid or that the amount thereof will not be

decreased.

Any amounts paid as dividends in the past are not necessarily indicative of our Company’s future dividend

policy or dividend amounts.

74

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATION

You should read the following discussion of our financial condition and results of operations in conjunction

with the audited consolidated financial information including notes thereto and the examination report

thereon, which appear in the section titled ‘Financial Statements’ and ‘Summary Financial Information’ on

pages 182 and 37, respectively of this Placement Document, respectively. Our audited consolidated financial

statements are prepared in accordance with the Indian GAAP and the relevant provisions of the Companies

Act.

This discussion contains certain forward-looking statements that involve risks and uncertainties. Our actual

results may differ materially from those anticipated in these forward-looking statements as a result of certain

factors, such as the risks set forth in the sections titled ‘Risk Factors’ and ‘Forward Looking Statements’ on

pages 45 and 16, respectively of this Placement Document.

Unless otherwise expressly stated, the terms ‘we’, ‘our’, ‘our company’, ‘us’ etc. used in this section refer to

our Company, its Subsidiaries and Joint Ventures.

Overview

Our Company is an EPC contracting Company in the power transmission and distribution networks across the

home country and global markets with a key presence in Asia, Africa and North America. We undertake

turnkey projects offering a complete range of services in design, engineering, procurement, tower testing,

manufacturing, instruction and project management. Over a period of time, our Company has developed global

business in over 30 countries. We count major power transmission and distribution utilities across the globe

amongst our customers. Our main lines of operation are:

Transmission Lines;

Substation; and

Distribution.

In each of the above spheres of operation, we undertake turnkey projects offering a complete range of services

from design, engineering and tower testing to manufacturing, construction and project management. As of

June 30, 2014, we operate through 5 (five) manufacturing units at Nashik (India), Raipur (India), Dubai (UAE)

and Houston (Texas, USA) with a combined annual manufacturing capacity of 216,160 MT of transmission

line towers. We also have an in-house tower testing facility at Ghoti near Nashik (India). In addition, we also

supply transmission towers worldwide including Canada, Myanmar, Philippines and the United States.

We focus on projects which require industry and technological expertise, co-ordination of substantial resources

and project management skills. We believe that our comprehensive offering of high quality equipment, civil,

mechanical and electrical construction experience, project management expertise and our fabrication facilities

enables us to compete effectively. As on June 30, 2014, our Company employed a total 2,645 employees.

Our total consolidated revenues and profit / (loss) after tax for Financial Year 2014 was ₹ 366,550.77 lakhs

and ₹ (936.49) lakhs, respectively. Approximately 65.34% of the consolidated gross revenues in Financial

Year 2014 are from domestic business. Our standalone revenues and profit after tax, for Financial Year 2014

was ₹ 336,992.99 lakhs and ₹ 3,232.45 lakhs, respectively.

As on June 30, 2014, the Company and its Subsidiaries has a consolidated order book of approximately ₹

4,34,904 lakhs. As on June 30, 2014, our consolidated order book, by value, comprised 55% from our

domestic operations and 45% from our overseas operations.

Our market capitalisation as of June 30, 2014 was ₹ 50,113.95 lakhs on the NSE and ₹ 50,031.66 lakhs on the

BSE.

75

Factors affecting our operations

The business of our Company is subject to various risks and uncertainties including those discussed in section

titled ‘Risk Factors’ on page 45 of this Placement Document. Our financial condition and results of operations

are affected by various factors of which the following are of particular importance.

Variations on assumptions underlying our fixed-price and lump sum contracts

Revenues generated from projects with fixed price contracts aggregated ₹ 58,535.42 lakhs, ₹ 44,105.51 lakhs

and ₹ 72,734.58 lakhs constituting 17.08%, 15.45% and 27.36% of our total revenue in Financial Year 2014,

Financial Year 2013, Financial Year 2012, respectively. Under these contracts, we generally agree to provide

EPC services for the project on a fixed-price basis, subject to limited variations, such as to reflect changes in

the customer’s project requirements. Our actual expense in executing a fixed-price or lump sum contract may

vary substantially from the assumptions underlying our bid for several reasons. Our ability to manage our costs

in line with the assumptions used in pricing these contracts significantly affects our results of operations.

Competition

We operate in an intensely competitive environment in India and internationally. We face significant

competition from companies that have a pan-India footprint and also from companies in the international

markets.

Contracts in our business are generally awarded following a competitive bidding process and satisfaction of

prescribed pre-qualification criteria. While various factors including technical capability, health and safety

records, availability of qualified personnel, reputation and experience, are important considerations in

assessment of a bid, price is the major factor in most tender awards. In most of the contracts that we bid for,

once the qualified bidders clear the technical requirements of a tender, the bid price generally plays a

significant part in determining the award of the contract. Consequently, we face intense margin pressure,

which could have an adverse effect on our financial condition and prospects. Further, in the case of certain

privately awarded contracts, factors such as the bid price, the reputation and track record are the key

determinants for the award of contracts. Accordingly, if we are consistently unable to offer competitive rates

or if we cannot offer competitive rates on major contracts, our business and our financial condition will be

adversely affected.

Our ability to implement our growth strategies

We believe that we have a proven business plan and strategy which is critical to our future growth.

Accordingly, we have streamlined our operations to adapt to our current business strategy. Our success will

depend, in large part, on our ability to effectively implement our business and growth strategies. We believe

that our business and growth strategies will place significant demands on our senior management and other

resources and will require us to develop and improve operational, financial and other internal controls. Further,

our business and growth strategies may require us to incur further indebtedness. Any inability to manage our

business and growth strategies could adversely affect our business, financial condition and results of

operations.

Cost of raw materials

Our business is significantly affected by the availability, supply, cost and quality of raw materials, which

exposes us to market demand and supply fluctuations. The price and the supply of the raw materials depend on

factors beyond our control, which include economic conditions, consumer demand, production levels,

transportation costs and import duties. Such variations in the cost structure affect our operations. Moreover, if

we are unable to increase the cost of our products/ services commensurate with the increase in the cost of our

raw materials, our profitability may be adversely affected. Further, in the event that our primary suppliers

curtail or discontinue the supply of such materials to us in the quantities that we need or at prices that are

competitive, our operations and financial condition may be adversely affected.

Additionally, we import some of the raw materials required for our operations and, consequently, are subject to

risk due to foreign currency fluctuations. Our inability to effectively hedge out foreign exchange exposure

could adversely affect our financial condition and results of operations.

76

Overseas operations

In the past, we serviced our international customers directly through our Indian operations. We have since set

up overseas subsidiaries and joint ventures and, presently, execute international projects through our overseas

subsidiaries and Joint Ventures. We expect that our overseas subsidiaries and Joint Ventures will be a key

determinant of our future growth. Our ability to successfully expand our international operations, will,

therefore, depend on the ability of our overseas subsidiaries and Joint Ventures to expand their footprint, our

ability to manage their operations and, in the event of any future acquisitions, successfully integrate such

business with our operations.

Further, in the case of our joint venture with Gulf Investment Corporation i.e. Gulf Jyoti International LLC,

we have only a minority equity stake. Our ability to derive benefits of this joint venture will hinge on our

ability to successfully manage our relationship with our partners in growth.

Project execution capability

We have in the past executed our projects successfully in a timely and cost-efficient manner. Our ability to

continue to do so will depend heavily on our human resources, our project execution capabilities and our

product quality. Further, our profit margins are, in particular, significantly dependent on our ability to

systematically plan all aspects of the project, including procurement of raw materials, and execution of

projects in a timely manner. Failure to successfully plan and execute projects in a timely and cost-effective

manner could have a detrimental impact on our results of operations and our financial performance.

Our Significant Accounting Policies

1. Revenue Recognition

(i) Sale of goods is recognised on completion of supplies as per the terms of the contract and on

transfer of risk and reward. Sales include excise duty and adjustment for price variation and

are net of claims accepted.

(ii) In case of construction/erection contracts, revenue is recognised based on the stage of

completion determined as per the terms of the contract. Sales/Income are booked on the

basis of running account bills based on completed work and are net of claims accepted.

Escalations and other claims which are not acknowledged by customers are not taken into

account.

(iii) Interest income is recognized on time proportion basis.

(iv) The insurance claims are accounted for on accrual basis based on fair estimation of sanctions

by the insurance companies.

2. Use of Estimates

The presentation of financial statements requires certain estimates and assumptions. These estimates

and assumptions affect the reported amount of assets and liabilities on the date of the financial

statements and the reported amount of revenues and expenses during the reporting period. Differences

between the actual results and the estimates are recognised in the period in which the results are known /

materialised.

3. Fixed Assets

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost

attributable for bringing the asset to its working condition for its intended use and includes amount added

on revaluation, less accumulated depreciation and impairment loss, if any.

4. Depreciation / Amortisation

(i) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the

77

manner prescribed in Schedule XIV to the Companies Act, 1956, except on computer

software and on fixed assets of Uganda, Bhutan, Bangladesh, South Africa and Kenya

branches.

(ii) Computer software is depreciated over a period of 3 (three) to 6 (six) years depending upon

the expected useful life of the software.

(iii) On the fixed assets of Uganda, Bhutan, Bangladesh, South Africa and Kenya branches,

depreciation is provided on straight line method. The applicable rates are based on the local

laws and practices of the respective countries.

(iv) In case of revalued assets, the difference between the depreciation based on revaluation and

the depreciation charged on historical cost is recouped out of the Revaluation Reserve.

(v) Leasehold land is amortized over the period of lease.

(vi) Goodwill arising on amalgamation is amortised over a period of 5 (five) years.

5. Investments

Long term investments are stated at cost. Provision for diminution in value of such investments is

made only if such a decline is other than temporary.

6. Inventories

(i) Raw materials, Construction materials, Components and Stores & Spares are valued at lower

of cost or net realizable value. (ii) Cost of inventories is determined by using the weighted average cost formula, except that

of Jyoti Structures Africa (Pty) Ltd., in which case the same has been done on first in first

out basis.

(iii) Material purchased for supply against specific contracts is valued at cost or net realisable value

as per the contract, whichever is lower.

(iv) Work-in-progress is valued at cost including material cost and attributable overheads.

Provision is made when expected realisation is lesser than the carrying cost.

(v) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of

excise duty.

(vi) Tools and tackles are amortised over their estimated useful life.

(vii) Scrap is valued at net realisable value.

7. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of

qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that

necessarily takes substantial period of time to get ready for its intended use. All other borrowing

costs are recognised as expenses in the period in which they are incurred.

8. Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of

impairment of the carrying amount of the Company’s fixed assets. If any such indication exists,

then recoverable amount of the asset is estimated. An impairment loss, if any, is recognised

whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable

amount is greater of the net selling price and the value in use. In assessing value in use, the

estimated future cash flows are discounted to their present value based on an appropriate discount

78

factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change

in the estimate of recoverable amount.

9. Debenture / Preference Share Issue Expenses

Expenses incurred for issue of secured debentures / preference shares made by the Group are written

off as revenue expenditure during the year of issue.

10. Foreign Currency Transactions

(i) Transactions denominated in foreign currencies are accounted for at the exchange rates

prevailing on the dates of the transactions or that approximates the actual rate at the dates of

transactions.

(ii) Monetary items denominated in foreign currencies, remaining unsettled at the year end are

restated at the closing rates.

(iii) Non-monetary items denominated in a foreign currency are stated at costs.

(iv) Any income or expense on account of exchange difference either on settlement or on

translation is recognised in the Statement of Profit and Loss.

(v) Financial Statements of Overseas Integral Operations are translated as under:

a) Assets and liabilities are translated at the rate prevailing at the end of the year.

Income and expenditure are translated on the yearly average exchange rate prevailing

during the year.

b) Fixed assets are translated at the average rate prevailing on purchase/acquisition of

assets. Depreciation is accounted at the same exchange rate at which the assets are

translated.

c) The resultant exchange gains and losses are recognised in the Statement of Profit and

Loss.

(vi) Financial Statements of Overseas Non Integral Operations are translated as under:

a) Assets and liabilities are translated at the rate prevailing at the end of the year. Income

and expenditure are translated on the yearly average exchange rate prevailing during the

year. Depreciation is accounted at the same rate at which assets are translated.

b) Exchange differences arising on translation of non integral foreign operations are

accumulated in the foreign currency translation reserve until the disposal of such

operations.

(vii) Forward Exchange contracts

a) In case of transactions covered by forward exchange contracts, which are not intended

for trading or speculation purposes, premium or discount is amortised as expense or

income over the life of the contract.

b) Exchange difference on such contracts is recognised in the Statement of Profit and Loss

in the year in which the exchange rates change.

c) Profit or loss arising on cancellation or renewal of such forward exchange contracts is

recognized as income or expense for the year.

11. Excise Duty

79

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The

amount of CENVAT in respect of materials consumed for sales is deducted from cost of

materials consumed.

12. Leased Assets

Operating Lease

(i) Lease payments are recognised as expense in the statement of profit and loss on straight line

basis over the term of the lease.

(ii) Assets given on operating lease are included in fixed assets. Lease income is recognized in the

Statement of Profit and Loss on straight line basis over the term of the lease.

13. Employees’ Retirement and Other Benefits

(i) Short Term Employee Benefits

Short term employee benefits are recognised as expenses at the undiscounted amount in

the period during which the services have been rendered.

(ii) Long Term Employee Benefits

(a) Defined Contribution Plan

The Company’s contribution to Provident Fund and Superannuation Fund are charged

to Statement of Profit and Loss on accrual basis.

(b) Defined Benefit Plan

i. Gratuity: The company provides for the applicable gratuity based on actuarial

valuation as per the Projected Unit Credit Method.

ii. Leave Encashment: The company provides for the applicable liability at the year

end on account of unavailed earned leave as per the actuarial valuation as per

Projected Unit Credit Method.

iii. The cost of employee stock option attributable to current financial year is

accounted for and charged to Statement of Profit and Loss.

14. Taxes on Income

(i) Current Tax

Provision for current income tax is made on the estimated taxable income using the

applicable tax rates and tax laws.

(ii) Deferred Tax

Deferred tax arising on the timing differences and which are capable of reversal in one or more

subsequent periods is recognised using the tax rates and tax laws that have been enacted or

substantively enacted. Deferred tax assets are not recognised unless there is a virtual /

reasonable certainty, as applicable, as regards to the reversal of the same in future years.

15. Earnings per Share

The basic earnings per share is computed by dividing the net profit attributable to the equity

shareholders for the year by the weighted average number of Equity Shares outstanding during the

reporting period. Diluted earnings per share is computed by dividing the net profit attributable to

the equity shareholders for the year by the weighted average number of equity and dilutive equity

80

equivalent shares outstanding during the year, except where the results would be anti-dilutive.

16. Provisions and Contingencies

(i) A provision is recognized when there is a present obligation as a result of a past event and it

is probable that an outflow of resources will be required to settle the obligation, in respect of

which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and

adjusted to reflect the current best estimate.

(ii) A disclosure for a contingent liability is made when there is a possible or present

obligation that may but probably will not require an outflow of resources. When there is a

possible obligation in respect of which the likelihood of outflow of resources is remote, no

provision or disclosure is made.

(iii) Contingent assets are neither recognised nor disclosed in the financial statements.

17. Employees Stock Option Scheme

Stock options granted to the employees of the Company, under the Employees Stock Option

Scheme are evaluated as per the accounting treatment prescribed by SEBI (Employee Stock Option

Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, excess of market

value of the stock options, as on date of grant over the exercise price of the options is recognized as

deferred employee compensation and is charged to Statement of Profit and Loss as employee costs, on

straight line method over the vesting period of the options.

Changes in Accounting Policies

There have been no changes in our accounting policies in Financial Year 2014.

Results of our Operations

The following table provides certain information with respect to our results of operations for Financial Year

2014, Financial Year 2013 and Financial Year 2012, as set forth in our audited financial statements.

(in ₹ lakhs)

Sr. No. Particulars

Financial Year

2014 2013 2012

I INCOME

Revenue from Operations (Gross) 3,69,297.03 3,05,301.77 2,82,142.94

Less: Excise duty 5,692.49 4,032.47 5,535.87

Revenue from Operations (Net) 3,63,604.54 3,01,269.30 2,76,607.07

Other Income 2,946.23 499.49 818.87

Total Revenue 3,66,550.77 3,01,768.79 2,77,425.94

II EXPENSES

Cost of Materials Consumed 2,51,327.97 1,77,474.04 1,48,481.36

Erection and Sub-contracting Expense 55,951.85 49,205.82 63,643.19

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade (23,724.96) (90.19) (7,469.44)

Employee Benefits Expense 17,972.79 15,532.03 10,722.10

Finance Costs 24,612.36 18,213.33 14,779.03

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Depreciation and Amortization Expense

(Net) 4,026.96 3,556.52 2,490.16

Other Expenses 38,339.47 32,352.30 30,720.84

Total Expenses 3,68,506.44 2,96,243.85 2,63,367.24

III Profit Before Tax (I-II) (1,955.67) 5,524.94 14,058.70

IV Tax Expense

Current Tax 3,034.17 3,492.00 4,819.99

Deferred Tax (Net) (4,102.87) (1,750.98) (522.20)

(Excess)/Short Provision of Taxes for

earlier year 49.52 4.43 -

(1,019.18) 1,745.45 4,297.79

V Profit for the year (III-IV) (936.49) 3,779.49 9,760.91

The Principal Components of our Statement of Profit and Loss Account

Revenue

Our total revenue for Financial Year 2014, Financial Year 2013 and Financial Year 2012, was ₹ 366,550.77

lakhs, ₹ 3,01,768.79 lakhs and ₹ 2,77,425.94, respectively.

Our revenue consists of:

1. revenue from operations; and

2. other income.

Our revenues from operations comprise revenue from the sale of products, the sale of services and other

operating revenues. The details of our revenues from operations are set out below.

(in ₹ lakhs)

Revenue from operations Financial Year

2014 2013 2012

Sale of products 3,55,098.41 2,96,483.12 2,73,312.94

Sale of services 8,619.75 4,182.93 4,106.98

Other operating revenues 5,578.87 4,635.72 4,723.02

Total (gross) 3,69,297.03 3,05,301.77 2,82,142.94

Sale of products

Sale of products comprises sale of transmission towers parts, sale of components and from the erection of

towers at project sites.

Sale of services

Sale of services comprises revenues from testing and designing of transmission tower parts, survey charges

and other services.

Other operating revenue

Other operating revenue comprises sale of scrap generated from the transmission tower manufacturing process,

sale of steel scrap from tower erection at site and insurance claims.

Other Income

Our other income consists of lease rentals, interest of fixed deposits, interest on others and net gain on foreign

currency transactions and translation.

82

Expenses

Our expenses consist of cost of materials consumed, erection and sub-contracting expenses, changes in

inventories of finished goods, work-in-progress and stock-in-trade, employee benefit expense, finance cost,

depreciation and amortisation expense and other expenses. Set out below is the break-up of our expenses.

(in ₹ lakhs) Expense Financial Year

2014 2013 2012

Cost of material consumed 2,51,327.97 1,77,474.04 1,48,481.36

Erection and sub-contracting expenses 55,951.85 49,205.82 63,643.19

Changes in inventories of finished goods,

work-in-progress and stock-in-trade (23,724.96) (90.19) (7,469.44)

Employee benefit expense 17,972.79 15,532.03 10,722.10

Finance Cost 24,612.36 18,213.33 14,779.03

Depreciation and Amortisation Expense 4,026.96 3,556.52 2,490.16

Other Expenses 38,339.47 32,352.30 30,720.84

Total 3,68,506.44 2,96,243.85 2,63,367.24

Tax Expense

Provision for current income tax is made on the basis of the estimated taxable income and the applicable tax

rates under the prevailing tax laws.

Deferred Tax

Deferred tax arising out of the timing differences and which are capable of reversal in one or more subsequent

periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred

tax asset is not recognised unless there is a virtual certainty as regards the reversal of the same in future.

Results of Operations for Financial Year 2014 compared to Financial Year 2013

Our results of operation for Financial Year 2014 was particularly affected by the following factors:

1. The execution of the Tangla-Kokrajhar-Barabisa transmission line contract in Assam was affected by

ethnic strife and local agitation. PGCIL, the owner of the project, terminated the contract on April 10,

2014 and encashed the bank guarantee including the performance guarantee of approximately ₹ 3,303

lakhs. Though the event occurred post the balance sheet date and the liability is disputed, our Company

has provided for ₹ 3,302.68 lakhs; and 2. Jyoti International Inc., our Company’s wholly owned subsidiary, has reported a loss aggregating ₹

11,141.32 lakhs against a loss of ₹ 4,738.42 lakhs in Financial Year 2013 i.e. an incremental loss of ₹ 6,402.90 lakhs.

Revenue

Our total revenue increased by 21.47% from ₹ 3,01,768.79 lakhs in Financial Year 2013 to ₹ 3,66,550.77

lakhs in Financial Year 2014 due to increase in revenue from the sale of products and services.

Revenue from sale of products

Our revenue from the sale of products increased by 19.77% from ₹ 2,96,483.12 lakhs in Financial Year 2013

to ₹ 3,55,098.41 lakhs in Financial Year 2014 primarily due to increase in export and deemed export sale.

Revenue from sale of services

Our revenue from the sale of services increased by 106.07% from ₹ 4,182.93 lakhs in Financial Year 2013 to ₹

8,619.75 lakhs in Financial Year 2014 primarily due to the increase in revenues generated from the operations

of Jyoti Structure FZE.

83

Other operating income

Our other operating revenues increased by 20.35% from ₹ 4,635.72 lakhs in Financial Year 2013 to ₹ 5,578.87

lakhs in Financial Year 2014 primarily due to the increase in revenue generated by Jyoti Structures Africa Pty

Ltd.

Other Income

Our other income increased by 489.85% from ₹ 499.49 lakhs in Financial Year 2013 to ₹ 2,946.23 lakhs

Financial Year 2014 due to a change in presentation of net gain of foreign currency transactions and translation

in accordance with the revised schedule VI of the Companies Act, 1956.

Expenses

Total expense increased from ₹ 2,96,243.85 lakhs in Financial Year 2013 to ₹ 3,68,506.44 lakhs in Financial

Year 2014. This increase was primarily due to increase in cost of raw materials like electrical/electronic items,

accessories’ components, steel and cement required for tower erection and increase in finance cost. Total

expense as a percentage of total revenue was 98.17% in Financial Year 2013 compared to 100.53% in

Financial Year 2014.

Cost of materials consumed

Cost of materials consumed increased by 41.61% from ₹ 1,77,474.04 lakhs in Financial Year 2013 to ₹ 2,51,327.97 lakhs in Financial Year 2014 primarily due to the following:

1. increase in cost of raw materials like steel, zinc, bolt nuts; and 2. increase in cost of electrical/electronic items, accessories’ components viz. transformers, conductors,

insulators, isolators, cables, hardware fittings, poles, etc.

Erection and sub-contracting expenses

Erection and sub-contracting expenses increased by 13.71% from ₹ 49,205.82 lakhs in Financial Year 2013 to

₹ 55,951.85 lakhs in Financial Year 2014 primarily due to increase in cost of steel and cement procured during

the execution of projects, sub-contracting cost, labour wages, cost of material handling and transportation and

cost of other construction material

Changes in inventories of finished goods, work-in-progress and stock-in-trade

Change in inventory of finished goods, work-in-progress and stock-in-trade increased by 26,205.53% from ₹

(90.19) lakhs in Financial Year 2013 to ₹ (23,724.96) lakhs in Financial Year 2014 primarily due to an

increase in finished goods stock and stock in process for export and domestic supply.

Employee benefit expense

Employee benefit expense increased by 15.71% from ₹ 15,532.03 lakhs in Financial Year 2013 to ₹17,972.79

lakhs in Financial Year 2014 primarily due to an increase in salaries and wages in our international operations

Finance cost

Finance cost increased by 35.13% from ₹ 18,213.33 lakhs in Financial Year 2013 to ₹ 24,612.36 lakhs in

Financial Year 2014 primarily due to an increase in fund based and non-fund based facilities availed.

Depreciation and amortisation expense

Depreciation and amortisation expense increased by 13.23% from ₹ 3,556.52 lakhs in Financial Year 2013 to

₹ 4,026.96 lakhs in Financial Year 2014 primarily due to increase in depreciation on the assets capitalised

during the Financial Year 2014.

84

Other expenses

Other expenses increased by 18.51% from ₹ 32,352.30 lakhs in Financial Year 2013 to ₹ 38,339.47 lakhs in

Financial Year 2014 primarily due to increase in cost of consumables; increase in cost of power and fuel viz.

furnace oil and diesel; transportation & freight cost for finished goods; professional & legal fees; bank

guarantee commission; and bank charges.

Profit before tax

Profits before tax decreased by 135.40 % from ₹ 5,524.94 lakhs in Financial Year 2013 to ₹ (1,955.67) lakhs

in Financial Year 2014 primarily due to increase in cost of materials, construction cost, other overheads and

increase in finance cost.

Tax expense

Tax expense decreased to a credit of ₹ (1,019.18) lakhs in Financial Year 2014 from an expense of ₹ 1,745.45

lakhs in Financial Year 2013 due to reduction in profit before tax in Financial Year 2013 to ₹ (1955.67) lakhs

as against ₹ 5524.94 lakhs in Financial Year 2012. In addition, provision of deferred tax asset considered for

Jyoti International Inc, has also lead to reduction in tax expenses.

Net Profits

As a result of the foregoing our net profits decreased from ₹ 3,779.49 lakhs in Financial Year 2013 to ₹

(936.49) lakhs in Financial Year 2014.

Results of Operations for Financial Year ended March 31, 2013 compared to Financial Year ended

March 31, 2012

Revenue

Our total revenue increased by 8.77% from ₹ 2,77,425.94 lakhs in Financial Year 2012 to ₹ 3,01,768.79 lakhs

in Financial Year 2013 due to increase in revenue from sale of products and sale of services.

Revenue from sale of products

Our revenue from the sale of products increased by 8.48% from ₹ 2,73,312.94 lakhs in Financial Year 2012 to

₹ 2,96,483.12 lakhs in Financial Year 2013 primarily due to increase in export and deemed export sales.

Revenue from sale of services

Our revenue from the sale of services increased by 1.85% from ₹ 4,106.98 lakhs in Financial Year 2012 to ₹

4,182.93 lakhs in Financial Year 2013.

Other operating income

Our other operating revenues decreased by (1.85)% from ₹ 4,723.02 lakhs in Financial Year 2012 to ₹

4,635.72 lakhs in Financial Year 2013 primarily due to lesser realisation of scrap sales.

Other Income

Our other income decreased by 39.00% from ₹ 818.87 lakhs in Financial Year 2012 to ₹ 499.49 lakhs

Financial Year 2013. We occasionally lease out our equipment such as stringing tools and plants, erection

tools and plants and foundation tools and plants since these equipment are not required continuously during the

entire duration of a project. Further, we also lease out these equipment to our sub-contractors. In Financial

Year 2013, the rent generated from such lease reduced and, consequently, our other income for the period also

reduced.

Expenses

85

Total expense increased from ₹ 2,63,367.24 lakhs in Financial Year 2012 to ₹ 2,96,243.85 lakhs in Financial

Year 2013. This increase was primarily due to an increase in material cost, employee cost and finance cost.

Total expense as a percentage of total revenue was 94.93% in Financial Year 2012 compared to 98.17% in

Financial Year 2013.

Cost of materials consumed

Cost of materials consumed increased by 19.53% from ₹ 1,48,481.36 lakhs in Financial Year 2012 to ₹

1,77,474.04 lakhs in Financial Year 2013 primarily due to:

1. increase in cost of raw materials such as steel, zinc, bolt nuts; and 2. increase electrical/electronic items, accessories’ components viz. transformers, conductors, insulators,

isolators, cables etc.

Erection and sub-contracting expenses

Erection and sub-contracting expenses decreased by (22.68)% from ₹ 63,643.19 lakhs in Financial Year 2012

to ₹ 49,205.82 lakhs in Financial Year 2013 primarily due to reduction in procurement cost of steel, cement

and sub-contracting.

Changes in inventories of finished goods, work-in-progress and stock-in-trade

Change in inventory of finished goods, work-in-progress and stock-in-trade decreased by 98.79% from ₹

(7,469.44) lakhs in Financial Year 2012 to ₹ (90.19) lakhs in Financial Year 2013 primarily due to sale of

finished goods, unbilled stock of tower material at site, work-in-progress at factory and project sites.

Employee benefit expense

Employee benefit expense increased by 44.86% from ₹ 10,722.10 lakhs in Financial Year 2012 to ₹ 15,532.03

lakhs in Financial Year 2013 primarily due to an increase in salaries and wages in our international operations.

Finance cost

Finance cost increased by 23.24% from ₹ 14,779.03 lakhs in Financial Year 2012 to ₹18,213.33 lakhs in

Financial Year 2013 primarily due to an increase in fund based and non-fund based facilities availed.

Depreciation and amortisation expense

Depreciation and amortisation expense increase by 42.82% from ₹ 2,490.16 lakhs in Financial Year 2012 to ₹

3,556.52 lakhs in Financial Year 2013 primarily due to capitalisation of assets during the Financial Year 2013

in India and overseas.

Other expenses

Other expenses increased by 3.27% from ₹ 30,720.84 lakhs in Financial Year 2012 to ₹ 32,352.30 lakhs in

Financial Year 2013 primarily due to establishment cost of our overseas subsidiaries viz., Jyoti America LLC

and Jyoti Structures Africa Pty Ltd.

Profit before tax

Profits before tax decreased by 60.70% from ₹ 14,058.70 lakhs in Financial Year 2012 to ₹ 5,524.94 lakhs in

Financial Year 2013 primarily due to increase in material and finance cost.

Tax expense

86

Tax expense decreased to a credit of ₹ 1,745.45 lakhs in Financial Year 2013 from an expense of ₹ 4,297.79

lakhs in Financial Year 2012 due to a reduction in current tax from ₹ 4,819.99 lakhs in Financial Year 2012 to

₹ 3,492 lakhs in Financial Year 2013 as result of reduction in profits and deferred taxes.

Net Profits

As a result of the foregoing our net profits decreased from ₹ 9,760.91 lakhs in Financial Year 2012 to ₹

3,783.92 lakhs in Financial Year 2013.

Liquidity and Capital Resources

We have historically financed our working capital and capital expenditure requirements primarily through

funds generated from our operations and financing from banks and other financial institutions in the form of

term loans and working capital facilities. Our business requires a significant amount of working capital to

finance the purchase of materials, for performance of our contracts and other work. We also require funds for

funding our capital expenditure plans which include purchase of plant and machinery.

We believe that our anticipated cash flow from operations, committed debt facilities, together with proceeds

from this Issue and our existing cash, will be sufficient to meet our operating and capital expenditure

requirements for Financial Year 2015.

Cash Flows

Set out below is a summary of our consolidated cash flows in Financial Year 2014, Financial Year 2013 and

Financial Year 2012.

(in ₹ lakhs)

Particulars Financial Year

2014 2013 2012

Net cash generated from / (used in) operating activities (7,329.35) 5,083.57 (5,594.24)

Net cash generated used in investing activities (3,951.70) (8,033.23) (23,811.23)

Net cash generated from / (used in) financing activities 1,6257.17 822.27 27,785.32

Net increase in cash and cash equivalents 4,976.12 (2,127.39) (1,620.15)

Operating Activities

Net cash from operating activities decreased from ₹ 5,083.57 lakhs for the Financial Year 2013 to ₹ (7,329.35)

lakhs for the Financial Year 2014, primarily as a result of increased levels of inventory, book debts and loans

and advances.

Investing Activities

Net cash used in investing activities decreased from ₹ (8,033.23) lakhs for the Financial Year 2013 to ₹

(3,951.70) lakhs for the Financial Year 2014, primarily as a result of addition to fixed assets.

Financing Activities

Net cash from financing activities increased from ₹ 822.27 lakhs for the Financial Year 2013 to ₹ 1,6257.17

lakhs for the Financial Year 2014, primarily as a result of increase in bank borrowing and issue of non-

convertible debentures.

Operating Activities

Net cash from operating activities increased from ₹ (5,594.24) lakhs for the Financial Year 2012 to ₹ 5,083.57

lakhs for the Financial Year 2013, primarily as a result of increase in current liabilities and provisions.

Investing Activities

87

Net cash used in investing activities decreased from ₹ (23,811.23) lakhs for the Financial Year 2012 to ₹

(8,033.23) lakhs for the Financial Year 2013, primarily as a result of increased levels of increase in addition to

fixed assets.

Financing Activities

Net cash from financing activities decreased from ₹ 27,785.32 lakhs for the Financial Year 2012 to ₹ 822.27

lakhs for the Financial Year 2013, primarily as a result of increase bank borrowing and the issue of non-

convertible debentures.

Interest Coverage Ratio

Set forth below is the information in respect of our interest coverage for Financial Year 2014, Financial Year

2013 and Financial Year 2012 on a consolidated basis.

(in ₹ lakhs)

Particulars Financial Year

2014 2013 2012

Profit After Tax (936.49) 3,779.49 9,760.91

Add: Depreciation 4,026.96 3,556.52 2,490.16

Add: Finance cost 24,612.36 18,213.33 14,779.03

Total (A) 27,702.83 25,549.34 27,030.10

Finance Cost (B) 24,612.36 18,213.33 14,779.03

Interest Coverage (A/B) Ratio (in %) 1.13 1.40 1.83

Capital Expenditures

Our business operations do not require continuous capital expenditure. We generally incur capital expenditure

only when we set up new manufacturing units or towards replacing existing plant and machinery. For the

Financial Year 2014, Financial Year 2013 and Financial Year 2012, we spent ₹ 5,758.81 lakhs, ₹ 23,289.40

lakhs and ₹ 6,519.97 lakhs, respectively, on capital expenditures.

Secured and Unsecured Borrowing

As on June 30, 2014, our total outstanding indebtedness was ₹ 1,83,227.73 lakhs of which approximately ₹

1,74,182 lakhs was secured and the remainder was unsecured.

Secured Indebtedness

Set out below are the details of the total secured indebtedness in our Company as on June 30, 2014.

Particulars Amount

( ₹ in lakhs)

Term Loans 19,491

Working Capital Limits (fund based limits) 1,32,326

LC Devolvement (not included in the fund based limits) 17,391

Non-Convertible Debentures 4,974

Total 174,182

Term Loans

Set out below are brief details of our term loan facilities as on June 30, 2014.

Name of

Lender

Nature of

borrowing

Amount

sanctioned

(in lakhs

except

where set

out)

Amount

outstanding

as on June

30, 2014 (in

lakhs except

where set

out)

Interest/

commission

Tenure Repayment Security

Standard External USD 20.00 USD 0.74 FCY - 6 60 months Repayable in First pari

88

Name of

Lender

Nature of

borrowing

Amount

sanctioned

(in lakhs

except

where set

out)

Amount

outstanding

as on June

30, 2014 (in

lakhs except

where set

out)

Interest/

commission

Tenure Repayment Security

Chartered

Bank

commercial

borrowing

mn

(eqv ₹

11,980)

mn *

(eqv. ₹ 443)

month USD

LIBOR +

200 basis

points

payable

quarterly

from the

date of first

drawdown

of the

facility

12 equal

quarterly

instalments

after 24

months

moratorium

passu charge

by way of

hypothecation

on plant &

machinery,

both present

and future,

excluding

assets

exclusively

charged to

other lenders

DBS Bank

Ltd.

Singapore

Bilateral

Loan facility

USD 11

mn (eqv ₹

6,600)

USD 5.96

mn (eqv ₹ 3,576)

Applicable

LIBOR

+2.50% p.a

(25 bps

have been

included by

way of

arrangement

fee)

5 years 15 equal

quarterly

instalments

of USD

733,500 each.

The facility

will have a

moratorium

of 15 months

from the first

drawdown

and the first

repayment

will be at the

end of 18th

month from

the first

drawdown

prepayment

option in

compliance

with RBI

norms on

Libor

First pari

passu charge

over all

movable and

immoveable

fixed assets of

the company

in India.

Fixed asset

coverage ratio

of 1 time

DBS Bank

Ltd.

Singapore

Bilateral loan

facility

USD 7 mn

(eqv ₹

4,200)

USD 3.79

mn (eqv ₹

2,276)

Applicable

LIBOR plus

2.50% p.a

5 years 15 equal

quarterly

instalments

of USD

466,666 each.

The facility

will have a

moratorium

of 15 months

from the first

drawdown

and the first

repayment

will be at the

end of 18th

month from

the first

drawdown

prepayment

option in

compliance

with RBI

norms on

Libor

First pari

passu charge

over all

movable and

immoveable

fixed assets of

the company

in India.

Fixed asset

coverage ratio

of 1 time

89

Name of

Lender

Nature of

borrowing

Amount

sanctioned

(in lakhs

except

where set

out)

Amount

outstanding

as on June

30, 2014 (in

lakhs except

where set

out)

Interest/

commission

Tenure Repayment Security

Mahindra

Finance

Long term

vehicle

finance Loan

₹ 1000

(disbursed

₹ 469)

₹ 467.32 4.8% over

and above

SBI’s base

rate which

at the time

of execution

of the

agreement

was 9.7%

p.a

5 years 51 equal

monthly

instalments

commencing

at the end of

9 months

from the date

of first

disbursement

of the term

loan

Hypothecation

of vehicles to

be bought

Post-dated

security

cheques

towards

instalments of

interest/ EMI

Demand

promissory

note for loan

of ₹1,000

lakhs along

with interest

Reliance

Capital

Refinance ₹ 630 ₹ 128.65 16% 2 years 23 equal

monthly

instalments

from

November

15, 2012

First and

exclusive

charge by way

of

hypothecation

of plant and

machinery

purchased out

of this facility

Tata

Capital

Finance

Services

Ltd.

Term Loan ₹ 1,500 ₹ 1,341.89 13.85% p.a 18 months To be repaid

through

monthly

instalments

commencing

from the end

of 3rd month

from the date

of first

disbursement.

Interest to be

paid on

monthly

basis during

moratorium

period and

also during

the tenure of

the facility

First and

exclusive

charge by way

of

hypothecation

of plant and

machinery

located at

Nashik &

Raipur &

owned by our

Company

EXIM

Bank,

Kenya

Export cash

flow deficit

finance

₹ 3,100 ₹ 2,106 12.00% p.a

payable

monthly

2 years Repayment to

be made in 6

monthly

instalments

starting from

February

2014 to July

2014. First

five

instalments

of ₹ 500

lakhs each

and sixth

instalment of

First pari

passu charge

over current

assets of the

contract

including

receivables

Escrow of

receivables of

the project by

way of

tripartite

agreement and

letter of

90

Name of

Lender

Nature of

borrowing

Amount

sanctioned

(in lakhs

except

where set

out)

Amount

outstanding

as on June

30, 2014 (in

lakhs except

where set

out)

Interest/

commission

Tenure Repayment Security

₹ 600 lakhs confirmation

from project

authority

EXIM

Bank,

Madhya

Pradesh

Export cash

flow deficit

finance

₹ 8,900 ₹ 9,146 Long Term

Minimum

Lending

Rate +

2.45% p.a.

payable

monthly

20 months Repayment to

be made in 4

(four)

instalments

of ₹ 1,500

lakhs, ₹

2,000 lakhs,

₹ 2,500 lakhs

and ₹ 2,900

lakhs falling

due on March

2014, April

2014, May

2014 & June

2014

respectively.

First pari

passu charge

over stock and

receivables of

the project

Escrow of

receivables of

the project

* The outstanding amount of USD 0.721 million was repaid on July 8, 2014.

Note:

i. The conversion rate used above for USD 1 is ₹ 60.

ii. Our Company is at default for non-payment of instalments due on the aforementioned term loans. For

further details on the default as on March 31, 2014, please see section titled ‘Financial Statements’ on

page 182 of this Placement Document.

iii. Set out below are the details of default in repayment of the aforementioned term loans as of June 30,

2014.

(₹ in lakhs) Sr.

No. Details Principal Interest Total Amount

Duration of default as

on June 30, 2014

1 Standard Chartered

Bank

USD 721,428.57

(eqv ₹ 445.33)

USD 16,737.14

(eqv ₹ 10.33) ₹ 455.66 85 days

2

DBS Bank Ltd.

Singapore (USD 7

Mn facility)

USD 467,000

(eqv ₹ 280.00)

USD 33,090.79

(eqv ₹ 19.85) ₹ 299.85

7 days

3

DBS Bank Ltd.

Singapore (USD 11

Mn facility)

USD 733,500

(eqv ₹ 440.10)

USD 51,919.70

(eqv ₹ 31.15) ₹ 471.25 7 days

4 EXIM Bank, Madhya

Pradesh ₹ 8,900 ₹ 246

₹ 1,500

₹ 2,000

₹ 2,607

₹ 3,039

91 days

61 days

30 days

0 days

5 EXIM Bank, Kenya ₹ 2,060 ₹ 46

₹ 500

₹ 500

₹ 500

₹ 518

88

122 days

91 days

61 days

30 days

0 days

6 Tata Capital Finance

Services Ltd. ₹ 300 ₹ 41.89

₹ 115.29

₹ 113.66

₹ 112.93

61 days

30 days

0 days

7 Reliance Capital ₹ 30.34 ₹ 1.65 ₹ 31.99 15 days

8 Mahindra Finance ₹ 20.20 ₹ 5.55 ₹ 13.30

₹ 12.45

6 days

0 days

91

Working Capital Limits

We have entered into a working capital consortium agreement dated May 27, 2013 (Consortium Agreement)

with a consortium of bankers led by the State Bank of India. As on June 30, 2014, our Company has an

aggregate sanctioned limit of ₹ 592,900 lakhs comprising a fund based limit upto ₹ 79,900 lakhs, a non-fund

based limit upto ₹ 513,000 lakhs, to meet our working capital requirements.

Set out below are the details of the fund based and non-fund based limits sanctioned by various members of

the consortium and the amounts outstanding as on June 30, 2014.

(in ₹ in lakhs)

Sr.

No. Name of the Bank

Fund Based (FB) Non-Fund Based (NFB) Grand Total

(FB+NFB)

Rate of

Interest

p.a. (%) Sanctioned

Limit

Amount

outstanding

as of June 30,

2014

Sanctioned

Limit

Amount

outstandi

ng as of

June 30,

2014

Sanctio

ned

Limit

Amount

outstan

ding as

of June

30, 2014

1 State Bank of India* 10,625 40,275 1,12,100 78,909 1,22,725 1,19,185 12.25

2 Bank of India 6,100 15,050 58,500 48,584 64,600 63,635 13.25

3 ICICI Bank* 3,325 3,281 66,700 61,217 70,025 64,498 13.00

4 IDBI Bank 5,000 4,784 40,000 38,382 45,000 43,166 15.00

5 Indian Bank 3,000 3,074 35,975 29,213 38,975 32,287 14.50

6 Union Bank of India# 3,225 3,315 27,875 26,082 30,850 29,398 13.75

7 Canara Bank* 1,000 1,263 24,000 18,583 25,000 19,845 13.25

8 State Bank of

Hyderabad* 3,950 6,363 20,700 18,329 24,650 24,692 13.95

9 Standard Chartered Bank 2,000 2,087 15,700 13,944 17,700 16,031 16.75

10 DBS Bank 9,500 9,824 8,000 7,809 17,500 17,633 14.50

11 Vijaya Bank* 1,500 5,904 14,000 9,460 15,500 15,364 14.25

12 UCO Bank* 1,200 7,749 13,800 7,328 15,000 15,076 14.45

13 South Indian Bank* 10,900 11,530 10,000 9,535 20,900 21,065 13.25

14 Corporation Bank 1,000 1,010 14,000 13,997 15,000 15,008 12.95

15 Dena Bank 2,000 1,003 18,000 17,700 20,000 18,703 14.80

16 Bank of Maharashtra# 5,000 5,061 11,850 9,070 14,100 14,131 14.90

17 Syndicate Bank 2,100 2,115 10,400 10,003 12,500 12,118 14.25

18 Central Bank of India 600 620 9,400 9,323 10,000 9,943 13.75

19 Allahabad Bank 5,000 5,118 5,000 5,004 10,000 10,122 13.25

20 IndusInd Bank 2,875 2,899 Nil Nil 2,875 2,899 14.00

Total 79,900 1,32,326 5,13,000 4,32,472 5,92,900 5,64,798

* Cash Credit Account directly debited on LC devolvement

# Interchangeability between FB & NFB

Conversion rate used above is USD 1 = ₹ 60 and 1 € = ₹ 80

Note: In addition to the above, there has been certain devolvement of letter of credit issued by the banks of our

Company amounting to ₹ 17,391 lakhs which has not been directly debited to cash credit account and have

been separately categorised as secured liabilities.

Restrictive Covenants

Under the Consortium Agreement we are required to obtain the prior consent of the lenders for the following:

1. compounding or releasing any of our book debts or doing anything that may impede, delay or prevent

recovery by the Lenders;

92

2. releasing any goods, movables and other assets pledged to the lenders on trust and under a

factory/mundy type pledge, for any purpose in connection with our trade, business or industry;

3. dealing with goods, movables and other assets charged and any documents pertaining to the same; and

4. dealing with or avail any new credit facility or accommodation from any other lender.

Further, if we fail to meet our obligations to pay the interest, commission and / or other moneys payable to the

Lenders, so long as such default continues, we will require the prior written consent of the lead bank before we

declare any dividend on our share capital. The requirement for prior consent will continue as long as the

default continues.

In addition to the above, we are required to obtain the prior written permission of the lead bank of the

consortium to do any of the following:

1. effect any change in our capital structure;

2. formulate any scheme of amalgamation or restructuring;

3. implement any scheme of expansion/ diversification/modernisation other than incurring routine capital

expenditure;

4. make any corporate investments or investment by way of share capital or debentures or lend or advance

funds to or place deposits, with any other concern except to give normal trade credits or place on

security deposits in the normal course of business or make advances to employees, provided that we

may make such investments by way of deposit or advances that are required statutorily to be made in

accordance with the existing laws of the country or the rules or regulations or guidelines issued from

time to time by the authorities concerned; and

5. undertake guarantee obligations on behalf of any third party or any other company.

Management Rights

The Lenders have the right to appoint, from time to time, not more than 2 (two) nominee directors on our

Board. Such directors, appointed by the Lenders, shall not be liable to retire by rotation.

Non-Convertible Debentures

1. On October 28, 2013, our Company allotted 2,274 Series A unlisted, secured, rated, redeemable, non-

convertible debentures (NCD) of face value of ₹ 1,00,000 each at par for cash aggregating ₹ 2,274

lakhs on a private placement basis with an option to allot upto 5,000 NCDs. The NCDs were rated A-

(pronounced single A minus) by Credit Analysis & Research Limited and is divided into option I NCDs

for eligible investors with a term of 3 (three) years at a coupon rate of 12.50% p.a. and option II NCDs

for specified investors with a term of 5 (five) years at a coupon rate of 14.00% p.a. As on June 30,

2014, the amount outstanding was ₹ 2,274 lakhs.

2. Our Company entered into a debenture subscription agreement on October 21, 2013 (DSA) with AION

Direct Singapore Private Limited. Under the provisions of the DSA, AION Direct Singapore Private

Limited and/or its affiliates (AION Direct) agreed to subscribe to 270 secured listed fully redeemable

non-convertible debentures of the Company on the whole sale debt segment of BSE, for an aggregate

consideration of ₹ 2,700 lakhs with an option to allot upto 400 NCDs. The DSA requires that the

promoters of our Company, being Mr. K.R. Thakur, his wife, son and other relatives (Thakur Family)

together with their affiliates hold at least 13% of the total outstanding issued and paid up equity capital

of the Company (excluding, Equity Shares (if any) already held by the Investors) and that the Thakur

Family continue to have the ability and right to control / direct the management and / or policy

decisions of our Company. The DSA also gives AION the right to appoint 2 (two) directors on the

Board of Directors of our Company. As on June 30, 2014, the amount outstanding was ₹ 2,700 lakhs.

Unsecured Indebtedness

Set out below are the details of the unsecured loans of our Company outstanding as on June 30, 2014.

(in ₹ in lakhs)

Sr. No. Particulars Amount

1. Deposits 8,558

2. Inter Corporate Deposits 1,860

3. IBM 723

93

4. Deferred Payment Liabilities 365

5. Vehicle Loans 88

Total 11,594

Debt Restructuring Scheme

As of June 30, 2014, our Company has approximately ₹ 6,38,367 lakhs of indebtedness outstanding which is

now subject to the debt restructuring scheme discussed below.

The overall recession in trade and industry coupled with delays in the commissioning of certain projects has

put considerable financial pressure on the Company and, in particular, on its cash flow. Consequently, there

have been irregularities by our Company in the repayment of banking facilities such as delay in principal /

interest payment on the outstanding term loans and working capital loans.

The lenders of the Company include the lead banker State Bank of India and the majority of the lenders of our

Company (Lenders) entered into a Master Joint Lenders Forum Agreement dated July 2, 2014 amongst

themselves wherein the Lenders formed a JLF. The objective of the JLF is to restructure Company’s debt

under RBI’s JLF Framework.

In the JLF meeting held on August 6, 2014, the JLF have, in-principle, agreed and accepted a Restructuring

Scheme for the Company, wherein it has been inter-alia agreed by the JLF to an aggregate sacrifice of the

amount due, estimated at ₹ 13,014 lakhs, from our Company. Further, as per the Restructuring Scheme, our

Company is required to infuse funds of approximately ₹ 11,738 lakhs through issue of Equity Shares of our

Company. The broad terms and conditions set out in the Restructuring Scheme are set out below:

1. The cut-off date identified, for the purpose of determining the eligible debts to be restructured under

the Restructuring Scheme is April 1, 2014.

2. Rescheduling of principal outstanding for the term loans and sanction of additional cash credit

facility, non-fund based working capital and term loan.

3. Moratorium for principle repayment of term loan for 18 months from COD i.e. till September 30,

2015.

4. Reduction in rates of interest on term loans @ 12% p.a.

5. Interest to be funded on term loan for 12 months from COD i.e. till March 31, 2015.

6. Personal guarantees of promoters of the Company.

7. Pledge of the unencumbered shares of the promoters of the Company.

Corporate Guarantee issued by our Company for the Preferred Stock and Promissory Note issued by

Jyoti International Inc.

Our Company’s wholly-owned subsidiary Jyoti International Inc. entered into a securities purchase agreement

dated June 21, 2013 (SPA) with AION Capital Partners Limited (AION). Under the SPA, promissory notes

and convertible preferred stock aggregating USD 23 million were issued by Jyoti International Inc. to the

affiliates of AION i.e. AION Jyoti LLC and Apollo Jyoti LLC (together the Investors). The repayment of the

aforementioned promissory notes and preferred stock by Jyoti International Inc. was secured by a corporate

guarantee dated August 13, 2013 issued by our Company (Corporate Guarantee).

On April 2, 2014, the Investors subscribed to additional preferred stock of Jyoti International Inc. having an

aggregate value of USD 18.8 million. The Corporate Guarantee will be amended to secure the repayment of

the preferred stock issued in both June 2013 and April 2014.

In certain circumstances, our Company may, at its option, or shall, at the option of the Investors, issue Equity

Shares to the Investors or their affiliates in respect of amounts due to the Investors in respect of the preferred

stock issued by Jyoti International Inc. in June 2013 and / or April 2014. The Investors may opt to be issued

preference shares compulsorily convertible into Equity Shares. However, the Investors and / or their affiliates

may not, under any circumstances, be issued securities which at the time of issue or upon conversion, as the

case may be, would entitle them to over 21% of the paid up capital of our Company.

94

Default in payment of statutory dues

Set out below are the details of the outstanding defaults made by the Company in payment of statutory dues

made by our Company as on June 30, 2014.

(₹ in lacs)

Sr. No. Particulars Amount

1 Provident Fund 170.52

2 Profession Tax 21.53

3 Tax Deducted at Source 991.81

4 Tax Deducted at Source from WCT 175.75

5 Value Added Tax 176.57

6 Service Tax 34.75

7 Service Tax on GTA 17.21

8 Gratuity 640.53

9 Self Assessment Tax (Financial Year 2013) 2,250.93

10 Self Assessment Tax (Financial Year 2014) 663.14

11 Corporate Dividend Tax (Financial Year 2013) 106.95

12 Corporate Dividend Tax ( Financial Year 2014) 4.25

For further details on the defaults by our Company as on March 31, 2014, March 31, 2013 and March 31,

2012, please see section titled ‘Financial Statements’ on page 182 of this Placement Document.

Off balance sheet arrangements

We are generally required to furnish performance guarantees of upto 10% of the contract values to ensure

performance of contracts by us. The validity of guarantees and warranties given by us generally extend for 12

to 18 months after the date of the completion of the contract by us. We are liable for replacement of defective

portions of our products and services and for rectifying the defects, if any, during the warranty periods under

the terms of the contracts.

Related Party Transactions

We have entered into transactions with a number of related parties. For details of the related party transactions,

please see section titled ‘Financial Statements’ on page 182 of this Placement Document.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including commodities risk, interest

rate risk and foreign currency exchange risk. We are exposed to each of these risks in the normal course of our

business.

Interest Rate Risk

We have substantial amounts of indebtedness and expect that a majority of our indebtedness will continue to

be subject to floating interest rates. Fluctuations in market interest rates may require us to pay higher rates of

interest and will also affect the cost of our borrowings.

Foreign currency exchange rate fluctuation risk

For further details please see ‘Risk Factors - Exchange rate fluctuations may adversely affect our financial

performance’ on page 52 of this Placement Document.

Significant developments after March 31, 2014 that may affect our future results of operations

95

Except as stated in this Placement Document, to our knowledge no circumstances have arisen since the date of

the last financial statements as disclosed in this Placement Document which materially and adversely affect or

are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material

liabilities within the next 12 months.

Reviewed results of our Company for the three month period ended June 30, 2014

On July 30, 2014, we disclosed our unaudited standalone financial results for the three months period ended

June 30, 2014, in accordance with Clause 41 of the Listing Agreement. Set forth below are our unaudited

standalone financial results for the three months period ended June 30, 2014.

96

INDEPENDENT AUDITORS' REVIEW REPORT

To

The Board of Directors

Jyoti Structures Limited

We have reviewed the accompanying statement of standalone unaudited financial results of Jyoti Structures

Limited (the company) for the quarter ended on 30th June, 2014 (the statement); except for the disclosures

regarding `Public Shareholding' and `Promoter and Promoter Group Shareholding', which have been traced

from disclosures made by the management and not been audited by us. This statement is the responsibility

of the Company's Management and has been approved by the Board of Directors. Our responsibility is to issue

a report on this financial statement based on our review.

We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE)

2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"

issued by the Institute of Chartered Accountants of India. This standard requires that we plan and

perform the review to obtain moderate assurance as to whether the financial statement is free of

material misstatement. A review is limited primarily to inquiries of company personnel and analytical

procedures applied to financial data and thus provides less assurance than an audit. We have not performed

an audit and accordingly, we do not express an audit opinion.

Based on our review conducted as above, nothing has come to our attention that causes us to believe that

the accompanying statement of unaudited financial results, prepared in accordance with applicable

Accounting Standards issued under the Companies (Accounting Standards) Rules, 2006; which

continue to apply as per section 133 of the Companies Act, 2013, read with rule 7 of the Companies

(Accounts) Rules, 2014, and other recognised accounting practices and policies generally accepted in India has

not disclosed the information required to be disclosed in terms of Clause 41 of the Listing

Agreements with the stock exchanges, including the manner in which it is to be disclosed, or that it contains

any material misstatement.

For R. M. AJGAONKAR & ASSOCIATES, Chartered Accountants,

(Firm's Registration No. 117247W)

KOMAL SEVAK

Partner

Membership No. 143685

Place: Mumbai

Date: 30th July, 2014

97

JYOTI STRUCTURES LIMITED

Regd. Office: Valecha Chambers, 6th Floor,

New Link Road, Andheri (West), Mumbai - 400 053.

Corporate Identity Number: L45200MH1974PLC017494

Tel : 4091 5000 Fax : 40915014/15

e-mail : investor@jsl.in Website : www.jsl.co.in

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 30TH JUNE 2014

(₹ in lakhs)

Quarter Ended Year Ended

30/06/2014 31/03/2014 30/06/2013 31/03/2014

(Unaudited) (Unaudited) (Unaudited) (Audited)

PART I

1) Income from operations

a)

Net sales/income from operations (net of

excise duty) 68,894 1,30,639 71,005

3,32,576

b) Other Operating Income

123 123 122

501

Total income from operations (Net)

69,017 1,30,762 71,127

3,33,077

2) Expenses

a) Cost of Materials Consumed

30,502 1,07,601 46,801

2,39,002

b) Purchases of Stock in trade

- - -

-

c) Erection and sub-contracting Expenses

11,803 18,054 12,545

51,699

d) Change in inventories of finished goods,

work-in-progress and

stock-in-trade

13,835

(16,831)

(2,367)

(23,236)

e) Employees Benefits Expense

2,190 1,961 2,209

8,829

f) Depreciation and Amortisation Expense

872 666 663

2,696

g) Other Expenses

5,100 13,104 4,862

30,741

Total expenses

64,302 1,24,555 64,713

3,09,731

3)

Profit / (Loss) from operations before other income,

finance costs

and exceptional items (1-2) 4,715 6,207 6,414

23,346

4) Other income

412 2,227 286

3,916

5) Profit / (Loss) from ordinary activities before finance

costs and exceptional Items (3 + 4) 5,127 8,434 6,700

27,262

6) Finance Cost

6,926 10,038 4,224

22,031

7) Profit / (Loss) from ordinary activities after finance

costs but before exceptional Items (5 - 6) (1,799) (1,604) 2,476

5,231

8) Exceptional Items

- - -

-

9) Profit / (Loss) from ordinary activities before tax (7 +

8) (1,799) (1,604) 2,476

5,231

10) Tax expense

(202)

(351) 842

1,999

98

11) Net Profit / (Loss) from ordinary activities after tax (9

- 10) (1,597) (1,253) 1,634

3,232

12) Extraordinary Item (net of tax expense)

- - -

-

13) Net Profit / (Loss) for the period (11 + 12)

(1,597)

(1,253) 1,634

3,232

14) Share of Profit / (Loss) of Associates

- - -

-

15) Minority Interest

- - -

-

16) Net Profit / (Loss) after taxes (13+14-15) (1,597) (1,253) 1,634

3,232

17) Paid-up equity share capital

1,646 1,645 1,645

1,645

(Face value `. 2/- each)

18)

Reserve excluding Revaluation Reserves as per balance

sheet of previous accounting year

73,677

19) Earning per share before and after Extraordinary

items (not annualised)

- Basic `

(1.95)

(1.53) 1.99

3.89

- Diluted `

(1.94)

(1.53) 1.98

3.88

PART II

A - PARTICULARS OF SHAREHOLDING

1) Public shareholding

- Number of shares

6,00,32,031 5,99,66,931 5,94,02,631

5,99,66,9

31

- Percentage of shareholding 72.95% 72.89% 72.21% 72.89%

2) Promoters and Promoter Group Shareholding

a) Pledged / Encumbered

- Number of shares

1,77,53,062 1,77,53,062 1,82,85,061

1,77,53,0

62

- Percentage of shares

(as a % of the total shareholding of the

Promoter and Promoter group)

79.76% 79.59% 79.98% 79.59%

- Percentage of shares

(as a % of the total share capital of the

company)

21.58% 21.58% 22.23% 21.58%

b) Non - encumbered

- Number of shares

45,03,829 45,53,829 45,76,830

45,53,829

- Percentage of shares

(as a % of the total shareholding of the

Promoter and Promoter group)

20.24% 20.41% 20.02% 20.41%

- Percentage of shares

(as a % of the total share capital of the

company)

5.47% 5.53% 5.56% 5.53%

Particulars

Quarter Ended 30-06-2014

B - INVESTOR COMPLAINTS

Pending at the beginning of the quarter -

Received during the quarter 7

99

Disposed of during the quarter 7

Remaining unresolved at the end of the quarter -

Notes:

1. The above results as reviewed and recommended by the Audit Committee, have been approved by the

Board of Directors at its meeting held on 30th July 2014.

2. The Company is in the business of execution of projects related to power transmission and as such there

are no reportable primary business segments.

3. The Statutory Auditors of the Company have carried out the "Limited Review" of the above results.

4. Tax Expense includes provision for Current Tax and Deferred Tax.

5. During the quarter, the Company has allotted 15,100 Equity Shares of ₹ 2 each to the eligible

employees of the Company, under the Employees Stock Option Scheme

6. Cost of material consumed includes Bought-out materials purchased for supplies to customer under the

contracts.

7. In April 2014, Company has reassessed the estimated useful life of its fixed assets considering the

guidelines under schedule II of the Companies Act 2013. The realignment of the useful lives have

resulted into a capital charge of ₹ 433.04 Lacs to the opening balance of profit and Loss and increase in

depreciation in the current quarter by ₹ 192.09 Lacs. Further, in respect of plant and machinery,

Management is evaluating useful life of certain components; impact of which, if any, would be

accounted for in subsequent quarter(s)

8. The figures of Previous periods have been re-grouped/re-arranged/re-casted, wherever necessary.

100

INDUSTRY OVERVIEW

The information set forth in this section is based on publicly available information, which has not been

independently verified by our Company or the Book Running Lead Manager to the Issue, or any of their

respective affiliates and advisors. None of us, the Book Running Lead Manager or any other person connected

with the Issue has verified this information. Industry sources and publications generally state that the report

has been published for general information purposes and that the information contained therein has been

obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying

assumptions are not guaranteed and their reliability cannot be assured and accordingly, investment decisions

should not be based on such information. Several reports also expressly disclaim legal responsibility and

liability of the person/ organisation preparing the report for any loss or damage resulting from the contents of

such reports. Accordingly, we and the Book Running Lead Manager do not take any responsibility for the

data, projections, forecasts, conclusions or any other information contained in this section. Certain

information contained herein pertaining to prior years is presented in the form of estimates as they appear in

the respective reports/ source documents. The actual data for those years may vary significantly and

materially from the estimates so contained.

OVERVIEW OF THE INDIAN ECONOMY

The Indian economy is the fourth largest economy in the world on the basis of GDP calculated on purchasing

power parity basis. It is one of the most attractive destinations for business and investment opportunities due to

huge manpower base, diversified natural resources and strong macro-economic fundamentals. Also, the

process of economic reforms initiated since 1991 has been providing an investor-friendly environment through

a liberalised policy framework spanning the whole economy. (Source:

http://business.gov.in/indian_economy/index.php)

Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises,

and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the

country's growth, which averaged under 7% per year from 1997 to 2011.

In late 2012, the Indian Government announced additional reforms and deficit reduction measures, including

allowing higher levels of foreign participation in direct investment in the economy. Growth in 2013 fell to a

decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account

deficits. However, investors' perceptions of India improved in early 2014, due to a reduction of the current

account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital

flows and stabilization of the rupee. (Source: https://www.cia.gov The Central Intelligence Agency, “The World

Factbook”)

In terms of overall growth GDP at factor cost at constant (2004-05) prices in the year 2013-14 is estimated at ₹ 5,741,791 crores showing a growth rate of 4.7% over the first revised estimates of GDP for the year 2012-13

of ₹ 5,482,111 crores.

The following table illustrates India’s GDP growth at factor cost at constant (2004-05) prices between

Financial Year 2012 and Financial Year 2014:

Provisional Estimates of GDP at Factor Cost by Economic Activity (At 2004-05 prices)

(₹ in crores)

Industry 2011-12(2nd

RE)

2012-13

(1st RE)

2013-14

(PE)

Percentage change over

previous year

2012-13 2013-14

1. Agriculture, Forestry & Fishing 753,832 764,510 800,548 1.4 4.7

2. Mining & Quarrying 110,725 108,328 106,838 -2.2 -1.4

3. Manufacturing 854,098 863,876 857,705 1.1 -0.7

4. Electricity, Gas & Water Supply 100,646 102,922 109,018 2.3 5.9

5. Construction 415,188 419,795 426,664 1.1 1.6

6. Trade, Hotels, Transport and

Communication

1,402,261 1,473,353 1,517,826 5.1 3.0

7. Financing, Insurance, Real Estate

& Business Services

945,534 1,048,748 1,183,714 10.9 12.9

8. Community, Social & Personal 665,246 700,579 739,477 5.3 5.6

101

Services

9. GDP at factor cost 5,247,530 5,482,111 5,741,791 4.5 4.7 (Source: Ministry of Statistics and Programme Implementation, http://mospi.nic.in/Mospi_New/upload/nad_pr_30may14.pdf)

The median GDP growth forecast is estimated at 5.5% for 2014–2015, with a minimum and maximum range

of 5.0% and 6.0% respectively. The industrial sector is projected to witness an uptick, with a median growth

forecast of 3.3% in 2014–2015. (Source: FICCI “Economic Outlook Survey,” March 2014)

THE INDIAN INFRASTRUCTURE OPPORTUNITY

In developing countries, an essential requirement for economic growth and sustainable development is the

provision of efficient, reliable and affordable infrastructure services, such as water and sanitation, power,

transport and telecommunications. The availability of efficient infrastructure services is an important

determinant of the pace of market development and output growth, and, in addition, access to affordable

infrastructure services for consumption purposes serves to improve household welfare.

Primarily, the sector includes the following:

1. Electricity (including generation, transmission and distribution) and R&M of power stations,

2. Non-Conventional Energy (including wind energy and solar energy),

3. Water supply and sanitation (including solid waste management, drainage and sewerage) and street

lighting,

4. Telecommunications,

5. Roads & bridges,

6. Ports,

7. Inland waterways,

8. Airports,

9. Railways (including rolling stock and mass transit system),

10. Irrigation (including watershed development),

11. Storage,

12. Oil and gas pipeline networks.

(Source: The Empowered Sub-Committee of the Committee on Infrastructure, http://infrastructure.gov.in/pdf/doi.pdf)

Projected Investment in Infrastructure - Twelfth Plan (Crores in ₹ at current prices)

Sectors

Total

Eleventh

Plan

2012–13 2013–14 2014–15 2015–16 2016–17

Total

Twelfth

Plan

Electricity 728,494 228,405 259,273 294,274 333,470 386,244 1,501,666

Renewable Energy 89,220 31,199 42,590 58,125 79,075 107,637 318,626

Roads and Bridges 453,121 150,466 164,490 180,415 198,166 221,000 914,536

Telecommunications 384,962 105,949 136,090 176,489 230,557 294,814 943,899

Railways 201,237 64,713 78,570 96,884 121,699 157,355 519,221

MRTS 41,669 13,555 17,148 22,298 29,836 41,322 124,158

Irrigation (incl.

Watershed)

243,497 77,113 87,386 99,178 112,506 128,186 504,371

Water Supply and

Sanitation

120,774 36,569 42,605 49,728 58,084 68,333 255,319

Ports (+ILW) 44,536 18,661 25,537 35,260 49,066 69,256 197,781

Airports 36,311 7,691 10,716 15,233 21,959 32,116 87,714

Oil and Gas pipelines 62,534 12,211 16,604 23,833 36,440 59,845 148,933

Storage 17,921 4,480 6,444 9,599 14,716 23,202 58,441

Grand Total 2,424,277 751,012 887,454 1,061,316 1,285,573 1,589,308 5,574,663

Centre 856,717 250,758 280,662 315,217 354,296 400,129 1,601,061

States 680,056 206,944 230,045 255,645 283,201 313,928 1,289,762

Private 887,504 293,310 376,747 490,455 648,077 875,251 2,683,840

Grand Total 2,424,277 751,012 887,454 1,061,316 1,285,573 1,589,308 5,574,663

(Source: Planning Commission)

The total investment in infrastructure sectors in the Twelfth Plan is estimated to be ₹ 55.7 lakh crores. The

share of private investment in the total investment in infrastructure rose from 22% in the Tenth Plan to 36.61%

102

in the Eleventh Plan. It will have to increase to about 48.14% during the Twelfth Plan if the infrastructure

investment target is to be met.

OVERVIEW OF THE INDIAN POWER SECTOR

When India became independent in 1947, the country had a power generating capacity of 1,362 megawatt

(MW). Today, India is the sixth largest in terms of power generation and the per capita power consumption in

the country is 733.54 kilowatt-hours per year (kWh/yr).

The power sector in India is mainly governed by the Ministry of Power. The major public sector undertakings

involved in the generation of electricity include NHPC Ltd, NTPC Ltd, and Nuclear Power Corporation of

India. The responsibility for the inter-state transmission of electricity and the development of national grid is

with the Power Grid Corporation of India.

With major developments in the infrastructure sector and improvement in the standard of living, the demand

for power in the country is expected to grow at a rate of 10% -12% up till 2017.

(Source: http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/365/2)

Market size

The power sector is mainly divided into three segments: Generation, Transmission, and Distribution. The

generation is divided into these three sectors: Central Sector, State Sector, and Private Sector.

Electricity production in India (excluding captive generation) stood at 911.6TWh in Financial Year 2013.

Presently, about 53.7% of India's commercial energy demand is met through the country's vast coal reserves.

India has also invested heavily in recent years on renewable sources of energy such as wind energy.

Indian power sector remained closed to private investments till 1991. Power generation was opened up for

private participation in 1991.The Electricity (Amendment) Act, 1998, defined transmission as a separate

activity and led to the creation of the Central Transmission Utility (currently PGCIL) and State Transmission

Utilities=. The Regulatory Commission Act, 1998, mandated the setting up of an independent regulatory

mechanism at the central and state levels .

The Electricity Act, 2003, further rationalized the approach for privatization of the power sector. For

transmission sector, some projects were to be earmarked for tariff based competitive bidding. The Central and

State electricity regulators would grant licenses for building, maintaining and operating transmission lines.

Both, private players and public utilities could participate in the bidding individually or through joint ventures.

National Tariff Policy 2006 introduced mandatory tariff based competitive bidding for all transmission

projects with the objective of promoting competitive procurement of transmission services, encouraging

greater investment by private players in the transmission sector and increasing transparency & fairness in the

process. In addition, the policy further pushed to make the power sector not only financially viable but

investment worthy. It restructured the tariffs and guaranteed a 16% rate of return on investments made

between 2001 and 2004, and 14% return on investments made after 2004. (Source: FICCI “Power

Transmission: The Real Bottleneck”, September, 2013)

Sources of power

All India installed capacity of power stations stands at 253,389 MW as on August 2014. The sources of power

with shares in total installed capacity are as follows:

103

70%

16%

13%2%

Thermal

Hydro

Renewable

Nuclear

(Source: CEA)

Thermal energy accounts for the major share of generation in India. Share of hydro and renewable forms of

energy currently stands at around 13% of the total installed capacity.

With envisioned capacity additions, India is expected to reach an installed capacity of 400 GW by 2022. This

increase will be in line with the country’s GDP growth plans of 8–9% per year. Capacity addition in the

Eleventh Plan has been 69% of the original target, which is encouraging. This is expected to increase further in

the Twelfth Plan. (Source: Indian Electrical Equipment Industry Mission Plan: 2012-2022 – Ministry of

Heavy Industries & Public Enterprises)

Global Electricity Market

The demand for electricity worldwide is projected to grow at an annual rate of 2.4% for the period 2009–2035,

driven by economic and population growth. Over 80% of the growth between 2009 and 2035 is expected to be

in non-OECD countries.

The world’s installed power generation capacity is projected to rise from 4,957 GW in 2009 to about 9100 GW

in 2035. The total gross capacity addition is expected to amount to 4,100 GW over the period, with 48% of this

addition planned for installation by 2020.

The cumulative investment during 2009 – 2035 is expected to amount to USD 16.9 trillion, with USD 9.8

trillion needed in generation and USD 7.1 trillion in transmission and distribution. The share of coal in total

electricity generation is expected to decrease from 41% in 2009 to 33% in 2035. Non-hydro renewable energy

sources – biomass, wind, solar, geothermal, wave and tidal energy – are expected to continue gaining share of

the market, accounting for almost 15% of generation in 2035, up from 2% in 2009. The share of nuclear power

(14% in 2009) is not expected to increase by 2035.

The global electricity equipment industry consists of the following two segments:

1. The global heavy electrical equipment market, including boilers, turbines, generators, wind turbines,

solar power systems, etc.,

2. The global transmission and distribution equipment market, including electric power cables,

transformers, electrical switchgear, transmission line towers, conductors, control equipment, meters,

etc.

The global electricity equipment market is expected to increase from a cumulative size of more than USD 3

trillion (2008-15) to USD 6.8 trillion (2016-30). This translates into around 2% CAGR over the long term.

(Source: Indian Electrical Equipment Industry Mission Plan: 2012-2022 – Ministry of Heavy Industries &

Public Enterprises)

OVERVIEW OF THE POWER TRANSMISSION SECTOR

India's Power Transmission networks constitute the vital arteries of the entire power value chain. The growth

of power sector is contingent to development of a robust transmission network. India has been demarcated into

104

5 (five) transmission regions viz. Northern, Eastern, Western, Southern and North Eastern. The Northern,

Eastern, Western and North Eastern regions have been synchronously interconnected and operate as a single

grid – National Grid. The Southern region is asynchronously connected to the National Grid through HVDC

links. By January 2014, the southern grid was also connected to the existing national link synchronously.

Each of these 5 (five) regions has a (RLDC), which is the apex body, as per the Electricity Act 2003, to ensure

integrated operation of the power system in the concerned region. In addition, there is an apex body at the

national level called the (NLDC) to ensure integrated power system operation in the country. The NLDC and

RLDCs together form a part of the Power System Operation Corporation Limited, which is a wholly owned

subsidiary of Power Grid Corporation of India Limited. As a major move, a committee was constituted in

August 2008 by the Ministry of Power had recommended that ring-fencing of Load Despatch Centres must be

done. The objective was to ensure that Load Despatch Centres have functional autonomy, independent and

sustainable revenue streams, and are adequately staffed with people having the right skills, equipment, and

incentives to deliver. (Source: FICCI “Power Transmission: The Real Bottleneck”, September, 2013)

Both central and state governments are responsible for the development of electricity sector in India. The

market structure of the power transmission sector is as follows:

(Source: FICCI “Power Transmission: The Real Bottleneck”, September, 2013)

Growth in the Power Transmissions Sector

The following table depicts the plan-wise growth in the India transmission sector since the Sixth Plan.

Transmission

System Type

Voltage

(KV)

level

Unit Ach.At

the

end of

6h

Plan

Ach.At

the

end of

7h

Plan

Ach.At

the end of

8th Plan

(as on

31.3.1997)

Ach.At

the end of

9th Plan

(as on

31.3.2002)

Ach.as on

31.03.2007

(End of

10th Plan)

Ach.as on

31.03.2012

(End of

11th Plan)

Ach.as

on

31.72014

Target

31.03.2017

(End of

12th Plan)

AC

Transmission

lines

765 ckm 0 0 0 1160 2184 5250 13357 32250

400 ckm 6029 19824 36142 49378 75722 106819 129110 144819

220 ckm 46005 59631 79600 96993 114629 135980 145619 170980

Total ckm 52034 79455 115742 147531 192535 248049 288086 348049

HVDC ckm 0 0 1634 4738 5872 9432 9432 16872

Total

(AC+HVDC)

ckm 52034 79455 117376 152269 198407 257481 297518 364921

765 MVA 0 0 0 0 0 25,000 96000 174000

105

AC Substations

Transformation

Capacity

400 MVA 9330 21580 40865 60380 92942 151,027 182632 196027

220 MVA 37291 53742 84177 116363 156497 223,774 259104 299774

Total

AC

MVA 46621 75322 125042 176743 249439 399801 537736 669801

HVDC MW 0 0 0 5200 8200 9750 13500 22500

AC+HVDC 46621 75322 125042 181943 257639 409551 551236 692301

Inter-regional

transmission

capacity

MW

14050

27750

44850

65550

Inter-regional transmission Capacity at the end of 12th Plan excludes 600 MW of 132/ 110 kV lines operated in radial

mode time to time

(Source: CEA)

Currently, the Indian transmission sector is in the early stages of globalization compared to other sectors like

ITES, Telecom etc. Many private players to EPC and infrastructure companies are entering the sector.

(Source: FICCI “Power Transmission: The Real Bottleneck”, September, 2013)

The Indian power sector has witnessed rapid growth in the recent past and is poised for a quantum leap in the

coming decade, with the Indian economy growing at steady pace. A combination of ageing infrastructure, the

rising use of renewable energy sources which need to be integrated into the existing grid, rising demand for

electricity, a need to improve transmission efficiency and energy security, are translating into growth in the

electric power transmission and distribution transformer market.

Further, the Government has increased the share of expenditure of transmission and distribution as a

percentage of total expenditure on power from 44.2% in the X Five Year Plan to 51% and 56.4% in the XI and

XII Five Year Plans. In addition, the Government is implementing the Restructured Accelerated Power

Development and Reforms Programme in order to bring down the aggregate technical and commercial losses.

The programme amongst others attempts at revamping the transmission lines in order to reduce transmission

and distribution losses which will require replacement of existing lines with new ones.

In the transmission sector, the PGCIL has developed an experimental 1,200 kilovolt (kV) station at Bina

(Madhya Pradesh) with the involvement of domestic electrical equipment manufacturers, EPC contractors, and

a foreign expert. This is an excellent model of public-private partnership for fast development of new

technology / systems and should be replicated in other areas. To increase the capacity of existing transmission

lines, stress should be laid on areas such as high surge impedance loading lines and development of high

temperature low sag carbon core conductors. As experimental models, using superconductors, of transformers,

motors, cables, etc. have already been developed in the world, focussed attention should be given to research

on superconductivity, under the leadership of organisations like PGCIL. (Source: Indian Electrical Equipment

Industry Mission Plan: 2012-2022 – Ministry of Heavy Industries & Public Enterprises)

106

Investment in new technology and modernization, like 1,200 kV transmission lines, +/-800 kVDC

transmission, planning of smart grid projects and establishment of the national grid by the PGCIL are major

steps towards efficient utilization of energy by evacuating electricity from power surplus regions to meet

demand in power deficit regions.

The transmission segment plays a key role in transmitting power to various distribution entities across India.

The inter-regional capacity at the end of the Eleventh Plan was 28 GW. During the Twelfth Plan, total

transmission substation capacity addition is expected to be 270,000 MVA, while 110,340 cKm of transmission

lines are expected to be added. With this, the inter-regional transmission line carrying capacity at the end of

the 12th Plan is expected to increase to 66 GW.

The Ministry of Power has implemented the following initiatives to improve the overall performance of the

transmission sector:

a. Private sector participation in transmission: A number of projects are being implemented by private

companies under build, own and operate route.

b. Development of National Power Grid: The National Grid is expected to facilitate the optimal utilization of

electricity and also make scheduled/ unscheduled exchange of power between such regions possible.

Distribution of electricity in India is largely operated by states, with only 5–7% being distributed by private

players. One of the major problems in this segment is high Aggregate Technical & Commercial (AT&C)

losses, which continue to be around 26% against the global average of 10–15% in 2010–11. (Source: Indian

Electrical Equipment Industry Mission Plan: 2012-2022 – Ministry of Heavy Industries & Public Enterprises)

107

OUR BUSINESS

Unless otherwise expressly stated, the terms ‘we’, ‘our’, ‘our Company’, ‘us’ etc. used in this section refer to

our Company, its Subsidiaries and Joint Ventures.

Overview

Our Company is an EPC contracting Company in the power transmission and distribution networks across the

home country and global markets with a key presence in Asia, Africa and North America. We undertake

turnkey projects offering a complete range of services in design, engineering, procurement, tower testing,

manufacturing, instruction and project management. Over a period of time, our Company has developed global

business in over 30 countries. We count major power transmission and distribution utilities across the globe

amongst our customers. Our main lines of operation are:

Transmission Lines;

Substation; and

Distribution.

In each of the above spheres of operation, we undertake turnkey projects offering a complete range of services

from design, engineering and tower testing to manufacturing, construction and project management. As of

June 30, 2014, we operate through 5 (five) manufacturing units at Nashik (India), Raipur (India), Dubai (UAE)

and Houston (Texas, USA) with a combined annual manufacturing capacity of 216,160 MT of transmission

line towers. We also have an in-house tower testing facility at Ghoti near Nashik (India). In addition, we also

supply transmission towers worldwide including Canada, Myanmar, Philippines and the United States.

We focus on projects which require industry and technological expertise, co-ordination of substantial resources

and project management skills. We believe that our comprehensive offering of high quality equipment, civil,

mechanical and electrical construction experience, project management expertise and our fabrication facilities

enables us to compete effectively. As on June 30, 2014, our Company employed a total 2,645 employees.

Our total consolidated revenues and profit / (loss) after tax for Financial Year 2014 was ₹ 366,550.77 lakhs

and ₹ (936.49) lakhs, respectively. Approximately 65.34% of the consolidated gross revenues in Financial

Year 2014 are from domestic business. Our standalone revenues and profit after tax, for Financial Year 2014

was ₹ 336,992.99 lakhs and ₹ 3,232.45 lakhs, respectively.

As on June 30, 2014, the Company and its Subsidiaries has a consolidated order book of approximately ₹

4,34,904 lakhs. As on June 30, 2014, our consolidated order book, by value, comprised 55% from our

domestic operations and 45% from our overseas operations.

Our market capitalisation as of June 30, 2014 was ₹ 50,113.95 lakhs on the NSE and ₹ 50,031.66 lakhs on the

BSE.

Our Competitive Strengths

We believe that we are well positioned to capitalize on growth opportunities in the power sector, in India and

overseas.

Proven capabilities and demonstrated operating track record

We are a well established company in the power transmission sector and have been in the business since 1979.

We have over three decades of experience in the engineering, construction and manufacturing business and

have successfully completed and commissioned several projects. We have also tested transmission towers upto

a capacity of 1,200 kV HVAC. We believe that our rich experience, combined with the years spent on research

and development gives us an edge over our competitors.

Manufacturing Experience

108

We commenced operations as a pure manufacturer of transmission towers with a single factory in Nashik,

Maharashtra. As on June 30, 2014, our Company operated 5 (five) manufacturing units with a cumulative

manufacturing capacity of 216,160 MT. Our manufacturing units are located at Nashik (India), Raipur (India),

Dubai (UAE) and Houston (Texas, USA) and have a manufacturing and fabrication capacity of 73,930 MT,

42,240 MT, 50,000 MT and 50,000 MT, respectively. Our Indian manufacturing units have a combined

capacity of 116,160 MT making us one of the largest manufacturers of lattice steel towers in India.

Our manufacturing units are capable of manufacturing transmission line towers, microwave towers, wind mill

towers, substation structures, solar structures and cater to railway electrification. All our manufacturing units

adhere to, and satisfy, stringent environmental safety norms.

Our manufacturing units comprise CNC machines i.e., microprocessor controlled machines that are capable of

catering to angle plates and channels of various sizes and achieving accuracy. In addition to the CNC

machines, our manufacturing units located at Dubai and in the United States have fully automated environment

friendly galvanising plants. These automated galvanising plants are operated through programmable logic

controller systems enabling us to streamline our manufacturing process and improve operational efficiency.

Further our manufacturing units possess modern material handling equipment including goliath cranes and

EOT cranes.

Experienced Management and Qualified Project Execution Team

Our senior management including our Board has experience in the power transmission and distribution

industry and have been instrumental in our consistent growth. In addition, the Board includes a combination of

management executives and independent members who have significant experience in the power transmission

and distribution industry. We believe that the combination of our experienced Board and our dynamic and

forward-looking management team puts us in a position to capitalize on future growth opportunities. We have

recently appointed, and are in the process of appointing, senior management personnel across various business

divisions to further bolster our project execution capabilities.

In addition to a strong senior management, we believe that a qualified and technically competent employee

base is critical to our business. As of June 30, 2014, we employed approximately 2,645 full-time employees of

which 12% were engineers, 21% were diploma engineers and holding other technical qualifications. In

addition, 7% of the total employees hold professional and post graduate qualifications. The diverse skill sets of

our employees provide us the flexibility in adapting to the challenging and evolving needs of our business. The

experience gained during our initial years, as a pure manufacturing entity, has given us an in-depth

understanding of operational requirements and has helped us to establish systems which minimise execution

time without compromising on quality.

Diversified Operations

We have operations in three business segments i.e. transmission lines, sub-stations and distribution. Our

diversified operations enable us to reduce our dependence on a particular business area. While in Financial

Year 2009, construction of transmission lines constituted 16% of our total revenues, in Financial Year 2014,

construction of transmission lines constituted only 32% of our total revenues. Accordingly, although the

construction of transmission lines business area has grown at a CAGR of 196%, diversification has reduced

our dependence on this line of our operation. During the Financial Year 2014, our consolidated revenues from

domestic operations and overseas operations were ₹ 236,557.59 lakhs and ₹ 127,046.95 lakhs, respectively.

Further, our consolidated revenues from our overseas operations increased from ₹ 64,152.70 lakhs in Financial

Year 2009 to ₹ 127,046.95 lakhs in Financial Year 2014 at a CAGR of 14.6%.

In addition, we provide the full suite of EPC services either as a composite contract or on a stand-alone basis.

Further, even within the EPC segment, we provide the entire gamut of services including engineering,

manufacturing and construction. Our vast experience, built over 3 (three) decades enables us to plan each

project and execute it to exacting time and quality standards.

Design, Engineering and Tower Testing

We believe that strong design and engineering capabilities is the foundation for successful execution of EPC

contracts. We have designed and tested different types of towers such as self-supporting towers, guyed towers

and cross rope towers. Further, we have developed different types of foundation design such as open

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excavation pad-chimney RCC foundation, undercut foundation, pile foundation and grillage foundation. Our

focus on maintaining quality is well recognised and our R&D Facility has been confirmed to the Quality

Management System Standard: ISO 9001:2008 by DNV Certification B.V.

We are one of the few companies capable of testing transmission line towers in India. We operate a state of the

art tower testing facility at our R&D Facility in Ghoti, near Nashik (India). Our R&D Facility offers automatic

load applications with the ability to test towers of up to 1200 kV, with a maximum height of 85 metres, a

square or rectangle base width up to 26 metres and maximum uplift per leg 500 MTs. As on June 30, 2014, we

have successfully tested over 380 towers of varying sizes and capacities for both domestic and international

utilities.

Technical Competence and Pre-qualified Status

Design, engineering and project execution capabilities vary across geographies, tensile strengths, terrain and

other factors. Our technical capabilities have been proven across geographies, tensile strengths and over

different terrains. For instance, we have successfully executed various projects with river crossing

requirements, which are necessarily difficult and have specific design and engineering requirements, to

withstand the vagaries of nature such as storms, whirlwinds, flood, change in the course of the river, etc.

Additionally, a majority of the projects in the transmission line and sub-station segments are awarded on the

basis of tenders. Most tenders have in-built technical and financial pre-qualification criteria. Some of the more

usual pre-qualification criteria relate to the technical competence of the bidders such as the ability to construct

HVAC and HVDC transmission lines. The award is based on various criteria including the reputation of

bidder, technical competence, experience in implementing similar projects, quality of executed projects and

financial bid.

Since our Company has experience in construction of transmission line upto 800 kV, substations upto 765 kV

and power distribution, we are eligible to bid for majority of the tenders relating to projects in the power

transmission and distribution business. We believe that our ability to bid for any project of our choice gives us

greater flexibility in bidding for tenders and also gives us an opportunity to garner bigger projects.

Our Strategy

Focus on our service quality

We believe that the strident focus on the quality of our service is a key factor in our success. We will

endeavour to meet our customer’s expectations and ensure complete satisfaction. To that end, we will strive to

provide better service, through enhanced efficiency in completion of our projects with a greater focus on

meeting our timelines. We intend to develop relations with prospective customers and also strengthen our

relationship with our existing customers through superior management skills and a favourable customer

interface. We would also endeavour to maintain high levels of quality in our business and products and utilise

our skills and expertise to reach greater levels.

Rural Electrification

In March 2005, the Ministry of Power, Government introduced the RGGVY, with the aim of providing

electricity to over 100,000 un-electrified villages and providing free electricity connections to over 230 lakhs

rural below the poverty line (BPL) households. Under RGGVY, the Ministry of Power has sanctioned 921

projects to electrify 1,24,469 unelectrified villages, intensive electrification of 604,983 partially electrified

villages and to provide free electricity connections to 408.80 lakhs BPL rural households. (Source:

http://powermin.nic.in/bharatnirman/bharatnirman.asp) As on June 30, 2014, work in 108,408 un-electrified

villages and intensive electrification of 308,404 partially electrified villages have been completed and 218.30

lakhs free electricity connections have been released to BPL households. (Source:

http://powermin.nic.in/bharatnirman/bharatnirman.asp)

The contribution of rural electrification to our total revenues increased from ₹ 23,767 lakhs in Financial Year

2009 to ₹ 28,735 lakhs in Financial Year 2014 at a CAGR of 121% .We will continue to engage in providing

services and products associated with the process of rural electrification.

Focus on operation and process standardisation

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Operation and process standardization is a critical element of our continued success, particularly where there

are a significant number of projects. The quality management systems of our design, testing, manufacture,

supply and construction of 11 kV to 800 kV power transmission lines, substations, power distribution and

similar turnkey projects have all been approved by DNV Certification B.V to ISO 9001:2008. The

environmental management system of our design, testing, manufacture, supply and construction of 11 kV to

800 kV power transmission lines, substations, power distribution and similar turnkey projects have all been

approved by DNV Certification B.V to ISO 14001:2004. The occupational health and safety management

system standard of our design, testing, manufacture, supply and construction of 11 kV to 800 kV power

transmission lines, substations, power distribution and similar turnkey projects have all been approved by

DNV Certification AS to ISO 18001:2007.

Focus on large turnkey projects

We have built up the strength to successfully execute large scale turnkey projects. For instance, we

successfully charged and commissioned a turnkey project worth approximately ₹ 40,823 lakhs, for

construction of transmission line of 500 kV HVDC, with a route length of 989 Kms. from Mundra to

Mohindergarh. Further, in Namibia, we commissioned a turnkey project worth approximately a total of USD

38,861,935 and NAD 244,771,837, for construction of transmission line of 350 kV HVDC, with a route length

of approximately 672 Kms. We intend to continue to focus on such large scale projects so as to achieve

benefits of economies of scale in our business operations.

Maintain a sustainable and diversified business model

Our objective has been to create a sustainable and diversified business model in order to increase shareholder

value and grow our revenues. We continue to follow a diversified strategy for growth focused on EPC

contracting in the power transmission sector, which we believe have high potential for growth and where we

believe we enjoy the following competitive advantages:

5. Diversification of projects within the sector in which we operate; 6. Maintain a diverse customer base between the public and private sectors;

7. Maintain an appropriate mix of domestic and international orders to mitigate against geographical

exposures; and

8. Maintain an appropriate range of contract durations, for instance 18 - 24 month contracts.

We believe this strategy will mitigate our reliance on the growth of any one particular country or region from

one or few customers and will complement our business and provide us with growth opportunities.

Focus on international expansion

Presently, we have worked, through our Subsidiaries and Joint Ventures, with customers from over 30

countries directly. Our revenues from our international operations grew from ₹ 61,033 lakhs during the

Financial Year 2013 to ₹ 103,485 lakhs during the Financial Year 2014 i.e. a 69.56% growth, year on year.

While in Financial Year 2009, we had only one joint venture company catering to the Middle East and as of

June 30, 2014, we have executed, or are executing, EPC turnkey contracts across Middle East, the United

States and Africa through our Subsidiaries and Joint Ventures.

Africa, in particular, is a key focus area of our international operations. In Africa, we have executed, or are

executing EPC turnkey power transmission contracts in South Africa, Kenya, Ethiopia, Uganda, Rwanda,

Nigeria, Tanzania and Namibia. Further, we are presently undertaking business development initiatives in

other African countries. We intend to pursue a significant role in power transmission and distribution sector in

Africa. In order to accomplish this initiative, we have incorporated subsidiaries in South Africa, Kenya,

Namibia and Nigeria, where we perceive opportunities for future growth and development.

We intend to further expand our global presence and will evaluate potential opportunities to grow our business

and expand our capabilities and/or geographical reach.

Description of our Business

We are one of India’s leading providers of turnkey solutions in the power transmission business. With the

experience of executing projects in over 30 countries directly, through our Subsidiaries and Joint Ventures, we

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are amongst the few EPC service providers worldwide, who possess the capabilities to execute turnkey

projects in the power transmission business. We have three main lines of operation viz.

1. Transmission Lines;

2. Substation; and

3. Distribution.

The nature of contracts that we are generally awarded in our operations is set out below:

1. Turnkey contracts for transmission lines, substations and distribution.

2. Contracts for supply of transmission line towers.

Turnkey Contracts

Set out below are the various activities that we engage in while executing turnkey contracts:

Nature of the Contract Scope of services

Contract for setting up

transmission lines

These are generally comprehensive and encompass within its ambit the following

activities:

Design and Engineering;

Tower testing;

Manufacturing of tower;

Procurement of bought out items;

Project management;

Transportation and insurance;

Route alignment and survey;

Tower foundation, erection and stringing of conductors;

Testing and commissioning of the transmission line; and

Providing training to customer’s employees.

Contract for setting up

substations Engineering and designing activities;

Project management;

Transportation and insurance;

Civil works, foundations, internal road construction, site development,

control room construction;

Sewage and water system;

Installation of plant and equipment;

Testing, commissioning and operational acceptance of the sub-stations;

and

Providing training to customer’s employees.

Contract for distribution Route survey for laying overhead distribution lines;

Construction of 33 kV, 11 kV & low tension overhead lines using

conductors and cross linked polyethylene / poly vinyl chloride aerial

bunched cables on rolled steel joist / pre stretched concrete poles;

Construction of 33 kV/11 kV substations;

Construction of single phase / three phase distribution transformer

substations with metering facilities;

Providing low tension service connections to the consumers including

metering and protection system; and

Testing and commissioning of distribution system.

Turnkey contracts

Set out below are some of the projects that we are executing as on June 30, 2014.

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Sr. No. Project Description Currency Total Contract

Value*

1.

Design, Supply and Construction of 400 kV DC Transmission

Line with Quadruple Moose ACSR Conductor from Sagardighi

thermal power station to Gokarna 400 kV S/S and associated

works

(in ₹ lakhs) 10,219

2.

Supply, Erection, Testing & Commissioning of 400 kV Quad

DC Line from Nandiwanaparthi (Common Point) to

Shankarpalli 400 kV SS -120 km on turnkey basis. (in ₹ lakhs) 27,789**

3. Construction of 400 kV Double circuit transmission line from

Isinya-Suswa, Kenya

Euro 15,769,639

KES 411,836,265

4. Javeri - Khorga Interconnection Project. Supply, Installation of

500 kV & 220 kV Transmission Line Euro 13,035,533

5. Turnkey Construction of S/C 400 kV Transmission Line from

Gerus TX Station to the Otjikoto TX Station NAD 210,855,972

6. 220 kV Substation extensions for Regional Power Transmission

Project Tajikistan USD 5,512,975

7.

Procurement of Design, Supply and Erection of

Turkwel-Ortum-Kitale 220 kV Overhead Transmission

Line and associated substation.

USD 20,578,723

8.

Rural Electrification works Sarguja district of Chhattisgarh

under Rajiv Gandhi Grameen Vidyutikaran Yojana (Package-

C)

(in ₹ lakhs)

4,864

9. Supply of 271 transmission towers for the Butuan Placer

Transmission Line

USD 5,724,560

PHP 5,889,486

10.

Design, Testing , Manufacturing & Supply of 115 kV & 230

kV Tower for NLUPC caparispian wind farm project. USD 7,604,121

* As per the original contract entered by our Company

** As per the amended contract entered by our Company

Set out below are some of the projects that we have executed as on June 30, 2014.

Sr.

No. Project Description Currency

Total

Contract

Value *

Complet

ion

Year

1. Western Region System Strengthing Scheme of 400 kV in

Maharashtra (in ₹ lakhs) 31,304 2013

2. Western Region System Strengthing Scheme II 400 kV in

Gujarat (in ₹ lakhs) 10,231 2011

3. ±500 kV HVDC Transmission Line from Mundra to

Mohindergarh (in ₹ lakhs) 40,823 2012

4. 400 kV D/C Transmission Line Associate with Supplementary

Transmission for DVC and Maithon RB Project (in ₹ lakhs) 14,693** 2011

5. Tower Package A1 for supply & Construction of 765 kV S/C

Bina-Indore Transmission Line for Sasan region. (in ₹ lakhs) 10,235** 2012

6. 765 kV S/C Balia-Lucknow Transmission Line (Part-I) (in ₹ lakhs) 10,330 2012

7. 400 kV D/C Mundra-Dehgam Transmission Line (in ₹ lakhs) 8,764 2009

8.

Supply, Installation, testing and Commissioning of Gerus to

Zambezi HVDC 350 kV transmission line (Section A & B) on

turnkey basis

NAD 244,771,837 2010

USD 38,861,935

9.

Supply, Installation, testing and Commissioning of 400 kV Over

Headlines between H- Station new and Gardens Substation &

M Station and Garden substation on turnkey basis

DHS 145,487,226 2009

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10. 400/220 kV Substation - Tamil Nadu-I, Kerala -I & Kerala I & II (in ₹ lakhs) 13,919 2011

11. Supply , Installation & Testing of 220/33/11kV Amona (New)

Substation (in ₹ lakhs) 4,038 2011

12. Infrastructure Plan Phase II of Jalgaon & Bhusawal (in ₹ lakhs) 11,763 2013

13. Infrastructure Plan Phase II of Rastapeth & Nagarroad (in ₹ lakhs) 15,934 2013

14. Supply of Equipment & Material for RGGVY in Mau & Balia

District of Uttar Pradesh (in ₹ lakhs) 6,251 2009

15. Supply of Equipment & Material for RGGVY in Azamgarh

District of Uttar Pradesh (in ₹ lakhs) 5,283 2009

16. Design , Supply & erection , Testing of HT/LV Line under

APDRP scheme for Nagpur Rural (in ₹ lakhs) 2,966 2011

17. Manufacture & Supply of 225kV Towers for OHTL Projects (Lot

1 & 2) in Burkina Faso. USD 3,787,000 2009

* As per the original contract entered by our Company

** As per the amended contract entered by our Company

Business Processes

We provide the following EPC services:

1. pre-engineering, feasibility studies, engineering, design and consultancy services;

2. complete mechanical systems engineering, including fabrication and erection of structural steel works;

and

3. manufacturing, supply, erection, testing and commissioning of towers.

Surveying

Surveying is the first step in an EPC contract and comprises a geological and topographical survey of the area

in which the towers must be erected. It is undertaken prior to designing and engineering and is critical since it

enables the design and engineering team to understand the geographic layout, the terrain, the prevalent climatic

conditions, the soil and sub-strata conditions, wind speeds and load bearing capacities.

Some of the modern survey techniques used by us include remote sensing using satellite imagery, mosaicing of

images, digitization of toposheets and detailed terrain analysis of the alignment corridor.

Design and engineering

We have a design and detailed engineering department comprising senior design engineers experienced in the

field of extra high voltage transmission lines and sub-stations. We have successfully designed and tested

towers with a capacity ranging from 33 kV and 1,200 kV for various utilities.

We have designed different types of towers including self-supporting square base towers, rectangular base

towers, guyed towers and cross rope towers. Further, since each tower must rest on a stable foundation we also

undertake foundation designing. We have developed various foundation designs including open excavation

pad-chimney RCC foundation, undercut foundation, block type foundation for hard rock, pile foundation and

grillage foundation. We also have the capacity to test foundations for uplift/pullout at the project site. We use

various modern computer assisted engineering design software to facilitate different design requirements

which includes lattice tower designs upto 1,200 kV, guyed towers designs, profiling and building information

model for three-dimensional drafting.

As on June 30, 2014, we employ over 326 engineers in India and overseas. Our designers and engineers also

provide training in transmission line tower design to engineers from various utility services providers, in

particular, in Africa. We have started providing limited training as an ancillary to the engineering support

function and have trained engineers of our customers across Africa.

Tower Testing

Testing of prototypes is a crucial stage in the manufacturing process. Transmission towers are one of the few /

only structures in structural engineering which must be tested on miniature models and scaled to size. Mass

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production of towers cannot commence unless they have been tested and approved by the customer. We have

an R&D Facility in Ghoti, near Nashik (India) with a capacity of testing towers upto 1,200 kV, with a

maximum height of 85 metres, a square or rectangle base width up to 26 metres and maximum uplift per leg

500 MT. The development of the tower testing facility has improved our production and project execution

capabilities.

As on June 30, 2014, we have tested over 380 towers including guy and tubular towers for customers from

various countries. For testing the towers, we use a microprocessor based system with a simultaneous

application of load through multi speed motors.

Our R&D Facility comprises of a 4-bay, 5-tier longitudinal loading mast with a width of 60 meters and height

of 75 meters and high transverse loading mast of 85 meters with 129 pulley positions. We employ a derrick

crane with a boom height of 85 metres capable of lifting loads of upto 5 MT near the testing pads. The use of

pre-calibrated universal testing machine with a capacity of 100 MT helps in calibration of load cells up to 100

MT. The entire testing process is monitored and controlled from a centrally located control centre through a

supervisory control and data acquisition system with an human-machine interface device. To test a tower, it is

erected on the test bed and load is applied at various points of the tower through electrically driven wire ropes

and pulley blocks.

Further, since the R&D Facility is located adjacent to our manufacturing facility which generally stores steel

section of varying sizes, shapes and qualities. The speedy access to steel sections ensures speedy re-testing of

the towers in the event of a premature failure during testing. Set out below are salient features of our R&D

Facility.

Particulars Capability

Testing Capacity Upto 1,200 kV

Base Configuration Square, Rectangular & Triangular

Height of Mast Transverse longitudinal Transverse : 85 meters and Longitudinal : 75 meters

Maximum uplift per leg 500 MT

Load Application By Electrical winches. Simultaneously maximum 36

points at a time

Manufacturing

As on June 30, 2014, we operated 5 (five) manufacturing units with a cumulative manufacturing capacity of

216,160 MT. Our manufacturing units are located at Nashik (India), Raipur (India), Dubai (UAE) and Houston

(Texas, USA) and have a manufacturing and fabrication capacity of 73,930 MT, 42,240 MT, 50,000 MT and

50,000 MT, respectively. Our Indian manufacturing units have a combined capacity of 116,160 MT making us

one of the largest manufacturers of lattice steel towers in India. Each of our manufacturing units is equipped

with CNC machines in addition to modern material handling equipment such as goliath cranes and EOT

cranes.

Manufacturing Process

Fabrication of the tower is the first and the most important step in the manufacturing process and comprises

cutting, bending, and assembling processes. CNC machines are used for the purpose of fabrication, which are

operated by qualified and experienced engineers to ensure precise and accurate punching, drilling, cutting and

stamping. Further, hydraulic presses and machine tools and fixtures, furnace to handle plates or angles are used

for bending operations. Angle line CNC machines are used for fabrication of transmission towers for marking,

punching and cutting of angle bars. Different cranes, including mobile cranes, of varying load bearing capacity

are used to ensure smooth material handling.

The fabrication process is followed by galvanization of the fabricated structures. Galvanisation is carried out in

a temperature controlled galvanizing bath. The galvanizing plant primarily comprises of pre-treatment area, the

galvanising bath and the drying chamber. The pre-treatment of steel is effectively handled with chemicals to

minimize effluents. The control treatment includes degreasing, pickling and fluxing for an ideal reaction

between steel and zinc. The pre-heating chambers ensure uniform drying and pre-heating of steel to provide a

uniform surface finish and zinc coating.

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Further, Gulf Jyoti International follows a process called dulling after galvanization wherein a grayish coating

is formed on the galvanized material. It is basically treatment of galvanized material with zinc phosphate

at 60° Celsius followed by anti - corrosion oil spray at the end. The purpose of the process is to avoid the

occurrence of reflection caused by shining of galvanized steel structures.

Construction of Transmission Lines

We also provide on-site services, construction and erection of transmission lines and sub-stations, testing and

commissioning. This division is manned by experienced construction managers and engineers, engaged in

conducting detailed surveys using modern techniques such as satellite imageries, global positioning systems

and total stations. This division also undertakes conductor stringing operations of transmission lines. We have

tension stringing equipment for quadruple and twin bundle conductor stringing. We provide complete project

work including electrical, civil, structural and associated systems to complete installation and commissioning

of EHV sub-stations. We undertake construction projects in both the international and domestic market.

Raw materials and Procurement

The principle raw materials are steel and zinc. Transmission line towers are manufactured out of mild and high

tensile steel angles of varied sections. These steel angles are galvanized before they are assembled into

transmission line towers at site. For galvanizing, zinc is used as a raw material. For assembling, bolts / nuts are

used.

The demand of steel and zinc are met through domestic purchases and imports. Nuts/bolts are procured

domestically. In the turnkey contracts bought-out components like conductors, insulators, shield wires,

hardware accessories etc. are sourced locally and overseas.

Quality

We have received the following quality certifications:

1. ISO 9001:2008 which encompasses the quality management systems of our design, testing,

manufacture, supply and construction of 11 kV to 800 kV power transmission lines, substations, power

distribution and similar turnkey projects have all been approved by DNV Certification B.V;

2. ISO 14001:2004 which encompasses the environmental management system of our design, testing,

manufacture, supply and construction of 11 kV to 800 kV power transmission lines, substations, power

distribution and similar turnkey projects have all been approved by DNV Certification B.V; and

3. OHSAS 18001:2007 which encompasses the occupational health and safety management system

standard of our design, testing, manufacture, supply and construction of 11 kV to 800 kV power

transmission lines, substations, power distribution and similar turnkey projects have all been approved

by DNV Certification AS.

Subsidiaries

Set out below are the brief details of our Subsidiaries.

1. Jyoti Energy Limited

Jyoti Energy Limited was incorporated on July 6, 2001 and is engaged in the business of establishing,

erecting, commissioning, setting up and maintaining electric power generating stations based on

conventional resources, tie lines, sub-stations and transmission lines.

2. JSL Corporate Services Limited

JSL Corporate Services Limited was incorporated on November 19, 1993 and is engaged in the

business of providing a complete range of corporate services.

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3. Jyoti Structures Africa (Pty) Limited

Jyoti Structures Africa (Pty.) Limited (Jyoti Africa) was incorporated in the Republic of South Africa

on September 6, 2006 as a joint venture company between the Company and Ms. Veena Dhawakieram,

a citizen of the Republic of South Africa. Presently, the Company holds 70% of the shares and the

balance shareholding is held by Redlex (Pty.) Limited.

Jyoti Africa is engaged in the business of setting up high voltage transmission lines, substations and

distribution projects. Jyoti Africa has executed contracts from Nampower (Namibia’s national power

utility) for supply, delivery and construction of 672 Kms HVDC 350 kV Transmission Line from Gerus

to Zambezi and from Eskom Holdings Ltd (the Republic of South Africa’s electricity public utility) for

supply and construction of 114 Kms 765 kV Transmission Line.

4. Jyoti International Inc.

Jyoti International Inc. (Jyoti International), formerly known as Jyoti Holdings Inc.) was incorporated

in Delaware, USA, on February 17, 2010. At present, Jyoti Americas LLC and Jyoti Structures Canada

Limited are the wholly owned subsidiaries of Jyoti International. Jyoti International is a wholly owned

subsidiary of our Company and has completed the construction of its manufacturing plant and office

building.

5. Jyoti Americas LLC

Jyoti Americas LLC (Jyoti Americas) was incorporated in Delaware, USA, on September 11, 2009.

Jyoti Americas is a wholly owned subsidiary of Jyoti International, which is the direct subsidiary of our

Company. Jyoti Americas has commissioned a tower manufacturing plant near Houston, Texas, with an

annual capacity of 50,000 MTs. Jyoti Americas is engaged in the construction of transmission towers,

commissioning of sub-stations and execution of turnkey electricity projects.

6. Jyoti Structures Canada Limited

Jyoti Structures Canada Limited (Jyoti Canada) was incorporated in British Columbia, Canada on

September 19, 2012. It is a wholly owned subsidiary of Jyoti International. Jyoti Canada is engaged in

the business of executing overhead transmission lines and substation projects on total turnkey basis.

7. Jyoti Structures FZE

Jyoti Structures FZE (Jyoti FZE), originally Jyoti Projects FZE, was incorporated in the Jebel Ali Free

Zone on February 26, 2012 as a wholly owned subsidiary of the Company. Jyoti FZE is engaged in the

business of providing construction and engineering services (including deputing manpower) for various

projects, including power transmission projects.

8. Jyoti Structures Namibia (Pty) Limited

Jyoti Structures Namibia (Pty.) Limited (Jyoti Namibia) (incorporated as Caicos Island Investments

(Proprietary) Limited) was incorporated in Windhoek on July 30, 2012. On December 6, 2012 Jyoti

FZE and Mr. Robanus Amadhila, a citizen of Namibia, acquired 70 % and 30%, respectively, of the

equity share capital in Jyoti Namibia from Sage Secretarial Services (Pty) Ltd.

Jyoti Namibia is engaged in the business of undertaking engineering procurement construction

contracts in power transmission; distribution and substation sectors. Jyoti Namibia is executing a

contract awarded by Nampower for the turnkey construction of the Gerus-Otjikoto 400kV transmission

line.

9. Jyoti Structures Nigeria Limited

Jyoti Structures Nigeria Limited (Jyoti Nigeria) was incorporated in Abuja, Nigeria on October 20,

2009. On June 14, 2013 Jyoti FZE acquired 100 % of the shares in Jyoti Nigeria i.e. 12,00,000 shares

from Mr. Benedict Uwakwe Oguh and 7,99,999 shares from Mrs. Joyce Ibukunolu Oguh.

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Jyoti Nigeria is engaged in the business of providers of electric power and electrical infrastructures.

Jyoti Nigeria is executing a contract awarded by Transmission Company of Nigeria for the turnkey

construction of the Gashua-Hadeja 132 kV double-circuit Transmission line.

10. Jyoti Structures Kenya Limited

Jyoti Structures Kenya Limited (Jyoti Kenya) was incorporated in Nairobi, Kenya on November 12,

2013. Jyoti Kenya is a wholly owned subsidiary of Jyoti FZE, which is a wholly owned subsidiary of

our Company.

Jyoti Kenya is engaged in the business of execution of engineering procurement construction contracts

in power transmission, distribution and substation sectors. Jyoti Kenya is executing three contracts

awarded by Kenya Electricity Transmission Company Limited for the turnkey construction of the

transmission lines.

Joint Ventures

In addition to our Subsidiaries, we have also entered into 2 (two) joint ventures. Brief details of our joint

ventures are set out below.

1. Gulf Jyoti International LLC

Gulf Jyoti International LLC (Gulf Jyoti) was incorporated in Dubai and is jointly promoted by Gulf

Investment Corporation, Kuwait, and our Company. Our Company has a 30% equity stake in the joint

venture company. Gulf Jyoti International LLC has set up a manufacturing facility in Dubai Investment

Park. This facility has an annual manufacturing capacity of 50,000 MT.

2. Lauren Jyoti Private Limited

Lauren Jyoti Private Limited is a joint venture company (JVC) between Lauren Engineers Constructors

Inc. (Lauren) with equity participation of ₹ 500 lakhs by each party. In terms of the joint venture

arrangement Lauren was to provide technical assistance, support and know-how to the JVC and our

Company was to provide the pre-qualification credentials for EPC Contracts. The JVC was

incorporated for the execution of a 50 MW concentrated solar power plant proposed to be set up in

Rajasthan by Godavari Green Energy Ltd., India. However, the project could not be completed due to

certain disputes between the parties. Our Company is yet to initiate proceedings in the matter.

International Operations

In the past, we have catered to our international customers and executed projects overseas from India.

However, with the availability of greater opportunities and with the intent to augment our international

operations we established a joint venture in Dubai viz., Gulf Jyoti International LLC, a joint venture between

Gulf Investment Corporation, Kuwait, and us. We have a 30% equity stake in the joint venture company.

Subsequently, with a view to develop our operations in North America and, particularly, in the US we

established a subsidiary Jyoti International Inc., which is based out in Houston, Texas. As on June 30, 2014,

we have executed projects in over 30 countries.

However, with our increasing international presence and the need to comply with the local laws and

regulations we started setting up project special purpose vehicles. At present, we have project execution

subsidiaries based across countries including in Canada, Kenya, Namibia and Nigeria.

Personnel

As of June 30, 2014, we had 2,645 employees. Set out below is the distribution of our employees at our head

office, manufacturing units and R&D facilities

Particulars Mumbai Nashik Raipur R&D facility Constructions Dubai USA

Number of

Employees 211 418 170 110 1133 426 177

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Competition

We operate in an intensely competitive business environment. We face significant competition across

segments in the transmission and distribution industry in our domestic and international operations. The nature

of the competition and the entities we compete against will depend amongst others, on the segment, the size of

the project and the geography, in which we operate.

Safety and Environment

We are subject to various environmental regulations and are compliant with applicable health, safety and

environmental regulations.

We have received consent from the Maharashtra Pollution Control Board and the Chhattisgarh Environment

Conservation Board for the manufacturing units at Nashik and Raipur respectively. Further, we are also in

compliance with the Hazardous Waste (Management and Handling) Amendment Rules 2003, Water

(prevention & Control of Pollution) Act, 1977 and the Air Act, 1981 for the said manufacturing units.

Intellectual Property

We do not own any intellectual property rights relating to our business other than our registered trade name

and the following logo.

Property

At present, we own and lease various properties for our corporate operations and for undertaking our

businesses. In order to conduct our domestic and international operations we have entered into a combination

of leave and license agreements and lease deeds.

We own the premises where our registered and corporate office is situated.

Insurance

We maintain insurance for a variety of risks, including for risks relating to fire, burglary and losses and

damage to buildings, plant, vehicles, machinery, inventory and office equipment. We also maintain director

and officer liability insurance, which covers Directors' and officers' liability. In addition, we maintain workers'

compensation and accident and medical insurance for our Indian operations. Further, many of our project

contracts require us to purchase insurance for the duration of the project and, consequently, we regularly

purchase specific business operations insurance policies for individual projects, as appropriate. Our insurance

policies may not be sufficient to cover our economic losses. For further details, please see section titled ‘Risk

Factors’ on page 45 of this Placement Document.

119

BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Board of Directors

The general supervision, direction and management of our operations and business are vested in the Board of

Directors, which exercises its powers subject to the Memorandum and Articles and the requirements of Indian

law. The Articles set out that the number of Directors in our Company may not be less than 3 (three) and more

than 12 (excluding directors appointed by debenture trustees and financial institutions, if any). Currently, our

Company has twelve Directors.

In accordance with the Companies Act, at least two-thirds of the total number of Directors of our Company

(excluding the independent directors) must be subject to retirement by rotation, and of such directors, one

third, or if their number is not three or multiples of three, then the number nearest to one-third, must retire

every year. The Directors are not required to hold any qualification Equity Shares.

Further, our Company must have at least 1 (one) director who has stayed in India for at least 182 days in the

previous calendar year (i.e. is an Indian resident).

The quorum for meetings of the Board is one-third of the total number of directors (any fraction contained in

that one-third being rounded off as one) or 2 (two) directors, whichever is higher.

The following table sets forth details regarding the Board as at the date of this Placement Document:

Name, Father’s Name, Address,

Occupation, Designation and Term

Nationality DIN Age

(years)

Other Directorships

Mr. Sadashiv D. Kshirsagar

S/o Mr. Dattaraya Kshirsagar

Address: 15, Joothica, Makrand

Society, Veer Savarkar Marg, Mahim,

Mumbai 400 016

Occupation: Service

Designation: Chairman and Non-

Executive Independent Director

Term: Liable to retire by rotation

Indian 00001266 77 Unived Corporate Research

Private Limited

Mr. Abdul Jalil Khan

S/o Mr. Nazir Khan

Address: 2/7, Charkop Makrand

Society, Sector III, Plot No. 152,

R.D.P. – 7, Kandivali (West), Mumbai

400 067

Occupation: Professional

Designation: Non-Executive

Independent Director

Term: Liable to retire by rotation

Indian 00002081 78 Nil

Mr. Gopaldas L. Valecha

S/o Mr. Lilaram Valecha

Address: Sangam, 1st floor, 18 –

Greater Bombay Society, Gulmohar

Cross Road No. 5, J.V.P.D. Scheme,

Mumbai 400 059

Occupation: Business

Designation: Non-Executive Director

Term: Liable to retire by rotation

Indian 00001267 82 Nil

Mr. Vijay Mohan Kaul

S/o Mr. Dwarka Nath Kaul

Address: 485, Mandakini Enclave,

New Delhi 110019

Occupation: Professional

Designation: Non-Executive

Independent Director

Tenure: Liable to retire by rotation

Indian 00015245 62 1. Uttar Haryana Bijli Vitran

Nigam Limited

2. Power Finance Corporation

Limited

120

Name, Father’s Name, Address,

Occupation, Designation and Term

Nationality DIN Age

(years)

Other Directorships

Mr. Ramesh Chandra Rawal

S/o Mr. Lallji Prasad Rawal

Address: C- 404, Vertex Pleasant,

Nizampet Road, Hyderabad – 500 072,

Andhra Pradesh.

Occupation: Professional

Designation: Non – Executive

Independent Director

Term: Liable to retire by rotation

Indian 02932427 69 Nil

Mr. T. C. Venkat Subramanian

S/o Mr. Chandrasekharan

Tirumangalkudi

Address: Flat 10, 3rd Floor, “Devayan”

Apartments, Ganesh Nagar,

Pappammal Koil Street, Pducherry 605

003

Occupation: Professional

Designation: Additional Independent

Director

Term: Liable to retire by rotation

Indian 00040526 64 1. LIC - Nomura MF Trustee

Company Private Limited

2. STCI Finance Limited

3. AFC India Limited

4. Foundation of

Organisational Research &

Education (FORE School

of Management) Delhi

Trust

5. Rolta India Limited

6. Investec Capital Services

(India) Private Limited

Mr. Sanjay H. Mirchandani

S/o Mr. Harish Mirchandani

Address: 107, Mirchandani Sigma

House, Senapati Bapat Road, Pune 411

016

Occupation: Business

Designation: Non-Executive Director

Term: Liable to retire by rotation

Indian 00531110 49 1. Mirchandani Infrastructure

Private Limited

2. Mircon Realty Private

Limited

3. Morya Estates Pvt., Ltd.

4. Shantani Proteome

Analytics Pvt. Ltd.

5. Turquoise Housing Pvt.

Ltd.

6. Imagine Spaces LLP

Mr. Kalpesh Kikani

S/o Mr.Pankaj Kikani

Address: B-501/502, Gulmohar Apts.,

Caesar Road, Amboli, Andheri (West),

Mumbai 400058

Occupation: Professional

Designation: Non-Executive Director

Term: Liable to retire by rotation

Indian 03534772 42 1. AION India Investment

Advisors Private Limited

2. Avantha Holdings Limited

3. Jyoti International INC.

4. Jyoti Americas LLC

5. Jyoti Structures Canada

Limited

Mr. Prakash K. Thakur

S/o Mr. Kanayo Thakur

Address: Brighton, Bungalow No. 11,

Lokhandwala Complex, Andheri

(West), Mumbai 400 053

Occupation: Business

Designation: Vice Chairman

Term: Liable to retire by rotation

Indian 01421897 45 1. Gulf Jyoti International LLC

2. Jyoti Structures Africa (Pty.)

Ltd.

3. Jyoti Americas LLC.

4. Jyoti International Inc.

5. Jyoti Structures Canada

Limited

121

Name, Father’s Name, Address,

Occupation, Designation and Term

Nationality DIN Age

(years)

Other Directorships

6. Lauren Jyoti Private Limited

7. Surya India Fingrowth

Private Limited

8. Jyoti Structures FZE

9. Jyoti Structures Namibia

(Proprietory) Limited

10. Jyoti Structures Nigeria

Limited

11. Jyoti Structures Kenya

Limited

12. Mod Age Consultants and

Advisory Services Private

Limited

Mr. Santosh V. Nayak

S/o Mr. Vithal Nayak

Address: 22, Vidnyak, Artek Co-

operative Housing Society, Bandra

(East), Mumbai 400 051

Occupation: Service

Designation: Managing Director

Term: April 1, 2010 to March 31, 2015

Indian 00001281 54 1. Jyoti Energy Limited

2. JSL Corporate Services

Limited

3. Gulf Jyoti International LLC

4. Jyoti Structures Africa (Pty.)

Limited

5. Jyoti International Inc.

6. Lauren Jyoti Private Limited

7. Jyoti Structures FZE

8. Jyoti Structures Namibia

(Pty.) Ltd.

9. Jyoti Structures Nigeria

Limited

10. Jyoti Structures Kenya

Limited

Mr. Ashok B. Goyal

S/o: Mr. Bachan Goyal

Address: Flat No. 2, Konark Gardens,,

6, Burdwan Road, Kolkata, 700027

Occupation: Professional

Designation: Joint Managing Director

Term: August 18, 2014 to August 17,

2017

Indian 00035392 63 1. RPG Power Trading

Company Limited

Mr. Kanayo R. Thakur

S/o Mr. Ratanlal Thakur

Address: Brighton, Bungalow No. 11,

Lokhandwala Complex, Andheri

(West), Mumbai 400 053

Occupation: Business

Designation: Whole-time Director

Term: April 1, 2013 to March 31, 2018

Indian 00001270 71 1. JSL Corporate Services

Limited

2. Jyoti Energy Limited

3. Jyoti International Inc.

4. Surya India Fingrowth

Private Limited

5. Mod Age Consultants and

122

Name, Father’s Name, Address,

Occupation, Designation and Term

Nationality DIN Age

(years)

Other Directorships

Advisory Services Private

Limited

Brief Biographies of the Directors

Mr. Sadashiv D. Kshirsagar, Chairman and Independent Director, holds a Master’s Degree in Arts

(Economics), from the University of Mumbai and also has a Post Graduate Diploma in Industrial

Administration from Manchester College of Science & Technology, University of Manchester, United

Kingdom. Previously he was working for various companies belonging to the Tata group which included

heading the International Trading Division at Tata International Limited. He was also associated with the S. P.

Jain Institute of Management & Research, Mumbai in the capacity of professor and advisor to the Dean.

He has over four decades of experience in the field of international marketing, corporate affairs & governance,

project management and project control. He also has understanding on international business, business strategy

& planning, marketing and project management.

Mr. Abdul Jalil Khan, Independent Director, holds a Bachelor’s Degree in Electrical Power Engineering

from Jabalpur University. He retired as the Technical Director of Maharashtra State Electricity Board. He has

over three decades of experience in the transmission and power distribution industry. During his tenure in

Maharashtra State Electricity Board, he has served on various national committees of the Central Electricity

Authority of the Government and the Bureau of Indian Standards. Further, he acquired valuable experience in

planning, design and execution of EHV projects during the course of his tenure. As a member of various

Government delegations, he has participated in several discussions and seminars on EHV Transmission

System.

Mr. Gopaldas L. Valecha, Non-Executive Director, holds a Bachelor’s Degree in Arts from the University of

Mumbai. He is an active partner in Lilaram Pamandas & Sons, a finance merchants firm. Before joining the

Board, he was an active partner in Gopaldas Vasudev & Company, a construction company which was taken

over by Valecha Bros (EC) Private Limited on February 3, 1988, of which he was a director until 1993. He has

a rich and varied experience of more than 5 (five) decades in businesses like construction industry, financial

services and has extensive knowledge in accounting and project monitoring.

Mr. Vijay Mohan Kaul, Independent Director, is a Bachelor of Mechanical Engineering from IIT, Delhi with

MBA Degree from Indira Gandhi National Open University. He is a fellow member of All India Management

Association and a member of the Institute of Engineers. He has almost four decades of work experience in

organizations like Engineers India Limited, NTPC Limited and PGCIL. He retired as Director, Personnel in

PGCIL. He was also on the board of directors of Nuclear Power Corporation, Power Trading Corporation and

Power Links Transmission Limited. Over the years, he has handled various multi-disciplinary functions like

contract management, project management, joint venture, quality assurance and inspection and human

resource management.

Mr. Ramesh Chandra Rawal, Independent Director, holds a Bachelor’s degree in Mechanical Engineering

from the National Institute of Technology, Bhopal, Madhya Pradesh. He also completed a post graduate course

in ‘Nuclear Science & Engineering’ from the Bhabha Atomic Research Centre Training School, Mumbai. He

has experience of more than 4 (four) decades in construction and commissioning of several atomic power

projects in India. He also held the position of Principal Project Director in the grade of “Outstanding Scientist”

at Nuclear Power Corporation of India Limited. He is associated with the All India Management Association,

Indian Nuclear Society and Indian society for non-destructive Testing.

For his outstanding contribution in the areas of nuclear science and technology, he was awarded the ‘INS

Award 2003’ by the Indian Nuclear Society. He has also presented several technical papers on aspects of

quality assurance, safety and project management at various national and international seminars.

Mr. T. C. Venkat Subramanian, Independent Director, holds a Bachelor’s degree in Engineering and is a

certified associate of the Indian Institute of Bankers. He has experience of more than 3 (three) decades in the

financial sector and retired as the Chairman & Managing Director of Exim Bank. Before joining Exim Bank of

India in 1982 he worked in Bank of India and Industrial Development Bank of India. As a consultant he helped

setting up Exim Bank of Turkey. He also undertook consultancy assignments for setting up Export

Development Project in Armenia and for designing export development schemes for Ukraine Exim Bank. He

123

was the Honorary President of Global Network of Exim Banks and Development Finance Institutions (G-

NEXID), Geneva, under the auspices of UNCTAD for 3 (three) years (2006-09).

He was conferred with “Outstanding CEO” award by Association of Development Finance Institutions of Asia

Pacific, Manila, Philippines in 2008. He was nominated by the Government as a Member of Indian Council of

World Affairs, Delhi (Think Tank on International Affairs under the Ministry of External Affairs, Govt. of

India) for a 3 (three) year term (2010-2013).

Mr. Sanjay H. Mirchandani, Promoter and Non-Executive Director, holds a Bachelor’s degree in

Mechanical Engineering and also holds a Masters of Business Administration (MBA) from Michigan

University, US. He was also involved in inception of JNS Co-operative Bank Limited at Bhopal, Madhya

Pradesh, with an aim to provide micro financing to small and medium enterprises. He is also the founder

member and current President of University of Michigan India Alumni Association.

He has over 2 (two) decades of experience in real estate development and investments, as a business owner

and director. As a member of the Mirchandani Group, he has contributed by delivering 50 lakh square feet of

residential and commercial spaces in Tier II towns of India.

Mr. Kalpesh Kikani, Non-Executive Director, holds a Bachelor’s degree in Computer Engineering and an

MBA from the University of Bombay and is a charter holder member of the CFA Institute, USA. He is the

Managing Director and Senior Partner of AION India Investment Advisors Private Limited. Prior to joining

AION he spent over 15 years with ICICI Bank Limited. As part of ICICI Bank’s senior management team, he

most recently served as the Global Head of Structured Finance & Special Situations at ICICI Bank, where he

oversaw India focused investment teams based in Mumbai, Singapore and London. Prior to this, he established

and headed the corporate and investment banking business for ICICI Bank UK PLC focusing on leveraged and

structured finance transactions, both outbound and inbound for Indian companies, with teams based in the

United Kingdom, Germany and Belgium. Over the course of his career, Mr. Kikani has experience in investing

in Indian enterprises in the areas of project finance, structured finance and debt restructuring.

Mr. Prakash K. Thakur, Promoter and Non-Executive Vice Chairman, holds a Bachelor’s Degree in Civil

Engineer from the University of Mumbai and also holds a MBA in Finance from Carnegie Mellon University,

USA. After his MBA, he worked with AES Corporation of USA, which is an independent power producers

and New Zealand Transpower, which is the owner of transmission network in New Zealand.

He has over 18 years of experience in the power transmission line industry. His experience encompasses areas

of creation of strategic alliances, business development, and strategic planning. Prior to his induction on the

Board, as a president he played a lead role in achieving improved performance in operations of the Company.

He has been instrumental in establishing ventures in United Arab Emirates and South Africa and taking our

Company’s operations on a global scale.

Mr. Santosh V. Nayak, Managing Director, holds a Post Graduate Degree in Commerce from the University

of Mumbai. He is also an MBA (Finance) from the Jamnalal Bajaj Institute of Management Studies, Mumbai.

Before he was elevated to the position of a Board member, he held the position of Chief Executive Officer of

our Company.

He has experience spanning over 3 (three) decades in various facets of corporate management such as finance,

accounting, audit, taxation and corporate affairs and also has rich experience in marketing in India as well as

overseas and knowledge in areas of corporate governance and project control. He is responsible for

formulating our Company’s financial strategies.

Mr. Ashok Goyal, Joint Managing Director, holds a Bachelor’s Degree in Technology from IIT Kharagpur,

Post Graduate Diploma in Business Management from IIM, Kolkata and attended the Senior Executive

Programme from London Business School. He has over four decades of professional experience in India and

Africa. He has been instrumental in successfully turning around the companies with whom he has been

associated in the recent past. He is a proficient leader having held several leadership positions in the past such

as Profit Centre Head, Managing Director and Management Board Member across various companies.

Mr. Kanayo R. Thakur, Whole time Director, holds a Bachelor’s Degree in Mechanical Engineering with an

experience of working in companies such as Engineers India Limited and Nuclear Power Corporation of India

Limited. He was our Company’s Managing Director from the years 1989 to 2010.

124

He has been associated with the transmission industry since the year 1980. He has held several leadership

positions in various turnkey EHV transmission projects, in India and abroad, including design, engineering,

procurement and quality management have been implemented and commissioned. His experience also covers

design, engineering, implementation and establishment of state-of-the-art manufacturing facilities and tower

testing centre, for the transmission industry.

Remuneration of Executive Directors

The appointment of Mr. Santosh V Nayak and Mr. K.R. Thakur, our executive directors has been approved by

the Shareholders pursuant to their resolution dated September 15, 2010 and July 27, 2013 respectively. The

appointment of Mr. Ashok Goyal as the Joint Managing Director has been approved by the Board of Directors

at their meeting held on August 18, 2014 and the Shareholders approval approved at the Annual General

Meeting held on September 22, 2014. Mr. Prakash Thakur has been appointed as the Managing Director of

Jyoti Structures FZE, a group company based in Abu Dhabi and no longer receives any remuneration from our

Company pursuant to the Shareholders’ resolution passed on May 29, 2014. The key terms of appointment of

the executive directors are set out below:

Mr. Santosh Nayak (Managing Director)

Tenure

5 (five) years i.e. April 1, 2010 to March 31, 2015

Basic Salary

1. ₹ 600,000/- per month, in the scale of ₹ 600,000-50,000-800,000. The annual increment is due on April

1 each year upto the tenure of appointment; and

2. Commission on profit, subject to an overall limit of 1.75% of net profit.

Perquisites

1. House rent allowance upto 50% of the salary.

2. Expenditure incurred on gas, electricity, water and furnishing shall be valued as per Income Tax Rules

and subject to a ceiling of 10% of the salary.

3. Reimbursement of medical expenses for self and family subject to specified ceiling.

4. Leave travel allowance in accordance with rules of our Company.

5. Contribution to provident fund, superannuation fund or annuity fund in accordance with the rules of our

Company.

6. Gratuity and encashment of leave in accordance with the rules of our Company.

7. Personal accidental insurance in accordance with the rules of our Company. Gratuity and encashment of

leave.

Other terms

1. In case of loss or inadequacy of profits, remuneration including perquisites shall be paid in accordance

with Schedule XIII of the Companies Act, 2013.

2. Appointment may be terminated by either party giving the other party 3 (three) month notice in writing.

3. Not entitled to sitting fees.

Mr. Kanayo R. Thakur (Whole-time Director)

Tenure

5 (five) years, i.e., April 1, 2013 to March 31, 2018

Basic Salary

1. ₹ 7,00,000/- in the scale of ₹ 7,00,000 – 75,000 – 10,00 ,000 per month. The annual increment is due

on April 1 each year upto the tenure of appointment; and

2. Commission on profit, subject to an overall limit of 1.75% of net profit.

Perquisites

1. House rent allowance upto 50% of salary.

125

2. Expenditure incurred on gas, electricity, water and furnishing shall be valued as per Income Tax Rules

and subject to a ceiling of 10% of the salary.

3. Reimbursement of medical expenses for self and family subject to specified ceiling.

4. Leave travel allowance in accordance with rules of our Company.

5. Contribution to provident fund, superannuation fund or annuity fund in accordance with the rules of our

Company.

6. Personal accidental insurance in accordance with the rules of our Company.

7. Gratuity and encashment of leave in accordance with the rules of our Company.

Other terms

1. In case of loss or inadequacy of profits, remuneration including perquisites shall be paid in accordance

with Schedule XIII of the Companies Act, 2013.

2. Appointment may be terminated by either party giving the other party 3 (three) month notice in writing.

3. Not entitled to sitting fees.

Mr. Ashok Goyal (Joint Managing Director)

Tenure

3 (three) years from August 18, 2014 to August 17, 2017.

Basic Salary

1. ₹ 12,00,000/- per month, in the scale of ₹ 12,00,000 - 1,00,000 - 15,00,000. The annual increment is

due on April 1, 2015 and thereafter each year, upto the tenure of appointment.

2. Allowances: 100% of basic salary.

3. Bonus: Annual bonus @ 20% of basic salary.

Perquisites

1. Expenditure incurred on gas, electricity, water and furnishing shall be valued as per Income Tax Rules

and subject to a ceiling of 10% of the salary.

2. Reimbursement of medical expenses for self and family subject to specified ceiling.

3. Reimbursement of expenses incurred for one club membership.

4. Leave travel allowance in accordance with rules of our Company.

5. Contribution to provident fund, superannuation fund or annuity fund in accordance with the rules of our

Company.

6. Gratuity and encashment of leave in accordance with the rules of our Company.

7. Personal accidental insurance in accordance with the rules of our Company. Gratuity and encashment of

leave.

Other terms

1. In case of loss or inadequacy of profits, remuneration including perquisites shall be as per the terms of

the employment agreement.

2. Appointment may be terminated by either party giving the other party 3 months notice in writing.

3. Not entitled to sitting fees.

Interest of Directors

All Directors, including independent directors, may be deemed to be interested to the extent of fees, if any,

payable to them for attending meetings of the Board or a committee thereof and reimbursement of expenses

payable to them. Our Directors, including independent directors, may also be regarded as interested to the

extent of Equity Shares, if any, held by them and also to the extent of any dividend payable to them and other

distributions in respect of the Equity Shares. Our Directors, including independent directors, may also be

regarded as interested in the Equity Shares held by or that may be subscribed by and allotted to the companies,

firms and trusts, in which they are interested as directors, members, partners or trustees.

Our Directors may be deemed to be interested in the contracts, agreements or arrangements entered into or to

be entered into by our Company with any partnership firm in which they are partners or a body corporate in

126

which a director along with any other director holds more than 2% shareholding or is a promoter, manager or

Chief Executive Officer. Except as otherwise stated in this Placement Document and statutory registers

maintained by our Company in this regard, we have not entered into any contracts, agreements, arrangements

during the preceding 2 (two) years from the date of this Placement Document in which the Directors are

interested directly or indirectly and no payments have been made to them in respect of these contracts,

agreements, arrangements which are proposed to be made with them.

As on the date of this Placement Document, none of the Directors have availed of any loan from our Company.

Nature of Relationship

Except as set out below, none of our directors are related to each other.

Mr. Kanayo R. Thakur is Mr. Sanjay H. Mirchandani’s sister’s husband and Mr. Prakash Thakur is the son of

Mr. Kanayo R. Thakur.

Further, except Mr. Kikani, who is an AION nominee, none of our Directors were selected pursuant to any

arrangement or understanding with major shareholders, customers or others.

Shareholding of the Directors

The Articles do not require the Directors to hold any qualification Equity Shares in our Company. The table

below sets forth the number of Equity Shares held by the Directors, as of June 30, 2014:

Name Position Number of Equity

Shares

As a percentage of the

total paid up capital

Mr. Prakash K Thakur Promoter and Vice Chairman 49,42,488 6.01

Mr. Kanayo R Thakur Whole-time Director 36,55,973 4.44

Mr. Sanjay H Mirchandani Non-Executive Director 4,70,000 0.57

Mr. Santosh V. Nayak Managing Director 2,95,091 0.36

Mr. Gopaldas L. Valecha Non-Executive Director 1,60,000 0.19

Mr. S.D. Kshirsagar Chairman and Independent Director 3,200 0.00

Mr. A.J. Khan Independent Director 2,000 0.00

Corporate Governance

Our Company believes that it is in compliance with the requirements of applicable corporate governance

regulations, including the Listing Agreement in respect of the constitution of the Board of Directors and the

Committees of the Board of Directors. The corporate governance framework is based on an effective

independent Board, separation of the supervisory role of the Board from the executive management team and

constitution of the committees of the Board, as required under applicable law.

Our Company believes that its Board has been constituted in compliance with the Companies Act and the

Listing Agreement. The Board functions either as a full Board or through various committees constituted to

oversee specific operational areas. Our Company’s management provides the Board with detailed reports on a

periodic basis.

Committees of the Board of Directors

Our Board has constituted committees comprising of our Directors to focus on critical functions of our

Company and also for smooth and efficient business operations. The Committees meet at regular intervals for

deciding various matters and providing directions and authorizations to the management for its

implementation. The Board also takes note of minutes of the meetings of the Committees duly approved by

their respective Chairman and the material recommendations / decisions of the Committees are placed before

the Board for approval / information.

Set out below are details of the key committees of the Board of Directors:

1. Audit Committee;

2. Nomination and Remuneration;

3. Stakeholders’ Relationship Committee;

127

4. Corporate Social Responsibility Committee;

5. Compensation Committee;

6. Executive Committee; and

7. QIP Committee.

1. Audit Committee

The Audit Committee was re-constituted on April 18, 2014. The Audit Committee consists of

independent directors only and comprises of:

(i) Mr. T. C. Venkat Subramanian, Chairman;

(ii) Mr. S. D. Kshirsagar, Member;

(iii) Mr. V. M. Kaul, Member; and

(iv) Mr. R. C. Rawal, Member.

The purpose of the Audit Committee is to ensure the objectivity, credibility and correctness of our Company’s

financial reporting and disclosure processes, internal controls, risk management policies and processes, tax

policies, compliance and legal requirements and associated matters.

2. Nomination and Remuneration Committee

The Nomination and Remuneration Committee was last re-constituted on April 18, 2014. This

Committee consists of independent directors only and comprises of:

(i) Mr. T. C. Venkat Subramanian, Chairman;

(ii) Mr. S. D. Kshirsagar, Member;

(iii) A. J. Khan, Member; and

(iv) Mr. Kalpesh Kikani, Member.

The Committee’s responsibilities include to recommend the appointment and removal of Key Managerial

Personnel and senior management personnel of our Company, the nomination process including criteria of

independence of Directors.

3. Stakeholders’ Relationship Committee

The Stakeholders’ Relationship Committee was re-constituted on April 18, 2014. This Committee

comprises of:

(i) Mr. T. C. Venkat Subramanian, Chairman;

(ii) Mr. S. D. Kshirsagar, Member;

(iii) Mr. S. V. Nayak, Member; and

(iv) Mr. K. R. Thakur, Member.

The Committee’s prime responsibility is to assist the Board in discharging its social responsibilities by

way of formulating and monitoring implementation of the framework of ‘corporate social responsibility

policy’.

4. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee was created on May 29, 2013. This Committee

comprises

(i) Mr. S. D. Kshirsagar, Chairman;

(ii) Mr. T. C. Venkat Subramanian Member;

(iii) Mr. V. M. Kaul, Member; and

(iv) Mr. R. C. Rawal, Member.

The Committees prime responsibility is to assist the Board in discharging its social responsibilities by

way of formulating and monitoring implementation of the framework of ‘corporate social responsibility

policy’.

128

5. Compensation Committee

The Compensation Committee was created on May 26, 2005. The Committee comprises:

(i) Mr. S.D. Kshirsagar, Chairman;

(ii) Mr. A.J. Khan; Member; and

(iii) Mr. T.C. Venkat Subramanian, Member.

The Compensation Committee administers our ESOP schemes.

6. Executive Committee

The Executive Committee was re-constituted on April 18, 2014. This Committee comprises:

(i) Mr. S. D. Kshirsagar, Chairman

(ii) Mr. P. K. Thakur, Member;

(iii) Mr. K. R. Thakur, Member; and

(iv) Mr. S. V. Nayak, Member.

The Executive Committee has the authority to exercise the power of the Board between the Board

meetings except the powers reserved for the Board or the shareholders under the Companies Act.

7. QIP Committee

The QIP Committee was re-constituted on April 18, 2014. This Committee comprises:

(i) Mr. S. D. Kshirsagar, Chairman,

(ii) Mr. K. R. Thakur, Member and

(iii) Mr. S. V. Nayak, Member.

The QIP Committee has the authority to exercise the power of the Board to take all necessary actions

for the QIP.

Remuneration of Directors

The executive directors are not entitled to a sitting fee. The table below sets forth the details of the sitting fees

and salaries and perquisites paid to the non-executive directors:

(in ₹ lakhs)

Name

Financial Year 2015* Financial Year 2014 Financial Year 2013 Financial Year 2012

Sitting

Fee

Commission Sitting

Fee

Commission Sitting

Fee

Commission Sitting

Fee

Commission

Mr. S.D.

Kshirsagar

0.40 Nil 0.60 12.00 0.50 12.00 0.35 15.00

Mr. T.C.

Venkat

Subramanian

0.40 Nil 0.60 12.00 0.50 12.00 0.45 15.00

Mr. V.M. Kaul 0.20 Nil 0.45 9.00 N.A N.A N.A N.A

Mr. Ramesh

Chandra Rawal

0.30 Nil 0.45 6.00 0.45 20.00 0.45 20.00

Mr. Abdul Jalil

Khan

0.25 Nil 0.40 6.00 0.50 3.00 0.35 5.00

Mr. Gopaldas

L. Valecha

0.10 Nil 0.30 Nil 0.20 Nil 0.25 Nil

Mr. Sanjay H.

Mirchandani

0.20 Nil 0.10 Nil 0.10 Nil 0.10 Nil

Total 1.85 Nil 2.90 45.00 2.25 47.00 1.95 55.00

* as of August 31, 2014

129

The table below sets forth the remuneration paid to the executive Directors.

(in ₹ lakhs)

Name Financial Year

2015*

Financial Year

2014

Financial Year

2013

Financial Year

2012

Mr. Kanayo R. Thakur 58.73 159.31 137.04 125.77

Mr. Prakash K. Thakur** N.A 168.62 157.40 121.87

Mr. Santosh Nayak 59.95 168.62 157.40 146.18

Mr. Ashok Goyal# N.A N.A N.A N.A

Total 118.68 496.55 451.84 393.82

* as of July 31, 2014 **

Non-executive director with effect from April 1, 2014 # Appointed as the Joint Managing Director of our Company with effect from August 18, 2014

Borrowing Powers of the Board of Directors

Pursuant to the approval of the Shareholders dated October 8, 2012, the Board is authorized to borrow up to an

aggregate of ₹ 10,00,000 lakhs.

Consequent to implementation of Section 180 of the Companies Act, 2013 consent of the Company was

required by way of a special resolution to borrow funds in excess of the paid up capital and free reserves of the

company and to create security for the same. Shareholders’ approval by way of a special resolution was

obtained on May 29, 2014 to borrow up to an aggregate of ₹ 10,00,000 lakhs.

Organisational Structure of our Company

Executive

Directors

Sr. Vice

President

HR & Personel

Sr.Vice

President -

Finance

Vice President

Marketing

Sr. Vice President

TL Engineering

Vice President

TL Construction

Sr. Vice President

SS & RE

Construction,

Manufacturing

Vice President

Secretarial & Legal

Sr. Vice President

Accounts & Commercial

Vice

President -

Finance

Sr. General

Manager

Finance

Sr. General

Manager

Marketing

Sr. General

Manager

HSE

Sr. General

Manager

TL Engineering

General Managers

TL Construction

Sr. General

Manager

I.T.

Sr. General

Manager

Commercial

General Manager

Accounts

General Manager

Quality

Sr. General

Manager

Manufacturing

Sr. General

Manager

Procurement

General Manager

Substation & Rural

Electrification

Engineering

General Manager

Substation & Rural

Electrification

Construction

Board of Directors

Key Managerial Personnel

Set out below are details of our key managerial personnel other than our Company’s executive Directors.

130

Mr. Manoj Kumar Mathur, Chief Executive Officer, holds an electrical engineering degree from the

Regional Engineering College, Warangal. He has worked with Alstom and Isolux Corsan and is presently the

Chief Executive Structure of our Company. He has considerable experience in handling turnaround

management, business growth, change management, strategy planning and execution, brand building and

corporate communication.

He possesses an integrated set of competencies that encompass areas related to strategic customer

management, team building, business management and customer relationship management besides promoting

strategic perspective & building systems orientation.

Mr. L.H. Khilnani, Company Secretary and Compliance Officer, holds a Bachelors’ degree in Commerce

from the Mumbai University and a Master’s degree in law from the University of Mumbai. He is also a fellow

member of the Institute of Company Secretaries of India. Prior to moving to an in-house position, he was a

practicing advocate in the Bombay High Court. He has worked with ISPL Industries, Marico and Navmee

Capital.

He has over three decades of experience at senior management level in managing the in-house legal

departments. He has broad ranging experience both as a member of the Bar Council and a fellow member of

Institute of Company Secretaries of India. He is responsible for the legal and compliance function of our

Company.

Mr. Ravindra L. Wadkar, Senior Vice President, Engineering, holds a Diploma in Civil Engineering from

Government Polytechnic, Mumbai. He has an experience of over four and half decades in construction of

power transmission structures. He has worked with companies like Kamani Engineering Corporation (now

KEC International), SAE (India) Ltd., (now RPG Enterprises). He has vast experience in design and testing

transmission lines. In the past decade, he has successfully managed the engineering departments of the

Company and its subsidiaries. Immediately prior to joining our Company he was a consultant with our

Company for nearly 2 (two) decades.

Mr. Shriniwas Mulay, Senior Vice President, Internal Audit and Risk Management, holds a Bachelor degree

in Commerce from the Pune University and an MBA from the Pune University. He is also an associate

member of the Institute of Cost Accountants of India. He has previously worked with the Maharashtra State

Small Scale Industries Development Corporation. He has been with our Company for over 2 (two) decades in

various facets of corporate management such as accounting, audit, commercials, taxation and project

monitoring for Indian and overseas operations/subsidiaries and group companies. He is responsible for

accounting, auditing and tax compliance for overseas branches, overseas subsidiaries, joint venture and group

companies and its consolidation in India.

Mr. Deepak Joshi, Senior Vice President, Finance, holds a Bachelors’ Degree in Commerce and is a member

of Institute of Company Secretaries of India. He has almost three decades of experience in handling finance,

accounts and secretarial functions. He served the Government in the office of the Comptroller & Auditor

General of India. Subsequently, he was the group chief finance officer of Diamond Power Infrastructure Ltd.

where he was in charge of finance, accounts, secretarial, commercial and banking operations. Prior to this, he

was Executive Director (Finance) & Company Secretary with Multimedia Frontiers Ltd. a company forming

part of the TVS Group.

Mrs. Kunda R. Deshmukh, Senior Vice President, Human Resources, holds a post graduate diploma in data

processing from Caulfield Institute of Technology in Melbourne, Australia. She also completed her MBA from

Yashwantrao Chavan Maharashtra Open University, specializing in Human Resources. She is responsible for

the corporate Human Resource function of our Company.

Mr. Pradeep Pachhade, Senior Vice President, Production, holds a Bachelors’ Degree in Mechanical

Engineering from the University of Nagpur. He has over 28 years’ experience in manufacturing of

transmission lines towers and substation structures which includes system integration and process, project

management, overall factory operation (domestic and international), raw material and equipment resource

management, cost optimization techniques, customer relationship management and liaison with trade unions

for wage settlement of workmen, factory layout and installation. He has also worked with Richardson &

Cruddas Limited, Nagpur and Transpower Engineering, Mumbai and Garware Polyesters. He is presently the

operation's head for the substation and distribution business of our Company.

131

Compensation of Key Managerial Personnel

During Financial Year 2014, our Company paid a total remuneration of ₹ 184.48 lakhs to its key managerial

personnel.

Interest of Key Managerial Personnel

Except the executive directors forming part of our key managerial personnel, who are interested in our

Company in the manner set out above, the key managerial personnel of our Company do not have any interest

in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per

their terms of appointment and to the extent of the Equity Shares held by them or their dependants in our

Company, if any, and number of options granted to them under our Company’s ESOS.

Other confirmations

None of the Directors, Promoters or key managerial personnel of our Company has any financial or other

material interest in the Issue and there is no effect of such interest in so far as it is different from the interests

of other persons.

Employee Stock Option Scheme

In order to share the growth in value and reward employees for having participated in the success of our

Company, we introduced the Employee Stock Option Scheme - 2005 (ESOS 2005) and Employee Stock

Option Scheme - 2011 (ESOS 2011 and together with ESOS 2005 ESOS) which covers eligible employees of

our Company and its Subsidiaries. Our ESOS are prepared in due compliance with the ESOP Guidelines and

other applicable laws. Under ESOS 2005, on grant of an option eligible employees will be eligible to apply for

5 (five) Equity Shares at an exercise price of ₹ 17 per Equity Share for each option. Under ESOS 2011, on

grant of an option eligible employees will be eligible to apply for 1(one) Equity Share at an exercise price of ₹ 25 per Equity Share for each option. For further details of ESOS, please see section titled ‘Capital Structure’

on page 69 of this Placement Document.

132

PRINCIPAL SHAREHOLDERS AND OTHER INFORMATION

Corporate History relating to incorporation and change of name

Our Company was incorporated on May 27, 1974 as Jyoti Structurers Private Limited at Mumbai, India. A

fresh certificate of incorporation was issued on October 21, 1974, on our name being changed to Jyoti

Structures Private Limited. We further changed our name on October 21, 1974, to Jyoti Structures Limited on

being converted into a public limited company.

Initially, our registered office was situated at 4th

floor, Hind-Rajasthan Building, 95, D.S. Phalke Road, Dadar,

Mumbai 400 014. On April 30, 1982 we shifted our registered office was shifted to Khoor-Sill-Naz, 2nd

Floor,

Front Building, Swami Gyan Jiwandas Marg, Mumbai 400 014. On July 31, 1987 our registered office was

once again shifted to ‘Keshava’, 7th

Floor, Bandra-Kurla Commercial Complex, Bandra (East), Mumbai 400

050. Subsequently, on January 29, 1999, we shifted our registered office to Valecha Chambers, 6th

Floor, New

Link Road, Andheri (West), Mumbai 400 053, Maharashtra, India, on acquisition of the premises, which is

also our Company’s corporate office.

Our Company is registered with the RoC with a CIN: L45200MH1974PLC017494. Our Equity Shares have

been listed on the BSE and NSE since 1989 and 1995 respectively.

The following table presents information regarding the ownership of Equity Shares by the Shareholders as of

June 30, 2014:

Sr.

No. Category of Shareholder

No. of

Shareholde

rs

Total No.

of Shares

No. of Shares

held in

dematerialised

form

Total Shareholding

as a % of Total

Number of Shares

Shares Pledged or

otherwise

encumbered

As a %

of (A +

B)

As a %

of (A + B

+ C)

No. of

Shares

As a

%

(A) Shareholding of Promoter

& Promoter Group

(1) Indian

(a) Individual/Hindu undivided

family 33 14,710,926 14,710,926 17.88 17.88 10,383,625

70.5

8

(b) Central Govt./State Govt.(s) 0 0 0 0.00 0.00 0 0.00

(c) Bodies Corporate 4 7,545,965 7,545,965 9.17 9.17 7,369,437 97.6

6

(d) Financial Institutions/Banks 0 0 0 0.00 0.00 0 0.00

(e) Any other (Specify) 0 0 0 0.00 0.00 0 0.00

Sub -Total (A) (1) 37 22,256,891 22,256,891 27.05 27.05 17,753,062 79.7

6

(2) Foreign

(a) Individual(Non-Resident

Indi./Foreign individuals) 0 0 0 0.00 0.00 0 0.00

(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00

(c) Institutions 0 0 0 0.00 0.00 0 0.00

(d) Any other (Specify) 0 0 0 0.00 0.00 0 0.00

Sub -Total (A) (2) 0 0 0 0.00 0.00 0 0.00

Total Shareholding of Promoter

and Promoter Group (A) = (A)(1) +

(A) (2)

37 22,256,891 22,256,891 27.05 27.05 17,753,062 79.7

6

(B) Public Shareholding

(1) Institutions

(a) Mutual Funds/UTI 18 13,809,180 13,809,180 16.78 16.78 0 0.00

(b) Financial Institutions/Banks 17 2,544,435 2,544,435 3.09 3.09 0 0.00

(c) Central Govt./ State Govt.(s) 0 0 0 0.00 0.00 0 0.00

133

Sr.

No. Category of Shareholder

No. of

Shareholde

rs

Total No.

of Shares

No. of Shares

held in

dematerialised

form

Total Shareholding

as a % of Total

Number of Shares

Shares Pledged or

otherwise

encumbered

As a %

of (A +

B)

As a %

of (A + B

+ C)

No. of

Shares

As a

%

(d) Venture Capital Funds 0 0 0 0.00 0.00 0 0.00

(e) Insurance Companies 0 0 0 0.00 0.00 0 0.00

(f) Foreign Institutional Investor 12 1,422,549 1,422,299 1.73 1.73 0 0.00

(g) Foreign Venture Capital investor

0 0 0 0.00 0.00 0 0.00

(h) Any other 0 0 0 0.00 0.00 0 0.00

Sub-Total (B) (1) 47 17,776,164 17,775,914 21.60 21.60 0 0.00

(2) Non-Institutions

(a) Bodies Corporate 823 5,943,105 5,932,100 7.22 7.22 0 0.00

(b) Individuals -

i

Individual Shareholders

holding nominal share capital

upto ₹ 1,00,000

38,405 21,296,231 20,722,669 25.88 25.88 0 0.00

ii

Individual Shareholders

holding nominal share capital

in excess of ₹1,00,000

29 6,204,993 6,205,993 7.54 7.54 0 0.00

(c) Qualified Foreign Investor 0 0 0 0.00 0.00 0 0.00

(d) Any other

- Clearing Member 401 1,850,117 1,850,117 2.25 2.25 0 0.00

- NRI 820 6,961,421 6,961,421 8.46 8.46 0 0.00

- Trust 0 0 0 0.00 0.00 0 0.00

- Overseas Bodies

Corporate 0 0 0 0.00 0.00 0 0.00

- Unclaimed Suspense

Account 0 0 0 0.00 0.00 0 0.00

Sub-Total (B) (2) 40,478 42,255,867 41,671,300 51.35 51.35 0 0.00

Total Public shareholding =

(B)(1) + (B)(2) 40,525 60,032,031 59,447,214 72.95 72.95 0 0.00

TOTAL (A) + (B) 40,562 82,288,922 81,704,105 100.00 100.00 17,753,062 21.5

7

(C)

Shares held by custodians

and against which

depository receipts have

been issued

0 0 0 0.00 0.00 0 0.00

GRAND TOTAL (A)+(B)+(

C) 40,562 82,288,922 81,704,105 100.00 100.00 17,753,062

21.5

7

Note: Our Board of Directors on August 18, 2014, approved the issue 77,00,000 Equity Shares of face value of ₹ 2 each

and / or warrants at an issue price of ₹ 52 per equity share, to Surya India Fingrowth Private Limited, a promoter group

company, on preferential basis, within the overall limit of `12,000 lakhs including this Issue, subject to the approval of the

shareholders.

The table below gives details of shareholdings of our Promoters and Promoters Group as on June 30, 2014:

Sl. Name of Shareholder Number of Equity Shares Percentage of the equity

share capital

1. Valecha Infrastructure Limited 5,431,400 6.60

2. Prakash K Thakur 4,942,488 6.00

3. Kanayo R Thakur 3,655,973 4.44

4. Raj Kanayo Thakur 2,482,605 3.02

5. Surya India Fingrowth Private Limited 2,055,200 2.50

134

6. Neeta V Mirchandani 500,000 0.62

7. Kishore Harish Mirchandani 476,255 0.58

8. Sanjay H Mirchandani 470,000 0.57

9. Seema Mirchandani 450,000 0.54

10. Vijay Mirchandani 425,800 0.52

11. Madanlal Valecha 394,975 0.48

12. Harish C Mirchandani 200,000 0.24

13. Bela Valecha 192,750 0.23

14. G.L Valecha 160,000 0.19

15. Naresh G Valecha 80,225 0.10

16. Mohini Valecha 70,935 0.09

17. Deepak M Valecha 61,200 0.07

18. Val-Mir Constructions Private Limited 59,365 0.07

19. Rajesh Valecha 57,300 0.07

20. Roopa N Valecha 54,250 0.07

21. Varsha Valecha 36,170 0.04

Total 22,256,891 27.04

The table below gives details of the public shareholding in excess of 1% in our Company as on June 30, 2014:

Sl. Name of Shareholder Number of shares Percentage of the

equity share capital

1. Mahesh Dinkar Vaze 2,500,000 3.04

2. SBI Infrastructure Fund 2,393,735 2.91

3. Mohan Daulatram Asnani 1,787,500 2.17

4. Birla Sun Life Trustee Company Private Limited A/c Birla

Sun Life Pure Value Fund

1,578,658 1.92

5. Reliance Capital Trustee Co. Ltd A/c Reliance Diversified

Power Sector

1,526,427 1.85

6. UTI – Infrastructure Fund 1,500,000 1.82

7. HDFC Trustee Company Ltd. A/c HDFC Childrens 1,429,200 1.74

8. Mukesh Raghumal Chetwani 1,288,015 1.57

9. Bina Mohan Asnani 1,271,115 1.54

10. LIC of India Market Plus-1 Growth Fund 1,176,664 1.43

11. Birla Sun Life Trustee Company Private Limited A/c Birla

Sun Life Dividend Yeild Plus

909,100 1.10

Total 17,360,414 21.09

135

ISSUE PROCEDURE

The following is a summary intended to present a general outline of the procedure relating to the application,

payment, Allocation and Allotment of the Equity Shares to be issued pursuant to the Issue. The procedure

followed in the Issue may differ from the one mentioned below, and investors are presumed to have apprised

themselves of the same from our Company or the Book Running Lead Manager. Investors are advised to

inform themselves of any restrictions or limitations that may be applicable to them. For further details see the

section titled ‘Distribution and Solicitation Restrictions’ and ‘Transfer Restrictions’ on pages 148 and 153,

respectively of this Placement Document.

Qualified Institutions Placement

The Issue is being made to QIBs in accordance with the provisions of Section 42 of the Companies Act, 2013,

read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, and Chapter VIII of

the SEBI Regulations, through the mechanism of a QIP. Under Chapter VIII of the SEBI Regulations and

Section 42 of the Companies Act, 2013, a company may issue equity shares to QIBs provided that certain

conditions are met by the company. Some of these conditions are set out below:

1. the issuer has completed all allotments with respect to any offer or invitation previously made by it or

has withdrawn or abandoned any invitation or offer made by it;

2. the issuer would be in compliance with the minimum public shareholding requirements set out in the

SCRR and the listing agreement with the stock exchanges;

3. Equity shares of the same class of such issuer, which are proposed to be allotted through the QIP, are

listed on a stock exchange in India that has nation-wide trading terminals for a period of at least 1 (one)

year prior to the date of issuance of notice to its shareholders for convening the meeting to pass the

below-mentioned special resolution;

4. the shareholders of the issuer have passed a special resolution approving such QIP. Such special

resolution must specify (a) that the allotment of securities is proposed to be made pursuant to the QIP;

and (b) the relevant date;

5. the explanatory statement to the notice to the shareholders for convening the general meeting must

disclose the basis or justification for the price (including premium, if any) at which the offer or

invitation is being made;

6. the offer must be made through a private placement offer letter and an application form serially

numbered and addressed specifically to the QIB to whom the offer is made and is sent within 30 days of

recording the names of such QIBs;

7. the offer must not be to more than 200 persons in a financial year. However, an offer to QIBs will not

be subject to this limit of 200 persons. Prior to circulating the private placement offer letter, the issuer

must prepare and record a list of QIBs to whom the offer will be made. The offer must be made only to

such persons whose names are recorded by the issuer prior to the invitation to subscribe;

8. issuer must offer to each allottee at least such number of the securities in the issue which would

aggregate to ₹ 20,000 calculated at the face value of the securities;

9. the aggregate of the proposed issue and all previous QIPs made by the issuer in the same financial year

does not exceed 5 (five) times the net worth (as defined in the SEBI Regulations) of the issuer as per

the audited balance sheet of the previous financial year; and

10. the offering of securities by issue of public advertisements or utilisation of any media, marketing or

distribution channels or agents to inform the public about the issue is prohibited.

At least 10% of the Equity Shares issued to QIBs must be allotted to mutual funds, provided that, if this

portion, or any part thereof to be allotted to mutual funds remains unsubscribed, it may be allotted to other

QIBs.

136

Prospective purchasers will be required to make certain representations, warranties and undertakings in order

to participate in the Issue. For details, see sections titled ‘Representations by Investors’, ‘Distribution and

Solicitation Restrictions’ and ‘Transfer Restrictions’ on pages 5, 148 and 153, respectively of this Placement

Document.

Investors are not allowed to withdraw their Bids after the Bid/Issue Closing Date.

Additionally, there is a minimum pricing requirement under the SEBI Regulations. The Issue Price shall be

equal or more than the price calculated in accordance with Regulation 85 of the SEBI Regulations which shall

be the Floor Price. The issue price of the equity shares shall not be less than the average of the weekly high

and low of the closing prices of the equity shares of the same class quoted in the stock exchange during the 2

(two) weeks preceding the relevant date. However, a discount of not more than 5% on the Floor Price is

permitted in accordance with the provisions of SEBI Regulations.

The ‘relevant date’ referred to above, for the determination of Floor Price for the issue of the equity shares

means the date of the meeting in which the Board or any committee of Directors duly authorised by the Board

decides to open the Issue and ‘stock exchanges’ means any of the stock exchanges in India on which the equity

shares of the issuer of the same class are listed and on which the highest trading volume in such equity shares

has been recorded during the 2 (two) weeks immediately preceding the relevant date.

Our Company has received the in-principle approval under Clause 24 (a) of its Listing Agreement from BSE

and NSE vide their letters dated September 23, 2014 for the listing of the Equity Shares on BSE and NSE and

and application for listing and trading for the Equity Shares shall be made after allotment of Equity Shares.

Our Company has also filed a copy of the Preliminary Placement Document and this Placement Document to

the Stock Exchanges.

Our Company shall make the requisite filings with the RoC and the SEBI within the stipulated period as

required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules,

2014.

The Issue has been authorized under Section 62(1)(c) of the Companies Act, 2013, and other applicable

notified sections of the Companies Act, 2013 by (i) the Board, pursuant to resolutions passed on June 30,

2014, and (ii) the Shareholders, pursuant approval sought through postal ballot on August 12, 2014.

The Equity Shares will be Allotted within 12 months from the date of the Shareholders’ resolution approving

the QIP and within 60 days from the date of receipt of subscription money from the relevant QIBs.

The Equity Shares issued pursuant to the QIP must be issued on the basis of the Preliminary Placement

Document and this Placement Document that shall contain all material information including the information

specified in Schedule XVIII of the SEBI Regulations and the requirements prescribed under Form PAS-4 of

the Companies (Prospectus and Allotment of Securities) Rules, 2014. Securities allotted to QIBs pursuant to a

qualified institutions placement shall not be sold for a period of 1 (one) year from the date of allotment except

on a recognized stock exchange in India. Allotments made to FVCIs, VCFs and AIFs in the Issue are subject to

the rules and regulations that are applicable to them, including in relation to lock in requirements.

The Preliminary Placement Document and this Placement Document are private documents provided to only

select investors through serially numbered copies and are required to be placed on the concerned website of the

Stock Exchanges and of our Company with a disclaimer to the effect that it is in connection with an issue to

QIBs and no offer is being made to the public or to any other category of investors.

The minimum number of Allottees for each QIP shall not be less than:

1. 2 (two), where the issue size is less than or equal to ₹ 2.5 billion; and

2. 5 (five), where the issue size is greater than ₹ 2.5 billion.

No single Allottee shall be allotted more than 50% of the Issue Size or less than ₹ 20,000 calculated at the face

value of the securities.

137

Further, QIBs belonging to the same group or that are under common control shall be deemed to be a single

Allottee for the purpose of this SEBI Regulations. See ‘Issue Procedure - Application Form’ on page 140 of

this Placement Document.

THE EQUITY SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED, LISTED OR

OTHERWISE QUALIFIED IN ANY OTHER JURISDICTION OUTSIDE INDIA AND MAY NOT BE

OFFERED OR SOLD, AND BIDS MAY NOT BE MADE BY PERSONS IN ANY SUCH

JURISDICTION, EXCEPT IN COMPLIANCE WITH THE APPLICABLE LAWS OF SUCH

JURISDICTION.

Issue Procedure

1. Our Company and the Book Running Lead Manager shall circulate serially numbered copies of the

Preliminary Placement Document and the serially numbered Application Form, either in electronic

form and/or physical form to the QIBs and the Application Form will be specifically addressed to such

QIBs.

2. Our Company shall, in accordance with Section 42(7) of the Companies Act, 2013, maintain complete

records of the QIBs to whom the Preliminary Placement Document, this Placement Document and the

serially numbered Application Form have been dispatched.

3. Our Company shall make the requisite filings with the RoC and the SEBI within the stipulated time

period as required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of

Securities) Rules, 2014.

4. The list of QIBs to whom the Application Form is delivered shall be determined by our Company in

consultation with the Book Running Lead Manager. UNLESS A SERIALLY NUMBERED

PRELIMINARY PLACEMENT DOCUMENT ALONG WITH THE SERIALLY NUMBERED

APPLICATION FORM IS ADDRESSED TO A PARTICULAR QIB, NO INVITATION TO

SUBSCRIBE SHALL BE DEEMED TO HAVE BEEN MADE TO SUCH QIB. Even if such

documentation were to come into the possession of any person other than the intended recipient, no

offer or invitation to offer shall be deemed to have been made to such person and any application that

does not comply with this requirement shall be treated as invalid.

5. Bidders shall submit Bids for, and our Company shall issue and Allot to each Allottee at least such

number of Equity Shares in the Issue which would aggregate to at least ₹ 20,000 calculated at the face

value of the Equity Shares.

6. Our Company shall intimate the Bid/Issue Opening Date to the Stock Exchanges.

7. QIBs may submit an Application Form, including any revisions thereof, during the Bidding/Issue

Period to the Book Running Lead Manager.

8. QIBs may submit an Application Form to the Book Running Lead Manager and will be required to

indicate the following in the Application Form:

(i) Full name of the QIB to whom Equity Shares are to be Allotted;

(ii) Number of Equity Shares Bid for;

(iii) Price at which they are agreeable to bid for the Equity Shares provided that QIBs may also

indicate that they are agreeable to submit a Bid at the “Cut-Off Price” which shall be any price

as may be determined by our Company in consultation with the Book Running Lead Manager or

above the minimum price calculated in accordance with Regulation 85 of the SEBI Regulations

which shall be the Floor Price or the Floor Price net of such discount as approved in accordance

with SEBI Regulations;

(iv) The details of the dematerialised depository account(s) to which the Equity Shares should be

credited;

(v) A representation that it is outside the United States; and

(vi) It has agreed to all of the other representations set forth in the Application Form.

NOTE: Each sub-account of an FII other than a sub-account which is a foreign corporate or a foreign

individual will be considered an individual QIB and separate application forms would be required from

138

each such sub-account for submitting bids. It may be noted that a sub-account which is a foreign

corporate or a foreign individual is not a QIB in terms of SEBI Regulations.

9. Once the duly completed Application Form is submitted by the QIB, such Application Form constitutes

an irrevocable offer and cannot be withdrawn after the Bid/Issue Closing Date. The Bid may be revised

till Bid/Issue closing date, for which the QIB will have to revise the Bid in a revision form available

with the Book Running Lead Manager. Revision forms received after the closure of the Issue on

Bid/Issue closing date shall not be considered as valid and the original Bid will stand.

10. The Bid/Issue Closing Date shall be notified to the Stock Exchanges and the QIBs shall be deemed to

have been given notice of such date after receipt of the Application Form.

11. Upon receipt of the duly completed Application Form, after the Bid/Issue Closing Date, our Company

shall determine the final terms, in consultation with the Book Running Lead Manager, including (i) the

Issue Price of the Equity Shares to be issued pursuant to the Issue (ii) the number of Equity Shares to be

Allocated and the Applicants to whom the same would be allocated. Our Company shall notify the

Stock Exchanges of the Issue Price, upon determination of the final terms of the Equity Shares, the

Book Running Lead Manager will send the serially numbered CAN along with this Placement

Document to the QIBs who have been Allocated the Equity Shares. The dispatch of a CAN shall be

deemed a valid, binding and irrevocable contract for the QIB to pay the entire Issue Price for all the

Equity Shares Allocated to such QIB. The CAN shall contain details such as the number of Equity

Shares Allocated to the QIB and payment instructions including the details of the amounts payable by

the QIB for Allotment of the Equity Shares in its name and the Pay-In Date as applicable to the

respective QIB. PLEASE NOTE THAT THE ALLOCATION WILL BE AT THE ABSOLUTE

DISCRETION OF OUR COMPANY AND WILL BE BASED ON THE RECOMMENDATION

OF THE BOOK RUNNING LEAD MANAGER AND SHALL BE AT THEIR SOLE AND

ABSOLUTE DISCRETION, AND MAY NOT BE PROPORTIONATE TO THE NUMBER OF

EQUITY SHARES APPLIED FOR.

12. Pursuant to receiving a CAN, each QIB shall be required to make the payment to the Escrow Account

of our Company of the entire application monies for the Equity Shares indicated in the CAN at the

Issue Price, only through electronic transfer by the Pay-In Date as specified in the CAN sent to the

respective QIBs. No payment shall be made by QIBs in cash. Please note that any payment of

application money for the Equity Shares shall be made from the bank accounts of the relevant QIBs

applying for the Equity Shares. Monies payable on Equity Shares to be held by joint holders shall be

paid from the bank account of the person whose name appears first in the application. Pending

Allotment, all monies received for subscription of the Equity Shares shall be kept by our Company in a

separate bank account with a scheduled bank and shall be utilised only for the purposes permitted under

the Companies Act, 2013 i.e. the Escrow Account. For further details, see ‘Issue Procedure-Bank

Account for Payment of Application Money’ on page 144 of this Placement Document.

13. Upon receipt of the application monies from the QIBs, our Company shall issue and allot the Equity

Shares to those QIBs as per the details provided in their respective CANs. Our Company shall intimate

to the Stock Exchanges the details of the Allotment.

14. After passing the Board resolution for Allotment and prior to crediting the Equity Shares into the

beneficiary accounts maintained with the Depository Participants accounts of the successful Allottees,

our Company shall apply to the Stock Exchanges for listing approvals. Our Company will intimate the

Stock Exchanges the details of the Allotment.

15. After receipt of the listing approvals of the Stock Exchanges, our Company shall credit the Equity

Shares Allotted pursuant to this Issue into the Depository Participant accounts of the respective

Allottees.

16. Our Company will then apply for the final trading approvals from the Stock Exchanges.

17. The Equity Shares that have been allotted and credited to the beneficiary accounts with the Depository

Participants accounts of the Allottees shall be eligible for trading on the Stock Exchanges only upon the

receipt of final listing and trading approvals from the Stock Exchanges.

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18. As per the applicable laws, the Stock Exchanges shall notify the final listing and trading approvals,

which are ordinarily available on their websites and upon receipt of intimation of final trading and

listing approval from the Stock Exchanges, our Company shall inform to those QIBs to whom the

Equity Shares have been allotted about the receipt of such approval. Our Company and the Book

Running Lead Manager shall not be responsible for any delay or non-receipt of the communication of

the final trading and listing permissions from the Stock Exchanges or any loss arising from such delay

or non-receipt. Final listing and trading approvals granted by the Stock Exchanges are also placed on

their respective websites. QIBs are advised to apprise themselves of the status of the receipt of the

permissions from the Stock Exchanges or our Company.

Qualified Institutional Buyers

Only QIBs as defined in Regulation 2(1)(zd) of the SEBI Regulations and not otherwise excluded pursuant to

Regulation 86(1)(b) of the SEBI Regulations are eligible to invest. Currently, under Regulation 2(1)(zd) of the

SEBI Regulations for the purposes of the Issue, the term QIB means the following:

1. Eligible FPIs including FIIs, QFIs and eligible sub-accounts;

2. insurance companies registered with the Insurance Regulatory and Development Authority;

3. insurance funds set up and managed by army, navy or air force of the Union of India ;

4. insurance funds set up and managed by the Department of Posts, India.

5. multilateral and bilateral development financial institutions;

6. A mutual fund, venture capital fund, foreign venture capital investors registered with SEBI;

7. Alternate investment funds registered with SEBI;

8. pension funds with minimum corpus of ₹ 2,500 lakhs;

9. provident funds with minimum corpus of ₹ 2,500 lakhs;

10. public financial institutions as defined in section 4A of the Companies Act, 1956 (Section 2(72) of the

Companies Act, 2013);

11. scheduled commercial banks;

12. state industrial development corporations; and

13. the National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005

of the Government published in the Gazette of India.

ELIGIBLE NON-RESIDENT QIBS CAN PARTICIPATE IN THE ISSUE UNDER SCHEDULE 1 OF

FEMA 20. FIIS, SUB-ACCOUNTS (OTHER THAN A SUB-ACCOUNT WHICH IS A FOREIGN

CORPORATE OR A FOREIGN INDIVIDUAL), QFIS AND OTHER ELIGIBLE FPIS ARE

PERMITTED TO INVESTING THROUGH THE PORTFOLIO INVESTMENT SCHEME IS UNDER

SCHEDULE 2 AND SCHEDULE 2A OF FEMA 20 RESPECTIVELY, IN THIS ISSUE. FIIs AND

ELIGIBLE FPIS INVESTING THROUGH THE PORTFOLIO INVESTMENT SCHEME ARE

PERMITTED TO PARTICIPATE IN THE ISSUE SUBJECT TO COMPLIANCE WITH ALL

APPLICABLE LAWS AND SUCH THAT THE SHAREHOLDING DOES NOT EXCEED SPECIFIED

LIMITS AS PRESCRIBED UNDER APPLICABLE LAWS IN THIS REGARD.

In terms of the FPI Regulations, the issue of Equity Shares issued to a single FPI or an investor group (which

means the same set of ultimate beneficial owner(s) investing through multiple entities) is not permitted to

exceed 10% of post-issue equity share capital of our Company. Further, in terms of the FEMA 20, the total

holding by each FPI shall be below 10% of the total paid-up equity share capital of our Company and the total

holdings of all FPIs put together shall not exceed 24% of the paid-up equity share capital of our Company. The

aggregate limit of 24% may be increased up to the sectoral cap by way of a resolution passed by the Board of

Directors followed by a special resolution passed by the Shareholders of our Company. Eligible FPIs are

permitted to participate in the Issue subject to compliance with conditions and restrictions which may be

specified by the Government from time to time. The existing investment limit for FPIs (including FIIs) in our

Company is 40% of the paid up capital of our Company.

An FII or sub-account (other than a sub-account which is a foreign corporate or foreign individual) who holds

a valid certificate of registration from the SEBI shall be deemed to be an FPI until the expiry of the block of

(three) years for which fees has been paid as per the FII Regulations. An FII or a sub-account (other than a

sub-account which is a foreign corporate or a foreign individual) may participate in the Issue, until expiry of its

registration as an FII or sub-account or until it obtains a certificate of registration as an FPI, whichever is

earlier. If the registration of an FII or sub-account has expired or is about to expire, such FII or sub-account

may, subject to payment of conversion fees as applicable under the FPI Regulations, participate in the Issue.

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QFIs may participate in this Issue till January 6, 2015 or till they obtain a certificate of registration as FPIs

upon payment of conversion fees under the FPI Regulations, whichever is earlier. An FII, QFI or sub-account

shall not be eligible to invest as an FII, sub-account or QFI after registering as an FPI under the FPI

Regulations.

In terms of the FEMA 20, for calculating the aggregate holding of FPIs in a company, holding of all registered

FPIs as well as holding of FIIs (being deemed FPIs) shall be included.

The FPI regime has recently come into effect from June 1, 2014. FPI’s investing in this Issue should ensure

that they are eligible under the applicable law or regulation to apply in this Issue.

Allotments made to FVCIs, VCFs and AIFs in the issue are subject to the rules and regulations that are

applicable to them, including in relation to lock-in requirements.

Under Regulation 86(1)(b) of the SEBI Regulations, no Allotment can be made pursuant to the Issue, either

directly or indirectly, to any QIB being our promoter or any person related to the Promoter(s). QIBs which

have all or any of the following rights shall be deemed to be persons related to the “promoter(s)” as defined in

the SEBI Regulations:

1. rights under a shareholders‘ agreement or voting agreement entered into with our Promoters or persons

related to the Promoters;

2. veto rights; or

3. a right to appoint any nominee director on our Board.

Provided, however, that a QIB which does not hold any shares in our Company and which has acquired the

aforesaid rights in the capacity of a lender shall not be deemed to be related to the “Promoters”.

OUR COMPANY AND THE BOOK RUNNING LEAD MANAGER ARE NOT LIABLE FOR ANY

AMENDMENT OR MODIFICATION OR CHANGE IN APPLICABLE LAWS OR REGULATIONS,

WHICH MAY OCCUR AFTER THE DATE OF THIS PLACEMENT DOCUMENT. QIBS ARE

ADVISED TO MAKE THEIR INDEPENDENT INVESTIGATIONS AND SATISFY THEMSELVES

THAT THEY ARE ELIGIBLE TO APPLY. QIBS ARE ADVISED TO ENSURE THAT ANY SINGLE

APPLICATION FORM FROM THEM DOES NOT EXCEED THE INVESTMENT LIMITS OR

MAXIMUM NUMBER OF EQUITY SHARES THAT CAN BE HELD BY THEM UNDER

APPLICABLE LAW OR REGULATION OR AS SPECIFIED IN THIS PLACEMENT DOCUMENT.

FURTHER, QIBS ARE REQUIRED TO SATISFY THEMSELVES THAT THEIR BIDS WOULD

NOT EVENTUALLY RESULT IN TRIGGERING A TENDER OFFER UNDER THE TAKEOVER

CODE, AND THE QIB SHALL BE SOLELY RESPONSIBLE FOR COMPLIANCE WITH THE

PROVISIONS OF THE TAKEOVER CODE, INSIDER TRADING REGULATIONS AND OTHER

APPLICABLE LAWS, RULES, REGULATIONS, GUIDELINES AND CIRCULARS.

Note: Affiliates or associates of the Book Running Lead Manager who are QIBs may participate in the Issue in

compliance with applicable laws.

Bid/Issue Programme

Bidding Period / Issue Period:

BID/ISSUE OPENS ON September 24, 2014

BID/ISSUE CLOSES ON September 26, 2014

Application Process

Application Form

QIBs shall only use the specified serially numbered Application Form supplied (which is addressed to them)

by our Company and the Book Running Lead Manager in either electronic form or by physical delivery for the

purpose of making an Application in terms of the Preliminary Placement Document. Revisions to the Bid shall

only be made in the revision form.

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By making a Bid (including the revision thereof) for Equity Shares through Application Forms and pursuant to

the terms of the Preliminary Placement Document, the QIB will be deemed to have made the following

representations and warranties and the representations, warranties and agreements made under the sections

titled ‘Notice to Investors’, ‘Representations by Investors’, ‘Distribution and Solicitation Restrictions’ and

‘Transfer Restrictions’ on pages 3, 5, 148, and 153 of this Placement Document, respectively:

1. The applicant confirms that it is a QIB in terms of Regulation 2(1)(zd) of the SEBI Regulations and is

not excluded under Regulation 86 of the SEBI Regulations, has a valid and existing registration under

the applicable laws in India and is eligible to participate in this Issue;

2. The QIB confirms that it is not a “promoter” and is not a person related to the “promoters”, either

directly or indirectly, and its Application Form does not directly or indirectly represent the “promoters”

or “promoter group” or persons related to the “promoters” as defined in the SEBI Regulations;

3. The QIB confirms that it has no rights under a shareholders‘ agreement or voting agreement with the

“promoters” or persons related to the “promoters”, no veto rights or right to appoint any nominee

director on the Board other than those acquired in the capacity of a lender which shall not be deemed to

be a person related to the “promoters” as defined in the SEBI Regulations;

4. The QIB acknowledges that it has no right to withdraw its Bid after the Bid/Issue Closing Date;

5. The QIB confirms that if Equity Shares are Allotted through the issue, it shall not, for a period of 1

(one) year from Allotment, sell such Equity Shares otherwise than on the Stock Exchanges;

6. The QIB confirms that the QIB is eligible to Bid and hold Equity Shares so Allotted. The QIB further

confirms that the holding of the QIB, does not and shall not, exceed the level permissible as per any

applicable regulations applicable to the QIB;

7. The QIB confirms that its Bids would not eventually result in triggering a tender offer under the

Takeover Code;

8. The QIB confirms that together with other QIBs in the Issue that belongs to the same group or are under

same control, the Allotment to the QIB shall not exceed 50% of the Issue Size. For the purposes of this

statement:

(i) The expression “belongs to the same group” shall derive meaning from the concept of

“companies under the same group” as provided in sub-section (11) of Section 372 of the

Companies Act, 1956; and

(ii) “Control” shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the Takeover

Code;

9. The QIBs shall not undertake any trade in the Equity Shares credited to their beneficiary accounts

maintained with the Depository Participants until such time that the final listing and trading approvals

for the Equity Shares are issued by the Stock Exchanges.

EACH QIB MUST PROVIDE ITS DEPOSITORY PARTICIPANT ACCOUNT DETAILS, PAN,

DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION

NUMBER, E-MAIL ID, BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM.

EACH QIB MUST ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS

EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY PARTICIPANT

ACCOUNT IS HELD. FOR THIS PURPOSE, ELIGIBLE SUB ACCOUNTS OF AN FII WOULD BE

CONSIDERED AS AN INDEPENDENT QIB.

IF SO REQUIRED BY THE BOOK RUNNING LEAD MANAGER, THE QIB SUBMITTING A BID,

ALONG WITH THE APPLICATION FORM, WILL ALSO HAVE TO SUBMIT REQUISITE

DOCUMENT(S) TO THE BOOK RUNNING LEAD MANAGER TO EVIDENCE THEIR STATUS AS

A QIB.

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IF SO REQUIRED BY THE BOOK RUNNING LEAD MANAGER, ESCROW AGENT OR ANY

STATUTORY OR REGULATORY AUTHORITY IN THIS REGARD, INCLUDING AFTER ISSUE

CLOSURE, THE QIB SUBMITTING A BID AND/OR BEING ALLOTTED EQUITY SHARES IN

THE ISSUE, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO FULFILL THE

KNOW YOUR CUSTOMER (KYC) NORMS.

Demographic details such as address and bank account will be obtained from the Depositories as per the

Depository Participant account details given above.

The submission of an Application Form by a QIB shall be deemed a valid, binding and irrevocable offer for

the QIB to pay the entire Issue Price for the Equity Shares Allotted (as indicated by the CAN) and becomes a

binding contract on the QIB upon the issuance of the CAN by our Company in favour of the QIB.

Bids by Mutual Funds

The Bids made by the asset management companies or custodian of Mutual Funds shall specifically state the

names of the concerned schemes for which the Bids are made. Each scheme/fund of a Mutual Fund registered

with SEBI, will have to submit separate Application Form.

Each Mutual Fund will have to submit separate Application Forms for each of its participating schemes. Such

applications will not be treated as multiple Bids provided that the Bids clearly indicate the scheme for which

the Bid has been made. However, for the purpose of calculating the number of Allottee/applicants, various

schemes of the same mutual fund will be considered as a single Allottee/applicant.

Demographic details like address, bank account among other will be obtained from the Depositories as per the

demat account details given above.

As per the current regulations, the following restrictions are applicable for investments by Mutual Funds:

No Mutual Fund scheme shall invest more than 10% of its net asset value in Equity Shares or equity related

instruments of any company provided that the limit of 10% shall not be applicable for investments in case of

index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own more than

10% of any company's paid-up capital carrying voting rights.

The above information is given for the benefit of the Bidders. We and the Book Running Lead Manager are

not liable for any amendments or modification or changes in applicable laws or regulations, which may happen

after the date of this Placement Document. Bidders are advised to make their independent investigations and

ensure that the number of Equity Shares Bid for do not exceed the applicable limits under the applicable laws

and regulations.

Submission of Application Form

All Application Forms must be duly completed with information including the name of the QIB, the price and

the number of Equity Shares applied for. All Application Forms duly completed along with a copy of the PAN

card or PAN allotment letter shall be submitted to the Book Running Lead Manager. The Application Form

shall be submitted to the Book Running Lead Manager either through electronic form or through physical

delivery at the following address:

Edelweiss Financial Services Limited

Edelweiss House,

14th

Floor, Off. C.S.T. Road,

Kalina, Mumbai, 400 098,

Maharashtra, India.

Contact Person: Mr. Umang Poddar

Tel: +91 22 4009 4400

Fax: +91 22 4086 3610

The Book Running Lead Manager shall not be required to provide any written acknowledgement of the same.

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Permanent Account Number or PAN

Each QIB should mention its PAN allotted under the IT Act, 1961 in the Application Form. Applications

without this information will be considered incomplete and are liable to be rejected. QIBs should not submit

the GIR number instead of the PAN as the Application Form is liable to be rejected on this ground.

Pricing and Allocation

Build up of the Book

The QIBs shall submit their Bids (including the revision of bids) within the Bidding/Issue Period to the Book

Running Lead Manager. Such Bids cannot be withdrawn after the Bid/Issue Closing Date. The book shall be

maintained by the Book Running Lead Manager.

Price Discovery and Allocation

Our Company, in consultation with the Book Running Lead Manager, shall finalize the Issue Price for the

Equity Shares which shall be at or above the Floor Price. However, our Company may offer a discount of not

more than 5% on the Floor Price in terms of Regulation 85 of the SEBI Regulations.

After finalisation of the Issue Price, our Company shall update the Preliminary Placement Document with the

Issue details and file the same with the Stock Exchanges, SEBI and the RoC as the Placement Document.

Method of Allocation

Our Company shall determine the Allocation in consultation with the Book Running Lead Manager on a

discretionary basis and in compliance with Chapter VIII of the SEBI Regulations.

Bids received from the QIBs at or above the Issue Price shall be grouped together to determine the total

demand. The Allocation to all such QIBs will be made at the Issue Price. Allocation shall be decided by us in

consultation with the Book Running Lead Manager on a discretionary basis. Allocation to Mutual Funds up to

a minimum of 10% of the Issue Size shall be undertaken subject to valid Bids being received at or above the

Issue Price.

THE DECISION OF OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD

MANAGER IN RESPECT OF ALLOCATION SHALL BE FINAL AND BINDING ON ALL QIBS.

QIBS MAY NOTE THAT ALLOCATION IS AT THE SOLE AND ABSOLUTE DISCRETION OF

OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGER AND

QIBS MAY NOT RECEIVE ANY ALLOCATION EVEN IF THEY HAVE SUBMITTED VALID

APPLICATION FORMS AT OR ABOVE THE ISSUE PRICE. NEITHER OUR COMPANY NOR

THE BOOK RUNNING LEAD MANAGER IS OBLIGED TO ASSIGN ANY REASON FOR ANY

NON-ALLOCATION.

CAN

Based on the Application Forms received and the Issue Price decided, our Company, in consultation with the

Book Running Lead Manager, in their sole and absolute discretion, shall decide the QIBs to whom the serially

numbered CAN shall be sent, pursuant to which the details of the Equity Shares Allocated to them and the

details of the amounts payable for Allotment in their respective names shall be notified to such QIBs.

Additionally, a CAN will include details of the Escrow Account for transfer of funds if done electronically,

address where the application money needs to be sent, Pay-In Date as well as the probable designated date,

being the date of credit of the Equity Shares to the respective QIB‘s account.

The eligible QIBs would also be sent a serially numbered Placement Document either in electronic form or by

physical delivery along with the serially numbered CAN.

The dispatch of the serially numbered Placement Document and the serially numbered CAN to the QIBs shall

be deemed a valid, binding and irrevocable contract for the QIB to furnish all details that may be required by

the Book Running Lead Manager and to pay the entire Issue Price for all the Equity Shares Allocated to such

QIB.

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QIBS ARE ADVISED TO INSTRUCT THEIR DEPOSITORY PARTICIPANT TO ACCEPT THE

EQUITY SHARES THAT MAY BE ALLOTTED TO THEM PURSUANT TO THE ISSUE.

Bank Account for Payment of Application Money

Our Company has opened a special bank account “Jyoti Structures Limited - QIP Escrow Account” with

State Bank of India in terms of the arrangement among our Company, the Book Running Lead Manager and

State Bank of India as escrow bank. The QIB, to whom CAN is sent, will be required to deposit the entire

amount payable for the Equity Shares Allocated to it by the Pay-In Date as mentioned in, and in accordance

with, the respective CAN.

Payments are to be made only through electronic fund transfer.

If the payment is not made favouring the “Jyoti Structures Limited - QIP Escrow Account” within the time

stipulated in the CAN, the Application Form and the CAN of the QIB are liable to be cancelled.

Our Company undertakes to utilise the amount deposited in “Jyoti Structures Limited - QIP Escrow

Account” only for the purposes of (i) adjustment against Allotment of Equity Shares in the Issue; or (ii)

repayment of application money if our Company is not able to Allot Equity Shares.

In case of cancellations or default by the QIBs, our Company, the Book Running Lead Manager have the right

to reallocate the Equity Shares at the Issue Price among existing or new QIBs at their sole and absolute

discretion, subject to statutory limits.

Payment Instructions

1. The payment of application money shall be made by the QIBs in the name of “Jyoti Structures

Limited - QIP Escrow Account” as per the payment instructions provided in the CAN.

2. QIBs shall make Payments only through electronic fund transfer.

Note: Payments through cheques are liable to be rejected.

Designated Date and Allotment of Equity Shares

The Equity Shares will not be Allotted unless the QIBs pay the amount payable as mentioned in the CANs

issued to them, into the Escrow Account with the Escrow Agent as stated above.

The Equity Shares will be issued and Allotment shall be made only in dematerialised form. Allottees will have

the option to re-materialise the Equity Shares, if they so desire, as per the provisions of the Companies Act and

the Depositories Act.

Our Company, at its sole discretion, reserves the right to cancel the Issue at any time up to Allotment without

assigning any reason whatsoever.

Post Allotment and credit of Equity Shares into the QIB’s Depository Participant accounts, our Company will

apply for final trading and listing approvals from the Stock Exchanges.

In the case of a QIB who has been Allotted more than 5% of the Equity Shares in the Issue, our Company shall

disclose the QIB’s name and the number of the Equity Shares Allotted to such QIB to the Stock Exchanges

and the Stock Exchanges will make the same available on their website. Our Company shall make the requisite

filings with the RoC and the SEBI within the stipulated period as required under the Companies Act, 2013 and

the Companies (Prospectus and Allotment of Securities) Rules, 2014. If you are Allotted any Equity Shares,

our Company is required to disclose details such as your name, address and the number of Equity Shares

Allotted to the RoC and the SEBI.

As per the provisions of the Escrow Agreement, the Escrow Agent shall, on instructions of the Book Running

Lead Manager, release the monies lying to the credit of the Escrow Account to our Company after receipt of

the Listing approval of the Stock Exchanges for the Equity Shares offered in the Issue.

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In accordance with the Companies Act, 2013, In the event that our Company is unable to issue and Allot the

Equity Shares or there is a cancellation of the Issue within 60 days from the date of receipt of application

money from a QIB, our Company shall repay the application money within 15 days from expiry of the 60 day

period, failing which our Company shall repay that money to such QIBs with interest at the rate of 12% per

annum from expiry of the sixtieth day. The application money to be refunded by our Company shall be

refunded to the same bank account from which application money was remitted by the QIBs.

Other Instructions

Right to Reject Applications

Our Company, in consultation with the Book Running Lead Manager, may reject Bids, in part or in full,

without assigning any reason whatsoever. The decision of our Company and the Book Running Lead Manager

in relation to the rejection of Bids shall be final and binding.

Equity Shares in Dematerialised form with NSDL or CDSL

The Allotment of Equity Shares in the Issue shall be only in dematerialised form (i.e., not in physical

certificates but be fungible and be represented by the statement issued through the electronic mode).

A QIB applying for Equity Shares to be issued pursuant to the Issue must have atleast 1 (one) beneficiary

account with either of the Depository Participants of either NSDL or CDSL prior to making the Bid. Allotment

to a successful QIB will be credited in electronic form directly to the beneficiary account (with the Depository

Participant) of the QIB.

Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity

with NSDL and CDSL. All the Stock Exchanges where our Equity Shares are proposed to be listed have

electronic connectivity with CDSL and NSDL.

The trading of our Equity Shares to be issued pursuant to the Issue would be in dematerialised form only for

all QIBs in the demat segments of the respective Stock Exchanges.

Our Company and the Book Running Lead Manager will not be responsible or liable for the delay in the credit

of Equity Shares to be issued pursuant to the Issue due to errors in the Application Form or otherwise on part

of the QIBs.

Release of funds to our Company

The Escrow Bank shall not release the monies lying to the credit of the “Jyoti Structures Limited - QIP

Escrow Account” till such time, that it receives an instruction in pursuance to the Escrow Agreement, along

with the Listing approval of the Stock Exchanges for the Equity Shares offered in the Issue.

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PLACEMENT

Placement Agreement

The Book Running Lead Manager have entered into a placement agreement with our Company dated

September 18, 2014 pursuant to which the Book Running Lead Manager have agreed to procure subscriptions

for the Equity Shares on a reasonable efforts basis, to QIBs, pursuant to Section 42 of Companies Act, 2014,

read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014, and Chapter VIII of

the SEBI Regulations.

The Placement Agreement contains customary representations and warranties, as well as indemnities from our

Company and the Book Running Lead Manager and is subject to termination in accordance with the terms

contained therein.

Applications shall be made to list the Equity Shares issued pursuant to the Issue and admit them to trading on

the Stock Exchanges. No assurance can be given as to the liquidity or sustainability of the trading market for

such Equity Shares, the ability of the Shareholders to sell their Equity Shares or the price at which the

Shareholders will be able to sell their Equity Shares.

This Placement Document has not been, and will not be, registered as a prospectus with the RoC and no Equity

Shares will be offered in India or overseas to the public or any members of the public or any other class of

investors, other than QIBs. Our Company shall make the requisite filings with the RoC and the SEBI within

the stipulated period as required under the Companies Act, 2013 and the Companies (Prospectus and

Allotment of Securities) Rules, 2014.

Relationship with the Book Running Lead Manager

In connection with the Issue, the Book Running Lead Manager, (or their affiliates) may, for their own

accounts, subscribe to the Equity Shares or enter into asset swaps, credit derivatives or other derivative

transactions relating to the Equity Shares to be issued pursuant to the Issue at the same time as the offer and

sale of the Equity Shares or in secondary market transactions. As a result of such transactions, the Book

Running Lead Manager may hold long or short positions in such Equity Shares. These transactions may

comprise a substantial portion of the Issue and no specific disclosure will be made of such positions. Affiliates

of the Book Running Lead Manager may purchase Equity Shares and be Allocated Equity Shares for

proprietary purposes and not with a view to distribution or in connection with the issuance of P-Notes.

From time to time, the Book Running Lead Manager, and the affiliates and associates of such entity have

engaged in or may in the future engage in transactions with and perform services including but not limited to

investment banking, advisory, banking, trading services for our Company, its Subsidiaries, group companies,

affiliates and the Shareholders, as well as to their respective associates and affiliates, pursuant to which fees

and commissions have been paid or will be paid to the Book Running Lead Manager and their affiliates and

associates.

Lock-up

Mr. Kanayo R. Thakur, Mr. Prakash K. Thakur, Mr. Raj K. Thakur and Surya Fingrowth India Private Limited

forming part of the Promoter/Promoter Group of the Company holding 1,31,36,266 Equity Shares aggregating

15.96% of the paid up share capital of the Company, as on date (Promoter Shares) have consented that during

the period commencing on the Placement Agreement and ending 180 days after the date of allotment of the

Equity Shares under the Issue (Lock-up Period) not to, without the prior written consent of the Book Running

Lead Manager, to do the following: (i) directly or indirectly, offer, lend, sell, contract to sell, sell any option or

contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or

otherwise transfer or dispose of, any Promoter Shares / Promoter Group entity shares or any securities

convertible into or exercisable for Promoter Shares / Promoter Group entity shares or file any registration

statement under the Securities Act, as amended, with respect to any of the foregoing; or (ii) enter into any

swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly, any of the

economic consequences associated with the ownership of any of the Promoter Shares / Promoter Group entity

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shares or any securities convertible into or exercisable or exchangeable for Promoter Shares / Promoter Group

entity shares (regardless of whether any of the transactions described in clause (i) or (ii) is to be settled by the

delivery of Promoter Shares/ Promoter Group entity shares or such other securities, in cash or otherwise); or

(iii) deposit Promoter Shares / Promoter Group entity shares with any other depositary in connection with a

depositary receipt facility; or (iv) publicly announce any intention to enter into any transaction falling within

(i) to (iii) above or enter into any transaction (including a transaction involving derivatives) having an

economic effect similar to that of a sale or deposit of Promoter Shares / Promoter Group entity shares in any

depositary receipt facility or publicly announce any intention to enter into any transaction falling within (i) to

(iv) above.

Further, the Equity Shares acquired by the said promoters of the Company during the Lock-up Period shall

constitute Promoter Shares / Promoter Group entity shares, and shall be subject to the restrictions contained in

the Placement Agreement.

The above restriction shall not apply to transfer of Promoter Shares / Promoter Group entity shares by the

Promoter to any inter group transfer made to any entities promoted by the Promoter (Promoter Group

Entities), subject to compliance with applicable laws and subject to observance by the transferee Promoter

Group Entities of the foregoing restrictions on transfer of Promoter Shares until the expiry of the Lock-up

Period.

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DISTRIBUTION AND SOLICITATION RESTRICTIONS

The distribution of this Placement Document and the offer, sale or delivery of the Equity Shares is restricted

by law in certain jurisdictions. Persons who come into possession of this Placement Document are advised to

take legal advice with regard to any restrictions that may be applicable to them and to observe such

restrictions. This Placement Document may not be used for the purpose of an offer or sale in any

circumstances in which such offer or sale is not authorized or permitted.

General

No action has been taken or will be taken that would permit a public offering of the Equity Shares to occur in

any jurisdiction other than India, or the possession, circulation or distribution of this Placement Document or

any other material relating to our Company or the Equity Shares in any jurisdiction where action for such

purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and

neither this Placement Document nor any offering materials or advertisements in connection with the Equity

Shares may be distributed or published in or from any country or jurisdiction except under circumstances that

will result in compliance with any applicable rules and regulations of any such country or jurisdiction. The

Issue will be made in compliance with all applicable laws, including the SEBI Regulations. Each subscriber of

the Equity Shares in the Issue will be required to make, or will be deemed to have made, as applicable, the

representations, warranties, acknowledgments and agreements in the sections titled ‘Representations by

Investors’, and ‘Transfer Restrictions’ on pages 5 and 153, respectively of this Placement Document.

Bahrain

The Issue is a private placement in Bahrain. Therefore, it is not subject to the regulations of the Central Bank of

Bahrain that apply to public offerings of securities, and the extensive disclosure requirements and other

protections that these regulations contain. This Placement Document is therefore intended only for accredited

investors. The financial instruments offered by way of private placement may only be offered in minimum

subscriptions of $100,000 (or equivalent in other currencies). The Central Bank of Bahrain assumes no

responsibility for the accuracy and completeness of the statements and information contained in this Placement

Document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon

the whole or any part of the contents of this Placement Document. To the best of our Company’s board of

directors’ and management’s knowledge and belief, who have taken all reasonable care to ensure that such is

the case, the information contained in this Placement Document is in accordance with the facts and does not

omit anything likely to affect the reliability of such information.

European Economic Area

In relation to each Member State of the European Economic Area that has implemented the Prospectus

Directive (Relevant Member State), with effect from and including the date on which the Prospectus

Directive is or was implemented in that Relevant Member State (Relevant Implementation Date), the Equity

Shares may not be offered or sold to the public in that Relevant Member State prior to the publication of a

prospectus in relation to the Equity Shares which has been approved by the competent authority in that

Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the

competent authority in that Relevant Member State, all in accordance with the Prospectus Directive (defined

below) and the 2010 Amending Directive (defined below), except that the Equity Shares, with effect from and

including the Relevant Implementation Date, may be offered to the public in that Relevant Member State at any

time:

1. to persons or entities that are “qualified investors” as defined in the Prospectus Directive or, if that

Relevant Member State has implemented the 2010 Amending Directive, as defined in the 2010

Amending Directive;

2. to (i) fewer than 100 natural or legal persons (other than “qualified investors” as defined in the

Prospectus Directive); or (ii) if that Relevant Member State has implemented the 2010 Amending

Directive, fewer than 150 natural or legal persons (other than “qualified investors” as defined in the

2010 Amending Directive), in each case subject to obtaining the prior consent of the Book Running

Lead Manager; and

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3. in any circumstances falling within Article 3(2) of the Prospectus Directive as amended (to the extent

implemented in that Relevant Member State) by Article 1(3) of the 2010 Amending Directive, provided

that no such offering of Equity Shares shall result in a requirement for the publication by our Company

or the Book Running Lead Manager of a prospectus pursuant to Article 3 of the Prospectus Directive as

amended (to the extent implemented in that Relevant Member State) by Article 1(3) of the 2010

Amending Directive.

For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any

Equity Shares in any Relevant Member State means the communication in any form and by any means of

sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor

to decide to purchase or subscribe for the Equity Shares, as the same may be varied in that Member State by

any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus

Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant

Member State and the expression “2010 Amending Directive” means Directive 2010/73/EU and includes any

relevant implementing measure in each Member State.

Neither our Company nor the Book Running Lead Manager has authorised, nor do they authorise, the making

of any offer of Equity Shares through any financial intermediary on their behalf, other than offers made by our

Company or the Book Running Lead Manager.

Hong Kong

This Placement Document has not been reviewed or approved by any regulatory authority in Hong Kong. In

particular, this Placement Document has not been, and will not be, registered as a “prospectus” in Hong Kong

under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (CO) nor has it been

authorized by the Securities and Futures Commission (SFC) in Hong Kong pursuant to the Securities and

Futures Ordinance (Cap 571) (SFO). Recipients are advised to exercise caution in relation to the Offer. If

recipients are in any doubt about any of the contents of this Placement Document, they should obtain

independent professional advice.

This Placement Document does not constitute an offer or invitation to the public in Hong Kong to acquire any

Equity Shares nor an advertisement of the Equity Shares in Hong Kong. This Placement Document must not

be issued, circulated or distributed in Hong Kong other than:

1. to “professional investors” within the meaning of the SFO and any rules made under that ordinance

(Professional Investors); or

2. in other circumstances which do not result in this Placement Document being a prospectus as defined in

the CO nor constitute an offer to the public which requires authorization by the SFC under the SFO.

Unless permitted by the securities laws of Hong Kong, no person may issue or have in its possession for issue,

whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Equity Shares,

which is directed at, or the content of which is likely to be accessed or read by, the public of Hong Kong other

than with respect to the Equity Shares which are or are intended to be disposed of only to persons outside

Hong Kong or only to Professional Investors.

Any offer of the Equity Shares will be personal to the person to whom relevant offer documents are delivered,

and a subscription for the Equity Shares will only be accepted from such person. No person who has received a

copy of this Placement Document may issue, circulate or distribute this Placement Document in Hong Kong or

make or give a copy of this Placement Document to any other person.

No person allotted Equity Shares may sell, or offer to sell, such Shares to the public in Hong Kong within 6

(six) months following the date of issue of such Equity Shares.

Kuwait

The Issue has not been approved by the Kuwait Central Bank or the Kuwait Ministry of Commerce and

Industry, nor has our Company received authorisation or licensing from the Kuwait Central Bank or the

Kuwait Ministry of Commerce and Industry to market or sell the Equity Interests within Kuwait. Therefore,

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no services relating to the offering, including the receipt of applications and/or the allotment of Equity Shares

may be rendered within Kuwait by our Company or persons representing our Company.

Oman

This Placement Document and the Equity Shares offered under it are issued and governed by the laws of India.

No offer or marketing of the Equity Shares has been or will be made by our Company from within the

Sultanate of Oman and no subscription for Equity Shares may or will be effected or undertaken within the

Sultanate of Oman. Our Company does not have a presence or representation in the Sultanate of Oman and any

purchase of the Equity Shares will be deemed to be made in and under the laws of India.

By receiving this Placement Document, the person or entity to whom it has been issued understands,

acknowledges and agrees that this Placement Document has not been registered or approved by the Central

Bank of Oman, the Oman Ministry of Commerce and Industry, the Oman Capital Market Authority or any

other authority in the Sultanate of Oman, and neither our Company nor the Book Running Lead Manager is

authorized or licensed by the Central Bank of Oman, the Oman Ministry of Commerce and Industry, the Oman

Capital Market Authority or any other authority in the Sultanate of Oman, to market or sell the Equity Shares

within the Sultanate of Oman.

The Equity Shares offered under this Placement Document have not and will not be listed on any stock

exchange in the Sultanate of Oman.

Qatar

This Placement Document does not, and is not intended to, constitute an invitation or an offer of securities in

the State of Qatar (including the Qatar Financial Centre) and accordingly should not be construed as such. The

Equity Shares have not been, and shall not be, offered, sold or delivered at any time, directly or indirectly, in

the State of Qatar. Any offering of the Equity Shares shall not constitute a public offer of securities in the State

of Qatar.

By receiving this Placement Document, the person or entity to whom it has been provided to understands,

acknowledges and agrees that: (a) neither this Placement Document nor the Equity Shares have been registered,

considered, authorised or approved by the Qatar Central Bank, the Qatar Financial Markets Authority, the

Qatar Financial Centre Regulatory Authority or any other authority or agency in the State of Qatar; (b) neither

our Company nor the Book Running Lead Manager is authorised or licensed by the Qatar Central Bank, the

Qatar Financial Markets Authority, the Qatar Financial Centre Regulatory Authority, or any other authority or

agency in the State of Qatar, to market or sell the Equity Shares within the State of Qatar; (c) this Placement

Document may not be provided to any person other than the original recipient and is not for general circulation

in the State of Qatar; and (d) no agreement relating to the sale of the Equity Shares shall be consummated

within the State of Qatar.

No marketing of the Equity Shares has been or will be made from within the State of Qatar and no subscription

to the Equity Shares may or will be consummated within the State of Qatar. Any applications to invest in the

Equity Shares shall be received from outside of Qatar. This Placement Document shall not form the basis of, or

be relied on in connection with, any contract in Qatar. Neither our Company nor the Book Running Lead

Manager is, by distributing this Placement Document, advising individuals resident in the State of Qatar as to

the appropriateness of investing in or purchasing or selling securities or other financial products. Nothing

contained in this Placement Document is intended to constitute investment, legal, tax, accounting or other

professional advice in, or in respect of, the State of Qatar.

Saudi Arabia

This Placement Document may not be distributed in the Kingdom of Saudi Arabia except to such persons as

are permitted under the Offers of Securities Regulations issued by the Capital Market Authority in the

Kingdom of Saudi Arabia.

The Capital Market Authority does not make any representation as to the accuracy or completeness of this

Placement Document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in

reliance upon, any part of this Placement Document. Prospective purchasers of the Equity Shares offered

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hereby should conduct their own due diligence on the accuracy of the information relating to the Equity Shares.

If you do not understand the contents of this Placement Document you should consult an authorised financial

adviser.

Singapore

This Placement Document has not been and will not be registered as a prospectus with the Monetary Authority

of Singapore (MAS) under the Securities and Futures Act (Chapter 289) of Singapore (SFA). Accordingly, the

Equity Shares may not be offered or sold, or made the subject of an invitation for subscription or purchase nor

may this Placement Document or any other document or material in connection with the offer or sale, or

invitation for subscription or purchase of the Equity Shares be circulated or distributed, whether directly or

indirectly, in Singapore other than (i) to an “institutional investor” within the meaning of Section 274 of the

SFA and in accordance with the conditions of an exemption invoked under Section 274, (ii) to a relevant

person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the

conditions specified in Section 275, of the SFA, or (iii) other pursuant to, and in accordance with the

conditions of, any other applicable provision of the SFA.

Where the Equity Shares are subscribed or purchased under Section 275 of the SFA by a relevant person

which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole

business of which is to hold investments and the entire share capital of which is owned by one or more

individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited

investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an

accredited investor, shares, debentures and units of shares and debentures of that corporation or the

beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within 6 (six)

months after that corporation or that trust has acquired the Equity Shares pursuant to an offer made under

Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person

defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such

shares, debentures and units of shares and debentures of that corporation or such rights or interest in that trust

are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each

transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and

further for a corporation, in accordance with the conditions specified in Section 275 of the SFA; (2) where no

consideration is or will be given for the transfer; or (3) where the transfer is by operation of law.

United Arab Emirates (excluding the Dubai International Financial Centre)

The Equity Shares have not been, and are not being, publicly offered, sold, promoted or advertised in the

United Arab Emirates (U.A.E.) other than in compliance with the laws of the U.A.E. Prospective investors in

the Dubai International Financial Centre should have regard to the specific notice to prospective investors in

the Dubai International Financial Centre set out below. The information contained in this Placement Document

does not constitute a public offer of securities in the U.A.E. in accordance with the Commercial Companies

Law (Federal Law No. 8 of 1984 of the U.A.E., as amended) or otherwise and is not intended to be a public

offer. Our Company and the Equity Shares have not been approved or licensed by or registered with the

Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority or any other

relevant licensing authorities or governmental agencies in the U.A.E. This Placement Document has not been

approved by or filed with the Central Bank of the United Arab Emirates, the Emirates Securities and

Commodities Authority or the Dubai Financial Services Authority. This Placement Document is being issued

to a limited number of selected institutional and sophisticated investors, is not for general circulation in the

U.A.E. and may not be provided to any person other than the original recipient or reproduced or used for any

other purpose. If you do not understand the contents of this Placement Document, you should consult an

authorised financial adviser. This Placement Document is provided for the benefit of the recipient only, and

should not be delivered to, or relied on by, any other person.

Dubai International Financial Centre

This Placement Document relates to an exempt offer (an “Exempt Offer”) in accordance with the Offered

Securities Rules of the Dubai Financial Services Authority (the “DFSA”). This Placement Document is

intended for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied

on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in

connection with Exempt Offers. The DFSA has not approved this Placement Document nor taken steps to

verify the information set out in it, and has no responsibility for it. The Equity Shares to which this Placement

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Document relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the

Equity Shares offered in the Issue should conduct their own due diligence on the Equity Shares. If you do not

understand the contents of this Placement Document, you should consult an authorised financial adviser. For

the avoidance of doubt, the Equity Shares are not interests in a ‘‘fund’’ or a ‘‘collective investment scheme’’

within the meaning of either the Collective Investment Law (DIFC Law No. 2 of 2010) or the Collective

Investment Rules Module of the Dubai Financial Services Authority Rulebook.

United Kingdom (in addition to the European Economic Area selling restrictions above)

The Equity Shares offered in the Issue cannot be promoted in the United Kingdom to the general public. The

contents of this Placement Document have not been approved by an authorised person within the meaning of

Financial Services and Markets Act 2000, as amended (FSMA). The Book Running Lead Manager (a) may

only communicate or caused to be communicated and will only communicate or cause to be communicated an

invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA), to

persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets

Act 2000 (Financial Promotion) Order 2005, as amended (Financial Promotion Order), or (ii) fall within any

of the categories of persons described in article 49(2)(a) to (d) of the Financial Promotion Order or otherwise in

circumstances in which section 21(1) of the FSMA does not apply to our Company; and (b) has complied and

will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the

Equity Shares in, from or otherwise involving the United Kingdom. Any invitation or inducement to engage in

investment activity (within the meaning of Section 21 of FSMA) in connection with, or relating to, the sale or

purchase of any Equity Shares, may only be communicated or caused to be communicated in circumstances in

which Section 21(1) of the FSMA does not apply. It is the responsibility of all persons under whose control or

into whose possession this document comes to inform themselves about and to ensure observance of all

applicable provisions of FSMA in respect of anything done in relation to an investment in Equity Shares in,

from or otherwise involving, the United Kingdom.

United States of America

The Equity Shares offered in the Issue have not been and will not be registered under the Securities Act or any

state securities laws in the United States and may not be offered or sold in the United States except pursuant to

an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in

accordance with any applicable state securities laws. The Equity Shares are not being offered or sold in the

United States in the Issue. The Equity Shares are being offered and sold in the Issue only outside the United

States in accordance with Regulation S. To help ensure that the offer and sale of the Equity Shares in the Issue

was made in compliance with Regulation S, each purchaser of Equity Shares in the Issue will be deemed to

have made the representations, warranties, acknowledgements and undertakings set forth in the section titled

‘Transfer Restrictions’ on page 153 of this Placement Document.

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TRANSFER RESTRICTIONS

The Equity Shares Allotted in the Issue are not permitted to be sold for a period of 1 (one) year from the date

of Allotment, except on the Stock Exchanges. Due to the following restrictions, investors are advised to

consult legal counsel prior to making any resale, pledge or transfer of the Equity Shares, except if the resale of

the Equity Shares is by way of a regular sale on the Stock Exchanges.

United States of America

The Equity Shares offered in the Issue have not been and will not be registered under the Securities Act or any

state securities laws in the United States and may not be offered or sold except pursuant to an exemption from,

or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with any

applicable state securities laws.

Each purchaser of the Equity Shares, by accepting delivery of this Placement Document, will be deemed to:

1. Represent and warrant to our Company, the Book Running Lead Manager and its affiliates that the offer

and sale of the Equity Shares to it is in compliance with all applicable laws and regulations.

2. Represent and warrant to our Company, the Book Running Lead Manager and its affiliates that it was

outside the United States (within the meaning of Regulation S) at the time the offer of the Equity Shares

was made to it and it was outside the United States (within the meaning of Regulation S) when its buy

order for the Equity Shares was originated.

3. Represent and warrant to our Company, the Book Running Lead Manager and its affiliates that it did

not purchase the Equity Shares as a result of any directed selling efforts (as defined in Regulation S).

4. Acknowledge that the Equity Shares have not been and will not be registered under the Securities Act

or any state securities laws in the United States and warrant to our Company, the Book Running Lead

Manager and its respective affiliates that it will not offer, sell, pledge or otherwise transfer the Equity

Shares except in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S or

pursuant to any other available exemption from registration under the Securities Act and in accordance

with all applicable securities laws of the States of the United States and any other jurisdiction, including

India.

5. Represent and warrant to our Company, the Book Running Lead Manager and its affiliates that if it

acquired any of the Equity Shares as fiduciary or agent for one or more investor accounts, it has sole

investment discretion with respect to each such account and that it has full power to make the foregoing

acknowledgments, representations and agreements on behalf of each such account.

6. Acknowledge that our Company, the Book Running Lead Manager and its affiliates, and others will

rely upon the truth and accuracy of the foregoing acknowledgements, representations and warranties

and warrant to our Company and the Book Running Lead Manager that if any such acknowledgements,

representations or warranties deemed to have been made by virtue of its purchase of the Equity Shares

are no longer accurate, it will promptly notify our Company and the Book Running Lead Manager.

Any resale or other transfer, or attempted resale or other transfer, of the Equity Shares made other than in

compliance with the above-stated restrictions will not be recognized by our Company.

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THE SECURITIES MARKET OF INDIA

The information in this section has been extracted from publicly available documents from various sources,

including officially prepared materials (including websites) from the SEBI and the Stock Exchanges, and has

not been prepared or independently verified by our Company or the Book Running Lead Manager or any of

their respective affiliates or advisors.

The Indian Securities Market

India has a long history of organised securities trading. In 1875, the first stock exchange was established in

Mumbai. The BSE and the NSE together hold a dominant position among the stock exchanges in terms of the

number of listed companies, market capitalisation and trading activity.

Indian Stock Exchanges

India‘s stock exchanges are regulated primarily by the SEBI, as well as by the Government acting through the

Ministry of Finance, Capital Markets Division, under the SCRA , the SCRR, the SEBI Act, the Depositories

Act, the Companies Act and various rules and regulations framed thereunder.

On June 20, 2012, the SEBI, in exercise of its powers under the SCRA and the SEBI Act, notified the SCR

(SECC) Rules which regulate, inter alia, the recognition, ownership and internal governance of stock

exchanges and clearing corporations in India together with providing for minimum capitalisation requirements

for stock exchanges. The SCRA, the SCRR and the SCR (SECC) Rules along with the rules, bye-laws and

regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications

for membership thereof and the manner in which contracts are entered into and enforced between members.

The SEBI Act, under which the SEBI was established by the Government, grants the SEBI powers to promote,

develop and regulate the Indian securities markets, including stock exchanges and other financial

intermediaries in the capital markets, to protect the interests of investors, to promote and monitor self-

regulatory organisations, to prohibit fraudulent and unfair trade practices and insider trading and to regulate

substantial acquisitions of shares and takeovers of companies. The SEBI has also issued regulations

concerning minimum disclosure requirements by public companies, rules and regulations concerning investor

protection, insider trading, substantial acquisition of shares and takeovers of companies, buyback of securities,

delisting of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, Mutual

Funds, FIIs, credit rating agencies and other capital market participants.

Listing

The listing of securities on an Indian stock exchange is regulated by the applicable Indian laws including the

Companies Act, the SCRA, the SCRR, the SEBI Act, the Listing Agreement and various guidelines and

regulations issued by the SEBI. Under the SCRA and the SCRR, the governing body of each stock exchange is

empowered to suspend or withdraw admission to trading of or dealing in a listed security for breach of or non -

compliance by a listed company of any of the conditions of admission to dealings or for any other reason,

subject to the listed company receiving prior written notice of such intent of the stock exchange and upon

granting of a hearing in the matter. In the event that a suspension of a company‘s securities continues for a

period in excess of 3 (three) months, the company may appeal to the Securities Appellate Tribunal, which has

the power to vary or set aside the decision of the stock exchange in this regard. The SEBI also has the power to

amend the Listing Agreement and the bye-laws of the stock exchanges in India.

Delisting of Securities

The SEBI has notified the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations,

2009 in relation to the voluntary and compulsory delisting of securities from the stock exchanges. In addition,

certain amendments to the SCRR have also been notified in relation to delisting.

Minimum Level of Public Shareholding

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Pursuant to an amendment of the SCRR, all listed companies (except public sector undertakings) are required

to maintain a minimum public shareholding of 25%. We are in compliance with the minimum public

shareholding requirement. Where the public shareholding in a listed company falls below 25% at any time,

such company is required to bring the public shareholding to 25% within a maximum period of 12 months

from the date of such fall in the manner specified by the SEBI.

Index-Based Market-Wide Circuit Breaker System

In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to

apply daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The

index-based market-wide circuit breaker system (equity and equity derivatives) when triggered, bring about a

co-ordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit

breakers are triggered by movement of either the SENSEX of the BSE or the S&P CNX NIFTY of the NSE,

whichever is breached earlier.

In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise

price bands. However, no price bands are applicable on scrips on which derivative products are available or

scrips included in indices.

BSE

Established in 1875, the BSE is the oldest stock exchange in India. In 1956, it became the first stock exchange

in India to obtain permanent recognition from the Government under the SCRA. It has evolved over the years

into its present status as one of the premier stock exchanges of India.

NSE

The NSE was established by financial institutions and banks to serve as a national exchange and to provide

nationwide, on-line, satellite-linked, screen-based trading facilities with electronic clearing and settlement for

securities including government securities, debentures, public sector bonds and units. It has evolved over the

years into its present status as one of the premier stock exchanges of India. The NSE was recognised as a stock

exchange under the SCRA in April 1993 and commenced operations in the wholesale debt market segment in

June 1994.

Internet-based Securities Trading and Services

The SEBI approved internet trading in January 2000. Internet trading takes place through order routing

systems, which route customer orders to exchange trading systems for execution. This permits customers

throughout the country to trade using brokers’ internet trading systems.

Stock brokers interested in providing this service are required to apply for permission to the relevant stock

exchange and also have to comply with certain conditions stipulated under applicable law. The NSE became

the first exchange to grant approval to its members for providing internet-based trading services. Internet

trading is possible on both the ‘equities’ as well as the ‘derivatives’ segments of the NSE.

Trading Hours

Trading on both the BSE and the NSE occurs from Monday through Friday, from 9.15 a.m. to 3.30 p.m. Indian

Standard Time. The BSE and the NSE are closed on public holidays. The stock exchanges have been permitted

to set their own trading hours (in cash and derivatives segments) subject to the condition that (i) the trading

hours are between 9 a.m. and 5 p.m.; and (ii) the stock exchange has in place risk management system and

infrastructure commensurate to the trading hours.

Trading Procedure

In order to facilitate smooth transactions, the BSE replaced its open outcry system with BSE On-line Trading

facility in 1995. This totally automated screen based trading in securities was put into practice nation-wide.

This has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles

and improving efficiency in back-office work.

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NSE also provides on-line trading facilities through a fully automated screen based trading system called the

‘National Exchange for Automated Trading’ which operates on a strict price/time priority besides enabling

efficient trade. National Exchange for Automated Trading has provided depth in the market by enabling a large

number of members all over India to trade simultaneously, narrowing the spreads.

Takeover Code

Disclosure and mandatory open offer obligations for listed Indian companies under Indian law are governed by

the Takeover Code which provide specific regulations in relation to substantial acquisition of shares and

takeover. Once the equity shares of a company are listed on a stock exchange in India, the provisions of the

Takeover Code will apply to acquisitions of the company’s shares/voting rights/control. The Takeover Code

prescribes certain thresholds or trigger points in the shareholding a person or entity has in the listed Indian

company, which give rise to certain obligations on part of the acquirer. Acquisitions up to a certain threshold

prescribed under the Takeover Code mandate specific disclosure requirements, while acquisitions crossing

particular thresholds may result in the acquirer having to make an open offer of the shares of the target

company.

If an acquirer (together with any persons acting in concert with him): (a) acquires 25% of the voting rights in a

listed company; or (b) already holds 25% of the voting rights in a listed company, and acquires more than 5%

of the voting rights in the listed company between April 1 and March 31 in any year; or (c) acquires control

over a listed company, such acquirer will have to make an open offer to the public shareholders for at least

26% of the total shares of the listed company.

The Takeover Code also provides for the possibility of indirect acquisitions, imposing specific obligations on

the acquirer in case of such indirect acquisition. Since, our Company is an Indian listed company, the

provisions of the Takeover Code apply to our Company.

Insider Trading Regulations

The Insider Trading Regulations have been notified by the SEBI to prohibit and penalise insider trading in

India. An insider is, among other things, prohibited from dealing in the securities of a listed company when in

possession of unpublished price sensitive information. The Insider Trading Regulations also provide disclosure

obligations for shareholders holding more than a pre-defined percentage of equity shares, and directors and

officers, with respect to their shareholding in the company, and the changes therein. The definition of “insider”

includes any person who has received or has had access to unpublished price sensitive information in relation

to securities of the company or any person reasonably expected to have access to unpublished price sensitive

information in relation to securities of the company and who is, was or is deemed to have been, connected with

the company.

Depositories

The Depositories Act provides a legal framework for the establishment of Depositories to record ownership

details and effect transfers in book-entry form. Pursuant to the Depositories Act, the SEBI framed the

Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 to regulate, inter

alia, the formation and registration of such Depositories, the registration of Depository Participants as well as

the rights and obligations of the Depositories, Depository Participants, companies and beneficial owners.

The depository system has significantly improved the operation of the Indian securities markets.

Derivatives (Futures and Options)

Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in

February 2000 and derivative contracts were included within the term ‘securities’, as defined by the SCRA.

Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a

separate segment of an existing stock exchange.

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DESCRIPTION OF EQUITY SHARES

Set forth below is certain information relating to the Equity Shares of our Company including a brief summary

of some of the provisions of the Memorandum and Articles, the Companies Act, 1956 and the Companies Act,

2013 relating to the rights attached to the Equity Shares. Prospective investors are urged to read the

Memorandum and Articles carefully, and consult with their advisers, as the Memorandum and Articles and

applicable Indian law, and not this summary, govern the rights attached to the Equity Shares.

General

As of the date of this Placement Document, the authorised share capital of our Company is ₹ 8,500 lakhs

consisting of 17,50,00,000 Equity Shares of ₹ 2 each and 50,00,000 Redeemable Preference Shares of ₹ 100

each.

As of the date of this Placement Document, the outstanding paid-up equity share capital of our Company is ₹

1,645.78 lakhs. The Equity Shares have been are listed on the NSE and the BSE since 1989 and 1995

respectively.

Articles of Association

Our Company is governed by its Articles. Table F of the Companies Act, 2013 is not applicable to our

Company.

Dividends

Under the Companies Act, an Indian company pays dividend upon a recommendation by its board of directors

and subject to approval by a majority of the members, who have the right to decrease but not to increase the

amount of the dividend recommended by the board of directors. However, the board of directors is not

obligated to recommend a dividend. The decision of the board of directors and shareholders of the company

may depend on a number of factors, including but not limited to, the company‘s profits, capital requirements

and overall financial condition. The declaration of the Board as to the amount of the net profits shall be

conclusive.

Subject to certain conditions specified under Section 123 of the Companies Act, 2013 and the rules made

thereunder no dividend can be declared or paid by a company for any financial year except (a) out of the

profits of the company for that year, calculated in accordance with the provisions of the Companies Act, 2013;

or (b) out of the profits of the company for any previous financial year(s) arrived at in accordance with the

Companies Act, 2013 and remaining undistributed; or (c) out of both; or (d) out of money provided by the

central government or a state government for payment of dividend by the company in pursuance of a guarantee

given by that government.

No dividend shall be payable except in cash. The Directors may declare interim dividend as justified by the

position of our Company.

The Equity Shares issued pursuant to this Placement Document shall rank pari passu with the existing Equity

Shares in all respects including entitlements to any dividends that may be declared by our Company.

Capitalisation of Profits

Our Company may capitalize any part of the amount for the time being standing to the credit of any of our

Company’s reserve accounts or to the credit of the profit and loss account or otherwise available for

distribution. The capitalisation may be done among the Shareholders in the same proportion as they would

have been entitled thereto as dividend and can be applied in paying up in full any unissued shares and/or

towards payment of any unpaid amounts on shares. In addition, a bonus issue by our Company shall also be

subject to the SEBI Regulations.

Alteration of Share Capital

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The Articles of our Company authorise it to increase the authorised capital by issuing new shares consisting of

equity and/or preference shares, as our Company may determine in a general meeting.

The authorised share capital of our Company may be divided into several classes with preferential, qualified or

other special rights, privileges, conditions or restrictions attached thereto whether in regard to dividend, voting,

return of capital or otherwise. If authorised share capital of our Company is divided into shares of different

classes, the rights of any such class may be varied, modified, affected, extended, abrogated or surrendered as

provided by the Articles.

Preference Shares

Our Company may subject to the provisions of the Companies Act and the consent of the Board issue on a

cumulative or non-cumulative basis preference shares liable to be redeemed. The Board may provide for

redemption of such shares on such terms as they deem fit, subject to the provisions of the Companies Act,

including the right to redeem at a premium or otherwise as they deem fit. In addition, our Company may

subject to the provisions of the Companies Act and the consent of the Board issue on a cumulative or

noncumulative basis convertible redeemable preference shares. The Directors may provide for redemption at a

premium or otherwise and / or conversion of such shares into such securities on such terms as they may deem

fit.

General Meetings of Shareholders

There are two types of general meetings of the shareholders:

1. Annual general meeting (AGM); and

2. Extraordinary General Meeting (EGM).

A company must hold its AGM within 15 months of the previous AGM or within 6 (six) months after the end

of each financial year, whichever is earlier, unless extended by the RoC at the request of the company for any

special reason.

Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to

members at least 21 days prior to the date of the proposed meeting. A general meeting may be called after

giving shorter notice if consent is received, in writing or in electronic mode, from not less than 95% of the

shareholders entitled to vote at that meeting.

Voting Rights

Every member present in person and entitled to vote shall have 1 (one) vote on a show of hands. On a poll, the

voting rights will be in proportion to his share of the paid up capital of the company held by him, subject to

any rights or restrictions for the time being attached to any class or classes of shares.

The Articles provide that votes may be given by proxies in a manner as authorised by the Articles. The

instrument appointing a proxy is required to be lodged with our Company at least 48 hours before the time of

the meeting.

Transfer of shares

An instrument of transfer of shares must be in writing in the form prescribed under the Companies Act. Such

instrument must be executed both by the transferor and the transferee and attested and the transferor is deemed

to be the member until the name of the transferee is entered in the register of members in respect thereof. An

application for the registration of a transfer of shares in a company may be made either by the transferor or the

transferee. Where the application is made by the transferor and relates to partly paid shares, the transfer shall

not be registered unless the company gives notice of the application to the transferee and the transferee makes

no objection to the transfer within 2 (two) weeks from the receipt of the notice.

Shares held through Depositories are transferred in the form of book entries or in electronic form in

accordance with the Depositories Act and the Securities and Exchange Board of India (Depositories and

Participant) Regulations, 1996. These regulations provide the regime for the functioning of the Depositories

and the Depository Participants and set out the manner in which the records are to be kept and maintained and

the safeguards to be followed in such a system. While transfer of beneficial ownership of shares held through a

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Depository is exempt from stamp duty, it is subject to a securities transaction tax (levied on and collected by

the stock exchanges on which such equity shares are listed). Our Company has entered into an agreement for

such depository services with the NSDL and the CDSL.

Acquisition by our Company of its own shares

A company is empowered to buy-back its own shares or other specified securities out of its free reserves, the

securities premium account or the proceeds of any fresh issue of shares or other specified securities (other than

the kind of shares or securities proposed to be bought back) subject to certain conditions, including:

1. the buy-back should be authorised by the articles of association of the company;

2. a special resolution has been passed in a general meeting authorising the buy-back (in the case of listed

companies, by means of a postal ballot) unless the buy-back is for 10% or less than 10% of the total

paid-up equity capital and free reserves of the company and such buy-back has been authorized by the

board of directors of the company by means of a resolution passed at its meeting;

3. the proceeds utilised for the buy-back is limited to not more than 25% of the total paid-up capital and

free reserves of the company;

4. the buy-back of equity shares in any financial year is limited to not more than 25% of the total paidup

equity capital of the company in that financial year. No offer of buy-back shall be made within 1 (one)

year from the closure of the previous offer of buy-back;

5. the secured and unsecured debt owed by the company is not more than twice the paid-up capital and

free reserves after such buy-back;

6. the shares or other specified securities for buy back are fully paid-up; and

7. the buy-back is in accordance with the Securities and Exchange Board of India (Buy-Back of

Securities) Regulations, 1998.

A company buying back its securities is required to extinguish and physically destroy the securities so bought

back within 7 (seven) days of the last date of completion of the buy-back. Further, a company buying back its

securities is not permitted to buy back any securities for a period of 1 (one) year from the date of closure of the

preceding offer of buy-back or to issue the same kind of securities for 6 (six) months subject to certain limited

exceptions.

Other than as described above, a company is prohibited from acquiring its own shares unless the consequent

reduction of capital is effected by an approval of at least 75% of its shareholders, voting on it in accordance

with the Companies Act and sanctioned by the High Court in terms of the Companies Act. Subject to certain

conditions, a public company is prohibited from giving, whether directly or indirectly and whether by means

of loan, guarantee, provision of security or otherwise, any financial assistance for the purpose of or in

connection with a purchase or subscription made or to be made by any person for any shares in the company or

its holding company.

A company is also prohibited from purchasing its own shares or specified securities through any subsidiary

company including its own subsidiary companies or through any investment company or group of investment

companies. Further, a company is prohibited from purchasing its own shares or specified securities, inter alia,

if the company is in default with respect to the repayment of deposit or interest, in the redemption of

debentures or preference shares, in payment of dividend to a shareholder, in repayment of any term loan or

interest payable thereon to any financial institution or bank.

Liquidation Rights

On winding up, preference shares rank as regards capital in priority to equity shares to the extent of the paid up

value of the preference shares, but to no other rights or participation in its assets. Subject to the rights of

creditors, of employees and of the holders of any other shares entitled by their terms of issue to preferential

repayment over the equity shares and other dues payable, in the event of a winding-up of our Company, the

preference shareholders are entitled to be repaid the amounts of capital paid up or credited as paid up on such

shares. All surplus assets, after payment of statutory dues and other dues to employees, creditors and the

holders of any preference shares, belong to the holders of the equity shares in proportion to the amount paid up

or ought to have been paid up on the equity shares, respectively, at the commencement of the winding-up.

Subject to applicable provisions of the FEMA, all amounts payable with respect to Equity Shares upon

liquidation of our Company may be paid by our Company to the holder thereof in Rupees and may be

converted into foreign currency and freely transferred out of the Republic of India without the necessity of

obtaining any governmental or regulatory authorisation or approval in India or any political subdivision or

taxing authority thereof.

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TAXATION

The information provided below sets out the possible tax benefits available to the shareholders of an Indian

company in a summary manner only and is not a complete analysis or listing of all potential tax consequences

of the subscription, ownership and disposal of Equity Shares, under the current tax laws presently in force in

India. Several of these benefits are dependent on the shareholders fulfilling the conditions prescribed under

the relevant tax laws. Hence the ability of the Shareholders to derive the tax benefits is dependent upon

fulfilling such conditions, which based on business imperatives they may face in the future and they may not

choose to fulfill. The following overview is not exhaustive or comprehensive; and is not intended to be a

substitute for professional advice. Investors are advised to consult their own tax consultant with respect to the

tax implications of an investment in the Equity Shares particularly in view of the fact that certain recently

enacted legislation may not have a direct legal precedent or may have a different interpretation on the

benefits, which an investor can avail.

STATEMENT OF TAX BENEFITS

Statement of Possible Direct Tax Benefits available to Jyoti Structures Limited and its Shareholders

under the applicable laws in India.

The Board of Directors,

Jyoti Structures Limited,

Valecha Chambers,

6th

Floor, New Link Road,

Andheri (West),

Mumbai 400 053

Sub: Statement of possible tax benefits available to Jyoti Structures Ltd. (“the Company”) and its shareholders.

Dear Sirs,

We refer to the proposed Qualified Institutional Placement (QIP) of the shares of Jyoti Structures Ltd. (“the

Company”) and enclose the statement showing the current position of tax benefits available to the Company

and to its shareholders as per the provisions of the IT Act, 1961 and the Wealth Tax Act, 1957 for inclusion in

the Placement Document.

The benefits disclosed in the enclosed statement are not exhaustive. Several of these tax benefits/consequences

are dependent on the Company or the Qualified Institutional Buyers (“QIBs”) fulfilling the conditions

prescribed under the relevant tax laws. Hence, the ability of the Company or the QIBs to derive tax benefits is

dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the

future and the Company may or may not choose to fulfill. No assurance is given that the revenue authorities

will concur with the views expressed herein.

We do not express any opinion or provide any assurance as to whether:

• The Company or its shareholders will continue to obtain these benefits in future; and

• The conditions prescribed for availing the benefits have been / would be met with.

The enclosed annexure is only intended to provide general information to the QIBs and is neither designed nor

intended to be a substitute for professional tax advice. A potential investor is advised to consult their own tax

consultant with respect to the tax implications of an investment in the equity shares, particularly in view of the

fact that certain recently enacted legislation may not have a direct legal precedent or may have a different

interpretation on the benefits, which an investor can avail.

Our views expressed in the Annexure are based on the information, explanations and representations obtained

from you and our understanding of the business activities and operations of the Company. No assurance is

given that the revenue authorities/courts will concur with the views expressed herein. Our views are based on

the existing provisions of law and their interpretation(s), which are subject to changes from time to time. We

161

do not assume responsibility to update the views consequent to such changes. The enclosed annexure is

intended solely for your information and for inclusion in the Preliminary Placement Document and the

Placement Document in connection with the proposed QIP and is not to be used, referred to or distributed for

any other purpose without our prior written consent. R. M. AJGAONKAR & ASSOCIATES shall not be liable

to JYOTI STRUCTURES LTD for any claims, liabilities or expenses relating to this assignment, except to the

extent of fees received relating to this assignment, as finally judicially determined to have resulted primarily

from bad faith or intentional misconduct

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm Registration No. 117247W

Komal Sevak

Mumbai Partner

16th

September, 2014 Membership No. 143685

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STATEMENT OF TAX BENEFITS AVAILABLE TO JYOTI STRUCTURES LTD. (“THE

COMPANY”) AND ITS SHAREHOLDERS

The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of

these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the

relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent

upon fulfilling such conditions, which based on business imperatives it faces in the future and it may or may

not choose to fulfil.

1. SPECIAL TAX BENEFITS AVAILABLE TO THE COMPANY

a) To the Company: There are no special direct tax benefits available to the Company.

b) To the Shareholders: There are no special direct tax benefits available to the shareholders of the Company.

2. GENERAL TAX BENEFITS AVAILABLE TO THE COMPANY

The following benefits are available to the Company after fulfilling conditions as per the respective provisions

of the relevant tax laws.

i) Dividends

Exemption u/s 10(34) of the IT Act

As per section 10(34) of the IT Act, any income by way of dividends, referred to in section 115-O, from a

domestic company is exempt from tax in the hands of the Company. Such income is also exempt from tax

while computing book profit for the purpose of determination of MAT liability.

However, in view of the provisions of Section 14A of the IT Act, no deduction is allowed in respect of any

expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for

disallowance is to be computed in accordance with the provisions contained therein and the rules framed in

that regards.

Also, Section 94(7) of the IT Act provides that losses arising from the sale/transfer of shares purchased within

a period of three months prior to the record date and sold/transferred within three months after such date, will

be disallowed to the extent dividend income on such shares is claimed as tax exempt.

Exemption u/s 10(35) of the IT Act

As per section 10(35) of the IT Act, the following incomes will be exempt in the hands of the Company:

a) Income received in respect of the units of a mutual fund specified under clause (23D) of Section 10 of the IT

Act; or

b) Income received in respect of units from the administrator of the specified undertaking; or

c) Income received in respect of units from the specified company.

However, this exemption does not apply to any income arising from transfer of units of the administrator of the

specified undertaking or of the specified company or of a mutual fund, as thecase may be.

Such income is also exempt from tax while computing book profit for the purpose of determination of MAT

liability.

However, in view of the provisions of Section 14A of the IT Act, no deduction is allowed in respect of any

expenditure incurred in relation to earning such income. The quantum of such expenditure liable for

disallowance is to be computed in accordance with the provisions contained therein and the rules framed in

that regards.

Also, Section 94(7) of the IT Act provides that losses arising from the sale/transfer of shares or units purchased

within a period of three months prior to the record date and sold/transferred within three months in case of

shares or nine months in case of units after such date, will be disallowed to the extent dividend income on such

shares or units is claimed as tax exempt.

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As per section 94(8) of the IT Act, if an investor purchases units within three months prior to the record date

for entitlement of bonus, is allotted bonus units without any payment on the basis of holding original units on

the record date and such person sells / redeems the original units within nine months of the record date, then

the loss arising from sale/ redemption of the original units will be ignored for the purpose of computing

income chargeable to tax and the amount of loss ignored shall be regarded as the cost of acquisition of the

bonus units.

ii) Income from buy back of shares

Exemption u/s 10(34A) of the IT Act

As per section 10(34A) of the IT Act, any income arising to the Company being a shareholder, on account of

buy back of shares (not being listed on a recognized stock exchange) by a company as referred to in section

115QA of the IT Act will be exempt from tax. Such income is also exempt from tax while computing book

profit for the purpose of determination of MAT liability.

iii) Profits and Gains of Business or Profession

Under Section 35(1)(i) and Section 35(1)(iv) of the IT Act, in respect of any revenue or capital expenditure

incurred respectively, other than expenditure on the acquisition of any land, on scientific research related to the

business of the company are allowed as deduction against the income of Company.

Under Section 35(1)(ii) of the IT Act, any sum paid to a research association which has as its object, the

undertaking of scientific research or to a university, college or other institution to be used for scientific

research is eligible for weighted deduction to the extent of one and three-fourth times (175%) of the sum so

paid. This weighted deduction is available to amounts paid to approved research association, university,

college or institution.

Under Section 35(1)(iia) of the IT Act any sum paid to a company registered in India which has as its main

object the conduct of scientific research and development and is approved by the prescribed authority and

fulfills such conditions as may be prescribed shall be liable to deduction at one and one fourth times (125%) of

the amount so paid.

Where the Company pays any sum to a National Laboratory or a University or an Indian Institute of

Technology or specified person referred to in section 35(2AA) of the IT Act with a specific direction that the

said sum shall be used for scientific research undertaken under a programme approved in this behalf by

prescribed authority, the deduction shall be allowed of a sum equal to two times (200%) of the sum so paid.

As per section 35AC of the IT Act, a deduction of the amount of expenditure incurred by way of payment of

any sum to a public sector company or a local authority or to an association or institution approved by the

National committee for carrying out any eligible project or scheme, is allowable while computing income from

profits and gains of business or profession.

In case the Company is engaged in any of the specified businesses as prescribed in Section 35AD of the IT

Act, there shall be allowed a deduction of 100% or 150% of the capital expenditure incurred, except cost of

land, goodwill or any financial instruments depending on the type and nature of the business and the date on

which such business commenced as prescribed in Section 35AD.

As per section 35CCD of the IT Act, a weighted deduction to the extent of one and one-half times (150%) of

the amount of expenditure incurred (other than cost of land and building) on any skill development project

notified by the Board, is allowable while computing income from profits and gains of business or profession.

Subject to certain conditions, Section 35D of the IT Act provides for deduction of specified preliminary

expenditure incurred before the commencement of the business or after the commencement of business in

connection with the extension of the undertaking or in connection with the setting up a new unit. The

deduction allowable is equal to one-fifth of such expenditure incurred for each of the five successive previous

years beginning with the previous year in which the business commences.

Under Section 35DD of the IT Act, the Company will be entitled to a deduction equal to one-fifth of the

expenditure incurred in connection with Amalgamation or Demerger of an undertaking by way of amortization

over a period of 5 successive years, beginning with the previous year in which the amalgamation or demerger

takes place.

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iv) Depreciation

The Company is entitled to claim depreciation on specified tangible and intangible assets owned and used by it

for the purpose of its business as per provisions of section 32 of the IT Act.

v) Carry forward and Set-off of Business loss and unabsorbed depreciation

Business loss (other than speculative loss), if any, arising during a year can be set-off against the income under

any other head of income, other than income under the head salaries, in terms of the provisions of section 71 of

the IT Act. Balance business loss, if any, can be carried forward and setoff against business profits for eight

subsequent years in terms of the provisions of section 72 of the IT Act.

Unabsorbed depreciation under section 32(2) of the IT Act can be carried forward and set-off against any

source of income in subsequent years subject to provisions of section 72(2) of the IT Act.

vi) Capital gains

As per section 2(42A) of the IT Act, a security (other than a unit) listed in a recognised stock exchange in

India or units of the Unit Trust of India or a unit of an equity oriented fund of the IT Act or zero coupon bonds

will be considered as short term capital asset, if the period of holding of such shares, units or security is twelve

months or less. If the period of holding is more than twelve months, it will be considered as long term capital

asset as per section 2(29A) of the IT Act. In respect of other assets, the determinative period of holding is

thirty six months as against twelve months mentioned above. Further, gain/loss arising from the transfer of

short term capital asset and long term capital asset is regarded as short term capital gains/loss and long term

capital gains/loss respectively.

Section 48 of the IT Act, which prescribes the mode of computation of Capital Gains, provides for deduction

of cost of acquisition/improvement and expenses incurred in connection with the transferof a capital asset,

from the sale consideration to arrive at the amount of Capital Gains. However, inrespect of long term capital

gains, it offers a benefit by permitting substitution of cost of acquisition/improvement with the indexed cost of

acquisition/improvement, which adjusts the cost ofacquisition/ improvement by a cost inflation index as

prescribed from time to time. However, such indexation benefit would not be available on bonds and

debentures.

As per section 10(38) of the IT Act, long term capital gains arising to the Company from transfer of long term

capital asset being an equity share in a Company or a unit of an equity oriented fund listed in recognized stock

exchange in India, where such transaction is chargeable to Securities TransactionTax (STT), will be exempt in

the hands of the Company.

However, such income shall be taken into account in computing book profit under section 115JB ofthe IT Act.

As per section 54EC of the IT Act, capital gains upto Rs. 50 lacs per annum, arising from the transfer of a long

term capital asset (in cases not covered under section 10(38) of the IT Act) are exempt from capital gains tax

provided such capital gains are invested within a period of six months after the date of such transfer in

specified bonds issued by National Highways Authority of India (NHAI) or Rural Electrification Corporation

Ltd (RECL). Provided further that the investment made by an assessee in the long-term specified asset, from

capital gains arising from transfer of one or more original assets, during the financial year in which the original

asset or assets are transferred and in the subsequent financial year does not exceed fifty lakh rupees.".

Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30 percent

(plus applicable surcharge, education cess and secondary higher education cess). However, as per section

111A of the IT Act, short term capital gains arising to the Company from the sale of equity shares or a unit of

an equity oriented fund transacted through a recognized stock exchange inIndia, where such transaction is

chargeable to STT, will be taxable at the rate of 15% (plus applicable surcharge, education cess and higher

education cess).

However, as per the proviso to section 112(1), if the tax on long term capital gains resulting on transfer of

listed securities or units or zero coupon bond (other than through a recognized stock exchange), calculated at

the rate of 20 percent with indexation benefit exceeds the tax on long term capital gains computed at the rate of

10 percent without indexation benefit, then such gains are chargeable to tax at concessional rate of 10 percent

(plus applicable surcharge, education cess and secondary higher education cess).

165

As per section 70 read with section 74 of the IT Act, short term capital loss arising during a year is allowed to

be set-off against short term capital gains as well as long term capital gains. Balance loss, if any, shall be

carried forward and set-off against any capital gains arising during subsequent eight assessment years in terms

of the provisions of section 74 of the IT Act.

Long term capital loss arising during a year is allowed to be set-off only against long term capital gains in

terms of section 70 of the IT Act. Balance loss, if any, shall be carried forward and set-off against long term

capital gains arising during subsequent eight assessment years in terms of the provisions of section 74 of the IT

Act. Long term capital loss arising on sale of shares or units of equity oriented fund subject to STT may not be

carried forward for set off.

vii) Credit of MAT

As per section 115JAA(1A) of the IT Act, credit is allowed in respect of tax paid under section 115JB of the

IT Act for any assessment year commencing on or after April 1, 2006.

MAT credit eligible to be carried forward will be the difference between MAT paid and the tax computed as

per the normal provisions of the IT Act for that assessment year. Such MAT credit isallowed to be carried

forward for set off purposes for upto ten assessment years immediately succeeding the assessment year in

which the MAT credit becomes allowable under section 115JAA(1A) of the IT Act.

MAT credit can be set off in a year when tax is payable under the normal provisions of the IT Act. MAT credit

to be allowed for set off shall be the difference between MAT payable and the tax computed as per the normal

provisions of the IT Act for that assessment year.

viii) Concessional rate of tax on Dividend from Foreign subsidiaries.

The dividend received by an Indian company from foreign companies, in which it holds not less than 26% of

the equity share capital is taxed at concessional rate of Tax @ 15% under Section 115BBD.

ix) Tax on distributed profits of domestic companies

As per section 115-O of the IT Act, tax on distributed profits of domestic companies is chargeable at 15%

(plus applicable surcharge, education cess and higher education cess). As per sub-section (1A) to section 115-

O, the domestic Company will be allowed to set-off the dividend received from its subsidiary company during

the financial year against the dividend distributed by it, while computing the Dividend Distribution Tax (DDT)

if:

a) the dividend is received from its domestic subsidiary and the subsidiary has paid the DDT payable on such

dividend; or

b) the dividend is received from a foreign subsidiary, the Company has paid tax payable under section

115BBD.

However, the same amount of dividend shall not be taken into account for reduction more than once.

With effect from 1st October, 2014, for the purpose of determination of tax payable as per the provisions of

section 115-O, any amount by the way of dividend as referred to in sub section (1) of section 115-O as reduced

by the amount referred to sub section (1a) of section 115-O shall be increased by such amount as would, after

reduction of the tax on such increased amount at the rate specified in sub-section (1) be equal to the net

distributed profit.

x) Other Deductions

A deduction equal to 100% or 50%, as the case may be, of the sums paid as donations to certain specified

entities is allowable as per section 80G of the IT Act.

A deduction amounting to 100% of any sum contributed to a political party as explained or an electoral trust,

otherwise than by way of cash, is allowable under section 80GGB of the IT Act while computing total income.

3. SPECIAL TAX BENEFITS AVAILABLE TO THE SHAREHOLDERS

There are no special tax benefits available to resident as well as foreign Institutional Investors (FIIs)

shareholders of the Company.

4. GENERAL TAX BENEFITS AVAILABLE TO THE SHAREHOLDERS

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4.1 Resident Shareholders

i) The Company is required to pay a dividend distribution tax currently at the rate of 16.995% and with effect

from 1st October, 2014 at the rate of 19.99%, (including applicable surcharge and education cess) on the

total amount distributed or declared or paid as dividend. Under Section 10(34) of the IT Act, income by

way of dividends referred to in Section115-O of IT Act received on shares of a company is exempt from

income tax in the hands of shareholders. However it is pertinent to note that Section 14A of the IT Act

restricts claims for deduction of expenses incurred in relation to exempt income. Thus, any expense

incurred to earn the dividend income is not an allowable expenditure.

As per section 94(7) of the Act, losses arising from sale/transfer of shares, where such shares are purchased

within three months prior to the record date and sold within three months from the record date, will be

disallowed to the extent such losses do not exceed the amount of dividend claimed exempt.

ii) The characterisation of gains/losses, arising from sale of shares, as capital gains or business income would

depend on the nature of holding in the hands of the shareholder and various other factors.

iii) Section 48 of the IT Act, which prescribes the mode of computation of capital gains, provides for

deduction of cost of acquisition/improvement and expenses incurred wholly and exclusively in connection

with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains.

However, in respect of Long Term Capital Gains, (“LTCG”) i.e. gains from shares held for a period

exceeding twelve months, from transfer of shares of an Indian company, the second proviso to Section 48

of the IT Act, permits substitution of cost of acquisition/improvement with the indexed cost of

acquisition/improvement, which adjusts the cost of acquisition/improvement by a cost inflation index, as

prescribed from time to time.

iv) Under Section 10(38) of the IT Act, LTCG arising to a shareholder on transfer of equity shares would be

exempt from tax where the sale transaction has been entered into on a recognised stock exchange of India

and is chargeable to Securities Transaction Tax (“STT”).

v) Under Section 112 of the IT Act and other relevant provisions of the IT Act, LTCG, (other than those

exempt under Section 10(38) of the IT Act) arising on transfer of shares would be subject to tax at the rate

of 20% (plus applicable surcharge and education cess) after indexation. The amount of such tax shall,

however, be limited to 10% (plus applicable surcharge and education cess) without indexation, at the

option of the shareholder in case the shares are listed.

vi) Under Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, LTCG

(other than those exempt under Section 10(38) of the IT Act) arising on the transfer of the Company’s

shares would be exempt from tax, if such capital gain is invested within 6 months after the date of such

transfer in the bonds (long term specified assets) issued by:

(a) National Highway Authority of India constituted under Section 3 of The National Highway Authority

of India Act, 1988; or

(b) Rural Electrification Corporation Limited, the company formed and registered under the Companies

Act, 1956.

and notified by the Central Government in the Official Gazette for the purposes of this section with the

conditions as prescribed.

The investment in the long term specified assets is eligible for such deduction to the extent of Rupees 50

lacs during any financial year.

If only part of the capital gain is so reinvested, the exemption available shall be in the same proportion as

the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term

specified asset is transferred or converted into money within three years from the date of its acquisition, the

amount so exempted shall be chargeable to tax during the year of such transfer or conversion. For this

purpose, if any loan or advance is taken as against such specified securities, then such person shall be

deemed to have converted such specified securities into money.

vii) Under Section 54F of the IT Act, subject to other conditions as specified in the section, where in the case

of an individual or HUF long term capital gains rise from transfer of shares of the company (other than

exempt u/s 10(38) of the IT Act) , then such capital gain, subject to the conditions and to the extent

specified therein, will be exempt if the net sales consideration from such transfer is utilized for purchase of

residential house property within a period of 1 (one) year before or 2 (two) year after the date on which the

transfer took place or for construction of residential house property within a period of three years after the

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date of transfer. If only a part of the net consideration is so reinvested, the exemption shall be

proportionately reduced.

viii) As per Section 111A of the IT Act, Short Term Capital Gains (“STCG”), (i.e., gains from shares held for

a period not exceeding twelve months) arising on transfer of the equity shares of the Company would be

taxable at a rate of 15% (plus applicable surcharge and education cess) where such transaction of sale is

entered on a recognised stock exchange in India and is liable to STT. STCG arising from transfer of the

equity Shares of the Company, other than those covered by Section 111A of the IT Act, would be subject

to tax as calculated under the normal provisions of the IT Act.

ix) As per Section 70 of the IT Act, Short Term Capital Loss computed for the given year is allowed to be set-

off against Short Term, as well as Long Term, Capital Gains computed for the said year. However, Long

Term capital Loss computed for the given year is allowed to be set-off only against the Long Term Capital

Gains computed for the said year. Further, as per Section 71 of the IT Act, short term capital loss or long

term capital loss for the year cannot be set-off against income under any other heads for the same year.

x) As per Section 74 of the Act, the balance short term capital loss, which is not set off under the provisions of

Section 70, is allowed to be carried forward for subsequent eight assessment years for being set off against

subsequent years‘ Short Term as well as Long Term Gains. However, the long term capital loss of any year

is allowed to be set off only against the Long Term Capital Gains so brought forward.

xi) In terms of Section 36(xv) of the Act, the STT paid by the shareholder in respect of the taxable securities

transactions entered into in the course of his business of transactions/trading in shares would be eligible for

deduction from the amount of income chargeable under the head ‘Profit and gains of business or

profession’, provided the income arising out of such taxable securities transactions is included in

computation of business profits. As such, no deduction will be allowed in computing the income

chargeable to tax as capital gains of such amount paid on account of STT.

4.2 Non Resident shareholders other than Foreign Institutional Investor (“FII”s), and Foreign Venture

Capital Investors (“FVCI”)

i) The Company is required to pay a dividend distribution tax currently at the rate of 16.995% and with effect

from 1st October, 2014 at the rate of 19.99%, (including applicable surcharge and education cess) on the

total amount distributed or declared or paid as dividend. Under Section 10(34) of the IT Act, income by

way of dividends referred to in Section 115-O of the IT Act received, is exempt from income tax in the

hands of shareholders. As per section 94(7) of the Act, losses arising from sale/transfer of shares, where

such shares are purchased within three months prior to the record date and sold within three months from

the record date, will be disallowed to the extent such losses do not exceed the amount of dividend claimed

exempt.

ii) The characterisation of gains/losses, arising from sale of shares, as Capital Gains or Business Income would

depend on the nature of holding in the hands of the shareholder and various other factors.

iii) Under the first proviso to Section 48 of the IT Act, in case of a non resident shareholder, in computing the

capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as

per exchange control regulations) (in cases not covered by Section 115E of the IT Act), adjustment is

provided for fluctuations in the value of Rupee in terms of foreign currency in which the original

investment was made. Cost indexation benefits will not be available in such a case. The capital gains/loss

in such a case is computed by converting the cost of acquisition, sales consideration and expenditure

incurred wholly and exclusively in connection with such transfer into the same foreign currency which was

utilised in the purchase of the shares.

iv) Under Section 10(38) of the IT Act, LTCG arising to a shareholder, being a non-resident, on sale of equity

shares would be exempt from tax, where the sale transaction has been entered into on a recognised stock

exchange of India and is chargeable to STT.

v) Under Section 112 of the IT Act and other relevant provisions of the IT Act, LTCG, (other than those

exempt under Section 10(38) of the IT Act) arising on transfer of shares of the Company would be subject

to tax at a rate of 20% (plus applicable surcharge and education cess) after indexation. The amount of such

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tax should however be limited to 10% (plus applicable surcharge and education cess) without indexation, at

the option of the shareholder, in case the shares are listed.

vi) Under Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, LTCG

(other than those exempt under Section 10(38) of the IT Act) arising on the transfer of shares of the

Company would be exempt from tax, if such capital gain is invested within 6 months after the date of such

transfer in the bonds (long term specified assets) issued by:

(a) National Highway Authority of India constituted under Section 3 of the National Highway Authority of

India Act, 1988; or

(b) Rural Electrification Corporation Limited, the company formed and registered under the Companies

Act, 1956.

and notified by the Central Government in the Official Gazette for the purposes of this section with the

conditions as prescribed.

The investment in the long term specified assets is eligible for such deduction to the extent of Rupees 50

lacs during any financial year.

If only part of the capital gain is so reinvested, the exemption available shall be in the same proportion as

the cost of the long term specified asset bears to the whole of the capital gain. However, in case the long

term specified asset is transferred or converted into money within three years from the date of its

acquisition, the amount so exempted shall be chargeable to tax during the year of such transfer or

conversion. For this purpose, if any loans or advance is taken as against such specified securities, than such

person shall be deemed to have converted such specified securities into money.

vii) Under Section 111A of the IT Act and other relevant provisions of the IT Act, STCG (i.e., if shares are

held for a period not exceeding 12 months) arising on transfer of equity share would be taxable at a rate of

15% (plus applicable surcharge and education cess) where such transaction of sale is entered on a

recognised stock exchange in India and is chargeable to STT. STCG arising from transfer of shares of the

Company, other than those covered by Section 111A of the IT Act, would be subject to tax as calculated

under the normal provisions of the IT Act.

viii) As per Section 70 of the IT Act, Short Term Capital Loss computed for the given year is allowed to be

set-off against Short Term, as well as Long Term, Capital Gains computed for the said year. However,

Long Term capital Loss computed for the given year is allowed to be set-off only against the Long Term

Capital Gains computed for the said year. Further, as per Section 71 of the IT Act, short term capital loss or

long term capital loss for the year cannot be set-off against income under any other heads for the same

year.

ix) As per Section 74 of the IT Act, Short Term Capital Loss computed for the given year is allowed to be set

off against Short Term as well as Long Term Gains computed for the said year. The balance loss, which is

not set off, is allowed to be carried forward for subsequent eight assessment years for being set off against

subsequent years’ Short Term as well as Long Term Gains. However, the Long Term capital Loss

computed for a given year is allowed to be set off only against the LTCG. The balance loss, which is not

set off, is allowed to be carried forward for eight subsequent assessment years for being set off against

subsequent years’ LTCG.

x) Where the shares of the Company have been acquired in convertible foreign exchange, Non Resident

Indians (‘NRI’), i.e. an individual being a citizen of India or person of Indian origin who is not a resident,

has the option of being governed by the provisions of Chapter XII-A of the IT Act, which, inter alia,

entitles them to the following benefits:

(a) Under section 115E of the IT Act, where the total income of a NRI includes any income from

investments or income from long term capital gain from an asset other than a specified asset, such

income shall be taxable at the rate of 20 % (plus applicable surcharge and education cess). Where

Shares of the company are acquired by a NRI, the LTCG arising to the NRI shall be taxable at the rate

of 10 % (plus applicable surcharge and education cess). The benefit of indexation of cost would not

be available.

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(b) Under Section 115F of the IT Act, LTCG (in cases not covered under Section 10(38) of the IT Act)

arising to an NRI from the transfer of the shares of Company acquired in convertible foreign

exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets or

in any savings certificates referred to in Section 10(4B), within six months of the date of transfer. If

only part of the net consideration is so reinvested, the exemption shall be proportionately reduced.

The amount so exempted shall be chargeable to tax subsequently under the head Capital Gains

relating to Capital Assets other than Short Term Capital assets, if the specified assets are transferred

or converted into money within three years from the date of their acquisition.

(c) Under Section 115G of the IT Act, it shall not be necessary for an NRI to furnish his return of income

under Section 139(1) of the IT Act, if his income assessable under the Act consists of only investment

income or LTCG or both; arising out of assets acquired, purchased or subscribed in convertible

foreign exchange and tax deductible at source has been deducted there from as per the provisions of

Chapter XVII-B of the IT Act.

(d) In accordance with the provisions of Section 115H of the Act, where an NRI becomes assessable as a

resident in India, he may furnish a declaration in writing to the assessing officer along with his return

of income for that year under Section 139 of the IT Act to the effect that the provisions of Chapter

XII-A of the IT Act shall continue to apply to him in relation to such investment income derived from

the specified assets (which do not include shares in an Indian company) for that year and subsequent

assessment years until such assets are converted into money.

(e) As per provisions of Section 115-I of the IT Act, an NRI may elect not to be governed by provisions of

Chapter XII-A and compute his total income as per other provisions of the IT Act.

xi) In terms of Section 36(xv) of the IT Act, the STT paid by the shareholder in respect of the taxable

securities transactions entered into in the course of his business of transactions/trading in shares

would be eligible for deduction from the amount of income chargeable under the head “Profit and

gains of business or profession” arising from taxable securities transactions. As such, no deduction

will be allowed in computing the income chargeable to tax as capital gains of such amount paid on

account of STT.

xii) In respect of non-residents, the tax rates and consequent taxation mentioned above will be further

subject to any benefits available under the Double Taxation Avoidance Agreement (the ‘DTAA’

between India and the country of residence of the non-resident/NRI). As per Section 90(2) of the IT

Act, provisions of the IT Act would prevail over the provisions of the DTAA to the extent they are

more beneficial to the non-resident/NRI.

4.3 Non-resident shareholders - FIIs

i) The Company is required to pay a dividend distribution tax currently at the rate of 16.995% and with effect

from 1st October, 2014 at the rate of 19.99%, (including applicable surcharge and education cess) on the

total amount distributed or declared or paid as dividend. Under Section 10(34) of the IT Act, income by

way of dividends referred to in Section 115-O received on the shares of a Company is exempt from income

tax in the hands of shareholders. However, it is pertinent to note that Section 14A of the IT Act restricts

claims for deduction of expenses incurred in relation to exempt income. Thus, any expense incurred to earn

the dividend income is not allowable expenditure. As per section 94(7) of the Act, losses arising from

sale/transfer of shares, where such shares are purchased within three months prior to the record date and

sold within three months from the record date, will be disallowed to the extent such losses do not exceed

the amount of dividend claimed exempt.

ii) The characterisation of gains/losses, arising from sale of shares, as Capital Gains or Business Income

would depend on the nature of holding in the hands of the shareholder and various other factors.

iii) Under the first proviso to Section 48 of the IT Act, in case of a non resident shareholder, in computing

the capital gains arising from transfer of shares of the company acquired in convertible foreign exchange

(as per exchange control regulations), an adjustment is provided for fluctuations in the value of Rupee in

terms of foreign currency in which the original investment was made. Cost indexation benefits will not be

available in such a case. The capital gains/loss in such a case is computed by converting the cost of

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acquisition, sales consideration and expenditure incurred wholly and exclusively in connection with such

transfer into the same foreign currency which was utilised in the purchase of the shares.

iv) Under Section 10(38) of the IT Act, LTCG arising to a shareholder on transfer of equity shares wouldbe

exempt from tax where, the sale transaction has been entered into on a recognised stock exchange of

India and is liable to STT.

v) Under Section 54EC of the IT Act and subject to the conditions and to the extent specified therein, LTCG

(other than those exempt under Section 10(38) of the IT Act) arising on the transfer of the shares of the

Company would be exempt from tax, if such capital gain is invested within six months after the date of

such transfer in the bonds (long term specified assets) issued by:

(a) National Highway Authority of India constituted under Section 3 of the National Highway Authority of

India Act, 1988; or

(b) Rural Electrification Corporation Limited, the company formed and registered under the Companies

Act, 1956.

and notified by the Central Government in the Official Gazette for the purposes of this section with the

conditions as prescribed.

The investment in the long term specified assets is eligible for such deduction to the extent of Rs.50 lacs

during any financial year.

If only part of the capital gain is so reinvested, the exemption available shall be in the same proportionas

the cost of long term specified assets bears to the whole of the capital gain. However, in case the long term

specified asset is transferred or converted into money within three years from the date of its acquisition, the

amount so exempted shall be chargeable to tax during the year of such transferor conversion. For this

purpose, if any loans or advance is taken as against such specified securities, then such person shall be

deemed to have converted such specified securities into money.

vi) Under Section 115AD (1)(i) of the IT Act, any income received in respect of securities (other than units

referred to in Section 115AB), other than dividends referred to in Section 115-O and LTCG or STCG,

shall be chargeable to tax at a rate of 20%.

Under Section 115AD (1)(ii) of the IT Act STCG arising to an FII on transfer of securities shall be

chargeable to tax at a rate of 30%, where such transactions are not subjected to STT, and at the rateof

15%, if such transaction of sale is entered on a recognised stock exchange in India and is chargeable to

STT. The above rates are to be increased by applicable surcharge and education cess.

Under Section 115AD (1)(iii) of the IT Act income by way of LTCG arising from the transfer of

securities (in cases not covered under Section 10(38) of the IT Act) held in the company will be taxable

at the rate of 10% (plus applicable surcharge and education cess). The benefits of indexation of cost and

of foreign currency fluctuations are not available to FIIs.

As per section 196D(2) of the IT Act, no deduction of tax at source will be made in respect of income by

way of capital gain arising from the transfer of securities referred to in section 115AD.

vii) As per section 90(2) of the IT Act, the provisions of the IT Act would prevail over the provisions of

DTAA entered between India and the country of fiscal domicile of the non-resident, if any, to the extent

they are more beneficial to the non-resident. Thus, a non-resident (including NRI) can opt to be governed

by the provisions of the Act or the applicable tax treaty, whichever is more beneficial. However, the non-

resident investor will have to furnish a certificate of his being a resident in a country outside India, to get

the benefit of the applicable DTAA and such other document as may be prescribed as per the provision of

section 90(4) of IT Act.

viii) In terms of Section 36(xv) of the IT Act, the STT paid by the shareholder in respect of the taxable

securities transactions entered into in the course of his business of transactions/trading in shares would be

eligible for deduction from the amount of income chargeable under the head “Profit and gains of business

or profession” arising from taxable securities transactions. As such, no deductionwill be allowed in

computing the income chargeable to tax as capital gains of such amount paid on account of STT.

ix) As per Section 196D of IT Act, no tax is to be deducted from any income, by way of Capital Gains

arising to an FII from the transfer of securities referred to in section 115AD of the IT Act.

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4.4 VENTURE CAPITAL COMPANIES/FUNDS

Under Section 10(23FB) of the IT Act, any income of Venture Capital Company to whom the certificate of

registration is granted before 21/05/2012 under SEBI (Venture Capital Funds) Regulations, 1996 or as a sub-

category I Alternative Investment Fund as is regulated under SEBI (Alternative Investment Funds Regulations)

under the SEBI Act, 1992, would be exempt from income tax, subject to conditions specified therein.

As per Section 115U of the IT Act, any income derived by a person from his investment in Venture Capital

Company/Venture Capital Fund would be taxable in the hands of the person making an investment in the same

manner as if it were the income accruing or arising to or received by such person had the investments been

made directly in the venture capital undertaking.

4.5 MUTUAL FUNDS

Under Section 10(23D) of the IT Act, any income of mutual funds registered under SEBI Act or regulations

made there under or mutual funds set up by public sector banks or public financial institutions or authorised by

the RBI and subject to the conditions specified therein, is exempt from tax subject to such conditions as the

Central Government may by notification in the Official Gazette, specify in this behalf. However, the mutual

funds shall be liable to pay tax on distributed income to unit holders under section 115R of the IT Act.

BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957

Asset as defined under Section 2(ea) of the Wealth Tax Act, 1957 does not include shares in companies and

hence, the shares of the company held by the shareholders would not be liable to wealth tax.

TAX DEDUCTION AT SOURCE

No income tax is deductible at source from income by way of capital gains arising to a resident shareholder

under the present provisions of the IT Act. However, as per the provisions of Section 195 of the IT Act, any

income by way of capital gains payable to non-residents (other than LTCG exempt u/s 10(38)) may be subject

to withholding of tax at the rate under the domestic tax laws or under the tax laws or under theDTAA,

whichever is beneficial to the assessee, unless a lower withholding tax certificate is obtained from the tax

authorities. However, the non-resident investor will have to furnish a certificate of his being a resident in a

country outside India and a suitable declaration for not having a fixed base in India, to get the benefit of the

applicable DTAA and such other document as may be prescribed as per the provision of section 90(4) of IT

Act. The withholding tax rates are subject to the recipients of income obtaining and furnishing a permanent

account number (PAN) to the payer, in the absence of which the applicable withholding tax rate would be the

higher of the applicable rates or 20%, under section 206AA of the Act.

Notes:

1. The above benefits are as per the current tax laws as amended by the Finance (No. 2) Act, 2014 (the

‘FA’).

2. As per the FA, surcharge is to be levied on individuals, HUF, AOP, body of individuals, artificial

juridical person, co-operative society and local authorities at the rate of 10% if the total income exceeds

Rs. 100 lacs.

3. The above statement of possible direct tax benefits sets out the provisions of law in a summary manner

only and is not a complete analysis or listing of all potential tax consequences of the purchase,

ownership and disposal of Shares.

4. The stated benefits will be available only to the sole/first named holder in case the shares are held by

the joint holders.

5. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further

subject to any benefits available under the DTAA, if any, between India and the country in which the

non-resident has fiscal domicile.

6. This statement is intended only to provide general information to the investors and is neither designed

nor intended to be substituted for professional tax advice. In view of the individual nature of tax

consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax

consequences of his/her participation in the scheme.

7. No assurance is given that the revenue authorities/courts will concur with the views expressed herein.

Our views are based on the existing provisions of law and its interpretation, which are subject to

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changes from time to time. We do not assume responsibility to update the views consequent to such

changes.

8. This statement of possible direct tax benefits enumerated above is as per the Act as amended by the FA.

The above statement of possible Direct-tax Benefits sets out the possible tax benefits available to the

company and its shareholders under the current tax laws presently in force in India. Several of these

benefits available are dependent on the Company or its shareholders fulfilling the conditions prescribed

under the relevant tax laws.

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LEGAL PROCEEDINGS

Our Company and the Subsidiaries are, from time to time, involved in various legal proceedings in the

ordinary course of business, which involve matters pertaining to, amongst others, tax (including entertainment

tax), regulatory and other disputes. The section below describes the legal proceedings, which singly or in

aggregate, could have a material adverse effect on our Company or the relevant Subsidiary.

Cases filed against our Company

Criminal Matters

Criminal Writ Petition

1. Kishan Dhannulal Sadhwani (Petitioner) has filed a criminal writ petition (No. 130 of 2007) in the

Bombay High Court (Nagpur Bench) against the State of Maharashtra, MSEDCL, our Company and

others. The Petitioner’s daughter, Kumari Mitali, while playing on the terrace of their house, came in

contact with a high voltage wire causing severe injuries and resulting in the loss of her right hand and

both legs. Our Company has been impleaded as a respondent in the petition as our Company, being the

contractor, had installed the wires on behalf of MSEDCL. The Petitioner has sought a writ or order

from the court for an investigation and also prosecution of responsible individuals and authorities.

Further, the Petitioner has also sought compensation of ₹ 2,00,00,000 and ad-interim costs of ₹ 20,00,000 for medical treatment of his daughter.

The Bombay High Court in its interim order dated May 5, 2008, directed our Company to deposit ₹ 1,00,000 in the court for medical treatment of the Petitioner’s daughter. Since the Petitioner informed

the court that a charge sheet has been filed in the matter and relief claimed in the criminal writ petition

does not survive, the Bombay High Court by its order dated February 7, 2012 granted permission to the

Petitioner to convert the criminal writ petition into a civil writ petition by which the relief which

survives for consideration is the payment of compensation. The matter is currently pending.

Criminal Complaint

1. The Forest Department, government of Maharashtra, has filed a criminal complaint (W.A No. 2 of

2010) against certain site workers of our Company in the Regional Forest Office, Shirur, Maharashtra,

alleging that some of the site workers employed by our Company for the one of the projects allegedly

killed and consumed a peacock. Based on investigation conducted by the forest officer, 4 (four) site

workers were arrested. Subsequently, the site workers were, however, released on bail and the project

manager has obtained anticipatory bail. Since then, no further action has been taken in this matter.

Civil matters

Civil Suits

1. The Municipal Corporation of Nashik (NMC) has preferred an appeal (No. 895 of 2005) in the Bombay

High Court against an order passed by the Civil Judge, Senior Division, Nashik (CJSD) in the special

suit (No. 486 of 1989) filed against our Company. In the special suit filed by the NMC before CJSD, it

was alleged that during the period November 1982 and March 1986, our Company had paid octroi duty

on certain raw materials and goods at a rate lesser than that prescribed rate of octroi duty, for such raw

materials and goods. Further, it was alleged that our Company had failed to make necessary

applications for seeking concession of octroi duty on raw materials imported. The CJSD passed an

order directing our Company to pay ₹ 3,35,308.11 along with interest at the rate of 6% from the date of

filing of suit until its realisation, towards fulfillment of our Company’s outstanding dues. However, the

NMC has preferred the present appeal against the order of the CJSD on the ground that the CJSD had

erred in passing an order for a lesser amount instead of the entire value of ₹ 27,43,932, which was

claimed by the NMC. This matter is currently pending.

2. Compagnie Maritime D’Affretement (CMD) has filed a summary suit (No. 932 of 1998) against our

Company before the Bombay High Court on the ground that CMD has suffered losses as a result of

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confiscation of 27 containers which contained equipment for electrical transmission lines and/or towers

by the custom authorities at the port of Hartcourt owing to the failure of our Company’s consignee,

Consort Engineering (Nigeria) Pvt. Ltd to clear the containers. In the said summary suit, CMD has

claimed USD 71,400 along with interest at 18% p.a from the date of filing of the suit until payment or

realization, by way of damages. By an order dated July 1, 2002, the Bombay High Court disposed of

CMD’s summons for judgment (No. 635 of 2000) and granted our Company unconditional leave to

defend the suit and transferred the suit to the list of commercial causes. The matter is currently pending

and the next date of hearing in matter is on October 6, 2014.

3. UPPCL has filed an appeal (First Appeal No. 23 of 2013) before the High Court Allahabad, Lucknow

Bench, against an order of the District Court at Lucknow which dismissed UPPCL’s application

challenging an arbitration award passed by an Arbitral Tribunal at Lucknow. The dispute arose out of a

contract between the parties, due to non-completion of the project on time for laying of a 800 kV single

circuit Anpara – Jhusi transmission line. The Arbitral Tribunal had passed an award dated April 7, 2007

directing UPPCL to pay ₹ 9,68,63,403 to our Company and a further sum of ¥1,56,82,433 to Hyundai

Engineering and Construction Company Limited (HECCL), with further interest at the rate of 18%

from the date of the award till the date of payment.

UPPCL filed an application in the District Court at Lucknow challenging the award on the grounds of

illegality and lack of jurisdiction. According to UPPCL, since our Company was a collaborator of

HECCL, our Company was acting as a local representative of HECCL in the project and not a party to

the contract containing the arbitration clause. Thus, it was contended that our Company could not be

joined as claimants in the arbitration proceedings. The District Judge, by an order dated October 20,

2012 dismissed the objection petition filed by UPPCL and affirmed the award passed by the Arbitral

Tribunal. UPPCL has preferred an appeal to the High Court Allahabad, Lucknow Bench against the

order of the District Judge. The matter is currently pending.

4. EFC Logistics India Private Limited (EFC) has filed a summary suit (No. 1357 of 2008) in the Bombay

High Court against our Company, alleging non-payment of dues arising out of the transport carrier

services provided to various locations across India by EFC to our Company. Initially, EFC had filed a

company petition (No. 615 of 2007) in the Bombay High Court for winding up of our Company upon

non - payment of ₹ 5,16,635, the aggregate amount due as on March 31, 2005. Subsequently, the

Bombay High Court passed an order dated February 6, 2008, directing our Company to deposit an

amount of ₹ 5,16,635, which would be transferred to a suit account, provided no counter claims were

filed by our Company. EFC has, therefore, filed this summary suit for claiming the principal amount of

₹ 5,16,635 along with interest, aggregating to ₹ 7,33,621. The matter is currently pending.

5. Rajagiri Rubber and Production Co. Ltd. (Rajagiri Rubber) has preferred an appeal (R.S.A. No. 1058

of 2013) before the Kerala High Court against the order of Additional District Court, Kollam. Rajagiri

Rubber had filed a suit (No. 94 of 2000) before the sub-ordinate judge at Kottarakkara, against our

Company and PGCIL, claiming damages amounting to ₹ 2,00,000 for the destruction of certain rubber

and cashew trees caused by a fire at Shaliacary estate situated in Edamon and Valacode village, where

our Company was laying transmission lines on behalf of PGCIL for a thermal power station situated at

Kayamkulam. The sub-ordinate judge had passed an order against our Company to pay damages

amounting to ₹ 1,00,000 along with interest at the rate of 6% from the date of the order till the date of

payment.

Our Company challenged this order in the Additional District Court, Kollam in an appeal (No. 333 of

2009). Consequently, the Additional District Court, Kollam passed a judgment dated March 15, 2013

permitting Rajagiri Rubber to realize an amount of ₹ 52,000 along with interest at the rate of 6% from

date of suit till its realization from PGCIL & our Company. Thereafter, the present appeal has been

filed by Rajagiri Rubber before the Kerala High Court. The matter is currently pending.

6. Mr. Hulash Mahato and Mr. Thaneshwar Mahato (Plaintiffs) have filed a money suit (No. 5 of 2010),

for recovery of ₹ 5,28,000, from our Company in the Court of the Sub-Judge at Bermo, Jharkhand. The

Plaintiffs were our Company’s sub-contractors, who were given a work order to replace certain

conductors in the 132 kV Konar-Barhi line through a work order dated November 30, 2006. Our

Company deducted certain amount from the payment due to be made to the Plaintiffs on the ground that

the Plaintiffs held the replaced conductors in their own custody and later reported them as stolen.

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Thereafter, the Plaintiffs have filed the present money suit for recovery of ₹ 5,28,000. The matter is

currently pending.

7. Mr. Sunderji Mulji Shah has filed a summary suit (No. 1316 of 2000) in the Bombay High Court

claiming an amount of ₹ 6,02,995 and interest at the rate of 24% p.a. from the date of filing of the suit

till the date of realisation of the payment. The dispute arose out of non-payment of dues under a

purchase order placed by our Company to Mr. Sunderji Mulji Shah for supply of galvanized steel shield

wires. Pursuant to an order of the Bombay High Court dated November 29, 2007 passed in a company

petition (No. 982 of 1998), our Company was required to deposit an amount of ₹ 6,00,000 with the

court which was to be transferred to the suit account in the summary suit pending before the Bombay

High Court. The suit is pending for framing of issues and the next date of hearing is scheduled on

November 18, 2014.

8. Mr. Shankar Ramchandra Patki, proprietor of M/s. Project Management Group (PMG) had filed a

summary suit (No. 3122 of 2009) in the Bombay High Court alleging that our Company had wrongfully

deducted a sum of ₹ 4,26,357 from PMG’s final bill. During the year 2004, our Company had issued

work order for survey of Wardha Parli transmission line to PMG in relation to a contract awarded to our

Company by PGCIL. PGCIL rejected about 74 Kms. of survey done by PMG. As a result, our

Company deducted the cost of the survey, which had to be done through another contractor from

PMG's bill. In the books of accounts of our Company, the amount due and payable to PMG is ₹

1,22,918 against which the Bombay High Court has ordered our Company to deposit ₹ 2,00,000 in the

Court and transferred the suit to the list of commercial causes. The matter is currently pending.

9. Parashuram Sitaram Fage (Plaintiff) has preferred an appeal (No. 7 of 2012) before the District Court

at Khed challenging the order passed by the civil court at Ratnagiri in a suit filed against our Company

and Maharashtra State Electricity Board claiming a crop compensation of ₹ 10,00,000. Upon disposal

of the suit by the civil court at Ratnagiri, the Plaintiff has filed the present appeal.

10. Our Company had sub contracted work to Brij Lal Bansal (Petitioner), who was paid as per rules of the

Joint Management Committee of PGCIL. The Petitioner contended that the amount paid by PGCIL was

less than the amount actually due to him and filed a suit against PGCIL and our Company in the Court

of the District Judge, Bilaspur in Chattisgarh claiming for recovery of full amount due to him along

with interest. The matter is currently pending.

11. Mr. Lachhman Dass and Mr. Dhani Ram (Plaintiffs) have filed a suit (No. 15-NL/2 of 2011) in the

Court of the District Judge, Solan in Himachal Pradesh against PGCIL and our Company claiming a

compensation of ₹ 10,00,000 on account of the damage and obstruction caused during the course of

construction/laying work of a transmission line through the land belonging to the Plaintiffs for erection

of towers. The matter is currently pending.

12. The Grampanchayat through Sarpanch Ajay Charandas Kite has filed a suit (No.94 of 2012) before the

Civil Judge, Junior Division, Samudrapur in Wardha against Maharashtra State Electricity

Transmission Company Limited and our Company for grant of permanent injunction against the

defendants from constructing transmission line tower across farms belonging to the villagers without

obtaining the Grampanchayat’s statutory permission. The matter is currently pending.

Writ Petitions

1. Harsh Kumar Barla, has filed a writ petition (No. 2291 of 2013) before the High Court of Jharkhand,

Ranchi against the Union of India and others (including the state government, State Electricity Board

(SEB), our Company etc.) alleging non-completion of the rural electrification contract in the district of

Simdega and handing over of the project to SEB. Even though no relief is specifically sought against

our Company, we have been made one of the parties to the writ petition and is contesting the matter

along with others, since our Company is a contractor. The matter is currently pending before the

Jharkhand High Court

2. Mr. S.R. Ingale (Petitioner) has filed a preferred a letters patent appeal (LPA No. 251 of 2006) before

the Bombay High Court against an order dated March 28, 2006 passed by a single judge bench of the

Bombay High Court. The Petitioner had made an application in the Labour Court at Nashik, alleging

illegal termination of his service by our Company and seeking re-instatement and payment of back

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wages. The Labour Court, by an order dated May 16, 2005, declared the termination of the Petitioner as

illegal, but also stated that he was not entitled to reinstatement. Thereafter, the Petitioner challenged

this order through a writ petition (No. 8641 of 2005), which was dismissed by a single judge bench of

the Bombay High Court by an order dated March 28, 2006. Aggrieved by that order, the Petitioner has

now preferred a letters patent appeal. The matter is currently pending.

Sales Tax Matters

1. Our Company has filed a revision application (No. PT -115/13) in the Commercial Taxes Tribunal,

Bihar, Patna (CTT) against an order of the Joint Commissioner of Commercial Taxes (Appeal), East

and West Division, Patna wherein value added tax of ₹ 3,33,59,835 was levied on our Company by the

Assessing Officer. Our Company contended that the Assessing Officer did not take into consideration

the documents filed by our Company for grant of input tax credit. The revision application has been

admitted by the CTT by an order dated October 21, 2013 and the matter is currently pending.

2. Our Company had preferred 4 (four) appeals before the Deputy Commissioner of Sales Tax, Jeypore

against assessment orders passed by the Sales Tax Officer, Jeypore (Assessing Officer) dated March

31, 1999 for the assessment years 1995 - 1996 and 1996 – 1997; and March 31, 2001 for the period

1997 – 1998 and 1998 – 1999. The Assessing Officer levied sales tax of ₹ 1,36,14,663 for the

assessment year 1995 - 1996; ₹ 29,83,065 for the assessment year 1996 – 1997; ₹ 5,73,967 for the

assessment year 1997 – 1998 and ₹ 1,31, 328 for the assessment year 1998 – 1999. Our Company has

contended that the Assessing Officer did not allow deduction of the value of the tax on materials

utilized in the course of execution of works contracts from the sales tax payable despite submitting the

necessary documents. Vide an order dated June 30, 2009, the Deputy Commissioner of Sales Tax partly

allowed the appeals and reduced the value of the assessed tax. On September 15, 2009, our Company

filed an appeal in the Sales Taxes Tribunal, Cuttack against the order of the Deputy Commissioner of

Sales Tax and the matter is currently pending.

3. The Commissioner of Commercial Taxes, Lucknow has filed a commercial tax revision application

against an order of the Trade Tax Tribunal levying entry tax liability on the import of machinery by our

Company. The Assessing Officer levied an entry tax of ₹ 16,60,000 for the assessment year 2005 –

2006 an entry tax of ₹ 2,26,200 for the assessment year 2004 – 2005 against which our Company

preferred appeals, separately, before the Joint Commissioner of Commercial Taxes, both of which came

to be dismissed. Thereafter, our Company preferred appeals, separately, in the Trade Tax Tribunal

which was admitted by the Trade Tax Tribunal vide a common order dated February 11, 2009. The

matter is currently pending.

4. Our Company has filed an appeal, dated February 18, 2013, in the West Bengal Taxes Appellate and

Revisional Board against an order of the Joint Commissioner of Sales Tax, Asansol (JCST) dated June

30, 2010. Our Company has filed the appeal on the ground that the JCST had miscalculated the taxable

contractual transfer price in assessing the value added tax leviable on works contracts by disallowing

legitimate deductions for costs incurred in supply of labour and services. The matter is currently

pending.

Cases filed by our Company

Civil Matters

Civil Suits

1. Our Company has preferred an appeal (No. 2607 of 2005) before the Bombay High Court, against an

order passed by the Civil Judge, Senior Division, Nashik (CJSD) in a special suit (No. 486 of 1989)

filed against our Company on the ground that the CJSD has erred in its decision to direct our Company

to pay dues arising out of payment of octroi duty at a lesser rate amounting to ₹ 3,35,308.11 along with

interest. Pursuant to the direction of the Bombay High Court, our Company had deposited the entire

amount of ₹ 3,35,308.11 in the court. The Bombay High Court has directed that Appeal No.2607 of

2005 and Appeal No. 895 of 2005 (disclosed above under ‘Civil Suits filed against the Company’)

preferred against the order of the CJSD in the special suit will be heard together. The matter is currently

pending.

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2. Our Company has filed a civil suit, before the Civil Judge, Junior Division at Malvan, against the

Tarkarli Gram Panchayat and others claiming a compensation of ₹ 51,000 for breaking the boundary

wall and an application for grant of injunction has been filed restricting the Tarkarli Gram Panchayat

and others from trespassing our Company’s land. The Civil Judge, Junior Division had directed to

maintain status quo. Thereafter, the respondents have made a counter claim against which our

Company has made an application to the Civil Judge, Junior Division for rejection of the same. The

matter is currently pending.

3. Our Company has filed an appeal (No.1571 of 2010) before the Bombay High Court, against an order

of the Civil Judge, Senior Division, Nashik (CJSD) in the special civil suit (No. 230 of 2003). Simplex

had filed the special civil suit against HECCL, UPPCL and our Company for recovering mobilisation

and de-mobilisation costs amounting to ₹ 2,14,75,715 arising out of the contract for construction of

crossing foundations on the Ganga River and on the Sone river for laying of a 800 kV single circuit

Anpara – Jhusi transmission line. The CJSD had decreed the suit against HECCL and our Company

ordering the payment of an amount of ₹ 1,10,42,199 along with interest at the rate of 9% p.a. from the

date of the filing of suit till the date of realization.

Consequently, HECCL and our Company has preferred the present appeal before the Bombay High

Court impugning the decree inter alia on the grounds that the CJSD did not have jurisdiction over the

matter; the suit was barred by limitation; and since our Company has not received any payment from

UPPCL, there was no liability to pay Simplex. The Bombay High Court has admitted the appeal and

directed our Company to deposit the amount of ₹ 1,10,42,200 in the Court which has been deposited by

the Company. The matter is currently pending.

4. A collection suit dated was filed by our Company and Jyoti Americas LLC (Jyoti Americas) against

Wind Energy Transmission Texas LLC (WETT), Isolux Ingenieria, SA, KEC International Limited

and Kalpataru Power Transmission Limited before the 410th

District Court of Montgomery County,

Texas, USA wherein our Company and Jyoti Americas have sought collection of dues under a contract

for construction of lattice steel towers in West Texas. Our Company and Jyoti Americas have

contended that WETT, Isolux Ingenieria, SA, KEC International Limited and Kalpataru Power

Transmission Limited are inter alia in breach of contract, violations of the Texas Prompt Pay Act and

violations of the Texas Construction Trust Fund Act. The court through its order dated April 17, 2014

has directed the parties to attempt resolving the matter by mediation 30 days before the commencement

of the trial which is scheduled on March 2, 2015.

Arbitration matters

1. Our Company has filed a petition (No. 39 of 2004) before the Orissa High Court against M/s. Hirakud

Industrial Works Limited (HIWL) for appointment of an arbitrator to adjudicate upon a dispute

between the parties arising out of non-payment of ₹ 2,45,53,000 by HIWL. The petition is currently

pending before the Orissa High Court.

2. Our Company has invoked arbitration against PGCIL through a notice dated February 18, 2014. The

dispute has arisen out of the alleged wrongful withholding of amounts in relation to the contract of

erection and supply of towers for the Barh-Balia transmission line. Both the parties have appointed their

respective arbitrators. Presently, the arbitrators are in the process of appointing the presiding arbitrator.

3. Our Company has filed an arbitration petition (OMP No. 754 of 2014) before the High Court of Delhi

against Jaiprakash Power Ventures Limited (JPVL) seeking interim measures and injunction

restraining JPVL from invoking/encashing performance bank guarantees submitted by our Company to

JPVL. The dispute arose out of a delay in completion of the contract for supply, erection and other

services contract for a transmission line project. Our Company has contended that the delay was caused

due to reasons attributable to JPVL and the performance bank guarantees could only be encashed in the

event of non-performance of obligations under the contract. The High Court of Delhi, through its order

dated July 21, 2014 directed the relevant banks not to release the amount of the bank guarantees which

got transferred to the bank accounts of JPVL in respect of the 8 (eight) out of the eleven guarantees

which were invoked. Further, a direction of status quo was issued in respect of the 3 (three) guarantees

whose amount had not been transferred to the bank accounts of JPVL as on the date of the order.

Accordingly, the High Court of Delhi disposed of the arbitration petition and directed that the order will

remain in force till the arbitrator passes any order and / or award.

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Thereafter, our Company has filed a caveat petition in the High Court of Delhi praying that in the event

JPVL prefers an appeal against the order dated July 21, 2014, no interim ex-parte order may be passed

in the favour of JPVL without prior notice and hearing being granted to our Company.

Writ petitions

1. Our Company has filed a writ petition (No. 6326 of 2005) before the Orissa High Court against the

State of Orissa, the Managing Director of M/s. Hirakud Industrial Works Limited (HIWL) and others

(Respondents) seeking an appropriate writ to be issued against the Respondents to securitize their dues

by way of bank guarantee or by issuing bonds in favour of our Company till the dispute between our

Company and HIWL regarding non-payment of dues is settled. The matter is currently pending.

2. Our Company has filed a writ petition (No. 2667 of 2009) before the Bombay High Court against the

Union of India. Our Company had, on payment of import duty amounting to ₹ 21,39,710 cleared a

consignment comprising of 2 (two) sets of 500 kV BB double circuit towers comprising galvanised

steel work and bolts for the purpose of type testing prototype. As the consignment was to be re-

exported after testing, our Company had sought the clearance of the Department of Customs for duty

drawback on re-export of parts of the towers. However, this claim was rejected by a letter from the

Deputy Commissioner of Customs dated March 10, 2006. An appeal before the Commissioner of

Customs (Appeals) against the decision of the Deputy Commissioner was also rejected by an order

dated October 11, 2006. Thereafter, our Company filed a revision application before the Joint

Secretary, Department of Finance, Government of India, which was also rejected by an order dated

August 28, 2009. Our Company has, now filed the instant writ petition before the Bombay High Court

against the orders of these authorities. The matter is currently pending.

3. Our Company has filed a writ petition (No. 3959 of 2006) before the High Court of Chhattisgarh

challenging an order dated January 3, 2006 passed by the Industrial Court at Raipur. The order was

passed in an appeal filed against an order of the Labour Court at Raipur dated April 30, 2005, wherein

the Labour Court had rejected claims of the 102 workers for reinstatement and payment of back wages.

The workers had filed a suit under section 31(3) of the Chhattisgarh Industrial Relations Act, 1960,

alleging that our Company had illegally terminated their employment and failed to pay their dues and

wages. The Labour Court rejected these contentions and passed an order dated April 30, 2005 in favour

of our Company. However, the workers filed an appeal in the Industrial Court, which reversed the order

of the Labour Court. Our Company, has, therefore, filed the instant petition challenging that order. The

matter is currently pending.

4. Our Company has filed a writ petition (No. 417 of 1998) before the Bombay High Court against the

Union of India and the Bombay Port Trust (BPT) on February 24, 1998. Our Company had applied for

refund / remission of demurrage charges amounting to ₹ 7,95,000 inter alia under the BPT’s “scale of

rates charged at the docks” framed under the Mumbai Port Trust Act. Under the said scale of rates, our

Company contends steel angles were to be classified as “over dimensional consignment”, and therefore

were eligible for availing the concessional rates of demurrage. Our Company sought an appropriate

writ(s) quashing / setting aside the orders of the BPT rejecting our application for refund / remission of

demurrage charges already paid in full and directing BPT to refund (with interest) the amount of

demurrage charges which are in excess of the concessional rate. By its order of April 15, 1998, the

Bombay High Court had admitted our Company’s writ petition and declined any interim reliefs. The

petition came up for final hearing and the court recorded that as the matter involved question of facts

requiring evidence, the court could not settle the same in writ and in the circumstances directed the

petitioner to withdraw the petition and file a civil suit.

Accordingly, a suit (No.3086 of 2011) has been filed before the Bombay High Court with a prayer for

refund of demurrage charged by BPT during the period 1995 - 1997 with interest and BPT shall levy

license storage fees to our Company instead of demurrage charges. The matter is currently pending

before the Bombay High Court and the next date of hearing is scheduled on October 14, 2014.

5. Our Company has filed a writ petition before the Chattisgarh High Court against an order of the

Employees Provident Fund Appellate Tribunal. The Assistant Provident Fund Commissioner, Raipur,

Chattisgarh (APFC) had issued a notice to initiate proceedings against our Company under section 7A

of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 upon a complaint lodged by

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Mr. Chandulal Sahu for alleged non-extension of provident fund (PF) benefits to 126 persons employed

by our Company. Our Company had contested the proceedings on the ground that only 17 out of the

alleged 126 persons named in the complaint were employed by our Company, intermittently, through

various contractors and they are, therefore, not eligible for PF benefits. However, the APFC passed an

order dated December 2, 2005, stating that these 17 persons were our Company’s employees and were

entitled to PF benefits. It further directed our Company to deposit a sum of ₹ 1,55,584 as dues on

account of PF, Employees’ Pension Scheme, 1995 and Employee Deposit Linked Insurance Fund.

Pursuant to this order, our Company filed an appeal before the Employees Provident Fund Appellate

Tribunal which came to be dismissed and the consequently the present writ petition has been filed. The

matter is currently pending before the Chattisgarh High Court.

Cases filed against our Company’s subsidiaries

1. WETT has filed a suit against our Company and Jyoti Americas before the 132nd

Judicial District Court

of Scurry County, Texas seeking the court to declare materialman’s lien notices filed in Scurry, Howard

and Dickens Counties by our Company and Jyoti Americas invalid. The lien notices have been served

upon WETT, Isolux Ingenieria, SA, KEC International Limited and Kalpataru Power Transmission

Limited for the amounts due under a contract for construction of lattice steel towers in West Texas.

Separately, a collection suit that has been filed by our Company and Jyoti Americas for recovery of the

dues under the said contract for construction of lattice steel towers in West Texas. The matter is

currently pending.

Cases filed by our Company’s subsidiaries

1. A suit has been filed by Jyoti Americas against Plus Professionals (Plus) before the 248th

Judicial

District Court of Montgomery County, Texas in relation to a sales representative agreement entered into

with Plus who was a sales representative of Jyoti Americas. Following the termination of the

agreement, Plus has inter alia made claims for commissions and other damages which Jyoti Americas.

Jyoti Americas filed the present suit seeking the court to declare that Jyoti Americas had no further

obligations under the sales representative agreement. Thereafter, Plus filed a counterclaim against Jyoti

Americas alleging non-payment of sales commissions and other costs. This matter is currently in the

written discovery phase and has not gone for trial yet. The court through its order dated July 10, 2014

has directed the parties to attempt resolving the matter by mediation 5 (five) days before the

commencement of the trial which is scheduled on March 23, 2015.

Inquiries, inspections or investigations under Companies Act

There are no inquiries, inspections or investigations initiated or conducted against our Company and our

Subsidiaries under the Companies Act in the last 3 (three) years. Further, there are no prosecutions filed

(whether pending or not), fines imposed, compounding of offences in the last 3 (three) years involving our

Company and our Subsidiaries.

Material Frauds

There are no material frauds committed against our Company during the last 3 (three) years.

Litigation or legal action against Promoters taken by any Ministry or Department of the government or any

statutory authority

There is no litigation or legal action against the promoters of our Company taken by any Ministry or

Department of the government or any statutory authority.

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INDEPENDENT ACCOUNTANTS

Our Company’s current statutory auditors, R.M. Ajgaonkar & Associates, Chartered Accountants, are

independent auditors with respect to our Company as required by the Companies Act and in accordance with

the guidelines issued by the ICAI. Further, R.M. Ajgaonkar & Associates, Chartered Accountants, have

audited the financial statements as of and for the Financial Year 2014, Financial Year 2013 and Financial Year

2012 whose audited report and the Independent Auditors' Review Report of the unaudited standalone financial

results for the three months period ended June 30, 2014, is included in this Placement Document.

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GENERAL INFORMATION

1. Our Company was incorporated on May 27, 1974 as Jyoti Structurers Private Limited at Mumbai, India.

A fresh certificate of incorporation was issued on October 21, 1974, on our name being changed to Jyoti

Structures Private Limited. We further changed our name on October 21, 1974, to Jyoti Structures

Limited on being converted into a public limited company. Initially, our registered office was situated at

Hind-Rajasthan Building, 4th

floor, 95, D.S. Phalke Road, Dadar, Mumbai 400 014. On April 30, 1982

we shifted our registered office to Khoor-Sill-Naz, 2nd

Floor, Front Building, Swami Gyan Jiwandas

Marg, Mumbai 400 014. On July 31, 1987 our registered office was once again shifted to ‘Keshava’, 7th

Floor, Bandra-Kurla Commercial Complex, Bandra (East), Mumbai 400 050. Subsequently, on January

29, 1999, we shifted our registered office to 6th

floor of Valecha Chambers, New Link Road, Andheri

(West), Mumbai 400 053, on acquisition of the premises, which is also our Company’s corporate office.

2. Our Company is registered with the RoC with a number CIN: L45200MH1974PLC017494.

3. The authorised share capital of our Company is ₹ 8500 lakhs consisting of 175,000,000 Equity Shares

of ₹ 2 each and 50,00,000 Redeemable Preference Shares of ₹ 100 each. The outstanding paid-up

equity share capital of our Company was ₹ 1,645.78 lakhs.

4. The Equity Shares have been listed on the BSE and the NSE since 1989 and 1995, respectively.

5. The Issue has been approved by:

(i) A resolution of the Board of Director dated June 30, 2014; and

(ii) A resolution of the Shareholders pursuant to a postal ballot resolution dated August 12, 2014.

6. Our Company has received in-principle approval to list the Equity Shares to be issued pursuant to the

Issue, on the BSE and the NSE on September 23, 2014.

7. Copies of Memorandum and Articles will be available for inspection between 11:00 am to 1:00 pm on

all working days at the Registered Office.

8. Our Company has obtained necessary consents, approvals and authorisations required in connection

with the Issue.

9. Except as disclosed in this Placement Document, there has been no material change in the financial or

trading position of our Company since March 31, 2014, the date of the latest financial statements

prepared in accordance with Indian GAAP included in this Placement Document.

10. Except as disclosed in this Placement Document, there are no material legal or arbitration proceedings

against or affecting our Company or its assets or revenues, nor is our Company aware of any pending or

threatened legal or arbitration proceedings, which are, or might be, material in the context of the Issue.

11. Our Company’s statutory auditors, R.M Ajgaonkar & Associates, Chartered Accountants who have

audited the financial statements as of and for the Financial Year 2014, Financial Year 2013 and

Financial Year 2012 which have been included in this Placement Document, have consented to the

inclusion of their reports in relation thereto in this Placement Document.

12. Our Company confirms that it is in compliance with the minimum public shareholding requirements as

required under the terms of the Listing Agreement.

13. Our Company and Book Running Lead Manager accepts no responsibility for statements made

otherwise than in this Placement Document and anyone placing reliance on any other source of

information, including our website, would be doing so at his or her own risk.

14. The Floor Price for the Equity Shares under the Issue is ₹ 44.99 per Equity Share which has been

calculated in accordance with Chapter VIII of the SEBI Regulations.

15. Our Company may offer a discount of not more than 5% on the Floor Price in terms of Regulation 85 of

the SEBI Regulations.

182

FINANCIAL STATEMENTS

Sr. No. Particulars Page Number

1. Audited Consolidated Financial Statements for the Financial Year 2014 F 1

2. Audited Consolidated Financial Statements for the Financial Year 2013 F 28

3. Audited Consolidated Financial Statements for the Financial Year 2012 F 55

F1

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Jyoti Structures Limited

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Jyoti Structures Limited (‘the Company’) and its

subsidiaries and joint venture (collectively referred to as ‘the group’), which comprise of the consolidated Balance Sheet as at

March 31, 2014, the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year then ended

and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the

consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with

Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956(“the Act”) read with the General

Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,

2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation

and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement,

whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit

in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the

consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated

financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material

misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Group’s preparation and presentation of the consolidated financial statements that

give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness

of accounting policies used and the reasonableness of the accounting estimates made by management as well as evaluating the

overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of qualified opinion

a) The trade receivables of the Company include amount of ` 7,045.80 Lacs outstanding from Joint Venture Company namely,

Lauren Jyoti Private Limited. As informed to us, the accounts of the Joint Venture are not available for financial year ended

31st March, 2013 as well as for the financial year ended 31st March, 2014. Considering the facts that the accounts of that

company are not available and considering the fact that the joint venture company is not regular in the payment of the above

outstanding, we are not able to comment on the recovery of the debt and impact of the same on the Balance Sheet and

Statement of Profit and Loss of the Company for the year.

b) The Company has invested ` 500 Lacs in 50 Lacs equity shares of Lauren Jyoti Private Limited. In absence of availability

of annual accounts of the company for the financial year ended on 31st March 2013 and for the financial year ended on 31st

March, 2014, we are not able to comment, if there is other than temporary diminution in the value of the said investment and

impact of the same on the Balance Sheet and Statement of Profit and Loss of the Company for the year.

c) Due to non availability of audited financial statements of the Joint Venture Company namely Lauren Jyoti Pvt. Ltd. as on 31st

F2

March 2014, the company has not consolidated the financial statements of the said joint venture company with its financial

statements. In this connection, we draw attention of the members to note no 31(7) of the Notes to consolidated financial

statements. In absence of such consolidation and the audited accounts for the year of the said joint venture company, we

are not able to comment as regards the effects of the same on the consolidated financial statements of the company for the

year ended 31st March, 2014.

d) The company has reported that it has provided for deferred tax asset of US $ 52.87 Lacs (` 3,025.06 Lacs) for the year in

the consolidated Statement of Profit and Loss and it has considered the deferred tax asset of US $ 87.68 Lacs (` 5,254.91

Lacs) in the consolidated Balance Sheet. In light of AS-22 paragraph 17, deferred tax asset should be recognized only to

the extent that there is a virtual / reasonable certainty, as applicable, supported by convincing evidence that sufficient future

taxable income will be available against which such deferred tax asset will be realised. In the absence of convincing evidence

of virtual / reasonable certainty, as applicable, as required by AS–22, we are of the opinion that the consolidated loss for the

year is understated by an amount of ` 3,025.06 Lacs (P.Y. ` 1,564.08 Lacs) and the consolidated reserves & surplus for the

year ended 31st March, 2014 are overstated by ` 5,254.91 Lacs (P.Y. ` 1,896.96 Lacs).

Opinion

Subject to our observations stated in ‘basis of qualified opinion’ above, in our opinion and to the best of our information and according to

the explanations given to us, and based on consideration of the reports of the other auditors on the financial statements / consolidated

financial statements of the subsidiaries and joint venture noted below, the consolidated financial statements give a true and fair view

in conformity with the accounting principles generally accepted in India:

(a) In the case of the Consolidated Balance Sheet of the state of affairs of the group as at March 31, 2014;

(b) In the case of the Consolidated Statement of Profit and Loss, of the loss of the Group for the year ended on that date; and

(c) In the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Other matters

We did not audit the financial statements of the subsidiary companies namely Jyoti Structures Africa (Pty) ltd., Jyoti Structures

FZE along with its subsidiaries Jyoti Structures Namibia (Pty) Ltd., Jyoti Structures Nigeria Ltd., and Jyoti Structures Kenya Ltd.,

and Jyoti International INC. along with its subsidiaries Jyoti Americas LLC and Jyoti Structure Canada Ltd and joint venture

company Gulf Jyoti International LLC along with its subsidiary GJIL Tunisie Sarl. whose financial statements reflect total assets

of ` 61,237.24 Lacs as at 31st March, 2014 and total revenue of ` 35,780.75 Lacs; and net cash outflow of ` 697.68 Lacs for

the year ended on that date. These financial statements and other financial information have been audited / reviewed by other

auditors from whom the reports have been furnished to us and our opinion is based solely on the reports of the said other auditors.

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm’s Registration Number: 117247W

R. M. AJGAONKAR

Place: Mumbai Partner

Date: 30th May, 2014 Membership Number: 31927

F3

a) Fixed Assets

i) Tangible Assets 12 45,177.68 44,415.05

ii) Intangible Assets 12 1,675.86 1,247.21

iii) Capital Work-in-Progress 62.11 213.17

iv) Intangible Assets Under Development 112.02 675.71

47,027.67 46,551.14 b) Non Current Investments 13 525.57 525.35 c) Deferred Tax Assets (Net) 5,254.91 1,902.85 d) Long Term Loans and Advances 14 715.52 698.90 e) Other Non Current Assets 15 4,524.14 4,209.41 Current Assets a) Inventories 16 52,654.92 28,704.48 b) Trade Receivables 17 2,92,594.61 1,84,713.50 c) Cash and Bank Balances 18 9,919.31 5,353.87 d) Short Term Loans and Advances 19 39,306.71 28,979.93 e) Other Current Assets 20 146.36 1.69

3,94,621.91 2,47,753.47

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2014

I EQUITY AND LIABILITIES

Note As at

31-Mar-2014

` in Lacs

As at

31-Mar-2013

` in Lacs

1) Shareholders’ Funds

a) Share Capital

1

10,649.28

4,145.20

b) Reserves and Surplus 2 66,508.31 66,727.41

77,157.59 70,872.61 2) Share Application Money Pending Allotment 3 3.00 0.92 3) Minority Interest 62.92 61.95 4) Non Current Liabilities

a) Long Term Borrowings

4

36,843.02

30,503.87

b) Deferred Tax Liabilities (Net) 5 13.84 1,091.65

c) Other Long Term Liabilities 6 16,129.36 11,991.48

d) Long Term Provisions 7 964.97 758.83

53,951.19 44,345.83 5) Current Liabilities

a) Short Term Borrowings 8 89,769.34 63,502.63 b) Trade Payables 9 1,75,147.74 65,668.93 c) Other Current Liabilities 10 53,818.22 54,813.73 d) Short Term Provisions 11 2,759.72 2,374.52

3,21,495.02 1,86,359.81 TOTAL 4,52,669.72 3,01,641.12

II ASSETS

1) Non Current Assets

2)

TOTAL 4,52,669.72 3,01,641.12

Significant Accounting Policies 30

Other Notes to Financial Statements 31

The Significant Accounting Policies and Notes referred to above form an integral part of Financial Statements.

As per our report attached

For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR L. H. KHILNANI SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR Partner Company Secretary Managing Director Vice Chairman Chairman Membership No. 31927 Mumbai; 30th May, 2014

F4

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

I INCOME

Note Year Ended

31-Mar-2014

` in Lacs

Year Ended

31-Mar-2013

` in Lacs

Revenue from Operations (Gross) 21 3,69,297.03 3,05,301.77

Less: Excise duty 5,692.49 4,032.47

Revenue from Operations (Net) 3,63,604.54 3,01,269.30

Other Income 22 2,946.23 499.49

Total Revenue 3,66,550.77 3,01,768.79

II EXPENSES

Cost of Materials Consumed 23 2,51,327.97 1,77,474.04

Erection and Sub-contracting Expense 24 55,951.85 49,205.82

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade

25 (23,724.96) (90.19)

Employee Benefits Expense 26 17,972.79 15,532.03

Finance Costs 27 24,612.36 18,213.33

Depreciation and Amortization Expense (Net) 28 4,026.96 3,556.52

Other Expenses 29 38,339.47 32,352.30

Total Expenses 3,68,506.44 2,96,243.85

III Profit Before Tax (I-II) (1,955.67) 5,524.94

IV Tax Expense:

Current Tax 3,034.17 3,492.00

Deferred Tax (Net) (4,102.87) (1,750.98)

(Excess)/Short Provision of Taxes for earlier year 49.52 4.43

(1,019.18) 1,745.45

V Profit for the year (III-IV) (936.49) 3,779.49

VI Earnings Per Equity Share (In ` )

[Nominal value of share ` 2]

1) Basic ` (1.17) ` 4.59

2) Diluted ` (1.17) ` 4.58

Significant Accounting Policies 30

Other Notes to Financial Statements 31

The Significant Accounting Policies and Notes referred to above form an integral part of Financial Statements.

As per our report attached

For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR L. H. KHILNANI SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR Partner Company Secretary Managing Director Vice Chairman Chairman Membership No. 31927 Mumbai; 30th May, 2014

F5

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

I CASH FLOW FROM OPERATING ACTIVITIES

Year Ended

31-Mar-2014

` in Lacs

Year Ended

31-Mar-2013

` in Lacs

Net Profit Before Taxes and Extraordinary Items [A] (1,955.67) 5,524.94

ADJUSTMENTS FOR

i) Depreciation and Amortisation 4,278.46 3,570.55

ii) Transferred from Revaluation Reserve (2.42) (2.42)

iii) Finance Cost 24,612.36 18,213.33

iv) (Gain)/Loss on Sale of Fixed Assets (Net) 98.21 15.93

v) Interest Received (864.83) (220.41)

vi) Employee Compensation Expense - ESOS 56.15 (83.99)

vii) Effect of Exchange Rate Change 691.50 (428.52)

[B]

28,869.43

21,064.47

Operating Profit before Working Capital changes [A+B] = [C] 26,913.76 26,589.41

ADJUSTMENTS FOR

i) Inventories (23,950.45) 3,774.78

ii) Trade Receivable & Other Receivable, Loans & Advances, Other

Current Assets (1,18,310.10) (32,729.83)

iii) Current Liabilities and Provisions 1,09,894.18 13,804.04

[D]

(32,366.37)

(15,151.01)

Cas

h Generated from Operations

[C+D] = [E]

(5,452.61)

11,438.40

i) Direct Taxes Paid (Net) (1,876.74) (6,354.83)

[F] (1,876.74) (6,354.83)

Net Cash (used in) / from Operating Activities [I] [E+F] = [G] (7,329.35) 5,083.57

II CASH FLOW FROM INVESTING ACTIVITIES

i) Proceeds from Sale of Fixed Assets 190.85 126.69

ii) Purchase of Fixed Assets [After adjustment of (Increase)/Decrease

in Capital Work-in-Progress]

(5,044.05) (6,386.26)

iii) Investments in Other than Subsidiary company - (4.92)

iv) Purchase of Investments Net of Proceeds (0.22) -

v) Interest Received 864.83 220.41

vi) Net Advances to Companies other than Subsidiaries 36.89 (1,989.15)

Net Cash (used in) / from Investing Activities [II] (3,951.70) (8,033.23)

F6

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

III CASH FLOW FROM FINANCING ACTIVITIES

Year Ended

31-Mar-2014

` in Lacs

Year Ended

31-Mar-2013

` in Lacs

i) Proceeds from Issue of Equity Share

(inclusive of Share Premium and after considersing ESOS allotted to employees)

4.78 8.40

ii) Proceeds from Issue of Preference Share 6,503.80 2,500.00

iii) Proceeds from issue of Non Convertible Debentures 3,304.00 1,670.00

iv) Repayment of Non convertible Debentures - (12,086.41)

v) Proceeds from Long Term Borrowings 13,625.79 13,066.96

vi) Repayment of Long Term Borrowings (8,654.75) (8,266.40)

vii) Net Increase/(Decrease) in Interest Free Sales Tax Defferal Loan (27.74) (14.90)

viii) Proceeds from Short Term Borrowings from banks 27,605.12 23,145.67

ix) Repayment of Short Term Borrowings (1,338.41) -

x) Proceeds from Asset Finance from Banks - 150.12

xi) Repayment of Asset Finance from Banks (77.61) (83.71)

xii) Proceeds from Asset Finance from Financiers 613.98 -

xiii) Repayment of Asset Finance from Financiers (32.97) (7.74)

xiv) Dividends Paid (655.19) (899.55)

xv) Dividends on Preference Share Capital (1.23) -

xvi) Dividend and Dividend Distribution Tax for earlier year (0.04) (0.13)

xvii) Net Corporate Dividend Tax Paid - (146.71)

xviii) Finance Cost (24,612.36) (18,213.33)

Net Cash (used in) / from Financing Activities [III]

16,257.17

822.27

Net Increase/(Decrease) in Cash and Cash Equivalents [I + II + III] 4,976.12 (2,127.39)

Cash and Cash Equivalents at the beginning of the year 3,966.58 6,093.97

Cash and Cash Equivalents at the end of the year

8,942.70

3,966.58

Note: Cash and Cash Equivalents includes ̀ 32.60 Lacs (P.Y. ` 29.71 Lacs) on account of Unclaimed Dividend, which are not

available for the use by the Company.

As per our report attached

For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR L. H. KHILNANI SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR Partner Company Secretary Managing Director Vice Chairman Chairman Membership No. 31927 Mumbai; 30th May, 2014

F7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

1 SHARE CAPITAL 31-Mar-2014 31-Mar-2013

Number ` in Lacs Number ` in Lacs

Authorised :

Equity Shares of ` 2/- each 17,50,00,000 3,500.00 17,50,00,000 3,500.00

Redeemable Preference Shares of ` 100/- each 50,00,000 5,000.00 50,00,000 5,000.00

TOTAL 18,00,00,000 8,500.00 18,00,00,000 8,500.00

Issued :

Equity Shares of ` 2/- each 8,22,89,082 1,645.78 8,22,75,407 1,645.51

Redeemable Preference Shares of ` 100/- each 25,00,000 2,500.00 25,00,000 2,500.00

TOTAL 8,47,89,082 4,145.78 8,47,75,407 4,145.51

Subscribed and Paid-up :

Equity Shares of ` 2/- each fully paid up 8,22,73,822 1,645.48 8,22,60,147 1,645.20

Redeemable Preference Shares of ` 100/- each fully paid up 25,00,000 2,500.00 25,00,000 2,500.00

Cumulative Redeemable Preference Shares issued by wholly

owned subsidary namely, Jyoti International, INC. (25 Shares

of US$ 4,00,000 each fully paid up) - 6,503.80 - -

TOTAL 8,47,73,822 10,649.28 8,47,60,147 4,145.20

a) Reconciliation of the shares outstanding at the

beginning and at the end of the reporting period

Equity Shares

At the beginning of the period 8,22,60,147 1,645.20 8,22,13,897 1,644.28

Issued during the period - ESOS 13,675 0.28 46,250 0.92

Outstanding at the end of the period 8,22,73,822 1,645.48 8,22,60,147 1,645.20

b) Reconciliation of the preference shares outstanding at the

beginning and at the end of the reporting period

Preference Shares

At the beginning of the period 25,00,000 2,500.00 - -

Issued during the period - - 2,500,000 2,500.00

Outstanding at the end of the period 25,00,000 2,500.00 2,500,000 2,500.00

c) Reconciliation of the preference shares for subsidiaries,

outstanding at the beginning and at the end of the

reporting period

Preference Shares

At the beginning of the period - - - -

Issued duirng the period {refer point (i) } 25 6,503.80 - -

Outstanding at the end of the period 25 6,503.80 - -

d) Names of Equity shareholders holding more than 5 % shares

Number % Number %

1) Valecha Infrastructure Ltd. 54,31,400 6.60% 54,31,400 6.60%

2) Prakash K Thakur 49,42,488 6.00% 52,48,235 6.38%

3) K. R. Thakur 36,55,973 4.45% 46,46,426 5.65%

4) Reliance Capital Trustee Ltd. 46,14,900 5.61% 46,14,900 5.61%

F8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

e) Names of preference shareholders holding more than 5 % shares

Number % Number %

1) Amtek India Limited 4,00,000 10.94% 15,00,000 60.00%

2) Amtek Auto Limited 4,50,000 12.31% 10,00,000 40.00%

3) Aarken Advisors Private Limited 4,50,000 12.31%

4) Aryahi Buildwell Private Limited 4,75,000 12.99%

5) Vishwas Marketing Services Private Limited 3,50,000 9.57%

6) Mukund Motorparts Private Limited 3,75,000 10.26%

f) Shares reserved for issue under options

Employee Stock Options Scheme (ESOS)

1) Under ESOS 2005, eligible employee on grant of option & on

vesting shall be entitled to apply for five equity shares of `. 2/-

each at an exercise price of ̀ 17/- per equity share for each option.

2) Under ESOS 2011, eligible employee on grant of option & on

vesting shall be entitled to apply for five equity shares of ` 2/-

each at an exercise price of `. 25/- per equity share for each

option.

5,81,500 5,95,175

25,00,000 25,00,000

g) The Company has equity shares having a par value of ` 2/- each. Each shareholder is eligible for one vote per share held. In the

event of liquidation, the shareholders are eligible to receive remaining assets of the Company after distribution of all preferential

amounts, in proportion to their shareholding.

h) The Company has preference shares having a par value of ` 100/- each. The Share carries dividend @ 1%. In the event of

liquidation, the shareholders will have preference in repayment over equity shareholders.

i) The Company’s subsidairy i.e Jyoti International Inc. has issued 25 numbers of redeemable preference shares at par value having

$ 400,000/- each. The Share carries dividend @0.01%. Preference Share holders have right to receive dividends, if declared

to equity share sholders on pro rata basis. In the event of liquidation, the shareholders will have preference in repayment over

equity shareholders.

F9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

2 RESERVES AND SURPLUS 31-Mar-2014

` in Lacs 31-Mar-2013

` in Lacs

a. Capital Reserve

As per last Balance Sheet 6.06 6.06

b. Capital Redemption Reserve

As per last Balance Sheet 300.00 300.00

c. Foreign Currency Translation Reserve

As per last Balance Sheet 128.50 557.02

Add: During the year 940.58 (440.12)

Add: FCTR on Fixed assets (249.08) 11.60

820.00 128.50

d. Securities Premium Reserve

As per last Balance Sheet 16,140.75 16,087.95

Add: On Allotment of Equity Shares 15.21 52.80

16,155.96 16,140.75

e. Debenture Redemption Reserve

As per last Balance Sheet 417.50 6,044.00

Add: Transferred from Surplus in the Statement of Profit and Loss 826.00 417.50

Less: Transferred to General Reserve - 6,044.00

1,243.50 417.50

f. Revaluation Reserve*

As per last Balance Sheet 37.58 40.00

Less: Transferred from the Statement of Profit and Loss as Reduction from Depreciation 2.42 2.42

35.16 37.58

g. Employee Stock Option Outstanding [Note No. 31 (11)] 374.20 387.36

Less: Deferred Employee Compensation Expense 27.95 84.10

346.25 303.26

h. General Reserve

As per last Balance Sheet 16,256.64 9,562.64

Add: Transferred from Debenture redemption reserve - 6,044.00

Add: Transferred from Surplus in the Statement of Profit and Loss 350.00 650.00

16,606.64 16,256.64

i. Surplus in Statement of Profit and Loss

As per last Balance Sheet 33,137.12 30,490.97

Add: Tax Elimination for an earlier year including interest - 276.26

33,137.12 30,767.23

Add: Profit for the year (936.49) 3,838.07

Add: Previous Year Elimination - 363.30

Less: Appropriations

Proposed Dividend - Equity Shares

[amount per share ` Nil (P.Y.: ` 0.80/-)]

- 658.08

Tax on Dividend - 106.96

Dividend and Dividend Distribution Tax for an earlier year 0.04 0.13

Preference Share Dividend and Dividend Distribution Tax 29.25 1.23

Minority Interest 0.60 (2.42)

Transfer to Debenture Redemption Reserve 826.00 417.50

Transfer to General Reserve 350.00 650.00

1,205.89 1,831.48

Net Surplus in the Statement of Profit and Loss 30,994.74 33,137.12 TOTAL 66,508.31 66,727.41 *Cumulative amount withdrawn from Revaluation Reserve is ` 48.47 Lacs (P.Y. ` 46.04 Lacs)

F10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

31-Mar-2014 31-Mar-2013

` in Lacs ` in Lacs

3 SHARE APPLICATION MONEY PENDING ALLOTMENT

Share Application Money Pending Allotment

For Equity Shares 3.00 0.92

Number of Shares proposed to be allotted 17,650 5,425

Amount of Premium, if any 2.65 0.81

Terms and Conditions of shares proposed to be issued

Option Grantees, in accordance with the Employees Stock Option Scheme have an option

to exercise their rights to apply for 5 Equity shares for each options held, at an exercise

price of ` 17 per Share within the vesting period

Date by which the shares shall be allotted 15- Apr-2014 15- Apr-2013

Whether sufficient authorised share capital to cover allotment of shares out of such share

application money

YES YES

The period overdue from the proposed date of allotment NA NA

Non- Current Current

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

4 LONG TERM BORROWINGS

Secured Loans

Non Convertible Debenture 4,974.00 1,670.00 - -

Term Loan

From Bank 6,038.78 13,011.72 18,398.68 17,741.78

From Other 17,230.08 - 128.19 4.90

TOTAL - A 28,242.86 14,681.72 18,526.87 17,746.68

Unsecured Loans Term Loan

From Bank - 5,220.26 - 3,260.21

From Other

Deferred Payment Liabilities 297.69 362.43 67.30 30.30

Others 1,740.42 3,103.81 - -

Deposits 6,562.05 7,135.65 2,134.56 2,688.60

TOTAL - B 8,600.16 15,822.15 2,201.86 5,979.11

Amount disclosed under the head “Other Current

Liabiliities”(Note No. 10) (Refer a)

- - (20,728.73) (23,725.79)

TOTAL - A + B 36,843.02 30,503.87 - -

Nature of Securities for Secured Loan

Debenture

a) ` 4,974.00 Lacs (P.Y. ` 1,670.00 Lacs) Non-Convertible Debentures Mortgage over identified immovable property of the

subsidiary company; Subservient charge on all moveable and immoveable properties of the company;

Term Loan from bank

a) ` 432.39 Lacs (P.Y. ` 3,707.79 Lacs ) Secured by i) first pari passu charge on company’s immovable properties situated

at M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh) and Ghoti, Dist. Nasik (Maharashtra),

Malvan, Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. ii) second charge

on current assets of the company and iii) exclusive charge on specific machinery and equipment;

b) ` Nil in C.Y. (P.Y. ` 148.97 Lacs) Secured by i) first pari passu charge on company’s immovable properties situated at

M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh) and Ghoti, Dist. Nasik (Maharashtra), Malvan,

Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. and ii) hypothecation on

specific Plant & Machinery

c) ` 183.30 Lacs (P.Y. ` 508.91 Lacs) Secured by hypothecation on specific Plant & Machinery

F11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

d) ` 1,300.00 Lacs (P.Y. ` Nil) Secured by hypothecation on specific Plant & Machinery

e) ` 10,960.00 Lacs (P.Y. ` 10,960.00 Lacs) Secured by Pari pasu charges on stock and receivables of the contract and

Escrow of receivable of the Project.

f) ` 6,475.74 Lacs (P.Y. ` Nil ) Secured by i) first pari passu charge by hypothecation of moveable assets of the company

and first pari passu charge on company’s immovable properties situated at M.I.D.C., Satpur Industrial Area, Nasik

(Maharashtra), Raipur (Chhattisgarh) and Ghoti, Dist. Nasik (Maharashtra), Malvan, Dist. Sindhudurgh (Maharashtra),

Flats and office premises situated at Andheri (W), Mumbai. ii) second charge on current assets of the company and iii)

exclusive charge on specific machinery and equipment;

g) ` 170.38 Lacs (PY. ` 170.38 Lacs) Secured by hypothecation of Specific plant and machinery and vehicles.

h) Term loan is secured by first priority liens on all property and equipment of Jyoti Americas LLC (present and future), including

but not limited to, equipment, real estate, leases and intangible assets and second lien on all current assets (present and

future).

i) The Company has defaulted in repayment of loans and interest in respect of following :-

Particulars Period of Default 31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

i) Term Loan Various dates from 20th Feb 2014

to 31st March 2014

ii) Term Loan - ECB Loan Various dates from 23rd March

2014 to 31st March 2014

1,000.00

717.39

Maturity Profile of Unsecured Term Loans are

as below :

Maturity Profile ` in Lacs

1-2 Years 2-3 Years 3-4 Years 4-5 Years

Deposits 6,186.15 375.90 - -

Redemption of Secured Non Convertible

Debentures are as below : 7.00 % Debentures - - - 2,700.00

14.00 % Debentures - - 650.00 214.00 12.50 % Debentures 1,020.00 390.00 - -

5 DEFERRED TAX LIABILITIES (NET)

Deferred Tax Liabilities

Deferred Tax

(Asset)/Liability

as on 31-03-14

` in Lacs

Current Year

Liability/(Asset)

` in Lacs

Deferred Tax

(Asset)/Liability

as on 31-03-13

` in Lacs

On Account of difference in Book and Tax Depreciation 2,053.86 (115.40) 2,169.26

Deferred Tax Assets

Disallowance under the Income Tax Act, 1961 (2,040.02) (962.41) (1,077.61)

TOTAL 13.84 (1,077.81) 1,091.65

6 OTHER LONG TERM LIABILITIES

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

Trade Payables* 9,867.81 6,813.31

Others (Advances received from Customers) 6,261.55 5,178.17

TOTAL 16,129.36 11,991.48

*Amount payable beyond one year

F12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

7 LONG TERM PROVISIONS

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

Provision for Gratuity 676.97 511.02

Provision for Compensated Absenses 288.00 247.81

TOTAL 964.97 758.83

8 SHORT TERM BORROWINGS

Secured Loan

Loans repayable on Demand

From Bank 89,597.25 61,208.00

Unsecured Loan

From Bank - 2,145.92

From Others 172.09 148.71

TOTAL 89,769.34 63,502.63

Secured Loan from Bank

` 89,597.25 Lacs (PY. ` 61,208.00 Lacs) Secured by a first charge on all present and future current assets, monies receivable

and claims, except assets for which an exclusive charge has been created and secured by a charge which is second and

subservient to the charge created in favour of IDBI and Standard Chartered Bank, by way of deposit of Title Deeds in respect

of the Company’s immovable property in M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh), Ghoti

Dist. Nashik (Maharashtra), Malvan Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W),

Mumbai.

9 TRADE PAYABLES 31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

Trade Payables (Including Acceptances) 1,75,147.74 65,668.93

TOTAL 1,75,147.74 65,668.93

10 OTHER CURRENT LIABILITIES

a) Current Maturities of Long Term Borrowings (Note No. 4) 20,728.73 23,725.79

b) Interest Accrued But Not Due on Borrowings 1,116.34 621.54

c) Advances from Customers 24,246.64 18,482.24

d) Unclaimed Dividend* 32.60 29.71

e) Other Payables (Including expenses) 5,147.11 10,313.11

f) Statutory Liabilities 2,546.80 1,641.34

TO TAL 53,818.22 54,813.73

* There is no amount due and outstanding to be paid to the Invester Education and Protection Fund as at 31st March, 2014.

These amount shall be paid to the fund as an when they became due.

11 SHORT TERM PROVISIONS

a) Provision for Employee Benefits 133.92 190.16

b) Proposed Dividend - 658.08

c) Provision for Income Tax on Proposed Dividend 4.25 106.96

d) Provision for Tax* 2,621.55 1,419.32

TO TAL 2,759.72 2,374.52

* The Provision for Income Tax amounting to ` 2,621.55 Lacs (P.Y. ` 1,419.32 Lacs) as stated in the Balance Sheet is net of

Advance Tax, Tax Deducted at Source and other Eliminations.

F13

13 NON-CURRENT INVESTMENTS Subsidi ry / Face Value No. of Shares / Units

1-Mar-2014 31-Mar-2013 3 Amount

-Mar-2014 31-M

Associate / 3 1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

12 FIXED ASSETS (` In Lacs)

GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

PARTICULARS

Tangible Assets : Ownership

As At Additions Deletions/ As At As At For The Deletions/ As At As At As At

01/04/2013 Eliminations 31/03/2014 01/04/2013 Year Eliminations 31/03/2014 31/03/2014 31/03/2013

Freehold Land 2,198.88 207.31 6.16 2,400.03 - - - - 2,400.03 2,198.88

Leasehold Land 188.82 34.88 - 223.70 17.24 3.42 - 20.66 203.04 171.58

Buildings 13,357.82 1,206.00 - 14,563.82 1,403.95 464.67 - 1,868.62 12,695.20 11,953.87

Plant & Machinery 34,269.05 1,932.74 647.57 35,554.22 9,122.60 2,545.67 382.76 11,285.51 24,268.71 25,146.45

Furniture & Fixtures 1,005.97 71.17 11.88 1,065.26 488.19 65.43 10.05 543.57 521.69 517.78

Computer & Office

Equipments

1,886.10 185.08 161.89 1,909.29 1,067.44 151.09 159.49 1,059.04 850.25 818.66

Vehicles 3,830.73 1,259.22 30.47 5,059.48 1,494.23 456.04 16.60 1,933.67 3,125.81 2,336.50

TOTAL - A 56,737.37 4,896.40 857.97 60,775.80 13,593.65 3,686.32 568.90 16,711.07 44,064.73 43,143.72

Tangible Assets :

On Operating Lease

Plant & Machinery 162.08 - - 162.08 14.03 12.03 - 26.06 136.02 148.05

Vehicles 1,294.03 - - 1,294.03 170.75 146.35 - 317.10 976.93 1,123.28

TOTAL - B 1,456.11 - - 1,456.11 184.78 158.38 - 343.16 1,112.95 1,271.33

TOTAL - C = A+B 58,193.48 4,896.40 857.97 62,231.91 13,778.43 3,844.70 568.90 17,054.23 45,177.68 44,415.05

Intangible Assets :

Software 1,779.93 852.23 - 2,632.16 592.95 373.53 - 966.48 1,665.68 1,186.98

Goodwill on amalgamation 301.13 10.18 - 311.31 240.90 60.23 - 301.13 10.18 60.23

TOTAL - D 2,081.06 862.41 - 2,943.47 833.85 433.76 - 1,267.61 1,675.86 1,247.21

TOTAL - E = C+D 60,274.54 5,758.81 857.97 65,175.38 14,612.28 4,278.46 568.90 18,321.84 46,853.54 45,662.26

Previous Year 37,311.70 23,289.40 326.56 60,274.54 11,227.02 3,570.55 185.29 14,612.28 45,662.26 26,084.68

Note :- The Land includes leasehold land and the amount shown in the Depraciation column represents amortisation of the lease cost over the period of the lease

a

Joint Venture

Nos

Nos

` in Lacs

ar-2013

` in Lacs Trade Investment

Investment in Equity Instruments Unquoted - At Cost Lauren Jyoti Pvt Ltd. - Eq Shares Joint Venture ` 10 Each 50,00,000 50,00,000 500.00 500.00 TAQA Jyoti Energy Ventures Private

Limited Other ` 10 Each 25,000 25,000 2.50 2.50

Jankalyan Sahakari Bank Ltd. - Eq. Shares Other ` 10 Each 49,955 49,955 5.85 5.85

508.35 508.35 Other Investment

Investment in mutual fund Quoted - At Cost SBI Blue Chip Fund Mutual Fund ` 10 Each 20,000 20,000 2.00 2.00 SBI Infrastructure Fund Mutual Fund ` 10 Each 50,000 50,000 5.00 5.00 SBI One India Fund Mutual Fund ` 10 Each Nil 50,000 - 5.00 SBI Magnum Equity Fund Mutual Fund ` 10 Each 12,136 Nil 5.22 - UTI Bond Fund Mutual Fund ` 10 Each 28,352 28,352 5.00 5.00

17.22 17.00 TOTAL 525.57 525.35

Book value of Unquoted Investments is ` 508.35 Lacs (P.Y. ` 508.35 Lacs )

Book value of Quoted Investments is ` 17.22 Lacs (P.Y. ` 17 Lacs)

Market value of Quoted Investments is ` 24.70 Lacs (P.Y. ` 22.74 Lacs)

F14

976.61 1,387.28

976.61 1,387.28

9,919.31 5,353.87

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

14 LONG TERM LOANS AND ADVANCES

Unsecured and considered good

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

a) Capital Advances 24.32 -

b) Security and Other Deposits 644.56 641.84

c) Other Loans and Advances (Loan to Employees) 46.64 57.06

TOTAL 715.52 698.90

15 OTHER NON CURRENT ASSETS

Unsecured, considered good

Trade Receivables 4,524.14 4,209.41

TOTAL 4,524.14 4,209.41

16 INVENTORIES

(VALUED AT LOWER OF COST AND NET REALIZABLE VALUE)

a) Raw Materials

i) In Stock

10,397.84

8,440.29

ii) In Transit 333.61 589.47 b) Construction Materials at Site 2,561.75 4,863.60 c) Semi Finished Goods 1,271.76 537.06 d) Work-in-Progress 19,852.21 7,332.21 e) Finished Goods 15,388.52 4,137.28 f) Stores and Consumables 332.11 706.82 g) Tools and Tackles 2,412.61 2,015.08 h) Scrap 104.51 82.67 TO TAL 52,654.92 28,704.48

17

TRADE RECEIVABLES

Unsecured, considered good

a) Trade Receivables (overdue more than six months)

25,604.31

9,476.48

b) Other Trade Receivables 2,66,990.30 1,75,237.02

TOTAL 2,92,594.61 1,84,713.50

18 CASH AND BANK BALANCES

Cash and Cash Equivalents

a) Balances with Banks 8,761.01 3,531.40

b) Fixed Deposit with original maturity for less than 3 months 86.70 349.15

c) Unpaid Dividend Bank Balanance 32.60 29.71

d) Cash On Hand 62.39 56.33

8,942.70 3,966.59 Other Bank Balances

a) Margin money with bank

TOTAL

F15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

19 SHORT TERM LOANS AND ADVANCES

Unsecured and considered good

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

a) Loan and Advances to Related Parties 6,769.95 6,806.63

b) Other Loans and Advances

i) Advance income-tax (net of provision for taxation) 2.89 2.25

ii) Prepaid Expenses 7,391.69 5,373.60

iii) Loans to Employees 15.72 20.77

iv) Balances With Statutory/Government Authorities 14,215.67 9,735.24

v) Advances to Supplier 8,868.95 4,565.80

vi) Sundry Deposits 368.74 533.31

vii) Other Advances and Claim Receivables 1,673.10 1,942.33

TOTAL 39,306.71 28,979.93

20 OTHER CURRENT ASSETS

Unsecured and considered good

Interest Accrued But Not Due on Fixed Deposit 146.36 1.69

TOTAL 146.36 1.69

F16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

31-Mar-2014

` in Lacs 31-Mar-2013

` in Lacs 21 REVENUE FROM OPERATIONS

a) Sale of Products

3,55,098.41

2,96,483.12

b) Sale of Services 8,619.75 4,182.93

c) Other Operating Revenues 5,578.87 4,635.72

Revenue from Operations (Gross) 3,69,297.03 3,05,301.77

Less: - Excise Duty 5,692.49 4,032.47

Revenue from Operations (Net) 3,63,604.54 3,01,269.30

22

OTHER INCOME

a) Lease Rentals

247.96

207.22

b) Interest on Fixed Deposits 297.29 145.57

c) Interest on Others 567.54 146.70

d) Net Gain on Foeign Currency Transactions and Translation

TOTAL 1,833.44

2,946.23 -

499.49

23

COST OF MATERIAL CONSUMED

Cost of Material Consumed

2,51,327.97

1,77,474.04

TOTAL 2,51,327.97 1,77,474.04

24

ERECTION AND SUB-CONTRACTING EXPENSE

a) Construction Materials and Stores Consumed

10,126.08

12,151.01

b) Tools and Tackles Consumed 1,372.98 1,461.52

c) Sub-contracting Expenses 37,728.91 30,007.30

d) Repairs to Construction Equipments/Machinery 296.37 114.61

e) Construction Transportation Charges 6,427.51 5,471.38

TOTAL 55,951.85 49,205.82

25

CHANGES IN INVENTORIES

a) (Increase)/ Decrease Finished Goods Stock

(10,306.72)

(509.35)

b) (Increase)/ Decrease WIP/Semi Finished Goods Stock (13,396.39) 379.02

c) (Increase)/ Decrease Scrap Stock (21.85) 39.96

TOTAL (23,724.96) (90.19)

26

EMPLOYEE BENEFITS EXPENSE

a) Salaries, Wages and Bonus, etc.

16,105.84

13,887.37

b) Leave Encashment 111.50 158.80

c) Employee Compensation Expense - ESOS 56.15 (83.99)

d) Contribution to Provident and Other Fund 918.08 946.15

e) Welfare Expenses 781.22 623.70

TOTAL 17,972.79 15,532.03

27

FINANCE COSTS

a) Interest Expense

23,196.62

16,699.18

b) Other Borrowing Costs 1,169.27 1,340.23

c) Net (gain)/loss on foreign currency transactions and translation on borrowing cost 246.47 173.92

TOTAL 24,612.36 18,213.33

F17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

28 DEPRECIATION AND AMORTIZATION EXPENSE

31-Mar-2014

` in Lacs

31-Mar-2013

` in Lacs

a) Depreciation of Tangible Assets (Note No. 12) 3,515.55 3,205.23

b) Amortization of Intangible Assets (Note No. 12) 513.83 353.71

4,029.38 3,558.94

c) Less : Transfer from Revaluation Reserve (2.42) (2.42)

TO TAL 4,026.96 3,556.52

29 OTHER EXPENSES

a) Stores and Consumables 1,211.00 977.10

b) Packing Materials 213.04 167.54

c) Power and Fuel 2,487.92 2,056.12

d) Conversion Expenses 2,597.95 2,271.53

e) Service Charges 3,389.31 3,798.92

f) Repairs to Buildings 110.23 93.13

g) Repairs to Plant and Machinery 315.53 340.72

h) Repairs to Others 1,204.83 417.49

i) Testing and Designing Expenses 242.99 833.94

j) Excise Duty on Stocks (Net) 515.87 (73.41)

k) Rent 768.50 678.18

l) Rates and Taxes 2,717.05 3,531.96

m) Insurance 1,150.24 1,117.98

n) Travelling and Conveyance 2,614.68 2,074.99

o) Postage, Telephone and Fax 551.84 518.65

p) Printing and Stationery 265.11 236.27

q) Professional and Legal Fees 3,240.81 1,554.56

r) Directors’ Sitting Fees 2.90 2.25

s) Payment to auditors 98.43 75.28

t) Net (gain)/loss on foreign currency transactions and translation 17.94 200.55

u) Licence and Tender Fees 199.32 148.18

v) Donations 6.12 16.35

w) Freight Outward 3,917.51 3,245.74

x) Brokerage and Commission 1,083.28 429.61

y) Bank Charges 7,264.84 5,605.65

z) (Gain)/Loss on Sale of Fixed Assets (Net) 98.21 15.93

aa) (Gain)/Loss on Sale of Investment (Net) (0.22) -

ab) Bad Debts 712.52 813.93

ac) General Expenses 1,308.23 1,172.51

ad) Amortisation of Deferred Expenes 33.49 30.65

TOTAL 38,339.47 32,352.30

F18

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL

STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

Note - 30 Statements of Significant Accounting Policies of the Consolidated Financial Statements

I. Basis of Consolidation:

The consolidated financial statements relate to Jyoti Structures Limited (the ‘Company’), and its subsidiary companies and

joint venture (the ‘Group’). The consolidated financial statements have been prepared in accordance with Accounting

Standard 21 “Consolidated Financial Statements” specified in the Companies (Accounting Standards) Rules, 2006 notified

by the Central Government in terms of Section 211 (3C) of the Companies Act, 1956.

A. Basis of Preparation:

i. The F i n a n c i a l S t a t e m e n t s have been prepared on historical cost convention. The Group follows accrual basis of

accounting. The financial statements of Jyoti Structures Africa (Pty) Limited and Jyoti Structures Namibia (Pty) Ltd. have

been prepared in accordance with International Financial Reporting Standards (IFRS) and for the requirements

of the Companies Act of South Africa and Namibia. The financial statements of Jyoti International Inc, Jyoti

Americas LLC, Jyoti Structures Canada Ltd., Jyoti Structures FZE, Gulf Jyoti International LLC and GJIL Tunisie

Sarl. Have been prepared in accordance with International Financial Reporting Standards (IFRS) and they are

modified to the extent necessary and practicable to make them uniform with the policies of the parent company.

ii. The following subsidiaries and Joint Venture are considered for consolidation:

Name of the Company

Percentage Holding (%) Country of Incorporation

2013-14 2012-13

JSL Corporate Services Ltd. 100 100 India

Jyoti Energy Ltd. 100 100 India

Jyoti International Inc. 100 100 USA

Jyoti Americas LLC 100 100 USA

Jyoti Structures Canada Ltd. 100 100 Canada

Jyoti Structures FZE 100 100 Dubai

Jyoti Structures Nigeria Ltd. 100 100 Nigeria

Jyoti Structures Kenya Ltd. 100 100 Kenya

Jyoti Structures Africa (Pty) Ltd. 70 70 South Africa

Jyoti Structures Namibia (Pty) Ltd. 70 70 Namibia

Gulf Jyoti International LLC 30 30 Dubai

iii. The financial statements of the Company, its subsidiaries and a Joint Venture are prepared up to 31st March, 2014.

B. Principles of Consolidation:

i. The financial statements of the Company, its subsidiary companies and a joint venture have been consolidated on a

line-by- line basis by adding together the book values of like items of assets, liabilities, income and expenses;

after fully eliminating intra-group balances and unrealised profits or losses on intra-group transactions as per

Accounting Standard 21.

ii. The excess of cost to the Company of its investments in the subsidiary companies is recognised in the financial

statements as goodwill, which is tested for impairment on every balance sheet date. The excess of Company’s share

of equity and reserves of the subsidiary companies over the cost of acquisition is treated as capital reserve.

iii. The consolidated financial statements have been prepared using uniform accounting policies for like transactions

and other events in similar circumstances to the extent possible and practicable, in the same manner as the

Company’s separate financial statements.

F19

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL STATEMENTS

II. Other Significant Accounting Policies

1. Revenue Recognition:

(a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and

reward. Sales include excise duty and adjustment for price variation and are net of claims accepted.

(b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined

as per the terms of the contract. Sales/Income are booked on the basis of running account bills based

on completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by

customers are not taken into account.

(c) Interest income is recognized on time proportion basis.

(d) The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance

companies.

2. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions

affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of

revenues and expenses during the reporting period. Differences between the actual results and the estimates are recognised

in the period in which the results are known / materialised.

3. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for

bringing the asset to its working condition for its intended use and includes amount added on revaluation, less accumulated

depreciation and impairment loss, if any.

4. Depreciation / Amortisation:

(a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in

Schedule XIV to the Companies Act, 1956, except on computer software and on fixed assets of Uganda, Bhutan,

Bangladesh, South Africa and Kenya branches.

(b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the

software.

(c) On the fixed assets of Uganda, Bhutan, Bangladesh, South Africa and Kenya branches, depreciation is provided

on Straight Line Method. The applicable rates are based on the local laws and practices of the respective countries.

(d) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation

charged on historical cost is recouped out of the Revaluation Reserve.

(e) Leasehold land is amortized over the period of lease.

(f) Goodwill arising on amalgamation is amortised over a period of 5 years.

5. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a

decline is other than temporary.

6. Inventories:

(a) Raw materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net

realizable value.

(b) Cost of inventories is determined by using the weighted average cost formula, except that of Jyoti Structures

Africa (Pty) Ltd., in which case the same has been done on FIFO basis.

(c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the contract,

whichever is lower.

F20

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL STATEMENTS

(d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when

expected realisation is lesser than the carrying cost.

(e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

(f) Tools and tackles are amortised over their estimated useful life.

(g) Scrap is valued at net realisable value.

7. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of

time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which

they are incurred.

8. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the

carrying amount of the Company’s fixed assets. If any such indication exists, then recoverable amount of the asset

is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its

recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing

value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount

factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate

of recoverable amount.

9. Debenture / Preference Share Issue Expenses:

Expenses incurred for issue of secured debentures / preference shares made by the Group are written off as revenue

expenditure during the year of issue.

10. Foreign Currency Transactions:

(a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the

dates of the transactions or that approximates the actual rate at the dates of transactions.

(b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the

closing rates.

(c) Non-monetary items denominated in a foreign currency are stated at costs.

(d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in

the Statement of Profit and Loss.

(e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year.

ii. Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation

is accounted at the same exchange rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

(f) Financial Statements of Overseas Non Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year. Depreciation is accounted at the same

rate at which assets are translated.

F21

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL STATEMENTS

ii. Exchange differences arising on translation of non integral foreign operations are accumulated in the

foreign currency translation reserve until the disposal of such operations.

g) Forward Exchange contracts:

i. In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation

purposes, premium or discount is amortised as expense or income over the life of the contract.

ii. Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which

the exchange rates change.

iii. Profit or loss arising on cancellation or renewal of such forward exchange contracts i s recognized as

income or expense for the year.

11. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of Central

Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials

consumed.

12. Leased Assets:

Operating Lease:

i. Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the

term of the lease.

ii. Assets given on operating lease are included in fixed assets. Lease income is recognized in the Statement of

Profit and Loss on straight line basis over the term of the lease.

13. Employees’ Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during

which the services have been rendered.

b) Long Term Employee Benefits:

I. Defined Contribution Plan:

The Company’s contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit

and Loss on accrual basis.

II. Defined Benefit Plan:

i. Gratuity: The company provides for the applicable gratuity based on actuarial valuation as per the

Projected Unit Credit Method.

ii. Leave Encashment: The company provides for the applicable liability at the year end on account of

unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii. The cost of employee stock option attributable to current financial year is accounted for and charged to

Statement of Profit and Loss.

14. Taxes on Income:

a. Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax

laws.

F22

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL STATEMENTS

B. Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent periods

is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets

are not recognised unless there is a virtual / reasonable certainty, as applicable, as regards to the reversal of the

same in future years.

15. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year

by the weighted average number of equity shares outstanding during the reporting period. Diluted earnings per share

is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average

number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be

anti dilutive.

16. Provisions and Contingencies:

a. A provision is recognized when there is a present obligation as a result of a past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b. A disclosure for a contingent liability is made when there is a possible or present obligation that may but

probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood

of outflow of resources is remote, no provision or disclosure is made.

c. Contingent assets are neither recognised nor disclosed in the financial statements.

17. Employees Stock Option Scheme:

Stock options granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated

as per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase

Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock options, as on date of grant over the exercise

price of the options is recognized as deferred employee compensation and is charged to Statement of Profit and Loss as

employee costs, on straight line method over the vesting period of the options.

F23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

NOTE- 31 NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS

1. Outstanding Contracts - Capital Account:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) are ̀ 11.28

Lacs (P.Y. ` Nil). Advances paid ` 24.32 Lacs (P.Y. ` Nil).

2. Contingent Liabilities not provided for:

Sr

No

Particulars

2013-14

` i n Lacs

2012-13

` i n Lacs 1 Outstanding of Bills Discounted Nil 533.91

2 Disputed liabilities in respect of Income Tax, Sales Tax,

Central Excise and Service Tax (under appeal) 802.51 637.47

3 Civil Suits 107.87 107.7

4 Corporate Guarantees 68,918.04 46,247.05

The Group has given a letter of comfort for general banking facilities provided by National Bank of Abu Dhabi to Gulf Jyoti

International LLC. The total loan outstanding from the bank to the said Company is AED Nil (P.Y. AED 100.98 Lacs) equivalent

to ` Nil (P.Y. ` 1,498.52 Lacs) as on 31st March, 2014.

3. The gross block of fixed assets includes ` 83.62 Lacs (P.Y. ` 83.62 Lacs) on account of revaluation of fixed assets carried out

by the Group in the year 1993-94. Consequent to the said revaluation, there is an additional charge of ` 2.42 Lacs (P.Y. ̀ 2.42

Lacs) on account of depreciation and an equivalent amount has been withdrawn from the revaluation reserve and credited to

Statement of Profit and Loss. This has no impact on the profit for the year.

4. Disclosures in Respect of Joint Ventures under the Accounting Standard 27 “Financial Reporting of Interest in Joint

Ventures”:

(` in Lacs)

As at

31-Mar-2014 As at

31-Mar-2013

Share of Interest

a) Jointly Controlled Entities

Gulf Jyoti International LLC

30%

30%

b) Aggregate amount of assets, liabilities, income and expenditure

related to Company’s interest in jointly controlled entity:

Assets:

Fixed Assets 4,654.56 4,178.90

Cash and Bank Balances 353.24 860.16

Inventories 2,821.11 2,083.84

Trade and Other Receivables 4,583.40 4,297.24

Loans and Advances 1,490.17 1,783.05

Current Liabilities: 5,809.99 8,319.25

Non Current Liabilities 6,376.11 3,484.93

Income 14,327.33 11,287.46

Expenditure 13,707.41 10,881.53

Contingent Liability on account of Letter of Credit 200.28 1,710.01

Contingent Liability on account of Guarantees 8,673.95 5,298.00

F24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

5. The company has consolidated the accounts of its two wholly owned subsidiary companies namely Jyoti International INC and

Jyoti Americas LLC with its accounts. The said companies have provided for deferred tax asset during the year amounting to

US$ 52,87,267 (P.Y. US$ 29,45,811) and the total accumulated deferred tax assets as at 31-Mar-2014 US$ 87,67,602 (P.Y.

US$ 34,80,355). The said treatment is considered by the auditors of the two companies and is approved by them.

6. Lauren Jyoti Private Ltd. is a joint venture company (JVC) between Lauren Engineers Constructors Inc. (Lauren) and Jyoti

Structures Limited (JSL) with equity participation of ` 500 Lacs by each partner and with technical assistance, support and

know-how to be provided by Lauren and pre-qualification credentials by the Company for EPC Contracts. Due to differences

and disputes arising between the partners during the execution of 50 MW Solar Thermal Power Plant EPC Contract awarded

by Godavari Green Energy Limited, the financial statements of JVC have not been adopted. Based on the advice, the Company

is in the process of referring the dispute to arbitration in accordance with the Joint Venture Agreement.

7. Pending resolution of the dispute, the Company is not in a position to consolidate the financial statements of JVC.(Lauren

Jyoti Private Ltd.)

8. Disclosures for operating leases under Accounting Standard 19 – “Leases”

a) Disclosures in respect of the agreements entered into after 1st April, 2001 for taking on leave and license/under operating

leases; the residential/office premises and warehouses, including furniture fittings therein as applicable, and machinery are

given below:

Sr

No

Particulars 2013-14

` i n Lacs 2012-13

` i n Lacs

1 Lease payments recognised in the Statement of Profit and Loss for the year 256.16 158.61

2

Future minimum payments receipt under the agreements, which are non-

cancellable. (All the lease agreements are cancellable)

-

-

b) Disclosures in respect of the agreements entered into after 1st April, 2001 for giving the plant and machineries and other fixed

assets under operating leases are given below:

Sr

No

Particulars 2013-14

` i n Lacs 2012-13

` i n Lacs

1 Lease income recognised in the Statement of Profit and Loss for the year 247.96 207.22

2 Future minimum lease receipt under the agreements, which are non-

cancellable are as follows:

i) Not later than one year Nil Nil

ii) Later than one year and not later than five years Nil Nil

The agreements provide for early termination by either party with a notice period which varies from fifteen days to three months

and they contain a provision for their renewal.

9. Related Party Disclosures:

Related party disclosures as required by Accounting Standard 18, “Related Party Disclosures”, issued by the Institute of

Chartered Accountants of India are given below:

1. Relationships (during the year)

(i) Key Management Personnel:

Mr. Prakash Thakur

Mr. Santosh Nayak

Mr. K. R. Thakur

(ii) Joint Venture:

a) Gulf Jyoti International LLC b) Lauren Jyoti Pvt. Ltd.

F25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

2. The following transactions were carried out with the related parties in the ordinary course of business.

Sr. Particulars Type of

Relationship 2013-14

` i n Lacs 2012-13

` i n Lacs

1 Remuneration Paid 1(i) 496.56 489.64

2 Purchase of Goods/Services 1(ii) 3,165.00 5,468.61

3 Sale of Goods/Services 1(ii) 933.27 5,313.04

4 Lease Rentals received 1(ii) 247.96 296.02

5 Investments at the end of the year 1(ii) 2,162.77 2,162.77

6 Outstanding balance receivable/ (payable) at the end

of the year. 1(ii) 14,313.09 11,044.95

10. Information in accordance with the requirement of Accounting Standard - 7 (Revised) “Construction Contracts”

2013-14

` i n Lacs 2012-13

` i n Lacs

Contract revenue recognised during the year 80,192.42 65,181.53

Method used to determine the contract revenue recognized and the stage of completion of contracts in progress

Percentage Completion Method

Disclosure in respect of contracts in progress as at the year- end: Aggregate amount of costs incurred and recognised profits (less recognised losses)

2,25,343.93 1,51,128.58

Advances received 8,799.03 8,639.33

Retentions receivable 17,712.96 15,657.68

Gross amount due from customers (Included under Note-17 Trade Receivable) 51,938.95 46,315.08

11. Employees Stock Option Scheme:

Under Jyoti Structures Limited Employees Stock Option Scheme 2005 (ESOS 2005) as amended, the Company is authorised

to issue upto 5,00,000 (Five lacs) stock options, convertible into 25,00,000 (Twenty Five lacs) equity shares of ` 2/- each to

employees. A Compensation Committee has been constituted by the Board of Directors of the Company to administer the

Scheme.

Each option is to be converted into 5 Equity shares of ` 2/- each at an exercise price of ` 17/- per equity share (being the

exercise price adjusted after split of face value from ` 10/- to ` 2/-). Under the scheme, 30% of the options vest at the end of

one year from the date of grant of options, 30% at the end of second year from the date of grant of options and the balance

40% at the end of third year from the date of grant of options.

The amount of ` 56.15 Lacs [P.Y. (` 83.99) Lacs] debited/(credited) to Employee Compensation Expense – ESOS account,

represents the proportionate cost for the year and has been credited to the revenue account.

The amount of ` 374.20 Lacs (P.Y. ` 387.36 Lacs) in Employee Stock Option outstanding account, represents discounts on the options outstanding.

The balance un-amortized portion of ` 27.95 Lacs (P.Y. ` 84.10 Lacs) being Deferred Employee Compensation

F26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

Expense has been shown as reduction from Employees Stock Options outstanding in the Balance Sheet.

Sr.

No. 2013-14

(In Numbers) 2012-13

(In Numbers)

i) Options granted and outstanding at the beginning of the year 1,19,035 90,785

ii) Options granted during the year - 60,650

iii) Options lapsed and/or withdrawn during the year - 23,150

iv) Options exercised during the year against which shares were allotted 2,735 9,250

v) Options granted and outstanding at the end of the year of which:-

- Options vested

- Options yet to vest

68,585

47,715

39,860

79,175

12. Earnings per Share (EPS)

Sr.

No.

2013-14

2012-13

i) Profit/(Loss) after Tax (Net of preference share dividend & Tax) (` i n Lacs) (965.74) 3,778.06

ii) Weighted Average Number of Ordinary Shares for Basic Earning per Share (In

No’s)

8,22,68,206

8,22,30,448

iii) Add: Equity shares for no consideration arising on grant of stock options under

ESOS

2,12,640

2,78,735

iv) WeightedAverage Number of Ordinary Shares for Diluted Earnings per Share (In No’s)

8,24,80,846

8,24,79,183

v) Nominal Value of Ordinary Share ` 2 ` 2 vi) Basic Earning Per Ordinary Share ` ( 1. 17) ` 4. 59 vii) Diluted Earning Per Ordinary Share ` ( 1. 17) ` 4. 58

13. Engineering Procurement Construction (EPC) Contracts provide for levy of liquated damages (LD) to the extent of 10% of

the contract value for delay in execution of the contracts. As a trade practice, on completion of the contracts such delay is

generally condoned by granting time extension. It is not possible to ascertain the quantum of the LD for the projects where

execution is delayed, as the proposals for time extension are pending with the customers and in the past, time extension have

been granted in similar circumstances.

14. Power Grid Corporation of India Ltd. had awarded Tangla-Kokrajhar-Barabisa transmission line contract in Assam on turnkey

basis for total value of ` 330 crores consisting of ` 200 crores supply portion and ` 130 crores construction portion. The

execution of the contract was delayed due to local agitation and ethnic strife, reasons which were beyond control of the

Company.

Power Grid Corporation of India Ltd. terminated the contract on 10th April 2014 and encashed the guarantees including

performance guarantee of ` 3,302.68 Lacs. Until termination of contract, the Company had completed

a) Supply of towers amounting to ` 185 crores and balance supply of towers of ` 15 crores are under dispatch;

b) Construction work amounting to ` 69 crores.

Though the events have occurred after the balance sheet date and the liability is disputed, the Company has provided for

` 3,302.68 Lacs in the Statement of Profit and Loss for the current year. The Company has been advised to initiate dispute

resolution mechanism provided in the contract.

15. Jyoti Structures Africa (Pty) Limited is currently involved in a legal dispute with its service provider KRB Electrical Engineering

Services (Pty) Limited. At the year end, the management and their legal advisers have not been able to determine the extent

of legal costs nor the outcome of the current proceedings.

F27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2014

16. The Group is operating in only one primary business segment of power transmission and distribution wherein it manufactures/

deals in various components/equipment’s and constructs infrastructure related to power transmission. As such there are no

separate primary reportable or identifiable business segments as defined by Accounting Standard – 17 “Segment Reporting”

Secondary Segment : Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments

considered for disclosure are as follows:

- Sales within India include sales to customers located in India.

- Sales outside India include sales to customers located outside India.

Information pertaining to Secondary Segment:

Details of Segment Revenue:

Particulars 2013-14

` i n Lacs 2012-13

` i n Lacs

Sales within India 2,36,557.59 2,20,885.27

Sales outside India 1,27,046.95 80,384.03

Total 3,63,604.54 3,01,269.30

Details of carrying amount of Segment Assets by geographical locations:

Particulars 2013-14

` i n Lacs 2012-13

` i n Lacs

Within India 3,73,737.21 2,40,785.00

Outside India 73,674.71 58,951.02

Total 4,47,411.92 2,99,736.01

Total cost incurred during the period to acquire segment assets (fixed assets including intangible assets) that are expected to

be used during more than one period:

Particulars 2013-14

` i n Lacs 2012-13

` i n Lacs

Within India 1,693.72 1,050.18

Outside India 3,350.35 5,336.05

Total 5,044.07 6,386.23

17. Figures pertaining to subsidiary companies have been reclassified wherever necessary to bring them in line with the parent

Company’s financial statements.

18. Previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

The Notes referred to above form an integral part of the Statement of Accounts.

As per our report attached

For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR L. H. KHILNANI SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR Partner Company Secretary Managing Director Vice Chairman Chairman Membership No. 31927 Mumbai; 30th May, 2014

F28

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Jyoti Structures Limited

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Jyoti Structures Limited (‘the Company’) and its

subsidiaries and joint ventures (collectively referred to as ‘the group’), which comprise of the consolidated Balance Sheet as

at March 31, 2013, the consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year then

ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the

consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance

with accounting principles generally accepted in India including Accounting Standards referred to in section 211(3C) of the

Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to

the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from

material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our

audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated

financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of

material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the Group’s preparation and presentation of the consolidated financial

statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates

made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of qualified opinion

a) The company has reported that it has provided for deferred tax asset of US$.29.46 Lacs (` 1,564.08 Lacs) for the year in

the consolidated Statement of Profit and loss and it has considered the deferred tax asset of US$ 34.80 Lacs (` 1,896.96

Lacs) in the consolidated Balance Sheet. In light of AS-22 paragraph 17, deferred tax assets should be recognized only

to the extent that there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be

available against which such deferred tax asset will be realised. In the absence of convincing evidence of virtual certainty

as required by AS – 22, we are of the opinion that the consolidated profits for the year are overstated by an amount of `

1,564.08 Lacs (P.Y. Nil) and the consolidated reserves & surplus for the year ended 31.03.2013 is overstated by ` 1,896.96

Lacs (P.Y. Nil).

b ) In absence of audited financial statements of the Joint Venture Company namely Lauren Jyoti Pvt. Ltd. as on 31.03.2013,

the company has not consolidated the financial statements of the said joint venture company with its financial statements.

In this connection, we draw attention of the members to note no 31(7) of the Notes to consolidated financial statements. In

absence of such consolidation and in absence of audited accounts for the year of the said subsidiary company, we are not

able to comment as regards the effects of the same on the consolidated financial statements of the company for the year

ended 31.03.2013.

F29

Opinion

Subject to our observations stated in ‘basis of qualified opinion’ above, in our opinion and to the best of our information and

according to the explanations given to us, and based on consideration of the reports of the other auditors on the financial

statements / consolidated financial statements of the subsidiaries and joint ventures noted below, the consolidated financial

statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2013;

(b) in the case of the consolidated Statement of Profit and Loss, of the profit of the Group for the year ended on that date; and

(c) in the case of the consolidated Cash Flow Statement, of the cash flows of the Group for the year ended on that date.

Other Matters

We did not audit the financial statements of the subsidiary companies namely Jyoti Structures Africa (Pty) ltd., Jyoti Structures

FZE along with its subsidiary Jyoti Structures Namibia (Pty) ltd and Jyoti International INC. along with its subsidiaries Jyoti

Americas LLC and Jyoti Structure Canada Ltd and joint venture company Gulf Jyoti International LLC along with its subsidiary

GJILTunisie Sarl. whose financial statements reflect total assets of ` 51,586.27 Lacs as at 31st March, 2013 and total revenue

of ` 29,539.79 Lacs; and net cash inflow of ` 256.70 Lacs for the year ended on that date. These financial statements and

other financial information have been audited / reviewed by other auditors from whom the reports have been furnished to us

and our opinion is based solely on the reports of the said other auditors.

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm’s Registration Number: 117247W

R. M. AJGAONKAR

Place: Mumbai Partner

Date: 29th May, 2013 Membership Number: 31927

F30

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2013

Note As at As at

31-Mar-2013 31-Mar-2012

` in Lacs ` in Lacs

I EQUITY AND LIABILITIES

1) Shareholders’ Funds a) Share Capital 1 4,145.20 1,644.28 b) Reserves and Surplus 2 66,723.63 63,521.74

70,868.83 65,166.02 2) Share Application Money Pending Allotment 3 0.92 0.39 3) Minority Interest 61.95 119.17 4) Non Current Liabilities

a) Long Term Borrowings 4 27,481.74 34,622.15 b) Deferred Tax Liabilities (Net) 5 1,091.65 1,278.55 c) Other Long Term Liabilities 6 14,903.89 18,901.97 d) Long Term Provisions 7 758.83 541.02

44,236.11 55,343.69 5) Current Liabilities

a) Short Term Borrowings 8 64,748.33 41,602.68 b) Trade Payables 9 65,313.89 59,188.94 c) Other Current Liabilities 10 54,037.62 46,031.73 d) Short Term Provisions 11 2,374.52 5,527.80

1,86,474.36 1,52,351.15 TOTAL 3,01,642.17 2,72,980.42

II ASSETS

1) Non Current Assets a) Fixed Assets

i) Tangible Assets 12 44,424.29 25,707.55 ii) Intangible Assets 12 1,237.97 377.12 iii) Capital Work-in-Progress 213.15 16,883.48 iv) Intangible Assets Under Development 675.72 908.55

46,551.13 43,876.70 b) Non Current Investments 13 527.77 522.85 c) Deferred Tax Assets (Net) 1,902.85 6.73 d) Long Term Loans and Advances 14 698.90 710.19 e) Other Non Current Assets 15 4,209.41 5,645.22

2) Current Assets a) Inventories 16 28,103.92 31,878.70 b) Trade Receivables 17 1,88,670.61 1,59,982.86 c) Cash and Bank Balances 18 5,353.87 6,111.05 d) Short Term Loans and Advances 19 25,622.02 23,855.01 e) Other Current Assets 20 1.69 391.11

2,47,752.11 2,22,218.73 TOTAL 3,01,642.17 2,72,980.42

Significant Accounting Policies 30 Other Notes to Financial Statements. 31

The Significant Accounting Policies and Notes referred to above form an integral part of Financial Statements.

As per our report attached

For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 29th May, 2013

F31

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2013

Note

Year Ended

31-Mar-2013

` in Lacs

Year Ended

31-Mar-2012

` in Lacs

I INCOME

Revenue from Operations (Gross) 21 3,05,301.77 2,82,142.94

Less: Excise duty 4,032.47 5,535.87

Revenue from Operations (Net) 3,01,269.30 2,76,607.07

Other Income 22 499.49 818.87

Total Revenue 3,01,768.79 2,77,425.94

II EXPENSES

Cost of Materials Consumed 23 1,78,013.11 1,48,481.36

Erection and Sub-contracting Expense 24 49,294.63 63,643.19

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade 25 (90.19) (7,469.44)

Employee Benefits Expense 26 15,532.03 10,722.10

Finance Costs 27 18,213.33 14,779.03

Depreciation and Amortization Expense (Net) 28 3,556.52 2,490.16

Other Expenses 29 31,724.42 30,720.84

Total Expenses 2,96,243.85 2,63,367.24

III Profit Before Tax (I-II) 5,524.94 14,058.70

IV Tax Expense:

Current Tax 1,927.92 4,819.99

Deferred Tax (Net) (186.90) (522.20)

1,741.02 4,297.79

V Profit for the year (III-IV) 3,783.92 9,760.91

VI Minority Interest (57.23) 119.17

VII Profit for the year after Minority Interest (V-VI) 3,841.15 9,641.74

VIII Earnings Per Equity Share (In ` )

[Nominal value of share ` 2]

1) Basic ` 4.67 ` 11.74

2) Diluted ` 4.65 ` 11.69

Significant Accounting Policies 30

Other Notes to Financial Statements. 31

The Significant Accounting Policies and Notes referred to above form an integral part of Financial Statements.

As per our report attached For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 29th May, 2013

F32

) Inventories 3,774.78 (7,198.38)

ii) Trade Receivable & Other Receivable, Loans & Advances, Other Current Assets (32,735.96) (58,072.32)

iii) Current Liabilities and Provisions 13,804.04 31,217.32

[D] (15,157.14) (34,053.38)

Ca h Generated from Operations [C+D] = [E] 11,360.40 (1,195.20)

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013

Year Ended

31-03-13

` In Lacs

Year Ended

31-03-12

` In Lacs

I CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Taxes and Extraordinary Items [A] 5,524.94 14,058.70

ADJUSTMENTS FOR

i) Depreciation and Amortisation 3,570.55 2,492.59

ii) Transferred from Revaluation Reserve (2.42) (2.42)

iii) Finance Cost 18,213.33 14,779.03

iv) (Gain)/Loss on Sale of Fixed Assets (Net) 15.93 (0.54)

v) Interest Received (292.28) (642.57)

vi) Employee Compensation Expense - ESOS (83.99) 96.22

vii) Effect of Exchange Rate Change (428.52) 2,077.17

[B] 20,992.60 18,799.48

Operating Profit before Working Capital changes [A+B] = [C] 26,517.54 32,858.18

ADJUSTMENTS FOR

s

i) Direct Taxes Paid (Net) (6,354.83) (4,399.04)

[F] (6,354.83) (4,399.04)

Net Cash (used in) / from Operating Activities [I] [E+F] = [G] 5,005.57 (5,594.24)

II CASH FLOW FROM INVESTING ACTIVITIES

i) Proceeds from Sale of Fixed Assets 126.69 1,488.97

ii) Purchase of Fixed Assets [After adjustment of (Increase)/

Decrease in Capital Work-in-Progress] (6,386.26) (23,236.37)

iii) Investments in Other than Subsidiary Company (4.92) (500.00)

iv) Interest Received 292.28 642.57

v) Net Advances to Companies other than Subsidiaries (1,989.15) (2,206.40)

Net Cash (used in) / from Investing Activities [II] (7,961.36) (23,811.23)

F33

Year Ended

31-03-13

` In Lacs

8.40

Year Ended

31-03-12

` In Lacs

III CASH FLOW FROM FINANCING ACTIVITIES

i) Proceeds from Issue of Equity Shares 14.46

(inclusive of Share Premium and after considersing ESOS allotted to employees)

ii) Proceeds from Issue of Preference Share 2,500.00

1,670.00

-

iii) Proceeds from issue of Non Convertible Debentures -

iv) Repayment of Non Convertible Debentures (12,086.41) -

v) Proceeds from Long Term Borrowings 13,066.96 25,926.74

vi) Repayment of Long Term Borrowings (8,266.40)

(14.90)

23,145.67

(3,609.79)

vii) Net Increase/(Decrease) in Interest Free Sales Tax Defferal Loan (54.41)

viii) Proceeds from Short Term Borrowings from Banks 21,730.04

ix) Proceeds from Asset Finance from Banks 150.12 -

x) Repayment of Asset Finance from Banks (83.71)

(7.74)

(4.87)

xi) Repayment of Asset Finance from Others (12.37)

xii) Dividends Paid (899.55) (1,225.11)

xiii) Dividend and Dividend Distribution Tax for earlier year (0.13)

(146.71)

(18,213.33)

(0.50)

xiv) Net Corporate Dividend Tax Paid (199.84)

xv) Finance Cost (14,779.03)

Net Cash (used in) / from Financing Activities [III] 822.27 27,785.32

Net Increase/(Decrease) in Cash and Cash Equivalents [I + II + III] (2,133.52)

5,935.24

3,801.72

(1,620.15)

Cash and Cash Equivalents at the beginning of the year 7,555.39

Cash and Cash Equivalents at the end of the year 5,935.24

Note: Cash and Cash Equivalents includes ` 29.71 Lacs (P.Y. ` 24.90 Lacs) on account of Unclaimed Dividend, which are no

available for the use by the Company.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013

t

As per our report attached

For R. M. AJGAONKAR & ASSOCIATES For and on behalf of the Board

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 29th May, 2013

F34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

1 SHARE CAPITAL 31-Mar-2013 31-Mar-2012

Number ` in Lacs Number ` in Lacs

Authorised :

Equity Shares of ` 2/- each 17,50,00,000 3,500.00 17,50,00,000 3,500.00 Redeemable Preference Shares of ` 100/- each 50,00,000 5,000.00 50,00,000 5,000.00 TOTAL 18,00,00,000 8,500.00 18,00,00,000 8,500.00

Issued :

Equity Shares of ` 2/- each 8,22,75,407 1,645.51 8,22,29,157 1,644.58 Redeemable Preference Shares of ` 100/- each 25,00,000 25,00.00 - - TOTAL 8,47,75,407 4,145.51 8,22,29,157 1,644.58

Subscribed and Paid-up :

Equity Shares of ` 2/- each fully paid up 8,22,60,147 1,645.20 8,22,13,897 1,644.28 Redeemable Preference Shares of ` 100/- each fully paid up 25,00,000 2,500.00 - - TOTAL 8,47,60,147 4,145.20 8,22,13,897 1,644.28

a) Reconciliation of the shares outstanding at the

beginning and at the end of the reporting period

Equity Shares

At the beginning of the period 8,22,13,897 1,644.28 8,21,26,115 1,642.52 Issued during the period - ESOS 46,250 0.92 87,100 1.75 Issued during the period against Share Warrant - - 682 0.01 Outstanding at the end of the period 8,22,60,147 1,645.20 8,22,13,897 1,644.28

b) Reconciliation of the preference shares outstanding

at the beginning and at the end of the reporting period

Preference Shares

At the beginning of the period - - - - Issued during the period 25,00,000 2,500.00 - - Outstanding at the end of the period 25,00,000 2,500.00 - -

c) Names of Equity shareholders holding more than 5 % shares

Number % Number %

1) Valecha Infrastructure Ltd. 54,31,400 6.60% 54,31,400 6.61% 2) Prakash K Thakur 52,48,235 6.38% 52,48,235 6.38% 3) K. R. Thakur 46,46,426 5.65% 46,46,426 5.65% 4) Reliance Capital Trustee Ltd. 46,14,900 5.61% 41,75,800 5.08%

d) Names of preference shareholders holding more than 5 % shares

1) Amtek India Limited 15,00,000 60.00% - - 2) Amtek Auto Limited 10,00,000 40.00% - -

e) Shares reserved for issue under options

Employee Stock Options Scheme (ESOS)

1) Under ESOS 2005, eligible employees on grant of option

and on vesting shall be entitled to apply for five equity

shares of `. 2/- each at an exercise price of `. 17/- per

equity share for each option.

5,95,175

6,41,425 2) Under ESOS 2011, eligible employees on grant of option

and on vesting shall be entitled to apply for one equity

share of ` 2/- each at an exercise price of `. 25/- per

equity share for each option.

25,00,000

25,00,000 f) The Company has equity shares having a par value of ` 2/- each. Each shareholder is eligible for one vote per share held.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual

General Meeting. In the event of liquidation, the shareholders are eligible to receive remaining assets of the Company after

distribution of all preferential amounts, in proportion to their shareholding.

g) The Company has Preference shares having a par value of ` 100/- each. The Share carries dividend @ 1%. In the event of

liquidation, the shareholders will have preference in repayment over equity shareholders

F35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

2 RESERVES AND SURPLUS 31-Mar-2013

` in Lacs 31-Mar-2012

` in Lacs a. Capital Reserve

As per last Balance Sheet 6.06 6.06

b. Capital Redemption Reserve As per last Balance Sheet 300.00 300.00

c. Foreign Currency Translation Reserve

As per last Balance Sheet 557.02 (1,520.15)

Add: During the year (440.12) 2,077.17 Add: FCTR on Fixed assets 11.60 -

128.50 557.02 d. Securities Premium Reserve

As per last Balance Sheet 16,087.95 15,961.07 Add: On Allotment of Equity Shares 52.80 126.88

16,140.75 16,087.95 e. Debenture Redemption Reserve

As per last Balance Sheet 6,044.00 6,044.00 Add: Transferred from surplus in the Statement of Profit and Loss 417.50 - Less: Transferred to General Reserve 6,044.00 -

417.50 6,044.00 f. Revaluation Reserve*

As per last Balance Sheet 40.00 42.42 Less: Transferred from surplus in the Statement of Profit and Loss as

Reduction from Depreciation

2.42

2.42 37.58 40.00

g. Employee Stock Option Outstanding [Note No. 31 (16)] 387.35 524.82 Less: Deferred Employee Compensation Expense 84.10 91.72

303.25 433.10 h. General Reserve

As per last Balance Sheet 9,562.64 8,698.64 Add: Transferred from Debenture redemption reserve 6,044.00 - Add: Transferred from surplus in the Statement of Profit and Loss 650.00 864.00

16,256.64 9,562.64 i. Surplus in Statement of Profit and Loss

As per last Balance Sheet 30,490.97 23,914.97 Add: Tax adjustment for an earlier year including interest 276.26 (1,324.99) Less: (Excess)/Short Provision of Taxes for earlier year 4.42 -

30,762.81 22,589.98

Add: Profit for the year 3,841.15 9,641.74 Add: Previous Year Adjustment 363.29 174.81 Less: Appropriations Proposed Dividend - Equity Shares [amount per share ` 0.80/- (P.Y.: ` 1.10/-)] 658.08 904.35

Tax on Dividend 106.96 146.71 Dividend and Dividend Distribution Tax for an earlier year 0.13 0.50 Preference Share Dividend 1.23 - Transfer to Debenture Redemption Reserve 417.50 -

Transfer to General Reserve 650.00 864.00 1,833.90 1,915.56

Net Surplus in the Statement of Profit and Loss 33,133.35 30,490.97 TOTAL 66,723.63 63,521.74

*Cumulative amount withdrawn from Revaluation Reserve is ` 46.04 Lacs (P.Y. ` 43.62 Lacs)

F36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

31-Mar-2013 31-Mar-2012

3 SHARE APPLICATION MONEY PENDING ALLOTMENT ` In Lacs ` In Lacs

Share Application Money Pending Allotment

For Equity Shares 0.92

5,425

0.81

0.39 Number of Shares proposed to be allotted 2,300 Amount of Premium, if any 0.35 Terms and Conditions of shares proposed to be issued

Option Grantees, in accordance with the Employees Stock Option Scheme have an

option to exercise their rights to apply for 5 Equity shares for each options held, at an

exercise price of ` 17 per Share within the vesting period

Date by which the shares shall be allotted

15-Apr-2013

YES

N A

15-Apr-2012

Whether sufficient authorised share capital to cover allotment of shares out of such

share application money

YES

The period overdue from the proposed date of allotment N A

Non-current Current

31-Mar-2013 31-Mar-2012 31-Mar-2013 31-Mar-2012

4 LONG TERM BORROWINGS ` in Lacs ` in Lacs ` in Lacs ` in Lacs

Secured Loans

Non Convertible Debenture 1,670.00

13,011.72

-

14,681.72

- -

18,111.49

4.90

18,116.39

12,086.41 Term Loan

From Bank 26,254.60 4,787.42 From Other 4.90 7.74

TOTAL - A 26,259.50 16,881.57 Unsecured Loans

Term Loan 5,220.26

362.43

81.68

7,135.65

12,800.02

-

27,481.74

3,260.21

30.30

-

2,688.60

5,979.11

(24,095.50)

-

From Banks 7,985.32 1,227.98

From Other Deferred Payment Liabilities 377.33 30.30 Others - - Deposits - -

TOTAL - B 8,362.65 1,258.28 Amount disclosed under the head “Other Current Liabiliities” (Note No. 10) - (18,139.85)

TOTAL - A + B 34,622.15 -

Nature of Securities for Secured Loan

Debentures

a) ` 1,670.00 Lacs (P.Y. Nil) Non-Convertible Debentures Mortgage over identified immovable property of the subsidiary

company;

b) ` Nil (P.Y. ` 12,086.41 Lacs) Non-Convertible Debentures Hypothecation on Company’s moveable assets including

moveable machinery, machinery spares, stocks, tools and accessories both present and future. Mortagage on

Company’s immoveable properties except CSIDCL Raipur properties.

Term Loan from banks

a) ` 3,707.79 Lacs (P.Y. ` 6,054.46 Lacs) Secured by i) first charge on company’s immovable properties situated at

M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh) and Ghoti, Dist. Nasik (Maharashtra),

Malvan, Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. ii) second charge

on current assets of the company and iii) exclusive charge on specific machinery and equipment;

b) ` 148.97 Lacs (P.Y. ` 637.21 Lacs) Secured by i) first charge on company’s immovable properties situated at M.I.D.C.,

Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh) and Ghoti, Dist. Nasik (Maharashtra), Malvan, Dist.

Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. and ii) hypothecation on

specific Plant & Machinery

F37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

4 LONG TERM BORROWINGS (Contd.....)

c) ` 508.90 Lacs (P.Y. ` Nill) Secured by hypothecation on specific Plant & Machinery

d) ` 10,960.00 Lacs (P.Y. ` 8,600.00 Lacs)Secured by Pari pasu charges on stock and receivables of the contract and

Escrow of receivable of the Project.

e) ` 170.38 Lacs (PY. ` 111.70 Lacs) Secured by hypothecation of specific Plant and Machinery and vehicles.

f) Term Loan is secured by first priority lines on all property and equipment of Jyoti International Inc. (present and future),

including but not limited to, equipment, real estate, leases and intangible assets and second lien on all current

(present and future).

Maturity Profile of Unsecured Term Loans are as below :

Maturity Profile ( ` in Lacs)

1-2 Years 2-3 Years 3-4 Years 4-5 Years

Term Loans - From Banks 2,610.13 2,610.13

Deposits 943.70 6,191.95

Redemption of Secured Non Convertible

Debentures are as below :

14.00 % Debentures - - - 650.00

12.50 % Debentures - 1,020.00 - -

5 DEFERRED TAX LIABILITIES (NET)

Deferred Tax Liability

/(Asset) as at

31-Mar-2012

` in Lacs

Current Year

Liability/

(Asset)

` in Lacs

Deferred Tax Liability/

(Asset) as at

31-Mar-2013

` in Lacs Deferred Tax Liabilities

On Account of difference in Book and Tax Depreciation

1,993.40

175.86

2,169.26 Deferred Tax Assets Disallowance under the Income Tax Act, 1961 (714.85) (362.76) (1,077.61)

TOTAL 1,278.55 (186.90) 1,091.65

6 OTHER LONG TERM LIABILITIES

31-Mar-2013

` in Lacs 31-Mar-2012

` in Lacs

Trade Payables* 9,725.72 15,375.26 Others (Advances received from Customers) 5,178.17 3,526.71 TOTAL 14,903.89 18,901.97 *Amount payable beyond one year

7 LONG TERM PROVISIONS

Provision for Gratuity 511.02 383.89 Provision for Compensated Absenses 247.81 157.13 TOTAL 758.83 541.02

8 SHORT TERM BORROWINGS

Secured Loan

Loans repayable on Demand

From Banks 60,838.30 39,431.27 Unsecured Loan

From Banks 2,145.92 2,171.41 From Others 1,764.11 -

TOTAL ( A+B) 64,748.33 41,602.68

Secured Loan from Bank

` 60,838.30 Lacs (P.Y. ` 39,431.27 Lacs) Secured by a first charge on all present and future current assets, monies

receivable and claims, except assets for which an exclusive charge has been created and secured by a charge which is

second and subservient to the charge created in favour of IDBI and Standard Chartered Bank, by way of deposit of Title

Deeds in respect of the Company’s immovable property in M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur

(Chhattisgarh), Ghoti Dist. Nasik (Maharashtra), Malvan Dist. Sindhudurgh (Maharashtra), Flats and office premises situated

at Andheri (W), Mumbai.

F38

a) Provision for Employee Benefits 190.16 199.01 b) Proposed Dividend 658.08 904.35 c) Provision for Income Tax on Proposed Dividend 106.96 146.71 d) Provision for Tax* 1,419.32 4,277.73 TOTAL 2,374.52 5,527.80

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

9 TRADE PAYABLES 31-Mar-2013

` in Lacs 31-Mar-2012

` in Lacs Trade Payables (Including Acceptances) 65,313.89 59,188.94 TOTAL 65,313.89 59,188.94

10 OTHER CURRENT LIABILITIES

a) Current Maturities of Long Term Borrowings (Note No. 4) 24,095.50 18,139.85 b) Interest Accrued But Not Due on Borrowings 621.54 186.48 c) Advances from Customers 17,071.69 16,363.39 d) Unclaimed Dividend* 29.71 24.90 e) Other Payables 10,668.76 10,676.92 f) Statutory Liabilities 1,550.42 640.19 TOTAL 54,037.62 46,031.73

* There is no amount due and outstanding to be paid to the Investor Education and

Protection Fund as at 31st March, 2013. These amount shall be paid to the fund as an

when they became due.

11 SHORT TERM PROVISIONS

* The Provision for Income Tax amounting to ` 1,419.32 Lacs (P.Y. ` 4,277.73 Lacs) as stated in the Balance Sheet is net of

Advance Tax, Tax Deducted at Source and other adjustments.

12 FIXED ASSETS

PARTICULARS

GROSS BLOCK

DEPRECIATION

(` In Lacs)

NET BLOCK

As at Additions Deletions/ As at As at For The Deletions/ As at As at As at

01/04/2012 Adjustments 31/03/2013 01/04/2012 Year Adjustments 31/03/2013 31/03/2013 31/03/2012

Tangible Assets : Ownership

Freehold Land 1,110.34 1,094.70 6.16 2,198.88 - - - - 2,198.88 1,110.34 Leasehold Land 81.33 107.48 - 188.81 14.15 3.09 - 17.24 171.57 67.18 Buildings 5,544.48 7,838.41 25.08 13,357.81 1,000.94 405.61 2.60 1,403.95 11,953.86 4,543.54 Plant & Machinery 21,926.52 12,407.55 65.03 34,269.04 6,991.46 2,164.21 33.07 9,122.60 25,146.44 14,935.06 Furniture & Fixtures 876.17 207.84 78.02 1,005.99 437.73 63.10 12.64 488.19 517.80 438.44 Computer & Office Equipments 1,757.23 226.86 83.55 1,900.54 994.41 158.53 80.32 1,072.62 827.92 762.81 Vehicles 3,595.77 303.36 68.40 3,830.73 1,175.31 375.59 56.67 1,494.23 2,336.50 2,420.47 TOTAL - A 34,891.84 22,186.20 326.25 56,751.80 10,614.01 3,170.12 185.29 13,598.84 43,152.96 24,277.84 Tangible Assets : On Operating Lease Plant & Machinery 162.08 - - 162.08 2.00 12.03 - 14.03 148.05 160.07

Vehicles

1,294.03

-

-

1,294.03

24.39

146.35

-

170.75

1,123.28

1,269.64 TOTAL - B 1,456.11 - - 1,456.11 26.40 158.38 - 184.78 1,271.33 1,429.71 TOTAL - C = A+B

Intangible Assets :

Software

36,347.95

662.61

22,186.20

1,103.19

326.25

0.30

58,207.90

1,765.50

10,640.40

405.94

3,328.50

181.82

185.29

-

13,783.61

587.76

44,424.29

1,177.74

25,707.55

256.67

Goodwill on Amalgamation 301.13 - - 301.13 180.68 60.23 - 240.90 60.23 120.45

TOTAL - D 963.74 1,103.19 0.30 2,066.63 586.62 242.04 - 828.66 1,237.97 377.12 TOTAL - C+D 37,311.69 23,289.39 326.55 60,274.53 11,227.02 3,570.55 185.29 14,612.27 45,662.25 26,084.67 Previous Year 32,317.72 6,519.97 1,526.00 37,311.69 9,082.30 2,545.60 400.88 11,227.02 26,084.67 23,235.42

F39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

13 NON CURRENT INVESTMENTS

Trade Investments

Subsidiary / Face Value No. of Shares / Units Amount

Associate / 31-Mar-2013 31-Mar-2012 31-Mar-2013 31-Mar-2012

Joint Venture Nos Nos ` In Lacs ` In Lacs

Investment in Equity Instruments Unquoted - At Cost Lauren Jyoti Pvt Ltd. - Eq Share Joint Venture ` 10 Each 50,00,000 50,00,000 500.00 500.00 TAQA Jyoti Energy Ventures Private Limited Other ` 10 Each 25,000 - 2.50 - GJIL Tunisie Sarl. Other TND 100 Each 245 - 2.42 - Jankalyan Sahakari Bank Ltd. - Eq. Shares Other ` 10 Each 49,955 49,955 5.85 5.85

510.77 505.85 Other Investments

Investment in mutual fund

Quoted - At Cost

SBI Blue Chip Fund Mutual Fund ` 10 Each 20,000 20,000 2.00 2.00 SBI Infrastructure Fund Mutual Fund ` 10 Each 50,000 50,000 5.00 5.00 SBI One India Fund Mutual Fund ` 10 Each 50,000 50,000 5.00 5.00 UTI Bond Fund Mutual Fund ` 10 Each 28,352 28,352 5.00 5.00

17.00 17.00

TOTAL 527.77 522.85

Book value of Unquoted Investments is ` 510.77 Lacs (P.Y. ` 505.85 Lacs)

Book value of Quoted Investments is ` 17 Lacs (P.Y. ` 17 Lacs)

Market value of Quoted Investments is ` 40.32 Lacs (P.Y. ` 20.80 Lacs)

14 LONG TERM LOANS AND ADVANCES

Unsecured and considered good

31-Mar-2013 31-Mar-2012

` in Lacs ` in Lacs

a) Capital Advances - 10.22

b) Security and Other Deposits 641.84 638.35

c) Other Loans and Advances (Loan to Employees) 57.06 61.62

TOTAL 698.90 710.19

15 OTHER NON CURRENT ASSETS

Unsecured, considered good

Trade Receivables 4,209.41 5,645.22 TOTAL 4,209.41 5,645.22

16 INVENTORIES

(VALUED AT LOWER OF COST AND NET REALIZABLE VALUE)

a) Raw Materials i) In Stock 8,700.50 11,128.14 ii) In Transit 589.47 463.58

b) Construction Materials at Site 4,263.05 4,178.52 c) Semi Finished Goods 537.06 305.64 d) Work-in-Progress 7,177.16 7,787.77 e) Finished Goods 4,137.28 5,298.18 f) Stores and Consumables 601.65 143.26 g) Tools and Tackles 2,015.08 2,450.98 h) Scrap 82.67 122.63 TOTAL 28,103.92 31,878.70

F40

a) Loan and Advances to Related Parties 4,667.02 7,070.38

b) Other Loans and Advances i) Advance income-tax (net of provision for taxation) 0.58 0.58

ii) Prepaid Expenses 4,905.89 3,888.00 iii) Loans to Employees 20.77 17.57 iv) Balances With Statutory/Government Authorities 9,467.80 6,460.77 v) Advances to Supplier 4,088.63 4,453.05 vi) Sundry Deposits 533.31 1,031.67 vii) Other Advances and Claim Receivables 1,938.02 932.99

TOTAL 25,622.02 23,855.01

Interest Accrued But Not Due on Fixed Deposit 1.69 391.11 TOTAL 1.69 391.11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

31-Mar-2013 31-Mar-2012

` in Lacs ` in Lacs

17 TRADE RECEIVABLES

Unsecured, considered good a) Trade Receivables (overdue more than six months) 9,476.49 26,569.07 b) Other Trade Receivables 179,194.12 133,413.79 TOTAL 188,670.61 159,982.86

18 CASH AND BANK BALANCES

Cash and Cash Equivalents

a) Balances with Banks 3,367.58 5,115.42 b) Fixed Deposit with original maturity for less than 3 months 349.14 739.56 c) Unpaid Dividend 29.71 24.90 d) Cash On Hand 55.29 55.36

3,801.72 5,935.24 Other Bank Balances a) Margin Money 1,552.15 158.73 b) Fixed Deposit with original maturity for more than 3 months

but less than 12 months - 17.08 1,552.15 175.81

TOTAL 5,353.87 6,111.05

19 SHORT TERM LOANS AND ADVANCES

Unsecured and considered good

20 OTHER CURRENT ASSETS

Unsecured and considered good

F41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

31-Mar-2013 31-Mar-2012

` in Lacs ` in Lacs

21 REVENUE FROM OPERATIONS

a) Sale of Products 2,96,483.12 2,73,312.94

b) Sale of Services 4,182.93 4,106.98

c) Other Operating Revenues 4,635.72 4,723.02

Revenue from Operations (Gross) 3,05,301.77 2,82,142.94

Less: Excise Duty 4,032.47 5,535.87

Revenue from Operations (Net) 301,269.30 2,76,607.07

22 OTHER INCOME

a) Lease Rentals 207.21 172.35

b) Interest on Fixed Deposits 145.57 308.71

c) Interest Others 146.71 337.81

TOTAL 499.49 818.87

23 COST OF MATERIAL CONSUMED

Cost of Material Consumed 178,013.11 148,481.36

TOTAL 178,013.11 148,481.36

24 ERECTION AND SUB-CONTRACTING EXPENSE

a) Construction Materials and Stores Consumed 12,151.01 18,238.57

b) Tools and Tackles Consumed 1,461.52 1,281.89

c) Sub-contracting Expenses 30,007.30 39,640.76

d) Repairs to Construction Equipments/Machinery 114.61 288.83

e) Construction Transportation Charges 5,560.19 4,193.14

TOTAL 49,294.63 63,643.19

25 CHANGES IN INVENTORIES

a) Opening Stock i) Work in Progress/Semi Finished Goods 8,093.41 3,337.11

ii) Finished Goods 5,298.18 2,523.82

iii) Scrap 122.63 183.85

13,514.22 6,044.78

b) Less: Closing Stock i) Work in Progress/Semi Finished Goods 7,714.21 8,093.41

ii) Finished Goods 5,807.53 5,298.18

iii) Scrap 82.67 122.63

13,604.41 13,514.22

TOTAL (90.19) (7,469.44)

26 EMPLOYEE BENEFITS EXPENSE

a) Salaries, Wages and Bonus, etc. 13,887.37 9,101.52

b) Leave Encashment 158.80 131.36

c) Employee Compensation Expense - ESOS (83.99) 96.22

d) Contribution to Provident and Other Fund 946.15 852.70

e) Welfare Expenses 623.70 540.30

TOTAL 15,532.03 10,722.10

F42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

31-Mar-2013 31-Mar-2012

` in Lacs ` in Lacs

27 FINANCE COSTS

a) Interest Expense 16,699.18 13,929.77

b) Other Borrowing Costs 1,340.23 582.78

c) Net (gain)/loss on foreign currency transactions and translation on borrowing cost 173.92 266.48

TOTAL 18,213.33 14,779.03

28 DEPRECIATION AND AMORTIZATION EXPENSE

a) Depreciation of Tangible Assets (Note No. 12) 3,205.23 2,323.67

b) Amortization of Intangible Assets (Note No. 12) 353.71 168.91

3,558.94 2,492.60

c) Less : Transfer from Revaluation Reserve (2.42) (2.42)

TOTAL 3,556.52 2,490.16

29 OTHER EXPENSES

a) Stores and Consumables 977.10 592.96

b) Packing Materials 167.54 137.46

c) Power and Fuel 2,056.12 2,397.92

d) Conversion Expenses 2,295.41 2,675.90

e) Service Charges 3,798.92 2,944.30

f) Repairs to Buildings 74.75 85.52

g) Repairs to Plant and Machinery 340.72 346.60

h) Repairs to Others 440.19 368.25

i) Testing and Designing Expenses 294.87 154.99

j) Excise Duty on Stocks (Net) (73.41) 179.04

k) Rent 678.18 587.14

l) Rates and Taxes 3,531.96 3,290.46

m ) Insurance 1,112.48 956.79

n) Travelling and Conveyance 2,074.99 1,683.66

o) Postage, Telephone and Fax 518.65 414.53

p) Printing and Stationery 236.27 232.82

q) Professional and Legal Fees 1,554.56 1,047.27

r) Directors’ Sitting Fees 2.25 1.95

s ) Payment to auditors 75.28 68.52

t) Net (gain)/loss on foreign currency transactions and translation. 200.55 1,284.59

u) Licence and Tender Fees 148.18 118.85

v) Donations 16.35 8.46

w) Freight Outward 3,186.57 4,233.27

x) Brokerage and Commission 483.63 629.07

y) Bank Charges 5,605.65 5,348.26

z) (Gain)/Loss on Sale of Fixed Assets (Net) 15.93 (0.54)

aa) Bad Debts 813.93 -

ab) General Expenses 1,066.15 910.51

ad) Amortisation of Deferred Expenes 30.65 22.29

TOTAL 31,724.42 30,720.84

F43

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINALCIAL

STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

NOTE-30 Statement of Significant Accounting Policies of the Consolidated Financial Statements

I. Basis of Consolidation:

The consolidated financial statements relate to Jyoti Structures Limited (the ‘ Company’), and its subsidiaries (the ‘ Group’).

The consolidated financial statements have been prepared in accordance with Accounting Standard 21 “Consolidated

Financial Statements” specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government

in terms of Section 211 (3C) of the Companies Act, 1956.

A. Basis of Preparation:

i. The Financial Statements have been prepared on historical cost convention. The Group follows accrual basis of

accounting. The financial statements of Jyoti Structures Africa (Pty) Limited and Jyoti Structures Namibia (Pty) Ltd.

have been prepared in accordance with International Financial Reporting Standards (IFRS) and for the requirements

of the Companies Act of South Africa and Namibia. The financial statements of Jyoti International Inc, Jyoti Americas

LLC, Jyoti Structures Canada Ltd., Jyoti Structures FZE, Gulf Jyoti International LLC and GJIL Tunisie Sarl. have

also been prepared in accordance with International Financial Reporting Standards (IFRS) and they are modified

to the extent necessary and practicable to make them uniform with the policies of the parent company.

ii. The following subsidiaries and Joint Venture are considered for consolidation:

Name of the Company Percentage Holding (%) Country of Incorporation

2012-13 2011-12

JSL Corporate Services Ltd. 100 100 India Jyoti Energy Ltd. 100 100 India Jyoti International Inc. 100 100 USA Jyoti Americas LLC 100 100 USA Jyoti Structures Canada Ltd. 100 N.A. Canada

Jyoti Structures FZE 100 100 Dubai Jyoti Structures Africa (Pty) Ltd. 70 70 South Africa Jyoti Structures Namibia (Pty) Ltd. 70 N.A. Namibia Gulf Jyoti International LLC along with its

Subsidiary Company GJIL Tunisie Sarl., Tunisia

30

30

Dubai

iii. The financial statements of the Company, its subsidiaries and a Joint Venture are prepared up to 31st March,2013,

B. Principles of Consolidation:

i. The financial statements of the Company, its subsidiary companies and a joint venture have been consolidated on

a line-by- line basis by adding together the book values of like items of assets, liabilities, income and expenses;

after fully eliminating intra-group balances and unrealised profits or losses on intra- group transactions as per

Accounting Standard 21.

ii. The excess of cost to the Company of its investments in the subsidiary companies is recognised in the financial

statements as goodwill, which is tested for impairment on every balance sheet date. The excess of Company’s

share of equity and reserves of the subsidiary companies over the cost of acquisition is treated as capital reserve.

iii. The consolidated financial statements have been prepared using uniform accounting policies for like transactions

and other events in similar circumstances to the extent possible and practicable, in the same manner as the

Company’s separate financial statements.

F44

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINALCIAL STATEMENTS

II. Other Significant Accounting Policies

1. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and

reward. Sales include excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined as

per the terms of the contract. Sales/Income are booked on the basis of running account bills based on completed

work and are net of claims accepted. Escalations and other claims which are not acknowledged by customers are

not taken into account.

c) Interest income is recognised on time proportion basis.

d) The insurance claims are accounted for on accrual basis based on fair estimation of sanctions by the insurance

companies.

2. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and

assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the

reported amount of revenues and expenses during the reporting period. Differences between the actual results and

the estimates are recognised in the period in which the results are known / materialised.

3. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable for

bringing the asset to its working condition for its intended use and includes amount added on revaluation, less

accumulated depreciation and impairment loss, if any.

4. Depreciation / Amortisation:

a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in

Schedule XIV to the Companies Act, 1956, except on computer software and on fixed assets of Uganda, Bhutan,

Bangladesh and Kenya branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the

software.

c) On the fixed assets of Uganda, Bhutan, Bangladesh and Kenya branches, depreciation is provided on Straight

Line Method. The applicable rates are based on the local laws and practices of the respective countries.

d) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation

charged on historical cost is recouped out of the Revaluation Reserve.

e) Leasehold land is amortised over the period of lease.

f) Goodwill arising on amalgamation is amortised over a period of 5 years.

5. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such a

decline is other than temporary.

6. Inventories:

a) Raw materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net

realisable value.

b) Cost of inventories is determined by using the weighted average cost formula, except that of Jyoti Structures Africa

(Pty) Ltd., in which case the same has been done on FIFO basis.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the

contract, whichever is lower.

F45

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINALCIAL STATEMENTS

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when

expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value, whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

7. Tools and Tackles:

Tools and tackles are amortised over their estimated useful life.

8. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time

to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which they are

incurred.

9. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the

carrying amount of the Company’s fixed assets. If any such indication exists, then recoverable amount of the asset is

estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its recoverable

amount. The recoverable amount is greater of the net selling price and the value in use. In assessing value in use, the

estimated future cash flows are discounted to their present value based on an appropriate discount factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate

of recoverable amount.

10. Debenture / Preference Share Issue Expenses:

Expenses incurred for issue of secured debentures and preference shares made by the Group were written off as

revenue expenditure during the year of issue.

11. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are accounted for at the exchange rates prevailing on the dates

of the transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the closing

rates.

c) Non-monetary items denominated in a foreign currency are stated at costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in

Statement of Profit and Loss.

e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year.

ii. Fixed assets are translated at the average rate prevailing on purchase/acquisition of assets. Depreciation is

accounted at the same exchange rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

F46

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINALCIAL STATEMENTS

f) Financial Statements of Overseas Non Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year. Depreciation is accounted at the

same rate at which assets are translated.

ii. Exchange differences arising on translation of non integral foreign operations are accumulated in the foreign

currency translation reserve until the disposal of such operations.

g) Forward Exchange Contracts:

i. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation

purposes, premium or discount is amortised as expense or income over the life of the contract.

ii. Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which

the exchange rates change.

iii. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as

income or expense for the year.

12. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of

Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of materials

consumed.

13. Leased Assets:

Operating Lease:

i. Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the

term of the lease.

ii. Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of

Profit and Loss on straight line basis over the term of the lease.

14. Employees’ Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during which

the services have been rendered.

b) Long Term Employee Benefits:

I. Defined Contribution Plan:

The Company’s contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit

and Loss on accrual basis.

II. Defined Benefit Plan:

i. Gratuity: The company provides for the applicable gratuity based on actuarial valuation as per the Projected

Unit Credit Method.

ii. Leave Encashment: The company provides for the applicable liability at the year end on account of

unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

F47

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED FINALCIAL STATEMENTS

iv. The cost of employee stock option attributable to current financial year is accounted for and charged to

Statement of Profit and Loss.

15. Taxes on Income:

a. Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax

laws.

b. Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent

periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred

tax assets are not recognised unless there is a virtual certainty as regards to the reversal of the same in future

years.

16. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year

by the weighted average number of equity shares outstanding during the reporting period. Diluted earning per share is

computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number

of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti

dilutive.

17. Provisions and Contingencies:

a. A provision is recognised when there is a present obligation as a result of a past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b. A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably

will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of

outflow of resources is remote, no provision or disclosure is made.

c. Contingent assets are neither recognised nor disclosed in the financial statements.

18. Employees Stock Option Scheme:

Stock options granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as

per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase

Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the exercise

price of the option is recognised as deferred employee compensation and is charged to Statement of Profit and Loss

as employee costs, on straight line method over the vesting period of the options.

F48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

NOTE- 31 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

1. Outstanding Contracts - Capital Account:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) are ` Nil

(P.Y. ` 10.55 Lacs). Advances paid ` Nil (P.Y. ` 10.22 Lacs).

2. Contingent Liabilities not provided for:

Sr. Particulars

No.

2012-13

` in Lacs

2011-12

` in Lacs

1 Outstanding of Bills Discounted 533.91 404.10

2 Disputed liabilities in respect of Income Tax, Sales Tax,

Central Excise and Service Tax (under appeal) 637.47 567.13

3 Civil Suits 107.87 100.21

The Group has given a letter of comfort for general banking facilities provided by National Bank of Abu Dhabi to Gulf Jyoti

International LLC. The total loan outstanding from the bank to the said Company is AED 100.98 Lacs (P.Y. AED 98.49 Lacs)

equivalent to ` 1,498.52 Lacs (P.Y. ` 1,385.93 Lacs) as on 31st March, 2013.

3. The gross block of fixed assets includes ` 83.62 Lacs (P.Y. ` 83.62 Lacs) on account of revaluation of fixed assets carried out

by the Group in the year 1993-94. Consequent to the said revaluation, there is an additional charge of ` 2.42 Lacs (P.Y. ` 2.42

Lacs ) on account of depreciation and an equivalent amount has been withdrawn from the revaluation reserve and credited

to Statement of Profit and Loss. This has no impact on the profit for the year.

4. Disclosure as required by Accounting Standard 15 (revised 2005) “Employee Benefits”. :

Defined Contribution Plans

a) Provident Fund

b) Superannuation Fund

The provident fund is operated by the Regional Provident Fund Commissioner and the superannuation fund is administered

by the Trustees of Jyoti Structures Limited Officers Superannuation Scheme. Under the schemes, the Company is required

to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits. These funds are

recognised by the Income Tax authorities.

The Group has recognised the following amounts in the Statement of Profit and Loss for the year:

Sr. Particulars

No.

2012-13

` in Lacs

2011-12

` in Lacs

i) Contribution to Provident Fund 387.26 319.83

ii) Contribution to Other Fund

120.84

113.20

iii) Contribution to Employees’ Superannuation Fund

97.05

211.68

F49

Sr. Particulars 2012-13

Gratuity Leave

Encashment

2011-12

Gratuity Leave

Encashment 1 Expenses recognised in Statement of Profitand Loss and

included in Note-26 “Employee Benefits Expense”

Current Service Cost

113.30 109.21

85.32 99.92

Interest Cost 69.37 18.59 56.60 13.41

Expected Return on Plan Assets (42.30) - (33.86) - Net Actuarial losses/(gain) 115.34 24.05 70.86 25.98 Total Expenses 255.71 151.85 178.92 139.31

2 Reconciliation of opening and closing balances of

changes in present value of the defined benefit obligation

Opening balance of defined benefit obligation.

:

840.88 225.33

665.94 157.72 Current Service Cost 113.30 109.21 85.32 99.92 Interest Cost 69.37 18.59 56.60 13.41 Actuarial losses/(gain) 112.94 24.05 68.48 25.98 Liabilities Extinguished on Settlements - - - - Benefits Paid (58.13) (58.32) (35.46) (71.71) Closing balance of defined benefit obligation 1,078.36 318.86 840.88 225.33

3 Reconciliation of opening and closing

balances of changes in fair value of plan assets:

Opening balance of plan assets 427.54 - 356.45 - Expected Returns on Plan Assets

Actuarial (losses)/gain 42.30 -

(2.40) - 33.86 -

(2.38) - Assets Distributed on Settlement - - - - Contribution by Employer 85.00 - 50.47 - Benefits Paid (25.58) - (10.86) - Closing balance of plan assets 526.86 - 427.54 -

4 Net liability recognised in the Balance Sheet

Closing balance of defined benefit obligation

1,078.35 318.86

840.88 225.33

Closing balance of fair value of plan assets 526.87 - 427.54 - Present value of unfunded obligation

recognised as liability

551.48 318.86

413.34 225.33

5 Actual Return on Plan Assets 39.90 31.48 6 Actuarial Assumption

Discount Rate

8.25%

8.50% Expected Rate of Return on Plan Assets 9.25% 9.00% Expected Rate of Salary Increase 6.00% 5.50%

Mortality LIC (1994-96)

published table of

Mortality Rates

LIC (1994-96)

published table

of Mortality Rates Withdrawal Rates 5% at younger ages

and reducing to 1% at

older ages according

to graduated scale

5% at younger ages

and reducing to 1% at

older ages according

to graduated scale Retirement age 58 years 58 years Actuarial Valuation Method Project Unit Credit

Method Project Unit Credit

Method

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

Defined Benefit Plans:

Gratuity and Leave Encashment (` in Lacs)

Above information is as per certificates of a actuary.

F50

Particulars 31-Dec-2012 31-Dec-2011

Share of Interest a) Jointly Controlled Entities : Lauren Jyoti Pvt Ltd. 50% 50% b) Aggregate amount of assets, liabilities, income and expenditure related to

Company’s interest in jointly controlled entity: * Assets:

Fixed assets 187.14 15.42 Cash and Bank Balances 156.64 1,148.27 Inventories 21,346.40 435.57 Trade and Other Receivables 948.19 - Loans and Advances 4,837.90 1,532.90

Current Liabilities 28,071.67 2,646.29 Non-Current Liabilities 5.55 - Income 24,998.29 379.21 Expenditure 26,079.56 393.35 Contingent Liability on account of Guarantees 5,507.00 Nil Capital Commitments Nil Nil

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

5. Disclosures in Respect of Joint Ventures under the Accounting Standard 27 “Financial Reporting of Interest in Joint Ventures”:

(` in Lacs)

Particulars As at

31-Mar-2013

As at

31-Mar-2012

Share o f Interest a) Jointly Controlled Entities : Gulf Jyoti International LLC 30% 30% b) Aggregate amount of assets, liabilities, income and

expenditure related to Company’s interest in jointly controlled entity: Assets:

Fixed Assets 4,178.90 4,501.32 Cash and Bank Balances 860.16 714.87 Inventories 2,083.84 2,428.40 Trade and Other Receivables 4,297.24 3,036.68 Loans and Advances 1,783.05 2,611.63

Current Liabilities: 8,319.25 8,213.40 Non Current Liabilities 3,484.93 4,061.57 Income 11,287.46 8,847.90 Expenditure 10,881.53 8,394.87 Contingent Liability on account of Letter of Credit 5,700.20 1,211.57 Contingent Liability on account of Guarantees 17,664.53 14,202.52

6. Disclosures in Respect of Joint Ventures under the Accounting Standard 27 “Financial Reporting of Interest in Joint Ventures”:

(` in Lacs)

* These figures are reviewed by the management but are not audited by any auditor.

The Group’s Share of investment in the Joint Venture is 50% of the Capital Contribution. In absence of audited financial

statements of the Joint Venture Company namely Lauren Jyoti Pvt. Ltd. as on 31.03.2013, the company has not consolidated

the financial statements of the said joint venture company with its financial statements. Had this been considered, the

consolidated assets would have increased by ` 27,476.27 Lacs and consolidated liability would have increased by

` 28,077.22 Lacs, profit for the year would have decreased by ` 1,081.26 Lacs and reserves would have been lower by

` 1,100.95 Lacs.

7. The Company has invested an amount of ` 500 Lacs (P.Y. ` 500 Lacs) in its Joint Venture Company namely, Lauren Jyoti Pvt

Ltd. That Company maintains its accounts on financial year basis. The total paid up capital of the Company as on 31st

March 2013 was ` 1,000 Lacs (P.Y. ` 1,000 Lacs) . The statutory audit is in progress hence as per management presentation

total loss incurred during the year by the company was ` 2,162.52 Lacs (P.Y. ` 28.27 Lacs). However, based on the orders

in hand and the business outlook of the Joint Venture Company, the management is of the opinion that there is no

diminution in value of the investment and therefore no provision for the same is made during the year.

F51

Sr. Particulars

No. 2012-13

` in Lacs 2011-12

` in Lacs 1 Lease payments recognised in the Statement of Profit and Loss for the year 158.61 307.82 2 Future minimum payments receipt under the agreements,

which are non cancellable. (All the lease agreements are cancellable)

-

-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

8. During the year, the Company has capitalised interest of ` Nil (P.Y. ` 14.32 Lacs) on borrowings made for acquisition of

qualifying assets.

9. The company has consolidated the accounts of its two wholly owned subsidiary companies namely Jyoti International INC

and Jyoti Americas LLC. The said companies have provided for deferred tax asset during the year amounting to US$

29,45,811 (P.Y. US$ 5,34,524) and the total accumulated deferred tax assets as at 31.03.2013 is US$ 34,80,355 (P.Y. US$

5,34,524). The said treatment is considered by the auditors of both companies.

10. Forward exchange contracts outstanding as at 31st March, 2013 which are entered into by the Company and which are not

intended for trading or speculative purposes are given below:

(` in Lacs)

Particulars As at As at

31-Mar-2013 31-Mar-2012

Forward Exchange Contracts Nil 2,559.25

11. The year end net monetary foreign currency exposures that have not been hedged, are given below:

Receivables

As at As at

31-Mar-2013 31-Mar-2012

Currency Foreign ` in Lacs Foreign ` in Lacs

Currency in Currency in

Lacs Lacs

USD 307.98 16,740.40 243.17 12,446.91

EURO 4.95 344.82 36.45 2488.39

AED 188.13 2,783.28 238.78 3326.59

TND 2.11 71.69 2.67 91.78

UGX 9,003.15 187.90 18,867.11 378.29

BDT 437.96 299.81 955.66 587.10

Nu 2,022.43 2,022.43 2,572.36 2,572.36

Payables

Currency

As at

31-Mar-2013

Foreign ` in Lacs

Currency in

Lacs

As at

31-Mar-2012

Foreign ` in Lacs

Currency in

Lacs

USD 11.94 652.85 31.50 1,643.65 EURO - - 2.62 182.73

12. Expenditure on account of premium of forward exchange contracts to be recognised in the Statement of Profit and Loss of

subsequent accounting periods amounts to ` Nil (P.Y. ` 31.46 Lacs).

13. Disclosures for operating leases under Accounting Standard 19 – “Leases”

a) Disclosures in respect of the agreements entered into after 1st April, 2001 for taking on leave and license/under

operating leases; the residential/office premises and warehouses, including furniture fittings therein as applicable,

and machinery are given below:

F52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

b) Disclosures in respect of the agreements entered into after 1st April, 2001 for giving the plant and machineries and

other fixed assets under operating leases are given below:

Sr. Particulars

No.

2012-13

` in Lacs

2011-12

` in Lacs

1 Lease income recognised in the Statement of Profit and Loss for the year 207.21 172.35

2 Future minimum lease receipt under the agreements, which are non

cancellable are as follows:

i) Not later than one year Nil Nil

ii) Later than one year and not later than five years Nil Nil

The agreements provide for early termination by either party with a notice period which varies from fifteen days to three

months and they contain a provision for their renewal.

14. Related Party Disclosures:

Related party disclosures as required by Accounting Standard 18, “Related Party Disclosures”.

1 Relationships (during the year)

(i) Key Management Personnel:

Mr. Prakash Thakur

Mr. Santosh Nayak

Mr. K. R. Thakur

(ii) Joint Venture:

Gulf Jyoti International LLC

Lauren Jyoti Pvt Ltd.

2 The following transactions were carried out with the related parties in the ordinary course of business.

Sr. Particulars Type of

No. Relationship

2012-13

` in Lacs

2011-12

` in Lacs

1 Remuneration Paid 1(i) 489.64 642.84

2 Purchase of Goods/Services 1(ii) 5,468.61 16,587.41

3 Sale of Goods/Services 1(ii) 5,313.04 436.46

4 Lease Rentals received 1(ii) 296.02

2,142.77

44.04

5 Investments at the end of the year 1(ii) 2,142.77

6 Outstanding balance receivable/(payable) at the end of the year. 1(ii) 11,044.95

Nil

(1,419.11)

7 Investment during the year 1(ii) 500.00

15. Information in accordance with the requirement of Accounting Standard - 7 (Revised) “Construction Contracts”.

Particulars 2012-13

` in Lacs 2011-12

` in Lacs Contract revenue recognised during the year 65,181.53 82,811.30 Method used to determine the contract revenue recognised and

the stageof completion of contracts in progress

Disclosure in respect of contracts in progress as at the year end:

Percentage Completion Method

Aggregateamount of costs incurred and recognised profits

(less recognised losses)

1,51,128.58

1,54,755.92 Advances received 8,639.33 5,922.23 Retentions receivable 15,657.68 7,955.23 Gross amount due from customers (Included under Note-17 Trade Receivable) 46,315.08 47,608.41 Gross amount due to customers (Included under Note No.10 Advances

from Customer under Other Current Liabilities)

8,639.33

4,084.55

F53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

16. Employees Stock Option Scheme:

Under Jyoti Structures Limited Employees Stock Option Scheme 2005 (ESOS 2005) as amended, the Company is authorised

to issue upto 5,00,000 (Five lacs) stock options, convertible into 25,00,000 (Twenty Five lacs) equity shares of ` 2/- each to

employees. A Compensation Committee has been constituted by the Board of Directors of the Company to administer the

Scheme.

Each option is to be converted into 5 Equity shares of ` 2/- each at an exercise price of `17/- per equity share (being the

exercise price adjusted after split of face value from ` 10/- to ` 2/-). Under the scheme, 30% of the options vest at the end of

one year from the date of grant of options, 30% at the end of second year from the date of grant of options and the balance

40% at the end of third year from the date of grant of options.

The amount of ` (83.99) Lacs (P.Y. ` 96.22 Lacs), debited/(credited) to Employee Compensation Expense – ESOS account,

represents the proportionate cost for the year and has been credited to the revenue account.

The amount of ` 387.35 (P.Y. ` 524.82 Lacs) in Employee Stock Option outstanding account, represents discounts on the

options outstanding.

The balance un-amortised portion of ` 84.10 Lacs (P.Y. ` 91.72 Lacs) being Deferred Employee Compensation

Expense has been shown as reduction from Employees Stock Options outstanding in the Balance Sheet.

Sr. Particulars

No. 2012-13

(In Numbers) 2011-12

(In Numbers) i) Options granted and outstanding at the beginning of the year 90,785

60,650 95,055

ii) Options granted during the year 13,150 iii) Options lapsed and/or withdrawn during the year 23,150

9,250 -

iv) Options exercised during the year against which shares were allotted 17,420 v) Options granted and outstanding at the end of the year of which:--

39,860

- Options vested 50,205 - Options yet to vest 79,175 40,580

17. Earnings Per Share (EPS)

SN Particulars 2012-13 2011-12 i) Profit/(Loss) after Tax (Net of preference share dividend) ( ` in Lacs) 3,839.72

8,22,30,448

2,89,450

8,25,19,898

9,641.74 ii) Weighted Average Number of Ordinary Shares for

Basic Earning per Share (In Nos)

8,21,61,055 iii) Add: Equity shares for no consideration arising on grant of

stock options under ESOS

2,92,625 iv) Weighted Average Number of Ordinary Shares for

Diluted Earning per Share (In Nos)

8,24,53,680 v) Nominal Value of Ordinary Share ` 2/-

` 4.67

` 4.65

` 2/- vi) Basic Earning Per Ordinary Share ` 11.74 vii) Diluted Earning Per Ordinary Share ` 11.69

18. The terms and conditions of various contracts being executed by the Company provide for clauses in respect of liquidated

damages applicable for any delay in completion of the whole or a portion of the contracts. In case of a few contracts,

where there have been such delays in completion of the contracts, the Company is currently negotiating with its customers

for an extention of time for the delays attributable to the customers to complete the contracts. It is currently uncertain as

to whether the customers would grant the required extension of time and hence, the quantum of liquidated damages is

also uncertain. As per the past experience, where the delays are due to reasons beyond the control of the Company, the

approvals for time extensions are normally received from customers, which sometimes take more than reasonable time.

As such, no provision on this account has been made in the books of account.

19. Jyoti Structures Africa (Pty) Limited is currently involved in a legal dispute with its service provider KRB Electrical Engineering

Services (Pty) Limited. At the year end, the management and their legal advisers have not been able to determine the extent

of legal costs nor the outcome of the current proceedings.

F54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013

20. The Group is operating in only one primary business segment of power transmission and distribution wherein it

manufactures/deals in various components/equipments and constructs infrastructure related to power transmission. As

such there are no separate primary reportable or identifiable business segments as defined by Accounting Standard – 17

“Segment Reporting”

Secondary Segment: Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical segments

considered for disclosure are as follows:

- Sales within India include sales to customers located in India.

- Sales outside India include sales to customers located outside India. Information pertaining to Secondary Segment:

Details of Segment Revenue:

Particulars 2012-13

` in Lacs

2,20,885.27

80,384.03

3,01,269.30

2011-12

` in Lacs Sales within India 2,24,394.89 Sales outside India 52,212.18 Total 2,76,607.07

Details of carrying amount of Segment Assets by geographical locations:

Particulars 2012-13

` in Lacs

2,19,375.46

80,363.29

2,99,738.75

2011-12

` in Lacs Within India 2,15,704.88 Outside India 56,894.34 Total 2,72,599.22

Total cost incurred during the period to acquire segment assets (fixed assets including intangible assets) that are expected

to be used during more than one period:

Particulars 2012-13

` in Lacs

1,831.58

4,554.67

6,386.25

2011-12

` in Lacs Within India 3,260.32 Outside India 20,880.28 Total 24,140.60

21. Figures pertaining to subsidiary companies have been reclassified wherever necessary to bring them in line with the

parent Company’s financial statements.

22. Previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

The Notes referred to above form an integral part of the Financial Statements.

As per our report attached

For R. M. AJGAONKAR & ASSOCIATES For and on behalf of the Board Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman Membership No. 31927

Mumbai; 29th May, 2013

F55

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF JYOTI STRUCTURES LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF JYOTI STRUCTURES LIMITED AND ITS SUBSIDIARIES

To the Board of Directors of Jyoti Structures Limited

1. We have audited the attached Consolidated Balance Sheet of Jyoti Structures Limited (‘the Company’) and its subsidiaries

(collectively referred to as ‘the Group’) as at 31st March, 2012, and the Consolidated Statement of Profit and Loss and

the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated financial

statements are the responsibility of the Company’s management and have been prepared by the management on the

basis of separate financial statements and other financial information regarding components. Our responsibility is to

express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used and significant estimates

made by management, as well as evaluating the overall financial statement presentation. We believe that our audit

provides a reasonable basis for our opinion.

3. We did not audit the financial statements of the subsidiaries namely Jyoti Structures Africa (Pty) Ltd., Jyoti Projects FZE

and Jyoti Holding INC. along with its subsidiary Jyoti Americas LLC, whose financial statements reflect total assets of

` 32,828.50 Lacs as at 31st March, 2012; and total revenue of ` 11,701.59 Lacs; and net cash inflow of ` (2,304.17)

Lacs for the year ended on that date. These financial statements and other financial information have been audited /

reviewed by other auditors from whom the reports have been furnished to us and our opinion is based solely on the

reports of the other auditors.

4. As referred to in Note 30 ( 5 & 6 ) to the Consolidated Financial Statements, the Company has not included its share in

assets, liabilities, incomes and expenditures of its 30% joint venture ‘Gulf Jyoti International LLC’ and 50% joint venture

`Lauren Jyoti Private Limited’ while preparing the Consolidated Financial Statements as required by AS 27 “Financial

Reporting of Interest in Joint Ventures”. The respective shares in assets, liabilities and profits of the company in these

Joint Ventures are `16,741.39 Lacs, `15,335.28 Lacs and `494.46 Lacs respectively. Subject to our above observation,

we report that the consolidated financial statements of the Group for the year ended 31st March, 2012 have been

prepared by the Company in accordance with the requirements of Accounting Standard (AS) 21 “Consolidated Financial

Statements” notified by the Companies (Accounting Standards) Rules, 2006.

5. On the basis of the information and explanations given to us and on the consideration of the audit reports and a review

report of other auditors on the separate financial statements and on the other financial information of the components

and to the best of our information and according to the explanations given to us, we are of the opinion that the attached

Consolidated Financial Statements together with the notes thereon and attached thereto give, except subject to the note

number 30(20), to which we hereby draw attention of members, a true and fair view in conformity with the Accounting

Principles generally accepted in India:

a) In the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2012;

b) In the case of the Consolidated Statement of Profit and Loss, of the results of operations of the Group for the year

ended as on that date ; and

c) In the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year ended on that

date.

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

Firm Registration No. 117247W

R. M. AJGAONKAR

Partner

Mumbai; 25th May, 2012 Membership No. 31927

F56

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2012

As at As at

31/03/2012 31/03/2011

I EQUITY AND LIABILITIES

1) Shareholders’ Funds

Note ` in Lacs ` in Lacs

a) Share Capital 1 1,644.28 1,642.52

b) Reserves and Surplus 2 64,379.34 55,970.76

66,023.62 57,613.28

2) Share Application Money Pending Allotment 3 0.39 1.56

3) Minority Interest 119.17 -

4) Non Current Liabilities

a) Long Term Borrowings 4 33,807.49 24,047.44

b) Deferred Tax Liabilities (Net) 5 1,278.55 1,795.74

c) Other Long Term Liabilities 6 10,703.06 7,564.37

d) Long Term Provisions 7 481.02 349.19

46,270.12 33,756.74

5) Current Liabilities

a) Short Term Borrowings 8 41,167.43 20,814.30 b) Trade Payables 9 58,364.36 44,646.46 c) Other Current Liabilities 10 44,090.16 18,347.04 d) Short Term Provisions 11 5,527.80 4,081.56

1,49,149.75 87,889.36 TOTAL 2,61,563.05 1,79,260.94

II ASSETS

1) Non Current Assets

a) Fixed Assets

i) Tangible Assets 12 21,524.90 19,306.01

ii) Intangible Assets 12 377.66 278.32

iii) Capital Work-in-Progress 16,883.47 816.21

iv) Intangible Assets Under Development 822.12 -

39,608.15 20,400.54

b) Non Current Investments 13 2,165.62 1,665.62

c) Deferred Tax Assets (Net) 6.73 -

d) Long Term Loans and Advances 14 763.99 645.89

e) Other Non Current Assets 15 5,645.22 4,229.92

2) Current Assets

a) Inventories 16 29,450.29 23,068.69

b) Trade Receivables 17 1,56,946.18 1,05,076.90

c) Cash and Cash Equivalents 18 5,396.19 6,734.93

d) Short Term Loans and Advances 19 21,189.57 17,435.47

e) Other Current Assets 20 391.11 2.98

2,13,373.34 1,52,318.97

TOTAL 2,61,563.05 1,79,260.94

Significant Accounting Policies

Notes to Accounts 30

The Significant Acounting Policies and Notes referred to above form an integral part of the Statement of Accounts.

As per our report attached For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 25th May, 2012

F57

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2012

Note

Year Ended

31/03/2012 Year Ended

31/03/2011

` in Lacs ` in Lacs

I INCOME

Revenue from Operations (Gross) 21 2,73,300.52 2,48,072.61

Less: Excise duty 5,535.87 8,111.08

Revenue from Operations (Net) 2,67,764.65 2,39,961.53

Other Income 22 750.42 486.03

Total Revenue 2,68,515.07 2,40,447.56

II EXPENSES

Cost of Materials Consumed 23 1,44,311.89 1,34,661.04

Erection and Sub-contracting Expense 24 62,029.27 45,946.74

Changes in Inventories of Finished Goods,

Work-in-Progress and Stock-in-Trade 25 (7,347.32) (149.41)

Employee Benefits Expense 26 10,091.07 7,678.01

Finance Costs 27 14,358.18 10,279.17

Depreciation and Amortization Expense 28 2,287.18 2,098.49

Other Expenses 29 29,184.65 24,310.24

Total Expenses 2,54,914.92 2,24,824.28

III Profit Before Tax (I - II) 13,600.15 15,623.28

IV Tax expense:

Current Tax 4,819.99 5,625.00

Deferred Tax (Net) (522.20) 20.31

4,297.79 5,645.31

V Profit for the year (VII-VIII) 9,302.36 9,977.97

VI Minority Interest 119.17 -

VII Profit for the year after Minority Interest (V-VI) 9,183.19 9,977.97

VIII Earning Per Equity Share: (in `) [Nominal value of share ` 2/-]

1) Basic ` 11.18 ` 12.16

2) Diluted ` 11.14 ` 12.11

Significant Accounting Policies

Other Notes to Accounts 30

The Significant Acounting Policies and Notes referred to above form an integral part of the Statement of Accounts.

As per our report attached For and on behalf of the Board

For R. M. AJGAONKAR & ASSOCIATES

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 25th May, 2012

F58

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

Year Ended

31/03/2012 Year Ended

31/03/2011 ` in Lacs ` in Lacs

I CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Taxes and Extraordinary Items [A] 13,600.15 15,623.28

ADJUSTMENTS FOR

i) Depreciation 2,289.60 2,100.91

ii) Transferred from Revaluation Reserve (2.42) (2.42)

iii) Finance Cost 14,358.18 10,279.17

iv) (Gain)/Loss on Sale of Fixed Assets (Net) (0.54) 29.75

v) Interest Received (587.79) (195.76)

vi) Employee Compensation Expense - ESOS 96.22 169.80

vii) Foreign Currency Translation Reserve 1,319.47 (229.74)

[B] 17,472.72 12,151.72

Operating Profit before Working Capital changes [A+B] = [C] 31,072.87 27,775.00

ADJUSTMENTS FOR

i) Inventories (6,381.60) 1,647.83

ii) Trade Receivable & Other Receivable, Loans &

Advances and Other Current Assets (59,483.30) (22,740.25)

iii) Current Liabilities and Provisions 30,593.61 4,048.33

[D] (35,271.29) (17,044.09)

Cash Generated from Operations [C+D] = [E] (4,198.42) 10,730.91

i) Direct Taxes Paid (Net) (4,399.04) (4,465.17)

[F] (4,399.04) (4,465.17)

Cash Flow before Extraordinary Items [E+F] = [G] (8,597.46) 6,265.74

EXTRAORDINARY ITEMS

i) Excess / (Short) Provision of Taxes for earlier years - (3.98)

[H] - (3.98)

Net Cash (used in) / from Operating Activities [I] [E+F] = [G] (8,597.46) 6,261.76

II CASH FLOW FROM INVESTING ACTIVITIES

i)

ii) Proceeds from Sale of Fixed Assets

Purchase of Fixed Assets [After adjustment of 1,125.67 142.74

(Increase)/Decrease in Capital work-in-progress] (22,047.56) (4,933.85)

iii) Investments in Other than Subsidiary company (500.00) -

iv) Proceeds from Redemption of Investments - 0.50

v) Interest Received 587.79 195.76

vi) Net Advances to Companies other than Subsidiaries (283.74) 87.90

Net Cash (used in) / from Investing Activities [II] (21,117.84) (4,506.95)

F59

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2011

Year Ended Year Ended

31/03/2012 31/03/2011

` in Lacs ` in Lacs

III CASH FLOW FROM FINANCING ACTIVITIES

i)

ii)

Net Proceeds from Issue of Equity Share Capital

(inclusive of Share Premium and after considersing

ESOS allotted to employees)

Proceeds from issue of Non Convertible Debentures

14.46

-

20.91

12,086.41

iii) Proceeds from Long Term Borrowings 22,138.92 -

iv) Repayment of Long Term Borrowings (2,397.73) (1,611.70)

v) Net Increase/(Decrease) in Interest Free Sales Tax Defferal Loan (54.41) -

vi) Proceeds from Short Term Borrowings from banks 24,476.20 5,777.23

vii) Repayment of Short Term Borrowings - (5,545.57)

viii) Proceeds from Asset Finance from Banks 50.19 94.33

ix) Repayment of Asset Finance from Banks (55.06) (32.94)

x) Proceeds from Asset Finance from Financiers 7.91 21.76

xi) Repayment of Asset Finance from Financiers (20.29) (18.56)

xii) Dividends Paid (1,225.11) (816.27)

xiii) Dividend and Dividend Distribution Tax for earlier year (0.50) (1.94)

xiv) Net Corporate Dividend Tax Paid (199.84) (136.20)

xv) Finance Cost (14,358.18) (10,279.17)

Net Cash (used in) / from Financing Activities [III] 28,376.56 (441.71)

Net Increase/(Decrease) in Cash and Cash Equivalents I + II + III (1,338.74) 1,313.10

Cash and Cash Equivalents at the beginning of the year 6,734.93 5,421.83

Cash and Cash Equivalents at the end of the year 5,396.19 6,734.93

Note: Cash and Cash Equivalents includes ` 24.90 Lacs (P.Y. ` 18.12 Lacs) on account of Unclaimed Dividend, which

are not available for the use by the Company.

As per our report attached

For R. M. AJGAONKAR & ASSOCIATES For and on behalf of the Board

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 25th May, 2012

F60

1

Share Capital

Number ` in Lacs Number ` in Lacs

Authorised :

Equity Shares of ` 2/- each 17,50,00,000 3,500.00 17,50,00,000 3,500.00

Redeemable Preference Shares of ` 100/- each 50,00,000 5,000.00 50,00,000 5,000.00

18,00,00,000 8,500.00 18,00,00,000 8,500.00

Issued :

Equity Shares of ` 2/- each 8,22,29,157 1,644.58 8,21,41,375 1,642.83

Subscribed and Paid-up :

Equity Shares of ` 2/- each fully paid up 8,22,13,897 1,644.28 8,21,26,115 1,642.52

a)

Reconciliation of the shares outstanding at the

beginning and at the end of the reporting period

Equity Shares

At the beginning of the period 8,21,26,115 1,642.52 8,20,04,415 1,640.09

Issued during the period - ESOS 87,100 1.75 1,21,700 2.43

Issued during the period - Share Warrant 682 0.01 - -

Outstanding at the end of the period 8,22,13,897 1,644.28 8,21,26,115 1,642.52

b) Names of shareholder holding more than 5 % shares Number % Number %

1 Valecha Infrastructure Ltd. 54,31,400 6.61% 53,71,400 6.54%

2 Prakash K. Thakur 52,48,235 6.38% 52,09,735 6.34% 3 K. R. Thakur 46,46,426 5.65% 46,07,926 5.61%

4 Reliance Capital Trustee Ltd. 41,75,800 5.08% 46,75,800 5.69%

1,95,01,861 23.72% 1,98,64,861 24.18%

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012 31/03/2011

Shares reserved for issue under options

c) Employee Stock Options Scheme (ESOS) 31,41,425 7,28,525

1) Under ESOS 2005, eligible employee on grant

of option & on vesting shall be entitled to apply

for five equity shares of ` 2/- each at an

exercise price of ` 17/- per equity share for

each option.

2) Under ESOS 2011, eligible employee on grant

of option & on vesting shall be entitled to apply

for one equity share of ̀ 2/- each at an exercise

price of `25/- per equity share for each option.

Warrants 2,01,43,328 -

Warrant holders are entitled to exercise their

rights to apply for 1 Equity share of ` 2/- each at the warrant exercise price of ` 120/- for each

warrant held. Warrants are to be exercised

from June 15, 2012 to August 14, 2012.

d) The Company has only one class of equity shares having a par value of ` 2/- each. Each shareholder is eligible for one

vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting. In the event of liquidation, the shareholders are eligible to receive remaining assets of

the Company after distribution of all preferential amounts, in proportion to their shareholding.

F61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012 31/03/2011

` in lacs ` in lacs

2 RESERVES AND SURPLUS

a. Capital Reserve

As per last Balance Sheet 6.06 6.06

b. Capital Redemption Reserve

As per last Balance Sheet 300.00 300.00

c. Foreign Currency Translation

As per last Balance Sheet (762.45) (532.71)

Add: During the year 1,319.47 (229.74)

557.02 (762.45)

d. Security Premium

As per last Balance Sheet 15,961.07 15,787.26

Add: On Allotment of Equity Shares 126.88 173.81

16,087.95 15,961.07

e. Debenture Redemption Reserve

As per last Balance Sheet 6,044.00 -

Add: Transferred from the Statement of Profit and Loss - 6,044.00

6,044.00 6,044.00

f. Revaluation Reserve*

As per last Balance Sheet 42.43 44.85

Less: Transferred from the Statement of Profit and Loss as Reduction from

Depreciation 2.42 2.42

40.01 42.43

g. Employee Stock Option Outstanding [Note No. 30 (21)] 524.82 590.73

Less : Deferred Employee Compansation Expenses 91.72 140.84

433.10 449.89

h. General Reserve

As per last Balance Sheet 8,698.64 7,498.64

Add: Transferred from the Statement of Profit and Loss 864.00 1,200.00

9,562.64 8,698.64

i. Surplus in Statement of Profit and Loss

As per last Balance Sheet 25,231.11 23,932.04

Less: Tax adjustment for an earlier year including interest 1,324.99 -

Less: (Excess)/Short Provision of Taxes for earlier year - 1.21

23,906.12 23,930.83

Add: Profit for the year 9,183.19 9,977.97

Add: Previous Year Adjustment 174.81 -

Less: Appropriations

Proposed Dividend - Equity Shares (amount per share ` 1.10/-)

(P.Y. : ` 1.50/-, including a special dividend of ` 0.40/-) 904.35 1,231.90

Tax on Dividend 146.71 199.85

Dividend and Dividend Distribution Tax for an earlier year 0.50 1.94

Transfer to Debenture Redemption Reserve - 6,044.00

Transfer to General Reserve 864.00 1,200.00

1,915.56 8,677.69

Net Surplus in the Statement of Profit and Loss 31,348.56 25,231.11

TOTAL 64,379.34 55,970.76

* Cumulative amount withdrawn from Revaluation Reserve is ` 43.62 Lacs (P.Y. ` 41.20 Lacs)

F62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012

` in lacs 31/03/2011

` in lacs 3 Share Application Money Pending Allotment Share Application Money Pending Allotment 0.39 1.56

Number of Shares proposed to be allotted 2,300 9,175

Amount of Premium, if any. 0.35 1.38

Terms and Conditions of shares proposed to be issued

Option Grantees, in accordance with the Employees Stock Option Scheme

have an option to exercise their rights to apply for 5 Equity Shares for each options held, at an exercise price of ` 17/- per share within the vesting period

Date by which the shares shall be allotted 15/04/2012 15/04/2011

Whether sufficient authorised share capital to cover allotment of shares out

of such share application money YES YES

The period overdue from the proposed date of allotment - -

Non-Current Current

31/03/2012 31/03/2011

` in Lacs ` in Lacs 31/03/2012

` in Lacs 31/03/2011

` in Lacs 4 LONG TERM BORROWINGS Secured Loans 7% Non Convertible Debenture - 12,086.41 12,086.41 -

Term Loan From Bank 25,439.94 6,092.16 3,489.72 3,101.18

From Other 4.90 - 7.74 25.01

TOTAL - A 25,444.84 18,178.57 15,583.87 3,126.19

Unsecured Loans Term Loan From Bank 7,985.32 5,425.46 1,227.98 -

From Other 377.33 443.41 30.29 18.62

TOTAL - B 8,362.65 5,868.87 1,258.27 18.62

Amount disclosed under the head “Other Current Liabiliities” (Note No. 10) - - (16,842.14) (3,144.81)

TOTAL - A + B 33,807.49 24,047.44 - -

Debenture

a) ` 12,086.41 Lacs (PY. ` 12,086.41 Lacs) Hypothecation on Company’s moveable assets including moveable

machinery, machinery spares, stocks, tools and accessories both present and future. Mortagage on Company’s

immoveable properties except CSIDCL Raipur properties.

Nature of Securities for Secured Loan

Term Loan

a) ` 6,054.46 Lacs (PY. ` 7,931.53 Lacs) i) Secured by first charge on company’s immovable properties situated at

M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh), Ghoti, Dist. Nasik (Maharashtra), Malvan,

Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. ii)Secured by

hypothecation on specific plant and machinery.

b) ` 9,237.21 Lacs (PY. ` 1,157.87 Lacs) i) Secured by first charge on company’s immovable properties situated at

M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra), Raipur (Chhattisgarh), Ghoti, Dist. Nasik (Maharashtra), Malvan,

Dist. Sindhudurgh (Maharashtra), Flats and office premises situated at Andheri (W), Mumbai. ii) Secured by

hypothecation on specific plant and machinery. iii) Pari pasu charge on stock and receivables of the contract and

Escrow of receivables of the project.

c) ` 111.70 Lacs (PY. ` 128.95 Lacs) Secured by hypothecation of Specific plant and machinery and vehicles.

d) Term Loan is secured by first priority liens on all property and equipment of Jyoti Holding Inc (present and future),

including but not limited to, equipment, real estate, leases, and intangible assets and second lien on all current

assets(present and future).

F63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

Maturity Profile of Unsecured Term Loans are as below : (` in Lacs)

Maturity Profile

1-2 Years 2-3 Years 3-4 Years Beyond 4

Years

Term Loans - from banks 2,866.08 2,457.28 2,457.28 204.68

Schedule of Redemption of Debenture

The Company had allotted 10,072,005, 7% Secured Non Convertible Debentures having face value of ` 120/- each, at par,

during the year 2010-11. The said debentures have been redeemed, at par, on 14th May, 2012.

5 DEFERRED TAX LIABILITIES (NET) Deferred Tax Deferred Tax

Liability/(Asset) Liability/(Asset)/

as at as on

31/03/2012 01/04/2011

` in Lacs ` in Lacs

Deferred Tax Liabilities

On account of difference in book and tax depreciation 1,993.40 1,859.90

Deferred Tax Assets

Disallowance under the I Tax Act, 1961 (714.85) (64.16)

TOTAL 1,278.55 1,795.74

6 OTHER LONG TERM LIABILITIES

31/03/2012 31/03/2011

` in lacs ` in lacs

Trade Payables* 7,176.35 5,415.67

Others (Advances received from Customers) 3,526.71 2,148.70

TOTAL 10,703.06 7,564.37

* Amount payable beyond one year

7 LONG TERM PROVISIONS

Provision for Gratuity 323.89 263.17

Provision for Compensated Absences 157.13 86.02

TOTAL 481.02 349.19

8 SHORT TERM BORROWINGS

Secured Loan

Loans Repayable on Demand

From Bank 38,992.82 19,282.90

Unsecured Loan

From Bank 2,171.41 1,192.96

Deposits 3.20 338.44

TOTAL 41,167.43 20,814.30

Secured Loan from Bank

F64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

` 38,992.82 Lacs (PY. ` 19,282.90 Lacs) Secured by a first charge on all present and future current assets,

monies receivable and claims, except assets for which an exclusive charge has been created and secured by a charge

which is second and subservient to the charge created in favour of IDBI and Standard Chartered Bank, by way of deposit of

Title Deeds in respect of the Company’s immovable property in M.I.D.C., Satpur Industrial Area, Nasik (Maharashtra),

Raipur (Chhattisgarh) and Ghoti Nashik Dist. (Maharashtra), Malvan, Dist. Sindhudurgh (Maharashtra), Flats and office

premises

situated at Andheri (W), Mumbai.

9 TRADE PAYABLES

31/03/2012 31/03/2011

` in Lacs ` in Lacs

Trade Payables (Including Acceptances) 58,364.36 44,646.46

58,364.36 44,646.46

10 OTHER CURRENT LIABILITIES

a) Current Maturities of Long Term Borrowings (Note No. 4) 16,842.13 3,144.81

b) Interest Accrued But Not Due on Borrowings 186.49 171.48

c) Advances from Customers 16,363.39 11,077.34

d) Unclaimed Dividend* 24.90 18.12

e) Other Payables 10,033.06 2,074.77

f) Statutory Liabilities 640.19 1,860.52

TO TAL 44,090.16 18,347.04

* There is no amount due and outstanding to be paid to the Invester Education

and Protection Fund as at 31st March, 2012. These amount shall be paid to the

fund as an when they became due.

11 SHORT TERM PROVISIONS

a) Provision for Employee Benifits 199.01 118.01

b) Proposed Dividend 904.35 1,231.90

c) Provision for Income Tax on Proposed Dividend 146.71 199.85

d) Provision for Tax** 4,277.73 2,531.80

TOTAL 5,527.80 4,081.56

** The Provision for Income Tax amounting to ` 4,277.73 Lacs (P.Y. ` 2,531.80 Lacs)

as stated in the Balance Sheet is net of Advance Tax, Tax Deducted at Source and

other adjustments.

F65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

12 FIXED ASSETS

(` in Lacs)

PARTICULARS GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

As at Additions Deletions/ As at As at For The Deletions/ As at As at As at

01/04/2011 Adjustments 31/03/2012 01/04/2011 Year Adjustments 31/03/2012 31/03/2012 31/03/2011

Tangible Assets :

Freehold Land 848.83 261.51 - 1,110.34 - - - - 1,110.34 848.83

Leasehold Land 81.33 - - 81.33 13.28 0.89 - 14.17 67.16 68.05

Buildings 2,806.05 25.02 - 2,831.07 601.99 71.23 - 673.22 2,157.85 2,204.06

Plant & Machinery 18,842.78 2,141.16 780.63 20,203.31 5,449.28 1,516.71 182.63 6,783.36 13,419.95 13,393.50

Furniture & Fixtures 628.40 201.59 2.32 827.67 367.73 56.65 0.59 423.79 403.88 260.67

Computers and Office Equipments 1,514.17 209.48 34.31 1,689.34 860.18 127.09 27.68 959.59 729.75 653.99

Vehicles 2,882.93 1,169.13 708.75 3,343.31 1,006.02 321.04 190.00 1,137.06 2,206.25 1,876.91

Tangible Assets : On Operating Lease

Plant & Machinery 162.08 162.08 2.00 2.00 160.08 -

Vehicles 1,294.03 1,294.03 24.39 24.39 1,269.64 -

TOTAL - A 27,604.49 5,464.00 1,526.01 31,542.48 8,298.48 2,120.00 400.90 10,017.58 21,524.90 19,306.01

Intangible Assets :

Software 569.00 94.16 - 663.16 296.55 109.40 - 405.95 257.21 272.45

Goodwill on amalgamation 126.32 174.81 - 301.13 120.45 60.23 - 180.68 120.45 5.87

(Net of amortisation)

TOTAL - B 695.32 268.97 - 964.29 417.00 169.63 - 586.63 377.66 278.32

TOTAL - A+B 28,299.81 5,732.97 1,526.01 32,506.77 8,715.48 2,289.63 400.90 10,604.21 21,902.56 19,584.33

Previous Year 24,381.32 4,353.97 435.48 28,299.81 6,877.55 2,100.91 262.98 8,715.48 19,584.33 17,503.77

F66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

No. of Shares / Units

31/03/2012

Nos

31/03/2011

Nos

31/03/2012

` in Lacs

31/03/2011

` in Lacs

13 NON CURRENT INVESTMENTS

Trade Investments

a) Investment in Equity Instruments

Unquoted - At Cost

Gulf Jyoti International LLC 12,930 12,930 1,642.77 1,642.77

Lauren Jyoti Pvt Ltd. 50,00,000 _ 500.00 -

Jankalyan Sahakari Bank Ltd. 49,955 49,955 5.85 5.85

2,148.62 1,648.62

b) Investment in Mutual Fund

Quoted - At Cost

SBI Blue Chip Fund 20,000 20,000 2.00 2.00

SBI Infrastructure Fund 50,000 50,000 5.00 5.00

SBI One India Fund 50,000 50,000 5.00 5.00

UTI Bond Fund 28,352 28,352 5.00 5.00

17.00 17.00

TOTAL 2,165.62 1,665.62

Book value of Unquoted Investments is ` 2,148.62 Lacs (P.Y. ` 1,648.62

Lacs) Book value of Quoted Investments is ` 17 Lacs (P.Y. ` 17 Lacs )

Market value of Quoted Investments is ` 20.80 Lacs (P.Y. ` 18.11 Lacs )

14 LONG TERM LOANS AND ADVANCES

Unsecured and considered good

31/03/2012 31/03/2011

` in Lacs ` in Lacs

a) Capital Advances 10.22 36.66

b) Security Deposits 692.16 541.11

c) Other Loans and Advances

Loans to Employees 61.61 68.12

TOTAL 763.99 645.89

15 Other Non Current Assets

Unsecured, considered good

Trade Receivables 5,645.22 4,224.92

Non current Bank Balances

Fixed deposits with original maturity for more than 12 months - 5.00

TOTAL 5,645.22 4,229.92

F67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012 31/03/2011

` in Lacs ` in Lacs

16 INVENTORIES (VALUED AT LOWER OF COST AND NET REALIZABLE VALUE)

a) Raw Materials

i) In Stock

9420.12

10367.05

ii) Goods-in-Transit 463.58 108.12

b) Construction Materials at Site 4,178.52 4,710.83

c) Semi Finished Goods 305.64 424.15

d) Work-in-Progress 7,619.24 2,543.49

e) Finished Goods 4,790.91 2,339.61

f) Stores and Consumables 98.67 107.64

g) Tools and Tackles 2,450.98 2,283.95

h) Scrap 122.63 183.85

TO TAL 29,450.29 23,068.69

17

TRADE RECEIVABLES

Unsecured, considered good

a) Trade Receivables (overdue for more then six months) 26,569.07 15,649.28

b) Other Trade Receivables 1,30,377.11 89,427.62

TOTAL 1,56,946.18 1,05,076.90

18

CASH AND CASH EQUIVALENTS

a) Balances with Banks 4,646.21 6,125.95

b) Fixed deposits with original maturity for less than 3 months 656.12 -

c) Unpaid Dividend 24.90 18.12

d) Cash In Hand 51.19 63.42

e) Other Bank Balances 17.77 527.44

TOTAL 5,396.19 6,734.93

19 SHORT-TERM LOANS AND ADVANCES

Unsecured and considered good

a) Loan And Advances to Related Parties 4,458.75 2,246.09

b) Other Loans and Advances

i) Advance Income-tax (net of provision for taxation) 0.58 0.58

ii) Prepaid Expenses 3,888.00 3,021.88

iii) Loans to Employees 17.57 24.01

iv) Balances With Statutory/Government Authorities 6,460.77 4,709.85

v) Advances to Supplier 4,453.04 5,625.91

vi) Sundry Deposits 977.87 137.97

vii) Other Advances and Claim Receivables 932.99 1669.18

TOTAL 21,189.57 17,435.47

20 OTHER CURRENT ASSETS

Unsecured and considered good

Interest Accrued But Not Due on Fixed Deposits 391.11 2.98

TOTAL 391.11 2.98

F68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012

` in Lacs 31/03/2011

` in Lacs 21 REVENUE FROM OPERATIONS a) Sale of Products 2,64,344.63 2,41,447.75

b) Sale of Services 4,010.90 3,203.99

c) Other operating revenues 4,944.99 3,420.87

Revenue from Operations (Gross) 2,73,300.52 2,48,072.61 Less: - Excise Duty 5,535.87 8,111.08

Revenue from Operations (Net) 2,67,764.65 2,39,961.53

22

OTHER INCOME

a) Lease Rentals 157.29 290.00

b) Interest On Fixed Deposits 238.86 55.12

c) Interest from Others 348.93 140.64

d) Miscellaneous Income 5.34 0.27

TOTAL 750.42 486.03

23

COST OF MATERIALS CONSUMED

Cost of Material Consumed 1,44,311.89 1,34,661.04

TOTAL 1,44,311.89 1,34,661.04

24

ERECTION AND SUB-CONTRACTING EXPENSE

a) Construction Materials and Stores Consumed 17,258.43 12,559.66

b) Tools and Tackles Consumed 1,281.89 1,081.10

c) Sub-contracting Expenses 39,006.98 28,127.32

d) Repairs to Construction Equipments/Machinery 288.83 156.83

e) Construction Transportation Charges 4,193.14 4,021.83

TOTAL 62,029.27 45,946.74

25

CHANGES IN INVENTORIES

a) Opening Stock i) Work-in-Progress/Semi Finished Goods 2,967.64 3,102.02

ii) Finished Goods 2,339.61 2,124.32

iii) Scrap 183.85 115.35

5,491.10 5,341.69

b) Less: Closing Stock

i) Work-in-Progress/Semi Finished Goods

7,924.88

2,967.64 ii) Finished Goods 4,790.91 2,339.61

iii) Scrap 122.63 183.85

12,838.42 5,491.10

TOTAL (7,347.32) (149.41)

26 EMPLOYEE BENEFIT EXPENSE a) Salaries, Wages and Bonus, etc. 8,537.68 6,365.38 b) Leave Encashment 119.10 52.39 c) Employee Compensation Expense - ESOS 96.22 169.80 d) Contribution to Provident and Other Fund 440.04 376.29 e) Premium for Gratuity 167.29 172.89 f) Premium for Superannuation Policy 211.68 180.34 g) Welfare Expenses 519.06 360.92 TOTAL 10,091.07 7,678.01

27 FINANCE COST

a) Interest Expense 13,495.40 9,554.71

b) Other Borrowing Costs 582.78 713.59

c) Applicable net (gain)/loss on foreign currency transactions and 280.00 10.87

translation on borrowing cost

TOTAL 14,358.18 10,279.17

F69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

31/03/2012 31/03/2011

` in Lacs ` in Lacs

28 DEPRECIATION AND AMORTIZATION EXPENSE

a) Depreciation of Tangible Assets 2,120.69 1,936.64 b) Amortization of Intangible Assets 168.91 164.27

2,289.60 2,100.91 c) Less : Transfer from Revaluation Reserve (2.42) (2.42) TOTAL 2,287.18 2,098.49

29 OTHER EXPENSES

a) Stores and Consumables 535.98 540.57 b) Power and Fuel 2,251.01 1,681.49 c) Conversion Expenses 2,582.96 4,221.05 d) Repairs to Buildings 85.52 98.56 e) Repairs to Plant and Machinery 317.04 368.46 f) Testing and Designing Expenses 133.73 440.72 g) Applicable net (gain)/loss on Foreign Currency Transactions 1,284.59 (150.65)

and translation other than borrowing cost h) Excise Duty on Stocks (Net) 179.04 (5.47) i) Service Charges 2,933.79 2,240.36 j) Repairs to Others 343.15 206.32 k) Rent 417.07 166.77 l) Rates and Taxes 721.28 286.10 m ) Insurance 956.79 803.21 n) Travelling and Conveyance 1,613.92 1,162.94 o) Postage, Telephone and Fax 390.56 337.93 p) Printing and Stationery 225.48 205.06 q) Professional and Legal Fees 952.04 768.40 r) Directors’ Sitting Fees 1.95 2.40 s ) Audit fees 47.75 37.80 t) Licence and Tender Fees 99.28 86.35 u) General Expenses 770.11 548.93 v) (Gain)/Loss on Sale of Fixed Assets (Net) (0.54) 29.75 w) Donations 8.46 7.80 x) Freight Outward 4,233.27 4,102.40 y) Packing Materials 119.17 157.14 z) Levies and Taxes 2,552.08 1,821.68 aa) Brokerage and Commission 301.41 263.16 ab) Bank Charges 5,105.47 3,502.15 ac) Debenture Issue Expenses - 378.86 ad) Amortisation of Deferred Expenes 22.29 -

TOTAL 29,184.65 24,310.24

F70

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED

ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2012

I. Basis of Consolidation:

The consolidated financial statements relate to Jyoti Structures Limited (the ‘Company’), and its subsidiaries (the ‘Group’).

The consolidated financial statements have been prepared in accordance with Accounting Standard 21 “Consolidated

Financial Statements” specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government

in terms of Section 211 (3C) of the Companies Act, 1956.

A. Basis of Accounting:

i. The accounts have been prepared on historical cost convention. The Group follows accrual basis of accounting.

The financial statements of Jyoti Structures Africa (Proprietary) Limited, have been prepared in accordance with

International Financial Reporting Standards (IFRS) and for the requirements of the Companies Act of South

Africa and the financial statements of Jyoti Holding Inc, Jyoti Americas LLC, Jyoti Projects FZE, have been

prepared in accordance with International Financial Reporting Standards (IFRS) and they are modified to the

extent necessary and practicable to make them uniform with the policies of the parent company.

ii. The following subsidiaries are considered for consolidation:

Name of the Company Percentage Holding (%) Country of Incorporation 2011-12 2010-11

JSL Corporate Services Ltd.

Jyoti Energy Ltd.

Jyoti Holding Inc.

Jyoti Americas LLC

Jyoti Projects FZE

Jyoti Structures Africa (Pty) Ltd.

100

100

100

100

100

70

100

100

100

100

N.A.

70

India

India

USA

USA

Dubai

South Africa

iii. The financial statements of the Company and its subsidiaries are prepared up to 31st March, 2012

B. Principles of Consolidation:

i. The financial statements of the Company and its subsidiary companies have been consolidated on a line-by- line

basis by adding together the book values of like items of assets, liabilities, income and expenses; after fully

eliminating intra-group balances and unrealised profits or losses on intra- group transactions as per Accounting

Standard 21.

ii. The excess of cost to the Company of its investments in the subsidiary companies is recognised in the financial

statements as goodwill, which is tested for impairment on every balance sheet date. The excess of Company’s

share of equity and reserves of the subsidiary companies over the cost of acquisition is treated as capital

reserve.

iii. The consolidated financial statements have been prepared using uniform accounting policies for like transactions

and other events in similar circumstances to the extent possible and practicable, in the same manner as the

Company’s separate financial statements.

II. Other Significant Accounting Policies

1. Revenue Recognition:

a) Sale of goods is recognised on completion of supplies as per the terms of the contract and on transfer of risk and

reward. Sales includes excise duty and adjustment for price variation and are net of claims accepted.

b) In case of construction/erection contracts, revenue is recognised based on the stage of completion determined

as per the terms of the contract. Sales/Income are booked on the basis of running account bills based on

completed work and are net of claims accepted. Escalations and other claims which are not acknowledged by

customers are not taken into account.

c) Interest income is recognised on time proportion basis.

F71

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED ACCOUNTS

d) The insurance claims are accounted for on accrual basis based on fair estimation of sanction by the insurance

companies.

2. Use of Estimates:

The presentation of financial statements requires certain estimates and assumptions. These estimates and

assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the

reported amount of revenues and expenses during the reporting period. Differences between the actual result and

the estimates are recognised in the period in which the results are known/materialised.

3. Fixed Assets:

Fixed assets are stated at cost of acquisition or construction, net of recoverable taxes including any cost attributable

for bringing the asset to its working condition for its intended use and includes amount added on revaluation, less

accumulated depreciation and impairment loss, if any.

4. Depreciation / Amortisation:

a) Depreciation on fixed assets is provided on Straight Line Method at the rates and in the manner prescribed in

Schedule XIV to the Companies Act, 1956 except on computer software and on fixed assets of Uganda, Bhutan

and Bangladesh branches.

b) Computer software is depreciated over a period of 3 to 6 years depending upon the expected useful life of the

software.

c) On the fixed assets of Uganda, Bhutan and Bangladesh branches, depreciation is provided on Straight Line

Method. The applicable rates are based on the local laws and practices of the respective countries.

d) In case of revalued assets, the difference between the depreciation based on revaluation and the depreciation

charged on historical cost is recouped out of the Revaluation Reserve.

e) Leasehold land is amortised over the period of lease.

f) Goodwill arising on amalgamation is amortised over a period of 5 years.

5. Investments:

Long term investments are stated at cost. Provision for diminution in value of such investments is made only if such

a decline is other than temporary.

6. Inventories:

a) Raw materials, Construction materials, Components and Stores & Spares are valued at lower of cost or net

realisable value.

b) Cost of inventories has been determined by using the weighted average cost formula, except that of Jyoti

Structures Africa (Pty) Ltd., in which case the same has been done on FIFO basis.

c) Material purchased for supply against specific contracts is valued at cost or net realisable value as per the

contract, whichever is lower.

d) Work-in-progress is valued at cost including material cost and attributable overheads. Provision is made when

expected realisation is lesser than the carrying cost.

e) Finished goods are valued at cost or net realisable value whichever is lower and inclusive of excise duty.

f) Scrap is valued at net realisable value.

F72

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED ACCOUNTS

7. Tools and Tackles:

Tools and tackles are amortised over their estimated useful life.

8. Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of

time to get ready for its intended use. All other borrowing costs are recognised as expenses in the period in which

they are incurred.

9. Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the

carrying amount of the Company’s fixed assets. If any such indication exists, then recoverable amount of the asset

is estimated. An impairment loss, if any, is recognised whenever the carrying amount of an asset exceeds its

recoverable amount. The recoverable amount is greater of the net selling price and the value in use. In assessing

value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount

factor.

The impairment loss recognised in a prior accounting period is reversed, if there has been a change in the estimate

of recoverable amount.

10. Debenture Issue Expenses:

Expenses incurred for issue of secured debentures made by the Company, were written off as revenue expenditure

during the year of issue.

11. Foreign Currency Transactions:

a) Transactions in foreign currencies are accounted for at the exchange rates prevailing on the dates of the

transactions or that approximates the actual rate at the dates of transactions.

b) Monetary items denominated in foreign currencies, remaining unsettled at the year end are restated at the

closing rates.

c) Non-monetary items denominated in a foreign currency are stated at costs.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in

Statement of Profit and Loss.

e) Financial Statements of Overseas Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year.

ii. Fixed assets are translated at the closing average rate prevailing on purchase/acquisition of assets.

Depreciation is accounted at the same rate at which the assets are translated.

iii. The resultant exchange gains and losses are recognised in the Statement of Profit and Loss.

f) Financial Statements of Overseas Non Integral Operations are translated as under:

i. Assets and liabilities are translated at the rate prevailing at the end of the year. Income and expenditure are

translated on the yearly average exchange rate prevailing during the year. Depreciation is accounted at the

same rate at which assets are translated.

ii. Exchange differences arising on translation of non integral foreign operations are accumulated in the

foreign currency translation reserve until the disposal of such operations.

F73

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED ACCOUNTS

g) Forward Exchange Contracts:

i. In case of transactions covered by forward exchange contracts which are not intended for trading or speculation

purposes, premium or discount is amortised as expense or income over the life of the contract.

ii. Exchange difference on such contracts is recognised in the Statement of Profit and Loss in the year in which

the exchange rates change.

iii. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognised as

income or expense for the year.

12. Excise Duty:

The excise duty in respect of closing inventory of finished goods is included as part of the inventory. The amount of

Central Value Added Tax (CENVAT) credit in respect of materials consumed for sales is deducted from cost of

materials consumed.

13. Leased Assets:

Operating Lease:

i. Lease payments are recognised as expense in the Statement of Profit and Loss on straight line basis over the

term of the lease.

ii. Assets given on operating lease are included in fixed assets. Lease income is recognised in the Statement of

Profit and Loss on straight line basis over the term of the lease.

14. Employees’ Retirement and Other Benefits:

a) Short Term Employee Benefits:

Short term employee benefits are recognised as expenses at the undiscounted amount in the period during

which the services have been rendered.

b) Long Term Employee Benefits:

I. Defined Contribution Plan:

The Company’s contribution to Provident Fund and Superannuation Fund are charged to Statement of Profit

and Loss on accrual basis.

II. Defined Benefit Plan:

i. Gratuity: The company provides for the applicable gratuity based on actuarial valuation as per the

Projected Unit Credit Method.

ii. Leave Encashment: The company provides for the applicable liability at the year end on account of

unavailed earned leave as per the actuarial valuation as per Projected Unit Credit Method.

iii. The bonus and leave travel allowance applicable to employees is accounted for on accrual basis.

iv. The cost of employee stock option attributable to current financial year is accounted for and charged to

Statement of Profit and Loss.

15. Taxes on Income:

a. Current Tax:

Provision for current Income Tax is made on the estimated taxable income using the applicable tax rates and tax

laws.

F74

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES OF THE CONSOLIDATED ACCOUNTS

b. Deferred Tax:

Deferred tax arising on the timing differences and which are capable of reversal in one or more subsequent

periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred

tax assets are not recognised unless there is a virtual certainty as regards to the reversal of the same in future

years.

16. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year

by the weighted average number of equity shares outstanding during the reporting period. Diluted earning per share

is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average

number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be

anti dilutive.

17. Provisions and Contingencies:

a. A provision is recognised when there is a present obligation as a result of a past event and it is probable that an

outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

b. A disclosure for a contingent liability is made when there is a possible or present obligation that may but

probably will not require an outflow of resources. When there is a possible obligation in respect of which the

likelihood of outflow of resources is remote, no provision or disclosure is made.

c. Contingent assets are neither recognised nor disclosed in the financial statements.

18. Employees Stock Option Scheme:

Stock option granted to the employees of the Company, under the Employees Stock Option Scheme are evaluated as

per the accounting treatment prescribed by SEBI (Employee Stock Option Scheme and Employees Stock Purchase

Scheme) Guidelines, 1999. Accordingly, excess of market value of the stock option, as on date of grant over the

exercise price of the option is recognised as deferred employee compensation and is charged to Statement of Profit

and Loss as employee costs, on straight line method over the vesting period of the options.

F75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

NOTE- 30 NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS

1. Outstanding Contracts - Capital Account:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) are

`10.55 Lacs (P.Y. ` 72.54 Lacs). Advances paid ` 10.22 Lacs (P.Y. ` 36.66 Lacs)

2. Contingent Liabilities not provided for:

2011-12

` in Lacs

2010-11

` in Lacs

1

Outstanding of Bills Discounted

404.10

Nil

2 Disputed liabilities in respect of Income Tax, Sales Tax, Central Excise

and Service Tax (under appeal)

567.13

547.82

3

Civil Suits

100.21

59.41

The Group has given a letter of comfort for general banking facilities provided by National Bank of Abu Dhabi to Gulf Jyoti

International LLC. The total loan outstanding from the bank to the said Company is AED 98.49 Lacs (P.Y. AED 96.53 Lacs)

equivalent to ` 1,385.92 Lacs (P.Y. ` 1,185.26 Lacs) as on 31st March, 2012.

3. The gross block of fixed assets includes ` 83.62 Lacs on account of revaluation of fixed assets carried out. Consequent

to the said revaluation, there is an additional charge of ` 2.42 Lacs (P.Y. ` 2.42 Lacs) on account of depreciation and an

equivalent amount has been withdrawn from the revaluation reserve and credited to Statement of Profit and Loss. This

has no impact on the profit for the year.

4. Disclosure as required by Accounting Standard 15 (revised 2005) “Employee Benefits”. : Defined Contribution Plans

a) Provident Fund

b) Superannuation Fund

The provident funds are operated by the Regional Provident Fund Commissioner and the superannuation fund is

administered by the Trustees of the Jyoti Structures Limited Officers Superannuation Scheme. Under the schemes, the

Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the

benefits. These funds are recognised by the Income Tax authorities.

The Group has recognised the following amounts in the Statement of Profit and Loss for the year:

2011-12

` in Lacs

2010-11

` in Lacs

i. Contribution to Provident Fund 319.83 260.72

ii. Contribution to Other Fund 113.20 115.58

iii. Contribution to Employees’ Superannuation Fund 211.68 180.34

F76

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

Defined Benefit Plans:

Gratuity and Leave Encashment

(` in Lacs)

Particulars 2011-12 2010-11

Gratuity Leave

Encashment Gratuity Leave

Encashment 1 Expenes recognised in Statement of Profit &

Loss and included in Note-26

“Employee Benifit Expences”

Current Service Cost

85.32

99.92

71.07

46.22

Interest Cost 56.60 13.41 40.41 12.48

Expected Return on Plan Assets (33.86) - (26.22) -

Net Actuarial losses/(gain) 70.86 25.98 94.55 2.59

Total Expenses 178.92 139.31 179.81 61.29 2 Reconciliation of opening and closing balances

ofchanges in present value of the defined

benefit obligation:

Opening balance of defined benefit obligation 665.94 157.72 489.82 151.25

Current Service Cost 85.32 99.92 71.06 46.22

Interest Cost 56.60 13.41 40.41 12.47

Actuarial losses/(gain) 68.48 25.98 101.37 2.59

Liabilities Extinguished on Settlements - - - -

Benefits Paid (35.46) (71.71) (36.72) (54.81)

Closing balance of defined benefit obligation 840.88 225.33 665.94 157.72 3 Reconciliation of opening and closing balances

ofchanges in fair value of plan assets:

Opening Balance of Plan Assets 356.45 - 259.27 -

Expected Returns on Plan Assets 33.86 - 26.22 -

Actuarial losses/(gain) 2.38 - 6.81 -

Assets Distributed on Settlement - - - -

Contribution by Employer 50.47 - 100.87 -

Benefits Paid (10.86) - (36.72) -

Closing balance of plan assets 427.54 - 356.45 - 4 Net liability recognised in the Balance Sheet

Closing balance of defined benefit obligation

840.88

225.33

665.94

157.72

Closing balance of fair value of plan assets 427.54 - 356.45 -

Present value of unfunded obligation recognised as liability 413.34 225.33 309.49 157.72 5 Actual Return on Plan Assets 31.48 - 33.04 - 6 Actuarial Assumption

Discount Rate 8.50% 8.25%

Expected Rate of Return on Plan Assets 9.00% 9.00%

Expected Rate of Salary Increase 5.50% 5.50%

Mortality LIC

(1994-96)

published table

of Mortality Rates

LIC

(1994-96)

published table

of Mortality Rates

Withdrawal Rates 5% at younger ages and

reducing to 1% at older

ages according to

graduated scale

5% at younger ages and

reducing to 1% at older

ages according to

graduated scale

Retirement age 58 years 58 years

Actuarial Valuation Method Project Unit Credit Method Project Unit Credit Method Above information is as per certificates of the actuary.

F77

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

5. Disclosures in Respect of Joint Ventures under the Accounting Standard 27 “ Financial Reporting of Interest in Joint

Ventures” :

(` in Lacs)

Share of Interest 2011-12 2010-11

a) Jointly Controlled Entities Gulf Jyoti International LLC

30%

30% b) Aggregate amount of assets, liabilities, income and expenditure

related to Company’s interest in jointly controlled entity: Assets:

Fixed Assets 4,519.74 3,775.37 Cash and Bank Balances 436.75 1,960.47 Inventories 2,235.99 1,431.25 Trade and Other Receivables 2,843.78 2,658.31 Loans and Advances 2,075.80 1,298.51

Current Liabilities: 6,944.36 7,322.74 Non Current Liabilities 4,239.51 3,457.18 Income 9,305.30 4,108.93 Expenditure 8,789.47 3,892.66 Contingent Liability on account of Letter of Credit 893.37 1,080.31 Contingent Liability on account of Guarantees 4,476.24 2,707.22 The Group’s Share of investment in the Joint Venture being less than 50% of the Capital contribution, the management is of the view not to consider its share of assets, liabilities, income, and expenditure while preparing its consolidated financial statements. Had this been considered, the consolidated assets would have increased by ` 12,112.07 Lacs and consolidated liability would have increased by ` 11,183.87 Lacs, profit for the year would have increased by ` 515.83 Lacs and reserves would have been lower by ` 1,060.46 Lacs.

6. Disclosures in Respect of Joint Ventures under the Accounting Standard 27 “ Financial Reporting of Interest in Joint Ventures” :

` in Lacs)

Share of Interest 2011-12

a) Jointly Controlled Entities Lauren Jyoti Pvt ltd.

50% b) Aggregate amount of assets, liabilities, income and expenditure related to

Company’s interest in jointlycontrolled entity : Assets :

Fixed assets 43.36 Cash and Bank Balances 676.17 Inventories 1,377.19 Trade and Other Receivables 355.37 Loans and Advances 2,177.23

Current Liabilities 717.27 Non Current Liabilities 3,434.14 Income 1,398.31 Expenditure 1,419.69 Contingent Liability on account of Guarantees 5,507.00 Capital Commitments 74.75 (Note : Figures for the year 2010-11 are Not Applicable, refer Note No. 30(8)

The Group’s Share of investment in the Joint Venture is 50% of the Capital Contribution, the management is of the view not to consider its share of assets, liabilities, income, and expenditure while preparing its consolidated financial statements. Had this been considered, the consolidated assets would have increased by ` 4,629.32 Lacs and consolidated

liability would have increased by ` 4,151.41 Lacs, profit for the year would have decreased by ` 21.38 Lacs and reserves would have been lower by ` 21.38 Lacs.

7. The Group has invested an amount of AED 129.30 Lacs equivalent to ` 1,642.77 Lacs in its Joint Venture Company

namely, Gulf Jyoti International LLC. That Company maintains its accounts on calendar year basis. The total paid up capital of the Company as on 31st December 2011 was AED 431.00 Lacs (P.Y. AED 431.00 Lacs). As against this capital, the total profit earned during the year was AED 116.31 Lacs (P.Y. Profit AED 57.61 Lacs) and total accumulated losses as on 31st December 2011 were AED 239.11 Lacs (P.Y. AED 343.78 Lacs). However, based on the orders in hand and the business outlook of the joint venture Company, the management is of the opinion that these accumulated losses are temporary in nature and will be recovered in the next couple of years. Due to this, the management believes that there is

no diminution in value of the investment and therefore no provision for the same is made during the year.

F78

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

8. During the year the Company has invested an amount of ` 500 Lacs in its Joint Venture Company namely, Lauren Jyoti

Pvt Ltd. The total paid up capital of the Company as on 31st March 2012 was ` 1,000 Lacs. As against this capital, the total

loss during the year was ` 42.76 Lacs. However, based on the orders in hand and the business outlook of the

Joint Venture Company, the management is of the opinion that there is no diminution in value of the investment and

therefore no provision for the same is made during the year.

9. Forward exchange contracts outstanding as at 31st March, 2012 which are entered into by the Company and which are

not intended for trading or speculative purposes are given below:

(` in Lacs)

Currency As at

31/03/2012 As at

31/03/2011 Forward Exchange Contracts 2,559.25 2,255.26

10. The year end net monetary foreign currency exposures that have not been hedged, are given below:

Receivables

Currency As at 31/03/2012 As at 31/03/2011

Foreign

Currency

in Lacs

` in

Lacs Foreign

Currency

in Lacs

` in

Lacs

USD 243.17 12,446.91 390.53 17,615.01 EURO 36.45 2,488.39 13.72 876.66 AED 238.78 3,326.59 269.58 3,310.20 TND 2.67 91.78 7.65 248.98 UGX 18,867.10 378.29 52,382.65 1,027.49 BDT 955.66 587.10 Nil Nil Nu 2,572.36 2,572.36 Nil Nil

Payables

Currency As at 31/03/2012 As at 31/03/2011

Foreign

Currency

in Lacs

` in

Lacs Foreign

Currency

in Lacs

` in

Lacs

USD 31.50 1,643.65 144.86 6,549.37 EURO 2.62 182.73 56.55 3,622.78

11. Expenditure on account of premium of forward exchange contracts to be recognised in the Statement of Profit and Loss

of subsequent accounting periods amounts to `31.46 Lacs (P.Y. ` 18.94 Lacs)

12. Disclosures for operating leases under Accounting Standard 19 – “Leases”

a) Disclosures in respect of the agreements entered into after 1st April, 2001 for taking on leave and license/under

operating leases; the residential/office premises and warehouses, including furniture fittings therein, as

applicable, and machinery, are given below:

2011-12

` in Lacs 2010-11

` in Lacs 1 Lease payments recognised in the Statement of Profit and Loss for the year 307.82 154.50 2 Future minimum payments receipt under the agreements, which are

non cancellable. (All the lease agreements are cancellable)

-

-

F79

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

b) Disclosures in respect of the agreements entered into after 1st April, 2001 for giving the plant and machineries and

other fixed assets under operating leases are given below:

2011-12

` in Lacs 2010-11

` in Lacs 1 Lease income recognised in the Statement of Profit and Loss for the year 157.29 290.00 2 Future minimum lease receipt under the agreements,which are non

cancellable are as follows:

i) Not later than one year Nil Nil

ii) Later than one year and not later than five years Nil Nil The agreements provide for early termination by either party with a notice period which varies from fifteen days to

three months and they contain a provision for their renewal.

13. Related Party Disclosures:

Related party disclosures as required by Accounting Standard 18, “Related Party Disclosures”, issued by the Institute of

Chartered Accountants of India are given below:

1 Relationships (during the year)

(i) Key Management Personnel:

Mr. Prakash Thakur

Mr. Santosh Nayak

Mr. K. R. Thakur

(ii) Joint Venture:

Gulf Jyoti International LLC

Lauren Jyoti Pvt Ltd.

2 The following transactions were carried out with the related parties in the ordinary course of business.

Sr. Particulars Type of

Relationship

2011-12

` in Lacs

2010-11

` in Lacs

1 Remuneration Paid 1(i) 642.84 836.81

2 Purchase of Goods/Services 1(ii) 16,587.41 11,976.34

3 Sale of Goods/Services 1(ii) 436.46 1,812.31

4 Lease Rentals received 1(ii) 44.04 Nil

5 Investments at the end of the year 1(ii) 2,142.77 1,642.77

6 Outstanding balance receivable/(payable) at the end of the year. 1(ii) (1,419.12) 2,246.10

7 Investment during the year 1(ii) 500.00 Nil 14. Information in accordance with the requirement of Accounting Standard - 7 (Revised) “Construction Contracts” issued

by Institute of Chartered Accountants of India :-

2011-12

` in Lacs 2010-11

` in Lacs Contract revenue recognised during the year 82,811.30 59,078.40 Method used to determine the contract revenue recognised and the stage

of completion of contracts in progress

Percentage Completion Method Disclosure in respect of contracts in progress as at the year end: Aggregate

amount of costs incurred and recognised profits (less recognised losses)

1,54,755.92

1,06,832.40 Advances received 5,922.23 2,304.80 Retentions receivable 7,955.23 6,672.50 Gross amount due from customers (Included under Note-17 Trade Receivable) 47,608.42 21,255.20 Gross amount due to customers (Included under Note No.10 Advances from

Customer under Other Current Liabilities)

4,084.55

1,960.40

F80

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

15. Employees Stock Option Scheme:

Under Jyoti Structures Limited Employees Stock Option Scheme 2005 (ESOS 2005), the Company is authorised to issue

upto 5,00,000 (Five lacs) options, convertible into 25,00,000 (Twenty Five lacs) equity shares of ` 2/- each to employees.

A Compensation Committee has been constituted by the Board of Directors of the Company to administer the Scheme.

Each option is to be converted into 5 Equity shares of ` 2/- each at an exercise price of ` 17/- per equity share (being the

exercise price adjusted after split of face value from ` 10/- to ` 2/-). Under the scheme, 30% of the options vest at the end

of one year from the date of grant of options, 30% at the end of second year from the date of grant of options and the

balance 40% at the end of third year from the date of grant of options.

The amount of ` 96.22 Lacs (P.Y. ` 169.80 Lacs), debited to Employee Compensation Expense – ESOS account,

represents the proportionate cost for the year and has been charged to the revenue account.

The amount of ` 524.82 Lacs (P.Y. ` 590.73) in Employee Stock Option outstanding account, represents discounts on

the options outstanding.

The balance un-amortised portion of ` 91.72 Lacs (P.Y. ` 140.84 Lacs) being Deferred Employee

Compensation

Expense has been shown as reduction from Employees Stock Options outstanding in the Balance Sheet.

2011-12

(In Numbers)

2010-11

(In Numbers)

i) Options granted and outstanding at the beginning of the year 95,055 96,095

ii) Options granted during the year 13,150 23,300

iii) Options lapsed and/or withdrawn during the year - -

iv) Options exercised during the year against which shares were allotted 17,420 24,340

v) Options granted and outstanding at the end of the year of which:-

- Options vested

- Options yet to vest

50,205

40,580

41,795

53,260

16. Earnings Per Share (EPS)

2011-12 2010-11

i) Profit/(Loss) after Tax. (` in Lacs) 9,183.19 9,977.97

ii) Weighted Average Number of Ordinary Shares for Basic Earning per Share (In Nos) 8,21,61,055 8,20,57,677

iii) Add: Equity shares for no consideration arising on grant of stock options under ESOS 2,92,625 3,69,420

iv) Weighted Average Number of Ordinary Shares for Diluted Earning per Share (In Nos) 8,24,53,680 8,24,27,097

v) Nominal Value of Ordinary Share ` 2/- ` 2/-

vi) Basic Earning Per Ordinary Share ` 11.18 ` 12.16

vii) Diluted Earning Per Ordinary Share ` 11.14 ` 12.11

17. The terms and conditions of various contracts being executed by the Group provide for clauses in respect of liquidated

damages applicable for any delay in completion of the whole or a portion of the contracts. In case of a few contracts,

where there have been such delays in completion of the contracts, the Group is currently negotiating with its customers

for an extension of time for the delays attributable to the customers to complete the contracts. It is currently uncertain as

to whether the customers would grant the required extension of time and hence, the quantum of liquidated damages is

also uncertain. As per the past experience, where the delays are due to reasons beyond the control of the Group, the

approvals for time extensions are normally received from customers, which sometimes take more than reasonable time.

As such, no provision on this account has been made in the books of account.

F81

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

18. Jyoti Structures Africa (Pty) Limited is currently involved in a legal dispute with its service provider KRB Electrical Engineering

Services (Pty) Limited. At the year end, the management and their legal advisers have not been able to determine the

extent of legal costs nor the outcome of the current proceedings.

19. The Group is operating in only one primary business segment of power transmission and distribution wherein it

manufactures/deals in various components/equipments and constructs infrastructure related to power transmission. As

such there are no separate primary reportable or identifiable business segments as defined by Accounting Standard – 17

“Segment Reporting”

Secondary Segment : Geographical Segment

The analysis of geographical segment is based on the geographical location of the customers. The geographical

segment considered for disclosure are as follows :

- Sales within India include sales to customers located in India.

- Sales outside India include sales to customers located outside India.

Information pertaining to Secondary Segment:

Details of Segment Revenue:

2011-12

` in Lacs

2010-11

` in Lacs

Sales within India 2,24,393.50 2,10,909.29

Sales outside India 43,371.15 29,052.24

Total 2,67,764.65 2,39,961.53

Details of carrying amount of Segment Assets by geographical locations:

2011-12

` in Lacs

2010-11

` in Lacs

Within India 2,14,523.70 1,47,093.72

Outside India 47,032.02 32,166.62

Total 2,61,555.72 1,79,260.34

Total cost incurred during the period to acquire segment assets (fixed assets including intangible assets) that are

expected to be used during more than one period:

2011-12

` in Lacs

2010-11

` in Lacs

Within India 19,534.07 4,034.79

Outside India 3,088.27 964.02

Total 22,622.33 4,998.81

20. In response to relevant notices issued by the Assessing Officer, the company has filed its returns of income in respect of

earlier years. The Tax liability of ` 1,324.98 Lacs arising from the same being related to an earlier year is reduced from the

credit balance of Statement of Profit and Loss under the head Reserves and Surplus in the balance sheet of the company

and effect of the same is not given in the Statement of Profit and Loss. Due to this, the profit after tax for the year is higher

by the same amount and the basic and diluted earnings per share for the year is higher by ` 1.62 respectively

F82

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

21. Figures pertaining to subsidiary companies have been reclassified wherever necessary to bring them in line with the

parent Company’s financial statements.

22. Previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

The Notes referred to above form an integral part of the Statement of Accounts.

As per report Attached

For R. M. AJGAONKAR & ASSOCIATES For and on behalf of the Board

Chartered Accountants

R. M. AJGAONKAR

Partner L. H. KHILNANI

Company Secretary SANTOSH NAYAK PRAKASH THAKUR S. D. KSHIRSAGAR

Managing Director Executive Vice Chairman Chairman

Membership No. 31927

Mumbai; 25th May, 2012

183

DECLARATION

Our Company certifies that all relevant provisions of Chapter VIII read with Schedule XVIII of the SEBI

Regulations have been complied with and no statement made in this Placement Document is contrary to the

same and that all approvals and permissions required to carry on our Company’s business have been obtained

are valid and have been complied with. Our Company further certifies that all the statements in this Placement

Document are true and correct.

Signed by

Santosh V. Nayak

Managing Director

K. R. Thakur

Whole Time Director

Date: September 26, 2014

Place: Mumbai

184

DECLARATION IN ACCORDANCE WITH FORM PAS-4

We, the Directors of the Company certify that:

1. the Company has complied with the provisions of the Companies Act, 2013 and the rules made

thereunder;

2. the compliance with the Companies Act, 2013 and the rules does not imply that payment of dividend or

interest or repayment of debentures, if applicable, is guaranteed by the Central Government; and

3. the monies received under the offer shall be used only for the purposes and objects indicated in this

Placement Document (which includes disclosures prescribed under Form PAS-4) .

Santosh V. Nayak

Managing Director

K. R. Thakur

Whole Time Director

We are authorized by the Board of Directors of our Company, vide resolution dated September 22, 2014 to

sign this form and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in

respect of the subject matter of this form and matters incidental thereto have been complied with. Whatever is

stated in this form and in the attachments thereto is true, correct and complete and no information material to

the subject matter of this form has been suppressed or concealed and is as per the original records maintained

by the promoters subscribing to the Memorandum and the Articles.

It is further declared and verified that all the required attachments have been completely, correctly and legibly

attached to this form.

Signed by:

Santosh V. Nayak

Managing Director

K. R. Thakur

Whole Time Director

Date: September 26, 2014

Place: Mumbai

185

JYOTI STRUCTURES LIMITED

Registered and Corporate Office: Valecha Chambers, 6th Floor, New Link Road,

Andheri (West), Mumbai 400 053, Maharashtra, India.

Contact Person: L.H. Khilnani, Company Secretary & Compliance Officer

Email: lkhilnani@jsl.co.in ; Tel: +91 22 4091 5000

Fax: +91 22 4091 5014; Website: www.jsl.in

BOOK RUNNING LEAD MANAGER

Edelweiss Financial Services Limited

14th

Floor, Edelweiss House, Off. C.S.T. Road,

Kalina, Mumbai 400 098, Maharashtra, India.

DOMESTIC LEGAL ADVISOR TO THE ISSUE

Bharucha & Partners

2nd

Floor, Hague Building,

9, S.S. Ram Gulam Marg, Ballard Estate,

Mumbai 400 001, Maharashtra, India.

INTERNATIONAL LEGAL ADVISOR TO THE ISSUE

Duane Morris & Selvam LLP

16 Collyer Quay #17-00

Singapore 049318

AUDITORS TO OUR COMPANY

R.M. Ajgaonkar & Associates

Chartered Accountants

Sambava Chambers, Sir P M Rd, Fort,

Mumbai 400001, Maharashtra, India.